Opinion ID: 580788
Heading Depth: 3
Heading Rank: 2

Heading: Post-Trial Forfeiture

Text: 50 Adult Video argues that RICO's post-trial forfeiture penalty constitutes an unlawful prior restraint because, by seizing assets beyond those adjudged obscene, it exacts as a toll for past transgressions the defendant's ability to communicate in the future. While we decline to equate these forfeitures with prior restraints, we also conclude that some tailoring of the scope of forfeiture is necessary to harmonize RICO's post-trial forfeiture penalty with the First Amendment.
51 Because a RICO forfeiture occurs only after a criminal trial on the obscenity issue, with its full panoply of procedural protections, the forfeiture represents punishment for engaging in obscenity rather than a prior restraint. There is a historical distinction between prior restraints and criminal penalties in the first amendment setting, which has both practical consequences and a theoretical basis. Polykoff, 816 F.2d at 1337. 52 The primary concern animating the Supreme Court's prior restraint jurisprudence has been to prevent the government from seizing materials or otherwise halting speech prior to a determination that the speech is actually harmful. See, e.g., Fort Wayne Books, 489 U.S. at 66-67, 109 S.Ct. at 929-30 (seizure inappropriate because effected prior to a judicial determination of obscenity); Vance v. Universal Amusement Co., 445 U.S. 308, 316-17, 100 S.Ct. 1156, 1161-62, 63 L.Ed.2d 413 (1980) (per curiam) (prior restraint unconstitutional because speech not yet adjudged unlawful); A Quantity of Copies of Books v. Kansas, 378 U.S. 205, 210, 84 S.Ct. 1723, 1725-26, 12 L.Ed.2d 809 (1964) (warrant for seizure unconstitutional because not preceded by a hearing on obscenity); Marcus v. Search Warrant of Property at 104 E. Tenth St., 367 U.S. 717, 731, 81 S.Ct. 1708, 1715-16, 6 L.Ed.2d 1127 (1961) (warrants to seize alleged obscenity unconstitutional because of inadequate procedural safeguards); cf. Kingsley Books, Inc. v. Brown, 354 U.S. 436, 444-45, 77 S.Ct. 1325, 1329-30, 1 L.Ed.2d 1469 (1957) (seizure after determination of obscenity in a criminal trial does not violate the First Amendment). The Court's constant refrain has been that it is better to punish harmful speech after it occurs than to smother it at birth. See, e.g., Vance, 445 U.S. at 316 n. 13, 100 S.Ct. at 1161 n. 13 ([A] free society prefers to punish the few who abuse rights of speech after they break the law than to throttle them and all others beforehand.) (original emphasis); Near v. Minnesota ex rel. Olson, 283 U.S. 697, 714-15, 51 S.Ct. 625, 630-31, 75 L.Ed. 1357 (1931). 53 The prior restraint cases do not stand for the proposition that harmful speech can never be punished. To the contrary, case law expressly permits punishment so long as the process for determining the appropriateness of sanctions embod[ies] the most rigorous procedural safeguards and is ringed about with adequate bulwarks. Bantam Books, 372 U.S. at 66, 83 S.Ct. at 637. The protections contained in a criminal RICO prosecution--such as the allocation of the burden of proof, a heightened standard of proof, and adversariness--satisfy Bantam's command. 54 In Kingsley Books, the Supreme Court sustained a New York statute permitting the seizure of obscene books and an order enjoining the defendant from further distribution of such books because, unlike the prior restraint cases, a court imposed these penalties only after the books had been adjudged obscene in a criminal trial. 354 U.S. at 445, 77 S.Ct. at 1330 (Unlike Near [v. Minnesota], [the New York Law] is concerned solely with obscenity and ... studiously withholds restraint upon matters not already published and not yet found to be offensive.); see also Bantam Books, 372 U.S. at 70, 83 S.Ct. at 639 (Criminal sanctions may be applied only after a determination of obscenity has been made in a criminal trial hedged about with the procedural safeguards of the criminal process.). 55 RICO likewise postpones forfeiture until a judicial determination of obscenity is made after a criminal trial. 7 Only at this point does RICO permit the seizure ... of the instruments of ascertained wrongdoing. Kingsley Books, 354 U.S. at 444, 77 S.Ct. at 1329; see also Sequoia Books, 901 F.2d at 636 (post-trial forfeiture under Illinois obscenity statute does not violate the First Amendment because Illinois does not attempt here to regulate the sale of protected reading materials or to close bookstores. It merely punishes past obscenity convictions.); Western Business Sys., Inc. v. Slaton, 492 F.Supp. 513, 514 (N.D.Ga.1980) (post-trial forfeiture under Georgia's RICO statute does not entrench upon free speech rights). 56 The purpose of the forfeiture is to strip the defendant of the tools and profits of criminal conduct and thereby to terminate the illegal enterprise. Thus, unlike prior restraints, it is the defendant's unlawful commercial conduct (dealing in obscenity) rather than the defendant's anticipated speech that sets into motion a RICO forfeiture. In Arcara, 478 U.S. at 705-07, 106 S.Ct. at 3177-78, the Supreme Court upheld an order of closure of an adult bookstore. It refused to equate the closure with a prior restraint in part because, as with RICO, non-expressive conduct (prostitution on the premises), rather than speech, prompted the closure. Id. at 705 n. 2, 106 S.Ct. at 3177 n. 2; see also Pryba, 900 F.2d at 755. 57 Also like the orders sustained in Arcara and Kingsley Books, RICO forfeiture does not silence the defendant. Forfeiture simply precludes the defendant from using assets derived from the obscenity trade to subsidize future speech. See Arcara, 478 U.S. at 706 n. 2, 106 S.Ct. at 3177 n. 2 (order impose[s] no restraint at all on the dissemination of particular materials, since respondents are free to carry on their bookselling business at another location); 511 Detroit St., Inc. v. Kelley, 807 F.2d 1293, 1299 (6th Cir.1986) (heavy fines imposed under Michigan's anti-obscenity law do not constitute prior restraints because there is no prospective legal restraint on any expression, obscene or protected, that [defendants] ... may choose to undertake), cert. denied, 482 U.S. 928, 107 S.Ct. 3211, 96 L.Ed.2d 698 (1987). A forfeiture is not a gag order. RICO defendants do not risk contempt if they revive that portion of their business dealing in sexually explicit and erotic videotapes after conviction. Defendants simply have no First Amendment right to use the profits and proceeds from trafficking in obscenity to finance their constitutionally protected speech. We agree with the Fourth Circuit that defendants may not launder their money derived from racketeering activities by investing it in bookstores, videos, magazines and other publications. The First Amendment may be used as a shield, but it is not a shield against criminal activity. Pryba, 900 F.2d at 755.
58 Although we will not characterize RICO forfeiture as a prior restraint, we do consider it necessary to tailor the scope of the forfeiture permitted by statute to alleviate constitutional concerns about curtailing legitimate speech in the name of fighting obscenity. While the authorization of a forfeiture does not by itself render the RICO statute unconstitutional, to the extent section 1963 mandates forfeiture of more property than the Constitution will tolerate as punishment for an obscenity offense, the statute is unconstitutional on its face. 59 As noted earlier, the scope of RICO forfeiture is extremely broad, reaching nearly every asset remotely connected with the offense. [F]orfeiture is not limited to those assets of a RICO enterprise that are tainted by use in connection with racketeering activity, but rather extends to the convicted person's entire interest in the enterprise. United States v. Busher, 817 F.2d 1409, 1413 (9th Cir.1987). We have already observed that RICO's breadth and inflexibility counsel[ ] caution, for no penalty is per se constitutional. Id. at 1414 (quotation omitted); cf. Simon & Schuster, Inc. v. Members of the N.Y. State Crime Victims Bd., --- U.S. ----, 112 S.Ct. 501, 511-12, 116 L.Ed.2d 476 (1991) (statute designed to deprive convicted criminals of profits and proceeds from publicizing their crimes not sufficiently tailored to survive First Amendment scrutiny). 60 For purposes of comparison, a number of other obscenity statutes contain markedly less drastic forfeiture provisions than federal RICO does. Illinois's obscenity statute permits forfeiture only of the direct and indirect proceeds of obscenity violations and the assets used wholly or in part to subsidize the actual criminal conduct. See Sequoia Books, 901 F.2d at 632; see also id. at 637-38 (comparing the scope of forfeiture permitted by Illinois law and by federal RICO). The federal Child Protection and Obscenity Enforcement Act likewise limits forfeitures to (i) the obscene materials themselves, (ii) property constituting or traceable to the gross profits or proceeds obtained from the offense, and (iii) property actually used or intended to be used to commit or to promote the offense. 18 U.S.C. §§ 1466(a), 2253(a); cf. Fort Wayne Books, 489 U.S. at 65, 109 S.Ct. at 928 ([W]e assume without deciding that bookstores and their contents are forfeitable ... when it is proved that these items are property actually used in, or derived from, a pattern of violations of ... obscenity laws.) (emphasis added). 8 61 The Supreme Court, in the past, has recognized the need to tailor criminal rules narrowly and carefully when they seek to operate within the First Amendment arena. Our decisions furnish examples of legal devices and doctrines in most applications consistent with the Constitution, which cannot be applied in settings where they have the collateral effect of inhibiting the freedom of expression, by making the individual the more reluctant to exercise it. Smith, 361 U.S. at 150-51, 80 S.Ct. at 217 (citing examples); see also Simon & Schuster, 112 S.Ct. at 512 (New York's Son of Sam law held to be inconsistent with the First Amendment because not narrowly tailored to achieve goal of compensating victims from the fruits of the crime); Quantity of Books, 378 U.S. at 211-12, 84 S.Ct. at 1726-27 (state may not treat ordinary contraband and obscene books the same for purposes of seizure because of the First Amendment concerns infusing the latter); accord Speiser v. Randall, 357 U.S. 513, 525, 78 S.Ct. 1332, 1342, 2 L.Ed.2d 1460 (1958) (The separation of legitimate from illegitimate speech calls for ... sensitive tools....) 62 In light of these precedents, the current breadth of RICO's forfeiture provision cannot pass constitutional muster. At the very least, those assets or interests of the defendant invested in legitimate expressive activity being conducted by parts of the enterprise uninvolved or only marginally involved in the racketeering activity may not be forfeited. As in Busher, district courts should not, absent exceptional circumstances, order forfeiture of a defendant's entire interest in an enterprise that is essentially legitimate where he has committed relatively minor RICO [obscenity] violations not central to the conduct of the business and resulting in relatively little illegal gain in proportion to its size and legitimate income. 817 F.2d at 1415-16. Because Adult Video raises only a facial attack, we leave for the district courts the specific formulation of RICO forfeiture orders that are consistent with the First Amendment, in light of the particular facts presented in individual cases. Cf. id. 63 The government no doubt believes that diminishing the scope of RICO forfeiture in this manner will dilute the statute's deterrent effect and risk a resurrection of the criminal enterprise. While these are important concerns, the incremental contribution that RICO's current sweeping forfeiture provisions make to the deterrence and destruction of criminal enterprises over what would be accomplished under a narrower definition of forfeitable assets does not justify the additional curtailment of constitutionally protected, sexually explicit speech. See Simon & Schuster, 112 S.Ct. at 509 ([W]e have long recognized that even regulations aimed at proper governmental concerns can restrict unduly the exercise of rights protected by the First Amendment.) (quoting Minneapolis Star & Tribune Co. v. Minnesota Comm'r of Revenue, 460 U.S. 575, 592, 103 S.Ct. 1365, 1376, 75 L.Ed.2d 295 (1983)). Tailoring the scope of forfeiture acknowledges that in obscenity cases, unlike traditional RICO prosecutions, a countervailing concern for protecting the public's right to receive, as well as the defendant's right to engage in, non-obscene speech demands a more delicate approach to forfeitures. See Marcus, 367 U.S. at 736, 81 S.Ct. at 1719 (expressing concern for the public's opportunity to obtain ... publications because the state's obscenity seizure law deterred the sale and distribution of speech falling under the First Amendment's aegis). The forfeiture of assets derived from drugs, arson, fraud, and murder rarely, if ever, implicates a public right of access to information. The forfeiture of assets loosely affiliated with obscenity offenses, by contrast, hurts not just the defendant, but also those members of the public who wish to obtain sexually explicit and erotic videotapes. Government is not free to adopt whatever procedures it pleases for dealing with obscenity ... without regard to the possible consequences for constitutionally protected speech. Id. at 731, 81 S.Ct. at 1716; see also Smith, 361 U.S. at 154, 80 S.Ct. 215, 219 (strict liability provision in obscenity statute unconstitutional because it would restrict the public's access to forms of the printed word which the State could not constitutionally suppress directly). 64 In sum, we hold that RICO's provisions permitting the pre-trial preservation of assets for forfeiture are not facially unconstitutional in obscenity cases. Only that part of section 1963(d) that authorizes pre-trial seizures of obscene materials on the basis of probable cause is unconstitutional. Post-trial forfeitures do not, on their face, amount to prior restraints. We find it necessary, however, to tailor the scope of RICO forfeitures in obscenity cases in order to conform the statute to the dictates of the First Amendment. So delineated, RICO's post-trial forfeiture provisions are not facially unconstitutional.