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Kayley v. U.S.: A set-back for fighting criminal asset forfeiture-even to hire a lawyer.

Posted By Steven Brill || 17-Apr-2014

A person accused by the United States of committing a crime is presumed innocent until proven guilty beyond a reasonable doubt. But he faces a foe of powerful might and vast resources, intent on seeing him behind bars. That individual has the right to choose the advocate he believes will most ably defend his liberty at trial.

The words above come from a recent Supreme Court decision and eloquently express a sentiment that defense attorneys hold to be fundamental to our legal system. Which justice espoused this belief? Ruth Bader Ginsberg? Sonya Sotomayor? Stephen Breyer? None of the above. The quote comes from Chief Justice John Roberts, writing in dissent of the majority decision in Kaley v. United States, 134 S. Ct. 1090, 1114 (2014). In Kaley, the Court considered the question of whether or not an indicted defendant, whose assets had been seized or frozen under 21 U.S.C. 853(e) and wanted to use those assets to retain an attorney of his choice, was entitled to an evidentiary hearing to determine if there was probable cause to believe he committed the crime(s) that justified the asset seizure. In a 6-3 decision, Justice Kagan, writing for the majority, determined that a defendant had no right to re-litigate a grand-jury’s finding of probable cause, even if this meant that a defendant did not have access to the funds necessary to secure counsel of his choice. Under the criminal forfeiture statute, the government must show two things in order to freeze a defendant’s assets: 1) That there is probable cause to believe that the defendant has committed a crime that would give rise to forfeiture, and 2) that there is probable cause that the alleged assets have the required connection to the criminal conduct.

By definition, when a grand-jury votes an indictment, it has found probable cause to believe the defendant had committed the crime(s) alleged in that indictment. In Kaley, the defendants wished to use a portion of the frozen assets to engage the criminal attorney of their choice, one who had been representing them during the grand-jury investigation. They did not contest that the funds were involved with the alleged criminal activity, but rather that there was no probable cause to believe a crime had been committed. They requested a hearing to determine that issue. The majority held that if a defendant were entitled to a hearing on the same issue (probable cause) that the grand-jury already decided, and the judge found a lack of probable cause, the “same judge who found probable cause lacking would preside over a trial premised on its presence. That legal dissonance, if sustainable at all, could not but undermine the criminal justice system's integrity—and especially the grand jury's integral, constitutionally prescribed role.” Kaley, 134 S. Ct. at 1099. The majority defends the inviolability a grand-jury finding vis-a-vis the importance of seized assets by asserting, “[i]f judicial review of the grand jury's probable cause determination is not warranted (as we have so often held) to put a defendant on trial or place her in custody, then neither is it needed to freeze her property.” Id. at 1098.

Further the majority expresses the practical conundrum that would face the prosecution having to consider a pre-trial, adversarial hearing to determine probable cause. It observes, “any defense counsel worth his salt—whatever the merits of his case—would put the prosecutor to a choice: ‘Protect your forfeiture by providing discovery’ or ‘protect your conviction by surrendering the assets.’ It is small wonder that the Government wants to avoid that lose-lose dilemma.” Id. at 1102. At the end of the opinion, the majority expresses a kind of judicial-hand-washing stating, “Congress of course may strike its own balance and give defendants like the Kaleys the kind of hearing they want. Indeed, Congress could disapprove of Monsanto itself and hold pre-trial seizures of property to a higher standard than probable cause.” Id. at 1105. In the dissent, Justice Roberts address this assertion simply and directly: “Not very likely.” Id. at 1114. The dissent takes a somewhat practical approach to the legal analysis of the majority. The dissent recognizes that the decision can give prosecutors an unfair advantage. The dissent points out that the government could craft it charges such that it could freeze a defendant’s assets, thus preventing him from retaining the lawyer of his choice. The dissent states,few things could do more to ‘undermine the criminal justice system's integrity,’ than to allow the Government to initiate a prosecution and then, at its option, disarm its presumptively innocent opponent by depriving him of his counsel of choice—without even an opportunity to be heard. That is the result of the Court's decision in this case, and it is fundamentally at odds with our constitutional tradition and basic notions of fair play.Id. at 1110. The dissent also asserts that allowing a judge to reexamine whether there was probable cause that the defendant had committed the alleged crime(s) for the specific purpose of deciding whether a portion of the seized assets could be to fund the criminal defense, would not undermine the grand-jury’s finding. In such circumstance,the District Court would consider the merits of the prosecution to determine whether there is probable cause to believe the [defendant’s] assets are forfeitable, not to determine whether the [defendant] may be tried at all. If the judge agrees with the defendant, he will merely hold that the Government has not met its burden at that hearing to justify freezing the assets the [defendant] need[s] to pay [his] attorneys.

The Government may proceed with the prosecution, but the defendants will have their chosen counsel at their side. Id. at 1108-09. A critical part of the dissent, however, underscores a part of the decision that has been sufficiently addressed. The Kaleys were requesting a hearing on probable cause relating to their alleged criminal conduct; they had agreed that the seized funds were traceable or involved with the alleged conduct. The dissent points out that all Courts of Appeals to have considered the issue have held—that ‘defendants are entitled to show that the assets that are restrained are not actually the proceeds of the charged criminal offense,’ . . . But by listing property in the indictment and alleging that it is subject to forfeiture—as required to restrain assets before trial under § 853(e)(1)(A)—the grand jury found probable cause to believe those assets were linked to the charged offenses, just as it found probable cause to believe the Kaleys committed the underlying crimes . . . Neither the Government nor the majority gives any reason why the District Court may reconsider the grand jury's probable cause finding as to traceability—and in fact constitutionally must, if asked—but may not do so as to the underlying charged offenses. Id. at 1108 (emphasis in original).

Because the Kaleys in this case did not contest the second prong, probable cause that the funds were involved with the criminal activity, the Court was only considering whether or not a defendant was entitled to an evidentiary hearing on the issue of probable cause regarding the criminal charges. With respect to whether the defendant is entitled to a hearing on the second prong, when the grand-jury’s indictment already finds probable cause, the Court specifically deferred. It stated in a footnote, “[a]t oral argument, the Government agreed that a defendant has a constitutional right to a hearing on [the second prong]. We do not opine on the matter here.” Id. at 1095, n.3). Thus this issue had yet be resolved. This decision, with its strange alignment of justices, cannot be seen as anything less than another blow to the rights of defendants seeking to assure themselves of a fair trial and just outcome. Justice Roberts, an unusual promoter of what is, arguably, a liberal position summed up the result: The Government seeks to use the grand jury's probable cause determination to strip the Kaleys of their counsel of choice. The Kaleys can take no comfort that they will be able to vindicate that right in a future adversarial proceeding. Once trial begins with someone other than chosen counsel, the right is lost, and it cannot be restored based on what happens at trial. The fundamental requirement of due process is the opportunity to be heard ‘at a meaningful time and in a meaningful manner. Id. at 1114.