Anaheim Property Owner & IJ Win Civil Forfeiture Fight

John Kramer
John Kramer · October 8, 2013

Arlington, Va.
—One of the most contentious property rights battles in the country has ended today when the United States government agreed to drop its civil forfeiture case against Anaheim, Calif., landlord Tony Jalali. Jalali faced the loss of his entire building, worth more than $1.5 million, despite never being charged with any crime; the federal government went after his property merely because he rented space to a medical marijuana dispensary, which was legal under state law.

Medical marijuana is legal in California and state law prohibits the forfeiture of homes and buildings without convicting a property owner of a crime. But the city of Anaheim and the federal government teamed up to do an end-run around California law to deprive Jalali of his property.Under civil forfeiture law, property taken from its owners is used to pad the budgets of the agencies that seize it, giving government officials a perverse incentive to take property.

“I was shocked when the government first sued me and I realized that civil forfeiture meant the government could take my property from me even though I was not charged with any crime,” said Jalali, who was represented by the Institute for Justice. “I did not want to be bullied and stood up to the government to protect my property and my reputation.”

Jalali was forced into federal court to prove his innocence and save his building, but the case came to an end today when the government agreed to dismiss the case with prejudice, which means the government gives up any right to file the case again in the future and threaten the property.

“Civil forfeiture should not be used as a punishment for a property owner who committed no crime,” said Institute for Justice Attorney Larry Salzman. “This is a case that should never have been filed.”

The U.S. Attorney’s Office for the Central District of California, where Anaheim is located, has aggressively used civil forfeiture against landlords in an attempt to enforce the federal prohibition of marijuana, filing more than 30 lawsuits against medical marijuana dispensaries during the past two years. It continued the case against Jalali even though Jalali was a mere landlord, not involved in the operation of his tenant’s dispensary, and evicted his tenant immediately upon being served with the government’s lawsuit.

But on August 29, 2013, the U.S. Department of Justice issued a memorandum to all U.S. Attorneys, instructing them not to bring cases enforcing the federal ban on marijuana in states where it is legal unless the activity involves “criminal enterprises, gangs, cartels” or implicates important national concerns.

“We are delighted that Tony’s property is safe, but we will continue our fight against the injustice of civil forfeiture on behalf of property owners across the nation,” said IJ Senior Attorney Scott Bullock.

“Civil forfeiture is a threat to property rights that must end,” said IJ President and General Counsel Chip Mellor. “The Institute for Justice has documented time and again that it invites a lack of due process and a lack of constitutionally enshrined restraints on government authority. If the government wants to take someone’s property, it should first be required to convict him or her of a crime.”