Federal Civil Asset Forfeitures: A Pre-Trial Roadmap for Litigators in Private Practice

Defending a Federal civil asset forfeiture can be one of the most challenging tasks faced by litigation counsel in private practice. The stakes are often very high. Frequently, the Government seeks to forfeit all or nearly all of a client's assets, threatening in effect to take everything owned by the client except the shirt off his (or her) back and destroying a client's ability to pay retained counsel. An effective defense usually requires a vigorous attack on the facts relied upon by the Government. However, the threat of a criminal prosecution of the client is always present. A client may be prosecuted later for either (1) misconduct relating to the source of the funds used to obtain the property, (2) the use of the property, or (3) false statements made in the course of the civil forfeiture proceeding itself. Every instinct of counsel calls for the client to remain silent on the Government's factual assertions, yet the client must address those issues to mount an effective defense to the civil forfeiture proceeding. There are no easy answers to this dilemma.

The procedural structure of an asset forfeiture proceeding sets the framework within which counsel responds to a civil forfeiture action. Understanding the procedural hoops through which the Government must jump to civilly forfeit property is a key component of the planning process.

The first step for the Government in a civil asset forfeiture case is generally to obtain possession of the property at issue. See, e.g., 21 U.S.C. § 881(b) (authorizing seizure of property without issuance of judicial process). If the Government has already obtained possession of the property in connection with a prior administrative forfeiture proceeding, then no new steps need be taken by the Government to physically obtain possession of the property. In these circumstances the Government starts civil forfeiture by filing a complaint, obtaining a summons and warrant for the arrest of the property, and providing effective notice to interested parties. See Rule C of the Supplemental Rules for Certain Admiralty and Maritime Claims ("Supplemental Rules"). This process merely ratifies the Government's continued possession of the property already held by the Government under the administrative forfeiture procedures.

On the other hand, the Government may not possess the property at the time the civil forfeiture proceeding begins. The property may be real estate, which the Government does not seize and forfeit administratively, or it may be worth more than $500,000.00 in value, or there may be some other reason why the Government does not want to proceed administratively initially. In these instances, the Government can obtain physical possession of the property and seize it pending later forfeiture by using a search warrant. See 21 U.S.C. § 881(d); 18 U.S.C. 981(b); Federal Rule of Criminal Procedure 41.

Once a client learns of a seizure, counsel must immediately monitor the various deadlines for filing papers to protect the client's interest in the seized property. Under Supplemental Rule C, a claimant must file a formal claim "within 10 days after process has been executed" to assert an interest in the property subject to forfeiture. "The claim shall be verified on oath or solemn affirmation, and shall state the interest in the property by virtue of which the claimant demands its restitution and the right to defend the action." Id. Claims may be made by counsel on behalf of a client. Id. The claim must be filed even if the client has already filed a claim and bond in a prior administrative forfeiture proceeding involving the property.

An answer to the forfeiture complaint in rem also must be served "within 20 days after the filing of the claim." Id. The answer must comply with Federal Rule of Civil Procedure 8, which provides among other things that "[averments in a pleading . . . are admitted when not denied in the responsive pleading." The answer is also governed by Federal Rule of Civil Procedure 11, which has no counterpart in criminal practice. Rule 11 provides that counsel's signature on an answer certifies that "the denials of factual contentions are warranted on the evidence."

The Government may also require a claimant contesting forfeiture to answer its interrogatories when it answers the complaint. Supplemental Rule C. A claimant must personally answer interrogatories under oath, although the text may be drafted by counsel. Federal Rule of Civil Procedure 33. These interrogatories usually force a client to go on record with his or her account of the relevant events. Although discovery in the Federal Court in Maryland generally cannot begin until the Court issues a scheduling order following receipt of an answer, see Local Rule 104(4)(b), forfeiture actions are exempt from this requirement. See Local Rule 103(9)(a). Unless the prosecutor agrees to stay discovery or the Court agrees to intervene, a claimant often will have no choice but to answer the interrogatories or risk discovery sanctions including a possible default. See Federal Rule of Civil Procedure 37.

After the claim, answer, and any interrogatories are addressed, conventional civil discovery follows. A claimant can depose Government agents, informers, or cooperating witnesses under Federal Rules of Civil Procedure 30 and 45, but the Government can also depose a claimant. The Government has a statutory right to stay civil forfeiture proceedings,see 21 U.S.C. § 881(i), 18 U.S.C. § 981(g), but claimants have no similar statutory right to stay forfeiture proceeding even while criminal charges are pending.

Following discovery, the Government will frequently move for summary judgment under Federal Rule of Civil Procedure 56. To prevail, the Government must show there is no question of material fact (1) that there is probable cause to believe the property is subject to forfeiture and (2) that the claimant lacks evidence of an affirmative defense which would entitle him or her to judgment against the Government. Generally, to rebut the Government's showing of probable cause, the claimant must produce evidence sufficient to raise a question of fact for trial which if favorably resolved would entitle the claimant to judgment in his or her favor. Thus, the claimant must either show the absence of probable cause to forfeit the property or must present sufficient evidence to show that the fact-finder at trial could find that the claimant had shown its entitlement to the property by a preponderance of the evidence. For example, if the Government alleges under 21 U.S.C. § 881(a)(7) that property was used to commit a narcotics offense, once the Government has shown probable cause to forfeit the property, the claimant must show that the fact finder could find by a preponderance of the evidence that "the property was not unlawfully used or that the claimant has a valid defense" to resist summary judgment for the Government. See United States v. 152 Char-Nor Manor Boulevard, Chestertown, Maryland, 922 F. Supp. 1064, 1067 (D. Md. 1996) (citing to United States v. 7715 Betsy Bruce Lane, 906 F.2d 110, 111 (4th Cir. 1990)). A claimant cannot rest on simple denials to resist the Government's motion for summary judgment: The claimant's "response by affidavits or as otherwise provided . . . must set forth specific facts showing that there is a genuine issue for trial." Federal Rule of Civil Procedure 56(e).

If a claimant successfully resists the Government's summary judgment motion, and discovery is complete, the case will be scheduled for trial. If the Government seized the property at sea, the claimant has no right to a jury trial. If the property was seized on land, a jury trial can be obtained if timely sought.See Federal Rule of Civil Procedure 38.