California Scheming

August 1, 2013

When IJ client Tony Jalali fled Iran in 1978, he came to America seeking protection of the rule of law, due process, and justice. He never would have imagined that 35 years later he would be battling in federal court to save the small Anaheim, Calif., office building that represents his family’s life savings.

But Southern California is ground zero in the federal government’s fight against states that have legalized medical marijuana, and civil forfeiture is the U.S. Attorney’s weapon of choice. The Attorney General’s office has filed more than 30 civil forfeiture actions against landlords in California and threatened more than 1,100 landlords in all the states where medical marijuana has been made legal.

Although Tony has never been charged with any crime, the federal government is attempting to use civil forfeiture to take his entire $1.5 million commercial building merely because he used to rent office space to a medical marijuana dispensary that was entirely legal under state law. His modest building is home to an insurance company, a dentist and the business office of a car dealer.

No one in America should have his or her property taken by law enforcement without first being convicted of a crime, but civil forfeiture eviscerates this principle. Worse, the federal government is offering the city of Anaheim a financial bounty to do an end run around state law on two fronts. Not only did California voters legalize the sale of medical marijuana, but state law also bars local and state officials from taking land, homes or other buildings by civil forfeiture unless the property owner has been convicted of a crime, which has not happened here. But through a federal program called “equitable sharing,” Anaheim can cash in on a million dollar payday by evading state law.

Federal civil forfeiture law sacrifices not only property rights and due process, but subverts state law in violation of the U.S. Constitution. That is why IJ has teamed up with Jalali to challenge the attack on his property in federal court.

In 2011, when Tony was approached by two medical marijuana dispensaries as potential tenants, there were more than 40 other dispensaries operating in Anaheim. In fact, for the past four years, Anaheim itself has profited handsomely by hosting what is advertised as the world’s largest marijuana trade show—the Kush Expo—in its city-owned convention center. So Tony did not have a second thought renting space to someone who appeared to be a good tenant.

Even when they are legal under state law, however, these businesses are prohibited by federal law. Yet federal officials, right up to the President of the United States, have repeatedly said they have “bigger fish to fry” than to undermine state laws legalizing medical marijuana. Consistent with that policy, the federal government never prosecuted Tony’s tenants or their patients, whose violations of federal law allegedly justify the seizure of Tony’s property.

Through civil forfeiture, federal law enforcement agencies can keep a big share of the proceeds of forfeited property, giving them a direct financial incentive to target property rather than crime. The “equitable sharing” program lets federal agencies pay out up to 80 percent of what is seized to local police and keep the remaining 20 percent for themselves. And Tony’s property is mortgage-free, allowing for pure profit for the Anaheim police department and the federal government.

In 2012, without so much as a warning, Tony was served with a federal forfeiture action. The same day he received the notice he explained the situation to his tenants and asked them to vacate, which they did—yet the federal government and city of Anaheim would not drop the case.

Forfeiture was not supposed to be used as a punishment for innocent property owners, but that is how it is increasingly used today—as an arbitrary punishment imposed only against those citizens who have something the government can take to pad its budgets.

For three years, since releasing our Policing for Profit study on civil forfeiture, the Institute has pursued cases in Georgia, Texas and Massachusetts to show how civil forfeiture metes out harsh punishments to property owners who have never been charged with, let alone convicted of, a crime.

In this case, we are demonstrating not only these injustices, but also the way federal civil forfeiture—particularly equitable sharing—undermines forfeiture reform in states that wish to better protect property owners. By encouraging local law enforcement agencies to ignore their duties and limits under state law, the equitable sharing program violates important principles of federalism and state sovereignty.

With IJ’s help, Tony will not only defend his property but also go a long way to laying down constitutional ground rules protecting the rights of other innocent property owners caught in similar conflicts between federal and state law.

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