Undue Delay or Due Process? Does the Due Process Clause Require a Prompt Post-Seizure Hearing When the Government Seizes an Individual’s Property?

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Dean Reuter:  Welcome to Teleforum, a podcast of The Federalist Society's practice groups. I’m Dean Reuter, Vice President, General Counsel, and Director of Practice Groups at The Federalist Society. For exclusive access to live recordings of practice group teleforum calls, become a Federalist Society member today at fedsoc.org.

 

 

Nick Marr:  Welcome, everyone, to The Federalist Society's Teleforum conference call as this afternoon, February 23, 2021, we're having a panel discussion on "Undue Delay or Due Process?" There's a longer title, but I think our moderator might read it out, or you can find it online.

 

      I'm Nick Marr, Assistant Director of Practice Groups at The Federalist Society. As always, please note that expressions of opinion on today's call are those of our experts.

 

      We're very pleased to be joined by a great panel offering different views on this issue. I'm just going to introduce our moderator, then he'll take it away.

 

      We're joined today by Mr. Adam Griffin. He is a Constitutional Law Fellow at the Institute for Justice and he was actually, unfortunately, not listed on this event page, but here is here. He is moderating, and we're very pleased to have him.

 

      With that, Adam, take it away.

 

Adam Griffin:  Thanks, Nick, and thank you all for listening in. Our Teleforum today is "Undue Delay or Due Process? Does the Due Process Clause Require a Prompt Post-Seizure Hearing When the Government Seizes an Individual's Property?"

 

      Today, we have the leading legal scholars on asset forfeiture discussing a cert petition, Serrano v. CBP, and it's currently being briefed before the Supreme Court. The question presented is: "When the government seizes a vehicle for civil forfeiture"—here, the U.S. Customs and Border Protection agency seized Mr. Serrano's truck at the United States Border—"does due process require a prompt post-seizure hearing to test the legality of the seizure and continued detention of the vehicle pending the final forfeiture trial?" How quickly must the government provide some kind of hearing to test the legality of a seizure after the government seizes a vehicle?

 

      To discuss this important cert petition with us today is Robert Johnson. He is Mr. Serrano's lead attorney and a Senior Attorney at the Institute for Justice and a nationally recognized expert on civil forfeiture. He previously litigated Harjo v. City of Albuquerque that resulted in a federal decision striking down a forfeiture law on the ground that enforcement personnel faced an unlawful profit incentive. And he also represented a series of property owners who were targeted for civil forfeiture by the IRS because they deposited cash in the wrong amounts.

 

      He graduated from Harvard Law School and then clerked for Chief Judge Alex Kozinski on the Ninth Circuit and Justice Anthony Kennedy on the Supreme Court before coming to the Institute for Justice.

 

      Mr. Stef Cassella served as a federal prosecutor and has been one of the federal government's leading experts on asset forfeiture and money laundering law for over 30 years. He served as Deputy Chief of the Justice Department's Asset Forfeiture and Money Laundering Section and later as the Chief of the Asset Forfeiture and Money Laundering Section in the U.S. Attorney's Office in Baltimore, Maryland.

 

      He has also authored two treatises, Federal Money Laundering: Crimes and Forfeitures, and Asset Forfeiture Law in the United States.

 

      Finally, Mr. David Smith is one of the country's foremost experts on asset forfeiture law and practice. He is the author of the leading two-volume legal treatise on forfeiture, Prosecution and Defense of Forfeiture Cases, and co-author of Civil RICO, both published by Matthew Bender.

 

      Mr. Smith has over 35 years of white collar criminal experience. For nearly a decade, prior to entering private practice, Mr. Smith was a prosecutor in the Criminal Division of the United States Department of Justice and at the United States Attorney's Office for the Eastern District of Virginia.

 

      Thank you all for being here. I'm now going to turn it over to Mr. Robert Johnson to present Mr. Serrano's case, followed by Mr. Stef Cassella and then Mr. David Smith. Thank you, all.

 

Robert Johnson:  Thanks, Adam. As Adam mentioned, this case is about civil forfeiture, and specifically, the question of how quickly the government has to provide a hearing when it seizes property under the forfeiture laws.

 

      Here, we represent a gentleman named Gerardo Serrano. He's a U.S. citizen and a resident of Tyner, Kentucky, which is in rural Kentucky. In 2015, he was crossing the U.S.-Mexico border at Eagle Pass, Texas. He was crossing in his brand-new Ford pickup truck. As he was crossing, Gerardo began taking pictures at the border using his phone. He was planning to share them with his family in Mexico to let them know that he would see them soon.

 

      CBP didn't like that Gerardo was taking pictures. They pulled him over. They asked for the password to the phone. When Gerardo, who is a staunch civil libertarian, refused to provide the password, they went over his truck with a fine-toothed comb. Inside the truck, they found five low-caliber bullets in the truck's center console.

 

      As I mentioned, Gerardo is a resident of rural Kentucky and, like many people in that part of the country, he sometimes keeps a gun in his car. It's perfectly legal for him to do so. He has a concealed carry permit. To be clear, he didn't have his gun with him at the border, but he had forgotten that those five bullets were in the truck's center console.

 

      That was enough for CBP to seize his truck. CBP labeled those five bullets "munitions of war," and claimed that they made the truck subject to the civil forfeiture laws. At that point, CBP sent Gerardo a letter, which is a form letter that they send to everybody in civil forfeiture cases, where the property is valued at less than $500,000. That letter gave Gerardo, essentially, four options.

 

      Option number one was to simply walk away—to give up his truck. Option number two was to make the government a settlement offer—to actually write them a check for some amount, then see if the government would accept that as settlement of the case. Option number three was to file what's called a petition for remission or mitigation, which is essentially a pardon petition. It's a request for the government to exercise its mercy to give back the property. Option number four was to contest the case in court.

 

      Gerardo took option number four. He posted the necessary bond, and he asked to see a judge. Then he waited, and he waited, and he waited, ultimately, for over two years. Unfortunately, that kind of a delay is not uncommon in civil forfeiture cases. In many contexts, there is a federal statute called CAFRA that limits these types of pre-filing delays to effectively 160 days. Which, to be clear, is itself a very long time.

 

      But in the customs context, when property is seized at the border, even that limit doesn't apply, and as a result, in the customs context, it's not infrequent to see delays of months or even years. Now, as an aside, as a clever lawyer, you might be thinking, "Well, why don't people file their own cases rather than waiting for the government to file a civil forfeiture case? Maybe sue the government instead?" But the problem is that also doesn't work for a variety of reasons that we can get into if people want. A court stated that type of suit is premature and they won't address it.

 

      In Gerardo's case, Gerardo waited for two years and then, finally, he filed a class action represented by the Institute for Justice on behalf of all U.S. citizens who have vehicles seized at the border, claiming that the government, under due process, is required to provide a prompt post-seizure hearing.

 

      To be clear, we are not arguing that the government has to hold the ultimate forfeiture trial right away. Instead, what we're saying is that, given the delays that occur between the seizure and the ultimate forfeiture trial, the government has to provide an interim hearing where the property owner can contest the seizure.

 

      I think the easiest way to explain that is if you're arrested, the government provides a post-arrest probable cause hearing within a matter of days after the arrest. Obviously, that's separate from the ultimate criminal trial. What we're saying is that the government should provide an analogous procedure if it seizes your truck.

 

      We took that claim up to the Fifth Circuit and, unfortunately, the Fifth Circuit disagreed. They ruled that no prompt procedure hearing was required, and so now we are presenting that issue to the Supreme Court in a cert petition.

 

      Of course, in a cert petition, the primary issue is not who's right or who's wrong but rather is there a conflict of authority, and we certainly have that in this case. In fact, we have a very distinguished conflict of authority because the Second Circuit, in an opinion by then-Judge Sotomayor, ruled that prompt post-seizure hearings are required. Of course, that is the focus of the cert petition itself.

 

      But you all are not the Supreme Court. You're probably interested in the question of who here is right, and so with that in mind, I'm just going to offer two quick reasons why we are right and the Fifth Circuit is wrong.

 

      The first issue is really an originalist argument. We did a fair amount of historical research as we were putting together this petition, and we found that the first Congress actually enacted a civil forfeiture law. It was applied primarily at the border. That's where most forfeitures occurred at the time. Under that law, courts were directed to "hear and decide forfeiture cases" after a mere 14-day delay.

 

The kinds of administrative pre-filing delays that we see today didn't even begin to occur until the mid-nineteenth-century. And even then, they were limited to low-value seizures. They didn't become the norm like they are today until the threshold for those procedures to apply was vastly increased in the 1970s. Really, the types of routine pre-filing delays that we see today would've been unthinkable to the founders.

 

The second point I want to make is based on precedent. The Supreme Court has held that due process requires a meaningful hearing at a meaningful time. It's simply impossible to square that standard with a system where people have to wait years for their day in court. In fact, the Supreme Court, in a case called James Daniel Good, held that when the government wants to forfeit real property, like a house or another building, in that circumstance, the government has to provide a pre-seizure hearing.

 

Now, the Court, in James Daniel Good, distinguished cases involving movable personal property on the ground that, in those cases, the property owner might abscond with the property. But, once property has been seized and is in the government's possession, it's not going anywhere, and that distinction no longer applies. Under the logic of James Daniel Good, in cases involving personal property, there should be a requirement for a prompt post-seizure hearing.

 

Put differently, the procedures that we see in the modern forfeiture world are really an anomaly. They're historically anomalous, and they're also anomalous as a matter of precedent. There's no other area of the law where the government can seize property and hold it for years without any type of hearing to challenge the seizure.

 

That's the ten-minute overview. There's many other twists and turns to it, which we may be able to get into later. But right now, I really just want to close with a quick observation about why this issue is so important.

 

I think most people on this call are probably lawyers. As lawyers, we understand that procedures matter. And they don't just matter; they often can be the entire ballgame in a case. And I think that's definitely true in the area of civil forfeiture. What we see is that many property owners simply can't wait months or years to challenge a seizure. As a result, many property owners will agree to enter into what I would call coercive settlement agreements where they give up some portion of the value of the seized property in order to get it back. And many others simply walk away.

 

In fact, the vast majority of forfeiture cases are resolved without any filing ever being made in any court of law. The result is a system that really is a black box. Obviously, we get reports that surface in the news or otherwise of very troubling abuses in the forfeiture system. But, for the most part, the system is a black box. There's nothing being filed in courts. There's no oversight by judges. And because there are no public filings and these administrative proceedings occur behind closed doors, there's also very little public oversight.

 

By contrast, requiring a prompt post-seizure hearing would bring the courts into the process at a very early point, and it would also open these seizures up to public scrutiny at an early point. I think it's easy to see how this would've made a difference for Gerardo. It's difficult to me to believe that law enforcement would've even seized his truck under the facially absurd theory that these five bullets were munitions of war if they'd known that they were going to be required to promptly justify it before a judge. And even if they had seized it, I think the majority of prosecutors would've declined to proceed with the case if they had known that they had to go to a hearing.

 

It seems to me, even if you're somebody who supports civil forfeiture—which, to be clear, I am not—but I think even if you are somebody who supports civil forfeiture, you should support requiring these types of prompt hearings in order to bring increased scrutiny, increased transparency to the system, and to prevent the type of abuse that we see in Gerardo's case and in other cases as well.

 

With that observation, I will turn this over to Stef Cassella.

Stef Cassella:  Well, thank you very much. This is Stef Cassella, and I'm happy to participate in this program. There is an interesting issue that the Supreme Court needs to decide at some point, but this case does not raise it.

 

      The issue the Court may one day decide is whether there is a due process right to a post-seizure probable cause hearing when the property was seized without a warrant and no forfeiture action is pending. A lengthy delay between a warrantless seizure and the trial on the merits could give rise to a right to challenge the probable cause.

 

      Now, here, the property was seized without a warrant, and there was no forfeiture proceeding pending. But here's the key point: the petitioner in this case did not challenge probable cause. He did not challenge the validity of the seizure. The Fifth Circuit said that explicitly in Footnote 10 of its opinion: "Serrano does not challenge the validity of the initial seizure." And nor would he have any basis for doing so if he did. There is no doubt but that once the agents found the ammunition in the vehicle as it was being driven across the border into Mexico, they had probable cause to seize the vehicle for forfeiture under the customs statute.

 

      A hearing on that issue would've been pointless. Under the second Mathews factor, the court must consider the probable value of additional safeguards. But a post-seizure probable cause hearing adds no value at all. It does nothing to reduce the risk of erroneous deprivation of property if probable cause for the seizure is not in doubt and is not even challenged. What the plaintiff in this case is really concerned about is the delay in getting a chance to litigate the merits of the case.

 

      To be sure, that delay was egregious, and there are issues that he could've raised on the merits, not the least of which is whether or not the forfeiture of the vehicle in these circumstances would've been excessive under the Eighth Amendment. But the standard for determining if the delay in affording a hearing on the merits violates due process is well settled. It's the Barker v. Wingo test as applied by the Supreme Court forfeiture in United States v. $8,850. If a plaintiff wants to challenge the continued validity of that standard, he must say so.

 

But Serrano, in this case, is not challenging the Barker standard either, and nor would it be appropriate for him to do so. Under virtually all federal civil forfeiture statutes, the delay that occurred in this case could not happen. The government is bound to commence a civil forfeiture action in court within 90 days of receiving the claim or the property must be returned and its civil forfeiture is forever barred. This is called the death penalty for civil forfeiture.

 

The customs statute at issue in this case is one of the few statutes exempted from that rule. If the Court wants to revisit Barker and decide whether the delay in granting a person a hearing on the merits of a federal forfeiture case violates due process, it should do so in a case that's governed by the statute that applies in 99 percent of the cases not in the odd case where that statute does not apply and where the Court's ruling would, therefore, have no general application.

 

But the plaintiff, here, says that he's not challenging the delay on the merits and he's not challenging Barker. What he says is that he's challenging the legality of the government's possession of the property pending trial. So that gets us back to the probable cause for the seizure.

 

The standard for whether the government can seize, restrain, or maintain possession of property subject to forfeiture pending trial is probable cause. The Court has said that repeatedly in Monsanto, in James Daniel Good, and most recently in Kaley. If the government has probable cause to believe the property is subject to forfeiture, it has the right to retain possession of that property pending trial.

 

And that's not only true in a case involving a pickup truck. It's true if the property owner needs the property to exercise his Sixth Amendment right to counsel, an obviously more important situation.

 

The plaintiff says he's not challenging probable cause. He's not challenging the delay in obtaining a hearing on the merits. So, what relief is he asking for in this case? He says that he's entitled to a post-seizure hearing on the lawfulness of the government's continued possession of his property. But if it's not about probable cause, what would the post-seizure hearing on the government's continued right to possess the property be about?

 

Without saying so, the plaintiff is asking the Court to adopt an entirely new standard for maintaining possession of property pending trial. He's asking the Court to adopt the Krimstock standard, the Second Circuit standard, which, as the Fifth Circuit noted, would require the government to demonstrate a likelihood of success on the merits. In other words, the plaintiff in this case is arguing that it's not enough to establish probable cause and that the seizure was lawful. He's not challenging either of those things.

 

Rather, he's arguing that, following the lawful seizure of property for forfeiture, he's entitled to a prompt hearing at which he would get a preview of the government's case. A hearing at which the government would have to establish not only that its seizure or restraint of the property was based on probable cause but that it was likely to succeed on the merits of the case.

 

Changing the standard for the lawfulness of the government's possession of the property pending trial from probable cause to likelihood of success on the merits would be an enormous change in the law. It would overturn decades of Supreme Court cases. And it would do so in the absence of any split in the lower courts on that issue.

 

Now, we've just heard that there's an assertion that there's a split in the courts on this issue, but all of the cases that the plaintiff cites in favor of a hearing are Krimstock-type hearing cases that were based on state forfeiture statutes. There is no case, that I'm aware of, holding that such a hearing is required under the federal forfeiture statutes.

 

To the contrary, the courts have almost universally recognized that the additional procedural protections in federal law, the short deadline for commencing a case in court 90 days after the claim is filed, the procedure for a prompt hearing in the event that the seizure is causing a hardship—that's Sec. 983(F) of Title 18—the right to recover attorney's fees if successful on the merits—all of those things, and more, taken together, make a Krimstock-type hearing unnecessary.

 

Now, the plaintiff argues that those protections, which, as you heard, are part of the civil asset forfeiture format, don't apply in his case because it arose under the customs statute. But again, if the question is whether the right to an immediate hardship hearing or some other protection in CAFRA is inadequate, the case to decide that would be a case where those protections apply, not in the odd case where they don't apply and not in a case where the plaintiff never claimed that he was suffering any hardship.

 

To be sure, there may be instances where due process requires a hearing between the initial determination of probable cause and a trial on the merits. In hardship cases, maybe one of them. In such cases, the government might be required to show whether there are less intrusive means to preserve the property for forfeiture pending trial. That's what the First Circuit called, in one case, "prudential considerations concerning the burdens of restraint."

 

But this case does not raise those issues. In this case, the plaintiff is not claiming hardship. He's not challenging probable cause for the seizure. He's not contesting the delay in the hearing on the merits. What he's asking for is the right to preview the government's case as a routine matter in every case when none of those factors are present. That would not only upset decades of precedent but would place an enormous burden on the government.

 

Indeed, there's no reason such a rule should be limited to civil forfeiture cases. Why would it not apply when the property is seized for criminal forfeiture? There's no reason it would be limited to vehicles. Why would it not apply to the seizure of cash from a drug courier or to a cache of firearms seized from domestic terrorists? And there's no reason it would be limited to minor cases involving a single individual driving to Mexico. It would apply to the seizure of money moving through the U.S. financial system to Iran or North Korea. Or to the seizure of money from Russian organized crime or a corrupt foreign dictator.

 

The reason this case is being pursued is simply because it involves an egregious set of facts: an extended delay in affording the property owner a hearing on the merit. It is an atypical case brought under the rare statute not governed by the short time limits in CAFRA. It does not involve a challenge to the initial seizure of the property. It does not involve any claim of hardship or other irreparable harm that might merit a more prompt hearing. It does not even involve a challenge to the standard in Barker regarding the delay in bringing a case to trial.

 

It is simply a challenge to the well-established, universally recognized rule that the standard for retaining possession of seized property pending trial is probable cause, and there's no reason for the Court to consider such a far-reaching change in the law in this case.

 

Thank you much, and I'll turn it over to David.

 

David Smith:  Thank you. This is David Smith. I was glad to hear that Stef Cassella recognizes that there is a good due process argument out there. His whole argument seems to be that this case doesn't present that issue adequately because Mr. Serrano didn't contest probable cause at the beginning of his case. That may well be what the argument of the solicitor general is in opposing cert in this case. I don't know because they haven't filed a brief in opp yet.

 

      I do think that because this is a customs case, it is particularly a good case for the Supreme Court to review. Customs seizures are hardly rare. There are thousands of customs seizures for forfeiture every year in this country, and most of them go uncontested, so you don't hear about many of them.

 

And there's an awful lot of abuse by Customs and Border Protection in the forfeiture area, more than from any other federal government agency. Customs' own internal watchdogs have repeatedly revealed a lack of adequate guidance and oversight of the forfeiture process by Customs and Border Patrol. That's detailed both in the petition for cert and in an amicus brief that was put together by Gibson Dunn which cites Customs' reports for several years about these types of issues and the abuse going on.

 

      I agree with Mr. Cassella that there's a substantial difference between Customs and the other seizing agencies because Congress didn't apply most of the CAFRA reforms to Customs. Not because they thought Customs should be exempt from those reforms; it was really a decision by House Judiciary Chairman Henry Hyde who was the main sponsor of the 2000 Reform Act. He didn't want his bill to have to go through the House Ways and Means Committee which has jurisdiction over the Customs service and the IRS. He was afraid it would get stuck in that committee, so that's why he carved Customs and the IRS out of the reforms in the bill.

 

      So, Customs is basically administering the old horrible system which provided very few due process rights to the property owner. By itself, that's a good reason why the Supreme Court should be reviewing this case to allow for some greater due process rights than exist right now. One of the most important rights is the right to a prompt post-seizure hearing. The delays in customs cases are extraordinary because there is no requirement that Customs act promptly to file a case.

 

      Under the 2000 CAFRA reforms, the other agencies have about 180 days to file a complaint, which is plenty of time, and that causes its own problems. But Customs has no such requirements, and they can wait for up to five years until the statute of limitations runs out before they have to file a complaint, which is way too long. That's the old system, and Congress really ought to act in this area, but they haven't, so at least we could have the Supreme Court imposing some minimal timing requirements on Customs.

 

      I think Stef's distinction between the Krimstock type of hearing and a traditional probable cause hearing is correct. Krimstock, the decision of the Second Circuit written by then-Judge Sotomayor, requires the government to show more than probable cause that the vehicle is subject to forfeiture. It gives the property owner a right to a kind of hearing on whether it's really necessary for the government to maintain control of the vehicle until there's a trial or a trial-type hearing in the case.

 

      It's interesting that the Krimstock procedure, which governs car seizures in New York State, hasn't been that much of an administrative burden for the authorities in New York. There aren't that many Krimstock hearings every year despite thousands of vehicle seizures in New York. It's surprising how few of the car owners ask for such a hearing. I think that's partly due to the fact that a lot of them are not represented by lawyers so they don't even know they have the right to such a hearing or that it would be beneficial to them.

 

      But for whatever reason, it hasn't been a great administrative burden for the police or the prosecutors in New York, and there's no reason why it would have to be a great burden for the Customs service either. A lot of their seizures are perfectly justified, and so asking for an early probable cause hearing is not going to do those car owners any good.

 

It's only where there's a real issue about the forfeitability of the car or whether the car owner should be immediately deprived of his car. Many people don't realize that being deprived of your car immediately before you can get a new car or rent a car can impose incredible hardships on persons, especially at the border, which is often far from where the person lives.

 

      Really, under the Mathews v. Eldridge balancing test, the interest of the car owner in obtaining a prompt post-seizure hearing is very, very weighty, and the courts have stressed that not just in these cases but also in a related line of cases that goes quite far back dealing with the impoundment of vehicles by municipal authorities, which are technically -- they're not forfeiture cases, but they raise the same kind of issue.

 

      In those cases, the courts all across the country have repeatedly required very fast hearings for the car owner whose vehicle is impounded by the police. Vehicles are actually an easy case compared to some of the other possible types of property that is seized by the government for forfeiture.

 

Obviously, if the government seizes cash, it's a very different story because the loss of the cash is usually not as severe to the property owner as the loss of what is probably their only vehicle. The due process test may come out differently, although, the Seventh Circuit applied the same kind of Krimstock hearing requirement under an Illinois civil forfeiture statute involving drug cases, including cash and other property not just vehicles.

 

But the vehicle seizure is an easy case, partly because the government's interest in holding onto the vehicle is usually not as great as its interest in holding onto some other things, such as adulterated drugs or large amounts of cash that are seized, and the hardship on the part of the property owner is much greater.

 

      This case presents an opportunity for the Supreme Court to not only resolve a wide split in the federal and state courts on this issue but also an opportunity to provide some much-needed additional due process protection in customs cases. Apart from the fact that the Customs service is not regulated by or constrained by the provisions in the CAFRA statute, the fact that these seizures are at the border is another important factor because, as I think everybody on this phone call knows, Customs has tremendous powers to search and seize at the border. They don't need a warrant. They don't need probable cause. They don't even need reasonable suspicion in the vast majority of their cases. And so, there's a lot of arbitrary power, illustrated by this case, of Customs' authority to seize vehicles.

 

      That, too, should be factored into the due process equation. There's definitely a case for requiring Customs to offer people who want one a prompt post-seizure hearing, which can be informal and quite limited, as the Seventh Circuit held in the case that went up to the Supreme Court before in 2009, the Alvarez v. Smith case, which they granted cert on and heard oral argument on and then dismissed on the grounds of mootness because all the plaintiffs in that case had settled their case in state court.

 

      I'll give the microphone back to Stef now to have another rebuttal.

 

Stef Cassella:  Thank you, David, and thank you everyone. I'll be very brief. First, a comment in response to one of Rob's points. Rob ended by saying that there's an awful lot of administrative forfeitures under federal law and that they're not under the supervision of any court, and that concerns him.

 

But this case was not an administrative forfeiture case. This was a case in which the administrative forfeiture procedure ended immediately as soon as Mr. Serrano filed his claim. So that's a red herring. That's your classic red herring. This case has nothing to do with administrative forfeitures.

 

To David's point about the customs laws. He's right that there are thousands of Customs seizures every year, and the vast, vast majority of those are commercial seizures having to do with goods and merchandise and proper documentation of bills of lading and so forth. One of the reasons why CAFRA was not extended to Customs was to not superimpose on that sort of commercial regulations these requirements which are sort of quasi-criminal.

 

With respect to the Customs cases that are not commercial but which are quasi-criminal, I think David makes a good argument for why CAFRA should be extended to those cases, but it's not an argument for why the Supreme Court should overturn decades of precedent with respect to unrelated issues having to do with the standard for maintaining possession of property pending trial.

 

The question in this case is what really are the parties asking for, the petitioners asking for? David agrees that they're essentially asking for the Krimstock standard, which is raising the burden from probable cause to maintain property pending trial, a burden that has been applied even, as I mentioned before, in cases where the defendant needs property to retain counsel and preserve his Sixth Amendment rights, raise it from that standard to a likelihood of success on the merits standard. Or, alternatively, David says, to show that there's less intrusive means for holding onto the property in the case of a hardship.

 

Well, there is already a federal hardship relief standard. Title 18, 983(F) provides for a hearing when someone says, "My car has been seized, and that's causing me a hardship." If that's not good enough, then it should be challenged in the Supreme Court on due process grounds in a case where that provision applies not in a case where, like this one, it doesn't apply and where, again, Mr. Serrano never raised the issue of hardship.

 

My last point is this. David says that there have been very few Krimstock hearings in the Second Circuit because most people don't feel the need to go hire a lawyer and contest the temporary deprivation of their automobile when it was seized under state law—drunk driving cases or other cases where New York statute applies.

 

Can you imagine if that were applied more generally in federal cases involving major drug dealers? Involving international traffickers in child pornography and human trafficking? In Russian organized crime and money flowing through Chinese banks on its way to North Korean and Iran?

 

There would be an enormous incentive for those people, particularly foreign actors, to want to get a preview of the government's case and force the government to show its cards instead of just being able to show probable cause to retain possession of the property pending trial. So that's why I think this is an extremely important case to consider the third Mathews factors on; that is, the burden of the government.

 

Thank you all, and Adam, I think it's back to you.

 

Adam Griffin:  Thanks, Nick. Rob or David, did either of you want to make a comment before we open it up to audience questions?

 

Robert Johnson:  I would love to.

 

David Smith:  I have a couple -- well, let me go first, Rob. I'm glad Stef mentioned that Sec. 983(F), which is the hardship provision of the CAFRA statute, which is used, usually unsuccessfully, to get vehicles released pending pendendte lite. That does not apply to Customs. So, again, Customs forfeitures are the place where this prompt post-seizure requirement is most needed because of this quirk in our federal forfeiture laws excluding them from all these reforms.

 

      Also, I think all we're dealing here with is a claim that, in vehicle cases, Customs has to provide a prompt post-seizure hearing. There's no claim in the petition for cert that this protection should be extended beyond vehicle cases, which is, of course, where all the authority, or virtually all the authority, on our side comes from—vehicle cases not cases involving international drug smugglers, child pornography, or any of the other more important government interests in pursuing forfeiture. This only involves vehicles.

 

Usually, these vehicles are not incredibly expensive. They're not Ferraris. They're often clunkers, but necessary for somebody to get to work, to get to medical appointments. Most of us don't have the luxury of living inside cities with good mass transit, like New York where you can use the subway to get just about everywhere.

 

A car is a necessity in this country almost everywhere. Being deprived of your car for more than a few days, or even a few days, can result in tremendous hardship to the owner and his family and other people who depend on him. Let's say he's the only who can take his mother to the doctor or the hospital. A lot is at stake here, much more than most people realize.

 

      That's all I have to say.

 

Adam Griffin:  Rob?

 

Robert Johnson:  Yeah, I would love to just jump in really quickly. It's gratifying in some ways that the discussion here focuses so much on whether our case is a good vehicle and less on whether this issue is worthy of the Court's attention. I think that just shows how important this issue is. It goes to the point I was making earlier that even if you're somebody who generally is supportive of civil forfeiture, this should be something you support because it's a way to prevent the types of abuses that are making people so concerned about this whole system.

 

      Mr. Cassella mentioned a concern that this would be unworkable if applied to really bad people engaged in really bad things. I just think those are precisely the people who the government is going to be able to prove probable cause. The places where the government's not going to be able to prove probable cause are people like Mr. Serrano.

 

      That segues me into a point that I do want to make very quickly. I don't think we need to argue all the merits of this particular case on this call because, frankly, the audience probably doesn't care. But I did pull up our complaint, and I'm looking at paragraph 91 of our complaint. We specifically allege that if plaintiff had a hearing, he would've argued that the government lacked any basis to seize it and that he also would've made a hardship claim as well.

 

      Mr. Cassella points to a footnote in the Fifth Circuit's opinion that he reads as to the contrary. I think that footnote is simply saying that our class claims—because, remember, this is a class action—don't challenge those aspects of the case. We're seeking, on behalf of the class, a judgement that people are entitled to a hearing where they could raise those types of issues, but those issues are not the subject of our class claims.

 

      One final point I'd like to make is Mr. Cassella suggests that Customs seizures are kind of a one-off context and that they're hardly worth the Court's attention. I would just point out the agency is under the umbrella of the Department of Homeland Security, many of which are seizing property under the customs laws. Those agencies brought in $1.2 billion under the forfeiture laws in just one year alone. Even if customs seizures are a portion of that, we are talking about a lot of property, a very large amount of property, and there are thousands of cars, automobiles, seized at the border every year. So we are talking about a significant issue that impacts a significant number of people.

 

      I would argue that the procedures that are provided under CAFRA are themselves inadequate, but, obviously, that would be a question for another day and not one we need to get into here. But Customs obviously is the most egregious case, and it's hardly an obscure example.

 

Adam Griffin:  Thanks, Rob. We have about ten minutes, so I want to turn it over to audience Q&A. Mr. Cassella, if you have any response comments, maybe you can work those into answering any of the questions we have in the queue.

 

Stef Cassella:  Okay.

 

Adam Griffin:  Nick, do we have some questions from the audience?

 

Nick Marr:  I'll let you know if one pops up.

 

Adam Griffin:  Great. Thank you. I really appreciate this debate. It's been robust and really engaging, and it's great.

 

One of the questions that I had was this Customs context. It seems like everyone admits that there's a need for this due process question to be answered at some point, but there seems to be a debate about whether the Customs context is the best context.

 

      Mr. Cassella, first, you said that there's not this death penalty factor in the Customs context and there's not these CAFRA protections and, therefore, this is an anomalous case and, therefore, it's not a good case. But if Customs lacks some of those statutory protections, does that make the due process argument in the Customs context more pressing? Why or why not?

 

Stef Cassella:  No, I don't think so. I'm sorry, I didn't mean to interrupt you. I thought you had finished.

 

Adam Griffin:  No, that was it.

 

Stef Cassella:  Okay. Well, a couple of points. First, it gives me a chance to respond to Rob's last point, which was that there's over a billion dollars in seizures by Homeland Security. True, but not in customs cases. The vast majority of that money is in Title 21 drug cases that Homeland Security happens to be the investigating agency on.

 

      But directly to your point, Adam, if there is a challenge to the delay in getting a hearing on the merits, the appropriate place to bring that challenge would be in a case where the 90-day deadline applies because the question then -- because, in the vast majority of cases, none of this that happens in this case could've happened.

 

It's just not the appropriate vehicle for the Supreme Court to decide a case of universal application—and again, it wouldn't apply just to vehicles; it would apply to everything—that would raise the standard from probable cause to something greater—likelihood of success on the merits or whatever—in a case where, in vast majority of cases, this wouldn't happen because you would have a seizure, you'd have a claim, and within 90 days, the government either has to fish or cut bait.

 

      That's why I'm perfectly happy to say yes there's a right to a prompt hearing if there's an extended delay, but there wouldn't be an extended delay in any other cases. To deal with an issue of such universal importance in a one-off situation involving the one statute that doesn't have that deadline seems to me to be a poor choice of the Supreme Court's attention, which is the issue we're talking about, right? We're not talking about anything else; we're talking about whether this is the appropriate vehicle.

 

Adam Griffin:  All right.

 

Robert Johnson:  If I could jump in and --

 

Adam Griffin:  Sure.

 

Robert Johnson:  Yeah, so I just -- just to very quickly respond to some of those points. Mr. Cassella's obviously right. Not all of that $1.2 billion is Customs. I don't think he's right that the vast majority of it is not. But regardless, here are some numbers that we included in our complaint.

 

As we were preparing to file this case, we looked at data on vehicle seizures at the border, and we found in a one-year period between 2014 and 2015, CBP seized 122 vehicles in Eagle Pass alone. That's just one border crossing. Nationwide, we're looking at thousands of vehicles seized by CBP alone every year.

 

      Look, the exact size of the issue -- we're not going to quantify it on this call, but this is not like it's some sort of obscure thing that never happens.

 

      The second point I just want to very quickly make is on the question of the statutory timelines, which, again, to be clear, don't apply in the Customs context. But Mr. Cassella keeps suggesting that the statutory deadlines are very quick, and he gives the figure of 90 days. What he's leaving out is that before you can even file a claim, the government has to send you the notice, which is essentially the form letter that I described in my initial remarks, and the government has 60 days to send you its form letter. You add the 60 to 90 and suddenly it's not 90 days anymore; it's 150 days.

 

And then, of course, that assumes that you file your claim immediately after you get it, which, for some people who don't have a lawyer on call and they're not a lawyer themselves, that's not realistic. So, you're looking at least at 150-day delay, and likely longer than that.

 

Even under these statutory timelines, people have to wait a long time for a case even to be filed and then, of course, once the case is filed, it's not like then you get a hearing right away. You have to then wait. There's all sorts of things that have to happen once the case is filed. You have to file a second claim. The government publishes notice. Then you have to go through discovery. Finally, you have a forfeiture trial. Even in a case subject to these statutory deadlines, people are waiting years for a final judgement on the merits, and there's no interim review where they can challenge the seizure.

 

Adam Griffin:  Thank you. Nick, do we have any questions in the queue?

 

Nick Marr:  No questions from the audience. I'll send it back to you, and maybe we can have a round of closing remarks or if you have another question.

 

Adam Griffin:  Sure. I have a question, but do people want to present closing remarks?

 

Stef Cassella:  I don't have anything that I haven't said already, but if I'm called upon to say it again, I will.

 

David Smith:  I think we'd be better off with questions.

 

Adam Griffin:  Okay. I was wondering -- there was some remarks about forfeiture at the founding. What would be the best originalist answer on either side for what the Due Process Clause requires here?

 

Robert Johnson:  I'm happy to go first. I think we talk about this a lot in our petition. It seems to me -- obviously, a part of this -- originalism is not -- you don't just look at what they were doing and then that's, therefore, what's required. That's kind of an unsophisticated view of originalism. But you do look at, first off, what does this language say? And it says, "due process of law." I think what the Supreme Court has said, "a meaningful hearing at a meaningful time," that's not a bad interpretation of the text itself as an originalist matter.

 

      Then, I think you add onto that what we have found about the practice at the time, which was that people -- the very first Congress enacted a forfeiture law that says, "Courts should hear and decide the case after this 14-day delay." That strongly suggests that this kind of textual reading of what does due process mean is the correct reading. The framers very clearly understood -- they were very concerned that the courts could decide these cases in a timely way. To me, that's kind of the originalist take on this case.

 

Adam Griffin:  So 14 days is what you think the originalist answer would require?

 

Robert Johnson:  Well, I don't know that you can look at originalism and get a particular number of days out of it. I think that may be too fine of a point. But I do think that if you look at the history and the understanding of due process, the idea that the government could take your car and hold it, or whatever the equivalent would've been, and hold it for two years without providing you any kind of hearing before any kind of judge, that's just not what anybody had in mind when they talked about due process.

 

Adam Griffin:  Mr. Cassella?

 

Stef Cassella:  Yeah, two observations. One is just that I think it would be a fascinating historical study—I don't know that anyone's ever done it—to see how quickly they actually had hearings in cases involving pirate ships and slave ships that they were seizing in the late-eighteenth-century because that, after all, was the original purpose of the first forfeiture statutes.

 

      I don't know whether they had them in 14 days or not. I'd be interested to know. Not that I would be governed by what the answer was, but I think it'd be interesting to know if that was the case.

 

      But I just wanted to point out what I consider to be an interesting irony. The same folks who profess adherence to originalism in this context about how long we should go before there is a hearing are the same folks who think that we shouldn't have civil forfeiture at all. And yet, civil forfeiture was enacted by the very first Congress and it preceded by almost 200 years the first criminal forfeiture statute.

 

We've had civil forfeiture since the beginning, and I think that anyone who is an adherent to originalism—I'm not one, but I think those who are should keep in mind that that was the very first effort that Congress made to impose some economic sanction on persons who could not be brought to trial criminally because there's no possibility of a criminal case.

 

David Smith:  I have something to add, too. This is David Smith. The Supreme Court has frequently justified the extraordinary powers of the government in forfeiture cases, which the Court has held you can take the property of a completely innocent person, stuff like that, which is kind of hard to justify. But the Supreme Court has repeatedly justified these extraordinary features of civil forfeiture based on history. This goes back to the founding so therefore it must be justified.

 

What's interesting about this argument is that here we actually have an historical argument that favors the reformers. That is, that back in 1791, the government had only 14 days to file a civil forfeiture complaint. Adding to the irony is, back in those days, as Stef was just saying, most of these forfeiture cases were against immensely valuable property—ships, ships full of cargo that had been brought into the country without paying customs duties, which, by the way, provided 90 percent of the federal government's revenue in those days; 90 percent, unlike today where it's a tiny proportion of the federal government's revenue, and they only had 14 days to actually file a complaint.

 

      And here, in today's case, we're dealing with property of extremely little value—cars, which, compared to a merchant ship in 1790, are extremely low-value items—and yet, look how much more time the government has to file a complaint. It's ridiculous. Totally ridiculous to me.

 

Robert Johnson:  To the originalist argument about forfeiture more generally, I would just say Justice Thomas has a fantastic opinion in a case called Leonard v. Texas. It's a statement respecting the denial of certiorari where he addresses the originalist evidence, and he suggests that there's actually very good originalist evidence that the government was held to a beyond a reasonable doubt standard in these early forfeiture cases.

 

      I don't think the originalist argument on civil forfeiture more broadly is that clear cut that it's permissible, either. In fact, I'd say the opposite, but certainly David's right. This is a great case where both the arguments from precedent and based on originalism all point in the same direction.

 

Adam Griffin:  All right. Nick, do we have any more questions in the queue?

 

Nick Marr:  We do not. We do not, and we're a few minutes over our time, so I think we'll close out. If anyone has any final remarks, please offer them now, and then we'll close out.

 

David Smith:  I just thank you for inviting me, and best wishes to everyone.

 

Robert Johnson:  Yeah, thank you.

 

Stef Cassella:  Yep, yes.

 

Adam Griffin:  Thank you to all the speakers.

 

Stef Cassella:  You're welcome. It was fun.

 

Nick Marr:  I'll add that on behalf of The Federalist Society, I want to thank our speakers and our moderator for taking the time this afternoon, to our audience for calling in.

 

      As always, we welcome your feedback by email at [email protected]. Also, be checking our website and your emails for announcements about upcoming teleforum calls, Zoom events, and more.

 

      With that, I thank you all for joining us today. We are adjourned.

 

[Music]

 

Dean Reuter:  Thank you for listening to this episode of Teleforum, a podcast of The Federalist Society’s practice groups. For more information about The Federalist Society, the practice groups, and to become a Federalist Society member, please visit our website at fedsoc.org.