Project Report:
Ending Civil Forfeiture and Protecting Private Property
Purpose
- Investigates causes tending to destroy or impair the free-market system.

Summary

Civil forfeiture is the ability of law enforcement to seize homes, cars, cash, and other property on the mere suspicion that it was involved in a crime—no conviction or arrest required. What’s worse, civil forfeiture allows law enforcement to keep forfeited property or the proceeds for its own use. The Institute for Justice is working to counter this unconstitutional practice through path-breaking litigation, strategic research, legislative reform, and award-winning communications.

IJ Client Carter Walker
The Institute for Justice's lawsuits on behalf of reporter Carter Walker aim to shed light on forfeiture in Pennsylvania.

Description

Nearly every state, the District of Columbia, and the federal government have civil forfeiture laws. And while state and local laws vary, every year, police and prosecutors across the United States take hundreds of millions of dollars in cash, cars, homes, and other property—regardless of the owners’ guilt or innocence. What’s more, even if certain states have protections in place limiting civil forfeiture, federal law allows local and state law enforcement to circumvent state laws to still profit at the expense of innocent property owners. But through IJ’s strategic litigation, groundbreaking publications scrutinizing the practice, and bipartisan efforts to enact legislative reforms, IJ has taken this issue from legal obscurity and driven it to the nation’s highest court in just under a decade. In addition, we have successfully returned homes, cars, cash, and other property, worth a total of $5.2 million, to our clients. This progress is nothing short of extraordinary, and is especially exemplified in our most recent achievements.

In a decision handed down in February, the U.S. Supreme Court unanimously sided with IJ in Timbs v. Indiana, ruling that the U.S. Constitution prohibits state and local governments from imposing excessive fines, fees, and forfeitures, just as it prevents the federal government from doing so. As you may recall, we are representing Tyson Timbs, a young man whose recovery from opioid addiction was made far more difficult when Indiana law enforcement used forfeiture to seize his vehicle. Before overcoming addiction and turning his life around, Tyson was convicted of selling $225 worth of drugs.

He pleaded guilty and served out his sentence, which included house arrest, probation, attending drug treatment programs, and paying $1,200 in fees. Yet the state of Indiana took advantage of its forfeiture laws and seized Tyson’s $40,000 truck, which he purchased with a small inheritance. In doing so, the state effectively imposed on Tyson an additional fine that was far greater than his court-ordered penalty. As the trial court judge put it, this seizure was “grossly disproportionate” to Tyson’s crime.

But the Indiana Supreme Court disagreed, claiming the specific provision of the Bill of Rights does not apply to states and opted not to enforce it. That opinion had frightening implications for civil liberties: Without the Constitution’s protection against excessive fines, state and local law enforcement could confiscate everything a person owns based on a minor crime or, using civil forfeiture, no crime at all. By vindicating Tyson Timbs’ rights at the nation’s highest court, IJ is protecting Americans from abuse at all levels of government—federal, state, and local.

Coverage in The Washington Post, The Wall Street Journal, the Los Angeles Times, The New York Times, and the New York Post, among others, propelled IJ’s victory to the forefront of the national conversation. The decision was also featured on ABC, CBS, NBC, and Fox. Armed with the Court’s historic opinion, and a groundswell of support, IJ has the ammunition to take on other abusive property rights schemes throughout the nation.

Just months before IJ presented the Court with its first opportunity to re-examine the constitutionality of forfeiture in over two decades, we dismantled the city of Philadelphia’s draconian forfeiture program, ushering in long-awaited justice to the 35,000 Philadelphians who were stripped of their property and their constitutional rights.

Until IJ brought suit, Philadelphia routinely seized homes, cars, and cash without notice. It forced owners to navigate the notorious “Courtroom 478,” where so-called “hearings” were run entirely by prosecutors, without any judges or court-appointed lawyers to defend indigent property owners. Prosecutors continually demanded that property owners appear in court, sometimes ten times or more. Missing even a single “hearing” meant that prosecutors could permanently take an owner’s property, sell it, and use the proceeds for any law-enforcement purpose they wished. More than 35% of proceeds went to salaries, including the salaries of the very officials seizing and forfeiting property, thus creating a perverse incentive to seize property for forfeiture.

IJ put all this to an end by securing two sweeping consent decrees—which received preliminary approval in May—that curb the financial incentives under which law enforcement keeps and uses forfeiture revenue; fundamentally reform procedures for seizing and forfeiting property; and establish a $3 million fund to compensate those whose property was wrongly confiscated.

On the policy front, IJ’s expert advocacy led to the passage of the Taxpayer First Act, which, among its provisions, would stop the Internal Revenue Service (IRS) from raiding the bank accounts of small-business owners. The provisions, known as the Clyde-Hirsh-Sowers RESPECT Act, enjoyed broad, bipartisan support and were signed into law by President Donald Trump in July 2019. This marks the first time in nearly two decades that Congress has reined in excessive property seizures.

In most of these cases, there was no evidence of any wrongdoing: Under so-called “structuring” laws designed to prohibit evasion of currency-reporting requirements, federal agencies routinely seized entire bank accounts from ordinary Americans simply because they had frequently deposited or withdrawn cash in amounts under $10,000. The IRS had seized more than $242 million in over 2,500 structuring cases in a seven-year span.

To apply pressure and bring the structuring scheme out of the shadows, IJ secured high-profile, exclusive media coverage, including a front-page New York Times article and a The Wall Street Journal editorial.

And our strategy worked. In 2014, the IRS announced a policy change limiting the use of structuring laws to go after actual criminals. IJ dug deeper, releasing a research report that detailed the IRS’s growing use of structuring forfeitures over the years and our policy recommendations to reform—and, where possible, stop—the exploitation of forfeiture in the structuring process.

As you know, IJ also established a forfeiture remission petition procedure. Through that effort, the IRS received 464 petitions from owners seeking to recover their money that had been seized for structuring. Out of 208 petitions that were within its jurisdiction, the IRS granted 174—roughly 84%—and returned over $9.9 million to property owners.

For the remaining 256 petitions under the Department of Justice’s jurisdiction, the IRS recommended that Department grant 194 of those petitions. The Department accepted 41 petitions, returning $1.9 million.

IJ’s remission template enabled hundreds of structuring victims, including the namesakes of the RESPECT Act—Jeff Hirsch and Randy Sowers—to ultimately recover their wrongfully taken money. But a codified change in the law has been IJ’s mission from the start. The House took notice of IJ’s real-world success and research and invited IJ and our clients to testify before the Ways and Means Oversight Subcommittee.

Today, the RESPECT Act guarantees that a future administration cannot reverse the IRS’s positive 2014 policy change and will enable property owners whose cases fall within the jurisdiction of the IRS to challenge a seizure at a prompt, post-seizure hearing. No longer will innocent Americans have to wait months or even years to present their case before a judge because the IRS didn’t approve of how they handled their business.

IJ’s Forbes column announcing the legislation’s passage describes what the Act will look like in practice and re-tells our clients’ stories to get their property back when this fight first began. But the piece, which reached nearly 58,000 views in less than two weeks, also points out that we have a long way to go. As IJ Senior Attorney Darpana Sheth notes, “The Clyde-Hirsch-Sowers RESPECT Act is an important first step to address one type of forfeiture abuse by one federal agency. But civil forfeiture by other agencies continues unabated. Congress should seize the opportunity … [to pass comprehensive reform of forfeiture laws] … and protect the constitutional rights of all Americans.”

Our latest two forfeiture cases are positioned to take on such agency abuse. Every year, the District Attorney’s office in Lancaster, Pennsylvania, uses forfeiture to take hundreds of thousands of dollars in cash and other property from Pennsylvania citizens. Under Pennsylvania law, the DA’s office is able to spend the proceeds with few restrictions and almost no public oversight. Carter Walker, a young reporter for LNP Media Group in Lancaster, is working hard to change that.

As part of his investigative reporting, Carter filed a public records request with the local DA’s office under Pennsylvania’s “Right-to-Know” law, asking for information about what kind of property the DA is taking through forfeiture and how the office is spending the proceeds. When the Pennsylvania Office of Open Records ordered the DA to make this information available, he opted to fight Carter’s request for information in court. That’s when IJ stepped in, teaming up with Carter in April 2019 to launch two cases and ensure that district attorneys across Pennsylvania must make information about their forfeiture practices and the property they confiscate under them available to the public.

Local reporting, like Carter’s and LNP’s, plays a crucial role in the national fight for forfeiture reform by giving the public—and public interest litigators—the information they need to hold public officials accountable. This information often comes from public records requests made under state or federal transparency laws. By analyzing records of individual forfeitures and expenditures of forfeiture proceeds, reporters can provide a snapshot of how the system operates and shine a light on potential wrongdoing.

U.S. Supreme Court Justice Louis Brandeis famously once said, “Sunlight is the best disinfectant.” By joining forces with Carter and LNP, IJ will help shed light on forfeiture in Pennsylvania. In the process, we will advocate for the right of all Pennsylvanians to know how their government is taking property and how it spends the proceeds.

IJ remains vigilant, prepared to step in on behalf of ordinary Americans and advocate in court to keep government adhering to the timeless principles the Founding Fathers laid out, protecting—not trampling—property rights.

Purpose

Property rights are the foundation of all our rights in a free society. But across the country, governments violate property rights through the practice of civil forfeiture. Civil forfeiture laws allow cash, cars, homes, and other property to be seized when the property is merely suspected of being involved with criminal activity. Under these laws, property owners can permanently lose their property without even being charged with or convicted of a crime—a gross violation of fundamental constitutional rights.

Scope

Every American’s right to own and enjoy their property hangs in the balance under the threat of civil forfeiture. Millions of dollars in property are seized every year and forfeiture funds continue to grow exponentially: For example, the federal government took $29 billion in cash and other property in just 14 years, and state and local governments have taken hundreds of millions more. IJ engages courts, policymakers, activists, and the media nationwide to expose this harmful practice and advocates for greater protections in state and federal law; secures the return of this unlawfully seized property; and sets precedent in state and federal courts that others can rely on to win back their property.
Since 2010, we have litigated 25 cases; secured the return of over $17 million in property; helped usher in significant reforms in 24 states; and propelled this issue to national prominence.

Information Dissemination

Our litigation, strategic research, and activism provide us with a stream of news and events that present powerful opportunities to bolster the impact of our victories and create interest and outrage among the general public. In this grant term alone, IJ secured over 490 media hits featuring our work combatting civil forfeiture. Placement in outlets such as USA Today, The New York Times, The Wall Street Journal, The Washington Post, SCOTUSblog, Bloomberg, and the Associated Press shined a light on forfeiture abuse, and IJ’s client-focused communications raised the profile of our campaign to end forfeiture.

At the start of the 116th Congress, IJ hosted a briefing on Capitol Hill featuring Congressmen Tim Walberg (R-MI) and Jamie Raskin (D-MD) alongside two IJ clients. The event was well attended by more than 40 staffers and set the stage for IJ to prioritize federal forfeiture reform with the new leadership in Congress. At the event, IJ shared our latest white paper, Civil Forfeiture, Crime Fighting and Safeguards for the Innocent: An Analysis of Department of Justice Forfeiture Data. Using the DOJ’s own data, IJ found that the DOJ cannot substantiate its claim that forfeiture fights crime and the Department’s new safeguards are unlikely to prevent innocent people from losing their property unjustly.

IJ’s legislative team continues to use this white paper, along with an IJ poll that found the majority of American adults oppose forfeiture, to stimulate forfeiture reforms nationwide. And IJ’s December 2018 report, Forfeiture in Arizona: An Institute for Justice Analysis of FY2018 Reporting Data, which confirms that the incremental reforms Arizona enacted in 2017 are lacking and abuse still persists, made its way into the hands of key Arizona legislators this past session.

Our most recently released study, Fighting Crime or Raising Revenue? Testing Opposing Views of Forfeiture, is already playing a major role in IJ’s fight to abolish forfeiture.

The most extensive and sophisticated report of its kind, Fighting Crime or Raising Revenue? combines more than a decade’s worth of data from the nation’s largest forfeiture program, the Department of Justice’s equitable sharing program, with local crime, drug use, and economic data from a variety of federal sources. The results are clear: Increased forfeiture does not mean more crimes solved or less drug use, indicating that forfeiture is not the valuable crime-fighting tool proponents claim. However, when local economies suffer, forfeiture activity increases, suggesting police do indeed use forfeiture to raise revenue.

Featured in The Washington Post, Reason, NPR, and Techdirt among others, the study was also widely well-received on social media. The two videos IJ produced in-house—one of which teased the report’s release in July 2019 with video of former Attorney General Jeff Sessions praising forfeiture and trying to justify the practice in terms of crime-fighting—gained over 69,000 views on Facebook and YouTube.

We are at an exciting turning point: IJ has the hard evidence that generating revenue seems to motivate forfeiture and there is no significant relationship between the increased use of forfeiture and crime fighting. To get this valuable information into the hands of policymakers, their constituents, other researchers, and opinion leaders, IJ distributed the report to over 190 legislators, staffers, and coalition partners across the nation.

Through generating increased awareness of forfeiture abuse, IJ has amassed a groundswell of support and laid the groundwork for future litigation and lasting reforms. All the work described in this section was, as always, performed consistent with IJ’s tax status and applicable IRS regulations. Similarly, all Foundation funds were used in a manner consistent with the requirements laid out in the grant agreement.

Project Link http://endforfeiture.com/

Amount Approved
$10,000.00 on 8/1/2018 (Check sent: 8/27/2018)


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Posted 1/17/2018 11:27 AM
Updated   8/26/2019 3:36 PM



U.S. Supreme Court Victory
Tyson Timbs speaks with reporters outside the U.S. Supreme Court. In his case, the Court unanimously ruled that the U.S. Constitution prohibits state and local governments from imposing excessive fines and fees, just as it prevents the federal government from doing so.

 
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