Proposing a transactional approach to civil forfeiture reform.

• Author: van den Berg, Michael
• Position: Introduction through IV. Potential Solutions B. Expanding Constitutional Defenses 1. Double Jeopardy, p. 867-897

INTRODUCTION I. THE HISTORY OF CIVIL FORFEITURE A. The Ancient Roots of the Practice B Uses Throughout American History C. The Drug War and the Expansion of Forfeiture II. FORFEITURE LAW TODAY A. The National Landscape 1. Federal Law a. CAFRA b. Customs Rules and Other Federal Laws 2. State Law a. North Carolina b. Alaska c. Florida 3. The Interrelation: Equitable Sharing B. Arguments for Robust Civil Forfeiture Laws III. REFINING THE ISSUE IV. POTENTIAL SOLUTIONS A. Inaction B. Expanding Constitutional Defenses 1. Double Jeopardy 2. The Due Process Clauses of the Fifth and Fourteenth Amendments 3. Excessive Fines Clause of the Eighth Amendment C. Removing the Profit Motive from Civil Forfeiture D. Abolishing Civil Forfeiture V. THE TRANSACTIONAL APPROACH A. Some Insights from Economic Theory 1. Transaction Costs 2. Externalities 3. Nudges B. Proposed Solutions 1. Require an Immediate in Personam Hearing to Determine Whether the Seizure is Justified 2. Require Forfeiture Documentation to be Notarized by Independent Notaries 3. Require Extensive Documentation on Any Dogs Used in Forfeiture Actions 4. Disallow the "Alert" of Drugs on Currency to Justify Forfeiture 5. Require One Hundred Percent of Attorneys' Fees to Be Returned to Successful Claimants 6. Require Officers Who Would Engage in Seizure to Obtain Certification C. Progress? CONCLUSION INTRODUCTION

Civil forfeiture is a truly extraordinary legal doctrine--so much so that those who find themselves subject to a forfeiture proceeding frequently express disbelief that such an action could exist in the United States. (1) The Kafkaesque civil forfeiture system is ancient, labyrinthine, and impermeable to the uninitiated. Despite its esoteric nature, federal, state, and local authorities commonly utilize this legal doctrine. While the practice once had reputable roots, it has become a tool with enormous potential for abuse. This Comment explores the doctrine of civil forfeiture at a macro level before suggesting some specific recommendations for reform.

I begin by briefly examining the history of civil forfeiture. Forfeiture has its origins in biblical text and was present in English law as early as the tenth century. Rapidly appearing via statute in the United States, it was used as a tool against smugglers, confederate sympathizers, and liquor runners during Prohibition. The practice grew increasingly common in the 1980s, as legislatures realized forfeiture could prove a potent weapon in the war on drugs. As such, forfeiture use has since expanded dramatically; today, the value of property forfeited annually stands in the billions of dollars. (2)

The historical underpinnings of civil forfeiture continue to be relevant because they help clarify what forfeiture is. Essentially, forfeiture is an action filed directly against property, rather than against an individual. It depends on the central notion that property can be guilty per se. Forfeiture actions, then, proceed against the property itself. The property owner, who is reduced to a third party claimant, lacks many constitutional protections that would otherwise be available in a criminal action. (3)

Nationwide, civil forfeiture laws are a complex, multilayered landscape of federal and state statutes. The federal forfeiture statute--the Civil Asset Forfeiture Reform Act (CAFRA)--stands as the dominant federal paradigm, although it interacts with other federal laws, like customs statutes, that provide for forfeiture. Simultaneously, forty-nine states--all except North Carolina--allow civil forfeiture. Law enforcement officers pursuing a seizure of property have a number of options; for instance, federal "equitable sharing" guidelines allow officers in a state with a more restrictive statute to bypass state guidelines and access more favorable federal forfeiture proceedings.

Critically, many of these statutes--most notably CAFRA--allow law enforcement to keep the proceeds of forfeiture actions. Although the revenue raised by forfeiture has proved vital to reinforcing sagging law enforcement budgets in difficult economic times, such provisions also increase the threat of abuse. The resulting revenue, combined with a lower burden of proof than in criminal prosecutions, incentivizes law enforcement to use civil forfeiture as a tool to seize and dispose off individual property for its own ends.

This Comment addresses the problems associated with civil forfeiture in a very specific context: mid value chattel (MVC) and low value chattel (LVC) forfeiture. This should not suggest that forfeiture against real property (RP) or high value chattel (HVC), defined here as chattel with a value greater than $10,000, is not problematic. Rather, MVC and LVC forfeiture pose several unique problems.

The major issue that MVC and LVC seizure creates is that it is simply not economically rational for most individuals to defend an action against such chattel, given the relatively high cost of doing so. Standard attorneys' retainers in forfeiture actions can be upwards of $10,000--an amount that may be several times greater than the value of the chattel itself. (5) Indeed, data reveal that approximately eighty percent of forfeitures are uncontested. (6) Moreover, it is not readily apparent that the seizure of MVC and LVC--often involving small, personal belongings, such as phones or sneakers--is particularly effective at stopping pernicious drug traffickers. Finally, the Constitution, which provides some due process protections for the deprivation of real property via forfeiture, does not afford analogous protection to MVC and LVC.

Many other proposed solutions to the problems of civil forfeiture fall short of providing a framework to protect MVC and LVC. First, law enforcement officers, prosecutors, and their lobbies oppose any limitation on forfeiture. Second, some legal commentators have argued for extending constitutional protections to forfeiture. MVC and LVC, however, pose unique problems for any ex post constitutional protections. The major problem, of course, is that the majority of such actions are uncontested. As such, courts simply do not consider any constitutional protections because it is not economically rational for individuals to litigate a defense in the first place.

Even if the advanced constitutional protections of the Fifth or Eighth Amendments merited consideration, they would fail to provide much help to MVC and LVC claimants. For example, although the Eighth Amendment's excessive fines clause can overturn certain forfeitures, which in the language of CAFRA are "grossly disproportional," (7) MVC and LVC are frequently of such little value that this provision does not provide sufficient protection.

The most serious suggestion--and one not disparaged here--is the abolition of the profit motive in forfeiture. This Comment, however, cautions against viewing such an approach as a panacea that would cure all the ills of forfeiture. First, there is evidence that forfeiture can be a tool of racial oppression. (8) Merely abolishing monetary profit from forfeiture might not therefore dissuade officers from engaging in forfeiture to harass minorities. (9) Furthermore, abolishing the profit motive might discourage officers from undertaking the forfeitures that "matter"--i.e., pursuing valuable proceeds or instrumentalities of the drug trade, such as the massive property owned by Pablo Escobar, seized in Florida during the 1980s. (10) Forfeitures of such properties are likely to be complicated and dangerous, and police should be rewarded for pursuing them. Finally, totally stripping the profit system from forfeiture might cripple police budgets, which, particularly in our current economic milieu, rely on forfeiture proceeds. (11)

In light of these issues, I propose a new approach to civil forfeiture reform. I argue that forfeiture should be seen as a transaction--one that transfers rights in property from the claimant to the seizing department. As such, different costs can affect the "market" for forfeiture. Within this framework, I suggest increasing the transaction costs of forfeiture and requiring police departments to internalize the externalities they impose on non-consenting parties (i.e., owners) in these actions. The idea, in essence, is to change the ex ante incentive structure to protect MVC and LVC from entering a system where defense is simply not economically rational. Increasing transaction costs--by requiring heightened procedural formality or by forcing immediate probable cause hearings for plaintiffs--would make police discount the value of any seized property against the costs of its seizure, with the hope that MVC and LVC will simply no longer be worth the effort.

This Comment proceeds in five parts. In part I, I examine the history of forfeiture, beginning in Exodus and continuing through medieval England. I track the development of forfeiture law in the United States, before examining its initial deployment in the war against drugs in the early 1980s. I then discuss the vociferous criticism of forfeiture in the 1990s, which eventually led to the passage of CAFRA, the federal forfeiture act...