Caplin & Drysdale, Chartered v. United States

PETITIONER:Caplin & Drysdale, Chartered
RESPONDENT:United States
LOCATION:Sable Communications of California

DOCKET NO.: 87-1729
DECIDED BY: Rehnquist Court (1988-1990)
LOWER COURT: United States Court of Appeals for the Fourth Circuit

CITATION: 491 US 617 (1989)
ARGUED: Mar 21, 1989
DECIDED: Jun 22, 1989

ADVOCATES:
Peter Van N. Lockwood – on behalf of the Petitioner
William C. Bryson – on behalf of the Respondent

Facts of the case

Question

Audio Transcription for Oral Argument – March 21, 1989 in Caplin & Drysdale, Chartered v. United States

William H. Rehnquist:

We’ll hear argument first this morning in No. 87-1729, Caplin & Drysdale v. United States.

Mr. Lockwood, you may proceed whenever you’re ready.

Peter Van N. Lockwood:

Mr. Chief Justice, and may it please the Court:

The issue that the Court is faced with here today is whether the Comprehensive Forfeiture Act of 1984 and the Fifth and Sixth Amendments to the United States Constitution permit the federal government to deprive a… an unconvicted defendant of access to his assets to employ counsel to defend him against the very charges on which the proposed forfeiture in the indictment is based and to obtain necessary living expenses.

The facts, briefly stated, in Caplin & Drysdale are… is that the Petitioner, the law firm of Caplin & Drysdale, was retained in the summer of 1983 by the Defendant Christopher Reckmeyer to represent him in a matter then understood to be a grand jury investigation involving possible federal tax evasion.

In January of 1985, Reckmeyer was indicted for not only a multiplicity of tax crimes, but a multiplicity of drug crimes and a… charged with a violation of the Continuing Criminal Enterprise statute or CCE.

The indictment also contained what I will refer to in shorthand as blanket forfeiture allegations which essentially sought forfeiture of every asset Reckmeyer owned that was worth more than $1,000.

Approximately simultaneously with the entry of the indictment, the government, ex parte, obtained a temporary restraining order against Reckmeyer and all persons acting in concert with him from transferring any of the assets listed as forfeitable in the indictment.

Immediately prior to the indictment, Reckmeyer had paid Caplin & Drysdale $10,000 by check for previously incurred legal fees.

That check… those checks were returned unpaid by the banks as a result of the restraining order.

Shortly after the indictment, Reckmeyer paid Caplin & Drysdale approximately $25,000 in cash, again for previous… pre-indictment legal services.

Because of the restraining order, Caplin & Drysdale deposited that money in an escrow account and immediately notified both the court and the government of its receipt of those funds.

Thereafter, Caplin & Drysdale continued to represent Reckmeyer in the criminal proceedings.

Some weeks after the indictment, Caplin & Drysdale filed on Reckmeyer’s behalf a motion with the district court for… to amend the temporary restraining order to allow Reckmayer access to his restrained assets to pay counsel and, in addition, requested that the assets so relieved from restraint would be exempted from subsequent forfeiture in the event Reckmeyer should be convicted.

That motion came on for a hearing, but the day prior to the hearing, Reckmeyer pleaded guilty.

As a result, the district court deferred ruling on the motion to some post-conviction procedures under Subsection N(2) of the CCE forfeiture statute.

At that subsequent… subsequent hearing, Caplin & Drysdale at this point, petitioning on its own behalf for the fees, pursuant to the court’s instruction… and the court granted Caplin & Drysdale’s motion.

In the interim, while those proceedings were transpiring, Reckmeyer also consented to the entry of a forfeiture decree against him, which once again covered all the assets listed in the indictment and included the bank accounts on which the $10,000 in unpaid checks were drawn and the 25,000 odd dollars that was in the possession of Caplin & Drysdale in the escrow account.

William H. Rehnquist:

Mr. Lockwood, what are the requirements for a forfeiture?

That the… the monies or property have been acquired as a result of the drug activities?

Peter Van N. Lockwood:

Chief Justice Rehnquist, there are a variety of properties which are subject to forfeiture in Section 853(a).

They include proceeds of drug transactions, but–

William H. Rehnquist:

I didn’t mean so much the various kinds of properties, but what does the government have to show in order to forfeit any property?

That it be acquired from drug proceeds?

Peter Van N. Lockwood:

–The government has to show… well, the government first has to convict the defendant.

William H. Rehnquist:

Yes.

Peter Van N. Lockwood:

Secondly, having convicted it, it has to show that the property was either obtained or used in the manner proscribed by the statute itself which, as I say, involves a variety of different considerations including, for example, that the property in a RICO case, which has an identical statute to the one at issue here, was a portion of the enterprise that the defendant conducted by a pattern of racketeering activity.

For example, if an enterprise is a legitimate business, but the defendant participated in two or more predicate crimes which were deemed to be a pattern of racketeering activity, the defendant’s entire interest in the enterprise could be forfeited, not merely that portion of the enterprise’s assets that resulted from the criminal activity.

William H. Rehnquist:

What was the basis for the forfeiture against Reckmeyer here?

Peter Van N. Lockwood:

Well, the ultimate basis was Reckmeyer’s consent.

William H. Rehnquist:

Well, but–

Peter Van N. Lockwood:

There was never any litigation or findings–

William H. Rehnquist:

–Doesn’t the court have… doesn’t the court have to make any findings or anything like that?

Peter Van N. Lockwood:

–Not if the defendant consents.

It’s… it’s just like a guilty plea in that regard, Your honor.

The… we believe there are certain basic principles that have to be kept in mind in evaluating the arguments over whether or not the lower court was correct in ruling that Caplin & Drysdale should be paid the legal fees from Reckmeyer’s assets that it had earned, or whether the Court of Appeals for the Fourth Circuit en banc was correct in holding that neither the statute nor the… the applicable constitutional provisions authorize such a result.

The first point is that, unlike the government’s argument at various places in its brief which suggests that this is simply a dispute over property rights, forfeiture is a criminal penalty in this statute.

It is imposed only upon conviction of the defendant and is… it was enacted as an effort to punish the defendant for his wrongful conduct and deter others from engaging in similar conduct.

The restraining order provisions in both the CCE and the RICO statutes were intended by Congress… this much both sides agree on… to prevent a defendant from avoiding the impact of forfeiture by disposing of his property prior to forfeiture but after indictment in a manner which would, for example, allow him to retain the economic and beneficial ownership of that property, which we would refer to as a sham transaction, or which would enable his organization… the statute… these statutes were, after all, aimed at criminal organizations… to maintain its continued use of the assets in criminal activity.

This would be involved in transferring assets to other members of the criminal organization.

The issue in this case–

Antonin Scalia:

I mean… there… there… there is not agreement on both sides that that’s the only purpose.

Peter Van N. Lockwood:

–Your… Justice Scalia, I didn’t mean to say it was agreement that that was the only purpose.

It is agreement that that is a major purpose.

I was about to say that the… the disagreement between the parties has to do with how much farther Congress intended to go than those basic purposes and specifically whether Congress intended that the government, by indicting a defendant and including blanket forfeiture allegations, could in fact render a defendant functionally indigent prior to the time of his conviction for the offenses on which the forfeiture charges were based.

William H. Rehnquist:

But that… is that your principal contention here, that the forfeiture… or the tying up of the assets simply on the basis of an indictment is not right?

I thought you would object also to a later recapture of those, even after a conviction.

Peter Van N. Lockwood:

That is correct, Chief Justice Rehnquist.

William H. Rehnquist:

So, it isn’t just the fact that it is just an indictment.

You object to the thing even after a conviction.

Peter Van N. Lockwood:

That is correct, Chief Justice Rehnquist.

Our view is that the so-called relation-back provision of the statute which purports to vest title to the… of the defendant’s asset in the government at the time the defendant committed the crime and therefore prohibits the transfer of any such assets to a third party at any time after that crime, subject to very narrow exceptions, has exactly the same practical effect as restraint because no third party, whether they be a lawyer, a grocer, a surgeon or whoever, who is… who is aware through publicity or otherwise that the defendant has been indicted is going to transfer goods or services to the defendant–

William H. Rehnquist:

It’s like a–

Peter Van N. Lockwood:

–In exchange for money that the government can come and take back if the defendant is convicted.

William H. Rehnquist:

–It is like a lis pendens in a civil action.

Peter Van N. Lockwood:

Short of the formality of filing the lis pendens with the court, it is exactly the same, Justice Rehnquist.

Byron R. White:

But your claim is limited to compensation for services performed prior to conviction.

Peter Van N. Lockwood:

Prior to conviction, that is correct, Justice White.

Byron R. White:

And you think you should be paid either before or after conviction for those services.

Peter Van N. Lockwood:

As long as the services were rendered prior to conviction, it is our position that the procedural context of when the lower court got around to deciding that we were entitled to be paid is irrelevant.

Peter Van N. Lockwood:

The… the key factor is that Reckmeyer had a… a statutory and constitutional right to pay us prior to his conviction, and the conviction does not cut that right off, as the government seems to suggest.

The… part of the… the issue here is that the government’s arguments about why the statute should be interpreted in the way it claims, which is to provide that this pre-conviction impact through either restraint or threat of forfeiture is appropriate, is that the government has a legitimate interest which the Congress in its view clearly intended in drafting of this statute in maximizing the forfeiture penalty by “preserving assets for forfeiture”.

It is our position that, if analyzed correctly, that interest, to the extent that it purports to be penal, cannot be given any legal or constitutional effect prior to conviction.

You cannot punish someone prior to the time they are convicted of the crime.

So–

Byron R. White:

So, you… it’s your position that… I mean, that… that relation back to the date of the offense is just… you shouldn’t construe the statute that way or that if you do, it’s unconstitutional?

Peter Van N. Lockwood:

–We do not–

Byron R. White:

What about an… what about just a bank loan that the defendant owed and was due and it was owing?

Do you think the… do you think the bank can collect that?

Or are you–

Peter Van N. Lockwood:

–Well, under the statute–

Byron R. White:

–[inaudible] something special out of the fact that these are counsel fees?

Peter Van N. Lockwood:

–Well, we are and we aren’t, Justice White.

We… we… in the pre-conviction setting, we would not under the statute, as opposed to the Sixth Amendment argument, distinguish between counsel fees and other necessary living expenses.

We don’t–

Byron R. White:

xxx bank loan?

Peter Van N. Lockwood:

–A bank loan, depending upon the circumstances under which it would be made, the bank could very well qualify as a bona fide for… purchaser for value without notice.

There is a dispute between the government and… and various claimants in the lower courts, which is not presented by this case, over whether a “mere creditor” can get assets that are not forfeited if the bank did not obtain a security interest.

It’s clear under the statute if the bank loaned money and obtained a security interest prior to the time the defendant was indicted, the bank could get the repayment of that loan out of the forfeited assets.

William H. Rehnquist:

But what about the money that is claimed to be the proceeds of a bank robbery?

Peter Van N. Lockwood:

Chief Justice Scalia, we would… excuse me… Chief Justice Rehnquist.

[Laughter]

William H. Rehnquist:

You see visions of the future.

[Laughter]

Peter Van N. Lockwood:

We would argue that the bank robbery analogy is not apt.

In the bank robbery analogy, you have a common law fight over title to property.

We do not posit that Reckmeyer or anybody else has the right to use somebody else’s property to pay a lawyer or for any other purpose.

But here, the notion that the assets that Reckmeyer has in his possession at the time of indictment belonged to the government–

William H. Rehnquist:

But–

Peter Van N. Lockwood:

–by operation is a fiction.

Peter Van N. Lockwood:

It’s a penalty.

William H. Rehnquist:

–Well, but… but why can’t the federal government make property law the same way state governments make property law when they say that the… that the money deposited in a bank belongs to a bank?

Why can’t the federal government say on the happening of certain events, this property belongs to United States?

Peter Van N. Lockwood:

They can, provided that they have a particular, legitimate constitutional purpose.

The Congress under the taking clause of the Fifth Amendment could not pass a statute that said Peter Lockwood’s property belongs to the government.

There has to have a legitimate purpose.

In this case the… the legitimate purpose behind the forfeiture statute is the… is penalizing criminals.

Our… we do not challenge the legitimacy of that purpose.

We challenge the impact of the penalty being applied prior to the time that the defendant is convicted.

Anthony M. Kennedy:

But the only legitimate basis for imposing the penalty is the wrongful act and, therefore, it is perfectly proper… in fact, I should think necessary… for the government to make the statute relate back to the occurrence of the wrongful act, which is all it has done here.

That is the whole predicate for the government asserting the ownership interest.

Peter Van N. Lockwood:

That’s correct, Justice Kennedy, as long as you don’t push the principle too far because if the issue… to the extent the statute and the forfeiture provisions are directed at the defendant himself, it is perfectly appropriate for the statute by way of a penalty to look back to the time that the criminal act was committed for purpose of identifying the forfeitable property.

When you get to transfers to third parties who are presumptively innocent, different considerations are presented, and where you get to depriving a defendant under the notion that we are going to take this property from him after he is convicted, depriving him of the use of property to hire a lawyer to defend himself against the very charges which, if he wins, the forfeiture will not occur, we… we urge that that is a very draconian type of remedy.

It is an infliction of punishment.

Antonin Scalia:

That’s a… that’s a different theory.

Now… now, you’re getting into the right to counsel aspect of it.

You said in response to the Chief Justice’s question a short time ago that on… your objection to relation back means that you would not draw a distinction between attorney’s fees and other necessary living expenses.

If I… but if I understand your… your theory correctly, you shouldn’t be drawing a distinction between attorneys’ fees and anything else the individual does with the money.

He could go out and just say, you know, I know I’m going to get convicted.

They have the goods on me.

Boy, I’m going to really live for the two years it takes for this trial to be… to be completed.

Isn’t… isn’t that consequence of your theory?

Peter Van N. Lockwood:

Justice Scalia, I don’t believe so.

Antonin Scalia:

He can go through that money completely.

Peter Van N. Lockwood:

I don’t believe so.

We would–

Antonin Scalia:

Why not?

Peter Van N. Lockwood:

–We would concede that the government has a legitimate interest in preventing the defendant from simply wasting money that he believes he will ultimately have to turn over to the government.

Antonin Scalia:

Why is that if… if it can’t make any relation back?

He doesn’t owe any money to the government until he is convicted.

Antonin Scalia:

It’s his money.

Peter Van N. Lockwood:

We didn’t say that the relation-back doctrine is unconstitutional on its face.

We were… we… I’m arguing that the relation-back doctrine cannot legitimately be used in a very limited class of cases where the impact of the use of the relation-back doctrine is not to preserve the status quo, which is the normal purpose for equitable relief, but to dramatically alter the status quo to the defendant’s is detriment by rendering him indigent functionally by mere indictment alone.

Antonin Scalia:

Well, you must be reasoning from something else other than the mere relation back then.

I mean, you must be relying on the… on right to counsel or some other… some other right–

Peter Van N. Lockwood:

Well, we… the statutory–

Antonin Scalia:

–because if you really think that you can’t take it away from him until he is convicted, he ought to have the right to do whatever he wants with that money during the period while the trial is continuing.

Peter Van N. Lockwood:

–In the statutory context, Justice Scalia, we are relying on language in the statute which we contend gives the court an equitable discretion both under the restraining order provisions and under the relation-back provisions.

And that involves balancing of hardships in the government’s interest.

And we concede that the… in that context, the government’s interest in avoiding the dissipation of assets, whether it’s through a restraining order or the application of relation-back principles, is entitled to sufficient weight to prohibit what Your Honor has suggested would be otherwise appropriate, namely, dissipation of assets.

We suggest, as did Judge Winter in his opinion in Monsanto, that the equitable discretion inherent in the statute cannot be utilized, however, to render the defendant a pauper.

With respect to the constitutional argument, we… we… we say that… our argument is essentially that you’ve got to balance the invasion of the defendant’s right to counsel of choice against the government’s interest.

The relation-back principle in that context… the government’s interest in its application is to maximize the amount of money it will collect as a penalty from the defendant when he is convicted.

That is its only legitimate interest.

It does not have a legitimate interest in putting the defendant in a posture in which the government picks his lawyer and chooses how much to pay his lawyer.

Anthony M. Kennedy:

Well, of course, that… that’s the issue.

You see, you… you defined status quo, but I suggest the fantacy in that… the use of that word is that your definition of the status quo includes the defendant’s balance sheet after he has acquired illegal assets.

Peter Van N. Lockwood:

Justice Kennedy–

Anthony M. Kennedy:

And that’s the whole point.

Peter Van N. Lockwood:

–Justice Kennedy, the problem is that at the time of the impact of the restraint and forfeiture, the defendant’s assets are only claimed by the government to be illegal.

They have not been proven to be illegally obtained, and they will only be so proven when the defendant is convicted at the criminal trial.

But the government, if the statute is to be interpreted the way it argues, is in effect tying one hand behind the defendant’s back by depriving him of his ability to hire a lawyer to contest the charges on which the proposed forfeiture is based.

Sandra Day O’Connor:

Mr. Lockwood, what if the defendant has as his property a stash of narcotics, which he had been planning to sell, and also money that he had obtained from prior sales of narcotics according to the government’s allegations?

Do you think that he can use that money constitutionally pending the trial and conviction?

Peter Van N. Lockwood:

We would concede he could not use the narcotics.

Narcotics are contraband.

Nobody maintains… can maintain legal title in them, and they cannot be sold.

With respect to the money, money is fungible.

The money may or may not, in fact, be the proceeds of narcotics transactions.

No one will know until the defendant is convicted and the forfeiture allegations are litigated with–

Sandra Day O’Connor:

And do you think the government has a different interest there so it can prevent the use of that money that it alleges were simply obtained by drug sales?

Peter Van N. Lockwood:

–I think the government’s interest at all times in this criminal forfeiture penalty in this statute that is before the Court is in penalizing the defendant by stripping him of his assets that were illegally obtained.

Sandra Day O’Connor:

Well, are we sure of that?

Could it… could it not incorporate taking the proceeds of crime that are usable as evidence or for any other purpose in the trial?

Peter Van N. Lockwood:

The government could, I believe, make a different case from the one that is presented here if the assets sought to be seized were alleged to be needed to be used for evidence because that gets into a different set of constitutional considerations more like the typical ones that this Court has upheld in… in prior cases where counsel of choice was at issue, namely, the due and fair administration of justice.

Here, where the only interest is money, the only interest on the government side of the equation is maximization of the penalty regardless of what the basis for that penalty is.

The… the government’s rationale could as easily apply in this case to… to tying up assets of a defendant to enable him to pay fines.

William H. Rehnquist:

What… what if you applied the government’s rationale to your rather standard forfeiture of an automobile used in transporting drugs, nothing to do with CCE or RICO?

You know, they’ve had that statute on the books for years.

Would it be your position that the government could not seize an automobile that it claimed was used for transporting drugs until the person had been convicted?

Peter Van N. Lockwood:

No, Chief Justice Rehnquist.

William H. Rehnquist:

How do you distinguish that case from this?

Peter Van N. Lockwood:

Well, for openers, we would… I would not… I would need to know whether the automobile was the only asset that the defendant possessed which he could convert to cash to hire a lawyer because that’s what this case entails.

William H. Rehnquist:

Let’s suppose it… let’s suppose it was.

Peter Van N. Lockwood:

And the automobile was not proposed to be used as evidence.

Its sole purpose of the seizure was to sell it–

William H. Rehnquist:

To… yes.

Peter Van N. Lockwood:

–and penalize the defendant for having–

William H. Rehnquist:

So that the defendant doesn’t sell it… doesn’t sell it before the forfeiture proceedings are completed.

Peter Van N. Lockwood:

–I believe that if the sole purpose is to maximize the forfeiture penalty and not for evidence or some other thing and the automobile was not proven to be used in the crime at the time of its seizure and the defendant needs to sell it to raise counsel fees, that… that that would, in fact, be a violation of the defendant’s Sixth Amendment to counsel of choice in that very unusual circumstance.

William H. Rehnquist:

Well, I don’t think it is terribly unusual.

I mean, typically a libel in a case like that proceeds on the basis of probable cause just like here you have an indictment.

Peter Van N. Lockwood:

What is unusual is the notion that a defendant’s only asset would be the automobile.

That’s unusual.

Byron R. White:

Mr. Lockwood, you would… I gather you… in this example about the car, you… it was necessary for you to reach the Sixth Amendment issue.

Peter Van N. Lockwood:

That’s correct, Justice White.

Byron R. White:

And so, you concede that the… that the statute and the forfeiture provision covers that car.

Peter Van N. Lockwood:

Well, the… the question of the scope of the discretion in 853 could be read to even include it there.

It is a more difficult case–

Byron R. White:

Well, it seems to me–

Peter Van N. Lockwood:

–because it is not a blanket asset forfeiture; it is a particularized one.

I would urge that the Court would have discretion in that case as well, although I concede it’s a more difficult case.

John Paul Stevens:

–Let me push you one step further.

Supposing the government had made a controlled buy of drugs and paid the defendant $500,000 with marked bills.

You… you wouldn’t say that they… they couldn’t… the government couldn’t get those bills back.

You couldn’t use that money to hire a lawyer, would you?

Peter Van N. Lockwood:

No, Justice Stevens, I wouldn’t.

There the marked bills, among other things, are evidence.

John Paul Stevens:

And… and also, of course, they would be the property of the government.

Peter Van N. Lockwood:

That’s correct, from the beginning.

They are not being returned as a penalty for the crime that the defendant has yet to be convicted of.

I’d like to–

Anthony M. Kennedy:

Counsel, one more question–

–Suppose the bills are–

–If I may.

You use the word penalize the defendant.

In a standard unjust enrichment action that has been known to the common law for years, we never talk about penalizing the person who has been unjustly enriched when we make that person disgorge, do we?

Peter Van N. Lockwood:

–No, Justice Kennedy, but this is not an unjust enrichment statute, and in an unjust enrichment case, the defendant generally speaking, is not deprived of his ability to live and hire counsel while he litigates with his opponent under some doctrine of relation back or some restraining order.

Anthony M. Kennedy:

Your position is there no unjust enrichment in the prospect of a dope dealer keeping the proceeds of his transaction?

That is not unjust enrichment?

Peter Van N. Lockwood:

By definition, the dope dealer or the RICO defendant or the… in the future, the tax evader who has spent the money on a lawyer has not kept it.

The only question is can he spend it on a lawyer or for living expenses and have it dissipated that way, or does he have to go without so that the government can take all of it after he is convicted.

I’d like to reserve the rest of my time for rebuttal, if I might.

William H. Rehnquist:

Very well, Mr. Lockwood.

Mr. Bryson?

William C. Bryson:

Mr. Chief Justice, and may it please the Court:

At the outset, I’d like to make a couple of points applicable to both of the cases before Court today, and then turn to the Caplin & Drysdale case.

First, it is important I think to point out the procedural posture that these two cases present.

There are two basic issues that have been litigated in the so-called attorneys’ fee forfeiture cases.

One is the substantive question, which is the question that is presented in these cases, of whether funds that a defendant wishes to use to pay an attorney may be forfeited at all, consistent with the statute and the Sixth Amendment, and the second is a procedural question which is not presented in this… these cases, but has come up in other cases, involving what kind of procedures the courts must go through, if any, to establish the right to a forfeiture, that is to say, should… must there be a pretrial hearing of some sort and what must that hearing consist in.

William C. Bryson:

Now, the reason, of course, that these two cases don’t present the procedural point is simply that in the Caplin & Drysdale case, there was a guilty plea simultaneously with the motion to modify the restraining order and, therefore, we know as of the time that the restraining order modification motion was filed, that the defendant was, in fact, guilty of the crimes and that he, in fact, was subject to the forfeiture provisions with respect to all of the property that he conceded was forfeitable.

And in the Monsanto case, the court of appeals panel required and the district court held a pretrial hearing long before any counsel had to prepare for the trial in which it was determined, as the district court found, by overwhelming evidence that the defendant had committed the crimes and that the property was forfeitable.

So… so, these cases present the substantive question in a very stark posture.

They present the question whether… that if we know to either a certainty or by overwhelming likelihood that the fees are… excuse me… that the… the property in issue is subject to forfeiture, must that property nonetheless be excluded from a forfeiture order.

And our position on that is that neither statute nor the Sixth Amendment requires that result.

Antonin Scalia:

And you assert that the Fifth Amendment issue, the due process issue, is not involved here at all.

William C. Bryson:

Well, the… there is a Fifth Amendment issue with respect… a general Fifth Amendment claim that is made by Caplin & Drysdale with respect to the question of whether it violates the Fifth Amendment to put this kind of authority in the hands of prosecutors.

It’s related to the Sixth Amendment question.

The procedural due process question–

Antonin Scalia:

Yes.

William C. Bryson:

–we believe is not presented in these cases.

Antonin Scalia:

As to whether you need a hearing–

William C. Bryson:

A hearing.

That’s right.

Antonin Scalia:

–and what has to be shown at that hearing.

William C. Bryson:

That’s right.

And, indeed, the court of appeals in Caplin & Dryscales en banc court, made exactly that point and pointed out that in light of the posture of this case, we are really presented only with the… the flat, substantive question of whether forfeiture is possible without regard to the strength of the government’s case.

In other words, this is, in essence, the case that I think Justice Stevens put in which we know… because the bills are marked, we know that this money belongs to the government.

In this case we know that the money belongs to the government not because the bills are marked, which gives us a very high degree certitude, but because the defendant admitted that he was guilty and that the money was forfeitable, which gives us a complete degree of certitude, as much as the law–

John Paul Stevens:

Yes, but of course, you didn’t have that before the guilty plea.

You didn’t have that degree of certitude then.

William C. Bryson:

–When we had it, Your Honor, was… and let me give you the chronologies because I think it may be important.

There was an indictment in January, and six weeks passed and then on March 7th, the defendant made a motion to vacate or modify the restraining order in order to provide for the payment of attorneys’ fees.

That was the first time the court or the government heard anything from the defendant about the question of whether there should be attorneys’ fees–

John Paul Stevens:

No, that’s true.

But during that six-week period, you did not have the certitude that you had described.

William C. Bryson:

–That’s correct.

That’s correct.

John Paul Stevens:

And part of the issue is what can be done during that six-weeks period.

William C. Bryson:

That’s right.

John Paul Stevens:

Say h makes… pays his landlord his rent during that six-weeks period, and the landlord hears about the indictment and has reason to be believe maybe this fellow is a crook and maybe this is tainted money.

But your position is the landlord cannot take the money during that period, as I understand it.

William C. Bryson:

That’s right.

And… and the… in order to trigger any right to a contrary result, the defendant has to make some kind of motion, tell the court that there is something wrong with this regime.

The first time that happened–

John Paul Stevens:

And the landlord has to refuse to accept any rent from him, too, I guess.

I… we’re talking about the rights of third parties–

William C. Bryson:

–Well, if the landlord is on notice.

–in part here.

William C. Bryson:

If the landlord is not in a position to be a bona fide purchaser for value because he is on notice of the forfeiture.

John Paul Stevens:

As long as there is enough information in the newspapers and headlines to put him on notice that it may be… and I suppose the grocer and the doctor that he goes to or the dentist, all those people can’t… can’t… cannot treat him without doing so at their peril.

William C. Bryson:

If they are not bona fide purchasers for value, that’s right.

John Paul Stevens:

Well, I’m assuming wide publicity of… attending the indictment and people who have treated this man for many, many years.

And I assume that would go back, would it not, to even… how far back do you go?

When the offense was committed… say he’s indicted for drug business.

He had been in it for five or six years, say.

Can all the people who have dealt with him during that period with some reason to suspect the nature of the activities–

William C. Bryson:

Well, it… it requires more than a reason to suspect the nature of activities.

It requires that you have notice of the probable forfeiture of the particular assets.

John Paul Stevens:

–I see.

William C. Bryson:

That is not likely to happen with respect to anyone prior to indictment.

John Paul Stevens:

So, really we’re only concerned about the–

William C. Bryson:

We’re really realistically only talking as of the indictment.

John Paul Stevens:

–The period between the indictment and the conviction.

William C. Bryson:

That’s right.

Sandra Day O’Connor:

Mr. Bryson, what if we thought that it was necessary before trial that there be a hearing at which evidence would be taken and the defendant would have an opportunity to rebut the government’s claims, and that procedural due process requires that?

What does that do in the Caplin case do you think?

Your Honor, nothing at all because here, as I say, the request for a modification and a hearing on the… on the motion for modification was filed on March 7th.

The hearing was… came or quite quickly, on March 15th.

But, in fact, in the meantime, on March 14th, the defendant had pleaded guilty and had conceded forfeitability.

Sandra Day O’Connor:

So, there was nothing to hear at that point.

All that was presented at that point was the naked constitutional and statutory question.

Now, in the Monsanto case, there is a pretrial hearing.

And that hearing, we contend, was beyond what any court has required that has required some kind of due process hearing because in that hearing, not only was it an adversarial hearing and a four-day hearing at that, in which the defendant was entitled to put on any evidence that… that he chose, but also the finding that the property was forfeitable was made by a standard of proof beyond clear and convincing.

So, our… our point is that in… in both of these cases, the Court does not have to address the question of what procedure is necessary because whatever procedure is necessary was necessarily satisfied here.

Well, Mr. Bryson, you say that as soon as he pled guilty, he was… he conceded forfeitability.

William C. Bryson:

Yes.

Byron R. White:

I thought you had to… the government had to prove that the property was actually forfeitable in the sense that it was a… used in or a product of criminal activity.

William C. Bryson:

Well, he… he conceded, number one, that he had–

Byron R. White:

Well, not… just not… not just by pleading guilty.

William C. Bryson:

–Well, his plea of guilty included a concession that, in fact, his assets over a course of many years were essentially all the product of narcotics transactions and there was some relation–

Byron R. White:

All he did was plead guilty, though, isn’t it?

He didn’t–

William C. Bryson:

–No, he pleaded guilty and there was a representation on his part that there had been… that his… his assets, essentially, were all narcotics tainted there.

So, he did much more than simply concede that he had committed the particular crimes.

He conceded that his… the assets that were the subject of the indictment and named in the indictment were, in fact, forfeitable under the 853(a).

So, he has conceded–

Byron R. White:

–Well, that’s certainly not true in Monsanto, is it?

William C. Bryson:

–It was… in Monsanto, he didn’t concede anything, but the court found–

Byron R. White:

Well, I know, but there was… there was just probable cause to believe that he had committed these crimes–

William C. Bryson:

–But you see, the court in Monsanto–

Byron R. White:

–and not probable cause to say that every asset he had was forfeitable.

William C. Bryson:

–Well, there was more than probable cause because the district court specifically found with respect to the only two assets that were at issue in Monsanto, that they were forfeitable.

Byron R. White:

Okay.

William C. Bryson:

That was an issue which the panel in Monsanto required the district court to address, and the district court did address.

There are only two assets at issue in Monsanto, so it’s… it’s pretty simple.

Here there are many more in Caplin & Drysdale.

John Paul Stevens:

May I ask you one other question before I… about the relation back business?

Is it not true that although the third parties who deal in good faith with the man would… prior to indictment would have no risk.

If you had sham transactions prior to the indictment, but after the date of the first offense, they could be set aside and the money could be recovered, could it not?

William C. Bryson:

Well, if they were sham transactions–

John Paul Stevens:

Say… say he had a lawyer who just took a $5 million fee because… for general services or something.

William C. Bryson:

–You could well conclude from that that that lawyer had notice of the probable forfeitability of his assets.

John Paul Stevens:

Right, I mean, assuming that you can prove that the… that the third had… had… had notice of–

William C. Bryson:

The fact that it–

John Paul Stevens:

–the fact it was probably drug–

William C. Bryson:

–Yes, the fact that it was a sham transaction would be very strong proof that there was some reason for the–

John Paul Stevens:

–Right.

William C. Bryson:

–for the fraudulent transfer–

John Paul Stevens:

But–

William C. Bryson:

–which would be in anticipation–

John Paul Stevens:

–But your right… I mean, the government’s right is to get the money… all money earned by the defendant out of the offense all the way back to the date his illegal activities commenced.

William C. Bryson:

–That’s right, and… and the statute… under common law forfeiture principles, we would have an absolute right to all that money, including the grocer’s… monies paid to the grocer, whatever, or property just given to the grocer or whatever.

But there is an exception.

Congress has modified that admittedly–

John Paul Stevens:

xxx.

William C. Bryson:

–harsh result by saying in two settings, we will not require forfeiture.

One is where there was a prior interest prior to the commission of the… of the act… now, that’s consistent with the common law rule… but, two, where there is a bona fide purchaser for value without notice.

In the second setting, that’s contrary to the old common law rule, but it ameliorates the harshness of the statute with respect to a very narrowly defined class of people in… among whom these lawyers clearly do not fail.

Byron R. White:

Is there at issue here some… some… some payment of an attorney’s fees prior to the plea of guilty?

William C. Bryson:

Yes.

Byron R. White:

Was it… is that just the $29,000?

William C. Bryson:

No, no.

The… the… well, it’s a little complicated, but let me see if I can lay it out.

Byron R. White:

Well, I mean, just generally there is–

William C. Bryson:

There were no fees paid.

The only thing that was paid–

Byron R. White:

–There’s no fees paid prior to the plea of guilty?

William C. Bryson:

–That… that is one of the problems in this case.

There was a… a payment of $25,000 in cash on January 25th–

Byron R. White:

Yes.

William C. Bryson:

–which was after the indictment, but Mr. Lockwood has… has said today that that was for pre-indictment services.

And, in fact, the papers in the lower court indicate that–

Byron R. White:

Well, don’t you think that is recoverable or not?

William C. Bryson:

–Well, they took the position–

Byron R. White:

Under your theory, I would think it is.

William C. Bryson:

–They took the… well, it… it is money which was accepted after… well, I mean, the first problem is that it was money which was paid contrary to the… to the restraining order.

But in any event, it was money that was accepted after the… the attorneys had notice of the indictment–

Byron R. White:

Yes, so you think–

William C. Bryson:

–and therefore were aware.

Byron R. White:

–it’s recoverable under your theory.

William C. Bryson:

I think it’s… that’s right.

That’s right.

Byron R. White:

And it would have been even if they had… they just don’t qualify for bona fide purchaser.

William C. Bryson:

That’s right.

Byron R. White:

And now… and but now, there is also at issue attorneys’ fees that are due and owing after the plea–

William C. Bryson:

That’s right.

Byron R. White:

–for… for–

William C. Bryson:

That’s right.

That’s the $170,000.

Byron R. White:

–Yes, exactly.

William C. Bryson:

That’s right.

How, those… those fees, of course, have not been transferred.

There has been no transfer, and that is one at the reasons, among others, that the attorneys in this case are not entitled to recovery under the statute because to the extent that the statute provides any recovery… any opportunity for a recovery for any party, there must be an actual transfer of property.

The statute does not permit recovery for a party which is simply in the position of a general creditor.

Antonin Scalia:

Mr. Bryson, I… to be a bona fide purchaser, you… you have… you have to know about the possible forfeiture not when you received the money, but when you provide the services.

Isn’t that right?

I mean, isn’t that what counts, whether at the time you provide the services, you… you… you’re on notice?

So, wouldn’t it be the case that if the lawyers, prior to the indictment, didn’t… any services they provided before the indictment… why is that automatic–

William C. Bryson:

Well, it is at the time of the purchase as the… the statute states now.

Antonin Scalia:

–Well, I purchase when I provide the services for which that’s the exchange.

No?

William C. Bryson:

Well, it–

Antonin Scalia:

Or is it when I… when he… when he turns it over to me?

William C. Bryson:

–Well, that–

Antonin Scalia:

That’s a very strange rule you’re–

William C. Bryson:

–That is not… that is not entirely clear particularly on the facts of this $25,000 payment.

Antonin Scalia:

–Well, if it isn’t clear, I know how it ought to come out.

William C. Bryson:

It… it may will be that the purchase was effected at the time the services were provided, not at the–

Antonin Scalia:

I would think so.

William C. Bryson:

–time that the money was paid, but I’d have… I have to point out that in the lower court, the Petitioners in this case took the contrary position that… saying that the $25,000 was paid for money… was paid for services that were performed after the indictments, in other words, in connection with the–

Antonin Scalia:

xxx.

William C. Bryson:

–representation of the case, or at least that’s the way I read their representation on that.

So, that… the disposition of the $25,000 is somewhat up in the air, but under our–

Antonin Scalia:

Well, I–

William C. Bryson:

–theory of the case, it doesn’t matter because the $170,000 that’s at issue here is clearly and concededly not subject to the bona fide purchaser for value.

John Paul Stevens:

–May I just ask one other question?

Supposing the man has a genuine preexisting debt of a mortgage or something for $100,000, and pays that off after the indictment, but before the guilty plea, is that money recoverable by the government?

He’s apparently using government money to pay it.

William C. Bryson:

If it is a secured–

John Paul Stevens:

No, it’s an unsecured debt, but a genuine debt.

William C. Bryson:

–If it is an unsecured debt–

John Paul Stevens:

He bought a–

William C. Bryson:

–and the… and the payment is made to somebody, again, with notice–

John Paul Stevens:

–Well, at the time of the payment, notice; at the time of the services, no notice.

I’m assuming it’s a payment for a preexisting debt that was incurred by the… that the services were performed… really the problem Justice Scalia identified.

He is paying that debt with the government money I think under your view.

William C. Bryson:

–Well, again, it depends on how you view the… the term “purchase”.

If the purchase occurs at the time the service is–

John Paul Stevens:

Well, I’m wondering… I’m asking you how do you view it.

William C. Bryson:

–Well, I… I think one could–

John Paul Stevens:

I know one can argue both sides.

How do you argue it?

[Laughter]

William C. Bryson:

–Well, we believe that the purchase is not complete until the money–

John Paul Stevens:

That was for your view.

Unlike Justice Scalia’s suggestion, it’s the time of payment because it’s being paid with government money.

William C. Bryson:

–That’s right.

William H. Rehnquist:

Well, under fraudulent conveyance law, under voidable preference law in bankruptcy, it has to be a fresh service performed.

A payment on an old debt doesn’t make you a bona fide purchaser.

William C. Bryson:

Yes, that’s true.

Sandra Day O’Connor:

Mr. Bryson, you say you don’t have to address it here, but do you think that a post-indictment restraining order can be obtained ex parte by the government?

William C. Bryson:

Yes, Your Honor.

There is… the restraining order itself clearly can be obtained simply… as the statute makes clear, simply by petitioning to the district court ex parte.

And, in fact, there is a lot in the legislative history that indicates that that… it is important that it be able to be done that way because of the possibility of transfers being done very quickly if notice is given of the restraining order.

The… however, as the… the legislative history also makes clear, the… excuse me… the court certainly can hold a hearing at any time after the restraining order is entered to consider modifying the restraining order or vacating it altogether.

Now, that’s when in our view any process that may be due is properly to come into play.

So, in our view, the… whatever due process is required applies to any hearing that may be held on a motion to modify the restraining order if one has been entered post-indictment.

The actual right to enter the restraining order initially can… applies… it could be done ex parte.

Byron R. White:

You are going to argue the constitutional issue I suppose.

William C. Bryson:

Yes, yes.

John Paul Stevens:

May I just ask one other preliminary question because I… you do… you do have… fortunately you have two hours today, so we’re not quite as unfair as we sometimes are.

The general scheme is the some under both the RICO statute and the CCE statute–

William C. Bryson:

Yes, that’s right.

John Paul Stevens:

–so that whatever we decide pertaining to the drug business applies to everyone subject to RICO, too.

Is that correct?

William C. Bryson:

It applies to everyone subject to RICO in which there is a forfeiture allegation.

I would have to–

John Paul Stevens:

I understand.

William C. Bryson:

–I would hasten to point out that the number of cases that are affected is vastly more in the context of… of narcotics forfeiture than RICO.

John Paul Stevens:

Why do you say that?

There are an awful lot of RICO cases.

William C. Bryson:

Well, there are, but we only have about 50 cases a year in which RICO forfeitures are sought.

We have many more than that–

John Paul Stevens:

Yes, but potentially there are an awful lot more than that.

William C. Bryson:

–Well, that’s right, but then we only have about 100 RICOs a year, total.

It’s… RICO is… you see a lot of the RICO cases, of course, because most of them are appealed all the way up, but in spite of the disproportionate number that you see, there are, in fact, a very small number that are actually brought.

So, it’s 100 cases out of a total of 50,000 criminal cases that are brought a year.

So, proportionately the vast majority of… of cases in which forfeiture is going to be an issue will be drug cases.

That’s right.

Now, on the constitutional question… and let me… let me turn directly to that… it is our view that the Sixth Amendment requires only… with respect to the right to counsel of choice, only that there be no arbitrary or unreasonable limitation of the right to counsel of choice.

It’s different from the right to counsel, period.

And the question then in this case is does the forfeiture statute operate in a way that is somehow arbitrary or unreasonable.

And what in this context the question really comes down to is is it arbitrary or unreasonable to bar defendants from using to pay lawyers’ fees money that has been determined, as in these cases, either conclusively or by overwhelming evidence to be subject to forfeiture, to be, in other words, the government’s money.

Now, the first question I guess one could start with is to say is there any constitutional flaw in the process of… or in… in the fact of determining that this is, in fact, the tainted money, money that was obtained as a result of drug transactions, is forfeitable.

Is there any Fifth Amendment bar to that?

Now, Mr. Lockwood said, and quite correctly, the government couldn’t simply… the Congress couldn’t simply declare that Mr. Lockwood’s funds are forfeitable, all of his property is forfeitable.

But what we submit there would be absolutely no Fifth Amendment bar to is a rule that says any of his property that are the proceeds of drug transactions are forfeitable.

And that’s a… a traditional civil notion, and it is, we… we’d submit, entirely consistent with the Fifth Amendment to do that.

That’s what Congress has done.

Now, once you accepted that it is permissible, then the only remaining question is whether there is something arbitrary about saying that the defendant cannot use those funds, funds that the government… that Congress has declared belong to the government, to hire a lawyer.

There is, in our view, no Sixth Amendment right to use somebody else’s property to hire a lawyer, and that’s what’s going on in this case.

As I say, we have in this case established with a high degree of confidence that this is the government’s property, and that is what the defendants are contending for is that even though the government has established that it is government property, they are entitled to dip into that property to the extent necessary to hire the lawyers of their choice.

Anthony M. Kennedy:

So, suppose you had a statute which permitted the defendant to have ordinary living expenses and to pay for grocery and medical bills, but it specifically prevented use of the proceeds to pay an attorney.

There was no exemption for that.

Would that be constitutional?

William C. Bryson:

I think it probably would be constitutional, assuming that Congress had some… some reasonable purpose behind–

Anthony M. Kennedy:

Well, suppose the purpose is so that the defendant doesn’t hire a first-rate attorney.

William C. Bryson:

–Well, if the purpose is to defraud… deny the… specifically to deny the defendant a right to counsel, then I think there are problems with that statute.

That is, of course, not the situation–

Anthony M. Kennedy:

Well, can… if it’s the government’s money, can’t the government say we don’t want you to be using this money to hire the best law firm in the United States.

William C. Bryson:

–It would be the discrimination, specifically picking out lawyers if there is no reason other than simply to hobble the defendant in his defense, if that’s the sole purpose of this rule.

We’re talking about a very narrow and unusual statute, but I would think that there would be a problem.

Antonin Scalia:

And this statute is okay because it doesn’t allow him to keep money for food either.

Is that right?

[Laughter]

William C. Bryson:

This was not specifically… this was not… this is a general policy.

This is not… this is a sweeping, general, overall policy.

The purposes behind this policy are not to hobble the defendant.

Antonin Scalia:

But there are no exemptions.

There–

William C. Bryson:

There are no exemptions.

That’s right.

This is not a statute in which Congress has set out to skew the scales between the defense and the… and the government.

And that I think makes a big difference for purposes of looking at the constitutionality of the statute.

There are a lot of situations in which the defendant’s property posture with respect to his property can affect the likelihood that a lawyer will… will take on his representation.

And some of them relate to the defendant’s just not having the money.

Others relate to the defendant’s situation with respect to other creditors, and some of them relate to problems that the defendant may have with respect to creditors where the creditor is the government.

And I would just give you examples.

Suppose, for example, the defendant had… prior to his criminal trial, had been slapped with a jeopardy assessment for back taxes based, let’s say, on the narcotics transactions that the government has discovered.

That would discourage, no doubt, some lawyers from representing the defendant on the theory that they would not be likely to get paid in light of this very high likelihood that the jeopardy assessment would result in tax–

John Paul Stevens:

–Well, Mr. Bryson, the jeopardy assessment would be justified by the government’s legitimate interest in fiscal purposes, collecting tax money that is due.

And we had a little discussion earlier about what really is the motivation for this whole program.

We’ve heard your opponent’s view.

Is it fiscal in nature or… is that part of it, or is it… is it–

William C. Bryson:

–It’s principally… it’s fiscal in this sense.

It’s fiscal in that the purpose is to strip drug dealers of economic power, and at the same time to deter drug dealers from engaging in drug dealings when they expect, as they have in the past, that whatever penalties they suffer, they will not lose the vast profits that they have been able to accumulate.

So, it is deterrence stripping them of their power, and also to collect assets in order to continue the asset forfeiture–

John Paul Stevens:

–But to the extent you talk about stripping the defendant of economic power, that purpose is not defeated if some of the money is spent for legitimate living expenses and attorneys’ fees.

William C. Bryson:

–Well, it can be in this sense, Your Honor.

William C. Bryson:

First of all, he knows that even though he may be subject to forfeiture, that he knows that he can exercise some considerable economic power by hiring whatever lawyer he wants to hire, and he knows also… and this is even–

John Paul Stevens:

Wells, but we’re not talking about sham transactions now.

We’re talking about hiring reputable counsel who charge normal legal rates or paying normal food bills.

And so, we are not talking about just extravagant living and that–

William C. Bryson:

–I… I understand.

John Paul Stevens:

–Yes.

William C. Bryson:

But, nonetheless, there is… it’s a matter of considerable comfort I think to a lot of potential defendants in… in the drug trace to know that they can have in a sense–

That they can afford a good lawyer.

William C. Bryson:

–they were assured of being able to pay us, as was true in a couple of the cases involving this issue.

John Paul Stevens:

So, part of the motivation then is to deprive them of that right to select lawyers that they think they’d like to have represent them.

William C. Bryson:

Not specifically with respect to lawyers.

John Paul Stevens:

That seems to me what you’re saying.

William C. Bryson:

I… it is with respect to not allowing them to… to exercise economic power.

One way–

John Paul Stevens:

And one… one way of exercising economic power, as you define it, is to hire the counsel of your choice.

William C. Bryson:

–And to… to make whatever other uses of the money that you can justify to a district court.

John Paul Stevens:

No, but I… am I right in saying that the desire of the defendant to hire counsel of his or her choice is part of the economic power the government seeks to take away from him?

William C. Bryson:

Well, the government is… I mean, the Congress–

John Paul Stevens:

Yes or no.

William C. Bryson:

–It is certainly true that… that that is one of the manifestations of economic power that is–

John Paul Stevens:

That you think Congress intended to deprive the defendant of.

William C. Bryson:

–They didn’t specifically address the question.

John Paul Stevens:

In fact, they said just the opposite is the only comment on the issue that I remember.

William C. Bryson:

They… they did not specifically want to deprive anybody of counsel.

They did want to deprive defendants of the ability to spend large sums of money on whatever resources that they–

Thurgood Marshall:

But they didn’t spell out any restrictions.

William C. Bryson:

–No restrictions.

Thurgood Marshall:

No restrictions at all.

William C. Bryson:

The… the statute is… is quite sweeping, that’s right, except for the provisions–

Thurgood Marshall:

And you agree it includes food.

William C. Bryson:

–That’s right, Your Honor.

Thurgood Marshall:

And medical services.

William C. Bryson:

That’s right.

Thurgood Marshall:

Burial services, too?

William C. Bryson:

That’s right, Your Honor, to anyone who isn’t a bona fide purchaser for value.

Byron R. White:

Is there an order of forfeiture entered in cases like this?

William C. Bryson:

Yes, there was in this case.

Byron R. White:

And so, the issue here… the… this property X… bank account X, for example, is forfeited to the government, and the issue is whether the attorneys may collect out of that forfeited property.

William C. Bryson:

That’s right, whether they can get a court order declaring that that property must be conveyed back to the government… I mean, back to the defendant or to the third party.

That’s right.

Now–

Antonin Scalia:

You’re saying essentially the government didn’t want… want him to have gold-plated anything, watches or lawyers or anything else.

William C. Bryson:

–Gold-plated anything, that’s right.

That’s right.

It wasn’t specifically addressed to lawyers.

Byron R. White:

To lawyers–

William C. Bryson:

But it was addressed to the general–

Byron R. White:

–To gold-plating or even food, for that matter.

William C. Bryson:

–That’s right.

Byron R. White:

Well, I take it you… any other creditors, if they weren’t a bona fide purchaser of value, couldn’t… couldn’t collect out of that forfeited property either.

William C. Bryson:

Not according to our theory, that’s right.

Now, the… the… Caplin & Drysdale would say that any creditor whose credit… whose obligations… the obligations to whom arose because of ordinary living expenses would be entitled to collect under the statute.

That is not, as I understand it, their Sixth Amendment argument, but they say the statute provides for–

Byron R. White:

But at least they… their argument is that lawyers at least should be treated specially.

William C. Bryson:

–Under the Sixth Amendment, they do take that position, and that is certainly the position that Monsanto takes.

Their argument on the statute goes beyond lawyers and… and reaches ordinary living expenses, as I understand it.

The–

Anthony M. Kennedy:

And you agree that lawyers can’t be singled out, but–

William C. Bryson:

–That’s right, by a statute.

I think that would raise… raise serious problems unless there were some good reason, such as Congress deciding there was a serious problem with the narcotics defense bar collecting fees, and they specifically addressed that problem of collecting huge fees under dubious circumstances.

William C. Bryson:

There very well might be a statute that would be constitutional if it addressed that problem for that reason.

But if it was simply designed in order to skew the balance against the defendant and for no other purpose, then I think there would be a problem.

That is not the purpose of this statute.

Anthony M. Kennedy:

–Well, it’s not designed to skew the balance.

It’s designed to prevent money that the government owns from being used for that purpose.

William C. Bryson:

Well, that’s… that’s the purpose of this statute.

Anthony M. Kennedy:

Is that skewing the balance?

William C. Bryson:

No.

That’s the purpose of this statute, that… if another purpose… well, thank you.

William H. Rehnquist:

Thank you, Mr. Bryson.

Mr. Lockwood, you have two minutes remaining.

Peter Van N. Lockwood:

Your Honor, counsel for the government has persistently attempted to suggest that the Caplin & Drysdale case is unusual because the… it involves a situation where at the time the defendant was deprived of the ability to pay his lawyer, the government had proven or had a high degree of certainty that the assets were forfeitable.

That is simply not the case.

What is the case is that it was proven after the services were rendered that the assets were forfeitable by consent.

But if you… if you posited that Caplin & Drysdale had been paid as it went along, because there was no restraining order, then we would not have received any money prior to the time of the… at which the government knew to be forfeitable or the court knew to be forfeitable.

But under 853(c), the relation-back doctrine, the… the government would be here arguing we would have to give it back.

The question, therefore, is… is… is whether or not the fact that Caplin & Drysdale, as part of its ethical obligation to its client, agreed to proceed forward and represent him without having been paid, should now be penalized for having done so or, alternatively, should have given into a conflict of interest and said to the defendant don’t plead guilty on March the 14th.

We’ve got a hearing on March 15th on our fees.

We want to make sure we get paid first.

And maybe the government will withdraw the guilty plea offer if we don’t take it today, but that’s not really very important because it’s more important that we get paid.

That is, it seems to me, an extremely harsh and unjustified rule to try and single out Caplin & Drysdale from all other lawyers that could come in here and make an argument–

Byron R. White:

But you still are–

Peter Van N. Lockwood:

–to get you to pay.

Byron R. White:

–wanting to… wanting to collect your attorneys’ fees out of property that has been ordered forfeited.

Peter Van N. Lockwood:

It was ordered forfeited because a person with no economic–

Byron R. White:

Well, anyway, the answer is yes.

Peter Van N. Lockwood:

–Yes, sir.

William H. Rehnquist:

Thank you, Mr. Lockwood.

The case is submitted.