United States v. Peter Monsanto

OAKES, Before CARDAMONE and In an indictment July unsealed MAHONEY, Judges. Circuit charged Monsanto was one sub- 1962(c) count, 18 U.S.C. such § RICO from forfeiture would stantive count, 18 U.S. conspiracy (1982), RICO one allowed to the extent the rates conspiracy to dis- (1982), 1962(d) one C. established the Criminal Justice Act § count, 21 U.S.C. § narcotics tribute (1982 (“CJA”). 18 U.S.C. 3006A (1982), count, 21 one CCE U.S.C. Supp. 1986). IV (1982 Supp. illegal Ill and four August On Monsanto’s counsel counts, possession firearm of a 18 U.S.C. pro tem filed a motion to modify vacate or 1202(a) (1982).1 Appendix The indict- § restraining (a) the by permitting specified parcels ment also two of resi- Monsanto to use the restrained assets to $335,000 property, dential real valued at private counsel, (b) retain trial exempt- $30,000, $35,000 cash, as well as ing legal paid fees to that counsel from being subject to forfeiture under 21 U.S.C. post-trial Judge forfeiture. Ward held a 853(a) 1985). Ill (Supp. On the same § hearing August 28, on this motion on 1987. parte Keenan entered an ex day, Judge The accepted court that Monsanto was ren- order, 853(e)(1)(A) restraining 21 U.S.C. § dered de indigent by the restraining facto (Supp. prohibiting Ill Monsanto from Moreover, order. the court was informed directly indirectly transferring or en- by pro tem that Monsanto had cumbering properties.2 the residential counsel,” “potential contacted several trial willing but that none repre- of them was At the initial conference before compensa- sent Monsanto for the CJA-level 31, 1987, Judge July Ward on James Mer- Judge suggested tion that Ward had at the Boston, berg, attorney an from audited the 6, August pro conference. Counsel proceedings but declined to enter a formal tem also empirical submitted an study pre- appearance on The behalf Monsanto. pared by the Association of the Bar of the by court was informed the Assistant Unit- City of indicating private New York (“AUSA”) Attorney ed States that “[Mer- attorney’s fees in RICO and CCE cases berg] exploring and Mr. Monsanto are the routinely exceed Although CJA rates. circumstances under which he would be Judge potential Ward stated that some trial retained.” At later a conference on Au- appeared present counsel should have a gust 6, 1987, Chikofsky, Edward M. coun- proposed arrangement, fee he did not de- pro tem appearing sel on behalf of Mon- part position from his that he would allow purpose santo for the presenting limited compensation. Judge CJA-level Ward challenge Monsanto’s to the pro- forfeiture denying entered an order Monsanto’s mo- visions, Judge informed Ward that the prejudice tion “without upon the renewal threat of forfeiture of fees was legal submission of further factual and ar- specifically Merberg what deterred Mr. gument.” representing Although Monsanto. Merberg conference, did not attend this September On Monsanto’s coun- pro AUSA described his tem filed a own discussions sel appeal. notice of On Merberg concerning possible agreement September 8,1987, Monsanto moved for an by government expedited appeal, not to seek granted. forfeiture of which was Oral argument fees. The AUSA was for stated that the set October 1987. On October not enter into an Monsanto for such moved agreement. stay Judge pending appeal. trial Ward then his The trial stated position date for Monsanto and thirteen co-defend- invasion of the forfeitable as- originally ants was set for sets could November pay attorney’s be allowed to day 1987. On choice, argument, after oral Monsanto’s counsel of but repealed restraining 1. This section was Ward found that the order rendered effective November IS, 104(b), indigent eligible Pub.L. No. Monsanto and therefore (1986). Stat. 459 All the violations of this sec- appointed counsel. We cannot determine on charged tion with which Monsanto is occurred $35,- actually this record whether Monsanto has prior to that date. disposal, impact might 000 at his or what ability private have to retain counsel. 2. We note that the order does not $35,000 cash, apply to and that the com- as adjourned however, Judge Ward invasion position erate his January until of trial sets would be allowed only mencement pay CJA Image rates. See Carrier jurisdiction Corp. Beame, have over interlocu- (2d tory appeal pursuant Cir.1977), to 28 U.S.C. cert. denied, 1292(a)(1)(1982). L.Ed.2d 239 That attorney no made Discussion such “appearance” an arguably demon Ripeness A. very strates “chill” that Monsanto claims to be the effect of the forfeiture outset, we must determine At the provisions attorneys who would controversy ripe adjudi whether this represent otherwise RICO and CCE defend argues cation. The that it is ants. Such appearance an attorney not, mainly because Monsanto has failed to would not “significantly advance our adequate abili make an record of effect of ty legal to deal with the provisions ability presented on his issues nor aid us in their of choice. resolution.” obtain counsel See United Duke Pow Gelb, (2d Co. v. Carolina Study Envtl. Group, conclude, Inc., Cir.1987).3 59, 82, we for reasons While 57 below, explained this case must be Any L.Ed.2d 595 delay further be proceedings, remanded for further we do appeal, furthermore, fore have agree not that Monsanto has failed ade hardships caused Monsanto, since the impact quately to demonstrate the case already trial, was set for and his trial provisions ability his forfeiture on to retain preparation would obviously by be affected counsel. the resolution of presented the issue on appeal. We note also that Monsanto and true, government out, points It is as the many co-defendants are pending detained attorney appeared that no at the motion trial. hearing present proposed or thereafter to arrangement Judge

fee Ward. Never- Gelb, (2d United States v. 826 F.2d 1175 theless, already the district court had held Cir.1987), upon which the pretrial two conferences at which Monsan- relies, heavily clearly distinguishable. In indigence to’s de and efforts to obtain Gelb, the pursue defendants failed to their facto counsel were made known to the court. modify post-in- motion to vacate and/or informed, only by The court had been restraining dictment order the district pro by Monsanto’s counsel tem but also court, representing to the court that an AUSA, Merberg that James had made impending agreement representation contingent Monsanto probably counsel would moot the issue. agreement upon obtaining an from the agreement through, When the fell defend- government not to seek forfeiture of attor- appealed restraining ants then from the Then, ney’s hearing, fees. at the motion giving order to this court without the dis- the court was informed none of the opportunity any trict court to consider or attorneys by contacted Monsanto was inter- motion, stay decide their and moved here to representing him ested for the CJA-level restraining pending appeal compensation willing Judge Ward was expedite appeal. We concluded that to allow. restraining appealable, order was but because, therefore, denied the motions in view of de- purposes ripeness, For failure appropriate fendants’ to make an think it would have a futile exercise been bring provide record before the district court and attorneys Monsanto to who were “fine compensation opportunity uninterested in that court with an CJA-level tune” order to meet defend- simply into court to hear Ward reit- 1985) provisions (Supp. apply S.Rep. 3. Gelb dealt with the Ill forfeiture of 18 which here. See 1985); (Supp. apply U.S.C. § 1963 Ill Cong., reprinted which No. 98th 1st Sess. prosecutions. provisions RICO These were also Cong. U.S.Code Admin.News 1984 essentially enacted the CFA in and are 3380-81. provisions identical to the of 21 U.S.C. 853 78 objections, See, prospect

ants’ there was little reached this conclusion.4 e.g., United Id. at 1176-77. appeal. on Estevez, success F.Supp. (E.D. 645 869 Wis.1986); Ianniello, United States v. Here, contrary, Judge on the Ward did F.Supp. (S.D.N.Y.1985); United States motion, rule on Monsanto’s and he made Rogers, F.Supp. (D.Colo.1985). clear his intention to adhere to the CJA-lev Compare Badalamenti, United States v. compensation. el limit on There is thus F.Supp. (S.D.N.Y.1985) (find- here, nothing just to “fine tune” a clear ing Congress did post-con- not intend issue to be decided. The effect of the viction provisions already paid forfeiture ability Monsanto’s to an accordingly attorney, indicating to retain counsel of choice is re- enough certain for our review this time. straint assets that would otherwise be Land, See United States v. One Parcel used to retain counsel is a “differ- (D.C.Ill.1985) (where F.Supp. problem[]”). ent attorneys appearances had not filed It Congress, is clear that in enacting the yet accepted fees, had not issue wheth CFA, intended loophole to close a in the fees are excluded from forfei previous criminal forfeiture scheme that 1985) (Supp. ture under 21 III U.S.C. § had allowed defendants to evade forfeiture ripe adjudication); was nonetheless party means third prior transfers Rogers, conviction. S.Rep. Cong. No. 98th (D.Colo.1985) (where attorneys en reprinted 1st in 1984 U.S.Code Sess. appearances” tered “conditional which Cong. (herein- & Admin.News would be if attorney’s revoked fees were after Report”). “Senate The courts that held forfeitable under 18 U.S.C. Congressional have found no intent to cov- 1963(a)(3) (Supp. III proceed court legitimate attorney’s fees have essential- issue). ed to decide forfeiture ly Congress concluded only that intended regard Nor language do we the CFA tD reach party third fraudulent vacate, Ward’s denying the motion to transfers, such attorney’s as “sham” fees. prejudice that it was “without to renewal See United States v. Harvey, 905, upon the legal submission further (4th Cir.1987) (surveying the cases argument,” precluding factual at this rejecting position), reh’g in banc their Any application time. subject is to such granted sub nom. Caplin litigation progresses, renewal as a but that Drysdale, Chartered June does not detract from the fact that an (hereinafter “Harvey”). agree, how- refusing order has been entered to dissolve ever, Harvey, the only other circuit or modify injunction an meaning within the court case that has addressed this issue 1292(a)(1)(1982). of 28 U.S.C. Contrast directly, finding Congres- cases City Freeman, Fort Lauderdale sional of non-fraudulent attor- (5th Cir.1952) (appeal dis- ney’s fees err in statutory interpreta- their ruling missed where no made on motion to tion. injunction, hearing dissolve of which was deferred). First, plain language of the statute is categorical and exception contains no B. Statutory Claim attorney’s “Any person fees: convicted of a violation Monsanto’s first ... shall forfeit to contention is that the United (1) we need not even any property address the States ... constituting, constitution or ality from, of the provisions any proceeds derived person because ob- Congress tained, provisions never directly indirectly, intended the or as a result of violation_” apply to property pay legitimate used 853(a) such 21 U.S.C. § 1985) fees. (Supp. Several courts have Ill (emphasis added). The Act Many addressing statutory cases provision feiture of RICO. These authorities here, constitutional equally pertinent and/or issue have done so in the are since the RICO and challenges context of provisions virtually forfeiture under 18 CCE forfeiture identical. (Supp. U.S.C. 1963 Ill supra the criminal for- See note 3. States, forfeiture of only exception one S.Ct. 298- allows (1983) (quoting Turk 78 L.Ed.2d 17 person, and transferred to a third property ). ette mention fraud at exception does not all: passages legislative history Three in the subsequently is Any property that such upon by have been most relied the courts person other than the to a transferred that have construed the exempt statute to special subject of a may defendant be the legitimate attorney’s fees forfeiture. and thereafter shall

verdict of forfeiture The first is a in report footnote a House States, to the United accompanying early be ordered forfeited draft of the 1984 “[njothing transferee establishes unless the CCE forfeiture amendments: (n) this this hearing pursuant to subsection section is intended to interfere with a person’s purchaser section that he is a bona fide Sixth Amendment to coun- sel.” H.R.Rep. No. Part 98th property at the of such who value Cong., 2d Sess. 19 n. As the court reasonably with- purchase time of was in Harvey concluded, is footnote some- property out cause to believe that the cryptic any what and could mean of a num- subject was to forfeiture under this sec- things, ber none of which amounts to a tion. clearly expressed Congressional intention 853(c) 1985) (Supp. (empha- Ill 21 U.S.C. § should be forfeita- added). sis ble when based sham fraudulent As the Fourth Circuit observed Har- Harvey, transactions. See 814 F.2d at 918. vey, the common law meaning “bona Furthermore, very next sentence of notice,” purchaser” simply fide “without report belies intention to establish attorney may prop- and an have notice that statutory concerning rule forfeiture of erty though to forfeiture even Committee, attorney’s fees: “The there- receipt exchange such fore, does not resolve the conflict in Dis- necessary legal defense ser- opinions trict Court on the use of restrain- is not fraudulent or less than an vices ing impinge person’s right orders that on a length arm’s transaction. to retain counsel in a criminal case.” H.R. But United States F.2d at 917. cf. loc. cit. Rep. No. (5th Cir.1987) (court 809 F.2d 249 footnote, ap- passage, The second also a suggest payment does not of fees to analysis by in pears the Senate Judi- always counsel will immunize fees bona fide ciary purchas- of the Committee forfeiture, post-trial only that a de- provision in is exception the CFA: “[t]he knowledge charges attorney’s fense deny par- relief to third to be construed to ipso against disqualify not client does facto acting as nominees of the defendant or ties purchaser). claim to be bona fide knowingly engaged in sham or who have Second, history legislative since the Report transactions.” Senate fraudulent point courts is which Monsanto and several 47, Cong. & Admin. 209 n. 1984 U.S.Code clearly express a inconclusive and does not Again, agree 3392 n. 47. News legislative contrary intent to the that Harvey that this statement does not state meaning statutory language, plain of the nominee, only imply or fraud- sham See United meaning prevail. must may party transactions lead to third ulent Turkette, 576, 580, v. States 452 U.S. 101 forfeiture, plain in contravention of the 2524, 2527, (1981) S.Ct. 69 L.Ed.2d 246 Harvey, 814 of the statute. See meaning (where statutory language unambiguous, Indeed, one court so F.2d at 916-17. went language regarded ordinarily must be interpolate “only” far as to the word conclusive, clearly ex (bracketed, sure) absence of quotation to be into its pressed legislative contrary) (par legislative history support intent of its this Safety Consumer Product tially quoting attorneys’ sham fees conclusion Inc., Sylvania, Comm’n GTE to forfeiture. See United subject 447 U.S. were 2051, 2056, 1332, Rogers, 100 S.Ct. 64 L.Ed.2d (1980). (D.Colo.1985). also Russello v. agree that the addition United We is required position; to sustain the 917-18, we do 814 F.2d at that we are not agree not that the addition is appropriate. presented with “fair alternatives” of con- here, struction and accordingly conclude passage The third comes from the same purchaser” that the “bona fide exemption report: purpose Senate provi- of this “[t]he 853(c) of 21 1985) U.S.C. (Supp. Ill does permit voiding sion is to of certain exempt legitimate, not non-fraudulent at- pre-conviction po- transfers and so close a torney’s fees from forfeiture. loophole tential whereby current law criminal forfeiture sanction could be avoid- that were ‘arm’s C. Constitutional Claim

ed transfers length’ transactions.” Report Senate It is clear that the sixth amend Cong. 1984 ILS.Code & Admin. right ment to counsel right includes a 3383, added). (emphasis News The privately See, retained counsel of choice. very report states, next sentence of the e.g., Curdo, United States v. 14, 694 F.2d hand, however: provi- the other this “[o]n (2d Cir.1982). 22-23 “An accused who is operate sion should not to the detriment of financially able to retain counsel must not innocent bona purchasers of the de- fide deprived opportunity to do so.” fendant’s property.” Id. 201, 1984 U.S. Burton, States v. 485, 584 F.2d Cong. Code & Admin.News 3384. Read as denied, (D.C.Cir.1978), cert. whole, passages establishes with clari- (1979). S.Ct. 59 L.Ed.2d 34 It is that “bona ty only purchasers” in the fide clear, equally however, right sense, i.e., normal those who have no notice counsel of qualified, choice is and can be taint, of the property’s will not be outweighed by countervailing governmen to the penalty. There is certain- See, e.g., tal United States v. interests. ly expression no clear of an intention to Paone, (2d Cir.), 782 F.2d cert. exempt from paid forfeiture fees to attor- — denied, -, U.S. 107 S.Ct. neys notice, solely who are on because (1986); In Re L.Ed.2d 2-6 Jury Grand payments those constitute Subpoena Upon Doe, Served for actual services rendered. (2d Cir.1985)(in banc), denied, cert. sum, In contrary legisla- evidence of U.S. 89 L.Ed.2d intent, singly tive viewed both and in com- The two courts that have di bination, thoroughly ambiguous, and is rectly addressed the issue of the constitu certainly enough not clear to warrant de- tional choice in the parture plain meaning from the of the stat- context of the CFA have found that the ute. The courts that have read the “bona government’s interest forfeiture is out purchaser” fide legit- to include weighed by the defendant’s interest in us imate typically fees have done so ing to retain counsel. in order to confronting avoid the sixth 924; Nichols, 814 F.2d at question amendment which results from a (D.Utah 654 F.Supp. 1987). See, contrary e.g., United interpretation. disagree with reasoning and the results Estevez, F.Supp. 645 of those cases. (E.D.Wis.1986); United States v. Ianniel- First, lo, Harvey we think that both F.Supp. (S.D.N.Y.1985); 644 and 456 Nichols undervalue the government’s Badalamenti, United States v. inter- est in F.Supp. restraining obtaining and (S.D.N.Y.1985); forfeiture Rogers, of assets that would otherwise be used to (D.Colo.1985). compensate private This counsel only appro- course is of choice. The priate, however, general governmental where a fairly statute is interest in forfeiture susceptible to more is interpretation, “strip [racketeering drug than one to and traffick- in ing] which event the interpretation organizations offenders most con- of their sistent with constitutionality power.” Report 191,1984 should be economic Senate adopted. See Rumely, Cong. U.S.Code & Admin.News 3374. The U.S. specific S.Ct. interest post-indict- embodied in the (1953). L.Ed. agree ment restraint provi- and “relation-back” (2d grounds, from “de rev’d on other 767 F.2d 26 prevent defendants sions is to removing, Cir.1985). transfer feating Clearly, forfeiture he would thus attain a concealing prior assets to ring, their indigent or benefit not available to defendants 1984 U.S.Code conviction.” Id. do not have tainted funds at who their in 3378. The court Cong. Admin.News disposal. importance of these Harvey conceded importantly, More we also conclude that outweigh interests, them found legiti- Harvey and Nichols overvalue the taint “any ‘right’ by an accused to transfer macy using in a defendant’s interest counsel, to his defense ostensi property ed possibly Specifically, tainted assets. we reality in as a bly attorney as fees but Harvey are not convinced court’s Harvey, 814 prevent forfeiture.” sham to attempt distinguish forfeiture and re- flatly The court in Nichols F.2d at 924. straint of assets under the from CFA “[exempting attorneys’ concluded situation in which a criminal defendant preconviction fees from a simply prevented using be from de- pur the statute’s does not undermine ... contraband, money such rivative seized drug stripping dealers of their eco pose of immediately drug after a sale or a bank Nichols, v. nomic bases.” United States robbery, Harvey to retain counsel. distin- F.Supp. at 1558. See also United guished such situations these terms: (5th 1463, 1474-75 Cir.1986) cases, suffi (exempting from restraint In such seized pay attorneys reasonable cient assets property manifestly that of someone oth- necessary living expenses does fees and preservative er than the accused and for economically defendant to benefit not allow purposes. [, Forfeiture under the Act on crime), modified, 809 F.2d 249 hand,] may obviously the other reach party to which no third has a think, approach, This amounts to an superior plight The claim. financial policy impermissible judicial substitution of might sequestration result from of con- Congressional policy. Because of the simply piece traband of a with that complicated protracted and nature RICO vagaries very resulting from other of life that prosecutions, CCE considerable money may paid impossible private to defense hire amounts make it coun- If, concluded, counsel. as we have Con sel.

gress exempt did not see fit to tainted Harvey, 814 F.2d at 926. payment assets from forfeiture for the though property subject to forfei Even legal expenses, reluctant to con we are may not be “that of ture under the CFA significant clude that such transfers do not accused,” the Har someone other than ly impede statutory purpose. Further overlooks the fact that vey rationale “[a]ll more, it seems anomalous to contend that title, right, and interest [forfeitable] privately retained counsel essential (a) of this property described subsection the effective defense of RICO and CCE vests in the United States section prosecutions, as those who favor rise to giving commission the act attorneys’ fees from forfeiture invari this section.” 21 U.S.C. under maintain,5 ably arguing while that a de 1985) added). 853(c) (emphasis (Supp. III fendant who is enabled to retain Ginsburg, See United States solely possesses tainted because he Cir.1985)(while (7th government's activity funds as a result of criminal does profits proceeds of racketeer interest possession not benefit from his of those ing activity until convic does attach Subpoena funds. In re Jury Grand tion, at the time of the act 2, its interest vests January (Pay Duces Tecum 1985 dated violation), racketeering den), 839, (S.D.N.Y.), the F.Supp. 605 n. 14 that constitutes (D.Colo.1985) Rogers, F.Supp. jE.g., 5. Brief of The Association of the Bar of The 1349-50 cases, York, exigencies ap- City (given court Advo- the of RICO of New Committee on Criminal pri- inadequate for cacy, support pointed counsel is substitute as Amicus Curiae in of Defendant- counsel). Appellant vately at 13-14. See v. retained also United States denied, (3d Cir.1981) cert. 475 U.S. 106 S.Ct. (government cannot rely on (1986). 89 L.Ed.2d 302 indictment alone to establish likelihood properties subject forfeiture). to distinction, us, it The real seems to is the degree of likelihood that the property is As disinclined as arewe to establish an superior exempting to the claim of a absolute third rule property ear- party (the depositor, forfeiture, or its marked for bank the case fees from government, equally we are robbery; postulate a the disinclined to bank the an assets). allowing case of absolute rule forfeitable the Harvey, See to impose (sequestered indigence deprive 814 F.2d and at 926 RICO and contraband CCE defendants of “manifestly” property opportunity the to re- someone other private tain counsel accused). merely by obtaining than In the an the case of the bank indictment. give Such a rule would the robber arrested with loot in his hands or government “the ultimate drug the tactical advan- money dealer arrested with from tage being able to hands, competent exclude a sell in his it is manifest that the counsel as simply it chooses” by property probably “append- is and contraband thus ing charge a of forfeiture to an indictment question The is forfeitable. whether re- under RICO” or CCE. United States straint and forfeiture under the CFA is Rogers, (D.Colo. 602 F.Supp. analogous more to the situation in which 1985). obvious contraband is seized than to the property which situation is seized even In our search for a compro- reasonable though suggestion there is no it is mise statutorily between the posited inter- any related to activity. criminal See Unit- ests of the qualified and the ed States ex rel. Brierley, Ferenc v. 320 right of a defendant to retain counsel of (E.D.Pa.1970) (right to retain choice, we have found an alternative rule by government’s counsel violated suggested by the line of circuit court cases pre-trial failure to return money seized in requiring a post-restraining order adver- alleged excess of stolen). sum to have been hearing sarial respect with to forfeiture-re- us, In the before case where the is restraining lated orders.6 real contraband, estate rather than obvious 928-29; F.2d at United States v. the only certainty source of prop- the F.2d (5th Cir.1986), 1466-70 mod- erty probably proceeds is the of criminal ified, (5th Cir.1987); 809 F.2d 249 is the activity indictment itself. But Crozier, see States v. United States Long, (9th Cir.1985);7 F.2d Lewis, attorney pro argued Monsanto’s tem approved, for such a under circumstances there hearing solution," "possible below as a presented against procedur- and a claim request Ward violated, denied the process and the issue al due eighteen had been an pursued appeal. was not 58,850 We note that this delay month by the seizure of the expressed situation meets the concern inspecting in our Customs Service officer to the colleague's represent dissent as to who would a initation the United States of a civil action case, hearing defendant at such a suggest in this money. Upon remand rule, general Crozier, prospec- further that as a distinguished the Ninth Circuit crimi- tive unwilling represent defendant nal forfeiture under the CFA from civil forfei- at an paid laws, extended trial because unable ture under the customs and adhered to its from forfeitable prior assets would ruling, nonetheless be pro- 674 F.2d at that due willing represent relatively him at a requires brief adversary hearing cess pretrial hearing to make those assets available restraining the continuance of a order based compensate attorney representa- upon for trial forfeiture counts in an indictment. 777 tion. F.2d at 1382-84. any concerning holding, To avoid doubt our Crozier, 7. An earlier decision in pre-trial adversary hearing we rule that a (9th Cir.1982), was vacated required remanded question where fees is Court, Supreme (1984), 468 U.S. 1206 implicated, ultimately or not the law is whether of, light alia, further consideration in inter hearing required Unit- settled that such a Eight ed Eight Thousand respect Hundred and and all orders based ($8,850) Fifty Dollars in United Currency, in a forfeiture counts criminal indictment. words, 76 L.Ed.2d special In other in view of the sixth case, In the Supreme latter presented Court amendment considerations where a 1985), (8th Cir.), requirement post- omits that for de 1324-25 cert. 759 F.2d orders, nied, 853(e)(1)(A) 21 U.S.C. indictment (1985); Spilo 1985), L.Ed.2d (Supp. Ill we conclude with Harvey (9th Cir.1982); 612, 616-19 tro, F.2d hearing a are that notice and constitutional- F.2d 915— Long, 654 v. United States (i.e., required as a matter of amend- ly fifth Cir.1981). (3d But see United States v. process)8 respect post-in- ment due Cir.1986); (10th Musson, restraining orders, but are not dictment Draine, v. United States statutorily required. (S.D.Ala.1986); Report 195- Senate regard have also differed with Courts afforded, hearing is as Where such a government’s hearings. burden at such be, restraining agree it must and we re pre-1984 amendment cases Several continued, conclude is thereafter order demonstrate, quired by require is no sixth amendment that there indictment, independent a evidence of property be made restrained ment that the probability convincing jury beyond fees. a a available doubt that the defendant reasonable both post-restrain- required that have Courts the statute and that the assets has violated done so in the ing hearings have order forfeiture, are and we concur process chal- procedural due context Lewis, that view. See freezing of a defendant’s lenges to the 1324; See, Spilotro, v. F.2d at United States e.g., to trial. property prior 618; concluded: Harvey Long, 928-29. v. 814 F.2d at 680 F.2d at United States why the appears hand, “No reason F.2d at 915. On the other Unit any public unduly or burdened legisla relying on the ed States the same by providing interest disserved CFA, history tive of the 1984 concluded hearing post-deprivation sort of immediate the indictment itself constitutes setting required post-indictment as is in the showing” continuing freeze “strong setting pre-indictment by in the [21 U.S.C.] order, grand jury’s finding although “the contemplated is Fed.R.Civ.P. the defendant probable cause that such courts have held 65.” Some crime and its deter should be tried for the hearings the restrain- are consistent with potentially that certain assets mination 853(e)(1)(A) ing provision, order 21 U.S.C. § are not irrebuttable.” forfeitable ... require- (Supp. Ill because “[t]he (at Report 203 at 1470. Senate apply to the issuance of ments of Rule 65 post-indictment, hearing modify or vacate restraining injunctions orders all order, restraining court is not to entertain of the United States.” United the courts indictment). The validity challenges to Thier, 801 F.2d at 1468. Other court agree that the district seem to courts superimposed requirement courts have strength of the consider the must at least adversary hearing upon section of an independent government's evidence 853(e)(1)(A) the Act because “to the extent government has a that the must determine re- parte the issuance of ex authorizes succeeding trial. Such a likelihood straining orders after indictment without may as it seem requirement, anomalous hearing any post-deprivation other than a context, foreign. totally is not a criminal trial, it fifth amendment criminal violates 853(e)(l)(B)(i)(Supp. Compare U.S.C. § guarantees.” Harvey, 814 process due 1985) (in application for a ruling III on an 853 of the stat- F.2d at 929. Since section order, restraining court -indictment pre very specifically requires notice and ute there is substantial must determine restraining or- hearing pre-indictment prevail probability that United States will ders, 853(e)(1)(B) (Supp. Ill 21 U.S.C. § passed the situation where a impacts adversely upon the retention choice, overruling sixth challenged limited as violative of the of counsel an ultimate above, authority the line of cited of which of choice. Crozi- to counsel amendment representative, affect our hold- would not 7, supra. ing ruling specifically see note encom- 8. But herein unless that 84

on the forfeitability).9 issue of legitimate attorney’s fees exempt be from any post-trial future forfeiture. recog- We Requiring an hearing, adversarial at nize may that this result ain situation in government which the has the burden to government which the does not meet its demonstrate the likelihood that the assets burden at pre-trial the forfeitable, hearing, provide are procedural will a obtains a against government’s check verdict of the favorable forfeiture at trial discretion the to limit of CCE and RICO execution which is defendants’ choice hindered totally or of simply by obtaining precluded a by pre-trial ruling. forfeiture the Never- charge in the govern theless, indictment. If the persuaded, arewe as was the court ment cannot the demonstrate in likelihood 814 F.2d at only that not jury that a would find the assets to be the pre-trial the orders, “freeze” but also the proceeds crime, of the interest of the de threat of post-conviction party third forfei- fendant in using property the to retain ture, may effectively prevent a defendant prevail. counsel of choice should Brick being Cf. able to retain counsel of choice. Attorneys’ Fees: The Im ey, Forfeiture pre-trial At the stage, the where defendant pact RICO and CCE on the Forfeitures presumed innocent, we hold that if the Counsel, Right 72 Va.L.Rev. 524- government cannot make a sufficient show- (1986) (where government’s ing to justify restraining order, a the de- allegations unfounded, case is similar to fendant should not have to bear the risk government that where refuses to return that counsel will still be deterred assets). untainted the prospect of disgorging attorneys’ fees

In after the the trial.10 To event district the court finds extent some government that the funds ultimately has not met its burden found to be forfeitable at order, and lifts the restraining moreover, trial will remain in the of attorneys, hands we think the district court should also or we view this as a necessary cost in this der that funds thereafter pay used to difficult balance between the interests of courts, 9. requiring Some adversary an hear government. available to the In view of the context, ing in suggested the forfeiture have foregoing, we require also will not the kind of the granting traditional prelimi standards for a balancing" "harm ap- is involved when the nary injunction incorporated are into such hear plicant injunction for an can establish “suf- ings. See United States v. 801 F.2d at ficiently questions going serious to the merits” 1470; Spilotro, at F.2d rather than likelihood of success. requires This applicant court pre that the a for liminary injunction establish: 10. This problem should deal suggested with the Badalamenti, in United States F.Supp. (1) irreparable (2) (a) harm and either a like- (S.D.N.Y.1985). The court there envi- merits, (b) lihood of success the suffi- sioned a wealthy situation in which a defendant ciently questions going serious to the merits qualify indigent could not ap- and obtain ground litigation make them a fair and counsel, pointed but would be unable to a retain hardships tipping balance of decidedly in its private counsel because post-tri- of the threat of favor. al attorney’s forfeiture of Co., fees. We Baker’s are not Aid v. Hussman Foodservice here, faced (2d with such Cir.1987), possibility a since the and cases there cited. hold, district court has infra, found that Because we enforcement of govern- the that once the restraining order indigent ment fails will render Monsanto obtain restraint of assets qualified appointed needed for thus fees it counsel. also loses Sim- the ilarly, post-trial importantly, prohibition to seek post- forfeiture of transfer- services, recapture red trial to counsel fee under defense these circumstances should irreparable conclude obviate the element of "conflict interest” concern expressed injury always present will be in such the cases cases. The and literature on this see, subject, e.g., element of Ianniello, likelihood success on the merits addressed, course, F.Supp. will (S.D.N.Y.1985), be inquiry into respect likelihood that will potentially convince simultaneous and con- jury guilty flicting that the represent defendant and the dis- concerns to diligent- client puted subject assets ly avoiding post-trial to forfeiture. Since we while forfeiture of his fees. process rule that requires due showing suggest reason, that for quotation success," "likelihood of we do not Badalamenti, consider that from United States v. establishing alternative of "sufficiently seri- (S.D.N.Y.1985), colleague’s our questions going ous to the merits" inapposite should be dissent is to the rule stated herein. convicted at trial and the sixth residential the defendant’s government and properties question will be of choice. right to counsel amendment procedures generally The forfeiture. fol- hand, if the On the other hearings lowed Fed.R.Civ.P. should hearing, we con- at the meets its burden 853(e)(3) In apply. view of U.S.C. § has no sixth the defendant clude 1985),however, Ill (Supp. the district court exemption of assets right to amendment will not be bound the Federal Rules of attorney fees either from earmarked hearing. at the Evidence See United post-conviction or from restraint 1332, Rogers, F.Supp. v. government has es- Once the forfeiture. (D.Colo.1985). “balancing” Nor the will that the assets a likelihood tablished traditionally utilized in Rule 65 hear- tests forfeitable, is more analo- the case indeed ings applicable, supra; be see note 9 a defendant which gous to the situation government’s the likelihood of success in is mani- contraband that access to is denied convicting obtaining the defendant and for- interest of someone festly subject to the disputed of will feiture the assets be at right The to retain other than the accused. government In the issue. the event meets absolute; choice is not counsel of hearing the the restrain- its burden at and and, the defendant does event that the continued, no ing order is hearing, he is post-restraint prevail at order will provisions the the under appointed counsel guaranteed still pri- to be made to enable Monsanto retain no constitu- We see sixth amendment. the choice, except extent vate counsel of to the requiring that a defendant principle tional allowing payment fees the results pay private counsel ability to whose assets. at CJA rates from the restrained property possession of solely from the ad- as the district court has Inasmuch activity, criminal acquired by he has which the commencement of trial until journed has, Congress declared to property which deny mo- January Monsanto’s forfeitable, placed position in a must be be pending appeal as s^ay of trial tion indigent of an defendant preferable to that event, assume, We would moot. property at his have such does not who capable district experienced the and disposal. litigation pend- this whom judge before Judge sug approve Ward’s alsoWe to manage his calendar so as ing would may be in gestion that forfeitable assets scheduling concerns any legitimate meet purpose paying vaded for the appeal. this resulting from attorney any private at CJA rates to fees be choice who would of the defendant’s Conclusion compen him willing represent for such to to the district reverse and remand We at government the conceded sation. As proceedings not inconsist- court for further have argument, the oral shall opinion. The mandate ent with this (to anyway appointed pay CJA rates to issue forthwith. counsel), practical differ it makes little payment from as comes ence whether OAKES, dissenting: Judge, Circuit to the or from sets forfeitable appeal- ripe agree I that the case governmental source. Further another district court agree I also that the able. more, rule would enable a criminal Congress did not intend holding that cases (as to retain counsel choice defendant CCE provisions of RICO and the forfeiture suming willingness accept CJA counsel’s fees, e.g., apply rates), minimizing the incursion thus Estevez, F.Supp. v. United States limited constitutional the defendant’s erroneously (E.D.Wis.1986), were 871-72 to counsel of choice. purchas- Reading fide” the “bona decided. 1963(i)(6)(B) district U.S.C. accordingly provision, remand attorneys who hearing which the to cover (Supp. conduct a IV court to their believe cause to the burden of estab- have reasonable government will have subject might payable out lishing probability Monsanto will improperly plain contorts partisan advocacy on both sides of a language of the statute. case promote See United will best the ultimate objec- (4th guilty tive that the be convicted and the Cir.1987), granted go innocent reh’g en banc sub free.” nom. See also Strickland v. Caplin Drysdale, Washington, 685-86, v. United States U.S. (June 11, 1987). all, (1984); S.Ct. Chartered After L.Ed.2d 674 noted, County Dodson, Polk Leval one is more on U.S. 318- “[n]o 445, 449-50, money may notice of likelihood that L.Ed.2d 509 process The worthy itself is prohibited activity come from ... than protection. lawyer represent who is asked to the de- fendant in the trial of the indictment.” By failing to credit the institutional inter Badalamenti, United States 614 ests in system, a fair adversarial major (S.D.N.Y.1985). ity opinion provides the Government with a negative, unwholesome, power indeed an However, majority opinion’s the charac over the defendant’s choice of in right terization of the to counsel merely very the type complex of criminal case using “a defendant’s in possibly interest astute, where experienced counsel is most tainted permits assets” deference to con needed. RICO and CCE cases involve gressional policy in the conflicting face of vague statutes and penalties. severe If a rights. constitutional The Sixth Amend was, conspiracy charge in Learned Hand’s implicated ment is only on the individu words, “darling the of the prosecu modern defendant, al particular level of the nursery,” tor’s States, Harrison v. United also on the institutional level of the crimi (2d Cir.1925), 7 F.2d what would justice Cloud, nal system as a whole.1 See say he of a charge RICO whose three or Forfeiting Attorneys’ Ap Fees: Defense conspiracies four charged “predi as the plying Theory an Institutional Role to cate” E.g., acts? United States v. Ruggie Rights, Individual Constitutional Define ro, (2d Cir.), 726 F.2d 918-19 cert. 8-15; Note, Against Wis.L.Rev. denied, 469 U.S. 105 S.Ct. Attorneys’ Fees Under Forfeiture RICO: of L.Ed.2d 60 seriously Can we con Protecting the Constitutional proper tend that a balance would be effect Rights Defendants, Criminal 61 N.Y.U. ed in by giving defendant, such cases a (1986). Therefore, L.Rev. I “indigent” by made the Government’s as agree with the in Harvey, result potential sertion of a claim, a 924-26,2 at analy and would not limit the young attorney underfunded, from an over sis, as majority, weighing does the the public worked defender’s office for the en Government’s against interest in forfeiture suing 6-15 Cloud, month trial? See the using proper defendant’s interest in his Wis.L.Rev. at 47-48 lawyer & n. 224. Or a ty to employ Rather, counsel of his choice. appointed under Act, the Criminal Justice I would also systemic consider the interest with its limitations on fees attorneys, of permitting perform defense counsel to 3006A(d)(l) (1982 18 U.S.C. Supp. & IV proper their role in adversary system our investigative expert services? justice. As Supreme Court said 3006A(e) (1982 18 U.S.C. Supp. IV Cronic, 648, 655, 466 U.S. 1986). See United States v. Reckmeyer, 2039, 2044-45, 104 S.Ct. 80 L.Ed.2d 657 F.Supp. 1191, (E.D.Va.1986), (1984) (quoting York, Herring v. New aff'd sub Harvey, nom. 814 F.2d 905. 853, 862, 2550, 2555, U.S. 95 S.Ct. (1975)), L.Ed.2d 593 very premise of Congress While may “[t]he towish consider the our adversary system justice of criminal mini-trial majority opinion that the Although 1. possible this court wherever ignored. must Fifth Amendment concerns cannot be construe statutes to sults, Harvey, avoid unconstitutional re- 814 F.2d at 917-18. Benson, 22, 62, Crowell v. 285, 296, (1932), course, L.Ed. 598 here neither the held that the Act could legislative history plain language nor the properly of the reach fraudulent or sham transfers to supports statute an attorneys’ attorney, agree an F.2d at and I Therefore, fees from forfeiture. the Sixth and with that also. attempt forfeiture,” to revise the stat proposes the evidence on demands, meet the constitutional this issue primarily ute to would consist priv- First, ileged I proposal problematic. am curi matter confided to him represent might client. He ous as to who will defendant furthermore be found Second, accepted hearing. theory contingent have a fee in criminal case in showing 2-106(C), violation of DR burden likelihood Government’s since his retention of his on the fee would of success merits of criminal de- pend gaining on acquittal charges in the forfeitability the issue of client’s trial. But, give The statute would prac at- the assets is substantial. as a torneys negotiate a motive guilty matter, rigorous absent cross-exami tical plea forfeiture, that did not involve rath- production or the of evidence to nation fight er than expending the case valuable show that defendant’s was increasing time and incurring the risk of sources, earned or derived from forfeiture. the Government will have little trouble Thus, meeting that burden. the mini-trial at 196-97. protect do little to the interests of Surely this statute not intrudes sys either the defendant or the adversarial the individual’s to secure coun- Finally, we should be hesitant tem. sel of his very choice. It shakes the foun- procedural step light create this new justice dations of our system. criminal Supreme rejection Court’s firm Accordingly I dissent. respect new universe of mini-trials in Jacque

class actions. Eisen v. Carlisle &

lin, 156, 177-78, 40 L.Ed.2d 732 statute, permits

The forfeiture which recapture attorneys’

Government conviction, paid before is unconstitutional NATURAL RESOURCES DEFENSE Amendment, possibly at least on Sixth INC., COUNCIL, Council, the Parks process, on Fifth grounds. Amendment due Inc., Clearwater, Sloop Hudson River See United States v. Inc., Benbow, Todd, Terence H. Eleanor (5th Cir.1986) (Rubin, J., concur Sandler, Reitman, Ross Paul Wilber Cloud, ring); 1987 Wis.L.Rev. at 50 n. 237. Simmons, Sanders, force D. Virdell M. Bassett, also Jackson, Antoinette C. and Gloria Ver (D.Md.1986)(“Although dell, Plaintiffs-Appellants, aspect the ‘relation back’ of the forfeiture conviction, only triggered by statute is MARSH, Jr., Secretary as of the John O. practical ap effect is that if forfeiture is Army, Department Army, of the John plied attorneys’ impact fees the true Lehman, Navy, Secretary as of the Wil conviction.”), felt prior sub nom. aff'd Ryan, Navy liam J. as Director of the put 814 F.2d 905. Leval it Office, Support Department Resale and even better in Badalamenti: Watt, Navy, and James G. lawyer foolish, A ignorant, who was so Interior, Secretary of Defendants- beholden or idealistic as to take the busi- Appellees. ness would find himself in po- inevitable No. Docket 86-6272. sitions of conflict. obligation His to be well informed on of his Appeals, States Court of client’s case would conflict with his inter- Second Circuit. learning est in not facts that would en- 9, 1987. Submitted June danger telling fee him his fee was Decided Dec. proceeds illegal activity. If he fight made efforts the forfeiture

claiming he was “reasonably without

cause to believe that was

Case Details

Case Name: United States v. Peter Monsanto

Court Name: Court of Appeals for the Second Circuit

Date Published: Jan 29, 1988

Citation: 836 F.2d 74

Docket Number: 436, Docket 87-1397

Court Abbreviation: 2d Cir.