by Jon Guze
Senior Fellow, Legal Studies, John Locke Foundation
For many years, it was generally accepted that two features of North Carolina’s asset forfeiture regime made it the best in the country. First, under our criminal forfeiture statutes, the state can confiscate property acquired as a result of a crime but only after the owner of the property has been charged and convicted. Second, under our state constitution, law enforcement agencies may not keep forfeited property or profit from its sale. Instead, all forfeiture proceeds must be used to maintain public schools. These features of North Carolina law have served us well. They have protected the innocent and discouraged abuse, while still making it possible for law enforcement agencies to deprive criminals of their ill-gotten gains.
Other states haven’t been so fortunate. Under their civil forfeiture statutes, the state was empowered to confiscate property without bothering to charge and convict the owner, and, under their constitutions, little would prevent law enforcement agencies from keeping forfeited property or profiting from its sale. The result was inevitable – a series of highly publicized forfeiture abuse scandals and the creation of a national asset forfeiture reform movement. Since 2014, almost half of the states have reformed their asset forfeiture laws to make them more like North Carolina’s statute, and more states are poised to do so.
One of those states is Alabama. In a previous Legal Update, I wrote the following about the Forfeiture Accountability and Integrity Reform (FAIR) Act, which had just been introduced in the Alabama Senate:
If enacted, the bill will propel Alabama past North Carolina and establish it as the clear leader when it comes to asset forfeiture law. … While North Carolina’s asset forfeiture regime is very good, if [the FAIR Act] passes Alabama’s asset forfeiture regime will be even better, which is something we in North Carolina should probably take note of. However, from our point of view, the most noteworthy thing about [the bill] isn’t what it does to protect Alabama’s citizens from asset forfeiture abuse under state law; it’s what it does to ensure that state and local law enforcement agencies can’t use federal law to circumvent that protection. … North Carolina’s existing laws do nothing to curtail circumvention, and, as a result, we rank among the worst states in the country in that regard. It therefore behooves all of us, but especially the members of our legislature, to take a good look at the measures that are under consideration in Alabama. [For more information about the need for anti-circumvention legislation in North Carolina, read this.]
Today, I’m delighted to report that the FAIR Act was approved by the Alabama Senate last week and is now headed for the Alabama House of Representatives. I’m also delighted to report that a very similar bill has just been introduced in the Minnesota State Legislature concurrently. Like the FAIR Act, the Minnesota bill not only eliminates civil asset forfeiture completely, it also severely limits the use of equitable sharing.
As I noted in my discussion of the FAIR Act, state and local law enforcement agencies use two types of equitable sharing programs to circumvent their states’ forfeiture laws. The most commonly used type is the so-called “adoptions” program. Under this program, a federal agency “adopts” property seized by a state or local law enforcement agency, processes it in federal courts under federal law, and then returns the bulk of the proceeds (typically 80 percent) to the agency that made the seizure. The Alabama bill bans all adoptions processed under federal drug law, but the Minnesota bill goes even farther and completely bans federal adoptions:
(a) An appropriate agency shall not refer, transfer, or otherwise relinquish possession of property seized under state law to a federal agency by way of adoption of the seized property or other means by the federal agency for the purpose of the property’s forfeiture under federal law.
Joint task force operations provide another way for state and local law enforcement agencies to circumvent state asset forfeiture laws. When a joint task force seizes property and processes it under federal law, some of the proceeds are typically returned to participating state and local agencies to reward them for their part in the operation. As in the Alabama bill, the Minnesota bill places a $100,000 threshold on task force payments:
(b) An appropriate agency or participant in a joint task force or other multijurisdictional collaboration with the federal government shall not accept payment of any kind or distribution of forfeiture proceeds resulting from a joint task force or other multijurisdictional collaboration unless the aggregate net equity value of the property and currency seized in a case exceeds $100,000, excluding the value of contraband.
If the measure passes, these two provisions will effectively stop circumvention in Minnesota. Taken in conjunction with the other reforms in the bill, they will protect against asset forfeiture abuse that is second-to-none and serve as a model for the rest of the states, including North Carolina.