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SCOTUS: Pretrial seizure of untainted assets violates right to counsel of choice

Sila Luis v. United States, USSC No. 14-419, 2016 WL 1228690 (March 30, 2016), vacating and remanding U.S. v. Luis, 564 Fed. Appx. 493 (11th Cir. 2014) (per curiam) (unpublished); Scotusblog page (including links to briefs and commentary)

The question presented in this case is whether the pretrial restraint of a criminal defendant’s legitimate, untainted assets—that is, assets not traceable to a criminal offense—needed to retain counsel of choice violates the Sixth Amendment. A majority of the U.S. Supreme Court answers “yes,” though for different reasons.

Under 18 U.S.C. § 1345, a court may freeze before trial certain assets belonging to a criminal defendant accused (as Luis was) of violations of federal health care laws. Those assets include: (1) property “obtained as a result of” the crime, (2) property “traceable” to the crime, and (3) other “property of equivalent value.” § 1345(a)(2). In this case the court froze assets of Luis falling into the third category of property—namely, property untainted by the crime and belonging fully to Luis. Luis claims the freeze prevents her from paying her lawyer and thus violates her Sixth Amendment right to counsel of choice. A four-justice plurality and a concurring justice agree.

The plurality (Justice Breyer, joined by Chief Justice Roberts and Justices Ginsburg and Sotomayor) reaches its conclusion by balancing the constitutional right at stake and the Government’s interest in preventing the loss or dissipation of assets that would be available to pay penalties or restitution in the event of a conviction. As to the right at stake, the Sixth Amendment right to counsel is fundamental, of course, and denying a defendant access to assets to hire counsel of choice significantly erodes that right. As to the Government’s interest in preserving assets, the Court’s precedent recognizes the Government’s interest recognized in preventing the loss or dissipation of assets like contraband or loot, which are derived from or traceable to the crime and in which a defendant has zero or minimal legitimate property interest. United States v. Monsanto, 491 U.S. 600 (1989); Caplin & Drysdale, Chartered v. United States, 491 U.S. 617 (1989); Kaley v. United States, 134 S. Ct. 1090 (2014). But the Government’s interest here is substantially weaker because the assets are untainted by the crime, and thus wholly owned by the defendant. The Sixth Amendment right therefore trumps the Government’s interest. (Slip op. at 3-15).

Justice Thomas concurs with the plurality’s result, but he rests his conclusion on the Sixth Amendment’s text and common-law tradition of drawing a line between tainted and untainted assets. (Concurrence at 1-9). He rejects the plurality’s “atextual balancing analysis”:

The Sixth Amendment guarantees the right to counsel of choice. …[A] pretrial freeze of untainted assets infringes that right. This conclusion leaves no room for balancing. Moreover, I have no idea whether, “compared to the right to counsel of choice,” the Government’s interests in securing forfeiture and restitution lie “further from the heart of a fair, effective criminal justice system.” Ante, at 12. Judges are not well suited to strike the right “balance” between those incommensurable interests. Nor do I think it is our role to do so. The People, through ratification, have already weighed the policy tradeoffs that constitutional rights entail. …. Those tradeoffs are thus not for us to reevaluate.

(Concurrence at 9-10).

Justice Kennedy dissents, joined by Justice Alito, finding this case to be controlled by Monsanto and Caplin & Drysdale. (Principal dissent at 1-11). They also object that the result here perversely rewards criminals sophisticated enough to spend, conceal, or launder stolen or fraudulently obtained property: “The true winners today are sophisticated criminals who know how to make criminal proceeds look untainted.” (Principal dissent at 12). Justice Kagan dissents separately, agreeing that the Court’s precedent controls here, though acknowledging that precedent is “troubling.” (Kagan dissent at 1).

As we said in our post on the cert grant, this decision is of interest primarily to federal practitioners, especially those defending clients with assets accused of violating health care or banking laws. Wisconsin has a number of statutes providing for the forfeiture of property used in or traceable to a criminal offense (listed in our post on Kaley), but unlike the federal statutes at issue in this case, our statutes don’t provide for pretrial seizure of the assets. Should the state ever try to use one of our statutes to seek pre-trial restraint of assets, this decision provides some ammunition for a Sixth Amendment argument against the attempt.

Note, though, that the opinion’s precedential value is unclear because the unusual 4-1-3 line-up means the rationale for finding the asset freeze violates the Sixth Amendment doesn’t earn a clear majority of votes. Marks v. United States, 430 U.S. 188, 193 (1977), held that when the Court issues a splintered plurality decision, courts interpreting that decision should regard the opinion of the Justice concurring on the “narrowest grounds” as the Court’s ultimate holding. Determining the “narrowest grounds” is easier said than done, and it’s not clear that it can be done at all here, as the concurrence is strongly at odds with and critical of the plurality’s reasoning.

Lawyers representing defendants without assets to freeze or forfeit might take note of the bit of back-and-forth between the plurality and principal dissent about the indigent defense system. The plurality suggests that freezing a defendant’s assets has the effect of consigning the defendant to “fall back upon publicly paid counsel, including overworked and underpaid public defenders.” (Slip op. at 15). The public defender system already suffers from limited resources, and accepting the Government’s argument “would—by increasing the government-paid-defender workload—render less effective the basic right the Sixth Amendment seeks to protect.” (Id.). The principal dissent responds:

Neither Luis nor the plurality nor Justice Thomas suggests that Luis will receive inadequate representation if she is not able to use the restrained funds. And this is for good reason. Given the large volume of defendants in the criminal justice system who rely on public representation, it would be troubling to suggest that a defendant who might be represented by a public defender will receive inadequate representation. …. Since Luis cannot afford the legal team she desires [because of the restrained assets], and because there is no indication that she will receive inadequate representation as a result, she does not have a cognizable Sixth Amendment complaint.

The plurality does warn that accepting the Government’s position “would—by increasing the government-paid-defender workload—render less effective the basic right the Sixth Amendment seeks to protect.” Ante, at 15. Public-defender offices, the plurality suggests, already lack sufficient attorneys to meet nationally recommended caseload standards. Ibid. But concerns about the caseloads of public-defender offices do not justify a constitutional command to treat a defendant accused of committing a lucrative crime differently than a defendant who is indigent from the outset. The Constitution does not require victims of property crimes to fund subsidies for members of the private defense bar.

(Principal dissent at 14-15).

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