Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Kaley v. United States

United States Supreme Court

February 25, 2014

KERRI L. KALEY, et Vir, PETITIONERS
v.
UNITED STATES

Argued October 16, 2013.

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT.

[134 S.Ct. 1092] Syllabus [*]

Title 21 U.S.C. §853(e)(1) empowers courts to enter pre-trial restraining orders to "preserve the availability of [forfeitable] property" while criminal proceedings are pending. Such pre-trial asset restraints are constitutionally permissible whenever probable cause exists to think that a defendant has committed an offense permitting forfeiture and that the assets in dispute are traceable or otherwise sufficiently related to the crime charged. United States v. Monsanto, 491 U.S. 600, 109 S.Ct. 2657, 105 L.Ed.2d 512.

After a grand jury indicted petitioners, Kerri and Brian Kaley, for reselling stolen medical devices and laundering the proceeds, the Government obtained a §853(e)(1) restraining order against their assets. The Kaleys moved to vacate the order, intending to use a portion of the disputed assets for their legal fees. The District Court allowed them to challenge the assets' traceability to the offenses in question but not the facts supporting the underlying indictment. The Eleventh Circuit affirmed.

Held:

When challenging the legality of a §853(e)(l) pre-trial asset seizure, a criminal defendant who has been indicted is not constitutionally entitled to contest a grand jury's determination of probable cause to believe the defendant committed the crimes charged. Pp. 1096 – 1105, 134 S.Ct. 1090, 188 L.Ed.2d, at 54-64.

(a) In Monsanto, this Court held that the Government may seize assets before trial that a defendant intends to use to pay an attorney, so long as probable cause [134 S.Ct. 1093] exists "to believe that the property will ultimately be proved forfeitable." 491 U.S., at 615, 109 S.Ct. 2657, 105 L.Ed.2d 512. The question whether indicted defendants like the Kaleys are constitutionally entitled to a judicial re-determination of the grand jury's probable cause conclusion in a hearing to lift an asset restraint has a ready answer in the fundamental and historic commitment of the criminal justice system to entrust probable cause findings to a grand jury. A probable cause finding sufficient to initiate a prosecution for a serious crime is "conclusive[e], " Gerstein v. Pugh, 420 U.S. 103, 117, n. 19, 95 S.Ct. 854, 43 L.Ed.2d 54, and, as a general matter, "a challenge to the reliability or competence of the evidence" supporting that finding "will not be heard, " United States v. Williams, 504 U.S. 36, 54, 112 S.Ct. 1735, 118 L.Ed.2d 352. A grand jury's probable cause finding may, on its own, effect a pre-trial restraint on a person's liberty. Ger-stein, 420 U.S., at 117, n. 19, 95 S.Ct. 854, 43 L.Ed.2d 54. The same result follows when it works to restrain a defendant's property.

The Kaleys' alternative rule would have strange and destructive consequences. Allowing a judge to decide anew what the grand jury has already determined could result in two inconsistent findings governing different aspects of one criminal proceeding, with the same judge who found probable cause lacking presiding over a trial premised on its existence. That legal dissonance could not but undermine the criminal justice system's integrity, especially the grand jury's constitutional role. Pp. 1096-1100, 134 S.Ct. 1090, 188 L.Ed.2d, at 54-59.

(b) The balancing test of Mathews v. Eldridge, 424 U.S. 319, 96 S.Ct. 893, 47 L.Ed.2d 18—which requires a court to weigh (1) the burdens that a requested procedure would impose on the government against (2) the private interest at stake, as viewed alongside (3) "the risk of an erroneous deprivation" of that interest without the procedure and "the probable value, if any, of [the] additional . . . procedural safeguar[d], " id., at 335, 96 S.Ct. 893, 47 L.Ed.2d 18—if applicable here, tips against the Kaleys. Because the Government's interest in freezing potentially forfeitable assets without an adversarial hearing about the probable cause underlying criminal charges and the Kaleys' interest in retaining counsel of their own choosing are both substantial, the test's third prong is critical. It boils down to the "probable value, if any, " of a judicial hearing in uncovering mistaken grand jury probable cause findings. But when the legal standard is merely probable cause and the grand jury has already made that finding, a full-dress hearing will provide little benefit. See Florida v. Harris, 568 U.S. __, __, 133 S.Ct. 1050, 1055, 185 L.Ed.2d 61. A finding of probable cause to think that a person committed a crime "can be [made] reliably without an adversary hearing, " Gerstein, 420 U.S., at 120, 95 S.Ct. 854, 43 L.Ed.2d 54, and the value of requiring additional "formalities and safeguards" would "[i]n most cases .. be too slight, " id., at 121-122, 95 S.Ct. 854, 43 L.Ed.2d 54. The experience of several Circuits corroborates this view. Neither the Kaleys nor their amid point to a single case in two decades where courts, holding hearings of the kind they seek, have found the absence of probable cause to believe that an indicted defendant committed the crime charged. Pp. 1100- 1105, 134 S.Ct. 1090, 188 L.Ed.2d, at 59-64.

677 F.3d 1316, affirmed and remanded.

KAGAN, J., delivered the opinion of the Court, in which SCALIA, KENNEDY, THOMAS, GINSBURG, and ALITO, JJ., joined. ROBERTS, C. J., filed a dissenting opinion, in which BREYER and SOTOMAYOR, JJ., joined.

Howard Srebnick, Miami, FL, for Petitioners.

[134 S.Ct. 1094] Michael R. Dreeben, Washington, DC, for Respondent.

Howard Srebnick, Counsel of Record, Black, Srebnick, Kornspan & Stumpf, P.A., G. Richard Strafer, G. Richard Strafer. P.A., Miami, FL, for Petitioners.

Donald B. Verrilli, Jr., Solicitor General (Counsel of Record), Mythili Raman, Acting Assistant Attorney General, Michael R. Dreeben, Deputy Solicitor General, Elaine 4. Goldenberg, Assistant to the Solicitor General, Sonja M. Ralston, Attorney, Department of .Justice, Washington D.C., for Respondent.

OPINION

KAGAN, JUSTICE.

A federal statute, 21 U.S.C. §853(e), authorizes a court to freeze an indicted defendant's assets prior to trial if they would be subject to forfeiture upon conviction. In United States v. Monsanto, 491 U.S. 600, 615, 109 S.Ct. 2657, 105 L.Ed.2d 512 (1989), we approved the constitutionality of such an order so long as it is "based on a finding of probable cause to believe that the property will ultimately be proved forfeitable." And we held that standard to apply even when a defendant seeks to use the disputed property to pay for a lawyer.

In this case, two indicted defendants wishing to hire an attorney challenged a pre-trial restraint on their property. The trial court convened a hearing to consider the seizure's legality under Monsanto. The question presented is whether criminal defendants are constitutionally entitled at such a hearing to contest a grand jury's prior determination of probable cause to believe they committed the crimes charged. We hold that they have no right to relitigate that finding.

I.

A.

Criminal forfeitures are imposed upon conviction to confiscate assets used in or gained from certain serious crimes. See 21 U.S.C. §853(a). Forfeitures help to ensure that crime does not pay: They at once punish wrongdoing, deter future illegality, and "lessen the economic power" of criminal enterprises. Caplin & Drysdale, Chartered v. United States, 491 U.S. 617, 630, 109 S.Ct. 2646, 105 L.Ed.2d 528 (1989); see id., at 634, 109 S.Ct. 2646, 105 L.Ed.2d 528 ("Forfeiture provisions are powerful weapons in the war on crime"). The Government also uses forfeited property to recompense victims of crime, improve conditions in crime-damaged communities, and support law enforcement activities like police training. See id., at 629-630, 109 S.Ct. 2646, 105 L.Ed.2d 528. [1] Accordingly, "there is a strong governmental interest in obtaining full recovery of all forfeitable assets." Id., at 631, 109 S.Ct. 2646, 105 L.Ed.2d 528.

In line with that interest, § 853(e)(1) empowers courts to enter pre-trial restraining orders or injunctions to "preserve the availability of [forfeitable] property" while criminal proceedings are pending. Such an order, issued "[u]pon application of the United States, " prevents a defendant from spending or transferring specified property, including to pay an attorney [134 S.Ct. 1095] for legal services. Ibid. In Monsanto, our principal case involving this procedure, we held a pre-trial asset restraint constitutionally permissible whenever there is probable cause to believe that the property is forfeitable. See 491 U.S., at 615, 109 S.Ct. 2657, 105 L.Ed.2d 512. That determination has two parts, reflecting the requirements for forfeiture under federal law: There must be probable cause to think (1) that the defendant has committed an offense permitting forfeiture, and (2) that the property at issue has the requisite connection to that crime. See § 853(a). The Monsanto Court, however, declined to consider "whether the Due Process Clause requires a hearing" to establish either or both of those aspects of forfeitability. Id., at 615, n. 10, 109 S.Ct.2657, 105 L.Ed.2d 512. [2]

Since Monsanto, the lower courts have generally provided a hearing to any indicted defendant seeking to lift an asset restraint to pay for a lawyer. In that hearing, they have uniformly allowed the defendant to litigate the second issue stated above: whether probable cause exists to believe that the assets in dispute are traceable or otherwise sufficiently related to the crime charged in the indictment.[3] But the courts have divided over extending the hearing to the first issue. Some have considered, while others have barred, a defendant's attempt to challenge the probable cause underlying a criminal charge.[4] This case raises the question whether an indicted defendant has a constitutional right to contest the grand jury's prior determination of that matter.

B

The grand jury's indictment in this case charges a scheme to steal prescription medical devices and resell them for profit. The indictment accused petitioner Kerri Kaley, a sales representative for a subsidiary of Johnson & Johnson, and petitioner Brian Kaley, her husband, with transporting stolen medical devices across state lines and laundering the proceeds of that activity.[5] The Kaleys have contested those allegations throughout this litigation, arguing that the medical devices at issue were unwanted, excess hospital inventory, which they could lawfully take and market to others.

Immediately after obtaining the indictment, the Government sought a restraining order under § 853(e)(1) to prevent the Kaleys from transferring any assets traceable to or involved in the alleged offenses. [134 S.Ct. 1096] Included among those assets is a $500, 000 certificate of deposit that the Kaleys intended to use for legal fees. The District Court entered the requested order. Later, in response to the Kaleys' motion to vacate the asset restraint, the court denied a request for an evidentiary hearing and confirmed the order, except as to $63, 000 that it found (based on the parties' written submissions) was not connected to the alleged offenses.

On interlocutory appeal, the Eleventh Circuit reversed and remanded for further consideration of whether some kind of evidentiary hearing was warranted. See 579 F.3d 1246 (2009). The District Court then concluded that it should hold a hearing, but only as to "whether the re- strained assets are traceable to or involved in the alleged criminal conduct." App. to Pet. for Cert. 43, n. 5. The Kaleys informed the court that they no longer disputed that issue; they wished to show only that the "case against them is "baseless.'" Id., at 39; see App. 107 ("We are not contesting that the assets restrained were . . . traceable to the conduct. Our quarrel is whether that conduct constitutes a crime"). Accordingly, the District Court affirmed the restraining order, and the Kaleys took another appeal. The Eleventh Circuit this time affirmed, holding that the Kaleys were not entitled at a hearing on the asset freeze "to challenge the factual foundation supporting the grand jury's probable cause determination[ ]"-that is, "the very validity of the underlying indictment." 677 F.3d 1316, 1317 (2012).

We granted certiorari in light of the Circuit split on the question presented, 568 U.S. __, 133 S.Ct, 1580, 185 L.Ed.2d 575 (2013), ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.