Amicus Curiae Brief — Timbs v. Indiana, 139 S. Ct. 45 (2018) (No. 17-1091)

No. 17-1091

RR

IN THE

Supreme Court of the United States

TYSON TIMBS AND A 2012 LAND ROVER LR2,

Petitioners,

v.

STATE OF INDIANA,

Respondent.

ON WRIT OF CERTIORARI TO THE

INDIANA SUPREME COURT

BRIEF OF THE CHAMBER OF COMMERCE OF

THE UNITED STATES OF AMERICA AS

AMICUS CURIAE SUPPORTING

PETITIONERS

DARYL JOSEFFER BERT W. REIN

MICHAEL B. SCHON Counsel of Record

U.S. CHAMBER CAROL A. LAHAM

LITIGATION CENTER, INC. ANDREW G. WOODSON

1615 H Street NW WILEY REIN LLP

Washington, DC 20062 1776 K Street NW

(202) 463-5337 Washington, DC 20006

(202) 719-7000

brein@wil .

September 11, 2018

Counsel for Amicus

Curiae

.

-l-

TABLE OF CONTENTS

Page

TABLE OF CITED AUTHORITIES ......................... iii

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

INTRODUCTION AND SUMMARY OF THE

FITS RTA SCR 2

ee iideateinettiineinicaiieetnimmememinnnecnee 4

I. Eighth Amendment Review of State

Forfeitures and Fines Is a Constitutionally

Necessary Check on Abuse. .............................. 4

A. The Excessive Fines Clause Is Precisely

the Type of Constitutional Provision

That Should Be Incorporated. ............... 4

B. Incorporating the Excessive Fines

Clause Will Prevent Indiana, and Other

States, from Ignoring an Essential!

Element of Ordered Liberty................. 10

II. The Unchecked Proliferation of

Disproportionate Forfeitures and Revenue-

CEE EEE EEE EE EEE EEE EEE EEE EEE EE EEE EEE EEE EEE EEE EERE EEE REET

-ii-

TABLE OF CONTENTS

(continued)

Page

B. Governments Are Increasingly Misusing

Mandatory Forfeitures and Fines as

Revenue Streams Rather Than as

Proportionate Punishments for

Uncertainty Surrounding Whether They

Ill. As under Federal Law, This Court Should

Hold That a State or Local Fine Is Excessive

under the Eighth Amendment When It Is

Disproportionate to the Harm Caused by the

I cnntencniennninrctnsinuctiemmnnnes 25

ee 27

-lii-

TABLE OF CITED AUTHORITIES

Austin v. United States,

Re Se ED cxccececccecssecssensensencesesecees

Baze v. Rees,

EB Tr

Browning-Ferris Industries of Vermont, Inc.

v. Kelco Disposal, Inc.,

492 U.S. 257 (1988) ................0....cscesceeseesees

Cantwell v. State of Connecticut,

310 U.S. 206 (1940) ..............0ccccesesseeseeeeeeees

Cooper Industries, Inc. v. Leatherman

Tool Group, Inc.,

es ID cecceccssnnscrssesuseuecencensees

Ewing v. California,

C—O ae

Harmelin v. Michigan

5O1 U.S. 957 (1991) ooccccccccccsscooeeesssseeeeeeeseee

Ingraham v. Wright,

ee

In re Kemmler,

ED Ce SP IID cnccscsccrecsuvevecrnsemmesmnnanes

Page(s)

-iv-

TABLE OF CITED AUTHORITIES

(continued)

Page(a)

Kennedy v. Louisiana, 554 U.S. 407, as modified on

denial of reh’g, 554 U.S. 945 (2008)...................... 9

Levine v. United States,

8 ee 9

McDonald v. City of Chicago, Illinois,

Ee 2,4

Miller v. Alabama,

ene aoe 9

Prince v. City of New York,

tL eee 17

Robb v. Connolly,

5 TNE me 9

Robinson v. California,

eee 2

Roper v. Simmons,

ne 8

Russello v. United States,

ee 11

Schilb v. Kuebel,

GG WE . BIRe GG Bp ccccccecncsesecessccssscsvessccecces.ccssseneses 2

-V-

TABLE OF CITED AUTHORITIES

(continued)

Page(s)

Solem v. Helm,

LL Tn 7, 10, 26

United States v. Bajakajian,

ae 1, 25, 27

Weems v. United States,

4 a 4, 26

West Virginia State Board of Education v. Barnette,

EE EE eae eT ar 27

Other Authorities

Alisa Hauser, City Slaps Fines on Businesses for

Putting Signs on Windows Without Permits,

DNAInfo.com (July 28, 2017)......................cccc00000 19

Alisa Hauser and Tanveer Ali, As Sign Violations

Spike, “Erratically Enforced” Law Questioned,

DNAInfo.com (Sept. 11, 2017) ....................00000000 19

Andrew M. Kenefick, The Constitutionality of

Punitive Damages Under the Excessive Fines

Clause of the Eighth Amendment,

85 Mich. L. Rev. 1699 (1987) .....................00...00000 4

Anthony Noto, L’/PS Vows to Fight $247M Penalty

for Shipping Untaxed Cigarettes,

New York Business Journal (May 26, 2017)....... 14

-vi-

TABLE OF CITED AUTHORITIES

(continued)

Page(s)

April Leachman, When It Come to Sign Violations in

Chicago, It’s All About the Dollar Signs,

ChicagoNow.com (Sept. 11, 2017)....................... 19

Barnini Chakraborty, Despite Promises to Cut Back,

Fed and State Governments Press Asset

Forfeitures, Fox News, Jan. 30, 2018 .................. 13

Brief for Amicus Curiae Chamber of Commerce of the

United States of America in Support of Petitioner,

Endo Pharmaceuticals v. New Hampshire, No. 17-

— s § , E 13, 15

Cesare Bonesana-Beccaria, An Essay on Crimes and

TE 5

David Pimentel, Forfeitures and the Eighth

Amendment: A Practical Approach to the

Excessive Fines Clause as A Check on Government

Seizures,

11 Harv. L. & Pol’y Rev. 541 (2017) .............. 13, 14

David J. Stone, The Opportunity of Austin v. United

States: Toward A Functional Approach to Civil

Forfeiture and the Eighth Amendment,

jp SS Fe 12

Eric Blumenson & Eva Nilsen, Policing for Profit:

The Drug War’s Hidden Economic Agenda,

65 U. Chi. L. Rev. 35 (1998)........................... 12-13

TABLE OF CITED AUTHORITIES

(continued)

Page(s)

Erin Durkin, Newkirk Plaza Merchants Hit with

Fines as de Blasio Pushes City to Ease Up on

Small Businesses, N.Y Daily News,

Fk RES ae tA RR a OC 17

James Peltz, Los Angeles Seeks $1.45 Million from

Carl’s Jr. for Alleged Minimum Wage Violations,

Los Angeles Times (June 26, 2017) ..................... 18

Jennifer Henderson, Coastal Carolina Diner Sues

State Agency over Workers’ Comp Fines, Triangle

Business Journal (June 26, 2017......................... 20

Jessica Dye, NY Public Advocate Slaps City with

Lawsuit over Fines, Reuters, July 26, 2012 ...... 17

John Terzaken & Pieter Huizing, Allen & Overy,

How Much Is Too Much? A Call for Global

Principles to Guide the Punishment of

International Cartels (Spring 2013).............. 23-24

Kristen Beckman, Penalty for Lapsed Comp Coverage

Was Excessive, Court Rules, Business Insurance

a AE RI AP ars ee es 20

L. Stuart Ditzen, Are Punitive Damage Awards Too

Punishing?, Phila. Inquirer, Oct. 29, 1989.......... 24

L. S. Sealy and R J A Hooley, Commercial Law:

Text, Cases and Materials (5th ed. 2003)........... 25

-Vill-

TABLE OF CITED AUTHORITIES

(continued)

Page(s)

Less runitive Damages, Wash. Post,

SR SRE EP 22

Letter from Ohio Chief Justice Maureen O’Connor to

State Judges Wan. 29, 2018)..................cc cc ccce eee 21

Louis S. Rulli, Seizing Family Homes from the

Innocent: Can the Eighth Amendment Protect

Minorities and the Poor from Excessive

Punishment in Civil Forfeiture? 19 U. Pa. Const.

Bae Ee CETTE onicachicatininiunidncienbiiaernbemadaal 5, 7, 16, 17

Melissa Etehad, Small Business Owners in Flushing

Say the City Unfairly Targets Them, TheInk.NYC

SURE: Ti IIIT iucsitssidendndipinibinlinamiaiiidataneteiinamennaibionas 18

Michael K. Block, Optimal Penalties, Criminal Law

and the Control of Corporate Behavior,

Pe ee 24

Nicholas M. McLean, Livelihood, Ability to Pay, and

the Original Meaning of the Excessive Fines

Clause, 40 Hastings Const. L.Q. 833

SEI dinisdiinabnetismiataabsisiningehienerinadeddlianinismeseiaundnes 7, 8, 21

Office of Bill de Blasio, Report de Blasio: City

Budgets Drowning Small Businesses in Frivolous

Sy I I icici neeticeanstinbinasemssetinlen 18

-1x-

TABLE OF CITED AUTHORITIES

(continued)

Page(s)

Patrick Henry, Debate in Virginia Ratifying

Convention (June 16, 1788)................-...c00cceeeeeee000s 6

Robert O. Dawson, Sentencing Reform: The Current

Round Toward a Just and Effective Sentencing

System: Agenda for Legislative Reform. by Pierce

O'Donnell, Michael J. Churgin & Dennis E.

Curtis. New York: Praeger Publishers, 1977. pp

xvi, 88 Yale L.J. 440 (1978)...............-22-.2.2.---- 11, 12

Steven G. Calabresi & Sarah E. Agudo, Individual

Rights Under State Constitutions When the

Fourteenth Amendment Was Ratified in 1868:

What Rights Are Deeply Rooted in American

History and Tradition?, 87 Tex. L.

United States Chamber Institute for Legal Reform,

Constitutional Constraints: Provisions Limiting

Excessive Government Fines (Oct. 2015) .14, 15, 16

United States Chamber Litigation Center,

Grady v. Hunt County, Tezas......................--...---. 15

United States, Small Business Administration, Office

of Advocacy, Small Business Profile: Indiana.....24

he

INTEREST OF AMICUS CURIAE'!

The Chamber of Commerce of the United States

of America (“Chamber’) is the world’s largest business

federation. It represents 300,000 direct members and

indirectly represents the interests of more than three

million businesses and professional organizations of

every size, in every sector, and from every geographic

region of the country. An important function of the

Chamber is to represent the interests of its members

in matters before Congress, the Executive Branch,

and the courts. To that end, the Chamber regularly

files amicus curiae briefs in cases that raise issues of

concern to the nation’s business community.

The Chamber and its members have a strong

interest in ensuring a fair and predictable legal

environment across the United States.

Unfortunately, and with increasing frequency, state

and local legislatures are authorizing — and executive

officials are seeking — excessive fines and forfeitures”

for relatively modest violations of the law by

businesses and individuals. While the Eighth

' Counsel of record for all parties received timely notice of the

intent to file this brief and consented to the filing of the brief. S.

Ct. R. 37(@2)(a). No counsel for any party authored this brief in

whole or in part, and no person or entity other than amicus

curiae or its counsel made a monetary contribution intended to

fund the briefs preparation or submission.

2 Under this Court's Excessive Fines Clause jurisprudence,

“[florfeitures—payments in kind—are ... ‘fines’ if they constitute

punishment for an offense.” United States v. Bajakajian, 524

U.S. 321, 328 (1998).

-2.

Amendment's Excessive Fines Clause restricts

excessive fines arising under federal law, some

jurisdictions’ failure to apply that constraint to state

and local governments is needlessly driving up costs

for businesses, increasing prices for consumer goods

and services, and undermining economic growth. The

Chamber thus has a particular interest in ensuring

that the Excessive Fines Clause is held applicable to

the States.

INTRODUCTION AND

SUMMARY OF THE ARGUMENT

The Eighth Amendment prohibits “excessive

sanctions.” Atkins v. Virginia, 536 U.S. 304, 311

(2002) (internal quotation marks omitted). In a series

of twentieth-century opinions, the Supreme Court

held much of the Bill of Rights applicable to the

States, including two-thirds of the Eighth

Amendment's guarantees against excessiveness. See

Robinson v. California, 370 U.S. 660, 675 (1962)

(prohibiting cruel and unusual punishments); Schilb

v. Kuebel, 404 U.S. 357, 365 (1971) (prohibiting

excessive bail). Consistent with these decisions, this

Court affirmatively stated in 2001 that the “Due

Process Clause . . . makes the Eighth Amendment's

prohibition against excessive fines . . . applicable to

the States” as well. Cooper Indus., Inc. v. Leatherman

Tool Grp., Inc., 532 U.S. 424, 433-34 (2001). But a

footnote in a more recent decision, McDonald v. City

of Chicago, Illinois, 561 U.S. 742, 765 n.13 (2010),

unsettled the issue by suggesting that the Court has

yet to decide whether the Excessive Fines Clause

applies to the States.

-3-

The case currently before the Court

underscores why Cooper Industries was correct. And

the disproportionate and punitive forfeiture in

Petitioner’s case is hardly unique. Across the country,

state and local prosecutors are targeting large and

small businesses for similar treatment. Newspapers

and legal literature from the 1980s forward are

replete with examples of large fines being handed out

for even the most inconsequential violations — at great

cost to businesses and their customers.

Many of the same excesses that originally led

to the federal constitutional prohibition are thereby

presenting themselves forcefully in states that have

not recognized the Clause’s incorporation. And often,

state and local prosecutors have pursued excessive

sanctions for the government's financial benefit

rather than meting out justice fairly and

proportionately to the harm caused by the underlying

offense.

The solution to this problem is straightforward.

The Founders recognized the judiciary as the last line

of defense against legislative excess and overzealous

prosecution. This Court should embrace the judicial

branch’s role in reviewing fines and other monetary

sanctions for excessiveness. Cooper Industries’

conclusion should be reaffirmed, and the Eighth

Amendment's Excessive Fines Clause and its concept

of proportionality should be held applicable to the

States.

”

ARGUMENT

I. EIGHTH AMENDMENT REVIEW OF

STATE FORFEITURES AND FINES IS A

CONSTITUTIONALLY NECESSARY

CHECK ON ABUSE.

A. The Excessive Fines Clause Is

Precisely the Type of Constitutional

Provision That Should Be

Incorporated.

Individual components of the Bill of Rights are

incorporated against the States where a provision is

“fundamental to our scheme of ordered liberty” or

where the right is “deeply rooted in this Nation's

history and tradition.” McDonald, 561 U.S. at 767

(citation omitted); see also Cantwell v. State of

Connecticut, 310 U.S. 296, 303 (1940). Both are true

here.

It is a basic “precept of justice that punishment

for crime should be graduated and proportioned to

[the] offense.” Weems v. United States, 217 U.S. 349,

367 (1910). In fact, this “enduring principle” was long

ago embedded into the Magna Carta, Andrew M.

Kenefick, The Constitutionality of Punitive Damages

Under the Excessive Fines Clause of the Eighth

Amendment, 85 Mich. L. Rev. 1699, 1716 (1987), and

reaffirmed by key thought leaders during The

Enlightenment. While the “sovereign’s right to

punish crimes is founded . . . upon the necessity of

defending the public liberty,” Cesare Bonesana-

Beccaria wrote in his quintessential work on crime,

the “punishments [must be] just in proportion as the

-5-

liberty, preserved by the sovereign, is sacred and

valuable.” Cesare Bonesana-Beccaria, An Essay on

Crimes and Punishments, at 17 (1872 ed.).*

The Founders learned lessons from the past,

when these principles were not resolutely entrenched

into law. As a result, a “primary focus” of their efforts

in drafting the Constitution and Bill of Rights “was

the potential for governmental abuse of its

‘prosecutorial power.” Browning-Ferris Indus. of

Vermont, Inc. v. Kelco Disposal, Inc., 492 U.S. 257, 266

(1989). Based on past abuses, the Founders wanted a

clear limit on “the ability of the sovereign to use its

prosecutorial power, including the power to collect

fines, for improper ends.” /d. at 267. Among other

models, the Founders turned to the English Bill of

Rights of 1689, which was designed “to curb the

excesses of [17th century] English judges” who were

imposing “partisan” and “heavy fines on the King’s

enemies.” /d.

Against this general background, the Framers

of the Bill of Rights lifted the Eighth Amendment

“almost verbatim, from a provision of the Virginia

Declaration of Rights of 1776, which in turn derived

3 http: //if-

oll. s3.amazonaws.com/titles/2 193/Beccaria_1476_Bk_ pdf.

Notably, “Beccaria’s writings materially informed the Founding

Fathers’ attitudes and views of the provisions of the federal Bull

of Rights.” Louis S. Rulli, Seizing Family Homes from the

Innocent: Can the Eighth Amendment Protect Minorities and the

Poor from Excessive Punishment in Civil Forfeiture?, 19 U. Pa Jd.

Const. L. 1111, 1113 n2 (nternal quotations and brackets

omitted) ( Excessive Punishment in Cwil Forfeiture’).

-6-

from the [aforementioned] English Bill of Rights of

1689.” Ingraham v. Wright, 430 U.S. 651, 664 (1977).

While Congress did not debate the Eighth

Amendment's language directly to any meaningful

extent in 1791, see Browning-Ferris, 492 U.S. at 264,

contemporary advocates spoke out and wrote

approvingly about its principles. For example, during

the original Virginia Ratifying Convention in 1788,

Patrick Henry argued that it would “depart from the

genius of your country” to adopt a Constitution

without a restriction on excessive fines. Patrick

Henry, Debate in Virginia Ratifying Convention,

(June 16, 1788). “[W]hen we come to punishments,”

Henry continued, “no latitude ought to be left [to

legislatures to] . . . define punishments without this

control.” Jd. A prominent pre-ratification author

likewise linked the importance of placing

excessiveness-related constraints on both the federal

and state governments:

For the security of liberty it has been

declared, “that excessive bail should

not be required, nor excessive fines

general government as under that of

the individual states; for the power of

the former is as complete to the

purpose of requiring bail, imposing

‘ http://press-pubs. uchicago.edu/founders/documents/amend

VIlIs13. html

-7-

fines, inflicting punishments, . . . and

seizing . . . property . . . as the other.

Louis S. Rulli, Excessive Punishment in Ciwil

Forfeiture, 19 U. Pa. J. Const. L. at 1115 (quoting

Brutus II (Nov. 1, 1787), as reprinted in The Complete

Bill of Rights 621 (Neil H. Cogan, ed., 1997)).

Given this “traditional understanding of

protection from excessive fines as inherent in English

fundamental law, and in light of the fact that

protections against ‘excessive fines’ are among the

most ancient rights of the Anglo-American legal

tradition, it can scarcely be argued that such rights

are not ‘deeply rooted in this Nation’s history and

tradition.” Nicholas M. McLean, Livelihood, Ability

to Pay, and the Original Meaning of the Excessive

Fines Clause, 40 Hastings Const. L.Q. 833, 875 (2013)

(citation omitted); see also Solem v. Helm, 463 U.S.

277, 284-88, 313 (1983) (observing that the

“constitutional principle of proportionality has been

recognized explicitly in this Court for almost a

century”).

Historic support for incorporation is also

quantifiable. By 1791, the constitutions of Delaware,

Georgia, Maryland, Massachusetts, New Hampshire,

North Carolina, Pennsylvania, and Virginia a!!

contained prohibitions on excessive fines, as did the

Northwest Ordinance of 1787. Nicholas M. McLean,

Livelihood, Ability to Pay, and the Original Meaning

of the Excessive Fines Clause, 40 Hastings Const. L.Q.

at 876. And by the year the Fourteenth Amendment

was adopted, 35 states — accounting for nearly 92% of

the population — had incorporated their own version

-8-

of an excessive fines prohibition into their

constitutions. Steven G. Calabresi & Sarah E. Agudo,

Individual Rights Under State Constitutions When the

Fourteenth Amendment Was Ratified in 1868: What

Rights Are Deeply Rooted in American History and

Tradition?, 87 Tex. L. Rev. 7, 82 (2008).°

This is why, as Petitioners detailed in their

brief petitioning for a writ of certiorari (at 13-18 &

n.5), many state and federal courts have concluded

that it is “beyond serious dispute” that the Excessive

Fines Clause applies to the States — particularly so

given this Court's past statements to this effect. Just

four years after seven justices signed onto the opinion

in Cooper Industries, the Court reaffirmed in Roper v.

Simmons, 543 U.S. 551, 560, 589 (2005), that the

entirety of the Eighth Amendment “is applicable to

the States through the Fourteenth Amendment.” And

in 2008, the Court again held that the “National

Government and, beyond it, the separate States are

bound by the proscriptive mandates of the Eighth

Amendment to the Constitution of the United States”

— including the Excessive Fines Clause — and that “all

® In fact, prior to the Fourteenth Amendment, one prominent

author had even argued for applying the Eighth Amendment's

ban on excessive fines to the States of its own force. In his 1825

treatise, Wilham Rawle wrote that the prohibition on excessive

-9-

persons within those respective jurisdictions may

invoke its protection.” Kennedy v. Louisiana, 554 U.S.

407, 412, 419, as modified on denial of reh’g, 554 U.S.

945 (2008). Other justices’ individual opinions also

have referred back to the Excessive Fines Clause’s

incorporation post-Cooper Industries.®

Discerning excessiveness is a vital judicial

function. A hallmark of the American constitutional

system is the creation of “an independent judiciary

[as] the ultimate reliance of citizens in safeguarding

rights guaranteed by the Constitution” over and

beyond the legislative and executive branches. Levine

v. United States, 362 U.S. 610, 616 (1960). This Court

long ago recognized “the duty of the courts to adjudge

such penalties to be within the constitutional

prohibition” of the Eighth Amendment. In re

Kemmler, 136 U.S. 436, 446 (1890). In fact, “by

broadly prohibiting excessive sanctions, the Eighth

Amendment [actually] directs judges to exercise their

wise judgment in assessing the proportionality of all

forms of punishment.” Ewing v. California, 538 U.S.

11, 32-35 (2003) (Stevens, J., dissenting). And this

Court has made clear that the responsibility lies

“[{ujpon the state courts, equally with the courts of the

Union, . . . to guard, enforce, and protect every right

granted or secured by the constitution of the United

States.” Robb v. Connolly, 111 U.S. 624, 637 (1884).

’ See, e.g., Baze v. Rees, 553 U.S. 35, 47 (2008) (plurality); Miller

v. Alabama, 567 U.S. 460, 503 (2012) (Thomas, J., dissenting).

-10-

B. Incorporating the Excessive Fines

Clause Will Prevent Indiana, and

Other States, from Ignoring an

Essential Element of Ordered

Liberty.

“The purpose of the Eighth Amendment .. . was

to limit the government’s power to punish,” with the

Excessive Fines Clause forming an integral part of the

Amendment’s three-part framework by “limit[ing] the

government's power to extract payments, whether in

cash or in kind, ‘as punishment for some offense.”

Austin v. United States, 509 U.S. 602, 609-10 (1993)

(quoting Browning—Ferris, 492 U.S. at 265). It “would

be anomalous indeed” if other sanctions under the

Eighth Amendment were subject to review under

federal constitutional principles but excessive fines

were not. Solem, 463 U.S. at 289.

As detailed below, state and local prosecutors

have sought to extract grossly disproportionate fines

from disfavored or unpopular parties — like large

corporations — who presumably have the resources to

pay, rather than seeking sanctions in proportion to

the harms caused by their actions. But such schemes,

unbound to fundamental constitutional principles of

proportionality, defeat the broader goals behind the

Eighth Amendment and this Court's decision to

incorporate its other clauses against the States. This

Court should not allow overzealous prosecutors or

legislators to effectively do away with fundamental

constitutional rights.

-11-

Il. The Unchecked Proliferation of

Disproportionate Forfeitures and

Revenue-Seeking Fines Undermines

Economic Growth.

A. Mandatory Forfeitures Are

Increasingly Common and

Problematic.

Penalty statutes — and in particular here,

statutes imposing fines and forfeitures — are often

drafted with the worst prospective offender in mind.

As commentators have noted, penalty amounts have

“tended to be quite high because legislatures have

used a ‘worst case’ mentality in setting them.” Robert

O. Dawson, Sentencing Reform: The Current Round

Toward a Just and Effective Sentencing System:

Agenda for Legislative Reform. by Pierce O'Donnell,

Michael J. Churgin & Dennis E. Curtis. New York:

Praeger Publishers, 1977. pp. xvi, 88 Yale L.J. 440,

442 (1978) (“Sentencing Reform”). For example, in the

early 1970s, Congress passed legislation, including

the Racketeer Influenced and Corrupt Organizations

Act, which authorized forfeiture of property connected

to the criminal enterprise. These laws — and other

statutes like them in the years since — were an

“extraordinary weapon” against those who had

significant involvement in organized crime, but they

did not take into account the unfairness that such

“drastic” measures would have against others with

less culpability. Russello v. United States, 464 U.S.

16, 27 (1983) (quoting 16 Cong. Rec. 819 (1970)).

The responsibility for reviewing fines to ensure

that they are not grossly disproportionate to the

-12-

alleged wrongdoing lies principally with the judiciary.

In fact, legislatures rely upon trial judges “to mitigate

the severity of punishment in the great majority of

cases.” Robert O. Dawson, Sentencing Reform, 88

Yale L.J. at 442. And a key part of that analysis in

many jurisdictions is the Excessive Fines Clause.

Incorporation of this provision imposes a duty

on state courts to go beyond whether a fine is

authorized under state law and ask whether it is

appropriate in the actual circumstances before the

court. Without this additional check, the resultant

financial penalties can offend basic notions of fairness

and over-compensate for the conduct the legislature

was attempting to prevent in the first place.

B. Governments Are Increasingly

Misusing Mandatory Forfeitures

and Fines as Revenue Streams

Rather Than as Proportionate

Punishments for Particular

Offenses.

Fines and related forfeitures are on the rise in

America, as are state and local government’s reliance

on — and abuse of — such enforcement mechanisms.

See, e.g., David J. Stone, The Opportunity of Austin v.

United States: Toward a Functional Approach to Civil

Forfeiture and the Eighth Amendment, 73 B.U. L. Rev.

427, 429-30 (1993). In 1991, a Justice Department

memorandum observed that “state and local law

enforcement agencies were becoming increasingly

dependent upon equitable sharing of forfeiture

proceeds,” with nearly $1.4 billion in assets

transferred to the agencies as of 1994. Eric

13.

Blumenson & Eva Nilsen, Policing for Profit: The

Drug War's Hidden Economic Agenda, 65 U. Chi. L.

Rev. 35, 64 (1998). By 2017, “[florfeitures,

particularly civil forfeitures, have become a powerful

tool for the Department of Justice, as well as for local

law enforcement agencies,” with dollar amounts far

exceeding totals from the 1990s. David Pimentel,

Forfeitures and the Eighth Amendment: A Practical

Approach to the Excessive Fines Clause as a Check on

Government Seizures (“Forfeitures”), 11 Harv. L. &

Pol'y Rev. 541, 541-42 (2017).

For their part, local officials now openly boast

about their profit-making enterprises and engage

contingent fee private attorneys to pursue them. See,

e.g., Br. for Amicus Curiae Chamber of Commerce of

the United States of America in Support of Petitioner,

Endo Pharmaceuticals v. New Hampshire, No. 17-633

(U.S. Nov. 30, 2017).7 In fact, a “national study found

60 percent of the 1,400 municipal and county agencies

surveyed across the country relied on forfeiture profits

as a ‘necessary part of their budget.” Barnini

Chakraborty, Despite Promises to Cut Back, Fed and

State Governments Press Asset Forfeitures, Fox News,

Jan. 30, 2018.8 The Las Cruces, New Mexico city

attorney bragged that, through civil forfeitures:

’ http://www.chamberlitigation.com/sites/default/files/cases/file

8/17171717/U.S.%20Chamber%20A micus%20Brief™®20--

%20Endo%20Pharmaceuticals%20I nc. %20v.%20New%20Hamp

shire%20%28U .S.%20Supreme%20Court%29. pdf.

® http://www. foxnews.com/politics/20 18/0 1/30/despite-promises-

to-cut-back -fed-and-state-governments-press-asset-

forfeitures. htmL

.14-

“We could be czars. We could own the

city. We could be in the real estate

business.” He detailed how police

targeted nice vehicles and other

desirable assets, but that they should

pursue bigger fish: “This is a gold

mine! A gold mine! You can seize a

house, not a vehicle!”

David Pimentel, Forfeitures, 11 Harv. L. & Pol’y Rev.

at 550.

Not only are the fines and forfeitures sought by

state and federal governments massive in the

aggregate, but the fines on a case-by-case are equally

as staggering, sometimes reaching “into the billions of

dollars against a single entity.” U.S. Chamber

Institute for Legal Reform, Constitutional

Constraints: Provisions Limiting Excessive

Government Fines at 1 (Oct. 2015).9 For example, the

State of New York and the City of New York recently

sought $872 million in penalties — and were awarded

$247 million — against UPS because a small number

of sellers used UPS's services to ship untaxed

cigarettes. Anthony Noto, UPS Vows to Fight $247M

Penalty for Shipping Untaxed Cigarettes in New York,

New York Business Journal (May 26, 2017).'° At the

opposite end of the country, Hunt County, Texas hired

private attorneys who sought approximately $2 billion

® http://www. instituteforlegalreform.com/uploads/sites/1/Cons

titutionalConstraints_web.pdf.

‘0 https://www.bizjournals.com/newyork/news/2017/05/26/ups-

vows-to-fight-247m-penalty. html

-15-

in fines from a landowner for improperly storing a pile

of wood on his property. See U.S. Chamber Litigation

Ctr., Grady v. Hunt Cty., Texas.'' In other examples,

Arkansas and Louisiana retained private counsel to

pursue aggressive claims against a Johnson &

Johnson subsidiary, initially resulting in $1.2 billion

and $330 million verdicts. See Br. for Amicus Curiae

Chamber of Commerce of the United States of

America in Support of Petitioner, Endo

Pharmaceuticals v. New Hampshire at 11.

Ultimately, these verdicts were overturned and the

States recovered nothing, but the final result in these

two cases does not diminish the impact and enormity

of the penalties that state and local governments are

seeking via these types of cases. See id.

Moreover, business entities are frequently

subject to multiple fines by different government

actors for the same conduct. U.S. Chamber Institute

for Legal Reform, Constitutional Constraints:

Provisions Limiting Excessive Government Fines, at 1.

For example, the South Carolina Supreme Court

recently upheld a $124 million civil penalty award in

a case brought by the South Carolina Attorney

General against Johnson & Johnson for the same

purported misconduct regarding a drug that was

already the subject of the company’s $2.2 billion

settlement with the federal government. /d. at 5. “If

the other 49 states followed South Carolina’s lead, it

‘| http:/Awww.chamberlitigation.com/cases/grady-v-hunt-

county-texas.

-16-

would amount to over $6 billion in civil fines on top of

the federal government's $2.2 billion settlement.” /d.

Fines are also hurting small businesses, in

particular, with the “explosion of civil forfeiture cases

[bringing] with it persistent allegations of abuse.”

Louis S. Rulli, Seizing Family Homes from the

Innocent: Can the Eighth Amendment Protect

Minorities and the Poor from Excessive Punishment in

Civil Forfeiture?, 19 U. Pa. J. Const. L. 1111, 1120

(2017) (Excessive Punishment in Civil Forfeiture’).

For example:

The CBS television show, 60 Minutes,

highlighted the plight of Willie Jones, a

black landscaper who was stopped at

the Nashville airport after being

observed paying cash for his airline

ticket. Law enforcement authorities

detained Mr. Jones and seized $9,000

in cash from his person because,

according to police, he matched the

profile of a drug courier. In fact, he was

traveling to Texas to buy shrubs for his

landscaping business and needed cash

to do s0. Nonetheless, police

confiscated his $9,000, and released

him without ever charging him with a

crime. Mr. Jones sued the governncnt

to get his money back and ultimately

prevailed, with the presiding judge

noting that “the statutory [forfeiture]

scheme as well as its administrative

implementation provide|d] substantial

-17-

opportunity for abuse and potentiality

for corruption.”

Id.

In New York City, small businesses “flooded

{then-Public Advocate Bill de Blasio’s] office with

complaints of being hounded for minor offenses and

[being] forced to pay ‘excessive’ fines.” Jessica Dye,

NY Public Advocate Slaps City with Lawsuit over

Fines, Reuters (July 26, 2012). With the City’s

estimated fine revenue doubling from $400 million to

$800 million in a ten-year period, de Blasio sought

“answers about what this ‘fine first, ask questions

later’ enforcement is doing to our small businesses

and their ability to survive in this economy.” Id. See

also Erin Durkin, Newkirk Plaza Merchants Hit with

Fines as de Blasio Pushes City to Ease Up on Small

Businesses, N.Y. Daily News, Apr. 25, 2012; Prince v.

City of New York, 108 A.D.3d 114 (2013) (explaining

how the New York City sanitation police fined a

carpenter/artist $2,000 and had his work-related

vehicle impounded for removing “a single television

antenna from the top of some curbside garbage

bags”).'”

The fines have had particularly deleterious

effects on New York’s “[i/mmigrant entrepreneurs,”

who find themselves faced with a “harsh enforcement

of non-critical violations [that] are creating

unnecessary obstacles to small business success.”

‘2 http:/Awww. nydailynews.com/new-york/brooklyn/newkirk-

plaza-merchants-hit-fines-de-blasio-pushes-city-ease-small-

businesses-article- 1. 1067535.

-18-

Office of Bill de Blasio, Report de Blasio: City Budgets

Drowning Small Businesses in Frivolous Fines (Apr.

25, 2012).'° For example, one proprietor of a Korean

restaurant shut his doors following “years of excessive

fines” for violations concerning his dishwasher’s size

and an occasional broken tile. Melissa Etehad, Small

Business Owners in Flushing Say the City Unfairly

Targets Them, Thelnk.NYC (Oct. 6, 2015). The

former restauranteur, a leader in the local business

association, went on to express concern that city

inspectors were taking advantage of a language

barrier among immigrant entrepreneurs to issue fines

without the proprietor being able to argue back or

fully comprehend the regulatory requirements. See

id.

Similar accounts of excessive fines against

business owners exist all across the country. In Los

Angeles, for example, the city ordered Carl’s Jr. to pay

$1.45 million in restitution and penalties because the

fast food chain failed to pay some employees an

additional $0.25 or $0.50 to meet the updated local

minimum wage. James Peltz, Los Angeles Seeks $1.45

Million from Carl’s Jr. for Alleged Minimum Wage

Violations, Los Angeles Times (June 26, 2017). The

total amount actually owed to the employees in back

pay: $5,400.

Chicago regulations call for fines of $350 to

$15,000 per sign, per day against small businesses

‘8 http://www. maketheroad_org/article_ php?! D=2359.

‘4 http://Atheink. nyc/small-business-owners-in-flushing-say -the-

city-unfairly-targets-them/.

-19-

that post unauthorized signs like “ATM Inside” or

“Breakfast, Lunch & Dinner” on the front window of

their convenience store or restaurant. April

Leachman, When It Come to Sign Violations in

Chicago, It’s All About the Dollar _ Signs,

ChicagoNow.com (Sept. 11, 2017).'5 Under this policy,

one Chicago dry cleaner was threatened with a $1,000

daily fine for a painted window sign that advertised

wedding dress cleaning and leather repair. Alisa

Hauser, City Slaps Fines on Businesses for Putting

Signs on Windows Without Permits, DNAInfo.com

(July 28, 2017).'6 While the dry cleaner took down the

sign, others did not and owe significant sums to the

city in penalties, interest, and administrative and

collection fees. Alisa Hauser and Tanveer Ali, As Sign

Violations Spike, “Erratically Enforced” Law

Questioned, DNAInfo.com (Sept. 11, 2017)."’

Residents, community leaders, and at least one city

alderman have questioned why the city is cracking

down on storefront signs in light of Chicago’s other

pressing problems. See April Leachman, When It

Come to Sign Violations in Chicago, It’s All About the

Dollar Signs.

‘© http://www.chicagonow.com/chicago-on-the-

radar/20 1 7/09/when-it-comes-to-sign-violation-citations-in-

chicago-its-all-about-the-dollar-signs/image/ 1.

‘6 https:/Awww.dnainfo. com/chicago/20 1 70728/wicker-

park/window-signs-permits-chicago-fines-businessowners-

appeal

‘7 https:/Awww.dnainfo.com/chicago/20 17091 1/wicker-

park/sign-ordinance-chicago-business-sign-permits-law-

-20-

And in Colorado and coastal North Carolina,

businesses are fighting against excessive fines levied

by state officials involving workers compensation. In

one example, a Denver-based hospitality company

with an annual payroll of less than $50,000 was fined

$841,200 by the Colorado Division of Workers’

Compensation for failure to provide the appropriate

workers’ compensation insurance for several years.

See Kristen Beckman, Penalty for Lapsed Comp

Coverage Was Excessive, Court Rules, Business

Insurance (Mar. 6, 2017).'* After “Soon Pak, owner of

the company, [argued] that she would be forced to

declare both personal and business bankruptcy and

shut her business down if the fine was enforced,” a

Colorado appellate court intervened and found the

fine excessive—by applying the Eighth Amendment to

state proceedings. See id. Separately, in a scenario

described as “likely ‘representative of situations being

faced by hundreds of small businesses across the

state,” a Corolla, North Carolina diner went to court

over a similar $86,750 penalty even though the

violation was remedied within days of receiving a

notice letter from state officials. Jennifer Henderson,

Coastal Carolina Diner Sues State Agency over

Workers’ Comp Fines, Triangle Business Journal

(June 26, 2017).'9

‘8 https:/Awww. businessinsurance.com/article/20 1 70306/NEW

S08/9 123 12252/Colorado-workers-compensation-fines- Dam:-

Hospitality.

‘8 https:/Awww. bizjournals.com/triangle/news/20 1 7/06/26/coas

tal-carolina-diner-sues-state-agency-over. html

-21-

All of these examples reflect the type of

injustice the Eighth Amendment exists to prevent.

“There is good reason to be concerned,” Justice Scalia

wrote, “that fines, uniquely of all punishments, will be

imposed in a measure out of accord with the penal

goals of retribution and deterrence.” Harmelin v.

Michigan, 501 U.S. 957, 978 n.9 (1991) (Scalia, J.).”

“Imprisonment, corporal punishment, and even

capital punishment cost a State money; fines are a

source of revenue. As we have recognized in the

context of other constitutional provisions, it makes

sense to scrutinize governmental action more closely

when the State stands to benefit.” Jd.

Indeed, earlier this year the Chief Justice of the

Ohio Supreme Court issued a stark warning to her

judicial colleagues that courts must be “centers of

justice, not automatic teller machines whose purpose

is to generate revenue for governments.” Letter from

Ohio Chief Justice Maureen O’Connor to State Judges

(Jan. 29, 2018).2'! Chief Justice O'Connor continued:

» Indeed, even before adoption of the Fourteenth Amendment,

officials recognized the particular destructive power of fines on

businesses. In an 1864 speech, Pennsylvania Senator Edgar

Cowan argued that in order for a fine to be constitutional, it must

“save[] . . . to the merchant his merchandise [and] to the villein

his wainage.” Nicholas M. Mclean, Livelihood, Ability to Pay,

and the Original Meaning of the Excessive Fines Clause, 40

Hastings Const. L.Q. at 884 (citing Cong. Globe, 38th Cong., Ist

Sess. 561 (1864) (statement of Sen. Edgar Cowan)).

21 https:/Awww.supremecourt. ohio.gov/SCO/justices/oconnor/fi

nesFeesBaill etter. pdf.

-22-

[Clourt cases are not business

transactions. . . . Judges and court staff

cannot be seen as collection agents.

Whether courts contribute to a city’s

bottom line or generate sufficient cash

flow for its own operations should not

be even a_ secondary’ thought

considering the role of the judiciary in

our system of government. .. . We

should not be expected to engage in

practices designed to maximize revenue

by taking advantage of our citizens or

ignoring basic constitutional

standards. ... Practices that . . . impose

unreasonable fines, fees, or bail

requirements upon our citizens to raise

money or cave to local funding

pressure .. . are simply wrong.

While a remedy for these problems might lie

with state legislatures, they are not always careful

guardians of constitutional rights and, in times of

budgetary crisis, often look for new avenues to raise

funds. Such bodies are “overstocked with lawyers”

who have little interest in limiting potential sources

of revenue for themselves or their private sector

colleagues (in the form of assistance with forfeiture

proceedings, for example). Less Punitive Damages,

Wash. Post, July 11, 1989.22 Moreover, legislators are

often politically reluctant to discontinue a funding

2 https://www.highbeam.com/doc/1 P2- 1200624. html.

-23-

stream that substitutes financial punishment for tax

increases.

Defendants also cannot always take refuge in

state constitutional or statutory prohibitions on

excessive fines. Not all states have excessive fines

clauses. Moreover, trying to track legal developments

and adjust one’s business affairs based on fifty

different rules for excessive fines is a prohibitively

cumbersome jigsaw puzzle for many corporations to

solve.

Thus, the only way that the longstanding

constitutional principles underlying the Excessive

Fines Clause will be applied fairly and uniformly to

all businesses and individuals across this country is

by a reaffirmation of incorporation by this Court.

C. Excessive Fines, and the Legal

Uncertainty Surrounding Whether

They May Be Imposed, Hinder

Beneficial Economic Activity.

While this case comes to the Court in the

context of the State imposing a_ grossly

disproportionate sanction on a single individual,

Petitioner is not alone in seeking a fair, uniform

standard. The business community and its customers

are equally affected.

“Over-punishment can .. . lead to over-

deterrence, where businesses become too cautious and

refrain from undertaking competitive activity because

of fear that the activity may be deemed” a violation of

law. John Terzaken & Pieter Huizing, Allen & Overy,

-24-

How Much Is Too Much? A Call for Global Principles

to Guide the Punishment of International Cartels, at 6

(Spring 2013) (‘How Much Is Too Much”). When

corporations face the prospect of excessive financial

penalties, products are “withheld from the market by

lawsuit-leery companies,” L. Stuart Ditzen, Are

Punitive Damage Awards Too Punishing?, Phila.

Inquirer, Oct. 29, 1989, thereby depriving businesses

of profitable opportunities and consumers of the

products that they might want to purcha.e. With over

493,000 small businesses and 1,173,626 employees of

such businesses in Indiana alone, see U.S. Small

Business Admin., Office of Advocacy, Small Business

Profile: Indiana,™ for example, even modest risk-

based adjustments can have a significant impact.

Consumers are affected in other ways.

“Excessive fines, designed to punish corporations, will

more likely than not hurt consumers by requiring an

excessive increase in prices as well as an excessive

diversion of resources to prevention activities.”

Michael K. Block, Optimal Penalties, Criminal Law

and the Control of Corporate Behavior, 71 B.U. L. Rev.

395, 402 (1991). Moreover, “excessive fines may lead

to insolvency .. . , which in certain markets may

significantly weaken competition and ultimately hurt

consumers in that market.” John Terzaken & Pieter

Huizing, How Much Is Too Much at 6.

The continuing uncertainty in the legal

landscape also takes a toll. Among other things, such

http://awa2014.concurrences.com/IMG/pdffhow_much_ pdf.

24 https:/Awww.sba.gov/sites/default/files/advocacy/IN_0.pdf.

-25-

uncertainty increases transaction costs, hinders

entrepreneurial investment, and deters consumer

purchases. Indeed, “[b]usinessmen . . . require the

decisions of the courts on commercial issues to be

predictable so that they know where they stand.” L. S.

Sealy and R J A Hooley, Commercial Law: Text, Cases

and Materials at 10 (5th ed. 2003). This is

particularly true here, where businesses may have

their goods and services spanning jurisdictions that

recognize the binding effect of the Eighth Amendment

and those who do not. As the amount of the excessive

fines grows, see supra at 12-22, businesses may need

to avoid transactions in jurisdictions where

businesses are treated unfairly. Such inefficiencies,

caused by legal uncertainty and a patchwork of

inconsistent legal regimes, do not serve businesses or

consumers well.

Ill, AS UNDER FEDERAL LAW, THIS

COURT SHOULD HOLD THAT A STATE

OR LOCAL FINE IS EXCESSIVE UNDER

THE EIGHTH AMENDMENT WHEN IT IS

DISPROPORTIONATE TO THE HARM

CAUSED BY THE UNDERLYING

OFFENSE.

When reviewing fines imposed under federal

law, this Court has already held that the “touchstone

of the constitutional inquiry under the Excessive

Fines Clause is the principle of proportionality: The

amount of the forfeiture must bear some relationship

to the gravity of the offense that it is designed to

punish.” Bajakajian, 524 U.S. at 334. In that case,

Mr. Bajakajian’s reporting violation did not mask any

other currency-related violations and caused no

-26-

independent harm to the government's interest.

Application of the proportionality principle in the

lower court resulted in a reduction of a $350,000

forfeiture based solely on the unreported funds to a

$5,000 penalty.

Bajakajian’s holding “is deeply rooted and

frequently repeated in common-law jurisprudence,”

Solem, 463 U.S. at 284 (collecting authorities), and

grounded in the basic “precept of justice that

punishment for crime should be graduated and

proportioned to offense,” Weems, 217 U.S. at 367. This

Court has “repeatedly applied this proportionality

precept in later cases interpreting the Eighth

Amendment,” including in proceedings arising under

state law. Atkins, 536 U.S. at 311.

Yet this case illustrates how far state and local

governments are straying from these fundamental

principles. After imposing a proportional criminal

fine on Mr. Timbs, Indiana imposed a statutory

forfeiture in an amount arbitrarily set by the value of

the car Mr. Timbs happened to be driving at the time

of the offense. That type of sanction bears little

relationship to the offense or the harm being

remedied. While Indiana may have articulated other

justifications for its forfeiture statute, it is difficult to

see this type of add-on punishment as anything other

than a revenue-seeking exercise.

This Court, as in Bajakajian, should leave it to

the lower state and federal courts to make, in the first

instance, judgments about whether a specific penalty

is excessive under the Eighth Amendment.

Consistent with Bajakajian and other cases, the

-27-

Chamber respectfully submits that lower courts

would benefit from a reaffirmance that the standard

for adjudicating excessiveness in all cases arising

under the Eighth Amendment is assessing the

proportionality of the forfeiture imposed to the public

harm caused by the triggering violation. See, e.g.,

Bajakajian, 524 U.S. at 335 (citing 1 N. Webster,

American Dictionary of the English Language (1828))

(defining “excessive” as “beyond the common measure

or proportion”).

CONCLUSION

Today the imperative for incorporating the

Excessive Fines Clause against the States could

scarcely be clearer. “The very purpose of a Bill of

Rights was to withdraw certain subjects from the

vicissitudes of political controversy, to place them

beyond the reach of majorities and officials and to

establish them as legal principles to be applied by the

courts.” W. Virginia State Bd. of Educ. v. Barnette,

319 U.S. 624, 638 (1943). With excessive fines on the

rise, and the burdens on business and individuals

growing, this case presents the Court with an

opportunity to conclusively resolve the incorporation

question and protect all Americans’ fundamental

right to liberty. This Court should reverse the Indiana

Supreme Court's decision and require the Eighth

Amendment Excessive Fines Clause’s application in

state penalty and forfeiture proceedings.

-28-

Respectfully submitted,

DARYL JOSEFFER BERT W. REIN

MICHAEL B. SCHON Counsel of Record

U.S. CHAMBER CAROL A. LAHAM

LITIGATION CENTER, INC. ANDREW G. WOODSON

1615 H Street NW WILEY REIN LLP

Washington, DC 20062 1776 K Street NW

(202) 463-5337 Washington, DC 20006

(202) 719-7000

brain@wil -

September 11, 2018

Counsel for Amici Curiae