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Friday, April 29, 2011

Ind. Decisions - Still more on: Supreme Court decides civil forfeiture case

Wednesday's decision by the Supreme Court in Martin Serrano v. State of Indiana and the City of Fort Wayne (earlier ILB entries here and here), and particularly the dicta in footnote 3, is the focus of an Indianapolis Star a must-read story today by Heather Gillers, headed "After state high court opinion, question remains: who is entitled to forfeitures? State high court opinion casts further doubt on whether law enforcement can keep seized assets."

The ILB noted Wednesday:

In its discussion of the origin of Indiana‘s system for civil forfeitures, the Court writes that "At the core of the financing scheme for this objective was creation of the Common School Fund, a 'perpetual' depository for 'support of Common Schools, and no other purpose.' Ind. Const. art. 8, § 3." Footnte 3 on page 4 cites IC 34-6-2-73 and notes: "Whether this limited diversion, calculating actual expenses on a case-by-case basis, is consonant with the constitutional command that 'all forfeitures' be deposited in the Common School Fund is an unresolved question."
From Gillers' lengthy story today:
For decades, police and prosecutors have used the assets they seize from suspected criminals to help balance their budgets. But some legal and political leaders are now questioning whether that practice violates the state constitution.

At stake is potentially millions of dollars that would shift from law enforcement to education.

Police and prosecutors already were expecting to lose some forfeiture funds next year. State lawmakers are preparing to approve a bill that would cap the law enforcement share at 85 percent and send the rest to schools.

It is no longer clear, however, that police and prosecutors are entitled to any of the money.

A Marion County judge, several state legislators, a pending lawsuit and a state Supreme Court opinion are questioning whether the proposed law and an existing law violate the state constitution, which they suspect requires all forfeiture money to be deposited in the state's Common School Fund.

"I don't know," said the bill's author, Sen. Richard Bray, R-Martinsville, when asked whether his proposal is constitutional.

"That's up to the gentlemen at the end of the hall to decide," he said, pointing toward the state Supreme Court.

On Wednesday, the state Supreme Court issued an opinion in an unrelated forfeiture case that questioned whether it's constitutional for prosecutors to keep any proceeds from seized assets.

An Indianapolis Star investigation earlier this year revealed that prosecutors across the state -- and especially in Marion County -- have been keeping nearly all proceeds.

Their justification comes in part from a legal opinion issued last year by Attorney General Greg Zoeller.

When the constitution says forfeited funds must go into the Common School Fund, Zoeller wrote in the opinion, it is not talking about civil forfeitures.

Instead, he said, the constitution is talking about criminal forfeitures.

It's an important distinction.

The vast majority of forfeitures in Indiana are civil forfeitures -- cases in which prosecutors seize assets before ever going to trial. In fact, civil forfeitures can take place even when there is not enough evidence to bring charges. Civil forfeitures in Marion County last year amounted to $1.3 million.

Criminal forfeitures, which happen only after a property owner is convicted, are unusual.

But since Zoeller wrote his opinion, in May, a growing number of legal and political leaders have expressed disagreement -- culminating in the state Supreme Court opinion Wednesday.

"Before the decision, there was sufficient uncertainty for the (office of the) attorney general to issue its opinion," said David Orentlicher, a former state legislator and the Samuel R. Rosen professor of law at Indiana University School of Law-Indianapolis. "But after the Supreme Court decision, I think they have to change their position."

The state Supreme Court wrote that "constitutional command" is so definitive that it's not clear prosecutors can retain any money for law enforcement expenses.

The Supreme Court's analysis echoes one earlier this month by Marion Superior Court Judge Tim Oakes, which said that criminal and civil forfeitures belong in the Common School Fund -- "despite an attorney general opinion and some precedent in this state." * * *

Zoeller's spokesman, Bryan Corbin, said the attorney general will defend prosecutors -- and, if necessary, the state statute -- in the face of a constitutional challenge.

Corbin also pointed out that the state Supreme Court opinion was a comment in an unrelated forfeiture case. The court was not asked to rule on the question of whether civil forfeiture money belongs in the Common School Fund, so the opinion is not binding. The Marion Superior Court opinion also was nonbinding.

Zoeller said he is standing by his opinion -- the one that allows prosecutors to keep civil forfeiture money -- and called the constitutional challenge to that practice "frivolous." * * *

But the Common School Fund almost never benefits from asset seizures. The Star's investigation revealed that only five counties turned over any forfeiture money to the fund from January 2008 to February 2010.. That's due, in great part, to Indiana's vague forfeiture law.

The current statute says law enforcement officials can hang on to only the assets needed to cover the cost of the law enforcement operation that seized them and must turn the rest over to the school fund.

Prosecutors, however, have interpreted the law broadly. Marion County, for example, traditionally has justified keeping all of the money by interpreting the phrase "law enforcement costs" to mean the entire cost of enforcing the law in Marion County.

Amid The Star's investigation and Ogden's lawsuit on behalf of schools, lawmakers took up the issue this legislative session.

Today, lawmakers are expected to approve a final version of the bill after working out a compromise between the Senate and House versions Thursday. After that, it will head to the governor's desk.

And then, potentially, to the courts.

ILB: The bill is SB 215. Conference committee reports were filed yesterday in the Senate at 5:31 PM and in the House at 5:54 PM. Here is the synopsis:
Citations Affected: IC 34-24-1.

Forfeiture. Conference committee report for ESB 215. Requires counties to create an asset forfeiture account. Provides that, in a forfeiture proceeding, 1/3 of the proceeds may be provided to the prosecuting attorney or an attorney retained by the prosecuting attorney in a forfeiture action, unless the prosecuting attorney has declined a request from the state police department to transfer the forfeiture to federal jurisdiction, in which case 20% of the proceeds but no more than $5,000 may be transferred to the prosecuting attorney. Provides that of the remaining proceeds, 15% shall be provided to the common school fund and 85% shall be distributed to an account for distribution to law enforcement agencies participating in the seizure as necessary law enforcement expenses. Specifies that money or the proceeds of seized property placed in a county asset forfeiture account may be disbursed only by action of the county legislative body under a claim submitted by a law enforcement agency or prosecuting attorney, and must be disbursed pursuant to an interlocal agreement, if applicable. Permits a prosecuting attorney to retain an attorney to bring a forfeiture action only if the attorney general reviews the compensation agreement between the prosecuting attorney and the retained attorney, and requires that the compensation agreement with the attorney be capped at: (1) 33 1/3% of the first $10,000 of the amount of the proceeds or money obtained; (2) 25% of the part of the amount between $10,000 and $100,000; and (3) 20% of the part of the amount that is at least $100,000; unless a court finds that the forfeiture action is unusually complex. Requires a court to notify the Indiana criminal justice institute of the amount and manner of a forfeiture distribution. Provides that a prosecuting attorney or deputy prosecuting attorney who engages in a forfeiture action for the prosecuting attorney's office may not receive a contingency fee. (This conference committee report: (1) provides that the prosecuting attorney or attorney retained by a prosecuting attorney receives 20% (to a maximum of $5,000) of the forfeiture proceeds if the prosecuting attorney declines to transfer a forfeiture case to federal jurisdiction; (2) provides that 15% of the remaining funds shall be transferred to the common school fund, and 85% to participating law enforcement agencies as necessary law enforcement expenses; (3) removes a provision permitting the state police department to move to transfer a forfeiture to federal jurisdiction; and (4) removes provisions concerning the school safety fund.)

Posted by Marcia Oddi on April 29, 2011 06:31 AM
Posted to Ind. Sup.Ct. Decisions