Category: Forfeiture reform

Download “ag_order_3946-2017.pdf”

(c) 2017, Brenda Grantland, Esq. 7/23/2017

On July 19, 2017, Attorney General Jeff Sessions announced a new forfeiture policy regarding federal adoptions, Order No. 3946-2017 and Policy Directive 17-1: “Policy Guidance on the Attorney General’s Order on Federal Adoption and Forfeiture of Property Seized by State and Local Law Enforcement Agencies.”

To make sense of this order and what it does you have to put aside what you read in the newspaper articles interpreting the press release, and read the order and policy directive themselves.  (Download the order and related documents using the download buttons above.)

The one-page order is signed by Sessions. The only concrete change announced in the order is its repeal of two Obama era Attorney General policy orders issued by former Attorney General Eric Holder. This is the point most of the articles have gone ballistic on. As I explain below, that repeal is no big deal.

The details of the policy changes are set out in Policy Directive 17-1, signed by Deborah Connor, Acting Chief of the Money Laundering and Asset Recovery Section of the Justice Department. It is only three pages long, but contains very specific procedures that will make major changes for the better.

On the same day, the DOJ issued a press release containing Sessions’ remarks – three pages of the usual platitudes about the virtues of asset forfeiture. Sessions’ remarks are worth dissecting, which I will do later, but let’s look at the details of the policy change first.

What federal adoption means

For those who don’t know, “federal adoption” has nothing to do with giving orphans a forever home. It is a Justice Department program, created by statute, that rewards state and local police for seizing property from citizens and turning it over to the feds for forfeiture under federal law, by giving the local police a kickback (“equitable sharing”) of up to 80% of the proceeds of the forfeiture case. See 28 U.S.C. Sec. 524(c). These state and local cops could just use their states’ forfeiture laws to forfeit property, but many prefer federal adoption to get around their state’s forfeiture laws which are more protective of property owners.

When a case is federally adopted, the forfeiture is processed in federal court, under federal forfeiture law, using federal standards, even if the forfeiture would be illegal under state law. Forfeiture opponents argue that allowing the feds to subvert local and state police into disregarding the law of their own states and instead seize property for forfeiture under federal law — by offering them up to 80% of the proceeds of the federal forfeiture.

What the policy order and directive do

1. Repeals “Obama era policy order” limiting federal adoption

The most seemingly dramatic feature of Sessions’ order is its repeal of Attorney General Order No. 3488-2015 (1/16/2015 – Holder order limiting federal adoption) and No. 3485-2015 (1/12/2015). I have not been able to find Attorney General Order No. 3485-2015. The only mention of it anywhere on line is this order repealing it.

The policy orders that Sessions repealed were issued by outgoing Attorney General Eric Holder in January 2015. Order No. 3488-2015 set specific limitations on the federal adoption of state and local police seizures. As I explained in a previous blog, Holder’s order did not do much to curb federal adoption. See Attorney General Holder’s Asset Forfeiture Policy Limiting Federal Adoption Will Not Stop the Abuses.

Holder’s policy order contained built-in loopholes that told the police how to get around the new policy. All they had to do was put a federal agent on their task force, or get a federal judge to issue a federal seizure warrant for the property and they were back to business as usual.

Less than two weeks after my blog predicting the Holder order would have little or no effect, Justice Department spokespeople admitted it would not have a substantial effect.  See the HuffPost article Justice Department Budget Projects Some Asset Forfeiture Payments Will Rise Despite Reforms. The Holder order did not even reduce federal adoption payments, as the DOJ admitted in the HuffPost article.

2. Review by a federal agency lawyer before agreeing to a federal adoption

Policy Directive 17-1 requires that the facts of each seizure be reviewed by the adopting agency’s legal counsel before agreeing to accept the federal adoption.

“To ensure that adoptions involve property lawfully seized, legal counsel at the federal agency adopting the seized property must continue to review all seizures for compliance with law, especially seizures made pursuant to an exception to the Fourth Amendment’s warrant requirement.” Policy Directive 17-1 p. 1-2.

The directive tells the agencies to revise the forms used to request federal adoption and require the seizing cops to provide enough information to determine if there was probable cause for the seizure. The cops are also required to state on the revised form whether a turnover order was obtained, if required by state law. Policy Directive p. 2. (Only a few states have statutes requiring local police to get a turnover order from a state court judge before they can turn over property they seized to the feds for federal adoption.)

These new procedures, if actually followed, will weed out many illegal roadside forfeiture trap seizures at a very crucial time — before sending notice to claimants requiring them to file a claim within 30 days. All of the cases claimants lost by default were lost during that crucial period.

Although there was eventually a review by an Assistant U.S. Attorney before filing a forfeiture complaint in court — which would usually occur 90 days later — that review only occurs after a claimant files a claim. If the claimant defaulted before that point, there would never be a review for probable cause.

3. Additional screening procedures for seizures of $10,000 or less

The vast majority of the highway forfeiture trap cases are these smaller dollar value seizures.

They target travelers on the interstate highways, particularly those with out of state tags, and minorities. They are pulled over for a minor traffic infraction or on the ruse that they fit a vague drug courier profile. In most of those cases, little or no drugs are found and no one is arrested, yet after a search, they seize all of the cash the travelers are carrying, saying it is suspected drug proceeds.

Under the policy directive, when cash totaling $10,000 or less is seized, the seizure can be adopted only if

• (1) the seizure was pursuant to a state warrant,
• (2) it was seized incident to an arrest for a forfeiture triggering offense,
• (3) it was seized at the same time as contraband was seized “relevant to the forfeiture,” or
• (4) if the person from whom it was seized admits it was crime proceeds or intended for use to commit a crime.

Policy Directive 17-1 p. 2. If a federal agency wants to adopt a seizure that does not fit into one of those categories they have to get the approval of the U.S. Attorney’s Office first.

This is an excellent reform! Let’s hope they actually follow this policy.

Roadside forfeiture traps rake in a huge number of small dollar value seizures — with values too small for the property owner to hire a lawyer to defend. Many give up instead of filing a claim because hiring a lawyer would cost more than the value of the property. Sessions claimed that “over the last decade, four out of five administrative civil asset forfeitures filed by federal law enforcement agencies were never challenged in court.” That is probably true, but it is not because those people were all guilty, as Sessions suggested. Many defaulted because it was not cost effective to litigate in federal court over these small dollar amounts.

When the feds adopt a state or local police seizure, all money seized (and most other personal property) is sent through the administrative forfeiture process. The adopting agency sends out a notice to the property owner and they have to send in a claim within 30 days or they are in default and automatically lose their property.

When the property is forfeited by default in the administrative process no judge ever reviews the legality of the seizure. The policy directive suggests that a lawyer from the agency would review the case to determine the legality of the seizure before agreeing to adopt it (“the federal agency … must continue to review all seizures for compliance with the law….”) — but if they were already doing this, why would Sessions issue a policy order requiring it?

Also, it appears that the previous forms the local cops filled out to request adoption wouldn’t have had enough information for the federal agency to determine whether the seizure was valid.

For decades these small dollar value highway forfeiture trap cases have been nuisance cases for claimants. Now they are nuisance cases for the government!

Agency lawyers will have to plow through thousands of cases and weed out bogus seizures that they would have otherwise won by default. I can imagine agency lawyers will perform triage and drop cases that wouldn’t be cost effective to prosecute. Many of those people who would previously have lost by default will get their money back.

4. Additional scrutiny of seizures of real property

The Policy Directive warns officials to “proceed with caution” when deciding whether to waive the Department’s net equity thresholds for real estate, and in taking cases where real estate is owned by innocent people.

Their concern many not be altruistic as much as economic. Real estate can’t be put through the administrative forfeiture process where claimants so often default because it is not cost effective to hire a lawyer. The government has to work to forfeit real estate. It’s hard for the government to make profits off forfeiture if the litigation involves real estate with low equity when innocent owners and lienholders will have to be paid off.

5. Expediting the forfeiture process by 45 days

The statutes give the government 90 days after seizure to commence the administrative forfeiture process by sending notice. Sessions’ order shortens that time to 45 days.

This is not a big deal for claimants. In cases that are contested, after the claimant files a claim, the case goes to federal court where it bogs down for several years.

Because the new 45 deadline is just a policy deadline, the claimant cannot enforce it and nothing happens if they miss it. The 90 day deadline is statutory, and missing it has consequences for the government — including dismissal of the case and return of the property. I suspect that the 45 day deadline is to hurry things along so the feds don’t miss the 90 day deadline.

Other forces have begun to curtail the federal adoption program

Actually “equitable sharing” under the federal adoption program has been curtailed in recent years, but not by policy changes at the Department of Justice.

Federal legislation

A few years ago Congress put a rider in the budget appropriation bill prohibiting the DOJ from spending money from its budget on federal adoption. When the police lobby went ballistic about losing their federal sharing revenue, the DOJ found a way to get around it. They increased forfeitures in federal agency originated cases and used that money to fund the state and local cops who were feeding them forfeiture cases.

Congress has since imposed another limit on the federal adoption program which no Attorney General can override. In a budget appropriations rider Congress prohibited the DOJ from spending any money from its budget to thwart the implementation of state medical marijuana laws:

None of the funds made available in this Act to the Department of Justice may be used, with respect to the States of Alabama, Alaska, Arizona, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Hawaii, Illinois, Iowa, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nevada, New Hampshire, New Jersey, New Mexico, Oregon, Rhode Island, South Carolina, Tennessee, Utah, Vermont, Washington, and Wisconsin, to prevent such States from implementing their own State laws that authorize the use, distribution, possession, or cultivation of medical marijuana.

Consolidated and Further Continuing Appropriations Act, 2015, Pub. L. No. 113-235, § 538, 128 Stat. 2130, 2217 (2014). The Ninth Circuit interpreted this statute to preclude the feds from prosecuting medical marijuana providers who were in full compliance with state law legalizing and regulation medical marjuana. United States v. McIntosh, 833 F.3d 1063 (2016). That limit on prosecutions would bar federal forfeiture prosecutions as well.

State legislation restricting federal adoption

Federal adoption will also likely decrease substantially because state legislatures have been passing laws to curtail federal adoption. Unhappy with the feds’ use of federal adoption to lure state and local police into disregarding limitations on state forfeiture laws, several states have passed legislation stopping the state and local cops from receiving equitable sharing revenue for federal adoption cases that conflict with state laws.

According to a National Review article, thirteen states have passed state forfeiture reform legislation curbing federal adoptions.

California’s forfeiture reform statute, SB 443, effective January 1, 2017, bars any police force from accepting revenue from federal adoptions unless they can prove there was a conviction in the related criminal case – that is, if a criminal conviction is required under state law. Under the new law, a criminal conviction is required in a related criminal case in order to forfeit anything except cash and negotiable instruments totaling $40,000 or more. This provision was obviously meant to curb the “highway robbery” type forfeiture trap, where local cops stop travelers on the highway for minor traffic infractions (or nothing at all) and seize their cash on the ruse that it is drug proceeds or intended for use to purchase drugs – even though they found no drugs. They could never get a criminal conviction in such a case because the burden of proof is beyond a reasonable doubt. In most of these highway forfeiture trap cases they didn’t even arrest anyone, yet their money was subjected to the civil forfeiture process.

This will likely be a very effective way to curb federal adoption. Would local police go to the trouble of mounting these highway forfeiture traps just to turn the money over to the feds and get nothing in return? This may force them to enforce their own state forfeiture laws instead!

A word or two about the accompanying press release

If you wonder how journalists could so poorly understand what Sessions order and the policy directive do, I believe it is because they only read the DOJ press release. The press release is comprised primarily of Session’ remarks, which are loaded with pro-forfeiture propaganda, such as his repeated claim that civil forfeiture targets “organized crime.” If it were “organized crime” why wouldn’t they be going after them criminally, where they could just use criminal forfeiture?

This passage is a doozy:

“When I was in the Senate, I worked with Senator Schumer to make modifications to the civil asset forfeiture program. We required probable cause for the seizure of property. And we raised the burden on the government, who has the initial burden in all of these cases, to the same preponderance of the evidence standard used in all civil cases. In addition, if the government lost the case, then the government pays attorneys’ fees. I believe those were good reforms that strengthened the program.”

Those modifications to the civil asset forfeiture program he is talking about is the Civil Asset Forfeiture Reform Act of 2000 – “CAFRA.” I can’t believe he is trying to take credit for CAFRA’s reforms!

I consulted with Representatives John Conyers and Henry Hyde in drafting CAFRA, and my organization Forfeiture Endangers American Rights lobbied for it for 8 years before it passed.

Sessions and Schumer were major opponents of forfeiture reform. They fought CAFRA’s positive reforms every inch of the way!

Once CAFRA passed in the House, Sessions and Schumer introduced a competing bill drafted by the DOJ, which added about 200 new forfeiture triggering offenses and poked huge loopholes in our due process reforms.

Because of Sessions and Schumer — and Orrin Hatch, who wouldn’t let our bill go out of his Senate committee without forcing a compromise — those 200 new offenses got added to CAFRA. Even worse, Sessions and Schumer forced the DOJ’s proposed loopholes into our reform provisions too, watering down the Hyde bill and eroding its due process reforms.

Sessions tries to take credit for the probable cause requirement, saying the modifications to the forfeiture program that he and Schumer made “required probable cause for the seizure of property.” He can’t take credit for that. The Fourth Amendment requires probable cause before property is seized.

It was nice of him — or more likely Deborah Connor, Acting Chief of the Asset Forfeiture and Money Laundering Section — to require agency lawyers to review local police seizures for probable cause before agreeing to federal adoption. They should have been doing it all along.