Judicial Conversations: SCOTUS Likely to Limit Asset Forfeiture

Today’s Supreme Court Oral Argument in Timbs v. Indiana Suggests Justices are Likely to Apply Excessive Fines Clause to State Asset Forfeitures

The Court seems very likely to rule that the Excessive Fines Clause of the Eighth Amendment applies to state governments, and that at least some asset forfeitures violate the Clause. Potentially a big win for property rights and civil liberties.

This morning, the Supreme Court heard oral argument in Timbs v. Indiana, an important asset forfeiture and property rights case. I wrote about the issues at stake here and here. The big questions before the Court are whether the Excessive Fines Clause of the Eighth Amendment is “incorporated” against state governments and, if so, whether at least some state civil asset forfeitures violate the Clause. If the answers to these two questions are both “yes,” the Court could also potentially address the issue of what qualifies as an “excessive” fine.

Today’s oral argument makes clear that the Court will almost certainly rule that the Excessive Fines Clause does indeed apply to the states. The justices also seem likely to rule that at least some state asset forfeitures violate the Clause. Both liberal and conservative justices seemed to support Timbs on these two issues, especially incorporation. It is hard to say, however, what – if anything – the Court will do on the question of how to define “excessive.” The justices could well decide to leave it to the lower courts, at least for the time being.

On the incorporation question, all the justices who spoke seemed to favor incorporating this right against the states. This is not surprising, since it would be anomalous to incorporate nearly all of the rest of the Bill of Rights against states (including other parts of the Eighth Amendment, such as the Excessive Bail Clause), yet leave out the Excessive Fines Clause. The justices seem to agree on this fundamental point. As Neil Gorsuch put it in today’s argument, “[w]e all agree that the Excessive Fines Clause is incorporated against the states.” Similarly, Justice Brett Kavanaugh asked Indiana Solicitor General Thomas Fisher: “Isn’t it just too late in the day to argue that any of the Bill of Rights is not incorporated?”

A few parts of the Bill of Rights do remain unincorporated (most notably the Third and Seventh Amendments). But defending such omissions after almost everything else has already been applied to the states, seems like a losing cause. The Third Amendment has been ruled to be incorporated in multiple lower court decisions.

Fisher, in fact, made little effort to oppose incorporation of the Clause. Instead, he argued that, while it might be incorporated as a general rule, it should not be applied to “in rem” forfeitures of property (where the proceeding is technically against property allegedly used in a crime, rather than against the owner). On this theory, the Excessive Fines Clause applies to “punitive” fines that target the owner, but not civil forfeitures that seek to confiscate property without imposing any penalty on the owner as such.

The justices seemed skeptical of this argument, too. Among other things, it would enable states to impose massive penalties on defendants simply by relabeling fines as in rem forfeitures. As Justice Stephen Breyer explained, Indiana’s theory would open up a giant loophole in the Excessive Fines Clause: “what is to happen if a state needing revenue says anyone who speeds has to forfeit the Bugatti, Mercedes, or a special Ferrari or even jalopy [he was driving]?” Fisher was forced to concede that would indeed be permissible under his approach. He even admitted it would apply if the person charged with speeding was only 5 MPH above the speed limit.

As Justices Gorsuch and Sonia Sotomayor pointed out, modern civil asset forfeitures have a massive punitive component, which cannot be eliminated simply by labeling them as “in rem” proceedings. Similarly, Justice Ruth Bader Ginsburg emphasized that “whether you label it in rem or in personam, let’s remember that .. things don’t have rights or obligations in and of themselves. It’s people that have rights or obligations with respect to things.”

Last year, Justice Clarence Thomas (who, as is his usual oral argument practice did not speak today), wrote an opinion in which he urged the Supreme Court to take up the asset forfeiture issue and emphasized that “Modern civil forfeiture statutes are plainly designed, at least in part, to punish the owner of property used for criminal purposes” and suggested that the Court should “align its distinct doctrine governing civil forfeiture with its doctrines governing other forms of punitive state action and property deprivation.” Presumably, that includes subjecting civil forfeitures to the constraints of the Excessive Fines Clause.

Various justices also noted that the Supreme Court has already ruled, in Austin v. United States (1993), that some federal in rem forfeitures are covered by the Excessive Fines Clause – thos that are “punitive” in nature. If the Clause is incorporated against the states, the same logic should apply to state forfeitures, as well.

Unlike the issue of incorporation, the Court may not be unanimous on the question of whether and to what extent the Clause applies to state in rem civil forfeitures. But it seems highly likely there will be a majority in favor of applying the Clause to at least some substantial category of such state forfeiture cases. At the very least, Gorsuch, Sotomayor, Thomas, Ginsburg, and Breyer all seem inclined in that direction (in Thomas’ case based on his earlier statements rather than anything said today).

The justices seemed much more uncertain about the question of what exactly qualifies as an “excessive” fine in the forfeiture context. Many of the questions posed to Wesley Hottot, counsel for Timbs, addressed this very issue. It is indeed a tough question, and it’s possible the justices will not try to settle it, but instead leave it to the lower court. As Justice Elena Kagan put it, “it just seems as though there are two questions. And one question is incorporating the right, and the other question is the scope of the right to be incorporated.” The Supreme Court could address the definitive of “excessive” more fully at some point in the future, after lower state and federal courts have had a chance to weigh in.

In my view, the Timbs case itself should be fairly easy to decide. In United States v. Bajakijian, the Court ruled that “a punitive forfeiture violates the Excessive Fines Clause if it is grossly disproportional to the gravity of a defendant’s offense.” This is hardly a precise standard, and it may often be hard to tell whether a forfeiture is “grossly disproportionate” or not. But Timbs seems clearly on the “gross” side of the line. The state of Indiana seized the defendant’s brand new Land Rover LR2, a vehicle worth about $42,000, even though the maximum fine for his actual offense was only $10,000 – a very large disparity. But there are likely to be cases where things are much less clear.

Even if the justices punt on the excessiveness issue, a ruling that incorporates the Excessive Fines Clause against the states and holds that the Clause applies to at least some substantial number of civil asset forfeitures would be an important victory for civil liberties and property rights. The asset forfeiture system has led to serious abuses that especially victimize poor and minority property owners. If the Timbs case ends up curbing those abuses, it would also be a notable success for the broad cross-ideological coalition backing Timbs, including such varied groups as the ACLU, the Chamber of Commerce, the NAACP Legal Defense and Educational Fund, and the Pacific Legal Foundation, among others.

NOTE: Timbs is represented by the Institute for Justice, a leading public interest law firm with which I have longstanding ties. Among other things, I have worked with them on a number of other property rights cases. However, I have no involvement in this case. IJ’s website has a lot of interesting information on the background of the case here.

UPDATE: I have made a few minor additions to this post.

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