Opinion ID: 576216
Heading Depth: 3
Heading Rank: 2

Heading: Implications of United States v. Halper for Civil Forfeitures

Text: 27 We read Halper to apply to civil forfeitures. Forfeitures 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. See 21 U.S.C. § 881 (forfeiture provisions). Among those purposes, the government may use in rem forfeiture to remove instrumentalities of crime from general circulation and prevent further illicit use of harmful objects, a goal springing from the historic fiction underlying forfeiture that an instrument of harm is itself culpable. United States v. Certain Real Property and Premises Known as 38 Whalers Cove Drive, Babylon, New York, 747 F.Supp. 173, 177 (E.D.N.Y.1990) (hereinafter 38 Whalers Cove Drive ); see One 1958 Plymouth Sedan v. Pennsylvania, 380 U.S. 693, 699, 85 S.Ct. 1246, 1250, 14 L.Ed.2d 170 (1965); United States v. One Assortment of 89 Firearms, 465 U.S. 354, 363, 104 S.Ct. 1099, 1105, 79 L.Ed.2d 361 (1984); Calero-Toledo v. Pearson Yacht Leasing Co., supra. We have also stated that forfeiture of an object may substitute for a civil fine, imped[ing] the success of the criminal enterprise by eliminating its resources and instrumentalities, United States v. $2500 in U.S. Currency, 689 F.2d at 13; see Calero-Toledo v. Pearson Yacht Leasing Co., 416 U.S. at 687, 94 S.Ct. at 2094. The government may also use forfeitures to compensate the government's investigation and enforcement expenditures, in addition to any damages the government may suffer directly as a result of criminal acts, essentially as a form of liquidated damages for harm caused by an individual wrong-doer. See 21 U.S.C. § 881(e); One Lot Emerald Cut Stones & One Ring v. United States, 409 U.S. 232, 237, 93 S.Ct. 489, 493, 34 L.Ed.2d 438 (1972) (per curiam); Calero-Toledo v. Pearson Yacht Leasing Co., 416 U.S. at 687 & n. 26, 94 S.Ct. at 2094 & n. 26. 28 Civil forfeitures do not retain their civil character if they are used in order to achieve deterrence or retribution, however. Retribution and deterrence ... are not legitimate nonpunitive governmental objectives. Bell v. Wolfish, 441 U.S. 520, 539 n. 20, 99 S.Ct. 1861, 1874 n. 20, 60 L.Ed.2d 447 (1979). We acknowledge that otherwise proper forfeiture actions may have the collateral effect of deterring future drug offenders. See 38 Whalers Cove Drive, 747 F.Supp. at 179. This fact alone will not render a particular forfeiture punitive in nature. Rather, Halper requires us 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. 29 In evaluating whether a forfeiture under § 881(a)(7) serves its ostensible goals, we focus upon the effects on the claimant who has violated the statute, despite the fact that the forfeiture actions are brought in rem. See Livonia Road, 889 F.2d at 1270. See also United States v. Huber, 603 F.2d 387, 397 (2d Cir.1979), cert. denied, 445 U.S. 927, 100 S.Ct. 1312, 63 L.Ed.2d 759 (1980) (for Eighth Amendment purposes, there is no substantial difference between an in rem proceeding and a[n in personam criminal] forfeiture proceeding brought directly against the owner); cf. United States v. U.S. Coin & Currency, 401 U.S. 715, 718, 91 S.Ct. 1041, 1043, 28 L.Ed.2d 434 (1971). Where an individual has suffered severe penalties in an in rem forfeiture proceeding, it is particularly appropriate to address the substance of that proceeding. See United States v. On Leong Chinese Merchants Ass'n Bldg., 918 F.2d 1289, 1299 (7th Cir.1990) (Cudahy, J., concurring); United States v. Premises Known as 3639-2nd St., N.E., 869 F.2d at 1098 (Arnold, J., concurring). 30 We therefore hold that a forfeiture under 21 U.S.C. § 881(a)(7) will not be presumed punitive where the seized property has been used substantially to accomplish illegal purposes, so that the property itself can be said to be culpable or an instrumentality of crime. See Dobbins' Distillery v. United States, 96 U.S. 395, 401, 24 L.Ed. 637 (1878) (offense attached primarily to distillery). Where the seized property is not itself an instrumentality of crime, however, and its total value is overwhelmingly disproportionate to the value of controlled substances involved in the statutory violation, there is a rebuttable presumption that the forfeiture is punitive in nature. In using the value of the drugs as a rough measuring stick, we follow the Halper Court's decision to evaluate the sanction against the value obtained by Halper's criminal conduct. We also note that the Sentencing Commission, through the Guidelines, has utilized the weight of drugs and, implicitly, their value to differentiate between punishments for violations of the narcotics laws. 31 The government may then account under Halper in order to show that the forfeiture serves legitimate civil goals. The government may present its costs of investigation and detection, as well as other costs and damages attributable to the criminal misconduct of the claimant. See 21 U.S.C. § 881(e)(3)(A) (relating transfer of forfeited property to state agency to total law enforcement effort with respect to the [individual] violation of law on which the forfeiture is based). See United States v. Hall, 730 F.Supp. 646, 655 (M.D.Pa.1990); Kvitka v. Board of Registration in Medicine, 407 Mass. 140, 145, 551 N.E.2d 915 (1990) (examining governmental losses and harm to identifiable victims directly caused by physician's fraud), cert. denied, --- U.S. ----, 111 S.Ct. 74, 112 L.Ed.2d 47 (1990). The assessment of costs and damages must be individualized. A reasonable allocation of more generalized enforcement costs--in the nature of overhead--may also be allowed. The allocation must not be incommensurate with the portion of the overall enforcement problem represented by the offense at hand. While we are extremely sympathetic to the need to address our nation's serious narcotics problems, we do not believe that a disproportionately large forfeiture can be reasonably justified as a civil fine as opposed to punishment by placing full responsibility for the war on drugs on the shoulders of every individual claimant. This is particularly so where the individual claimant's violations are relatively minor. See 38 Whalers Cove Drive, 747 F.Supp. at 180; see also Halper, 490 U.S. at 449, 109 S.Ct. at 1902 (compensable portion of the costs and damages suffered by the government was that directly caused by the defendant); United States v. Bizzell, 921 F.2d 263, 267 (10th Cir.1990); compare United States v. A Parcel of Land with a Building Located Thereon at 40 Moon Hill Road, 884 F.2d 41, 44 (1st Cir.1989). Following the accounting, the trial court may then determine whether the government has carried its burden of showing that the sanction is entirely assignable to civil purposes or whether part or all of the sanction is designed to serve punitive purposes. 32