U.S. v. Chandler

• Citation: 36 F.3d 358
• Decision Date: 27 September 1994
• Docket Number: No. 93-2064,93-2064
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Robert H. CHANDLER, II, Claimant-Appellant, and The Real Property Known as Tract 1 of Little River Farms, Route 1, Island Road, Hillsborough, Orange County, North Carolina; Orange County, Defendants, Eastern Skateboard Supply, Incorporated, Claimant.
• Court: United States Courts of Appeals. United States Court of Appeals (4th Circuit)

Page 358

36 F.3d 358

63 USLW 2249

UNITED STATES of America, Plaintiff-Appellee, v. Robert H. CHANDLER, II, Claimant-Appellant, and The Real Property Known as Tract 1 of Little River Farms,

Route 1, Island Road, Hillsborough, Orange County,

North Carolina; Orange County, Defendants,

Eastern Skateboard Supply, Incorporated, Claimant.

No. 93-2064.

United States Court of Appeals, Fourth Circuit.

Argued June 7, 1994.

Decided Sept. 27, 1994.

ARGUED: Thomas Franklin Loflin, III, Durham, NC, for appellant. Gill Paul Beck, Asst. U.S. Atty., Greensboro, NC, for appellee. ON BRIEF: Walter C. Holton, Jr., U.S. Atty., Greensboro, NC, for appellee.

Before WILKINSON, NIEMEYER, and WILLIAMS, Circuit Judges.

Affirmed by published opinion. Judge NIEMEYER wrote the opinion, in which Judge WILKINSON and Judge WILLIAMS joined. Judge WILKINSON wrote a separate concurring opinion.

OPINION

NIEMEYER, Circuit Judge:

We must consider in this case the important question of whether civil forfeiture to the United States of a 33-acre farm, due to its involvement in violations of the federal drug laws, constitutes an excessive fine under the Eighth Amendment. While the Supreme Court held in Austin v. United States, --- U.S. ----, 113 S.Ct. 2801, 125 L.Ed.2d 488 (1993), that such forfeitures are limited by the Excessive Fines Clause of the Eighth Amendment, it left to the lower courts the task of articulating the appropriate standard for determining excessiveness. We articulate in this case an instrumentality test, rejecting any proportionality test, for determining whether a civil forfeiture under 21 U.S.C. Secs. 881(a)(6) & (a)(7) is excessive. After applying the instrumentality test to the facts of this case, and considering the other challenges raised on appeal by the property's owner, we affirm the "decree and judgment of forfeiture" entered by the district court.

I

The United States brought this civil in rem action in July 1991 against Tract 1 of Little River Farms in Orange County, North Carolina, seeking to take title to the 33-acre property under 21 U.S.C. Secs. 881(a)(6) & (a)(7). Little River Farms is located in a secluded rural area approximately 20 miles from Durham, North Carolina, a couple of miles off the main road. The next closest house is at least 300 yards away from the property. The property is valued at approximately $569,000 and is owned by Robert H. Chandler, II, who inherited the property from his mother at the time of her death in 1978. The government alleged in its complaint that the property was "used or intended to be used in any manner or part to commit or to facilitate the commission of a violation of Title II of the Controlled Substances Act, 21 U.S.C. [Sec. 801] et seq. " and that the property constituted "proceeds traceable to the exchange of controlled substances."

Chandler, who is the sole owner of Little River Farms, intervened and filed a claim to the property in answer to the forfeiture complaint. Chandler alleged that the property did not constitute the proceeds of any drug dealing and that it was not used to facilitate the commission of any violation of the drug laws. In his answer, he specifically denied the government's allegations of his involvement in drug transactions and claimed that he "has no knowledge of, and did not give any consent for, the subject real property being used or intended for use to commit or facilitate the commission of a violation of 21 U.S.C. Sec. 801 et seq. by any person."

At trial, the government's principal witnesses, John Baucom, Doug Frazee and Gary George, all testifying under grants of immunity, stated that they had distributed, packaged, sold, purchased and used controlled substances, including marijuana, cocaine and quaaludes, on Little River Farms. Baucom, who had worked for Chandler at Little River Farms, testified that he was paid in marijuana and cocaine by Chandler for doing maintenance-type work on the property, such as cutting grass, and for doing landscaping and minor carpentry work. He stated that on approximately 30 to 40 occasions, Chandler paid him $100 and a half-gram of cocaine in the basement of the farmhouse. Baucom also testified that he had observed Chandler in the basement with between one and two pounds of marijuana and that he saw others, including George, pick up marijuana from Chandler on at least three occasions. Baucom testified that at times, he was instructed by Chandler to serve as a lookout while Chandler and George consummated drug deals on the farm.

Frazee testified that between 1985 and 1986, he was hired by Chandler to do maintenance work on Little River Farms. He testified that on at least a dozen occasions, he was paid by Chandler with a quarter of a gram to a gram of cocaine for his work done on the property. He stated that the drugs were usually given to him in the kitchen of the farmhouse. In addition, Frazee testified that on at least 15 occasions between 1984 and 1987, Chandler sold him cocaine in quantities ranging from a quarter of a gram to an ounce, worth up to $1,400.

George testified that Chandler distributed two bales of marijuana to him in the garage of Little River Farms in 1987. Each bale weighed between 30 and 40 pounds and was valued at approximately $500 to $600 per pound, for a total value of approximately $30,000 to $48,000. George testified that he had noticed that there were approximately two or three more bales of marijuana stored inside of the trunk of a car in the garage. George also stated that he observed Chris Nash, a Chandler employee, burning marijuana wrappers on the farm.

At the close of the evidence, the district court found that probable cause that the property was subject to a forfeiture had been established by the government and shifted the burden to Chandler to show, by a preponderance of the evidence, that the property was not used for illegal purposes or that he did not know about the illegal use. Chandler presented other witnesses, who had been employed on Little River Farms, who testified that they had never seen Chandler give either Baucom or Frazee any drugs. These witnesses also stated that they had never seen Chandler either use or store drugs on the property. Chandler himself took the stand and testified that he had inherited the property from his parents and that he had not engaged in any illegal activities.

At the conclusion of the evidence, the jury found in favor of the United States, concluding that the property had been used to facilitate the commission of violations of the drug laws, that the property was improved by the proceeds of drug exchanges, and that Chandler could not claim a lack of awareness. On July 9, 1993, the court entered a "decree and judgment" forfeiting the 33-acre farm to the United States subject to prior liens recorded against the property. This appeal followed.

II

Chandler contends that the forfeiture constituted an excessive fine in violation of the Eighth Amendment. ¹ He claims that he has never been convicted of any drug offense in any court and that this civil forfeiture proceeding is being used by the government "to circumvent the criminal burden of proof and to punish [him] by taking away his entire property worth at least $569,000, consisting of approximately 33 acres." He argues that even if he failed to carry his burden with respect to whether the property had been involved in the violation of drug laws, "the most that should have been forfeited under this evidence under the excessive fines clause of the Eighth Amendment would be the house and garage--not the entire 33-acre tract."

The Controlled Substances Act, enacted in 1970, includes provisions for the forfeiture to the United States of property used in or intended to be used in the commission of a violation of drug laws which are punishable by more than one year's imprisonment. See 21 U.S.C. Sec. 881. The forfeiture proceeding is civil in nature and relies on the nexus between the property and illegal drug activity. Property is subject to forfeiture if it is given in exchange for drugs; if it is "traceable" to a drug transaction; if it is used in committing or facilitating the commission of a drug offense; or if it is intended for such use. See 21 U.S.C. Secs. 881(a)(6) & (a)(7). The owner of an interest in the property may defend against forfeiture by showing that the offense involving the property was committed without his knowledge or consent. Id. Because a forfeiture action is in rem, elements of a claim establishing forfeiture focus principally on the property's role in the offense and not on the owner's guilt.

The procedure governing a civil forfeiture action is that prescribed for seizures in admiralty. See 21 U.S.C. Sec. 881(b). The government may seize property if it can establish probable cause to believe that the property has the statutorily prescribed nexus to illegal drug activity which is punishable by more than one year's imprisonment. See 21 U.S.C. Sec. 881(b)(4). It is not an element of the government's case to prove the involvement of the property's owner in the commission of the offense giving rise to the forfeiture. By carrying the burden of establishing that the violation occurred "without the knowledge or consent of that owner," however, the owner establishes a defense to the forfeiture. See 21 U.S.C. Sec. 881(a)(6) & (a)(7).

The in rem nature of a forfeiture action brought under 21 U.S.C. Sec. 881 and the adverse effect on the property's owner of such forfeiture raises unique questions about the proper application of the constitutional limit of excessiveness, which Chandler claims was exceeded.

In this case, after Chandler made the Eighth Amendment objection and the jury rendered its verdict, but before the court entered the decree and judgment of forfeiture, the Supreme Court decided Austin v. United States, --- U.S. ----, 113 S.Ct. 2801, 125 L.Ed.2d 488 (1993), which held that in rem civil forfeiture proceedings are subject to the limitations...