United States v. Bajakajian

In United States v. Bajakajian, 524 U.S. 321 (1998), the government had sought a forfeiture of $ 357,144, which the defendant had attempted to take overseas without complying with the currency reporting requirement of 31 U.S.C. 5316(a)(1)(A). Id. at 321. The Court held that the forfeiture of the full amount would be an unconstitutional excessive fine because (1) the case involved only a reporting offense unrelated to other illegal activities, and (2) the money was the proceeds of a legal activity and was to be used to repay a lawful debt. Id. at 337-38. Although holding that the subject forfeiture was unconstitutional, the Bajakajian Court favorably recognized an existing line of cases, embracing both in personam and in rem forfeitures, that traditionally have not been subject to the excessive fines prohibition because such forfeitures were not regarded as punishment. Id. at 341-44. Instead, they have not been considered remedial when reasonably based upon compensation for the social harm done. Id. at 331, 342-44. The court concluded that a proceeds-based forfeiture could not be considered a fine because it "provided a reasonable form of liquidated damages," Id. at 343 n. 19. , and was inherently linked to the harm caused. Id. at 339-41. Applying this reasoning, the forfeiture of proceeds in the instant case does not constitute an excessive fine. The Supreme Court addressed the Eighth Amendment in the context of forfeitures. In Bajakajian, the Court concluded that in rem forfeitures were traditionally nonpunitive and "considered to occupy a place outside the domain of the Excessive Fines Clause." 524 U.S. at 331. The Court explained that traditional in rem forfeiture actions proceeded against the instrumentalities of crime, or the "guilty property" itself, and "the conduct of the property owner was irrelevant." Id. at 330, 118 S. Ct. at 2034, 141 L. Ed. 2d at 326-27. The Court, however, did not retreat from its holding in Austin v. United States, repeating that, if a forfeiture "constitutes punishment even in part, regardless of whether the proceeding is styled in rem or in personam," the Eighth Amendment applies. Id. at 331. And, the Court further stated, albeit in a footnote, that, although the term "instrumentality" is of recent vintage, it fairly characterizes property that historically was subject to forfeiture because it was the actual means by which an offense was committed. "Instrumentality" forfeitures have historically been limited to the property actually used to commit an offense and no more. A forfeiture that reaches beyond this strict historical limitation is ipso facto punitive and therefore subject to review under the Excessive Fines Clause. Id. at 333. The Court then adopted a gross disproportionality standard for determining whether a forfeiture is excessive under the Eighth Amendment, instructing courts to "compare the amount of the forfeiture to the gravity of the defendant's offense." Id. at 336-37. The United States Supreme Court provided guidelines for determining whether a fine is excessive under the Eighth Amendment. The court explained that two considerations were "particularly relevant." (Id. at p. 336.) "The first . . . is that judgments about the appropriate punishment for an offense belong in the first instance to the legislature. The second is that any judicial determination regarding the gravity of a particular criminal offense will be inherently imprecise. Both of these principles counsel against requiring strict proportionality between the amount of a punitive forfeiture and the gravity of a criminal offense, and we therefore adopt the standard of gross disproportionality articulated in our Cruel and Unusual Punishments Clause precedents. In applying this standard, the district courts in the first instance, and the courts of appeals, reviewing the proportionality determination de novo, must compare the amount of the forfeiture to the gravity of defendant's offense. If the amount of the forfeiture is grossly disproportional to the gravity of the defendant's offense, it is unconstitutional." (Id. at pp. 336-337.)