Stratemeyer v. State

WILNER, Chief Judge. In Allen v. State, 91 Md.App. 775 , 605 A.2d 994 , cert. denied, State v. Threatt, 328 Md. 92 , 612 A.2d 1315 (1992), we held that the forfeiture of a defendant’s motor vehicle pursuant to Md.Code art. 27, § 297, on the ground that the vehicle had been used to transport a controlled dangerous substance, did not constitute a punishment for purposes of Federal or State double jeopardy law and therefore did not preclude the State from prosecuting criminal charges against the defendant arising from the possession of that substance. We are called upon now to reconsider that holding in the light of several intervening decisions of the United States Supreme Court and the Maryland Court of Appeals. Those decisions convince us that the broad ruling announced and applied in Allen is no longer entirely correct.

We now conclude that (1) a forfeiture of non-contraband property under § 297—i.e., property other than the unlawful substance or paraphernalia itself—constitutes punishment for purposes of double jeopardy, and (2) whether such a forfeiture either precludes a subsequent criminal action or is precluded by a prior criminal action depends, at least in part, on the respective bases for the forfeiture and the criminal action. FACTS In the summer of 1992, Harford County law enforcement officers began conducting an investigation of appellant for suspected illegal drug activity. As a result of that investigation, the State applied for and, on September 10, 1992, a judge of the Circuit Court for Harford County issued, search and seizure warrants with respect to two residential properties. Those warrants were executed the next day and resulted in (1) the arrest of appellant, and (2) the discovery and seizure of a ⁴²⁴ pound of cocaine, certain other controlled dangerous substances and paraphernalia, and various documents and records.

Following the execution of the two warrants and based, in part, on some of the items seized, the police applied for and the court issued additional warrants to seize a Chevrolet Corvette, a 1992 Toyota truck, a 1973 Jeep, and a 1981 boat and trailer. 1 Those warrants were based on probable cause to believe that the items had been purchased with proceeds from the sale of controlled dangerous substances. The warrants were executed and the property seized. On October 21, 1992, in an 11-count indictment, appellant was charged with having, on September 11, 1992, imported, distributed, possessed with intent to distribute, and possessed various controlled dangerous substances, including cocaine, as well as having, on that same day, possessed controlled paraphernalia, maintained certain residential property as a common nuisance, and been a drug kingpin. For various reasons, trial of the criminal case was delayed until January 17, 1995.

In the meanwhile, shortly after the indictment was filed, the State filed a separate civil action to forfeit the Corvette, the Toyota truck, the Jeep, and the boat and trailer. 2 In each case, the State alleged that the vehicle “was traceable to the proceeds of the alleged cocaine distribution by [appellant]” and that appellant knew or should have known that it was being used “to facilitate the transportation, sale, receipt, possession or concealment of suspected controlled dangerous substances.” The forfeiture case was tried in January, 1994. We are not privy to the evidence produced at the hearing, as neither a ⁴²⁵ transcript of testimony nor any exhibits have been included in the record now before us. We know only, from a transcript of the judge’s remarks at the conclusion of the hearing, that the court found as fact: (1) that appellant had no significant employment or source of income other than from dealing in drugs; (2) that the money used to purchase the boat and trailer “was from the drug activities that he was involved in” and that there was “a clear connection between the Defendant’s drug purchase and sale activities with the purchase of this boat”; (3) that the Jeep was transferred to appellant “to satisfy a drug debt”; (4) that the cash used to purchase the Corvette “was from drug activities which he was involved with”; and (5) that the cash used to purchase the Toyota truck “was related to [appellant’s] drug activities and not from any other legitimate source” and, additionally, that the truck “was used after acquisition for drug purchases and/or distribution.” Upon these findings, the court immediately ordered the forfeiture of the boat and trailer, the Jeep, and the Corvette. It held the matter of the Toyota sub curia for a time because that vehicle was titled in appellant’s girlfriend’s name and it was not clear who actually owned it.

A month later, however, after giving further consideration to the matter, the court ordered the Toyota forfeited as well. On January 17, 1995, appellant moved to dismiss the pending criminal charges, arguing that “forfeiture of the aforesaid property is punishment as contemplated by the law and is not remedial” and that “subsequent punishment for the same acts or omissions ... [is] prohibited by the double jeopardy provisions of the United States Constitution and the Constitution of Maryland.” At a hearing on the motion held the same day, appellant relied principally on Department of Revenue v. Kurth Ranch, — U.S. -, 114 S.Ct. 1937 , 128 L.Ed.2d 767 (1994), in support of his contention that civil forfeitures are “punishment” within the ambit of double jeopardy. ⁴²⁶ The court denied the motion. It declared that appellant’s reliance on Kurth was misplaced, that Kurth was a fact-specific case dealing with a “rather bizarre tax scheme,” and that the holding and rationale of United States v. Borromeo, 995 F.2d 23 (4th Cir.1993), 3 was more applicable to this case. Appellant has taken an immediate appeal from that ruling.

Bowling v. State, 298 Md. 396 , 470 A.2d 797 (1984); Evans v. State, 301 Md. 45 , 481 A.2d 1135 (1984), cert. denied, Grandison v. Md., 470 U.S. 1034, 105 S.Ct. 1411 , 84 L.Ed.2d 795 (1985) (holding that a denial of a motion to dismiss on double jeopardy grounds is immediately appealable). DISCUSSION Introduction Md.Code art. 27, § 297, which is part of the State controlled dangerous substance law, authorizes the forfeiture of certain kinds of property acquired, or used in connection with, or that facilitate the unlawful manufacture, possession, or distribution of controlled dangerous substances. We are concerned here with two categories of such property: (1) vehicles used or intended for use to transport or facilitate the transportation, sale, receipt, possession, or concealment of such substances (subject to forfeiture under § 297(b)(4)), and (2) property furnished or intended to be furnished in exchange for a controlled dangerous substance, including all proceeds traceable to such an exchange (subject to forfeiture under § 297(b)(10)). ⁴²⁷ These provisions mirror, and were largely adopted from, a comparable Federal forfeiture law, 21 U.S.C. § 881 (a)(4) and (a)(6). Proceedings to forfeit property under these provisions of State or Federal law are regarded as civil proceedings in rem. 1986 Mercedes v. State, 334 Md. 264 , 638 A.2d 1164 (1994); U.S. v. Winston-Salem/Forsyth County Bd. of Educ., 902 F.2d 267 (4th Cir.1990).

The Double Jeopardy Clause of the Fifth Amendment to the United States Constitution, made applicable to the States through the Fourteenth Amendment, provides: “[N]or shall any person be subject for the same offense to be twice put in jeopardy of life or limb.” The Supreme Court has interpreted that clause as protecting against “three distinct abuses: a second prosecution for the same offense after acquittal; a second prosecution for the same offense after conviction; and 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). 4 See also State v. Jones, 340 Md. 235 , 666 A.2d 128 (1995). Appellant did not argue below and does not argue here that either of the first two protections has been violated, so we need not address those aspects. His singular argument is that, because the forfeiture of his property constitutes a punishment already imposed for the offenses now pending against him, placing him in jeopardy of further, criminal ⁴²⁸ sanctions will constitute a transgression of the third protection—against multiple punishment. As noted, we addressed this same argument in Allen v. State, supra, 91 Md.App. 775 , 605 A.2d 994 .

There, as here, a defendant was charged with violations of the controlled dangerous substance laws; prior to trial, his truck, in which the contraband was found, was forfeited; he then sought to have the criminal charges dismissed; and, when the court denied that motion and proceeded to put him on trial and convict him, he cried foul. In rejecting his double jeopardy claim, we started with the fact that forfeiture proceedings under Maryland law are civil in nature. We noted, however, that, in United States v. Halper, supra, 490 U.S. 435 , 109 S.Ct. 1892 , the Supreme Court had rejected the notion that a mere labeling of a sanction as “civil” sufficed to make it non-punitive for double jeopardy purposes and held instead that the character of the sanction and the purpose actually served by it must be examined. Following that mandate, we determined from earlier pronouncements that the forfeiture law was intended “to curtail and discourage drug use and trafficking” and, quoting from United States v. Price, 914 F.2d 1507, 1513 (D.C.Cir.1990), concluded that the remedy is “punitive only insofar as it does not condone the trade in narcotics by permitting persons involved in such trade to retain ill gotten gains.” Our ultimate holding, from this analysis, was that “a forfeiture proceeding is a civil action and when brought prior or subsequent to a criminal proceeding does not involve the Double Jeopardy Clause of the Fifth Amendment nor the Maryland common law double jeopardy prohibition.” 91 Md.App. at 788 , 605 A.2d 994 .

Upon further reflection and with the benefit of subsequent pronouncements from the Supreme Court and the Court of Appeals, it appears that our adoption of the statement from United States v. Price that forfeiture has only a peripheral punitive effect was not entirely warranted. It has also become apparent that a somewhat broader analysis is required. We ⁴²⁹ think that the framework set forth in U.S. v. Ursery, 59 F.3d 568, 571 (6th Cir.1995), properly distills the questions that ordinarily need to be addressed: “To decide whether the government has violated [appellant’s] constitutional right this court must make three key determinations: (1) whether the civil forfeiture in the instant case constitutes “punishment ” for double jeopardy purposes; (2) whether the civil forfeiture and criminal conviction are punishment for the same offense; and (3) whether the civil forfeiture and criminal prosecution are separate proceedings.” Punishment Prior to 1989, the law with regard to whether a particular sanction constituted a punishment for double jeopardy purposes was fairly straightforward. The issue centered more around labels than substance.

The determining factor was whether the proceeding leading to the sanction was civil or criminal in nature; if the proceeding was found to be a civil one, the sanction would not constitute a punishment for double jeopardy purposes even if it had some deterrent or retributive purpose or effect. The multiple punishment aspect of the protection against double jeopardy was thought to apply only to criminal penalties. See Johnson v. State, 95 Md.App. 561 , 622 A.2d 199 (1993). That straightforward and simple analysis ended with United States v. Halper, supra, 490 U.S. 435 , 109 S.Ct. 1892 .

Mr. Halper was employed by a company that provided medical services to Medicare patients. During the course of that employment, he submitted 65 false claims for Government reimbursement, in violation of both a criminal false claims statute ( 18 U.S.C. § 287 ) and a civil false claims statute ( 31 U.S.C. §§ 3729-3731 ). He was convicted under the criminal Act and sentenced to two years imprisonment and fined $5,000. After the conviction, the Government brought an action against Halper under the civil Act.

A person who violates that Act is “liable to the United States Government ⁴³⁰ for a civil penalty of $2,000, an amount equal to 2 times the amount of damages the Government sustains because of the act of that person, and costs of the civil action.” 31 U.S.C. § 3729 (1982 ed., Supp. II). The evidence showed that the aggregate actual loss suffered by the Government from Halper’s 65 false claims was $585 (plus the cost of bringing and prosecuting the civil action). Nonetheless, the Government insisted that the statute required imposition of a $2,000 fine with respect to each claim— a total of $130,000—plus an additional fine equal to double the amount of the Government’s actual loss. The District Court found that the aggregate fine was so disproportionate to the Government’s loss that it constituted punishment for double jeopardy purposes and therefore limited the recovery to double the actual loss—$1,170—plus costs, which the court found to be $16,000.

There was no dispute that Halper had already been punished criminally and that both the criminal and civil proceedings arose from the same conduct. The sole question was whether the statutory civil penalty constituted a second “punishment” for double jeopardy purposes. Relying on earlier pronouncements from the Court, the Government argued that civil penalties do not constitute punishment in that context. The Court responded, first, by declaring that the Government was reading more into the earlier pronouncements than was intended.

More significantly, it rejected the mere labeling of a penalty as civil or criminal as determinative, declaring at 447-48, 109 S.Ct. at 1901 : “[T]he labels ‘criminal’ and ‘civil’ are not of paramount importance. It is commonly understood that civil proceedings may advance punitive as well as remedial goals, and, conversely, that both punitive and remedial goals may be served by criminal penalties. The notion of punishment, as we commonly understand it, cuts across the division between the civil and the criminal law.” (Citation omitted; footnote omitted.) The issue, then, is “whether and under what circumstances a civil penalty may constitute punishment for the purpose of ⁴³¹ the Double Jeopardy Clause.” Id. at 446 , 109 S.Ct. at 1901 . That, the Court said, at 448, 109 S.Ct. at 1901-02 , requires “a particularized assessment of the penalty imposed and the purposes that the penalty may fairly be said to serve.” A civil sanction “constitutes punishment when the sanction as applied in the individual case serves the goal of punishment.” Id. at 448, 109 S.Ct. at 1901-02 (emphasis added).

The goals of punishment, the Court continued, were retribution and deterrence; thus, “it follows that a civil sanction that cannot be said solely to serve a remedial purpose, but rather can only be explained as also serving either retributive or deterrent purposes, is punishment, as we have come to understand the term.” Id. (emphasis added). 5 The civil sanction at issue in Halper was a fixed penalty of money damages. In that context, the Court held that the Government could not impose a criminal penalty, then bring a civil action based on the same conduct, “and receive a judgment that is not rationally related to the goal of making the Government whole.” Id. at 451 , 109 S.Ct. at 1903 . The standard announced in Halper was essentially one of proportionality, to be judged on a case-by-case basis.

The Court expressed the belief that the principle it was announcing was intended “for the rare case ... such as the one before us, where a fixed-penalty provision subjects a prolific but small- ⁴³² gauge offender to a sanction overwhelmingly disproportionate to the damages he has caused.” Id. at 449 , 109 S.Ct. at 1902 . It stated what it regarded as a rule of reason: “Where a defendant previously has sustained a criminal penalty and the civil penalty sought in the subsequent proceeding bears no rational relation to the goal of compensating the Government for its loss, but rather appears to qualify as ‘punishment’ in the plain meaning of the word, then the defendant is entitled to an accounting of the Government’s damages and costs to determine if the penalty sought in fact constitutes a second punishment.” Id. In that particular case, the Court concluded that the fixed penalty of $130,000 was “overwhelmingly disproportionate” to any loss suffered by the Government and could not be sustained. It remanded the case to the District Court to determine more precisely the extent of the Government’s costs and expenses and to allow a recovery commensurate with that loss.

Halper , of course, did not involve a forfeiture statute; it merely set forth the required analytical framework for determining when a sanction ordinarily regarded as civil in nature may constitute punishment for double jeopardy purposes. Four years after Halper , in Austin v. United States, 509 U.S. 602 , 113 S.Ct. 2801 , 125 L.Ed.2d 488 (1993), the Supreme Court did examine a civil forfeiture statute, in the context of the Eighth Amendment. Based on evidence that he had sold two grams of cocaine, Austin was convicted in State court of one count of possessing cocaine with intent to distribute, for which he was sentenced to seven years in prison and fined $5,000. A month later, the Government, acting under a Federal forfeiture statute ( 21 U.S.C. § 881 ), filed an action to forfeit Austin’s auto body repair shop (where he made the deal to sell the cocaine) and his nearby mobile home (where he had apparently stored the cocaine).

The District and Circuit courts, rejecting a proportionality analysis based on the “Excessive Fines” clause of the Eighth Amendment, entered and affirmed a judgment for the Government. ⁴³³ The