Crime & Federalism

Civil Forfeiture Goes Too Far: United States v. Hull

A rational person can simultaneously hold the following beliefs:

• In a state of nature, people who look at child pornography should be removed from the gene pool.
• In a nation of laws, a person who uses his property to commit crimes - by, say, growing marijuana - may have that property seized as the instrumentality of a crime.
• In a nation of laws, a person who has child pornography on his computer should not have his home and 19 acres of property seized.

When people are prosecuted for possession of child pornography, judges forget that the United States is a nation of laws.  Reason sleeps.  United States v. Hull (CA8) (here).  See also United States v. Dodge Caravan.

Under 18 U.S.C. Sec. 2252(a)(3), the federal government may seize any property "used or intended to be usedto commit or to promote the commission of [a child-pornography related] offense."  If you use your computer to e-mail child porn, the government may seize your computer.  One might have philosophical objections to civil-forfeiture laws.  Yet Section 2252 would plainly allow the seizure of a laptop.  

Yet in United States v. Hull, the government seized substantially more property.  How much more?

Larry Richard Hull was convicted of two counts of distribution of childpornography, in violation of 18 U.S.C. § 2252(a)(1). The district court2 orderedforfeiture of Hull’s real property, which consisted of approximately nineteen acres inrural Iowa, pursuant to 18 U.S.C. § 2253(a)(3).

Nineteen acres of property?  Did the defendant use the property to hold children as slaves?  In that case, one might view the forfeiture as reasonable under the law.  Yet the property was not used to house children:

In 2007, Hull engaged in online conversations with a law enforcement agentwho was posing as a mother of two minor children. Special Agent Eric Adams of theUnited States Secret Service operated under the username “miamimisswith2,” anddescribed himself as a Florida mother named “Kathy” with twelve- and nine-year-olddaughters named “Kelly” and “Sam,” respectively. On several occasions, Hull transmitted images of child pornography to Adams. Hull expressed an interest inperforming sexual activities with “Kelly,” and encouraged “Kelly” to view his childpornography. He discussed the possibility of the group meeting in Florida or Iowa.

OK.  So take his computer.  he used his computer to have online chats with FBI agents posting as children, and to e-mail child pornography.  Yet the panel concluded otherwise:

We think it clear that Hull “used” his realproperty “to commit” or “to promote the commission of” the child pornography offenses. He set up a computer in a room in his house, connected to the Internet, and distributed child pornography from there.  The evidence showed a substantialconnection – not merely an incidental or fortuitous relationship – between the realproperty and the offenses. To be sure, use of the computer was necessary to committhe offenses, but the real property played a substantial role as well.

What did the nineteen acres have to do with the lap top? A lap top sits in your house.  You don't need 19 acres to go online.  The property existed, but wasn't used. 

United States v. Hull is one of the worst civil-forfeiture decisions of all time, and we hope that the Eighth Circuit agrees to rehear the case en banc.

Civil Forfeiture Run Amok? (With the Help of Judicial Activism?)

[Post bumped and updated 8.22.06.  Scroll down to the bottom of the post for the update.]

Query: How does an appellate panel get around the clear error standard of review when it disagrees with the district court?  As astute readers know, an appellate court will reverse a trial court's credibility determinations only after concluding that the trial court committed clear error, i.e., that it exercised will, not judgment.  It's hard, but not impossible, as Judge Colloton demonstrated in U.S. v. $124,700 in U.S. Currency (here, via Cato).

At issue in $124,700 was this: Was money found in a Mexican immigrant's rental car substantially connected to drug activity?  Here was the evidence that it was:

• There was a lot of it.
• The defendant was travelling home via a rental car after taking a one-way plane ticket to the Chicago.
• The defendant lied about who rented the car for him.
• The rental car was in a third party's name.
• The defendant lied about having money in the car.
• A drug dog alerted when sniffing the rental car.
  

That certainly is strong evidence that the money was substantially connected to drugs!  Except that, at a bench trial, the defendant believably explained how he got the money, and why he was driving the rental car.

He was travelling to Chicago to purchase a truck he needed to start a new business.  He flew on a one-way ticket because he intended to drive the truck home. When he arrived in Chicago, the truck had already been sold.  Thus, he needed a rental car.  Since he, like many recent immigrants, did not have a credit card, he had someone else rent the car for him. 

In support of his story, he presented this evidence:

• There were no drugs in the car, and the government could not link the him, by any standard of proof, to drugs or drug dealers. 
• A business partner testified that he had given him "$65,000 in cash, which was a
  combination of money that he had borrowed from his father-in-law and his own
  personal cash savings, with the expectation that [the defendant] would help him buy a refrigerated truck for the produce business."
• The defendant "testified that he gave $40,000 of his own money, plus $20,000 from a friend, Andres Madrigal Morgan, as an investment in Gomez’s truck."
• "Consistent with Gonzolez’s account, Andres Madrigal Morgan testified that he contributed $20,000 in proceeds from a vehicle sale to Gonzolez’s investment in the truck."   

After hearing all of this evidence, the district court held that the government did not prove its case that the money was substantially connected to drug activity.  Thus, the issue would seem to be: Did the district court abuse its discretion when it believed the defendant's story? 

Not so fast, said Judge Colloton.  Given that it would be impossible, in light of the record, to reverse the district court, Judge Colloton re-frames the issue:

The district court’s opinion includes no finding as to the credibility of Gonzolez and the other two claimants. The court did observe that the explanations of the claimants were “plausible and consistent,” but this is different from a finding that the court actually believed the testimony. “Plausible” means “apparently acceptable or trustworthy (sometimes with the implication of mere appearance),” see Shorter Oxford English Dictionary 2238 (5th ed. 2002), and we thus read the district court’s opinion to hold that given a “plausible and consistent” explanation from the claimants on one side of the balance, the government’s countervailing proof was not strong enough to meet its burden of showing a substantial connection by a preponderance of the evidence.

Okay, let's assume that you buy that when a trial court, after hearing evidence, finds the defendant's story "plausible and consistent," he really isn't making credibility determinations.  This is a dubious assumption - so dubious that the government didn't even argue that the appellate court make it.  Appellant's Br. at 8 [page 15 of the .pdf] (noting that the court "must accept the district court’s factual findings ... unless those findings are clearly erroneous."

But let's make the assumption that the trial court was really doing something else.  It wasn't making factual findings.  For the sake of argument, we, like Judge Colloton, won't define that that something else is.

How then do you explain the panel's conduct: It reversed the trial court's judgement, rather than remanding to allow the trial court to state whether it made credibility determinations.  It did not remand the case, which is what courts usually do when unsure whether the lower court made a credibility call.  Rather, it reversed the judgment.

The split panel reversed the judgment precisely because the two judges knew that the lower court had made credibility determinations.  The split panel was willing to disregard standard operating procedure (re: remand to the lower court to determine what, if any, credibility determinations it made) because the two judges wanted to reach a different result - here, that the money was connected to drug activity.

The result, of course, was tragic.  Several poor immigrants lost their life savings even though the government could not prove that they, or their money, had any connection to drugs.

UPDATE: Ted Frank leaves an important comment at C&F and at Overlawyered:

I'd be more impressed with this story (a) if Gonzolez knew the name or address of the guy who he was going to see about the truck; and (b) if Freightliner refrigerated trucks weren't (i) commonplace and (ii) considerably cheaper than $124,700. 

I am quite confident that there are poster children for civil forfeiture abuse.  But I'm skeptical that this is one of them.

In this post, I discuss the standard-of-review issue in more detail.

Putting aside the substance of Ted's post, it does demonstrate an important point for the judicial process: Couldn't the panel's decision have been more persuasive?   Results matter to the ligitants, but process and judicial reasoning matter to everyone. 

Judges should write their opinions with the same mind that lawyers write briefs - with the goal to persuade.  In a democracy, even life-tenured judges have a duty to persuade the public that their opinion resulted from judgment, not will.

More Civil Forfeiture Lunacy

King crab taken in violation of Russian fishing regulations is subject to forfeiture under the Lacey Act, 16 U.S.C. § 3374(a), on a strict liability basis. The question before us is whether an importer of such crab may assert an 'innocent owner defense' in forfeiture proceedings. Under the Civil Asset Forfeiture Reform Act, 18 U.S.C. § 983, the innocent owner defense cannot be asserted when the property to be forfeited is 'contraband or other property that it is illegal to possess.'" 

U.S. v. Deep Sea Harvester, No. 03-36006 (9th Cir. Jun. 9, 2005).

Driving while committing a crime

United States v. Dodge Caravan,
No. 03-1925 (8th Cir., Oct. 27, 2004) (Melloy, for Smith, J.J., Collotan, J. dissenting).
[Ed's note: This case has been reported as a constitutional law case. It's not that sexy, though it's very informative.]

Facts: [Citizen] was addicted to prescription pain killers. She forged prescriptions and used used her minivan and went to drive-thru pharmacies for the pain killers. She was the sole owner of the van, but she used it to drive her 3 children. After she was convicted of various offenses that carried a maximum fine of $10,000, the government brought a forfeiture action to take away her van that was valued at $12,000 to $14,000. The district court agreed and gave the van to the government. Obviously we would all be better off if the citizen was unable to drive her children to school. After all, citizen lived in Nebraska, famous for its public transportation. I'm sure the kids will be okay.

Issue: Before a district court orders property forfeited to the government, he must weigh and balance several factors. Here, a judge only looked to one factor before he ordered the citizen to forfeit personal property to the government. Is the forfeiture proper?

Holding: No. The case is remanded to the trial court to properly analyze the case.

Reasoning: The Excessive Fines Clause has a proportionality requirement. A fine violates the Excessive Fines Clause if its "grossly disproportionate." Id. at *7. Citing Bajakajian, 524 U.S. 321, 334 (1998). The burden of making a prima face showing of gross disproportionality is on the plaintiff. If she shows it, the court conducts an ad hoc analysis, looking at several factors, including:

* "the extent and duration of the criminal conduct"
* "the gravity of the offense weighed against the severity of the criminal sanction"
* "and the value of the property forfeited"
* "an assessment of the personal benefit reaped by the defendant"
* "the defendant’s motive and culpability"
* "the extent that the defendant’s interest and the enterprise itself are tainted by criminal conduct"
* "the monetary value of the property"
* "the extent of the criminal activity associated with the property"
* "the fact that the property was a residence"
* "the effect of the forfeiture on innocent occupants of the residence including children,
* "any other factors that an excessive fine analysis might require.”
Id. at *8.

Generally, if the forfeiture does not exceed the maximum fine allowed under the law, there is no excessive fine issue. Here, the judge did not look to all the factors. He also analyzed the citizen's sentence under the wrong sentencing guideline. Thus, the case is remanded for him to weigh and balance the factors, though the panel expressed no opinion on the constitutionality of the forfeiture.

Judge Colloton, a President George W. Bush appointee, dissented. For him, it was enough that the citizen used the van to illegally obtain the prescription pain killers. That's troubling to me, since it's the children who would ultimately be punished by the forfeiture. Let's use a little common sense, judge. A woman who drives her van to pick up prescription medication is not the same as a person who flies his jet to traffic kilos of cocaine. Have you no decency? Have you no sense of proportion?

Standing in civil forfeiture cases

In a civil forfeiture action, the government presented substantial evidence that the property fraduently conveyed. The property owner did not present any evidence to counter this assertion. Does the property owner have Article III standing to challenge a civil forfeiture?

No - A property owner does not have Article III standing to challenge a civil forfeiture unless he can raise a trial issue of material fact that he rightfully has a possessory interest. United States v. Markarian, No. 03-15396, (9th Cir., Oct. 1, 2004).

For Judges Noonon Clifton, Judge Fogel wrote:

Article III standing must be determined as a threshold matter in every federal case. In a forfeiture action, this determination turns upon whether the claimant has a sufficient interest in the property to create a case or controversy. The claimant’s burden under Article III is not a heavy one; the claimant need demonstrate only a colorable interest in the property, for example, by showing actual possession, control, title, or financial stake. Id. Ownership interest is determined under the law of the state in which the interest arose — here, California.

Slip opinion at 6.

The government presented significant evidence that the property was fraudulently conveyed to the Markarians. The Markarians did not present any evidence to rebut the government's arguments: This was a fatal mistake.

Because the government met its initial burden of presenting evidence from which a trier of fact could conclude that the transfer to the Markarians was fraudulent, the burden shifted to the Markarians to demonstrate a triable issue of material fact as to the fraudulent nature of the transfer. The Markarians, however, failed to oppose the government’s motion. Accordingly, the district court properly concluded as a matter of law that the transfer of the defendant property was fraudulent,5 and that as a result the Markarians lacked Article III standing to contest the forfeiture action. [A] claimant need demonstrate only a colorable interest in the defendant property in order to establish Article III standing. Had the Markarians mounted any opposition to the government’s motion for summary judgment, it is entirely possible that they could have met their threshold burden under Article III. However, because the government presented evidence that the transfer of the property was fraudulent under state law, and the Markarians failed to present any evidence whatsoever to the contrary, the district court properly concluded that there were no triable issues of material fact with respect to that issue.

Id. at 8-9.