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Government Is Keeping Their $9K on a Technicality. The Supreme Court Should Act.

May 16, 2024

Two innocent business owners suffered an injustice at the hands of the federal government, joining the ranks of countless others who have had their property seized under a practice known as civil asset forfeiture. To make matters worse, they were denied due process of law in court when they were trying to defend their rights. Now, they are asking the U.S. Supreme Court to take up their case, and the Goldwater Institute has joined with the Cato Institute and our friends at the law firm Wiley Rein LLP in filing a brief in support of their petition.

Civil forfeiture grants the government power to seize and profit from individuals’ property without convicting or even charging them with a crime—officials need only suspect that the property was used in connection with a crime. The practice was disfavored throughout most of this nation’s history, but the last 50 years have seen an unfortunate expansion, with more than $68.8 billion of property seized by the federal and state governments since 2000, according to the Institute for Justice. Innocent property owners frequently find themselves ensnared in a system where they must surrender their property, often due to the lack of resources to fight the government seizures.

In 2021, Luis Sanchez, co-owner of Excentric Import and Export Corporation, a Florida-based company that sells electronics to Latin American clients, was owed $9,000 by Bolivian resident Jacqueline Palacios, who operates an electronics company in her native country, as payment for electronics merchandise. Sanchez and Palacios have never faced any allegations of criminal activity—neither in this case nor previously. Yet when Palacios attempted to transfer the money, it was taken by American law enforcement—and officials won’t give it back.

Here’s why: under federal law, innocent property owners have a 30-day window to come to court and petition for the return of their assets. Despite facing challenges such as limited English proficiency, the need to obtain an affidavit in a foreign country, and a tight deadline, Sanchez and Palacios were able to initiate a civil proceeding to challenge the forfeiture within the required timeframe. However, because they had signed affidavits incorporated by reference in their petition rather than signing the petition itself, the government sought to dismiss their case. Regrettably, both the district court and Eleventh Circuit Court of Appeals accepted the government’s position.

Despite their diligent efforts to adhere to correct procedures, two innocent property owners were deprived of due process, resulting in the loss of $9,000 over a mere misplaced signature. Now, nearly three years later, the Supreme Court can vindicate their due process rights. Specifically, the high court has the opportunity to address whether innocent owners like Sanchez and Palacios can correct, or “cure,” a petition for the return of their property after the 30-day filing period expires.

Goldwater’s brief, joined by the Cato Institute and Wiley Rein LLP, argues that the very principle of due process demands Sanchez and Palacios have the opportunity to fix their petition.

The brief details how, in forfeiture proceedings under similar circumstances, the government has been granted the leniency that is currently being denied to Sanchez and Palacios. That’s what happened in United States v.James Daniel Good Real Property, where the Supreme Court considered whether the government’s failure to adhere to several timing prerequisites to forfeit property necessitated the dismissal of an otherwise timely forfeiture action. The high court held that “courts may not dismiss” a timely filed forfeiture action for noncompliance with those other timing prerequisites.

Furthermore, earlier this year in McIntosh v. United States, the Supreme Court addressed whether the Federal Rule of Criminal Procedure’s requirement that a preliminary order of forfeiture be entered by a particular point in time renders a court “powerless to order forfeiture against the defendant” after that point. The court determined that this is not the case, and that the requirement was merely a “time-related directive.”

Putting innocent property owners like Sanchez and Palacios on worse footing than the government jeopardizes the fundamental fairness required by due process.

Several Supreme Court justices have expressed due process concerns over civil forfeiture. In a recent concurring opinion in a separate case, Justice Neil Gorsuch said the original understanding of the Fifth and Fourteenth Amendments—which guarantee that no government may take “life, liberty, or property without due process of law”—necessitates that a government seeking to deprive an individual of their property can do so only after a jury trial, during which the burden of proof rests on the government, not the individual.

“So how is it that, in civil forfeiture, the government may confiscate property first and provide process later?” wrote Justice Gorsuch, who was joined in his concurrence by Justice Clarence Thomas. “Why does a Nation so jealous of its liberties tolerate expansive new civil forfeiture practices that have ‘led to egregious and well-chronicled abuses’? Perhaps it has something to do with the relative lack of power of those on whom the system preys. Perhaps government agencies’ increasing dependence on forfeiture as a source of revenue is an important piece of the puzzle…. In this Nation, the right to a jury trial before the government may take life, liberty, or property has always been the rule…. Perhaps it is past time for this Court to examine more fully whether and to what degree contemporary civil forfeiture practices align with that rule.”

Justice Gorsuch is right. The Supreme Court should agree to hear Sanchez and Palacios’ case and rein in the injustice of civil forfeiture.

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.

 

 

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