DD 3/5 (corrected) Forfeiting the Innocent InterestFORFEITURES; "INNOCENT OWNER" DEFENSE: U.S. Supreme Court holds, 5-4, that the "innocent owner" defense is not constitutionally compelled; in a proceeding in which a court retains equitable jurisdiction to prevent gross unfairness, the state may seize property that has served as an instrumentality in a crime even if the owner was totally unaware of and did not consent to the criminal activity. Bevis v. Michigan, 1996 U.S. Lexis 1565 (3/4/96) This remarkable holding appears to "roll back" the Supreme Court's recent more generous approach to property owners faced with forfeiture. Note that most, if not all, federal forfeiture provisions contain an "innocent owner" defense. But Michigan's does not. Here, the court holds that the forfeiture of an innocent owner's interest in property that is used in the commission of a criminal act is not "constitutionally significant."
The facts of the case add some additional poignancy. Husband and wife had recently purchased a car for $600. They had joint ownership of the car. Husband was convicted of violation of a local "red light" ordinance - having sex with a prostitute in an area in which such activities had been a problem in the past. The court forfeited both husband's and wife's interest in the car. The court viewed it as irrelevant under the statute that the wife had no knowledge of the husband's activities. She had consented to the husband's use of the car.
The trial court had emphasized that it viewed its authority as equitable, and took into account the fact that the couple had another car and that the value of the car was very low, and that "after expenses" there would be little left of the wife's interest anyway.
The Court here holds that the forfeiture of the car participates in a well established legal doctrine preceding even the founding of the republic - the notion that objects used in in the commission of a crime become "public nuisances" and are subject to "abatement" by the state. Most of the early cases involved impoundment of vessels used in smuggling. Indeed, the most important recent Supreme Court decision acknowledging the existence of this doctrine, Calero-Toledo, involved the forfeiture of a yacht which the Court here characterizes as having been used for smuggling. (It has been popular to describe Calero-Toledo as turning on the existence of one "roach" tucked away in the crew's quarters - but in any event it was clear that the owner/lessor of the yacht had no knowledge of the illegal activity.)
The case is hardly a ringing endorsement for either the result of the concept. In essence, the Court is saying that the concept has been around for a long time and the application of it is not "Constitutionally significant," whether or not it is a good idea. Two concurrences were necessary to join with the three judge plurality to make the outcome. In one of those concurrences, Justice Thomas wrote that sometimes bad things happen to innocent people, but that this is not always a Constitutional offence:
" This case is ultimately a reminder that the Federal Constitution does not prohibit everything that is intensely undesirable. As detailed in the Court's opinion and the cases cited therein, forfeiture of property without proof of the owner's wrongdoing, merely because it was "used" in or was an "instrumentality" of crime has been permitted in England and this country, both before and after the adoption of the Fifth and Fourteenth Amendments."
Justice Thomas' concurrence, particularly, emphasizes the equitable nature of the proceeding, which in his view ameliorates the most egregious dangers. Justice Stevens, in dissent, characterizes the plurality as authorizing the forfeiture of an ocean liner because one of the passengers "sinned," unbeknownst to the captain. The plurality opinion by Chief Justice Rhenquist specifically responds to that charge, indicating that the opinion does not so hold, and that it will address that hypothetical case when and if it arises. (Of course, this is effectively admitting that there is nothing in the opinion that denies the possibility posed in the hypothetical. Presumably these are the sorts of things that "equitable discretion" should avoid.
Comment 1: Isn't it long past time to get into the State legislatures and convince them that such sweeping criminal forfeiture statutes go too far? There should at least be an "innocent owner" exception, and probably a much clearer "instrumentality" definition in order to have a forfeiture policy that even begins to make sense. At present, owners of private residential rental property in many states, for instance, hold their property virtually at the whim of the local prosecutor, who could seize it on plausible grounds if a tenant engaged in telephone solicitation fraud, performed an act of prostitution, or planned a burglary, or conceivably even if someone just walked across the grounds with the burglary plans in his pocket. In the editor's uch fund in the editor's current county of residence, proceeds from forfeited property were placed into a fund controlled by the police and allegedly used to pay for expensive convention trips, tickets to fundraisers for police oriented charities, and other "fringe" activities without much public awareness. Whatever the legitimacy of the expenditures, isn't there a danger that a prosecutor will be tempted to abuse the forfeiture power in order to build such a "war chest?"
Comment 2: The case doesn't mention what happens to mortgagees. But there doesn't seem to be much basis to differentiate the interests of mortgagees from other "innocent owners."
Items in the Daily Development section generally are extracted from the Quarterly Report on Developments in Real Estate Law, published by the ABA Section on Real Property, Probate & Trust Law. Subscriptions to the Quarterly Report are available to Section members only. The cost is nominal. For the last five years, these Reports annually have been collated, updated, indexed and bound into the Annual Survey of Developments in Real Estate Law, volumes 1-5, published by the ABA Press. The Annual Survey volumes are available for sale to the public. For the Report or the Survey, contact Laprica Mims at the ABA. (312) 988 6233.
Items reported here and in the ABA publications are for general information purposes only and should not be relied upon in the course of representation or in the forming of decisions in legal matters. Accuracy of data and opinions expressed are the sole responsibility of the DIRT editor and are in no sense the publication of the ABA.