Forfeiture reform bill H.R. 5212 does not go far enough

On July 28, 2014, Congressman Tim Walberg (R.MI) introduced H.R. 5212, the “Civil Asset Forfeiture Reform Act of 2014,” saying it would “restore the balance of power away from the government and back to protecting individual rights and due process.”  On 09/26/2014, it was referred to the Subcommittee on Crime, Terrorism, Homeland Security, and Investigations. gives it a 3% chance of being enacted.

Click here for the complete text of the bill.

Unfortunately this bill falls far short of restoring the balance of power or protecting individual rights and due process.  Unless this bill gets supplemented with some serious reforms — such as provisions that would close the loopholes in CAFRA that prevent CAFRA’s most important reforms from being implemented – I for one will not waste any time trying to get this passed.

Later, I will tell you about the reforms I would like to see in a real forfeiture reform bill (including the reforms of criminal forfeiture I talked about in yesterday’s blog) but today I will talk about what’s wrong with this bill and why the prognosis of a 3% chance of passing is probably accurate.

Features of H.R. 5212

1.  Raises the government’s burden of proof in civil forfeiture cases from a preponderance of the evidence to “clear and convincing evidence.”

That’s a good reform, but not as important as it sounds.  Most civil forfeiture cases never get to trial, so the burden of proof at trial is not that important an issue, in my opinion.  The reasons most civil forfeiture cases do not get to trial are: (a) by the time the claimant gets through the early stages of litigation, the expensive civil discovery process, and possibly fights off a motion for summary judgment, their attorney’s fee are so high they can’t afford to go through a civil trial, considering the relative value of the property; (b) many cases are won or lost on summary judgment; (c) the client tires and/or runs out of money to litigate after a year or two of litigation (or less) and/or desperately wants their property back and the ordeal to end, so they settle.  Most civil forfeiture cases settle for the above reasons. Even worse, many claimants lose by default because they can’t afford to hire a lawyer to fight the case.  Addressing these problems is much more important than tinkering with the burden of proof, though it would be nice to raise the burden of proof as well.

When the government can seize your car or bank account and keep it until the outcome of the case, it’s easy for the government to wear down the claimant and extort a settlement even if the claimants are squeaky clean.  That is what is fundamentally wrong with forfeiture.  In almost all civil cases in which the plaintiff is suing for money damages or recovery of property, the defendant keeps the property unless and until the plaintiff wins.  Giving the government as plaintiff the ability to instantly impoverish the adversary and deprive him of funds to fight back is the source of most of the problems with forfeiture, civil and criminal.

2.  Shifts the burden of proof on the “innocent owner defense” to the government.

H.R. 5212 amends the statutory innocent owner defense of 18 U.S.C. § 983(d) to substitute this language:  “Where a prima facie case is made for such a defense, the Government has 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.”

That’s certainly an improvement, but really it only moves the burden of proof by 2% — from claimant having the burden of proof by a preponderance of evidence (51%) to the government having to prove by a preponderance (51% for the government).

One thing that might do however, is allow claimants to move for summary judgment on the innocent owner defense.  Since they would no longer have the burden of proof, the court could grant summary judgment for the claimant if the government cannot show any evidence the claimant was not an innocent owner.

3.  Makes the following changes in the innocent owner defense

This bill would make the following changes in § 983(d)(2)(B)(I) – strikeouts indicate replaced language, redline text is replacement language.

For the purposes of this paragraph, ways in which a person may show that such person did all that reasonably could be expected may include demonstrating that such person, to the extent permitted by law the Government may show that the property owner should have had knowledge of the criminal activity by demonstrating that the property owner did not

(I) gave give timely notice to an appropriate law enforcement agency of information that led the person to know the conduct giving rise to a forfeiture would occur or has occurred; and

(II) in a timely fashion revoked or made revoke and make a good faith attempt to revoke permission for those engaging in such conduct to use the property or took take reasonable actions in consultation with a law enforcement agency to discourage or prevent the illegal use of the property.

The revision of the first paragraph really doesn’t make sense. If the government can’t prove the claimant actually knew about the criminal activity this allows the government to prove the claimant should have known of the criminal activity – by showing the claimant didn’t report the crime to law enforcement?  How could the claimant be expected to report the criminal activity to law enforcement if they didn’t know about it?  This is a complete tautology and proves nothing.

It looks like they made those changes because the government would now bear the burden of proving the claimant wasn’t an innocent owner, but this language is imprecise and creates an absurd standard.

4.  Requires that the government’s notice of forfeiture include “notice that the person receiving the notice may be able to obtain free or reduced rate legal representation under subsection (b).”

First of all there is no provision in the statute for “reduced rate legal representation.”  I’m not aware of any such thing existing under any applicable federal law. Perhaps  they are referring to the overburdened non-profit Legal Aid societies, who are generally not equipped to handle federal cases, and certainly have no familiarity with forfeiture. Secondly, all it does is require the government to notify claimants that they “may” be able to obtain free counsel.

In most civil forfeiture cases, indigent claimants do not qualify for court appointed counsel.

First, Section 983 does not apply to forfeiture cases brought under Customs statutes and certain other statutes excepted from some of  CAFRA’s reforms.  Even in CAFRA cases, the only indigent claimants with a right to court appointed counsel are those whose primary residence is seized.  Even in those cases — where the statute requires the court to appoint counsel, most courts don’t.

In one particularly nasty case in Fresno, when I tried to get the court to appoint counsel for a client who had run out of money, the court created an exception to this provision and refused to appoint counsel because my client was staying with her daughter at the time.  She was a retiree whose house and car were seized and whose bank accounts had been wiped out by an identity thief just before the forfeiture. She was forced by her financial predicament to move in with her adult daughter, son-in-law and child in a two bedroom apartment in another city.  The government had seized her car, so she had no transportation.  With her bank accounts wiped out she couldn’t pay the mortgage, taxes and utility bills on her meager Social Security check. Because she was renting out the house to cover the mortgage, the court said it was not her principal residence — even though it had been her principal residence for decades until the government seized everything.

When I filed the motion for court appointed counsel in the Fresno case, that court had never appointed counsel for a civil forfeiture litigant before.  That was in 2011 — eleven years after CAFRA was enacted.  In 2010 I had another case in Los Angeles where I had to move to withdraw and asked for court appointed counsel, and that court had never appointed counsel under that CAFRA provision either — in one of the busiest courthouses in the country!  Fortunately, the judge appointed counsel.

CAFRA also allows, but does not require, the court to appoint counsel in one other narrow class of cases – those where the claimant is being prosecuted federally for the forfeiture-triggering offense, and who already has court appointed counsel in the criminal case.  Because CAFRA does not require the judge to appoint counsel, it rarely happens.

It would be a cruel joke to give forfeiture claimants false hopes of court appointed counsel.  Instead real forfeiture reform should beef up the provisions for appointment of counsel so that the courts must appoint counsel, and it should not be limited to these narrow classes of cases.  If the government is going to take people’s property without paying for it, the least they can do is share some of the proceeds to pay for court appointed counsel for all indigent forfeiture victims, or those rendered indigent by the property seizures.  Without counsel they do not have a fighting chance to defend their property.

5.  Codifies a standard for determining proportionality which already exists under case law in some jurisdictions.

The proportionality defense was created by several Supreme Court cases interpreting the Excessive Fines clause of the Constitution.  CAFRA only codified it in a very general way, but did not change the higher Constitutional requirements. Some courts interpreting the three Supreme Court cases outlining the defense have already recognized these additional factors are relevant in determining whether a forfeiture would be a grossly excessive punishment.  It would help to have it codified, for the sake of claimains in jurisdictions not already recognizing these relevant factors.  However, those factors are pretty vague and could be more comprehensive.  For example, I would like to see the 9th Circuit’s clarification in U.S. v. Ferro, 681 F.3d 1105 (9th Cir. 2012) that the relevant factor is not the seriousness of “the offense” (which could be some other person’s culpability) but the seriousness of the claimant’s culpability for the offense.  A claimant who was not involved at all in the offense shouldn’t be punished more severely because someone else committed a very serious offense with the property.  It is not the property which is being punished, but the property owner.

6.  Requires DOJ’s Assets Forfeiture Fund reporting requirements by requiring DOJ to report how much was forfeited through civil as opposed to criminal forfeiture.

Big deal.  That doesn’t matter because innocent people can lose property through criminal forfeiture as well as civil forfeiture.  I would rather know how much was forfeited from people who were not charged with a crime.

7.  Requires DOJ to assure equitable sharing doesn’t violate state laws.

How would that be enforced? No judge supervises the distribution of equitable sharing revenue.  The general public never finds out the particulars of equitable sharing – how much money went to whom, and for which cases.  The public would never know when equitable sharing was used to circumvent state law, so ordering the DOJ to police this won’t do much.  Unless the bill required the DOJ to report this to Congress or another agency, it is unenforceable.

In short, this bill is just window dressing.  I’m not proposing we scrap the bill, though.  We need some co-sponsors who are willing to fight for real forfeiture reform, and have them amend the bill to add provisions that would put some teeth into forfeiture reform.  I will be making some suggestions in coming blogs.  Please write your Congressmen and ask them to sponsor a bill with more teeth in it.

Brenda Grantland

Brenda Grantland is a private attorney in Mill Valley California, with 30 years' experience primarily in asset forfeiture defense, as well as federal criminal appeals and victims rights and restitution. Brenda handles federal cases throughout the country, and frequently works with other attorneys or legal teams as a consultant or co-counsel.

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