Civil Forfeiture Run Amok? (With the Help of Judicial Activism?)

[Post bumped and updated 8.22.06.  Scroll down to the bottom of the post for the update.]

Query: How does an appellate panel get around the clear error standard of review when it disagrees with the district court?  As astute readers know, an appellate court will reverse a trial court's credibility determinations only after concluding that the trial court committed clear error, i.e., that it exercised will, not judgment.  It's hard, but not impossible, as Judge Colloton demonstrated in U.S. v. $124,700 in U.S. Currency (here, via Cato).

At issue in $124,700 was this: Was money found in a Mexican immigrant's rental car substantially connected to drug activity?  Here was the evidence that it was:

• There was a lot of it.
• The defendant was travelling home via a rental car after taking a one-way plane ticket to the Chicago.
• The defendant lied about who rented the car for him.
• The rental car was in a third party's name.
• The defendant lied about having money in the car.
• A drug dog alerted when sniffing the rental car.
  

That certainly is strong evidence that the money was substantially connected to drugs!  Except that, at a bench trial, the defendant believably explained how he got the money, and why he was driving the rental car.

He was travelling to Chicago to purchase a truck he needed to start a new business.  He flew on a one-way ticket because he intended to drive the truck home. When he arrived in Chicago, the truck had already been sold.  Thus, he needed a rental car.  Since he, like many recent immigrants, did not have a credit card, he had someone else rent the car for him. 

In support of his story, he presented this evidence:

• There were no drugs in the car, and the government could not link the him, by any standard of proof, to drugs or drug dealers. 
• A business partner testified that he had given him "$65,000 in cash, which was a
  combination of money that he had borrowed from his father-in-law and his own
  personal cash savings, with the expectation that [the defendant] would help him buy a refrigerated truck for the produce business."
• The defendant "testified that he gave $40,000 of his own money, plus $20,000 from a friend, Andres Madrigal Morgan, as an investment in Gomez’s truck."
• "Consistent with Gonzolez’s account, Andres Madrigal Morgan testified that he contributed $20,000 in proceeds from a vehicle sale to Gonzolez’s investment in the truck."   

After hearing all of this evidence, the district court held that the government did not prove its case that the money was substantially connected to drug activity.  Thus, the issue would seem to be: Did the district court abuse its discretion when it believed the defendant's story? 

Not so fast, said Judge Colloton.  Given that it would be impossible, in light of the record, to reverse the district court, Judge Colloton re-frames the issue:

The district court’s opinion includes no finding as to the credibility of Gonzolez and the other two claimants. The court did observe that the explanations of the claimants were “plausible and consistent,” but this is different from a finding that the court actually believed the testimony. “Plausible” means “apparently acceptable or trustworthy (sometimes with the implication of mere appearance),” see Shorter Oxford English Dictionary 2238 (5th ed. 2002), and we thus read the district court’s opinion to hold that given a “plausible and consistent” explanation from the claimants on one side of the balance, the government’s countervailing proof was not strong enough to meet its burden of showing a substantial connection by a preponderance of the evidence.

Okay, let's assume that you buy that when a trial court, after hearing evidence, finds the defendant's story "plausible and consistent," he really isn't making credibility determinations.  This is a dubious assumption - so dubious that the government didn't even argue that the appellate court make it.  Appellant's Br. at 8 [page 15 of the .pdf] (noting that the court "must accept the district court’s factual findings ... unless those findings are clearly erroneous."

But let's make the assumption that the trial court was really doing something else.  It wasn't making factual findings.  For the sake of argument, we, like Judge Colloton, won't define that that something else is.

How then do you explain the panel's conduct: It reversed the trial court's judgement, rather than remanding to allow the trial court to state whether it made credibility determinations.  It did not remand the case, which is what courts usually do when unsure whether the lower court made a credibility call.  Rather, it reversed the judgment.

The split panel reversed the judgment precisely because the two judges knew that the lower court had made credibility determinations.  The split panel was willing to disregard standard operating procedure (re: remand to the lower court to determine what, if any, credibility determinations it made) because the two judges wanted to reach a different result - here, that the money was connected to drug activity.

The result, of course, was tragic.  Several poor immigrants lost their life savings even though the government could not prove that they, or their money, had any connection to drugs.

UPDATE: Ted Frank leaves an important comment at C&F and at Overlawyered:

I'd be more impressed with this story (a) if Gonzolez knew the name or address of the guy who he was going to see about the truck; and (b) if Freightliner refrigerated trucks weren't (i) commonplace and (ii) considerably cheaper than $124,700. 

I am quite confident that there are poster children for civil forfeiture abuse.  But I'm skeptical that this is one of them.

In this post, I discuss the standard-of-review issue in more detail.

Putting aside the substance of Ted's post, it does demonstrate an important point for the judicial process: Couldn't the panel's decision have been more persuasive?   Results matter to the ligitants, but process and judicial reasoning matter to everyone. 

Judges should write their opinions with the same mind that lawyers write briefs - with the goal to persuade.  In a democracy, even life-tenured judges have a duty to persuade the public that their opinion resulted from judgment, not will.

Comments

[mythago]

Civil forfeiture cases are the right wing's rebuttal of the notion that only liberals practice 'judicial activism'.

[Ted]

Mike, you left out the next sentence: "The district court’s determination that the government carried its burden based upon those factual findings, however, is subject to de novo review as a mixed question of law
and fact," citing United States v. $84,615 in U.S. Currency, 379 F.3d 496, 501 (8th Cir. 2004).

I'd be more impressed with this story (a) if Gonzolez knew the name or address of the guy who he was going to see about the truck; and (b) if Freightliner refrigerated trucks weren't (i) commonplace and (ii) considerably cheaper than $124,700.

I am quite confident that there are poster children for civil forfeiture abuse. But I'm skeptical that this is one of them.

[Mike]

Ted: Thanks for your comment. After posting this, like you, I wondered how much a truck would actually cost.

But I still wonder how the panel got around the standard of review. My understanding is that the judge concluded the story made sense. This presupposes a conclusion that the people telling the story were truthful. It would be odd to say, "Well, Ted, I don't believe your story, but I do believe you're telling the truth." Or vise versa.

So I still think it was ultra vires to ignore the clear error standard of review.

[Ted]

Did the appellate court really ignore the clear error standard of review? Lay's dissent sure doesn't claim so. The recitation of facts on page 7 of the opinion is not inconsistent with the findings of fact. The lower court did not "find" that Gonzolez was going to Chicago to buy a truck, a finding that would have been conclusive even on the appellate court. The appellate didn't overturn any of the facts. It held that the government met its burden of proof under the facts that the lower court found. One can argue that they were being disingenuous in giving so much weight to the circumstantial evidence, but why assume bad faith? One at least can equally complain that the district court should have said "credible", rather than "plausible and consistent," and made the appropriate explicit finding. If the magistrate feels an injustice has been done, he'll have the power to address it on remand when he writes an opinion on the "innocent owner" defense.

[mythago]

The history of civil forfeiture proceedings when drugs are involved tends to make one skeptical of 'good faith'.

I understand that the guy's story is not rock-solid, but that's not the standard; the question is whether or not the goverment established its case by a preponderance of the evidence. That's the same standard in all those products liability cases you abhor. ;)

[Glen Raphael]

Ted, trucks lose their value quickly. If Gonzales was considering using friends-and-family funds to buy a fancy brand-new freightliner, $124k doesn't seem out of line. Um, here's a list that includes several 2006 and 2007 model year freightliner trucks in the $100k-$130k range.

Now, you might claim it makes bad business sense to spend so much on a first truck when you could get a cheaper used one. And you'd probably be right. But that's between Gonzales and his funders.

[Ted]

Glen is correct, and I am wrong. I did the wrong search, and my incorrect impression was confirmed by an Ebay search where a Freightliner refrigerated truck with only 1000 miles on it was available for $80,000, with the seller willing to deliver.

An attorney friend of mine tells me of the legal problems a prominent Mexican business family in Houston had because of their similarly poor recordkeeping of cash transactions, so I suppose it's not entirely inconceivable that someone would have tens of thousands of dollars of savings in small bills.

It's a close case, and the real problem here is the "preponderance" standard for forfeitures, which is a legislative mess to clean up. After all this to-ing and fro-ing my vote would have been for affirmance, but I think the "activism" epithet for the majority is a bit strong here.

I think Gonzolez suffered from a poor brief that didn't frankly acknowledge the argument the government brought.

[Mark]

Greetings!
I am deeply interested in prison issues and reform on all points of view as well as social justice on all levels. What is happening in America? Is this not still the land of opportunity? Why then is it a crime to have/carry huge amounts of money without having to worry about being labeled a drug dealer or some other supposed crime? If someone hits big at a casino and then has that money on them in their car or on their person, why is it supposed that a crime was committed? Guilty before proven innocent rather than innocent before proven guilty! It is sad but too many people today already have preconceived opinions as to guilt beofre hearing or knowing all the facts, and this is why to some degree we have too many people going to prison for a crime they truly did not commit, and some others who did commit a crime but got life sentences in some cases for unbelievable petty stuff on the htree strikes law! There are even cases where on circumstantial evidence people are sent to prison everyday even if they are not guilty in fact. Before it is too late the everyday common man and woman should educate themselves in ongoing unfair prison sentences and policies as it could be them going there next or one of their loved ones for a crime that would better warrant restitution or a crime they didn't even commit based on heresay, circumstantial eveidence and/or a Justice system gone mad. Crime should not be reared, but neither should it be so exploited that the punishment does not fit the crime, as well as some people getting rediculous amounts of jail time for certain wrongs. When justice no longer is justice balanced, then we all suffer: those in prison as well society on the outside. Thanks for listening.
MARK

[Xrlq]

Pardon my naivete, as I'm one of those lawyers who has "never lost a case" (i.e., don't argue cases), but this factual vs. legal argument strikes me as a gross example of elevating form over substance. If every Court of Appeal can undo the factual determinations of a lower court simply by re-casting its factual determinations as quasi-legal conclusions that the requisite standard was or was not met, then what on earth is the "clearly erroneous" standard good for? Every factual disagreement with a lower court finding can be recast the same way, and the "clearly erroneous" standard is effectively reduced to a drafting guide.

Setting such sophistry aside, it would seem to me that the only genuine legal question on appeal ought not to have been whether the government did not did not sustain its burden, but rather, whether the facts on the record were so overwhelmingly in the government's favor that no rational trier of fact could find that the government had failed to meet its burden. And by that standard, the original decision should have been easily upheld. Am I missing something?