Kaley v. United States

Citation571 U.S. 320,134 S.Ct. 1090,188 L.Ed.2d 46
Decision Date25 February 2014
Docket NumberNo. 12–464.,12–464.
Parties Kerri L. KALEY, et vir, Petitioners v. UNITED STATES.
CourtU.S. Supreme Court

Howard Srebnick, Miami, FL, for Petitioners.

Michael R. Dreeben, Washington, DC, for Respondent.

Howard Srebnick, Counsel of Record, Black, Srebnick, Kornspan & Stumpf, P.A., G. Richard Strafer, G. Richard Strafer, P.A., Miami, FL, for Petitioners.

Donald B. Verrilli, Jr., Solicitor General (Counsel of Record), Mythili Raman, Acting Assistant Attorney General, Michael R. Dreeben, Deputy Solicitor General, Elaine J. Goldenberg, Assistant to the Solicitor General, Sonja M. Ralston, Attorney, Department of Justice, Washington D.C., for Respondent.

Justice KAGAN delivered the opinion of the Court.

A federal statute, 21 U.S.C. § 853(e), authorizes a court to freeze an indicted defendant's assets prior to trial if they would be subject to forfeiture upon conviction. In United States v. Monsanto, 491 U.S. 600, 615, 109 S.Ct. 2657, 105 L.Ed.2d 512 (1989), we approved the constitutionality of such an order so long as it is "based on a finding of probable cause to believe that the property will ultimately be proved forfeitable." And we held that standard to apply even when a defendant seeks to use the disputed property to pay for a lawyer.

In this case, two indicted defendants wishing to hire an attorney challenged a pre-trial restraint on their property. The trial court convened a hearing to consider the seizure's legality under Monsanto . The question presented is whether criminal defendants are constitutionally entitled at such a hearing to contest a grand jury's prior determination of probable cause to believe they committed the crimes charged. We hold that they have no right to relitigate that finding.

I
A

Criminal forfeitures are imposed upon conviction to confiscate assets used in or gained from certain serious crimes. See 21 U.S.C. § 853(a). Forfeitures help to ensure that crime does not pay: They at once punish wrongdoing, deter future illegality, and "lessen the economic power" of criminal enterprises. Caplin & Drysdale, Chartered v. United States, 491 U.S. 617, 630, 109 S.Ct. 2646, 105 L.Ed.2d 528 (1989) ; see id., at 634, 109 S.Ct. 2646 ("Forfeiture provisions are powerful weapons in the war on crime"). The Government also uses forfeited property to recompense victims of crime, improve conditions in crime-damaged communities, and support law enforcement activities like police training. See id., at 629–630, 109 S.Ct. 2646.1 Accordingly, "there is a strong governmental interest in obtaining full recovery of all forfeitable assets." Id., at 631, 109 S.Ct. 2646.

In line with that interest, § 853(e)(1) empowers courts to enter pre-trial restraining orders or injunctions to "preserve the availability of [forfeitable] property" while criminal proceedings are pending. Such an order, issued "[u]pon application of the United States," prevents a defendant from spending or transferring specified property, including to pay an attorney for legal services. Ibid. In Monsanto, our principal case involving this procedure, we held a pre-trial asset restraint constitutionally permissible whenever there is probable cause to believe that the property is forfeitable. See 491 U.S., at 615, 109 S.Ct. 2657. That determination has two parts, reflecting the requirements for forfeiture under federal law: There must be probable cause to think (1) that the defendant has committed an offense permitting forfeiture, and (2) that the property at issue has the requisite connection to that crime. See § 853(a). The Monsanto Court, however, declined to consider "whether the Due Process Clause requires a hearing" to establish either or both of those aspects of forfeitability. Id., at 615, n. 10, 109 S.Ct. 2657.2

Since Monsanto, the lower courts have generally provided a hearing to any indicted defendant seeking to lift an asset restraint to pay for a lawyer. In that hearing, they have uniformly allowed the defendant to litigate the second issue stated above: whether probable cause exists to believe that the assets in dispute are traceable or otherwise sufficiently related to the crime charged in the indictment.3 But the courts have divided over extending the hearing to the first issue. Some have considered, while others have barred, a defendant's attempt to challenge the probable cause underlying a criminal charge.4 This case raises the question whether an indicted defendant has a constitutional right to contest the grand jury's prior determination of that matter.

B

The grand jury's indictment in this case charges a scheme to steal prescription medical devices and resell them for profit. The indictment accused petitioner Kerri Kaley, a sales representative for a subsidiary of Johnson & Johnson, and petitioner Brian Kaley, her husband, with transporting stolen medical devices across state lines and laundering the proceeds of that activity.5 The Kaleys have contested those allegations throughout this litigation, arguing that the medical devices at issue were unwanted, excess hospital inventory, which they could lawfully take and market to others.

Immediately after obtaining the indictment, the Government sought a restraining order under § 853(e)(1) to prevent the Kaleys from transferring any assets traceable to or involved in the alleged offenses.

Included among those assets is a $500,000 certificate of deposit that the Kaleys intended to use for legal fees. The District Court entered the requested order. Later, in response to the Kaleys' motion to vacate the asset restraint, the court denied a request for an evidentiary hearing and confirmed the order, except as to $63,000 that it found (based on the parties' written submissions) was not connected to the alleged offenses.

On interlocutory appeal, the Eleventh Circuit reversed and remanded for further consideration of whether some kind of evidentiary hearing was warranted. See 579 F.3d 1246 (2009). The District Court then concluded that it should hold a hearing, but only as to "whether the restrained assets are traceable to or involved in the alleged criminal conduct." App. to Pet. for Cert. 43, n. 5. The Kaleys informed the court that they no longer disputed that issue; they wished to show only that the "case against them is 'baseless.' " Id., at 39; see App. 107 ("We are not contesting that the assets restrained were ... traceable to the conduct. Our quarrel is whether that conduct constitutes a crime"). Accordingly, the District Court affirmed the restraining order, and the Kaleys took another appeal. The Eleventh Circuit this time affirmed, holding that the Kaleys were not entitled at a hearing on the asset freeze "to challenge the factual foundation supporting the grand jury's probable cause determination[ ]"—that is, "the very validity of the underlying indictment." 677 F.3d 1316, 1317 (2012).

We granted certiorari in light of the Circuit split on the question presented, 568 U.S. ––––, 133 S.Ct. 1580, 185 L.Ed.2d 575 (2013), and we now affirm the Eleventh Circuit.

II

This Court has twice considered claims, similar to the Kaleys', that the Fifth Amendment's right to due process and the Sixth Amendment's right to counsel constrain the way the federal forfeiture statute applies to assets needed to retain an attorney. See Caplin & Drysdale, 491 U.S. 617, 109 S.Ct. 2646, 105 L.Ed.2d 528; Monsanto, 491 U.S. 600, 109 S.Ct. 2657, 105 L.Ed.2d 512. We begin with those rulings not as mere background, but as something much more. On the single day the Court decided both those cases, it cast the die on this one too.

In Caplin & Drysdale, we considered whether the Fifth and Sixth Amendments exempt from forfeiture money that a convicted defendant has agreed to pay his attorney. See 491 U.S., at 623–635, 109 S.Ct. 2646. We conceded a factual premise of the constitutional claim made in the case: Sometimes "a defendant will be unable to retain the attorney of his choice," if he cannot use forfeitable assets. Id., at 625, 109 S.Ct. 2646. Still, we held, the defendant's claim was "untenable." Id., at 626, 109 S.Ct. 2646."A defendant has no Sixth Amendment right to spend another person's money" for legal fees—even if that is the only way to hire a preferred lawyer. Ibid. Consider, we submitted, the example of a "robbery suspect" who wishes to "use funds he has stolen from a bank to retain an attorney to defend him if he is apprehended." Ibid. That money is "not rightfully his." Ibid. Accordingly, we concluded, the Government does not violate the Constitution if, pursuant to the forfeiture statute, "it seizes the robbery proceeds and refuses to permit the defendant to use them" to pay for his lawyer. Ibid.

And then, we confirmed in Monsanto what our "robbery suspect" hypothetical indicated: Even prior to conviction (or trial)—when the presumption of innocence still applies—the Government could constitutionallyuse § 853(e) to freeze assets of an indicted defendant "based on a finding of probable cause to believe that the property will ultimately be proved forfeitable." 491 U.S., at 615, 109 S.Ct. 2657. In Monsanto , too, the defendant wanted to use the property at issue to pay a lawyer, and maintained that the Fifth and Sixth Amendments entitled him to do so. We disagreed. We first noted that the Government may sometimes "restrain persons where there is a finding of probable cause to believe that the accused has committed a serious offense." Id., at 615–616, 109 S.Ct. 2657. Given that power, we could find "no constitutional infirmity in § 853(e)'s authorization of a similar restraint on [the defendant's] property" in order to protect "the community's interest" in recovering "ill-gotten gains." Id., at 616, 109 S.Ct. 2657. Nor did the defendant's interest in retaining a lawyer with the disputed assets change the equation. Relying on Caplin & Drysdale, we reasoned: "[I]f the Government may, post-trial, forbid the use of forfeited assets to pay an...

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