Caplin Drysdale, Chartered v. United States

• Citation: 105 L.Ed.2d 528,109 S.Ct. 2646,491 U.S. 617
• Decision Date: 22 June 1989
• Docket Number: No. 87-1729,87-1729
• Parties: CAPLIN & DRYSDALE, CHARTERED, Petitioner v. UNITED STATES
• Court: United States Supreme Court

491 U.S. 617

109 S.Ct. 2646

105 L.Ed.2d 528

CAPLIN & DRYSDALE, CHARTERED, Petitioner

v UNITED STATES.

No. 87-1729.

Argued March 21, 1989.

Decided June 22, 1989.

Syllabus

Christopher Reckmeyer was charged with running a massive drug importation and distribution scheme alleged to be a continuing criminal enterprise (CCE) in violation of 21 U.S.C. § 848. Relying on a portion of the CCE statute that authorizes forfeiture to the Government of property acquired as a result of drug-law violations, § 853, the indictment sought forfeiture of specified assets in Reckmeyer's possession. The District Court, acting pursuant to § 853(e)(1)(A), entered a restraining order forbidding Reckmeyer from transferring any of the potentially forfeitable assets. Nonetheless, he transferred $25,000 to petitioner, a law firm, for preindictment legal services. Petitioner continued to represent Reckmeyer after his indictment. Reckmeyer moved to modify the District Court's order to permit him to use some of the restrained assets to pay petitioner's fees and to exempt such assets from postconviction forfeiture. However, before the court ruled on his motion, Reckmeyer entered a plea agreement with the Government in which, inter alia, he agreed to forfeit all of the specified assets. The court then denied Reckmeyer's motion and, subsequently, entered an order forfeiting virtually all of his assets to the Government. Petitioner—arguing that assets used to pay an attorney are exempt from forfeiture under § 853 and, if they are not, that the statute's failure to provide such an exemption renders it unconstitutional—filed a petition under § 853(n) seeking an adjudication of its third-party interest in the forfeited assets. The District Court granted the relief sought. However, the Court of Appeals reversed, finding that the § atute acknowledged no exception to its forfeiture requirement and that the statutory scheme is constitutional.

Held:

1. For the reasons stated in United States v. Monsanto, 491 U.S. 600, 611-614, 109 S.Ct. 2657, 105 L.Ed.2d 512 (1989), whatever discretion § 853(e) does provide district court judges to refuse to issue pretrial restraining orders on potentially forfeitable assets, it does not grant them equitable discretion to allow a defendant to withhold assets to pay bona fide attorney's fees. Nor does the exercise of judges' § 853(e) discretion "immunize" nonrestrained assets used for attorney's fees from subsequent forfeiture under § 853(c), which provides for recapture of forfeitable assets transferred to third parties. Pp. 622-623.

2. The forfeiture statute does not impermissibly burden a defendant's Sixth Amendment right to retain counsel of his choice. A defendant has no Sixth Amendment right to spend another person's money for services rendered by an attorney even if those funds are the only way that that defendant will be able to retain the attorney of his choice. Such money, though in his possession, is not rightfully his. Petitioner's contention that, since the Government's claim to forfeitable assets rests on a penal statute that is merely a mechanism for preventing fraudulent conveyances of the assets and is not a device for determining true title to property, the burden the statute places on a defendant's rights greatly outweighs the Government's interest in forfeiture is unsound. Section 853(c) reflects the application of the long-recognized and lawful practice of vesting title to any forfeitable assets in the hands of the Government at the time of the criminal act giving rise to forfeiture. Moreover, there is a strong governmental interest in obtaining full recovery of the assets, since the assets are deposited in a fund that supports law-enforcement efforts, since the statute allows property to be recovered by its rightful owners, and since a major purpose behind forfeiture provisions such as the CCE's is to lessen the economic power of organized crime and drug enterprises, including the use of such power to retain private counsel. Pp. 624-633.

3. The forfeiture statute does not upset the balance of power between the Government and the accused in a manner contrary to the Due Process Clause of the Fifth Amendment. The Constitution does not forbid the imposition of an otherwise permissible criminal sanction, such as forfeiture, merely because in some cases prosecutors may abuse the processes available to them. Such due process claims are cognizable only in specific cases of prosecutorial misconduct, which has not been alleged here. Pp. 633-635.

837 F.2d 637, affirmed.

WHITE, J., delivered the opinion of the Court, in which REHNQUIST, C.J., and O'CONNOR, SCALIA, and KENNEDY, JJ., joined. BLACKMUN, J., filed a dissenting opinion, in which BRENNAN, MARSHALL, and STEVENS, JJ., joined, post, p. 633-635.

Peter Van N. Lockwood, Washington, D.C., for petitioner.

Acting Sol. Gen. William C. Bryson, Washington, D.C., for respondent.

Justice WHITE delivered the opinion of the Court.

We are called on to determine whether the federal drug forfeiture statute includes an exemption for assets that a defendant wishes to use to pay an attorney who conducted his defense in the criminal case where forfeiture was sought. Because we determine that no such exemption exists, we must decide whether that statute, so interpreted, is consistent with the Fifth and Sixth Amendments. We hold that it is.

I

In January 1985, Christopher Reckmeyer was charged in a multicount indictment with running a massive drug importation and distribution scheme. The scheme was alleged to be a continuing criminal enterprise (CCE), in violation of 84 Stat. 1265, as amended, 21 U.S.C. § 848 (1982 ed., Supp. V). Relying on a portion of the CCE statute that authorizes forfeiture to the Government of "property constituting, or der ved from . . . proceeds . . . obtained" from drug-law violations, § 853(a),¹ the indictment sought forfeiture of specified assets in Reckmeyer's possession. App. 33-40. At this time, the District Court, acting pursuant to § 853(e)(1)(A),² entered a restraining order forbidding Reckmeyer to transfer any of the listed assets that were potentially forfeitable.

Sometime earlier, Reckmeyer had retained petitioner, a law firm, to represent him in the ongoing grand jury investigation which resulted in the January 1985 indictments. Notwithstanding the restraining order, Reckmeyer paid the firm $25,000 for preindictment legal services a few days after the indictment was handed down; this sum was placed by petitioner in an escrow account. Petitioner continued to represent Reckmeyer following the indictment.

On March 7, 1985, Reckmeyer moved to modify the District Court's earlier restraining order to permit him to use some of the restrained assets to pay petitioner's fees; Reckmeyer also sought to exempt from any postconviction forfeiture order the assets that he intended to use to pay petitioner. However, one week later, before the District Court could conduct a hearing on this motion, Reckmeyer entered a plea agreement with the Government. Under the agreement, Reckmeyer pleaded guilty to the drug-related CCE charge, and agreed to forfeit all of the specified assets listed in the indictment. The day after the Reckmeyer's plea was entered, the District Court denied his earlier motion to modify the restraining order, concluding that the plea and forfeiture agreement rendered irrelevant any further consideration of the propriety of the court's pretrial restraints. App. 54-55. Subsequently, an order forfeiting virtually all of the assets in Reckmeyer's possession was entered by the District Court in conjunction with his sentencing. Id., at 57-65.

After this order was entered, petitioner filed a petition under § 853(n), which permits third parties with an interest in forfeited property to ask the sentencing court for an adjudication of their rights to that property; specifically, § 853(n)(6)(B) gives a third party who entered into a bona fide transaction with a defendant a right to make claims against forfeited property, if that third party was "at the time of [the transaction] reasonably without cause to believe that the [defendant's assets were] subject to forfeiture." See also § 853(c). Petitioner claimed an interest in $170,000 of Reckmeyer's assets, for services it had provided Reckmeyer in conducting his defense; petitioner also sought the $25,000 being held n the escrow account, as payment for preindictment legal services. Petitioner argued alternatively that assets used to pay an attorney were exempt from forfeiture under § 853, and if not, the failure of the statute to provide such an exemption rendered it unconstitutional. The District Court granted petitioner's claim for a share of the forfeited assets.

A panel of the Fourth Circuit affirmed, finding that—while § 853 contained no statutory provision authorizing the payment of attorney's fees out of forfeited assets—the statute's failure to do so impermissibly infringed a defendant's Sixth Amendment right to the counsel of his choice. United States v. Harvey, 814 F.2d 905 (4th Cir.1987). The Court of Appeals agreed to hear the case en banc and reversed. Sub nom. In re Forfeiture Hearing as to Caplin & Drysdale, Chartered, 837 F.2d 637 (4th Cir.1988). All the judges of the Fourth Circuit agreed that the language of the CCE statute acknowledged no exception to its forfeiture requirement that would recognize petitioner's claim to the forfeited assets. A majority found this statutory scheme constitutional, id., at 642-648; four dissenting judges, however, agreed with the panel's view that the statute so construed violated the Sixth Amendment, id., at 651-653 (Phillips, J., dissenting).

Petitioner sought review of the statutory and constitutional issues raised by the Court of Appeals' holding. We granted certiorari, 488 U.S. 940, 109 S.Ct. 363, 102 L.Ed.2d 352 (1988), and now affirm.

II

Petitioner's first submission is that the statutory provision that authorizes...