Proposals and Prospects for Reform

Several reforms can at least move the system in a more just direction. The perverse incentives in this area of law, though reduced by these reforms, can never be eliminated so long as the general populace fails to question the government’s authority to limit protections of property and so long as the legal system leaves open the avenue of forfeiture legislation to some political constituency or special interest.

Given the reluctance of the courts to deviate from the longstanding precedents that have carved out an exception from normal methods of punishment for forfeiture law, statutory and constitutional reforms appear to be the most immediate route for re-injecting due process into this area of law. Courts, however, should remain cognizant of the inconsistent applications of constitutional protections and attempt to correct the system as far as their legitimate authority will allow.

Though reform at the state level should be encouraged, it will not be enough to guarantee adequate protection for Michigan’s citizens. First, the incorporation doctrine has severely limited the ability of states to develop constitutional doctrine independent of the dictates of the federal Constitution and its judicial interpretation. Second, state law enforcement agents, encumbered by more protective state forfeiture laws, can request that federal officials "adopt" a case, allowing seizures under broader federal laws and forcing property owners to fight the full legal and financial resources of the national government. This is relevant in the areas of concurrent jurisdiction—such as drug and racketeering laws—where the majority of forfeitures are practiced. Enacting state laws restricting the power of adoption could address these concerns to some extent.

The financial incentives for states to assist the federal government in forfeitures are also strong. The U.S. Department of Justice maintains an Asset Forfeiture Fund. Part of the proceeds from the fund is shared with state and local law enforcement agencies to assist them in fighting the drug war. In 1990, Michigan received almost $3.7 million in cash from this fund.

The burden of proof should be shifted to the government to prove that property is connected to illegal activity beyond a reasonable doubt. The underlying theme in such a reform is to formally recognize that forfeiture is considered punishment for all purposes and normal standards of due process should apply. Contingent to such a reform would be the elimination of civil in rem forfeiture. Property could only be forfeited upon a showing of guilt commensurate with that required in a criminal trial. The presumption should be against the state.

With such a reform, there should be the formal elimination of the archaic legal fiction which personifies property. Property does not have rights; people have rights. Likewise, property cannot commit a bad act; people commit bad acts. Eliminating the legal fiction and instituting all forfeiture proceedings in personam will afford owners the rights of persons. When combined with the recognition of punishment, the rights afforded the owners should become the same as those afforded to individuals threatened with punishment in the criminal justice system.

Another necessary reform in forfeiture should involve the establishment of a proportionality and nexus requirement between the property deprivation and the crime committed. Any presumptions of nexus should be eliminated and the government should bear the burden of showing a connection between specific property and the actual crime for which guilt is found. In England, before the Magna Carta, rulers often seized all property belonging to any person convicted of a felony. As a result of pressure by English barons, King John was forced to limit these powers.

Proportionality in the degree of forfeiture allowed should be a concern. Just as someone cannot be subject to capital punishment for shoplifting, he should not have his entire home forfeited for the presence of a small amount of drugs within it. Likewise, a proportionality requirement should apply to all criminal forfeitures, both as currently constituted and as they would be defined under the reform described. In the current criminal system, prison or jail sentences are intended to be commensurate with the crime proven. The loss of property, as opposed to liberty, should not be treated differently.

In civil asset forfeiture, procedural hurdles that make it difficult to challenge the government action should be eliminated. The time limits on filing a claim require significant extension. Furthermore, when a person is involuntarily brought into litigation—as a victim of a forfeiture certainly is—the burden should be on the government to prove its case and to bear the financial costs of doing so. Thus, the requirement in most forfeiture laws that a claimant post a bond with sureties should be eliminated. Additionally, the government should be required to reimburse a successful claimant for reasonable litigation costs related to his defense of his property rights in a forfeiture proceeding.

Because of the difficulty, cost, and inconvenience of a court challenge, the government should limit the number of forfeitures that are actually conducted, especially those based on seizures without process. Often the cost of a challenge outweighs the potential recovery of property. Knowing that their seizures will likely go unchallenged, police have a perverse incentive to conduct more of them. Self-restraint on the part of law enforcement is the most needed reform.

One reform which could encourage such restraint and increase accountability would require a formal procedure by which police and prosecutors would be required to explain and justify why they are seeking forfeiture against an alleged wrongdoer in the absence of criminal charges. Both the police and prosecutors should be required to publish such an explanation each time an asset is seized and retained. This would increase the public awareness of forfeiture activities. Criticism of unreasonable actions would be much easier, granting the populace a tool by which they can analyze the actions of their governmental agents and subsequently hold them accountable. As a consequence, police and prosecutors would be more likely to analyze their own actions and restrain from activities that they would have difficulty explaining to the public. Finally, such a reform will raise awareness of activities even when a property owner is financially unable to challenge a forfeiture himself.

Greater protections for innocent owners should be implemented and applied in both civil and criminal forfeitures. Courts have seriously eroded most current statutory efforts to grant innocent owners a defense. Stronger language should be inserted into all forfeiture statutes that indicates that an innocent owner shall not be punished through forfeiture absent a culpability requirement approaching or reaching a standard based in actual knowledge of, and involvement in, the offense. In other words, those who have neither participated in the offense nor knowingly acquiesced in the crime should not be punished. If the system is reformed to allow only criminal forfeitures upon a showing of guilt for a crime, co-owners would only be responsible if they were also guilty of some offense, such as aiding and abetting or conspiracy. That reformed system would ensure that fewer innocent owners would have a property interest harmed.

Innocent owners are often third parties, thus making it more difficult to recover because they must inject themselves into a forfeiture proceeding or bring a claim following a forfeiture order. The system should be eased to allow these individuals to challenge a forfeiture and assert their claim to the property. Furthermore, third-party creditors or lien holders should be given a judicial remedy to recover against the government. Currently, these individuals normally must petition the agency, the attorney general, or the Justice Department asking for an equitable share. Because the decision to do so is within the discretion of the authority, and because the authority normally has a monetary incentive to keep the property, the likelihood of success in filing such a petition is low.

Finally, a note of caution is required relating to a reform proposal that allows forfeiture only upon the proof of a related crime. Given both the crisis mentality and the desire to obtain resources through forfeiture, there may be a natural tendency among state officials to circumvent the protections afforded in reform measures by broadening the definitions of criminal behavior to include activities not currently considered criminal. This would, indeed, be a grave consequence of reform. But we must heed the message of California deputy attorney general Gary Schons: "Much like a drug addict becomes addicted to drugs, law enforcement agencies have become dependent on asset forfeitures. They have to have it." Thus, altering our approach to governance and our mindset on criminality may be the only effective means of eliminating this addiction and the behavior it inspires.

Reform should also be instituted that limits the ability for law enforcement agents to seize property in the first place. For example, informants often receive money for information that will lead to a successful forfeiture. This incentive system can only increase the amount of unreliable information, allowing innocent citizens to be targeted on the basis of such tips.

In fact, the current system provides a disincentive for the acquisition of reliable information. For example, a landlord who discovers illegal activity in his building may want to report it to the police. Because the entire building may be subject to forfeiture and because the owner with knowledge will normally have no defense to the loss of his interest in the property, he has a disincentive to assist the police in the discovery of illegal behavior. Caught in a Catch-22, he may often decide not to report.

One final reform which might help to eliminate the enforcers’ addiction involves the elimination of the financial incentives which encourage overuse and abuse of the asset forfeiture system. Seizing agencies normally retain the cash or profits from the sale of property forfeited. Law enforcement agencies have consistently opposed reforms of forfeiture laws because of the enormous profits forfeitures bring to their departments. Their survival and growth become dependent on the revenue that then makes forfeitures a self-perpetuating process in which the need to seize is insatiable. This is the nature of all bureaucracies.

When enforcement agencies perceive the existence of real threats of reform, they have even attempted to adopt measures disguised as reform, as a self-preservation technique, to quell an imminent threat of more drastic reform. Minor reform creates a facade of change, calming the opposition and allowing the agency to begin expanding its powers once again.

Eliminating the incentive created when law enforcement is permitted to keep the spoils of its forfeitures, however, may only create additional problems. The money gained through seizures necessarily must be shifted somewhere, thus someone will always maintain an incentive to perpetuate the current system of forfeiture law which makes owner recovery difficult. Representative John Conyers has proposed shifting the money to drug abuse treatment and the Missouri legislature has shifted the proceeds to education. Wherever the money goes, there will always be a political constituency employing the rent-seeking process to encourage legislatures to maintain and expand the forfeiture system. Legislatures can, in turn, influence law enforcement by making their budgets contingent upon the number of forfeitures performed. Given the realities of the legislative and lobbying process, the incentive for law enforcement to vigorously seize property, therefore, is not likely to diminish. Institutional forces are at work that cannot be cured by merely shifting the pool from which the incentives are created.

Though no significant property seizure reform effort appears to be occurring in Michigan, many of the types of reform options discussed in this section are occurring in various federal legislative efforts to inject greater property protections into the system. Though many reforms help to protect liberty, they should at least be approached with a watchful eye and should not divert our attention from the need to eliminate the roots of the perverse institutional incentives that have surfaced.