California Law Reins in Asset Forfeiture, Takes on Federal Equitable Sharing Program

By Mike Maharrey

Today, a California law went into effect that not only bolsters restrictions on state officials from seizing property without due process, but also throws a wrench into federal efforts to do the same.

Sen. Holly Mitchell (D-Los Angeles) introduced Senate Bill 443 (SB443) in 2015. The new law sets additional restrictions to prevent abuses from civil asset forfeiture, a controversial practice that observers such as the Institute for Justice (IJ) have called “legal plunder.”

CLOSING THE FEDERAL LOOPHOLE

California previously had some of the strongest state-level restrictions on civil asset forfeiture, but law enforcement would often bypass the state restrictions by partnering with a federal asset forfeiture program known as “equitable sharing.”

Under these arrangements, state officials would simply hand over forfeiture prosecutions to the federal government and then receive up to 80 percent of the proceeds—even when state law banned or limited the practice. According to a report by the Institute for Justice, Policing for Profit, California ranked dead last of all states in the country between 2000 and 2013 as the worst offender.

Through this loophole, U.S. DOJ paid local and state agencies in California more than $696 million in equitable-sharing proceeds.

The new law contains provisions to prevent prosecutors from bypassing the more stringent state asset forfeiture laws by passing cases off to the federal government under its Equitable Sharing forfeiture program. The following language shuts the loophole in most situations:

State or local law enforcement authorities shall not refer or otherwise transfer property seized under state law to a federal agency seeking the adoption by the federal agency of the seized property.

SB443 makes it clear that state and local law enforcement agencies won’t receive federal equitable sharing money related to the seizure of assets unless it is expressly permitted under state law or if the seizure is over $40,000:

A state or local law enforcement agency participating in a joint investigation with a federal agency shall not receive an equitable share from the federal agency of all or a portion of the forfeited property…unless a defendant is convicted in an underlying or related criminal action of an offense for which the property is subject to forfeiture…

Boats, vehicles, and homes will still require a conviction regardless of value.

These provisions cover a vast majority of forfeiture proceedings in the state and make this law a substantial step forward over the status quo.

BROAD SUPPORT

Supported by a politically diverse group of grassroots organizations, SB443 passed in the state Senate last summer by a resounding 38-1 vote. This year, the full Assembly passed it with a 69-7 vote.

“By approving SB 443, California is taking aim at an appalling loophole that has let state and local law enforcement pad their budgets,” said Lee McGrath, Legislative Counsel, Institute for Justice. “Requiring a criminal conviction in most forfeiture cases is a common-sense approach to protecting the rights of the innocent, without jeopardizing public safety.”

“It’s those private citizens who could not be convicted of a crime whose assets that we need to protect,” Mitchell said.

As an additional protection, under the law notices will be required giving specific instructions to forfeiture victims about their right to receive a fair hearing to reclaim their lost property. It also changes the burden of proof that a state or local law enforcement agency must meet to succeed in a forfeiture action with regards to cash or negotiable instruments of a value over $40,000, from a clear and convincing standard to beyond a reasonable doubt.

NEXT UP

The ACLU of California summarized the main changes in the law this way:

• Federal Cases: State and local law enforcement may only receive a share of forfeited property if there is an underlying conviction, or if the forfeited property is $40,000 or more in cash. Cash under $40,000 will require a conviction, as will vehicles, boats, homes, and other types of personal property regardless of their value;
• State Cases: Cash under $40,000 may only be forfeited if there is an underlying conviction, increasing the cash threshold from the current $25,000. Boats, vehicles, and homes will still require a conviction regardless of value.

California joins with Nebraska and New Mexico, which have also closed this equitable sharing loophole in most situations.

Michael Maharrey [send him email] is the Communications Director for the Tenth Amendment Center, where this article first appeared. He proudly resides in the original home of the Principles of ’98 – Kentucky. See his blog archive here and his article archive here. He is the author of the book, Our Last Hope: Rediscovering the Lost Path to Liberty. You can visit his personal website at MichaelMaharrey.com and like him on Facebook HERE