Opinion ID: 705074
Heading Depth: 3
Heading Rank: 1

Heading: Applying the Double Jeopardy Clause to Civil Forfeiture

Text: 24 The first question that must be addressed is simply: When and to what extent will in rem civil forfeitures be precluded by the Double Jeopardy Clause? Unfortunately, the Supreme Court cases give no clear answer to this fundamental question. 25 Not long ago, Supreme Court rulings strongly indicated that the Double Jeopardy Clause would rarely apply in civil forfeiture proceedings. In United States v. One Assortment of 89 Firearms, 465 U.S. 354, 104 S.Ct. 1099, 79 L.Ed.2d 361 (1984), the Court held that the Double Jeopardy Clause did not bar a forfeiture of guns under 18 U.S.C. Sec. 924(d) after the claimant had been acquitted on criminal firearms charges. See id. at 366, 104 S.Ct. at 1107. Applying the tests it developed in United States v. Ward, 448 U.S. 242, 100 S.Ct. 2636, 65 L.Ed.2d 742 (1980), and Kennedy v. Mendoza-Martinez, 372 U.S. 144, 83 S.Ct. 554, 9 L.Ed.2d 644 (1963), the Court concluded that the Sec. 924(d) forfeiture proceeding ... is not a criminal proceeding, [and so] it is not barred by the Double Jeopardy Clause. 89 Firearms, 465 U.S. at 366, 104 S.Ct. at 1107. See also One Lot Emerald Cut Stones and One Ring v. United States, 409 U.S. 232, 235-37, 93 S.Ct. 489, 492-93, 34 L.Ed.2d 438 (1972) (finding no double jeopardy bar on a forfeiture of illegally imported jewels under 19 U.S.C. Sec. 1497, after the owner had been acquitted on criminal charges for violating customs procedures, since the Sec. 1497 forfeiture is civil and remedial and so involves neither two criminal trials nor two criminal punishments). The thrust of the Court's holding in 89 Firearms seemed clear: the Double Jeopardy Clause precludes only successive criminal prosecutions, and thus it will not bar a forfeiture action brought after an initial criminal prosecution as long as the forfeiture action can properly be characterized as a civil proceeding. 26 But the Supreme Court's decision in United States v. Halper, 490 U.S. 435, 109 S.Ct. 1892, 104 L.Ed.2d 487 (1989), changed matters drastically. See United States v. Millan, 2 F.3d 17, 19 (2d Cir.1993) (calling Halper the seminal case in this realm of double jeopardy jurisprudence), cert. denied, --- U.S. ----, 114 S.Ct. 922, 127 L.Ed.2d 215 (1994). In Halper, the Supreme Court focused on the multiple punishment component of the Double Jeopardy Clause and held that some sanctions or penalties, even if labelled civil and imposed in civil proceedings, may still constitute punishment for the purpose of double jeopardy analysis. See 490 U.S. at 440-48, 109 S.Ct. at 1897-1902. Regardless of the nature of the proceeding in which the sanction is imposed, a sanction that serves punitive goals, if imposed after another punishment for the same offense, runs afoul of the Double Jeopardy Clause's proscription of multiple punishments. Id. at 447, 109 S.Ct. at 1901. For under the Double Jeopardy Clause a defendant who already has been punished in a criminal prosecution may not be subjected to an additional civil sanction to the extent that the second sanction may not fairly be characterized as remedial, but only as a deterrent or retribution. Id. at 448-49, 109 S.Ct. at 1901-02. 27 Because Halper arose in the context of a statutory penalty under the False Claims Act and barely mentioned the Supreme Court's prior civil forfeiture/double jeopardy decisions in 89 Firearms and One Lot Emerald Cut Stones, lower courts were left to determine for themselves what Halper meant for civil forfeiture actions. In United States v. 38 Whalers Cove Drive, 954 F.2d 29 (2d Cir.), cert. denied, --- U.S. ----, 113 S.Ct. 55, 121 L.Ed.2d 24 (1992), this Court had occasion to examine the implication of Halper for such proceedings. As in the instant case, the claimant in Whalers Cove had been criminally punished under state law for criminal conduct (two minor drug sales from his home) that the Government claimed provided grounds for the forfeiture of his property. He asserted that the Double Jeopardy Clause barred the forfeiture of his personal residence because it would constitute a second punishment under the terms of Halper. 28 After reviewing the Halper decision, we concluded that Halper appl[ies] to civil forfeitures, such that [f]orfeitures that are overwhelmingly disproportionate to the value of the offense must be classified as punishment unless the forfeitures are shown to serve articulated, legitimate civil purposes. Whalers Cove, 954 F.2d at 35. We noted that among the valid civil purposes for forfeiture are the removal of the instrumentalities of crime and the compensation of the Government for whatever enforcement expenditures or damages can be attributed to the criminal misconduct of the claimant. See id. at 35-36. At the same time, we recognized that some forfeitures can be punitive in nature. See id. at 36. We concluded that a court's task after Halper was to examine whether the forfeiture at hand is fully justified by the civil and remedial purposes it ostensibly serves, or whether it or a portion thereof can be explained only with reference to punitive goals. Id. 29 Our analysis in Whalers Cove focused not upon the general characteristics of the statute under which the forfeiture was sought, but rather upon the specifics of the particular property forfeiture at issue. And we set out a detailed procedure for district courts to use in determining whether the forfeiture at hand  constituted punishment. See Whalers Cove, 954 F.2d at 36-37 (emphasis added). Under Halper, this appeared to be the appropriate methodology, since the language used by the Supreme Court in Halper suggested that deciding whether a civil sanction constituted punishment involved an individualized determination turning on the specific circumstances surrounding the application of the sanction to a particular defendant. See Halper, 490 U.S. at 448, 109 S.Ct. at 1901-02 (explaining that the determination whether a given civil sanction constitutes punishment in the relevant sense requires a particularized assessment of the penalty imposed); id. (indicating that the inquiry concerns the sanction as applied in the individual case); id. at 447 n. 7, 109 S.Ct. at 1901 n. 7 (clarifying that in determining whether a particular civil sanction constitutes punishment, it is the purposes actually served by the sanction in question, not the underlying nature of the proceeding giving rise to the sanction, that must be evaluated); see also id. at 453, 109 S.Ct. at 1904 (Kennedy, J., concurring) (stressing that the Court's holding constitutes an objective rule that is grounded in the nature of the sanction and the facts of the particular case). 3 30 Relying on Whalers Cove, the Government argues that no double jeopardy problem exists in the instant case because the forfeiture of the property of GPS and Phil Schaffer was directed only to the instrumentalities of crime, and therefore does not constitute punishment under Halper (as read by us in Whalers Cove ). And though, as discussed below, the District Court relied on other grounds in rejecting the double jeopardy claims of GPS and Phil Schaffer, its opinion suggests that it also adopted the Government's contention that the particular forfeitures at issue here did not constitute punishment and hence could not create double jeopardy problems. See Memorandum and Order, United States v. All Assets of G.P.S. Automotive Corp., No. 91-0223, at 7-11 (E.D.N.Y. July 10, 1992). Developments in the law since its decision, however, pose two significant difficulties for the notion that the forfeitures at hand are not punishment. 31 First, it is not obvious on this record that all of the property of GPS and Phil Schaffer that the Government seeks to have forfeited can properly be considered to have been an instrumentality of their criminal activities. GPS's and Phil Schaffer's state convictions certainly indicate that they conducted a large-scale trade in stolen vehicles and parts on this property, but it seems clear that they also ran a sizeable legitimate automotive salvage and repair business from the same premises. As a result, though much of the property at issue may apparently be deemed the 'means' by which the crime was committed, United States v. $145,139, 18 F.3d 73, 75 (2d Cir.), cert. denied, --- U.S. ----, 115 S.Ct. 72, 130 L.Ed.2d 27 (1994), it is questionable whether all of it may be so characterized. 32 Since the Supreme Court has recently cast doubt upon expansive definitions of what can qualify as instrumentalities of a particular crime, see Austin, --- U.S. at ----, 113 S.Ct. at 2811, we are not permitted automatically to accept a contention that all of the assets of a legitimate enterprise, as well as all of the real property upon which that enterprise is located, constitute instrumentalities of whatever crimes are committed on the premises. Cf. United States v. $69,292, 62 F.3d 1161, 1167-68 (9th Cir.1995) (expressing concerns about stretch[ing] the fiction of an 'instrumentality' ). And since the District Court did not develop a factual record or rule directly on what could be deemed to have been instruments of the appellants' crimes, we cannot on appeal resolve the double jeopardy claim of GPS and Phil Schaffer by seeking to determine, for the first time in the case, whether all their properties did in fact constitute criminal instrumentalities. 33 Second, and more fundamental, it is by no means clear, given two very recent decisions by the Supreme Court, that the methodology we formulated in Whalers Cove for determining whether a particular civil forfeiture constitutes punishment for double jeopardy analysis remains good law. For Austin v. United States, --- U.S. ----, 113 S.Ct. 2801, 125 L.Ed.2d 488 (1993), and Department of Revenue of Montana v. Kurth Ranch, --- U.S. ----, 114 S.Ct. 1937, 128 L.Ed.2d 767 (1994), may mean that the appropriate inquiry is no longer whether the particular forfeiture in the case at hand is remedial or punitive, but rather whether the statute upon which the Government relies for the forfeiture is itself remedial or punitive. In Austin, the issue was whether the Excessive Fines Clause of the Eighth Amendment applied to in rem civil forfeiture. In finding that the in rem civil forfeiture did constitute punishment, the Court expressly focused on the statute, upon which the Government sought forfeiture, as a whole. --- U.S. at ---- n. 14, 113 S.Ct. at 2812 n. 14 (emphasis added); see also id. at ---- - ----, 113 S.Ct. at 2810-12 (examining aspects of the forfeiture statute generally). In Kurth Ranch, the Supreme Court considered whether Montana's tax on illegal drugs constituted punishment so as to be barred by the Double Jeopardy Clause. Again, the Court examined Montana's tax statute generally and expressly avoided the particularized analysis it had applied in Halper. See --- U.S. at ---- - ----, 114 S.Ct. at 1944-48. 34 Because these recent decisions do not discuss methodology, we cannot be sure that Austin and Kurth Ranch intended to cast doubt upon the case-by-case approach we employed in Whalers Cove. And we are hesitant to conclude that the Supreme Court meant its decision in Austin, a case addressing the Excessive Fines Clause, to reformulate the standards Halper had established for the Double Jeopardy Clause. Similarly, Kurth Ranch 's avoidance of Halper 's individualized methodology may have been based solely on the fact that it simply does not work in the case of a tax statute. --- U.S. at ----, 114 S.Ct. at 1948 (internal quotation omitted). Only if we read Austin and Kurth Ranch as making major changes in double jeopardy analysis, sub silento, would we have to conclude that Halper 's particularized approach to the question of punishment (which we adapted to civil forfeitures in Whalers Cove ) has been cast aside. And, in fact, rather than reading Austin or Kurth Ranch in this way, we have continued to follow Halper and to make individualized, case-by-case determinations of whether particular civil sanctions constitute punishment even after Austin and Kurth Ranch (albeit without discussion of these cases). See United States v. Carson, 52 F.3d 1173, 1182-83 (2d Cir.1995); United States v. Morgan, 51 F.3d 1105, 1112-15 (2d Cir.1995); United States v. $145,139, 18 F.3d 73, 75 (2d Cir.), cert. denied, --- U.S. ----, 115 S.Ct. 72, 130 L.Ed.2d 27 (1994). 35 We must recognize, however, that the Ninth Circuit in a double jeopardy case has recently expressly held--and even more recently re-emphasized--that, after Austin, in order to determine whether a forfeiture constitutes 'punishment,' we must look to the entire scope of the statute which the government seeks to employ, rather than to the characteristics of the specific property the government seeks to forfeit. United States v. $405,089.23, 33 F.3d 1210, 1220 (9th Cir.1994). Reading the Supreme Court's decision as directly rejecting a prior Ninth Circuit civil forfeiture/double jeopardy holding, 4 that Circuit concluded that Austin now requires a categorical approach to 'punishment' determinations. Id. And, upon a petition for rehearing, the Ninth Circuit amended its opinion by adding that the adoption of this categorical approach is also compelled by the Supreme Court's recent decision in ... Kurth Ranch. United States v. $405,089.23, 56 F.3d 41, 42 (9th Cir.1995) (text of amendment to original opinion). Applying this categorical approach in $405,089.23, the Ninth Circuit formally held that any forfeiture action under Sec. 981(a)(1)(A)--the statute employed by the Government in the case before us--constitutes punishment for purposes of the Double Jeopardy Clause. See 33 F.3d at 1221-22. 36 The Ninth Circuit's forceful opinion in $405,089.23--which it has declined to reconsider en banc, see 56 F.3d at 42, and which has gained adherents in other circuits, see United States v. Ursery, 59 F.3d 568, 572-73 (6th Cir.1995); see also United States v. Baird, 63 F.3d 1213, 1220-26 (3d Cir.1995) (separate opinion of Sarokin, J.)--may raise a question about the impact of Austin and Kurth Ranch on double jeopardy analysis in civil forfeiture cases. Nevertheless, while we think it is important to resolve the issue of how and when the Double Jeopardy Clause applies to civil forfeiture actions, 5 we believe we ought not do so at this stage of the proceedings in this case. 37 To try to reconcile Halper, Austin and Kurth Ranch with each other, and with the Supreme Court's earlier double jeopardy/civil forfeiture decision in 89 Firearms, we would have to fly blind. In their arguments to this Court, the parties have not really addressed these broad issues, but have instead focused almost exclusively on the dual sovereignty doctrine. They have done this both because that doctrine provided the essential foundation for the District Court's rejection of the appellants' double jeopardy claims, and because many of the broader jurisprudential developments discussed above occurred after this appeal was briefed and argued. We therefore do not yet have an adequate account of the parties' views on how these broader issues should be resolved in the context of this case. 38 Moreover, though we think further consideration of the issue is required after more fact-finding, the District Court may still determine, as it did originally, that the dual sovereignty doctrine makes the Double Jeopardy Clause inapplicable in this case. Our remand for additional fact-finding on the issue in no way precludes this. And a final determination that the dual sovereignty doctrine applies would, obviously, make superfluous any consideration of the broader double jeopardy issues implicated in this proceeding. 39 For all these reasons, we think the proper course is to avoid, for now, the resolution of these broad questions. We therefore leave open (1) whether the detailed methodology set forth in Whalers Cove for dealing with double jeopardy and forfeitures remains good law given recent Supreme Court holdings, and (2) whether, if Whalers Cove still governs on this issue, all the properties of GPS and Phil Schaffer constitute instrumentalities of their crimes. Such issues are to be considered in the first instance by the District Court, if, and only if, it were to conclude upon remand that the dual sovereignty doctrine does not dispose of the double jeopardy contentions of GPS and Phil Schaffer. 6 It is to dual sovereignty that we therefore now turn.