Serrano v. CBP

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Case: 18-50977 Document: 00514927760 Page: 1 Date Filed: 04/23/2019

RECORD NO. 18-50977

In The

United States Court of Appeals


for the Fifth Circuit

GERARDO SERRANO, on behalf of himself and all


others similarly situated,
Plaintiff-Appellant,
v.

CUSTOMS AND BORDER PATROL, U.S. Customs and


Border Protection; UNITED STATES OF AMERICA;
JOHN DOE 1- X; JUAN ESPINOZA; KEVIN
MCALEENAN,
Defendants-Appellees.

On Appeal from the United States District Court for the


Western District of Texas, Del Rio Division, No. 2:17-cv-00048-AM-CW,
Honorable Alia Moses, Presiding

BRIEF OF AMICI CURIAE NATIONAL ASSOCIATION


OF CRIMINAL DEFENSE LAWYERS, CATO
INSTITUTE, AND DUE PROCESS INSTITUTE IN
SUPPORT OF PLAINTIFFS-APPELLANTS

Cynthia Eva Hujar Orr


GOLDSTEIN, GOLDSTEIN, HILLEY & ORR
310 St. Mary’s St. #2900
29th Floor Tower Life Building
San Antonio, TX 78205
Case: 18-50977 Document: 00514927760 Page: 2 Date Filed: 04/23/2019

Nicole DeBorde Hochglaube


3515 Fannin St.
Houston, Texas 77004
713-526-6300 Office
713-808-9444 Facsimile
Nicole@DeBordeLawFirm.com
www.debordelawfirm.com

Of Counsel:
Nathan C. Pysno
National Association of Criminal
Defense Lawyers
1660 L Street NW, 12th Floor
Washington, DC 20036
(202) 872-8600

Attorney for Amicus Curiae


National Association of Criminal
Defense Lawyers

Clark M. Neily III


Jay R. Schweikert
CATO INSTITUTE
1000 Mass. Ave., N.W.
Washington, DC 20001
(202) 842-0200
cneily@cato.org

Attorneys for Amicus Curiae Cato


Institute

Shana-Tara O’Toole
DUE PROCESS INSTITUTE
700 Pennsylvania Avenue SE #560
Washington, DC 20003
202-558-6683
Shana@iDueProcess.org

Attorney for Amicus Curiae Due


Process Institute

ii
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SUPPLEMENTAL STATEMENT OF INTERESTED PARTIES

Pursuant to Fifth Circuit Rule 29.2, the undersigned counsel

certifies that the following listed persons and entities, in addition to those

already listed in the parties’ briefs, have an interest in the outcome of

this case. These representations are made in order that the judges of this

Court may evaluate possible disqualification or recusal.

Amicus Curiae
National Association of Criminal Defense Lawyers
Cato Institute
Due Process Institute

Counsel for Amicus Curiae


Cynthia Eva Hujar Orr
Clark M. Neily III
Jay R. Schweikert
Shana-Tara O’Toole

Undersigned counsel further certifies, respectively, pursuant to

Federal Rule of Appellate Procedure 26.1(a), that amicus curiae National

Association of Criminal Defense Lawyers, Cato Institute, and Due

Process Institute are not publicly held corporations, do not have any

parent corporations, and that no publicly held corporation owns 10

percent or more of their stock.

Dated: April 23, 2019


/s/ Cynthia E. Orr
Case: 18-50977 Document: 00514927760 Page: 4 Date Filed: 04/23/2019

Cynthia Orr
Counsel for Amicus Curiae
National Association of Criminal
Defense Lawyers

Clark M. Neily III


Jay R. Schweikert

Counsel for Amicus Curiae Cato


Institute

Shana-Tara O’Toole

Counsel for Amicus Curiae Due


Process Institute

ii
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Table of Contents
TABLE OF AUTHORITIES .................................................................. iv
INTEREST OF AMICUS CURIAE ........................................................ 1
INTRODUCTION AND SUMMARY OF ARGUMENT ...................... 2
ARGUMENT ............................................................................................ 4
I. Unfair and Abusive Uses of Asset Forfeiture by Government
Agencies Underscore the Importance of Due Process Protections in
This Case................................................................................................ 4
II. Due Process Requires A Prompt Post-Deprivation Hearing When
The Government Seeks Forfeiture Of A Vehicle. ................................ 10
A. Relevant Supreme Court And Federal Court Precedent
Generally Require A Pre-Deprivation Hearing, But Still Require A
Post-Seizure Hearing For Seizure Of Vehicles. ............................... 10
B. The Factors In Mathews v. Eldridge Weigh Strongly In Favor
Of A Prompt Post-Seizure Hearing.................................................. 13
CONCLUSION ....................................................................................... 21
CERTIFICATE OF SERVICE ............................................................. 24
CERTIFICATE OF COMPLIANCE.................................................... 25
Case: 18-50977 Document: 00514927760 Page: 6 Date Filed: 04/23/2019

TABLE OF AUTHORITIES
Cases
Alvarez v. Smith, 558 U.S. 87 (2009) ...................................................... 12
Brown v. District of Columbia, 115 F. Supp. 3d 56 (D.D.C. 2015) .... 5, 12,
20
City of Los Angeles v. David, 538 U.S. 715 (2003). ................................ 20
Coleman v. Watt, 40 F.3d 255 (8th Cir. 1994) ........................................ 14
Commonwealth v. 1997 Chevrolet & Contents Seized from Young, 160
A.3d 153 (Pa. 2017) .............................................................................. 14
Connecticut v. Doehr, 501 U.S. 1 (1991) ................................................. 10
Fuentes v. Shevin, 407 U.S. 67 (1972)......................................... 10, 11, 15
Goss v. Lopez, 419 U.S. 565 (1975).......................................................... 10
Grannis v. Ordean, 234 U.S. 385(1914) .................................................. 10
Harmelin v. Michigan, 501 U.S. 957 (1991) ........................................... 16
J.W. Goldsmith, Jr.-Grant Co. v. United States, 254 U.S. 505 (1921) ..... 9
Krimstock v. Kelly, 306 F.3d 40 (2d Cir. 2002) ............................... passim
Leonard v. Texas, 137 S. Ct. 847 (2017)................................................ 4, 9
Mathews v. Eldridge, 424 U.S. 319 (1976)...................................... passim
Neapolitan Navigation, Ltd. v. Tracor Marine Inc., 777 F.2d 1427 (11th
Cir. 1985).............................................................................................. 12
Nielsen v. 2003 Honda Accord, 845 N.W.2d 754 (Minn. 2013) .............. 16
Smith v. City of Chicago, 524 F.3d 834 (7th Cir. 2008) .......................... 12
Sniadidach v. Family Fin. Corp., 395 U.S. 337 (1969) .................... 11, 15
Stypmann v. City & County of San Francisco, 557 F.2d 1338 (9th Cir.
1977) ..................................................................................................... 14
Taylor v. Books a Million, Inc., 296 F.3d 376 (5th Cir. 2002) .................. 3
United States v. $506,231 in U.S. Currency, 125 F.3d 442 (7th Cir. 1997)
................................................................................................................ 8
United States v. 6109 Grubb Rd., 886 F.2d 618 (3d Cir. 1989) ................ 5
United States v. All Assets of Statewide Auto Parts, 971 F.2d 896 (2d
Cir. 1992)................................................................................................ 8
United States v. James Daniel Good Real Prop., 510 U.S. 43 (1993)
...................................................................................................... passim
United States v. One 1971 BMW 4-Door Sedan, 652 F.2d 817 (9th Cir.
1981). .................................................................................................... 18
United States v. Von Neumann, 474 U.S. 242 (1986) ............................. 11

iv
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Washington v. Marion Cnty. Prosecutor, 264 F. Supp. 3d 957 (S.D. Ind.


2017) ..................................................................................................... 12
Statutes
21 U.S.C. § 881(a)(7).................................................................................. 8
Other Authorities
Compare U.S. Dep’t of Justice, Assets Forfeiture Fund and Seized Asset
Deposit Fund, Ann. Fin. Statements FY 2000,
http://www.justice.gov/jmd/afp/01programaudit/auditreport92002.htm
, with Ann. Fin. Statements FY 2012,
http://www.justice.gov/oig/reports/2013/a1307.pdf ............................. 18
Federal Asset Forfeiture: Uses and Reforms: Hearing Before the
Subcomm. on Crime, Terrorism, Homeland Security, and
Investigations of the H. Comm. On the Judiciary, 114th Cong. 1, 3
(2015)...................................................................................................... 7
Forfeiture Reform, Nat’l Ass’n of Crim. Defense Lawyers,
https://www.nacdl.org/forfeiture/........................................................... 4
Institute for Justice, D. Carpenter, L. Knepper, A. Erickson, & J.
McDonald, Policing for Profit: The Abuse of Civil Asset Forfeiture 10
(2d ed. Nov. 2015) .................................................................................. 4
Last Week Tonight with John Oliver: Civil Forfeiture (HBO television
broadcast Oct. 5, 2014) .......................................................................... 5
Nathaniel Cary, Anna Lee & Mike Ellis, How Civil Forfeiture Errors,
Delays Enrich SC Police, Hurt People, Grenville News, Feb. 1, 2019,
https://www.greenvilleonline.com/in-
depth/news/taken/2019/01/29/civil-forfeiture-south-carolina-errors-
delays-property-seizures-exclusive-investigation/2460107002/ ........... 6
They Fought the Law. Who Won?, Wash. Post., Sept. 8, 2014 ................ 6
Treasury Forfeiture Fund, Accountability Report: Fiscal Year 2017,
available at https://www.treasury.gov/resource-center/terrorist-illicit-
finance/Asset-
Forfeiture/Documents/TFF%20FY%202017%20Accountability%20Rep
ort%20Final%2012-13-17.pdf .............................................................. 17
U.S. Gov’t Accountability Office, GAO-12-736, Justice Assets Forfeiture
Fund: Transparency of Balances and Controls Over Equitable
Sharing Should Be Improved 6 (2012), http://
www.gao.gov/assets/600/592349.pdf ................................................... 17

v
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Constitutional Provisions
U.S. Const. amend. V ..........................................................................................10

vi
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INTEREST OF AMICUS CURIAE1

The National Association of Criminal Defense Lawyers (“NACDL”)

is a nonprofit voluntary professional bar association that works on behalf

of criminal defense attorneys to ensure justice and due process for those

accused of crime or misconduct, in both state and federal court. NACDL

was founded in 1958 and has a nationwide membership of many

thousands of direct members, and up to 40,000 members when affiliates

are included. NACDL’s members include private criminal defense

lawyers, public defenders, military defense counsel, law professors, and

judges. NACDL is the only nationwide professional bar association for

public defenders and criminal defense lawyers. It is dedicated to

advancing the proper, efficient, and just administration of justice.

NACDL files its brief in this case because asset forfeiture is one of the

most fundamental threats to the individual liberties of those accused of

criminal activities, as well as citizens not charged with any crime.

1 No party or party’s counsel authored this brief in whole or in part, and no party or
party’s counsel contributed money that was intended to fund preparing or submitting
this brief. No person—other than the amicus curiae—contributed money that was
intended to fund preparing or submitting this brief. Pursuant to Federal Rule of
Appellate Procedure 29(a), counsel for amicus states that counsel for all parties
consented to the filing of this brief.
1
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NACDL strongly supports full due process rights and constitutional

protections in such cases.

The Cato Institute is a nonpartisan public-policy research

foundation established in 1977 and dedicated to advancing the principles

of individual liberty, free markets, and limited government. Cato’s

Project on Criminal Justice was founded in 1999, and focuses on the scope

of substantive criminal liability, the proper and effective role of police in

their communities, the protection of constitutional safeguards for

criminal suspects and defendants, citizen participation in the criminal

justice system, and accountability for law enforcement.

The Due Process Institute is a nonprofit, bipartisan, public interest

organization that works to honor, preserve, and restore procedural

fairness in the criminal justice system.

INTRODUCTION AND SUMMARY OF ARGUMENT

Gerardo Serrano, a U.S. citizen and resident of Kentucky, was

stopped at the border by U.S. Customs and Border Protection (“CBP”) in

Eagle Pass, Texas on September 21, 2015, while he was traveling to

2
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Mexico to meet with his cousin about the cousin’s solar panel business.2

ROA.11, 13. Mr. Serrano is a legal gun owner and CPB found five .380

caliber bullets and a .380 caliber magazine that he had inadvertently left

in his truck. ROA.15-16. After hours of detention, he was allowed to

leave the area on foot and was not charged with a crime.

Mr. Serrano timely and diligently pursued remission of his truck

and other property. ROA.18. Twenty-three months after the seizure, he

sued on behalf of himself and a putative class, arguing that Defendants,

among other things, violated his Fifth Amendment due process right to a

prompt post-seizure hearing after the government seizes a vehicle

through civil forfeiture. The District Court granted Defendant’s motion

to dismiss and Mr. Serrano now appeals.

NACDL supports Mr. Serrano and others in his position and

disagrees with the District Court’s dismissal. NACDL argues that this

Court should hold that there is a constitutional due process right to a

prompt post-seizure hearing when a vehicle is seized by the government.

NACDL also notes that frequent abuses of asset forfeiture laws by both

2Because this appeal comes from a motion to dismiss, the court must accept as true
the well-pled factual allegations in the complaint. E.g., Taylor v. Books a Million,
Inc., 296 F.3d 376, 378 (5th Cir. 2002).
3
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state and federal government agencies underscore the importance of

strong due process protections for persons whose property is seized using

civil or administrative forfeiture laws.

ARGUMENT

I. Unfair and Abusive Uses of Asset Forfeiture by Government


Agencies Underscore the Importance of Due Process
Protections in This Case.

Aggressive use of forfeiture proceedings has grown in recent years

and is a practice that is often oppressive, unfair, and constitutionally

dubious. Leonard v. Texas, 137 S. Ct. 847 (2017) (Thomas, J., statement

respecting the denial of certiorari).3

As Justice Thomas has noted, civil forfeiture in recent decades has

become “widespread and highly profitable.” Leonard, 137 S. Ct. at 848

(Thomas, J., statement respecting the denial of certiorari) (citing

Institute for Justice, D. Carpenter, L. Knepper, A. Erickson, & J.

McDonald, Policing for Profit: The Abuse of Civil Asset Forfeiture 10 (2d

ed. Nov. 2015) (Department of Justice Assets Forfeiture Fund took in $4.5

3
See also Forfeiture Reform, Nat’l Ass’n of Crim. Defense Lawyers,
https://www.nacdl.org/forfeiture/ (stating that asset forfeiture “tears at the heart of
justice and fairness in our system and turns the fundamental principle that a person
is innocent until proven guilty on its head” and that it “represents one of the most
fundamental threats to the individual liberties of those accused of criminal activities
as well as citizens not charged with any crime”).
4
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billion in 2014 alone)).4 “This system—where police can seize property

with limited judicial oversight and retain it for their own use—has led to

egregious and well-chronicled abuses.” Id.; see also United States v. 6109

Grubb Rd., 886 F.2d 618, 624 (3d Cir. 1989) (“Civil forfeitures could

sometimes lead to harsh and surprisingly unjust results . . .”); Brown v.

District of Columbia, 115 F. Supp. 3d 56, 59 (D.D.C. 2015) (“[E]vidence

has emerged suggesting that at least some police departments have

abused the civil forfeiture process.”).

Stories of such abuse have been widely covered by the mainstream

press. Consider the experience of New Jersey resident George Reby.

Reby was driving through Tennessee on his way to purchase a vehicle in

cash. Last Week Tonight with John Oliver: Civil Forfeiture (HBO

television broadcast Oct. 5, 2014). He was pulled over by police, who

seized $22,000 under the “theory” that “common people do not carry this

much currency.” Id. Despite Reby’s protests and offers to show his bid

on the vehicle, and despite Reby never being charged with any crime in

conjunction with this stop, the officer confiscated Reby’s cash. Id.

4 Available at https://ij.org/wp-content/uploads/2015/11/policing-for-profit-2nd-
edition.pdf
5
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In another case, Matt Lee of Michigan was moving to California

when a friend offered him an entry-level sales rep job there. Robert

O’Harrow Jr., Michael Sallah & Stephen Rich, They Fought the Law.

Who Won?, Wash. Post., Sept. 8, 2014.5 His father loaned him $2,500 in

cash. Id. While passing through the Nevada desert, Lee was stopped by

police, who confiscated nearly all of his cash on the “theory” that Lee was

on a “drug run,” despite Lee’s credible explanation, his lack of criminal

record, and the absence of drugs in his vehicle. Id.

Ryan Hamer, a resident of Greenville, South Carolina, was trying

to mail money to a friend in need. Nathaniel Cary, Anna Lee & Mike

Ellis, How Civil Forfeiture Errors, Delays Enrich SC Police, Hurt People,

Grenville News, Feb. 1, 2019, https://www.greenvilleonline.com/in-

depth/news/taken/2019/01/29/civil-forfeiture-south-carolina-errors-

delays-property-seizures-exclusive-investigation/2460107002/. Police

seized $6,000 in money orders even though Hamer was not charged with

any crime. Id. Hamer could prove that the money was his and it was

eventually returned, but he had to pay $1,200 for legal help. Id.

5
https://www.washingtonpost.com/sf/investigative/2014/09/08/they-fought-the-law-
who-won/?utm_term=.38852b4f8954.
6
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Unsurprisingly, members of Congress have often expressed concern

about the Government’s use of asset forfeiture and the negative impacts

it has on innocent private property owners. In a 2015 hearing on asset

forfeiture, Representative James Sensenbrenner said, “It is hard to

believe this can happen in America. The Government is seizing billions

of dollars of cash and property from Americans, often without charging

them with a crime.” Federal Asset Forfeiture: Uses and Reforms: Hearing

Before the Subcomm. on Crime, Terrorism, Homeland Security, and

Investigations of the H. Comm. On the Judiciary, 114th Cong. 1, 3 (2015)

(statement of Rep. James Sensenbrenner, Chairman, Subcomm. on

Crime, Terrorism, Homeland Security, and Investigations).

Representative Sensenbrenner then quoted former Representative

Henry Hyde, who described civil asset forfeiture as “an unrelenting

Government assault on property rights, fueled by a dangerous and

emotional vigilante mentality that sanctions shredding the U.S.

Constitution into meaningless confetti.’” Id.

Courts have also criticized asset forfeitures. United States v. James

Daniel Good Real Prop., 510 U.S. 43, 81 (1993) (Thomas, J., concurring

in part and dissenting in part) (“[L]ike the majority, I am disturbed by

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the breadth of new civil forfeiture statutes such as 21 U.S.C. § 881(a)(7),

which subjects to forfeiture all real property that is used, or intended to

be used, in the commission, or even the facilitation, of a federal drug

offense.”); United States v. $506,231 in U.S. Currency, 125 F.3d 442, 454

(7th Cir. 1997) (stating that “the government’s conduct in forfeiture cases

leaves much to be desired” and noting that “[w]e are certainly not the

first court” to be troubled by unchecked government use of forfeiture

statutes); United States v. All Assets of Statewide Auto Parts, 971 F.2d

896, 905 (2d Cir. 1992) (“We continue to be enormously troubled by the

government’s increasing and virtually unchecked use of the civil

forfeiture statutes and the disregard for due process that is buried in

those statutes.”).

Justice Thomas has even remarked on the facial Due Process

deficiencies of forfeiture laws. Over twenty years ago, before forfeiture

and its resulting abuses were as widespread as they are today, he wrote

that people unaware of the “history of forfeiture laws and 200 years of

this Court’s precedent . . . might well assume that such a scheme is

lawless—a violation of due process.” Bennis v. Michigan, 516 U.S. 442,

454 (1996) (Thomas, J., concurring). He criticized the practice that allows

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law enforcement to seize property and seek permanent forfeiture “all

without so much as charging the owner with a criminal offense.”

Leonard, 137 S. Ct. at 847 (Thomas, J., dissenting). This allows forfeiture

to “become more like a roulette wheel employed to raise revenue from

innocent but hapless owners . . .” Bennis, 516 at 456 (Thomas, J.,

concurring).

Justice Thomas’s concerns are not new. Nearly a century ago, the

Supreme Court considered a forfeiture statute and said that it “seems to

violate that justice which should be the foundation of the due process of

law required by the Constitution.” J.W. Goldsmith, Jr.-Grant Co. v.

United States, 254 U.S. 505, 510 (1921). Nevertheless, the Court upheld

the law based on such laws’ historical prevalence and consequent

presumption of legality. Given even the Supreme Court’s longstanding

due process concerns with asset forfeitures, it is even more important

that due process rights be afforded to victims of asset forfeiture such as

Mr. Serrano and others like him.

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II. Due Process Requires A Prompt Post-Deprivation Hearing


When The Government Seeks Forfeiture Of A Vehicle.

A. Relevant Supreme Court And Federal Court Precedent


Generally Require A Pre-Deprivation Hearing, But Still
Require A Post-Seizure Hearing For Seizure Of Vehicles.

The Due Process Clause of the Fifth Amendment guarantees that

“[n]o person shall . . . be deprived of life, liberty or property, without due

process of law.” U.S. Const. amend. V. Due process generally requires

that “individuals must receive notice and an opportunity to be heard

before the Government deprives them of property.” United States v.

James Daniel Good Real Prop., 510 U.S. 43, 48-49 (1993); see also Goss v.

Lopez, 419 U.S. 565, 579 (1975) (stating that, “at the very minimum” due

process “requires some kind of hearing”); Grannis v. Ordean, 234 U.S.

385, 394 (1914) (“The fundamental requisite of due process of law is the

opportunity to be heard”). Even a temporary, nonfinal deprivation

requires that Due Process protections be provided. Fuentes v. Shevin,

407 U.S. 67, 84-85 (1972); see Connecticut v. Doehr, 501 U.S. 1, 15 (1991)

(a later hearing “would not cure the temporary deprivation that an

earlier hearing might have prevented”).

The Supreme Court has been clear that Due Process requires a

hearing when the government seizes a person’s property, though the

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timing of that hearing may vary depending on the type of property seized.

The Supreme Court has held that a pre-deprivation hearing is required

for most types of property. See James Daniel Good Real Prop., 510 U.S.

at 62 (absent exigent circumstances, “the Due Process Clause requires

the Government to afford notice and a meaningful opportunity to be

heard before seizing real property subject to civil forfeiture”); Fuentes,

407 U.S. at 80 (holding that state replevin statutes that permitted

seizure of household chattel property prior to judgment and without a

pre-deprivation opportunity to be heard violated Due Process);

Sniadidach v. Family Fin. Corp., 395 U.S. 337, 338-41 (1969) (finding

due process violation where wages were garnished prejudgment without

garnishee having opportunity for hearing). However, for moveable

property, such as motor vehicles, a preseizure hearing is not required.

United States v. Von Neumann, 474 U.S. 242, 251 (1986). In these limited

set of circumstances, however, Due Process still requires a post-seizure

hearing. See id. at 249 (considering what type of proceeding would

“provide[] the postseizure hearing required by due process to protect Von

Neumann’s interest in the car”) (emphasis added).

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The courts that have considered this issue have agreed and found

that a prompt post-seizure hearing is required when a vehicle is seized

by the government. See Krimstock v. Kelly, 306 F.3d 40, 48 (2d Cir. 2002)

(Sotomayor, J.) (calling seizure of vehicles “without any prompt hearing

before a neutral fact-finder . . . constitutionally infirm”); Smith v. City of

Chicago, 524 F.3d 834, 836 (7th Cir. 2008) (“A post-seizure hearing is,

however, required.”), vacated and remanded sub nom., Alvarez v. Smith,

558 U.S. 87 (2009) (finding case was moot because the government

returned property in the interim period between the Seventh Circuit’s

decision and the hearing of the case before the Supreme Court); Brown v.

District of Columbia, 115 F. Supp. 3d 56, 60 (D.D.C. 2015) (“[T]he

government must provide a prompt opportunity for owners of seized

automobiles to challenge the reasonableness of the seizure . . .”);

Washington v. Marion Cnty. Prosecutor, 264 F. Supp. 3d 957, 975 (S.D.

Ind. 2017) (agreeing with Krimstock), vacated due to new legislation

enacted while appeal was pending, 916 F.3d 676, 679 (7th Cir. 2019); see

also Neapolitan Navigation, Ltd. v. Tracor Marine Inc., 777 F.2d 1427,

1430 (11th Cir. 1985) (“Although the usual due process requirements of

notice and a pre-seizure hearing are overcome by the necessity of keeping

12
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a maritime vessel within the jurisdiction, there is no justification

whatsoever for denying the vessel’s owner a post-seizure hearing after

the in rem arrest has taken place, and the vessel’s presence is assured.”).

B. The Factors In Mathews v. Eldridge Weigh Strongly In


Favor Of A Prompt Post-Seizure Hearing.

The Supreme Court and lower courts have used the three-factor test

from Mathews v. Eldridge to evaluate the sufficiency of the process

afforded in post-seizure, pre-judgment civil forfeiture proceedings.

Krimstock, 306 F.3d at 60 (citing Mathews v. Eldridge, 424 U.S. 319, 335

(1976); James Daniel Good Real Prop., 510 U.S. at 53)). The factors are:

(1) the private interest that will be affected by the official action; (2) the

risk of an erroneous deprivation of such interest through the procedures

used, and the probable value, if any, of additional or substitute

procedural safeguards; and (3) the Government’s interest, including the

function involved and the fiscal and administrative burdens that the

additional or substitute procedural requirement would entail. Mathews,

424 U.S. at 334-35.

The District Court used the correct standard, the Mathews test, to

determine what procedures were required, but its conclusions with

respect to the Mathews factors were incorrect. Analysis of these factors

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in the context of this case confirms the conclusions that other courts have

drawn in similar cases—that a prompt post-seizure hearing is required

by Due Process.

With respect to the first factor, the private interest affected, courts

have recognized the significant private interest in the use of one’s

automobile. Automobiles are often central to Americans’ lives and are

crucial to their lives and livelihoods. See Krimstock, 306 F.3d at 61 (the

“particular importance” of vehicles derive “from their use as a mode of

transportation, and, for some, the means to earn a livelihood); Coleman

v. Watt, 40 F.3d 255, 260-61 (8th Cir. 1994) (“Automobiles occupy a

central place in the lives of most Americans, providing access to jobs,

schools, and recreation as well as to the daily necessities of life.”);

Stypmann v. City & County of San Francisco, 557 F.2d 1338, 1342-43 (9th

Cir. 1977) (finding a “substantial” interest in the “uninterrupted use of

an automobile,” upon which the owner’s “ability to make a living” may

depend); Commonwealth v. 1997 Chevrolet & Contents Seized from

Young, 160 A.3d 153, 177 (Pa. 2017) (stating that “in our society” a

vehicle is “often essential to one’s life and livelihood”). The District Court

agreed that the seizure of a vehicle “unquestionably implicates an

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Case: 18-50977 Document: 00514927760 Page: 23 Date Filed: 04/23/2019

important private interest in being able to travel and go to work.”

ROA.485 (internal quotation marks omitted). This factor weighs heavily

in favor of Mr. Serrano.

The District Court disagreed with Mr. Serrano, however, on the

second Mathews factor, the risk of an erroneous deprivation. Courts have

generally agreed that a trained police officer’s initial assessment “can

typically be expected to be accurate.” Krimstock, 306 F.3d at 62-63.

Nevertheless, the risk of erroneous deprivation that is posed to innocent

owners is a substantial one. Id. at 63. This concern is particularly salient

in the present case, as Mr. Serrano was deprived of possession of his

automobile for nearly two years without ever being charged with any

crime or violation. Additionally, even the eventual determination that

Mr. Serrano, or another property owner, was an innocent owner “would

not cure the temporary deprivation that an earlier hearing might have

prevented.” James Daniel Good Real Prop., 510 U.S. at 56. Even a

“temporary, nonfinal deprivation of property is nonetheless a

‘deprivation’” in terms of the Due Process Clause. Fuentes, 407 U.S. at

85 (citing Sniadidach v. Family Fin. Corp., 395 U.S. 337, 338-41 (1969)

(discussing Fourteenth Amendment)). As noted, Mr. Serrano was never

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Case: 18-50977 Document: 00514927760 Page: 24 Date Filed: 04/23/2019

charged with a crime. Such circumstances suggest a higher likelihood

that a seizure is erroneous. It is likely that many others in a similar

position have likewise not been charged with crimes but have been

subject to erroneous seizures by CBP or other law enforcement. This

considerable risk weighs heavily in favor of providing strong Due Process

protections.

Further, the Supreme Court has said that stronger procedural

safeguards are needed “where the Government has a direct pecuniary

interest in the outcome of the proceeding.” James Daniel Good Real

Prop., at 55-56; see Harmelin v. Michigan, 501 U.S. 957, 979 n.9 (1991)

(“[I]t makes sense to scrutinize governmental action more closely when

the State stands to benefit.”); Nielsen v. 2003 Honda Accord, 845 N.W.2d

754, 761 (Minn. 2013) (Anderson, J., concurring) (calling a statutory

forfeiture regime with a pecuniary incentive for law enforcement

“inconsistent with historic American insistence on checking authority”).

U.S. Customs and Border Protection (CBP) has such a pecuniary

interest. CBP is a participant in the Treasury Forfeiture Fund, which is

the receipt account for asset forfeitures for several federal government

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Case: 18-50977 Document: 00514927760 Page: 25 Date Filed: 04/23/2019

agencies.6 In 2017, the Treasury Forfeiture Fund “earned revenue”—a

euphemistic term for seizing assets—of over $500 million. Treasury

Forfeiture Fund, 2017 Report. The majority of the Fund’s revenue is used

for expenses or distributed to state and local law enforcement agencies,

other federal agencies, or other entities. Id. at 30. According to a 2010

GAO report, one of the three primary goals of the U.S. Department of

Justice’s Assets Forfeiture Fund, another major forfeiture fund and the

largest of the federal government’s forfeiture funds, is “to produce

revenues in support of future law enforcement investigations and related

forfeiture activities.” U.S. Gov’t Accountability Office, GAO-12-736,

Justice Assets Forfeiture Fund: Transparency of Balances and Controls

Over Equitable Sharing Should Be Improved 6 (2012), http://

www.gao.gov/assets/600/592349.pdf.

Moreover, law enforcement’s pecuniary incentive to seize property

using forfeiture has caused federal forfeitures to grow astronomically. In

1986, the year after the Assets Forfeiture Fund was created, it took in

$93.7 million in proceeds from forfeited assets. Id. at 11. By 2008, the

6Treasury Forfeiture Fund, Accountability Report: Fiscal Year 2017, available at


https://www.treasury.gov/resource-center/terrorist-illicit-finance/Asset-
Forfeiture/Documents/TFF%20FY%202017%20Accountability%20Report%20Final%
2012-13-17.pdf.
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fund—for the first time in history—topped $1 billion in net assets, i.e.,

forfeiture proceeds free and clear of debt obligations and now available

for use by law enforcement. From fiscal years 2000 to 2012, the fund’s

net assets grew from $536.5 million to $ 1.6 billion.7 The Treasury

Forfeiture Fund, which CBP participates in, is smaller but has seen

similar growth in recent years. In considering the second Mathews

factor, CBP’s direct pecuniary incentive to conduct asset forfeitures

should weigh heavily in favor of providing robust procedural safeguards.

The third and final Mathews factor is the Government’s interest,

including the burden that procedural safeguards would entail. In finding

that this factor favored the Government, the District Court cited United

States v. One 1971 BMW 4-Door Sedan, which noted the “substantial

interest of the government in controlling the narcotics trade without

being hampered by costly and substantially redundant administrative

burdens.” 652 F.2d 817, 821 (9th Cir. 1981). The relevance of this case,

however, is minimal. Mr. Serrano was a legal gun owner with a handful

of low-caliber bullets. He was not involved in the narcotics trade or any

7Compare U.S. Dep’t of Justice, Assets Forfeiture Fund and Seized Asset Deposit
Fund, Ann. Fin. Statements FY 2000,
http://www.justice.gov/jmd/afp/01programaudit/auditreport92002.htm, with Ann.
Fin. Statements FY 2012, http://www.justice.gov/oig/reports/2013/a1307.pdf.
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Case: 18-50977 Document: 00514927760 Page: 27 Date Filed: 04/23/2019

illicit activity and was not charged with any crime. Ultimately, we ask

this Court to conclude that the Government’s interest in seizing the

property of an innocent person is essentially non-existent.

Additionally, the Government can have no fear of an owner

absconding with the vehicle as it is already in the Government’s

possession. See Krimstock, 306 F.3d at 65 (noting under Mathews’ third

factor that “there is no danger” that an already seized vehicle could

abscond) (citing James Daniel Good Real Prop., 510 U.S. at 56-57). A

prompt post-seizure hearing would not change that.

The District Court also cites the potential burden on the agency,

given the number of forfeitures at the border. ROA.487. However, the

District Court acknowledged that current customs law provided the

owners with the option to petition for remission of the forfeiture, have

their cases submitted to the U.S. Attorney for independent evaluation,

and receive ultimate judicial review to determine whether the forfeiture

was just. ROA.486. Leaving aside the fact that Mr. Serrano timely

petitioned for remission of his property and then was ignored for nearly

two years, it is not clear how requiring a prompt hearing before a neutral

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Case: 18-50977 Document: 00514927760 Page: 28 Date Filed: 04/23/2019

fact-finder would be more burdensome8 than this multi-step process,

provided, of course, that the Government actually followed the process,

unlike what it did in this case. Moreover, several jurisdictions already

allow for prompt post-seizure hearings,9 and there is no evidence that the

required hearings in these jurisdictions have posed an unfair

administrative burden, particularly considering the important private

interests at issue.

The District Court also cites with approval City of Los Angeles v.

David, which held that a mere 27-day delay in holding a hearing for a

property owner whose car had already been returned was not

constitutionally insufficient and that a quicker timeframe would burden

the government. 538 U.S. 715, 718 (2003). There, Plaintiff paid $134.50

to get his car back and petitioned for the return of the money, arguing

that the 27-day wait for a hearing violated Due Process. See id. at 716-

18. The case is obviously distinguishable. David paid a relatively small

sum (in comparison with the value of the seized property) and was

reunited with his car immediately. Mr. Serrano, on the other hand, paid

8 See James Daniel Good Real Prop., 510 U.S. at 59 (noting that altering the timing
of a required hearing “creates no significant administrative burden”).
9 See, e.g., Krimstock, 306 F.3d at 44, Brown, 115 F. Supp. 3d at 60.

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Case: 18-50977 Document: 00514927760 Page: 29 Date Filed: 04/23/2019

a much larger bond—over three thousand dollars—but his car was still

not returned. 10 David argued that he suffered a constitutional violation

because of a delay of less than one month. Mr. Serrano waited nearly

two years and, unlike David, did not enjoy possession of his property

during that period. Ultimately, to whatever extent the government

would be burdened by providing prompt post-seizure hearings, that cost

is minimal.

A review of the Mathews factors weighs strongly in favor of Mr.

Serrano and Plaintiffs. Thus, a prompt post-seizure hearing should be

required to protect the significant private interest at stake from the risk

of an erroneous deprivation by a government agency that has a pecuniary

interest in the seizures.

CONCLUSION

This Court should hold that Due Process requires a prompt post-

deprivation hearing in this and similar cases. The need for these

important constitutional protections is heightened by the government’s

increased use and abuse of asset forfeiture laws.

10 ROA.11.
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Case: 18-50977 Document: 00514927760 Page: 30 Date Filed: 04/23/2019

Dated: April 23, 2019 Respectfully submitted,

/s/ Cynthia E. Orr


Cynthia Eva Hujar Orr
Texas Bar No. 15313350
GOLDSTEIN, GOLDSTEIN, HILLEY & ORR
310 St. Mary’s St. #2900
29th Floor Tower Life Building
San Antonio, TX 78205
Tel.: 210-226-1463
Fax: 210-226-8367
E-mail: whitecollarlaw@gmail.com

Nicole DeBorde Hochglaube


3515 Fannin St.
Houston, Texas 77004
713-526-6300 Office
713-808-9444 Facsimile
Nicole@DeBordeLawFirm.com
www.debordelawfirm.com

Of Counsel:
Nathan C. Pysno
NATIONAL ASSOCIATION OF
CRIMINAL DEFENSE LAWYERS
1660 L Street NW, 12th Floor
Washington, DC 20036
(202) 872-8600

Counsel for Amicus Curiae


National Association of Criminal
Defense Lawyers

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Case: 18-50977 Document: 00514927760 Page: 31 Date Filed: 04/23/2019

Clark M. Neily III


Jay R. Schweikert
CATO INSTITUTE
1000 Mass. Ave., N.W.
Washington, DC 20001
(202) 842-0200
cneily@cato.org

Counsel for Amicus Curiae Cato


Institute

Shana-Tara O’Toole
DUE PROCESS INSTITUTE
700 Pennsylvania Avenue SE
#560
Washington, DC 20003
202-558-6683
Shana@iDueProcess.org

Counsel for Amicus Curiae Due


Process Institute

23

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