No. 99-1501
In the Supreme Court of the United States
DONALD G. FORD, PETITIONER
v.
UNITED STATES OF AMERICA
ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
BRIEF FOR THE UNITED STATES IN OPPOSITION
SETH P. WAXMAN
Solicitor General
Counsel of Record
JAMES K. ROBINSON
Assistant Attorney General
LISA SIMOTAS
Attorney
Department of Justice
Washington, D.C. 20530-0001
(202) 514-2217
QUESTION PRESENTED
Under 19 U.S.C. 1615, as applicable before enactment of the Civil Asset
Forfeiture Reform Act of 2000, once the government demonstrated probable
cause to institute a forfeiture action, the burden of proof shifted to the
claimant to avoid forfeiture. The question presented is whether that allocation
of the burden of proof violates the Due Process Clause of the Fifth Amendment.
In the Supreme Court of the United States
No. 99-1501
DONALD G. FORD, PETITIONER
v.
UNITED STATES OF AMERICA
ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
BRIEF FOR THE UNITED STATES IN OPPOSITION
OPINIONS BELOW
The opinion of the court of appeals (Pet. App. 1a-19a) is unpublished, but
the judgment is noted at 191 F.3d 461 (Table). The opinion of the district
court (Pet. App. 20a-29a) is unreported.
JURISDICTION
The judgment of the court of appeals was entered on September 1, 1999. The
petition for rehearing was denied on December 10, 1999 (Pet. App. 40a-41a).
The petition for a writ of certiorari was filed on March 9, 2000. The jurisdiction
of this Court is invoked under 28 U.S.C. 1254(1).
STATEMENT
Following a jury trial in the United States District Court for the Western
District of Kentucky, petitioner was convicted on two counts of illegal
gambling, in violation of 18 U.S.C. 1955; one count of money laundering,
in violation of 18 U.S.C. 1956; and 26 counts of engaging in monetary transactions
in criminally-derived property, in violation of 18 U.S.C. 1957. The court
of appeals affirmed. United States v. Ford, 184 F.3d 566 (6th Cir. 1999),
cert. denied, 120 S. Ct. 1175 (2000). In a related civil proceeding, at
issue here, the district court granted the motion of the United States for
summary judgment of forfeiture as to four parcels of real property and two
lots of currency. The court of appeals affirmed.
1. In 1989, petitioner and his then-wife, Margaret Ford, purchased four
contiguous parcels of real property in Louisville, Kentucky. Petitioner
built a large bingo hall on three of the parcels, which he intended to rent
to charities seeking to conduct bingo games as a fund-raising activity.
Under Kentucky law, "charitable gaming" can constitute a defense
to prosecution for illegal gambling. Petitioner sold the bingo hall to Clay
Ballinger, but after Ballinger defaulted on his payments in December 1991,
petitioner reassumed ownership of the hall. Pet. App. 2a.
The Regular Veterans Association (RVA) is a national organization that supports
veterans and members of the military. In late 1991, petitioner organized
a post of the RVA (RVA Post #1), and registered it as an entity that would
conduct charitable gaming in Louisville. Petitioner appointed long-time
friends and family members as officers of RVA Post #1, and at its first
meeting, petitioner loaned $50,000 to the Post. In December 1991, RVA Post
#1 began to sponsor bingo events at petitioner's bingo hall. Pet. App. 2a-3a;
C.A. Br. 9-10.
In February 1992, petitioner purchased a meeting hall located directly across
the street from the bingo hall. Petitioner paid $144,000 for the meeting
hall (RVA hall). Later that month, petitioner sold the RVA hall to RVA Post
#1 for $375,000. RVA Post #1 paid petitioner $75,000 in cash upon execution
of the contract, and spent $74,000 to repair, renovate, and furnish RVA
hall. RVA Post #1's only known source of income was proceeds from the gambling
events it sponsored at petitioner's bingo hall. Pet. App. 3a.
From January 1, 1992, through August 28, 1992, local RVA posts sponsored
gambling events at the bingo hall. Petitioner charged rent for each gaming
session conducted at the bingo hall. The proceeds from the games and profits
from the concession stand were deposited daily into the checking account
of petitioner's closely held corporation, and only periodically distributed
to the RVA posts. Petitioner also stashed large sums of the bingo proceeds
in safe deposit boxes at various Louisville banks. Petitioner had no other
known source of large sums of cash. Pet. App. 3a-4a.
2. Following an investigation by the Internal Revenue Service and local
law enforcement, the United States filed a complaint seeking civil forfeiture
of the bingo hall, RVA hall, a private residence, and six lots of United
States currency seized in searches of the bingo hall and assorted safe deposit
boxes. The United States alleged that the property had been used in an illegal
gambling business or involved in financial transactions in criminally derived
property. The United States sought forfeiture of the property under 18 U.S.C.
1955(d) and 18 U.S.C. 981(a)(1)(A). Pet. App. 4a-5a.
In August 1993, a federal grand jury indicted petitioner on various counts
of illegal gambling, money laundering, and engaging in monetary transactions
in criminally-derived property. In November 1996, petitioner was convicted
on those counts. Following petitioner's convictions, the government moved
for summary judgment in the forfeiture action. Pet. App. 5a..
The district court granted the government's motion in substantial part.
Pet. App. 20-31. The court noted that, under the forfeiture statutes, once
the government establishes probable cause to institute the forfeiture action,
the burden shifts to the claimant to show by a preponderance of the evidence
that the property is not subject to forfeiture. Id. at 21a-22a. Relying
on Sixth Circuit precedent, the court rejected petitioner's argument that
the government must establish that property is subject to forfeiture by
clear and convincing evidence. Id. at 22a.
Applying the settled statutory framework, the district court first held
that petitioner could raise no factual issue to oppose forfeiture of the
three parcels of property devoted to the bingo hall because "illegal
gambling actually occurred there." Pet. App. 23a. The court next found
that "the evidence clearly and convincingly proves that the [RVA hall]
was used as and in connection with an illegal gambling operation."
Ibid. In that regard, the court noted that petitioner completely controlled
the RVA; that the RVA sponsored most of the illegal gambling events at the
nearby bingo hall; and that "the RVA and the RVA Hall had no existence
apart from" the "central" role they played in petitioner's
illegal gambling operation. Ibid. Finally, the court concluded that the
cash seized at the bingo hall and from petitioner's safe deposit box was
derived from petitioner's gambling operation. Id. at 24a-25a. The court
rejected petitioner's argument that the funds cannot be traced to his gambling
operation because they were derived from the concession stand operations.
"Without the illegal gambling operation," the court reasoned,
"the concession stand would not have existed. The concession stand
was an important and expected part of the entire bingo scene." Id.
at 24a.
3. In an unpublished per curiam opinion, the court of appeals affirmed.
Pet. App. 1a-19a. The court rejected petitioner's contention that the burden
of proof set forth in 19 U.S.C. 1615, and incorporated by reference in 18
U.S.C. 981(d) and 18 U.S.C. 1955(d), violates due process. The court noted
that under the terms of Section 1615, once the government establishes probable
cause for the institution of the suit, the burden of proof is on the claimant.
Pet. App. 7a. The court further noted that the Sixth Circuit's standard
practice has been to "place on claimants the evidentiary burden to
show by a preponderance of the evidence that forfeiture is not warranted."
Ibid.
The court of appeals rejected petitioner's contention that this Court's
decisions in Austin v. United States, 509 U.S. 602 (1993), and United States
v. James Daniel Good Real Property, 510 U.S. 43 (1993), required a contrary
conclusion. The court reasoned that James Daniel Good Real Property held
only that, absent exigent circumstances, the Due Process Clause requires
notice and an opportunity to be heard before the government seizes real
property under the forfeiture statutes. The court also noted that, in holding
that forfeitures are subject to the limitations of the Eighth Amendment's
Excessive Fines Clause, this Court in Austin did not rest its analysis on
characterizing forfeiture as criminal or quasi-criminal. Pet. App. 8a. The
court of appeals emphasized, moreover, that in United States v. Ursery,
518 U.S. 267 (1996), this Court refused to extend Austin's punishment rationale
to the Double Jeopardy Clause. To the contrary, the court noted, this Court
held that "[t]here is little doubt that Congress intended [forfeitures
under 18 U.S.C. 981] to be civil proceedings," and that there is "little
evidence" to suggest that such proceedings "are so punitive in
form and effect as to render them criminal despite Congress' intent to the
contrary." Pet. App. 8a (quoting Ursery, 518 U.S. at 288, 290).
Judge Clay dissented. Pet. App. 14a-19a. In his view, the burden of proof
allocation set forth in 19 U.S.C. 1615 "violates the Fifth Amendment's
protection against loss of property without due process of law." Pet.
App. 15a. He concluded that the government should be required to "establish
at minimum that forfeiture is supported by a preponderance of the evidence-a
typical burden in civil proceedings-before the burden of proof may shift
to the claimant to demonstrate that he is entitled to keep his property."
Ibid.
ARGUMENT
Petitioner contends that the burden of proof for civil forfeitures established
in 19 U.S.C. 1615 violates the Due Process Clause of the Fifth Amendment.
That contention is without merit and does not warrant review.
Section 1615 provides as follows:
In all suits or actions * * * brought for * * * forfeiture * * * where the
property is claimed by any person, the burden of proof shall lie upon such
claimant; * * * Provided, That probable cause shall be first shown for the
institution of such suit or action, to be judged of by the court * * *.
19 U.S.C. 1615. That method for allocating the burden of proof also governs
forfeiture actions instituted under the provisions at issue here. See 18
U.S.C. 981(d), 1955(d). Every court of appeals that has considered the question
has upheld that burden of proof allocation against due process challenge.
See United States v. $129,727 U.S. Currency, 129 F.3d 486, 491-494 (9th
Cir. 1997), cert. denied, 523 U.S. 1065 (1998); United States v. One Beechcraft
King Air 300 Aircraft, 107 F.3d 829, 829-830 (11th Cir. 1997) (per curiam);
United States v. $94,000 in U.S. Currency, 2 F.3d 778, 782-784 (7th Cir.
1993); United States v. 228 Acres of Land, 916 F.2d 808, 814 (2d Cir. 1990);
United States v. Santoro, 866 F.2d 1538, 1543-1544 (4th Cir. 1989); United
States v. $250,000 in U.S. Currency, 808 F.2d 895, 900 (1st Cir. 1987);
Bramble v. Richardson, 498 F.2d 968, 970-973 (10th Cir. 1974). This Court
has repeatedly denied petitions for a writ of certiorari that have challenged
that allocation of the burden of proof on due process grounds. See Trujillo
v. United States, 523 U.S. 1065 (1998); Scianna v. United States, 519 U.S.
932 (1996); Moreno v. United States Drug Enforcement Admin., 498 U.S. 1091
(1991); Aponte v. United States, 466 U.S. 994 (1984). For several reasons,
review is unwarranted in this case as well.
First, after the instant petition was filed, Congress enacted legislation
altering the burden of proof in civil forfeiture actions. The Civil Asset
Forfeiture Reform Act of 2000 contains the following provision:
(c) BURDEN OF PROOF.-In a suit or action brought under any civil forfeiture
statute for the civil forfeiture of any property -
(1) the burden of proof is on the Government to establish, by a preponderance
of the evidence, that the property is subject to forfeiture;
(2) the Government may use evidence gathered after the filing of a complaint
for forfeiture to establish, by a preponderance of the evidence, that property
is subject to forfeiture; and
(3) if the Government's theory of forfeiture is that the property was used
to commit or facilitate the commission of a criminal offense, or was involved
in the commission of a criminal offense, the Government shall establish
that there was a substantial connection between the property and the offense.
Pub. L. No. 106-185, § 2(a), 114 Stat. 205-206. Those provisions apply
to civil forfeiture actions brought under 18 U.S.C. 981 and 1955, the statutes
at issue here. See § 2(b), 114 Stat. 210.
As the text of the new statute makes clear, in future actions to forfeit
property under Sections 981 and 1955, the burden is no longer on the claimant
to avoid forfeiture once the government establishes probable cause to initiate
a forfeiture action. Under the new statute, the government must establish
"by a preponderance of the evidence" that the property is subject
to forfeiture. The question raised by petitioner-whether the Due Process
Clause permits the government to forfeit property upon a showing of probable
cause, unless the defendant shows by the preponderance of the evidence that
the property is not forfeitable-is therefore of no continuing importance.
Second, even if the question presented were of prospective importance, this
case would present a poor vehicle for resolving it. The evidence submitted
by the government in support of forfeiture in this case readily satisfies
both the preponderance of the evidence standard suggested by the dissent
and the clear and convincing standard espoused by petitioner. As petitioner's
criminal convictions demonstrate, the government proved beyond a reasonable
doubt that illegal gambling actually occurred at the bingo hall. See Pet.
App. 23a. The district court also found that "the evidence clearly
and convincingly proves" that the RVA hall was "used as and in
connection with an illegal gambling operation." Ibid. And there was
"overwhelming evidence in the record" to establish that the two
lots of seized currency were proceeds from petitioner's gambling operation.
Id. at 3a-4a, 24a-25a. Thus, the three parcels of land devoted to the gambling
hall, the RVA hall, and the two lots of seized currency are all subject
to forfeiture, regardless of the applicable burden of proof.
Finally, petitioner's constitutional challenge lacks merit. Since the earliest
days of our nation, forfeiture statutes have placed the burden of proof
on the claimant to avoid forfeiture once the government established probable
cause to initiate a forfeiture proceeding. For example, a revenue collection
Act of 1799 provided:
[I]n actions, suits or informations to be brought, where any seizure shall
be made pursuant to this act, if the property be claimed by any person,
in every such case, the onus probandi shall lie upon such claimant; * *
* but the onus probandi shall lie on the claimant, only where probable cause
is shown for the prosecution, to be judged of by the court before whom the
prosecution is had.
Act of Mar. 2, 1799, ch. 22, § 71, 1 Stat. 678. As this Court recently
reaffirmed, "[e]vidence of a longstanding legislative practice 'goes
a long way in the direction of proving the presence of unassailable ground
for the constitutionality of the practice.'" United States v. Ursery,
518 U.S. 267, 276 (1996) (quoting United States v. Curtiss-Wright Export
Corp., 299 U.S. 304, 327-328 (1936)).
Moreover, in several cases, this Court has applied the forfeiture laws'
probable cause standard without ever suggesting that such a standard might
be constitutionally infirm. In Locke v. United States, 11 U.S. (7 Cranch)
339, 348 (1813), for example, the Court concluded that the evidence offered
by the government furnished "just cause to suspect" that certain
goods were subject to forfeiture. The Court rejected the claimant's contentions
that "this [wa]s not enough to justify the Court in requiring exculpatory
evidence" from him and that guilt "must be proved, before the
presumption of innocence can be removed." Ibid. Applying the plain
terms of the 1799 statute, the Court concluded that
the term 'probable cause,' according to its usual acceptation, means less
than evidence which would justify condemnation; and, in all cases of seizure,
has a fixed and well known meaning. It imports a seizure made under circumstances
which warrant suspicion.
Ibid. See also, e.g., The John Griffin, 82 U.S. (15 Wall.) 29, 33 (1872)
(finding that government established clear prima facie case for forfeiture,
which "both by the statutes and the ordinary rules of evidence required
of the claimant such testimony as should satisfactorily rebut the presumption
of guilt which it raised"); Wood v. United States, 41 U.S. (16 Pet.)
342, 366 (1842) (finding government's proof established probable cause and
affirming jury instructions placing onus probandi on the claimant).
Petitioner's reliance (Pet. 11-12) on Santosky v. Kramer, 455 U.S. 745 (1982),
and Addington v. Texas, 441 U.S. 418 (1979), as support for a clear and
convincing evidence standard is misplaced. Those cases hold that due process
requires the government to adduce clear and convincing evidence in order
to obtain a judgment terminating parental rights or a judgment of involuntary
civil commitment. The crucial factor in those cases was that they implicated
"fundamental liberty interest[s]" (Santosky, 455 U.S. at 753)
of great "weight and gravity" (Addington, 441 U.S. at 427). This
case does not implicate such a fundamental liberty interest. Instead, it
involves the loss of property and money. That distinction is significant.
As explained in Santosky, 455 U.S. at 756 (quoting Addington, 441 U.S. at
424), "[t]his Court has mandated an intermediate standard of proof-'clear
and convincing evidence'- when the individual interests at stake in a state
proceeding are both 'particularly important' and 'more substantial than
mere loss of money.'"
CONCLUSION
The petition for a writ of certiorari should be denied.
Respectfully submitted.
SETH P. WAXMAN
Solicitor General
JAMES K. ROBINSON
Assistant Attorney General
LISA SIMOTAS
Attorney
JULY 2000