AUSTIN v. UNITED STATES
Legal provision: 21 U.S.C. 881
Argument of Richard L. Johnson
Chief Justice Rehnquist: We'll hear argument next in No. 92-6073, Richard Lyle Austin v. the United States.
Mr. Johnson: Mr. Chief Justice, and may it please the Court:
The issue in this case is whether the Eighth Amendment and specifically the Excessive Fines Clause applies to the concept of... applies to the civil forfeiture under 21 U.S.C., section 881(a)(4) and (a)(7).
Mr. Richard Lyle Austin is the owner of the Garretson Body Shop and also the 1972 mobile home that were seized by the Government under the... these appropriate statutes.
The facts of the case show that he transferred 2 grams of cocaine to someone in the body shop, and that he obtained this from the mobile home.
A subsequent search of the mobile home and body shop indicated there were small amounts of cocaine, some paraphernalia, and some small amounts of marijuana.
Mr. Austin pled guilty in State court.
He was sentenced to 7 years.
The Government seized his mobile home and his body shop, which was his livelihood, and he had been in the auto body shop for about 25 years.
The affidavit in the record indicates he intended to return to that job, that type of living, the body-shop living, when he got out of prison.
The district court granted summary judgment.
The court of appeals reluctantly affirmed indicating that the technical legal distinctions regarding in personam and in rem prohibited it from reaching the issue of the Eighth Amendment applicability.
It also indicated that clear court decisions by this Court and other courts do not require proportionality in the civil proceedings for the forfeiture of property.
I want to make three points in this oral argument.
First is that where the Government stands to gain monetarily the Excessive Fines Clause should apply and Eighth Amendment proportionality should apply.
Secondly, the in rem fiction shouldn't bar the application of the excessive fines/proportionality analysis when the civil forfeitures are quasi-criminal or punishment in actual character.
Thirdly, under this Court's decisions in Halper and Kennedy v. Mendoza-Martinez, those tests actually show that this civil forfeiture is punishment.
First of all, regarding the first point, the Court's decision in Browning v. Ferris provides a basis for applying the Eighth Amendment Excessive Fines Clause to civil actions and to forfeitures.
Unknown Speaker: I thought we rejected the application there.
Mr. Johnson: You indicated that you rejected the application to actions between private parties.
You left open the possibility that when the Government is involved, that the Excessive Fines Clause could also be applicable.
And, in fact, you suggested in, I think, a footnote quoting Halper that it might give rise to the Eighth Amendment analysis when the Government stood to gain punitive damages.
And in Justice O'Connor's concurring and dissenting opinion, there was a substantial analysis of the historical development of the Excessive Fines Clause and the fact that fines and forfeitures are equivalent, and that, in fact, the Eighth Amendment should apply to civil actions.
Your quote in Browning v. Ferris regarding the court of Vermont also indicated... the Supreme Court of Vermont also indicated that in certain circumstances you felt that the Excessive Fines Clause or the Eighth Amendment could be applicable.
In your case Harmelin v. Michigan, Justice Scalia's footnote also indicated that it makes sense to scrutinize governmental action more closely when the state stands to benefit.
It's clear that under 21 U.S.C. 881(a)(4) and (a)(7), the Government has stood to benefit.
We cite in our brief an article from Newsweek which indicates that since 1985 the Government has obtained about $2.6 billion through this forfeiture proceeding.
There's also a quote by the Director of the Asset Forfeiture Branch of the Attorney General's Office.
It says that civil forfeiture is the goose that laid the golden egg.
There's another quote also that we indicate from a American Criminal Law Review article in which it indicates that in August of 1990, the U.S. Attorney General warned U.S. attorneys that the Department was far short of its projected $470 million in forfeiture deposits and urged them to increase the efforts in order to make the budget goal during fiscal year 1990.
And this was in August of 1990, and Mr. Austin's property--
Unknown Speaker: What does this prove?
Mr. Johnson: --Well, it shows I think that there should be some sort of check on the Government, just as Justice Scalia says it makes sense to scrutinize Government actions more closely.
What it indicates is that there is a possibility for overreaching.
Unknown Speaker: And so, the Constitution automatically erects a shield against it?
Mr. Johnson: I think that the Constitution protects individuals from Government overreaching if that happens, if there's a possibility of it.
And there is the possibility of it under this forfeiture statute.
Unknown Speaker: Well, what do you do with a case like Calero-Toledo which says that even an innocent owner... and no one contends, I take it, that your client is innocent.
Mr. Johnson: No.
Unknown Speaker: Even an innocent owner can... the property can be taken under traditional forfeiture law.
Mr. Johnson: Calero-Toledo needs to be distinguished and possibly even looked at again I think.
Number one, in--
Unknown Speaker: Well, what's the matter with it?
It always struck me as a perfectly good case.
Mr. Johnson: --Well, Calero-Toledo, the Eighth Amendment wasn't raised.
That would be one point.
Secondly, although Calero-Toledo indicates, as you said, that in rem forfeiture really shouldn't deal with the guilt or innocence of the owner, in fact, it does establish an innocent owner exception.
And thirdly, forfeitures at the time of Calero-Toledo weren't the same as they are now.
The forfeitures that the Government is having under 21 U.S.C. 881 (a)(4) and (a)(7) are far in excess of what was happening back at the time of Calero-Toledo.
Unknown Speaker: What difference does it make how much money you're talking about if it's money being taken from an innocent person?
How can disproportionality have any meaning once you acknowledge that the car or the ship or the facility that belongs to a totally innocent person may be taken?
Even if it's only worth $100, that's vastly disproportionate to his guilt.
I assume proportionality means proportional to guilt.
Mr. Johnson: Correct.
Unknown Speaker: But all these in rem things at common law could be imposed against a totally innocent person.
I think... doesn't that conclusively establish that there's no proportionality requirement for in rem takings?
Mr. Johnson: I think that in rem forfeiture under common law and as... at the time that the Framers knew it is different than the forfeiture that we're experiencing today.
I think that the cases established that in rem forfeiture at that time was against ships, dealt with piracy, dealt with violations of the customs laws--
Unknown Speaker: Cars.
Mr. Johnson: --Which are instrumentalities... which can be instrumentalities of drug use, but when it comes to someone's home or in this case the business, these were incidental, in effect, to the drug use.
In other words, he could have transferred this drug use anywhere, outside, in somebody's place.
Unknown Speaker: Well, what if he did... what if the defendant just did business out of his house, the drug business out of his house?
Mr. Johnson: If there was... if the house was used specifically for that purpose, if it was... if there was a history--
Unknown Speaker: Then no proportionality?
Mr. Johnson: --Then there should be proportionality, but it should be analyzed under a series of factors.
That's what proportionality is as we advocate it.
There should be many factors or several factors that are applied, factors such as the circuit courts have applied in criminal forfeiture cases in order to determine whether all of the property should be forfeited, whether some of it should be forfeited, or whether none of it should be.
Unknown Speaker: I thought this particular statute does provide a defense for innocent owners, does it not?
Mr. Johnson: Yes, it does.
Unknown Speaker: I mean, we're dealing here with what could be characterized as a punitive sanction.
Mr. Johnson: I believe that's true, yes.
I think that's an example of why it is a punitive sanction because you do have the innocent owner defenses in both (a)(4) and (a)(7).
We are asking that the Court apply proportionality analysis to someone who is not innocent like Mr. Austin.
Unknown Speaker: You mean, if... let's assume you have a good, old... the most old-fashioned old-fashioned in rem forfeiture statute around.
You forfeit the ship if it's used for contraband.
If Congress should enact a... an amendment to that statute that says, however, if the ship belongs to an innocent person who didn't know it was being used for contraband, it shall not be forfeited.
That would convert it to no longer a classic in rem forfeiture and thereafter it would be subject to a proportionality requirement.
Mr. Johnson: I think that... first of all, I think Congress in a sense has enacted that type of law under (a)(4).
Unknown Speaker: I understand, but I understood your argument to be that since an innocent person gets off in this one, we should impose the proportionality requirement because that renders it punishment, whereas the ordinary in rem thing was not punishment.
Mr. Johnson: That's correct.
Yes, I believe--
Unknown Speaker: So, your answer to my hypothetical would be yes, that if Congress got tender-hearted and said, well, let's make an exception to our traditional in rem forfeiture of pirate ships and we'll say if the owner of the ship was innocent of the piracy, we won't forfeit it.
That would convert it suddenly to a punishment, and if it was just a small-time pirate, you wouldn't be able to take the ship even from the pirate--
Mr. Johnson: --Well, I think that would depend on--
Unknown Speaker: --because that would be too much punishment.
Mr. Johnson: --It could depend on the cases.
I guess it depends on the facts of the particular case.
That's what I would say.
Unknown Speaker: It seems to me it's in rem whether or not you decide to let the innocent person off.
I don't see how that makes a difference.
Mr. Johnson: It can be in rem, but it can also be punishment.
Unknown Speaker: Well, is it punishment if the owner has not engaged in punishable misconduct?
Mr. Johnson: It would--
Unknown Speaker: I mean, how--
Mr. Johnson: --It certainly would be punishment then, yes.
Unknown Speaker: --If the owner has not engaged in punishable conduct.
Mr. Johnson: --If the owner has not engaged in punishable conduct--
Unknown Speaker: Then how would that be punishment?
Mr. Johnson: --Well, if the owner had not done anything wrong and yet had the property seized and forfeited, then obviously--
Unknown Speaker: Yes.
Mr. Johnson: --that certainly would be punishment to that particular person.
Unknown Speaker: I wouldn't have thought so.
It might be a confiscation, but I... it's a little hard to call it punishment I would think.
Mr. Johnson: If the person has done nothing wrong it seems like, then it would be punishment if the person would have their assets taken.
I guess that's what I would say.
The Excessive Fines Clause also should apply because the Government is able to use this forfeiture procedure without the traditional safeguards, procedural safeguards, that would apply in most criminal cases.
The Government needs only to establish probable cause.
It can establish hearsay evidence, and then the claimant has the burden to prove the claimant's innocence or some other defense that might be applicable in the case.
Unknown Speaker: Yes, but you would be making the same argument if this forfeiture was done after a finding of guilt beyond reasonable doubt.
Mr. Johnson: That's true, yes.
And the reason is because--
Unknown Speaker: Well, why don't we talk about the case like that?
You'd still be making the same argument.
Mr. Johnson: --Yes, I would.
There was guilt in this case.
He pled guilty, and yet his involvement was relatively minor.
At least that's what the record seems to indicate.
And yet, he lost his home and he lost his business, a business that he had been involved in... not that particular place, but he has been involved in that business for 25 years.
Unknown Speaker: How about somebody like Mr. Harmelin, as we call them all Mister, in the drug case from Michigan where he was convicted of a relatively minor offense, possession I guess perhaps with intent to distribute, and he was sentenced to life imprisonment?
Surely, that's a much more severe punishment than the loss of one's mobile home, and yet we held that was not barred by the Eighth Amendment.
Mr. Johnson: That's true, you did.
And I think you felt that the States obviously had the right to enact laws that were like that.
And the other thing is, though--
Unknown Speaker: We felt the Constitution didn't prohibit the States from doing that.
Mr. Johnson: --Yes, that's true, and... but the amount of drugs in that case was 600 and some grams I believe too.
Unknown Speaker: And yours was only 2 grams?
Mr. Johnson: Only 2 grams, yes.
Unknown Speaker: In your case, do you agree with the correctness of the Government's statement that if your client had been prosecuted federally, the fines could have amounted to $1 million?
Mr. Johnson: Well, I think the statute probably allows that, but that never would have happened.
Unknown Speaker: Well, if it had happened, is the... would the application of the statute be unconstitutional?
Mr. Johnson: I think one could argue that that would be an excessive fine for someone that... who is in forma pauperis.
In my experience representing persons who are... under court appointment, the fine provision is never used because they are not able to pay the fine.
Unknown Speaker: I assume the higher the fine... the poorer you are, the easier it is to impose a higher fine.
To the extent you're insolvent, you don't pay it anyway.
Mr. Johnson: Usually I think it would... usually, at least in my experience, the fine is not imposed if the person is not able to pay it.
Unknown Speaker: Well, why... what is the reason why it's disproportionate here?
Because there were only a couple of grams involved?
Why... I mean, it's a violation of the drug laws.
Mr. Johnson: Right.
There are a couple grams involved.
This was a first offense for him.
He lost his business, which was his means to earn a living, and he lost his home.
Unknown Speaker: Well, it depends entirely upon how serious the society considers a drug offense to be I suppose.
Mr. Johnson: I think that's a factor, but also we're asking the Court to take into consideration the other factors, that someone who has lost everything they have for a relatively minor offense--
Unknown Speaker: Well, it's not relatively minor if society really has its face set against drugs and has provided for... at the Federal level at least, for penalties of the sort that has been mentioned.
How can we say it's relatively minor?
I can only look to the Federal statute and say, gee, at least the Federal Government thinks this is very serious stuff.
It's very harmful to society.
Mr. Johnson: --It is harmful to society, and the... certainly the Government has to have laws which help it in its war on drugs.
But the other thing that's true is that the full weight of the war on drugs shouldn't be visited on one person for this particular offense.
Unknown Speaker: Well, from the statistics you gave, it isn't.
Mr. Johnson: Well, that's true, but this person lost everything because of it.
So, from his point of view, I think as the court of appeals alluded to, he lost everything that he had.
In a sense, from his point of view, it has been visited on him.
Unknown Speaker: He's at least able to start over again in a way that Harmelin never was, spending the rest of his life in jail.
Mr. Johnson: That's true.
Yes, that's right.
Unknown Speaker: Have you got any cases on your side?
Mr. Johnson: Well, I think the Halper case is on our side, at least as far as the punishment issue.
We're arguing mainly that the Eighth Amendment should apply to this case.
Unknown Speaker: Have you got any cases applying it to the... to civil cases?
Mr. Johnson: The Whalers Cove case from the Second Circuit applies it, although the Whalers Cove case on the facts finds that it does not apply.
And strictly speaking I guess it was an Eighth Amendment application.
It said that the Excessive Fines Clause argument had been abandoned.
So, it applied I think the Cruel and Unusual Punishment Clause and found that under the proportionality analysis that it wouldn't make any difference.
Unknown Speaker: But it applied the Eighth Amendment anyway.
Mr. Johnson: It applies the Eighth Amendment yes.
But as far as the Excessive Fines Clause, it doesn't.
So, I don't think it's necessarily instructive on that issue.
This would be the first case that really the Court has had to decide that applies the Excessive Fines Clause to this type of--
Unknown Speaker: Have you got any State supreme court cases on your side?
Mr. Johnson: --No, not that have applied the Excessive Fines Clause.
Unknown Speaker: Or under their own constitutions?
Mr. Johnson: Not that I'm aware of, Your Honor.
The Halper case indicates that a civil sanction that cannot fairly be said solely to serve a remedial purpose, but rather can be explained only as also serving either retributive or deterrent purposes, punishment, as we have come to understand the term.
I don't think there's any question that civil forfeiture serves a retributive or deterrent purpose in addition to whatever remedial purpose it might serve.
Because it also serves that, it's punishment within the... under the understanding of that term.
Because it is punishment, the Excessive Fines Clause should apply.
The in rem/in personam distinction also should not bar the Court from considering this issue.
The Court's past cases, first of all, are instructive.
One 1958 Plymouth Sedan, Boyd v. the United States, U.S. v. Coin and... U.S. v. U.S. Coin and Currency all see through the in rem/in personam distinction and apply the Fourth Amendment and Fifth Amendment protections to in rem actions.
The statute themselves, as I indicated, establish that this is punishment rather than just remedial.
They have innocent owner exceptions.
They're tied to a violation of the criminal law punishable by more than one year's imprisonment.
There are procedures for remission or mitigation of forfeiture, and they are based on violations of the Controlled Substances Act.
Unknown Speaker: What did the prior or the old law mean when it defined the objective of the in rem action as remedial?
Remedial in the sense of removing an instrumentality of the crime from the hands of criminals?
Mr. Johnson: Yes, that was one of the--
Unknown Speaker: Well, that's exactly what's being done here, isn't it?
Mr. Johnson: --Well, I guess I'd argue that the body shop and the mobile home were not instrumentalities.
They weren't specifically structured or designed for this type of drug use.
In other words, there wasn't a manufacturing plant in there.
There weren't secret compartments.
Unknown Speaker: Well, ships were not necessarily designed for smuggling either, but they were used for that.
And warehouses on Long Wharf in Boston weren't necessarily built for smuggling, but that's what they were used for, and they were forfeitable I suppose.
Mr. Johnson: --I think that in those cases too, though, that the item was specifically used to store drugs and it was used to transport drugs.
Unknown Speaker: Well, the mobile home was being used to store drugs, wasn't it?
Mr. Johnson: Not--
Unknown Speaker: I forget where the cocaine was found, but I mean, there's a bag of cocaine either in the body shop or the mobile home.
I mean, I just am finding the distinction based on remedial versus punitive a pretty ethereal distinction, and what bothers me about it is if we go your way on the theory that there is, in effect, a punitive function going on here by virtue of the innocent owner defense, then we have to face the fact that despite that variation, we're still dealing with two kinds of in rem actions, one against the guilty owner and one all other varieties of in rem action.
And we would have put ourselves in the position of saying that the guilty owner has a proportionality objection.
The innocent owner has none whatsoever in those cases which make no distinction between innocent and guilty owners.
And I suppose the next step down the road, if we go your way, is going to be the due process argument, that one cannot go against an innocent owner in an in rem action simply because the Government has no justifiable purpose under the Due Process Clause when at the same time the guilty owner is allowed to contest it.
And it seems to me that you're setting us off on rather a steep slope if we buy your argument, and I'm trying to see if there's a way out of it.
Mr. Johnson: --Well, I guess I'm arguing that the Excessive Fines Clause should apply to this forfeiture whether the person is guilty or innocent.
It's the actions of the Government I think that should be scrutinized under the Excessive Fines Clause.
Unknown Speaker: Well, then do we take the next step and say in the most garden variety of old-fashioned in rem actions, there is likewise going to be a proportionality defense, and in fact, it will always work I suppose because the owner is always going to be innocent or innocence is always going to be... strike that.
Guilt is always going to be irrelevant.
Mr. Johnson: I don't think guilt is irrelevant.
I think it's one of the factors.
Unknown Speaker: Well, it's irrelevant under the traditional in rem action as you were describing it.
You're saying it's remedial.
It's not punitive.
Why isn't the proportionality argument, at least as raised by a person who claims innocence and can show innocence, always going to succeed?
Mr. Johnson: Well, I don't know.
I guess I think that the--
Unknown Speaker: Well, if I'm innocent, it's disproportionate to take a nickel out of my pocket, isn't it?
Mr. Johnson: --That's true, yes.
Unknown Speaker: Then it's always going to succeed.
Mr. Johnson: I don't know.
I guess again it depends on what the Court sees, the different factors.
But if a person is innocent and hasn't done anything, well then certainly that should be a defense.
It should be something the Court should consider in deciding whether or not it was proper to forfeit property or not.
Unknown Speaker: Well, I suppose the Government can always decide that certain property is malum in se.
In other words, it's contraband.
It can be taken.
Mr. Johnson: Yes.
Unknown Speaker: It has no proper use or it's dangerous to the public.
Mr. Johnson: That's true.
Unknown Speaker: I would think there would be many reasons where you could take property even from someone who's totally innocent.
Mr. Johnson: Yes, that's true, especially if the property is used... has a specific purpose in advancing the drug business.
If it's specifically designed, for example, to hide contraband or if it's specifically used for nothing but the drug use, then--
Unknown Speaker: But none of those categories would be applicable to the property involved here.
Mr. Johnson: --I would say that's true, yes.
Unknown Speaker: Are you saying... I want to... I am not... I want to be sure I'm following your argument.
Are you saying the tests should be different depending on whether the... assume it's an instrumentality of the... of crime.
On the one hand, you have an instrumentality can be used for no lawful purpose, burglar tools or something else, that that would have a different test than one where you have an automobile and most of the time it's used for perfectly legitimate driving, but on one or two occasions it's involved in the drug trade.
Are you saying there's a different test depending on the character of the use of that which is sought to be forfeited?
Mr. Johnson: I think that's one of the factors that should be taken into consideration I guess; that among other factors, one of the factors should be is this property used all the time for illegal purposes or is its use incidental to the particular use... illegal use.
Unknown Speaker: And do you draw a distinction between instrumentalities of crime and proceeds of illegal activity?
Mr. Johnson: I believe that proceeds of illegal activity... yes, that's correct.
Unknown Speaker: And which do we have in this case?
Mr. Johnson: Well, this is not proceeds or instrumentalities I would say because these--
Unknown Speaker: Then how did they get... how could they forfeit it if it isn't one or the other?
Mr. Johnson: --Because it's under the right to forfeit homes and conveyances and businesses, real property, whether it's--
Unknown Speaker: Yes, but it's real property, homes, et cetera that are used in the furtherance of the drug trade, isn't it?
Mr. Johnson: --Yes, but I would argue that it's not an instrumentality because it hasn't been specifically adapted for that use, that it's... the fact that it was done in that particular place was incidental to it.
Unknown Speaker: And you're, in effect, arguing we should limit the historic law like illegal distilleries and things like that to properties that had no legitimate... basically had no significant legitimate use.
Is that it?
Mr. Johnson: I would say that those particular items would be more likely to be forfeited than something that had some legitimate use.
I guess that's where this analysis would come into play, this factor analysis.
Unknown Speaker: Well, it would seem to me that if they had no legitimate use, that it would always be proportional to forfeit it.
I don't know when you could say it's disproportionate to take... a $1 million distillery would be no different from a $10 distillery as far as I could see.
Mr. Johnson: If it's always used for... I guess that kind of depends on what the property is, though.
If, let's say someone again has lost everything they have, if it's their business or something like that, and if it's not used, well then maybe there would be an argument that it should not be forfeited.
Unknown Speaker: Well, but if it's their business and the only use is illegal, it's not the kind of business we want to preserve.
Mr. Johnson: That's true.
If the sole use is illegal, then it should be forfeited, yes.
I'll reserve the rest of my time for rebuttal.
Unknown Speaker: Very well, Mr. Johnson.
Argument of Miguel A. Estrada
Mr. Estrada: Thank you, Mr. Chief Justice, and may it please the Court:
The issue in this case is whether the Eighth Amendment requires that civil in rem forfeitures be proportional to the criminal culpability of the owner of the property.
Seven of the eight courts of appeals that have ruled on that question, including the court of appeals in this case, have concluded that the Eighth Amendment does not require that type of proportionality review, and because the majority view is correct, the judgment of the court of appeals in this case should be affirmed.
Unknown Speaker: Mr. Estrada, historically... do you know the answer to this?
Historically at the time the Eighth Amendment was adopted, was there such a thing as in rem forfeiture of real property, or was it limited to ships and personal property?
Mr. Estrada: The... there is no contemporary case that we've been able to find in which a specific issue was made of the fact.
There is a case, Dobbins Distillery, which is cited in our case, in which the claim was raised specifically that real property in that case could not be forfeited, and the Court dealt with the real property in the case much as it had dealt with the claims of ships and the like without giving any indication whatsoever that the real estate, by virtue of being that type of property interest, couldn't be forfeited under the common law.
The statute in that--
Unknown Speaker: In that case, Mr. Estrada, was it a leasehold interest or a fee interest?
Mr. Estrada: --I think the fee interest was forfeited.
The facts of the case were that the claimant had leased the interest to someone who then used it for the purpose of a distillery business, and the person who was so using it was putting it to a lawful use so long as he kept records and paid taxes, which he failed to do.
Now, as a result of the acts of the lessee in not doing what he was supposed to do, the property, including the tract of land, was forfeited to the Government.
And the statute in that case was very clear that the tract of land was to be forfeited.
It was a statute passed by Congress I believe on July 20, 1868 and is found at 15 Stat., page 133.
There was no indication in the Court's... in how the Court dealt with the case that it thought of this as being in any way unusual.
Unknown Speaker: Didn't they set aside... I haven't looked at the case for quite a while.
Didn't they set aside part of the forfeiture in that case?
Mr. Estrada: That is not my recollection.
Unknown Speaker: And your understanding is that even though it was a leasehold, actually what was forfeited was the fee interest in the property.
Mr. Estrada: That is what... how we read the case, and the statute I think was very clear.
It actually made reference to the tract of land rather than to the interest of the owner.
Unknown Speaker: What's the name of the case, Mr. Estrada?
Mr. Estrada: Dobbins--
Unknown Speaker: Dobbins?
Mr. Estrada: --Distillery, which is cited in our brief, Mr. Chief Justice.
Now, this Court has long understood the Eighth Amendment with its references to bail, fines, and punishments, to be directed to the criminal law function of the Government.
And consistent with that understanding, this Court in Brown and Ferris concluded that the word fine, as used in that amendment and as understood by the Framers, meant a payment to a sovereign as punishment for some offense.
Our claim here is that civil in rem forfeitures are not fines under the Eighth Amendment and do not otherwise implicate the Eighth Amendment because they have never been considered punishment for an offense.
Unknown Speaker: Well, now, doesn't Halper indicate that a civil pecuniary sanction, designed to be remedial, can be punitive?
Mr. Estrada: I think Halper indicates that there are certain cases in which the Court will disregard the label that Congress has chosen to put on a given exaction, but under certain very limited circumstances.
Both Halper and the case of Bell v. Wolfish, which is cited, do what is in essence an as-applied challenge to a specific Government conduct; that is a claim that even though a statute is civil in the usual case, as applied in the case, it should be considered forbidden punishment.
But in the type of as-applied challenge, both Halper and Bell concentrated on the seventh Mendoza-Martinez factor, which is whether the Government conduct seems excessive in relation to the nonpunitive purpose as being claimed for it.
The theory of both cases, which was a theory that won in Halper and lost in Bell v. Wolfish, was that if the Government exaction in the specific case is so patently out of kilter with the stated nonpunitive purpose, then the court may safely infer that the true purpose was something else, i.e., the desire to use the sanction in the specific case, not to further the purpose of the statute, but to inflict what is, in essence, punishment.
Halper makes very clear that the road to that level of... lack of rationality is very long and there are very few cases in which the specific invocation of--
Unknown Speaker: Where it would meet the standard.
Well, should this case be subjected to a Halper inquiry do you think?
Mr. Estrada: --I think every case in which the Government conduct is challenged can be subjected to a Halper inquiry.
We think that this class of cases, including this specific case, is of such a nature that the inquiry should never be successful because since the whole point of the in rem forfeiture statute is to make the property unavailable for further unlawful use and to compensate the victims of the unlawful use, it will never be a case in which the specific invocation of the forfeiture statute will exceed the bounds that the Court outlined in Halper.
Unknown Speaker: Well, we can accept in this case, can we not, Mr. Estrada, that the purpose of the forfeiture statute is supplementary to the criminal laws because it deters and punishes?
Mr. Estrada: I think you can certainly accept that the civil forfeiture statute in this case is part of a whole set of weapons, if you will, that Congress chose to use for a very grave social issue, and we certainly concede that it is part of the statute that certain owners will be deterred from using the property in this way.
We do not agree with the claim that anytime there is any element of deterrence in Government action, that that automatically means that the action should be set aside or that it should be examined under heightened constitutional scrutiny, and we don't think--
Unknown Speaker: Well, in addition to deterrence, it's punishment, is it not, in the civil forfeiture context that we have here?
Mr. Estrada: --We don't think that what we have in this case, either as a general matter or in the specific facts of this case, that we can call this punishment in the constitutional sense, Justice Kennedy.
Unknown Speaker: Well, in the brief that the Justice Department filed in the Parcel of Land case that we decided earlier this term, the Solicitor General is quoted at length from the Senate committee report indicating that the purpose of these laws would be to deter and punish further because criminal sanctions were ineffective to combat the drug trade.
So, I just think that we ought to recognize that the purpose of this law is to deter and punish.
If we do recognize that, do you have a more difficult case?
Mr. Estrada: Yes, I think we would.
I just... as a comment on that cite, it is often the case that a word can be used by Members of Congress, such as the word punish, in a sense which is broader than the constitutional sense.
And we think that even though there are, in fact, some such statements in the legislative record, that the structure of the statute, the language of the statute, and the history of this type of thing show that this is not punitive in the constitutional sense.
And as to that point, I think we would simply point to the tests that this Court has followed in a case like Mendoza-Martinez.
Unknown Speaker: If we thought it was punishment, do you lose?
Mr. Estrada: Excuse me, Justice Stevens... I mean, Justice White.
Unknown Speaker: If we thought this was punishment, this amounted to punishment, would you lose?
Mr. Estrada: No.
If you thought that this was, in fact, punishment in the constitutional sense, there would still be the claim as to whether it is excessive punishment.
The Eighth Amendment doesn't outlaw punishment.
Unknown Speaker: But you would say, however, that if it is punishment, it is... the Eighth Amendment is applicable to civil cases.
Mr. Estrada: Yes.
I think it is true that Congress cannot get out of the Eighth Amendment simply by the label that it places on something.
It is also--
Unknown Speaker: Does it have to be some connection with a criminal case?
Mr. Estrada: --Yes.
I think this Court would have to conclude under the tests that this Court has always applied in similar inquiries like the Mendoza case that in fact what this statute does is to inflict punishment in the constitutional sense.
And if that were the case, then it would follow that you could, in fact, look at what the Government is doing under the Eighth Amendment.
Our principal claim in this case is that something of this type, by reason of history and by reason of the fact that the history still serves a purpose to this day, should not be considered punishment in the constitutional sense.
Unknown Speaker: Do you think historically the excessive fines notion applied at all in civil cases?
Mr. Estrada: No.
No, and I think when the Court went over the history of the excessive fines language in the Eighth Amendment in the Brown and Ferris case, the Court concluded that to the Framers the excessive fines... that the fines that are mentioned in the Eighth Amendment were payments to the sovereign as punishment for some offense because then and now fines are assessed in criminal cases.
Unknown Speaker: So, the answer historically would be if a fine is payable to the sovereign as a fine, if it's as punishment, it doesn't make any difference that it's a civil case.
Mr. Estrada: That is right, Justice White.
I should say that in looking at the issue of whether this is, in fact, punishment in the constitutional sense, there are tests that this Court has always applied, most notably the Mendoza-Martinez factors.
And using that very test, this Court only a few years ago ruled that a very similarly worded in rem forfeiture statute was not punishment under the Mendoza-Martinez factors.
That case is One Assortment of 89 Firearms, which is cited in our brief, and in that case, the statute in question mandated forfeiture of all firearms used or intended to be used in violations of the Gun Control Act or any other criminal law of the United States.
Unknown Speaker: So, what if we say that we think this is punishment contrary to your belief?
Is there any difference between saying it's an excessive fine or it's cruel and unusual punishment?
Mr. Estrada: We don't think that the constitutional standard in that event would be significantly different because in either case, you would be looking at whether the Government exaction is extremely out of kilter with what the Government is trying to do with the exaction.
Unknown Speaker: So, what would be the standard under the excessive fines route if we said, well, this is punishment, and so the Excessive Fines Clause applies?
Mr. Estrada: We think that the standard would be comparable to the standard that the Court used in Harmelin, which is in the first instance to ask whether the fine or the punishment is grossly disproportionate to the gravity of the crime.
Unknown Speaker: So, you do say that the standard would be roughly the same--
Mr. Estrada: Yes, we do, Justice White.
Our principal claim here is that this type of conduct is not punishment, but even if it is, our alternative claim is that under the Harmelin standard, this conduct couldn't be found to meet the level of excessiveness that would counsel setting it aside.
Unknown Speaker: --Mr. Estrada, historically did these in rem forfeitures contain an exclusion for the property of innocent persons?
Mr. Estrada: Yes, Justice Scalia, in a very limited sense.
Not innocence of the crime as such.
There is an 1808 case written by Chief Justice Marshall that was cited in this Court's opinion in Calero-Toledo, and the name of the case is Peish v. Ware, which is cited at page 689 of Calero-Toledo and is reported at Fork Ranch 347.
That was a case in which a ship had been wrecked on the coast of Delaware.
The goods were taken to the coast, and the Government brought a forfeiture action claiming that shortly after the ship was shipwrecked, the goods had been found in Delaware without tax stamps.
The Government lost that case, Chief Justice Marshall saying what seemed to be a statement of the common law of forfeiture, that a forfeiture wouldn't lie at common law in a case where there was nothing that the person, on whom the forfeiture would work, could have done to keep it from happening.
And we would take that as being part of the common law of forfeiture.
This Court's case in Calero-Toledo cited that and in addition said that invoking a forfeiture under those facts would likely be a violation of due process.
In addition, footnote 27 in Calero-Toledo pointed out... excuse me... that since 1790 the Federal Government has had statutes that provide for the remission of forfeitures as a matter of administrative grace when the owner can show that he was without intent or without willful negligence, and that goes back to 1790.
We think that Congress' decision to include something very much like that in this statute, as a matter of statutory right rather than as a matter of grace, really doesn't change what the nature of the action--
Unknown Speaker: It doesn't stop... it doesn't turn it from remedial into punitive.
Mr. Estrada: --Correct, because that has always been there.
Throughout the history since 1790, there have been some statutes that actually vest that type of claim with the court and there are some statutes now where a claimant can go to a court and ask that the forfeiture be mitigated rather than going to an agency, but that has always been there since 1790.
And making this a matter of statutory right doesn't change the nature of the action.
Unknown Speaker: Just looking at it from the other side, that sort of provides an answer to the question that I asked your brother, and that is, assuming we do find that there's something punitive here and we don't classify it as immune from review merely as a remedial forfeiture, there seems then to be a historical basis for us not to have to worry about the case of the truly innocent owner subject to the classic historical forfeiture because that person, based on your case from Fork Ranch, may very well have had a defense to the forfeiture all along.
Mr. Estrada: I think we have to... yes, but I think we have to distinguish two meanings of innocence in this context.
When the Court has always said that innocence is not relevant, what it had meant as the cases make clear is that you needn't be guilty of a crime.
However, it is still possible and, indeed, likely that you haven't been very careful with your property.
Unknown Speaker: In the case of the parents whose child uses the house to store drugs that he sells on the street, you would say if they had reason to know that he was using them, their property would historically be... on historical grounds be subject to forfeiture in the absence of any statutory defense; whereas, if they had not in any way been negligent in failing to know of the fact that he was using his room as a storehouse for the drugs he was selling, they would have a defense.
Mr. Estrada: Well, I think that that's not necessarily the case because I think what Chief Justice Marshall had in mind and what we have had through the history is the imposition of a very high standard of care--
Unknown Speaker: A... an affirmative obligation--
Mr. Estrada: --on the owner.
Unknown Speaker: --really to take--
Mr. Estrada: Right, and--
Unknown Speaker: --to take care that it not be used.
Mr. Estrada: --Correct, and I think that that is, in fact, what we think has historically justified civil forfeitures.
The civil forfeiture statutes go on the really common sense premise that there are certain uses of property that are so harmful and so socially undesirable that the law must place every incentive on the owner of the property to make sure, even if that takes taking affirmative steps, that no one, whether the owner knows about him or not, will inflict those harms on society with the owner's property.
Unknown Speaker: And that, of course, would be your answer to the claim of the so-called innocent owner who was merely negligent.
Mr. Estrada: Right.
Unknown Speaker: Yes.
Mr. Estrada: Yes, and we would say that as a historical matter, that person wouldn't have that type of a claim because the whole point of having a remedy of this type is to take note of the fact that there are certain things that only an owner can do and only an owner can take care of his property and make sure that it is not broken into and turned into a crack house, for example.
Unknown Speaker: But all that analysis, Mr. Estrada, proceeds from the line of cases that essentially began with forfeitures in the maritime area and forfeitures of certain kind of chattel.
But isn't it true that at early common law, one of the benefits, at least to the nobles, of classifying certain crimes as felony was so that they could have forfeiture.
Forfeiture was intricately bound up with the definition of crime at a very early English law, was it not?
Mr. Estrada: Well, I think--
Unknown Speaker: And didn't the Framers recognize that?
Mr. Estrada: --There were two types of forfeiture at early common law, Justice Kennedy.
One of them was the so-called forfeiture of estate, which really was in personam and really only came into play when the Government proved with a judgment of conviction that the person had, in fact, been convicted of a crime.
The other type of forfeiture really didn't have anything to do with the crimes that were hurting the king's bench.
It was in a completely different court system, the Court of the Exchequer, and that type of forfeiture, which is, in essence, what is at issue here, didn't partake of the rationale that you just gave I think.
Unknown Speaker: It seems to me that the Framers were concerned that the criminal laws not be used to impose excessive punishments, and certainly in the early history of England, that was true with reference to forfeitures for felonies.
Mr. Estrada: Right, but it is not the same type of forfeiture that is at issue here, Justice Kennedy.
If this were a case in which the forfeiture could only be had upon the conviction of a crime, we don't... we would not be here because we would concede that the essence of that sort of action is on the person.
What we do have here is a statute that really doesn't need the criminal law other than to state a... other than to set a standard of conduct and, taking that as the standard of conduct, then says if your property has been used or is intended to be used for this purpose, then we will make sure that that harm doesn't come to pass by placing the property in the hands of someone who can give surety to society as a whole that these harms won't happen.
And I think that's a very different type of forfeiture than the forfeiture that you have in mind, Justice Kennedy.
Unknown Speaker: May I ask you a question, Mr. Estrada?
Your discussion of two kinds of innocence and the different... your colloquy with Justice Kennedy brings this to mind.
In the Dobbins Distillery case that you describe, the landlord knew that the property is going to be used for a distillery and perhaps had a higher duty to be sure they kept the records properly and so forth.
But you say you would apply the same standard in a case like that as if just an ordinary landlord rented a flat somewhere to a party and had no reason to believe it was to be used for anything but a residence, and it turned out that the tenant dealt in drugs in the flat without any knowledge of the landlord.
Would you say that the fee interest of the landlord would be forfeitable equally as... on those facts as in the distillery case?
Mr. Estrada: Well, it would not happen under this statute because of the--
Unknown Speaker: No.
I'm just talking about would the constitutional objection... if there was any constitutional problem at all, would you say the analysis would be the same--
Mr. Estrada: --Yes, although--
Unknown Speaker: --in a case where you know that it's the kind of business that has special duties and special concerns on the one hand, and just rent it as a residence on the other?
Mr. Estrada: --I think the mode of looking at the question would be the same in the sense that you would ask the same questions, i.e., whether the owner did everything that he physically could to ensure that this didn't happen.
I think if the owner, for example, never was around to see all of the suspicious people come and go and really made no effort whatsoever to stop by and look at the property, it is possible that that person would lose.
Someone who did take those steps, we would think that as a matter of common law, he would have exercised every care that the law could ask of him.
And if after every care and physically... and after physically doing everything that he could, the harm still came to pass, we would understand the common law as giving that person a defense.
Unless the Court has any further questions, we'll rely on our briefs.
Unknown Speaker: Thank you, Mr. Estrada.
Mr. Johnson, you have 3 minutes remaining.
Rebuttal of Richard L. Johnson
Mr. Johnson: Thank you, Your Honor.
Counsel for the Government talks about the Kennedy v. Mendoza-Martinez criteria.
Applying that criteria to this case, it's clear that the actions of the Government in this case do constitute punishment.
First is whether it creates an affirmative disability or restraint.
Obviously, the loss of Mr. Austin's business and his home was a disability on him.
Whether it historically has been regarded as punishment.
We'd argue that this type of forfeiture that occurred in this case has historically been regarded as punishment because we argue that it goes back to the time of the Framers and prior to that what they understood as punishment to be.
Unknown Speaker: Would the answer on proportionality be different if it was 600 grams instead of 2?
Mr. Johnson: I would argue that that would be a more... that would be a factor which would be more detrimental to Mr. Austin, obviously, yes.
Unknown Speaker: Even though he's deprived of his entire livelihood.
Mr. Johnson: --If it was 600 grams, there's more of a chance that probably the place was being used to store drugs too.
That very likely could be the case, but again, that's a... it's a... an analysis that has to be determined I think by the court in the first instance, by the district court.
In other words, all the factors have to be taken into consideration.
The third factor is whether it comes into play on a finding of scienter.
In this case, the statutes themselves indicate that scienter is a factor.
In other words, if the owner does not know of the drug use, then it's a defense.
Four, whether the operation will promote the traditional aims of punishment, retribution, and deterrence.
In fact, that is the case here too.
This civil forfeiture under 21 U.S.C. 881(a)(4) and (a)(7) does promote--
Unknown Speaker: So, the more lenient Congress is with respect to the mental element, scienter, the more it is criminal?
Mr. Johnson: --I don't think I'm saying that.
Unknown Speaker: Well, I thought you said that if the statute provides that lack of scienter is a defense, then that tends to make it a criminal statute.
Did I misunderstand?
Mr. Johnson: --Yes, that's true.
In this particular case--
Unknown Speaker: So, the more lenient Congress is with respect to the party involved, the more it's criminal rather than civil.
That strikes me as astounding.
Mr. Johnson: --Well, one of the factors of whether or not it's punishment is whether or not scienter is involved, and that... in this particular case, if you are an innocent owner, then that is a defense to the civil forfeiture.
So, that's... that is one of the factors in this case.
Next, whether the behavior to which it applies is already a crime.
As I indicated, the statutes do tie the civil forfeiture to the violations of the controlled drug statutes.
And I see my time is up.
Chief Justice Rehnquist: Thank you, Mr. Johnson.
The case is submitted.
Unknown Speaker: The honorable court is now adjourned until tomorrow at ten o'clock.