Opinion ID: 33933
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Heading: the need to preserve the availability of

Text: the property through the entry of the requested order outweighs the hardship on any party against whom the order is to be entered. 18 U.S.C. § 983(j) (2000) (emphasis added). This provision, along with all of the civil forfeiture procedures set forth in § 983, is a product of the Civil Asset Forfeiture Reform Act of 2000 (CAFRA), Pub. L. No. 106-185, 114 Stat. 202. As the restraining order in this case was requested contemporaneously with the filing of the forfeiture complaint, issuance of the restraining order was authorized under paragraph (A) above. Paragraph (A) makes no mention of a hearing, either before or after issuance of the restraining order. The absence of any mention of a hearing is notable because paragraph (B), which concerns pre-complaint restraining orders, says that such orders may issue only after notice and an opportunity for a hearing. In this case, the district court did not hold a hearing before issuing the restraining order, and White does not contend that it should have held a pre-restraint hearing.3 3 This case therefore does not implicate the question whether the district court may in its discretion hold a prerestraint hearing, or indeed whether it must hold a pre-restraint hearing as a matter of due process. There is authority for the proposition that due process does not require a pre-restraint hearing in the context of post-indictment restraining orders 11 The government recognizes, however, that considerations of due process can require the court to hold a post-restraint pretrial hearing in certain circumstances. Although there does not seem to be a reported holding to this effect regarding the still fairly new provision at issue here, 18 U.S.C. § 983(j), authorities interpreting its criminal analogue, 21 U.S.C. § 853(e), are in broad agreement that due process requires the district court to hold a prompt hearing at which the property owner can contest the restraining order——without waiting until trial to do so——at least when the restrained assets are needed to pay for an attorney to defend him on associated criminal charges. See United States v. Jones, 160 F.3d 641, 645-48 (10th Cir. 1998); Monsanto, 924 F.2d at 1203; United States v. Moya-Gomez, 860 F.2d 706, 729-30 (7th Cir. 1988); United States v. Harvey, 814 F.2d 905, 928-29 (4th Cir. 1987), superceded as to other issues, In re Forfeiture Hearing as to Caplin & Drysdale, Chartered, 837 F.2d 637 (4th Cir. 1988) (en banc), aff’d, 491 U.S. 617 (1989).4 Other courts have held that due process under 21 U.S.C. § 853(e)(1)(A), the criminal analogue of § 983(j)(1)(A). See United States v. Monsanto, 924 F.2d 1186, 1192-93 (2d Cir. 1991) (en banc), on remand from 491 U.S. 600 (1989); United States v. Musson, 802 F.2d 384, 387 (10th Cir. 1986). But cf. United States v. James Daniel Good Real Prop., 510 U.S. 43, 52-57, 62 (1993) (holding that due process requires a hearing before the government may seize real property pending the resolution of a civil forfeiture action). 4 The Eleventh Circuit, on the contrary, holds that no pretrial hearing is required under 21 U.S.C. § 853(e) even when the restrained assets are needed to pay counsel. See United 12 requires that a claimant to assets that have been civilly seized be afforded a prompt opportunity to challenge the seizure when the assets are needed to pay counsel in a related criminal case. See United States v. Farmer, 274 F.3d 800, 805 (4th Cir. 2001); United States v. Michelle’s Lounge, 39 F.3d 684, 700-01 (7th Cir. 1994). Note that neither due process, nor the Sixth Amendment right to counsel, requires that assets needed to pay an attorney be exempted from restraining orders or, ultimately, from forfeiture. Caplin & Drysdale, Chartered v. United States, 491 U.S. 617, 62335 (1989); Monsanto, 491 U.S. at 616. Rather, the constitutional requirement set forth in the circuit court cases cited above is States v. Bissell, 866 F.2d 1343, 1354 (11th Cir. 1989); see also United States v. Register, 182 F.3d 820, 835 (11th Cir. 1999) (“We appear to be the only circuit holding that, although pre-trial restraint of assets needed to retain counsel implicates the Due Process Clause, the trial itself satisfies this requirement.”). The government concedes that the better view is that embraced by the other authorities. This court has held that the requirements of Federal Rule of Civil Procedure 65, including Rule 65’s hearing requirements and time limits on ex parte restraining orders, apply to ex parte restraining orders and injunctions issued under 21 U.S.C. § 853(e)(1)(A). See United States v. Thier, 801 F.2d 1463, 146869 (5th Cir. 1986), modified, 809 F.2d 249 (5th Cir. 1987); accord United States v. Crozier, 777 F.2d 1376, 1384 (9th Cir. 1985). Contra United States v. Jamieson, 189 F. Supp. 2d 754, 756 (N.D. Ohio 2002). Thier’s hearing requirement would evidently apply without regard to whether the restrained assets are needed to pay counsel. In today’s case, which involves the added element of the Sixth Amendment right to counsel, the district court did hold a post-restraint hearing. Thus, we have no need to consider the issue whether post-restraint hearings are more generally appropriate under 18 U.S.C. § 983(j)(1)(A), as Thier apparently envisioned they would be under 21 U.S.C. § 853(e)(1)(A). 13 simply a requirement that the district court in certain circumstances hold a hearing on the restraining order and make a determination that the assets are properly subject to forfeiture. Because the district court held a hearing in this case, and because the government does not dispute that due process can require such hearings, we can assume without deciding that due process can mandate a post-restraint hearing under § 983(j)(1)(A), at least in certain circumstances. But in order to resolve White’s appeal, we do need to decide the question of the standard of proof that should be used in such a postrestraint hearing. In particular, we must decide whether the district court erred in continuing the restraining order based on a showing of probable cause to believe that the assets were subject to forfeiture. According to White, the government should not be permitted to restrain assets that he needs to pay his criminal counsel unless the government can make a post-restraint showing that it is likely to succeed on the merits of the forfeiture action. Essentially, the government would be required to meet the burden generally imposed on parties seeking preliminary injunctions, which is presumably somewhat higher than a mere showing of probable cause. In support of that proposition, White relies on our decision in United States v. Thier, 801 F.2d 1463 (5th Cir. 1986), modified, 809 F.2d 249 (5th Cir. 1987), which applied the substantial-likelihood-of-success-on-the-merits standard in the 14 context of 21 U.S.C. § 853(e)(1)(A), which authorizes postindictment, pretrial restraining orders in criminal forfeiture cases. White further explains that the ultimate showing required for the government to succeed on the merits of a civil forfeiture action recently changed with the passage of CAFRA in April 2000. Before CAFRA, the government could prevail on the merits of a civil forfeiture action merely by showing probable cause to believe that the subject property was forfeitable. After CAFRA, however, the government can prevail on the merits only by establishing forfeitability by a preponderance of the evidence. 18 U.S.C. § 983(c)(1) (2000). Combining CAFRA’s higher standard of proof with Thier’s statements regarding the standard for pretrial restraining orders, White concludes that the government should be required to defend its § 983(j)(1)(A) pretrial restraining order by showing that it is substantially likely to succeed at trial in proving by a preponderance of the evidence that the assets are subject to forfeiture. Again, in White’s view, what is required is basically the familiar inquiry into whether a plaintiff is entitled to a preliminary injunction. According to the government, a pretrial restraining order issued under § 983(j)(1)(A) should be continued if the government shows probable cause to believe that the assets are subject to forfeiture. To the extent that White would read Thier to say otherwise, the government contends that the issue is instead controlled by the Supreme Court’s post-Thier decision in United 15 States v. Monsanto. In Monsanto, which involved a restraining order under a criminal forfeiture statute, the Supreme Court held that due process permitted the government to restrain assets needed to pay attorneys’ fees as long as the government showed that there was probable cause to believe that the assets were subject to forfeiture. 491 U.S. at 615-16. Regarding the impact of CAFRA, the government argues that while CAFRA increased the standard of proof on the merits of a civil forfeiture case, CAFRA does not affect the standard at a due process hearing challenging a pretrial restraining order. On that issue, according to the government, Monsanto still controls.5 5 Although the government believes that the district court applied the proper standard of proof (i.e. probable cause) and correctly concluded that probable cause was present, the government also argues that the district court should not have held a hearing in the first place because White did not make a sufficient threshold showing that the restrained funds were necessary to pay counsel. White presented an affidavit stating that he had no other funds with which to pay for a defense attorney, and there were suggestions, which the district judge apparently credited, that White had been found to qualify for appointed counsel in the related criminal prosecution. This showing appears quite similar to the showings described in cases that, according to the government’s own argument, set forth the proper threshold showing. See, e.g., Farmer, 274 F.3d at 802, 804. Since the district court decided to hold a hearing and the government still prevailed, we think it would be imprudent to use this case to elaborate the precise details of the circumstances and showings necessary to trigger a due process hearing——a constitutional question that we are not required to decide here. Cf. Monsanto, 491 U.S. at 615 n.10 (“[G]iven that the Government prevailed in the District Court notwithstanding the hearing, it would be pointless for us now to consider whether a hearing was required by the Due Process Clause.”). 16 Having weighed the parties’ contentions, we are persuaded that probable cause is the proper standard of proof for continuing a pretrial restraining order under § 983(j)(1)(A). Under pre-CAFRA law, property could be civilly forfeited to the government under 18 U.S.C. § 981 based merely on a showing of probable cause to believe that the property was implicated in certain offenses, unless the claimant could establish, by a preponderance of the evidence, that some defense was applicable or that the property was otherwise not subject to forfeiture. See United States v. $9,041,598.68, 163 F.3d 238, 246 (5th Cir. 1998); United States v. 1988 Oldsmobile Cutlass Supreme 2 Door, 983 F.2d 673-74 (5th Cir. 1993).6 Courts consistently held that this scheme comported with due process. See United States v. One Beechcraft King Air 300 Aircraft, 107 F.3d 829, 829-30 (11th Cir. 1997) (per curiam) (collecting cases). Moreover, the government could seize property pending the resolution of the forfeiture case, and this too required no more than probable cause. See 18 U.S.C. § 981(b)(2) (1994); Marine Midland Bank, N.A. v. United States, 11 F.3d 1119, 1124-26 (2d Cir. 1993); United States v. 6 Section 981 is a generic provision that provides for civil forfeiture of property involved in a host of offenses. See 18 U.S.C. § 981(a)(1) (2000) (listing offenses). Federal law also contains a number of specific civil forfeiture provisions tied to particular regulatory regimes. The discussion here focuses on the background of § 981 because it is the provision that authorizes the forfeitures at issue in this case. 17 One 1978 Mercedes Benz, Four-Door Sedan, 711 F.2d 1297, 1302-03 (5th Cir. 1983).7 Congress enacted CAFRA in 2000 in order to “provide a more just and uniform procedure for Federal civil forfeitures.” Pub. L. No. 106-185 pmbl., 114 Stat. 202, 202.8 CAFRA added 18 U.S.C. § 983, which sets forth a uniform (though not comprehensive) set of procedures and standards applicable to most civil forfeiture proceedings. Among other changes, CAFRA increased the government’s required showing on the merits: “In a suit or action brought under any civil forfeiture statute for the civil forfeiture of any property . . . the burden of proof is on the Government to establish, by a preponderance of the evidence, that 7 One 1978 Mercedes Benz might be taken to suggest that the Attorney General could use admiralty procedures to seize property even without probable cause. See 711 F.2d at 1302. Other courts held that probable cause must be present in all cases, regardless of the procedure, as a matter of constitutional law. See United States v. Daccarett, 6 F.3d 37, 49-50 (2d Cir. 1993). If One 1978 Mercedes Benz did not require probable cause for the seizure, it is unclear whether the case would still be a correct statement of the law, as both the civil forfeiture statutes and Rule C of the Supplemental Rules for Certain Admiralty and Maritime Claims have since been amended to afford greater procedural protections. See 12 CHARLES ALAN WRIGHT ET AL., FEDERAL PRACTICE AND PROCEDURE § 3222 (2d ed. 1997) (discussing amendments to admiralty warrant rules). Compare 18 U.S.C. § 981(b)(2) (1994) with id. (2000). For present purposes, the important point is simply that pretrial seizure in civil forfeiture cases has traditionally been available upon a relatively low showing by the government. 8 The purposes behind CAFRA are also recounted in two committee reports that discuss previous versions of the bill. See H.R. REP. NO. 106-192 (1999); H.R. REP. NO. 105-358 (1997). Neither report discusses the precise provision at issue here, as it was added as part of an amendment on the Senate floor. 18 the property is subject to forfeiture.” 18 U.S.C. § 983(c)(1). CAFRA also added § 983(j), which authorizes pretrial restraining orders and other measures to preserve property pending resolution of the case. The particular provision at issue in this appeal is § 983(j)(1)(A), which concerns post-complaint restraining orders. As we observed above, § 983(j)(1)(A) does not mention a hearing, let alone fix the standard of proof in such a hearing. When due process requires a hearing, as both sides agree that it sometimes does, we think that the standard of proof applied at such a hearing should likewise be a function of what due process requires. In deciding what due process requires, we find compelling guidance in the Supreme Court’s decision in Monsanto, which involved 21 U.S.C. § 853(e)(1)(A). In that case, like the case before us today, the government had obtained a pretrial restraining order that froze assets that the government contended were subject to forfeiture. The owner objected that the assets were necessary to pay for an attorney to defend him on the related criminal charges. The court of appeals had originally held that, although funds needed to pay for an attorney were subject to forfeiture and pretrial restraint, due process required a post-restraint, pretrial hearing at which the government would be required to show a likelihood of succeeding in the criminal forfeiture case. United States v. Monsanto, 836 F.2d 74, 83-84 & n.9 (2d Cir. 1987). On rehearing, the en banc court went further and held that funds needed to pay for a 19 criminal defense attorney were not subject to forfeiture or pretrial restraint at all. United States v. Monsanto, 852 F.2d 1400, 1402 (2d Cir. 1988) (en banc). The Supreme Court reversed, holding that funds needed to pay for a criminal defense were not exempt from forfeiture and that such assets could properly be restrained under § 853(e)(1)(A) pending trial “based on a finding of probable cause to believe that the assets are forfeitable.” 491 U.S. at 615 (emphasis added). The Court supported its decision by noting that its precedents required the government to make only a showing of probable cause before physically seizing property alleged to be subject to forfeiture, a more severe form of interference than a restraining order. Id. Moreover, the Court pointed out that the government may restrain a person (i.e., arrest him or her) based on a finding of probable cause. Id. at 615-16. The Court concluded by observing that “if the Government may, post-trial, forbid the use of forfeited assets to pay an attorney, then surely no constitutional violation occurs when, after probable cause is adequately established, the Government obtains an order barring a defendant from frustrating that end by dissipating his assets prior to trial.” Id. at 616. It is true that Monsanto arose in connection with a criminal forfeiture proceeding, but we see no reason why due process should require a different standard of proof when the assets 20 needed to pay an attorney to provide a criminal defense are restrained as part of a related civil forfeiture proceeding.9 The recent passage of CAFRA does not mean that we should now require more than what Monsanto required. CAFRA raised the government’s ultimate burden of proof on the merits in a civil forfeiture case from probable cause (subject to rebuttal by a preponderance) to a preponderance of the evidence. But it is important to remember that since Monsanto was a criminal forfeiture case under 21 U.S.C. § 853(a), the government’s ultimate burden on the merits was to prove the crime beyond a reasonable doubt and prove the forfeitability of the property by a preponderance of the evidence.10 Given that ultimate standard 9 This is not to deny that there are important differences between the civil and criminal contexts, including differences that might bear on the circumstances in which due process requires a speedy post-restraint hearing. In the criminal context, an ex parte pretrial restraining order under 21 U.S.C. § 853(e)(1)(A) is at least supported by a grand jury finding of probable cause, but that need not be the case in civil forfeitures. Moreover, the ultimate resolution of a civil forfeiture case may be longer in coming, as such a case is not governed by the speedy trial considerations operative in a criminal case. While a claimant in a civil forfeiture case might hope to regain restrained property quickly by filing a motion for summary judgment, the government can block this tactic by moving to stay the civil forfeiture proceeding pending the criminal trial. See 18 U.S.C § 981(g)(1) (2000); Michelle’s Lounge, 39 F.3d at 699-700. These differences might bear on the need for a post-restraint hearing, but the differences do not seem to us to affect Monsanto’s resolution of the standard of proof to be applied at such a hearing. 10 That appears to be the view embraced by most courts at around the time of the Supreme Court’s decision. See, e.g., United States v. Elgersma, 971 F.2d 690 (11th Cir. 1992) (en banc); United States v. Hernandez-Escarsega, 886 F.2d 1560, 157621 of proof, Monsanto held that the pretrial restraining order could continue in effect based on a showing of probable cause. With the passage of CAFRA, the ultimate standard on the merits in civil cases has been raised, but it has not been raised beyond the ultimate standard that was applicable in Monsanto, a criminal case. That CAFRA raised the merits standard in civil cases is therefore no reason to go beyond what Monsanto required at the pretrial stage. While Monsanto is the primary basis for our decision, we note as well that employing the probable cause standard in the context of § 983(j)(1)(A) has the additional virtue of aligning with the standard for obtaining the alternative device for preserving assets subject to forfeiture: outright seizure. Property subject to forfeiture can in many cases be seized by the government, pending trial, upon no more than an initial showing of probable cause. See 18 U.S.C. §§ 981(b)(2), 985(d) (2000). When the seizure is later challenged in a due process hearing, the standard has likewise been held to be probable cause. See Farmer, 274 F.3d at 805; Michelle’s Lounge, 39 F.3d at 700-01. Both Congress and the Constitution see pretrial restraining 77 (9th Cir. 1989); United States v. Sandini, 816 F.2d 869, 87476 (3d Cir. 1987). But see Monsanto, 852 F.2d at 1412 & n.1 (Mahoney, J., dissenting) (stating that the majority of courts held that forfeitability must be shown beyond a reasonable doubt). Whether the standard for criminal forfeiture was beyond a reasonable doubt or a preponderance of the evidence, the important point is that CAFRA does not require a higher showing on the merits than was required in Monsanto. 22 orders as preferable, somewhat less restrictive alternatives to outright seizure. See § 985(d)(2); James Daniel Good Real Prop., 510 U.S. at 58-59, 62. It would frustrate that preference were the government able to seize property more easily than it could restrain it. Against these considerations, White presses our decision in Thier. Some aspects of Thier appear to be in tension with Monsanto, and future cases may need to consider whether certain portions of Thier were overruled. Today’s case, however, only requires that we decide the relatively narrow question whether continuing a pretrial restraining order under § 983(j)(1)(A) demands a government showing of probable cause or instead a (presumably somewhat higher) showing of a substantial likelihood of success on the merits. Thier held, in a case involving a separate but textually very similar statute, that the government should be required to make the latter showing, as that is the showing typically required for preliminary injunctions. The opinion in Thier was ostensibly based on an interpretation of the statute itself, not on due process directly, but the opinion nonetheless makes clear that the court’s interpretation of the statute was guided by the need to make the statute comport with due process. 801 F.2d at 1468. The Supreme Court, however, did reach the constitutional question in Monsanto, and there the Court concluded that due process permitted the government to restrain assets needed to pay counsel upon a showing of probable 23 cause. 491 U.S. at 615-16. Whether or not all of Thier remains good law in the context of 21 U.S.C. § 853(e)(1)(A),11 this new guidance from the Supreme Court convinces us that in the context of § 983(j)(1)(A)——a statute enacted after Monsanto——Thier should not be carried over to the extent that it would require the government to show more than probable cause in order to restrain assets. On that particular question, we find the Supreme Court’s decision in Monsanto controlling.12 Accordingly, we hold that probable cause is the proper standard of proof.