Federal forfeiture reform legislation worth reviving in 2015

Thanks to the efforts of Senator Rand Paul (R-KY) and Representative Tim Walberg (R-MI-07), among others, the 113th congressional session saw the introduction of two significant bills aimed at reforming federal asset forfeiture practices. While neither Sen. Paul's bill nor Rep. Walberg's bill made it out of committee, both bills attracted bipartisan support, and both bills suggested meaningful reforms. Further, Rep. Walberg's bill managed to attract 20 co-sponsors in the brief run-up to the 2014 elections. As such, Americans for Forfeiture Reform endorses reviving both bills in the 114th Congress.

An overview of what both bills would have done, which legislators supported the bills, and where the bills (if reintroduced) might be improved:

The FAIR Act (S.2644, 113th Congress, 2013-14). Senator Rand Paul proposed three significant reforms to federal and state civil asset forfeiture practice.

Sponsor: Sen. Rand Paul (R-KY).

Co-Sponsor: Sen. Angus King (I-ME).

Proposed reforms:

  1. The bill attempted to curb federal participation in the perverse incentives driving asset forfeiture abuse by directing federal forfeiture proceeds to the Treasury department's general fund in lieu of the DOJ's asset forfeiture fund.

  2. It would have prevented state and local police from evading state laws governing the availability of civil forfeiture and the distribution of forfeiture proceeds (several states' police agencies, for instance, circumvent state laws directing forfeiture funds to education by having the DOJ adopt their forfeitures in a process called equitable sharing).

  3. The act would have increased the Government's burden of proof for a forfeiture, from a preponderance of the evidence standard to that of a clear and convincing evidence standard--the standard originally proposed for the Civil Asset Forfeiture Reform Act of 2000.

Introduced by Rep. Scott Garrett, H.R. 5502 (113th Congress, 2013-14) mirrored the proposals described above in Sen. Paul's FAIR Act.

Sponsor: Rep. Scott Garrett (R-NJ-05)

Co-Sponsors: Rep. Tim Walberg (R-MI-07); Rep. Tony Cárdenas (D-CA-29).


Civil Asset Forfeiture Reform Act of 2014 (H.R.5212, 113th Congress, 2013-14). Rep. Timothy Walberg's proposal sought to improve personal property rights by reforming federal asset forfeiture laws. While not as far-reaching as Senator Paul's FAIR Act, in some respects (Sen. Paul's bill would do more to end the incentives driving the abuse of civil forfeiture laws), the bill featured a number of laudable proposals.

Sponsor: Rep. Tim Walberg (R-MI-07).

Co-Sponsors: Rep. Dana Rohrabacher (R-CA-48); Rep. Renee L. Ellmers (R-NC-02); Rep. Mike Coffman (R-CO-06); Rep. Cynthia Lummis (R-WY-AL); Rep. Stevan Pearce (R-NM-02); Rep. Reid J. Ribble (R-WI-08); Rep. Rob Bishop (R-UT-01); Rep. Mike Conaway (R-TX-11); Rep. Dr. Paul Broun (R-GA-10)[1]; Rep. Curt Clawson (R-FL-19); Rep. Scott Garrett (R-NJ-05); Rep. Scott Tipton (R-CO-03); Rep. Steve Stockman (R-TX-36)[2]; Rep. Kerry Bentivolio (R-MI-11)[3]; Rep. Tom McClintock (R-CA-04); Rep. Keith Ellison (D-MN-05); Rep. Sam Farr (D-CA-20); Rep. Jim Moran (D-VA-08)[4]; Rep. Hank Johnson (D-GA-04); Rep. Tony Cárdenas (D-CA-29).

  1. Like the FAIR Act, Congressman Walberg's bill would have raised the Government's burden, for civil forfeitures, to that of a clear and convincing evidence standard.

  2. Congressman Walberg's bill sought to improve the innocent owner defense by altering who has the burden when the innocent owner defense is affirmatively raised, and by altering some of the language in the innocent owner defense. Under current law, the claimant has the burden of proving that they are an innocent owner by a preponderance of the evidence. If Rep. Walberg's bill were enacted, in its current incarnation, the Government would have the burden of proving that the claimant knew or reasonably should have known that the property was involved in the illegal conduct giving rise to the forfeiture.

  3. Rep. Walberg's bill would have clarified how courts should evaluate arguments that a forfeiture is disproportional to the offence giving rise to the forfeiture by inserting that "the court shall consider such factors as the seriousness of the offense, the extent of the nexus of the property to the offense, the range of sentences available for the offense giving rise to forfeiture, the fair market value of the property, and the hardship to the property owner and dependents." Currently, several courts only evaluate whether the forfeiture, if chiefly punitive, would be in excess of the criminal penalty range prescribed by Congress. If adopted, this would constitute a significant improvement over current law.

  4. Rep. Walberg's bill would have increased the reporting requirements for a forfeiture--always a good thing.

  5. Like Senator Paul's FAIR Act, H.R. 5212 attempted to rein in circumventions of state laws governing forfeitures and the distribution of forfeiture proceeds. The two bills, however, differed in approach and probable efficacy. H.R. 5212 would have amended 28 U.S.C. § 524(c) by inserting ‘‘(12) The Attorney General shall assure that any equitable sharing between the Department of Justice and a local or State law enforcement agency was not initiated for the purpose of circumventing any State law that prohibits civil forfeiture or limits use or disposition of property obtained via civil forfeiture by State or local agencies.’’ Adoption of such language would constitute an improvement over current law by expressing a congressional wish that the DOJ not use the equitable sharing program to facilitate circumventions of state laws governing asset forfeiture. Our worry, though, was that the language lacked any teeth to compel enforcement of its aim. First, if H.R. 5212's anti-circumvention language were adopted, the Office of the Attorney General could continue to knowingly facilitate circumventions of state and local asset forfeiture laws by pointing to any other purpose as the purpose for which federal adoption of the forfeiture was initiated. Because the federal government uniformly enjoys superior resources and greater expertise for prosecuting forfeitures, alternative explanations will always be available. Second, even if a party were able to prove that a forfeiture was adopted by a federal agency for the express purpose of circumventing a state law that prohibited civil forfeiture or limited the use or disposition of property, it's not clear that H.R. 5212 would provide the means for a party to recover the asset or to sue to stop the disbursement of an equitable sharing award. A better approach, we think, would be to adopt the FAIR Act's proposal of directing all federal forfeiture proceeds to the Treasury fund, disbanding the equitable sharing program, and giving Congress discretion over how to appropriate forfeiture proceeds. Barring that, a future incarnation of H.R. 5212 would be improved by removing authorization for the award of any equitable sharing if the forfeiture proceeds were either (a) derived from a civil forfeiture in a state where civil forfeiture is unavailable under state law or (b) where local law enforcement would be ineligible to receive forfeiture proceeds, but for the existence of the federal equitable sharing program--that appears, after all, to be the intent of H.R. 5212. Moreover, H.R. 5212 should (if the FAIR Act proposal is shunned) expressly grant standing to forfeiture claimants and stipulated forfeiture proceeds beneficiaries (such as the school districts of Missouri and North Carolina) to sue on theories that such circumventions are unlawful, if the parties can show direct harm.

  6. Unlike Senator Paul's FAIR Act, the bill would have still permitted most of the incentives driving asset forfeiture abuse by leaving in place the DOJ's Asset Forfeiture fund instead of directing proceeds to the Treasury, as the FAIR Act would do. That's unfortunate but may be more of a statement on what Representative Walberg thought could get passed than what Mr. Walberg thought would be a good idea (notably, Rep. Walberg co-sponsored the House version of the FAIR Act).

  7. H.R. 5212, would have required that the government notify potential claimants that they may be able to obtain free or reduced rate legal representation under 18 U.S. Code § 983(b), with its forfeiture notices. This is a decent start, however, Congress should do more:

                    a.) Congress should require that forfeiture notices fully inform potential claimants of what steps the potential claimant needs to take so as to gain a court-appointed lawyer under 18 U.S. Code § 983(b) and of the eligibility requirements.

                    b.) Congress should require that forfeiture notices inform potential claimants that they can petition the court for an award of their legal expenses if they substantially prevail in an adjudicated civil forfeiture action (28 U.S.C. §2465). 18 U.S.C. § 983(b) appointments are reserved for indigent claimants facing civil forfeitures against real property that is being used by the person as a primary residence and/or potential claimants facing a related criminal case who already have a court-appointed lawyer. Few potential claimants fit either criteria. Congress has, however, enacted legislation (the Civil Asset Forfeiture Reform Act of 2000 (the first "CAFRA")) to stimulate a market for lawyers to take civil forfeiture cases on the hopes of being awarded attorney fees and other legal expenses. [c.f. Amicus Curiae Americans for Forfeiture Reform in Support of Defendants-Appellants and Reversal of the Judgment Below, United States v. Moser, No. 13-55266 (9th Cir. Nov. 1, 2013), ECF No. 20).] These fee-shifts provide potential claimants with the possibility of finding lawyers who will take their cases at no cost to the claimant or at a reduced cost. Potential claimants should be made aware of this.

Moreover, Congress should want claimants to seek fee-shifts because they serve the public good. First, in assuring that more forfeiture claimants are competently represented, fee-shifts reduce the instances where the Government is able to profit from a claimant's ignorance of asset forfeiture procedure. Second, fee-shifts discourage the Government from pursuing bad cases because fee-shifts attach a substantial cost to losing an adjudicated civil forfeiture case. Third, fee-shifts encourage vigorous representation because the attorneys' pay hinges on prevailing. Fourth, fee-shifts make it more economically feasible for attorneys to offer pro bono legal services by providing some assurance that if the litigation does stretch out for years, and if their client substantially prevails, the attorney doesn't bear a crippling expense. Moreover, fee-shifts enable institutions like the ACLU and the Institute for Justice to defend against more injustices by defraying their costs when they prevail. All of these goods, however, go unrealized if the claimant, unaware of the promise of fee-shifts, forgoes consultation with an attorney because the potential legal expense appears to outweigh the value of the property seized.

                    c.) Congress should instruct the Executive branch to standardize forfeiture notifications. Currently, different agencies send out different instructions to potential claimants. That leads to confusion over how to respond to the instructions.

                    d.) Congress should instruct the Executive branch to make clearer the instructions for, and the consequences of, filing a "Petition for Remission and/or Mitigation" or filing a claim contesting the forfeiture. The current instructions are confusing and fail to adequately explain that filing a Petition for Remission and/or Mitigation, in lieu of a claim, concedes the potential claimant's right to have a judge or jury adjudicate the forfeiture action. Furthermore, the instructions obscure the reality that filing a Petition for Remission and/or Mitigation gives the agency (that has already declared its intent to forfeit the property) discretion to decide whether to grant the Petition for Remission and/or Mitigation. The upshot is that some potential claimants mistakenly file Petitions for Remission and/or Mitigation when they mean to file claims or don't understand the consequences of filing such petitions. 




[1] Rep. Dr. Paul Broun, having opted to (unsuccessfully) run for the U.S. Senate in lieu of the U.S. House of Representatives, will be replaced by member-elect Jody Hice (R-GA-10) in the 114th Congress.

[2] Rep. Steve Stockman, having opted to (unsuccessfully) run for the U.S. Senate in lieu of the U.S. House of Representatives, will be replaced by member-elect Dr. Brian Babin (R-TX-36) in the 114th Congress. Notably, Rep. Stockman also introduced H.R. 5847, an act that would have prevented federal agencies from participating in or benefiting "from any multiple-jurisdiction, equitable sharing, or shared civil asset forfeiture program with any State or local government, [or] accept[ing] or adopt[ing] property seized by a State or local government."

[3] Rep. Kerry Bentivolio, having lost the Republican primary to represent Michigan's 11th House district, will be replaced by member-elect Dave Trott (R-MI-11) in the 114th Congress.

[4] Rep. Jim Moran, having opted to retire from the U.S. House of Representatives, will be replaced by member-elect Don Beyer (D-VA-08) in the 114th Congress.

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