Civil asset forfeiture is a law enforcement tool that enables the seizure and eventual forfeiture of real and personal property that may have been involved in criminal activity. States are beginning to scale back their civil forfeiture laws, and with good reason. Today’s expansive forfeiture laws, rather than relieving drug kingpins and criminal organizations of their ill-gotten gains (as was their original purpose), instead allow for—and even incentivize—the seizure of property and currency from ordinary Americans based on little or no evidence of actual criminality.[1]
An Overview of Civil Forfeiture
Modern civil forfeiture laws hold that property can be guilty of a crime, and therefore may be seized and forfeited even if that property’s owner never faces criminal charges. For two centuries, American civil forfeiture law was largely restrained to admiralty and customs enforcement. In the 1980s, Congress and the states turned to civil forfeiture to combat rampant drug distribution and organized crime. Civil forfeiture became a mainstream law enforcement tool and Congress and the states encouraged its use by allowing law enforcement agencies to retain the proceeds of successful property forfeitures.
Once authorities seize private property, the resulting civil proceeding differs dramatically from the customary standards of American criminal law.
First, the proceeding targets the property rather than the owner. Under forfeiture law at the federal level and in most states, the evidentiary standard requires “a preponderance of the evidence,” not the criminal law standard of “beyond a reasonable doubt.” Thus, prosecutors need prove only that it is more likely than not that the property is tied to crime and is thus forfeitable.
Second, the prosecution need not prove that an owner used the property to commit a crime or was willfully blind to its use, as is the case in ordinary criminal trials. In a forfeiture proceeding, the burden falls on the owner to disprove these facts by demonstrating that he neither knew of, nor consented to, the property’s illicit use.
Third, property owners in forfeiture cases, unlike defendants in criminal cases, have no guaranteed right to counsel. Consequently, if an owner cannot afford an attorney, he must navigate a tortuous legal landscape alone. Oftentimes, the cost of hiring a lawyer exceeds the value of the seized property or currency; hence, a large number of defendants opt not to retain counsel even if they can afford the expense.[2]
With such low odds of victory in forfeiture cases, many innocent property owners simply walk away: A vast majority of federal civil forfeiture cases—88 percent by some estimates—never see the inside of a courtroom.[3] In these “administrative forfeiture” cases, the agency that originally seized the property, and stands to gain financially from keeping it, acts as investigator, prosecutor, judge, and jury all in one.[4]
Forfeiture and the Equitable Sharing Link
Once a federal forfeiture is completed, federal law enforcement agencies may retain and spend the proceeds or, through a program known as “equitable sharing,” transfer a portion of the proceeds—in practice, up to 80 percent—to any state and local agency “which participated directly in any of the acts which led to the seizure or forfeiture of the property.”[5]
The Treasury and Justice Departments operate equitable sharing programs. Since 2000, both have doled out more than $5 billion in forfeiture revenues.[6] This money may be spent only by the seizing agency, and then only for law enforcement purposes. The funds are not subject to control by state and local legislatures. As a result, federal law allows, and even financially incentivizes. state and local law enforcement agencies to bypass state laws that attempt to curtail or ban civil forfeiture. This loophole blunts the force of state-law forfeiture reforms and flies in the face of federalism, government transparency, and accountability.
Comprehensive Forfeiture Reforms
Over the past few years, a number of states have enacted broad forfeiture reform bills incorporating restrictions on the ability of state and local law enforcement authorities to transfer property to the federal government or receive the consequent revenues.
New Mexico
On April 10, 2015, New Mexico Governor Susana Martinez (R) signed into law H.B. 560, a sweeping forfeiture reform bill passed unanimously by the legislature.[7]
H.B. 560 abolished civil forfeiture in the state. As of July 1, 2015, prosecutors must obtain a criminal conviction before property may be forfeited. However, a conviction alone does not automatically result in the forfeiture of property. The state must also prove by clear and convincing evidence that the owner of the property had “actual knowledge of the underlying crime giving rise to the forfeiture.” Now innocent owners whose property was used to commit a crime without their knowledge or consent will not find themselves unjustly penalized for the conduct of others.[8]
H.B. 560 also abolished the forfeiture funding mechanism. Now any proceeds derived from the seizure and forfeiture of property must be deposited in the state’s general fund, available for appropriation by elected legislators. H.B. 560 also curtails the ability of New Mexico’s law enforcement agencies to circumvent state laws by transferring property to the federal government in exchange for payments under the equitable sharing program. State agencies may transfer property only when:
Its value exceeds $50,000;
The underlying criminal conduct is interstate in nature or sufficiently complex to justify the transfer; or
The property may only be forfeited under federal law.
Even in these situations, no property transfer may take place “if the transfer would circumvent the protections of the Forfeiture Act that would otherwise be available to a putative interest holder in the property.”[9]
New Mexico’s efforts have been hailed by many as the gold standard for how to reform forfeiture law. Brad Cates, who headed the Asset Forfeiture Office at the Department of Justice between 1985 and 1989 and was an early architect of the federal forfeiture ramp-up, has publicly decried what civil forfeiture has become, writing that while the “program began with good intentions [], having failed in both purpose and execution, it should be abolished.”[10] In his capacity as counsel to New Mexico’s House Judiciary Committee, Cates was able to help craft and advocate for the bill that did just that in his home state.
Nebraska
Just over a year after New Mexico’s forfeiture bill was passed, Nebraska Governor Pete Ricketts (R) signed L.B. 1106, a forfeiture bill similar to its counterpart in New Mexico.[11]
Like New Mexico’s H.B. 560, the Nebraska act requires a criminal conviction, essentially abolishing civil forfeiture in the state. Property may still be forfeited, but only after the state first obtains a criminal conviction on drug, child pornography, or illegal gambling charges, and then only after demonstrating by clear and convincing evidence that the property sought for forfeiture was used or intended to be used to commit the crime, or represents the proceeds of the offense.
L.B. 1106 also restricts the ability of Nebraska law enforcement agencies to circumvent the new law by transferring property to the federal government. Such transfers may take place only if the property or cash seized exceeds $25,000 in value; if the property was physically seized by an agent who is actually employed by the federal government (thereby preventing a local officer who has been deputized by a federal agency from skirting the restriction); or if the person from whom the property was seized is the subject of a federal prosecution.
However, a financial incentive to seize property in the state remains in place. Article VII-5 of the Nebraska Constitution preserves 50 percent of forfeiture revenues for use by law enforcement agencies for drug enforcement efforts, with the remainder preserved to finance public education. Because the profit incentive is enshrined in the state’s constitution, only a constitutional amendment can change this.
Maryland
The Old Line State has adopted two significant pieces of forfeiture reform legislation in the span of just a few months. The first, S.B. 528,[12] became law in January 2016 after the state legislature overrode Governor Larry Hogan’s (R) veto.[13] On May 19, 2016, Governor Hogan signed a second reform bill, H.B. 336, into law.[14]
Under these reforms, the standard of proof has been raised from a mere “preponderance of the evidence”—a low standard given the quasi-criminal nature of the proceeding and what is often at stake for the property owner—to “clear and convincing” evidence, and places the burden of proof squarely on the state.
Furthermore, Maryland law enforcement agencies may forfeit cash only in connection with the illegal manufacture, distribution, or dispensing of controlled substances. Cash seizures based on simple possession are no longer allowed. Agencies will also be subjected to a host of reporting requirements designed to increase transparency, including documenting how they spend “any funds appropriated to the [agency] as a result of forfeiture,” the disposition of any related criminal proceedings, demographic dat…