IV. Double Jeopardy Problems of Civil Forfeiture

A. Background of Double Jeopardy

The Constitution provides that "[no] person shall ... be subject *1630 for the same offence to be twice put in jeopardy of life or limb." [FN92] Tracing its roots to ancient Greece, [FN93] the prohibition against Double Jeopardy was recognized at English common law before the American Revolution. [FN94] Acknowledged as a protection against government tyranny, the prohibition was preserved in the Fifth Amendment and made applicable to the states through the Fourteenth Amendment. [FN95]

Under settled principles of Double Jeopardy jurisprudence, individuals are protected from being subjected to a second prosecution for the same offense after acquittal or conviction. [FN96] Furthermore, although the text of the Fifth Amendment only mentions life or limb, it is now an accepted principle that the Double Jeopardy Clause also protects individuals from being subjected to multiple punishments through the loss of property. [FN97]

*1631 While the Double Jeopardy clause does not prevent the *1632 legislature from authorizing multiple punishments under separate statutes for a single crime, [FN98] it does protect individuals from being subjected to multiple punishments for the same offense in the same proceeding in excess of what is legislatively allowed. [FN99] Thus, in cases where multiple punishments are sought within the same proceeding, the focus is on whether such punishments conform with or exceed legislative authority. [FN100]

Moreover, the Double Jeopardy clause prohibits the imposition of multiple punishments in successive proceedings for a single crime, even if such punishments are legislatively allowed. [FN101] This prohibition bars the government from seeking successive punishment when it is dissatisfied with the punishment that it obtained in a prior proceeding. [FN102]

It should be noted, however, that the dual sovereignty doctrine provides an important exception to the principle of Double Jeopardy. This doctrine allows the federal government and a state government to bring successive prosecutions for offenses arising from the same conduct. [FN103] Mere cooperation and coordination between federal and state agents does not preclude a subsequent prosecution by one sovereign, when an earlier prosecution has been conducted by the other. [FN104]

B. Erosion of Civil Forfeiture Jurisprudence

Until recently, Double Jeopardy jurisprudence focused solely on criminal punishment. However, recent Supreme Court decisions have blurred the traditional boundaries between criminal and civil sanctions in an unprecedented way, causing a troublesome spill-over of Double Jeopardy jurisprudence into the civil sanction arena.

The first decision that signified a clear break from precedent in the area of civil sanctions was United States v. Halper. [FN105] In that case, Dr. Irwin Halper had been convicted of sixty-five separate violations of the Criminal False Claims Statute [FN106] for filing false Medicare claims. Each false claim involved a demand for twelve dollars in reimbursement for medical expenses that were only worth three dollars per claim. [FN107] Thus, Dr. Halper, who had defrauded the government out of $585, received a two year prison sentence and a $5,000 fine. [FN108]

After the conclusion of the criminal proceedings, the government initiated a civil proceeding under the Civil False Claims Act, [FN109] seeking to recover a $2,000 penalty from Dr. Halper for each of the false claims. [FN110] However, the presiding district court denied the claim, holding that a civil penalty that was more than 220 times greater than the government's loss lacked the necessary "rational relation" to the government's actual damages so as to justify the penalty. [FN111] The government appealed and the case was *1634 eventually heard by the Supreme Court.

In unprecedented fashion, the Supreme Court held on appeal that the Double Jeopardy Clause is applicable to civil sanctions, regardless of the civil or criminal label attached to the proceeding in which the civil sanction is pursued, when the sanction is "punitive" rather than "remedial." [FN112] The Court explained that the magnitude and purpose of the sanction are dispositive of the issue, [FN113] adding that when a sanction is designed to strictly reimburse the government for the actual costs that are caused by a defendant's conduct, that sanction is remedial and not punitive. [FN114] Concluding that the government's expenses in connection with the case had been only $16,000, the Court held that the penalty in Halper was "disproportionate," bore no rational relationship to the government's expenses, and therefore, was punitive for purposes of the Double Jeopardy Clause of the Fifth Amendment. [FN115] However, perhaps wary of the consequences that such broad pronouncements could have on the use of civil sanctions around the country, the Halper Court explained that its holding was "a rule for the rare case." [FN116]

Aside from the problems that Halper creates with respect to the pursuit of civil sanctions, Halper contains certain pronouncements of law which make the opinion particularly troublesome. Despite its finding that the sanction at issue was punitive for purposes of the Double Jeopardy Clause, the Supreme Court stated that the punitive nature of the sanction did not color the proceeding as a criminal proceeding. [FN117] Accordingly, the Court refused to expand all the constitutional protections that are attendant to criminal *1635 proceedings to the civil sanction action before the Court. [FN118] Additionally, the Court explained that its holding did not apply when the defendant has not been previously punished in a criminal action. [FN119]

These pronouncements reveal that the Court has adopted a bifurcated approach to determine the applicability of criminal constitutional protections. The bifurcation comes from the Court's focus on the nature of the sanction vis-a-vis the nature of the action for purposes of the different protections that are afforded by the Double Jeopardy Clause. For purposes of the multiple punishment *1636 protection of the Double Jeopardy Clause, the Court focuses on the nature of the sanction. Thus, according to the Court, if the subsequent sanction is "punitive," the punishment protection of the Double Jeopardy Clause is implicated. However, for purposes of the remaining constitutional protections that are attendant to criminal proceedings, including the multiple prosecution component of the Double Jeopardy Clause, the Court focuses on the nature of the action. That is to say, if the subsequent action is criminal, the Court deems those other constitutional protections to apply. However, in order for all of the constitutional protections to apply, the Court requires that both the sanction and the action be of a punitive and/or criminal nature. This is likely to lead to absurd results.

The Court's pronouncement that the second "punishment," but not the second proceeding, triggers the multiple punishment protection of the Double Jeopardy Clause provides a perfect illustration. [FN120] The natural extension of this pronouncement is that the government can pursue civil sanctions in a subsequent civil proceeding if the prior criminal prosecution results in acquittal. [FN121] However, if the prior criminal prosecution results in conviction, the government cannot thereafter pursue civil sanctions because of the multiple punishment aspect of the second action. Clearly, this outcome would be absurd, as it gives acquitted defendants less rights than it gives convicted defendants. [FN122] Nevertheless, such an *1637 outcome would appear to follow from the Court's decision in Halper.

In Austin v. United States, [FN123] the Supreme Court once again shook the foundations of civil sanction jurisprudence by expanding the Halper holding to civil forfeiture cases. [FN124] The claimant in Austin had been indicted on four counts of state drug violations, had pleaded guilty to one of the counts, and had been sentenced to seven years imprisonment. [FN125] After the conclusion of the criminal proceeding, the government filed an action in which it sought the forfeiture of the claimant's mobile home and place of business, pursuant to sections 881(a)(4) and (7) of the Drug Control Act. [FN126] The issue before the Court was whether the civil forfeiture at issue violated the claimant's Eighth Amendment right to not be *1638 subjected to excessive fines. [FN127]

After concluding that the Eighth Amendment limits the government's power to "punish," [FN128] the Court held that sections 881(a)(4) and (7) of the Drug Control Act were "punitive" in nature because they targeted guilty property owners, rather than innocent ones. [FN129] The government argued that the forfeiture provisions were also remedial and, thus, no punishment could follow under the Eighth Amendment's Excessive Fines Clause. However, the Court, relying on Halper, rejected the government's position, pointing out that the deterrent or retributive aspects of the forfeiture alone rendered the forfeiture "punitive."

[FN130] Significantly, the Supreme Court had held in Halper that the designation of a civil sanction as "punishment" carried Double Jeopardy implications. [FN131] Thus, by designating the civil forfeitures at issue in Austin as punishment under Halper, the Austin decision expanded by fiat the reach of the Halper decision, contrary to the Halper Court's admonition that the Halper decision was "the rule for the rare case." [FN132]

The Halper and Austin precedents proved to be an explosive *1639 combination in Department of Revenue of Montana v. Kurth Ranch, [FN133] in which the Court held that the imposition of taxes, too, could trigger Double Jeopardy protections. In that case, members of the Kurth family had been involved in the harvesting of marijuana on the family farm and had been convicted on criminal charges. [FN134] Pursuant to the state's Dangerous Drug Tax Act, [FN135] the Montana Department of Revenue levied a tax on the Kurths' drugs after conviction. [FN136] The Kurths challenged the levy, claiming that it violated the Double Jeopardy Clause because the tax put them in jeopardy of being punished a second time for their drug offense. [FN137] The Supreme Court agreed, holding that, like civil penalties, the imposition of taxes that are contingent upon criminal conduct may constitute punishment for Double Jeopardy purposes when the taxes are a "disproportionately large" civil penalty. [FN138]

Reasoning that penalties, fines, and forfeitures always have punitive purposes, whereas tax statutes normally have revenue-raising purposes, [FN139] the Court provided the government with different burdens of proof with respect to each category of civil sanction. The Court held that in the case of penalties, fines, and forfeitures, the government must equate the size of the penalty with *1640 the government's remedial costs in order to demonstrate the remedial nature of the penalty, fine, or forfeiture. However, in the case of taxes, the government need not equate the tax to the government's proven remedial costs, but merely must show that the tax is not "disproportionate" in relation to the charged offense. [FN140]

Ultimately, the Kurth Ranch Court found that when viewed in conjunction with other factors, such as the conditional imposition of the tax pursuant to the commission of a crime, the tax was "too far-removed in crucial respects from a standard tax assessment to escape characterization as punishment." [FN141] Therefore, the Court concluded that the Double Jeopardy Clause required the tax to be imposed at the initial criminal proceeding or not at all. [FN142]

C. The Aftermath

In essence, the Supreme Court opinions in Halper, Austin, and Kurth Ranch require the government to demonstrate that the civil sanctions arise under a non-punitive statute and are proportionate to the government's costs before civil sanctions can be pursued in conjunction with criminal sanctions. According to the Supreme Court, a civil sanction that fails under either prong of this test must be struck down as violative of the Double Jeopardy Clause when pursued in addition to a criminal proceeding. Notwithstanding such precedent, by announcing in Halper that its holding was the "rule for the rare case" but then expanding the scope of its Halper ruling in Austin and Kurth Ranch, the Supreme Court has sent mixed signals, which have left the lower courts guessing as to whether they should apply the new civil sanction jurisprudence narrowly or expansively.

For example, seemingly in violation of Supreme Court precedent that requires the government to demonstrate that a civil sanction is exclusively remedial, the Ninth Circuit has held that the *1641 government's failure to submit evidence of costs did not preclude the court from holding that a monetary fine was remedial. [FN143] To justify its decision, the court reasoned that the money would alleviate the general financial burdens on the government body that sought the sanctions. [FN144] On a similar note, the Sixth Circuit held in another action that a monetary penalty was remedial despite a total lack of evidence of government's costs. [FN145] The court justified this outcome on the basis of the unsupported conclusion that the penalty assessed was "rationally related to the goal of making the government whole." [FN146]

In contrast, some other courts have strictly adhered to the requirement that the government demonstrate that a sanction is exclusively remedial by showing that the sanction does not exceed the government's costs. [FN147] Other courts have required the government to prove such costs, but have adhered to the "rough justice" approach, which allows the government to provide a rough approximation of its costs in order to demonstrate the remedial purpose and effect of the sanction in question. [FN148]

Nowhere has the lack of uniformity among courts been more evident than in the application of the new Double Jeopardy jurisprudence on civil forfeitures. After Austin and Halper, the issue of Double Jeopardy by virtue of separate forfeiture and criminal proceedings has been hotly debated in the federal circuits. The Second and Eleventh Circuits have concluded that Austin and Halper do not prevent the government from initiating separate, but *1642 parallel, civil and criminal proceedings. [FN149] Thus, according to those circuits, the Double Jeopardy Clause is never violated by the imposition of a civil sanction that is pursued as part of a coordinated prosecution. [FN150] However, the Seventh and Ninth Circuits consider those decisions to have dubious validity after Kurth Ranch. [FN151] Moreover, the Ninth Circuit has gone as far as to hold that all civil forfeitures under the Drug Control Act violate the Double Jeopardy Clause. [FN152] Some courts have simply avoided the extreme of either position and instead focused on the "remedial" versus "punitive" aspects of each civil forfeiture at issue. [FN153]

In sum, the Supreme Court's inconsistent opinions in the Double Jeopardy area have led lower courts to hand down tortuously-reasoned and result-driven decisions on the area of civil sanctions and Double Jeopardy. Much like the law on civil sanctions, the law on civil forfeiture under the Drug Control Act and Double Jeopardy is also in flux, currently lacking any sense of cohesiveness. [FN154] Overall, therefore, the law on the subject lacks the sense of predictability and uniformity that is so vital for the orderly administration of the law.

D. A Few Lessons on Civil Forfeiture Under the Drug Control Act After Halper, Austin, and Kurth Ranch

Notwithstanding the prevailing chaos in this area of the law, a few broad principles can be extracted from the Court's decisions with respect to civil forfeitures under the Drug Control Act. First, courts may always allow the forfeiture of contraband because it encompasses illegal items and, thus, their forfeiture is by definition remedial. [FN155] Similarly, courts should have no problem concluding that the forfeiture of proceeds and derivative proceeds is remedial. [FN156] Inasmuch as proceeds and derivative proceeds constitute illegally derived property, the forfeiture of these items amounts to nothing more than a disgorgement of ill-gotten gains. [FN157]

Nevertheless, Supreme Court dicta provides plenty of ammunition for criminals who wish to challenge the *1644 constitutionality of the forfeiture of contraband, proceeds, and derivative proceeds. Under Halper, the punitive intent of a statute renders civil sanctions under that statute punitive. [FN158] Under Austin, the Drug Control Act is a punitive statute. [FN159] Thus, collectively, these cases provide defendants with a basis to argue that a forfeiture of contraband, proceeds, and derivative proceeds is punitive whenever their value exceeds the government's costs, notwithstanding the fact that the forfeiture involves items that are illegal in nature or the fruits of an illegal enterprise. [FN160]

It will be significantly more difficult for courts to allow the forfeiture of derivative contraband or instrumentalities of the drug trade given the announcement in Austin that the forfeiture of derivative contraband or instrumentalities of the drug trade is always punitive in nature. [FN161] Indeed, since the Court concluded in Halper that a defendant may not be punished a second time through the use of civil forfeiture, Austin and Halper collectively require the government to forego criminal prosecution in order to obtain the forfeiture of derivative contraband or instrumentalities of the drug trade. [FN162]

*1645 Notwithstanding this disabling precedent, the government has a few remaining avenues to pursue instrumentalities of the drug trade without foregoing criminal prosecution. For example, the government can seek the forfeiture of property that has been utilized by a criminally-convicted defendant in connection with the drug trade when the record owner of the property is someone other than the defendant. Because the defendant is not the one who is "punished" by the forfeiture in such cases, he cannot raise a Double Jeopardy defense to the forfeiture. [FN163]

A more risky avenue for forfeiture exists when the government proceeds with the civil forfeiture case before it proceeds with the criminal prosecution in the hope that the defendant will not contest the forfeiture for fear of incrimination. [FN164] Because a lack of participation translates into a lack of standing to raise Double Jeopardy, [FN165] the government would be able to obtain the forfeiture by default and still proceed with the criminal prosecution. Of course, by proceeding with the civil forfeiture first, the government *1646 faces the risk that the defendant will contest and purposely lose the civil forfeiture action, effectively barring the government from subsequently pursuing him criminally. [FN166]

Another possible route for forfeiture is for the government to obtain a waiver of the defendant's Double Jeopardy rights in connection with the defendant's negotiation of a plea agreement. [FN167] However, courts subject the waiver of Double Jeopardy protections to "stringent scrutiny" and "indulge every reasonable presumption against the loss of such a constitutional right ." [FN168] Therefore, such waivers may not always be enforceable.

Lastly, the Dual Sovereignty doctrine provides a sensible way in which the government may pursue both civil and criminal sanctions. Under that doctrine, the government may split the civil sanction and criminal prosecution phases of a drug case among the federal and state agencies that are involved in the case. In this manner, the remedies sought in each phase are pursued by different sovereigns and, thus, not subject to the multiple punishment restriction of the Double Jeopardy Clause. [FN169] However, it is quite likely that courts will fashion limitations to the government's ability to pursue civil forfeitures on the basis of the Dual Sovereignty doctrine if it becomes the subject of government manipulation or a mere tool to circumvent Supreme Court precedent. Consequently, the Dual Sovereignty doctrine currently presents more of a quick-fix than a long-term solution to the government's enforcement problems.

In sum, the government still has viable arguments for the forfeiture of contraband, proceeds, and derivative proceeds. However, the Supreme Court precedent in this area will surely provide defendants with substantial ammunition to challenge the forfeiture of such items. Moreover, the government has a few *1647 remaining avenues it can use to sidestep the Supreme Court's announcements pertaining to the forfeiture of derivative contraband or instrumentalities of the drug trade. Nevertheless, such avenues present significant risks or are likely to offer only temporary solutions to the obstacles posed by the new civil forfeiture jurisprudence.

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