The Supreme Court To Civil Forfeiture: Snort My Taint*

Though not the sexiest Supreme Court case this year, a few have recognized that Luis v. United States has an issue that could do some serious harm to nice folks who meet the criminal justice system. It’s one of those cases that, after the shit hits the fan, everybody will cry “how did that happen?”, as if this was a big secret.

Not so secret, really. It’s just that you couldn’t be bothered watching when it was happening before your eyes, so it will seem all secret-y when it comes back to bite you in the butt.  The issue is fairly straightforward.  Should the dreaded Monsanto case be applied, pre-trial, to concededly untainted assets?

The case of Luis v. United States arose in 2012 when Sila Luis was indicted in Florida on charges of operating a complicated scheme that allegedly defrauded Medicare of upwards of $40 million. The federal prosecutor in her case sought and obtained a pre-trial order freezing her assets. What makes this order notable is that the federal government moved to freeze not only her “tainted” assets, meaning those assets that can be arguably traced back to the alleged underlying crime; but the federal government also moved to freeze Luis’ undisputedly legitimate assets, which amount to some $15 million that cannot be connected in any way to any alleged criminal activity.

Much of the discussion of Luis reflects a poor understanding of how this issue arises.  In Monsanto, the Supremes held that the government is entitled to freeze funds allegedly tainted by the same crime of which the defendant is charged. It creates a self-fulfilling circular prophecy:

  • Allege a crime
  • deprive a person of the funds to fight the charges
  • get a conviction and
  • boom, it confirms the brilliance of freezing the funds up front because the defendant is guilty, and no one is entitled to use criminal proceeds to defend themselves.

Of course, if you look at the problem from the backend, it doesn’t sound nearly so bad. Why should a guilty guy get to squander his ill-gotten gains on a lawyer when they should be available after conviction for restitution? Sounds legit, right?

But in Luis, the funds were “undisputably” untainted. (At oral argument, Deputy Solicitor General Michael Dreeben contended that the government didn’t dispute the funds were, in fact, tainted because it decided not to, not because the government, in fact, agreed that they were untainted. A very disingenuous assertion, but made nonetheless.)  This raises a chorus of how the seizure is crazy, wrong, a flagrant violation of the Sixth Amendment right to counsel.

Except it’s not so flagrant. The basis for the argument is “substituted proceeds,” meaning that if a defendant gained $10,000 from a crime, then went and pissed it all away or gave it to a worthy charity, any other $10,000 will do. Money is fungible. One hundred dollar bill is pretty much the same as any other, and the government just wants to make sure there will still be $10,000 to forfeit when the case is over, and it’s not picky where it came from.

As Radley Balko points out, the concept can also be analogized to bail:

[Dreeben] compared such seizures to bail. Where the latter prevents a defendant from fleeing with his body, the former prevents what Dreeben calls “asset flight.”

Got assets? If the government claims an entitlement to them later, doesn’t it have authority to make sure they remain available?  Tainted. Untainted. So what? At the end of the case, the guilty guy has to cough them up, and since you can’t get blood from a rock, it’s only reasonable to make sure they don’t get frittered away on a defense. Or rent. Or food. Or any of those indulgences that people waste money on.

But what do you care? After all, it’s not like you’re ever going to find yourself in the dock, with the government claiming you’re living high off the profits of crime.  Except for the slide down the slippery slope problem:

JUSTICE KENNEDY: But what is it that confines your ­­ your rationale to a specific area? It seems to me that if the government prevails in this case, every State in the union, every locality could say that in the event of assault and battery, malicious mischief, an accident caused by drunk driving, any crime involving a bodily injury, that the government is entitled to restrain disposition of assets that might be used for medical care, for pain and suffering. And this would, in effect, prevent the private bar from ­­ from practicing law unless it did so on a contingent basis.

MR. DREEBEN: Justice Kennedy, it’s correct that our principle is not limited to the types of crimes that are in this case. It is limited to the government making an adequate showing that at the conclusion of the case, it will have the right to the money.

In the quest to focus on the victims, or the need to ring up some extra loot for the court ATM, or our hatred of drunk driving, the possibilities for government entitlement to money from defendants are unlimited. Same theory, if the government is entitled to the money at the end, then it gets to seize it up front to make sure it’s “available.” The Sixth Amendment may entitle a guy to a lawyer, but does it entitle a guy to the lawyer of his choosing, which requires payment of a fee, by dissipating the funds the government also claims?

The missing link in this scenario isn’t the tainted versus untainted distinction, but the Monsanto decision’s circular reasoning. Either the constitutional right to counsel trumps the government’s desire to grab its piece of the alleged loot or not. All assets are untainted until a defendant is convicted of something, no matter what the government claims. Is probable cause, the test under Monsanto (as well as the grand jury, see e.g., ham sandwich except for cops), good enough to deprive a guy of his right to defend? Of course, it’s good enough to hold him in jail, so why not?

But reading the tea leaves of oral argument, Andrew Fleischman holds out a glimmer of hope from Justice Kagan’s mouth:

You have Monsanto, you combine Monsanto with a—a simple factual acknowledgement that money is fungible, and it gets you to a judgment in this case. You win, the petitioner loses. And—and, you know, that’s a fair, strong argument, if—if one is comfortable with Monsanto.

I mean, there is—so I think I would just ask you, I mean, suppose the Court is just uncomfortable with the path we started down the road on in Monsanto? And you might be right that it just doesn’t make sense to draw a line here, but it leaves you with a situation in which more and more we’re depriving people of the ability to hire counsel of choice in complicated cases. And so what should we do with that intuition that Monsanto sent us down the wrong path?

And that is, without a doubt, the problem. If Monsanto remains the rule, then the seizure of assets, tainted or not, logically prevails, as to retaining counsel as well as eating. And while nobody gave a damn about Monsanto at the time because it was all about taking the profit out of crime for drug dealers (and everybody hates drug dealers, right?), it could come in mighty handy when it’s applied to every post-conviction claim, from the victims’ suffering to the surcharges on fines.

Reversing Monsanto, however, would prove to be a huge, monumental, paradigm shift.  Though it’s exactly what’s needed, what are the chances? I won’t hold my breath.

*Apologies to Ken White.

7 thoughts on “The Supreme Court To Civil Forfeiture: Snort My Taint*

  1. Marc R

    After Kaley, it was exciting that Howard and Roy Black got another shot with Scotus. The ramifications of property, not the PC basis of the arrest, being frozen attacks not just the 6th. Oral Argument had Scalia (I believe) asking how the defendant has gotten money for food and rent and living, and Howard said they don’t have access period; all accounts are frozen. So if you’re an accused breadwinner, and you had untainted assets, forget about going counsel…your family will starve. That’s a 5th amendment due process takings violation that happens daily.

    I wonder how this will impact future Nebbia hearings where there’s an affirmative duty to show clean funds. Also, Florida (maybe NY too) loves serving the civil forfeiture complaint on your client at jail or at home on bail where say cash was found in the same vehicle as drugs. You have 20 days to file a responsive pleading or to call the sheriff’s outside counsel and negotiate a release. Either way it’s a trap; say it’s your client’s money and due to location they have your client then for constructive possession of drugs/guns…or outside counsel says “have you gotten your whole retainer? How about we release $2K to your operating account as earned income owed and we keep the rest” and then you deservedly get a bar complaint. Civil forfeiture is great for the state and their lucky outside collections counsel but a wreck overall. The New Yorker had a large free story available for a while and i imagine the next step find attacking Kaley from another angle.

    There’s got to be a conflict between Kaley and the next decision and “taintness” isn’t the only nexus.

    1. SHG Post author

      Trying to make sense of your comment is more effort than it’s worth for me, but I will point out that Kaley was a disaster, though the issue there was the mechanism by which probable cause for seizure happened.

  2. Ahcuah

    But how can this implicate the Sixth Amendment? If the defendants no longer have money to hire their own attorney, shouldn’t they rest secure in the knowledge that they can rely on a well-funded Public Defender who is just waiting around the office waiting for a case, any case, to show up?

    1. SHG Post author

      Heh, yup. This goes against the trope that indigent defense is the same as counsel of choice. And the government uses this argument to point out the no one goes unrepresented. Problem solved!

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