Courthouse Steps Preview: Culley v. Marshall

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Jack Capizzi:  Hello, and welcome to today's Federalist Society virtual event. Today, October 24, 2023, we are excited to present a Courthouse Steps preview recap in the case of Cully v. Marshall. My name is Jack Capizzi, and I'm an assistant director of practice groups at the Federalist Society. As always, please note that all expressions of opinion are those of the speakers on today's call. After our speakers have given their remarks, we will turn to you, the audience, for any questions that you might have. If you do have a question at any point, please type it into the Q&A feature at the bottom of your screen, and we'll handle those questions as we can towards the end of the program. With that, thank you all very much for being with us today. I'll turn it over to our moderator. Our moderator is Adam Griffin, a constitutional litigation fellow at Pacific Legal Foundation and a member of our environmental law and property rights practice group. Adam, over to you.

 

Adam Griffin:  Thanks, Jack. And thanks to The Federalist Society and to our audience for being here today for our Courthouse Steps preview of Cully v. Marshall. This case concerns private property rights, civil asset forfeiture, and due process of law. The question presented to the Court is whether, when the government seizes an individual's private property, whether or not the government must afford that individual a prompt post seizure probable cause hearing, and then also whether or not the determination of whether that hearing is required falls under the speedy trial test of Barker v. Wingo or under the three-pronged due process test of Mathews v. Eldridge.

 

Here to discuss this very interesting topic with us today are two of the leading lights in civil asset forfeiture. Robert Johnson is a Senior Attorney at the Institute for Justice, where he litigates free speech and private property and other individual liberties. He's a well-recognized expert on civil asset forfeiture law and has litigated numerous cases against the federal government in defense of individuals' private property rights. He filed an amicus brief with the Institute for Justice in this case, representing both his firm and several of his clients that he has represented in civil asset forfeiture cases prior to Cully vs. Marshall.

 

Our other speaker is Mr. Stefan D. Cassella. He is the CEO of Asset Forfeiture Law, LLC. Mr. Cassella is a well-recognized expert in civil asset forfeiture law. Prior to becoming CEO of Asset Forfeiture Law, he was a federal prosecutor and an expert in money laundering and civil asset forfeiture. He's published widely on the subject of civil asset forfeiture and has published textbooks and is a well-recognized expert in federal prosecutor law and anyone interested in the subject of civil asset forfeiture. Very grateful to both of our speakers for being here today to talk about this interesting case. Mr. Johnson, the floor is yours.

 

Robert Johnson:  Great. Thank you, Adam. So, as I think most listeners are probably aware, civil forfeiture is a legal mechanism that allows the government to take people's property based on suspicion of a crime and then to keep that property forever without having to convict anybody of anything. So in civil forfeiture cases, the property itself is the defendant, and that results in strange case names like United States v. $4,000 or State of Alabama v. one Dodge Durango. And because the property itself is the defendant, ordinary concepts of due process and fair play go out the window. So the normal criminal standard of guilt beyond a reasonable doubt is found nowhere in civil forfeiture law. And in fact, in many cases, property owners in forfeiture cases actually have to prove their own innocence as a defense in order to get their property back. And as particularly relevant here, when you're arrested, the government is required to give you a hearing where you can contest the basis for your arrest within a reasonable time after your arrest, ordinarily 48 hours. But in the forfeiture context, the government can take property, and then it can hold it for months or even years without providing any hearing at all.

 

And that is the question at issue in this case, Cully, at the Supreme Court. The question is, Cully, is whether in civil forfeiture cases when the government takes your property, the government should be required to provide a prompt post seizure hearing where you can contest the basis for the seizure and the basis for the continued retention of your property, just like the government has to do when a person is arrested. So the facts of Cully, it's two individuals who are residents of Alabama whose vehicles were seized not because they did anything wrong, but because other people allegedly violated the law. So Lena Sutton had her vehicle seized because her friend allegedly dealt drugs. And Halima Cully had her vehicle seized because her son allegedly dealt drugs. And then their vehicles were held for 14 months and 20 months, respectively, without a hearing. Now, the law in Alabama has since been amended to provide for prompt hearings, but their case is not moot because they're still seeking damages. And this remains very much a live issue in other jurisdictions. And that's something that we highlighted in the brief that we filed with the Court.

 

So, as Adam mentioned, the brief that we filed was on behalf of both the Institute for Justice and also two clients in IJ cases. And their stories show the importance of the question that's before the Court right now. The first client is Stephanie Wilson. Stephanie's vehicle was seized by the city of Detroit because the father of her children, her ex-boyfriend, allegedly purchased drugs. And then after her vehicle was seized, it was held for almost two years without any hearing. Now, Stephanie repeatedly asked to see a judge during that time, but those requests were denied, and instead, she had to go to meetings with prosecutors. And at those meetings, the prosecutors offered to give the car back, but only if she would agree to settle for a payment of $1,800. Stephanie turned those offers down. She finally saw a judge after two years, and the judge ordered the car returned. But at that point, the car had sat for so long in a Detroit impound lot that it was no longer operable. The other client on our brief is Gerardo Serrano. Gerardo's car was seized at the border by customs and border patrol agents because they found five bullets that Gerardo had forgotten in the center console of the car. And they claimed that this made Gerardo an international arms smuggler and made his truck subject to forfeiture. And again, Gerardo's car was held over two years without any kind of a hearing, and he only got it back when he filed a federal class action lawsuit, at which point the government agreed to give the car back.

 

And these stories aren't unique. The brief highlights many stories of IJ clients and others where the government has held property for months or years without a hearing. And in fact, this kind of delay is baked into the law. Federal forfeiture laws that apply to most seizures give the government at least 160 days to file a forfeiture action after property has been seized. Then, of course, as any lawyer knows, once a case has been filed, you're going to be waiting months or years to actually get to a decision. So these delays are not just common. They're an expected part of the law. And these delays impose important costs. People have to rent a car or buy a new car. They have to miss all kinds of events, like family events, work events. People rely on their cars to get to work. They may lose their job if they don't have a car. People also have to give up all kinds of business opportunities as their property is being held. Just as an example, we had an IJ client who had $75,000 that was seized at the airport. It was eventually returned, but she was taking that property with her to Nigeria, where she was planning to open a medical clinic. That was her home country of Nigeria. And she had to give up that plan because her money was seized. These are just examples.

 

The other problem that we see is -- because of delay, is that people give up. And so often what we see and what we saw in Stephanie's case is that the government will offer to return property, but only if people agree to make some sort of a monetary payment or in the case of seized cash, agree to forfeit some percentage of the whole. So we've had clients who've been offered to have seized cash returned, but only if they agree to forfeit half of it. And these settlement offers are very coercive when you have to wait months or years for a hearing, because some people just can't afford to wait months or years to get their property back, even if they've done nothing wrong. So that's the problem as a legal matter. Very quickly, who is right?  And on that, I'm actually just going to defer to the recent opinion of the Sixth Circuit in Stephanie Wilson's case. The Sixth Circuit there, I think undoubtedly with an eye to this Supreme Court case, held that the Constitution requires a prompt post seizure hearing. The majority there said that a hearing has to be held within 14 days after property has been seized. And Judge Thapar, concurring said, actually, no, it should be held within 48 hours.

 

And both opinions make two points in support of this conclusion. The first is an originalist point. Both the majority and the concurrence point out that historically the kind of delays that we see in modern forfeiture law were just unheard of and that there were procedures in early American forfeiture law which, incidentally, was limited to pirate ships and things that have nothing to do with the kinds of crimes that today can lead to forfeiture. But even putting that aside, early American forfeiture law allowed for speedy procedures to allow for the quick resolution of forfeiture cases. And then the second point is one based on precedent. The Supreme Court's due process cases hold that due process requires a meaningful hearing at a meaningful time. And a hearing that occurs years after your property has been seized just isn't a meaningful time to have a hearing.

 

Ultimately, the point that I would make is that modern forfeiture procedures are an anomaly. There are no other areas of the law where the government can just take your property and hold it for years without giving you any kind of a hearing. Ordinarily the government has to give you a pre seizure hearing, but at the very least, they should have to give you a prompt post seizure hearing. Civil forfeiture is an anomaly, and in this respect, it needs to be ended.

 

Adam Griffin:  Thank you, Mr. Johnson. Great presentation. Mr. Cassella, the floor is yours.

 

Stefan Cassella:  Well, thank you very much. First, I just want to begin by making one correction to what Rob said. In a civil forfeiture case, as most people watching know, the government cannot seize based on mere suspicion. It can only seize based on probable cause, the same standard that applies to making an arrest of an individual. And it cannot forfeit the property permanently based on mere suspicion. It can only do so after it proves on a preponderance of the evidence that a crime occurred and the property was involved in the crime. The defendant does not, or the property owner does not have to prove his innocence. That is the government that has the burden of proving that the property is subject to forfeiture. And as Mr. Johnson knows, the Congress changed the law to make that the law 23 years ago, not what he's referring to as the law that existed back in the 20th century. But we're not here to talk about that. We're here to talk about the basis for making a seizure and then following it up with an immediate post seizure probable cause hearing.

 

The cases before the Supreme Court are simple cases. Sutton and Cully are cases involving simple facts. Somebody was transporting drugs in a car. In one case, methamphetamine. In the other case, marijuana. The police seized the car. The owner, who was somewhere else at the time, says, "Hey, I need my car to get to work. I think the seizure was illegal, so I want my car back. That I have a right to contest all of this in some hearing before a judge someday is nice, but I need my car now. The seizure was illegal, and I should have the right to have that immediate hearing." So it is easy to see how in a simple case, under a balancing test, the request for immediate hearing would make sense. What, after all, is the burden on the government to grant such a hearing in such a simple case? Indeed, for 20 plus years, this issue has been percolating in the federal courts, and courts have been granting such hearings in similar state civil forfeiture cases. The Second Circuit did so in the Krimstock case with the author was Justice Sotomayor, then on the Second Circuit. The Seventh Circuit did so in the Smith case. And as we just heard in the Ingram case, the Sixth Circuit did so recently as well. And it's likely that the Supreme Court in this case will say that a prompt post seizure hearing makes sense because of the simple facts.

 

But the plaintiffs are not seeking a probable cause hearing rule that would apply only in simple state cases involving automobiles. What they're seeking is a general rule that under Mathew v. Eldridge, there is a probable cause hearing requirement in every civil forfeiture case. But what Mathews requires in a simple case is maybe not what it requires in a far more complicated case. Indeed, Justice Sotomayor herself in the Krimstock case acknowledged that in the holding in that case, that its holding might not apply in a much more complicated federal case simply because it's more complicated. What I believe is what the Court should hold in this case is that where there are complicated factual issues, standing issues, and affirmative defenses such as arise in almost every federal civil forfeiture case, the balance required by Mathews is the speedy trial rule of Barker v. Wingo, coupled with the due process protections that have already been written into federal forfeiture law. Now, as I say, Krimstock and the other cases have been percolating in the federal courts for 20 plus years. But in all of that time, in all of that time, no court has held that there's a right to an immediate post seizure hearing in a federal civil forfeiture case.

 

Now, why is that? Well, lots of reasons. First, the administrative burden. I don't know how often Alabama seizes a car from a drug dealer in Alabama but the DEA makes 14,000 seizures a year. The FBI makes 4,000 seizures a year. The last time I looked, the Customs Service made 60,000 seizures a year. Do you couple that with what the IRS, the Secret Service, Homeland Security, the Fish and Wildlife Service, and so forth. You're talking about an enormous administrative burden if every case required an immediate post seizure hearing. Second, warrants. In most federal civil forfeiture cases, the seizure is pursuant to a warrant. The risk of erroneous deprivation is minimized if the seizure has already been authorized by a federal magistrate judge who has issued a warrant.

 

Third, in these federal cases, there's often a parallel criminal case. The forfeiture may be begun as a civil case because that's government policy to begin every seizure of property as a civil or administrative forfeiture because most of them are going to be uncontested. But there's often a parallel criminal case and there is the great risk that if you had an immediate probable cause hearing it would be used as discovery by the defense and it would jeopardize the criminal investigation or the criminal prosecution. Fourth, there are deadlines. The government cannot seize property and sit on it indefinitely. Also, 23 plus years ago, Congress required the government to commence a civil forfeiture action within 60 days and if someone files a claim, it must, thereafter, within 90 days, file an action, either criminally or civilly, in federal court. If the government does not comply with the guidelines there is Rule 41 G of the Federal Rules of Criminal Procedure which do give the property owner the very right that Mr. Johnson is suggesting they should have, the right to a hearing because the government has not acted promptly enough as required by law.

 

Most important, cases have not been applied to federal law because federal law contains a hardship provision. If someone's property is seized and it's a car or something that he needs immediately to get to work or to school, he has a right to petition the seizing agency. And if not successful there, petition the court for the immediate release of the property pending trial. This has nothing to do with the merits, nothing to do with whether there's probable cause. The only issue is whether there is a hardship and the person needs the property in order to get about his daily business and there is some way of guaranteeing that the property is not going to disappear while the case is pending.

 

Next, there's a remission process. Under federal law, you don't need to make a claim. You don't need to go to court, you don't need to have a prosecutor involved. You can simply petition the seizing agency for the immediate release of the property. And the courts have recognized time and again that that is a streamlined process that makes it easy for people who have a justifiable reason for suggesting that the seizure was incorrect to get that property back without going through all of the due process that is required in a federal case. But the most important reason why federal cases have not recognized the right to a post seizure probable cause hearing in federal civil forfeitures is because, as Justice Sotomayor recognized, federal cases are complicated. Yes, there are simple seizures of $50,000 from a drug courier who stopped at the airport. But federal civil forfeiture cases involve the seizure of yachts from Russian oligarchs, of money used to finance terrorist organizations like Hamas and Hezbollah, of money going to sanctioned countries like Iran and North Korea. International money laundering cases involving cryptocurrency and ransomware, the proceeds of foreign public corruption that's found in the United States, as in the case of Prime Minister Lazarenko from Ukraine or Mr. General Abacha from Nigeria. The proceeds of foreign organized crime invested in the United States, as in the Magnitsky case involving Russian organized crime, the proceeds of Ponzi schemes involving hundreds of victims like in the Madoff cases.

 

There is a whole, well designed, orderly process for litigating such cases and short circuiting that process to require a probable cause hearing within days of the seizure simply makes no sense. And that's particularly the case, because there is seldom a need in those cases for the immediate return of the property, as there might be in the case of somebody's automobile that was seized in Alabama. Also, in federal cases, there are standing issues. In those cases, the claim is not necessarily filed by someone who says, "Hey, that's my car and I want it back." There can be multiple parties claiming the property, ex-spouses, creditors, trusts, shell corporations that are created in bank secrecy jurisdictions, and so forth. With all those multiple claimants coming forward, who gets the probable cause hearing? Does it have to be multiple probable cause hearings? So the bottom line is that except in the simplest cases arising under state forfeiture statutes, as we see in Cully and in Sutton, even under a balancing test, there should be no due process right to an immediate post seizure hearing.

 

Let me make one last point before I wrap it up. Even with respect to the simplest cases, even with a case like the one before us today, Sutton and in Cully, this case is the wrong case to be used to decide this issue. Why? At most, a property owner should have the right to contest the legality of the seizure. Was there probable cause to believe that a crime occurred and the property was involved in the crime? He's not entitled to a hearing on every affirmative defense that conceivably could be raised in the course of the litigation. The two cars in these cases were seized because they were being used to transport drugs. There was no doubt about that. There was no question that they were being used to transport drugs, no question the seizures were legal or that they were forfeitable under state law.

 

What the owners wanted was an immediate right to assert their affirmative defense that they were innocent owners who didn't know that their property was being used for this purpose. But just as the government does not have to plead the negative of an affirmative defense to charge someone with a crime in a criminal case, it does not need to show the negative of an affirmative defense to seize and retain property for forfeiture in a civil case. If a third party could assert his affirmative defenses as a reason to release the property, such as the innocent owner defense, why not every other affirmative defense that he acquired the property after the crime as a bona fide purchaser for value, that the statute of limitations had run, that venue was improper, that the government missed the filing deadlines, that the forfeiture would violate the excessive fines clause of the 8th Amendment. None of those are appropriate to erase at the probable cause stage, where you're just questioning whether or not there was a legal seizure of the property based on probable cause that is subject to forfeiture.

 

So the point is this, in this case, even if the Supreme Court were to hold that there's an immediate right to a post seizure probable cause hearing, it would do the plaintiffs no good. There was probable cause for the seizures. The process for determining their affirmative defenses is to litigate the case at trial. So this is simply the wrong case to be used to resolve the issue that was presented. Thank you.

 

Adam Griffin:  Thank you, Mr. Cassella. Great presentation. Mr. Johnson, rebuttal?

 

Robert Johnson:  Yeah. Well, I guess I'd like to start by just saying I think I sort of appreciated that Stef ended with the last remarks about innocence being an affirmative defense, because he began his remarks by saying that I was wrong to say that in civil forfeiture cases, innocence is a defense. So there was sort of a nice circularity we actually ended by contradicting the very first thing that Stef said in his remarks. So that I appreciated. And I was going to start by talking about how actually innocence is a defense. But I think Stef just did that nicely himself, so I'll just leave that point alone.

 

I do want to just very quickly say that Stef also said that I was wrong to say that civil forfeiture allows the government to take property based on suspicion of a crime. But obviously, probable cause is just suspicion of a crime. And I think every lawyer knows that the standard for probable cause is not high. Stef also said that in many cases, property is seized pursuant to a warrant. But we know that in most cases involving civil forfeiture, there is no warrant. And in fact, the question that the Court is deciding is what to do in cases where there is no warrant for a seizure, which there was no warrant, obviously, in Lena Sutton's case and in Halima Cully's case. There was no warrant in Stephanie Wilson's case. There was no warrant in Gerardo Serrano's case either. These are all warrantless seizures where you just have an officer seizing property because in the officer's subjective opinion, there's probable cause to think that the property is somehow tied to a crime.

 

Now, I think a lot of Stef's remarks really focused on what I would consider sort of edge cases where property is being seized because it's linked to some sort of crazy cryptocurrency scheme or because it's the property of Russian oligarchs. And the first thing I would say is those are not the typical civil forfeiture cases. And we know this that the Institute for Justice has done empirical research where we have obtained data on forfeitures through the Freedom of Information Act and from states using their public records laws. And we've compiled those into a report called Policing for Profit. And it looks at civil forfeiture cases. And one of the things that it finds is that most forfeitures are quite small, just a few thousand dollars. So the typical forfeiture is not some yacht that's being seized from a Russian drug oligarch. The typical forfeiture is somebody's car or just a few thousand dollars in cash, property like the property that's at issue in this very case at the Court right now. I also would say, I think Stef sort of remarked that, well, in complicated cases, we can't have a probable cause hearing. The first thing I would say, I guess, is, I don't know why not? Why can't you have a hearing? If the government thinks it has probable cause to take property, surely it could articulate that probable cause in a hearing. But if there is some circumstance where that's not possible, then I think perhaps the government should argue that there should be an exception in some class of cases, and the Court might consider that.

 

But I don't see why the sort of inarticulate concern that there might be some class of cases where we can't have a hearing should be a reason why somebody like Lena Sutton or Halima McCully should have to go over a year without a hearing about their seized car. Now, just a couple other small points. Stef also mentioned the concern that what happens if there's a parallel criminal case? And I would say in that case, the government should just use what's called criminal forfeiture, which our position at the Institute for Justice is that all forfeiture should be criminal forfeiture. Criminal forfeiture allows the government to take property as part of a criminal proceeding. And the Supreme Court has held that if there's an indictment, the government can seize property pursuant to that indictment, if it's included in the indictment, and then hold it for the duration of the criminal proceedings. So that's something the government can do.

 

Stef also mentioned that there are deadlines in the law, but I think I mentioned those in my initial presentation. And the point that I would make is that those deadlines give the government up to 160 -- at least 160 days. Basically, the way the deadlines are set up, there's no way that a case is going to get to court any faster than 160 days after the property has been seized. And 160 days is a long time. And again, that just is to the filing of the forfeiture complaint. Once the complaint is filed, then you have a whole nother round of service of a claim of an answer, and then you have discovery, you have a fight over, do they have standing or not, and then you're going to have months more proceedings until you get to a trial. So again, the way these deadlines are set up is it not just does it often take months or years? It has to take months or years, which is precisely why it's so important to have that initial hearing right at the start of the process. The other thing I would just very quickly say is Stef mentioned the idea that you can get a hardship hearing under federal laws.

 

One thing I would point out is hardship hearings are not available if the seized property is currency. They are available for some other kinds of property. But you have to prove, " substantial hardship," which is a high burden to prove. And I think this just ultimately flips things around and puts the burden in the wrong place. The burden should be on the government, if it takes your property, to provide some good reason why it took it. And if the government can't do that, then it should have to give the property back. Okay. So those are kind of my big picture thoughts in response to Stef.

 

Stefan Cassella:  Okay. Well, we could debate all day whether or not the law is or is not what it says. Section 983 C of Title 18 says, "The burden of proof is on the government to prove a civil forfeiture case. The government must prove by a preponderance of the evidence that a crime occurred and that the property was involved in a crime." If the government seizes $50,000 from a drug courier, it must prove that it was drug money. And the innocent owner defense only comes into play after the government has met its burden and someone comes in and says, "I didn't realize that I was purchasing or acquiring money that was derived from a crime. I was a bona fide purchaser, or I didn't realize my car was being used to rob the bank. I didn't know that that's what my friend was doing with it when he went out and borrowed it last night." So the government has the burden of proof.

 

Now, the cases that I cited are the typical civil forfeiture cases that the federal government brings. I only did this for 30 years, so I don't know why I would know. But that's what you do day in and day out is cases that involve complicated cases. Yes, there are some simple cases involved, but if you go to my website, you will find page after page after page of listed of federal civil forfeiture cases that have nothing to do with seizing $5,000 from knucklehead at a traffic light, but which have to do with complicated international money laundering cases, Ponzi schemes, money going to North Korea, and so forth and so on. These are complicated cases. Why can't you have a probable cause hearing? Well, if the government alleges that some Russian was selling electronic parts to a Russian military organization that was actually being fronted by a Chinese company, you might not want to reveal all the evidence you have in the first probable cause hearing and it might be a little bit difficult to do.

 

But nevertheless, you have to establish probable cause in the first instance to get a warrant. And having done so, that there's little reason to have a second probable cause hearing just because someone who claims to be acting on the part of the Chinese corporation or the British Virgin Island shell company that asserts an interest in the property wants a probable cause hearing. Why can't we just do these cases as criminal cases? Because sometimes the bad guy is not in the United States. Sometimes he's dead. Sometimes he's a fugitive. Sometimes he's a foreign actor who laundered his property here. Sometimes he's just unknown. In a ransomware case, you might be able to track the ransomware, the cryptocurrency that was used to pay the ransom, but have no idea who the bad guys were, whether they were in Russia or Turkey or Timbuktu. You need civil forfeiture. You have to have civil forfeiture. It is an essential part of the criminal justice system.

 

The Institute for Justice wants to repeal civil forfeiture. I understand that. I respect that. I think that taking money away from terrorists, money going to North Korea to fund the nuclear weapons program are important things to do. Getting money back to victims in cases where the defendant who committed the crime is no longer available, those are important cases to do. Others disagree. But you have to have civil forfeiture if you want to do those cases. And the last thing about the hardship -- this was seriously debated 20 some years ago before Congress as to under what circumstances should someone have the right to the release of his property. And the decision was made. He doesn't have to show lack of probable cause. All he has to show is that he needs the property. And there has to be a balance, though, to show that the property is still going to be available for forfeiture at the end of the day. So in the case of a vehicle, if he can post a bond or in some way show that he needs the property but it can be secured, then he gets the property back. But in the case of cash, there's no way of determining that that's going to be available and so cash cannot be released on a showing of hardship.

 

The government, however, as I've explained before, in cases where there's a real immediate need for the property, as in the case of someone who needs property to vindicate his Sixth Amendment right to counsel because he has a need to hire an attorney in a criminal case, that's an exception to the general rule and there is a right to a probable cause hearing. It's called the Jones-Farmer Rule after two cases from the Tenth and the Fourth Circuits. So there is a right, but you require a substantial hardship because otherwise you get what happens in some real cases. You can go look them up. Someone says, "I need my automobile in order to get to work." Well, wait a minute. It's a Mercedes convertible and you have two others. Is that a substantial hardship? Maybe you can take the bus. Maybe you can get a ride from a friend. It's only in cases where somebody really needs the property that we have this balance between what is a real hardship and what's the government's interest in preserving the property. And that's been passed on by Congress and they came up with a rational compromise that balances both sides of it.

 

The bottom line is there is a process for litigating all of these issues from the merits of the forfeiture to the standing issues to the affirmative defenses. And rather than short circuit that process by having an immediate probable cause hearing in the typical civil forfeiture case brought by the federal government, which involve complex issues, we should just defer to the process that has worked so well and that no court has ever held is improper. In a simple case involving someone who says, "Hey, you took my car but it's the wrong car," then give them a hearing and then we should be done.

 

Adam Griffin:  So on this point, what is each of your -- Mr. Cassella, you would kind of agree that in some of these simple cases, a prompt post seizure probable cause hearing might make sense but that there shouldn't be a categorical rule in all cases because there may be these foreign -- is there any grounds for distinguishing those as a formal matter? So if we weren't going to use -- if Mathews is the case, I'm guessing you're going to say that it's just you would balance out the equities and then on one side of the balance, in these complex cases, you wouldn't have this rule. When it's these simple cases, it would balance out. Is there any kind of historical analog for treating sort of simple property cases differently than these international terrorist cases?

 

Stefan Cassella:  No, not really. It's because it's such a market basket of different considerations. It's not just the simplicity of the case versus the complexity of the case. But as I mentioned, it's the administrative burden, the thousands and tens of thousands of cases that are processed federally versus what they do in Alabama. It's the opportunity for an exception if you have a Sixth Amendment right, it's the immediate need for the property. Is it a car versus is it an investment account or is it a bitcoin wallet? All of those issues, the fact that federal law has a hardship provision and it has a remission provision, which the states don't generally have, all of those things factor into whether or not there's a right to a hearing. What I'm afraid of is, although it will keep me in business for the rest of my life, is that the Supreme Court will say right to a hearing in this case. But in general, you have to go to this balancing case, reviewing these 13 factors, and we'll be litigating that until the cows come home. Because there's no bright-line. There's no bright-line rule.

 

I think that, on balance, what you would come up with if you try to come up with a bright-line rule, is that in cases that involve warrants, in cases that involve federal law, in cases that involve international issues, in cases that involve all the things that I've been talking about, you generally don't need to have a probable cause hearing. And it should be the unusual exception in the simplest case. And by the way, it should be limited to the probable cause for the seizure, not the probable cause to believe that this person is or is not an innocent owner or that the statute of limitations is wrong or whatever. That is simply the wrong standard. It would make no sense whatsoever to have -- you have to pretrial the entire case before you got started if you wanted to hear whether or not the person had standing and the person had an affirmative defense.

 

Adam Griffin:  Mr. Johnson, do you have anything to add? Do you have any kind of historical analog bright-line rule that you would offer, in contrast and how that would play into some of these complex cases that Mr. Cassella is raising?

 

Robert Johnson:  Yeah. So, I mean, the first thing I would say is I just want to reemphasize that, using FOIA, we obtained a database, it's called the CATS database, and it's a database that the federal government uses to track every asset forfeiture case in the entire country. And we analyzed all of that data. It took us years. And what we found is that the average forfeiture at the federal level is just a few thousand dollars. And yes, I'm sure that in Stef's practice, the cases where people are hiring lawyers and they're hiring expensive lawyers, and then the Department of Justice is coming in with their forfeiture experts and it's being contested all the way up through the courts, those are the complicated cases. But that doesn't mean that's the average case.

 

The average case is a small dollar forfeiture just like the cases that are at issue in the Cully case. And so when we're designing a system, I think the question is, do you design the system around the average case, the sort of normal case, which is the small cases, or do you design the system around the really expensive sort of unusual case where people maybe actually can afford to hire a lawyer and come in and contest it? And I guess what I would say is it doesn't make sense to design -- what Stef is talking about are basically the edge cases. And it doesn't make sense to sacrifice the due process rights of most of the people who are actually getting caught up in these forfeiture cases because it would be inconvenient for the edge cases. Whether you have to have a bright-line rule or not, I guess it sounds like maybe Stef and I agree about this. I think you do need a bright-line rule. I don't think it makes sense to sort of, in every single case, say, "Well, is this a case where we're going to have a probable cause hearing?" I don't think that's workable.

 

I think you might -- perhaps there are situations where the government could come in and try to convince a court that there should be an exception in this particular case based on the sort of particular circumstances, but the sort of presumption at least should be that you get a hearing. And any departure from that should be something the government would have to justify. I think that's more administrable and it just makes more sense. At the end of the day, I guess I just don't understand what would be so difficult for the government to come in and say, "This is why we took this property and this is why we think we should be allowed to keep it."

 

Stefan Cassella:  Well, the cases that Rob's talking about are overwhelmingly state cases that are adopted by federal agencies. The typical criminal case involving a violation of federal law where there's a federal seizure are the cases that I'm talking about. Those adoption cases and the real simple cases that involve seizure of a few thousand dollars are overwhelmingly uncontested. I mean, what's the point of having a rule that applies across the board that is governed by your view of what happens in the 80 percent of the seizures that are uncontested? 80 percent of the seizures by the DEA are uncontested. Why is that? They seize a few thousand dollars in a drug case. They send notice out that says, "On the 1 May we seized $60,000 wrapped in rubber bands, two kilos of cocaine and a handgun. Anyone interested in making a challenge to this can file a claim in the following fashion." And 80 percent of the time, nobody does. Surprise, but we don't want the tail wagging the dog.

 

The cases that matter are the cases that we're talking about here. And if you have a very minor case involving someplace where there's a real question or whether there's a showing of probable cause, then we can deal with that. But you can't deal with that in tens of thousands of cases processed by customs, Fish and Wildlife and all the other agencies, including the DEA and the FBI, and in cases where there's no reason to believe there's anything wrong with the seizure and that would just be an incredible administrative burden that would be used as discovery by defense counsel trying to get the facts of an underlying criminal investigation before them.

 

Adam Griffin:  I want to get to our question. That was a great back and forth. Very interesting. "Has the government raised any standing argument as the car was returned after the suit was filed?" I think this was kind of briefly touched on. I know that the respondents have argued some standing and those kinds of section 1983, the state's not a person for the suit purposes. Because the government returned the car, why do they have standing?

 

Robert Johnson:  So I think in this case, standing is relatively uncontested because there's a claim for damages that can proceed against the municipal defendants under Monell. And this issue has been up to the Supreme Court before. And the last time it was up to the Supreme Court, they had to dismiss it for mootness because the cars had been returned. But in doing so, one of the things they specifically noted was there was no claim for damages in that case. There is a claim for damages here. So I don't think it can be seriously debated whether there is standing.

 

Steffan Cassella:  I don't disagree. I don't know anything different from what Rob is saying about the mootness of the case. I know that the Smith case out of the Seventh Circuit is the one he's referring to that was dismissed for mootness grounds ten years ago or so. The Supreme Court's obviously been looking for a case to resolve this issue for years. Rob's case, Sereno, was one where they denied cert last year. It wasn't the right case. This one, again, is not the right case. But nevertheless, they've granted cert, and we'll see what they're going to do with it. But all of these have been state cases. There hasn't been a case involving federal seizure to which any court has applied the rule of an immediate probable cause hearing for the reasons that I've already mentioned.

 

What the government did raise in its amicus brief was standing in a different sense. That is, you don't always know whose property it is that has been seized. You seize jet engines being exported to the Islamic Revolutionary Guard and all kinds of people file claims, the exporter, the importer, the consignee, the person who has the letter of credit, the shell company that claims ownership, and so forth and so on. And the difficulty in determining which of those people has standing is the big part of the litigation of the case. Well, you need to know that before you can determine who's going to have the right to a probable cause hearing. And it would be putting the cart before the horse. You'd be litigating probable cause for the seizure when the issue has been raised by someone who might not have standing to raise the issue. And so the government has pointed out that one of the reasons for not requiring an immediate probable cause hearing is that you have to resolve the standing issue first, depending on who's gotten notice and who has responded to the notice within the statutory period of time.

 

Robert Johnson:  Just very quickly, the way you deal with that is if there are multiple claims, then obviously you need to figure out -- you have to have some sort of proceeding to figure out who to return the property to. I don't think anyone would dispute that. But again, the most common situation, that's not what's going on. The property is -- you're talking about cash that's seized from somebody who's holding the cash. You're talking about a car that seized, and it has a clear owner on the title, especially with vehicles. Most of these cases are about vehicles that are being -- where this issue is being brought up. And with vehicles, there's no question who the vehicle belongs to. And so, again, I guess to just cases that Stef is talking about are so often just these kinds of bizarre edge cases. Yeah. I get it. Those are the cases that Stef litigates, but that's not the typical forfeiture case. And to say that we should hold Lena Sutton's car without a hearing because maybe they seized some jet engines that were headed to Iran, I just think that's ridiculous, to be quite honest.

 

Steffan Cassella:  Well, my view, of course, is the opposite. We should have hearings where we give the Islamic Revolutionary Guard a probable cause hearing because there's some case in Alabama involving somebody's car is what I would call ridiculous.

 

Robert Johnson:  I guess I just wonder why would it be so hard? I mean, assuming that the Islamic Republican Guard shows up for their probable cause hearing, which seems unlikely, presumably it would be pretty easy to explain why the jet engines were seized.

 

Steffan Cassella:  Yeah. Well, who would show up would, of course, would be the shell company that claims to be the beneficial owner, even though it turns out that they were incorporated someplace where you can't tell who the beneficial owner is. But you say that it's always obvious who the owner of a car is. It's just not so. You seize a car from a drug dealer, and what you find out is it is titled in the name of his maiden aunt from Vermont who's never seen the car and has no idea how to drive a car with a standard transmission because they titled their property in the names of nominees. That's the whole purpose of this hundreds of pages of case law on standing and on the innocent owner defense, because you've got to establish that you're the real owner, not somebody who was nominated as a nominee.

 

That's the issue you litigate in most of these cases. When General Abacha's property is seized on its way through the United States and on its way to the Channel Islands, the claims were filed by trusts and then held in the names of family members. And you had to determine what was the nature of the trust and under what foreign or state law was the trust established, and so forth. They're complicated cases. It's not always obvious who the owner of the property is. Where it is obvious, then you have a nice case to bring to the Supreme Court involving Mrs. Sutton. But once again, she's not even contesting the legality of the seizure. So why are we here?

 

Robert Johnson:  I guess when I hear that, what I hear is sometimes we take property and we don't know who it belongs to, and we don't know why we think we should be able to keep it, but we want to have some time to figure that out. And I guess, to me, the government --

 

Steffan Cassella:  No, you got it wrong. We take property because we know that a crime was occurred and the property was involved in the crime. In a civil forfeiture case, the ownership of the property is irrelevant. It's the crime and the connection between the property and the crime. If someone wants to raise an affirmative defense, they have a statutory right to do that, not a due process right. The Supreme Court has already said that. But it's the connection between the property and the crime that gives rise to a forfeiture. That's why they're called in rem forfeitures.

 

Robert Johnson:  So it seems to me if it's obvious that the property should be forfeited, then it should be fairly easy to establish probable cause. And if it's not obvious, then the government shouldn't be taking the property in the first place. And a hearing seems like an easy place to sort all of this out.

 

Adam Griffin:  All right. Great back and forth. We've talked a little bit about this idea of a bright-line rule that both of you agree that you can't have this litigating every case to determine whether or not you even get a hearing and then determine whether there's a hearing or not in every case. Mathews seems like a multi factor, like, balancing test. So would you be saying that this bright-line rule emerges from Mathews or why is Mathews the right or wrong test?  And where would the bright-line rule come from, regardless of what side of the bright-line rule you're on?

 

Stefan Cassella:  Well, I think that it's sort of a false dichotomy to say it's in either the Mathews test or the Barker test. I think that under any balancing test, you would have to consider whether or not, given all the factors we've been talking about, the Barker test is all the due process that's required. That's a balance. It's a balance between the administrative burdens and all of the complexities involved in the case and on the one hand, and the right of the person to an immediate probable cause hearing. So you have a balancing test, but the default would be that you don't need a probable cause hearing in a federal civil forfeiture case because those cases are more complex. And if Justice Sotomayor isn't a good authority on that, then I don't know who is. That's what she said in Krimstock. So I would say if the Supreme Court wants to codify what has been the evolving rule for the last 20 years and say that in state cases involving automobiles that people need to get to work, there's a right to a probable cause hearing but otherwise there's not, because federal cases are different, then I would be happy to live with that.

 

Adam Griffin:  Rob, did you have a -- like, about Mathews and whether or not Mathews should apply -- whether Mathews -- yeah. I know you're just processing his position. Me too. Whether Mathews should apply in every case, or if under Mathews, this prompt post seizure hearing is just always required. So I'm wondering because the Mathews test is a multi-factor balancing test, but then there's kind of this argument that every case should have this probable cause hearing. And I'm wondering how those square. Does Mathews apply or does this rule apply and where does that come from?

 

Robert Johnson:  Yeah. I appreciate that. We've sort of forgotten the initial question. So just for background. So the Barker test is a test that the Supreme Court developed in a criminal context. And the Barker test is the test that they apply when someone says, "I've been held in jail for years and I haven't gotten a trial, a speedy trial, and you shouldn't be able to convict me at all." And it's the test that the Court applies to determine if you've gotten a speedy trial. Separate from Barker in the criminal context, the Court has also held that people who are arrested are entitled to a prompt probable cause hearing if the government's going to hold them pending trial. And those are two separate issues.

 

Ultimately, I think what the petitioners in Cully are arguing for, what we're arguing for is that the same rule should apply when the government takes your property. And the Supreme Court has already held that the Barker test applies to the ultimate timeliness of the forfeiture case. So if your property is held for years and then you say, "It's been too long to get to the actual trial," that's when Barker applies. But there's a separate question of do you get a prompt hearing when your property is taken, a probable cause hearing, where the government has to just explain in court why they took your stuff and why they're holding it for the years that it's going to take to resolve the forfeiture case. And whether that's sort of analyzed under Mathews or not -- I think Mathews is one way to think about it, to sort of take this question of are you entitled to a hearing? One way to think about that is using Mathews and to say, balancing the Mathews factor, it's just not that hard for the government to provide you with a probable cause hearing where they explain why they took this property and it's going to prevent all kinds of erroneous deprivations. So we should require that. I think you can do that under Mathews.

 

But the other way to do it, and this is what Judge Thapar says in his concurrence in Ingram, is forget Mathews. Let's just look at this more from a sort of property rights originalist perspective that the government can't just hold property without giving you some sort of process. And so he said within 48 hours, the government should hold a hearing. And he didn't really apply Mathews. He just applied the sort of bigger picture notions of due process and what that meant as a historical matter. So does it have to be Mathews or can it be some other way of sort of thinking about it? I'm not sure. But I think that at the end of the day, if you kind of look at this from a Mathews perspective, the Mathews factors weigh in favor of a hearing. If you look at it from an originalist perspective, the history weighs in favor of a hearing. If you look at it more just from the perspective of what is the due process of law. Due process, I think, requires some sort of a hearing. So I'm not sure that the test has to be positive but that helps.

 

Adam Griffin:  And question, also following up on Krimstock, do you agree that then Judge Sotomayor's opinion in Krimstock leads to the conclusion that federal cases are different than state? In state cases you might have this right, but in federal cases you do not, because the logic of Krimstock doesn't apply to the federal context?

 

Robert Johnson:  So Judge Sotomayor -- Krimstock is a case that Judge Sotomayor decided when she was a judge on the Second Circuit, and that case involved vehicle forfeitures under New York state law, factually very similar to the Cully case, to Stephanie Wilson's case. And she held that prompt procedure hearings are required. And there's a footnote in that decision where she suggests that maybe federal law would be different. She doesn't decide that issue. It wasn't presented. There was really no occasion to decide that issue, obviously, because it wasn't a federal case. So I don't think that Krimstock leads to that conclusion that federal cases would be different.

 

And frankly, it's just simply not true that most federal cases involve these sorts of elaborate circumstances involving jet engines headed to Iran. Those may be, again, the cases that Stef is seeing litigated, but the statistics are very clear that most federal forfeiture cases are small dollar drug seizures. Some of them are initiated directly by the DEA. Some of them are what Stef referred to as adoptive seizures. Where local law enforcement is seizing property and then turning it over to the federal government for the federal government to forfeit it. But either way, these are relatively small amounts of money or property, and there's just no reason not to provide a hearing in those types of cases.

 

Adam Griffin:  Rob, let me jump in because I want to give you each a final opportunity to speak. Sorry to cut you off there, Mr. Cassella. We're coming right to the end. We have a question that Rob was kind of hitting on, and I wanted to make sure that he got to address that question. And then each of you can have a closing statement. And since, Rob, since you got the first word, I'll give you this question, let you make a closing statement, and then we'll give the last word to Mr. Cassella. TJ Abernathy asks "For Robert, can you explain further how you use the data for your result to claim that most cases are small amounts? So where did you get -- you said you FOIAd, but where did you get the information from? DOJ, IRS, DHS? And I'm aware that the federal government utilizes minimum thresholds which are significantly high, when in fact, they would not take on a small case to the de minimis value." So I think you can see that question below. If you want to address that question and then give any closing comments, then we'll turn it over to Mr. Cassella for final remark.

 

Robert Johnson:  Sure. So the data, again, was obtained by a FOIA from the Department of Justice and it's their CATS asset tracking database. And the data, the analysis is published in our report. It's called policing for profit. It's available on our website. Feel free to check it out. It's very excellent. In terms of the de minimis thresholds, this actually came up in a case I've been litigating recently involving a bunch of seizures by the FBI. I know in that case, the FBI agents testified that their threshold for forfeiture is $5,000. So if property is less than $5,000, they won't try to forfeit it because it's not worth it. $5,000 not a lot of money. In the grand scheme of things, if you're going to go out and you're going to hire a lawyer, you're going to end up spending more than $5,000, which, again, as Stef pointed out, yeah, a lot of these cases are not contested. But that's why. It's very expensive to hire a lawyer and to try to contest a forfeiture. And so a lot of people just give up, and then you stack on top of that all these delays. If you're going to have to hire a lawyer and it's going to take years, people just give up. And that's exactly why a hearing is so important.

 

Stefan Cassella:  Let me say this. No one disagrees that there's a right to due process in a civil forfeiture case. And that has been litigated for 200 years, and it has been codified in the Civil Asset forfeiture Reform Act. The government has to seize property based on probable cause, generally with a warrant unless one of the warrant exceptions applies. The government has to commence its action within 60 days. The government has the burden of proof. There's a right to a jury trial, there's a right to raise an affirmative defense. There is a limitation on forfeitures by the Eighth Amendment under the Excessive Fines Clause, and if for any reason the property owner prevails, they get their attorney's fees paid for. That's a lot of due process.

 

The question is whether, in addition to all of that, there is a right to an immediate hearing after the property is seized, rather than requiring the person to file the claim to establish standing, which is often the key issue in these cases and then to put the government to its proof as to its ability to prove that it was a crime and that the property was connected to the crime. In the vast majority of cases, there is no hardship and there's no reason to have a hearing unless there is a showing of hardship. And if there is a showing of hardship, there is a hardship provision under federal law that allows the property to be released even if there is probable cause. So, except in the very unusual situation, there is no need to burden the process and to disrupt this orderly process that has been codified to have a probable cause hearing immediately after the case.

 

The fact of the matter is, these involve complicated issues, and it's not appropriate to put the government to the showing of probable cause if there's already been a determination by a judge or a magistrate if there's no claim has been filed, if there's a parallel criminal case, if there's no hardship involved, for all of the reasons we've been talking about, there's no reason to do that. It's just an administrative burden that those who oppose civil forfeiture would like to impose so that there was less enforcement of the law.

 

Adam Griffin:  Great. Thank you so much. This was a really lively debate and great discussion. Thanks to FedSoc and to our audience for being here and to our wonderful speakers for sharing their expertise. Turn it over to Jack for the last word.

 

 

Jack Capizzi:  Thanks a lot, Adam. Certainly want to echo your thanks to Rob and Stef for sharing their time and expertise today. And also, Adam, to you as well for moderating the program. Certainly a good back and forth, but informative as always, which is what we're going for. As always, please do keep an eye on our website and your emails for upcoming programs. If you'd like to provide feedback, you may do so by email at [email protected]. A recording and audio recording of this will be available on our website in the next couple of days. So, with that, thank you all very much for joining us. We are adjourned.