High Court Says No Joint and Several Liability in Forfeiture

 

The U.S. Supreme Court said two brothers were not jointly and severally liable under a forfeiture statute for conspiring to distribute products used to make methamphetamine.

In Honeycutt v. United States, the High Court turned back prosecutors’ claims that both brothers owed $269,751 in the case — even though one of them did not profit personally from the crimes. The justices said the Comprehensive Forfeiture Act, 21 U. S. C. sec. 853(a)(1), limits forfeiture to property flowing from the crime.

“Forfeiture pursuant to sec. 853(a)(1) is limited to property the defendant himself actually acquired as the result of the crime,” Justice Sonia Sotomayor wrote for the unanimous panel.

Polar Pure Problem

Polar Pure is an iodine-based purification product that Terry and his brother Tony sold at their Tennessee hardware store. Terry managed the business, and his brother owned it.

The problems started when Terry saw some “edgy-looking folks” buying the product, and he called the Chattanooga Police Department about it. Police said the iodine crystals in Polar Pure could be used to manufacture methamphetamine.

Three years and about $400,000 in Polar Pure sales later, drug enforcement agents seized 300 bottles of the remaining inventory. A grand jury indicted the brothers on various criminal charges for knowing or having reason to believe the product could be used to make methamphetamine.

In a plea deal, Tony agreed to forfeit $200,000. Terry went to trial and was convicted, and the government wanted $69,751 from him even though he did not receive any money from the sales.

Buck Stopped There

A trial judge denied the proposed order, and a federal appeals court reversed. The Supreme Court, turning back the tide in a decade of aggressive forfeiture actions, said a defendant is only liable for forfeiture of his or her interest in a criminal enterprise.

“In this case, the Government has conceded that Terry Honeycutt had no ownership interest in his brother’s store and did not personally benefit from the Polar Pure sales,” the court said in reversing the court of appeals.

http://blogs.findlaw.com/supreme_court/2017/06/high-court-says-no-joint-and-several-liability-in-forfeiture.html

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