Amicus Curiae Brief — Ethicon, Inc. v. Eisenmenger

Supreme “ourt, US |

Fii. E ®

Aus 7 a5

OFFME & wc Uk

——— i

In The

Supreme Court of the United States

October Term 1995

.

TINA B. BENNIS,

Petitioner,

STATE OF MICHIGAN ex rel. WAYNE

COUNTY PROSECUTOR,

Respondent.

— ¢

On Writ Ot Certiorari To The

Michigan Supreme Court

+

BRIEF OF THE INSTITUTE FOR JUSTICE

AS AMICUS CURIAE IN SUPPORT OF PETITIONER

+

INSTITUTE FOR JUSTICE

*WituaM H. Me tor III

Cunt Bouck

Scott G. BuLLock

1001 Pennsylvania Avenue, NW

Suite 200 South

Washington, DC 20004

(202) 457-4240

Attorneys for Amicus Curiae

*Counsel of Record

COCKLS LAay SEP PeRTIp SS OD, Gee ibenes

OR CALL COLLECT (402) 342-283

TABLE OF CONTENTS

Page

INTEREST OF AMICUS CURIAE .................. 1

SE GO MI eh Se Piws ccc cceccdscccccstes 1

SUMMARY OF ARGUMENT....................... 3

PEGE WS wha Peete Feb ct Peis nccvidoeees 4

5.

Il.

THE GOVERNMENT’S ZEALOUS USE OF

CIVIL FORFEITURE LAWS, AND THEIR

APPLICATION TO INNOCENT PROPERTY

OWNERS, SERIOUSLY UNDERMINES PRI-

VATE PROPERTY RIGHTS. ...................

ALTHOUGH CIVIL FORFEITURE IS A CENTU-

RIES-OLD DOCTRINE, IT HAS BEEN

RELEASED FROM ITS HISTORICAL MOOR-

INGS AND IS NOW USED IN A VARIETY OF

INAPPROPRIATE CONTEXTS. ................

THE APPLICATION OF CIVIL FORFEITURE TO

INNOCENT PROPERTY OWNERS VIOLATES

THE DUE PROCESS CLAUSE OF THE FOUR-

TEENTH AMENDMENT AND THE TAKINGS

A. Unless An Owner Negligently Entrusts His

Property To Another, The Forfeiture of An

Innocent Owner’s Property Is Unduly

ye Ain: And Violates The Due Process

Clause Of The Fourteenth Amendment. ...

B. Forcing Ms. Bennis To Bear The Costs of

Addressing Urban Problems When She Is

Entirely Innocent Of Wrongdoing Violates

The Takings Clause Of The Fifth Amend-

14

15

ii

TABLE OF AUTHORITIES

Page

Cases

Armstrong v. United States, 364 U.S. 40 (1960)..... 20, 21

Austin v. United States, 113 S. Ct. 2801 (1993)..3, 14, 20

Calero-Toledo v. Pearson Yacht Leasing Co., 416 U.S.

663 (19FO)... oo ccscccccccccccscansaveueueneneee passim

Dolan v. City of Tigard, 114 S. Ct. 2309 (1994)......... 6

Eide v. Sarasota, 908 F.2d 716 (11th Cir. 1990)........ 15

In re Metmor Financial, 819 F.2d 446 (4th Cir. 1987) .... 22

Lucas v. South Carolina Coastal Council, 112 S. Ct.

2886 (1992)... cccccccccccscavdeuacnseneenenn nae 24

Marshall v. Jerrico, Inc., 446 U.S. 238 (1980).......... 13

Miller v. United States, 78 U.S. (11 Wall.) 268 (1871) .... 10

Monroe Savings Bank v. Castalano, 733 F. Supp. 595

(W.D.N.Y. 1990) ..ccccccccctosctessie neuen . 22

Moore v. City of East Cleveland, 431 U.S. 494 (1977) 15

National Board of Y.M.C.A. v. United States, 395 US

85 (1969) 21

Nollan v. California Coastal Commission, 483 US

R25 (1 9R7) 21

Norris v. Doniphan, 61 Ky. (4 Met.) 385 (1863)

People ex rel. Arcara 0 Clowd Books, Inc. 480 2d

NE

1oRo (NY 1085 rev 2d om otmer grounds “seus

*)

iii

TABLE OF AUTHORITIES - Continued

Page

Sinaloa Lake Owners Association v. City of Simi Val-

ms a 882 F.2d 1398 (9th Cir. 1989), ae denied sub

nom. Doody v. Sinaloa Lake Owners Association,

110 S. Ct. EE EE ee 15

Sinclair v. Croom, 8 S.E.2d 834 (N.C. 1940)........... 19

State ex rel. Carrol v. Gatter, 260 P.2d 360 (Wash.

EE SS EE EEET OTT ETETTTT TATE TT 23

State ex rel. W Cty. Prosecutor v. Bennis, 447

td eeeadcinad de deneccncsescccece 2, 23

The Palmyra, 25 U.S. (12 Wheat.) 1 (1827) ............ 8

Tumey v. Ohio, 273 U.S. 510 (1927) ...............5.. 13

United States v. Brig Malek Adhel, 43 U.S. (2 How.)

ae wn nn ccncecccccese: 9, 10

United States v. One 1936 Model Ford V-8 Deluxe

eG ES 11

U.S. v. One 1957 Rockwell Aero Commander, 671 F.2d

Ee ek eee ees ocncecee cece: 16

U.S. » $6,700, 615 F.2d 1 (ist Cir. 1980) 16

LULS. & james Daniel Good Real Property, 114 S. Ct

492 (1993) 5. 6, 11, 13

US. & Ome Mercedes Benz 380 SEL. 604 F Supp

1M7 SDNY 1984) 16

Ward o Village of Monroeville, 9 US 5S’ (1972) 13

StaruTss

Act of August 4. 1790. | Seat 145 8

Act of August 6 1861. 12 Stat 319

iv

TABLE OF AUTHORITIES ~- Continued

Page

Act of July 17, 1862, 12 Stat. 589...........6-eeeeees 10

Act of July 31, 1789, 1 Stat. 29.......... cece eee eeeees 8

Civil Asset Forfeiture Reform Act of 1995, H.R.

1916, 104th Cong., Ist Sess... ... 6.6.66 e cece eeeeeee 6

Michigan Comp. Laws § 600.3801 ...........-+++0055 1

MISCELLANEOUS

Boudreaux & Pritchard, Civil Forfeiture and the War

on Drugs: Lessons from Economics & History

(forthcoming). ......cccccccccccccccecccecceseccees 12

Brazil & Berry, Tainted Cash or Easy Money?,

Orlando Sentinel Trib., June 14-15, 1992.......... 5, 6

Buchanan, Constitutional Economics (1991)............ 12

Bullock, Filling the Coffers with Civil Forfeitures,

Legal Times, Nov. 1, 1993 ..........--ceeeeeeeeeees 5

Epstein, Takings: Private Property and the Law of

Banieged Daememsite CGE: <cccccccccccsceeccoasceseecs 21

Franze, Casualties of War?: Drugs, Civil Forfeiture

and the Plight of the Innocent Owner, 70 Notre

Demme L. Hav. SEP (RPS Es ccccccoccoceseccesequseées 5

Gordon, Prosecutors Who Seize Too Much and the

Theories They Love: Money Laundering, Facilita-

tion, and Forfeiture, 44 Duke L.J. 744 (1995)......... 5

Hart, Variety of Responsibility, 83 Law Q. Rev. 346

TROGPD . oc cnccesvecctecseuteanbasedeetsassusbeensann 17

Holmes, The Common Law (1881) ..............eeeeee: 7

Hyde, Forfertting Our Property Rights: Is Your Prop-

erty Safe From Seizure? (B90G) 0. cicccccccvccccccese 5

Vv

TABLE OF AUTHORITIES - Continued

Lee & Lindahl, Modern Tort Law (1990).............. 25

Maxeiner, Bane of American Forfeiture Law — Ban-

ished at Last? 62 Corn. L. Rev. 768 (1977) ....7, 8, 10

Piety, Scorched Earth: How the Expansion of Civil

Forfeiture Doctrine Has Laid Waste to Due Process,

& VU. Balam L.. Baw. GER CRORE) . ccc cc ccscccccess 8

Pilon, Can American Asset Forfeiture Law Be Justi-

fied?, 39 N.Y. L. Rev. 311 (1994).................... 5

Pratt & Petersen, Civil Forfeiture in the Second Cir-

cuit, 65 St. John’s L. Rev. 653 (1991) ............... 4

Reed, American Forfeiture Law: Property Owners

Moot the Prosecutor, Cato Policy Analysis No.

Ped SY ED, Veedeebhbcdnsseeeseranvecesdécvecs 5

Restatement of Torts (2d) (1965) .............00.00000- 18

Schecter, Fear and Loathing and the Forfeiture Laws,

7a Caom. L. Baw. BEDE (RGRG).....ccccccccccccece. 7,17

Schneider & , Presumed Guilty: The Law’s

Victims in the War on Drugs, Pittsburgh Press,

BE, BEE OED MB ci pee Sn ccccnccctstecotecccces 6

The Federalist No. 51 (Madison) ..................... 12

INTEREST OF AMICUS CURIAE

The Institute for Justice is a nonprofit, public interest

law center committed to defending essential foundations

of a free society and securing greater protection for indi-

vidual liberty. Central to the mission of the Institute is

strengthening the ability of individuals to control their

property and advancing the belief that property rights are

intricately connected to other civil rights. The Institute’s

brief therefore critiques civil forfeiture from a property

rights perspective. It recognizes that the government's

current, aggressive use of civil forfeiture laws represents

one of the gravest threats to private property rights

today.

The Institute for Justice has obtained the consent of

the parties to the filing of this brief and letters of consent

have been filed with the Clerk.

°

STATEMENT OF FACTS

On October 3, 1988, Detroit police officers witnessed

Kathy Polarchio, a suspected prostitute, perform a sex act

on John Bennis in a 1977 Pontiac. The car, co-owned by

Mr. Bennis and his wife, petitioner Tina Bennis, was

parked on the street in a residential neighborhood. Mr.

Bennis was arrested for gross indecency. In addition, the

Wayne County prosecutor filed a complaint alleging that

the Pontiac was a public nuisance subject to abatement

under a Michigan statute providing for the abatement of

property used for the purpose of lewdness, assignation,

or prostitution. Michigan Comp. Laws § 600.3801. This

case was the first time in the seventy-year history of the

1

statute that the law had been invoked to forfeit an auto-

mobile used for the purpose of prostitution.

In the trial court, Mr. Bennis was convicted of gross

indecency. Furthermore, the trial judge held that the Pon-

tiac was a nuisance and abated the interest of Mr. Bennis

and his wife. Although the Wayne County prosecutor

conceded that Ms. Bennis had no knowledge of her hus-

band’s activities, her interest in the car was also forfeited.

In a 2-1 decision, the Michigan Court of Appeals

reversed the decision of the trial court. In a 4-3 decision,

however, the Michigan Supreme Court reversed the judg-

ment of the Michigan Court of Appeals and upheld the

forfeiture. The Michigan Supreme Court found that the

statute in question did not require Tina Bennis to have

prior knowledge of her husband’s activities. It said that

the statute “expressly obviates the requirement that an

owner consent to or acquiesce in the illegal use of prop-

erty.” State ex rel. Wayne Cty. Prosecutor v. Bennis, 447

Mich. 719, 739 (1994).

Furthermore, the Court rejected Tina Bennis’ consti-

tutional claims. Bennis had argued that because she was

an innocent owner of the automobile, the Due Process

Clause of the Fourteenth Amendment, as well as the

Takings Clause of the Fifth Amendment (as applied to the

states through the Fourteenth Amendment) precluded the

forfeiture of her interest in the Pontiac. The Michigan

Supreme Court, however, held that under the Constitu-

tion, an innocent owner’s interest may be abated so long

as the vehicle was not stolen or used without the consent

of the owner. One dissenting justice agreed with the

Court’s rejection of Bennis’ constitutional claims even

Le -

though he disagreed with its interpretation of the statute.

The opinion signed by the two other dissenting justices

did not address Bennis’ constitutional claims.

This Court has granted Tina Bennis’ petition for cer-

tiorari to hear the issues of whether the Michigan statute

and its application to Ms. Bennis violates the Due Process

Clause of the Fourteenth Amendment and the Takings

Clause of the Fifth Amendment by permitting the forfei-

ture of an innocent owner’s property.

¢

SUMMARY OF ARGUMENT

Private property rights form the foundation of a free

society. The ability of government to forfeit the property

of wholly innocent owners strikes at the core of the

constitutional right to own and control property.

Although civil forfeiture has roots in common law and

was incorporated into early American law, it was origi-

nally viewed as an extraordinary power that arose from

the necessities of enforcing admiralty and customs laws.

At the federal and state levels, today’s forfeiture practices

far exceed the limited forfeiture power at common law.

The State of Michigan deprived Ms. Bennis of her

property even though she committed no wrong and had

no knowledge of the illegal use of her property. Current

Michigan law provides no recourse for innocent owners.

This Court should adopt as law the language in Calero-

Toledo v. Pearson Yacht Leasing Co., 416 U.S. 663 (1974) and

Austin v. United States, 113 S.Ct. 2801 (1993) that the

forfeiture of property held by truly innocent owners is

unduly oppressive and violates the Due Process Clause of

the Fourteenth Amendment. Furthermore, the law should

not place affirmative obligations on individuals to police

the actions of third parties. Rather, the burden should be

on the government to demonstrate that an owner negli-

gently entrusted property to another in order to expose

that individual to civil forfeiture.

The forfeiture of Ms. Bennis’ rights in the automobile

of which her husband was a co-owner also constitutes a

taking of private property without just compensation.

The cost of solving urban problems cannot, consistent

with the Takings Clause, be thrust upon innocent prop-

erty owners such as Ms. Bennis. Nor can the state escape

takings liability by distorting common law nuisance prin-

ciples and characterizing the single illegal use of an auto-

mobile as a “public” “nuisance.”

.

ARGUMENT

I. THE GOVERNMENT'S ZEALOUS USE OF CIVIL

FORFEITURE LAWS, AND THEIR APPLICATION

TO INNOCENT PROPERTY OWNERS, SERIOUSLY

UNDERMINES PRIVATE PROPERTY RIGHTS.

In reviewing the state of contemporary civil fortet-

ture law, Judge John Pratt of the United States Court of

Appeals for the Second Circuit astutely commented that

the forfeiture power generates a conflict between two

fundamental principles of American law: “(1) that crime

does not, or at least should not, pay, and (2) that property

rights are a fundamental aspect of individual freedom.”

Pratt & Petersen, Civil Forfeiture in the Second Circuit, 65

St. John’s L. Rev. 653, 655-56 (1991). Pratt concluded that

“l[ajs civil forfeiture has been used with increasing

aggressiveness, the discord between these two assump-

tions has increased to a point at which they seem unable

to coexist.” Id. at 656.

In its last decision addressing civil forfeiture, this

Court recognized the current imbalance between govern-

mental power and private property rights in the context

of civil forfeiture. Starting from first principles and rein-

serting a property rights perspective to the civil forfeiture

debate, this Court declared that “individual freedom

finds tangible expression in property rights.” U.S. v. James

Damiel Good Real Property, 114 S.Ct. 492, 505 (1993). Noting

the trampling of private property rights in the govern-

ments recent exercise of the forfeiture power, Justice

Thomas stated in Good that property rights are “central to

our heritage” and that he was “sympathetic to [the major-

ity’s| focus on the protection of ‘those] rights. " Id at

515. (Thomas, ]., concurring and dissenting)

The abuse of civil forfeiture laws, and the concom:-

tant destruction of private property mghts, has been wel!

documented in both scholarly and popular publications

Franze, Casualties of War’: Drugs, Ciml Forfeiture and the

Plight of the Innocent Owner, 70 Notre Dame L. Rev. 369

(1994); Gordon, Prosecutors Who Seize Too Much and the

Theortwes They Love: Money Laundering. Facilitation. and For

fetture, 44 Duke L. |. 744 (1995); Pilon. Can American Asset

Forfetture Law Be justified? 99 NY L. Rew 311 (1994),

Hyde, Forfeiting Our Property Rights: Is Your Property Safe

From Serzure’ (1995); Reed. American Forfetture Law Prop-

179 (Sept. 29, 1992); Bullock. Filling the Coffers arth Crm

Forfeitures, Legal Times, Now 1. 1993, Brazil & Berry

Tainted Cash or Easy Money?, Orlando Sentinel Trib., June

14-15, 1992; Schneider & Flaherty, Presumed Guilty: The

Law's Victims in the War on Drugs, Pittsburgh Press, Aug.

11-Sep. 16, 1991. Moreover, the numerous horror stories

of property owners caught in the web of government's

enormous forfeiture power has spawned “distrust of the

Government's aggressive use of broad civil forfeiture

statutes.” Good, 114 S.Ct. at 515 (Thomas, J., concurring

jissenting). Consequently, efforts are underway to

‘orm civil forfeiture laws and afford greater procedural

é mn to property owners. See Civil Asset Forfeiture

form Act of 1995, H.R. 1916, 104th Cong., Ist Sess.

— lune 22. 1995)

nstant case, however, does not con-

jing greater procedural protections in order to

rom the imnocent in civil forfeiture

nstant case addresses whether the

sxesthonably mnocent owner can be

--— = -—* .% co > . .

‘ é hecause that property was

through no fault of the

Ren nis aims that the forfeiture of

rormomie she co-owned with her

vw Process Clause of the Four-

the Takings Clause of the Fifth

‘as recogruzed that property

: ‘ose ‘ Ms Benmis. should not be

fa poor relahon im comparison

nal rughts. See Dolan ov City of Tigerd

794) The Michigan Supreme Court

mandate in an anc undermined

Il. ALTHOUGH CIVIL FORFEITURE IS A CENTU-

RIES-OLD DOCTRINE, IT HAS BEEN RELEASED

FROM ITS HISTORICAL MOORINGS AND IS

NOW USED IN A VARIETY OF INAPPROPRIATE

CONTEXTS.

The forfeiture power has roots in common law and

even predates the founding of this country. Early forfei-

tures, however, were of limited use and application.

Property owners in the twentieth century have witnessed

the virtually unbounded expansion of civil forfe**ture

laws far beyond their common law origins. Therefore, it

is important to explore the history of civil forfeiture in

order to distinguish between constitutional applications

of a long-established, limited governmental power and

unwarranted and unconstitutional applications of its

vastly expanded incarnation.

In his seminal work, The Common Law, Oliver Wen-

dell Holmes traced the origin of American civil forfeiture

law to the ancient law of deodands.' For several decades,

Holmes’ historical view of civil forfeiture prevailed.?

However, recent scholarship disputes Holmes’ perspec-

tive. Schecter, Fear and Loathing and the Forfeiture Laws, 75

Corn. L. Rev. 1151, 1154 (1990) (hereinafter “Schecter”);

Maxeiner, Bane of American Forfeiture Law — Banished at

! Deodand, derived from the Latin “deo dandum,” means

“to be given to God.” Pearson, 416 U.S. at 681. It represents the

oldest form of civil forfeiture and embodied the notion that the

“thing” was guilty of illegal activity.

2 This Court in Pearson relied in part on Holmes’ history of

the rise of American forfeiture law. Id. at 681.

Last?, 62 Corn. L. Rev. 768, 772 (1977) (hereinafter “Max-

einer”). According to this scholarship, American forfei-

ture law arose not from ancient deodand law, but from

English admiralty procedures. Piety, Scorched Earth: How

the Expansion of Civil Forfeiture Doctrine Has Laid Waste to

Due Process, 45 U. Miami L.Rev. 911, 935-42 (1991).

Early American forfeiture statutes trace their origins

to the British Navigation Acts of the mid-1600s. The Acts

were passed during England’s vast expansion as a mar-

itime power. The Acts required imports and exports from

England to be carried on British ships. If the Acts were

violated, the ships or the cargo on board could be seized

and forfeited to the crown regardless of the guilt or

innocence of the owner.®

Using the British statutes as a model, the first United

States Congress passed forfeiture statutes to aid in the

collection of customs duties, which provided 80-90% of

the finances for the federal government during that time.

Act of August 4, 1790, 1 Stat. 145; Act of July 31, 1789, 1

Stat. 29; Maxeiner, 62 Corn. L. Rev. at 782 n.86. Civil or

“in rem” forfeitures were introduced in American law

through these early customs statutes. The forfeiture

power was challenged and upheld in The Palmyra, 25 U.S.

(12 Wheat.) 1 (1827). The owner of a shipping vessel

asserted that an in rem forfeiture could not occur unless

> Although the Acts were worded in absolute terms, juries

nevertheless acquitted shipowners if it could be shown that they

had taken all reasonable steps to ensure that the ship not be

used for illegal purposes. Maxeiner, 62 Corn. L. Rev. at 774.

he was convicted of criminal wrongdoing. However, Jus-

tice Story held that the “proceeding in rem stands inde-

pendent of, and wholly unaffected by any criminal

proceeding in personam.” Id. at 15. Consequently, “[t]he

thing is here primarily considered as the offender, or

rather the offence is primarily attached to the thing... . ”

Id. at 14. Despite the sweep of the Palmyra language, it is

clear from a careful reading of the case that the holding

was plainly limited to in rem forfeitures under the admi-

ralty jurisdiction.

This Court clarified the government's forfeiture

power in the landmark case, United States v. Brig Malek

Adhel, 43 U.S. (2 How.) 210 (1844). The case presented the

question of whether an innocent owner of a ship could

have his property forfeited due to the illegal and

unauthorized acts of the master. Justice Story, once again

writing for the majority, upheld the forfeiture under the

same rationale developed in The Palmyra.

The most important aspect of these early forfeiture

cases is the justification provided for the expansion of

civil forfeiture to innocent property owners. This Court

held that the forfeitures were closely tied to the func-

tional necessities of enforcing admiralty, piracy, and cus-

toms laws. In rem forfeiture permitted courts to obtain

jurisdiction over property when it was virtually impossi-

ble to obtain in personam jurisdiction over the property

owners. Therefore, the government could ensure that cus-

toms laws were enforced even if the owner of the ship or

the cargo was outside the court's jurisdiction. Justice

Story wrote that the “vessel which commits the aggres-

sion is treated as the offender, as the guilty instrument or

0

‘Tung amech the *orterture attaches etthowt amy reter-

ence whetsoever to the Character of conduct of the

~wner” Sng Malet Adhel 43 US at 133 Howewer, Story

usnhhed <a nr ‘ortertures fromm the secesssty of the case. as

‘he omy adequate means of suppressang the offence or

a7ong of nmsumng am ndemmnrty to the apured party

eTDMNass se0ced

noormngs turng the wl Were "he omfieceter Act

wed che mon to seune and tortest che cebeis North

om property and the property of those wie anded te

uederacy Act of july '7 1982. 12 Soe SP A a

4uguset 56. > Set 9? lp 1888 the Sepeeee Cour

‘ RLertecky de are’ fe Ao" Goons? rene and pres

ently omeerwed ther tihese © oe preceeding: mney

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(oh = oe actpon «evtiyoatt commtttuteema iettetee FF o

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decessors. Twenneth century ows tortertures are part ©

arge’ governmenta: efforts to siimunete andes atr

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ssue in this Court's decision upholding civil Traditionally, the forfeiture power was narrowly lim-

©. Calero-Tolede - is within the traditional admi- ited in ways that prevented government from violating

fomann of m rem forfeiture individual rights. As the forfeiture power has strayed

from its historical and common law moorings, govern-

' the traditonal justifications for civil forfei- ments now use this power without built-in safeguards

7 " tye instant case. If Ms. Bennis were guilty of and in violation of the Constitution.

» "ome some or neghgently entrusted her property to

' amother the government could easily obtain in

m ower her for the issuance of an

rimnal penalty. Furthermore, the state

"eg rewenve laws when it forfeited the

fomomee [t ts more likely that the State of

© many other jurisdictions today, was using

wer to generate unappropriated reve-

‘rough the expropriation of private “auxiliary precautions,” or the constitutional restraints

designed by the Framers to protect individuals from unwar-

ranted or abusive government actions. /d.

When public officials and agencies have a direct financial

sicressing the general constitu- stake in the outcome of their actions, this Court has subjected

~ure thes Court held that forfeiture did such actions to particularly close scrutiny. Tumey v. Ohio, 273

« Process Clause of the Fourteenth Amend- U.S. 510 (1927) (overturning fine where mayor, who also sat as

“© assumpnhon that forfeitures were “not judge, personally received share of the fines); Ward v. Village of

erested private parties” Calero-Toledo, 416 Monroeville, 409 U.S. 57 (1972) (due process violated where sub-

_ es essutmed that forfertures are carned stantial portion of town’s income came from fines imposed by

7. ‘caals acting mm the public, as opposed to town mayor sitting as judge); Marshall v. Jerrico, Inc., 446 U.S.

238, 250 (1980) (constitutional concerns raised when govern-

monor moerning government officials ment official's “judgment will be distorted by the prospect of

es ‘hat influence all government dec: institutional gain as a result of zealous enforcement efforts”);

surmpnor « especally musplaced m civil Good, 114 S.Ct. at 502 (constitutional considerations arise where

_ ~ efor ement agenoes keep a percentage of “the Government has a direct pecuniary interest in the outcome

= recweds indrveduals. whether they act in of the proceeding”). The current institutional arrangement and

* <0 meres end to promote their own self incentive structure behind civil forfeiture demand that the

wetrtutsomal Ecomomacs 37-38 (1991), Bou property rights of innocent owners be protected. Accordingly,

reeture and the War on Drugs Lessons this Court should discard the Calero-Toledo holding that civil

rthcomung). see also The Federairs: forfeiture is not initiated by self-interested parties and instead

acura onmentamon goverr consider the constitutional! claims of innocent property owners,

~>at Madison described as such as petitioner in the instant case.

14

Ill. THE APPLICATION OF CIVIL FORFEITURE TO

INNOCENT PROPERTY OWNERS VIOLATES

THE DUE PROCESS CLAUSE OF THE FOUR-

TEENTH AMENDMENT AND THE TAKINGS

CLAUSE OF THE FIFTH AMENDMENT.

This Court in Pearson recognized, albeit in dicta, two

instances where the application of civil forfeiture to inno-

cent owners may raise serious constitutional concerns:

forfeitures where the wrongdoer obtained the property

without the consent of the owner and those situations

where an innocent owner demonstrated not only that he

was unaware of the property’s illegal use, but that he had

done all that could reasonably be expected to prevent its

illegal use. Id at 689. In those situations, it would be

difficult to conclude that the forfeiture was not “unduly

oppressive.”” Id. at 690. The instant case squarely pre-

sents one of the situations alluded to in Pearson — the case

of the entirely innocent owner. This Court should adopt

as law, with the modifications outlined below, the Pearson

dicta. As the following sections set forth, the nuisance

abatement statute’s lack of any “innocent owner” excep-

tion to forfeiture violates both the Due Process Clause of

the Fourteenth Amendment and the Takings Clause of the

Fifth Amendment to the United States Constitution.

7 Likewise, this Court in Austin, 113 S.Ct. at 2809, reiterated

the Pearson dicta by declaring that forfeitures have never been

applied “when the owner had done all that reasonably could be

expected to prevent the unlawful use of his property.”

15

A. Unless An Owner Negligently Entrusts His

Property To Another, The Forfeiture of An

Innocent Owner’s Property Is Unduly Oppres-

sive And Violates The Due Process Clause Of

The Fourteenth Amendment.

The Due Process Clause protects individuals from

malicious, arbitrary, and irrational deprivations of prop-

erty. Moore v. City of East Cleveland, 431 U.S. 494 (1977);

Eide v. Sarasota, 908 F.2d 716 (11th Cir. 1990); Sinaloa Lake

Owners Ass‘n v. City of Simi Valley, 882 F.2d 1398 (9th Cir.

1989), cert. denied sub nom. Doody v. Sinaloa Lake Owners

Ass'n, 110 S.Ct. 1317 (1990). Not providing innocent

owners any relief whatsoever from the application of civil

forfeiture laws results in arbitrary and “unduly oppres-

sive” forfeitures in violation of due process guarantees.

See Pearson, 416 U.S. at 689. If there were ever an example .

of an “unduly oppressive” forfeiture, it is the forfeiture of

Ms. Bennis’ interest in the automobile of which her hus-

band was a co-owner. Ms. Bennis is, unquestionably, an

innocent owner; she had absolutely no knowledge of, nor

did she consent to, her husband’s illegal use of their

property. Current Michigan law, however, provides no

recourse for innocent owners such as Ms. Bennis.

Because the Pearson language setting forth what

would constitute an “unduly oppressive” forfeiture was

dicta, several courts, including the Michigan Supreme

Court, have refused to provide any relief to innocent

owners. At a minimum, this Court should adopt as law

the Pearson dicta in order to prevent “unduly” oppressive

forfeitures such as the forfeiture of Ms. Bennis’ auto-

mobile.

16

Even when courts have applied the Pearson dicta,

however, the lack of clarity concerning what constitutes

reasonable steps a property owner must take to prevent

the illegal use of his property has led to particularly

harsh applications of the forfeiture power. See, e.g., U.S. v.

One 1957 Rockwell Aero Commander, 671 F.2d 414 (10th Cir.

1982) (upholding forfeiture of an aircraft for non-compli-

ance with Customs Service regulations even though air-

craft was stolen and owner was unaware of its activities);

U.S. v. $6,700, 615 F.2d 1 (1st Cir. 1980) (affirming forfei-

ture of cash brought into United States illegally even

though the cash was embezzled from the owner’s estate);

U.S. v. One Mercedes Benz 380 SEL, 604 F. Supp. 1307

(S.D.N.Y. 1984) (upholding forfeiture of an automobile

used in drug transaction even though car had been

loaned to third person in whose care owner had left the

car and owner had no knowledge of drug activity). As

these cases and many others demonstrate, a strict inter-

pretation of the Pearson suggestion that a private party

must take “all” reasonable precautions against illegal use

places both onerous and vague duties on private parties

to pro-actively police the actions of others.

Such a burden is especially troubling in the context of

family relationships, where the government has tradi-

tionally not intervened to impose obligations on family

members to probe into the activities of one another.

indeed, it would be difficult to imagine any steps Ms.

Bennis could have reasonably taken to prevent the illegal

use of her property when she had no previous knowledge

© reason to believe that her property was going to be

sed illicitly What precautions should a woman take

before letting her heretofore law-abiding husband use the

17

family car? Even outside the special context of a mar-

riage, if a property owner has no knowledge or reason to

believe that someone will engage in illegal activity with

particular property, then why would one take steps to

prevent its illegal use?

Other innocent owners, such as mortgagees, pur-

chasers, lessors, and landlords also have to walk a very

fine line. They subject themselves, on the one hand, to

possible physical harm or legal action (by prying too

closely into the affairs of others) or, on the other hand,

the possible forfeiture of valuable property (by not pry-

ing closely enough). Moreover, the imposition of affirma-

tive law enforcement obligations on private parties runs

counter to traditional Anglo-American criminal law doc-

trine that has refused to place such duties on individuals.

Hart, Variety of Responsibility, 83 Law Q. Rev. 346, 354-55

(1967). Innocent property owners “should not forfeit their

property for failing to act as a private police force which

searches every person who borrows, leases, or is invited

into a vehicle.” Schecter, 75 Corn. L. Rev. at 1180.

In order to prevent the application of civil forfeiture

to unquestionably innocent owners, this Court should

adopt the Pearson dicta as a constitutional rule. However,

the Pearson rule should be clarified and strengthened by

adopting a rule of negligent entrustment when forfeiture

is used against innocent owners.* Drawn from traditional

* Indeed, this Court already has suggested such a rule

Sumilar to the negligent entrustment rule for civil forfeiture

suggested in the instant case, the Austin decision stated tha

holding the owner “accountable for the wrongs of others to

whom he entrusts his property” rests “on the notion that the

-

18

common law tort principles, the negligent entrustment

doctrine holds:

It is negligence to permit a third party to use a

thing .. . which is under the control of the actor,

if the actor knows or should know that such

person intends or is likely to use the thing . . . in

such a manner as to create an unreasonable risk

of harm to others.

Restatement of Torts (2d) § 308 (1965). As petitioner’s brief

more substantially sets forth, the substitution of the

words “in such a manner as to create an unreasonable

risk of harm to others” with the words “in a manner

proscribed by law” establishes a reasonable rule of care

when property owners allow their property to be used by

others.

The negligent entrustment doctrine would provide

clear guidance to lower courts where, as in the instant

case, forfeiture statutes provide no relief for innocent

owners. Under this doctrine, Ms. Bennis clearly did not

negligently entrust her property to her husband. There is

no evidence that Ms. Bennis “should have known” that

her car would be used by her husband for illegal pur-

poses. She never knew her husband to engage in such

conduct in the past nor did she have any reason to

suspect he was going to engage in such conduct that

night. Furthermore, since Mr. Bennis had equal access

and “control” over the vehicle and did not have to seek

owner has been negligent in allowing his property to be mis-

used and that he is properly punished for the negligence.” 113

S.Ct. at 2809.

19

his wife’s consent to use the car, Ms. Bennis could not

have taken reasonable steps to prevent its misuse.

Accordingly, the state has not met its burden of justifying

the forfeiture of Ms. Bennis’ property either under the

Pearson dicta language or the negligent entrustment doc-

trine.?

Without an innocent owner exception, the Michigan

nuisance abatement statute deprives individuals of prop-

erty without due process of law in violation of the Four-

teenth Amendment. Recognizing the inherent unfairness

of a rule which deprived individuals of property without

regard to wrongdoing or negligence, the Supreme Court

of North Carolina de-rlared that

a law which requires such a person at all times

to know what is being done with his property, in

other words, by the act of sale or lease to make a

public guaranty that it shall at all times be used

for a legitimate purpose, is opposed to common

experience and the necessity of commercial and

social intercourse, and is so obviously unjust as

to be arbitrary.

Sinclair v. Croom, 8 S.E.2d 834, 836 (N.C. 1940). Further-

more, the Pearson suggestion that an owner must take

“all” reasonable precautions imposes a far too onerous

% The Pearson dicta implies that property owners have the

burden of proving that they took all reasonable steps to prevent

the illegal use of their property. As petitioner’s brief more sub-

stantially sets forth, the negligent entrustment rule would place

the burden on the government to demonstrate that an owner

negligently allowed another to use his property for illegal pur-

poses.

20

burden on property owners and provides extremely nar-

row relief. The negligent entrustment doctrine provides a

workable rule when innocent owners are swept up in

civil forfeiture proceedings.

B. Forcing Ms. Bennis To Bear The Costs of

Addressing Urban Problems When She Is

Entirely Innocent Of Wrongdoing Violates The

Takings Clause Of The Fifth Amendment.

In addition to violating due process guarantees, the

application of Michigan’s nuisance abatement statute to

innocent property owners such as Ms. Bennis constitutes

a taking of private property without just compensation in

violation of the Fifth and Fourteenth Amendments to the

United States Constitution. While this Court held that the

forfeiture in Pearson did not constitute a taking, it left

open the question, later reiterated in Austin, of whether

“forfeiture of a truly innocent owner’s property” would

comport with the Constitution. Austin, 113 S.Ct. at 2809.

In the instant case, it is undisputed that Ms. Bennis acted

neither criminally nor negligently with her property. In

other words, she is a “truly innocent owner[].” Id. How-

ever, the Michigan nuisance abatement statute offers no

relief or exception for innocent property owners.

The Fifth Amendment to the United States Constitu-

tion states that “private property shall not be taken for

public use without just compensation.” Central to the

requirements of the Takings Clause is this Court’s hold-

ing that private parties cannot be forced to bear costs that

should in fairness and justice be borne by the public.

Armstrong v. United States, 364 U.S. 40, 49 (1960); see also

21

Nollan v. California Coastal Commission, 483 U.S. 825, 837

(1987); Epstein, Takings: Private Property and the Law of

Eminent Domain 42-44, 182-94 (1985). Significantly, the

plaintiff in Armstrong, like Ms. Bennis, was an innocent

owner. Armstrong was a subcontractor who furnished

material to a shipbuilding company. He attached valid

liens to the products he provided. The shipbuilding com-

pany had a contract with the government. When the

company went bankrupt, the government demanded and

secured the ships under its contract. The government

prevented Armstrong, however, from foreclosing on his

valid liens.

This Court held in Armstrong that while the govern-

ment was certainly entitled to foreclose and destroy liens,

it had to compensate the lienholders. Similarly, if the

government chooses to forfeit the Bennis automobile to

further the public purpose of law enforcement and

“cleaning up” Detroit, then it must compensate innocent

parties, like Ms. Bennis, who hold an interest in the

property. As discussed in Part A of this section, the

forfeiture of Ms. Bennis’ interest serves no remedial or

punitive purpose to take it outside the protection of the

Fifth Amendment’s Takings Clause. Furthermore, Ms.

Bennis was not the “intended beneficiary” of the govern-

ment action in this case. See National Board of Y.M.C.A. v.

United States, 395 U.S. 85 (1969) (no taking if government

destroys property when it acts primarily in defense of

plaintiffs’ property rather than primarily for public

good). Rather, the forfeiture of Ms. Bennis’ property

rights is a taking of property for a public purpose without

the payment of just compensation. As an unquestionably

innocent third party, Ms. Bennis should not bear the

22

financial burden of law enforcement activities designed

to address urban problems.

The destruction of an innocent owner’s interest has

been considered a violation of the Takings Clause in other

contexts. For instance, in In re Metmor Financial, 819 F.2d

446, 450 (4th Cir. 1987), the United States Court of

Appeals for the Fourth Circuit held that the forfeiture of

property could not change the nature of an innocent

mortgagee’s rights. The court held that “if viewed from

the perspective of a Fifth Amendment taking, for which

[an innocent owner] is entitled to ‘just compensation’ -

typically defined as ‘fair market value of the property on

the date it is appropriated’ —- the government must pay

[the innocent owner] the fair market value of the mort-

gage. ...” Id. at 450; see also Shelden v. United States, 7

F.3d 1022 (Fed. Cir. 1993); Monroe Savings Bank v. Cas-

talano, 733 F. Supp. 595 (W.D.N.Y. 1990). The court further

held that “the government can succeed to no greater

interest in the property than that which belonged to the

wrongdoer whose actions have justified the seizure.” Id.

at 448-49. Likewise, the government in the instant case

should not be allowed to deprive innocent third parties,

such as Ms. Bennis, of any legitimate interests in the

property.

Nor can the government escape the requirements of

the Takings Clause merely by characterizing the forfei-

ture as an abatement of a nuisance. Only a single act of

prostitution occurred in the Bennis car. A majority of the

Michigan Supreme Court, however, ruled that the car was

transformed into a nuisance because it occurred in a

neighborhood allegedly known as an area frequented by

those soliciting prostitutes.

23

Chief Justice Cavanaugh’s dissent clearly demon-

strates how the majority twisted the traditional rights and

responsibilities of property owners in an effort to address

an urban problem. Bennis, 44 Mich. at 744-51. At common

law, property could, under specific and limited circum-

stances, be declared a nuisance. 58 Am.Jur.2d, Nuisances,

§ 77. However, nuisance has always involved “continuity

or recurrence” of an offending practice. People ex rel.

Arcara v. Cloud Books, Inc., 480 N.E.2d 1089, 1095 (N.Y.

1985), rev'd on other grounds, 478 U.S. 697 (1986) (nuisance

is “a consistent pattern of conduct sufficient to prove that

the premises are being employed for a proscribed use”).

Under the common law, a “place” becomes a nuisance

when it has “absorbed and taken the character of the acts

committed.” State ex rel. Carrol v. Gatter, 260 P.2d 360, 364

(Wash. 1953).

The Michigan Supreme Court deviated widely from

the common law definition of a nuisance when it

attempted to demonstrate the continuity of supposed nui-

sance-like acts in a particular neighborhood or “place”

where prostitution occurs. However, it was the auto-

mobile and not the neighborhood that was forfeited.

Under the Michigan Supreme Court’s logic, property

rights are determined by the area in which property

happens to be located. If a property owner is unfortunate

enough to have property located in an area where “lewd-

ness” occurs on a regular basis, then his rights are signifi-

cantly diminished under the Michigan court’s novel and

unprecedented approach to property rights. Indeed,

under this view of property rights, a respectable hotel

that happens to be located in a neighborhood that has

“declined” could be forfeited if a single act of prostitution

24

occurred in one of the rooms without the knowledge of

the owner. That same act of prostitution could occur in a

more upscale neighborhood, however, and the hotel (or

automobile) could not be forfeited under the Michigan

Supreme Court’s rule.

These common law understandings of nuisance ~ and

the Michigan Supreme Court’s departure from them ~ are

significant in light of this Court’s decision in Lucas v.

South Carolina Coastal Council, 112 S.Ct. 2886 (1992). Lucas

recognized that a taking cannot be excused merely by a

legislature or a court attaching the nuisance label to the

government action:

Any limitation [on property] so severe cannot be

newly legislated or decreed (without compensa-

tion), but must inhere in the title itself, in the

restrictions that background principles of the

State’s law of property and nuisance already

place upon... ownership. A law or decree with

such an effect must, in other words, do no more

than duplicate the result that could have been

achieved in the courts — by adjacent landowners

(or other uniquely affected persons) under the

State’s law of private nuisance, or by the State

under its complimentary power to abate nui-

sances that affect the public generally, or other-

wise.

Lucas, 112 S.Ct. at 2900.

Under Lucas, a nuisance must be justified on common

law doctrines and principles rather than self-serving leg-

islation or novel judicial determinations of what consti-

tutes a nuisance. Use of the nuisance abatement statute to

forfeit Ms. Bennis’ interest in the automobile would be

extremely difficult to justify under common law nuisance

25

principles. A private party could not successfully file a

nuisance action against the automobile based upon a

single act of prostitution (although a private party could

probably successfully file such an action against a house

of prostitution that was causing significant and long-

standing problems in the neighborhood and interfering

with the owner’s use of his property). Moreover, the

automobile does not rise to the level of a public nuisance

at common law, which was generally a criminal action to

abate property uses that were injurious to the public at

large. See Lee & Lindahl, Modern Tort Law § 35.02 (1990)

(“[A] public nuisance . . . is an invasion of a right com-

mon to members of the public generally. . . . It is an

offense against the state. . . . It is a crime.”).

The Michigan Supreme Court has undermined prop-

erty rights and traditional property law principles in its

attempt to address vexing urban problems. Such prob-

lems cannot be ameliorated, however, at the expense of

private property rights. Ms. Bennis had absolutely no

knowledge of, nor did she consent to, the illicit use of the

automobile she co-owned with her husband. She should

not be punished for the behavior of her husband and,

even more importantly, the behavior of other men in a

particular neighborhood. The cost of cleaning up Detroit

cannot be thrust upon an individual who merely wishes

to retain property she rightfully owns.

SJ

26

CONCLUSION

For all the foregoing reasons, amicus curiae Institute

for Justice respectfully requests that this honorable Court

reverse the opinion below.

*Counsel of Record

Date: August 4, 1995

Respectfully submitted,

INSTITUTE FOR JUSTICE

*WituaAM H. Me tor III

Cunt Bouck

Scott G. BuLLock

1001 Pennsylvania Avenue, NW

Suite 200 South

Washington, DC 20004

(202) 457-4240

Attorneys for Amicus Curiae