Asset Forfeiture

Testimony on Asset Forfeiture Before the Arkansas State Advisory Committee to the US Commission on Civil Rights

My testimony addressed the general problem of asset forfeiture, the potential impact of the Supreme Court's recent decision in Timbs v. Indiana, and Arkansas' recent reform law.

|The Volokh Conspiracy |

Asset forfeiture.

Last week, I testified about asset forfeitures before the Arkansas state Advisory Committee to the US Commission on Civil Rights. This post is based on that testimony. While some of the issues involved are specific to Arkansas, many are relevant to numerous states around the country.

I am grateful to the Advisory Committee for their interest in this important issue. My testimony covers the general danger of asset forfeitures, the potential impact of the Supreme Court's recent decision in Timbs v. Indiana – which ruled that the Excessive Fines Clause of the Eighth Amendment applies to the states and constrains asset forfeitures, and the strengths and weaknesses of Senate Bill 308, Arkansas' recently passed asset forfeiture reform law.

I. How Asset Forfeiture Undermines Property Rights and Civil Liberties.

Asset forfeiture is a longstanding practice under which law enforcement agencies can confiscate property on the suspicion that it might have been used in the commission of a crime. In many cases, this allows police to seize property even if the owner was never charged with a crime, much less convicted of one. In is way, authorities can seize your car merely because they suspect someone else used it to commit a crime, seize a house because other people may have sold or consumed illegal drugs there or a phone in the house might have been used to arrange a drug deal, or take cash you have been transporting because they believe it is suspicious. Examples of the latter include a 2016 Arkansas case where state police seized $20,000 from the car of a construction worker with no prior criminal record, simply on the theory that transporting that much cash was an indication that the owner might be involved in illegal drug dealing.

Often, seizures occur with little or no due process protections for the owners, thereby enabling the government to hold onto the property or months at a time, before the owner has any chance to contest the seizure. Unlike in criminal cases, there is no right to state-funded counsel in asset forfeiture cases. That makes it prohibitively expensive for many owners to contest the seizure in court. Recovering a property worth several thousand dollars—such as a used car—can cost more in legal fees than the property is worth. As a result, many owners have little choice but to forego legal challenges to the seizure.

Law enforcement agencies are often allowed to keep the proceeds of the assets they seize. This kind of "policing for profit" creates obvious incentives for abuse. In addition, studies indicate that it diverts law enforcement resources away from violent and property crime to drug offenses and other victimless crimes where opportunities for seizures are more likely to arise.

The scale of asset forfeiture abuse is enormous. In some years, federal law enforcement alone seizes more property through asset forfeiture than burglars steal throughout the nation. In Arkansas, law enforcement authorities seize some $9.7 million of property per year, according to state government data.

In recent years, many states have enacted asset forfeiture reform laws that constrain some of the worst abuses. Unfortunately, the impact of these reforms is partly undercut by then-Attorney General Jeff Sessions' 2017 revival of the federal "equitable sharing" program, under which state and local asset forfeitures are "adopted" by the federal government, which then shares the proceeds with state law enforcement agencies—even in cases where state law otherwise prevents the latter from profiting from seized assets. Sessions' policy has attracted bipartisan opposition in Congress and elsewhere, but so far remains in place. Reforms that passed the House of Representatives by unanimous vote in 2017 stalled in the Senate. Reform efforts have been revived in the new Congress, but it remains to be seen whether they will actually be enacted into law.

II. The Impact of the Supreme Court's Recent Decision in Timbs v. Indiana

In February, the Supreme Court issued its ruling in Timbs v. Indiana, a unanimous ruling holding that the Excessive Fines Clause of the Eighth Amendment applies to state governments, and that at least some civil asset forfeitures qualify as excessive fines forbidden by the Clause. Timbs is an important step forward for constitutional property rights. But no one should imagine that it will be a panacea for the problem of asset forfeiture abuse.

The Court did not resolve a crucial issue: the question of what exactly counts as "excessive" in the civil forfeiture context. That is likely to be a hotly contested issue in the lower federal courts over the next few years. The ultimate effect of Timbs depends in large part on how that question is resolved. If courts rule that only a few unusually extreme forfeitures qualify as excessive, the impact of Timbs might turn out to be very modest.

Even if the courts ultimately adopt a more robust definition of "excessive," the harm caused by asset forfeitures will still be only partially addressed. Timbs does little to fix the procedural flaws of asset forfeiture, such as the often prohibitive cost of contesting seizures. Nor does it fix the fundamental problem that owners can lose their property even if they were never convicted of a crime, or even charged with one.

Future Supreme Court decisions might potentially curb other abuses associated with asset forfeitures. For example, the Court might rule that holding property for months without giving owners an opportunity to contest the seizure is a violation of the Due Process Clause of the Fourteenth Amendment (an issue the court considered in a 2009 case that was ultimately dismissed on procedural grounds). But we should not count on the justices to fix the asset forfeiture system for us.

III. Assessing Arkansas' Senate Bill 308

The Arkansas state legislature recently passed Senate Bill 308, a potentially useful asset forfeiture reform law that bans most asset forfeitures without a criminal conviction. Unfortunately, however, SB 308 contains major loopholes that are likely to severely compromise its effectiveness. The most significant is that the bill does not constrain asset forfeitures cases where the owner fails to contest the seizure. Because SB 308 also does not provided for state-funded counsel, this loophole is by itself large enough to swallow up the new rule.

Data obtained from the Arkansas state Drug Director by the Institute for Justice show that the average cash value of Arkansas asset forfeiture seizures is $1051. In only 13% of cases was the value of the seized property greater than $5000. These latter are likely to be almost the only cases where the property is valuable enough to be worth the expense of litigation. The loss of property worth $1000 or $2000 may not seem like much to affluent people. But it can be devastating for the poor, who are disproportionately affected by asset forfeitures. Other problematic exemptions built into SB 308 include cases where the owner is deceased (thus depriving his or her heirs of their property rights), cases where the owner has been deported abroad, and cases where he or she has fled the jurisdiction.

SB 308 also fails to address the problem of "policing for profit." Arkansas law enforcement agencies thus continue to directly benefit from seizures, with all the perverse incentives that creates.

Arkansas law does impose some constraints on "equitable sharing" of asset forfeitures with the federal government. It prohibits the transfer of seized property to the federal government unless there is a court order permitting it. Courts are only allowed to issue such an order if "it reasonably appears that the activity giving rise to the investigation or seizure involves more than one (1) state or the nature of the investigation or seizure would be better pursued under federal law." But the latter criterion can potentially be met in almost any case where the seizure involves a suspected drug crime, so long as the drug in question is illegal under both state and federal law.

The best way to address these flaws in SB 308 would be to abolish civil asset forfeiture entirely, as several states have done. Doing so would still permit states to seize stolen property and return it to its rightful owners. But it would end the pernicious practice of confiscating legitimately owned property merely because it might potentially have been used to commit a crime.

Short of that, the state legislature can potentially adopt piecemeal reforms closing individual loopholes in SB 308. Most importantly, it should give owners the right to state-funded legal representation, and eliminate "policing for profit."

The combination of the Timbs decision and SB 308 create hope for progress on the asset forfeiture issue in Arkansas. But much remains to be done to make that progress a full-fledged reality.

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  1. The whole business is ludicrous – no more than outright theft.

    The notion that the government is acting against the property, and not its owner, is worthy of Lewis Carroll.

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    2. To me, the issue is whether the property owner can be identified. Where it reasonably appears to be contraband, and nobody will admit ownership, then the in rem actions make sense.

      What doesn’t make sense is using in rem proceedings as an end run around criminal burden of proof requirements, and statutorily specified penalties.

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