A New York couple's case heads to the Supreme Court on Wednesday -- and the outcome could determine whether the government can prevent criminal defendants from selecting the lawyers of their choice by freezing their assets.
The court is hearing oral arguments in the case of Kerri and Brian Kaley, of Cold Spring Harbor, N.Y., who were indicted in February 2007 on federal charges related to the alleged theft of medical devices. After a grand jury indicted them, the feds froze a $500,000 line of credit they took out on their house to pay their lawyers.
The practice is known as asset forfeiture, and for years it has been derided by a coalition of libertarians and civil rights groups who argue that it is unfair for law enforcement to freeze gains that it argues are ill-gotten. The government then turns around to use that money, they say, as a virtual slush fund.
"That whole notion that law enforcement people get to keep and use the money that they get by confiscating citizens' funds and property, that is really at play in these forfeiture cases," said Harvey Silverglate, a criminal defense and civil liberties lawyer and a prominent critic of asset forfeiture. "I think that gives the whole system a kind of bad smell, and the Supreme Court does have the ability to smell."
But the federal government will not give up its license to seize assets lightly: Big money is at stake. In the 2012 fiscal year, the U.S. Department of Justice’s Assets Forfeiture Fund had $5.9 billion in assets. Some of that is earmarked for victims of crimes like financial fraud, but much of it is left for law enforcement to use at its own discretion. Similar asset forfeiture funds exist in many states.
The outcome, critics like the libertarian-leaning Institute for Justice charge, is a system that rewards "policing for profit." Huffington Post reporter Radley Balko has documented the extreme liberties some law enforcement agencies have taken with the law -- in Wisconsin, cops even confiscated a family's bail money -- and the resulting militarization of police forces.
Not all of those asset forfeitures are under consideration in the Kaley case, since it focuses on federal cases and criminal defendants, whereas in many cases people's money can be seized even if they are never charged with a crime under the practice of civil forfeiture.
The Kaleys argue that their Fifth and Sixth Amendment rights are violated when the government denies them the right to be defended by the lawyers of their choice. They say defendants should have the right to contest the evidence against them before their assets are frozen.
Lawyers for the United States, meanwhile, agree with the Eleventh Circuit Court of Appeals, which ruled in April 2012 against the Kaleys because the pretrial hearing they proposed would turn into a "mini-trial on the merits."
"Simply put, the Kaleys are not entitled to try this case twice -- once before trial, and then again in the main act before judge and jury," the court found.
Nevertheless, if the Kaleys win their appeal, Silverglate believes the case could signal a significant shift in legal thinking on the entire practice of asset forfeiture. He believes the court will keep in mind both the public's waning appetite for the war on drugs, which spurred the growth of asset forfeiture in the first place, and the backlash over its 2005 decision supporting the government's use of eminent domain.
"These excuses for forfeiture and for freezing assets prior to forfeiture, the reasons in the public eye have diminished," he said. "I think that even some of the judges have seen that these never ending wars are an excuse for, among other things, enriching and growing the bureaucracies."
Oral arguments in the case take place Wednesday afternoon, and a ruling will not likely come for months. In the meantime, the Kaleys, who were first informed of the federal investigation against them in 2005, are still waiting for their trial. They hope to be represented by the lawyers of their choice.
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