John Locke Update / Research Brief

A Local Attorney Wins a Noteworthy Case at the Fourth Circuit

posted on in Law & Regulation, Legal Update
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The case of United States v. Chamberlain gave the U.S. Court of Appeals for the Fourth Circuit an opportunity to reconsider what it described as, “[O]ur anomalous rule permitting the pretrial restraint of a defendant’s innocent property pursuant to the federal criminal forfeiture statute.” Whereas every other federal court of appeals that had considered the issue had held that the government’s power to freeze a criminal defendant’s property prior to trial was limited to “tainted property” (i.e., property used for or derived from the alleged crime), the Fourth Circuit held that the government could freeze “untainted” property as well. When it handed down its opinion in Chamberlain last week, however, the Court announced that it would abandon its old rule and “join our sister circuits in holding that [the statute] does not authorize such restraint.”

The case is noteworthy because it’s an example of a court overturning its own precedent, which is rare. It is also noteworthy because it’s an example of a court taking a new and more critical approach to the jurisprudence of asset forfeiture, which—it appears—is becoming increasingly common.

The defendant in the case, William Todd Chamberlain, was accused of conspiring with other army officers to steal federal funds while he was deployed in Afghanistan. In the indictment, the government indicated that it intended to seek recovery of the stolen funds through asset forfeiture upon conviction. While the charges were pending, the government sought a restraining order to prevent Mr. Chamberlain and his wife from selling a piece of jointly owned real estate. The government did so, not because the property had been purchased with the stolen funds or was related in any other way to the crime for which Chamberlain had been indicted, but because it wanted to preserve the property as a “substitute asset” that might be subject to forfeiture if the “tainted” assets— i.e., the actual proceeds of crime—turned out to be insufficient for full restitution.

Chamberlain challenged the restraining order, and the lawyer who represented him was Elliot Abrams of Cheshire, Parker, Schneider & Bryan in Raleigh. When Abrams briefed the Fourth Circuit in Chamberlain, he cited Luis v. United States, a case from 2016 in which the U.S. Supreme Court had held that freezing a criminal defendant’s untainted assets prior to conviction violated her right to counsel under the Sixth Amendment. Abrams called attention to two different justifications for that holding, one by Justice Breyer in his opinion for a plurality of the court, and another by Justice Thomas in a concurring opinion. Judge Wynn’s analysis in Chamberlain suggests that the Fourth Circuit was primarily swayed by the former, but it is the latter that particularly interests me.

In contradistinction to the “balancing of interests” approach taken by the plurality in Luis, Justice Thomas suggested two alternative lines of argument. The first was based on the logical implication of the constitutional text:

[C]onstitutional rights necessarily protect the prerequisites for their exercise. The right “to have the Assistance of Counsel,” thus implies the right to use lawfully owned property to pay for an attorney. Otherwise the right to counsel—originally understood to protect only the right to hire counsel of choice—would be meaningless. History confirms this textual understanding. The common law limited pretrial asset restraints to tainted assets. Both this textual understanding and history establish that the Sixth Amendment prevents the Government from freezing untainted assets in order to secure a potential forfeiture. …

Constitutional rights thus implicitly protect those closely related acts necessary to their exercise. … The right to keep and bear arms, for example, implies a corresponding right to obtain the bullets necessary to use them, and to acquire and maintain proficiency in their use. Without protection for these closely related rights, the Second Amendment would be toothless. Likewise, the First Amendment right to speak would be largely ineffective if it did not include the right to engage in financial transactions that are the incidents of its exercise.

The same goes for the Sixth Amendment and the financial resources required to obtain a lawyer. Without constitutional protection for at least some of a defendant’s assets, the Government could nullify the right to counsel of choice. …

The second was based on history:

Pretrial freezes of untainted forfeitable assets did not emerge until the late 20th century. …

The common law prohibited pretrial freezes of criminal defendants’ untainted assets. … Although the defendant’s goods could be appraised and inventoried before trial, he remained free to sell any of them for his own support in prison, or that of his family, or to assist him in preparing for his defense on the trial. …

Numerous English authorities confirm these common-law principles. …

Because the pretrial asset freeze here crosses into untainted assets, for which there is no historical tradition, it is unconstitutional. Any such incursion violates the Sixth Amendment.

This, it seems to me, is the right decision based on the right kind of judicial reasoning, but it is more than that. It is also an example of something I alluded to above – a willingness to take a new, more critical approach to asset forfeiture.

Justice Thomas provided another example of that new, more critical approach earlier this year when the Supreme Court declined to review a civil asset forfeiture case called Leonard v. Texas. Despite concurring, on procedural grounds, with the decision to deny certiorari, Thomas took the occasion to add a lengthy statement in which he said:

This petition asks an important question: whether modern civil-forfeiture statutes can be squared with the Due Process Clause and our Nation’s history. …

This system—where police can seize property with limited judicial oversight and retain it for their own use—has led to egregious and well-chronicled abuses. …

These forfeiture operations frequently target the poor and other groups least able to defend their interests in forfeiture proceedings. Perversely, these same groups are often the most burdened by forfeiture. They are more likely to use cash than alternative forms of payment, like credit cards, which may be less susceptible to forfeiture. And they are more likely to suffer in their daily lives while they litigate for the return of a critical item of property, such as a car or a home. …

Thomas went on to provide a detailed account of how the modern practice of civil asset forfeiture differs from the historical precedents that are supposed to justify it, and, after regretfully conceding that, because the petitioner failed to raise her due process arguments at the Texas Court of Appeals, her case was not eligible for Supreme Court review, he ended his statement by saying:

Whether this Court’s treatment of the broad modern forfeiture practice can be justified by the narrow historical one is certainly worthy of consideration in greater detail.

Justice Thomas was right to raise this question about civil forfeiture in Leonard, and he was right to raise similar questions about criminal forfeiture in Luis. The Fourth Circuit’s decision in United States v. Chamberlain suggests that, by raising such questions, Justice Thomas may be changing the way the federal judiciary approaches constitutional questions about asset forfeiture. If so, that will be a very good thing indeed.

Jon Guze is Director of Legal Studies at the John Locke Foundation. Before joining the John Locke Foundation, Jon practiced law in Durham, North Carolina for over 20 years. He received a J.D., with honors, from Duke Law School in… ...

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