U.S. v. Unit No. 7 and Unit No. 8 of Shop in the Grove Condominium

• Decision Date: 05 August 1988
• Docket Number: Nos. 87-2499,No. 10907,10907,s. 87-2499
• Citation: 853 F.2d 1445
• Parties: UNITED STATES of America, Appellant, v. UNIT NO. 7 AND UNIT NO. 8 OF SHOP IN THE GROVE CONDOMINIUM, a Condominium, according to the Declaration of Condominium as recorded in Official Records Book, at , of the Public Records of Dade County, Florida, and the amendments thereto as recorded in Official Records Book 10956, , Public Records of Dade County, Florida; Located on: Block 14, of Edwards Pent Subdivision, according to the Plat Book A, at of the Public Records of Dade County, Florida, Locally known as 3310 Virginia Avenue, Miami, Florida, Appellees. UNITED STATES of America, Appellant, v. LOTS 1, 4 AND 5, BLOCK 3, BRUSH CREEK VILLAGE, together with all that portion of vacated Laney Lane abutting said Lots 4 and 5 in the County of Pitkin, State of Colorado, locally known as 0250 Medicine Bow Road, Aspen, Colorado, Appellees. UNITED STATES of America, Appellant, v. LOT 1, OF SUNSET HAVEN, according to the Plat thereof recorded in Plat Book 64 at , of the Public Records of Dade County, Florida, locally known as 7335 S.W. 69th Court, Miami, Florida, 33143, Appellee. UNITED STATES of America, Appellant, v. Stanley Carter KISER, Appellee. to 87-2502.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 1445

853 F.2d 1445

UNITED STATES of America, Appellant, v. UNIT NO. 7 AND UNIT NO. 8 OF SHOP IN THE GROVE CONDOMINIUM,

a Condominium, according to the Declaration of Condominium

as recorded in Official Records Book No. 10907, at Page

1432, of the Public Records of Dade County, Florida, and the

amendments thereto as recorded in Official Records Book

10956, Page 304, Public Records of Dade County, Florida;

Located on: Block 14, of Edwards Pent Subdivision,

according to the Plat Book A, at Page 45 of the Public

Records of Dade County, Florida, Locally known as 3310

Virginia Avenue, Miami, Florida, Appellees.

UNITED STATES of America, Appellant, v. LOTS 1, 4 AND 5, BLOCK 3, BRUSH CREEK VILLAGE, together with

all that portion of vacated Laney Lane abutting said Lots 4

and 5 in the County of Pitkin, State of Colorado, locally

known as 0250 Medicine Bow Road, Aspen, Colorado, Appellees.

UNITED STATES of America, Appellant, v. LOT 1, OF SUNSET HAVEN, according to the Plat thereof

recorded in Plat Book 64 at Page 110, of the Public Records

of Dade County, Florida, locally known as 7335 S.W. 69th

Court, Miami, Florida, 33143, Appellee.

UNITED STATES of America, Appellant, v. Stanley Carter KISER, Appellee.

Nos. 87-2499 to 87-2502.

United States Court of Appeals Eighth Circuit.

Submitted Feb. 11, 1988.

Decided Aug. 5, 1988.

Maury S. Epner, Washington, D.C., for appellant.

Joseph Beeler, Miami, Fla., for appellee.

Before LAY, Chief Judge, and McMILLIAN and ARNOLD, Circuit Judges.

ARNOLD, Circuit Judge.

This case presents a constitutional question concerning the government's seizure of property allegedly forfeitable under 21 U.S.C. Secs. 853 and 881: May the government deprive a criminal defendant of the only assets with which he can pay a reasonable attorney's fee to the lawyer assisting in his defense solely on the basis of its allegation that the property is forfeitable as a criminal penalty and a magistrate's ex parte finding of probable cause to believe it is forfeitable? We hold that in these narrow circumstances the deprivation conflicts with the Fifth and Sixth Amendments, considered in combination.

I.

Stanley Carter Kiser has been indicted for, among other things, conducting a continuing criminal enterprise in violation of 21 U.S.C. Sec. 848. The indictment alleges that some of Kiser's property, including two parcels of real estate in Miami, Florida, and one in Aspen, Colorado, should be forfeited to the United States under Sec. 848 and 21 U.S.C. Sec. 853. After the indictment was filed, the government also filed three civil-forfeiture actions under 21 U.S.C. Sec. 881, one against each of these properties, and the properties were seized by the United States pursuant to seizure warrants. See 21 U.S.C. Sec. 881(b). The warrants were issued by a magistrate, who made an ex parte finding of probable cause, in much the same way as findings are made to support the issuance of ordinary search warrants. Kiser then asked the District Court ¹ to release two of the properties from forfeiture and grant him permission to transfer them to his attorney in payment of fees and costs for legal representation in the prosecution. Chief Judge Vietor, who was presiding over the prosecution, transferred the motion to the Honorable Charles R. Wolle, United States District Judge for the Southern District of Iowa, before whom the civil-forfeiture cases were pending.

Before Judge Wolle could rule, Kiser petitioned for a writ of mandamus in this Court, asking us to order Chief Judge Vietor to stay the criminal prosecution pending determination of the motion to set aside the forfeiture. We ordered that the motion and the civil-forfeiture cases be transferred to Chief Judge Vietor, who

promptly shall hold an adversary hearing on Petitioner's Motion.... Judge Vietor shall consider Petitioner's financial condition in order to determine whether Petitioner has assets not subject to forfeiture that could supply a reasonable fee to the counsel he has retained to assist in his defense in the pending criminal prosecution. For the protection of Petitioner's Fifth Amendment privilege of self-incrimination, any examination of Petitioner to determine his financial condition shall be conducted ex parte and in camera by Judge Vietor. If it is determined that Petitioner is without assets not subject to forfeiture from which he could pay the fee of his retained counsel, Judge Vietor shall determine the amount of a reasonable fee for Petitioner's retained counsel in the pending criminal prosecution and shall decide whether Petitioner's motion should be granted to that extent.

Kiser v. Vietor, No. 87-2287 (8th Cir. Sept. 30, 1987) (order) (Heaney, Arnold, and Bowman, JJ.), slip op. at 2.

Judge Vietor promptly conducted the hearing and found that Kiser has no assets not allegedly subject to forfeiture and that the proposed contract between Kiser and his retained counsel is for a reasonable sum. ² The Court ruled further that the Sixth Amendment required that the motion be granted to the extent that the government sought forfeiture of property that was the subject of Kiser's contract with his defense lawyer. Accordingly, the Court released two of the properties, the Aspen realty and a house in Miami, from forfeiture and gave Kiser permission to transfer them to his lawyer. The motion was denied as to the other Miami property. The government appeals.

II.

We first consider our jurisdiction in these appeals. We have jurisdiction in the underlying criminal action, No. 87-2502, under the collateral-order doctrine and 28 U.S.C. Sec. 1291. See United States v. Lewis, 759 F.2d 1316, 1327 n. 4 (8th Cir.), cert. denied, 479 U.S. 994, 106 S.Ct. 406, 88 L.Ed.2d 357 (1985). The District Court certified its orders in the civil cases, Nos. 87-2499, 87-2500, and 87-2501, for immediate appeal under 28 U.S.C. Sec. 1292(b). The United States never filed a petition in this Court for leave to appeal on the basis of these certifications, but we have jurisdiction in the civil cases anyway, both under the collateral-order doctrine and because the seizure orders have all the effects of a preliminary injunction. See 28 U.S.C. Sec. 1292(a)(1); United States v. Monsanto, 836 F.2d 74, 77 (2d Cir.1987), vacated en banc on other grounds, 852 F.2d 1400 (2d Cir.1988) (per curiam). The appeal in No. 87-2499, however, must be dismissed as moot. (This is the case involving the other Miami property.) On April 11, 1988, the District Court dismissed the complaint in this case with prejudice, on motion of the plaintiff United States.

III.

The procedural posture of this case is unlike those in the other appellate cases considering the validity of actions taken under these forfeiture statutes. Most have arisen after the government has obtained or been denied a restraining order under 21 U.S.C. Sec. 853(e) directed at the defendant to prevent him from disposing of the allegedly forfeitable property. E.g., United States v. Nichols, 841 F.2d 1485 (10th Cir.1988); United States v. Monsanto, supra; United States v. Thier, 801 F.2d 1463 (5th Cir.1986), modified, 809 F.2d 249 (5th Cir.1987); United States v. Crozier, 777 F.2d 1376 (9th Cir.1985); United States v. Lewis, supra. Another came on appeal from a law firm's post-conviction third-party petition under 21 U.S.C. Sec. 853(n) to determine the validity of its claim for fees in forfeited assets as against the government's forfeiture claim. In re Caplin & Drysdale, 837 F.2d 637 (4th Cir.1988) (en banc), pet'n for cert. filed, 56 U.S.L. Week 3739 (U.S. April 11, 1988) (No. 87-1729).

This action has not progressed so far. The government has lodged its indictment seeking forfeiture, filed its complaints against the three properties, and seized them pursuant to warrants. The seizure warrants issued on June 8, 1987, the day the indictment was unsealed. Kiser was not arrested until August 19, 1987. Trial was scheduled for November 9, 1987. Twelve days after his arrest, on August 31, 1987, Kiser filed this motion for release of two of the properties so he could pay his lawyer. The government resisted the motion, but it did not request a restraining order or adduce any additional proof that the properties were forfeitable. Thus, in light of the District Court's ruling that the attorney's fee is reasonable and that the seized assets are the only ones from which Kiser can pay the fee, which we have affirmed, the government is in the position of arguing that it can deprive Kiser of those assets solely because a grand jury has alleged that they are forfeitable and a magistrate has found probable cause to believe that they are.

Thus we are concerned with a particular application of the forfeiture statutes by the government, not with their facial constitutionality.

IV.

The issue before us is not complex. Kiser has been indicted under federal criminal statutes. He wishes to defend himself; he has a lawyer who is willing to assist in his defense; and he has assets with which he can pay a reasonable attorney's fee. Can the prosecution then, on the strength of its allegations and a determination of probable cause, made without giving Kiser a chance to be heard, constitutionally deprive Kiser of this property, thereby rendering him unable to pay his lawyer? The answer, in our view, is so elementary as to be almost obvious: No. Due process requires more than allegation and a determination of probable cause that property is the fruit of illegal drug trafficking before the government can place it out of reach of a criminal defendant who needs it to pay the lawyer conducting his defense.

We start from a fundamental premise: forfeiture of property as a criminal punishment of its owner cannot occur unless the owner is first convicted of a crime. This reasoning is a cornerstone of our system of justice, a basic tenet of the concept of due process. Kiser has been convicted of no crime; he has only been indicted. There is also a set of parallel civil...