Gavel on sounding block

Ballard Spahr LLP Legal Team Obtains Key Court Victory

It is with great pleasure that I introduce the following post by our colleague and fellow blogger Joanna Kunz.  She was part of a team of Ballard Spahr lawyers who, working pro bono, recently obtained a landmark victory for their client — and for property owners throughout Pennsylvania — when the Pennsylvania State Supreme Court unanimously affirmed a lower court decision defining the parameters of civil forfeiture and arming Pennsylvanians involved in such cases with robust constitutional and statutory protections.  The team also included Jessica Anthony, who argued the case before the Supreme Court, and Jason Leckerman. — Peter D. Hardy

Elizabeth Young is a 72-year-old grandmother whose home and car the government sought to forfeit based on several relatively minor drug sales her adult son conducted out of the house and car. Young fought the forfeiture and lost at the trial level. However, last week the Pennsylvania Supreme Court affirmed the Commonwealth Court’s en banc reversal of that decision. Its 73-page opinion ends years of uncertainty in the law regarding the constitutional limits on civil forfeiture where the property owner often is not charged with any crime.

In recent years, the Philadelphia police and DA’s office have been extremely aggressive in their civil forfeiture practices. As noted by Young amicus the Institute for Justice, “between 2002 and 2014, Philadelphia law-enforcement officials forfeited over $72 million worth of property, including over 1,200 real properties, 3,500 vehicles, and $50 million in cash.” Critics of the program have long complained that law enforcement’s retention of forfeiture proceeds creates a conflict of interest, incentivizing forfeiture even where dubious grounds for those forfeitures exist. In the civil context this is particularly troubling, since the property owner oftentimes was never convicted of, or even accused of a crime.

Compounding this problem, case law defining the constitutional limits on civil forfeiture has been remarkably thin. Although the Eighth Amendment prohibits the imposition of “excessive fines,” and the United States Supreme Court has ruled that this prohibition applies to all punitive forfeitures – including to civil forfeitures, as held in Austin v. United States – the contours of what makes a fine “excessive” have not been well-defined in the civil context. In the leading case on excessiveness, United States v. Bajakajian, the Supreme Court held that the sole test for excessiveness under the Eighth Amendment in criminal forfeitures is whether the property forfeited would be “grossly disproportional to the gravity of the defendant’s offense.” This gross disproportionality test applies to all punitive forfeitures, including civil forfeitures. However, the Court left open the possibility that it may be appropriate to consider additional factors in determining the excessiveness of civil forfeitures.

In Commonwealth v. Real Property and Improvements Commonly Known as 5444 Spruce St., Philadelphia, the Pennsylvania Supreme Court once considered the excessiveness analysis following Bajakajian, but declined to adopt specific factors to be considered in determining excessiveness, stating that the proper approach had not yet gone through the “sharpening and annealing process of litigation in the lower courts.” This left open two key constitutional questions: (1) the degree to which the government must show that the property it seeks to forfeit facilitated the underlying crime (in other words, whether the property was an “instrumentality” of the crime), and (2) the factors a court must consider in measuring whether a given forfeiture would be “grossly disproportional” to the underlying offense in civil forfeitures.

The Young decision sets forth a detailed, comprehensive guide for courts to apply in making the excessive fines determination in civil forfeitures. And, the rubric adopted by the Court includes robust protections for property owners, explicitly rejecting the much harsher analysis the Commonwealth propounded.

Instrumentality as a Threshold

The Commonwealth argued that property can be civilly forfeited if it either is an instrumentality of the underlying crime (in which case, the Commonwealth contended, the forfeiture would be non-punitive and thus not subject to the Eighth Amendment’s prohibition on excessive fines), or satisfies the gross disproportionality test. The Young court rejected this formulation, instead holding that whether the property is an instrumentality of the underlying crime is a threshold requirement in determining whether a civil forfeiture would be excessive. This holding is in line with the historical justification for civil forfeitures — the legal fiction that the property itself is “guilty” by virtue of its use in the underlying crime. Indeed, historically, civil forfeitures were sharply limited to instrumentalities of the underlying offense. Austin, 509 U.S. at 628 (Scalia, J., concurring in part and concurring in the judgment) (“[I]n the case of deodands (a historic form of forfeiture), juries were careful to confiscate the instrument of death and not more. Thus, if a man was killed by a moving cart, the cart and its horses were deodands, but if the man died when he fell from a wheel of an immobile cart, only the wheel was treated as a deodand, since only the wheel could be regarded as the cause of death.”); Bajakajian, 524 U.S. at 333 n. 8 (noting that in historical civil forfeiture cases, property was “subject to forfeiture because it was the actual means by which the offense was committed. ‘Instrumentality’ forfeitures have historically been limited to the property actually used to commit an offense and no more.” (emphasis added)).

Thus, the Young decision hews closely to precedent, while clarifying that the government may not civilly forfeit property unless that property bears a “significant relationship” to the underlying offense.

The court went further, and set forth factors to be considered in making the instrumentality determination:

To be an instrumentality, the property itself is required to be “significantly utilized in the commission” of the offense. Indeed, there may be property that is connected to a crime, but is not significantly used in the crime. Considerations regarding this “significant utilization” assessment include: whether the property was integral to the commission of the offense — i.e., uniquely important to the success of the illegal activity; whether the use of the property was deliberate and planned or was merely incidental and fortuitous to the illegal enterprise; whether the illegal use of the property was an isolated event, or repeated; whether the purpose of acquiring, maintaining or using the property was to carry out the offense; and whether the illegal use of the property was extensive spatially and/or temporally.

The requirement that instrumentality be a threshold inquiry provides a safeguard to property owners that was not previously explicit.

Proportionality

Assuming property satisfies the instrumentality threshold, courts must also determine whether the forfeiture would be “grossly disproportional” to the underlying crime. In the absence of established guidelines for making the proportionality determination, the Commonwealth advocated an extraordinarily harsh rubric — it argued that property should be civilly forfeitable if the value of the property is below the statutory maximum fine theoretically applicable to the crime the property facilitated. (This is the method the Young trial court applied; before the Pennsylvania Supreme Court the Commonwealth argued that forfeiting Ms. Young’s house would not be grossly disproportionate: the appraisal of the house was $54,000, and, applying the statutory maximum fine for the crime of possession with intent to sell marijuana ($15,000) to each of her son’s proven sales in the case would total either $105,000 or $75,000, depending on the analysis used—in either case, more than the value of Young’s house and car.) The Commonwealth argued for this analysis regardless of the actual fines assessed on the defendant, and without considering the property owner’s culpability (or lack thereof). After all, the Commonwealth offered, Pennsylvania protects innocent property owners by statute (the “innocent owner defense”); thus, it argued, consideration of the property owner’s knowledge or involvement with the underlying crime would be unnecessary in the excessiveness analysis.

The court soundly rejected this logic. First, the court noted that in civil forfeitures, the property owner and criminal offender may not be the same person. Thus, “the potential harshness of a forfeiture against a property owner with no alleged criminal conduct, or minor culpability . . . must be recognized in any excessiveness inquiry . . . .” Indeed, the court recognized that property owners in civil forfeitures already lack many of the protections afforded in the criminal context — there is no right to counsel in civil forfeiture proceedings, the burden of proof on the Commonwealth is merely the preponderance of the evidence standard, and there is no presumption of innocence. Pennsylvania courts did not previously expressly require a consideration of the harshness of forfeiture to the property owner in applying the excessive fines clause. Therefore, the Young decision marks a significant improvement in ensuring that courts safeguard property owners against excessive fines under the Eighth Amendment.

The court provided further protection to property owners, requiring courts to conduct “both an objective pecuniary and subjective non-pecuniary valuation” of property the government seeks to forfeit. The court explained, “[w]hile a simple market value may be appropriate in some instances . . . certain property – such as a residence, a vehicle, or other similar necessities in our daily life – carry additional value to the owner and possibly others, and, thus, call for a subjective non-pecuniary evaluation of the property sought to be forfeited. Such a valuation would consider whether the property is a family residence, or is essential to the owner.”

And, the court rejected the Commonwealth’s contention that the statutory innocent owner defense could take the place of inquiring into the owner’s culpability in the excessive fines analysis:

As poignantly offered by Justice Anthony Kennedy in his concurring opinion in Austin, “[a]t some point, we may have to confront the constitutional question whether forfeiture is permitted when the owner has committed no wrong of any sort, intentional or negligent. That for me would raise a serious question.” Austin, 509 U.S. at 629 (Kennedy, J., concurring); see also id. at 617. While a forfeiture may be especially troubling for a completely innocent property owner, contrary to the Commonwealth’s assertions, the degree of culpability is significant even if the trial court determines that the property owner did not satisfy a statutory innocent owner defense. Constitutional protections are independent from statutory safeguards. Indeed, the legislature’s desire to protect an innocent property owner is not necessarily co-extensive with the constitution’s protection against excessive sanctions. As a constitutional matter, we find that assessing the gravity of the offense includes a determination of the degree of knowledge of a property owner. Even a property owner, while not wholly without knowledge or granting consent, may lack full knowledge of criminal activity, or may bear only nominal or token blame for the illegal conduct serving as the foundation for the forfeiture.

The Future of Civil Forfeiture in Philadelphia

Skyline of Philadelphia, Pennsylvania
Skyline of Philadelphia, Pennsylvania

The Young decision presumably will substantially alter the Philadelphia District Attorney’s civil forfeiture practices, which have been controversial for many years and have been criticized severely, by adding a greater burden on the Commonwealth to perform a more comprehensive analysis before civilly forfeiting property. Further, in a primary election, the City recently elected to the District Attorney ticket’s democratic slot a self-described criminal justice reformer (and career defense attorney) who campaigned on a civil rights platform. Assuming that this individual wins the general election (in a city which historically tends to vote for democratic candidates), his campaign messaging at least suggests that the City should not resist the lessons of the Young decision going forward.

Finally, this victory represented a true group effort. Amici briefs were filed by the Pennsylvania Association of Criminal Defense Lawyers, the Philadelphia Bar Association, the Hispanic Bar Association of Pennsylvania, the Barristers’ Association of Philadelphia, the Institute for Justice, the American Civil Liberties Union of Pennsylvania, Community Legal Services, the Philadelphia NAACP, Philadelphia Legal Assistance, Philadelphia Volunteers for the Indigent, and the Senior Law Center. We thank all of them, and we thank Mrs. Young.

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