Civil forfeiture contingency fees for private lawyers challenged in new lawsuit

Indiana’s civil forfeiture framework is once again under scrutiny as a new lawsuit alleges a law allowing private prosecutors to earn a contingency fee in forfeiture actions is unconstitutional.

The Virginia-based Institute for Justice — which has litigated multiple cases challenging Indiana’s civil forfeiture laws — filed a complaint Wednesday in the Indiana Southern District Court asking the court to strike down as unconstitutional an Indiana statute that allows private prosecutors to retain up to 30% of the proceeds from a successful civil forfeiture action. The complaint names Fishers lawyer Joshua N. Taylor as the primary defendant, alongside the elected prosecutors of 16 Indiana counties.

According to the complaint, Taylor, of RileyCate LLC, is “one of Indiana’s most prolific contingency-fee forfeiture prosecutors … .” Under Indiana Code § 34-24-1-8, elected prosecutors may contract with private attorneys to prosecute civil forfeiture actions on a contingency-fee basis that allows the private lawyer to keep up a statutorily-set percentage of the proceeds from a successful forfeiture — a practice the Institute for Justice says violates the 14th Amendment.

When contacted by Indiana Lawyer, Taylor did not comment on the specific allegations in the complaint but said generally that he believes the practice is constitutional.

“The complaint that was filed yesterday by the Institute for Justice is currently being reviewed,” Taylor said in an email. “That being said, I remain confident that Indiana’s forfeiture statutes meet constitutional muster under the Fourteenth Amendment, and I look forward to a vigorous defense of this matter in federal court.”

The plaintiff in the case is Amya Sparger-Withers, who is the defendant in a Hancock County civil forfeiture action seeking to forfeit $6,096. According to the complaint, Taylor is representing the state in its case against Sparger-Withers on a contingency-fee basis.

While Sparger-Withers said she is not asking the federal court to decide the merits of her case or to remove Taylor from his representation, she said she is asking the court “to declare invalid and eliminate (Taylor’s) personal financial stake in the forfeiture actions he prosecutes,” including the action filed against her.

The complaint seeks to certify a class, with Sparger-Withers serving as class representative.

“The private prosecutor does not make money (and may even lose money) if the State loses,” the complaint alleges. “This system gives the prosecutor a personal financial stake, not in seeing that justice is done, but in forfeiting as much property as possible. In this way, the system skews the prosecutor’s incentive away from stewarding the public trust and towards maximizing their personal financial gain.”

The case is Amya Sparger-Withers v. Joshua N. Taylor, et al., 1:21-cv-2824.

I.C. 34-24-1-8 was codified in 2018 as part of a legislative effort to reform Indiana’s civil forfeiture practices.

At the same time, a case challenging a specific Grant County forfeiture action was making its way to the United States Supreme Court. The federal justices in the case of Timbs v. Indiana ruled that the Eight Amendment’s excessive fines clause was incorporated to the states via the 14th Amendment.

On remand to the Indiana Supreme Court, the state justices created a proportionality test that led to the return of defendant Tyson Timbs’ vehicle. The Hoosier high court later upheld the ruling for the vehicle’s return under its proportionality test.

Also, in 2019, the Indiana Supreme Court in the case of Horner v. Curry upheld the practice of diverting civil forfeiture proceeds from the Common School Fund to reimburse law enforcement.

The Institute for Justice challenged the state in both Timbs and Horner.

“Every forfeiture defendant has the right to a prosecutor who is financially disinterested, whose incentive is to do justice, not turn a profit,” IJ lawyer Sam Gedge said in a news release. “Prosecutors wield enormous power, and in our justice system, there must be no question that they are exercising that power in the public’s interest — not for personal gain.”

Indiana Lawyer has reached out the Indiana Prosecuting Attorneys Council for comment on the practice of private lawyers prosecuting civil forfeitures. IPAC is not named as a defendant in the case.

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