Michigan Civil Forfeiture Asset Update 2019

[KLAW Blog]

Michigan Civil Forfeiture Asset 2019 Update from a 2017 ICLE interview on asset frofeiture with Michael Komorn and Jeff Frazier.

US Supreme Court decided Tyson Timbs v. Indiana,  586 U.S. _____ (2019) on February 20, 2019.  Tyson Timbs was convicted of drug charges that had a maximum monetary fine of $10,000. 

At the time of his arrest, police seized Timbs $42,000 Land Rover, Timbs purchased with money from his father’s life insurance policy.

The state sought civil forfeiture of the vehicle, charging that the vehicle transported heroin. 

The trial court denied the request, ruling that the forfeiture would be “grossly disproportionate” to the gravity of the offense, and unconstitutional under the Excessive Fines Clause of the Eighth Amendment.

The Court of Appeals of Indiana affirmed, but the Indiana Supreme Court reversed, reinstated the forfeiture and concluded that the Excessive Fines Clause applies only to federal actions. 

The Court reversed, and held the Eighth Amendment’s prohibition against “excessive fines” applies to the states under the Due Process Clause of the Fourteenth Amendment.

The Court did not articulate a test or analysis to determine when or if a fine is excessive, and did not take a position on whether Indiana’s seizure of the Land Rover was excessive.  The case remanded to Indiana for further proceedings.

In Michigan, three bills seeking to revise provisions dealing with the civil forfeiture of property were proposed in January 2019.   The bills were signed into law as Public Acts 7, 8, and 9 of 2019 (the Acts) and take effect on August 7, 2019.

The Acts only apply to Article 7 (Controlled Substances) of Michigan’s Public Health Code and added MCL 333.7521 and MCL 333.7523a and amended MCL 333.7523. 

Some of the changes require a civil forfeiture action be stayed until criminal proceedings are over and prohibit seized property from being subject to forfeiture or disposition unless the criminal proceeding has been completed and defendant is convicted of or pleads guilty. Seized property can be subject to forfeiture if no one claims an interest in it, or the owner relinquishes the property. 

The SCAO is also required to create a form to relinquish a property right and another form for a property owner to file a written objection regarding forfeiture of property seized without a warrant.  Other changes involve certain notice requirements.

According to the House Fiscal Agency Legislative Analysis of the new bills, civil asset forfeiture laws have come under scrutiny in Michigan and across the country, some calling the process “policing for profit.”

Michigan enacted legislation in 2015 and 2016 that, among other things, requires some governmental agencies to file annual reports about seized and forfeited property and make the reports publically available on a website.

2018 Michigan State Police Forfeiture Report

That legislation also raised the standard of proof from preponderance of the evidence to clear and convincing evidence. 

According to the Institute for Justice, since 2014, 33 states and District of Columbia have reformed their civil asset forfeiture laws.

Three states—North Carolina, New Mexico, and Nebraska—have abolished civil forfeiture entirely and only use criminal law to forfeit property.

The Legislative Analysis was also cognizant of the Timbs’ case and the impact on the current amendments and other civil asset forfeiture laws. While the current revisions may be premature, “they do provide some relief to a population most impacted by seizures and forfeitures of property that is not connected to criminal drug activity.” It will likely take years to see how the Excessive Fines Clause of the Eighth Amendment will apply to the states, and when will that prohibit civil asset forfeiture.

In 2017, Jeff Frazier and Michael Komorn, both of Komorn Law, filmed an On Demand Studio Seminar on Civil Asset Forfeiture were in the ICLE Studios. We reached out to them to get an update.

For over 25 years Komorn Law has been a trusted adviser providing outstanding, results-focused legal counsel to its clients in all areas of criminal defense from districts courts all the way to the supreme court. 

John:  So, the Supreme Court ruled in Timbs v. Indiana that Indiana’s civil asset forfeiture was unconstitutional. In May, Governor Whitmer signed in to law a package of bills amending [some] of Michigan’s asset forfeiture laws.  How exactly do you see the [Timbs decision and] amendments changing the landscape of civil asset forfeiture?

Michael – Well, I think that the amendments if anything are a bandaid.  They are certainly not a solution. The amendments certainly do not go as far as to address the excessiveness of fines like in the Timbs case. 

The financial penalties for most of the crimes involving civil asset forfeiture in Michigan are usually under $5,000.  Most if not all of the forfeitures that have taken place up to this point and that will continue to take place in Michigan, in my opinion, violate the excessive fines clause. When forfeiting property at the state level the analysis should be whether the forfeiture penalty exceeds the financial penalty of the crime.

In that respect, nothing has really changed.  When there is a forfeiture case against real property, the government has essentially taken an interest in the property.  While the government might not file an actual lis pendins or something else with the register of deeds, it is my experience that they will file some kind of injunction that prevents the homeowner from improving, selling or, borrowing against the real property. 

Whether the government actually takes the property or has a claim to the property or the property is held by the police and disposed of, even if a conviction is required, a citizen’s traditional property rights associated with the right to own property are impaired during forfeiture.

I had a case where a client owned two houses.  He inherited one, and the other house was his marital home.  The government filed a forfeiture action against both houses and enjoined the homeowner from doing anything with them. 

The day the order was entered in the forfeiture case, my client could not borrow against the properties, improve or sell them, all of that was encumbered by the government action. 

The mere filing of the forfeiture deprived my client of his property rights without any due process. The amended statutes don’t undo that.

Jeff:  I think what Michael says is right.  The amendments do not address the excessive nature of the fine at all. The Timbs case says that excessive fines analysis applies to the states in the context of civil asset forfeiture – that is meaningful and more of a change than the series of statutes that the Michigan legislature passed.

The more powerful argument is against the taking of things that have no relation, no proportionality to the crime committed. There are a number of general forfeiture provisions related to sex work, trafficking, and other things, but the current amendments only apply to forfeitures taken under the Controlled Substances Act of the Public Health Code.

Call me skeptical, but I think that the law enforcement is going to try every possible loophole to maintain this income stream for lack of a better word – this policing for profit.

The police can still take the property, but they just can’t take it away.  Which means that clients will find themselves in a situation where, under the threat of forfeiture, the police have taken the property and the clients are left without funds to hire an attorney. 

Then if your client waives as part of a plea deal, the police can keep the forfeited property. Clients will still have unequal bargaining power, where they have a gun to their head negotiating a plea on the criminal side.  Also, the fact that [the amended statute] doesn’t apply to forfeitures in excess of $50,000, will just have the police looking for larger forfeiture cases going forward.

As a practice tip, there are a couple of things that we as attorneys need to continue to do on behalf of our clients who are facing civil asset forfeiture. One is to adequately inform the client about exactly what’s going down and what their rights are.

You may recall from our last visit, there’s a Supreme Court case, that says that under certain circumstances, taking a defendant’s money, not clearly traceable to some kind of criminal activity, or perhaps excessive in light of the crime, that prevents the defendant from hiring an attorney can implicate not just the excessive fines provision, but also the Sixth Amendment right to counsel.  We still want to continue to emphasize that.

Second, and at the same time, if a client doesn’t have full access to their assets, whether it’s money or other assets, or the government has decided to forfeit your client’s real property, we need to immediately I believe, make the excessive fines argument, that taking away the right to use the property is taking away a property right.  I would still hammer them on both of these fronts, whether or not there has been a final forfeiture.

Max:  So with respect to the waiver under a plea bargain do you think that there is an issue of say, lack of informed consent with respect to this waiver – that people do not understand that they are also sort of waving their claim to the property seized?

Jeff:  The statute provides an exception for when an owner waives the conviction. Whether that is informed or whether there is actual consent there is a very good question.

Max:  From your point of view, nothing really has changed with respect to representing clients who are facing civil asset forfeiture from when the two of you were in the studio couple of years ago?

Jeff:  I would not go that far.  I mean clearly, these amendments are a significant thing.  Anything that is as important as civil asset forfeiture, that really goes to the root of so many abuses that does what this statute does is commendable.  But, you are talking to a couple of criminal lawyers.

Michael:  Its an attempt to be transparent, but not really having an impact on the concerns that attorneys have which are due process rights, excessive fines, and Eighth Amendment protections, things like that.

For more on this topic, Look for our Civil Asset Forfeiture Update coming in September.

The Eight Amendent

The Eighth Amendment (Amendment VIII) of the United States Constitution prohibits the federal, state, and local governments of the United States, or any other government, or any corporation, private enterprise, group, or individual, from imposing excessive bail, excessive fines, or cruel and unusual punishments, in any part of the US, on US property (i.e. a US embassy), or against any US citizen, or any resident of the US. This amendment was adopted on December 15, 1791, along with the rest of the United States Bill of Rights.^[1] The phrases in this amendment originated in the English Bill of Rights of 1689.

Read The Rest Here

Related Cases

https://en.wikipedia.org/wiki/United_States_v._Bajakajian

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