01/30/13 – Larry Salzman – The Scott Horton Show

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All right, y'all.
Welcome back to the show.
Our guest today is Larry Salzman from the Institute for Justice.
That's IJ.org.
Welcome to the show.
How's it going?
Hi, Scott.
Thanks for having me on.
Well, you're welcome.
Thanks for joining us.
Really appreciate it.
And you guys have won a great victory here on the issue of civil forfeiture.
I'm going to get it wrong.
Caswell is the name of the motel.
You've got it right.
It's the Motel Caswell.
And indeed we did.
We had a complete victory for the Caswell family.
It's the Tewksbury Realty Trust.
That's what threw me off.
But that is the same case, right?
It is the same case.
Patricia and Russell Caswell, who own the Motel Caswell, own it through a trust.
So the court documents say Tewksbury Realty Trust.
But it's the same case.
And what happened in this case is typical of what happens in a lot of asset forfeiture cases, a lot of civil forfeiture cases in which these laws give tremendous discretion to prosecutors to use the law to take the property of innocent people.
And surprisingly, I think surprisingly to most people, the civil forfeitures allow the government to take property from people who have never been convicted or even charged with a crime.
And when they get the assets that they take from the forfeiture, that goes directly to the law enforcement's budget that took the property.
Now, when I first learned about this, I was explaining to the audience earlier, when I first heard of this, when I was I think in junior high school, it could have been like ninth grade, something like that.
I was absolutely astounded.
This is the kind of thing where just on the face of it, it's the most un-American thing in the whole world.
You know, what do you mean that they can just take your property?
They don't even have to necessarily even accuse you of doing anything wrong.
How could that possibly be in America?
And you know what?
I hate to admit it, but I got quite a few gray hairs on my chin now.
It was a long time since I've been in ninth grade, and it's still this policy just keeps rolling on.
Especially as you say, the cops themselves get to keep the money that they take.
Well, there's no conflict of interest there or anything.
Right.
That's really one of the main problems with the civil forfeiture laws is the law enforcement agencies have this direct financial interest in what they forfeit, which naturally encourages some law enforcement agencies to police for profit rather than safety or justice.
And you have exactly right that the civil forfeiture laws do not require the property owner to be guilty of any crime to take the property.
These laws have been on the books for many, many years, almost since the founding of the country.
But during the 1990s, they were changed a little bit to give the police greater powers to fight the war on drugs.
And since that time, there's just been an explosion of the use of civil forfeiture.
And many more innocent people have been caught up in them.
We were very fortunate in the casual case to find a great client and a great situation.
The judge in the United States District Court of Massachusetts heard us and found that he was innocent and that the government could not use these laws to take his property.
All right.
Now, one of the things that I read about this particular case was that a DEA agent under cross-examination by you guys basically admitted that, yeah, really, my job is looking for property to take.
And then we try to come up with an excuse to take it sort of a thing.
And that sort of blatant admission hardly ever comes out in these sorts of things.
It made me wonder whether that's really why you won, because it was just so blatant that, oh, yeah, us, we're thieves, basically, and we pretend and call it law enforcement.
I mean, what's the judge supposed to do in that case?
You know, absolutely.
So what you're talking about is a DEA agent was deposed and said that his job was to sit in an office in Boston and look through the Internet and look through newspapers for stories involving properties that had drug crime occurring on them.
And when they met certain criteria, including that they had enough equity in the property, he would refer those to the Department of Justice for forfeiture action.
In this case, the DEA agent found the Motel Caswell property by reading about an article in the paper or on the Internet, he's not sure, approached the local police agency, the Tewksbury Police Department, explained to them this program that they have called equitable sharing.
The federal government has an equitable sharing program so that if the federal government takes the property and the local authorities cooperate in that case, the local authorities can get 80 percent of what was taken from the property owner.
So in this case, the local authorities, the local police department, stood to gain more than a million dollars kicked back from the federal government if they were successful in the forfeiture action.
OK, now I'm just using my imagination here, but something tells me that this must have been, you know, more or less outright banned dating back to the foundations of the country, that they must have had to overturn some serious case law, some serious, you know, statutes in order to implement this sort of thing in the first place, right?
Because I can't imagine Patrick Henry and them would have ever stood for anything that even smelled like this.
Well, if we go way back, in fact, the civil forfeiture or forfeiture in general was a main revenue producer for the federal government in the colonial days going forward.
There was a certain, you know, we had no income tax back then.
We had very few other tax powers of the federal government.
And civil forfeiture is something that came over from England, was part of our colonial past.
The idea here was pretty simple and very different from the way it's used now, though.
The idea was people would come into the country with, say, ships coming from England, with goods that weren't paying the tariff, weren't paying an excise tax, whatever the tax system was set up.
The people who owned those ships, the people who were in control of that property, were in a foreign country.
They couldn't be subject to a lawsuit in American courts.
And so the federal government's response to that was, fine, if you're a foreign owner and you have goods that are here unlawfully, and we can't sue you to somehow make you pay or get damages or get taxed for those goods, we're just going to take the goods and that's going to provide a disincentive for you to send goods in that are essentially smuggled in.
Come forward almost 200 years later, these laws were seized on then during Prohibition as a tool that the federal government sought to shut down the bootlegging of alcohol, because they thought we can't always catch the people who are making the alcohol, but oftentimes we can get the trucks or the cars that are transporting the alcohol from state to state, and so we'll just use these civil forfeiture laws in the same way.
We'll say we can't find the people who are guilty of producing the alcohol, we can't sue them, we can't bring them into court, we'll just take all the property and that will create a disincentive.
That just exploded in the 1980s and 90s when the war on drugs got started up, and there was a real serious enforcement at the federal level to crack down on drugs, and in 1994 the civil forfeiture laws were changed so that this profit incentive was given to the law enforcement agencies who take the property.
It went from the money would just be taken or the property would be taken, it would go to say the general treasury fund of the United States or the general fund of a state, to the actual law enforcement agencies that did the taking, and it just led to this explosive growth because now individual agencies, individual police department or task forces, have this financial incentive to take the property.
Right, and now here's the thing about, you know, I was talking before about how I first heard of this so many years ago, and when I first heard of it, I think it was a collection of horror stories like this, and there were already hundreds and hundreds that were, you know, had been compiled, and so it must be thousands like this, and it seems like it's such a, it ought to be such a controversial thing.
It seems like every case at least, you know, would make the local news that, man, these people, and because in so many cases it's not real drug dealers, right, it's somebody like this motel owner, they're just some regular people who end up getting their property stolen just because it's valuable.
It seems like, I guess IJ is the backlash, but where the hell is everybody else on this?
It just is amazing that this has been allowed to persist, you know?
That's right.
Well, IJ did a report in 2010 called Policing for Profit where we studied the problem.
We just released this week actually reports looking at the state laws in Minnesota and looking at Georgia, and we show, as you indicate, that although some of the money and some of the property taken is from people who are involved in drug dealing, when it's civil forfeiture, none of these people have been convicted.
So the due process concerns are legion, and in a great many cases it's simply innocent people who get small amounts of money taken, and it's not worth suing the government to get it back.
Because what you said before, it seems un-American.
This is why the Institute for Justice has taken on this issue and why we've been suing the government in these cases in the last few years to try to get a case to the Supreme Court to test this.
Unlike almost every other aspect of the American justice system, with civil forfeiture, your property is taken if it's suspected of being used in a drug crime.
The only way for you to get it back is for you to then sue the government and prove your own innocence.
If you can prove your own innocence, as Mr. Caswell and his wife Patricia Caswell did in our case, you can get the property back.
But that turns the American idea that you're innocent until proven guilty right on its head.
It's just a complete reversal of the standards of proof that should be applicable when somebody's depriving you of property.
Well, you know, one of the things, it's been a long time since I read about this so I'm trying to think back, but I guess, are you guys some of the only ones who will take cases like this?
Because I've always heard that one of the hardest parts about this is you can't even get a lawyer who will take your civil forfeiture case because the odds are so stacked against him that he's going to waste his time and then you're not going to pay him because you're not going to get your property back, you're not going to have any money to pay him with.
So they'll always tell you, go find somebody else.
It is an uphill battle.
There are private attorneys who will do it on contingency.
There are a handful of other public interest groups that are interested in this subject.
There's an attorney here in Alexandria who has written a desk book for lawyers, like a reference manual, who's excellent.
And there's David Smith who's done a lot of these cases as well.
There are people who will take them, but you've indicated one of the problems with these laws.
And I can demonstrate that with what happened in the Caswell's case.
So the motel Caswell has been operated by Pat and Russ for 30 years.
Russ bought it from his father who built it in the 1950s.
It's basically their only asset in the entire world.
They spent 30 years paying off the mortgage.
It's mortgage-free and they always assume that someday they'd give it to their kids or they'd sell it or somehow it would provide for their retirement that way.
Well, the federal government targets it for civil forfeiture.
The first thing they do is put a notice on the title to say this is subject to a forfeiture lawsuit.
They no longer can use that asset to defend themselves because any lawyer looking at it, and even them looking at themselves, realizes that we can't get a mortgage on it.
We can't sell it.
We can't promise a lawyer that we can pay them with proceeds of the motel because if we lose, we don't have the motel anymore.
By targeting that property for forfeiture, essentially encumbering their greatest asset in the world, they were really deprived of an effective way to defend themselves.
They went right to the wall.
They spent almost $100,000 on a private attorney trying to get this thing dropped until we were approached by their private attorneys.
We looked at it and thought this is a great case and a terrible group of people for this to be happening to the Caswell family.
We stepped up to defend them, but it can be very difficult for people to get proper representation in these cases.
Yeah, and the government always does pronounce guilt in such a harsh way.
The presumption of innocence is just completely turned around.
Anyone that they accuse, we're all supposed to believe is Al Pacino from Scarface in his M16 with the grenade launcher screaming and going crazy and making so much money.
And you think that guy who made all those illegitimate proceeds ought to be able to use those proceeds in order to get off scot-free on a technicality somehow?
Well, no way, Buster.
They're going to make sure that the good guys, that is the government, is able to level the playing field and really prosecute them.
That's exactly right.
That's the justification they use, but I think what this case showed and what the judge saw is that the civil forfeiture laws just give too much discretion to prosecutors to bring these cases and to push them so aggressively against innocent people.
That's why civil forfeiture is wrong, and that's why we think it needs to end.
We got one great case, and possibly the government will appeal, and we can double down on this and get a precedent at the appellate court.
But IJ will continue to find good clients and good cases to demonstrate that civil forfeiture abuses innocent owners of property.
It's not just about drug dealers and criminals that they're taking property away from.
If that's what it was about, all they would need is criminal forfeiture.
They would just need the criminal statutes to say we'll take the property upon conviction.
But trying to take property from people who have never been convicted or even charged with a crime is really un-American.
That was one of the things I meant to ask you that I forgot about, was just how precedent-setting this is.
What level federal court did this, and then you say it's already being appealed or what now?
It hasn't yet been appealed.
It was a United States District Court, so it's a federal trial court.
The government just hasn't come to a decision on whether they'll appeal.
They have 60 days in which to decide.
They've certainly not said that they will not appeal.
We just have to watch for that to happen.
It is precedent-setting.
It's persuasive precedent.
Other courts around the country, it's not binding.
Every other court in the country doesn't have to decide this way if they get a similar case.
But it's very persuasive when a judge rules on this, for them to consider the facts of this case and the way that this holding came out.
One thing that was important about this case, which was new, is that this case not only was a case in which the Caswell family was proved to be innocent owners.
Some other cases have done that.
But this was a case in which the federal district judge said the Department of Justice did not meet its burden of proof, showing that the property was forfeitable at all.
It just said you can't take a property from somebody where transient guests at a motel using drugs behind closed doors, totally unbeknownst to the owner.
That's simply not enough to forfeit a property.
You can't do it.
Yeah.
And now really, was there a sentence in the law the judge was citing, or just the abject unfairness of it?
Well, what the law says is that property is subject to forfeiture if there's a, quote, substantial connection.
Right, so substantial is what's up to the judge.
That's right.
And she looked at this and she said, come on, how can it be substantial that, what the government alleges, over an almost 20-year period, 15 drug crimes occurred, and at trial it was proven that Mr. Caswell, his wife, none of his employees knew when they rented a room to somebody that had drugs with them, ever discovered that drugs were being used in the rooms while it was occurring, and that the times where they discovered drugs on the property, after the fact, they called the police.
And the judge looked at that and said, maybe there's an outer boundary for substantial.
This certainly is not substantial.
This case was wrong to bring from the get-go.
And she really scolded them at parts of the opinion for bringing such an aggressive case.
Yeah.
Well, and I guess, you know, the lack of reform here on the legislative end is really because it's just not a very sexy issue as far as people getting outraged.
I don't know, I guess the left doesn't really care about property rights, and the right wing, they're all in for the drug war, and so who's going to stand up for this except libertarian groups like yours?
Well, we are getting a lot of attention, and we do think there will be some legislative discussion of this, and certainly we'll be pushing that to the extent that we can.
You know, you might be surprised.
It's astounding to me that prior to 2000, there was not even an innocent owner defense in the law.
That was something that was reformed in 2000.
They put this defense in so that you could at least get your property back if you went to trial and proved that you were innocent of any wrongdoing.
That came about as a bipartisan measure.
Senator Leahy in the Senate, Representative Henry Hyde, Democrat on one side, Republican on the other side, both saw outrageous abuses of the civil forfeiture laws and said we need to reform them.
I'm glad they put an innocent owner defense in.
What the Caswell case shows, and what we will continue to demonstrate to our cases, is that it was just not enough, and civil forfeiture has got to end.
Right, yeah, absolutely.
So do you guys do any kind of lobbying or anything like that on the legislative end, or do you just sue?
We don't do the lobby.
We promote liberty in both the course of law and the course of public opinion.
There are occasions when our attorneys will testify before legislative committees when they're called up.
We have a lot of expertise in some of these areas, but we are a firm that sues the government to vindicate people's rights, property rights, economic liberties, and free speech.
Yeah, well, you know, this victory in court is important.
As you said, other lawyers are going to be able to cite it, at least as an example if not a binding precedent, unless it does get overturned on appeal or something like that.
For now, they'll be able to anyway.
And that is certainly a victory for the Caswell family, as you said, and congratulations for that.
That's really good of you to save these people the way you did.
But also, it's publicity just for the issue at all.
That, hey, did you hear the one?
Can you believe they tried to steal this guy's motel for no good reason?
But then, hey, the good news is these lawyers won and he got to keep it.
So I think that's really great.
I think you just did wonders for publicity for this very important issue, which goes to the very crux of whether you're free or not in this society, if you ask me, Fifth Amendment protections and all that.
Absolutely.
It keeps it in the news.
We're happy about that.
But it is an important win at the district federal trial court.
We did break new ground in this case.
If it's appealed, that could be the best thing.
I don't want the Caswells' nightmare in this to be continued, but we are exceptionally confident in this victory.
You could win again.
Yes, the government is just looking to lose again, and it will extend that precedent.
So it's a wonderful victory for the Caswells and for property rights.
Great.
And for the Institute of Justice, that's ij.org.
Larry Salzman, thank you very much for your time.
Appreciate it.
Thank you.
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