When Punishing Isn’t Punishment

Posted by Asset Forfeiture Attorney Steven Kessler.

By Steven L. Kessler | Article Posted 8/8/96

My 5-year-old nephew recently asked me: “When is a door not a door?” When I gave up trying to guess, he looked at me sweetly and said: “When it’s ajar!” He giggled, and walked away.

Never in my wildest dreams did I believe that the Supreme Court of the United States would adopt the same reasoning in analyzing the Bill of Rights and its relation to the intricacies of civil forfeiture. But on June 24, 1996, the Court proved me wrong.

Writing for the Court in United States v. Ursery, Chief Justice William H. Rehnquist held that for purposes of the Excessive Fines Clause of the Eighth Amendment, civil forfeiture constitutes punishment. For purposes of the Fifth Amendment protection against Double Jeopardy, however, civil forfeiture does not constitute punishment.

This decision reads like plain vanilla: in rem forfeitures are neither “punishment” nor criminal for purposes of the Double Jeopardy clause. Accordingly, in all but the most extreme situations where the civil forfeiture is so clearly punitive as to be the “equivalent to a criminal proceeding”, the Fifth Amendment will not prohibit the government from bringing parallel criminal prosecutions and in rem forfeiture actions in cases prosecuted under 21 U.S.C. 881(a)(6) and (a)(7) and 18 U.S.C. 981.

Justice Rehnquist, writing for the majority, made short shrift of the scores of federal and state decisions that held that the Supreme Court’s long line of cases approving civil forfeitures and criminal convictions based upon the same conduct had been undermined by seven years of recent precedent. The Ursery court said, quite simply: they were wrong. The lower courts had relied primarily on United States v. Halper, Austin v. United States and Department of Revenue of Montana v. Kurth Ranch.

Reading these three cases together, courts had concluded that in rem drug forfeitures qualified as punishment under the Fifth Amendment. The courts then struggled with various issues raised by the Double Jeopardy Clause, such as if and when jeopardy attaches, whether the underlying acts constitute the same offense, whether the civil and criminal actions are separate proceedings or constitute a single prosecution and whether the loss of specific property constitutes punishment or is wholly remedial.

The decision in Ursery renders the resolution of these divisive issues unnecessary. The Court affirmed “a long line of cases,” dating back to 1827, which “adhere to a remarkably consistent theme” that in rem forfeitures are not punitive for purposes of double jeopardy. Specifically, the Court focused upon Various Items of Personal Property v. United States. There, the Court, contrasting in rem proceedings against “guilty” property with in personam proceedings against the guilty person, stated: “The forfeiture is no part of the punishment for the criminal offense.” That, Rehnquist said, has never changed. He cited United States v. One Assortment of 89 firearms, decided more than 53 years later, in which the Court confirmed the Various Items approach and developed a two-part test for determining whether an in rem forfeiture qualifies as punishment: (1) Did Congress intend the forfeiture to be civil or criminal? (2) Is the forfeiture scheme so punitive in purpose or effect as to negate Congress’ intent? This approach should be followed today, the Court said. As to Halper, Austin and Kurth Ranch, the Court said that they did not overrule the 89 Firearms line of cases. Indeed, Justice Rehnquist observed that their reasoning would not apply in a double jeopardy analysis. Halper, for example, “involved not a civil forfeiture, but a civil penalty.” The difficulty of applying Halper’s proportionality analysis to in rem proceedings such as these, the Court said, demonstrates that it was never intended to be used outside the context of in personam civil penalties. Further, the Court said, Halper’s “case-by-case” analysis for “the rare case” is inconsistent with the categorical approach later applied in Austin, which, Justice Rehnquist emphasized, was not even a double jeopardy case, but, rather, an excessive fines case. Thus, Austin’s conclusion that in rem drug forfeitures were punitive enough to be subjected to scrutiny for excessiveness under the Eighth Amendment — a conclusion which the Ursery court reaffirmed — was not a conclusion that such forfeitures were so punitive as to constitute punishment under the Fifth Amendment.

Further, the Court said that the lower courts had misunderstood this trio of cases as creating a “radical jurisprudential shift.”

“Halper dealt with in personam civil penalties under the Double Jeopardy Clause; Kurth Ranch with a tax proceeding under the Double Jeopardy Clause, and Austin with civil forfeitures under the Excessive Fines Clause.” Nothing in those rulings “purported to replace our traditional understanding that civil forfeiture does not constitute punishment for the purpose of the Double Jeopardy Clause.” However, the Court did leave an opening, albeit small, for a civil forfeiture case to constitute punishment for Fifth Amendment purposes where the civil forfeiture is so clearly punitive as to be the “equivalent to a criminal proceeding”.

Applying the 89 Firearms test to in rem drug forfeitures under 21 U.S.C. 881(a)(6) and (a)(7), Justice Rehnquist had little trouble concluding that Congress’ choice of in rem procedures over in personam procedures demonstrated its clear intent that such proceedings be “civil”. As for the second prong, the Court acknowledged that, while civil forfeitures do “perhaps hav[e] some punitive aspects,” they also “serve important nonpunitive goals,” such as “encourag[ing] property owners to take care in managing their property and ensur[ing] that they will not permit that property to be used for illegal purposes.” This, it should be noted, is in direct contrast with the Austin Court’s analysis, which held that civil forfeiture was punitive even if, in part, it served remedial goals.

Regarding forfeiture of proceeds of illegal activity under 881(a)(6), all nine justices agreed that this “serves the additional nonpunitive goal of ensuring that persons do not profit from their illegal acts.” Justice Rehnquist noted that such forfeitures have not been regarded historically as punishment nor do they require proof of scienter. And although they do serve the goal of deterrence and, consequently, are tied to the commission of criminal activity, that is insufficient to constitute the ” clearest proof’ necessary to show that a proceeding is criminal,” he said, quoting the 89 Firearms language. The same reasoning supported the Court’s conclusion with respect to money laundering forfeitures pursuant to 18 U.S.C. 981(a)(1)(A).

Justice Anthony M. Kennedy, in his concurrence, argued that the Court was not readopting the legal fiction that a civil forfeiture action is brought solely against the “guilty” property and not against the owner. He acknowledged that forfeiture “punishes the owner by taking property involved in a crime.” However, because a property owner may be subject to civil forfeiture “whether or not he committed any criminal acts, it is not punishment for a person’s criminal wrongdoing,” and, therefore, is not a punishment for purposes of double jeopardy.

Calling the decision a “stunning disregard not only for modern precedents but for our older ones as well,” and referring to the Court’s earlier decision in Bennis v. Michigan, Justice John Paul Stevens said in a scathing and articulate dissent that “the Court has begun dismantling the protections it so recently erected” in the forfeiture arena. He could not understand how the Court could conclude that the owner is not punished by the loss of his residence, a fact-pattern never before approved in Supreme Court jurisprudence. He accused the majority of repudiating Halper, Austin and Kurth Ranch, because those cases presented an inconvenience for the Court.

Specifically, Justice Stevens said that the majority “today stands Austin on its head.” It is “difficult to imagine why the Framers of the two amendments would have required a particular sanction not be excessive, but would have allowed it to be imposed multiple times for the same offense.”

Justice Stevens was surprised by what he perceived as the Court’s selective reading of Austin with regard to 89 Firearms. “In reality, both cases rejected the monolithic view that all in rem civil forfeitures should be treated the same, and recognized the possibility that other types of forfeitures that could not properly be characterized as remedial’ might constitute an additional penalty for the commission of a criminal act.”

Justice Stevens attacked the Court’s conclusion that since the statute serves the purpose of deterrence, it helps illustrate that it is remedial rather than punitive in character. “If deterrence is a legitimate remedial rationale distinct from’ any punitive purpose, then the $130,000 fine in Halper could not be condemned as excessive because it plainly served a powerful deterrent function. … [This] simply ignores Halper without explanation or comment.”

Following a thorough analysis of the facts of the two cases and a review of the “divisive” issues debated in the lower courts, Justice Stevens lamented that the majority’s analysis would have authorized, during Prohibition, “the forfeiture of every home in which alcoholic beverages were consumed.” “Our recent decisions in Halper, Austin, and Kurth Ranch, dictate a far different conclusion.”

The Impact of Ursery

Putting it bluntly, Ursery is an intellectually dishonest and result-oriented decision. Justice Ginsburg’s statement at oral argument that “Austin is just one case” highlights the true purpose behind the decision: To put to rest “outrageous decisions” which, following Supreme Court precedent of some seven years, permit the property of “bad” people — most of whom, mind you, have never been so much as charged with a crime — to be seized and confiscated. Forfeiture is not “remedial” in nature nor does it serve “important nonpunitive goals”, the Court said. Ironically, as an example of such “nonpunitive goals”, Justice Rehnquist cited discouraging property owners from allowing their property to be used for criminal purposes. Sounds like deterrence. And deterrence evokes criminal activity and punishment, at least according to the Supreme Court three years ago, and Justice Stevens.

The majority seemed to distinguish punishing an individual with punishment.

Forfeiture is not a penalty, it said; it’s a forfeiture. And, the Court said, although there may be punitive aspects to it and, most definitely, it is punishment for purposes of the Eighth Amendment — the clause just a few lines below the Fifth Amendment’s Double Jeopardy Clause in the same document called the Bill of Rights — the Framers envisioned the same phrase to have two different and incompatible meanings. There is no coherence to this jurisprudence. The Court should have said candidly that it was deciding this case based on the facts and what it wanted the outcome to be.

Indeed, in his concurrence, Justice Kennedy acknowledged that forfeiture “punishes the owner by taking property involved in a crime.” It is this statement, however, read in conjunction with his impassioned dissents in prior forfeiture cases, including Bennis, that leads one to believe that Justice Kennedy’s thinking was irrational when he wrote the rest of his concurrence here.

Even Justice Antonin Scalia could not swallow the majority’s analysis regarding “punishment”. Vehement in his opposition to the government’s — and majority’s — characterization of forfeiture as remedial, Justice Scalia displayed his displeasure during oral argument. And although concurring with the majority in judgment, he stood by his long-held belief that the Fifth Amendment prohibits successive prosecutions, not multiple punishments. Since civil forfeiture is not a “prosecution”, Scalia argued, it does not fall within the scope of the Double Jeopardy Clause.

The New Test

Under the new test, the analysis becomes a case-by-case review, rather than looking at the nature and/or effect of the statute as a whole. Given that the facts of the two cases before the Court did not fall within the “criminal proceeding” exception provided by the majority, it is questionable what egregious fact pattern would constitute double jeopardy under the Court’s new standard of review.

Also, Justice Kennedy’s beliefs notwithstanding, the Ursery decision resurrects the ancient fiction that the property is guilty of the crime. The notion that the owner is not punished by the forfeiture of his property was slighted in Halper and firmly rejected in Austin. But, as those pesky silver screen gremlins might say, “it’s back”.

For now, Ursery will bring to a grinding halt the flood of double jeopardy challenges nationwide in the civil forfeiture context. Also, at least in the short term, expect to see the government’s use of civil forfeiture revert to “the way it used to be”, as one prosecutor put it. Unfortunately, the government has never really understood the problem with the double jeopardy issue.Following Ursery, Gerald E. McDowell, Chief of the Asset Forfeiture and Money Laundering Section for the Department of Justice, justified the decision by stating that “[w]ithout civil forfeiture, we could not confiscate the assets of drug cartels whose leaders remain beyond the reach of United States extradition laws and who cannot be brought to trial.”

Fine. At least the government no longer makes the flag-waving, benefiting society, argument of the past. But the issue is not — and never has been — “taking the profit out of crime.” It is punishing an individual twice for the same crime. Few would advocate permitting criminals to reap the benefits of their illegal activity. But that is what grand juries, indictments and criminal courts are for. The government may choose between a criminal forfeiture count in the indictment, with its higher burden of proof, or a civil forfeiture proceeding, with its substantially lower standard. But if the latter is chosen, a parallel criminal prosecution should be prohibited. This discussion, however, appears moot, at least in the lion’s share of situations. To the government, only the bottom line is important: dollars, and lots of them — a concept with which a majority of the Supreme Court appears to concur. It remains for Congress and the state legislatures to perform the difficult and unenviable task of reforming our existing laws and providing fairness and justice in the world of civil forfeiture.

Steven L. Kessler, an attorney in private practice in Manhattan and Adjunct Professor of Law at New York Law School, is the author of Civil and Criminal Forfeiture: Federal and State Practice (Clark Boardman Callaghan 1993 and 1996 Supp.), a three-volume treatise on the forfeiture laws of all 50 states and the federal statutes.

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