401 U.S. 715 (1971), 5, United States v. United States Coin & Currency

Docket Nº:No. 5
Citation:401 U.S. 715, 91 S.Ct. 1041, 28 L.Ed.2d 434
Party Name:United States v. United States Coin & Currency
Case Date:April 05, 1971
Court:United States Supreme Court
 
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Page 715

401 U.S. 715 (1971)

91 S.Ct. 1041, 28 L.Ed.2d 434

United States

v.

United States Coin & Currency

No. 5

United States Supreme Court

April 5, 1971

Argued February 25-26, 1969

Reargued October 20, 1970

CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

Syllabus

The United States brought this action for the forfeiture of money in the possession of one Angelini when he was arrested for failing to register as a gambler and to pay the gambling tax required by 26 U.S.C. §§ 4411, 4412, and 4901. Having found that the money had been used in violation of those laws, [91 S.Ct. 1042] the District Court ordered forfeiture under 26 U.S.C. § 7302. After the Court of Appeals affirmed, the case was remanded for further consideration in the light of this Court's subsequent decisions in Marchetti v. United States, 390 U.S. 39, and Grosso v. United States, 390 U.S. 62, which held that gamblers had the Fifth Amendment right to remain silent despite the statutory requirement that they submit reports that could incriminate them. The Court of Appeals thereafter ordered the money's return, having concluded that Angelini could assert his Fifth Amendment privilege. The Government contends that (1) the Marchetti-Grosso rationale is inapplicable to § 7302 forfeiture proceedings because, under that provision, "any property intended for use in violating the . . . internal revenue laws" is subject to forfeiture regardless of the property owner's guilt, and (2) Marchetti and Grosso should not be given retroactive effect.

Held:

1. The Fifth Amendment privilege may properly be invoked in this case, since the forfeiture statutes, when viewed in their entirety, are intended to penalize only persons significantly involved in a criminal enterprise. Pp. 717-722.

2. The Marchetti-Grosso rule has retroactive effect in a forfeiture proceeding under § 7302. Pp. 722-724.

393 F.2d 499, affirmed.

HARLAN, J., delivered the opinion of the Court, in which BLACK, DOUGLAS, BRENNAN, and MARSHALL, JJ., joined. BLACK, J., filed a concurring statement, post, p. 724. BRENNAN, J., filed a concurring opinion, post, p. 724. WHITE, J., filed a dissenting opinion, in which BURGER, C.J., and STEWART and BLACKMUN, JJ., joined, post, p. 730.

Page 716

HARLAN, J., lead opinion

MR. JUSTICE HARLAN delivered the opinion of the Court.

After Donald J. Angelini had been convicted of failing to register as a gambler and to pay the related gambling tax required by federal law, 26 U.S.C. §§ 4411, 4412, 4901, the United States instituted the forfeiture proceeding to obtain $8,674 which Angelini had in his possession at the time of his arrest. The District Court for the Northern District of Illinois found that the money was being used in a bookmaking operation in violation of these internal revenue laws, and ordered forfeiture under 26 U.S.C. § 7302, which provides:

It shall be unlawful to have or possess any property intended for use in violating the provisions of the internal revenue laws . . . and no property rights shall exist in any such property. . . .

When the Court of Appeals affirmed, we granted certiorari, sub nom. Angelini v. United States, 390 U.S. 204, and remanded the case for further consideration in the light of our decisions in Marchetti v. United States, 390 U.S. 39 (1968), and Grosso v. United States, 390 U.S. 62 (1968), which precluded the criminal conviction of gamblers who properly assert

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their privilege against self-incrimination as a ground for their failure to comply with these aspects of the gambling tax law. A unanimous panel of the Court of Appeals concluded that Angelini might properly assert his Fifth Amendment privilege in this forfeiture proceeding, and ordered the return of the seized money. 393 F.2d 499 (1968). Since the Court of Appeals for the Sixth Circuit subsequently came to the opposite conclusion,1 we granted the Government's petition for certiorari in the present case, 393 U.S. 949 (1968), in order to resolve the conflict. The case was first argued at the 1968 Term, and reargued at the current Term. We now affirm the decision below.

I

The Government's principal argument turns upon an exceedingly narrow construction of our decisions in Marchetti and Grosso. In those cases, we took pains to make it clear that the Court in no way doubted the Government's power to assess and collect taxes on unlawful gambling activities. It was only the method Congress had adopted in collecting the tax that raised the Fifth Amendment question. The statute commanded that gamblers submit special registration statements and tax returns that contained information which could well incriminate them in many circumstances. Because the risk of self-incrimination was substantial, we held that a Fifth Amendment privilege could be raised as a defense to a criminal prosecution charging failure to file the required forms. Since it was only this method of tax collection which was subject to constitutional objection, we indicated that the Government remained free to collect taxes due under the statute so long as it

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did not attempt to punish the taxpayer for his failure to file the required documents.

The Government now relies heavily on the fact that Marchetti and Grosso only held that "a claim of privilege precludes a criminal conviction premised on failure to pay the tax."2 (Emphasis supplied.) It argues that, just as it may collect taxes in a civil action, the Government may also initiate forfeiture proceedings -- which are also formally civil in nature -- without offending Marchetti and Grosso. But, as Boyd v. United States, 116 U.S. 616, 634 (1886), makes clear,

proceedings instituted for the purpose of declaring the forfeiture of a man's property by reason of offences committed by him, though they may be civil in form, are in their nature criminal

for Fifth Amendment purposes. (Emphasis supplied.) From the relevant constitutional standpoint, there is no difference between a man who "forfeits" $8,674 because he has used the money in illegal gambling activities and a man who pays a "criminal fine" of $8,674 as a result of the same course of conduct. In both instances, money liability is predicated upon a finding of the owner's wrongful conduct; in both cases, the Fifth Amendment applies with equal force. See also One 1958 Plymouth Sedan v. Pennsylvania, 380 U.S. 693, 700 (1965).

The Government does not seriously contend otherwise. Instead, it places great emphasis on the peculiar nature of the proceedings authorized under § 7302. Boyd, we are told, was only concerned with forfeitures which are imposed "by reason of offences committed by" the owner. 116 U.S. at 634. In the present action, however, the Government contends that the guilt of the owner of the money is irrelevant. The forfeiture statute, it is noted, simply authorizes confiscation of "any property

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intended for use in violating the provisions of the internal revenue laws"; it does not require that Angelini be the one who possessed the requisite intention. If, for example, Angelini had left the money in a bookmaker's office without having any reason to know that illegal activities would take place there, the Government reads the statute as permitting confiscation if it can be shown that the bookmaker used Angelini's money in illegal wagering activities. Since, under the Government's view, the guilt or innocence of the actual owner of the money is irrelevant in an action under § 7302, the Government urges that the present forfeiture should not be considered the result of a "criminal" proceeding for Fifth Amendment purposes.

If we were writing on a clean slate, this claim that § 7302 operates to deprive totally innocent people of their property would hardly be compelling. Although it is true that the statute does not specifically [91 S.Ct. 1044] state that the property shall be seized only if its owner significantly participated in the criminal enterprise, we would not readily infer that Congress intended a different meaning. Cf. Morissette v. United States, 342 U.S. 246 (1952). However, as our past decisions have recognized, centuries of history support the Government's claim that forfeiture statutes similar to this one have an extraordinarily broad scope. See Goldsmith-Grant Co. v. United States, 254 U.S. 505 (1921); United States v. One Ford Coupe, 272 U.S. 321 (1926). Traditionally, forfeiture actions have proceeded upon the fiction that inanimate objects themselves can be guilty of wrongdoing. See Dobbins' Distillery v. United States, 96 U.S. 395, 399-401 (1878); The Palmyra, 12 Wheat. 1, 14 (1827). Simply put, the theory has been that, if the object is "guilty," it should be held forfeit. In the words of a medieval English writer,

Where a man killeth another with the sword of John at Stile, the sword shall be forfeit as deodand, and

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yet no default is in the owner.3

The modern forfeiture statutes are the direct descendants of this heritage, which is searchingly considered by Mr. Justice Holmes in a brilliant chapter in his book, The Common Law.4 The forfeiture action in the present case was instituted as an in rem proceeding in which the money itself is the formal respondent. More remarkable, the Government's complaint charges the money with the commission of an actionable wrong.5

It would appear then that history does support the Government's contention regarding the operation of this forfeiture statute, as do several decisions rendered by the courts of appeals.6 But before the Government's attempt to distinguish the Boyd case could even begin to convince, we would first have to be satisfied that a forfeiture statute, with such a broad sweep, did not raise serious constitutional questions under that...

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