New York Law Review

Tag: civil forfeiture

  • Property Clerk v. Harris, 9 N.Y.3d 237 (2007): Due Process Rights of Innocent Co-Owners in Vehicle Forfeiture

    Property Clerk of Police Department v. Harris, 9 N.Y.3d 237 (2007)

    Due process requires that an innocent co-owner of a vehicle seized for forfeiture be given the opportunity at a post-seizure hearing to demonstrate that their present possessory interest in the vehicle outweighs the government’s interest in continued impoundment.

    Summary

    The New York Court of Appeals addressed whether the Property Clerk of the NYPD must prove at a post-seizure retention hearing that a vehicle co-owner is *not* an “innocent owner” to justify impoundment pending civil forfeiture. The Court held that the City does not bear that initial burden. However, building on prior case law, it found that due process requires that an innocent co-owner be given the chance to show that their present possessory interest outweighs the City’s need to impound the vehicle. The court outlined a specific test for determining whether an innocent co-owner is entitled to the vehicle’s release, focusing on hardship and access to life necessities.

    Facts

    Delores Newton Harris co-owned a 2002 Mitsubishi Montero with her husband, Merv Harris. Mr. Harris was arrested for selling cocaine from the vehicle to an undercover officer. The NYPD seized the Montero, intending to forfeit it. Ms. Harris claimed to be an innocent owner, unaware of her husband’s illegal activities. At the Krimstock hearing, the City presented evidence of Mr. Harris’s drug offense and prior drug-related arrests. Ms. Harris testified about co-ownership and use of the vehicle.

    Procedural History

    The OATH administrative law judge ordered the Montero’s release, stating that the City failed to prove Ms. Harris wasn’t an innocent owner. The City filed an Article 78 proceeding. Supreme Court upheld OATH’s ruling. The Appellate Division reversed, holding that the City only needed to make the required showing against Mr. Harris. The New York Court of Appeals granted leave to appeal.

    Issue(s)

    Whether due process requires the Property Clerk of the NYPD to prove at a post-seizure retention hearing that the co-owner of a seized vehicle is not an “innocent owner” to justify continued impoundment during forfeiture proceedings.

    Holding

    No, the City doesn’t initially bear the burden of proving a co-owner is *not* an innocent owner; however, due process requires giving an innocent co-owner a chance at the Krimstock hearing to show that their present possessory interest outweighs the City’s impoundment needs because the innocent co-owner’s hardship and need for the vehicle are relevant to balancing the parties’ interests.

    Court’s Reasoning

    The Court balanced three factors to determine what process is due to an innocent co-owner: (1) the private interest affected; (2) the risk of erroneous deprivation; and (3) the government’s interest. The Court recognized that an innocent co-owner’s interest in a vehicle can be significant, as vehicles are often essential for transportation and life necessities. It found a substantial risk of erroneous deprivation if innocent co-owners can’t contest impoundment, because they possess crucial information about their reliance on the vehicle. The Court stated, “No better instrument has been devised for arriving at truth than to give a person in jeopardy of serious loss notice of the case … and opportunity to meet it.” While acknowledging the government’s interest in preventing future crime and preserving assets for forfeiture, the Court held these interests don’t always outweigh an innocent co-owner’s possessory interest. It established a test for when an innocent co-owner may be entitled to the vehicle’s release, requiring the co-owner to prove: (i) co-ownership, (ii) lack of participation in the crime, and (iii) substantial interference with critical life necessities. Here, Ms. Harris failed to prove a substantial hardship because her use of the vehicle was infrequent. Quoting People ex rel. Price v Sheffield Farms-Slawson-Decker Co., 225 NY 25, 30 (1918): “Sufferance … implies knowledge or the opportunity through reasonable diligence to acquire knowledge”.

  • County of Nassau v. Ureña, 36 A.D.3d 137 (2006): Civil Forfeiture & Due Process Rights

    County of Nassau v. Ureña, 36 A.D.3d 137 (2006)

    Civil forfeiture statutes must provide due process, including a prompt post-seizure hearing, and avoid excessive fines by ensuring proportionality to the offense and considering innocent owner defenses.

    Summary

    This case addresses the constitutionality of Nassau County’s civil forfeiture statute as applied to a vehicle seizure following a DWI arrest. The New York Court of Appeals found the ordinance unconstitutionally deficient because it lacked provisions for prompt post-seizure hearings and risked excessive fines by allowing forfeiture for even minor offenses. While upholding the general concept of vehicle forfeiture in DWI cases, the Court emphasized the need for procedural safeguards to protect due process rights and prevent disproportionate penalties. The court mandated prompt post-seizure hearings to establish probable cause for the arrest and the likelihood of success in the forfeiture action.

    Facts

    Defendant Ureña was arrested for DWI, speeding, and failure to signal. Her vehicle, valued at $6,500, was seized incident to the arrest. She later pleaded guilty to speeding and driving while impaired and was fined and had her license suspended. Nassau County then initiated a civil forfeiture action under the County Administrative Code seeking to permanently seize the vehicle.

    Procedural History

    The Supreme Court granted summary judgment to Nassau County, allowing the forfeiture. The Appellate Division reversed, finding the ordinance unconstitutionally vague. The New York Court of Appeals then reviewed the Appellate Division’s decision.

    Issue(s)

    1. Whether the Nassau County Administrative Code § 8-7.0(g)(3) is unconstitutionally vague?

    2. Whether the forfeiture of Ureña’s vehicle constituted an excessive fine in violation of the Eighth Amendment?

    3. Whether the seizure of Ureña’s vehicle without a pre-seizure hearing violated her due process rights?

    Holding

    1. No, because the ordinance clearly defines the conduct that may lead to forfeiture.

    2. No, because in this specific instance, the forfeiture was not disproportionate to the gravity of the DWI offense.

    3. No for a pre-seizure hearing, but yes, a prompt post-seizure hearing is required to satisfy due process.

    Court’s Reasoning

    The Court reasoned that while the ordinance itself was not unconstitutionally vague, its broad application risked violating the Excessive Fines Clause because it allowed forfeiture for even minor offenses. The Court emphasized that forfeiture must be proportional to the crime. Regarding due process, the Court acknowledged that exigent circumstances (the mobility of the vehicle and the risk of continued drunk driving) justified a seizure without a pre-seizure hearing. However, it held that due process requires a prompt post-seizure hearing.

    The Court applied the Mathews v. Eldridge balancing test, weighing the private interest affected (the vehicle owner’s property rights), the risk of erroneous deprivation, and the government’s interest. It found that the private interest in retaining a vehicle is significant, the risk of erroneous deprivation is heightened when innocent owners are involved, and the government’s interest can be protected through less restrictive means than prolonged seizure without a hearing. The court noted, quoting United States v James Daniel Good Real Prop., 510 U.S. 43, 62 (1993), that “Fair procedures are not confined to the innocent. The question before us is the legality of the seizure, not the strength of the Government’s case”. The Court explicitly stated that such post-seizure retention hearing should be provided with adequate notice to all defendants whose cars are seized and held for possible forfeiture. Quoting Bajakajian, the court also stated, “violates the Excessive Fines Clause if it is grossly disproportional to the gravity of a defendant’s offense”.

    The Court also highlighted the lack of an “innocent owner” defense in the ordinance, raising further constitutional concerns. It cited Krimstock v Kelly, 306 F.3d 40, 57 (2d Cir. 2002), stating “A statute that authorizes the police to seize property to which the government has not established a legal right or claim, and that on its face contains no limitation of forfeiture liability for innocent owners, raises substantial constitutional concerns”.

    Therefore, Nassau County would need to demonstrate probable cause for the initial arrest, the likelihood of success in the forfeiture action, and the necessity of retention to preserve the vehicle. The Court affirmed the Appellate Division’s reversal, effectively requiring the county to revise its forfeiture procedures.

  • Property Clerk v. Ferris, 77 N.Y.2d 428 (1991): Forfeiture Proceedings and the Limits of Prosecutorial Discretion

    Property Clerk v. Ferris, 77 N.Y.2d 428 (1991)

    In civil forfeiture proceedings under the New York City Administrative Code, courts lack the authority to dismiss a forfeiture petition in the interests of justice once it is established that the property was used unlawfully, and a prosecutor’s promise to release seized property does not bind the Property Clerk, an independent agency.

    Summary

    This case concerns the forfeiture of an automobile seized following respondent Ferris’s arrest for drug possession. The Property Clerk sought forfeiture under the New York City Administrative Code. While the lower courts found the vehicle subject to forfeiture, they dismissed the petition in the interest of justice, believing its release was part of Ferris’s plea bargain. The New York Court of Appeals reversed, holding that the courts lacked the authority to dismiss the forfeiture action based on equitable considerations or prosecutorial promises, as the Administrative Code mandates forfeiture once unlawful use is established, and the Property Clerk is an independent agency not bound by the prosecutor’s actions.

    Facts

    Respondent Ferris was arrested for drug possession after being observed purchasing drugs and driving away with passengers, who also possessed drugs. A search revealed Ferris was holding a packet containing PCP. Ferris later pleaded guilty to disorderly conduct. As part of the plea agreement, the prosecutor agreed to release Ferris’s vehicle and notified the Property Clerk that the vehicle was no longer needed as evidence. The Property Clerk then initiated a civil forfeiture proceeding to retain possession of the vehicle.

    Procedural History

    The trial court initially found the vehicle subject to forfeiture but dismissed the petition in the interests of justice, influenced by the plea agreement in the criminal case. The Appellate Division affirmed this decision. The Property Clerk appealed to the New York Court of Appeals.

    Issue(s)

    Whether a court has the authority to dismiss a civil forfeiture petition under the New York City Administrative Code in the interests of justice, based on a plea agreement in the related criminal case where the prosecutor promised to release the seized property.

    Holding

    No, because the New York City Administrative Code mandates forfeiture once it’s established that the property was used unlawfully, and courts lack the power to dismiss the petition absent express statutory authorization. The prosecutor’s promise does not bind the Property Clerk, an independent agency.

    Court’s Reasoning

    The Court of Appeals emphasized the mandatory language of Section 14-140 of the Administrative Code, stating that once the Property Clerk establishes unlawful use, the property “should have been declared forfeited.” The Court distinguished this case from CPLR 1311(4), which allows dismissal of forfeiture actions in the interest of justice, noting that this provision applies to a different forfeiture scheme and does not supersede the authority to enforce other legal remedies. The Court also distinguished this case from Matter of Chaipis v. State Liq. Auth., where a prosecutor’s promise was given weight in a licensing decision. Here, the Property Clerk is an independent agency without discretion to recognize respondent as a “lawful claimant,” and the court cannot compel the Property Clerk to return the vehicle without statutory authorization. The court noted that if Ferris was misled by the prosecutor’s promise, his remedy was to move to vacate his plea. The court reasoned, “The Property Clerk is a separate and independent agency and has no discretion under the Code to recognize respondent as a ‘lawful claimant entitled to * * * such * * * property’ (Administrative Code § 14-140 [e] [1]).” Therefore, the Court reversed the Appellate Division’s order and granted the petition for forfeiture.

  • Kuriansky v. Bed-Stuy Health Care Corp., 73 N.Y.2d 875 (1989): Provisional Remedies and Preservation of Constitutional Claims

    Kuriansky v. Bed-Stuy Health Care Corp., 73 N.Y.2d 875 (1989)

    A party must properly raise and preserve a constitutional challenge at the trial level to allow for appellate review; broad assertions of constitutional violations are insufficient.

    Summary

    This case concerns the propriety of provisional remedies (attachment and preliminary injunction) obtained by the plaintiff in a civil forfeiture action. The New York Court of Appeals affirmed the lower court’s decision, holding that the plaintiff made a sufficient showing to justify the provisional remedies. Furthermore, the Court held that the defendants’ claim that conditioning relief from the provisional restraints upon disclosure of potentially incriminating financial information violated their Fifth and Sixth Amendment rights was not preserved for appellate review, as the argument was not specifically raised and ruled upon in the lower courts. A general assertion of Fifth Amendment rights was deemed insufficient. Therefore, the order of the Appellate Division was affirmed.

    Facts

    The specific facts underlying the forfeiture action against Bed-Stuy Health Care Corp. are not detailed in this memorandum opinion. However, the plaintiffs sought and obtained provisional remedies, including attachments and preliminary injunctions, to restrain the defendants’ assets during the pendency of the forfeiture proceedings. The defendants sought relief from these restraints, arguing that doing so would violate their Fifth and Sixth Amendment rights.

    Procedural History

    The Supreme Court granted the plaintiffs’ motions for provisional relief. The defendants appealed, arguing that conditioning relief from the provisional restraints upon the disclosure of potentially incriminating financial information was precluded by the Fifth and Sixth Amendments. The Appellate Division affirmed the Supreme Court’s order. The defendants then appealed to the New York Court of Appeals. The Court of Appeals affirmed the Appellate Division’s order.

    Issue(s)

    Whether the defendants adequately preserved their claim that conditioning relief from provisional restraints upon the disclosure of potentially incriminating financial information violated their Fifth and Sixth Amendment rights, thus entitling them to appellate review of that claim.

    Holding

    No, because the defendants did not specifically invoke their Fifth Amendment privilege or raise the argument they now advance on appeal in the lower courts. The Court of Appeals held that a broad assertion of Fifth Amendment violations was insufficient to preserve the specific argument for appellate review.

    Court’s Reasoning

    The Court of Appeals based its decision on the principle of preservation of issues for appellate review. The Court stated that “the record does not demonstrate either that defendants ever actually attempted to invoke their Fifth Amendment privilege or that they made the argument they now advance on appeal.” The Court emphasized that the defendants only broadly argued that “CPLR Article 13-A violates defendants’ Fifth Amendment rights,” which was insufficient to preserve the specific argument regarding the disclosure of financial information as a condition for relief from the provisional restraints. Because the issue was not properly raised and ruled upon in the lower courts, the Court of Appeals declined to address the merits of the constitutional claim. This holding reinforces the importance of raising specific legal arguments and creating a clear record in the lower courts to preserve those arguments for appellate review. This is a fundamental principle of appellate procedure and ensures that the trial court has the initial opportunity to address and rule upon the legal issues presented.

  • Morgenthau v. Citisource, Inc., 68 N.Y.2d 211 (1986): Provisional Remedies and Pre-Conviction Asset Seizure

    68 N.Y.2d 211 (1986)

    New York’s CPLR Article 13-A permits the pre-conviction attachment of a criminal defendant’s assets, not limited to proceeds of the crime, to ensure funds are available for potential forfeiture judgments, provided due process safeguards are met.

    Summary

    The District Attorney sought to attach assets of defendants indicted for “post-conviction forfeiture crimes” under CPLR Article 13-A. The lower courts disagreed on whether assets beyond the direct proceeds of the alleged crimes could be seized pre-conviction. The Court of Appeals held that the statute allows such seizure to ensure funds are available for potential forfeiture judgments, but emphasizes that due process rights must be carefully protected. The court found that the statute contained sufficient safeguards to satisfy due process requirements, including notice requirements, burden of proof, and opportunities to challenge the attachment.

    Facts

    Robert Morgenthau, the District Attorney, initiated a civil forfeiture action against Citisource, Inc., Marvin Kaplan, Stanley Friedman, and others, seeking $4.49 million. Kaplan, Friedman, and others were indicted on various felony charges, including violations of the Donnelly Act, the Martin Act, grand larceny, bribery, bribe receiving, and conspiracy. Morgenthau obtained ex parte orders to attach certain assets belonging to Kaplan and Friedman and to restrain the alienation of funds in Kaplan’s retirement trust account. The claiming authority asserted that these provisional remedies were necessary to prevent the dissipation of assets that would be subject to a judgment if the defendants were convicted.

    Procedural History

    The Supreme Court denied the defendant’s motion to vacate the attachment and injunction, confirming the attachment on the funds already levied. The Appellate Division modified and vacated the Supreme Court’s order, limiting attachment only to assets directly traceable to the alleged crimes. The Court of Appeals reversed the Appellate Division’s order. The case was remitted to the Appellate Division to consider the factual issues and arguments not previously addressed.

    Issue(s)

    1. Whether CPLR Article 13-A authorizes the pre-conviction attachment of a putative “criminal defendant’s” assets that are not directly traceable to the alleged crime?

    2. Whether CPLR Article 13-A, as interpreted to allow pre-conviction attachment of untainted assets, violates the defendant’s federal constitutional rights to due process and right to counsel?

    Holding

    1. Yes, because the statute explicitly allows for provisional remedies, including attachment, in actions relating to post-conviction forfeiture crimes prior to conviction to prevent the dissipation of assets that would be subject to judgment.

    2. No, because the statute provides sufficient procedural safeguards to protect the defendants’ interests and minimizes the risk of erroneous deprivation of property.

    Court’s Reasoning

    The Court reasoned that the legislative intent behind CPLR Article 13-A was to “take the profit out of crime.” The statute allows forfeiture actions against “criminal defendants” resulting in a judgment recovering proceeds of the crime or a money judgment equivalent in value to those proceeds (CPLR 1311[1]). The availability of provisional remedies such as attachment is crucial to prevent defendants from dissipating assets before a judgment can be obtained. The court emphasized that a contrary interpretation would contravene the legislative purpose.

    Addressing the due process challenge, the Court applied the balancing test from Mathews v. Eldridge, considering the private interest affected, the risk of erroneous deprivation, and the government’s interest. The Court acknowledged the defendant’s interest in possessing their assets, but weighed this against the government’s strong interest in deterring crime and preserving assets for victims. The Court determined that CPLR Article 13-A provides sufficient safeguards, including the requirements for the claiming authority to demonstrate a substantial probability of success on the issue of forfeiture, that failure to enter the order may result in proceeds being unavailable, and that the need to preserve the property outweighs any hardship on the defendants (CPLR 1312[3]). These safeguards ensure compliance with due process requirements.

    Regarding the right to counsel, the Court stated that while pre-conviction asset attachment could potentially infringe on the ability to hire counsel, CPLR 1312(3) requires the claiming authority to prove the need for the provisional remedy outweighs the hardship on any party. The court can also consider the impact of forfeiture on the defendant (CPLR 1311[4][d][i]).

    The Court specifically noted, “[Provisional remedies * * * shall be available in all actions to recover property or for a money judgment” (CPLR 1312 [1]).”