United States v. Nichols

LOGAN, Circuit Judge,

dissenting:

I agree with the majority opinion that the language of the Comprehensive Forfeiture Act (CFA), 21 U.S.C. § 853, does not permit the exemption of attorney’s fees from otherwise forfeitable property. Congress appears to have intended to foreclose the use of such property for payment of attorney’s fees to the extent the Constitution permits. I also agree with the majority that the case is in a posture requiring us to decide the constitutional issue. I cannot accept the majority’s conclusion, however, that 21 IP.S.C. § 853 is constitutional insofar as it forecloses persons accused of a crime from hiring counsel to defend against the accusation.

In deciding the constitutional issues presented by this case, we cannot be carried away by our emotional revulsion to drug dealers and others who make crime a way of life. The same analysis that today permits a pretrial seizure and then a forfeiture of the property of drug dealers may be applied tomorrow to anyone who violates federal antitrust laws or laws prohibiting polluting the water or the air. Indeed, the reasoning of the majority would support a law forfeiting as of the date of the offense all of a person’s property, for his or her lifetime, for any offense, assuming it could survive an Eighth Amendment proportionality test.

The majority opinion admits the hostility of our Founding Fathers to the English practice of forfeiture of estate. But in doing so it maintains that the only constitutional restriction on criminal forfeiture is in the admonition in Article III, § 3, that “no Attainder of Treason shall work Corruption of Blood, or Forfeiture except during the Life of the Person attained.” This provision standing alone clearly is not broad enough to prohibit what Congress has done by enacting the CFA. Thus, the majority and some other courts have permitted Congress, by the device of vesting property rights in the government as of the date the crime was committed, to prevent the person who would otherwise be the owner under our law (common law owner) from any use of the property until and unless that person is found innocent of the crime or the property is found not to be derived from the crime, not used or intended to be used in facilitating the crime or, for persons found guilty of engaging in a continuing criminal enterprise, not property “affording a source of control over” the enterprise. 21 U.S.C. § 853(a). Because the government’s ownership attaches at the moment of the crime, the government can seize the property even before the common law owner is formally accused. By alleging that all of the common law owner’s property is subject to forfeiture, the government can deprive him or her of use of any property to provide for a defense against the criminal charge. Presumably the government can prevent expenditures necessary to sustain life itself.

The majority here and the en banc majority of the Fourth Circuit, see United States v. Caplin & Drysdale, Chartered, 837 F.2d 637, 640 (4th Cir.1988), admit that the key to their analysis is the use of the relation-*1510back doctrine. The CFA employs this legal fiction to prioritize the government’s claim and thereby legitimize a freeze of the defendants’ use of their property at the time or even before the filing of an indictment. See 21 U.S.C. § 853(e). Such a freeze is thought necessary to protect the government’s inchoate interest in the property, should the property be found forfeitable, against pretrial dissipation or conveyence by the defendants. Thus, the majority and the Fourth Circuit would elevate the government’s status at the time of indictment to that of at least a coequal competitor to the common law owner, akin to a bank fighting with an accused robber over money allegedly stolen from the bank, or to a creditor fighting a debtor over property in which the creditor claims a lien. See Caplin & Drysdale, 837 F.2d at 640.

I see a significant difference between the situation at bar and the examples posed as analogous by the majority. The government’s interest in the property allegedly subject to criminal forfeiture is of a different nature than the interest of a bank seeking to recover stolen currency or of a creditor claiming a lien against a debtor’s property. The latter claims are based upon traditional common law property ownership concepts embedded in the Constitution.1 When a bank and an accused robber are fighting, even over funds that have changed form after the robbery, both are claiming to be the owners under traditional common law property concepts. When a creditor and debtor are litigating over property alleged to be subject to a lien, the creditor is asserting that it advanced consideration which created a debt under the traditional common law property system, and that either the debtor or the law has given the creditor a lien enforceable against the property to secure repayment of the debt. The government’s jeopardy assessment for back taxes is not essentially different from the ordinary creditor-debtor situation.

The government’s interest in forfeited property, on the other hand, does not derive from a common law ownership right to the property, for the government neither owned the property before the crime2 nor gave value for the property as a creditor or purchaser does. Forfeiture, as an exception to the Fifth Amendment’s requirement that property shall not be taken for public use without “just compensation,” is grounded entirely upon public policy. Criminal forfeiture is a penalty, to prevent a criminal from profiting from crime or *1511from retaining the means to commit more crimes, or it is in the nature of a fine, to punish the criminal. See, e.g., at 1487; United States v. Busher, 817 F.2d 1409, 1413 (9th Cir.1987) (forfeiture under RICO “is clearly ‘punishment’ as that term is used in the eighth amendment”); see generally United States v. D.K.G. Appaloosas, Inc., 829 F.2d 532, 543-44 (5th Cir.1987) (distinguishing criminal forfeiture, which is intended to be primarily penal in nature, from civil forfeiture, which is primarily remedial). The property law jargon borrowed by Congress — that “title vests” in the government on the date the crime is committed — does not alter the essentially penal basis and justification for the forfeiture. In my view, this distinction between the desire to punish and the protection of legitimately pre-existing property rights demands treating the property to which the government claims a right of forfeiture as different from the property of competing contestants who assert claims as rightful owners under common law property concepts.

Although the cases cited by the majority have gone far to uphold the relation-back doctrine, I know of no case until the recent CFA decisions in which a court has directly considered whether forfeiture might be limited by the Sixth Amendment right to counsel. Miller’s Executor v. United States, 78 U.S. (11 Wall.) 268, 20 L.Ed. 135 (1870), cited by the majority to support the government’s power to impose criminal forfeiture, upheld Civil War forfeiture acts only under the war powers of Congress; the Court conceded that if the acts were intended to punish crimes and were thus “municipal regulations only, there would be force in the objection that Congress has disregarded the restrictions of the 5th and 6th amendments of the Constitution.” Id., 78 U.S. (11 Wall.) at 304, 20 L.Ed. at 144.

Unlike the forfeiture law in Miller’s Executor, the CFA rests squarely and solely on the power of municipal regulation. The government’s right to forfeiture is not based upon an explicit provision of the Constitution, but only upon Congress’ power to prescribe criminal laws. Balanced against that are well-established and clearly enunciated constitutional rights: The accused has explicit Fifth Amendment rights to due process3 and, as applicable to this case, Sixth Amendment rights to counsel.

The government’s interests justifying forfeiture of a common law owner’s property are only to deprive that person of the fruits of criminal activity, to confiscate the person’s means to commit further crime, and to punish. Pretrial seizure is justified only to prevent dissipation or concealment.4 Balanced against these interests is the accused’s explicit Sixth Amendment right to counsel. This right includes the right “to secure counsel of his own choice.” Powell v. Alabama, 287 U.S. 45, 53, 53 S.Ct. 55, 58, 77 L.Ed. 158 (1932); see also United States v. Monsanto, 836 F.2d 74, 80 (2d Cir.1987) (“right to counsel includes a right to privately retained counsel of choice”); Linton v. Perini, 656 F.2d 207, 209 (6th Cir.1981), cert. denied, 454 U.S. 1162, 102 S.Ct. 1136, 71 L.Ed.2d 318 (1982) (same). There can be no doubt that the normal understanding of the authors of the Sixth Amendment must have been that common law owners of property could use their property to hire counsel of their choice to defend them on a criminal charge. Further, the accused is entitled to a presumption of innocence, which in all normal cir*1512cumstances would presuppose a right to use personal resources to defend against the charge. See United States v. Thier, 801 F.2d 1463, 1476 (5th Cir.1986) (Rubin, J., concurring).

The result of the majority’s decision is that the government, at the time of filing a charge, or before, may seize an accused's assets, rendering that person a pauper dependent upon appointed counsel whose fees are limited to whatever amount the government authorizes.5 Surely in such a case there is a drastic departure from the Sixth Amendment’s original contemplation of the right to counsel. The majority takes solace in the fact that the Supreme Court has held that appointed counsel, paid under the Criminal Justice Act, are constitutionally adequate for indigent defendants. But that holding rests on an uneasy compromise of an ideal, required by the fiscal realities of government budgets and made minimally acceptable by the fact that most crimes are simpler than those now before us.

The majority apparently believes that permitting defendants to use funds subject to forfeiture somehow allows them to benefit from criminal activity; that payment to retained counsel who will cost more than the government would pay for an indigent’s appointed counsel is an unlawful burden upon the government’s interest in the property. In my view, equating the ability to raise a defense to a “benefit” of crime is like considering the right to a jury trial a benefit of being accused of murder. But even if we accept the majority's characterization, such a benefit is justified to preserve what I believe are important constitutional concerns with the proper role of defense counsel in our adversary system of justice. Thus, I agree with Judge Jenkins’ conclusion below, see United States v. Nichols, 654 F.Supp. 1541, 1558 (D.Utah 1987). See also the dissents of Judge Oakes in Monsanto, 836 F.2d at 86-87, of Judges Phillips, Winter, Sprouse and Ervin in Caplin & Drysdale, 837 F.2d at 652, and Judge Rubin’s concurrence in Thier, 801 F.2d at 1475-77.

I do accept that the government has a sufficient interest under the CFA and other forfeiture statutes to prevent pretrial disposition of property that is the alleged fruit of a crime for purposes other than retaining counsel. I agree that the government has sufficient interest to prevent payment of more than reasonable fees. Further, I believe that if the accused has nonforfeitable assets from which to pay counsel, he or she may be required to use those funds instead of the frozen assets. But when the assets in which the government claims a forfeited interest are the only property available to pay reasonable fees of defense counsel of the accused’s choice, surely the explicit Sixth Amendment rights should outweigh the government’s interest in the forfeiture of those sums, regardless of the eventual outcome of the trial.

For the reasons stated, I dissent.

. The original text of the Constitution does not mention an "approved" system of property ownership except in the most oblique and offhand manner: references to Congress' power to give authors and inventors the exclusive right for a limited time to their writings and discoveries, Art. I, § 8; the prohibition on state laws impairing the obligation of contracts in Art. I, § 10; extending judicial power of federal courts to citizens "claiming Lands under Grants of different States,” Art. Ill, § 2; the aforementioned "Forfeiture" reference in Art. Ill, § 3; and Congress’ power to make rules respecting "Property belonging to the United States,” Art. IV, § 3. It is clear, however, that the drafters of the Constitution assumed the fee ownership system developed in English law applied in the United States, and that the Constitution intended to recognize and approve these notions of property ownership. The Bill of Rights makes this explicit: the Third Amendment states that no soldier should be quartered during peacetime in any house "without the consent of the Owner”; the Fourth Amendment refers to the right of "people to be secure in their persons, houses, papers, and effects” against unreasonable searches and seizures; and especially the Fifth Amendment recognizes the right of private ownership by declaring that no person shall "be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation." The Fourteenth Amendment, applicable to the states, repeats the prohibition on deprivation "of life, liberty or property, without due process of law.”

. In 1066 William the Conqueror regarded himself as the personal owner of all of the land in England; this was the basic concept of the feudal system. He thereafter granted vast tracts to his tenants-in-chief, not as owners but literally as tenants who had a continuing relationship with their lord, the King. The tenants had to render continuing services to satisfy the terms of their tenancy, not the least of which were to provide the armies to support the throne. See A. Casner & W. Leach, Cases and Text on Property 251-52 (1951). Forfeiture of estates for treason arose out of this; the land reverted to the King. Id. at 257. No similar notion of the government reasserting title to property it always owned underlies the forfeitures at issue in the case before us.

. The majority declines to consider whether the statutory scheme of ex parte restraining orders complies with due process, because defendants did not explicitly raise a due process argument in support of the district court’s order. See at 1491 n. 4. I accept that disclaimer even though the majority opinion later comes close to approving the procedure. Id. at 1504-05. I do not agree that United States v. Musson, 802 F.2d 384 (10th Cir.1986), which involved a mere restriction on alienation, resolves all of the due process concerns. See United States v. Monsanto, 836 F.2d 74 (2d Cir.1987); United States v. Thier, 801 F.2d 1463 (5th Cir.1986).

. Defendants here did not challenge the seizure of their property on Fourth Amendment grounds. It does appear, however, that they could present a colorable argument that the magistrate's issuance of an order restraining the defendants’ use of property, solely upon the prosecution’s presentation of an indictment, constituted an unconstitutional seizure of defendants’ property. See United States v. Thier, 801 F.2d 1463, 1476 (Rubin, J., concurring); see also United States v. Rubio, 727 F.2d 786, 795 (9th Cir.1983).

. An accused who has no funds as a practical matter will not be able to hire a lawyer. A retained lawyer who takes money from a person accused in a forfeiture case has no defense under the majority’s holding if the money paid the lawyer is deemed forfeitable property. Further, assignment of an interest in funds the government seeks to forfeit would seem to be improper as legal ethics forbid a lawyer from taking a criminal case on a contingency basis. A.B.A. Model Code of Professional Responsibility DR 2-106(C); A.B.A. Model Rules of Professional Conduct Rule 1.5(d)(2).