Imagine losing your life savings, business assets, or even proceeds from selling your home—all without ever being charged with a crime.
It’s called civil asset forfeiture, and it affects countless Americans to the tune of billions of dollars seized. It’s also what happened what happened to Richard Ross, an attorney with nearly 40 years of experience: The government seized Richard’s entire attorney trust account, which included $1.2 million in untainted funds belonging to multiple clients, as well as proceeds from the sale of his own home—none of which were connected to any investigation. The seizure even violated the Department of Justice’s Asset Forfeiture Policy Manual, which requires that the government ensure it does not seize untainted funds.
Now the Goldwater Institute is joining with our friends at the Cato Institute, the Manhattan Institute, and the law firm Carlton Fields to file an amicus brief in the Second Circuit Court of Appeals, standing up for Richard’s rights and urging the court not to let the feds evade accountability.
Richard’s ordeal was made worse by the federal government’s attempt to circumvent protections for innocent property owners included in the Civil Asset Forfeiture Reform Act (CAFRA). One of CAFRA’s key reforms permits claimants—i.e., innocent Americans whose property was unjustly seized by the government—to recover attorney fees and other litigation costs if they “substantially prevail” in their civil forfeiture proceedings. However, the government often exploits a loophole to avoid its obligation to pay these fees by aggressively litigating cases and then seeking voluntary dismissals without prejudice when it’s clear the claimant is likely to win. A case dismissed “without prejudice” means that the government retains the right to bring the same claims in the future. This allows officials to argue that the claimant has not substantially prevailed because there is no final ruling in the claimant’s favor.
That’s what happened to Richard, who has now been engaged in over two years of litigation as a result of the forfeiture. His legal fees had already surpassed $100,000 by the time his case was heard last year in the U.S. District Court for the Northern District of New York. Richard was on the brink of winning his case and was preparing to file for summary judgment, which would have allowed the court to rule in his favor without a full trial. Recognizing that Richard was likely to prevail, the government moved to dismiss the case without prejudice, and the district court granted the motion. This tactic allowed the government to evade accountability and left Ross, an innocent property owner, on the hook for substantial legal costs.
Our brief explains why that’s wrong, highlighting the government’s misuse of voluntary dismissals to sidestep its obligations under CAFRA, demonstrating that this is not an isolated incident but part of a broader pattern of abuse.
Courts have pushed back on this deceptive strategy in the past. Take the case of Lyndon McClellan, a rural North Carolina convenience store owner whose life savings were seized from his store’s bank account. The government claimed he violated “structuring” laws to justify seizing $107,702.66, even though the IRS had already announced that it would only apply the structuring laws to those engaged in illegal activity, which Lyndon was not. When it became evident that Lyndon would win his case, the government attempted to pressure him into waiving his right to $15,000 in attorney fees in exchange for returning his money. Only after he refused this offer did the government seek to dismiss the case without prejudice. Fortunately, the court denied the government’s motion, upholding Lyndon’s right to the relief granted under CAFRA.
The Second Circuit now has a chance to correct the district court’s error of granting the government an unconditional voluntary dismissal without prejudice in Richard’s case. Upholding justice requires ensuring that the government cannot continue to avoid accountability and deny property owners their rightful protections under the law.
You can read our brief here. Learn more about the Goldwater Institute’s work fighting forfeiture abuse here.
Kamron Kompani is the Legal Programs Manager at the Goldwater Institute.
