United States v. Kaley

[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS
FILED
FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
________________________ ELEVENTH CIRCUIT
AUGUST 18, 2009
No. 07-13010 THOMAS K. KAHN
________________________ CLERK

D. C. Docket No. 07-80021-CR-KAM

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

versus

KERRI L. KALEY,
BRIAN P. KALEY,

Defendants-Appellants.

________________________

Appeal from the United States District Court
for the Southern District of Florida
_________________________

(August 18, 2009)

Before TJOFLAT, MARCUS and WILSON, Circuit Judges.

MARCUS, Circuit Judge:
 In this case, a grand jury sitting in the United States District Court for the

Southern District of Florida returned an indictment charging the defendants, Brian

Kaley and Kerri Kaley, with conspiracy to transport stolen property, transportation

of stolen property, obstruction of justice, and money laundering. The indictment

also included a criminal forfeiture count. After the return of the indictment, the

government, ex parte, obtained a protective order enjoining the Kaleys from

encumbering the property listed in the forfeiture count. The Kaleys moved the

district court to vacate the order so they could use the restrained assets to retain

counsel of their choice, and they requested that the district court hold an

evidentiary hearing to determine whether there was probable cause to believe that

the property was forfeitable. The district court declined to hold a hearing and

denied the motion to vacate the protective order. The Kaleys now appeal these

rulings. After thorough review, we reverse and remand for further proceedings

consistent with this opinion.

I.

In January 2005, Kerri Kaley, then a sales representative with Ethicon Endo-

Surgery, was informed she was the target of a grand jury investigation in the

Southern District of Florida. Kaley was suspected of stealing prescription medical

devices (“PMDs”) from hospitals and then selling them on the black market.

2
Kaley retained Howard Srebnick of Black, Srebnick, Kornspan & Stumpf, P.A. as

her counsel in the investigation. Kaley’s husband, Brian Kaley, who was also

under investigation was initially represented by Howard Srebnick and later retained

a separate attorney, Susan Van Dusen, to avoid a potential conflict of interest.

Together, the two attorneys informed the Kaleys that their legal fees to take the

case through trial would be approximately $500,000. To obtain funds to pay those

fees, the Kaleys applied for and obtained a home equity line of credit of $500,000

on their residence and used the proceeds to buy a certificate of deposit (“CD”).

On February 6, 2007, the grand jury returned a seven-count indictment

against the Kaleys.1 Count One charged a conspiracy to transport PMDs in

interstate commerce while knowing them to have been stolen, in violation of 18

U.S.C. § 371. Counts Two through Six charged five substantive § 2314 offenses,2

and Count Seven charged obstruction of justice, in violation of 18 U.S.C. §

1512(b)(3). The indictment also sought criminal forfeiture of all property traceable

to the § 2314 offenses, including the CD, and a money judgment in the amount of

1
The indictment was also returned against Jennifer Gruenstrass, whose case has since
been severed from the Kaleys’.
2
Section 2314 provides that “[w]hoever transports, transmits, or transfers in interstate or
foreign commerce any goods, wares, merchandise, securities or money, of the value of $5,000 or
more, knowing the same to have been stolen, converted or taken by fraud” shall be subject to
criminal liability. 18 U.S.C. § 2314.

3
$2,195,635.28.3

On February 7, 2007, the Government moved the district court ex parte for a

protective order restraining the Kaleys from transferring or otherwise disposing of

the property listed in the forfeiture count, and a magistrate judge, concluding that

the indictment established probable cause that the property was “traceable to” the

Kaleys’ commission of the § 2314 offenses, granted the motion the same day.4

The next day, the Government filed a notice of lis pendens against the Kaleys’

residence.

On March 5, 2007, the Kaleys moved the district court to vacate the

February 7th protective order. They contended that the order prevented them from

retaining counsel of their choice in violation of their Sixth Amendment right to the

3
The forfeiture was authorized by the civil forfeiture statute, 18 U.S.C. § 981(a)(1)(C),
which provides for forfeiture of property actually “traceable to” the specific crime alleged --
here, conspiracy to violate and violations of § 2314. Such forfeiture can become part of a
criminal sentence pursuant to 28 U.S.C. § 2461(c), which provides in pertinent part that “[i]f the
defendant is convicted of the offense giving rise to the forfeiture, the court shall order the
forfeiture of the property as part of the sentence in the criminal case.” The “traceable to”
language limited the United States to forfeiture of $140,000 of the Kaleys’ assets.
4
The Government based its motion on § 413 of the Controlled Substances Act, 21 U.S.C.
§ 853, which provides that “[u]pon application of the United States, the court may enter a
restraining order or injunction, require the execution of a satisfactory performance bond, or take
any other action to preserve the property [listed in the forfeiture count].” That section of the
Controlled Substances Act applies to the Kaleys pursuant to 28 U.S.C. § 2461(c). See supra note
3.

4
representation of counsel. A magistrate judge heard this motion too on April 6th 5

and sustained the protective order; however, he limited the protective order’s scope

(insofar as it applied to the CD) to $140,000.6

On April 10, 2007, the grand jury returned a superseding indictment. This

indictment replicated the first seven counts of the first indictment and added an

additional count -- a charge that the Kaleys had conspired to launder the proceeds

of the § 2314 offenses, in violation of 18 U.S.C. § 1956(h).7 This indictment also

sought the criminal forfeiture of the CD and the Kaleys’ residence on the theory

that those assets were “involved in” the Kaleys’ commission of the § 1956(h)

offense.8 On April 17th, the Kaleys renewed their motion to vacate the February

7th protective order (as amended by the order of April 6th), and expressly

5
The motion was referred to a second magistrate judge, who handled the case in place of
the initial magistrate judge. This magistrate judge heard the Kaleys’ motion during a telephone
conference call, which was not recorded or transcribed.
6
At the same time, the magistrate judge scheduled a hearing for April 16, 2007 on the
Kaleys’ motion to vacate the protective order in its entirety.
7
Section 1956(h) provides that “any person who conspires to commit any offense
defined in this section or § 1957 shall be subject to the same penalties as those prescribed for the
offense the commission of which was the object of the conspiracy.”
8
By adding the money laundering conspiracy to the indictment, the grand jury enabled
the United States to utilize the criminal forfeiture statute, 18 U.S.C. § 982(a)(1), which
authorizes forfeiture of assets “involved in”-- rather than “traceable to the proceeds of”-- the
offense.

5
requested a pretrial, post-restraint evidentiary hearing.9

The magistrate judge heard the motion on April 27th. He questioned

whether the indictment alone provided probable cause to restrain the defendants’

assets and ordered the prosecutor to submit an affidavit supporting probable cause.

The prosecutor responded by filing, in secret and under seal, an affidavit executed

by the FBI case agent.

On May 1, 2007, the magistrate judge issued two orders. In the first order,

he found probable cause -- based on the indictment and the case agent’s affidavit --

that the CD and the Kaleys’ residence were “involved in” the violations of §

1956(h) and § 2314. In the second order, he amended the February 7th protective

9
In addition to moving the district court to vacate the protective order, the Kaleys
moved the district court to strike from the indictment the allegation seeking forfeiture under 18
U.S.C. § 982(a)(1) on the ground that the allegation was “vindictive,” in retaliation for the
Kaleys having moved the court on March 5th to vacate the February 7th protective order. The
Kaleys also moved the district court to strike from the indictment the allegation seeking
forfeiture under 18 U.S.C. § 981(a)(1)(C) on the ground that § 981(a)(1)(C) could not be applied
without violating the Ex Post Facto Clause. The district court denied both motions.

In their blue brief, the Kaleys ask us to review these two rulings as well, which are not
independently appealable, under the doctrine of pendent appellate jurisdiction. “Under the
pendent appellate jurisdiction doctrine, we may address [such] orders [only] if they are
‘inextricably intertwined’ with an appealable decision or if ‘review of the former decision [is]
necessary to ensure meaningful review of the latter.’” Hudson v. Hall, 231 F.3d 1289, 1294
(11th Cir. 2000) (quoting Summit Med. Assoc., P.C. v. Pryor, 180 F.3d 1326, 1335 (11th Cir.
1999)) (quotation marks omitted). However, the two rulings are not inextricably intertwined
with the district court’s ruling denying the Kaleys’ motion for a pretrial hearing on the validity
of the February 7th protective order; nor is review of those rulings necessary to ensure
meaningful review of the district court’s June 25, 2007 order denying the pretrial, post-restraint
hearing the Kaleys are seeking. We, therefore, decline to exercise our pendent appellate
jurisdiction.

6
order to include within its scope the full value of the CD and the Kaleys’ residence.

On May 2nd, the magistrate judge issued a third order denying the Kaleys’ motion

to vacate the protective order and to hold a pretrial, post-restraint evidentiary

hearing. In that order, the magistrate judge concluded that “no post-restraint

hearing was necessary until trial.”

On May 7, 2007, the Kaleys appealed the magistrate judge’s May 1st and

2nd orders to the district court. On June 25th, the district court affirmed the

magistrate judge’s issuance of the protective order, concluding that the case agent’s

affidavit “demonstrated probable cause to believe that the Defendants’ residence

was ‘involved in’ the money laundering offense charged in the superseding

indictment, and that all but $63,007.65 of the funds used to obtain the CD were

‘traceable to’ the residence.” The trial court also affirmed the magistrate judge’s

denial of a pretrial evidentiary hearing, concluding that postponing the hearing

until the trial itself satisfied due process. On June 27, 2007, the Kaleys lodged this

interlocutory appeal, challenging the district court’s decision.

II.

This Court has jurisdiction to entertain appeals of “[i]nterlocutory orders of

the district courts . . . granting, continuing, modifying, refusing, or dissolving

injunctions.” 28 U.S.C. § 1292(a)(1). Protective orders designed to preserve

7
forfeitable assets, like the one in this case, qualify as injunctions for the

jurisdictional purposes of § 1292(a)(1). United States v. Monsanto, 491 U.S. 600,

602-06 (1989) (exercising interlocutory jurisdiction to review a pretrial restraining

order, which was granted ex parte for the purpose of preserving forfeitable assets

prior to forfeiture); Roberts v. United States, 141 F.3d 1468, 1471 (11th Cir. 1998)

(stating that denial of a motion to vacate a protective order over forfeitable assets

would be reviewable as an interlocutory order in the appellate courts under §

1292(a)(1)). Such protective orders are like injunctions because they are “directed

to a party, enforceable by contempt, and designed to accord or protect some or all

of the substantive relief sought by the complaint in more than temporary fashion.”

16 Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice

and Procedure § 3922, at 65 (2d. ed. 1996) (quotation marks omitted). We,

therefore, review under § 1292(a)(1) the district court’s order denying the Kaleys’

motion to vacate the protective order and denying them a pretrial evidentiary

hearing.

III.

With our jurisdiction settled, we address the main issue raised today: the

Kaleys’ argument that they have a due process right to a post-indictment, pretrial

evidentiary hearing on the legality of the restraints on their property especially

8
needed for the purpose of retaining counsel of their choice. In doing so, we are

controlled by our decision in United States v. Bissell, 866 F.2d 1343 (11th Cir.

1989). Bissell presented the same argument and this Court clearly held that a

defendant whose assets are restrained pursuant to a criminal forfeiture charge in an

indictment, rendering him unable to afford counsel of choice, is entitled to a

pretrial hearing only if the balancing test enunciated in Barker v. Wingo, 407 U.S.

514 (1972), is satisfied. Id. at 1353. Thus, our task in this appeal is to decide

whether the district court correctly interpreted and applied the Barker balancing

test. After thorough review, we conclude that the district court incorrectly applied

that test, and we, therefore, reverse and remand the case for further consideration

consistent with this opinion.

In Bissell, a grand jury indicted each of the defendants with one or more of

the following offenses: violating the Racketeer Influenced and Corrupt

Organizations Act (“RICO”), 18 U.S.C. § 1961 et seq.; engaging in a Continuing

Criminal Enterprise, 21 U.S.C. § 848; and conspiring to import cocaine, 21 U.S.C.

§ 846. Bissell, 866 F.2d at 1347. The indictment contained criminal forfeiture

counts pursuant to 21 U.S.C. § 853, in which the grand jury alleged that all assets

derived from, or devoted to, violations of federal narcotics laws were subject to

forfeiture upon the defendants’ convictions. Id. Following the return of the

9
indictment, the Government seized the defendants’ assets pursuant to a warrant it

obtained from the district court ex parte pursuant to 21 U.S.C. § 853(f). Id. No

pretrial, post-indictment motion was made to the district court contesting the

legality of the court-ordered restraints and no hearing was sought. Id. at 1347–48,

1353.

On appeal, the Bissell defendants argued, among other things, that they were

entitled under the Fifth Amendment’s Due Process Clause to a pretrial hearing at

which the government must demonstrate that the forfeiture was justified and that

the failure to provide that hearing fatally tainted their convictions. Id. at 1352. A

panel of this Court directly addressed and unambiguously rejected this claim,

applying the Barker v. Wingo framework and holding10 under the circumstances of

10
Bissell’s determination that the Barker factors should be used to evaluate when a
defendant is entitled to a post-indictment, pretrial hearing under due process of law is holding,
not dicta. As our cases frequently have observed, dicta is defined as those portions of an opinion
that are not “not necessary to deciding the case then before us.” United States v. Eggersdorf, 126
F.3d 1318, 1322 n.4 (11th Cir. 1997); Schwab v. Crosby, 451 F.3d 1308, 1327 (11th Cir. 2006);
Jordan v. Hamlett, 312 F.2d 121, 124 (5th Cir. 1963); Carpenter Paper Co. v. Calcasieu Paper
Co., 164 F.2d 653, 655 (5th Cir. 1947); see also United States v. Crawley, 837 F.2d 291, 292
(7th Cir. 1988) (“We have defined dictum as a statement in a judicial opinion that could have
been deleted without seriously impairing the analytical foundations of the holding.”) (quotation
marks omitted). Conversely, the holding of a case is, as the Supreme Court observed, comprised
both of the result of the case and “those portions of the opinion necessary to that result by which
we are bound.” Seminole Tribe of Florida v. Florida, 517 U.S. 44, 66-67 (1996). Bissell’s
conclusion that there was no violation of the defendants’ Fifth Amendment due process rights
was necessary to its ultimate decision. In fact, Bissell’s adoption and use of the Barker test
forms a critical part of the case’s holding. Our conclusion that the defendants’ due process rights
were not violated was driven by, and cannot be understood apart from our application of the
Barker test to the facts of the case. While it is true that the court could have decided the case on
other grounds, such as plain error, the panel resolved the defendant’s due process claim by

10
the case that the defendants were not entitled to a post-indictment, pretrial hearing.

Indeed, we framed the specific issue before us this way:

[Appellants] contend that this scheme violate[d] due process. They
argue that when pretrial restraints are imposed on assets, the Fifth
Amendment requires a hearing on the merits at which the government
must prove the probability that the defendant will be convicted and
that his assets will be forfeited. Since no such hearing occurred in this
case, appellants urge that they have been denied due process of law.
We disagree.

Id. at 1352; see also id. (“We must consider whether appellants had a right to an

explicating and applying the Barker v. Wingo analysis.

Despite the suggestion in the special concurring opinion, it is of no moment that it was
the Bissell panel, and not the parties, that proposed the Barker analysis as the legal rule of
decision. Plainly, this Court employed the Barker factors to determine whether a pretrial hearing
was required. There is no requirement in our law that the explication of the governing principle
of law may only be taken from an argument advanced by a party. What matters in discerning
whether a rule of law expounded by a court is in fact holding is whether it was necessary to the
result reached, or, in the alternative, could be discarded without impairing the foundations of the
holding. And here, a panel of this Court deliberately and carefully offered the analytical
framework set forth in Barker as the way to analyze and ultimately decide the issue.

We add that another prior panel of our Court has also observed that Bissell’s application
of the Barker factors is holding. United States v. Register questioned the soundness of Bissell,
observing that “in the appropriate case” Bissell “perhaps should” be re-examined in light of the
fact that we are “the only circuit holding that, although pre-trial restraint of assets needed to
retain counsel implicates the Due Process Clause, the trial itself satisfies this requirement.” 182
F.3d 820, 835 (11th Cir. 1999) (emphasis added). And our Court is not the only one to have
thought that the application of the Barker factors by the Bissell court constituted holding. See,
e.g., United States v. Monsanto, 924 F.2d 1186, 1191 (2d Cir. 1991); United States v. Holy Land
Found. for Relief & Dev., 493 F.3d 469, 475 (5th Cir. 2007); United States v. Kirschenbaum,
156 F.3d 784, 793 (7th Cir. 1998); United States v. Farmer, 274 F.3d 800, 803 (4th Cir. 2001);
13 Fed. Proc. § 35:790 (“At the other end of the spectrum, the Eleventh Circuit has held that
there is no due process right to a hearing prior to the entry of an order freezing a defendant’s
property, and the due process clause imposes no bright line dictating when a post-restraint
hearing might occur in a criminal forfeiture case.”).

11
immediate post-restraint hearing.”).

The Bissel panel recognized that “once an indictment has issued, the court

may order such restraints [to preserve forfeitable assets in a criminal case] ex

parte.” Id. at 1349. In addition, the Court explained that by its own terms 21

U.S.C. § 853(a)(1) does not require a hearing before or after the restraint of assets,

and that “the statute’s legislative history reveals that while Congress did not intend

there to be a hearing prior to the issuance of a restraint, the district court does

retain authority to hold a post-restraint hearing.” Id. (citing S. Rep. No. 225, 98th

Cong., 1st Sess. 191, 203, reprinted in 1984 U.S.C.C.A.N. 3182, 3386). Further,

the panel observed:

At that hearing, the defendant may undertake to prove that the
government wrongfully restrained specific assets which are outside
the scope of the indictment, not derived from, or used in, criminal
activity, but may not challenge the validity of the indictment itself and
thus require that the government present its evidence before trial.

Id.

In deciding which analytical framework to apply to determine what process,

if any, is due to a criminal defendant whose assets have been restrained pursuant to

a criminal forfeiture charge thereby preventing him from retaining his counsel of

choice, the Bissell panel looked to United States v. $8,850 in U.S. Currency, 461

U.S. 555 (1983), for guidance. In that case, the Supreme Court addressed the

12
narrow question of whether an eighteen-month delay between the seizure of

currency that was being transported without being reported to the U.S. Customs

Service, in violation of 31 U.S.C. § 1101, and the resulting civil forfeiture

proceedings, violated the due process rights of an individual with an interest in the

seized currency. Id. at 556-62. In $8,850, the Court imported the four-factor

balancing test laid out in Barker v. Wingo, 407 U.S. 514 (1972), a case that

assessed whether a delay in trying a criminal case violated a defendant’s Sixth

Amendment right to a speedy trial as the applicable analytical framework. The

stated reason for importing the Barker test into the realm of the defendant’s claim

under the due process clause in $8,850 was that “the Fifth Amendment claim here

– which challenges only the length of time between the seizure and the initiation of

the forfeiture trial – mirrors the concern of undue delay encompassed in the right to

a speedy trial.” Bissell, 866 F.2d at 1352 (quoting $8,850, 461 U.S. at 564).

Bissell, in turn, imported the Barker test into the realm of a defendant’s due

process claim when his assets were restrained without a hearing pursuant to § 853,

thereby preventing him from retaining counsel of choice.

Thus, in Bissell, we evaluated the defendants’ claim in light of the four

factors taken from Barker: (1) the length of the delay before the defendants

received their post-restraint hearing; (2) the reason for the delay; (3) the

13
defendants’ assertion of the right to such a hearing pretrial; and (4) the prejudice

the defendants suffered due to the delay weighed against the strength of the United

States's interest in the subject property. 866 F.2d at 1352.

As for the first of the Barker factors, in Bissell, we concluded that no post-

restraint hearing was necessary because the delay of eight months between the

restraint of the assets and the criminal trial was insignificant. 866 F.2d at 1353.

As for the reason for delaying the hearing until trial (the second of the Barker

factors), we referenced the statute’s legislative history and explained that requiring

the government to meet the requirements for issuing a temporary restraining order

and to establish the merits of the underlying criminal case and the forfeiture before

the trial would make obtaining a restraining order difficult because of the abundant

dangers surrounding the premature disclosure of the government’s case and its

witnesses. Id.

As for the third factor, we held that whether the defendants’ asserted their

right to a post-indictment hearing prior to trial, weighed against the defendants in

Bissell because the defendants “d[id] not point to, and the record d[id] not disclose,

any motion for a hearing to contest the government's restraints.” Id. at 1353.

Finally, as for the last of the Barker factors (the prejudice associated with the

restraint), we recognized the not inconsiderable danger that “perfectly legitimate

14
assets will be wrongfully restrained,” which would, in turn, result in palpable

prejudice to the defendant, particularly when the defendant sought to use those

assets to retain counsel of his choice. 866 F.2d at 1354. But, we observed, when

both parties arguably have property rights in the constrained assets, “a due process

analysis must comprehend both interests.” Id. Finally, weighing the four Barker

factors in concert, we concluded that the defendant suffered no due process

violation. Id.

The Kaleys argue, however, that Bissell is no longer good law in light of the

United States Supreme Court’s recent decision in United States v. Gonzalez-Lopez,

548 U.S. 140 (2006). They are mistaken. We may disregard the holding of a prior

opinion only where that “holding is overruled by the Court sitting en banc or by the

Supreme Court.” Smith v. GTE Corp., 236 F.3d 1292, 1300 n.8 (11th Cir. 2001).

To constitute an “overruling” for the purposes of this prior panel precedent rule,

the Supreme Court decision “must be clearly on point.” Garrett v. Univ. of Ala. at

Birmingham Bd. of Trs., 344 F.3d 1288, 1292 (11th Cir. 2003); see also Main

Drug, Inc. v. AETNA U.S. Healthcare, Inc., 475 F.3d 1228, 1230 (11th Cir. 2007)

(“Of course, we will not follow prior panel precedent that has been overruled by a

Supreme Court decision, but without a clearly contrary opinion of the Supreme

Court or of this court sitting en banc, we cannot overrule a decision of a prior panel

15
of this court.”) (quotation marks and citations omitted); United States v. Chubbuck,

252 F.3d 1300, 1305 n.7 (11th Cir. 2001) (“[T]he prior precedent rule would not

apply if intervening on-point case law from either this Court en banc, the United

States Supreme Court, or the Florida Supreme Court existed.”). In addition to

being squarely on point, the doctrine of adherence to prior precedent also mandates

that the intervening Supreme Court case actually abrogate or directly conflict with,

as opposed to merely weaken, the holding of the prior panel. See In re Provenzano,

215 F.3d 1233, 1235 (11th Cir. 2000) (“We would, of course, not only be

authorized but also required to depart from [our prior decision] if an intervening

Supreme Court decision actually overruled or conflicted with it.”); Chambers v.

Thompson, 150 F.3d 1324, 1326 (11th Cir. 1998) (“We are bound to follow a prior

panel or en banc holding, except where that holding has been overruled or

undermined to the point of abrogation by a subsequent en banc or Supreme Court

decision.”).

In Gonzalez-Lopez, the Supreme Court addressed whether a district court

erroneously refused the defendant’s chosen counsel the right to practice pro hac

vice before that court. 548 U.S. at 147-51. The government conceded that the

denial deprived the defendant of counsel of choice, and the Supreme Court

reversed, finding the disqualification to be erroneous and not subject to harmless

16
error review. Id. The case in no way addressed what, if any, right a criminal

defendant has to use assets subject to criminal forfeiture pursuant to an indictment

in order to pay for the legal fees of the counsel of his choice. Nor did the case in

any way address the circumstances under which a defendant making a Sixth

Amendment counsel of choice challenge to a post-indictment pretrial restraint

would be entitled to a hearing. Thus, it cannot be said that Gonzalez-Lopez is

“clearly on point,” or that it “directly conflicts with” the analytical framework

announced by this Court in Bissell. In fact, the Supreme Court itself said in

Gonzalez-Lopez that “[n]othing we have said today casts any doubt or places any

qualification upon our previous holdings that limit the right to counsel of choice

and recognize the authority of trial courts to establish criteria for admitting lawyers

to argue before them,” id. at 151, including cases such as Bissell. Accordingly, the

district court was bound to apply Bissell in exercising its discretion to award the

Kaleys a hearing.

In the case at hand, the district court did employ the Bissell factors to

determine whether the Kaleys had a due process right to a pretrial evidentiary

hearing on the legality of the restraints. It addressed each of the four factors and

found that the first and second factors weighed in favor of the Government.

Among other things, the district court found that the length of delay in this case (a

17
projected eight months) was not significant and that the government had a

substantial interest in not revealing its case and witnesses before trial. Neither of

these two determinations amounts to an abuse of discretion, although it is worth

noting in passing that in this white collar case the defendants have already had

access to much of the government’s evidence as the case against their co-

conspirator, Jennifer Gruenstrass, was severed and she was tried and acquitted in

November, 2007. See Bissell, 866 F.2d at 1349 (explaining that the legislative

history of 21 U.S.C. § 853(a)(1) “reveals that while Congress did not intend there

to be a hearing prior to the issuance of a restraint, the district court does retain

authority to hold a post-restraint hearing.”).

As for the third factor -- the defendants’ pretrial assertion of their right -- the

district court held that

[w]hile Defendants have [asserted their right to a hearing] in this case,
that fact does not end the inquiry. As the Bissell court noted, the
purpose of a post-restraint hearing is to determine whether legitimate
assets – those outside the scope of the indictment – have been
wrongfully restrained. In the present case, based upon the money
laundering charge and this Court's probable cause determination, the
only way Defendants could demonstrate that the restrained assets,
other than the $63,007.65 that is being released by this order, are
outside the scope of the indictment is to challenge its validity on the
merits. As has been seen previously, such a challenge cannot be made
pretrial. At best, the third factor is in equipoise.

United States v. Kaley, No. 07-80021-CR, 2007 WL 1831151, at *3 (S.D. Fla.

18
June 25, 2007) (citations and quotations omitted) (emphasis added and omitted).

As for the fourth factor, the district court did not clearly state whether it cut in

favor of or against a pretrial evidentiary hearing, observing only that “a district

court’s probable cause determination, as is present here, diminishes the prejudicial

effect of the pretrial restraint,” but offering no indication of the nature, degree, or

impact of any such diminution. Id. at *4.

The district court plainly made an error of law in disposing of Bissell's third

factor. As the underscored language of the district court’s holding reveals, in

evaluating the third factor, the district court concluded that, under Bissell, once

probable cause has been determined, the only way that a defendant can show that

assets are not forfeitable is to establish that the crime charged in the indictment did

not occur. This, however, was not the holding of Bissell and could not have been

the opinion’s intent, because, as the district court correctly noted, a challenge to the

indictment cannot be made pretrial. A pretrial challenge to the indictment would

require the district court to hold an evidentiary hearing to determine whether the

crime occurred. The court would hear the Government's case and the defendant’s

response, and then determine whether the crime had occurred and, thus, whether

the assets were forfeitable. In many cases, such a hearing would go so far as to

render the trial on the merits of the criminal charge unnecessary. In short, such a

19
procedure would require the Government to preview its case -- at the very least, the

Government would have to put on enough evidence to withstand a motion to

dismiss the charge. But the Bissell court undeniably contemplated some

circumstances in which, despite the presence of probable cause, a pretrial hearing

would be required.

The principle of law Bissell advances is that, after weighing the four Barker

factors, the district court may grant the defendant's request for a pretrial evidentiary

hearing in order to determine whether assets described in the forfeiture count of the

indictment were wrongly seized (or placed under the restraint of a protective

order). The court in an appropriate case may grant the defendant's request

notwithstanding the fact that the return of the indictment established probable

cause to seize or restrain the assets, possibly, as in the Kaleys' case, with that

probable cause buttressed by an affidavit submitted by the case agent ex parte and

in camera. The purpose of the hearing would not be to determine guilt or

innocence but, rather, to determine the propriety of the seizure. Moreover, in such

a hearing, the defendant, as the movant, would have the burden of proof, and the

prosecution would thus be saved from having to preview its entire case.

This is the same approach that the Supreme Court has taken in civil cases

where property is seized based on an ex parte proceeding. See, e.g., Mitchell v.

20
W.T. Grant Co., 416 U.S. 600 (1974). In these cases, a creditor claims an interest

in a debtor’s property and files suit against the debtor to obtain such interest. Id. at

601–02. To ensure that the property is not disposed of prior to the trial on the

merits, the creditor obtains a court order freezing the debtor’s property by making

an ex parte showing of probable cause that the creditor is likely to prevail on the

merits. Id. at 602–03. The Supreme Court has held that, in these situations, the

debtor is, at least, owed a post-restraint hearing to determine whether probable

cause actually exists. See id. at 607; Fuentes v. Shevin, 407 U.S. 67 (1972). The

post-restraint hearing the Court has ordained, however, is not the trial on the merits

of the plaintiff’s claim. Mitchell, 416 U.S. at 603 (identifying the pretrial hearing

as separate from the trial on the merits). Rather, the purpose of the hearing is to

reduce the possibility that the court imposed the restraint improvidently. Fuentes,

407 U.S. at 81, 92 S. Ct. at 1994 (noting that the purpose of a pretrial hearing is to

prevent “substantively unfair and simply mistaken deprivations of property

interests”).

It is clear, then, that notwithstanding the district court’s probable cause

determination, the Kaleys were entitled to challenge the restraints on their assets;

in doing so, they would not be requiring the Government to establish the charged

offense. Because the Kaleys challenged the restraints early and often, this case is

21
very different than Bissell, where “nothing in the record indicate[d] that [the

defendants] desired an early hearing to contest the government's restraints.”

Bissell, 866 F.2d at 1353. At a minimum then, Bissell’s third factor, the “assertion

of the right” to a pretrial hearing, should weigh in the defendants’ favor when the

defendants have taken every available step to contest the restraints.

In addition, the district court also should engage in a more searching

exposition and calculus of the fourth Bissell factor, which requires it to weigh the

prejudice suffered by the defendants due to the delay before their post-restraint

probable cause hearing against the strength of the United States’ interest in the

subject property, and take care to give the powerful forms of prejudice that the

Kaleys will suffer ample consideration. 866 F.2d at 1354. As Bissell pointed out, a

wrongful deprivation of a defendant’s legitimate assets rendering him unable to

retain his counsel of choice will severely impair his ability to defend himself. Id.

at 1354. Indeed, our law is clear and unambiguous that depriving a defendant of

the counsel of his choice is a serious and significant impediment to his ability to

effectively navigate our nation’s criminal procedures and protections. See

Gonzalez-Lopez, 548 U.S. at 146 (“[T]he Sixth Amendment right to counsel of

choice . . . commands, not that a trial be fair, but that a particular guarantee of

fairness be provided -- to wit, that the accused be defended by the counsel he

22
believes to be best.”); Wheat v. United States, 486 U.S. 153, 159 (1988)

(explaining that, although it is subject to limitations to ensure representation by

effective counsel, “the right to select and be represented by one’s preferred

attorney is comprehended by the Sixth Amendment”); see generally United States

v. Garey, 540 F.3d 1253, 1263 (11th Cir. 2008) (en banc) (“The right to counsel is

a fundamental part of the adversary system of criminal justice and recognizes the

obvious truth that the average defendant does not have the professional legal skill

to protect himself when brought before a tribunal with power to take his life or

liberty.”) (quotation marks and citation omitted).

Being effectively shut out by the state from retaining the counsel of one’s

choice in a serious criminal case is a substantial source of prejudice, but the

inequities in this case actually go beyond being able to retain the counsel of choice.

The restraint of assets in the present case prohibits the Kaleys not only from

retaining their counsel of choice, but also from retaining the experienced attorneys

who have represented them since the grand jury investigation began in January,

2005. Losing access to long-time counsel who have already invested substantial

time into learning the intricacies of the Kaleys’ case and preparing for trial will

unquestionably cause the Kaleys prejudice.

Moreover, in order to retain any private counsel (not even the counsel of

23
choice), the Kaleys must incur a $183,500 non-recoverable liquidation and tax

penalty in order to release their only remaining unrestrained assets (retirement and

college savings accounts). On this record, it is clear that in order to access the

$323,000 contained in their 401(k) plan at the time the district court considered

their motion, the Kaleys would be forced to pay $168,000 in early withdrawal

penalties and income taxes leaving them with only $155,000 to allocate for their

legal fees. To access the $111,000 contained in college savings accounts, the

Kaleys must pay $15,000 in liquidation penalties and capital gains taxes. And,

even if they ultimately prevail in this case, the Kaleys will never be able to recover

those penalties and taxes.

These serious and substantial burdens must be weighed by the district court

against the government’s real interest in recovering the seized assets if, indeed, the

Kaleys are guilty of the charged criminal conduct and those assets are found to be

traceable to the illicit activity. This interest is supported in some measure by the

grand jury’s probable cause determinations in returning two indictments seeking

the criminal forfeiture of the CD and the Kaleys’ residence, as well as by the

probable cause affidavit executed by the FBI case agent and filed by the

Government. See Bissell, 866 F.2d at 1354 (“[T]he district court’s probable cause

determinations provided a significant check on the government’s power to restrain

24
legitimate, nonindicted assets.”). We leave it to the district court to weigh the

powerful competing interests in order to calculate whether the probable cause

determination and the accompanying government affidavit diminish the undeniable

and substantial prejudice the Kaleys will suffer if they are forced to liquidate their

remaining unrestrained assets and retain new counsel at this stage in the

proceedings. Under Bissell, therefore, the trial court must re-weigh the Barker

factors in order to calculate whether the Kaleys are entitled to a post-indictment

pretrial evidentiary hearing.

IV.

If we were writing on a blank slate today we would be inclined, as Judge

Tjoflat suggests in his special concurrence, to apply the test announced by the

Supreme Court in Mathews v. Eldridge, 424 U.S. 319, 335 (1976), in order to

determine what process is due to defendants in circumstances like these.

Indeed, virtually every circuit to address this issue other than this Court has

found that criminal defendants such as these are entitled, under the Due Process

Clause of the Fifth Amendment, to a pretrial hearing in order to determine whether

it is likely that the restrained assets will be subject to forfeiture.11 See Holy Land

11
Because 21 U.S.C. § 853(1)(a), the statute governing the procedures applicable to a
criminal forfeiture charge, does not expressly provide for a pretrial hearing regarding a post-
indictment restraint of assets subject to criminal forfeiture, such a hearing is required only
because it may be mandated by the Fifth Amendment’s right to due process.

25
Found. for Relief & Dev., 493 F.3d at 475; United States v. Jones, 160 F.3d 641,

647 (10th Cir. 1998); Monsanto, 924 F.2d at 1195-98; United States v. Moya-

Gomez, 860 F.2d 706, 728-29 (7th Cir. 1988); United States v. Harvey, 814 F.2d

905, 929 (4th Cir. 1987), superseded as to other issues, In re Forfeiture Hearing as

to Caplin & Drysdale, Chartered, 837 F.2d 637 (4th Cir. 1988) (en banc), aff’d,

491 U.S. 607 (1989); United States v. Crozier, 777 F.2d 1376, 1384 (9th Cir.

1985); United States v. Lewis, 759 F.2d 1316, 1324-25 (8th Cir. 1985); cf. United

States v. Long, 654 F.2d 911, 915 (3d Cir. 1981). In fact, the more recent cases

have utilized the balancing test employed in Mathews.

The Mathews test may be particularly well suited to the present case,

because it is the traditional test employed in order to determine what process is due

before a deprivation of property at the hands of the state may be sustained. See

Mathews, 424 U.S. at 333 (deciding whether an individual is entitled to a hearing

under the Fifth Amendment to contest the government’s deprivation of a property

interest); Grayson v. King, 460 F.3d 1328, 1340 (11th Cir. 2006) (“Mathews

applies only where an individual has a liberty or property interest that the

government seeks to eliminate.”); see also Moya-Gomez, 860 F.2d at 725-26

(determining that the defendant suffered “a deprivation of property in the

constitutional sense,” because “[t]he restraining order . . . operates to remove the

26
assets from the control of the defendant on the claim of the government that it has a

higher right to those assets. While the restraining order does not divest definitively

the ownership rights of the defendant, it certainly does remove those assets from

his immediate control and therefore divest him of a significant property interest”).

There can be little doubt that the posture of this case plainly deprives the

defendants of their assets and that the question the Kaleys have raised is one of

procedural due process.

If we were to apply Mathews in this case, the Kaleys would be entitled to a

pretrial hearing on the merits of the protective order. At the end of the day,

however, we are duty bound to apply our case precedent and examine this matter

under the framework outlined by this Court in Bissell.

V.

In sum, the district court did not abuse its discretion in assessing the first

two Bissell factors. But, the district court plainly made an error of law in

interpreting and applying the third of the Bissell factors. On the record before us,

this factor weighed in the defendants’ favor as a matter of law. Moreover, the

district court did not make a clear finding as to the fourth Bissell factor -- the

prejudice associated with the restraint. We, therefore, reverse the district court’s

decision and remand the case to the district court so that it may recalibrate the

27
fourth Bissell factor, and then weigh all of the factors together in order to

determine the defendants’ entitlement to a post-indictment evidentiary hearing.

REVERSED and REMANDED.

28
TJOFLAT, Circuit Judge, specially concurring:

I agree with the court’s decision to reverse and remand, but I write

separately because I disagree with the court’s rationale for its decision. The court

reverses and remands because it holds that the district court misapplied the four

factor test from United States v. Bissell.1 That test, which uses Barker v. Wingo’s

Sixth Amendment speedy-trial standard to resolve the procedural due process issue

this appeal presents, was not necessary to the holding in Bissell and is therefore

non-binding dicta. The district court erred in relying on the Bissell test because the

test cannot, in my view, be squared with Supreme Court procedural due process

precedent.2 As I shall explain, the court should have resolved this appeal using that

Supreme Court precedent rather than the contradictory dicta from our own circuit.

I.

In Bissell, the defendants were indicted for various violations of the federal

narcotics laws. Bissell, 866 F.2d at 1347. The grand jury later returned two

superceding indictments, containing counts seeking the forfeiture of assets

pursuant to 21 U.S.C. § 853. Id. After the superseding indictments were returned,

the Government appeared before the district court ex parte and obtained the

1
United States v. Bissell, 866 F.2d 1343 (11th Cir. 1989).
2
See Barker v. Wingo, 407 U.S. 514, 92 S. Ct. 2182, 33 L. Ed. 2d 101 (1972).

29
issuance of warrants authorizing the Government to seize the assets listed in the

forfeiture counts,3 including the defendants’ bank accounts. Id. The Government

then executed the warrants and seized the assets. Id. In due course, the case

proceeded to trial, and the defendants were convicted. Id. at 1348 & n.2. At

sentencing, the assets listed in the forfeiture counts were forfeited to the United

States as part of the defendants’ sentences.

At no point following the Government’s seizure of the defendants’ assets did

any of the defendants move the district court to quash the warrants or otherwise

challenge the validity of the Government’s retention of their assets.4 Id. at 1353.

On appeal, for the first time, the defendants challenged “the constitutionality of the

3
The district court issued the warrants pursuant to 21 U.S.C. § 853(f), which states:

(f) Warrant of seizure
The Government may request the issuance of a warrant authorizing the seizure
of property subject to forfeiture under this section in the same manner as provided
for a search warrant. If the court determines that there is probable cause to
believe that the property to be seized would, in the event of conviction, be subject
to forfeiture and that an order under subsection (e) of this section may not be
sufficient to assure the availability of the property for forfeiture, the court shall
issue a warrant authorizing the seizure of such property.

(emphasis added). Fed. R. Crim. P. 41 provides the procedure for obtaining a search warrant
and, thus, the seizure of property subject to forfeiture. Fed. R. Crim. P. 41(g) provides a
procedure for challenging the seizure. See infra note 4.
4
The defendants could have challenged the seizure of their property in the district court
pursuant to Fed. R. Crim. P. 41(g). See supra note 3.

30
ex parte, pretrial restraints on their assets.” Id. at 1348.5 Even in their brief on

appeal, the defendants failed to argue that they were entitled to a pretrial, post-

restraint hearing.

On its own initiative, however, the court posed the question the defendants

had never asked: whether, after issuing the warrants, the district court should have

held a pretrial hearing to determine whether the application for the warrants

authorizing the seizures was supported by probable cause. The court then

answered its own question by stating that under the Sixth Amendment speedy-trial

standard of Barker v. Wingo, a pretrial evidentiary hearing was not required.6 The

court’s answer constituted pure dicta, as the question was never raised by any

party, was unnecessarily injected into the case by the court itself, and was therefore

unnecessary to the resolution of the Bissell defendants’ appeals.7

5
The defendants had waived their challenge to the constitutionality of the ex parte
restraints by not presenting it to the district court. See Madu v. U.S. Att'y Gen., 470 F.3d 1362,
1366 n.2 (11th Cir. 2006) (“[A]n argument made for the first time in the court of appeals is
generally waived . . . .”) (citing Sterling Fin. Inv. Group, Inc. v. Hammer, 393 F.3d 1223, 1226
(11th Cir. 2004)); Mills v. Singletary, 63 F.3d 999, 1008 n.11 (11th Cir. 1995) (“The law in this
circuit is clear that arguments not presented in the district court will not be considered for the
first time on appeal.”); Lancaster v. Newsome, 880 F.2d 362, 371 (11th Cir. 1989); Stephens v.
Zant, 716 F.2d 276, 277 (5th Cir. 1983) (per curiam).
6
Since the court recognized that the defendants had never asked the district court for a
hearing, one could interpret its application of the Barker v. Wingo standard as a statement that a
district court is required to consider whether to hold a pretrial hearing even though the defendant
does not request a hearing. There is no basis for this interpretation.
7
A reading of the Bissell opinion clearly demonstrates that the court did not entertain the
question and answer it under the rubric of the plain error doctrine. See United States v. Evans,

31
 II.

If we acknowledge that Bissell’s discussion of the issue at hand is dicta, we

are left with no binding precedent on the question of whether a criminal defendant

standing in the Kaleys’ shoes is entitled as a matter of due process to a post-

restraint hearing prior to trial.8 In the absence of binding precedent, the panel

should have looked to the general requirements of procedural due process. See

United States v. E-Gold Ltd., 521 F.3d 411, 415 (D.C. Cir. 2008) (using this

approach to determine whether a post-restraint, pretrial hearing was due). The

court’s approach today, following the dicta in Bissell, contravenes these principles.

“The fundamental requirement of due process is the opportunity to be heard

‘at a meaningful time and in a meaningful manner’” upon the deprivation of liberty

or property. Mathews v. Eldridge, 424 U.S. 319, 333, 96 S. Ct. 893, 902, 47 L. Ed.

478 F.3d 1332, 1338 (11th Cir. 2007) (finding that defendant’s due process argument was
subject to plain error review because it was not raised before the district court).
8
In United States v. Monsanto, 491 U.S. 600, 603–06, 109 S. Ct. 2657, 2660–61, 105 L.
Ed. 2d 512 (1989), the Supreme Court explicitly sidestepped this question. In that case, the
Government, ex parte, obtained a pre-trial order restraining the defendant’s purportedly
forfeitable assets. The defendant moved to vacate the order, and the district court heard the
motion in a four-day evidentiary hearing. The district court found probable cause for restraining
the defendant’s assets and thus upheld the order. The defendant then took an interlocutory
appeal, which worked its way to the United States Supreme Court. The Court upheld the validity
of the restraining order, holding that “assets in a defendant's possession may be restrained in the
way they were here based on a finding of probable cause to believe that the assets are
forfeitable.” Monsanto, 491 U.S. at 615; 109 S. Ct. at 2666. It declined “to consider whether . . .
a hearing was required by the Due Process Clause” because the district court had held an
extensive post-restraint hearing on the issue. Id. at 615 n.10, 109 S. Ct. at 2666 n.10.

32
2d 18 (1976) (quoting Armstrong v. Manzo, 380 U.S. 545, 552, 85 S. Ct. 1187,

1191, 14 L. Ed. 2d 62 (1965)). This basic statement of due process requires

different measures in different contexts. Morrissey v. Brewer, 408 U.S. 471, 481,

92 S. Ct. 2593, 2600, 33 L. Ed. 2d 484 (1972) (“[D]ue process is flexible and calls

for such procedural protections as the particular situation demands.”); Mullane v.

Cent. Hanover Bank & Trust Co., 339 U.S. 306, 313, 70 S. Ct. 652, 657, 94 L. Ed.

865 (1950) (holding that due process requires a hearing “appropriate to the nature

of the case”). In any particular context, three factors are relevant to the question of

what constitutes a meaningful hearing:

First, the private interest that will be affected by the official action; second,
the risk of an erroneous deprivation of such interest through the procedures
used, and the probable value, if any, of additional or substitute procedural
safeguards; and finally, the Government's interest, including the function
involved and the fiscal and administrative burdens that the additional or
substitute procedural requirement would entail.

Mathews, 424 U.S. at 335, 96 S. Ct. at 903.

Under ordinary circumstances, the private interest weighs heavily enough to

require the government to provide notice and some sort of hearing prior to the

deprivation. United States v. James Daniel Good Real Property, 510 U.S. 43, 53,

114 S. Ct. 492, 501, 126 L. Ed. 2d 490 (1993)(civil forfeiture); Fuentes v. Shevin,

407 U.S. 67, 82, 92 S. Ct. 1983, 1994–95, 32 L. Ed. 2d 556 (1972) (“Although . . .

due process tolerates variances in the form of a hearing appropriate to the nature of

33
the case, . . . the Court has traditionally insisted that, whatever its form, opportunity

for that hearing must be provided before the deprivation at issue takes effect.”)

(quotation omitted). In Fuentes, for example, the Court struck down a state law

that allowed creditors, ex parte, to obtain a prejudgment writ ordering the sheriff to

seize a debtor's goods. The law failed because it did not afford the debtor notice

and a hearing prior to the seizure. Fuentes, 407 U.S. at 83, 92 S. Ct. at 1995; see

also Wolff v. McDonnell, 418 U.S. 539, 557–58, 94 S. Ct. 2963, 2975, 41 L. Ed.

2d 935 (1974) (“[S]ome kind of hearing is required at some time before a person is

finally deprived of his property interests.”); Connecticut v. Doehr, 501 U.S. 1, 18,

111 S. Ct. 2105, 2116, 115 L.Ed.2d 1 (1991) (requiring prior notice and a hearing

in the absence of “exigent circumstance[s]”).

In extraordinary situations, notice and a hearing may be postponed until after

the deprivation. Good Real Property, 510 U.S. at 53, 114 S. Ct. at 501 (“We

tolerate some exceptions to the general rule requiring predeprivation notice and

hearing, but only in extraordinary situations where some valid governmental

interest is at stake that justifies postponing the hearing until after the event.”)

(quotations omitted). In Mitchell v. W.T. Grant, 416 U.S. 600, 611, 94 S. Ct.

1895, 1902, 40 L. Ed. 2d 406 (1974), for example, the Court distinguished Fuentes

and upheld a statute allowing creditors to sequester the goods of delinquent debtors

34
without affording them prior notice and a hearing. Under the statute in Mitchell, to

sequester the goods, a creditor could file an ex parte application with a judge

showing that the delinquent debtor had the power to “conceal, dispose of, or waste

the property or the revenues therefrom, or remove the property from the parish,

during the pendency of the action.” Id. at 605, 94 S. Ct. at 1899 (quoting La. Code

Civ. Proc. Ann. art. 3571). If satisfied with the showing, the judge would then

issue a writ of sequestration. Id. at 605–06; see also Calero-Toledo v. Pearson

Yacht Leasing Co., 416 U.S. 663, 679–80, 94 S. Ct. 2080, 2089–90, 40 L. Ed. 2d

452 (1974) (allowing postponement of notice and a hearing until after the seizure

of a yacht in part because pre-seizure notice might have prompted the defendant to

destroy, conceal, or remove the property).

If postponed, however, notice and a hearing must be given immediately after

the deprivation. See Mitchell, 416 U.S. at 606, 94 S. Ct. at 1899. Under the statute

upheld in Mitchell, a creditor could obtain a writ of sequestration based on an ex

parte judicial determination, but the debtor, afterwards, could “immediately . . .

seek dissolution of the writ.” Id. (emphasis added). Similarly, in Barry v. Barchi,

443 U.S. 55, 99 S. Ct. 2642, 61 L. Ed. 2d 365 (1979), the Court struck down a

statute allowing the New York State Racing and Wagering Board to postpone

notice and a hearing until an unspecified time after the suspension of a horse racing

35
license. It held that the provision for delaying the administrative hearing “neither

on its face nor as applied in this case, assured a prompt proceeding and prompt

disposition of the outstanding issues.” Barchi, 443 U.S. at 66, 99 S. Ct. at 2650.

These constitutional principles are mirrored in the framework of Rule 65 of

the Federal Rules of Civil Procedure. Rule 65 provides that, under ordinary

circumstances, courts have discretion to order a certain course of action by issuing

a preliminary injunction only after affording the “adverse party” notice and a

hearing.9 Prior notice and a hearing are required even if the hearing will be

duplicative of the issues to be litigated at trial. See Fed. R. Civ. P. 65(a)(2).

In extraordinary situations, Rule 65, like the Due Process Clause, provides

an exception to the general rule of prior notice and a hearing. Rule 65 provides

that a temporary restraining order (“TRO”) may be granted without notice, but

only if the party requesting the order can offer specific facts clearly showing that

“immediate and irreparable injury, loss, or damage will result to the movant before

the adverse party can be heard in opposition.” Fed. R. Civ. P. 65(b)(1)(A). TROs

9
In noting the similarities between the due process requirement of a prompt
post-restraint hearing and Rule 65, I do not adopt the view that due process necessarily requires
Rule 65 compliance. See United States v. Holy Land Foundation for Relief and Development,
493 F.3d 469, 473–76 (5th Cir. 2007) (en banc); but see United States v. Roth, 912 F.2d 1131,
1133 (9th Cir. 1990) (“[I]n order for a restraining order under [21 U.S.C.] § 853 to be
constitutional, the district court must hold a hearing under Rule 65.”). I refer to Rule 65 only to
underscore the point that in those exceptional cases where notice and a hearing are delayed until
after the restraint occurs, the hearing ought to be conducted as promptly as possible.

36
are “designed to preserve the status quo until there is anopportunity to hold a

hearing on the application for a preliminary injunction.” 11A Charles Alan

Wright, Arthur R. Miller, & Mary Kay Kane, Federal Practice and Procedure: Civil

§ 2951, at 253 (2d. ed. 1995).

Consistent with due process, Rule 65 requires a prompt post-restraint

hearing when a TRO is granted. TROs expire after a fixed period of time set by

the court that can be no longer than ten days. Fed. R. Civ. P. 65(b)(2).

Immediately after the TRO is granted, therefore, the applicant must move for a

preliminary injunction, which requires prior notice and a hearing. Fed R. Civ. P.

65(a); see Fed. R. Civ. P. 65(b)(3). Unless notice and a hearing are afforded within

the ten-day period, the TRO will expire.

Congress also recognized these norms in those parts of the criminal

forfeiture statute that regulate protective orders entered prior to the return of an

indictment, 21 U.S.C. § 853.10 Before the indictment is returned, § 853 authorizes

the court to restrain property only “after notice to persons appearing to have an

interest in the property and opportunity for a hearing.” § 853(e)(1)(B). At the

hearing, before it issues the restraint, the court must determine that “there is a

substantial probability that the United States will prevail on the issue of forfeiture.”

10
Section 853 speaks to the return of an indictment or the filing of an information. I
refer here only to indictments.

37
§ 853(e)(1)(B)(i). Section 853, like Rule 65, allows this hearing to be delayed until

after the restraint occurs only in exceptional cases. When an indictment has not yet

been returned, the court may enter a temporary restraining order without notice or

opportunity for a hearing “if the United States demonstrates that there is probable

cause to believe that . . . provision of notice will jeopardize the availability of the

property for forfeiture.” § 853(e)(2). Even in these rare cases, however, the

hearing must be held within ten days of the restraint, or the restraint will expire:

“[s]uch a temporary order shall expire not more than ten days after the date on

which it is entered . . . . A hearing requested concerning [a TRO] shall be held at

the earliest possible time and prior to the expiration of the temporary order.” Id.

In those parts of the criminal forfeiture statute that regulate protective orders

entered following the return of an indictment, however, Congress was silent as to

whether the defendant is entitled to a post-restraint hearing prior to trial. See id. §

853(e)(1)(A). I apply the general due process requirements discussed above to

determine that the Constitution requires that such a hearing be held in this context.

III.

In general, then, once property has been seized or restrained by a court

order, the property owner must, at minimum, be given notice of the seizure or

restraint and a prompt hearing. The Government argues for a departure from this

38
general rule in cases like this one, where the court restrains property subject to

forfeiture in a criminal case. The Government argues that, in these cases, a hearing

on the propriety of the restraint may be delayed until the criminal case comes to

trial. To determine whether the Kaleys’ case justifies a departure from the general

requirement of a prompt post-restraint hearing, I examine the three relevant

interests that have been set out by the Supreme Court: (1) the private interest in a

prompt hearing, (2) the risk of an erroneous deprivation without a prompt hearing,

and (3) the government interest in delaying the hearing until trial. See Mathews v.

Eldridge, 424 U.S. 319, 335, 96 S. Ct. 893, 903, 47 L. Ed. 2d 18 (1976) (the

“Mathews factors”).

First, the Kaleys have a private interest in using their property that is akin to

the private interests in Mitchell and Fuentes. In those cases, a creditor alleged an

interest in the delinquent debtor’s property and wished to freeze that property

before the parties’ rights could be adjudicated. See Mitchell v. W.T. Grant Co.,

416 U.S. 600, 601–02, 94 S. Ct. 1895, 1897, 40 L. Ed. 2d 406 (1974); Fuentes v.

Shevin, 407 U.S. 67, 69–70, 92 S. Ct. 1983, 1988–89, 32 L. Ed. 2d 556 (1972) .

The only difference here is that the Government, rather than a private creditor,

asserts the interest. In both Mitchell and Fuentes, the Court noted that, even

39
though the status of the property was contested, the defendant retained an interest,11

and due process therefore required a prompt hearing on the propriety of the

deprivation. Mitchell, 416 U.S. at 606–07, 94 S. Ct. at 1899–1900 (holding that a

statute entitling the defendant to an immediate hearing following issuance of a writ

of sequestration “effect[ed] a constitutional accommodation of the conflicting

interests of the parties”); Fuentes, 407 U.S. at 81–82, 92 S. Ct. 1994–95 (holding

that the defendant's property interest requires a pre-seizure hearing).

The Kaleys also have an additional private interest in a prompt hearing that

is not present in the civil context because, as a result of the protective order, they

cannot use their assets to employ their preferred attorneys. The protective order

therefore implicates their Sixth Amendment right to counsel of choice. The right

to counsel of choice, while not absolute, is not satisfied merely because the

defendant is able to retain adequate substitute counsel. It protects a criminal

defendant’s ability to hire the particular lawyer he prefers. United States v.

11
Our decision in United States v. Bailey, 419 F.3d 1208 (11th Cir. 2005), further
affirms that criminal defendants retain an interest in forfeitable property. Prior to Bailey, some
courts had held that potentially forfeitable assets vest in the government immediately upon
commission of the act giving rise to the forfeiture. Under such a rule, the government takes all
right and title to forfeitable assets even before investigation and indictment of the criminal
defendant. Bailey clarified that there is no “unheard-of provision for immediate, undecreed,
secret vesting of title in the United States.” Bailey, 419 F.3d at 1213 (quoting United States v. 92
Buena Vista Ave., 507 U.S. 111, 134, 113 S. Ct. 1126, 1140, 122 L. Ed. 2d 469 (1993) (Scalia, J.
concurring in the judgement)). Under Bailey, potentially forfeitable assets listed in the forfeiture
count do not vest in the government until they are actually forfeited upon conviction or court
order. See id.

40
Gonzalez-Lopez, 548 U.S. 140, 146, 126 S. Ct. 2557, 2562, 165 L. Ed. 2d 409

(2006) (“[T]he Sixth Amendment right to counsel of choice . . . commands, not

that a trial be fair, but that a particular guarantee of fairness be provided—to wit,

that the accused be defended by the counsel he believes to be best.”). In this case,

therefore, it is irrelevant from a Sixth Amendment point of view that the Kaleys

have $270,000 in unrestrained assets with which to hire less expensive counsel.

What matters is that, without access to the property covered by the protective

order, the Kaleys are unable to retain their preferred attorneys, Howard Srebnick

and Susan Van Dusen.

Delaying the due process hearing until trial will only temporarily deprive the

Kaleys of their property rights, but it will completely eviscerate their right to

counsel of choice. After the verdict is handed down, of course, the Kaleys will no

longer need to retain Srebnick and Van Dusen. “While the [Sixth Amendment]

deprivation is nominally temporary, it is ‘in that respect effectively a permanent

one.’ ‘The defendant needs the attorney now if the attorney is to do him any

good.’” United States v. E-Gold, Ltd., 521 F.3d 411, 417–18 (D.C. Cir. 2008)

(quoting United States v. Monsanto, 924 F.2d 1186, 1193 (2d. Cir. 1991) (en

banc); and United States v. Moya-Gomez, 860 F.2d 706, 726 (7th Cir. 1988))

(emphasis in original). The Sixth Amendment interest, for that reason, weighs

41
heavily in the balance.

I next analyze the second factor, the risk of an erroneous deprivation without

an immediate hearing. In this case, prosecutorial incentives increase the likelihood

of an erroneous deprivation in the absence of a prompt hearing. A prosecutor has

everything to gain by restraining assets that ultimately may not be forfeited. By

doing so, he can stack the deck in the government’s favor by crippling the

defendant’s ability to afford high-quality counsel. If the prosecutor can delay

judicial oversight of the restraint until trial, he also has nothing to lose, as he does

not have to dedicate any extra resources to defending his decision.

Also relevant to the risk of an erroneous deprivation is “the probable value,

if any, of additional or substitute procedural safeguards.” Mathews, 424 U.S. at

335, 96 S. Ct. at 903. In this case, without a prompt hearing, probable cause rests,

initially, on the grand jury having found probable cause before returning the

indictment and, then, on the district court's finding of probable cause, both of

which findings were made on the Government’s ex parte showing.12 Neither

procedure significantly reduced the risk of an erroneous deprivation. In grand jury

proceedings, the government may rely, even entirely, on “read-backs and hearsay

12
In some cases, the court may treat the indictment, standing alone, as establishing
probable cause. The magistrate judge did that here. It was only after the Kaleys moved the
court to vacate the protective order that the magistrate judge required the prosecutor to present,
in camera, independent proof of probable cause.

42
witnesses,” United States v. Waldon, 363 F.3d 1103, 1109 (11th Cir. 2004) (per

curiam), or illegally acquired evidence, United States v. Calandra, 414 U.S. 338,

344–45, 354–55, 94 S. Ct. 613, 618, 623, 38 L. Ed. 2d 561 (1974).13 The

government has no duty to disclose exculpatory evidence to the grand jury, United

States v. Williams, 504 U.S. 36, 112 S. Ct. 1735, 118 L. Ed. 2d 352 (1992), and the

defendant has no right to testify or even appear, see Fed. R. Crim. P. 6(d)(1). The

grand jury, then, is not a mechanism well designed to protect a defendant against

an erroneous deprivation.

The district court’s finding is slightly more reliable than the grand jury’s. It

was, however, made upon an ex parte showing; the Kaleys had no opportunity to

challenge the Government’s showing. In this sense, the court’s probable cause

finding is comparable to the ex parte judicial determination in Mitchell. See

Mitchell, 416 U.S. at 606, 94 S. Ct. at 1899 (describing a statute that allowed a

judge to issue a writ of sequestration upon a creditor’s ex parte application). Here,

as in that case, the ex parte determination is insufficient to justify delaying the

post-restraint hearing for long after the restraint is imposed. See id. at 618, 94 S.

Ct. at 1905 (stressing that, after the deprivation, the debtor is entitled to an

immediate hearing).

13
The government may even rely on testimony that turns out to be perjured. See
Anderson v. Sec'y for the Dep’t. of Corr., 462 F.3d 1319, 1326–27 (11th Cir. 2006) (per curiam).

43
 Finally, I examine the Government’s interest. Citing the legislative history

of the forfeiture statute, the Government asserts that:

requiring the government to prove the merits of the underlying criminal case
and forfeiture pretrial would make obtaining a restraining order too difficult
and would make pursuing such an order inadvisable from the government’s
standpoint because of the potential for damaging premature disclosure of the
government’s case and trial strategy, as well as jeopardizing the safety of
witnesses and victims.

Gov’t. Br. at 31. Although these are certainly legitimate interests, the Government

overlooks the fact that the party challenging the restraint bears the burden of

convincing the court that probable cause is lacking. This is true whether the

defendants challenge a seizure made pursuant to a § 853(f) warrant via a motion

filed pursuant to Rule 41(g) of the Federal Rules of Criminal Procedure, as they

could have in Bissell, or a restraint affected pursuant to a § 853(e) protective order

via a motion to vacate the order.

The Mathews factors, on balance, do not justify an exception to the settled

minimum due process requirement of a prompt post-restraint hearing.

Accordingly, the Kaleys are entitled to a pretrial hearing on the merits of the

protective order.14 This court should therefore have reversed and remanded to the

14
The majority of our sister circuits that have considered the issue are in accord. See E-
Gold, 521 F.3d at 419 (requiring a post-restraint, pretrial hearing when the defendant needs the
assets to meaningfully exercise the right to counsel); Monsanto, 924 F.2d at 1203 (same); Moya-
Gomez, 860 F.2d at 728–29 (same); United States v. Lewis, 759 F.2d 1316, 1324–25 (8th Cir.
1985) (same with respect to restraining orders issued pursuant to 21 U.S.C. § 848); United States
v. Crozier, 777 F.2d 1376, 1383–84 (9th Cir. 1985) (noting due process requirement of a post-

44
district court with instructions to afford the Kaleys a pretrial hearing at which they

could show that the Government did not have probable cause to restraint their

assets. Because the court mistakenly believes that it is bound by Bissell, however,

the Kaleys may be deprived of this right. For these reasons, I specially concur.

restraint hearing in cases involving § 853 orders); see also United States v. Melrose East
Subdivision, 357 F.3d 493, 499 (5th Cir. 2004) (noting the “broad agreement that due process
requires the district court to hold a prompt hearing at which the property owner can contest the
restraining order—without waiting until trial to do so—at least when the restrained assets are
needed to pay for an attorney”); cf. United States v. Long, 654 F.2d 911, 915 (3rd Cir.
1981)(rejecting due process challenge to restraining order issued pursuant to § 848 where order
issued after hearing); United States v. Farmer, 274 F.3d 800, 803, 805–06 (4th Cir.
2001)(requiring a post-restraint, pretrial hearing but only where the defendant shows the
restrained assets are untainted and necessary to secure counsel of choice); United States v. Jones,
160 F.3d 641, 647 (10th Cir. 1998)(same).

45