U.S. v. Tilley

• Decision Date: 23 March 1994
• Docket Number: No. 93-1394,93-1394
• Citation: 18 F.3d 295
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Jerry Wayne TILLEY, and Susan Wells Tilley, Tommy Ross Anderson and Sarah Jane Anderson, Defendants-Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 295

18 F.3d 295

62 USLW 2613

UNITED STATES of America, Plaintiff-Appellee, v. Jerry Wayne TILLEY, and Susan Wells Tilley, Tommy Ross Anderson and Sarah Jane Anderson, Defendants-Appellees.

No. 93-1394.

United States Court of Appeals Fifth Circuit.

March 23, 1994.

Rehearing and Suggestion for Rehearing En Banc Denied May 11, 1994.

Gerald H. Goldstein, John Fahle, Goldstein, Goldstein & Hilley, San Antonio, TX for Jerry Tilley.

Martin L. LeNoir, Dallas, TX, for Tommy Anderson.

Barry Sorrels, Milner, Goranson, Sorrels, Udashen, Wells & Parker, Dallas, TX, for Sarah Anderson.

Tim K. Banner, Robert A. Montserrat, Dallas, TX, for Susan Tilley.

Jim E. Lavine, Houston, TX, for amicus TX. Crim. Defense Lawyers Ass'n and Nat'l Ass'n of Criminal Defense Lawyers.

Michael Snipes, Delonia A. Watson, and Stewart C. Robinson, Jr., Asst. U.S. Attys., Richard H. Stephens, U.S. Atty., Dallas, TX, for U.S.

Appeals from the United States District Court for the Northern District of Texas.

Before JOHNSON, JOLLY, and JONES, Circuit Judges.

E. GRADY JOLLY, Circuit Judge:

In this appeal, the defendants seek dismissal of their criminal indictment for selling illegal drugs on grounds of double jeopardy. They argue that the prior civil forfeiture of the proceeds from these drug sales constitutes punishment for the crimes charged in the indictment and that the Double Jeopardy Clause precludes a second punishment. The district court, refusing to buy into the defendants' double jeopardy argument, denied their motion to dismiss the indictment. The defendants then filed this interlocutory appeal. Because we hold that the forfeiture of unlawful proceeds of illegal drug sales does not constitute punishment, we affirm the district court.

I

In 1990, the Drug Enforcement Agency, and other authorities, began an investigation of large-scale activities involved in this case, which had yielded millions of dollars in drug proceeds. On July 25, 1991, the government filed a complaint for civil forfeiture in rem against certain personal and real property belonging to the defendants pursuant to 21 U.S.C. Secs. 881(a)(6) and (a)(7). ¹ On October 8, 1992, the government issued a criminal indictment charging the defendants for the various drug crimes committed from 1986 to 1991. On February 5, 1993, the four defendants in this case entered into a stipulated forfeiture agreement with the United States. They agreed to forfeit significant amounts of cash, certificates of deposit, automobiles, and other personal property with a total value of approximately $650,000. Based on the stipulated agreements, the district court, on February 8, entered final judgment of forfeiture with respect to the personal property; however, the court stayed forfeiture proceedings with respect to defendants' two homes pending outcome of the criminal trial. ² On April 7, the defendants filed a motion to dismiss the indictment on grounds that they were being subjected to multiple punishments for the same crimes in violation of the Double Jeopardy Clause. The defendants argued that they had already been "punished" for the same drug trafficking in the civil forfeiture proceeding. The district court rejected the argument and denied the motion. ³ The defendants then filed this interlocutory appeal pursuant to Abney v. United States, 431 U.S. 651, 97 S.Ct. 2034, 52 L.Ed.2d 651 (1977).

II

The Double Jeopardy Clause prohibits more than one "punishment" for the same offense. ⁴ North Carolina v. Pearce, 395 U.S. 711, 717, 89 S.Ct. 2072, 2076, 23 L.Ed.2d 656 (1969). The pending criminal trial in this case, if it results in a conviction, would, of course, subject the defendants to punishment. Thus, if the prior civil forfeiture proceeding, which was predicated on the same drug trafficking offenses as charged in the indictment, constituted a "punishment," the Double Jeopardy Clause will bar the pending criminal trial. ⁵

The Supreme Court has classified a civil sanction for wrongful conduct as a "punishment" under the Double Jeopardy Clause when the sanction served a traditional goal of punishment, that is, deterrence or retribution, instead of the remedial goal of reimbursing the government and society for the costs that result from that wrongful conduct. United States v. Halper, 490 U.S. 435, 448-49, 109 S.Ct. 1892, 1902, 104 L.Ed.2d 487 (1989). In Halper, the Supreme Court established the analytical methodology that will guide our determination of whether the civil forfeiture of the proceeds from illegal drug sales in this case served a punitive purpose, or a wholly remedial purpose. As explained below, this methodology focuses on the relationship between the amount of the civil sanction and the amount required to serve the remedial purpose of reimbursing the costs incurred by the government and society as a result of the wrongful conduct. We should make clear, however, that the sanction in Halper did not involve the proceeds from the crimes charged and the fact that the property forfeited in today's case constitutes unlawful proceeds is crucial to our analysis.

In Halper, 490 U.S. at 437-39, 109 S.Ct. at 1896-97, the government secured the conviction of a defendant on sixty-five counts of violating the False Claims Act by submitting fraudulent medicare claims. His crimes, however, had only netted him $585 in excess payments from the government, and the district court estimated the government's costs at $16,000. Nevertheless, the government, in a separate civil action, sought to impose an additional penalty of $130,000. Halper argued that the civil penalty constituted a second punishment on him for the same wrongful acts for which he had been criminally convicted and thus violated the Double Jeopardy Clause. Id. at 440, 109 S.Ct. at 1897. The Supreme Court reasoned that a government-imposed sanction, whether labelled as "criminal" or "civil," constituted punishment under the Double Jeopardy Clause if--and only if--the sanction, "as applied in the individual case serve[d] the goals of punishment," that is, retribution and deterrence, instead of only the traditional remedial purpose of reimbursing the government for the costs incurred because of the defendant's wrongful conduct. Id. at 448, 109 S.Ct. at 1899-1902 (emphasis added). The Court declined to determine whether a sanction is punitive by focusing on whether a defendant subjectively feels the "sting of punishment." Id. at 447, 109 S.Ct. 1901 n. 7. Instead, the Halper Court examined the civil sanction in that case with a focus on whether it was so excessive that it was punitive. See id., 490 U.S. at 447, 109 S.Ct. at 1902. The Court stated that a civil sanction constitutes criminal punishment only in the "rare case" in which the amount of the sanction is "overwhelmingly disproportionate" to the damages caused by the wrongful conduct and thus "bears no rational relation to the goal of compensating the government for its loss, but rather appears to qualify as 'punishment' within the plain meaning of the word." Id. at 449, 109 S.Ct. at 1902 (emphasis added). The Court then remanded to the district court for a determination of the government's actual costs and an application of its rational relation test. Id. at 452, 109 S.Ct. at 1904.

In United States v. Ward, 448 U.S. 242, 254, 100 S.Ct. 2636, 2644, 65 L.Ed.2d 742 (1980), the Supreme Court made clear that the compensation of both the government and society are remedial goals that a civil sanction may serve. The Court stated that a sanction that bore "absolutely no correlation to any damages sustained by society or the cost of enforcing the law" would be criminal. Id.

Thus, under Halper, we must classify the civil forfeiture of the unlawful proceeds of illegal drug sales under Sec. 881(a)(6) as a punishment under the Double Jeopardy Clause if, in this particular case, the amount of the proceeds forfeited was so great that it bore no rational relation to the costs incurred by the government and society resulting from the defendant's criminal conduct.

III

Unlike the fine imposed in Halper, the forfeiture of proceeds in this particular case is not so excessive as to render the relationship between the amount of the forfeiture and the resulting costs to the government and society irrational. The forfeiture of proceeds of illegal drug sales serves the wholly remedial purposes of reimbursing the government for the costs of detection, investigation, and prosecution of drug traffickers and reimbursing society for the costs of combatting the allure of illegal drugs, caring for the victims of the criminal trade when preventative efforts prove unsuccessful, lost productivity, etc. See One Lot Emerald Cut Stones v. United States, 409 U.S. 232, 237, 93 S.Ct. 489, 493, 34 L.Ed.2d 438 (1972) (stating that forfeiture of property under the customs laws serves remedial purpose by "provid[ing] a reasonable form of liquidated damages for violation of the inspection provisions [by] ... reimburs[ing] the Government for investigation and enforcement expenses"); Halper, 490 U.S. at 444, 109 S.Ct. at 1900 (stating that costs of detection and investigation are remedial in nature); Rex Trailer Co. v. United States, 350 U.S. 148, 153-54, 76 S.Ct. 219, 222 & n. 6, 100 L.Ed. 149 (1956) (recognizing market and societal costs resulting from wrongdoing and avoidance of unjust enrichment as remedial purposes); Ward, 448 U.S. at 254, 100 S.Ct. at 2644 (recognizing repayment of damages to society as remedial).

Although revenue from illegal drug sales and the cost to the government and society are incapable of exact measurement, a principle recognized in Halper, 490 U.S. at 449, 109 S.Ct. at 1902, the amount of illicit drug proceeds confiscated in this case do not appear to be excessive in comparison to the resulting governmental and societal costs. Various sources estimate that illegal drug sales produce approximately $80 to $100 billion per year while exacting $60 to $120 billion per year in...