Forfeiture

The involuntary relinquishment of money or property without compensation as a consequence of a breach or nonperformance of some legal obligation or the commission of a crime. The loss of a corporate charter or franchise as a result of illegality, malfeasance, or NONFEASANCE. The surrender by an owner of his or her entire interest in real property, mandated by law as a punishment for illegal conduct or NEGLIGENCE. Under old ENGLISH LAW, the release of land by a tenant to the tenant's lord due to some breach of conduct, or the loss of goods or chattels (articles of PERSONAL PROPERTY) assessed as a penalty against the perpetrator of some crime or offense and as a recompense to the injured party.

Forfeiture is a broad term that can be used to describe any loss of property without compensation. A forfeiture may be privately arranged. For example, in a contractual relationship, one party may be required to forfeit specified property if the party fails to fulfill its contractual obligations. Courts are often called upon to resolve disputes regarding a forfeiture of property pursuant to a private contract. They may examine these cases to see whether they are fair and not the result of duress, deception, or other nefarious tactics.

The forfeitures that inspire the most discussion in the U.S. are those that are exercised by the state or federal government. Congress and state legislatures maintain statutes that allow law enforcement to seize property on suspicion of certain criminal activity. The property can be forfeited to the government upon conviction. In many cases, forfeiture to the government occurs without criminal prosecution.

The general concept of forfeiture in the United States can be traced to the English COMMON LAW, or court decisions. English courts recognized three types of forfeiture: ESCHEAT upon attainder, deodand, and statutory forfeiture. Under the doctrine of escheat upon attainder, a person's property reverted to the government upon that person's conviction for a felony or TREASON. This doctrine was premised on the theory that the sovereign government possessed a superior property interest.

The doctrine of deodand, or guilty property, allowed English courts to strip a person of property if the property was involved in a certain offense. This doctrine allowed a court to seize property regardless of the owner's culpability. For example, if a horse caused the death of a person, the owner would lose that horse, even if he had been completely blameless.

Statutory forfeiture, or forfeiture based on written laws, was the only kind of English forfeiture recognized in the American colonies. In other words, the colonies did not order the forfeiture of property unless it was required pursuant to a law passed by the legislature. However, the written laws in the colonies sustained the concept of deodand, and this concept survives to the present day.

Although forfeiture laws have existed in the United States since the colonial period, they have not always been favored. Early cases of forfeiture usually involved extraordinary circumstances, such as the seizure of pirate ships or warring ships. After the Civil War, forfeitures were used for tax-revenue violations, but government-imposed forfeiture was a rarity.

In 1970, Congress enacted the Comprehensive Drug Abuse Prevention and Control Act (21U.S.C.A. § 881), also known as the Forfeiture Act. The Forfeiture Act authorized federal prosecutors to bring civil forfeiture actions against certain properties that were owned by persons who had been convicted in federal court of dealing drugs. This act was seldom used because it limited forfeiture to the property of persons who had been convicted of participating in continuing criminal enterprises.

In 1978, Congress amended the Forfeiture Act to allow the forfeiture of anything of value used or that was intended to be used by a person to purchase illegal drugs (Psychotropic Substances Act of 1978 [Pub. L. No. 95-633, tit. III, § 301(a), 92 Stat. 3768, 3777 (codified as amended at 21 U.S.C.A. § 8821(a)(6))]). This change expanded the Forfeiture Act to allow the forfeiture of all proceeds and property that were traceable to the purchase of an illegal drug. Under the 1978 amendments, the federal government was authorized to proceed in rem against property. In rem forfeiture actions are taken against the property itself, not against its owner. In such proceedings, the guilt or innocence of the property owner regarding any criminal activity is irrelevant. Thus, under the Forfeiture Act, the government may remove property from persons it suspects of a crime, without ever charging them with a crime. The basis of this kind of forfeiture is traced back to the deodand doctrine of the English common law.

The Forfeiture Act was again amended in 1984, when the Comprehensive CRIME CONTROL ACT (Pub. L. No. 98-473, § 306, 98 Stat. 1837, 2050 [codified as amended at 21 U.S.C.A. § 881(a)(7)]) expanded it to authorize the in rem forfeiture of real property, or land and buildings. Under the 1984 act, federal authorities may seize any real property that is purchased, used, or intended to be used to facilitate narcotics trafficking. Although the LEGISLATIVE HISTORY of the 1984 act suggests that Congress intended real property forfeiture to apply only to drug manufacturing or storage facilities, courts have construed the act to allow the seizure of any real property, including fraternity houses, hotels, ranches, and private residences. Furthermore, courts have allowed real property forfeiture regardless of whether the property was used to store or manufacture drugs.

Forfeiture under the Forfeiture Act begins with either the constructive or actual seizure of property after a district court has issued a warrant. This warrant must be based on a reasonable belief that the property was used in a crime subject to forfeiture, but this reasonable belief can be based entirely on HEARSAY and CIRCUMSTANTIAL EVIDENCE. After the property is seized, the court holds it until the case is resolved.

Forfeiture proceedings may be either criminal or civil. If the government seeks forfeiture pursuant to criminal charges, it must establish the defendant's guilt BEYOND A REASONABLE DOUBT. If acquitted, the defendant is entitled to retrieve the seized property.

To initiate a civil forfeiture proceeding, the government need only show reasonable grounds to believe that the property was used in, or derived from, certain prohibited activities. If the defendant fails to rebut the showing of PROBABLE

The Forfeiture Act allows law enforcement officials to seize property used in or derived from illegal activities, such as purchasing or selling drugs. This New York lot is filled with cars forfeited by a Bronx drug dealer.
AP/WIDE WORLD PHOTOS

CAUSE with sufficient evidence, the government may keep the property. At trial, the government's standard in a civil forfeiture is proof by a PREPONDERANCE OF THE EVIDENCE, a lesser burden than a criminal case's REASONABLE DOUBT STANDARD.

The Forfeiture Act also allows law enforcement agencies to receive a portion of the proceeds from property forfeiture. Many legal scholars claim that this is a perversion of the police function because it detracts from the more compelling, traditional police function of fighting violent crime. These critics also argue that law enforcement agencies may become financially dependent on the very drug activity that they are supposed to curtail. Proponents of this budgetary scheme argue that drug activity is the source of much violent crime. They further note that the proceeds both benefit community programs and increase the capacity to fight violent crime.

The Racketeer Influenced and Corrupt Organizations Act (RICO) (18 U.S.C.A. §§ 1961 et seq.) is another vehicle for forfeiture in federal court. Enacted as title IX of the Organized Crime Control Act of 1970 (Pub. L. No. 91-452, 84 Stat. 922), RICO allows federal authorities to seize the property of persons engaged in a pattern of RACKETEERING. Persons who commit murder, KIDNAPPING, perjury, EXTORTION, ARSON, ROBBERY, BRIBERY, gambling, or narcotics offenses two or more times within a ten-year period thus may be forced to forfeit all property that is traceable to the crimes. In a 1984 amendment, Congress added the violation of federal and state OBSCENITY laws to the list of racketeering offenses.

The case against Ferris Alexander illustrates the way in which federal authorities exercise the forfeiture provisions of RICO (Alexander v. United States, 509 U.S. 544, 113 S. Ct. 2766, 125L. Ed. 2d 441 [1993]). Alexander, the owner of more than a dozen stores and theaters offering sexually explicit materials in Minneapolis, was charged in 1989 with operating a racketeering enterprise in violation of RICO. He was convicted based on the jury's determination that four magazines and three videotapes from his enterprises were obscene. The trial court sentenced Alexander to six years in prison, fined him $100,000, and ordered him to pay the cost of his prosecution, incarceration, and supervised release.

After the conviction, federal authorities sought the forfeiture of all assets related to Alexander's businesses. The jury made findings to identify precisely what was owned by Alexander. Based on those findings, the trial court ordered Alexander to forfeit $8.9 million in cash and inventory, ten bookstores valued at a total of $2 million, his interests in 18 other businesses, and proceeds from 15 other businesses. Law enforcement officers later burned the merchandise from Alexander's businesses.

Alexander appealed to the U.S. Court of Appeals for the Eighth Circuit, which affirmed. On appeal to the U.S. Supreme Court, Alexander argued, in part, that the forfeiture had been excessive. He also argued that the forfeiture was a form of PRIOR RESTRAINT, in violation of his free speech rights. According to the Court, the forfeiture did not violate Alexander's free speech rights because it did not prevent him from publishing non-obscene material in the future. However, the Court also held that the amount of the forfeiture should have been examined to see whether it violated the Eighth Amendment's PROHIBITION of excessive fines.

The U.S. Supreme Court remanded the case to the Eighth Circuit for review on the excessive-fines issue. The appeals court sent the case to the trial court. In March 1996, the district court affirmed the original forfeiture of approximately $8.9 million in property.

To many scholars, the Alexander case stands as a serious threat to FREEDOM-OF-SPEECH rights. Although Alexander's businesses dealt specifically in PORNOGRAPHY, the decision nevertheless puts artists who create material with a sexual content in danger of losing their property. Many legal analysts also maintain that the forfeiture was excessive when compared with the offenses for which Alexander was convicted. Proponents maintain that the forfeiture helped to create cleaner, safer city neighborhoods.

Most states maintain statutes allowing forfeiture upon conviction of certain crimes. For example, Volume 15 of the Maine Revised Statutes Annotated, section 5821, authorizes the forfeiture of prohibited drugs; materials related to prohibited drugs; property that is used to contain, defend, protect, guard, or secure prohibited drugs; firearms; and vehicles used in the violation of litter laws. Real property used in connection with illegal drugs is also subject to forfeiture under section 5821, with the exception of real property connected to marijuana offenses.

Maine does not provide for the forfeiture of property that is used for prostitution or the solicitation of prostitution, but many states do. For example, section 600.3801 of the Michigan Compiled Laws Annotated authorizes state law enforcement to seize property that has been used to support or to solicit prostitution. In the 1990s, the application of this statute inspired a challenge that went all the way to the U.S. Supreme Court (Bennis v. Michigan, 516 U.S. 442, 116 S. Ct. 994, 134 L. Ed. 2d 68 [1996]).

In Bennis v. Michigan, Tina B. Bennis brought suit against the state of Michigan after it seized the 1977 Pontiac that she owned jointly with her husband, John Bennis. Her husband had been arrested and convicted in Michigan state court of gross indecency in connection with his encounter with a prostitute. The county prosecutor filed a complaint alleging that the Pontiac was a public NUISANCE and subject to abatement, or forfeiture. An order of abatement was entered by the trial court. On appeal by Bennis, the appeals court reversed. On subsequent appeal by the state of Michigan, the Michigan Supreme Court also reversed. Bennis appealed to the U.S. Supreme Court.

The high court affirmed the decision of the Michigan Supreme Court. Bennis argued that the forfeiture was a violation of the DUE PROCESS CLAUSE of the FOURTEENTH AMENDMENT because she had not known that the Pontiac would be used for prostitution. The Court cited a long line of cases supporting the proposition that a person may be deprived of property if it has been put to criminal use, regardless of the owner's knowledge or participation.

The Court also dismissed Bennis's argument that the forfeiture violated the Fifth Amendment's Takings Clause, which generally requires compensation for property seized by the government. According to the Court, the government is under no obligation to reimburse a person for property it has seized pursuant to government authority other than the power of EMINENT DOMAIN. Ultimately, Bennis lost her ownership of the Pontiac, despite being innocent of any wrongdoing. In a strong dissent, Justice JOHN PAUL STEVENS argued that "neither logic nor history supports the Court's apparent assumption that [a person's] complete innocence imposes no constitutional impediment to the seizure of their property simply because it provided the locus for a criminal transaction."

Defendants have cultivated several defenses to forfeiture, and some have been successful. If the initial seizure is not preceded by notice and a hearing before a court, a defendant may argue that a forfeiture violates the Due Process Clause of the Fifth and Fourteenth Amendments. Despite the decision in the Alexander case, if a massive, estate-depleting forfeiture is disproportionate to the offense that gave rise to it, it may be found to violate the Excessive Fines Clause of the EIGHTH AMENDMENT.

In addition, Congress has enacted an "innocent owner" defense in civil drug forfeitures (21U.S.C.A. § 881(a)(6) [2000]). These are cases in which forfeiture is sought without prosecution of the owner. A defendant in a civil forfeiture case may invoke this defense if the property was connected with the illegal drugs without the owner's knowledge or consent.

Supporters of forfeiture laws cite the laws' effectiveness in fighting crime and stripping criminals of their resources. Many legal observers argue that the increasing use of government forfeiture is a flagrant violation of several constitutional rights. The state of forfeiture in contemporary law has been compared to "an Orwellian nightmare" (Aznavoorian 1995, 553), creating a climate that has "turned police agencies into bounty hunters, who, in their quest for cash, have harmed innocent citizens or those guilty of only minor offenses" (Henry 1994, 52). By the early 1990s, the federal government was prosecuting only 20 percent of the individuals from whom they had seized property through forfeiture. Congress finally responded by passing the Civil Asset Forfeiture Reform Act of 2000 (Pub.L. No. 106-185, 114 Stat. 202), which requires federal prosecutors to show a substantial connection between the property and the crime. In addition, it allows the property to be released by the district court pending final disposition of the case when the owner can demonstrate that possession by the government causes a hardship to the owner. Finally, the law permits property owners to sue the government for any damage to the property if they prevail in a civil forfeiture action.