Civil forfeiture amendments don’t defeat prior forfeiture action, COA says

Legislative amendments to Indiana’s much-debated civil forfeiture scheme did not defeat a pre-existing forfeiture action in state court, the Indiana Court of Appeals ruled Friday, finding the amendments did not constitute an ex post facto law.

The state of Indiana, Indianapolis/Marion County and the Indianapolis Metropolitan Law Enforcement Agency filed a forfeiture action against Eric Butler, $236 and his 2004 Pontiac Grand Prix after a 2016 traffic stop revealed that Butler had marijuana and heroin in the Pontiac, as well as the $236. Butler also pleaded guilty to a state-law drug felony, while default judgment was entered against him in the forfeiture action.

Meanwhile, in August 2017, Indiana Southern District Chief Judge Jane Magnus-Stinson struck down part of Indiana’s civil forfeiture law in her ruling in Leroy Washington v. Marion County Prosecutor, et al., 1:16-cv-02980. The federal court said the state’s practice of withholding a seized vehicle without a “post-seizure, pre-forfeiture hearing” violated the Fifth and 14th amendments’ due process protections.

Based upon that ruling, the appellants in the instant case – which include Butler, the money and the Pontiac – moved for relief from the earlier default judgment. Meanwhile, in response to the federal court ruling, the Indiana General Assembly in 2018 passed a wide-ranging civil forfeiture reform bill that was designed to increase due process protections for property owners whose property is seized.

Among those protections is a requirement for a trial court to find probable cause to support a seizure within seven days of law enforcement taking the property. The legislation also built in hardship provisions for “innocent owners” — people who lend their property without knowing it will be used for illegal purposes — and created a disbursement mechanism for forfeiture proceeds.

The amendments to Indiana Code chapter 34-24-1 took effect in July 2018, and the Marion Superior Court subsequently granted the motion for relief from default judgment. A few days later, though, the trial court found probable cause to seize the car.

Both sides filed cross-motions for summary judgment, but Butler “did not acknowledge the 2018 Amendments, much less argue that they failed to cure Indiana Code chapter 34-24-1’s constitutional deficiencies.” The trial court granted summary judgment to the government and ordered forfeiture of the $236 and the Pontiac.

The federal case was also proceeding during this time, with the 7th Circuit issuing a ruling in February 2019 that remanded the Washington case to the district court for a determination on whether the amendments cured the “constitutional infirmities” in Indiana’s civil forfeiture statutes. A settlement agreement, however, meant the district court “never had the opportunity to determine the effect of the 2018 Amendments in Washington.”

On appeal of the grant of summary judgment to the government, Butler argued the 2018 amendments didn’t apply to the seizure of his car because the vehicle was initially seized in 2016. But the unanimous appellate panel disagreed.

“Without addressing the question of whether the 2018 Amendments cured the constitutional infirmities identified by the Washington court, we have little hesitation in at least concluding that the 2018 Amendments were all procedural in nature,” Judge Cale Bradford wrote. “… The 2018 Amendments do nothing to create, define, or regulate the State’s inherent power to seize property from citizens under certain circumstances; they affect only the procedures for enforcing that right and/or obtaining redress. Because the 2018 Amendments are procedural in nature, we conclude that applying them to the seizure of the car does not constitute an ex post facto law.”

The appellants, however, did not raise a claim as to the constitutionality of the 2018 amendments. Thus, like the 7th Circuit, the COA “decline(d) to address a constitutional question that was not raised or argued to the trial court or addressed by it, much less with an adequately-developed record,” Bradford said.

“We will diverge from the Seventh Circuit Court of Appeals, however, in that we will not remand for further proceedings on the effect of the 2018 Amendments; Butler, unlike Washington, had the opportunity to raise the issue but did not.”

Finally, the Court of Appeals upheld the trial court’s decision not to award attorney fees to the appellants because Butler did not prevail at the trial court. The panel also declined to award appellate attorney fees because the government presented “an entirely legitimate legal argument” on appeal.

Civil forfeiture has been a buzzword in Indiana for several years, especially after Magnus-Stinson’s 2017 ruling. But the 2018 amendments did not cure all concerns, with the revised mechanism for distribution of civil forfeiture proceeds remaining the subject of the constitutional challenge in Jeana M. Horner, et al. v. Terry R. Curry, et al., 18S-PL-333.

The Indiana Supreme Court in June upheld the amended disbursement procedure that allows for part of all forfeiture proceeds to be diverted to law enforcement and away from the Common School Fund. The Virginia-based Institute for Justice, which took Horner to the Indiana Supreme Court, had argued Article 8, Section 2 of the Indiana Constitution requires all forfeiture proceeds to be deposited in the Common School Fund.

Meanwhile, the United States Supreme Court in February rejected an Indiana Supreme Court ruling and held that the Eight Amendment’s Excessive Fines Clause applies to the states. Further, because civil in rem forfeiture is at least partially punitive, it is subject to the Excessive Fines Clause.

The case of Tyson Timbs v. Indiana was thus remanded to the state Supreme Court, which remanded it to the trial court for a determination as to whether the forfeiture of Tyson Timbs’ Land Rover was excessive.

Butler’s case is Eric Butler, $236.00 in U.S. Currency, and One 2004 Pontiac Grand Prix v. State of Indiana, the Consolidated City of Indianapolis/Marion County, and the Indianapolis Metropolitan Law Enforcement Agency, 19A-MI-5.

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