Ruling at 4th Circuit: Government must prove case for civil asset forfeiture

(The Center Square) – Government’s ability to seize personal property based on the mere suspicion of criminal activity has been curtailed by a federal court ruling in a North Carolina case.

The 4th U.S. Circuit Court of Appeals ruled last week that “equitable sharing,” in which a little-known loophole in civil asset forfeiture laws allows the federal government to seize property based on suspicion of a crime, is not unfettered.

The case involves Jermaine Sanders and $16,761 seized by police in Mooresville on Nov. 16, 2020, based on suspicions the money was connected to drug activity. Sanders, represented by the Goldwater Institute, was never convicted of a crime. The money was nonetheless passed on to the Justice Department through an equitable sharing program that allows the federal government to keep 80% to take on the case.

The arrangement allows state agencies to exploit the equitable sharing loophole to evade strong state-level legal protections for private property seized in North Carolina and elsewhere, even if authorities do not suspect the owner of wrongdoing. North Carolina is one of only four states that requires a criminal conviction based on proof beyond a reasonable doubt to allow forfeiture.

John Thorpe, a staff attorney at the Goldwater Institute, told The Center Square the Sanders case is one example in North Carolina. Another involved a victim of child sexual abuse who was denied $69,000 in court-ordered restitution from her abuser because the federal government claimed the money.

“In both cases, the state essentially circumvented (state civil asset forfeiture reforms) by going to the federal level,” he said. “Mr. Sanders went to the federal government … and the federal government so far has refused to give his money back.”

Last week, the appeals court found “the Government must demonstrate by a preponderance of the evidence that the property sought is subject to forfeiture” with a direct link to criminal activity.

The 4th Circuit reversed a district court ruling “and said the government needs to prove its case … that the money is actually connected to illegal activity,” Thorpe said. “It needs to have a substantial connection to criminal activity, not that there’s trace amounts of marijuana somewhere nearby.”

In the unpublished opinion, the appeals court vacated the initial judgment and remanded the case back to the district court for a trial. A trial date has not been set.

“What we’re really excited about is the precedent this sets,” Thorpe said, “that the burden is on the government if it seizes your money.”

In many cases, he said, courts have deferred to the federal government, and often those involved do not have the resources to fight their case. Goldwater reports that civil asset forfeiture and equitable sharing result in the federal government seizing about $3 billion per year from citizens, including some crime victims, without any due process.

Thorpe notes that while the unpublished opinion is not binding precedent, it can still be cited in similar cases, providing a pathway to ensure due process rights for those accused in the future.

“We think it’s highly persuasive and the reasoning is rock solid,” he said of the appeals court ruling.

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