Forfeiture Defined and Explained
A forfeiture is to be divested or deprived of the ownership of something as a penalty for the commission of a crime. 10 min read
2. Instrumentality and Proportionality
3. Why Support Proportionality With Instrumentality?
4. How Is Forfeiture Determined?
5. Further Definition of Forfeiture
6. Forfeiture by Waste
- To be divested or deprived of the ownership of something as a penalty for the commission of a crime.
- To give up or surrender property (usually).
- Obs. A vassal surrendering his land, or other property, to his lord, after conviction in the lord's court.
In Case Law
In the Supreme Court's decision in U.S. v. James Daniel Good Real Property, 114 S.Ct. 492 ('93), the Court held that the seizure of real property for forfeiture under 21 U.S.C. S 881(a)(7) without prior notice and a hearing violates the owner's due process rights under the Fifth Amendment. The Court reasoned that the immobility of real property ordinarily removes any resort to exigent circumstances to justify dispensing with the proper preseizure notice and hearing. Id. at 503. Other courts have held that Good applies retroactively. See, e.g., U.S. v. Real Property Located at 20832..., 51 F.3d 1402, 1405 (9th Cir.'95).
Austin v. U.S., 113 S.Ct. 2801 ('93) held that civil forfeitures under 21 U.S.C. S 881(a)(7) serve in part as punishment and are therefore subject to the Eighth Amendment's prohibition on excessive fines. The Court, however, declined to enumerate the factors to be considered in determining whether a forfeiture is excessive, leaving the issue to be decided by the lower federal courts. Id. at 2812.
Instrumentality and Proportionality
However, generally some form of the two-pronged approach set out above has been followed. First, under the 'instrumentality' (or 'nexus') test, the forfeited property must have a sufficiently close relationship to the illegal activity. Second, under the 'proportionality' test, forfeiture of the property must not impose upon the owner a penalty grossly disproportionate to his offense.
The instrumentality or nexus test derives from Justice Scalia's concurring opinion in Austin. In rem forfeiture, he points out, has traditionally been based on the theory that the property is guilty of an offense, that is, it has been tainted by its unlawful use. 113 S.Ct. at 2813 (Scalia, concur). Therefore, for purposes of determining whether a civil forfeiture is an excessive fine, the initial inquiry is whether the property (or the assets for which it has been exchanged in whole or in part) has a close enough relationship to the offense to permit its confiscation to any extent.
As Scalia explains:'[S]tatutory in rem forfeitures have traditionally been fixed, not by determining the appropriate value of the penalty in relation to the committed offense, but by determining what property has been 'tainted ' by unlawful use, to which issue the value of the property is irrelevant. . . . The question is not how much the confiscated property is worth, but whether the confiscated property has a close enough relationship to the offense.' Id. at 2815; see Chandler, 36 F.3d at 363-6 (adopting Scalia's approach and rejecting any proportionality analysis).
Chandler notwithstanding, many courts, having found a proper 'taint,' have also applied a proportionality test to determine whether a forfeiture constitutes an excessive fine. The proportionality test compares the nature of the offense with the harshness, monetary or otherwise, of the forfeiture imposed on the owner. E.g., U.S. v. Premises Known as RR #1, 14 F.3d 864, 874-5 & n.10 (3d Cir.'94); Hall Street, 853 F.Supp. at 1400; Zumirez Drive, 845 F.Supp. at 732-3. It has its sense in the Supreme Court's Cruel and Unusual Punishments Clause jurisprudence, particularly Solem v. Helm, 463 U.S. 277 ('83), where it was expressed as '[t]he principle that a punishment should be proportionate to the crime.' Id. at 284. Forfeiture of real property can be 'grossly disproportionate' to the offense involved. E.g., Hall Street, 853 F.Supp. at 1400.
Although any forfeiture must meet the instrumentality test, its potentially harsh results, when applied alone, make courts hesitate to accept it as the sole test for applying the command of Austin. Many courts accept the proportionality test as a check on the instrumentality approach.
Why Support Proportionality With Instrumentality?
This position is supported by the following reasons. First, the instrumentality test rests on a sharp distinction between in personam (criminal) and in rem (civil) forfeitures, the importance of which was reduced by the Court's decision in Austin.See The Supreme Court, 1992 Term
Leading Cases, 107 Harv.L.Rev. 144, 212-3 ('93) ('1992 Term'). It made punishment the focus of attention. For purposes of the Excessive Fines Clause, 'the question is not . . . whether forfeiture . . . is civil or criminal, but rather whether it is punishment.' Austin, 113 S.Ct. at 2806.
The Court recognized that, like in personam punishments, in rem forfeitures also punish the property owner. Id. at 2812. As a result, 'the focal elements of a proportionality test--the severity of the claimant's offense and the worth of the forfeited property--become relevant to in rem forfeitures as well.' 1992 Term at 213. Only by adding a proportionality test is the 'excessiveness' of the fine determined by weighing both the in rem and in personam punishments against the seriousness of the crime. See U.S. v. Littlefield, 821 F.2d 1365, 1368 (9th Cir.'87); U.S. v. Busher, 817 F.2d 1409, 1415 n.10, 1416 (9th Cir. '87). While to many one's liberty is more precious than one's property, all would concede that a deprivation of both is worse than the loss of either alone.
Second, because the punishment in personam is fixed by statute and sentencing guidelines in many instances, it is fines that must not be 'excessive.' It is 'difficult to imagine, apart from a wholly arbitrary `ceiling' figure, how a fine could ever be found `excessive' without some analysis of the relationship between the penalty and the offense for which it is imposed.' In addition, the Excessive Fines Clause should be read to employ a proportionality standard as does the Supreme Court's interpretation of the Excessive Bail Clause, in which the Court reads 'excessive' to require proportionality between the amount of bail and the 'interest the Government seeks to protect,' i.e., the risk of flight. U.S. v. Salerno, 481 U.S. 739, 754 ('87); see also 1992 Term at 211; Eaddy, supra, at 722.
Third, and most persuasive, the majority in Austin specifically refused to endorse Justice Scalia's instrumentality test as 'the sole measure of an in rem forfeiture's excessiveness.' 113 S.Ct. at 2815 n.15. Rather, the Court suggested that other factors were also relevant: 'We do not rule out the possibility that the connection between the property and the offense may be relevant, but our decision today in no way limits the Court of Appeals from considering other factors in determining whether the forfeiture of Austin's property was excessive.' Id.
Fourth, the Court's decision in Alexander v. U.S., 113 S.Ct. 2766 ('93), suggests that a proportionality test under the Excessive Fines Clause may be required. In Alexander, the Court considered the defendant's Eighth Amendment challenge to criminal forfeiture of his adult bookstores and theaters resulting from his conviction for RICO violations. The Court remanded the case for an analysis under the Excessive Fines Clause, finding that the court of appeals had failed to distinguish between the defendant's excessive fines claim and his claim under the Cruel and Unusual Punishments Clause: '[T]he court lumped the two together, disposing of them both with the general statement that the Eighth Amendment does not require any proportionality review of a sentence less than life imprisonment without the possibility of parole. But that statement has relevance only to the Eighth Amendment's prohibition against cruel and unusual punishments.' Id. at 2775.
The Court did not explicitly state that proportionality review was required under the Excessive Fines Clause, but its direction to the court of appeals on remand implied as much: 'It is in the light of the extensive criminal activities which petitioner apparently conducted through this racketeering enterprise over a substantial period of time that the question of whether or not the forfeiture was `excessive' must be considered.' Id. at 2776.
Finally, proportionality analysis is especially appropriate in the civil forfeiture context because it is the sovereign that profits from such forfeitures. Scalia recognized this when he stated: 'There is good reason to be concerned that fines, uniquely of all punishments, will be imposed in a measure out of accord with the penal goals of retribution and deterrence. Imprisonment, corporal punishment and even capital punishment cost a State money; [whereas] fines are a source of revenue. . . . [I]t makes more sense to scrutinize governmental action more closely when the State stands to benefit.' Harmelin v. Michigan, 501 U.S. 957, 979 n.9 ('91) (Scalia, plurality opinion).
How Is Forfeiture Determined?
All assets seized by the Department of Justice go into its Asset Forfeiture Fund, which the Attorney General is authorized to use for law enforcement purposes. 28 U.S.C. S 524(c). This incentive enhances the need for close scrutiny of in rem forfeitures.
Forfeitures, in effect, impose an impressive levy on wrongdoers to finance, in part, the law enforcement efforts of both the state and national governments. To that end, and to that extent, crime does pay. For this very reason, the judiciary, both state and federal, should be alert to detect constitutionally proscribed injustices imposed on individual wrongdoers.
In sum, the concensus seems to be that a proportionality approach is appropriate to determine whether an in rem forfeiture, proper under an instrumentality test, violates the Excessive Fines Clause. See Hall Street, 853 F.Supp. 1399; accord U.S. v. One Parcel of Real Estate..., 872 F.Supp. 968, 973 (S.D.Fla.'94).
In determining proportionality, a court, bearing in mind any in personam punishment of the owner, should consider, inter alia, the following factors in determining the harshness of the forfeiture:
- The fair market value of the property.
- The intangible, subjective value of the property, e.g., whether it is the family home.
- The hardship to the defendant, including the effect of the forfeiture on defendant's family or financial condition.
Culpability of the Owner
The owner's culpability is also relevant because it is the owner who is punished by the forfeiture. Zumirez Drive, 845 F.Supp. at 736; see Austin, 113 S.Ct. at 2810-1. The culpability of the owner should include consideration of the following factors:
- Whether the owner was negligent or reckless in allowing the illegal use of his property.
- Whether the owner was directly involved in the illegal activity, and to what extent.
- The harm caused by the illegal activity, including:
- In the drug trafficking context--the amount of drugs and their value.
- The duration of the illegal activity.
- The effect on the community.
'The extent of the Government's financial stake in drug forfeiture is apparent from a 1990 memo, in which the Attorney General urged U.S. Attorneys to increase the volume of forfeitures in order to meet the Department of Justice's annual budget target . . . .' Good, 114 S.Ct. at 502 n.2. The 'war on drugs' has resulted in an enormous increase in federal asset forfeitures in the last decade. The federal government's annual net gain from all types of forfeitures grew from $27 million in 1985 to $531 million in 1992.
Between 1985 and 1993, the Department of Justice seized $3.2 billion worth of assets. These assets include 'homes, land, businesses, currency, cars, planes, yachts, and livestock.' Pollack. State and local governments also benefit from federal forfeitures.
In recent years, the Department of Justice has transferred $1.2 billion in cash and property to over 3,000 state and local agencies. The most recent GAO estimate ('92) puts the federal government's total forfeiture inventory at $1.9 billion. Civil forfeitures are thus a substantial source of revenue for both federal and local governments.
Further Definition of Forfeiture
Forfeiture is a punishment annexed by law to some illegal act or negligence, in the owner of lands, tenements or hereditaments, whereby he loses all his interest therein and they become vested in the party injured, as a recompense for the wrong which he alone or the Public together with himself, hath sustained.
Lands, tenements and hereditaments, may be forfeited by various means:
- By the commission of crimes and misdemeanors.
- By alienation contrary to law.
- By the non-performance of conditions.
- By waste.
Forfeiture for Crimes
By the Constitution of the U.S., Art.III, S.III, it is declared that no attainder of treason shall work corruption of blood or forfeiture, except during the life of the person attainted. And by the Act of April 30, 1790, it is enacted, that no conviction or judgment for any of the offenses aforesaid, shall work corruption of blood or any forfeiture of estate. As the offenses punished by this act are of the blackest dye, including cases of treason, the punishment of forfeiture may be considered as being abolished. The forfeiture of the estate for crime is very much reduced in practice in this country and when it occurs, the stater takes the title the party had and no more.
Forfeiture by Alienation
By the English law, estates less than a fee may be forfeited to the party entitled to the residuary interest by a breach of duty in the owner of the particular estate. When a tenant for life or years, therefore, by feoffment, fine or recovery, conveys a greater estate than he is by law entitled to do, he forfeits his estate to the person next entitled in remainder or reversion. In this country, such forfeitures are almost unknown and the more just principle prevails, that the conveyance by the tenant operates only on the interest which he possessed and does not affect the remainder-man or reversioner.
Forfeiture by Non-Performance of Conditions
An estate may be forfeited by a breach or non-performance of a condition annexed to the estate, either expressed in the deed at its original creation or impliedly by law, from a principle of natural reason.
Forfeiture by Waste
Waste is also a cause of forfeiture.
By forfeiture is also understood the neglect of an obligor to fulfill his obligation in proper time: as when one has entered into a bond for a penal sum, upon condition to pay a smaller at a particular day and he fails to do it, there is then said to be a forfeiture. Again, when a party becomes bound in a certain sum by a recognizance to pay a certain sum, with a condition that he will appear at court to answer or prosecute a crime and he fails to do it, there is a forfeiture of the recognizance. Courts of equity and now courts, of law, will relieve from the forfeiture of a bond; and upon a proper case shown, criminal courts will in general relieve from the forfeiture of a recognizance to appear.