The Forfeiture Exception to Constitutional Norms

No person shall . . . be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.

The protection of private property rights is a fundamental condition for freedom and the most sacred obligation of government. The Framers of the United States Constitution strongly embraced such a view. James Madison observed the importance of this obligation when he wrote, "Government is instituted to protect property of every sort. . . . This being the end of government, that alone is a just government, which impartially secures to every man, whatever is his own." Madison’s statement of this truth echoed a similar pronouncement by John Locke: "The great and chief end therefore, of men’s uniting into commonwealths, and putting themselves under government, is the preservation of property. To which in the state of nature there are many things wanting." Thus, the government has a negative obligation to refrain from violating property rights as well as an affirmative obligation to ensure their preservation.

Despite the placement of these obligations into America’s constitutional structure, protection of property rights has gradually foundered. Receiving compensation for property taken by the government has become extremely difficult, and the Fifth Amendment prohibition against taking property for non-public uses has essentially disappeared. Furthermore, property rights have been relegated to an inferior position in the scheme of protected freedoms. As the power of the state has grown, those rights that were of primary concern to the Framers have become a secondary concern for contemporary legislatures and courts.

Yet Framers such as Madison understood that property rights could not be excluded from protected freedoms because the protection of property is the foundation of all freedoms. He emphasized this relationship when he wrote, "[A]s a man is said to have a right to his property, he may be equally said to have a property in his rights. Where an excess of power prevails, property of no sort is duly respected. No man is safe in his opinions, his person, his faculties, or his possessions."

Given Madison’s warning, each violation of property rights must be carefully scrutinized and guarded against by all who value individual liberty. Violations must be kept in check if our property in liberty is to be preserved. Current policymakers should emulate the Founders’ respect for private property rights whenever making decisions which affect those rights.

Unfortunately, that respect is too often absent in current legislators. The state of property rights law can be, in part, illustrated by the forfeiture laws currently in use by both the federal and Michigan governments.

Two main categories of forfeiture statutes exist in today’s legal system: criminal forfeiture and civil asset forfeiture. Civil asset forfeiture concerns the seizure of property presumed to have a relation to a crime or to be obtained as a consequence of criminal activity. No determination of criminal guilt is necessary to trigger a civil asset forfeiture, which is in rem, or against property, in nature. The bulk of this report will address this category of forfeiture and the constitutional and civil rights problems it poses.

The second category involves criminal forfeitures, which are primarily in personam—against the person—in nature. A criminal forfeiture results after a conviction for the crime to which the forfeited property is related. This can occur upon a showing that the property is contraband (illegally obtained, obtained through the profit from a crime, or involved as an instrument of the underlying offense), as a consequence of sentencing, or as a condition of a plea bargain. Fewer injustices are likely to result in this category of forfeiture, given the more protective procedural safeguards in criminal prosecutions.

Nonetheless, several concerns arise in the analysis of criminal forfeiture laws. Eighth Amendment protections from excessive fines and the implied protection against disproportionate punishments must be considered. In fact, on June 22, 1998, the U.S. Supreme Court addressed whether a violation of a customs law requiring reporting of more than $10,000 in cash transported across the border warranted a forfeiture of $357,144 in lawfully obtained cash carried by the defendants. Finding the forfeiture disproportionately high given the nature of the violation and limiting their opinion to the distinct issue of criminal forfeiture, the Court held for the first time that a criminal forfeiture violated the Excessive Fines clause.

Though these and other problems arise in both categories of forfeitures, their significance to the criminal category lies primarily beyond the scope of this report. Criminal forfeiture is particularly relevant to this report’s analysis, however, when innocent owners or co-owners of property are punished as a result of such forfeitures.