Judge Rules Disbursement Of Civil Forfeiture Proceeds Constitutional

Olivia Covington for www.theindianalawyer.com

Indiana’s process of diverting a portion of civil forfeiture proceeds to law enforcement and away from the Common School Fund is constitutional, a trial court judge ruled Friday.

Marion Superior Judge Thomas Carroll held a summary judgment hearing Friday on Jeana M. Horner, et al. v. Terry R. Curry, Marion County Prosecutor’s Office, et al., 49D06-1602-PL-004804, a case challenging the constitutionality of civil forfeitures by Indianapolis police and the Marion County Prosecutor’s Office. The Virginia-based Institute for Justice filed the suit two years ago, alleging county law enforcement keeps all forfeiture proceeds in a “policing for profit” scheme.

The alleged scheme violates Article 8, Section 2 of the Indiana Constitution, which provides that “…the fines assessed for breaches of the penal laws of the State; and from all forfeiture which may accrue…” must be diverted into the Common School Fund, IJ attorney Sam Gedge told Carroll during Friday’s hearing.  The phrase “all forfeitures” includes civil forfeitures, Gedge said, so the plain language of the Constitution does not allow forfeiture proceeds to be diverted for law enforcement costs.

Further, Gedge said the Indiana Supreme Court determined Article 8, Section 2 applies to Indiana’s civil forfeiture statute in Martin Serrano v. State of Indiana and the City of Fort Wayne, 946 N.E.2d 1139 (Ind. 2011), which means Marion County’s civil forfeiture practices violate Constitutional and statutory provisions. But Carroll saw a major problem with that argument: Senate Enrolled Act 99, passed by the General Assembly this year, changes the civil forfeiture statute.

Specifically, SEA 99 — which Gov. Eric Holcomb signed into law March 13 — makes numerous revisions to the state’s civil forfeiture framework designed to increase due process protections for property owners. The revisions most germane to the instant case were made in Section 3 of the bill, which provides a disbursement mechanism that begins with attorney fees and flows through law enforcement before depositing any remaining dollars into the Common School Fund.

Though the statute will change on July 1, Gedge told the court the plaintiffs’ argument could survive the statutory shift because the new law includes the same constitutional deficiencies identified in the current statute. Carroll, however, said he was troubled by the prospect of issuing an advisory opinion based on what the statute will be, and felt it would be unnecessary to rule on the constitutionality of a law that will soon be eliminated.

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Similarly, Senior Deputy Attorney General David Arthur told the judge that neither side had briefed SEA 99, making it more difficult for the judge to rule on the summary judgment motion. Carroll agreed, saying it seemed dangerous for him to “go where neither side has gone.”

Aside from the impending statutory change, Arthur argued that the meaning of “forfeiture” when it was written into the Indiana Constitution in 1851 is not the same as the 21^st century meaning. He specifically referenced the 2005 case of $100, et al. v. State of Indiana, et al., 822 N.E. 2d 1001 (Ind. Ct. App.), in which Indiana Court of Appeals Judge Melissa May wrote the appellant inaccurately asserted that “forfeitures under the forfeiture statute are ‘fines assessed for breaches of the penal laws of the State,’ as discussed in Article 8, Section 2.”

“As we have explained above, forfeiture statutes are in rem civil proceedings against property, not against a person,” May wrote in 2005. “…Accordingly, the forfeitures at issue are not the ‘fines assessed for breaches of the penal laws’ discussed in Article 8, Section 2 of the Indiana Constitution.”

Carroll agreed, ruling against the plaintiffs on their constitutional claim. However, the judge declined to rule on the current statute, telling the parties it would soon be moot.

Rather than waiting to rule on the summary judgment motion once SEA 99 takes effect, Carroll said he wanted to rule now so the case could begin the appellate process. Once it makes its way to the Indiana Supreme Court, Carroll predicted the justices would grant transfer to decide the issue.