Civil forfeiture laws allow law enforcement to seize homes, cars, investments, and cash derived from criminal business activity. Recently, an Ohio businessman facing health-care fraud charges was forced to forfeit more than $2.2 million seized from a bank account, nearly $3 million in property, and several vehicles, including replicas of vehicles used in "Back to the Future," "Ghostbusters" and "Batman."

While the federal government’s ability to seize assets is restricted by the Eighth Amendment’s ban on excessive fines, state and local agencies previously had unfettered authority to seize anything from cash to boats to vehicles.

In Timbs v. Indiana, 586 U. S. ____ (2019), the U.S. Supreme Court applied the “excessive fines” proscription of the Eighth Amendment to the states through the Fourteenth Amendment for the very first time. The Court’s ruling gives defendants in “civil forfeiture” actions brought by state and local governments a potential new defense to excessive fines and penalties.

Abuse of Civil Asset Forfeiture

In essence, civil asset forfeiture is a legal tool that allows law enforcement officials to seize property that is alleged to have played a role in criminal activity. To seize property, the owner of the property does not need to be convicted of a crime. Rather, civil asset forfeiture proceedings charge the property itself with being involved in a crime.

The stated goal of civil asset forfeiture is to punish criminals, such as members of organized crime, by forcing them to forfeit their ill-gotten gains. Thereafter, the proceeds can be used to fund further law enforcement activities. Unfortunately, the ability of law enforcement agencies to seize property, often for their own use and with very limited oversight from the courts, has resulted in significant abuse. It even has its own name — policing for profit.

Last summer, a New Jersey couple learned the hard way that innocent people can get ensnared by civil asset forfeiture laws. Dimitrios Patlias and Tonya Smith were pulled over by West Virginia police for allegedly drifting from their lane on the highway. While the officers let them go with a warning, they seized $10,500 that the couple had won on their trips to several local casinos. After their story gained media attention, the couple ultimately got their possessions back without resorting to court action. However, that is not always the case.

In New Jersey, the government must only prove by a preponderance of the evidence that the property was used in a crime, a fairly low standard that essentially translates to “more likely than not.” The potential for abuse is further elevated by the fact that local law enforcement agencies retain 100 percent of forfeiture proceeds. The ACLU of New Jersey recently published a report analyzing forfeiture seizures that took place from January through May 2016. It revealed that $5.5 million was seized in just five months. New Jersey counties also seized 234 cars and a home.

There is also no real limit on what can be seized. As part of a recent operation involving an alleged identity theft scheme, Monmouth County law enforcement seized more than $200,000 in cryptocurrency. It was the first seizure of its kind by a New Jersey law enforcement agency.          

Eighth Amendment’s Excessive Fines Clause

The Eighth Amendment to the U.S. Constitution provides: “Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted.” While the Supreme Court has previously held that most provisions of the Bill of Rights apply to states, the excessive fines clause remained unincorporated prior to the Court’s recent decision. 

Notably, the Court has addressed “excessive” federal fines. In Austin v. United States, the Supreme Court held that federal in rem forfeitures that are punitive in nature are “subject to the limitations of the Eighth Amendment’s Excessive Fines Clause.” In United States v. Bajakajian, the Court later held that a forfeiture of a large amount of currency ran afoul of the Eight Amendment because it was “grossly disproportional to the gravity of [the] offense.”

SCOTUS Decision in Timbs v. Indiana

The case involves Tyson Timbs, an Indiana man who was forced to forfeit his $42,000 Land Rover after being convicted on state drug charges in Indiana.  Timbs sold heroin to undercover police officers, as a means of funding his own drug habit. Police arrested Timbs while he was driving to a third drug deal, and he ultimately pleaded guilty. Timbs had purchased the vehicle with the proceeds of his father’s life insurance policy.

Timbs challenged the forfeiture, arguing that the seizure of a vehicle valued at approximately four times the maximum monetary fine was disproportional his illegal conduct. While lower courts agreed, the Indiana Supreme Court held that the U.S. Supreme Court had never expressly found that the excessive fines clause of the Eighth Amendment applies to the states.

The U.S. Supreme Court overturned the Indiana Supreme Court’s decision. “The historical and logical case for concluding that the 14th Amendment incorporates the Excessive Fines Clause is overwhelming,” Justice Ruth Bader Ginsburg wrote on behalf of the unanimous Court.

“Exorbitant tolls undermine other constitutional liberties,” Justice Ginsburg explained. “Excessive fines can be used, for example, to retaliate against or chill the speech of political enemies.” She further wrote, “Even absent a political motive, fines may be employed ‘in a measure out of accord with the penal goals of retribution and deterrence,’ for ‘fines are a source of revenue,’ while other forms of punishment ‘cost a State money.’”

The Court left the lower court to determine whether the seizure of Timbs’ Land Rover was “excessive.” However, Justice Ginsburg noted that that vehicle was worth “more than four times the maximum $10,000 monetary fine assessable against him for his drug conviction.”

Impact on White-Collar Defense

The Supreme Court’s decision is not just important for low-level drug offenders like Timbs. For individuals swept up in white-collar investigations, asset seizure is a significant concern, particularly because law enforcement can confiscate your hard-earned money and personal property without first convicting you of a crime. The Supreme Court’s decision in Timbs v. Indiana is significant because it means criminal defendants will be able to challenge the amount of property seized by New Jersey law enforcement in related “civil forfeiture” actions. 

If you have any questions, please contact us

If you have any questions or if you would like to discuss the matter further, please contact me, Rachel Simon, or the Scarinci Hollenbeck attorney with whom you work, at 201-806-3364.