III. Plaintiff's Double Jeopardy Claim
Plaintiff claims that the forfeiture of her property violated the Double Jeopardy Clause of the Fifth Amendment because "it subjected her to a second punishment . . . not imposed by the sentencing court." Plaintiff's Statement of Claims at 5. The final declaration of forfeiture, however, was issued on May 7, 1993, prior to plaintiff's criminal trial. See Declaration of Forfeiture, Snider Decl. Ex. 14. The jury which heard plaintiff's criminal case was sworn on May 25, 1993, and returned its guilty verdict the following day. Plaintiff was sentenced on December 9, 1993. See Docket Entries Numbers 30, 34, 35 and 47 in 93-CR-268(RR). Because the forfeiture preceded both plaintiff's criminal trial and sentencing, it cannot, as plaintiff contends, constitute a second punishment.
Even if plaintiff's criminal case had been completed prior to the issuance of the declaration of forfeiture, plaintiff's double jeopardy claim would nevertheless fail. The Double Jeopardy Clause protects against multiple punishments for the same offense. United States v. Halper, 490 U.S. 435, 440, 109 S. Ct. 1892, 1897, 104 L. Ed. 2d 487 (1989); see also United States v. Morgan, 51 F.3d 1105, 1108 (2d Cir.) ("if a person is twice subject to punishment for the same offense, double jeopardy protection attaches."), cert. denied. U.S. , 116 S. Ct. 171 (1995). For the reasons discussed below, this Court concludes that the civil forfeiture of plaintiff's currency pursuant to 21 U.S.C. § 881(a)(6) does not constitute "punishment."
In Halper, the Supreme Court held that whether a civil sanction constitutes punishment for purposes of the Double Jeopardy Clause depends upon the purposes served by the sanction, and that labels such as "criminal" and "civil" are not controlling. 490 U.S. at 447-49, 109 S. Ct. at 1901-02. The Court emphasized that a civil sanction will be classified as punishment under the Double Jeopardy Clause when it "serves the [traditional] goals of punishment" -- retribution and deterrence -- and cannot "fairly be said solely to serve a remedial purpose." Halper, 490 U.S. at 448, 109 S. Ct. at 1902. This determination is to be made, at least in part, by considering whether the civil penalty "bears [a] rational relation to the goal of compensating the Government for its loss." 490 U.S. at 449, 109 S. Ct. at 1902.
The task of determining whether a particular civil sanction constitutes punishment requires an individualized determination. See Halper, 490 U.S. at 448, 109 S. Ct. at 1901-02. "The question in each case is whether the sanction does more than merely compensate the government for its damages and costs." Morgan, 51 F.3d at 1114. A trial court must determine whether the size of the sanction can fairly be attributed solely to remedial purposes or whether, because it is disproportionate to the goal of making the government whole, it must be deemed to have been imposed for purposes of punishment as well. See Halper, 490 U.S. at 448-49, 109 S. Ct. at 1901-02; Morgan, 51 F.3d at 1115.
Neither the Supreme Court nor the Second Circuit has squarely decided whether the forfeiture of proceeds of narcotics sales pursuant to § 881(a)(6) constitutes punishment for purposes of double jeopardy.
A number of circuits, however, applying Halper, have held that the forfeiture of illegal proceeds is wholly remedial and not disproportionate to the costs imposed on the government and society by the underlying criminal conduct.
For example, in United States v. Tilley, 18 F.3d 295 (5th Cir.), cert. denied, U.S. , 115 S. Ct. 574 (1994), the Fifth Circuit held that forfeiture of illegal drug proceeds under § 881(a)(6) did not constitute "punishment." Applying the Halper "rational relation" test and citing data reflecting the revenues produced and costs imposed by illegal drug activities, the court found there to be a "rough proportionality" between the $ 650,000 forfeited and the governmental and societal costs imposed. Tilley, 18 F.3d at 299. The court further emphasized that
the forfeiture of proceeds of illegal drug sales serves the wholly remedial purpose 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.
Id. at 299.
The court in Tilley further held that, even absent this "rough proportionality," the forfeiture of illegal drug proceeds does not constitute "punishment" because "when . . . the property taken by the government [is] not derived from lawful activities, the forfeiting party loses nothing to which the law ever entitled him." 18 F.3d at 300 (citing Caplin & Drysdale, Chartered v. United States, 491 U.S. 617, 626, 109 S. Ct. 2646, 2652-53, 105 L. Ed. 2d 528, 109 S. Ct. 2667 (1989) (stating that "the government does not violate the Sixth Amendment if it seizes . . . robbery proceeds, and refuses to permit the defendant to use them to pay for his defense . . . [because] the money, though in [the defendant's] possession, is not rightfully his")). Finding that a forfeiture of proceeds under § 881(a)(6) is not punishment "within the plain meaning of the word," the court concluded that one who possesses illegally obtained proceeds "has no reasonable expectation that the law will protect, condone, or even allow, his continued possession of such proceeds." Id.; see also United States v. Salinas, 65 F.3d 551, 553 (6th Cir. 1995); United States v. $ 184,505.01, 72 F.3d 1160, 1995 U.S. App. LEXIS 37151, *24-*25, 1995 WL 764552 *7 (3d Cir. 1995).
The Ninth Circuit, however, has taken a different view. Basing its decision on the Supreme Court's analysis in Austin v. United States, U.S. , 113 S. Ct. 2801 (1993), the Ninth Circuit has held that the forfeiture of illegal proceeds under § 881(a)(6) does constitute "punishment" for double jeopardy purposes. United States v. $ 405,089.23, 33 F.3d 1210 (9th Cir. 1994), amended on denial of rehearing, 56 F.3d 41 (9th Cir. 1995), cert. granted, 116 S. Ct. 762, 133 L. Ed. 2d 707, 1996 WL 12801 (1996).
In Austin, the Supreme Court held that forfeitures under §§ 881(a)(4) and (a)(7) -- sections which apply to means of transportation and real estate used in drug transactions -- constitute punishment for purposes of the Excessive Fines Clause of the Eighth Amendment. The Court based its holding on the "historical understanding of forfeiture as punishment," the availability of an "innocent owner" defense pursuant to §§ 881(a)(4) and (a)(7), and references to punishment in the legislative history of § 881. 113 S. Ct. at 2810-12. The Court in Austin also applied Halper's focus on the relationship between the subject of the forfeiture and the costs imposed on the government by the underlying criminal conduct. The Court did not, however, consider the facts of the specific case before it, but instead concluded that "it makes sense to focus on §§ 881(a)(4) and (a)(7) as a whole." 113 S. Ct. at 2812 n. 14. The Court then reasoned that, because "the value of the conveyances and real property forfeitable under §§ 881(a)(4) and (a)(7) . . . can vary so dramatically[,] . . . any relationship between the Government's actual costs and the amount of the sanction is merely coincidental." Id. The Court concluded that forfeitures pursuant to §§ 881(a)(4) and (a)(7) therefore constitute "payment to a sovereign as punishment for some offense," and are therefore "subject to the limitations of the Eighth Amendment's Excessive Fines Clause. 113 S. Ct. at 2812.
In United States v. $ 405,089.23, the Ninth Circuit interpreted Austin to hold that whether a forfeiture constitutes punishment requires examination of "the entire scope" of the statute involved and not the particulars of the case in issue. 33 F.3d at 1220. The court noted that the historical understanding of forfeiture as punishment, discussed in Austin, applied to § 881(a)(6), that § 881(a)(6) allowed for an "innocent owner" defense, and that the legislative history of the provision "tie[s] forfeiture directly to the commission of specified offenses." $ 405,089.23, 33 F.3d at 1221. Finally, examining the "entire scope" of the statute, the Ninth Circuit emphasized that § 881(a)(6) reaches more than merely proceeds of narcotics sales, but also money "used to facilitate" narcotics offenses. Id.
As discussed above, several circuits have found forfeitures under § 881(a)(6) to be entirely remedial. These circuits, in contrast to the Ninth Circuit, have declined to extend Austin's categorical or "entire [statutory] scope" approach beyond the confines of the Eight Amendment and §§ 881(a)(4) and (7), and have instead continued to follow Halper's case-by-case approach for determining whether a particular civil forfeiture is punitive or remedial. In Tilley, for example, the Fifth Circuit concluded that the Court's concern in Austin -- that the forfeiture of conveyances under § 881(a)(4) and real estate under § 881(a)(7) could be wildly disproportionate to, and have no correlation with, the costs incurred by the government and society by the underlying criminal conduct -- was inapplicable to forfeitures of drug proceeds pursuant to § 881(a)(6). 18 F.3d at 300. Distinguishing forfeitures under §§ 881(a)(4) and (a)(7), the Court in Tilley noted that
the forfeiture of drug proceeds will always be directly proportional to the amount of drugs sold. The more drugs sold, the more proceeds that will be forfeited. These proceeds are roughly proportional to the harm inflicted upon government and society by the drug sale.
Id.; See also United States v. Perez, 70 F.3d 345, 349 (5th Cir. 1995); United States v. Clementi, 70 F.3d 997, 999 (8th Cir. 1995) (holding that "forfeiture of the fruits of illegal activity is rationally related to the damages of that activity").
Although it has not taken a clear position on whether forfeitures pursuant to § 881(a)(6) constitute punishment, the Second Circuit has had a recent occasion to consider the impact of the Austin holding on the continued viability of the Double Jeopardy analysis in Halper. See United States v. All Assets of G.P.S. Automotive Corp., 66 F.3d 483 (2d Cir. 1995). Noting that the Ninth Circuit's decision in $ 405,089.23 is contrary to the rule in other circuits, the Court in All Assets of G.P.S. Automotive Corp. nevertheless described the Ninth Circuit's decision as forceful." 66 F.3d at 492. Ultimately, though, the Second Circuit deferred resolution of the double jeopardy issues for another day.
Prior holdings of the Second Circuit, however, are consistent with the Tilley Court's conclusion that forfeitures of narcotics proceeds pursuant to § 881(a)(6) do not constitute punishment. See United States v. 38 Whalers Cove Drive, 954 F.2d 29, 35-36 (2d Cir.) (holding that forfeitures which serve legitimate civil purposes, such as removing instrumentalities of crime from use, or compensating the government for investigative and enforcement expenses, are not punishment), cert. denied, 506 U.S. 815, 113 S. Ct. 55 (1992); United States v. $ 145,139, 18 F.3d 73, 75 (2d Cir.) (holding that forfeiture of currency was not punishment because the currency was the instrumentality of a crime), cert. denied, U.S. , 115 S. Ct. 72 (1994); United States v. $ 2,500, 689 F.2d 10, 13-14 (2d Cir. 1982) (holding that § 881(a)(6) has a remedial, non-punitive purpose, and that it was "[Congress'] indisputable legislative finding that money in the narcotics trade finances and assists future trade . . ."), cert. denied, 465 U.S. 1099, 104 S. Ct. 1591 (1984). See also Erinkitola v. United States, 901 F. Supp. 80, 85 (N.D.N.Y. 1995); United States v. One 1990 Mercedes Benz, 907 F. Supp. 541, 1995 U.S. Dist. LEXIS 18489, *9, 1995 WL 728369 *2-*3 (N.D.N.Y. 1995 1995) (citing Tilley favorably).
This Court finds the analysis in Tilley to be persuasive and consistent with Austin, Halper and applicable Second Circuit precedent, and accordingly concludes that the seizure of plaintiff's currency, which was subsequently forfeited pursuant to § 881(a)(6), does not constitute punishment. Moreover, the forfeiture in this case is clearly not disproportionate to the underlying criminal conduct. Plaintiff was charged with possessing and intending to distribute almost four kilograms of heroin. See United States v. Ye Wen Hong, 93-190M, Criminal Complaint at P 2. A forfeiture of $ 16,306 is plainly not disproportionate to the costs of investigating and prosecuting plaintiff's criminal conduct, or to the social costs imposed by the distribution of such a substantial amount of drugs. Finally, as noted above, the declaration of forfeiture was issued before plaintiff's criminal trial began and before her sentence was imposed. For these reasons, I respectfully recommend that plaintiff's double jeopardy claim be dismissed.
IV. Plaintiff's Eighth Amendment Claim
Plaintiff's final claim is that the forfeiture of her currency violates the Excessive Fines Clause of the Eighth Amendment. Because this Court lacks jurisdiction over plaintiff's action, plaintiff's Eighth Amendment claim should be dismissed. See Lopes v. United States, 862 F. Supp. 1178, 1185 (S.D.N.Y. 1994).
Even if plaintiff's Eight Amendment claim were properly before the Court, it would be rejected. Plaintiff contends that the Supreme Court's decision in Austin compels the conclusion that the forfeiture of her currency is an excessive punishment under the Eighth Amendment. See Plaintiff's Statement of Claims at 5. In Austin, the Court ruled that the Excessive Fines Clause applies to all forfeitures pursuant to Sections 881(a)(4) and (a)(7) because "forfeiture under these provisions constitutes 'payment to a sovereign as punishment for some offense.'" 113 S. Ct. at 2805 (quoting Browning-Ferris Indus. v. Kelco Disposal, Inc., 492 U.S. 257, 265, 109 S. Ct. 2909, 2915, 106 L. Ed. 2d 219 (1989)). The Court noted, however, that the prescriptions of the Excessive Fines Clause do not apply to a forfeiture that is purely remedial in nature. Austin, 113 S. Ct. at 2812 n. 14 ("[A] fine that serves purely remedial purposes cannot be considered 'excessive' in any event").
This Court, for the reasons discussed above, concludes that the forfeiture of plaintiff's currency pursuant to § 881(a)(6) does not constitute punishment. Plaintiff's Eighth Amendment claim should, therefore, be dismissed. See United States v. $ 21,282, 47 F.3d 972, 973 (8th Cir. 1995) (holding that the "forfeiture of proceeds of criminal activity which 'simply parts the owner from the fruits of the criminal activity' does not constitute punishment and thus does not implicate the Eighth Amendment") (quoting United States v. Alexander, 32 F.3d 1231, 1236 (8th Cir. 1994)).
Even if the forfeiture of plaintiff's currency were punishment, it would not violate the Eighth Amendment because it was not excessive. The Second Circuit has set forth a "multi-factor test" for determining when a forfeiture is constitutionally excessive. See All Assets of G.P.S. Automotive Corp., 66 F.3d at 501. In United States v. Milbrand, 58 F.3d 841 (2d Cir. 1995), the Second Circuit explained that a court should consider
(1) the harshness of the forfeiture (e.g., the nature and value of the property and the effect of forfeiture on innocent third parties) in comparison to (a) the gravity of the offense, and (b) the sentence that could be imposed on the perpetrator of such an offense; (2) the relationship between the property and the offense, including whether use of the property in the offense was (a) important to the success of the illegal activity, (b) deliberate and planned or merely incidental and fortuitous, and (c) temporally or spatially extensive; and (3) the role and degree of culpability of the owner of the property.
58 F.3d at 847-48.
Applying these factors to the instant case, it is clear that the forfeiture of plaintiff's currency was not excessive. First, the forfeiture of plaintiff's $ 16,306 was proportional to the severity of the underlying crime and the statutory fines which could have been imposed. Having been convicted after a jury trial of four felony narcotics charges, Ye Wen Hong was subject to a fine of at least $ 16, 000,000. See 21 U.S.C. §§ 960(b)(1)(A) and 841(b)(1)(A)(i). Thus, in light of the Second Circuit's acknowledgment that "a fine of many thousands of dollars for a minor drug offense is not beyond the pale," the forfeiture of plaintiff's $ 16,306 was "not a grossly disproportionate punishment within the meaning of the Eighth Amendment." Whalers Cove, 954 F.2d at 39 (upholding the forfeiture of a condominium in which the claimant had a $ 68,000 equity interest and which was used in connection with isolated sales of 2 1/2 grams of cocaine for $ 250).
Finally, the relationship between the forfeited currency and the underlying narcotics offenses was sufficiently strong to sustain the forfeiture against an Excessive Fines Clause challenge. As stated above, Ye Wen Hong's currency was forfeited pursuant to § 881(a)(6) as drug proceeds after a complete and uncontested administrative proceeding. Therefore, because the forfeiture of plaintiff's currency was proportional to the severity of the underlying offenses and the potential statutory fines for such conduct, and because the forfeited currency was sufficiently connected to these offenses, this Court respectfully recommends that Ye Wen Hong's Eight Amendment claim be dismissed.
For the reasons stated above, I respectfully recommend that defendant's motion to dismiss plaintiff's claims concerning the forfeiture of her currency be granted. I further recommend that defendant be required to return plaintiff's jewelry no later than thirty days after plaintiff designates an address to which the jewelry should be sent. Any objections to the recommendations contained herein should be filed with the Clerk of the Court and with the chambers of the Honorable Reena Raggi within ten days of receipt of this report, but in any event no later then February 23, 1996. Failure to object to this report may waive the right to appeal the district court order. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 6(a), 6(e), 72; Small v. Secretary of Health and Human Services, 892 F.2d 15, 16 (2d Cir. 1989).
Dated: February 1, 1996
Brooklyn, New York
Steven M. Gold
United States Magistrate Judge