United States v. Bajakajian: Forfeiture of Sum of Money; Excessive Fines Clause (06/22/1998)

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United States v. Bajakajian

Does the forfeiture of $357,144 in cash, a sum involved in the offense of failure to report property in excess of $10,000 while attempting to leave the country, violate the Eighth Amendment’s Excessive Fines Clause?

Argued: 11/04/1997

Decision Date: 06/22/1998

Decision Record: 5-4; yes

Justices Majority: John Paul Stevens, David Souter, Clarence Thomas, Ruth Ginsburg, Stephen Breyer

Justices Dissenting: William Rehnquist, Sandra Day O’Connor, Antonin Scalia, Anthony Kennedy

Effect of the Decision

This case clarified that a forfeiture of a sum as great as $357,144 in cash for an offense like failure to report property in excess of $10,000 while attempting to leave the country is a violation of the Excessive Fines Clause, and is considered an unreasonable punishment.

In Favor

In the representation of the side of the United States, attorney Irving L., Gornstein said, “Respondent was about to board a flight to Syria when a Customs inspector informed him that he was required to file a currency report if he was taking more than 10,000 dollars with him.

Respondent claimed that he was taking less than 10,000 dollars and he therefore did not file a currency report.

Customs inspectors searched respondent and his possessions and found more than 350,000 dollars in cash.

Respondent subsequently pleaded guilty to wilfully failing to file a currency report as he was about to transport more than 350,000 dollars outside this country.

For that offense, Congress has mandated forfeiture of the unreported currency.

The Court of Appeals for the Ninth Circuit held, however, that the forfeiture of any of that currency would constitute an excessive fine.

The unreported currency is an instrumentality of a reporting offense and may be forfeited as such without violating the Excessive Fines Clause, and second, even if it is not an instrumentality, its forfeiture is a permissible punishment for what is a serious criminal offense.

The manner of satisfying the Excessive Fines Clause is by showing that it is property that’s seized… one way of satisfying it, it is showing that the property that is seized is in fact an instrumentality of the offense, and there… questions may arise about whether it has a sufficiently close connection to the offense to be classified properly as an instrumentality, but once it is, then that would satisfy the Excessive Fines Clause.”

Against

Then in opposition, representing Bajakajian, attorney James E. Blatt claimed, “This case, a criminal in personam matter, is here because a district court determined that forfeiture of 357,144 dollars would be grossly disproportionate under the Eighth Amendment for a failure-to-declare offense.

The decision was based on the following factual findings by the district court: that the money involved was lawful money for a lawful purpose; that the crime was committed in reference to cultural differences, and that the lies that Mr. Bajakajian stated grew out of fear.

He was a minority there, an Armenian, and where he grew up he was very frightened and afraid of the Government in reference to moneys taken in and out.

When he left this country to pay a lawful debt, and he was going to Cyprus, not to Syria, he thought that he would be harmed, or the money might be taken from him if he showed how much money he had.

We indicated that to the district court.

The district court took that into consideration, and took also into consideration the lies that he made, which were primarily out of fear, when it came up with a grossly disproportionate analysis.

It’s a factor that has to be considered in reference to whether the money was lawful, and for a lawful purpose, because it relates to the culpability.

If one lies not… if one lies because he or she is not involved in a criminal enterprise, but because they are frightened, and we’re not trying to excuse the culpability of Mr. Bajakajian, but it’s a factor for a court to consider in reference to punishment.”

Justices:

The majority opinion, written by Justice Clarence Thomas, said, “Finally, we must reject the contention that the proportionality of full forfeiture is demonstrated by the fact that the First Congress enacted statutes requiring full forfeiture of goods involved in customs offenses or the payment of monetary penalties proportioned to the goods’ value. It is argued that the enactment of these statutes at roughly the same time that the Eighth Amendment was ratified suggests that full forfeiture, in the customs context at least, is a proportional punishment. The early customs statutes, however, do not support such a conclusion because, unlike §982(a)(1), the type of forfeiture that they imposed was not considered punishment for a criminal offense.

Certain of the early customs statutes required the forfeiture of goods imported in violation of the customs laws, and, in some instances, the vessels carrying them as well. See, e.g., Act of Aug. 4, 1790, §27, 1 Stat. 163 (goods unladen without a permit from the collector). These forfeitures, however, were civil in rem forfeitures, in which the Government proceeded against the property itself on the theory that it was guilty, not against a criminal defendant. See, e.g., Harford v. United States, 8 Cranch 109 (1814) (goods unladen without a permit); Locke v. United States, 7 Cranch 339, 340 (1813) (same). Such forfeitures sought to vindicate the Government’s underlying property right in customs duties, and like other traditional in rem forfeitures, they were not considered at the Founding to be punishment for an offense. See supra, at 8—9. They therefore indicate nothing about the proportionality of the punitive forfeiture at issue here. Ibid.

Other statutes, however, imposed monetary ‘forfeitures’ proportioned to the value of the goods involved. See, e.g., Act of July 31, 1789, §22, 1 Stat. 42 (if an importer, ‘with design to defraud the revenue,’ did not invoice his goods at their actual cost at the place of export, ‘all such goods, wares or merchandise, or the value thereof . . . shall be forfeited’); §25, id., at 43 (any person concealing or purchasing goods, knowing they were liable to seizure for violation of the customs laws, was liable to “forfeit and pay a sum double the value of the goods so concealed or purchased”). Similar statutes were passed in later Congresses.

These ‘forfeitures’ were similarly not considered punishments for criminal offenses. This Court so recognized in Stockwell v. United States, 13 Wall. 531 (1871), a case interpreting a statute that, like the Act of July 31, 1789, provided that a person who had concealed goods liable to seizure for customs violations should ‘forfeit and pay a sum double the amount or value of the goods.’ Act of Mar. 3, 1823, ch. 58, §2, 3 Stat. 781—782. The Stockwell Court rejected the defendant’s contention that this provision was “penal,” stating instead that it was “fully as remedial in its character, designed as plainly to secure [the] rights [of the Government], as are the statutes rendering importers liable to duties.” 13 Wall., at 546. The Court reasoned:

‘When foreign merchandise, subject to duties, is imported into the country, the act of importation imposes on the importer the obligation to pay the legal charges. Besides this the goods themselves, if the duties be not paid, are subject to seizure . . . . Every act, therefore, which interferes with the right of the government to seize and appropriate the property which has been forfeited to it . . . is a wrong to property rights, and is a fit subject for indemnity.’Id., at 546.

Significantly, the fact that the forfeiture was a multiple of the value of the goods did not alter the Court’s conclusion:

‘The act of abstracting goods illegally imported, receiving, concealing, or buying them, interposes difficulties in the way of a government seizure, and impairs, therefore, the value of the government right. It is, then, hardly accurate to say that the only loss the government can sustain from concealing the goods liable to seizure is their single value … . Double the value may not be more than complete indemnity.’ Id., at 546—547.

The early monetary forfeitures, therefore, were considered not as punishment for an offense, but rather as serving the remedial purpose of reimbursing the Government for the losses accruing from the evasion of customs duties. They were thus no different in purpose and effect than the in rem forfeitures of the goods to whose value they were proportioned. Cf. One Lot Emerald Cut Stones v. United States, 409 U.S. 232, 237 (1972) (per curiam) (customs statute requiring the forfeiture of undeclared goods concealed in baggage and imposing a monetary penalty equal to the value of the goods imposed a ‘remedial, rather than [a] punitive sanctio[n]’). By contrast, the full forfeiture mandated by §982(a)(1) in this case serves no remedial purpose; it is clearly punishment. The customs statutes enacted by the First Congress, therefore, in no way suggest that §982(a)(1)’s currency forfeiture is constitutionally proportional.”

Then, in the dissenting side, Justice Anthony Kennedy wrote, “The Court’s holding may in the long run undermine the purpose of the Excessive Fines Clause. One of the main purposes of the ban on excessive fines was to prevent the King from assessing unpayable fines to keep his enemies in debtor’s prison. See Browning-Ferris Indus. of Vt., Inc. v. Kelco Disposal, Inc., 492 U.S. 257, 267 (1989); 4 W. Blackstone, Commentaries on the Laws of England 373 (1769) (‘[C]orporal punishment, or a stated imprisonment, … is better than an excessive fine, for that amounts to imprisonment for life. And this is the reason why fines in the king’s court are frequently denominated ransoms … .’) Concern with imprisonment may explain why the Excessive Fines Clause is coupled with, and follows right after, the Excessive Bail Clause. While the concern is not implicated here–for of necessity the money is there to satisfy the forfeiture–the Court’s restrictive approach could subvert this purpose. Under the Court’s holding, legislators may rely on mandatory prison sentences in lieu of fines. Drug lords will be heartened by this, knowing the prison terms will fall upon their couriers while leaving their own wallets untouched.

At the very least, today’s decision will encourage legislatures to take advantage of another avenue the majority leaves open. The majority subjects this forfeiture to scrutiny because it is in personam, but it then suggests most in rem forfeitures (and perhaps most civil forfeitures) may not be fines at all.Ante, at 8, 18, and n. 16; but see ante, at 9, n. 6. The suggestion, one might note, is inconsistent or at least in tension with Austin v. United States, 509 U.S. 602 (1993). In any event, these remarks may encourage a legislative shift from in personam to in rem forfeitures, avoiding mens rea as a predicate and giving owners fewer procedural protections. By invoking the Excessive Fines Clause with excessive zeal, the majority may in the long run encourage Congress to circumvent it.”

My Opinion:

In this case, I disagree with the majority opinion. Bajakajian committed an offense and broke the law by attempting to leave the country with an excess of $10,000. He brought $357,144 in cash with him, which is a violation of 31 U.S.C. Section 5316. According to 18 U.S.C. Section 982, Bajakajian was supposed to turn in all the money that he illegally attempted to bring with him. This is not a violation of the Eighth Amendment’s Excessive Fines Clause, because the money the respondent should have turned in cannot be considered a “fine.” Under the law, he should have forfeited his entire sum of $357,144 in cash. This wouldn’t have been difficult for Bajakajian, seeing as he already had the money with him in cash. Even if this were considered a fine, it cannot be seen as “excessive,” because 31 U.S.C. Section 5316 clearly states that no sum of money over $10,000 in cash can leave the United States. This law was violated by the respondent. Also, 18 U.S.C. Section 982 explains that any sums of money that tries to leave the US can be confiscated. So under this law, the forfeiture of Bajakajian’s sum of $357,144 was not a violation of the Eighth Amendment. It simply cannot be declared “unconstitutional” under the Excessive Fines Clause if the sum of money asked to be turned in was not excessive nor a fine. All actions performed by the government in this case was rightfully justified.

*Justice Leaning L=Left, LC=Left of Center, C=Center, RC=Right of Center, R=Right

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