Civil Asset Forfeiture Archives | Mike Simkus

New York City’s Scofflaw Law Requires a Hearing to Meet 14th Amendment Due Process Concerns

Administrator — Mon, 06 Apr 2026 22:53:00 +0000

City parking fines, red light camera violations and citations for toll violations has long caused owners, lessors and lienholders issues. The issues have become fairly acute when the government then seizes a vehicle for unpaid fines, violations and citations.

In a recent federal lawsuit, a lienholder challenged New York City’s “scofflaw” program when the city seized a vehicle that Mercedes-Benz Financial Services had a lien.

In Mercedes-Benz Financial Services USA, LLC v. City of New York, New York City was found to have violated fundamental constitutional protections by auctioning a seized vehicle without first providing a hearing to the secured creditor. Mercedes-Benz Financial Services (MBFS), which held a perfected lien on the vehicle, argued that the city’s conduct amounted to a denial of procedural due process under the Fourteenth Amendment. Although the City notified MBFS of the seizure and offered an opportunity to pay the fines, it failed to provide a “neutral” forum for challenging the seizure, imposed fines, tolls and violations and any resulting sale.

The United States District Court agreed and concluded that the absence of a “pre-auction hearing” deprived MBFS of its protected property interest without a meaningful opportunity to be heard. The ruling reinforces a core constitutional requirement: when the government takes action that may permanently affect property rights, it must do more than issue a notice—it must provide a “neutral hearing.” This case highlights the ongoing need for owners, lessors and lienholders to promptly address and timely contest any seizure by a governmental agency for unpaid fines, tolls or unpaid citations.

Table of Contents

Lien Holders Must Receive Notice of Seizure But Consequential Damages Are Unlikely

Administrator — Tue, 26 Aug 2025 12:58:35 +0000

In situations when a vehicle is seized by a law enforcement agency, the rights of lienholders are often overlooked. In the TD Auto Fin. LLC v. County of Putnam (2023) lawsuit, the court emphasized the critical importance of providing proper notice to lienholders but any consequential damages will require evidence and not conjecture. This lawsuit involved a vehicle seizure in connection with a criminal arrest, and the failure of the county to notify TD Auto, the lienholder, of the seizure. The opinion discussed significant due process issues as well as the protection of secured interests in seized property.

Background: Seizure of the 2020 GMC Sierra

The lawsuit arose when a Connecticut car dealership sold a 2020 GMC Sierra to a customer through a retail installment contract. TD Auto, the financial services company, secured and perfected a valid lien on the vehicle. However, the customer was arrested by the Putnam County Sheriff’s Department on serious felony charges, including criminal possession of a controlled substance. In connection with the arrest, the sheriff’s department seized the vehicle, holding it as evidence and presumably with the intent to pursue forfeiture once the evidentiary hold was removed.

The vehicle was towed to a secured lot controlled by Putnam County. Despite the serious legal and financial interests TD Auto held in the vehicle, no hearing was conducted to assess the propriety of the seizure, nor was TD Auto ever notified of the impoundment at that time. This failure to provide notice set the stage for a protracted legal battle between TD Auto and the county.

No Notice to the Lienholder: A Breach of Rights

Following the vehicle’s seizure, the county argued and later asserted a de facto possessory lien over the GMC Sierra. While the County impounded the vehicle, the customer defaulted on the retail installment contract, as of November 16, 2020. The situation became further complicated by the fact that TD Auto learned of the seizure three months later, on February 25, 2021, when the customer personally contacted the financier. [It is critical for lienholders to take swift action when it learns that a vehicle has been seized by a governmental agency to protect against any argument of laches.]

The county’s failure to provide notice to TD Auto violated the lienholder’s rights under due process principles. Despite the customer being notified that the vehicle could be subject to civil forfeiture, TD Auto received no such notice and had no opportunity to participate in a Krimstock hearing (a hearing process designed to review vehicle seizures by law enforcement) or any other proceedings regarding the vehicle’s seizure or potential forfeiture. This lack of communication deprived TD Auto of the opportunity to act in its own interest, either by repossessing the vehicle or by participating in the legal proceedings that followed.

TD Auto’s Claim for Damages

When TD Auto finally learned of the seizure, the company sought three distinct forms of damages:

Return of the Vehicle: First, TD Auto requested the immediate return of the 2020 GMC Sierra. As the lienholder, TD Auto was entitled to repossess the vehicle under the terms of the retail installment contract, especially since the customer was in default. The seizure and impoundment by the county prevented TD Auto from exercising this right.
Depreciation Damages: TD Auto also sought compensatory damages for the depreciation of the vehicle while it was held in the county’s possession. Vehicles naturally lose value over time, and the extended period during which the Sierra was impounded without TD Auto’s knowledge contributed to a significant loss in the vehicle’s market value.
Hypothetical Reinvestment Losses: Additionally, TD Auto argued that, had it been properly notified and allowed to repossess the vehicle, it could have auctioned the 2020 GMC Sierra and reinvested the proceeds into another retail installment contract. The financial services company claimed that the failure to repossess the vehicle in a timely manner resulted in a lost opportunity for reinvestment, and sought damages based on this hypothetical financial scenario.

The court ultimately returned the vehicle to TD Auto but left the issue of damages unresolved. The lawsuit was returned for further discovery and discussion regarding the amount of damages TD Auto was entitled to for the vehicle’s depreciation and the lost opportunity for reinvestment.

The Court’s Ruling: Protection of Lienholder Rights

The court’s decision to send the matter back for further discovery on the issue of damages reflects the importance of preserving the argument when there is such a willfull failure of notice of the seizure and the potential of forfeiture. Although the vehicle was eventually returned to TD Auto, the court recognized that the return of the vehicle did not fully compensate the financial services company for the losses it incurred due to the county’s failure to provide timely notice and allow TD Auto to participate in any potential forfeiture proceedings.

This lawsuit highlights the critical importance of lienholders being provided with proper notice when a vehicle in which they have a financial interest is seized by law enforcement. Under due process principles, lienholders must be given an opportunity to protect their rights and participate in legal proceedings related to the vehicle. In the absence of such notice, as demonstrated in this lawsuit, lienholders may seek consequential damages to recover their financial losses.

Implications of the Lawsuit

The TD Auto lawsuit has several broader implications for lienholders, vehicle financing companies, and law enforcement agencies:

Notice Requirements: Law enforcement agencies have a duty to notify all interested parties, including lienholders, when a vehicle is seized. The failure to provide notice, as in this lawsuit, can lead to significant legal and financial repercussions. It is essential for governmental agencies to establish clear protocols for notifying lienholders in a timely and effective manner to avoid disputes and potential claims for damages.
Lienholder Rights in Civil Forfeiture: The lawsuit underscores the need for lienholders to be involved in civil forfeiture proceedings. In this situation, TD Auto was not given an opportunity to participate in a Krimstock hearing or any forfeiture action, despite its substantial financial interest in the vehicle. Lienholders have the right to protect their interests and must be included in legal proceedings that may affect those interests.
Consequential Damages: The lawsuit raises important questions about the types of damages lienholders can recover when their rights are violated. TD Auto’s claims for depreciation and lost reinvestment opportunities reflect the complex financial losses that can result from a failure to provide proper notice. The court’s decision to allow further discovery on the issue of damages signals that lienholders may be entitled to recover consequential damages beyond the mere return of the seized vehicle.

Conclusion

The TD Auto Fin. LLC v. County of Putnam lawsuit serves as a clear reminder that lienholders are entitled to proper notice and participation in legal proceedings involving seized vehicles. When these rights are violated, as they were in this lawsuit, lienholders have the right to seek damages for their financial losses. The court’s decision emphasizes the importance of protecting lienholder rights and ensuring that all parties are included in the legal process. For law enforcement and lienholders alike, this lawsuit is a critical example of the consequences that can arise from failing to adhere to due process and notice requirements.

The post Lien Holders Must Receive Notice of Seizure But Consequential Damages Are Unlikely appeared first on Mike Simkus.

The Doctrine of Laches: Ensuring Compliance with State Lien Law and Timely Notice to Lien Holders

Administrator — Sat, 26 Jul 2025 12:31:19 +0000

The legal principle of the doctrine of laches plays a crucial role in repair shop and garage lien law lawsuits. A defense asserting laches will require that the repair shop, garage, tow, or impound yard has been in strict compliance with state lien laws and provided timely notice to lien holders and vehicle owners. A recent lawsuit involving a Lexus GX460 illustrates how the defense of laches rendered a garage’s lien void.

Case Overview: Toyota’s Action

In In re Special Proceeding Toyota Lease Trust, 2023 N. Y. Misc. Lexis 29703 (Nassau County, 2023), Toyota filed a hybrid proceeding and action by filing a Verified Petition/Complaint. The company sought an order declaring that a garage’s lien on the Lexus was invalid. Toyota argued that the garage had failed to follow the necessary steps to establish a valid lien under New York Lien Law and that the garage’s attempt to enforce the lien violated Toyota’s rights as a secured lienholder.

Specifically, Toyota asked the court for the following:

A declaration that the garage’s lien claim was void.
An order directing the immediate release of the Lexus.
A ruling that the amount payable by Toyota to redeem the vehicle was $0.00.
An acknowledgment that the garage’s attempt to subordinate Toyota’s lien interest was done without due process.

The case raised important questions about compliance with New York’s Lien Law §184, the authority necessary to authorize vehicle repairs, and the timing of notices to a lien holder when a shop asserts a repair shop or garage lien.

The Court’s Reasoning: Failure to Establish a Valid Lien

The court ruled in favor of Toyota, agreeing that the garage had failed to establish a valid lien under New York’s Lien Law §184. The court rested upon two fundamental reasons:

Lack of Apparent Authority: The garage was unable to prove that the individual who authorized the repairs and storage had the apparent authority to do so. In this case, the person acting on behalf of the vehicle lessee did not have sufficient authority to bind the lessee or the vehicle owner [Toyota Finance] to the repair and storage agreement. This meant that the lien was improperly claimed from the outset because the garage failed to meet the legal requirements necessary to assert a lien.
Failure to Provide Timely Notice: Even if the garage had established a valid garage lien, that lien would have still been voided under the doctrine of laches due to an unreasonable delay in serving the Notice of Lien. The court found that the garage had delayed more than a year after the storage began before providing the lienholder with notice. By the time the lien holder learned about the lien, nearly two years had passed. This unreasonable delay was found to prejudice the lien holder’s rights, as it was unaware of the accruing charges for repairs and storage, thus preventing the company from addressing the matter in a timely fashion.

The Doctrine of Laches in Action

The doctrine of laches is a legal principle that prevents a party from asserting a claim if they have unreasonably delayed in doing so, and this delay has prejudiced the opposing party. In this case, the garage’s failure to serve a timely Notice of Lien on the lien holder directly invoked the doctrine of laches, which ultimately voided the lien.

The court emphasized that in garage lien law disputes, strict compliance with statutory requirements for notice is critical. Lien holders must also act with reasonable diligence to protect their interests, and any unreasonable delay can lead to the dismissal of their claim. Here, the court found that the garage’s delay in providing notice prejudiced the lien holder because the company was left in the dark regarding the ongoing storage and repair costs for an extended period.

The Outcome: Partial Relief for the Garage

While the court voided the garage’s lien, it did grant partial relief by awarding $28,923 for the repair invoices. This amount covered the cost of the work performed on the Lexus, which the court deemed reasonable. However, the court denied the garage’s claim for $36,000 in storage fees, citing the unreasonable delay in notifying the lien holder about their garage lien. The court’s ruling underscored the importance of utilizing the defense of laches when there has been a lengthy delay in notifying the lien holder.

Defense of Laches Takeaways

This case highlights several critical issues that a lien holder or registered owner should consider when confronted with invoices for repair and storage of vehicles, particularly when a repair, garage, or tow shop asserts a lien:

Apparent Authority is Key: Before performing repairs or storage services, shops must ensure that the person authorizing the work has the legal authority to do so. This is especially important when dealing with leased or financed vehicles, as the lessee or person in possession may not always have the authority to bind the vehicle’s owner or lienholder for the costs of the repairs.
Timely Notice is Essential: Shops must serve notice to the appropriate parties, including the owner and lienholder, without unreasonable delay. Failing to do so can result in the lien being subject to attack under the doctrine of laches, even if the underlying services were performed properly.
Diligence Protects Rights: The doctrine of laches serves to protect parties from being unfairly prejudiced by unreasonable delays. This lawsuit underscores the importance that the shop acted diligently and complied with all procedural requirements to ensure that their lien claims are proper.

Conclusion

The In re Special Proceeding Toyota Lease Trust lawsuit provides a potential defense of the doctrine of laches and highlights that there must be strict compliance with repair and garage lien laws. This case serves as a reminder of the complexities involved in hybrid recovery and underscores the importance of properly asserting defenses to protect both lien holders and vehicle owners.

The post The Doctrine of Laches: Ensuring Compliance with State Lien Law and Timely Notice to Lien Holders appeared first on Mike Simkus.

What is The Standard for Proving Forfeitability in Illinois Today?

Administrator — Fri, 21 Mar 2025 01:29:09 +0000

The question of forfeitability in Illinois has seen significant legal evolution, particularly after the 2018 amendments to the Illinois Forfeiture Act. These changes transformed how the State is required to prove that seized property is indeed subject to forfeiture. Prior to these amendments, the State only needed to demonstrate probable cause, a relatively low standard. The legislative reform, however, raised the State’s burden to proving forfeitability by a preponderance of the evidence, aligning more closely with fundamental fairness in property rights.

The 2018 Amendments: A Shift Toward Greater Protection of Property Owners

The Illinois General Assembly enacted an amendment as a response to concerns over civil asset forfeiture abuses, where property could be seized with minimal justification, often leaving property owners at a disadvantage. By mandating a standard of preponderance of the evidence, the revision ensures that the State must now show that it is more likely than not that the property is connected to criminal activity. This shift reflects a broader movement across the United States to provide additional safeguards against wrongful forfeiture and to curb potential misuse of the process.

Under the pre-2018 standard, the existence of probable cause alone sufficed for the State to initiate forfeiture proceedings. Probable cause, defined as a reasonable belief that a crime has been or is being committed, did not require the State to meet a substantial evidentiary burden. This often led to situations where property was seized without a comprehensive examination of its connection to alleged criminal activity. The amendments demanded a more rigorous approach, thereby promoting a balance between law enforcement interests and property rights.

Lawsuit in Point of The Revision: PEOPLE v. $33,260 UNITED STATES CURRENCY (2024)

Recently, in the lawsuit PEOPLE v. $33,260 UNITED STATES CURRENCY, 2024 IL App (4th) 231465, the court addressed the practical implications of the 2018 reforms and the judicial interpretation of the amended standard. In this forfeiture proceeding, the State sought forfeiture of $33,260 seized under suspicion of its connection to criminal activities. The trial court concluded that the State did not meet the requisite standard and burden of proof, ruling that it failed to demonstrate, by a preponderance of the evidence, the forfeitability of the currency.

The State’s argument rested on a series of circumstantial facts intended to link the seized currency to criminal conduct. However, the trial court scrutinized these facts in light of the amended statute, finding that the evidence presented did not tilt the scales sufficiently in favor of forfeiture. This decision was notable for exemplifying the judiciary’s commitment to upholding the higher burden of proof mandated by the legislature.

Appellate Court Decision and Majority Opinion

On appeal, the Appellate Court reversed the trial court’s finding. The majority held that the trial court had erred in its interpretation of what constitutes sufficient evidence to meet the preponderance standard. The appellate panel analyzed the State’s evidence, including testimony and supporting documentation, and determined that it was enough to establish that the currency was more likely than not connected to illicit activities.

The reversal sparked considerable legal discussion, as it highlighted the nuanced interpretation of the “preponderance of the evidence standard.” The majority opinion emphasized that while the trial court was correct in applying the new standard, it underestimated the cumulative weight of the State’s evidence. We will need to further monitor whether this opinion becomes precedent clarifying how courts should assess the threshold of probability in forfeiture proceeding after the 2018 amendments.

Dissenting Opinion: Justice Doherty’s Perspective

Justice Doherty’s dissent provided a contrasting viewpoint that underscored the importance of judicial deference to trial court findings, particularly when those findings are supported by reasoned analysis. In his dissent, Justice Doherty asserted:

” It is clear to me that the trial court in this lawsuit gave real life to the legislature’s intended reform because it held the State to meeting the burden of proving forfeitability by a preponderance of the evidence. I do not find that its decision was against the manifest weight of the evidence, so I would affirm. “

Justice Doherty’s dissent raised critical questions about appellate review standards. He argued that the trial court’s findings should not be disturbed unless they are against the manifest weight of the evidence. His view supported the idea that trial courts, having the benefit of observing witness demeanor and assessing credibility firsthand, are better positioned to make factual determinations.

Will This Opinion Have a Broader Impact in Forfeiture Proceedings?

The decision in PEOPLE v. $33,260 UNITED STATES CURRENCY may lend a path forward on how courts may apply the amended Illinois Forfeiture Act. Key takeaways include:

Judicial Interpretation of “Preponderance of the Evidence”: The appellate court’s decision reinforces that courts must evaluate the cumulative weight of evidence to determine if it meets the 51% threshold of likelihood.
Balance Between Legislative Reform and Practical Application: The lawsuit demonstrates how courts interpret legislative changes designed to protect property owners while allowing the State to pursue forfeiture with stronger evidentiary backing.
Future Guidance for Legal Practitioners: Defense attorneys and prosecutors alike must adjust their strategies to account for the more demanding burden of proof. For prosecutors, this means presenting well-substantiated, coherent proceedings; for defense attorneys, closely scrutinizing and challenging the adequacy of the evidence.

These implications set the stage for how future forfeiture lawsuits may be approached, ensuring adherence to the higher standard without undermining the objectives of the Forfeiture Act.

Standard of Proof: From Probable Cause to Preponderance of the Evidence

The evolution of the burden of proof in Illinois forfeiture proceedings reflects a deeper legal and philosophical commitment to due process. The preponderance of the evidence standard, familiar to most civil lawsuits, requires the party bearing the burden to present evidence that persuades the factfinder that their claim is more likely true than not. This is more stringent than probable cause but less demanding than the “beyond a reasonable doubt” standard used in criminal lawsuits.

In practical terms, preponderance of the evidence can be seen as a “51% certainty” threshold. This relatively modest increase in the burden ensures a fairer process, aiming to prevent arbitrary or inadequately substantiated property seizures. The shift discourages law enforcement agencies from relying solely on initial suspicions or weak circumstantial connections when pursuing forfeiture.

Policy Considerations and Legislative Intent

The legislative intent behind the 2018 amendments was clear: to inject fairness into a process long criticized for potential overreach. By raising the State’s evidentiary standard, the law sought to address public concerns over wrongful forfeitures that disproportionately impacted individuals without sufficient means to contest the proceedings. Lawmakers aimed to create a system where the interests of justice are balanced against the need for effective tools to combat crime.

Advocates for civil rights have hailed these amendments as a necessary safeguard against the erosion of property rights. Critics of the changes, however, argued that they may hinder law enforcement’s ability to disrupt criminal enterprises that rely on liquid assets. The PEOPLE v. $33,260 UNITED STATES CURRENCY lawsuit illustrates how courts are navigating these competing priorities, demonstrating that the judiciary plays an essential role in ensuring that legislative reforms achieve their intended outcomes without compromising public safety.

Conclusion: Navigating Future Forfeiture Lawsuits

The standard for proving forfeitability in Illinois today is shaped by the requirement for a preponderance of the evidence standard, a standard aimed at protecting property rights while allowing the State to address illicit conduct. The PEOPLE v. $33,260 UNITED STATES CURRENCY opinion underscores the judiciary’s role in interpreting and applying this standard and highlights ongoing debates about the balance between individual rights and law enforcement authority. Moving forward, practitioners should anticipate that both trial and appellate courts will continue to refine how this standard is applied, potentially setting the stage for further legislative or judicial clarifications.

The post What is The Standard for Proving Forfeitability in Illinois Today? appeared first on Mike Simkus.

The United States Supreme Court Holds A Timely Forfeiture Hearing Must Be Conducted But A Separate Preliminary Hearing is Not Constitutionality Required

Administrator — Sat, 04 Jan 2025 04:02:00 +0000

The United States Supreme Court ruled that Due Process required a timely forfeiture hearing, but the Constitution did not require a separate preliminary hearing to determine whether the police could retain the vehicle pending the forfeiture hearing. Both the Concurrence and Dissenting Opinions provide a path forward on civil forfeiture practices that “can be squared with the Constitution’s promise of due process.” See Culley v. Marshall, 2024 Lexis 1979, _ S.Ct. _, 2024 WL 2061136 (Decided 6-3, May 9 th , 2024).

The Factual Background: Culley v. Marshall

For more than a year, Alabama deprived Halima Culley and Lena Sutton of their vehicles, without any judicial oversight: Sutton had loaned her vehicle to a friend, and police seized it when arresting him for trafficking methamphetamine; Culley bought her vehicle for her son to use at college, and police seized it when arresting him for possessing marijuana.

Neither Culley nor Sutton had done anything wrong. Both were “innocent owners.” Neither knew anything about any of alleged illegal activity.

The local police departments—”who stood to keep the cars upon forfeiture, or any money they might generate”—refused repeated requests from Culley and Sutton to release the vehicles.

“The consequences were devastating.” For Sutton, her vehicle was seized for fourteen months without a hearing. Sutton lost work, fell behind with her bills and missed mental health appointments. A simple “innocent owner” hearing may have ordered release of the vehicle immediately. See Brief for Petitioners.

Petitioner’s Argument

The United States Courts of Appeals and state high courts are split. “The Second, Fifth, Seventh, and Eighth Circuits and the Minnesota Supreme Court apply Mathews’ three-factor inquiry, but the Eleventh Circuit and Illinois Supreme Court apply Barker’s four-factor speedy trial test.” See Reply Brief for Petitioners.

Alabama’s Response

Alabama argued that Culley and Sutton’s constitutional claim was precluded by Alabama court forfeiture proceedings; that their vehicles had already been returned to them and they brought about any delay in the forfeiture proceedings. See Brief for Respondents.

Petitioner’s Reply

In reply, Culley and Sutton argued that Alabama’s argument “…that vehicle owners can post a bond for double the value of their vehicles. But that backbreaking burden only underscores the importance of the split. The idea that the government can cure a property deprivation by demanding twice the value in other property is nonsensical.” See Reply Brief for Petitioners.

“The question is not whether ‘the initial seizure’ was lawful, whether ‘due process required a predetention hearing,’ One 1998 GMC, 960 N.E.2d at 1080, or whether the final merits hearing comported with due process. Instead, as Alabama recognizes, the petition presents a discrete methodological question: whether to apply Mathews or Barker when deciding whether (and when) due process requires a retention hearing in civil forfeiture actions.”

“Mathews governs whether (and when) due process requires a retention hearing in civil forfeiture actions.”

“Mathews applies when ‘the government seeks to maintain possession of property before a final judgment is rendered.’ Krimstock, 306 F.3d at 60. Barker, by contrast, applies when there are ‘delays in rendering final judgment.'”

Culley v. Marshall May 9 th , 2024 Opinion

The United States Supreme Court released its decision on May 9 th , 2024 in a 6-3 decision. The opinion also had a concurrence and dissent.

Justice Kavanaugh delivered the opinion of the court and held, that when police seize and then seek civil forfeiture of a car that was used to commit a drug offense that the Constitution “…requires a timely hearing; the Constitution does not also require a separate preliminary hearing.”

The Court rejected the Petitioners’ argument that a preliminary hearing is constitutionally necessary to determine whether the government could retain seized personal property pending the ultimate forfeiture hearing. The Petitioners sought an earlier version of the ultimate forfeiture hearing. The government pushed back that requiring a “hearing before a hearing” in every case would interfere with “important law enforcement activities that must occur after the seizure and before the forfeiture hearing—including identifying and contacting potential claimants of the property; coordinating forfeiture proceedings with related criminal investigations and prosecutions; and ensuring that property is not removed, destroyed, or put to illegal use before the forfeiture hearing.”

The court stated that it did not need to “reweigh the competing due process arguments advanced by the parties” because of United States v. $8,850 and United States v. Von Neumann had already resolved that issue. “After a state seizes and seeks civil forfeiture of personal property, due process requires a timely hearing but does not require a separate preliminary hearing.”

The Court repeated its prior holding that “timeliness in civil forfeiture cases must be assessed by ‘analogizing to a defendant’s right to a speedy trial’ and considering four factors: the length of the delay, the reason for the delay, whether the property owner asserted his rights, and whether the delay was prejudicial.”

Further, Justice Kavanaugh stated “To balance the interests of the government and individuals in civil forfeiture cases involving personal property, the States and Congress have adopted a wide variety of approaches. For example, some States require that the forfeiture hearing occur within a fixed period of time. Others require a jury trial. Still others condition civil forfeiture on a successful criminal prosecution. And a few now require preliminary hearings. Our decision today does not preclude this legislatively prescribed innovations. Rather, our decision simply addresses the baseline protection of the Due Process Clause.”

Justice Gorsuch, joined by Justice Thomas, wrote in the concurrence that “…civil forfeiture has become a booming business. In 2018, federal forfeitures alone brought in $2.5 billion. Meanwhile, according to some reports, these days ‘up to 80% of civil forfeitures are not accompanied by a criminal conviction.'”

Justice Gorsuch provided a historical review of the seizure of vessels and other personal property. His last paragraph asked that in future cases, “I hope we might begin the task of assessing how well the profound changes in civil forfeiture practices we have witnessed in recent decades comport with the Constitution’s enduring guarantee that ‘no person shall be deprived of life, liberty, or property, without due process of law.'”

Justice Sotomayor wrote in the dissent that “Civil forfeiture occupies a murky space between criminal forfeiture and ordinary government deprivations of property.” “Civil forfeiture is a hybrid, where prosecutors proceed against property (in rem) they believe is connected to a crime, even when the owner is innocent.”

“The Federal Government, States, and localities set their own rules for civil forfeiture, subject only to the limits of the Due Process Clause. This lack of standardized procedural safeguards makes civil forfeiture vulnerable to abuse.”

“The majority’s holding relates only to retention hearings. It does not foreclose other potential due process challenges to civil forfeiture proceedings. People who have their property seized by police remain free to challenge other abuses in the civil forfeiture system. For instance, such claimants could challenge notice of a forfeiture posted only in a newspaper, the lack of a neutral adjudicator at an initial hearing, or the standard of proof necessary to seize a car. Lower courts remain free to apply Mathews to those claims. Due process also still ‘requires a timely post-seizure forfeiture hearing.'”

“The abuses of many civil forfeiture systems are well documented. I commend States or localities that have adopted retention hearings as a way of guarding against those abuses. Other States and localities should not view today’s decision as precluding them from following suit and adopting similar measures.”

“The majority today holds that due process never requires the minimal check of a retention hearing before a police officer deprives an innocent owner of her car for months or years. Given the diverse schemes adopted by States, some with adequate safeguards and some without, the Court should have just answered the question presented. Instead, it announces a universal rule for all schemes without heeding the dictates of this Court’s due process precedents that require a scheme- specific analysis. Because I instead would have answered the question presented and left lower courts the flexibility to apply the appropriate test in these myriad circumstances, I respectfully dissent.”

https://www.supremecourt.gov/opinions/23pdf/22-585_k5fm.pdf

The post The United States Supreme Court Holds A Timely Forfeiture Hearing Must Be Conducted But A Separate Preliminary Hearing is Not Constitutionality Required appeared first on Mike Simkus.

U.S. Attorney’s Office Collected More Than $60 Million in Civil, Criminal, and Asset Forfeiture Actions in Fiscal Year 2023

Administrator — Sat, 16 Nov 2024 21:35:37 +0000

The U.S. Attorney’s Office for the Northern District of Illinois announced that it collected over $60 million through criminal, civil, and asset forfeiture actions in Fiscal Year 2023, as stated by Acting U.S. Attorney Morris Pasqual.

The collections for 2023 included around $22.3 million from criminal cases, $29.5 million from civil cases, and $8.9 million from asset forfeitures. Additionally, the office collaborated with other U.S. Attorney’s Offices and Justice Department components nationwide to recover an additional $27.6 million in joint cases.

“Our attorneys and staff place a high priority on recovering funds for the federal treasury and victims of federal crimes,” said Acting U.S. Attorney Pasqual. “Our office will continue to responsibly safeguard taxpayer resources while delivering a valuable return to the citizens of our district.”

The U.S. Attorneys’ Offices, along with the Justice Department’s divisions, are tasked with enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to victims of federal crimes. Under federal law, defendants must pay restitution to victims of certain federal crimes who have suffered physical injury or financial loss. Restitution is directed to the victim, while criminal fines and felony assessments go to the Department of Justice’s Crime Victims Fund, which supports federal and state victim compensation and assistance programs.

The post U.S. Attorney’s Office Collected More Than $60 Million in Civil, Criminal, and Asset Forfeiture Actions in Fiscal Year 2023 appeared first on Mike Simkus.

Unpaid Parking Tickets and Vehicle Forfeiture: Legal Insights from O’Donnell v. City of Chicago

Administrator — Fri, 09 Aug 2024 14:28:35 +0000

In O’Donnell v. City of Chicago, the plaintiffs—O’Donnell and Goree—had their vehicles towed and impounded by the City of Chicago due to unpaid traffic ticket fines. The lawsuit sheds light on the intricate legal framework surrounding vehicle forfeiture, particularly when unpaid parking tickets are involved, and raises significant questions about property rights, co-ownership, and constitutional protections under the “Takings Clause” of the Constitution.

Factual Background of the Lawsuit

The plaintiffs in this lawsuit faced financial penalties and the subsequent loss of their vehicles as a result of unpaid traffic fines. O’Donnell’s vehicle was sold to URT United Road Towing, Inc. for a mere $273 after being towed by the City. No compensation or offset was applied to reduce O’Donnell’s outstanding debt, leaving her in a worse financial position. Goree’s situation was even more complicated: her vehicle was towed due to the unpaid ticket debt of a co-owner (the co-signor) on a different vehicle.

The plaintiffs argued that these actions violated their property rights and asserted claims under the Takings Clause of the U.S. Constitution, which generally prohibits the government from taking private property for public use without just compensation. However, the court found that the City’s actions were permissible under existing legal precedents, dismissing the claims under Rule 12(b)(6) for failure to state a claim.

Legal Framework: Forfeiture and the Takings Clause

The court’s decision in O’Donnell was heavily influenced by precedent concerning vehicle forfeiture and the Takings Clause. The plaintiffs’ arguments centered on the assertion that the City’s actions amounted to an unconstitutional taking of their property without compensation. However, forfeiture laws have long been recognized as part of the country’s punitive and remedial legal traditions, and courts have often upheld the authority of municipalities to seize property in certain circumstances without violating constitutional rights.

The court relied on the Supreme Court’s ruling in United States v. Bennis, 516 U.S. 442 (1996), which involved the forfeiture of a vehicle used in an illegal act. In that lawsuit, the Supreme Court held that the forfeiture of property, even without the owner’s direct wrongdoing, did not violate the Takings Clause. This ruling has been widely applied in lawsuits involving forfeiture for unpaid fines, criminal activities, and other legal violations, establishing a high threshold for constitutional challenges based on the Takings Clause.

In O’Donnell, the court also considered the recent Supreme Court decision in Tyler v. Hennepin County, 598 U.S. ___ (2023), a lawsuit involving tax debt and property confiscation. In Tyler, the Court found that confiscating property beyond the amount of the tax debt owed constituted a violation of the Takings Clause. However, the court in O’Donnell distinguished Tyler as inapplicable, noting that the Tyler lawsuit involved the excess confiscation of value beyond what was owed, whereas O’Donnell concerned the mere forfeiture of the vehicle in its entirety to cover unpaid debts.

Court’s discussion and distinction between Walker v. City of Chicago and United States v. Bennis

The court in O’Donnell leaned heavily on its prior decision in Walker v. City of Chicago, 2015 U.S. Dist. LEXIS 56247 (N.D. Ill. 2015), which similarly dealt with vehicle forfeiture following unpaid parking tickets. In Walker, the plaintiff also challenged the City of Chicago’s practices, alleging a violation of the Takings Clause. The court, however, found that the forfeiture of the vehicle was constitutional, as it fell within the government’s authority to enforce fines and penalties. The decision in Walker helped set a precedent for lawsuits like O’Donnell, where unpaid tickets lead to significant legal consequences, including the loss of property.

United States v. Bennis remains a cornerstone in forfeiture law. The Supreme Court’s decision in Bennis emphasized that forfeiture is a longstanding legal practice used by governments to deter illegal activity and enforce legal obligations. While the facts in O’Donnell and Bennis are not identical, the underlying principle—that the government can seize property without violating the Takings Clause—was crucial to the court’s decision.

The Role of Co-Ownership in Vehicle Forfeiture

Goree’s involvement adds a unique dimension to the lawsuit, as her vehicle was seized due to the unpaid ticket debt of a co-owner on a different vehicle. This raises important questions about the rights of co-owners and the extent to which they can be held accountable for the legal violations of their co-signors.

Under many state and municipal laws, co-owners of vehicles share responsibility for fines and fees associated with those vehicles. This principle was applied in Goree’s lawsuit, where the unpaid debt of her co-signor led to the forfeiture of her vehicle. The court’s decision reinforced the idea that co-ownership can expose individuals to legal penalties even when they are not personally responsible for the underlying violations.

Procedural Considerations: Rule 12(b)(6) and 12(b)(1)

The dismissal of the plaintiffs’ claims was grounded in procedural rules that are frequently applied in federal litigation. The City of Chicago and URT United Road Towing, Inc. filed motions to dismiss under Rule 12(b)(6), which allows a court to dismiss a lawsuit when the complaint fails to state a claim upon which relief can be granted. Essentially, the court found that even if all the facts alleged by the plaintiffs were true, they did not establish a valid legal claim under the Takings Clause or any other constitutional provision.

Rule 12(b)(1), by contrast, addresses whether a court has jurisdiction to hear a lawsuit. The City of Chicago also sought to dismiss the lawsuit under Rule 12(b)(1), arguing that the plaintiffs lacked standing to bring their claims. However, the court rejected this argument, allowing the lawsuit to proceed on the question of whether the plaintiffs had a valid legal claim—ultimately dismissing it under Rule 12(b)(6).

Policy Implications and Broader Context

The decision in O’Donnell highlights the ongoing tension between municipalities’ need to enforce fines and penalties and individuals’ property rights. Cities like Chicago rely heavily on traffic fines and fees as a source of revenue, and vehicle forfeiture is one of the tools they use to enforce compliance. However, critics argue that these practices disproportionately impact lower-income individuals, who may lack the financial resources to pay off their fines and recover their vehicles.

The legal framework governing vehicle forfeiture is complex and varies from state to state. In some jurisdictions, vehicle forfeiture is treated as a criminal matter, while in others, it is part of a civil process. The courts have generally upheld the authority of municipalities to seize vehicles in lawsuits of unpaid fines, but there are limits to this power, particularly when it comes to the confiscation of property exceeding the amount owed, as illustrated by the Tyler decision.

Conclusion

O’Donnell v. City of Chicago is a recent lawsuit that reinforces the principle that vehicle forfeiture, as a form of asset forfeiture for unpaid fines, does not violate the Takings Clause of the U.S. Constitution. The court’s reliance on prior decisions like Walker and Bennis underscores the long-standing acceptance of forfeiture as a punitive and remedial tool in the legal system. However, the lawsuit also raises important questions about fairness and proportionality in the enforcement of fines, particularly when co-owners are involved. As cities continue to rely on fines and asset forfeiture to address traffic violations, lawsuits like O’Donnell will likely continue to shape the legal landscape.

The post Unpaid Parking Tickets and Vehicle Forfeiture: Legal Insights from O’Donnell v. City of Chicago appeared first on Mike Simkus.

Sixth Circuit Finds Wayne County’s Forfeiture Program Unconstitutional

Administrator — Sun, 28 Jul 2024 03:57:00 +0000

Wayne County’s’ vehicle forfeiture program was held unconstitutional. Wayne County must hold a probable cause hearing within two weeks from seizure of vehicle. See Ingram v. Wayne County, 2023 U.S. App. LEXIS 23095 *; __ F.4th __ (Sixth Circuit 2023). Wayne County’s vehicle forfeiture program was held unconstitutional as Wayne County had a practice of seizing and holding vehicles for several months before deciding to initiate forfeiture proceedings. Sixth Circuit held that Wayne County failed to provide an opportunity to be heard about the detention of their vehicles violated the Due Process Clause of the Fourteenth Amendment.

“Wayne County seizes vehicles simply because of the vehicle’s location in an area generally associated with crime. Regardless of the owner’s innocence, Wayne County impounds the vehicles and its contents until the owner pays a redemption fee. This fee is $900 for the first seizure, $1,800 for the second, and $2,700 for the third, not including other fees for towing and storage. If the owner is unwilling or unable to pay the redemption fee, the only alternatives are either to abandon the vehicle or to wait for county prosecutors to decide whether to initiate civil forfeiture proceedings.” Wayne County argued that its forfeiture procedures complied with due process. The court rejected Wayne County’s argument and held that Wayne County was required to provide a prompt post-seizure hearing for plaintiffs’ personal vehicles.

The Sixth Circuit discussed what constituted a “timely hearing” prior to final disposition of the forfeiture proceeding. “As such, requiring a post-seizure hearing within a short time frame may be justified because a personal vehicle used for transportation is almost as precious as a home. As the Seventh Circuit has described, “Our society is, for good or not, highly dependent on the automobile. The hardship posed by the loss of one’s means of transportation, even in a city like Chicago, with a well- developed mass transportation system, is hard to calculate. It can result in missed doctor’s appointments, missed school, and perhaps most significant of all, loss of employment.”

“We also hesitate to announce a timeframe, but we are well aware of the important property and liberty interests at stake in a case where people are being deprived of their only vehicle used for transportation. Wayne County’s practices drove Ingram into bankruptcy, and they brought hardship on all three plaintiffs. We follow the Supreme Court’s lead in County of Riverside in remarking that a timeframe is important for predictability. Indeed, if Wayne County provides plaintiffs an opportunity to be heard, it will be faced with answering the very same question—how quickly it must provide a hearing to avoid liability under procedural due process. While that question is fact-dependent, where a person is to be deprived of something so integral and important as here—a vehicle integral to personal transportation and liberty—then a prompt opportunity to be heard to challenge the holding of the vehicle is required.”

“If a probable-cause hearing can be heard within 48 hours, and other circuits have found one to three weeks to be excessive in this sort of context, then, taking the factual setting of this case into account, we hold two weeks from the date of the vehicle’s seizure to be an appropriate time frame to provide the vehicle owner an opportunity to be heard to contest the holding of a vehicle vital to the owner’s transportation and livelihood.”

And “…a post-deprivation hearing for vehicle seizure requires law enforcement to first identify then notify all the relevant parties. Notification includes not merely the vehicle’s driver at the time of seizure, but also the registered owner and the titled owner, who may not be the same people.”

The post Sixth Circuit Finds Wayne County’s Forfeiture Program Unconstitutional appeared first on Mike Simkus.

Illinois Requires Seized Vehicle to be “within” county’s borders to confer in-rem jurisdiction

Administrator — Thu, 06 Jun 2024 03:54:00 +0000

A parked vehicle was seized in Hammond Indiana by the Crete Police Department. Illinois commenced a forfeiture action pursuant to Article 36 against the vehicle. Illinois then requested a hearing that there was probable cause that the vehicle was subject to forfeiture. Trial court found no probable cause and State appealed. Appellate Court affirmed and held it is the location of the property within the territorial jurisdiction of this state that confers jurisdiction on the circuit court. It is undisputed that the vehicle was in Hammond, Indiana, not Will County, when it was seized by law enforcement. Consequently, the circuit court lacked in rem jurisdiction over the property and was therefore unable to consider the State’s petition under article 36 of the Criminal Code. See 2023 Ill. v. 2016 Chrysler 200 Black, 2023 Il. App. (3rd) ____, 2023 Ill.App. Unpub. LEXIS 1421 (3rd Dist. September 7, 2023).

The post Illinois Requires Seized Vehicle to be “within” county’s borders to confer in-rem jurisdiction appeared first on Mike Simkus.

US Supreme Court Hears Arguments on Constitutionality of Seizures Held Without Hearing Within a Reasonable Period

Administrator — Wed, 27 Mar 2024 04:01:00 +0000

Seizures Held Without Hearing Within a Reasonable Period. On October 30, 2023, the United States Supreme Court heard argument to determine whether due process requires a post-seizure, prejudgment hearing to challenge the government’s retention of property—a retention hearing—during a civil forfeiture proceeding. See Culley v. Marshall, 217 L. Ed. 2d 5, 92 U.S.L.W. 3063, _ S.Ct. _, 2023 U.S. Lexis 3462, 2023 WL 6377745 (Argument Heard October 30th, 2023).

Factual Background: Culley v. Marshall

Neither Culley nor Sutton had done anything wrong. Both were “innocent owners.” Neither knew anything about any of alleged illegal activity.

The local police departments—”who stood to keep the cars upon forfeiture, or any money they might generate”—refused repeated requests from Culley and Sutton to release the vehicles.

Petitioner’s Argument

Alabama’s Response

Alabama’s Response. Alabama argued that Culley and Sutton’s constitutional claim was precluded by Alabama court forfeiture proceedings; that their vehicles had already been returned to them and they brought about any delay in the forfeiture proceedings. See Brief for Respondents.

Petitioner’s Reply

The question is not whether ‘the initial seizure’ was lawful, whether ‘due process required a predetention hearing,’ One 1998 GMC, 960 N.E.2d at 1080, or whether the final merits hearing comported with due process. Instead, as Alabama recognizes, the petition presents a discrete methodological question: whether to apply Mathews or Barker when deciding whether (and when) due process requires a retention hearing in civil forfeiture actions.”

“Mathews governs whether (and when) due process requires a retention hearing in civil forfeiture actions.”

Amicus Brief Arguments

Pacific Legal Foundation, a nonprofit corporation, filed an amicus brief. Among its arguments, Pacific argued that “…the growing trend of governments using fines, fees, and forfeitures to fund agency budgets, raising serious due process concerns. This trend moves public agencies from acting in the public interest as neutral arbiters to interested parties with a stake in the outcome. The Due Process Clauses of the Fifth and Fourteenth Amendments ensure fair procedures in the administration of the law and PLF believes this case presents an excellent opportunity for this Court to address the known problem of law enforcement agencies confiscating automobiles of innocent owners without a prompt hearing, with often financially ruinous consequences.” See Goldwater Foundation and Pacific Legal Foundation Amicus Brief.

The post US Supreme Court Hears Arguments on Constitutionality of Seizures Held Without Hearing Within a Reasonable Period appeared first on Mike Simkus.