Indiana’s civil forfeiture laws under scrutiny

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Since the Institute for Justice challenged Marion County’s civil forfeiture procedure a year ago, a few lawsuits pushing back against the practice have appeared in local courts and several bills have been introduced this term in the Indiana General Assembly.

They are part of the growing consensus across the country to rethink and perhaps curb the ability of government to seize private property on little more than a suspicion.

Civil forfeiture is intended to prevent criminals from enjoying the fruits of their illegal enterprises. State and federal governments can confiscate cars, houses, cash and whatever else is believed to have been purchased with the money from unlawful acts like selling drugs or human trafficking.

However, innocent individuals have been ensnared and either lost their possessions or had to pay hefty fees to get property back. Even in the Statehouse, lawmakers on both sides of the aisle have stories of people who had large sums of money pocketed by police officers after being pulled over, who had lost a business or could not pay the impound fees after law enforcement released the vehicle.

At least seven states have enacted reforms since 2014 to curb the abuses of civil forfeiture, according to the Virginia-based Institute for Justice. Could Indiana soon be joining the trend?

gedge-sam-mug.jpg Gedge

“Civil forfeiture is seen an inherently unjust,” said Sam Gedge, attorney with the Institute for Justice. “The more people learn about civil forfeiture, the more they want to do something about it, including lawmakers.”

But at a January legislative hearing on Senate Bill 8 that would significantly change Indiana’s civil forfeiture law, there was a clear divide between supporters and opponents of the practice.

Jesse Hathaway, research fellow at the conservative think tank Heartland Institute, praised the measure as the gold standard for protecting private property rights. “This bill, if passed as written, would actually make Indiana the best state in the country on this particular issue of civil asset forfeiture.”

Madison County Prosecutor Rodney Cummings offered a different outcome if Indiana made civil forfeitures more difficult.

“This is the gold standard on protecting property rights?” Cummings said referring to Hathaway’s description. “Translation: We’re going to have the best bill in the country to protect the illegal gotten gains of drug dealers.”

Cutting the incentive

The lawsuit filed by the Institute for Justice does not attack the practice of civil forfeiture directly, but argues the Marion County prosecutor and law enforcement are violating the state constitution in what they do with the proceeds from the seizure. Rather than turning the money over to the Common School Fund as required by the Indiana Constitution, they are keeping the funds for themselves.

To date, Jeana M. Horner, et al. v. Terry R. Curry, Marion County Prosecutor’s Office, et al., 49D06-1602-PL-004804, has survived a motion to dismiss and is moving through the discovery process, which is expected to conclude in May.

Gedge described Marion County’s method for handling the money as “policing for profit.”

Ultimately, the Institute for Justice hopes the case goes to the Indiana Supreme Court, where a decision in favor of its position would have statewide implications, most likely by limiting the financial gain from civil forfeiture and removing the incentive for law enforcement to seize and keep private property.

Cummings confirmed that much during the legislative hearing. According to a report by the Legislative Services Agency, Senate Bill 8 would reduce revenue from assets seized, although the amount of the cut was undetermined.

“If this bill goes into effect, you’re going to shut forfeitures down completely because prosecutors are not going to spend their resources — that are already stretched a lot — to bring money back to the state general fund,” Cummings told the legislators. “We’ll just stop collecting it.”

boots-phil-mug Boots

Due process concerns

When he introduced his bill, Sen. Phil Boots, R-Crawfordsville, told the members of the Senate Committee on Corrections and Criminal Law his intent was to protect individuals not involved in any crimes from civil forfeiture.

“I’m not trying to prevent forfeiture,” the senator said. “I’m not trying to prevent people who are in criminal enterprises from losing their property. … I’m just saying a lot of innocent people are being caught up in this forfeiture issue.”

The bill, which was revised in committee, passed the full Senate on a 40-10 vote Feb. 28.

To Indianapolis criminal defense attorney Todd Ess, the Senate bill contains two big improvements. First, the court overseeing the criminal matter will handle the civil forfeiture, similar to what happens in federal court. Second, civil forfeiture defendants can have a jury trial.

ess-todd-mug.jpg Ess

Ess has defended individuals who have had their possessions, typically cash or cars, seized after being charged with a crime. Because the civil forfeiture is held in a different court, these defendants may fail to respond because they did not get the notice and do not realize their property is gone until the default judgment arrives.

Ess maintained these kinds of cases should be decided by a jury as guaranteed by Article 1, Section 20 of the Indiana Constitution.

Precedent set by Boyd v. United States, 116 U.S. 616 (1886), established civil forfeitures are quasi-criminal in nature and thus entitled to a jury trial if requested.

Similarly, in Cunningham v. State, 835 N.E.2d 1075, 1079 (Ind. App. 2005) and Ess’s case Gates v. City of Indianapolis, 991 N.E.2d 592, 594 (Ind. App. 2013), the Indiana Court of Appeals found both traffic and municipal ordinance violations are quasi-criminal and therefore non-equitable because they are enforced by the police, litigated by the prosecutor’s office and result in fines for the violators.

However, a more direct road to reaching the same conclusion is through the 7th Circuit Court of Appeals decision in United States v. One 1976 Mercedes Benz 280S, 618 F.2d 453 (7th Cir. 1980), which held civil forfeiture cases are non-equitable and should be decided by the “earthy common sense of a jury.”

The opinion has not been cited by Indiana courts, but Ess described the decision as his “lodestar.” He would like to see Mercedes Benz be at least discussed in Indiana.

“It’s really fascinating because of the tension between the federal appeals court opinion, which has been around since the 1980s and been cited by other states, and the Indiana courts which subscribe to another school of thought,” Ess said. “It’s a case we need to re-examine.”

cardella-jeff-mug.jpg Cardella

Meanwhile, a class action filed in the U.S. District Court for the Southern District of Indiana attempts a direct hit on the law, arguing the statute violates the Due Process Clause. The case, Leroy Washington v. The Marion County Prosecutor, et al., 1:16-cv-2980, is asking the federal court to issue a permanent injunction preventing the state from enforcing the statute.

Attorney Jeff Cardella said he was motivated to challenge the statute by the number of frustrated innocent owners who keep asking why the government can hold their vehicle for months without accusing them of anything.

“I think civil forfeiture by its nature generally makes people uneasy,” Cardella said. “When the people enforcing the law also stand to benefit financially from it, there is a higher likelihood for abuse.”•


  • Transfer to Federal Agency
    One way County Prosecutor's get around the requirement to deposit seized property into the school fund is to send it to the Federal government under IC 34-24-1-9. There is no statute requiring the US to send forfeited property to the school fun. The US attorney then shares forfeited funds with local law enforcement agencies and prosecutors. It's wrong. This statute is pasted in below. Terry Curry doesn't send seized assets to the Feds because he does not want to share and generally8 no one challenges him because it costs too much money to do so. The reality is that people whose property is seized have bigger fish to fry than fighting a forfeiture case, especially one with the US attorney. So they don't fight and then, when the prosecutor offers a deal, part of the deal is that the State gets to keep all the seized property, and that way, it's not really property seized through a "forfeiture" case and the property does not have to be paid to the school fund. IC 34-24-1-9 34-24-1-9 Disposition of seized property; expenditures of money Currentness Sec. 9. (a) Upon motion of a prosecuting attorney under IC 35-33-5-5(j), property seized under this chapter must be transferred, subject to the perfected liens or other security interests of any person in the property, to the appropriate federal authority for disposition under 18 U.S.C. 981(e), 19 U.S.C. 1616a, or 21 U.S.C. 881(e) and any related regulations adopted by the United States Department of Justice. (b) Money received by a law enforcement agency as a result of a forfeiture under 18 U.S.C. 981(e), 19 U.S.C. 1616a, or 21 U.S.C. 881(e) and any related regulations adopted by the United States Department of Justice must be deposited into a nonreverting fund and may be expended only with the approval of: (1) the executive (as defined in IC 36-1-2-5), if the money is received by a local law enforcement agency; or (2) the governor, if the money is received by a law enforcement agency in the executive branch. The money received under this subsection must be used solely for the benefit of any agency directly participating in the seizure or forfeiture for purposes consistent with federal laws and regulations.

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