Nexus Rethought: Toward a Rational Factual Standard for Federal Criminal Forfeitures

• Author: Benjamin Gillig
• Position: J.D. Candidate, The University of Iowa College of Law, 2017; Ph.D., The University of Iowa, 2016; B.A., UC Irvine, 2009
• Pages: 289-316

Nexus Rethought: Toward a Rational Factual Standard for Federal Criminal Forfeitures Benjamin Gillig * ABSTRACT: Numerous federal statutes authorize the government to seek forfeiture of a criminal defendant’s property after conviction. Under each of those statutes, the government must establish, by a preponderance of the evidence, that there is a factual nexus between the defendant’s criminal conduct and the property to be forfeited. Courts have struggled to articulate a standard for judging whether the government has established a factual nexus sufficient to warrant forfeiture. As a result, the existing criminal forfeiture jurisprudence is idiosyncratic and chaotic, and invites suspicion that the forfeiture statutes may be unconstitutionally vague. This Note traces the development of asset forfeiture law in the United States and outlines the current, inconsistent application of the forfeiture statutes. It then argues that courts should: (1) read the statutory language authorizing forfeiture to determine the types of property that may be forfeited; and (2) grant forfeiture if the government establishes that the contact between the property at issue and the criminal conduct is more than merely incidental or fortuitous. Such a standard will comport with the purpose of the forfeiture statutes and allow courts to meaningfully distinguish between property that is sufficiently connected with crime to permit forfeiture and property that is not. I. INTRODUCTION ............................................................................. 290 II. THE DEVELOPMENT OF ASSET FORFEITURE LAW IN THE UNITED STATES .......................................................................................... 292 A. H ISTORICAL D EVELOPMENT OF A SSET F ORFEITURE L AW ............ 292 B. T HE E XCESSIVE F INES C ASES .................................................... 296 C. F RAMEWORK FOR C ONTEMPORARY C RIMINAL F ORFEITURES ....... 298 * J.D. Candidate, The University of Iowa College of Law, 2017; Ph.D., The University of Iowa, 2016; B.A., UC Irvine, 2009. I would like to thank Matthew Bergs and Peter Chalik for their invaluable comments on earlier drafts of this Note. I would also like to thank Tessa Register and the rest of the members of the Iowa Law Review Volume 102 Editorial Board for assistance preparing this Note for publication. 290 IOWA LAW REVIEW [Vol. 102:289 III. THE VARIOUS APPROACHES TO THE FACTUAL NEXUS ELEMENT .. 300 A. T HE “R EASONABLE U NDER THE C IRCUMSTANCES ” A PPROACH ... 302 B. T HE “R ECEIVED B ENEFIT ” A PPROACH ....................................... 303 C. T HE “C OMMINGLING ” A PPROACH ............................................ 305 IV. TOWARD A RATIONAL STANDARD FOR THE FACTUAL NEXUS ........ 307 A. T HE “M ORE THAN I NCIDENTAL OR F ORTUITOUS C ONTACT ” S TANDARD IS C ONSISTENT WITH THE P URPOSE OF C RIMINAL F ORFEITURE . ........................................................................... 309 B. T HE “M ORE THAN I NCIDENTAL OR F ORTUITOUS C ONTACT ” S TANDARD A LLOWS C OURTS TO M EANINGFULLY D ISTINGUISH B ETWEEN F ORFEITABLE P ROPERTY AND P ROPERTY N OT S UBJECT TO F ORFEITURE . ...................................................................... 311 C. S OME C OURTS A LREADY A PPLY THE “M ORE T HAN I NCIDENTAL OR F ORTUITOUS C ONTACT ” S TANDARD .................................... 314 V. CONCLUSION ................................................................................ 315 I. INTRODUCTION Crime should not pay. This basic idea reflects both the moral intuition and the legislative purpose of numerous federal statutes that authorize the federal government to take away property involved in crime. 1 Since the Founding, property involved in illegal conduct has been subject to forfeiture to the government. 2 Early in American history, property forfeitures were restricted to just a few specific types of crime, and were accomplished through a civil in rem proceeding against the “guilty property.” 3 The subsequent 200 years witnessed repeated expansions of the forfeiture power, culminating in 1970 when Congress created a new type of forfeiture: criminal forfeiture, which is part of sentencing following criminal conviction. 4 Now, instead of a civil proceeding against a particular piece of property, the government can forfeit property following a defendant’s conviction without instituting a separate action. 5 As a result of the government’s enhanced forfeiture powers 1. See DEE R. EDGEWORTH, ASSET FORFEITURE: PRACTICE AND PROCEDURE IN STATE AND FEDERAL COURTS 25–26 (2014) (listing the various federal statutes that authorize criminal forfeiture). For a description of asset forfeiture law in the United States, see infra Part III. 2. C.J. Hendry Co. v. Moore, 318 U.S. 133, 139 (1943) (“Long before the adoption of the Constitution the common law courts in the Colonies—and later in the states during the period of Confederation—were exercising jurisdiction in rem in the enforcement of forfeiture statutes.”). 3. United States v. Bajakajian, 524 U.S. 321, 325–26 (1998) (recounting the history of asset forfeiture in the United States). 4. Id. 5. Id. at 332 n.7. 2016] NEXUS RETHOUGHT 291 and the convenience of avoiding a separate proceeding, criminal forfeiture has become a ubiquitous part of federal criminal prosecution. 6 But if the underlying policy rationale for criminal forfeiture is that crime should not pay, courts imposing forfeitures must differentiate between property that is connected with criminal conduct and property that is not. This determination involves the so-called “factual nexus” element of criminal forfeiture: the government must prove by a preponderance of the evidence that there is a factual nexus between the property to be forfeited and the criminal conduct of which the defendant was convicted. 7 Courts have struggled to apply the factual nexus requirement with any consistency. 8 Instead, they have adopted a patchwork of approaches that lack any articulable standard for how strong of a connection must exist between the property and the criminal conduct before forfeiture is proper. 9 Of course, analysis of the factual nexus element is, by its very definition, a highly fact-specific inquiry. 10 But without some standard for determining when a connection is strong enough, the courts’ myriad approaches to the factual nexus element invite the conclusion that the forfeiture statutes are being enforced arbitrarily, and are therefore unconstitutionally vague. 11 To avoid the specter of unconstitutional vagueness and rationalize the current, disparate jurisprudence, this Note argues that courts should adopt a standard that requires the government to show that the contact between the property and the criminal conduct is more than incidental or fortuitous. 12 6. Stefan D. Cassella, Criminal Forfeiture Procedure: An Analysis of Development in the Law Regarding the Inclusion of a Forfeiture Judgment in the Sentence Imposed in a Criminal Case , 32 AM. J. CRIM. L. 55, 56 (2004) (“[F]ederal prosecutors have begun to make criminal forfeiture a routine part of criminal law enforcement in federal cases. Indeed, criminal forfeitures now account for approximately 50 percent of all contested forfeiture actions in federal courts. In some districts, the fraction is actually much higher.”); see also United States v. Delco Wire & Cable Co., 772 F. Supp. 1511, 1515 (E.D. Pa. 1991) (“In 1984, the Comprehensive Crime Control Act . . . amended the criminal forfeiture provisions of RICO ‘to enhance the use of forfeiture, and in particular, the sanction of criminal forfeiture, as a law enforcement tool.’” (quoting S. REP. NO. 225, at 191 (1984), reprinted in 1984 U.S.C.C.A.N. 3182, 3374)). 7. See infra Part II.B. 8. See infra Part III. 9. See infra Part III. 10. See FED. R. CRIM. P. 32.2 (Advisory Committee’s note to subdivision (b)) (“To the extent that the government is seeking forfeiture of a particular asset, such as the money on deposit in a particular bank account that is alleged to be the proceeds of a criminal offense, or a parcel of land that is traceable to that offense, the court must find that the government has established the requisite nexus between the property and the offense. To the extent that the government is seeking a money judgment, such as a judgment for the amount of money derived from a drug trafficking offense or the amount involved in a money laundering offense where the actual property subject to forfeiture has not been found or is unavailable, the court must determine the amount of money that the defendant should be ordered to forfeit.”). 11. See infra note 83 and accompanying text. 12. See infra Part IV. 292 IOWA LAW REVIEW [Vol. 102:289 This Note has five parts. After this introduction, Part II discusses the development of property forfeiture law in the United States. Part III examines the disorderly approaches that courts have taken when determining whether a particular piece of property meets the factual nexus requirement. Part IV argues that courts should adopt a uniform factual nexus standard for all criminal forfeitures: something more than incidental or fortuitous contact between the property and the criminal conduct. Part V concludes by arguing that the proposed standard affords courts an opportunity to develop the criminal nexus jurisprudence in an orderly way. II. THE DEVELOPMENT OF ASSET FORFEITURE LAW IN THE UNITED STATES The development of asset forfeiture law is, in large part, the story of the nation’s evolving law enforcement needs and priorities. 13 It tracks policymakers’ evolving attitudes towards taking a person’s property as punishment for crime—from hesitance to enthusiasm. 14 This Part first traces the historical development of asset forfeiture in the United States. It then highlights two cases in which the Supreme Court defined modern criminal forfeiture and its constitutional limits. It concludes by providing a framework for the analysis of modern...