I’ll just defer what others have already said about the court’s ruling in Kaley v. U.S. this week.
At Slate, here’s Chanakya Sethi:
Writing for a six-justice majority in Kaley v. United States, thus concluded Justice Elena Kagan that a criminal defendant indicted by a grand jury has essentially no right to challenge the forfeiture of her assets, even if the defendant needs those very assets to pay lawyers to defend her at trial. In an odd ideological lineup, the dissenters were Chief Justice John Roberts and the more liberal Justices Stephen Breyer and Sonia Sotomayor.
The Kaleys’ saga began more than nine years ago when Kelli, a medical device salesperson, learned that she was under investigation by federal authorities for stealing devices from hospitals. Kelli admits she took some devices and later sold them with Brian’s help, but she says the devices she took were unwanted, outdated models that the hospitals were glad to be rid of — in effect, that she couldn’t steal something that was given to her. (It’s not a crazy argument. In fact, it worked for a co-defendant, who was quickly acquitted by a jury after the government failed to find even a single hospital that claimed ownership of the allegedly stolen goods.)
With charges looming, the Kaleys sought an estimate from their lawyers of how much mounting a defense would cost. The answer: $500,000. (That figure may seem high, but sadly the government agreed it was reasonable.) The Kaleys took out a home equity loan and used the $500,000 to purchase a certificate of deposit, which they planned to spend on lawyers.
Then came the grand jury indictment and with it a nasty surprise: an order freezing essentially all their assets, including the CD that was meant to pay their legal bills. The only assets exempt from the order — Kelli’s retirement account and their children’s college funds — weren’t enough to cover the $500,000 estimate. And if the Kaleys liquidated those funds, they’d have owed $183,500 in tax penalties. The bottom line: They could no longer pay for their lawyer of choice even though, as the government agreed, that’s what the Sixth Amendment right to counsel protects. . . .
The Kaleys have tried only to keep the assets they want to use to pay for a lawyer, based on the Sixth Amendment. They initially had some success. A judge questioned why the government sought to freeze the entire CD when only $140,000 could be linked to the proceeds of the Kaleys’ allegedly criminal enterprise. The government’s response came just a few days later in the form of a new grand jury indictment adding a charge of conspiracy to commit money laundering. That allowed the government to say the entire $500,000 should be frozen because the funds were “involved in” the underlying theft. The lower courts went along.
Harvey Silverglate, writing on the case last fall in the Wall Street Journal:
The Kaleys were confident that they would prevail at trial if they could retain their preferred lawyers. A third defendant did go to trial with her counsel of choice and was acquitted. But the Justice Department made it impossible for the Kaleys to pay their chosen lawyers for trial.
The government insisted that as long as the Kaleys’ assets—including bank accounts and their home — could be traced to the sale of the medical devices, all of those assets could be frozen. The Kaleys were not allowed to go a step further and show that their activities were in no way criminal, since this would be determined by a trial. But the Kaleys insisted that if the government wanted to freeze their funds, the court had to hold a pretrial hearing on the question of the legality of how the funds were earned.
The Kaleys complained that the asset freeze effectively deprived them of their Sixth Amendment right to the counsel of their choice — the couple couldn’t afford to hire the defense that they wanted. Prosecutors and the trial judge responded that the Kaleys could proceed with a public defender. This wouldn’t have been an encouraging prospect for them, for while public counsel is often quite skilled, such legal aid wouldn’t meet the requirements the Kaleys believed they needed for this complex defense. Choice of counsel in a free society, one would think, lies with the defendant, not with the prosecutor or the judge.
New York defense attorney Scott Greenfield:
In considering the Court’s adherence to beloved legal fictions, one of which is that a grand jury indictment conclusively proves the existence of probable cause to believe that a crime occurred and the defendants committed the crime, the majority reduced the issue before it to an absurdity. What about the presumption of innocence? What about the right to counsel of choice? What about the constraints of forfeiture to the proceeds of crime?
Meh. It’s as if someone mumbled during their post argument conference, “you know, if we cut her a break, it’s going to look like we no longer have faith in grand jury indictments. Since everybody already knows they’re argle-bargle, that won’t end well. It looks like we have no choice here.” . . .
Then there is the substitute proceeds question, where the idea that what the government is seizing is the proceeds of crime gets blind-sided by the desire to grab anything they can get their hands on. And in whatever amount a prosecutor can claim based on his most fertile imagination. Reality has no place in forfeiture.
But what about due process, the opportunity for full and fair litigation of a disputed issue? Silly rabbit, tricks are for kids. Once the grand jury issued an indictment, there is nothing left to litigate. It’s sacred . . . .
. . . giving a defendant any opportunity to challenge the government’s advanced impoverishment would deprive the government of its critical interest in making sure that there were assets to be seized on the back-end, after the Catch-22 was completed upon conviction, thus proving how right they were to restrain the assets in the first place.
But that due process thing? That right to counsel thing? That Constitution thing? Stop complaining. The grand jury indicted, and that’s good enough reason to deprive a defendant of the money to fight. Get over it.
Jacob Sullum at Reason, writing before this week’s decision came down:
For people facing criminal charges, freedom not only is not free; it is dauntingly expensive. The Kaleys’ lawyers estimate that a trial will cost $500,000 in legal fees and other expenses. The Kaleys had planned to cover the cost with money drawn from a home equity line of credit-until the government took it.
Technically, the government has not taken the money yet; it has merely “restrained” it, along with the rest of the home’s value, in anticipation of a post-conviction forfeiture. But the result is the same for the Kaleys: They can no longer afford to pay the lawyers they chose and trust, the people who have been representing them for eight years and are familiar with the details of their case . . .
The Kaleys are not ready to surrender. They want their day in court with the counsel of their choice. Toward that end, they argue that the Sixth Amendment, which guarantees the right to counsel, and the Fifth Amendment, which prohibits the taking of property without due process, require that they have an opportunity to challenge the legal basis of the proposed forfeiture before they go to trial.
An adversarial hearing is especially important in this situation because prosecutors have a financial stake in forfeitures, which help fund their budgets. Given the weakness of the case against the Kaleys, it’s not clear who is guilty of theft here: the defendants or the government.
And from Chief Justice John Roberts’ dissent:
An individual facing serious criminal charges brought by the United States has little but the Constitution and his attorney standing between him and prison. He might readily give all he owns to defend himself.
We have held, however, that the Government may effectively remove a defendant’s primary weapon of defense — the attorney he selects and trusts — by freezing assets he needs to pay his lawyer. That ruling is not at issue. But today the Court goes further, holding that a defendant may be hobbled in this way without an opportunity to challenge the Government’s decision to freeze those needed assets. I cannot subscribe to that holding and respectfully dissent.
The odd 6-3 lineup had Roberts, Breyer and Sotomayor in dissent.