The New York State Executive Budget bill proposed in mid-January 2012 contains amidst its numerous provisions a measure that would radically enlarge the reach of New York’s forfeiture law and revamp its procedures. The proposal largely escaped press attention, except for a Jan. 20 article in the Law Journal.1
Part E of the budget’s Public Protection and General Government Article VII Legislation adds a new Article 62 to the Penal Law that would provide for forfeiture to the government of any “proceeds” of a crime.2 Unlike current state forfeiture laws, which are limited to felonies, this one would be triggered by misdemeanor convictions as well. This is a major expansion.
The measure was “inserted at the request of prosecutors,” who want to shift forfeiture from civil to criminal court. They want prosecutors to use the state system instead of relying on the federal system to effectuate the forfeiture of proceeds. New York’s current system, in the prosecutors’ view, is “far too cumbersome.”3
The “cumbersome” impediment to speedy forfeiture is otherwise known as “due process of law.” The forfeiture of proceeds in proposed Article 62 would be accomplished in a starkly simple manner. Section One says that a judge, in imposing sentence on a person convicted under the Penal Law, “shall” order forfeiture of any “proceeds” of the offense.
That’s it for process. Many convictions often involve a single sale or act of possession. Was the seized money truly the “proceeds” of the crime of conviction? Was all of the seized money proceeds, or just a portion? Was it the property of an innocent third party? These questions have always been among the issues to be resolved in federal and state forfeiture litigation. Article 62, in contrast, contains no trial, no hearing, no burden of proof on the state. The judge “shall” order forfeiture of what the prosecutor claims are “proceeds,” period.
The inclusion of misdemeanors in this seemingly automatic determination will affect an untold number of defendants. People carry cash. It is as easy for a prosecutor to allege that the money taken from the defendant is the “proceeds” of a crime as it is for the police to seize and voucher it upon arrest.
One of the anomalies of the attempted addition of Article 62 is that the Penal Law already has a detailed forfeiture law, Article 480. That law provides for the forfeiture of proceeds and instrumentalities of felony drug offenses. It was enacted in 1990, with the enthusiastic support of state prosecutors.
District Attorney Robert Morgenthau, speaking for the law enforcement community, praised the law for simplifying procedures by allowing prosecutors to seek forfeiture in the criminal case rather than have to commence a separate civil action under CPLR Article 13-A. It also provided an incentive to keep revenues in the state system, rather than hand off forfeitable property to federal prosecutors.4 Proposed Article 62 echoes these same goals.
As it turned out, Article 480 had a fatal flaw from a prosecutor’s perspective: genuine due process. Notice and an opportunity to be heard were embedded in the statute, from the requirement of a separate forfeiture information to give notice (PL §480.10(1)), discovery (§5), and a trial on the forfeiture counts (§6). As in the civil statute, an early opportunity to challenge retention of the property was also present (PL §480.30).
The 1990 law gave the prosecution the benefit of a rebuttable presumption that money found near drugs was the proceeds of the offense (PL §480.35). Nevertheless, the meaningful adversarial procedures in the law have apparently rendered it too “cumbersome.” Article 480 forfeiture has been virtually unused by prosecutors. The only two reported court decisions under it are reversals of forfeitures for failure of the prosecutors to follow its procedures.5
Article 480 was passed by the Legislature as part of the normal legislative process, after 13 months of consideration. 6 That explains its balanced nature. Proposed Article 62, however, has been submitted as part of the executive budget bill, which moves on an expedited track and allows no amendments. Its promoters’ obvious expectation is that its take-it-or-leave-it status in a bill that must be passed will enable the one-sided measure to blow past any opposition in the Legislature.
Role of the Judiciary
“Forfeiture is a ‘harsh and oppressive procedure’ which is not favored by the courts,” the Second Circuit has reiterated.7 The history of procedural due process in the forfeiture area has largely been one of judicial insistence that constitutional protections against arbitrary deprivation of property be an integral part of the system
The Court of Appeals, for example, has held that New York’s Constitution guarantees a trial by jury in a forfeiture action.8 The Court has also ruled that, soon after seizure of property, the government must demonstrate a likelihood of success in order to retain the property during the forfeiture case, and show as well that the need to hold it outweighs the hardship imposed on the deprived owner. 9
The federal judiciary has likewise reinforced the indispensability of due process safeguards in state and local forfeiture proceedings. Over 40 years ago, the Second Circuit concurred with state judges’ condemnations of New York City’s Administrative Code forfeiture regime as “shocking” and “a studied indifference to the rights of the public.”10 More recently, the Court ruled that owners of automobiles seized for forfeiture have a constitutional right to a prompt post-seizure hearing to seek return of the vehicle.11 The Court of Appeals agreed.12
Both decisions drew on the Supreme Court’s 1993 ruling in United States v. James Daniel Good,13 in which the Court ruled that an adversary hearing is required before seizure of real property for forfeiture. Due process protections are of particular importance, the Supreme Court stressed, “where the Government has a direct pecuniary interest in the outcome of the proceeding.”
This “direct pecuniary interest” could hardly be more evident in the impetus behind proposed Article 62. “Budget officials estimate that the measure will generate roughly $28 million annually—currently, about $16 million is obtained in civil forfeitures….”14 The business plan is a backhand tribute to due process: the increased revenue projection goes hand-in-hand with stripping the forfeiture process of procedural safeguards for those whose property is confiscated.
The Legislature, although blocked from amending it, may still simply vote down proposed Article 62. Basic fairness and fidelity to constitutional law dictate that it does so. The Penal Law already has a forfeiture scheme in Article 480; expanding it to include misdemeanor “proceeds” and non-drug offenses should be considered and debated as part of the normal legislative process. But enacting Article 62, with its retrograde disregard of procedural fairness, would be an affront to decades of constitutional jurisprudence developed by the judiciary.
Thomas M. O’Brien is an attorney with the Special Litigation Unit of the Criminal Defense Practice of The Legal Aid Society.
1. John Caher, “Cuomo Bill Would Move Forfeiture Rulings to Criminal Sentencings,” NYLJ, Jan. 20, 2012, p.1.
2. 2012-13 New York State Executive Budget, Article 7, Part E.
3. Caher, supra, note 1.
4. Bill Jacket, Laws of 1990, chapter 655, at 64-5.
6. Bill Jacket, supra, note 5, at 21.
7. United States v. $31,990 in U.S. Currency, 982 F.2d 851, 856 (2d Cir. 1993).
8. Matter of Vergari v. Marcus, 26 NY2d 764 (1970).
9. Morgenthau v. Citisource, 68 NY2d 211, 221-2 (1986).
10. McClendon v. Rosetti, 460 F.2d 111, 116 (2d Cir. 1972).
11. Krimstock v. Kelly, 306 F.3d 40 (2d Cir. 2002).
12. County of Nassau v. Canavan, 1 NY3d 134, 142-44 (2003).
13. 510 U.S. 43, 55-6 (1993).
14. Caher, supra, note 1.