Cisco v. State

• Citation: 285 Ga. 656,680 S.E.2d 831
• Parties: CISCO v. STATE of Georgia. Moore et al. v. State of Georgia. DO] No. S09A0371. DO] No. S09A0371. S09A0375.
• Decision Date: 15 June 2009
• Court: Supreme Court of Georgia

680 S.E.2d 831

285 Ga. 656

CISCO v. STATE of Georgia.

Moore et al. v. State of Georgia. DO] No. S09A0371. DO] No. S09A0371. S09A0375.

Supreme Court of Georgia.

June 15, 2009.

Reconsideration Denied June 30, 2009.

Alston & Bird, Peter M. Degnan, Gregory B. Mauldin, Atlanta, Zipperer, Lorberbaum & Beauvais, Alex L. Zipperer, Savannah, for Cisco.

Brown, Readdick, Bumgartner & Carter, Brunswick, Terry L. Readdick, Steven G. Blackerby, for Moore et al.

Stephen D. Kelley, District Attorney, Jacquelyn L. Johnson, Assistant District Attorney, Bondurant, Mixson & Elmore, John E. Floyd, Atlanta, John J. Ossick, Jr., Savage, Turner, Pinson & Karsman, Robert B. Turner, Savannah, William B. Johnson, Durham, McHugh & Duncan, James B. Durham, Brunswick, Ekonomou, Atkinson & Lambros, Michael G. Lambros, Atlanta, Oliver, Maner & Gray, Timothy D. Roberts, Savannah, Greenberg Traurig, Richard A. Serafini, Terry A. Dillard, Waycross, Clark & Williams, Nathan T. Williams, Brunswick, for State of Georgia et al.

Thurbert E. Baker, Attorney General, David S. McLaughlin, Assistant Attorney General, J. Scott Key, Koehler & Riddick, Christine A. Koehler, Lawrenceville, Laura D. Hogue, Macon, for amici curiae.

HUNSTEIN, Presiding Justice.

These cases involve the constitutionality of the in personam forfeiture provision, OCGA § 16-14-7(m), in the Georgia RICO (Racketeer Influenced and Corrupt Organizations) Act, OCGA § 16-14-1 et seq. (the "RICO Act"). The Camden County District Attorney in the name and on behalf of the State of Georgia filed an in personam RICO forfeiture complaint against defendants Althea Moore, Tammy Walker and their father, Fairley Cisco, along with nine other individuals and twelve businesses, who are the current or former owners, officers or operators of three truck stops in south Georgia.¹ In the complaint, the district attorney alleged that "the fuel pumps at said [truck stops] were intentionally altered by [d]efendants to indicate that customers were receiving a larger quantity of gasoline or diesel fuel than was actually dispensed"; that defendants "represented to customers that they were receiving premium grade gasoline while in fact they were receiving a lower octane gasoline"; and that "[d]efendants have operated said [truck stops] as a continuous enterprise through a pattern of criminal activity including fraud and theft." Asserting that "[t]he above-listed defendants in personam individually ... constitute an `enterprise' as that term is used in [the RICO Act]," the district attorney alleged that defendants "conducted or participated in the affairs of `The Enterprise' through a `pattern of racketeering activity' ... consisting of the following predicate acts," which, among the matters itemized by the district attorney, include the criminal acts of theft by deception and theft of services in violation of OCGA § 16-8-1 et seq.² and the unauthorized use of financial transaction cards in violation of OCGA § 16-9-33.

It is uncontroverted that not one of the in personam defendants had been convicted of or was even indicted either for committing any of the alleged crimes set forth as "predicate acts" in the Camden County District Attorney's complaint or for committing the offense of engaging in racketeering activity in violation of OCGA § 16-14-4.

After an ex parte hearing conducted the same day the complaint was filed, the trial court entered a temporary restraining order as to all of defendants' assets and appointed a receiver to take complete and immediate possession of and control over all of defendants' assets and property, without limitation, including the power to freeze all bank and securities accounts; possess and control all books and records of any entity in which defendants had a direct or indirect interest; and review defendants' records and reports of transactions. Additionally, defendants were ordered to cooperate with the receiver and provide him, inter alia, with "all information requested relating to [defendants'] past and present operations, activities and conditions (financial, legal, or otherwise)."

All of the defendants filed motions to dismiss challenging the constitutionality of the in personam RICO forfeiture provision, OCGA § 16-14-7(m). After entering an order that superseded the TRO but imposed in its stead a preliminary injunction and maintained the appointment of the receiver, the trial court rejected the constitutional challenges to OCGA § 16-14-7(m). In its amended order setting forth the reasons for its denial, the trial court relied on OCGA § 16-14-7(a) ("[f]orfeiture shall be had by a civil procedure known as a RICO forfeiture proceeding") and id. at (b) ("[a] RICO forfeiture proceeding shall be governed by Chapter 11 of Title 9, the `Georgia Civil Practice Act'"), see also id. at (i) (same), to conclude that "the [RICO] Act contains sufficient safeguards to protect a defendant's rights and property so that an in personam action may be pursued without running afoul of the Constitution." Tammy Walker, Althea Moore and several of the businesses appeal this ruling in Case No. S09A0375; Fairley Cisco appeals in Case No. S09A0371. We granted appellants' motion to consolidate their appeals.

This is the first time since 2001 that any appellate court has been presented the opportunity to address OCGA § 16-14-7(m).³ In Pimper v. State of Ga., 274 Ga. 624, 555 S.E.2d 459 (2001), the majority recognized there were "well-grounded concerns regarding the constitutional ramifications of an in personam RICO forfeiture action" such as the one raised in that case, but deemed it necessary to dismiss the appeal without reaching the merits. Id. at 627, 555 S.E.2d 459. No such procedural bar, however, exists in this case. For the reasons that follow, we conclude that OCGA § 16-14-7(m) provides for criminal in personam forfeiture prior to indictment or conviction; that an in personam forfeiture defendant must accordingly be afforded all of the constitutional safeguards due a criminal defendant; that Georgia's civil procedure rules, which OCGA § 16-14-7(m) expressly utilizes, are not adequate to protect an in personam forfeiture defendant's constitutional rights; and that, therefore, OCGA § 16-14-7(m) is unconstitutional because it deprives in personam forfeiture defendants of the safeguards of criminal procedure guaranteed by the United States and Georgia Constitutions.

1. Appellants contend that OCGA § 16-14-7(m) provides for criminal in personam forfeiture. We agree. Subsection (m) consists entirely of the following sentence:

In lieu of the provisions [regarding in rem forfeiture proceedings], the state may bring an in personam action for the forfeiture of any property subject to forfeiture under subsection (a) of this Code section.

We recognize that subsection (a) of OCGA § 16-14-7 states that a RICO forfeiture proceeding under that statute, i.e., in rem and in personam forfeitures, "shall be had by a civil procedure," and that the proceeding is governed by the Georgia Civil Practice Act, OCGA § 9-11-1 et seq. ("CPA"), with certain delineated exceptions. OCGA § 16-14-7(b), (i). Contrary to appellee's assertion, however, this statutory language does not mandate the conclusion that in personam RICO forfeitures are civil proceedings. The law is well established that a legislature's description of a statutory proceeding as civil does not foreclose the courts from determining that the proceeding is so punitive in fact that it may not legitimately be viewed as civil in nature, despite the legislature's intent. See Hudson v. United States, 522 U.S. 93, 99, 118 S.Ct. 488, 139 L.Ed.2d 450 (1997); United States v. Ursery, 518 U.S. 267, 278, 116 S.Ct. 2135, 135 L.Ed.2d 549 (1996). See also Dept. of Revenue of Montana v. Kurth Ranch, 511 U.S. 767, 777, 114 S.Ct. 1937, 128 L.Ed.2d 767 (1994) ("legislature's description of a statute as civil does not foreclose the possibility that it has a punitive character") (footnote omitted). Thus, "[e]ven in those cases where the legislature `has indicated an intention to establish a civil penalty, we have inquired further whether the statutory scheme was so punitive either in purpose or effect,' [cit.], as to `transfor(m) what was clearly intended as a civil remedy into a criminal penalty.' [Cit.]" Hudson, supra.

In order to determine whether the in personam RICO forfeiture proceeding is civil, as OCGA § 16-14-7(a) states, or criminal in nature, we utilize the factors set forth in Hudson v. United States, supra, 522 U.S. at 99-100, 118 S.Ct. 488.⁴ We need not address all seven Hudson factors, however, because we determine that the criminal nature of the in personam RICO forfeiture proceeding in OCGA § 16-14-7(m) is overwhelmingly established by the second factor in Hudson, namely, "`whether [the sanction] has historically been regarded as a punishment,'" id, and further reinforced by the third and fifth factors, namely, whether the punishment comes into play only on a finding of scienter and whether the behavior to which it applies is already a crime. Id.

The United States Supreme Court has recognized that civil asset forfeiture, with its biblical roots and common law development in medieval England, has for centuries been an in rem proceeding against property, operating under the legal fiction that the seized property, and not the property's owner, is the guilty party. See United States v. Bajakajian, 524 U.S. 321, 330 and n. 5, 118 S.Ct. 2028, 141 L.Ed.2d 314 (1998); Calero-Toledo v. Pearson Yacht Leasing Co., 416 U.S. 663, 680-682, 94 S.Ct. 2080, 40 L.Ed.2d 452 (1974). Hence, the physical object itself is "`treated as the offender,' without regard for the owner's conduct." Id. at 684, 94 S.Ct. 2080. However, where the forfeiture was in personam, literally "against the person," Black's Law Dictionary, p. 711 (5th ed.), the proceeding was criminal because it required proof of the guilt of the owner. As the United States Supreme Court recognized in ...