Calero-Toledo v. Pearson Yacht Leasing Co

In Calero-Toledo v. Pearson Yacht Leasing Co., 416 U.S. 663, 94 S.Ct. 2080, 40 L.Ed.2d 452 (1974), the Court addressed a due process challenge to a forfeiture, under a Puerto Rico statute, of property belonging to an alleged "innocent owner." The Court upheld the forfeiture, but stated in dicta that "it ... has been implied that it would be difficult to reject the constitutional claim of an owner whose property subjected to forfeiture had been taken from him without his privity or consent.... Similarly, the same might be said of an owner who proved not only that he was uninvolved in and unaware of the wrongful activity, but also that he had done all that reasonably could be expected to prevent the proscribed use of his property...." Id. at 689, 94 S.Ct. at 2094-95. The Supreme Court permitted forfeiture of a leased pleasure yacht after police found marijuana aboard. The Supreme Court upheld the seizure and forfeiture as constitutional despite lack of prior notice or hearing and despite the fact that the leasor was neither involved in nor aware of the unlawful use of the yacht. "Statutory forfeiture schemes are not rendered unconstitutional because of their application to the property interests of innocents." 416 U.S. at 680, 94 S.Ct. at 2090. Because the vessel is treated as the offender without regard to the owner's conduct, "the innocence of the owner of property subject to forfeiture has almost uniformly been rejected as a defense." Id. at 683, 684-86, 94 S.Ct. at 2092, 2093. The Supreme Court also noted, in dicta, that forfeiture may be "unduly oppressive" in circumstances where an owner "proved not only that he was uninvolved in and unaware of the wrongful activity, but also that he had done all that reasonably could be expected to prevent the proscribed use of his property." Id., at 689-90, 94 S.Ct. 2094-95. The Supreme Court suggested that should an innocent property owner meet this standard, forfeiture could raise a due process question. Id. However, the owner in Calero-Toledo did not meet this exception because no allegation or proof was offered that the company did all that it reasonably could to avoid having its property put to unlawful use. Id. at 690, 94 S.Ct. at 2095. The Court held that unless the offending property has been taken without the owner's consent or the owner shows he had done all he could to avoid the illegal use of it, his ignorance of the illegal use is no defense to forfeiture. Id. at 689, 94 S.Ct. at 2094.