OCTOBER TERM, 1992
Syllabus
UNITED STATES
v. A PARCEL OF LAND, BUILDINGS,
APPURTENANCES, AND IMPROVEMENTS, KNOWN AS 92 BUENA VISTA AVENUE,
RUMSON, NEW JERSEY, ET AL.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE THIRD
CIRCUIT
No. 91-781. Argued October 13, 1992-Decided February 24,
1993
The Government filed an
in rem action against the parcel
of land on which respondent's home is located, alleging that she
had purchased the property with funds given her by Joseph Brenna
that were "the proceeds traceable" to illegal drug trafficking, and
that the property was therefore subject to seizure and forfeiture
under the Comprehensive Drug Abuse Prevention and Control Act of
1970, 21 U. S. C. § 881(a)(6). The District Court ruled, among
other things, that respondent, who claims that she had no knowledge
of the origins of the funds used to buy her house, could not invoke
the "innocent owner" defense in § 881(a)(6), which provides that
"no property shall be forfeited ... , to the extent of the interest
of an owner, by reason of any act ... established by that owner to
have been committed ... without the knowledge or consent of that
owner." The Court of Appeals remanded on interlocutory appeal,
rejecting the District Court's reasoning that the innocent owner
defense may be invoked only by persons who are bona fide purchasers
for value and by those who acquired their property interests before
the acts giving rise to the forfeiture took place.
Held: The judgment is affirmed.
937
F.2d 98, affirmed.
JUSTICE STEVENS, joined by JUSTICE BLACKMUN, JUSTICE O'CONNOR,
and JUSTICE SOUTER, concluded that an owner's lack of knowledge of
the fact that her home had been purchased with the proceeds of
illegal drug transactions constitutes a defense to a forfeiture
proceeding under the statute. Pp. 118-131.
(a) The task of construing the statute must be approached with
caution. Although customs, piracy, and revenue laws have long
provided for the official seizure and forfeiture of tangible
property used in the commission of criminal activity, the statute
marked an important expansion of governmental power by authorizing
the forfeiture of proceeds from the sale of illegal goods and by
creating an express and novel protection for innocent owners. Pp.
118-123.
112
112 UNITED STATES
v. PARCEL OF RUMSON, N. J., LAND
Syllabus
(b) The statute's use of the unqualified term "owner" in three
places is sufficiently unambiguous to foreclose any contention that
the protection afforded to innocent owners is limited to bona fide
purchasers. That the funds respondent used to purchase her home
were a gift does not, therefore, disqualify her from claiming that
she is such an owner. P.123.
(c) Contrary to the Government's contention, the statute did not
vest ownership in the United States at the moment when the proceeds
of the illegal drug transaction were used to pay the purchase price
of the property at issue, thereby preventing respondent from ever
becoming an "owner." Neither of the "relation back" doctrines
relied on by the Government-the doctrine embodied in § 881(h),
which provides that "[a]ll right, title and interest in property
described in subsection (a) ... shall vest in the United States
upon commission of the act giving rise to forfeiture under this
section," or the common-law doctrine, under which a forfeiture
decree effectively vests title to the offending res in the
Government as of the date of the offending conduct-makes the
Government an owner of property before forfeiture has been decreed.
Assuming that the common-law doctrine applies, it is clear that the
fictional and retroactive vesting of title thereunder is not
self-executing, but occurs only when the Government wins a judgment
of forfeiture. Until then, someone else owns the property and may
invoke any available defense, including the assertion that she is
an innocent owner. A reading of § 881 (h) demonstrates that it did
not dispense with, but merely codified, the common-law doctrine and
leads to the same result. The legislative history reveals that §
881 (h) applies only to property that is subject to civil
forfeiture under § 881(a). Although proceeds traceable to illegal
drug transactions are, in § 881 (h)'s words, "property described in
subsection" (a)(6), the latter subsection exempts from civil
forfeiture proceeds owned by one unaware of their criminal source
and therefore must allow an assertion of the innocent owner defense
before § 881 (h) applies. Pp. 123-129.
(d) This Court need not resolve,
inter alia, the parties'
dispute as to the point at which guilty knowledge of the tainted
character of property will deprive a party of an innocent owner
defense, because respondent has assumed the burden of convincing
the trier of fact that she had no knowledge of the alleged source
of Brenna's gift when she received it. Pp. 129-131.
JUSTICE SCALIA, joined by JUSTICE THOMAS, concluded:
1. While it is true that § 881 (a)(6)'s "innocent owner"
exception produces the same result as would an "innocent owner"
exception to traditional common-law forfeiture (with its
relation-back principle), that conclusion cannot be based upon the
plurality's implausible reading of the
113
phrase "property described in subsection (a)." Rather, the
result reached in this case is correct because § 881(h) is best
read as an expression of the traditional relation-back doctrine,
which is a doctrine of
retroactive vesting of title that
takes effect only upon entry of the judicial order of forfeiture or
condemnation. Under the alternative readingthat § 881 (h) provides
for immediate, undecreed, secret vesting of title in the United
States at the time of the illegal transaction-either the plain
language of § 881 (a)(6)'s innocent-owner provision must be
slighted or the provision must be deprived of all effect.
Additionally, the traditional relation-back principle is the only
interpretation of § 881 (h) that makes sense within the structure
of the applicable customs forfeiture procedures, under which the
Government does not gain title until there is a forfeiture decree,
and provides the only explanation for the textual distinction
between § 881 (a)(6)'s innocent "owner" and § 853's innocent
"transferee" provisions. Pp. 131-138.
2. There is no proper basis for the plurality's conclusion that
respondent has assumed the burden of proving that she had no
knowledge of the alleged source of Brenna's gift when she received
it, as opposed to when the illegal acts giving rise to forfeiture
occurred. The issue of what is the relevant time for purposes of
determining lack of knowledge is not fairly included in the
question on which the Court granted certiorari, and the Court need
not resolve it. pp. 138-139.
STEVENS, J., announced the judgment of the Court and delivered
an opinion, in which BLACKMUN, O'CONNOR, and SOUTER, JJ., joined.
SCALIA, J., filed an opinion concurring in the judgment, in which
THOMAS, J., joined,
post, p. 131. KENNEDY, J., filed a
dissenting opinion, in which REHNQUIST, C. J., and WHITE, J.,
joined,
post, p. 139.
Amy L. Wax argued the cause for the United States.
With her on the briefs were Solicitor General Starr, Assistant
Attorney General Mueller, Deputy Solicitor General Roberts, and
David T. Shelledy.
James A. Plaisted argued the cause for the
respondents.
With him on the briefs was
Shalom D. Stone. *
*Briefs of
amici curiae urging affirmance were filed for
the American Bankers Association by
John J.
Gill III
and
Michael F.
Crotty; for the American Land Title
Association et al. by
David F.
B. Smith; and for the
Federal Home Loan Mortgage Corp. by
Diane Marshall
Ennist.
Robert A. Ginsburg and
Thomas W Logue filed a
brief for the Dade County Tax Collector et al. as
amici
curiae.
114
114 UNITED STATES
v. PARCEL OF RUMSON, N. J., LAND
Opinion of STEVENS, J.
JUSTICE STEVENS announced the judgment of the Court and
delivered an opinion, in which JUSTICE BLACKMUN, JUSTICE O'CONNOR,
and JUSTICE SOUTER join.
The question presented is whether an owner's lack of knowledge
of the fact that her home had been purchased with the proceeds of
illegal drug transactions constitutes a defense to a forfeiture
proceeding under the Comprehensive Drug Abuse Prevention and
Control Act of 1970, § 511(a), 84 Stat. 1276, as amended, 21 U. S.
C. § 881(a)(6).1
I
On April 3, 1989, the Government filed an
in rem action
against the parcel of land in Rumson, New Jersey, on which
respondent's home is located. The verified complaint alleged that
the property had been purchased in 1982 by respondent with funds
provided by Joseph Brenna that were "the proceeds traceable to an
[unlawful] exchange for a controlled substance," App. 13, and that
the property was therefore subject to seizure and forfeiture under
§ 881(a)(6), id., at 15.2
1 The statute provides:
"The following shall be subject to forfeiture to the United
States and no property right shall exist in them:
"(6) All moneys, negotiable instruments, securities, or other
things of value furnished or intended to be furnished by any person
in exchange for a controlled substance in violation of [21 U. S. C.
§§ 801-904], all proceeds traceable to such an exchange, and all
moneys, negotiable instruments, and securities used or intended to
be used to facilitate any violation of this subchapter, except that
no property shall be forfeited under this paragraph, to the extent
of the interest of an owner, by reason of any act or omission
established by that owner to have been committed or omitted without
the knowledge or consent of that owner."
2 See n. 1, supra. The complaint also alleged that the property
had been used in 1986 to facilitate the distribution of proceeds of
an illegal
115
On April 12, 1989, in an
ex parte proceeding, the
District Court determined that there was probable cause to believe
the premises were subject to forfeiture, and issued a summons and
warrant for arrest authorizing the United States marshal to take
possession of the premises. Respondent thereafter asserted a claim
to the property, was granted the right to defend the action,3 and
filed a motion for summary judgment.
During pretrial proceedings, the following facts were
established. In 1982, Joseph Brenna gave respondent approximately
$240,000 to purchase the home that she and her three children have
occupied ever since. Respondent is the sole owner of the property.
From 1981 until their separation in 1987, she maintained an
intimate personal relationship with Brenna. There is probable cause
to believe that the funds used to buy the house were proceeds of
illegal drug trafficking, but respondent swears that she had no
knowledge of its origins.
drug transaction, and was therefore subject to forfeiture
pursuant to § 881(a)(7), which provides:
"The following shall be subject to forfeiture to the United
States and no property right shall exist in them:
"(7) All real property, including any right, title, and interest
(including any leasehold interest) in the whole of any lot or tract
of land and any appurtenances or improvements, which is used, or
intended to be used, in any manner or part, to commit, or to
facilitate the commission of, a violation of this subchapter
punishable by more than one year's imprisonment, except that no
property shall be forfeited under this paragraph, to the extent of
an interest of an owner, by reason of any act or omission
established by that owner to have been committed or omitted without
the knowledge or consent of that owner."
No issue concerning the Government's claim under subparagraph
(7) is presented before us.
3 The United States Marshals Service entered into an agreement
with respondent that allows her to remain in possession of the
property pending the outcome of the litigation.
116
116 UNITED STATES
v. PARCEL OF RUMSON, N. J., LAND
Opinion of STEVENS, J.
Among the grounds advanced in support of her motion for summary
judgment was the claim that she was an innocent owner under §
881(a)(6). The District Court rejected this defense for two
reasons: First, it ruled that "the innocent owner defense may only
be invoked by those who can demonstrate that they are bona fide
purchasers for value" (emphasis in original); 4 second, the
court read the statute to offer the innocent owner defense only to
persons who acquired an interest in the property before the acts
giving rise to the forfeiture took place.5
Respondent was allowed to take an interlocutory appeal pursuant
to 28 U. s. C. § 1292(b). One of the controlling questions of law
presented to the Court of Appeals was:
"Whether an innocent owner defense may be asserted by a person
who is not a bona fide purchaser for value concerning a parcel of
land where the government has established probable cause to believe
that the parcel of land was purchased with monies traceable to drug
proceeds." 742 F. Supp. 189, 192 (NJ 1990).
Answering that question in the affirmative, the Court of Appeals
remanded the case to the District Court to determine whether
respondent was, in fact, an innocent owner.
4 "I find that the claimant cannot successfully invoke the
'innocent owner' defense here, because she admits that she received
the proceeds to purchase the premises as a
gift from Mr.
Brenna. More particularly, I find that where, as here, the
government has demonstrated probable cause to believe that property
is traceable to proceeds from drug transactions, the innocent owner
defense may only be invoked by those who can demonstrate that they
are bona fide
purchasers for value." 738 F. Supp. 854, 860
(NJ 1990).
5 "In particular, the 'innocent owner defense' at issue provides
that 'no property shall be forfeited ... to the extent of the
interest of
an owner, by reason of any act or omission ...
committed or omitted without the knowledge or consent of
that
owner.' 21 U. S. C. § 881(a)(6) (emphasis supplied). This
language implies that the acts or omissions giving rise to
forfeiture must be committed
after the third party acquires
a legitimate ownership interest in the property."
Ibid.
(emphasis in original).
117
The Court of Appeals refused to limit the innocent owner defense
to bona fide purchasers for value because the plain language of the
statute contains no such limitation,6 because it read the
legislative history as indicating that the term "owner" should be
broadly construed,7 and because the difference between the text of
§ 881(a)(6) and the text of the criminal forfeiture statute
evidenced congressional intent not to restrict the civil section in
the same way.8
The Court of Appeals also rejected the argument that respondent
could not be an innocent owner unless she acquired the property
before the drug transaction occurred. In advancing that argument
the Government had relied on the "relation back" doctrine embodied
in § 881(h), which provides that "[a]ll right, title, and interest
in property described in subsection (a) of this section shall vest
in the United States upon commission of the act giving rise to
forfeiture under this section." The court held that the relation
back doctrine applied only to "property described in subsection
(a)" and that the property at issue would not fit that description
if respondent could establish her innocent owner defense. The court
concluded that the Government's interpretation of § 881(h) "would
essentially serve to emasculate the innocent owner defense provided
for in section 881(a)(6). No one ob-
6 "Despite the appeal of this analysis, the plain language of
the innocent owner provision speaks only in terms of an 'owner' and
in no way limits the term 'owner' to a bona fide purchaser for
value."
937 F.2d
98, 101 (CA3 1991).
7"Furthermore, in
United States v.
Parcel of Real
Property Known as 6109 Grubb Road, 886 F.2d
618 (3d Cir. 1989), we determined, after reviewing the
legislative history of section 881(a)(6), that 'the term "owner"
should be broadly interpreted to include any person with a
recognizable legal or equitable interest in the property seized.'
Id. at 625 n. 4 (quoting 1978 U. S. Code Congo & Admin.
News at 9522-23)."
Id., at 101-102.
8 "Moreover, as the district court pointed out, the criminal
forfeiture statute, section 853, is explicitly limited to bona fide
purchasers for value, while in section 881 Congress omitted such
limiting language. We believe that such a difference was intended
by Congress."
Ibid.
118
118 UNITED STATES
v. PARCEL OF RUMSON, N. J., LAND
Opinion of STEVENS, J.
taining property after the occurrence of the drug
transaction-including a bona fide purchase for value-would be
eligible to offer an innocent owner defense on his behalf."
937 F.2d
98, 102 (CA3 1991).
The conflict between the decision of the Court of Appeals and
decisions of the Fourth and Tenth Circuits, see
In re One 1985
Nissan, 889 F.2d
1317 (CA4 1989);
Eggleston v.
Colorado, 873 F.2d
242, 245-248 (CAlO 1989), led us to grant certiorari, 503 U. S.
905 (1992). We now affirm.
II
Laws providing for the official seizure and forfeiture of
tangible property used in criminal activity have played an
important role in the history of our country. Colonial courts
regularly exercised jurisdiction to enforce English and local
statutes authorizing the seizure of ships and goods used in
violation of customs and revenue laws.9 Indeed, the misuse
9 "Long before the adoption of the Constitution the common law
courts in the Colonies-and later in the states during the period of
Confederation-were exercising jurisdiction
in rem in the
enforcement of forfeiture statutes. Like the Exchequer, in cases of
seizure on navigable waters they exercised a jurisdiction
concurrently with the courts of admiralty. But the vice-admiralty
courts in the Colonies did not begin to function with any real
continuity until about 1700 or shortly afterward. See Andrews,
Vice-Admiralty Courts in the Colonies, in Records of the
ViceAdmiralty Court of Rhode Island, 1617-1752 (ed. Towle, 1936),
p. 1; Andrews, The Colonial Period of American History, vol. 4, ch.
8; Harper, The English Navigation Laws, ch. 15; Osgood, the
American Colonies in the 18th Century, vol. 1, pp. 185-222,
299-303. By that time, the jurisdiction of common law courts to
condemn ships and cargoes for violation of the Navigation Acts had
been firmly established, apparently without question, and was
regularly exercised throughout the colonies. In general the suits
were brought against the vessel or article to be condemned, were
tried by jury, closely followed the procedure in Exchequer, and if
successful resulted in judgments of forfeiture or condemnation with
a provision for
119
of the hated general warrant is often cited as an important
cause of the American Revolution.10
The First Congress enacted legislation authorizing the seizure
and forfeiture of ships and cargos involved in customs offenses.ll
Other statutes authorized the seizure of ships engaged in piracy.12
When a ship was engaged in acts of "piratical aggression," it was
subject to confiscation notwithstanding the innocence of the owner
of the vessel.13
sale." C. J.
Hendry Co. v.
Moore, 318 U. S. 133, 139-140
(1943) (footnotes omitted).
lOWriting for the Court in
Stanford v.
Texas,
379 U. S. 476,
481-482 (1965), Justice Stewart explained: "Vivid in the memory of
the newly independent Americans were those general warrants known
as writs of assistance under which officers of the Crown had so
bedeviled the colonists. The hated writs of assistance had given
customs officials blanket authority to search where they pleased
for goods imported in violation of the British tax laws. They were
denounced by James Otis as 'the worst instrument of arbitrary
power, the most destructive of English liberty, and the fundamental
principles of law, that ever was found in an English law book,'
because they placed 'the liberty of every man in the hands of every
petty officer.' The historic occasion of that denunciation, in 1761
at Boston, has been characterized as 'perhaps the most prominent
event which inaugurated the resistance of the colonies to the
oppressions of the mother country. "Then and there," said John
Adams, "then and there was the first scene of the first act of
opposition to the arbitrary claims of Great Britain. Then and there
the child Independence was born.'''
Boyd v.
United
States, 116 U. S.
616, 625."
11 See,
e. g., §§ 12,36, 1 Stat. 39, 47; §§ 13,
14,22,27,67, 1 Stat. 157-159, 161, 163-164, 176.
12 See
The Palmyra, 12 Wheat. 1, 8 (1827).
13 "The next question is, whether the innocence of the owners
can withdraw the ship from the penalty of confiscation under the
act of Congress. Here, again, it may be remarked that the act makes
no exception whatsoever, whether the aggression be with or without
the co-operation of the owners. The vessel which commits the
aggression is treated as the offender, as the guilty instrument or
thing to which the forfeiture attaches, without any reference
whatsoever to the character or conduct of the owner. The vessel or
boat (says the act of Congress) from which such piratical
aggression, &c., shall have been first attempted or made shall
be
120
120 UNITED STATES
v. PARCEL OF RUMSON, N. J., LAND
Opinion of STEVENS, J.
Later statutes involved the seizure and forfeiture of
distilleries and other property used to defraud the United States
of tax revenues from the sale of alcoholic beverages. See,
e. g.,
United States v.
Stowell, 133 U. S. 1, 11-12 (1890).
In these cases, as in the piracy cases, the innocence of the owner
of premises leased to a distiller would not defeat a decree of
condemnation based on the fraudulent conduct of the lessee.14
condemned. Nor is there any thing new in a provision of this
sort. It is not an uncommon course in the admiralty, acting under
the law of nations, to treat the vessel in which or by which, or by
the master or crew thereof, a wrong or offense has been done as the
offender, without any regard whatsoever to the personal misconduct
or responsibility of the owner thereof. And this is done from the
necessity of the case, as the only adequate means of suppressing
the offence or wrong, or insuring an indemnity to the injured
party. The doctrine also is familiarly applied to cases of
smuggling and other misconduct under our revenue laws; and has been
applied to other kindred cases, such as cases arising on embargo
and nonintercourse acts. In short, the acts of the master and crew,
in cases of this sort, bind the interest of the owner of the ship,
whether he be innocent or guilty; and he impliedly submits to
whatever the law denounces as a forfeiture attached to the ship by
reason of their unlawful or wanton wrongs."
Harmony v.
United States, 2 How. 210, 233-234 (1844).
14 "Beyond controversy, the title of the premises and property
was in the claimant; and it is equally certain that he leased the
same to the lessee for the purposes of a distillery, and with the
knowledge that the lessee intended to use the premises to carry on
that business, and that he did use the same for that purpose.
"Fraud is not imputed to the owner of the premises; but the
evidence and the verdict of the jury warrant the conclusion that
the frauds charged in the information were satisfactorily proved,
from which it follows that the decree of condemnation is correct,
if it be true, as heretofore explained, that it was the property
and not the claimant that was put to trial under the pleadings; and
we are also of the opinion that the theory adopted by the court
below, that, if the lessee of the premises and the operator of the
distillery committed the alleged frauds, the government was
entitled to a verdict, even though the jury were of the opinion
that the claimant was ignorant of the fraudulent acts or omissions
of the distiller."
Dobbins's Distillery v.
United
States, 96 U. S.
395, 403-404 (1878).
121
In all of these early cases the Government's right to take
possession of property stemmed from the misuse of the property
itself. Indeed, until our decision in
Warden, Md.
Penitentiary v.
Hayden, 387 U. S. 294 (1967), the
Government had power to seize only property that" 'the private
citizen was not permitted to possess.'" 15 The holding in that case
that the Fourth Amendment did not prohibit the seizure of "mere
evidence" marked an important expansion of governmental power. See
Zurcher v.
Stanford Daily, 436 U. S. 547, 577580
(1978) (STEVENS, J., dissenting).
The decision by Congress in 1978 to amend the Comprehensive Drug
Abuse Prevention and Control Act of 1970, 84 Stat. 1236, to
authorize the seizure and forfeiture of proceeds of illegal drug
transactions, see 92 Stat. 3777, also marked an important expansion
of governmental power.16 Before that amendment, the statute had
authorized forfeiture of only the
15 "Thus stolen property-the fruits of crime-was always subject
to seizure. And the power to search for stolen property was
gradually extended to cover 'any property which the private citizen
was not permitted to possess,' which included instrumentalities of
crime (because of the early notion that items used in crime were
forfeited to the State) and contraband. Kaplan, Search and Seizure:
A No-Man's Land in the Criminal Law, 49 Calif. L. Rev. 474, 475. No
separate governmental interest in seizing evidence to apprehend and
convict criminals was recognized; it was required that some
property interest be asserted. The remedial structure also
reflected these dual premises. Trespass, replevin, and the other
means of redress for persons aggrieved by searches and seizures,
depended upon proof of a superior property interest. And since a
lawful seizure presupposed a superior claim, it was inconceivable
that a person could recover property lawfully seized."
Warden v.
Hayden, 387 U. S., at 303-304.
16 A precedent for this expansion had been established in 1970
by the Racketeer Influenced and Corrupt Organizations Act (RICO),
see 18 U. S. C. § 1963(a). Even RICO, however, did not specifically
provide for the forfeiture of "proceeds" until 1984, when Congress
added § 1963(a)(3) to resolve any doubt whether it intended the
statute to reach so far. See S. Rep. No. 98-225, pp. 191-200
(1983);
Russello v.
United States, 464 U. S. 16 (1983).
122
122 UNITED STATES
v. PARCEL OF RUMSON, N. J., LAND
Opinion of STEVENS, J.
illegal substances themselves and the instruments by which they
were manufactured and distributed.17 The original forfeiture
provisions of the 1970 statute had closely paralleled the early
statutes used to enforce the customs laws, the piracy laws, and the
revenue laws: They generally authorized the forfeiture of property
used in the commission of criminal activity, and they contained no
innocent owner defense. They applied to stolen goods, but they did
not apply to proceeds from the sale of stolen goods. Because the
statute, after its 1978 amendment, does authorize the forfeiture of
such proceeds and also contains an express and novel protec-
17 Section 511(a) of the 1970 Act, 84 Stat. 1276, provided:
"The following shall be subject to forfeiture to the United
States and no property right shall exist in them:
"(1) All controlled substances which have been manufactured,
distributed, dispensed, or acquired in violation of this title.
"(2) All raw materials, products, and equipment of any kind
which are used, or intended for use, in manufacturing, compounding,
processing, delivering, importing, or exporting any controlled
substance in violation of this title.
"(3) All property which is used, or intended for use, as a
container for property described in paragraph (1) or (2).
"(4) All conveyances, including aircraft, vehicles, or vessels,
which are used, or are intended for use, to transport, or in any
manner to facilitate the transportation, sale, receipt, possession,
or concealment of property described in paragraph (1) or (2),
except that-
"(A) no conveyance used by any person as a common carrier in the
transaction of business as a common carrier shall be forfeited
under the provisions of this section unless it shall appear that
the owner or other person in charge of such conveyance was a
consenting party or privy to a violation of this title or title
III; and
"(B) no conveyance shall be forfeited under the provisions of
this section by reason of any act or omission established by the
owner thereof to have been committed or omitted by any person other
than such owner while such conveyance was unlawfully in the
possession of a person other than the owner in violation of the
criminal laws of the United States, or of any State.
"(5) All books, records, and research, including formulas,
microfilm, tapes, and data which are used, or intended for use, in
violation of this title."
123
tion for innocent owners, we approach the task of construing it
with caution.
III
The Court of Appeals correctly concluded that the protection
afforded to innocent owners is not limited to bona fide purchasers.
The text of the statute is the strongest support for this
conclusion. The statute authorizes the forfeiture of moneys
exchanged for a controlled substance, and "all proceeds traceable
to such an exchange," with one unequivocal exception:
"[N]o property shall be forfeited under this paragraph, to the
extent of the interest of an owner, by reason of any act or
omission established by that owner to have been committed or
omitted without the knowledge or consent of that owner." 21 U. S.
C. § 881(a)(6).
The term "owner" is used three times and each time it is
unqualified. Such language is sufficiently unambiguous to foreclose
any contention that it applies only to bona fide purchasers.
Presumably that explains why the Government does not now challenge
this aspect of the Court of Appeals' ruling.
That the funds respondent used to purchase her home were a gift
does not, therefore, disqualify respondent from claiming that she
is an owner who had no knowledge of the alleged fact that those
funds were "proceeds traceable" to illegal sales of controlled
substances. Under the terms of the statute, her status would be
precisely the same if, instead of having received a gift of
$240,000 from Brenna, she had sold him a house for that price and
used the proceeds to buy the property at issue.
IV
Although the Government does not challenge our interpretation of
the statutory term "owner," it insists that respondent is not the
"owner" of a house she bought in 1982 and has lived in ever since.
Indeed, it contends that she never has
124
124 UNITED STATES
v. PARCEL OF RUMSON, N. J., LAND
Opinion of STEVENS, J.
been the owner of this parcel of land because the statute vested
ownership in the United States at the moment when the proceeds of
an illegal drug transaction were used to pay the purchase price. In
support of its position, the Government relies on both the text of
the 1984 amendment to the statute and the common-law relation back
doctrine. We conclude, however, that neither the amendment nor the
common-law rule makes the Government an owner of property before
forfeiture has been decreed.
In analyzing the Government's relation back argument, it is
important to remember that respondent invokes the innocent owner
defense against a claim that
proceeds traceable to an
illegal transaction are forfeitable. The Government contends that
the money that Brenna received in exchange for narcotics became
Government property at the moment Brenna received it and that
respondent's house became Government property when that tainted
money was used in its purchase. Because neither the money nor the
house could have constituted forfeitable proceeds until after an
illegal transaction occurred, the Government's submission would
effectively eliminate the innocent owner defense in almost every
imaginable case in which proceeds could be forfeited. It seems
unlikely that Congress would create a meaningless defense.
Moreover, considering that a logical application of the
Government's submission would result in the forfeiture of property
innocently acquired by persons who had been paid with illegal
proceeds for providing goods or services to drug traffickers,18 the
burden of persuading us that Congress intended such an inequitable
result is especially heavy.
18 At oral argument the Government suggested that a narrow
interpretation of the word "proceeds" would "probably" prevent this
absurdity. See Tr. of Oral Arg. 27. The Government's brief,
however, took the unequivocal position that the statute withholds
the innocent owner defense from anyone who acquires proceeds after
the illegal transaction took place. See Brief for United States 10,
21, 25, 27.
125
The Government recognizes that the 1984 amendment did not go
into effect until two years after respondent acquired the property
at issue in this case. It therefore relies heavily on the
common-law relation back doctrine applied to
in rem
forfeitures. That doctrine applied the fiction that property used
in violation of law was itself the wrongdoer that must be held to
account for the harms it had caused.19 Because the property, or
"res," was treated as the wrongdoer, it was appropriate to regard
it as the actual party to the
in rem forfeiture proceeding.
Under the relation back doctrine, a decree of forfeiture had the
effect of vesting title to the offending res in the Government as
of the date of its offending conduct. Because we are not aware of
any common-law precedent for treating proceeds traceable to an
unlawful exchange as a fictional wrongdoer subject to forfeiture,
it is not entirely clear that the common-law relation back doctrine
is applicable. Assuming that the doctrine does apply, however, it
is nevertheless clear that under the common-law rule the fictional
and retroactive vesting was not self-executing.
Chief Justice Marshall explained that forfeiture does not
automatically vest title to property in the Government:
"It has been proved, that in all forfeitures accruing at common
law, nothing vests in the government until some legal step shall be
taken for the assertion of its right, after which, for many
purposes, the doctrine of relation carries back the title to the
commission of the offence." United States v. Grundy,
3 Cranch 337, 350-351 (1806).20
19See Calero-Toledo v. Pearson Yacht Leasing Co.,
416 U. S. 663,680684
(1974).
20 In his dissent, JUSTICE KENNEDY advocates the adoption of a
new common-law rule that would avoid the need to construe the terms
of the statute that created the Government's right to forfeit
proceeds of drug transactions. Under his suggested self-executing
rule, patterned after an amalgam of the law of trusts and the law
of secured transactions, the Government would be treated as the
owner of a secured or beneficial interest in forfeitable proceeds
even before a decree of forfeiture is entered. The various
authorities that he cites support the proposition that if such
126
126 UNITED STATES
v. PARCEL OF RUMSON, N. J., LAND
Opinion of STEVENS, J.
The same rule applied when a statute (a statute that contained
no specific relation back provision) authorized the forfeiture. In
a passage to which the Government has referred US,21 we stated our
understanding of how the Government's title to forfeited property
relates back to the moment of forfeit ability:
"By the settled doctrine of this court, whenever a statute
enacts that upon the commission of a certain act specific property
used in or connected with that act shall be forfeited, the
forfeiture takes effect immediately upon the commission of the act;
the right to the property then vests in the United States,
although their title is not perfected until judicial
condemnation; the forfeiture constitutes a statutory transfer
of the right to the United States at the time the offence is
committed; and
an interest exists, it may be extinguished by a sale to a bona
fide purchaser; they provide no support for the assumption that
such an interest springs into existence independently. As a matter
of common law, his proposal is inconsistent with Chief Justice
Marshall's statement that "nothing vests in the government until
some legal step shall be taken," and with the cases cited by
JUSTICE SCALIA,
post, at 132. As a matter of statutory law,
it is improper to rely on § 881(a) as the source of the
Government's interest in proceeds without also giving effect to the
statutory language defining the scope of that interest. That a
statutory provision contains "puzzling" language, or seems unwise,
is not an appropriate reason for simply ignoring its text.
JUSTICE KENNEDY'S dramatic suggestion that our construction of
the 1984 amendment "rips out,"
post, at 145, the
"centerpiece of the Nation's drug enforcement laws,"
post,
at 144, rests on what he characterizes as the "safe" assumption
that the innocent owner defense would be available to "an
associate" of a criminal who could "shelter the proceeds from
forfeiture, to be reacquired once he is clear from law enforcement
authorities," ibid. As a matter of fact, forfeitable proceeds are
much more likely to be possessed by drug dealers themselves than by
transferees sufficiently remote to qualify as innocent owners; as a
matter of law, it is quite clear that neither an "associate" in the
criminal enterprise nor a temporary custodian of drug proceeds
would qualify as an innocent owner; indeed, neither would a sham
bona fide purchaser.
21 See Pet. for Cert. 9-10; Brief for United States 17.
127
the condemnation, when obtained, relates back to that
time, and avoids all intermediate sales and alienations, even to
purchasers in good faith." United States v. Stowell,
133 U. S., at 16-17 (emphases added).
If the Government wins a judgment of forfeiture under the
common-law rule-which applied to common-law forfeitures and to
forfeitures under statutes without specific relation back
provisions-the vesting of its title in the property relates back to
the moment when the property became forfeitable. Until the
Government does win such a judgment, however, someone else owns the
property. That person may therefore invoke any defense available to
the owner of the property before the forfeiture is decreed.
In this case a statute allows respondent to prove that she is an
innocent owner. And, as the Chief Justice further explained in
Grundy, if a forfeiture is authorized by statute, "the rules
of the common law may be dispensed with," 3 Cranch, at 351.
Congress had the opportunity to dispense with the common-law
doctrine when it enacted § 881(h); as we read that subsection,
however, Congress merely codified the common-law rule. Because that
rule was never applied to the forfeiture of proceeds, and because
the statute now contains an innocent owner defense, it may not be
immediately clear that they lead to the same result.
The 1984 amendment provides:
"All right, title, and interest in property described in
subsection (a) of this section shall vest in the United States upon
commission of the act giving rise to forfeiture under this
section." 21 U. S. C. § 881(h).
Because proceeds traceable to illegal drug transactions are a
species of "property described in subsection (a)," the Government
argues that this provision has the effect of preventing such
proceeds from becoming the property of anyone other than the United
States. The argument fails.
128
128 UNITED STATES
v. PARCEL OF RUMSON, N. J., LAND
Opinion of STEVENS, J.
Although proceeds subject to § 881(h) are "described" in the
first part of subsection (a)(6), the last clause of that subsection
exempts certain proceeds-proceeds owned by one unaware of their
criminal source-from forfeiture. As the Senate Report on the 1984
amendment correctly observed, the amendment applies only to
"property which is subject to civil forfeiture under section
881(a)." 22 Under § 881(a)(6), the property of one who can satisfy
the innocent owner defense is not subject to civil forfeiture.
Because the success of any defense available under § 881 (a) will
necessarily determine whether § 881(h) applies, § 881(a)(6) must
allow an assertion of the defense
before §881(h)
applies.23
22 The Report provides:
"Section 306 also adds two new subsections at the end of section
881.
The first provides that all right, title, and interest in
property which is subject to civil forfeiture under section
881
(a) vests in the United States upon the commission of
the acts giving rise to the forfeiture." S. Rep. No. 98-225, p. 215
(1983) (emphasis added).
23 The logic of the Government's argument would apparently apply
as well to the innocent owner defense added to the statute in 1988.
That amendment provides, in part:
"[N]o conveyance shall be forfeited under this paragraph to the
extent of an interest of an owner, by reason of any act or omission
established by that owner to have been committed or omitted without
the knowledge, consent, or willful blindness of the owner." §
6075(3)(C), 102 Stat. 4324. That amendment presumably was enacted
to protect lessors like the owner whose yacht was forfeited in a
proceeding that led this Court to observe:
"It therefore has been implied that it would be difficult to
reject the constitutional claim of an owner whose property
subjected to forfeiture had been taken from him without his privity
or consent. See,
[Peisch v.
Ware, 4 Cranch 347, 364
(1808)];
Goldsmith-Grant Co. v.
United States, 254 U.
S., at 512;
United States v.
One Ford Coupe
Automobile, 272 U. S., at 333;
Van Oster v.
Kansas, 272 U. S., at 467. Similarly, the same might be said
of an owner who proved not only that he was uninvolved in and
unaware of the wrongful activity, but also that he had done all
that reasonably could be expected to prevent the proscribed use of
his property; for, in that circumstance, it would be difficult to
conclude that forfeiture served legitimate purposes and was not
unduly oppressive. Cf.
Armstrong v.
129
Therefore, when Congress enacted this innocent owner defense,
and then specifically inserted this relation back provision into
the statute, it did not disturb the common-law rights of either
owners of forfeitable property or the Government. The common-law
rule had always allowed owners to invoke defenses made available to
them
before the Government's title vested, and after title
did vest, the common-law rule had always related that title back to
the date of the commission of the act that made the specific
property forfeitable. Our decision denies the Government no
benefits of the relation back doctrine. The Government cannot
profit from the common-law doctrine of relation back until it has
obtained a judgment of forfeiture. And it cannot profit from the
statutory version of that doctrine in § 881(h) until respondent has
had the chance to invoke and offer evidence to support the innocent
owner defense under § 881(a)(6).
V
As a postscript we identify two issues that the parties have
addressed, but that need not be decided.
The Government has argued that the Court of Appeals'
construction of the statute is highly implausible because it would
enable a transferee of the proceeds of an illegal exchange to
qualify as an innocent owner if she was unaware of the illegal
transaction when it occurred but learned about it before she
accepted the forfeitable proceeds. Respondent disputes this reading
of the statute and argues that both legislative history and common
sense suggest that the transferee's lack of knowledge must be
established as of the time the proceeds at issue are transferred.24
Moreover, whether
United States, 364 U. S. 40, 49 (1960)."
Calero-Toledo v.
Pearson Yacht Leasing Co., 416 U.
S., at 689-690 (footnote omitted).
24 See Brief for Respondent 31-32, 37-38; Tr. of Oral Arg. 38.
The several
amici make the same point, see Brief for
American Bankers Association as
Amicus Curiae 15; Brief for
Federal Home Loan Mortgage Corpo-
130
130 UNITED STATES
v. PARCEL OF RUMSON, N. J., LAND
Opinion of STEVENS, J.
or not the text of the statute is sufficiently ambiguous to
justify resort to the legislative history, equitable doctrines may
foreclose the assertion of an innocent owner defense by a party
with guilty knowledge of the tainted character of the property. In
all events, we need not resolve this issue in this case; respondent
has assumed the burden of convincing the trier of fact that she had
no knowledge of the alleged source of Brenna's gift in 1982, when
she received it.25 In its order denying respondent's motion for
summary judgment, the District Court assumed that respondent could
prove what she had alleged, as did the Court of Appeals in allowing
the interlocutory appeal from that order. We merely decide, as did
both of those courts, whether her asserted defense was insufficient
as a matter of law.26
At oral argument, the Government also suggested that the
statutory reference to "all proceeds traceable to such an exchange"
is subject to a narrowing construction that might avoid some of the
harsh consequences suggested in the various
amici briefs
expressing concerns about the impact of the statute on real estate
titles. See Tr. of Oral Arg. 5-10, 1925. If a house were received
in exchange for a quantity of illegal substances and that house
were in turn exchanged for another house, would the traceable
proceeds consist of the first house, the second house, or both,
with the Government having an election between the two? Questions
of this char-
ration as
Amicus Curiae 11-12; Brieffor American Land
Title Association et al. as
Amici Curiae 11-12; Brief for
Dade County Tax Collector et al. as
Amici Curiae 16-17.
25 "The statute should be read to require that the owner assert
his lack of knowledge of the criminal transaction at the time of
the transfer. Since Goodwin did not have any knowledge of the
alleged criminal transaction until long after the transfer, she
should be protected by the innocent owner clause." Brief for
Respondent 37-38.
26 If she can show that she was unaware of the illegal source of
the funds at the time Brenna transferred them to her, then she was
necessarily unaware that they were the profits of an illegal
transaction at the time of the transaction itself.
131
acter are not embraced within the issues that we granted
certiorari to resolve, however, and for that reason, see
Yee
v.
Escondido, 503 U. S. 519, 535-538
(1992), we express no opinion concerning the proper construction of
that statutory term.
The judgment of the Court of Appeals is affirmed.
It is so ordered.
JUSTICE SCALIA, with whom JUSTICE THOMAS joins, concurring in
the judgment.
I am in accord with much of the plurality's reasoning, but
cannot join its opinion for two reasons. First, while I agree that
the "innocent owner" exception in this case produces the same
result as would an "innocent owner" exception to traditional
common-law forfeiture (with its relation-back principle), I do not
reach that conclusion through the plurality's reading of the phrase
"property described in subsection (a)," see
ante, at
127-129, which seems to me implausible. Second, I see no proper
basis for the plurality's concluding that "respondent has assumed
the burden of convincing the trier of fact that she had no
knowledge of the alleged source of Brenna's gift in 1982, when she
received it,"
ante, at 130.
I
The Government's argument in this case has rested on the
fundamental misconception that, under the common-law relation-back
doctrine, all rights and legal title to the property pass to the
United States "at the moment of illegal use." Brief for United
States 16. Because the Government believes that the doctrine
operates at the time of the illegal act, it finds the term
"relation
back" to be "something of a misnomer."
Ibid. But the name of the doctrine is not wrong; the
Government's understanding of it is. It is a doctrine of
retroactive vesting of title that operates only upon entry
of the judicial order of forfeiture or condemnation: "[T]he decree
of condemnation when entered relates back to
132
132 UNITED STATES
v. PARCEL OF RUMSON, N. J., LAND
SCALIA, J., concurring in judgment
the time of the commission of the wrongful acts, and takes date
from the wrongful acts and not from the date of the sentence or
decree."
Henderson's Distilled Spirits, 14 Wall. 44, 56
(1872). "While, under the statute in question, a judgment of
forfeiture relates back to the date of the offense as proved, that
result follows only from an effective judgment of condemnation."
Motlow v.
State ex rel. Koeln, 295 U. S. 97, 99 (1935).
The relation-back rule applies only "in cases where the
[Government's] title ha[s] been consummated by seizure, suit, and
judgment, or decree of condemnation,"
Confiscation Cases, 7
Wall. 454, 460 (1869), whereupon "the doctrine of relation
carries back the title to the commission of the offense,"
United States v.
Grundy, 3 Cranch 337,350351 (1806)
(Marshall, C. J.) (emphasis added). See also
United States
v.
Stowell, 133
U. S. 1, 16-17 (1890), quoted
ante, at 126-127.
Though I disagree with the Government as to the meaning of the
common-law doctrine, I agree with the Government that the doctrine
is embodied in the statute at issue here. The plurality, if I
understand it correctly, does not say that, but merely asserts that
in the present case the consequence of applying the statutory
language is to produce the same result that an "innocent owner"
exception under the common-law rule would produce. Title 21 U. S.
C. § 881(h) provides: "All right, title, and interest in property
described in subsection (a) of this section shall vest in the
United States upon commission of the act giving rise to forfeiture
under this section." The plurality would read the phrase "property
described in subsection (a)" as not encompassing any property that
is protected from forfeiture by the "innocent owner" provision of §
881 (a) (6). It proceeds to reason that since, therefore, the
application of subsection (a)(6) must be determined
before
subsection (h) can be fully applied, respondent must be considered
an "owner" under that provision-just as she would have been
considered an "owner" (prior to decree of forfeiture) at common
law.
133
I would not agree with the plurality's conclusion, even if I
agreed with the premises upon which it is based. The fact that
application of subsection (a)(6) must be determined before
subsection (h) can be fully applied simply does not establish that
the word "owner" in subsection (a)(6) must be deemed to include (as
it would at common law) anyone who held title prior to the actual
decree of forfeiture. To assume that is simply to beg the question.
Besides the fact that its conclusion is a non sequitur, the
plurality's premises are mistaken. To begin with, the
innocent-owner provision in subsection (a)(6) does
not
insulate any "property described" in subsection (a)(6) from
forfeiture; it protects only the "interest" of certain owners in
any of the described property. But even if it could be regarded as
insulating some "property described" from forfeiture, that property
would still be covered by subsection (h), which refers to "property
described," not "property
forfeited." In sum, I do
not see how the plurality can, solely by focusing on the phrase
"property described in subsection (a)," establish that the word
"owner" in subsection (a) includes persons holding title after the
forfeiture-producing offense.
The Government agrees with me that § 881(h) "covers all
'property described in subsection (a),' including property so
described that is nonetheless exempted from forfeiture because of
the innocent owner defense." Brief for United States 29. That
position is quite incompatible, however, with the Government's
contention that § 881(h) operates at the time of the wrongful act,
since if both were true
no one would be protected under the
plain language of the innocentowner provision. In the Government's
view, the term "owner" in § 881(a)(6) refers to individuals "who
owned the seized assets before those assets were ever tainted by
involvement in drug transactions."
Id., at 21. But if §
881(h) operates immediately to vest in the Government legal title
to all property described in § 881(a), even that class of "owners"
would be immediately divested of their property
134
134 UNITED STATES
v. PARCEL OF RUMSON, N. J., LAND
SCALIA, J., concurring in judgment
interests and would be at most "former owners" at the time of
forfeiture proceedings. Because of this difficulty, the Government
is forced to argue that the word "owner" in § 881(a)(6) should be
interpreted to mean "former owner." Reply Brief for United States
5. Thus, if § 881(h) operates at the time of the illegal
transaction as the Government contends, either the plain language
of the innocent-owner provision must be slighted or the provision
must be deprived of all effect. This problem does not exist if §
881(h) is read to be, not an unheard-of provision for immediate,
undecreed, secret vesting of title in the United States, but rather
an expression of the traditional relation-back doctrine-stating
when title shall vest
if forfeiture is decreed. On that
hypothesis, the person holding legal title is genuinely the "owner"
at the time (prior to the decree of forfeiture) that the court
applies § 881(a)(6)'s innocent-owner provision.
I acknowledge that there is some textual difficulty with the
interpretation I propose as well: § 881(h) says that title "shall
vest in the United States upon commission of the act giving rise to
forfeiture," and I am reading it to say that title "shall vest in
the United States upon forfeiture, effective as of commission of
the act giving rise to forfeiture." The former is certainly an
imprecise way of saying the latter. But it is, I think, an
imprecision one might expect in a legal culture familiar with
retroactive forfeiture, and less of an imprecision than any of the
other suggested interpretations require. Moreover, this
interpretation locates the imprecision within a phrase where clear
evidence of imprecision exists, since § 881 (h)'s statement that
"all right ... shall vest in the United States" flatly contradicts
the statement in § 881(a) that "[t]he following shall be
subject
to forfeiture to the United States." What the United States
already owns cannot be forfeited to it.
This interpretation of § 881(h) is the only one that makes sense
within the structure of the statutory forfeiture procedures.
Subsection 881(d) provides that forfeitures under
135
§ 881 are governed by the procedures applicable to "summary and
judicial forfeiture, and condemnation of property for violation of
the customs laws," set forth in 19 U. S. C. § 1602
et seq.
It is clear from these procedures that the Government does not gain
title to the property until there is a decree of forfeiture.
Section 1604, for example, requires the Attorney General to
commence proceedings in district court where such proceedings are
"necessary" "for the recovery" of a forfeiture. See
United
States v.
$8,850, 461 U. S. 555, 557-558,
and n. 2 (1983) (detailing circumstances requiring judicial
forfeiture proceedings). If, however, legal title to the property
actually vested in the United States at the time of the illegal
act, judicial forfeiture proceedings would never be "necessary."
Under the customs forfeiture procedures the United States can, in
certain limited circumstances, obtain title to property by an
Executive declaration of forfeiture. The statute provides that such
an Executive "declaration of forfeiture ... shall have the same
force and effect as a final decree and order of forfeiture in a
judicial forfeiture proceeding in a district court of the United
States," and then specifies what that effect is: "Title
shall be
deemed to vest in the United States ... from the date of the
act for which the forfeiture was incurred." 19 U. S. C. § 1609(b)
(emphasis added). Finally, if the Government's construction of §
881(h) were correct, the statute-of-limitations provision, 19 U. S.
C. § 1621,1 would need to state that title
reverts to the
former owners of the property, rather than (as it does) simply
limit
1 In the proceedings below, the Government argued that § 1621
was the relevant statute of limitations for § 881 and the Court of
Appeals agreed. See Brief for United States, Plaintiff-Appellee in
No. 90-5823 (CA3), pp. 19-23; App. to Pet. for Cert. 14a-15a. That
ruling was not appealed and is consistent with other authority. See
United States v.
One Parcel of Real Property, 2401 S.
Claremont, Independence, Mo., 724 F. Supp. 670, 673 (WD Mo.
1989). See also
United States v.
$8,850, 461 U. S. 555, 563, n. 13
(1983) (forfeiture statute not specifying procedures to be used
held to incorporate statute of limitations in § 1621).
136
136 UNITED STATES
v. PARCEL OF RUMSON, N. J., LAND
SCALIA, J., concurring in judgment
the right of the United States to institute an "action to
recover" a forfeiture.2
The traditional operation of the relation-back doctrine also
explains the textual difference between § 881 (a) (6)'s
innocent-"owner" and § 853's innocent-"transferee" provisions-a
difference on which the Government relies heavily. See Brief for
United States 31-35; Reply Brief for United States 10-11. Section
853, which provides for forfeiture of drug-related assets in
connection with criminal convictions, uses the term
"transferee"-not "owner"-to protect the interests of persons who
acquire property after the illegal act has occurred.3 The
Government contends that the reason for this variance is that the
term "owner" simply does not cover persons acquiring interests
after the illegal act. That explanation arrives under a cloud of
suspicion, since it is impossible to imagine (and the Government
was unable to suggest)
why Congress would provide greater
protection for postoffense owners (or "transferees") in the context
of criminal forfeitures. The real explanation, I think, is that the
term "owner" could not accurately be used in the context of
2 Section 881(d) provides that the customs procedures are
applicable only to the extent "not inconsistent with the provisions
[of §881]"-so one might argue that the provisions I have discussed
in this paragraph, to the extent contrary to the Government's
interpretation of § 881(h), are simply inapplicable. That
disposition is theoretically possible but not likely, since it
produces massive displacement of not merely the details but the
fundamental structure of the referenced forfeiture procedures.
3 Title 21 U. S. C. § 853(c) provides:
"All right, title, and interest in property described in
subsection (a) of this section vests in the United States upon the
commission of the act giving rise to forfeiture under this section.
Any such property that is subsequently transferred to a person
other than the defendant may be the subject of a special verdict of
forfeiture and thereafter shall be ordered forfeited to the United
States, unless the transferee establishes in a hearing pursuant to
subsection (n) of this section that he is a bona fide purchaser for
value of such property who at the time of purchase was reasonably
without cause to believe that the property was subject to
forfeiture under this section."
137
§ 853 because third parties can assert their property rights
under that section only "[f]ollowing the entry of an order of
forfeiture." 21 U. S. C. § 853(n). See also § 853(k) (prohibiting
third parties from intervening to vindicate their property
interests except as provided in subsection (n)). Thus, at the time
the third-party interests are being adjudicated, the relation-back
doctrine has already operated to carry back the title of the United
States to the time of the act giving rise to the forfeiture, and
the third parties have been divested of their property interests.
See § 853(c) (codifying the relation-back principle for criminal
forfeiture). Indeed, if the court finds that the transferee has a
valid claim under the statute, it must "amend the order of
forfeiture." § 853(n)(6).
The owner/transferee distinction is found in other provisions
throughout the United States Code, and the traditional
relation-back doctrine provides the only explanation for it. While
Congress has provided for the protection of "owners" in many other
forfeiture statutes, see,
e. g., 15 U. S. C. § 715f(a)
(allowing court to order the return of oil subject to forfeiture
"to the owner thereof"); 16 U. S. C. § 2409(c) (permitting the
"owner" of property seized for forfeiture to recover it,
pendente lite, by posting bond); § 2439(c) (same); 18 U. S.
C. § 512(a) (permitting the "owner" of motor vehicle with altered
identification number to avoid forfeiture by proving lack of
knowledge), it consistently protects "transferees" in criminal
forfeiture statutes that follow the procedure set forth in § 853:
forfeiture first, claims of third parties second. See 18 U. S. C. §
1467 (criminal forfeitures for obscenity); 18 U. S. C. § 1963 (1988
ed. and Supp. III) (criminal RICO forfeitures); 18 U. S. C. § 2253
(1988 ed. and Supp. III) (criminal forfeitures for sexual
exploitation of children).4
4 It is worth observing that, if the Government's view of the
relationback principle were correct, the protection provided for
transferees in the last-mentioned statute would be utterly
illusory. The property subject to forfeiture under 18 U. S. C. §
2253 (1988 ed. and Supp. III) is also covered by a parallel civil
forfeiture statute that follows the pattern of § 881: It
138
138 UNITED STATES
v. PARCEL OF RUMSON, N. J., LAND
SCALIA, J., concurring in judgment
I think the result reached today is correct because the
relation-back principle recited in § 881(h) is the familiar,
traditional one, and the term "owner" in § 881(a)(6) bears its
ordinary meaning.
II
I cannot join the plurality's conclusion that respondent has
assumed the burden of proving that "she had no knowledge of the
alleged source of Brenna's gift in 1982, when she received it."
Ante, at 130. To support this, the plurality cites a passage
from respondent's brief taking the position that the owner's lack
of knowledge of the criminal activity should be tested "at the time
of the transfer," Brief for Respondent 37-38. The fact of the
matter is that
both parties took positions before this Court
that may be against their interests on remand. The Government may
find inconvenient its contention that "the statutory test for
innocence ... looks to the claimant's awareness of the illegal acts
giving rise to forfeiture at the time they occur." Reply Brief for
United States 8. Which, if either, party will be estopped from
changing position is an issue that we should not address for two
simple reasons: (1) Neither party has yet attempted to change
position. (2) The issue is not fairly included within the question
on which the Court granted certiorari. (That question was, "Whether
a person who receives a gift of money derived from drug trafficking
and uses that money to purchase real property is entitled to assert
an 'innocent owner' defense in an action seeking civil forfeiture
of the real prop-
protects only the rights of "owners," and has an express
relation-back provision. See 18 U. S. C. §§ 2254(a), 2254(g) (1988
ed. and Supp. III). Under the Government's view, whenever the
United States would be unable to obtain property through the
criminal forfeiture mechanism because of the innocent-"transferee"
defense, it could simply move against the same property in a civil
forfeiture proceeding, which gives a defense only to "owners." See
also 18 U. S. C. § 981 (1988 ed. and Supp. III) (civil forfeiture
provision); 18 U. S. C. § 982 (1988 ed., Supp. III) (parallel
criminal forfeiture statute incorporating by reference the
procedures in 21 U. S. C. § 853).
139
erty." Pet. for Cert. i. The plurality's reformulation of the
question in the first sentence of the opinion is inexplicable.)
This question of the relevant time for purposes of determining
knowledge was not a separate issue in the case, but arose
indirectly, by way of argumentation on the relationback point. The
Government argued that since (as it believed) knowledge had to be
measured at the time of the illegal act, § 881(h) must be
interpreted to vest title in the United States immediately, because
otherwise the statute would produce the following "untenable
result": A subsequent owner who knew of the illegal act at the time
he acquired the property, but did not know of it at the time the
act was committed, would be entitled to the innocent-owner defense.
Brief for United States 25. That argument can be rejected by
deciding
either that the Government's view of the timing of
knowledge is wrong,
or that, even if it may be right, the
problem it creates is not so severe as to compel a ruling for the
Government on the relation-back issue. (I take the latter course: I
do not find inconceivable the possibility that post-illegal-act
transferees with post-illegal-act knowledge of the earlier
illegality are provided a defense against forfeiture. The
Government would still be entitled to the property held by the drug
dealer and by close friends and relatives who are unable to meet
their burden of proof as to ignorance of the illegal act when it
occurred.) But it entirely escapes me how the Government's
argument, an argument
in principle, can be answered by
simply saying that, in the present case, respondent has committed
herself to prove that she had no knowledge of the source of the
funds at the time she received them.
For the reasons stated, I concur in the judgment.
JUSTICE KENNEDY, with whom THE CHIEF JUSTICE and JUSTICE WHITE
join, dissenting.
Once this case left the District Court, the appellate courts and
all counsel began to grapple with the wrong issue, one
140
140 UNITED STATES
v. PARCEL OF RUMSON, N. J., LAND
KENNEDY, J., dissenting
that need not be addressed. The right question, I submit, is not
whether the donee's ownership meets the statutory test of
innocence. 21 U. S. C. § 881(a)(6). Instead, the threshold and
dispositive inquiry is whether the donee had any ownership rights
that required a separate forfeiture, given that her title was
defective and subject to the Government's claim from the outset. We
must ask whether a wrongdoer holding a forfeitable asset, property
in which the United States has an undoubted superior claim, can
defeat that claim by a transfer for no value. Under settled
principles of property transfers, trusts, and commercial
transactions, the answer is no. We need not address the donee's
position except to acknowledge that she has whatever right the
donor had, a right which falls before the Government's superior
claim. In this case, forfeiture is determined by the title and
ownership of the asset in the hands of the donor, not the donee.
The position of respondent as the present holder of the asset and
her knowledge, or lack of knowledge, regarding any drug offenses
are, under these facts, but abstract inquiries, unnecessary to the
resolution of the case.
I
We can begin with the state of affairs when the alleged drug
dealer held the funds he was later to transfer to respondent. Those
moneys were proceeds of unlawful drug transactions and in the
dealer's hands were, without question, subject to forfeiture under
§ 881(a)(6). The dealer did not just know of the illegal acts; he
performed them. As the case is presented to us, any defense of his
based on lack of knowledge is not a possibility. As long as the
dealer held the illegal asset, it was subject to forfeiture and to
the claim of the United States, which had a superior interest in
the property.
Suppose the drug dealer with unlawful proceeds had encountered a
swindler who, knowing nothing of the dealer's
141
drug offenses, defrauded him of the forfeitable property. In an
action by the Government against the property, it need not seek to
forfeit any ownership interest of the swindler. In the
in
rem proceeding the Government would need to establish only the
forfeitable character of the property in the hands of the dealer
and then trace the property to the swindler who, having no higher
or better title to interpose, must yield to the Government's
interest. In this context we would not entertain an argument that
the swindler could keep the property because he had no knowledge of
the illegal drug transaction. The defect in title arose in the
hands of the first holder and was not eliminated by the transfer
procured through fraud. Thus the only possible "interest of an
owner," § 881(a)(6), that the swindler could hold was one inferior
to the interest of the United States.
Here, of course, the holder is a donee, not a swindler, but the
result is the same. As against a claimant with a superior right
enforceable against the donor, a donee has no defense save as might
exist, say, under a statute of limitations. The case would be
different, of course, if the donee had in turn transferred the
property to a bona fide purchaser for full consideration. The
voidable title in the asset at that point would become unassailable
in the purchaser, subject to any heightened rules of innocence the
Government might lawfully impose under the forfeiture laws. But
there is no bona fide purchaser here.
The matter not having been argued before us in these terms,
perhaps it is premature to say whether the controlling law for
transferring and tracing property rights of the United States under
§ 881 is federal common law, see
Boyle v.
United
Technologies Corp., 487 U. S. 500 (1988);
Clearfield Trust Co. v.
United States, 318 U. S. 363 (1943), or
the law of the State governing the transfer under normal
confiict-oflaw rules, which here appears to be New Jersey. That
matter could be explored on remand if the parties thought any-
142
142 UNITED STATES
v. PARCEL OF RUMSON, N. J., LAND
KENNEDY, J., dissenting
thing turned upon it, though the result likely would be the same
under either source of law because the controlling principles are
so well settled.
The controlling principles are established by the law of
voidable title, a centuries-old concept now codified in 49 States
as part of their adoption of the Uniform Commercial Code. 1 J.
White & R. Summers, Uniform Commercial Code 1, 186-191 (3d ed.
1988). These principles should control the inquiry into whether
property once "subject to forfeiture to the United States," §
881(a), remains so after subsequent transactions. Cf. R. Brown,
Personal Property § 70, pp. 237-238 (2d ed. 1955); Restatement
(Second) of Trusts §§ 284, 287, 289, pp. 47-48, 54-56 (1959);
Restatement (Second) of Property § 34.9, p. 338 (1992). The primary
rules of voidable title are manageable and few in number. The first
is that one who purchases property in good faith and for value from
the holder of voidable title obtains good title. The second rule,
reciprocal to the first, is that one who acquires property from a
holder of voidable title other than by a good-faith purchase for
value obtains nothing beyond what the transferor held. The third
rule is that a transferee who acquires property from a good-faith
purchaser for value or one of his lawful successors obtains good
title, even if the transferee did not pay value or act in good
faith. See Ames, Purchase for Value Without Notice, 1 Harv. L. Rev.
1 (1887); Uniform Commercial Code § 2-403(1) (Official Draft 1978);
Uniform Commercial Code § 2-403(1) (Official Draft 1957); Uniform
Commercial Code § 2-403(1) (Official Draft 1952). See also 4 A.
Scott & W. Fratcher, Law of Trusts §§ 284-289, pp. 35-70 (4th
ed. 1989); Searey, Purchase for Value Without Notice, 23 Yale L. J.
447 (1914).
Applying these rules to a transferee of proceeds from a drug
sale, it follows that the transferee must be, or take from, a bona
fide purchaser for value to assert an innocent owner defense under
§ 881(a)(6). Bona fide purchasers for value or their lawful
successors, having engaged in or bene-
143
fited from a transaction that the law accepts as capable of
creating property rights instead of merely transferring possession,
are entitled to test their claim of ownership under § 881(a)(6)
against what the Government alleges to be its own superior right.
The outcome, that one who had defective title can create good title
in the new holder by transfer for value, is not to be condemned as
some bizarre surprise. This is not alchemy. It is the common law.
See
Independent Coal &
Coke Co. v.
United
States, 274 U. S.
640, 647
(1927); United States v.
Chase Nat.
Bank, 252 U. S.
485, 494
(1920); Wright-Blodgett Co. v.
United
States, 236 U. S.
397, 403 (1915). By contrast, the donee of drug trafficking
proceeds has no valid claim to the proceeds, not because she has
done anything wrong but because she stands in the shoes of one who
has. It is the nature of the donor's interest, which the donee has
assumed, that renders the property subject to forfeiture. Cf.
Otis v.
Otis, 167 Mass. 245, 246, 45 N. E. 737 (1897)
(Holmes, J.) ("A person to whose hands a trust fund comes by
conveyance from the original trustee is chargeable as a trustee in
his turn, if he takes it without consideration, whether he has
notice of the trust or not. This has been settled for three hundred
years, since the time of uses").
When the Government seeks forfeiture of an asset in the hands of
a donee, its forfeiture claim rests on defects in the title of the
asset in the hands of the donor. The transferee has no ownership
superior to the transferor's which must be forfeited, so her
knowledge of the drug transaction, or lack thereof, is quite
irrelevant, as are the arcane questions concerning the textual
application of § 881(a) to someone in a donee's position. The
so-called innocent owner provisions of § 881(a)(6) have ample scope
in other instances, say where a holder who once had valid ownership
in property is alleged to have consented to its use to facilitate a
drug transaction. Furthermore, whether respondent's marital rights
were present value or an antecedent debt and whether either could
provide the necessary consideration for a bona fide pur-
144
144 UNITED STATES
v. PARCEL OF RUMSON, N. J., LAND
KENNEDY, J., dissenting
chase are questions that could be explored on remand, were my
theory of the case to control.
II
As my opening premise is so different from the one the plurality
adopts, I do not address the difficult, and quite unnecessary,
puzzles encountered in its opinion and in the opinion of JUSTICE
SCALIA, concurring in the judgment. It is my obligation to say,
however, that the plurality's opinion leaves the forfeiture scheme
that is the centerpiece of the Nation's drug enforcement laws in
quite a mess.
The practical difficulties created by the plurality's
interpretation of § 881 are immense, and we should not assume
Congress intended such results when it enacted § 881(a)(6). To
start, the plurality's interpretation of § 881(a)(6) conflicts with
the principal purpose we have identified for forfeiture under the
Continuing Criminal Enterprise Act, which is "the desire to lessen
the economic power of ... drug enterprises."
Caplin &
Drysdale, Chartered v.
United States, 491 U. S. 617,630 (1989).
When a criminal transfers drug transaction proceeds to a good-faith
purchaser for value, one would presume he does so because he
considers what he receives from the purchaser to be of equal or
greater value than what he gives to the purchaser, or because he is
attempting to launder the proceeds by exchanging them for other
property of near equal value. In either case, the criminal's
economic power is diminished by seizing from him whatever he
received in the exchange with the good-faith purchaser. On the
other hand, when a criminal transfers drug transaction proceeds to
another without receiving value in return, he does so, it is safe
to assume, either to use his new-found, albeit illegal, wealth to
benefit an associate or to shelter the proceeds from forfeiture, to
be reacquired once he is clear from law enforcement authorities. In
these cases, the criminal's economic power cannot be diminished by
seizing what he received in the donative exchange, for he received
no tan-
145
gible value. If the Government is to drain the criminal's
economic power, it must be able to pierce donative transfers and
recapture the property given in the exchange. It is serious and
surprising that the plurality today denies the Government the right
to pursue the same ownership claims that under traditional and
well-settled principles any other claimant or trust beneficiary or
rightful owner could assert against a possessor who took for no
value and who has no title or interest greater than that of the
transferor.
Another oddity now given to us by the plurality's interpretation
is that a gratuitous transferee must forfeit the proceeds of a drug
deal if she knew of the drug deal before she received the proceeds
but not if she discovered it a moment after. Yet in the latter
instance, the donee, having given no value, is in no different
position from the donee who had knowledge all along, save perhaps
that she might have had a brief expectation the gift was clean. By
contrast, the goodfaith purchaser for value who, after an exchange
of assets, finds out about his trading partner's illegal conduct
has undergone a significant change in circumstances: He has paid
fair value for those proceeds in a transaction which, as a
practical matter in most cases, he cannot reverse.
III
The statutory puzzle the plurality and concurrence find so
engaging is created because of a false premise, the premise that
the possessor of an asset subject to forfeiture does not stand in
the position of the transferor but must be charged with some guilty
knowledge of her own. Forfeiture proceedings, though, are directed
at an asset, and a donee in general has no more than the ownership
rights of the donor. By denying this simple principle, the
plurality rips out the most effective enforcement provisions in all
of the drug forfeiture laws. I would reverse the judgment of the
Court of Appeals, and with all due respect, I dissent from the
judgment of the Court.
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