USTICES ORDER LIMITS ON USE OF BIG FINES BY GOVERNMENT

WASHINGTON -- The Supreme Court for the first time Monday struck down
a government fine as unconstitutionally excessive, ruling that a
forfeiture intended as punishment is unconstitutional if the amount
seized is ``grossly disproportional'' to the gravity of the offense.

Applying that test in a sharply contested 5-4 ruling, the court
declared that the government could not constitutionally seize $357,144
in undeclared cash that a Los Angeles gas station owner and his family
had packed in their luggage on a flight to Cyprus. The money itself,
intended to repay a family debt, was not the proceeds of a crime; the
man's only crime was failing to obey a federal law that requires
reporting all currency being taken out of the country in excess of
$10,000.

Part of the penalty for violating the reporting law is the forfeiture
of ``any property, real or personal, involved in such offense'' -- in
this case, in the government's view, the entire $357,144.

To the extent that the 1992 law requires ``grossly disproportional''
forfeitures from ``innocent owners,'' it is unconstitutional under the
Eighth Amendment's prohibition of ``excessive fines,'' Justice
Clarence Thomas said in the majority opinion.

Thomas was joined, for the first time in a 5-4 decision, by the
court's four most liberal members, causing his usual allies in the
court's conservative bloc to label the decision a ``serious error''
that ``portends serious disruption of a vast range of statutory
fines,'' as Justice Anthony Kennedy put it in his dissenting opinion.

Obscure clause

The ruling marked the first time the court has applied the excessive
fines clause, a relatively obscure part of the constitutional
provision that is better known for its prohibition of ``cruel and
unusual punishment.''

The decision was limited by Thomas' suggestion that the forfeiture
would not have been excessive had the money's owner, Hosep Bajakajian,
been involved in some separate offense like money laundering or
evading taxes or customs duties. Thomas said that in this case, the
government had lost nothing except ``the information that $357,144 had
left the country.'' Forfeiture of the entire amount ``bears no
articulable correlation to any injury suffered by the government,''
Thomas said.

Under the majority's analysis, forfeitures that are designed to
reimburse the government for a loss are remedial, rather than
punitive, and so are not ``fines'' that could be deemed excessive for
Eighth Amendment purposes. But in this case, ``the forfeiture serves
no remedial purpose,'' Thomas said.

The decision did not displace a ruling from two years ago in which the
court held that the government could impose both a criminal penalty
and civil forfeiture for the same offense without violating the
constitutional prohibition against double jeopardy. The forfeitures
typically involved in those cases are the proceeds or location of a
crime, and as a legal matter, the confiscation is an action against
the property rather than against its owner.

Nonetheless, however limited in application, the ruling Monday was
surprising for a court that has expressed fitful concern about the
government's forfeiture policy for several years without ever ruling
that a particular forfeiture violated the Eighth Amendment.

Forfeiture laws, largely used in the government's war on drug
traffickers, have become a controversial tactic as critics complain
that the government is wielding its power without safeguards and

seizing money and property from people whose conduct does not always
warrant drastic action.

Vigorous defense

The Clinton administration was vigorous in its defense of the
forfeiture, arguing in its brief that the forfeiture of ``the very
case involved in the offense'' cannot be regarded as an excessive fine
because by taking all the undeclared money, of whatever amount, the
forfeiture is ``perfectly calibrated to the seriousness of the
defendant's conduct.'' The money was ``instrumental to the
violation,'' the administration said, arguing that strict enforcement
of the reporting requirement plays an important role in detecting
money laundering schemes.

In his opinion in the case, United States vs. Bajakajian, Thomas
traced the history of forfeiture. He noted that it was only in 1970
that the government began imposing criminal forfeiture of the type at
issue in this case, as opposed to civil forfeiture. His conclusion was
that while there is a respectable common law tradition for government
forfeitures, the current practice is a recent development, not blessed
by history.

The decision affirmed a 1996 ruling by the 9th U.S. Circuit Court of
Appeals, in San Francisco, which had applied the excessive fines
clause in refusing to order the forfeiture of Bajakajian's money.
Earlier, the U.S. District Court in Los Angeles had set $15,000 as a
``reasonable'' forfeiture, a figure the 9th Circuit let stand because
Bajakajian had not separately appealed it. Thomas said Monday that the
question of whether $15,000 or some other figure below the full amount
would be acceptable was not properly before the court because the
government's appeal sought only a full forfeiture.

Unusual alliance

Thomas' opinion was signed by a group of justices he had never before
joined in a 5-4 decision: Justices John Paul Stevens, David Souter,
Ruth Bader Ginsburg and Stephen Breyer. Chief Justice William
Rehnquist, along with Justices Sandra Day O'Connor and Antonin Scalia,
joined Kennedy's dissenting opinion.

The dissenters said the majority was improperly dismissive of the
importance of the reporting statute.

``Congress deems the crime serious, but the court does not,'' Kennedy
said. He said that ``one of the few reliable warning signs of some serious
crimes is the use of large sums of cash,'' adding that the court gave no
reason for rejecting the
congressional judgment that a ``blanket punishment'' was the most
effective way of addressing that problem. Without full forfeiture,
``the fine permitted by the majority would be a modest cost of doing
business in the world of drugs and crime,'' Kennedy said.

The Los Angeles Times contributed to this report.

Checked-by: (trikydik)