Nevada Court Shuts Down Police Use of Federal Loophole for Civil Forfeiture

RENO, Nev.—In a major victory for property rights, today a Washoe County judge ruled that Nevada law enforcement cannot use a federal program to bypass state laws that protect property owners. The decision shuts down what the Nevada Highway Patrol (NHP) argued was effectively a legal loophole that allowed officers to seize property under state law and process it federally—while still receiving an up-to-80% kickback from the proceeds. The court rejected that claim, finding no such loophole exists under Nevada law.

“This is a groundbreaking decision that closes the door on law enforcement agencies trying to evade their own state laws for profit,” said Ben Field, an attorney at the Institute for Justice (IJ). “The court recognized that Nevada’s civil forfeiture laws are clear: state police cannot outsource forfeitures to the federal government to make extra money. This ruling is a big step toward ending the abuse of civil forfeiture nationwide.”

The case arose from the 2021 seizure of retired Marine Stephen Lara’s life savings during a traffic stop. Without any evidence that Lara committed a crime and without even charging him with a crime, NHP handed his money to the U.S. Drug Enforcement Administration (DEA), bypassing Nevada’s stricter forfeiture protections. Lara had to fight for months to get his money back, exposing how police used the federal program to sidestep state laws that require higher proof to seize property and give property owners the right to much more quickly present their case to a neutral judge.

The court noted that Nevada’s forfeiture laws are more protective of property rights than the federal governments, writing “a review of the forfeiture schemes of Nevada law and federal law demonstrate that Nevada has more stringent requirements governing their forfeiture proceedings. Nevada’s forfeiture scheme requires that a law enforcement agency ‘establish proof by clear and convincing evidence that the property is subject to forfeiture.’ However, under the federal forfeiture scheme, ‘the burden of proof is on the Government to establish, by a preponderance of the evidence, that the property is subject to forfeiture.’”

The court ultimately found that Nevada’s civil forfeiture laws are mandatory and leave no room for federal workarounds. It specifically ruled that NHP’s participation in the federal program violated state law:

While federal law clearly provides Nevada the option to participate in the federal equitable sharing program, Nevada’s Legislature has yet to accept this offer. Without such an acceptance, NHP is unable to participate in this program—as doing so effectively requires NHP to eschew Nevada’s delineated forfeiture scheme. NHP is required to utilize the appropriate means, Nevada’s forfeiture scheme, to reach its desired ends.

This ruling has major implications for property owners statewide, making it clear that law enforcement cannot use federal programs to dodge state law protections. However, Lara’s case isn’t finished. He continues to seek damages and to pursue additional claims under the Nevada Constitution, and the state is expected to push back against the ruling.

“Law enforcement has no business profiting from civil forfeiture,” said IJ Attorney Brian Morris. “This decision is a wake-up call to other states that have allowed police to skirt their laws by pretending that the federal government’s ‘equitable sharing program’ is a legal loophole. It is not and it’s time to close these loopholes once and for all.”