Indiana Civil Forfeiture

Fleecing Schools and Turning Law Enforcers Into Lawbreakers

Civil forfeiture is one of the most serious assaults on private-property rights in the nation today.

Civil forfeiture treats property owners worse than criminals because it empowers police and prosecutors to take your belongings without ever charging you with a crime, much less convicting you of one. To make matters worse, law enforcement often gains financially from civil forfeiture. Not only do police and prosecutors decide what property to seize, they get to keep the property for their own use or profit from its sale. As a result, police and prosecutors have a powerful incentive to seize as much property as they can.

This type of “policing for profit” has become a booming industry in Marion County, Indiana—home to Indianapolis and the State Capitol. But in Indiana, profiting from forfeiture isn’t just wrong; it’s unconstitutional. Under the Indiana Constitution, “all forfeitures” are supposed to go—not to law enforcement—but to schools.

For far too long, police and prosecutors in Indianapolis have been keeping 100 percent of forfeiture proceeds for themselves. The constitution couldn’t be clearer—“all forfeitures” belong to the schools—yet the Indiana school fund hasn’t seen a penny of forfeiture money from Indiana’s capital since before some current students were even born. Meanwhile, police and prosecutors are siphoning off millions of dollars in civil forfeiture proceeds, violating both the Indiana Constitution and the state’s Civil Forfeiture Statute and fueling an increasingly aggressive forfeiture machine.

Now a group of Indiana citizens—two of whom were once unjustly targeted in a forfeiture case—have teamed up with the Institute for Justice to right the ship in Indianapolis. They are asking the courts to compel Indy’s police and prosecutors to follow the law and stop profiting from their forfeiture program. Victory will set a precedent to bind every police department and prosecutor’s office in Indiana. Equally important, it will have a nationwide impact by driving home that police and prosecutors—like everybody else—must follow the law.

Indiana Civil Forfeiture

Date Filed

February 9, 2016

Original Court

Marion Superior Court

Current Court

Marion Superior Court

Case Status

Open

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Indiana’s Civil Forfeiture System:

Fleecing Schools and Turning Law Enforcers Into Lawbreakers

Law enforcement is duty-bound not just to enforce the law, but to follow it.

Yet for too long, that has not been the rule when it comes to civil forfeiture in Indiana. Civil forfeiture is, as the Indiana Supreme Court puts it, a “legal fiction.”[1] Unlike criminal forfeiture—where the government takes someone’s property only after they have been convicted of a crime—police and prosecutors can use civil forfeiture to take cash, cars and homes of people, without ever having to convict the owners of a crime. The owner doesn’t even need to be charged with any wrongdoing. This is because civil forfeiture cases technically are filed against the property, leading to unusual names such as One 1968 Buick, 4 Door v. State of Indiana.[2]



IJ Clients Jenn Thompson and Danny Hargrove are challenging Indiana law enforcement's abuse of civil forfeiture.

After prosecuting a piece of inanimate property on the “legal fiction” that it is linked to illegal activity, police and prosecutors in Indiana then promptly—and illegally—pocket the forfeited property themselves.

When Indiana prosecutors win a lawsuit to forfeit someone’s property, who should gain? The answer is simple. For more than 150 years, the Indiana Constitution has plainly said that “all forfeitures which may accrue” belong to a fund that supports the state’s public schools.[3]

But that is not how it works in Marion County—Indiana’s most populous county and home to Indianapolis—where the school fund has not seen a penny of civil forfeiture proceeds since before some current students were born. Instead, forfeiture money is being pocketed by the Marion County Prosecutor’s Office, the Indianapolis Metropolitan Police Department and other law-enforcement agencies.

Frank Straub, Indianapolis Public Safety Director explaining civil forfeiture payments to education in 2010

Terry Curry, Marion County Prosecuting Attorney, explaining the allocation of civil forfeiture payments in 2015

This troubling situation has been years in the making. Decades ago, the Indiana General Assembly passed a law allowing police and prosecutors to deduct “law enforcement costs” from forfeiture proceeds. The law requires them to deliver only surplus money to the school fund.[4] That in itself violates the Indiana Constitution, which commands that “all forfeitures” go to the school fund. “All forfeitures” does not mean “some” forfeitures, and in the case of Indianapolis, it certainly does not mean “no” forfeitures.But given a yard, Indianapolis’s police and prosecutors have taken a mile. Even though the Civil Forfeiture Statute permits them to deduct only actual costs related to a specific forfeiture case, law enforcement in Indianapolis pockets every penny, of every forfeiture, every time.

Screen Shot 2016-02-08 at 5.37.21 PM

This case aims to put a stop to this illegal practice of siphoning forfeiture proceeds away from Indiana’s schools. The case has been filed by the Institute for Justice on behalf of Jeana and Jack Horner, who were unfairly targeted by Marion County’s Forfeiture Unit, and on behalf of a group of concerned Hoosier families. Their most basic claim is simple: Law enforcement needs to follow the law. That is why the Horners—along with Indianapolis residents Jenn Thompson, Danny Hargrove and Dan and Amy Willis—are asking the courts to halt Indianapolis’s ongoing, multimillion-dollar abuse of the state constitution.

A Case Study in Forfeiture Abuse: Indianapolis Prosecutors Attempt to Forfeit a Family’s Disability-Tagged Vehicle

Jeana and Jack Horner are among the hundreds of people each year who find themselves caught in Indianapolis’s forfeiture machine. Jeana, a lifelong Indiana resident, works as an insurance-claims adjuster; Jack is retired and suffering from serious health issues. During the summer of 2013, they lent two vehicles to Jeana’s son Jeremy (Jack’s stepson). At the time, Jeremy was participating in a work-release program—he had pleaded guilty to a marijuana-related offense—so he was responsible for working as a contractor during the days and spending his nights in a county corrections facility. To help Jeremy fulfill his work-release obligations, the Horners lent him their Ford pickup truck and a Jeep Grand Cherokee while they were staying at their cabin.

While driving the Jeep, Jeremy was pulled over and arrested for marijuana possession. Police impounded the Jeep, and they also seized the Horners’ second vehicle, the pickup, which was parked elsewhere.

So began a nine-month ordeal for the innocent Horners. Jeana and Jack didn’t know whether Jeremy had been using their property for illegal activity and they learned of the seizures only days after the fact. For a month, Jeana tried to find out which agency was holding the vehicle , without success.

By the time prosecutors finally filed a formal forfeiture action against the vehicles in order to keep them for good, the burdens on Jack and Jeana had reached staggering heights. Given his health problems, Jack struggles to get around on his own (the seized Jeep is a designated handicapped vehicle), and Jeana, who works full time, was often unable to drive him. With no end in sight, they finally broke down and bought Jack a replacement car.

The criminal case against Jeana’s son eventually collapsed—the police searches had been illegal—and the courts also dismissed the forfeiture action against Jeana and Jack’s vehicles. Even so, it took law enforcement almost another three weeks to turn over the property. In a final indignity, the Horners found that one of the two vehicles had been drained of oil when they were, at last, returned.

The Indiana Constitution’s Forfeitures Clause: Good on the Books, Ignored on the Ground

Police and prosecutors are incentivized to launch abusive forfeiture cases because they have a direct financial stake in the outcome, and Jeana and Jack Horner are determined to see that end. Their story shows that civil forfeiture is one of the greatest threats to property rights in the nation. Using civil forfeiture, the government can seize and sell your property without convicting you of a crime or even charging you with one. Often, the same officials who seize property get to pocket the proceeds as well. This gives police and prosecutors a direct and powerful financial incentive to seize first and ask questions later. And that is why forfeiture activity has exploded across the nation in the last few years.

Indianapolis is no exception. But unlike most states, when police and prosecutors pocket forfeiture proceeds in Indiana, they are actually breaking state law themselves. Since 1851, the Indiana Constitution has stated unequivocally that “all forfeitures which may accrue” belong to the state’s common school fund.[5]

For at least the past five years, however,Indianapolis has not only violated the state constitution, but also the very statute allowing them to deduct their enforcement costs. The problem dates back to 1984, when state lawmakers amended Indiana’s Civil Forfeiture Statute. Among the changes, the General Assembly authorized police and prosecutors to deduct “law enforcement costs” from forfeiture proceeds. Under the statute, only surplus proceeds must be turned over to the school fund. This alone is a serious problem, because the Indiana Constitution could not be clearer that “all forfeitures” are committed to the schools.

To make matters worse, the Marion County Prosecutor’s Office has converted this cost-shifting loophole into a thruway tunnel. According to Indy prosecutors, the already unconstitutional law allowing them to divert the costs of forfeiture proceedings leaves too little money in their pockets. They want all forfeited property, not just some of it. And their solution is to label every penny of civil forfeiture proceeds “law enforcement costs,” siphoning 100 percent of Indianapolis’s forfeitures away from the schools and into law-enforcement coffers.[6]

Indianapolis’s Multi-million Dollar Forfeiture Machine

This sleight of hand comes with a hefty price tag. In recent years, millions of forfeiture dollars in Indianapolis have ended up in the pockets of police departments and the prosecutor’s office. Meanwhile, the school fund has received not one penny on Indianapolis’s civil forfeiture revenue.

These practices are clearly unlawful, but they are no secret. Police and prosecutors have even formalized their forfeiture-fueled deals in black and white. Under a “memorandum of understanding regarding forfeitures,” the Marion County Prosecutor’s Office and the Indianapolis Metropolitan Police Department have agreed to a predetermined split for all property seized by the police department and forfeited in the courts. Essentially, the police get 70 percent and the prosecutor’s office gets 30 percent. In every case, the school fund gets nothing.

Read the agreements:

All too often, this leads to cases where Marion County prosecutors claim outlandish sums as “law enforcement costs.” Line prosecutors have claimed $12,000, $13,500, even $17,000 as the cost of litigating forfeiture cases in which the other side doesn’t even show up in court.[7] In one case, the police pocketed nearly $40,000 in reimbursement of the costs “associated with” picking up a suspicious package at a shipping facility, subjecting it to a sniff from a drug dog and opening it.[8]

These cases are hardly outliers. Annual forfeiture totals are soaring in Indianapolis. Over the past half-decade, prosecutors have initiated an estimated 2,700 civil forfeiture actions in Indianapolis alone.[9] (That represents about two forfeiture lawsuits kicking off in Indianapolis each working day for the past five years.) And between 2011 and 2012, for example, the average forfeiture proceeds awarded annually totaled $1,589,137—with the prosecutor’s office alone pocketing an average of $459,848 in each of those two years.[10]

As a justice on the Indiana Supreme Court wrote last year, civil forfeiture is a “law enforcement Weapon[] of Mass Destruction.”[11] Giving police and prosecutors a direct financial stake in forfeiture invites them to deploy that weapon far too often. And this case spotlights the problem: Civil forfeiture turns police and prosecutors into profiteers, even where there are clear laws to the contrary.

No Adversarial Process, No Oversight, No Accountability

None of this has gone unnoticed. In 2011, for example, then-Governor Mitch Daniels remarked that draining forfeiture proceeds from schools is “unwarranted as policy and constitutionally unacceptable.”[12] (In a presentation last winter, Indianapolis prosecutors confessed that the “Guv’s veto message wasn’t helpful.”[13]) The Indiana Supreme Court has also underscored that police and prosecutors can divert—at most—“limited” forfeiture proceeds reflecting their actual expenses.[14] And the Court’s justices have repeatedly remarked that “the disposition of the assets” in civil forfeiture cases “ha[s] become a matter of public note” and that the “misuse” of civil forfeiture “invites further scrutiny.”[15]

Internal presentation says “Guv’s veto message wasn’t helpful either.”
Presentation advises to “be prepared to lobby.”

Even so, it’s business as usual in Indianapolis. In part, that is because prosecutors have used legal technicalities to successfully prevent individual property owners from objecting to the unlawful siphoning-off of their forfeited property.[16] It is nearly impossible for property owners in individual forfeiture cases to make sure the government is playing by the rules. Thus, in a 2014 forfeiture presentation, Indy prosecutors could safely reassure their audience that “[a]ll recent challenges have failed on procedural and standing grounds.”[17]

Equally troubling, the Indiana Attorney General—the state’s chief legal officer—has made clear that he will not get involved. In 2010, the Attorney General’s Office formally decided that the constitution’s Forfeitures Clause “does not apply to forfeiture actions brought under” the Civil Forfeiture Statute.[18] The Indiana Supreme Court reached the opposite conclusion less than a year later.[19] Nonetheless, the Attorney General’s opinion remains in force and was hailed by prosecutors as being “on our side” as recently as December 2014.[20]

Legal theories aside, the Attorney General has also suggested that he would not step in even if he thought prosecutors were diverting forfeiture proceeds unlawfully. When asked about county prosecutors’ pattern of channeling forfeiture proceeds away from the common school fund, the Attorney General’s spokesman replied: “The 92 county prosecutors are the attorney general’s clients, and we provide them legal advice upon request . . . . We do not serve as the accountant for other units of government.”[21]

Little wonder that Indianapolis prosecutors have advised their law-enforcement colleagues statewide to “stay the course” and continue siphoning off forfeiture proceeds.[22] After all, who’s going to stop them?

The Solution: Strike Down the Civil Forfeiture Statute—or at the Very Least Enforce It

This is where the Horners, the Willises, Jenn Thompson and Danny Hargrove come in. Jeana and JackHorner can’t get back the ten months they spent fighting to recover their cars, but they can fight to fix Indiana’s broken forfeiture system. That is why they and their fellow Hoosiers are challenging the unconstitutional profit incentive that has been fueling Indianapolis’s forfeiture program for far too long.

This case asks the courts to fix two glaring problems with Indiana’s forfeiture system. The first is in the Civil Forfeiture Statute itself, which unconstitutionally empowers police and prosecutors to deduct “law enforcement costs” before delivering the leftover forfeiture proceeds to the school fund. This provision violates the plain text of the Indiana Constitution. Forfeiture proceeds—all forfeiture proceeds—belong in Indiana’s school fund, not in Indy’s law-enforcement fund.

The second problem is a lack of accountability and transparency that allows police and prosecutors to misapply the Civil Forfeiture Statute to a breathtaking degree. Unconstitutional as it is, the Civil Forfeiture Statute allows law enforcement to divert forfeiture proceeds only in limited circumstances: They may deduct only sums reflecting the specific costs of pursuing specific cases.[23] Police and prosecutors in Indianapolis have warped that limit beyond recognition, converting the “limited diversion” envisioned by the Indiana Supreme Court into a profit center for law enforcement alone.[24] If the courts are unwilling to strike the law-enforcement-costs provision as unconstitutional, the Horners and their co-plaintiffs will ask that the courts at least put a stop to Indianapolis’s clear violation of the law.

CASE TEAM

The litigation team consists of Institute for Justice attorneys Wesley Hottot and Sam Gedge. Lee McNeilly, Cynthia Bedrick and Scott Milkey, of McNeely Stephenson, serve as local counsel.

The Institute for Justice

The Institute for Justice is the national law firm for liberty and the nation’s leading advocate for property rights. This case is the latest in IJ’s nationwide initiative to end civil forfeiture, including a recent challenge to the City of Albuquerque’s refusal to follow fresh New Mexico forfeiture reforms.[25] IJ has fought civil forfeiture on behalf of the owners of the Motel Caswell in Massachusetts,[26] the owners of Schott’s Market in Michigan,[27] the owner of a truck seized in Texas,[28] the owner of a restaurant in Iowa,[29] convenience-store owners on Long Island[30] and in North Carolina,[31] and a college student in Kentucky.[32] In 2015, IJ updated its landmark report on civil forfeiture, Policing for Profit[33] and exposed the IRS’s abuse of structuring laws in Seize First, Question Later: The IRS and Civil Forfeiture.[34] For more information on IJ’s national initiative to end civil forfeiture, visit endforfeiture.com.

 

[1] Serrano v. State, 946 N.E.2d 1139, 1140 (Ind. 2011).

[2] 638 N.E.2d 1313 (Ind. Ct. App. 1994).

[3] Ind. Const. art. 8, § 2.

[4] Ind. Code §§ 34-6-2-73, 34-24-1-4.

[5] Ind. Const. art. 8, § 2.

[6] Kristine Guerra, In some cases, police seize cars, homes—with no charges filed, Indianapolis Star, Feb. 22, 2015, available at http://www.indystar.com/story/news/crime/2015/02/22/cases-police-seize-cars-homes-charges-filed/23802807/ (last visited Feb. 5, 2016); Heather Gillers et al., Forfeiture law invites abuse of the system, Indianapolis Star, Nov. 7, 2010 (copy on file with the Institute for Justice).

[7] Default Judgment at 2, State v. Escuder, Case No. 49D07-1202-MI-005555 (Ind. Super. Ct., Marion Cty. filed Feb. 10, 2012); Default Judgment at 2, State v. Buell, Case No. 49D13-1106-MI-022492 (Ind. Super. Ct., Marion Cty. filed Aug. 4, 2011); Default Judgment at 2,State v. Tran, Case No. 49D04-1106-MI-022626 (Ind. Super. Ct., Marion Cty. filed Oct. 5, 2011).

[8] Default Judgment at 2, Tran, Case No. 49D04-1106-MI-022626; see also Application for Default Judgment, Tran, Case No. 49D04-1106-MI-022626 (Ind. Super. Ct., Marion Cty. filed Sept. 29, 2011); Affidavit, Tran, Case No. 49D04 1106 MI 022626 (Ind. Super. Ct., Marion Cty. filed Sept. 29, 2011).

[9]   This figure was calculated by aggregating all electronic civil dockets in Marion County since January 2011, that (1) are designated Miscellaneous (“MI”); (2) include the State of Indiana as a plaintiff; and (3) show that the government was represented by prosecutors assigned to litigate forfeiture cases in Marion County.

[10] Marion County Prosecutor’s Office, 2012 Report to the Community 23 (2012), available at http://www.indy.gov/eGov/County/Pros/inititatives/Documents/2012%20Report%20to%20the%20Community.pdf. (last visited Feb. 5, 2016).

[11] Sargent v. State, 27 N.E.3d 729, 735 (Ind. 2015) (Massa, J., dissenting).

[12] Letter from Gov. Mitch E. Daniels, Jr. to President Pro Tem Long and Members of the Ind. State Senate (May 13, 2011), available at http://in.gov/governorhistory/mitchdaniels/files/215VetoMessage.pdf (last visited Feb. 5, 2016).

[13] Indiana Prosecuting Attorneys Council, Winter Conference, Forfeiture PowerPoint, Slide 48 (Dec. 8, 2014), available at http://www.in.gov/ipac/files/5a_-_Hirschauer.Forfeiture_CLE_IPAC_2014_css_2.ppt. (last visited Feb. 5, 2016).

[14] Serrano, 946 N.E.2d at 1142 n.3.

[15] Id. at 1141; Sargent, 27 N.E.3d at 735 (Massa, J., dissenting).

[16] E.g., $100 v. State, 822 N.E.2d 1001, 1015 (Ind. Ct. App. 2005).

[17] Forfeiture PowerPoint, supra n.13, Slide 48.

[18] Ind. Op. Att’y Gen. 2010-1, at 1 (May 12, 2010), available at http://www.in.gov/attorneygeneral/files/Official_Opinion_2010-1.pdf (last visited Feb. 5, 2016).

[19] Serrano, 946 N.E.2d at 1141-42.

[20] Forfeiture PowerPoint, supra n.13, at Slide 48.

[21] Tim Evans & Heather Gillers, Take the money and . . . ?, Indianapolis Star, Aug. 15, 2010 (copy on file with the Institute for Justice).

[22] Forfeiture PowerPoint, supra n. 13 at Slide 49.

[23] Ind. Code §§ 34-6-2-73, 34-24-1-4.

[24] Serrano, 946 N.E.2d at 1142 n.3.

[25] http://ij.org/case/new-mexico-forfeiture/.

[26] http://ij.org/massachusetts-civil-forfeiture.

[27] http://ij.org/case/miforf/.

[28] http://ij.org/case/state-of-texas-v-one-2004-chevrolet-silverado/..

[29] http://ij.org/case/iowa-forfeiture/.

[30] http://www.ij.org/long-island-forfeiture.

[31] http://ij.org/north-carolina-civil-forfeiture-release-5-1-2015.

[32] http://ij.org/case/kentucky-civil-forfeiture.

[33] http://www.ij.org/policing-for-profit-the-abuse-of-civil-asset-forfeiture-4.

[34] http://ij.org/images/pdf_folder/private_property/seize-first-question-later.pdf.

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