UR Explainer: Kaley v. United States

Blowhard, Esq. writes:


In the Washington Post, George Will highlights one of the more rotten fruits of this country’s War on Drugs — the government’s use and abuse of civil forfeiture laws. Under these “laws,” the government is authorized to seize the assets of someone merely suspected of certain crimes. No trial, no conviction, no due process needed. Will’s column reminded me of a developing body of Supreme Court case law that has upheld and strengthened this government overreach, the latest decision of which, Kaley v. United States, was handed down three months ago. Because I find this abuse of authority to be extremely alarming, I thought I’d walk you the reasoning that underlies the government’s position.

Before I proceed, I should note that I’m not a criminal lawyer, constitutional lawyer, or any other legal specialist with particular insight into this case. Although I have a law degree I’ve never practiced in any areas implicated, I’m merely providing a case summary with a little editorializing thrown in. For those who are interested, I encourage you to read the opinion for yourself. OK, now that the disclaimers and throat-clearing are out of the way, let’s get on with it.

The Issue

In a previous case, United States v. Monsanto, the Supreme Court upheld a statute that authorized freezing a defendant’s assets prior to trial, while criminal proceedings are pending, if two prongs are met. First, there must be probable cause to think the defendant has committed an offense permitting forfeiture. Second, the property at issue must have a requisite connection to the crime. If those two conditions are met, the government can seize your property.

The constitutionality of the Monsanto rule is not at issue. Here, what is at issue is whether a criminal defendant has the right to “contest a grand jury’s prior determination of probable cause to believe [the defendant] committed the crimes charged.” In other words, can the defendant challenge the first prong of the Monsanto test? That is, once a grand jury has determined that the government has probable cause to think the defendant committed an offense permitting forfeiture, may that defendant contest the grand jury’s finding? The Supreme Court said no, the defendant may not contest the grand jury’s finding.

The Facts

Kerri Kaley was a sales representative at Johnson & Johnson. She was accused by the federal government of transporting stolen medical devices across state lines and laundering the proceeds. Throughout her criminal proceedings she maintained the medical devices were unwanted, excess hospital inventory that she could lawfully take and sell to others.

After indicting Kaley, the government sought to freeze assets that were traceable to her alleged criminal activity. Specifically, the government moved the trial court to seize a $500,000 certificate of deposit that Kaley intended to use to pay her lawyers. The trial court found for the government and seized Kaley’s CD. Just to be clear, at this point in the proceedings there had been no trial or determination that Kaley had committed any crime.

Kaley immediately appealed to the Eleventh Circuit and the Eleventh Circuit reversed the trial court, holding that Kaley was entitled to an evidentiary hearing on the second prong of the Monsanto test, i.e. Kaley would be allowed to contest the trial court’s finding that her certificate of deposit was traceable to her alleged criminal activity. But Kaley wasn’t disputing the second Monsanto prong, she wanted dispute the first one. That is, Kaley wanted to dispute the factual foundation supporting the grand jury’s determination that the government had probable cause to believe Kaley committed a crime at all. The Eleventh Circuit said no, Kaley had no right to dispute the grand jury’s probable cause finding and the Supreme Court agreed.

The Majority Opinion


Elena Kagan wrote the majority opinion. Her basic position is that the grand jury’s decision is untouchable. The grand jury’s role is to determine whether a defendant should stand trial and once that decision is made, a relitigation of that question would infringe on the grand jury’s historical role as well as waste judicial time and resources.

Kagan begins by citing what she believes to be the two most relevant cases. First, Caplin & Drysdale holds that a defendant has no Sixth Amendment right to spend another person’s money for legal fees, even if that is the only way for a defendant to hire a lawyer. Second, Monsanto holds that even prior to conviction when the presumption of innocence applies, the government can freeze the assets of an indicted defendant based on a finding of probable cause that the property will ultimately be proved forfeitable. The purpose of this rule is to “protect the community’s interest in recovering ill-gotten gains.”

The issue in this case is whether Kaley is constitutionally entitled to a hearing to challenge the grand jury’s decision that probable cause supported her criminal prosecution. Kagan said the question had a “ready answer” in that the “fundamental and historic commitment of our criminal justice system is to entrust those probable cause findings to grand juries.”


Kagan then launches into a 5-page paean to the “grand jury’s singular role in finding the probable cause necessary to initiate a prosecution for a serious crime.” Kagan states that the “grand jury gets to say — without any review, oversight, or second-guessing — whether probable cause exists to think that a person committed a crime.” Why are grand jury decisions so sacred? Because the grand jury has a “historical role in protecting individuals from unjust persecution.” A criminal defendant is not entitled to dispute the grand jury’s probable cause determination to arrest or prosecute the defendant in the first place, so why should the defendant be able to disturb the grand jury’s decision to freeze her property?

According to Kagan, Kaley’s attempt to dispute the grand jury’s finding would have “strange and destructive consequences.” Kaley wishes to relitigate a question the grand jury has already decided. But suppose Kaley was allowed to dispute that issue and a judge agreed with her. Then the court would have two inconsistent findings on its hands: a grand jury that says there’s probable cause to believe Kaley committed a crime and a judicial determination that there is no probable cause to believe Kaley committed a crime. Such “legal dissonance” cannot be tolerated, especially given the grand jury’s “integral, constitutionally prescribed role.”

Kagan’s valentine to the grand jury is quite lovely, but let’s pause a second to review her CV. She got an AB from Princeton, an MA from Oxford, and JD from Harvard. She clerked for a federal appellate court and then the U.S. Supreme Court under Thurgood Marshall. “After briefly practicing law at a Washington D.C. law firm” (exact words from her official bio), she became a law professor at the University of Chicago and then Harvard. Next she served in the Clinton administration as Associate Counsel to the President and domestic policy adviser. Between 2003 and 2009 she was dean of Harvard Law School. In 2009 Obama appointed her Solicitor General at which point she argued her first case before any court, Citizens United v. FEC. After serving as SG for one year, she was appointed to the U.S. Supreme Court.

In short, she’s has precious little experience practicing law at the trial court level. As far as I can tell, she has no personal knowledge of how grand juries actually work. No doubt she has more brain power than all of us here put together, but, I dunno, maybe one should be a little hesitant, have a little humility, about creating rules over things one has only read about in books and law review articles. Not that Kagan’s bio necessitates any particular outcome in this or any other case, of course.

After an analysis of the Mathews test that I’m omitting, Kagan ends by noting that Congress is always free to pass legislation modifying the Court’s decision.

The Dissenting Opinion


John Roberts authored the dissenting opinion. He holds that the majority’s ruling results in gross unfairness. The government has essentially unlimited resources when prosecuting individuals and to permit the government to strip a defendant of his Sixth Amendment right to counsel simply gives the government too much power.

He begins by noting the majority omitted important facts. When Kaley learned that a federal grand jury was investigating her activities she retained counsel and met with prosecutors in an attempt to head off an indictment. Preparing for the worst, she got a $500,000 equity line of credit on her house that she then used to buy a CD for her attorney’s fees. The grand jury indictment came down and the government moved to seize more than $2.5 million of Kaley’s assets, including the $500k CD.

Kaley moved to vacate the order seizing her assets arguing they were not forfeitable because the government’s prosecution was baseless because the government could not identify anyone who claimed ownership of the medical devices alleged to have been stolen. When ruling on this motion, the government conceded it had been able to trace only $140,000. Two days later, the government added a count of conspiracy to commit money laundering thereby giving the government much broader forfeiture power. The government then attempted to seize $2.5 million of Kaley’s money as well as her home.

Roberts starts his analysis by noting that the case implicates fundamental constitutional principles, among them the right to select counsel which is the “root meaning” of the Sixth Amendment. He then points out the bloody obvious, namely that the “possibility that a prosecutor could elect to hamstring his target by preventing him from paying his counsel of choice raises substantial concern about the fairness of the entire proceeding.”

He notes that the majority’s reasoning fails on its own terms. Specifically, how does it make sense that the government and the majority concede that the trial court may reconsider the grand jury’s probable cause finding as to the traceability of the assets in question (that is, the trial court can reconsider the second Monsanto prong), but not the underlying criminal charges (i.e. the first Monsanto prong)?

Furthermore, the majority’s worry about “legal dissonance” is unfounded. A grand jury proceeding is not adversarial; the grand jury only ever hears the prosecution’s side. A judicial decision would be based on different evidence with both sides present. Such an arrangement preserves the traditional roles of the principal actors in the criminal justice system: the grand jury decides whether a defendant should stand trial, the judge decides how the trial should proceed, and the trial jury decides guilt.

The pretrial bail procedure is instructive. For certain serious crimes, a defendant is presumed to be ineligible for bail. However, the defendant is also entitled to rebut that presumption by contesting the evidence against him, thereby possibly obtaining bail. No one argues that this procedure usurps the grand jury’s “historical role.” Roberts points out that “few things could do more to undermine the criminal justice system’s integrity than to allow the government to initiate a prosecution and then, at its option, disarm the presumptively innocent opponent by depriving him of his counsel of choice — without even the opportunity to be heard. That is the result of the Court’s decision in this case, and it is fundamentally at odds with our constitutional tradition and basic notions of fair play.”

Roberts then goes on to challenge Kagan’s analysis of the Mathews test, but I’m omitting his rebuttal since I think this gives you the gist of their arguments and, besides, this post is already way tl;dr.

So what do you think? Is the majority right? Is the dissent? Am I being unfair to Kagan? If you have any questions or if anything is unclear, feel free to comment and I’ll respond as best as I can.




About Blowhard, Esq.

Amateur, dilettante, wannabe.
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4 Responses to UR Explainer: Kaley v. United States

  1. Handle says:

    Something looks awfully fishy about that chart.

    The area under the curve is, being generous, about $500 Billion. How did we get to $1.5 Trillion? Inflation is not enough for that kind of impact, especially since most of the spending is later on.

    Also, what’s being included in the annual number? The entire budget of the DOJ (where most ‘drug control spending’ occurs), including the entire FBI, DEA, and Bureau of Prisons is only $27B in FY15 (about a billion less in FY10). It is just not plausible to say that nearly 80% of that entire budget is ‘drug control spending’, unless one is being very loose with the estimates and definitions.


  2. I’d always rather side on the community loosing a little dough, the average person has it stacked against them enough as it is. One more protection removed, one more way Leviathan can get to you. Makes me sick.


  3. Callowman says:

    “A grand jury proceeding is not adversarial; the grand jury only ever hears the prosecution’s side.” Right. When my mother served on a grand jury, the judge was forever browbeating them to throw out more cases. “But they all seem guilty!” she said.

    Seems very much open to abuse.


  4. I know this is supposed to be irrelevant from a legal-reasoning perspective, but per Callowman’s point I would like to see the statistics on the results of Grand Jury proceedings.

    One has the impression that it is virtually impossible to get a Grand Jury to toss out a case. If this is true, then the warnings from Justice Roberts seem apt. The playbook for the government goes

    Secure indictment —-> Seize assets —-> Hamstring defendants right to counsel —> Settle anything even remotely close, generally ruining the defendant economically —-> Bring the resources of the State to convict everyone with the temerity to insist on a trial.


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