Source: http://sd.findacase.com/research/wfrmDocViewer.aspx/xq/fac.20160330_0006294.SCT.htm/qx
Timestamp: 2019-08-24 02:12:04
Document Index: 382135242

Matched Legal Cases: ['§ 1345', '§ 1345', '§ 1349', '§ 371', '§ 1320', '§ 1345', '§ 881', '§ 853', '§ 853', '§ 853', '§ 853', '§ 853', '§ 853', '§ 853', '§ 853', '§ 853', '§ 853', '§ 853', '§ 853', '§ 1345']

FindACase™ | Luis v. United States
(b) While the Government does not deny Luis' fundamental right to be represented by a qualified attorney whom she chooses and can afford to hire, it would nonetheless undermine the value of that right by taking from Luis the ability to use funds she needs to pay for her chosen attorney. The Government attempts to justify this consequence by pointing out that there are important interests on the other side of the legal equation. It wishes to guarantee that funds will be available later to help pay for statutory penalties and restitution, for example. The Government further argues that two previous cases from this Court, Caplin & Drysdale, supra, at 619, 109 S.Ct. 2646, 109 S.Ct. 2667, 105 L.Ed.2d 528, and United States v. Monsanto, 491 U.S. 600, 615, 109 S.Ct. 2657, 105 L.Ed.2d 512, support the issuance of a restraining order in this case. However, the nature of the assets at issue here differs from the assets at issue in those earlier cases. And that distinction makes a difference. Pp. 5-16.
A federal statute provides that a court may freeze before trial certain assets belonging to a criminal defendant accused of violations of federal health care or banking laws. See 18 U.S.C. § 1345. Those assets include: (1) property " obtained as a result of" the crime, (2) property " traceable" to the crime, and (3) other " property of equivalent value." § 1345(a)(2). In this case, the Government has obtained a court order that freezes assets belonging to the third category of property, namely, property that is untainted by the crime, and that belongs fully to the defendant. That order, the defendant says, prevents her from paying her lawyer. She claims that insofar as it does so, it violates her Sixth Amendment " right . . . to have the Assistance of Counsel for [her] defence." We agree.
In October 2012, a federal grand jury charged the petitioner, Sila Luis, with paying kickbacks, conspiring to commit fraud, and engaging in other crimes all related to health care. See § 1349; § 371; 42 U.S.C. § 1320a-7b(b)(2)(A). The Government claimed that Luis had fraudulently obtained close to $45 million, almost all of which she had already spent. Believing it would convict Luis of the crimes charged, and hoping to preserve the $2 million remaining [136 S.Ct. 1088] in Luis' possession for payment of restitution and other criminal penalties (often referred to as criminal forfeitures, which can include innocent -- not just tainted -- assets, a point of critical importance here), the Government sought a pretrial order prohibiting Luis from dissipating her assets. See 18 U.S.C. § 1345(a)(2). And the District Court ultimately issued an order prohibiting her from " dissipating, or otherwise disposing of . . . assets, real or personal . . . up to the equivalent value of the proceeds of the Federal health care fraud ($45 million)." App. to Pet. for Cert. A-6.
The Government and Luis agree that this court order will prevent Luis from using her own untainted funds, i.e., funds not connected with the crime, to hire counsel to defend her in her criminal case. See App. 161 (stipulating " that an unquantified amount of revenue not connected to the indictment [had] flowed into some of the accounts" subject to the restraining order); ibid. (similarly stipulating that Luis used " revenue not connected to the indictment" to pay for real property that she possessed). [194 L.Ed.2d 262] Although the District Court recognized that the order might prevent Luis from obtaining counsel of her choice, it held " that there is no Sixth Amendment right to use untainted, substitute assets to hire counsel." 966 F.Supp.2d 1321, 1334 (SD Fla. 2013).
The Eleventh Circuit upheld the District Court. See 564 Fed.Appx. 493, 494 (2014) ( per curiam ) (referring to, e.g., Kaley v. United States, 571 U.S. ___, 134 S.Ct. 1090, 188 L.Ed.2d 46 (2014); Caplin & Drysdale, Chartered v. United States, 491 U.S. 617, 631, 109 S.Ct. 2646, 109 S.Ct. 2667, 105 L.Ed.2d 528 (1989); United States v. Monsanto, 491 U.S. 600, 616, 109 S.Ct. 2657, 105 L.Ed.2d 512 (1989)). We granted Luis' petition for certiorari.
The question presented is " [w]hether the pretrial restraint of a criminal defendant's legitimate, untainted assets (those not traceable to a criminal offense) needed to retain counsel of choice violates the Fifth and Sixth Amendments." Pet. for Cert. ii. We see no reasonable way to interpret the relevant statutes to avoid answering this constitutional question. Cf. Monsanto, supra, at 614, 109 S.Ct. 2657, 105 L.Ed.2d 512. Hence, we answer it, and our answer is that the pretrial restraint of legitimate, untainted assets needed to retain counsel of choice violates the Sixth Amendment. The nature and importance of the constitutional right taken together with the nature of the assets lead us to this conclusion.
No one doubts the fundamental character of a criminal defendant's Sixth Amendment right to the " Assistance of Counsel." In Gideon v. Wainwright, 372 U.S. 335, 83 S.Ct. 792, 9 L.Ed.2d 799 (1963), the Court explained:
" 'The right to be heard would be, in many cases, of little avail if it did not comprehend the right to be heard by counsel. Even the intelligent and educated layman has small and sometimes no skill in the science of law. If charged with crime, he is incapable, generally, of determining for himself whether the indictment is good or bad. He is unfamiliar with the rules of evidence. Left without the aid of counsel he may be put on trial without a proper charge, and convicted upon incompetent evidence, or evidence irrelevant to the issue or otherwise inadmissible. He lacks both the skill and knowledge adequately to prepare his defense, even though he have a perfect one. He requires the guiding hand of counsel at every step in the proceedings against him. Without it, [136 S.Ct. 1089] though he be not guilty, he faces the danger of conviction because he does not know how to establish his innocence.'" Id., at 344-345, 83 S.Ct. 792, 9 L.Ed.2d 799 (quoting Powell v. Alabama, 287 U.S. 45, 68-69, 53 S.Ct. 55, 77 L.Ed. 158 (1932)).
It is consequently not surprising: first, that this Court's opinions often refer to the right to counsel as " fundamental," id., at 68, 53 S.Ct. 55, 77 L.Ed. 158; see Grosjean v. American Press Co., 297 U.S. 233, 243-244, 56 S.Ct. 444, 80 L.Ed. 660 (1936) (similar); Johnson v. Zerbst, 304 U.S. 458, 462-463, 58 S.Ct. 1019, 82 L.Ed. 1461 (1938) (similar); second, that commentators describe the right as a " great engin[e] by which an innocent [194 L.Ed.2d 263] man can make the truth of his innocence visible," Amar, Sixth Amendment First Principles, 84 Geo. L. J. 641, 643 (1996); see Herring v. New York, 422 U.S. 853, 862, 95 S.Ct. 2550, 45 L.Ed.2d 593 (1975); third, that we have understood the right to require that the Government provide counsel for an indigent defendant accused of all but the least serious crimes, see Gideon, supra, at 344, 83 S.Ct. 792, 9 L.Ed.2d 799; and fourth, that we have considered the wrongful deprivation of the right to counsel a " structural" error that so " affec[ts] the framework within which the trial proceeds" that courts may not even ask whether the error harmed the defendant. United States v. Gonzalez-Lopez, 548 U.S. 140, 148, 126 S.Ct. 2557, 165 L.Ed.2d 409 (2006) (internal quotation marks omitted); see id., at 150, 126 S.Ct. 2557, 165 L.Ed.2d 409.
Given the necessarily close working relationship between lawyer and client, the need for confidence, and the critical importance of trust, neither is it surprising that the Court has held that the Sixth Amendment grants a defendant " a fair opportunity to secure counsel of his own choice." Powell, supra, at 53, 53 S.Ct. 55, 77 L.Ed. 158; see Gonzalez-Lopez, supra, at 150, 126 S.Ct. 2557, 165 L.Ed.2d 409 (describing " these myriad aspects of representation" ). This " fair opportunity" for the defendant to secure counsel of choice has limits. A defendant has no right, for example, to an attorney who is not a member of the bar, or who has a conflict of interest due to a relationship with an opposing party. See Wheat v. United States, 486 U.S. 153, 159, 108 S.Ct. 1692, 100 L.Ed.2d 140 (1988). And an indigent defendant, while entitled to adequate representation, has no right to have the Government pay for his preferred representational choice. See Caplin & Drysdale, 491 U.S., at 624, 109 S.Ct. 2646, 109 S.Ct. 2667, 105 L.Ed.2d 528.
We nonetheless emphasize that the constitutional right at issue here is fundamental: " [T]he Sixth Amendment guarantees a defendant the right to be represented by an otherwise qualified attorney whom that defendant can afford to hire." Ibid.
The Government cannot, and does not, deny Luis' right to be represented by a qualified attorney whom she chooses and can afford. But the Government would undermine the value of that right by taking from Luis the ability to use the funds she needs to pay for her chosen attorney. The Government points out that, while freezing the funds may have this consequence, there are important interests on the other side of the legal equation: It wishes to guarantee that those funds will be available later to help pay for statutory penalties (including forfeiture of untainted assets) and restitution, should it secure convictions. And it points to two cases from this Court, Caplin & Drysdale, supra, at 619, 109 S.Ct. 2646, 109 S.Ct. 2667, 105 L.Ed.2d 528, and Monsanto, 491 U.S., at 615, 109 S.Ct. 105 L.Ed.2d 512, which, in the Government's view, hold that the Sixth Amendment does not pose an obstacle to its doing so here. In our view, however, the nature of the assets at issue [136 S.Ct. 1090] here differs from the assets at issue in those earlier cases. And that distinction makes a difference.
The relevant difference consists of [194 L.Ed.2d 264] the fact that the property here is untainted; i.e., it belongs to the defendant, pure and simple. In this respect it differs from a robber's loot, a drug seller's cocaine, a burglar's tools, or other property associated with the planning, implementing, or concealing of a crime. The Government may well be able to freeze, perhaps to seize, assets of the latter, " tainted" kind before trial. As a matter of property law the defendant's ownership interest is imperfect. The robber's loot belongs to the victim, not to the defendant. See Telegraph Co. v. Davenport, 97 U.S. 369, 372, 24 L.Ed. 1047 (1878) (" The great principle that no one can be deprived of his property without his assent, except by the processes of the law, requires . . . that the property wrongfully transferred or stolen should be restored to its rightful owner" ). The cocaine is contraband, long considered forfeitable to the Government wherever found. See, e.g., 21 U.S.C. § 881(a) (" [Controlled substances] shall be subject to forfeiture to the United States and no property right shall exist in them" ); Carroll v. United States, 267 U.S. 132, 159, 45 S.Ct. 280, 69 L.Ed. 543, T.D. 3686 (1925) (describing the seizure of " contraband forfeitable property" ). And title to property used to commit a crime (or otherwise " traceable" to a crime) often passes to the Government at the instant the crime is planned or committed. See, e.g., § 853(c) (providing that the Government's ownership interest in such property relates back to the time of the crime).
The property at issue here, however, is not loot, contraband, or otherwise " tainted." It belongs to the defendant. That fact undermines the Government's reliance upon precedent, for both Caplin & Drysdale and Monsanto relied critically upon the fact that the property at issue was " tainted," and that title to the property therefore had passed from the defendant to the Government before the court issued its order freezing (or otherwise disposing of ) the assets.
In Caplin & Drysdale, the Court considered a post-conviction forfeiture that took from a convicted defendant funds he would have used to pay his lawyer. The Court held that the forfeiture was constitutional. In doing so, however, it emphasized that the forfeiture statute at issue provided that " '[a]ll right, title, and interest in property [constituting or derived from any proceeds obtained from the crime] vests in the United States upon the commission of the act giving rise to [the] forfeiture.'" 491 U.S., at 625, n. 4, 109 S.Ct. 2646, 109 S.Ct. 2667, 105 L.Ed.2d 528 (quoting § 853(c)) (emphasis added). It added that the law had " long-recognized" as " lawful" the " practice of vesting title to any forfeitable asset[s] in the United State[s] at the time of the crim[e]." Id., at 627, 109 S.Ct. 2646, 109 S.Ct. 2667, 105 L.Ed.2d 528. It pointed out that the defendant did not " claim, as a general proposition, that the [vesting] provision is unconstitutional, or that Congress cannot, as a general matter, vest title to assets derived from the crime in the Government, as of the date of the criminal act in question." Id., at 627-628, 109 S.Ct. 2646, 109 S.Ct. 2667, 105 L.Ed.2d 528. And, given the vesting language, the Court explained that the defendant " did not hold good title" to the property. Id., at 627, 109 S.Ct. 2646, 109 S.Ct. 2667, 105 L.Ed.2d 528. The Court therefore concluded that " [t]here is no constitutional principle that gives one [194 L.Ed.2d 265] person [namely, the defendant] the right to give another's [namely, the Government's] property to a third party," namely, the lawyer. Id., at 628, 109 S.Ct. 2646, 109 S.Ct. 2667, 105 L.Ed.2d 528.
[136 S.Ct. 1091] In Monsanto, the Court considered a pretrial restraining order that prevented a not-yet-convicted defendant from using certain assets to pay for his lawyer. The defendant argued that, given this difference, Caplin & Drysdale 's conclusion should not apply. The Court noted, however, that the property at issue was forfeitable under the same statute that was at issue in Caplin & Drysdale. See Monsanto, supra, at 614, 109 S.Ct. 2657, 105 L.Ed.2d 512. And, as in Caplin & Drysdale, the application of that statute to Monsanto's case concerned only the pretrial restraint of assets that were traceable to the crime, see 491 U.S., at 602-603, 109 S.Ct. 2657, 105 L.Ed.2d 512; thus, the statute passed title to those funds at the time the crime was committed ( i.e., before the trial), see § 853(c). The Court said that Caplin & Drysdale had already " weigh[ed] . . . th[e] very interests" at issue. Monsanto, supra, at 616, 109 S.Ct. 2657, 105 L.Ed.2d 512. And it " rel[ied] on" its " conclusion" in Caplin & Drysdale to dispose of, and to reject, the defendant's " similar constitutional claims." 491 U.S., at 614, 109 S.Ct. 2657, 105 L.Ed.2d 512.
JUSTICE KENNEDY prefers to read Caplin & Drysdale and Monsanto broadly, as holding that " the Government, having established probable cause to believe that Luis' substitute [ i.e., innocent] assets will be forfeitable upon conviction, should be permitted to obtain a restraining order barring her from spending those funds prior to trial." Post, at 6-7 (dissenting opinion). In other words, he believes that those cases stand for the proposition that property -- whether tainted or untainted -- is subject to pretrial restraint, so long as the property might someday be subject to forfeiture. But this reading asks too much of our precedents. For one thing, as discussed, Caplin & Drysdale and Monsanto involved the restraint only of tainted assets, and thus we had no occasion to opine in those cases about the constitutionality of pretrial restraints of other, untainted assets.
For another thing, JUSTICE KENNEDY's broad rule ignores the statutory background against which Caplin & Drysdale and Monsanto were decided. The Court in those cases referenced § 853(c) more than a dozen times. And it acknowledged that whether property is " forfeitable" or subject to pretrial restraint under Congress' scheme is a nuanced inquiry that very much depends on who has the superior interest in the property at issue. See Caplin & Drysdale, supra, at 626-628, 109 S.Ct. 2646, 109 S.Ct. 2667, 105 L.Ed.2d 528; Monsanto, 491 U.S., at 616, 109 S.Ct. 2657, 105 L.Ed.2d 512. We see this in, for example, § 853(e)(1), which explicitly authorizes restraining orders or injunctions against " property described in subsection (a) of this section" ( i.e., tainted assets). We see this too in § 853(e)(1)(B), which requires the Government--in certain circumstances -- to give " notice to persons appearing to have an interest in the property and opportunity for hearing" before obtaining a restraining order against such property. We see this in § 853(c), which allows " bona fide purchaser[s] for value" to keep property [194 L.Ed.2d 266] that would otherwise be subject to forfeiture. And we see this in § 853(n)(6)(A), which exempts certain property from forfeiture when a third party can show a vested interest in the property that is " superior" to that of the Government.
The distinction that we have discussed is thus an important one, not a technicality. It is the difference between what is yours and what is mine. In Caplin & Drysdale and Monsanto, the Government wanted to impose restrictions upon (or seize) property that the Government had probable cause to believe was the proceeds of, or traceable to, a crime. See Monsanto, supra, at 615, 109 S.Ct. 2657, 105 L.Ed.2d 512. The relevant statute said that the Government took title [136 S.Ct. 1092] to those tainted assets as of the time of the crime. See § 853(c). And the defendants in those cases consequently had to concede that the disputed property was in an important sense the Government's at the time the court imposed the restrictions. See Caplin & Drysdale, supra, at 619-620, 109 S.Ct. 2646, 109 S.Ct. 2667, 105 L.Ed.2d 528; Monsanto, supra, at 602-603, 109 S.Ct. 2657, 105 L.Ed.2d 512.
This is not to say that the Government " owned" the tainted property outright (in the sense that it could take possession of the property even before obtaining a conviction). See post, at 7-10 (KENNEDY, J., dissenting). Rather, it is to say that the Government even before trial had a " substantial" interest in the tainted property sufficient to justify the property's pretrial restraint. See Caplin & Drysdale, supra, at 62, 109 S.Ct. 2646, 109 S.Ct. 2667, 105 L.Ed.2d 5287 (" [T]he property rights given the Government by virtue of [§ 853(c)'s relation-back provision] are more substantial than petitioner acknowledges" ); United States v. Stowell, 133 U.S. 1, 19, 10 S.Ct. 244, 33 L.Ed. 555 (1890) (" As soon as [the possessor of the forfeitable asset committed the violation] . .., the forfeiture . . . took effect, and (though needing judicial condemnation to perfect it) operated from that time as a statutory conveyance to the United States of all right, title and interest then remaining in the [possessor]; and was as valid and effectual, against all the world, as a recorded deed" (emphasis added)).
If we analogize to bankruptcy law, the Government, by application of § 853(c)'s relation-back provision, became something like a secured creditor with a lien on the defendant's tainted assets superior to that of most any other party. See 4 Collier on Bankruptcy ¶ 506.03[1] (16th ed. 2015). For this reason, § 853(c) has operated in our cases as a significant limitation on criminal defendants' property rights in such assets -- even before conviction. See Monsanto, supra, at 613, 109 S.Ct. 2657, 105 L.Ed.2d 512 (" Permitting a defendant to use [tainted] assets for his private purposes that, under this [relation-back] provision, will become the property of the United States if a conviction occurs cannot be sanctioned" ); cf. Grupo Mexicano de Desarrollo, S. A. v. Alliance Bond Fund, Inc., 527 U.S. 308, 326, 119 S.Ct. 1961, 144 L.Ed.2d 319 (1999) (noting that the Court had previously authorized injunctions against the further dissipation of property where, among other things, " the creditor (the Government) asserted an equitable lien on the property" ).
Here, by contrast, the Government [194 L.Ed.2d 267] seeks to impose restrictions upon Luis' un tainted property without any showing of any equivalent governmental interest in that property. Again, if this were a bankruptcy case, the Government would be at most an unsecured creditor. Although such creditors someday might collect from a debtor's general assets, they cannot be said to have any present claim to, or interest in, the debtor's property. See id., at 330, 119 S.Ct. 1961, 144 L.Ed.2d 319 (" [B]efore judgment . . . an unsecured creditor has no rights at law or in equity in the property of his debtor" ); see also 5 Collier on Bankruptcy ¶ 541.05[1][b] (" [G]eneral unsecured creditor[s]" have " no specific property interest in the goods held or sold by the debtor" ). The competing property interests in the tainted- and untainted-asset contexts therefore are not " exactly the same." Post, at 2 (KAGAN, J., dissenting). At least regarding her untainted assets, Luis can at this point reasonably claim that the property is still " mine," free and clear.
This distinction between (1) what is primarily " mine" (the defendant's) and (2) what is primarily " yours" (the Government's) does not by itself answer the constitutional question posed, for the law of [136 S.Ct. 1093] property sometimes allows a person without a present interest in a piece of property to impose restrictions upon a current owner, say, to prevent waste. A holder of a reversionary interest, for example, can prevent the owner of a life estate from wasting the property. See, e.g., Peterson v. Ferrell, 127 N.C. 169, 170, 37 S.E. 189, 190 (1900). Those who later may become beneficiaries of a trust are sometimes able to prevent the trustee from dissipating the trust's assets. See, e.g., Kollock v. Webb, 113 Ga. 762, 769, 39 S.E. 339, 343 (1901). And holders of a contingent, future executory interest in property (an interest that might become possessory at some point down the road) can, in limited circumstances, enjoin the activities of the current owner. See, e.g., Dees v. Cheuvronts, 240 Ill. 486, 491, 88 N.E. 1011, 1012 (1909) (" [E]quity w[ill] interfere . . . only when it is made to appear that the contingency . . . is reasonably certain to happen, and the waste is . . . wanton and conscienceless" ). The Government here seeks a somewhat analogous order, i.e., an order that will preserve Luis' untainted assets so that they will be available to cover the costs of forfeiture and restitution if she is convicted, and if the court later determines that her tainted assets are insufficient or otherwise unavailable.
The Government finds statutory authority for its request in language authorizing a court to enjoin a criminal defendant from, for example, disposing of innocent " property of equivalent value" to that of tainted property. 18 U.S.C. § 1345(a)(2)(B)(i). But Luis needs some portion of those same funds to pay for the lawyer of her choice. Thus, the legal conflict arises. And, in our view, insofar as innocent ( i.e., untainted) funds are needed to obtain counsel of choice, we believe that the Sixth Amendment prohibits the court order that the Government seeks.
Three basic considerations lead us to this conclusion. First, the nature of the competing interests argues against this kind of court order. On the one side we find, as we have previously explained, supra, at 3-5, [194 L.Ed.2d 268] a Sixth Amendment right to assistance of counsel that is a fundamental constituent of due process of law, see Powell, 287 U.S., at 68-69, 53 S.Ct. 55, 77 L.Ed.2d 158. And that right includes " the right to be represented by an otherwise qualified attorney whom that defendant can afford to hire." Caplin & Drysdale, 491 U.S., at 624, 109 S.Ct. 2646, 109 S.Ct. 2667, 105 L.Ed.2d 5287. The order at issue in this case would seriously undermine that constitutional right.
On the other side we find interests that include the Government's contingent interest in securing its punishment of choice (namely, criminal forfeiture) as well as the victims' interest in securing restitution (notably, from funds belonging to the defendant, not the victims). While these interests are important, to deny the Government the order it requests will not inevitably undermine them, for, at least sometimes, the defendant may possess other assets -- say, " tainted" property -- that might be used for forfeitures and restitution. Cf. Gonzalez-Lopez, 548 U.S., at 148, 126 S.Ct. 2557, 165 L.Ed.2d 409 (" Deprivation of the right" to counsel of the defendant's choice " is 'complete' when the defendant is erroneously prevented from being represented by the lawyer he wants" ). Nor do the interests in obtaining payment of a criminal forfeiture or restitution order enjoy constitutional protection. Rather, despite their importance, compared to the right to counsel of choice, these interests would seem to lie somewhat further from the heart of a fair, effective criminal justice system.
Second, relevant legal tradition offers virtually no significant support for the Government's position. Rather, tradition [136 S.Ct. 1094] argues to the contrary. Describing the 18th-century English legal world (which recognized only a limited right to counsel), Blackstone wrote that " only" those " goods and chattels" that " a man has at the time of conviction shall be forfeited." 4 W. Blackstone, Commentaries on the Laws of England 388 (1765) (emphasis added); see 1 J. Chitty, Practical Treatise on the Criminal Law 737 (1816) (" [T]he party indicted may sell any of [his property] . . . to assist him in preparing for his defense on the trial" ).
" It is well known, that at the common law, in many cases of felonies, the party forfeited his goods and chattels to the crown. The forfeiture . . . was a part, or at least a consequence, of the judgment of conviction. It is plain from this statement, that no right to the goods and chattels of the felon could be acquired by the crown by the mere commission of the offense; but the right attached only by the conviction of the offender. . . . In the contemplation of the common law, the ...