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Asset Forfeiture
Civil Asset Forfeiture In Oregon – A Brief History

October, 2000





Please note that the background information on this page was current as of the date of publication of this report in October, 2000, with minor modifications following passage of Ballot Measure 3 in November of that year. It has not and will not be updated to reflect changes in practice, law, or policy. Please refer to the Asset Forfeiture Home Page for current information.




The forfeiture of property has been used as a penalty or remedial action since Biblical times. Its use in the United States derives from English Common Law and the first Congress applied it to enforce customs laws. An extensive consideration of this history has been provided by Cecil Greek, Ph.D., University of South Florida, in Drug Control and Asset Seizures: A Review of the History of Forfeiture in England and Colonial America. In the absence of broad-based taxes, custom duties were a major source of revenue for the fledgling republic, and forfeiture was applied as a penalty for violations of those laws. Forfeiture was first applied as a criminal penalty, however, during the Civil War era when it was applied to treason. During Prohibition, forfeiture was applied as a criminal penalty to conveyances (cars and trucks) used in liquor law violations.

The application of civil asset forfeiture laws to drug-related offenses did not occur until the federal Comprehensive Drug Abuse Prevention and Control Act of 1970. According to the Drug Enforcement Administration, asset forfeiture is used "to ensure that criminals do not benefit financially from their illegal acts." Thus, "profits from drug-related crimes, as well as property used to facilitate certain crimes, are subject to forfeiture to the government ... asset forfeiture is an effective weapon because it removes the profit from such illegal activities" (from the U.S. Drug Enforcement Administration). Asset forfeiture may also capture revenue from transactions which escapes taxation for the support of drug law enforcement, drug education and treatment programs.

In Oregon, forfeiture was applied to property used in racketeering enterprises. Forfeiture was allowed if the government could prove a "pattern or practice" of criminal violations, and the clear proceeds were dedicated to the Common School Fund. By 1989, several Oregon cities and counties had adopted forfeiture ordinances relating to driving under the influence of intoxicants (DUII), gambling and drug law violations. Because there was no state law providing for these forfeitures, there was no uniform procedure followed around the state. In addition, an Oregon appeals court held that cities and counties needed specific statutory authority to enact forfeiture ordinances.

These circumstances led the 1989 Oregon legislature to enact a comprehensive civil forfeiture statute. This law (now found at ORS Chapter 475A) provides for forfeiture of properties used in or related to drug crimes. This law further describes how seized assets will be handled, conditions to disburse funds received through liquidation of forfeited assets, and return of assets to claimants if found not to be used as described above. Local governments that adopt forfeiture ordinances for other types of illegal conduct must also use these procedures.

The 1989 law also created the Asset Forfeiture Oversight Advisory Committee (AFOAC) to aid the legislature in determining the effect of the law and the manner in which it was being applied. The Committee gathers information on forfeitures from law enforcement agencies and prepares "reports detailing the number and nature of forfeitures carried out" under this law. In order to gather that information, the committee met regularly from October 1991 to April 1994. Report forms to be completed by forfeiture counsel were developed. These forms were used to gather information regarding seizure data and the distribution of forfeited assets as they related to specific cases. Completed forms were sent to the Legislative Counsel´s office where they were entered into a database, as time allowed. Data were not entered after 1995.

In 1997, the legislature repealed the sunset provision of the forfeiture law, provided staff for the AFOAC and directed the AFOAC to review the reporting process. Funding for AFOAC activities was provided from state and local forfeiture proceeds.

Other amendments have been made to the law in response to state and federal court cases and to expand protections for innocent property owners and other parties. These amendments created mitigation hearings to avoid excessive forfeiture judgments and provided for expedited hearings where the retention of seized property might create undue hardship for a claimant. The standard of proportionality was also included, whereby the value of the forfeited assets was required to be in proportion to the harm of the prohibited conduct.


Overview of Oregon Law
Prior to Passage of Ballot Measure 3

The following is a synopsis of forfeiture law, as amended by the 1999 Legislature. It does not reflect changes necessitated by passage of Ballot Measure 3 on 7 November 2000. That measure was a constitutional amendment, and supersedes provisions of the statute. The numbers in parentheses indicate section numbers of 1999 Oregon Revised Statutes Chapter 475A.

The statute distinguishes between a law enforcement agency which actually seizes property for forfeiture (the "seizing agency") and the "forfeiting agency," which is the "State of Oregon or a political subdivision thereof," usually the city or county of which the law enforcement agency is a department (.005).

Some drug law enforcement is conducted by task forces created by intergovernmental agreement under ORS Chapter 190, which gives them broad powers as independent agencies. They are usually staffed by sworn officers "donated" by participating agencies which pay their salaries. Operating costs, overtime expenses, facilities, and civilian staff are funded to varying degrees by the proceeds of asset forfeiture.


Burden of Proof and Standard of Evidence
Under current law, the seizing agency must have probable cause to seize property, meaning that the agency has a "substantial objective basis" to believe that the property is related to prohibited conduct. A claimant seeking to avoid forfeiture of their property must show by a preponderance of the evidence that the property is not related to prohibited conduct. That standard means that more evidence supports the claim than refutes it.


Civil versus Criminal Process
Asset forfeiture is a civil process, not a criminal process. In a forfeiture proceeding, the seized property - not the property owner - is the defendant, and the cases often bear names such as "Clackamas County vs. $445 in United States Currency." A person, such as the person from whom the property was seized, may file a claim on that money for the court to consider, in which case the person is a claimant, not the defendant.

A civil process by its nature permits a lower standard of evidence and does not create a right to legal counsel or to a jury trial. The Oregon statute does not require that anyone be charged with a crime.

The independent nature of the forfeiture proceeding, however, raises the issue of whether forfeiture constitutes "double jeopardy" for the same crime. The statute addresses this in two ways. First is the statement of intent, whereby the law is said to be remedial, not punitive. In other words, the law seeks to "remedy" a wrong, which is the diversion of funds from legal and taxable enterprises and the use of "ill gotten gains" for further criminal activity. Furthermore, the law is said to be not exclusive of other remedies (.010).


Property Which Is Subject To Forfeiture
Legal discussions of forfeiture often distinguish between three classes of property. First is property which is the proceeds of prohibited conduct. This would include money obtained from the sale of drugs as well as any property bought with that money. Property may also facilitate criminal activity, such as weapons, or computers used to find "recipes" for manufacturing controlled substances. Finally, there is property which is instrumental to the commission of the crime, such as the car used by a person driving "under the influence" or land upon which marijuana is grown.

The statute subjects the following items to forfeiture: controlled substances and the raw materials for their manufacture; containers, equipment, and conveyances used to facilitate trade in the substances; books, computers, data, and weapons used to facilitate the trade; and real property used to facilitate or commit the crime (.020). If the seizure was based solely on a consensual motor vehicle search, property is not subject to forfeiture unless a written notice of rights (including the right to refuse permission to search) is provided (.025).

Property may be seized without court order if "there is probable cause to believe that property is subject to forfeiture;" proximity of property to drugs is initially sufficient to establish probable cause. The seizing officer must provide a receipt with an estimate of the value of the items seized and information on where to file a claim (.035).

The seizing or forfeiting agency must decide within 30 days whether to proceed with forfeiture, must protect and maintain the seized property, and must deposit currency in interest-bearing accounts. An owner or interest-holder may demand a court decision on whether probable cause exists within 15 days of notice of seizure (.045).


Judicial versus Non-Judicial Forfeiture
The statute provides two forfeiture processes, judicial and non-judicial. The non-judicial procedure (.055) is available only if no claim is filed against the seized property and there is only one interest-holder. Within 15 days of the seizure, the agency must serve and/or publish notice of seizure for forfeiture. Following receipt of notice, anyone claiming an interest in the property must file a claim within 21 days. If no claim is filed, the agency may apply to a court to declare the property forfeited to the agency.

A claimant may also request an expedited court hearing within 15 days of receipt of notice (.060). The court may temporarily restore the property to the claimant if an affirmative defense is demonstrated, pending the resolution of the case. Whether or not the court restores the property to the claimant, the case then proceeds as a judicial forfeiture (.065).


Judicial Forfeiture
Judicial forfeiture is required for real property or other types of residences, and is available to the forfeiting agency in any case within 30 days of seizure (.075). A claimant may be required to post a bond of 10 percent of the value of the claimed property. Where the property is real property, the claimant must demonstrate that they did not acquiesce in the prohibited conduct (i.e., had no knowledge of it, reported it to proper authorities or sought to terminate any contractual agreement with the perpetrator). If no claim is filed, a judgment of default will be entered.

Once the government has shown probable cause to seize the property for forfeiture, the burden of persuasion shifts to the claimant to show cause why the property should not be forfeited (.080). The statute provides for affirmative defenses to forfeiture (.085). The claimant may demonstrate that they held the property without acquiescing in the prohibited conduct and without intent to defeat the interest of the forfeiting agency. The claimant may demonstrate that the seizure was in violation of 475A.025 (consensual vehicle searches). Finally, the claimant may establish that the controlled substance was solely for personal use.


Proportionality
The statute contains several provisions aimed at assuring that forfeiture judgments are "proportionate" to the conduct involved and are not excessive (.090, .100). These include the right of an unsuccessful claimant to a court hearing after a preliminary judgment of forfeiture is entered. The purpose of the hearing is to establish whether the judgment is excessive, and provides standards for the decision. The court may consider such factors as "the monetary value of the defendant property in relation to the actual injury to the public from the prohibited conduct" or the criminal culpability of someone engaging in the prohibited conduct. The court may also consider whether the property was directly or indirectly related to the illegal conduct. Failure of a claimant to properly request a mitigation hearing forecloses appellate review of any proportionality issues (.105).

Court decisions on proportionality have evolved with forfeiture statutes. Whether a forfeiture was excessive was considered by the Supreme Court in United States v. Bajakajian, 524 U.S. 321 (1998) under the Excessive Fines Clause of the Eighth Amendment. A statement of a four-justice minority makes it clear that forfeiture of the proceeds of criminal activity is remedial, not punitive, and should never be considered excessive since it "serve[s] the non-punitive ends of making restitution to the rightful owner." This view was also articulated in United States v. Ursery 518 U.S. 267 (1996), a decision under the Double Jeopardy Clause of the Fifth Amendment. That decision held that forfeiture of the proceeds of criminal activity serves the remedial "goal of ensuring that persons do not profit from their illegal acts."

But in Bajakajian, the court held that "some recent federal forfeiture laws have blurred the distinction" between punitive and remedial statutes. The court did not make it clear, however, exactly what makes a law punitive or remedial. Sources of distinction might be targeting property that "facilitates" the commission of a crime and providing an "innocent owner" defense. The original customs law forfeitures provided no innocent owner defense, and are considered "purely remedial" in that any property instrumental to the commission of the crime is wholly subject to forfeiture, whether the owner was aware of the violation or not. Because the Oregon statute provides an "innocent owner defense," proportionality provisions, and targets property which facilitates a crime, it might be considered to be a punitive statute, at least in part, and thus subject to the Excessive Fines Clause.

The statute allows a claimant to make a compromise offer before the case goes to trial (.095). The government may accept the offer, or reject it and proceed with the case anyway. If the government does not then win a judgment more favorable to it than the offer of compromise, the court may award attorney fees to the claimant. The statute allows the judgment to dictate the sale of assets and the distribution of proceeds to satisfy partial claims, notes that the judgment may foreclose any or all claims, and directs that a copy of the judgment be filed with the AFOAC (.110).


Distribution Of Forfeited Property
If a judgment favorable to the government is made, proceeds awarded to the government are distributed in a four-step process, which is reported to the AFOAC (.115-.125). After recovering any costs of a sale and satisfying any remaining liens, public bodies may recover their costs (typically law enforcement investigation costs, non-prosecutorial attorney time, and other costs of the forfeiture process).

Second, a portion of the post-cost proceeds go to state-level activities. The Oregon Department of Environmental Quality receives proceeds to pay for removal of toxic chemicals from illegal drug labs. The DEQ pays for removal only when these funds are available. Absent these funds, removal costs are born by the law enforcement agency. Additional costs to repair or restore the property are the responsibility of the property owner. The Asset Forfeiture Oversight Advisory Committee also receives forfeiture proceeds to support its activities.

Third, cities are required to use some portion of forfeiture proceeds to support criminal prosecutions by district attorneys. Finally, the remainder is distributed according to intergovernmental agreements or goes into the jurisdiction´s general fund. These funds may only be used to support the enforcement of drug laws, drug education, and treatment programs, and may not be used to pay regular salaries of police officers or the construction or maintenance of buildings. Lab equipment may be donated to schools while vehicles and other equipment may be retained by the agency.


Snapshot of Forfeitures In 1999
Most of the information on the following pages comes from the 30 March 2000 Annual Report of the AFOAC, and includes data from seizures reported to AFOAC between March 1 and December 31, 1999. Some additional analysis and alternative presentation is provided here. The full report is available from the AFOAC, and includes copies of the reporting forms and instructions for their use.


Seizure Data
The type of property seized includes all types of property seized for forfeiture. These properties are broken down into five property classifications: conveyance, currency, real property, weapons and other personal property. For purposes of this reporting, currency is defined to include any negotiable instrument of US currency, including travelers checks and money orders, balance in deposit or other accounts and securities. Currency does not include coin collections or foreign currency (these instruments are considered as other personal property). Of 1,064 cases total, 231 involved the seizure of a means of conveyance (car or truck which might or might not have been involved with the original law enforcement action). Currency was seized in 934 cases, weapons in 74, real property (land and/or houses) in 27, and other personal property in 180.


Nature of Violation
ORS 475A.005 (11) defines prohibited conduct for purposes of forfeiture under this law as inclusive of violation of, solicitation to violate, attempt to violate or conspiracy to violate any provisions of ORS 475.005 to 475.825 and 475.805 to 475.999 when the conduct constitutes either a felony or misdemeanor.

The following information details the nature of the drug violation establishing grounds for forfeiture. Offenses are described in the Uniform Controlled Substances Act. Data regarding possession, delivery and manufacture includes the lesser-included offense of attempt. Of the 1,064 cases, 105 involved possession only. The manufacture of a controlled substance was charged in 17.2 percent of the cases. Of the cases where manufacture was charged, 45.4 percent involved marijuana and 53.0 percent involved amphetamine ("speed"), methamphetamine, or a chemical precursor of methamphetamine. (For this discussion, those three drugs are referred to generically as methamphetamine.)

Distribution of a controlled substance was the most common charge. It is, after all, the distribution which gives rise to the profit which forfeiture principally targets. Distribution was charged in 85.4 percent of the cases in 1999. Of those cases, 29.9 percent involved marijuana, 33.5 percent involved methamphetamine, 30.6 percent involved cocaine or "crack" cocaine and 20.3 percent involved heroin. Note that the total exceeds 100 percent since there were often multiple drugs involved. (Other drugs, such as LSD or purported Psilocybe mushrooms, were also occasionally involved).


Law Enforcement Action At Time Of Seizure
While forfeiture in Oregon is a civil proceeding, the person or persons from whom the property is seized is frequently arrested, charged or otherwise involved in a corresponding criminal proceeding. Law enforcement actions are broken down into five classifications: Arrested/Cited (947), Excluded (40, of which 37 did not involve an arrest or charge), Indicted/Charged (403), None (10; no arrest, citation or criminal charge) and Unknown (8). Note that the Arrested/Cited category includes many, but not all of those who were indicted or charged. Thirty-eight percent of the total seizures resulted in arrest (or citation) and indictments (or charging) of one or more individuals for the suspected criminal activity that was the cause for the seizure.

The committee no longer gathers information regarding the disposition of any corresponding criminal proceedings.


Claims
Oregon forfeiture law allows persons with interest in seized property to file a claim stating that they are either an innocent owner (not involved in or having knowledge of the associated criminal activity), or that the property was not obtained through or profit of the associated criminal activity. Claims were filed in 303 (about one-third) of the reported cases. Of these claims, 78 percent (236) involved the person from whom the property was seized and only six involved a financial institution. Other interested parties filed claims in 86 cases. The committee does not, however, collect data directly related to the disposition of such claims.


Circumstances of Seizure
These circumstances include search warrant/seizure order, probable cause, vehicle consent search, other consent search, public health/safety, other or any combination of the aforementioned. Seizures were based on probable cause searches without a warrant in 59 percent (631) of the reported cases. Twenty-three percent of seizures (246) involved search warrants or seizure orders. About 10 percent of reported seizures involved consent as the sole basis for the search and seizure.


Dispositional Data
Forfeiture counsel declined to pursue civil forfeiture action in 212 (20 percent) of the 1,064 reported forfeiture cases. This committee does not gather information regarding the disposition of any corresponding criminal proceeding. Note that numbers in this section may reflect actions pertaining to multiple claimants in a single forfeiture case. The property being sought for forfeiture is the defendant in the forfeiture action.

Legal counsel represented claimants in 115 cases (14 percent of the 852 cases where forfeiture was not declined). In 12 cases the claimant was assisted by legal counsel, however counsel was not formally retained to represent the claimant regarding the civil matter. By statute, ORS 475A.110 (6)(a), claimants shall be awarded costs, disbursements and attorney´s fees if claimant prevails. There were no reported cases in which the court awarded attorney fees to claimant´s counsel.


Default Judgment
Default judgments were issued in 766 cases (90 percent of the 852 cases where forfeiture was not declined). In 640 (84 percent) of the default cases, the judgment was issued on the basis of no claim being filed.


Stay Of Proceedings
The claimant or government may request a stay of the forfeiture proceeding until such time as any corresponding criminal case has been resolved. A stay of proceeding was requested in 12 cases. Three of these were requested by the government agency prosecuting the case, one was requested by both the government agency and the claimant. Claimants requested the remaining eight.


Expedited Hearings
Claimants may file requests for an expedited hearing to order the return of seized property. There were only two cases reported requesting an expedited hearing. The resulting outcome was only reported for one of these cases, indicating that there was no hearing held.


Contested Hearing, Other Disposition, Mitigation Hearing, Appeal
In 21 cases, there was a trial or other proceeding that led to judgment. One case was found for the claimant, one case resulted in a mixed verdict, two cases resulted in a summary judgment for the claimant, one case resulted in a mixed summary judgment and the remaining 16 cases were found for the government. The court was the finder of fact in all of these cases.

There were 97 cases in which judgment was not entered as a result of default or a contested hearing. Of these cases, 69 were settled by stipulated judgment, nine were dismissed by forfeiture counsel, three resulted in a summary release, twelve were settled by a stipulated judgment associated with a criminal case and four were settled by other means.

No reported cases involved a mitigation hearing request and there was only one case in which an appeal was filed. The appeal was filed by the government agency prosecuting the case.


Accounting Data
Law enforcement agencies reported seizure of $1,195,383.37 in cash between March 1 and December 31, 1999, resulting in a forfeited amount of $1,094,363.87. Information regarding the actual value of property seized and distribution of proceeds is not available until the property is liquidated by the law enforcement agency. This information is detailed in the Asset Distribution section of this report.

Agencies reported 326 cases involving seizure of property that was not currency. The following table details those cases based on the estimated value of the noncurrency property seized.

There were 27 cases involving seizure of real property, of which fourteen involved marijuana only. There were 96 cases where all or part of the seized assets were returned to a claimant prior to judgment.


Value of Property Seized
Estimated value of non-currency property seized included 119 cases of less than $1,000, 112 cases of $1,000 - $5,000, 46 cases of $5,001 - $10,000, 26 cases of $10,001 - $25,000 , 13 cases of $25,001 - $100,000, and ten cases where the estimated value was over $100,000.

This data includes only those cases in which forfeiture was not declined by counsel, a total of 859 cases. For those cases, the total value ranged from $13 to $152,837 with one fourth of the cases involving property worth no more than $163. One half of the cases involved property worth no more than $632, and three-fourths involved not more than $2,585 worth of property.

These estimates of the total value for seized property were derived by adding the currency forfeited to the midpoint of the range of the estimated value of the non-currency property seized. In cases where the estimated value of property was "over $100,000," the value of $150,000 was used. Note that these numbers represent only a very rough estimate of the value of the property seized, and bear no relation to the net proceeds derived from forfeited property, since in many cases the property is returned to a claimant. The value of property returned is not reported.

Also, in some cases the costs of investigating and litigating the forfeiture case exceeded the value of the seized property. In those cases, the net proceeds were recorded as zero.


Asset Distribution
The following information details the manner in which the proceeds from forfeited assets are distributed pursuant to a judgment in a forfeiture case. Forfeiture counsels provide the information as soon as reasonably possible following liquidation and distribution of all assets associated with the case. The reporting of this data is only required for cases where total receipts available for distribution is greater than or equal to $10,000.00. However many agencies continue to report all cases regardless of the gross value of total receipts. All reported cases are included in this data.

Note: Information regarding distribution of assets is not received until all property associated with the forfeiture action has been liquidated. This liquidation process may take up to a year from the date of final disposition. There is no uniform manner in which agencies determine costs associated with the forfeiture action. Some agencies deduct actual costs, while others take an equal percentage from each case.

Actual cash forfeited at time of judgment$ 509,840.16
Interest earned on forfeited cash pending judgment$ 6,252.72
Liquidated proceeds of other property$ 229,276.01
Total Receipts available for distribution$ 801,569.13
COSTS:
Publications:$ 4,879.49
Attorney Fees:$ 243,617.49
Investigative Costs:$ 395,836.95
Other:$ 6,956.98
TOTAL DEDUCTIONS $ 651,290.91
Net Proceeds Available for distribution *$ 150,278.22
Deduct DEQ Illegal Drug Cleanup Fund Deposit$ 8,553.19
Deduct AFOAC Account Deposit$ 4,218.86
Net cash distributed to seizing agencies, governmental
entities and department, including prosecution
$ 137,506.17
Total estimated value of property in use by seizing agency$ 1,500.00
Total estimated value of weapons and equipment destroyed$ 4,935.00
Total estimated value of equipment donated to education$ 150.00

These numbers should be used only to compare future numbers generated by this database, where there is some assurance they will be internally consistent. These numbers should not be used for budgeting purposes or to compare against the fiscal year reports in the next section.


Local Government Use Of Proceeds
In addition to the forms completed by forfeiture counsel on a case-by-case basis, ORS 475A.120 (5) requires any political subdivision of the state that receives forfeiture proceeds to submit a report detailing how the proceeds have been or will be used. These reports are completed for the fiscal year of the agency and are submitted to the committee on or before December 15 of each year.

The following information is based on reports received detailing activity for the fiscal year ending in 1999. Approximately 50 percent of the agencies which had submitted seizure information had reported when this information was compiled. This table details activity reported by local governments regarding use of funds deposited in their forfeiture fund accounts.
NOTE: The information in this section cannot be directly compared to information in the Asset Distribution Section. This information is based on local government fiscal years and includes forfeiture cases not subject to seizure reports. The previous section uses reported data from a partial calendar year, includes seizures by state agencies and includes only data required to be reported (cases involving $10,000 or more) or is voluntarily reported.

Balance from previous fiscal year:$414,164.28
Total post-judgment receipts which became available for distribution this fiscal year from drug asset forfeitures including interest (excluding federal forfeitures)$2,044,623.67
Amount of post-judgment receipts expended for costs pertaining to forfeiture action
Publications$55,939.04
Attorney Fees$411,681.44
Investigative Costs$623,475.16
Other$45,880.83
Total Costs$1,136,976.47
Net receipts available after costs$907,647.20
Amount deposited in DEQ Illegal Drug Cleanup Fund$42,166.24
Amount deposited in Asset Forfeiture Oversight Account$16,713.30
Total amount of post-judgment forfeiture proceeds available for distribution (current proceeds plus previous balance)$1,262,931.94
Amount of proceeds expended during fiscal year and general purpose for which it was used (these amounts should not have been taken as costs above)
Law Enforcement$398,686.33
Prosecution$144,961.70
Forfeiture expenses paid/reimbursed$14,505.42
Removal of toxic substances$60,130.37
Drug Treatment, Education, Prevention$185,641.75
Other$13,884.49
Total Expenditures$817,810.06
Amount of post-judgment forfeiture proceeds retained$445,121.88