In a unanimous decision this month, the Supreme Court limited the scope of civil asset forfeiture, the controversial legal process whereby law enforcement officers can seize property they suspect was involved in illegal activities. In this post, we will discuss how the recent decision in Timbs v. Indiana affects a long-time cannabis industry boogeyman.
Civil asset forfeiture is something of a legal oddity – the government brings a civil action against the property itself, leading to such interesting case names as United States v. Article Consisting of 50,000 Cardboard Boxes More or Less, Each Containing One Pair of Clacker Balls, 413 F. Supp. 1281 (D. Wisc. 1976). The “civil” part of the action means that the government’s burden of proof is substantially lower than in a criminal action, such that assets can be legally forfeited even in the absence of a criminal conviction.
Forfeited assets typically get sold, auctioned or destroyed with net proceeds retained by the seizing authority. With the advent of the War on Drugs in the 1980s, changes to federal law allowed local law enforcement to take a cut of seized drug trafficking assets. While the principal that criminals shouldn’t be allowed to keep the fruits of their crimes is generally defensible, recent years have brought increased attention to the practice and allegations of abuse by law enforcement.
Civil asset forfeiture (CAF) casts a shadow over cannabis businesses. The practice places not only cash proceeds at risk, but also any property “used to commit, or to facilitate the commission” of a crime. This may include leased real property and vehicles, even if the owner of the property in question was not involved in the commission of the underlying crime. Notable targets include the landlord of Oakland’s Harborside dispensary, who ultimately prevailed after several years of litigation.
The issue considered by the Supreme Court in Timbs is whether there are limitations to the amount of assets that a state is allowed to seize. Timbs sold a small amount of heroin to an undercover cop. He was charged and convicted, and his crimes carried a monetary fine of up to $10,000. The state of Indiana brought a civil action to seize Timbs’ Range Rover, which he’d used to transport drugs, but which had been purchased with nearly $50,000 in legitimate funds from an inheritance. Nearly 30 years ago, the Supreme Court held that the magnitude of federal civil asset seizures are limited by the 8th Amendment’s restrictions on excessive fines. In Timbs, the Supreme Court held that these restrictions also apply to states.
So what’s changed post-Timbs? Likely, not much. The Supreme Court has repeatedly affirmed that the practice of civil asset forfeiture is constitutional. Timbs simply means that the amount of the seizure can’t be unreasonably large compared to the underlying crime. The Timbs ruling may not be much help, say, to the owners of a truck carrying hemp that was recently seized in Idaho. Under Idaho law, “trafficking in marijuana” carries a maximum fine of $50,000. This leaves a lot of leeway for Idaho authorities to constitutionally seize property used to facilitate what Idaho contends to be a crime.
Absent statutory reforms of asset forfeiture laws or the decriminalization of cannabis, asset forfeiture will continue to be a risk for cannabis business operators. Our attorneys regularly advise clients on forfeiture risks and help them develop strategies to minimize it. Our Cannabis and Investigations, Compliance & White Collar teams can assist if you or someone you know has property at risk.