Court Opinion

ID: 6980365
Source: CourtListenerOpinion
Date Created: 2022-07-24 02:18:33.490127+00
Date Added: 2024-06-11T16:09:09.980048
License: Public Domain

RYMER, Circuit Judge,
dissenting:
I concur in all except Part III.C, but cannot agree that we should reverse as the majority does on the Excess Fines Clause.
As the majority (correctly) concludes, the $200,686 the district court ordered forfeited to the government are “proceeds” of the fraudulently obtained loan. Under United States v. Feldman, 853 F.2d 648 (9th Cir.1988), forfeiture of proceeds can basically never be excessive. As we put it in Feld-man, “[wjhen the district court orders that the defendant forfeit the profits gained from illegal activity, it is hard to imagine how such a forfeiture could constitute cruel and unusual punishment.” Id. at 663. Thus, we held, forfeiture of proceeds received from an insurance policy as a result of arson “was not excessive.” Id. This makes total sense: how can forfeiture of proceeds of criminal activity ever be excessive?
Although Feldman involved cruel and unusual punishment under the Eighth Amendment, not the Excessive Fines Clause, the standard Feldman applied — that the “interest ordered forfeited is not so grossly disproportionate to the offense committed,” id., is precisely the same as the Supreme Court adopted for purposes of the Excessive Fines Clause in United States v. Bajakajian, — U.S. -, 118 S.Ct. 2028, 141 L.Ed,2d 314 (1998). Therefore, Feldman’s reasoning continues to apply and is neither undercut, nor controlled by Bajakajian, as the majority concludes.
Indeed, the type of forfeiture at issue here is quite different from the type of forfeiture at issue in Bajakajian. Bajakajian involved a criminal prosecution, not an in rem forfeiture. Bajakajian expressly recognized the two are distinct. Bajakajian, 118 S.Ct. at 2035. Further, the money at issue in Baja-kajian was the proceeds of legal activity and was to be used to repay a lawful debt. Id. In this case, the proceeds came from bank, mail and wire fraud and were used to pay off old loans and taxes which kept the house from foreclosure. While the latter is not necessarily an unlawful purpose, the former certainly was illegal activity. Thus, unlike the claimant in Bajakajian who was in lawful possession of the property (cash) because the crime did not lie in the possession of or transportation of the money, but in the failure to disclose it to customs officials, the property Ladum retains cannot be lawfully possessed since it is the fruit of an unlawful transaction. To profit from the proceeds of criminal activity can not possibly be disproportionate to anything. Finally, the aspects of forfeiture in relation to the gravity of the defendant’s offense that Bajakajian thought important are in many respects fact-specific. Therefore, even if I agreed that Bajakajian could be dispositive (which I do not), I would remand for the district court to take another look in light of what the Supreme Court said.
The parties have not had the opportunity to brief the effect, if any, of Bajakajian since it came down after the district court decision — -and after submission of the appeal. Bajakajian is the first time the Supreme Court has spoken on the Excessive Fines Clause. I may have missed its impact, or the importance of what the record discloses, with respect to the district court’s decision in this case. For this reason, I do not believe that we should opine about its effect without the parties’ input.
I therefore dissent from Part III.C.