United States v. Bajakajian

PETITIONER:United States
RESPONDENT:Bajakajian
LOCATION:National Endowment for the Arts

DOCKET NO.: 96-1487
DECIDED BY: Rehnquist Court (1986-2005)
LOWER COURT: United States Court of Appeals for the Ninth Circuit

CITATION: 524 US 321 (1998)
ARGUED: Nov 04, 1997
DECIDED: Jun 22, 1998

ADVOCATES:
Irving L. Gornstein – Department of Justice, argued the cause for the petitioner
James E. Blatt – Argued the cause for the respondent

Facts of the case

During a routine check of departing international flight passengers, customs officers discovered $357,144 on the person of Hosep Bajakajian. In addition to charging him, under 31 U.S.C. Section 5316, of attempting to leave the United States with an unreported sum in excess of $10,000 cash, the government also sought forfeiture of the entire $357,144 under 18 U.S.C. Section 982 providing that the deliberate violation of Section 5316 shall result in the forfeiture of “any property involved in such an offense.” After having its forfeiture claim rejected in both a district court and the Ninth Circuit, as excessively unconstitutional, the Supreme Court granted the government certiorari.

Question

Is the forfeiture of $357,144 cash, a sum involved in the offense of failure to report property in excess of $10,000 while attempting to leave the country, a violation of the Eighth Amendment’s Excessive Fines Clause?

William H. Rehnquist:

We’ll hear argument now in Number 96-1487, United States v. Hosep Krikor Bajakajian.

Mr. Gornstein.

Irving L. Gornstein:

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

Respondent was about to board a flight to Syria when a Customs inspector informed him that he was required to file a currency report if he was taking more than 10,000 dollars with him.

Respondent claimed that he was taking less than 10,000 dollars and he therefore did not file a currency report.

Customs inspectors searched respondent and his possessions and found more than 350,000 dollars in cash.

Respondent subsequently pleaded guilty to wilfully failing to file a currency report as he was about to transport more than 350,000 dollars outside this country.

For that offense, Congress has mandated forfeiture of the unreported currency.

The Court of Appeals for the Ninth Circuit held, however, that the forfeiture of any of that currency would constitute an excessive fine.

We believe the court of appeals erred for two reasons.

First, the unreported currency is an instrumentality of a reporting offense and may be forfeited as such without violating the Excessive Fines Clause, and second, even if it is not an instrumentality, its forfeiture is a permissible punishment for what is a serious criminal offense.

Anthony M. Kennedy:

On your first argument, if it’s an instrumentality of the crime and we agree with you on that, does that mean the excessive fines analysis is just inapplicable, or that it is presumptively non… not excessive?

Irving L. Gornstein:

It is satisfied.

That is that it is not… it is a way of showing that the fine is nonexcessive because the forfeiture of property that is involved in the offense is an inherently proportional… proportionate sanction.

Anthony M. Kennedy:

In other words, the Excessive Fines Clause analysis applies in either event.

Irving L. Gornstein:

It does, but the manner of satisfying the Excessive Fines Clause is by showing that it is property that’s seized… one way of satisfying it, it is showing that the property that is seized is in fact an instrumentality of the offense, and there… questions may arise about whether it has a sufficiently close connection to the offense to be classified properly as an instrumentality, but once it is, then that would satisfy the Excessive Fines Clause.

Anthony M. Kennedy:

Well, if we have to ask about excessiveness anyway, I’m just wondering why we have to go through the additional step of elaborating a big jurisprudence on what is an instrumentality and what isn’t.

Irving L. Gornstein:

Well, historic–

Anthony M. Kennedy:

If in any event we’re going to talk about proportionality, maybe–

Irving L. Gornstein:

–No.

I–

Anthony M. Kennedy:

–we should just save ourselves a step.

Irving L. Gornstein:

–Well, there are just two different ways of talking about proportionality, Justice Kennedy.

Proportionality, it is inherently proportionate once it’s an instrumentality.

No further inquiry into culpability or to the value of the property is ever necessary once there is a showing that this is in fact an instrumentality of the–

Anthony M. Kennedy:

Well, you said it’s presumptively proportional.

Irving L. Gornstein:

–No.

I’m saying that it is–

Anthony M. Kennedy:

I thought.

Irving L. Gornstein:

–I’m sorry if I… if we had a misunderstanding on that, but generally speaking, if the… if it is an instrumentality, then it is per se nonexcessive, and I would except from that one small category of cases where perhaps the property is involved in what might be a minor infraction such as a parking violation, but if it is the kind of violations that property have historically been forfeited for customs violations, for criminal offenses, then if it is an instrumentality in the offense, then it is per se a proportionate fine and not an excessive one.

Sandra Day O’Connor:

It seems a little odd, though, to equate excessiveness with just instrumentality as opposed to some examination of gross proportionality, or lack thereof.

Irving L. Gornstein:

Well, I think–

Sandra Day O’Connor:

I mean, the mere term excessiveness seems to import some notion of proportionality to me.

Irving L. Gornstein:

–Well, I think the question is excessive in relation to what.

Yes.

Irving L. Gornstein:

That’s right, and here I think that when some–

Sandra Day O’Connor:

Maybe in relation to the criminal fine that could be imposed, or something like that.

That might be easy to look at.

Irving L. Gornstein:

–But I think that historically it was that if as long as it was in relationship to the offense, that the property was used in the offense, the seizure was not an excessive fine, because it has always been the case that this has been viewed as a reasonable way, seizure of property involved in the offense, a reasonable and effective way to encourage the owners of property to make sure that their property does not become involved in the offense.

It is not excessive in that sense.

It is perfectly commensurate with that goal, because it has always–

Sandra Day O’Connor:

Well, I guess this Court has never really articulated the test.

Irving L. Gornstein:

–It has not, and the two cases that this Court has had previously on the Excessive Fines Clause simply said that forfeiture was a fine, but in neither case did the Court set out the methodology for deciding whether the fine would be excessive.

Now, our view is that there are really two ways to do it.

First, if it’s an instrumentality then it’s not excessive, without more.

But second, if it isn’t an instrumentality, then you would engage in the sort of inquiry that you would generally engage in if you had a monetary fine.

Anthony M. Kennedy:

Well, what is the conclusion that you seek to help us to by saying that it’s an instrumentality?

We have a purpose for these classifications.

Why is it that we’re asking about an instrumentality, in order to show the close connection of the property to the crime itself?

I mean, is that the object of the inquiry?

Irving L. Gornstein:

Yes.

The instrumentality is really just a shorthand expression for the kind of property that has historically been subject to forfeiture in rem because of the significant involvement of the property in the offense.

David H. Souter:

Ah, but–

–This is not an in rem forfeiture here, is it?

This is not in rem.

Irving L. Gornstein:

It’s not an in rem forfeiture, but the criminal provision here in addressing the kind of property that is subject to forfeiture singled out only property that is involved in the offense.

David H. Souter:

Right.

Irving L. Gornstein:

And that is the shorthand expression for the kind of property that has historically been subject to in rem forfeiture, and we think by using that language Congress manifested its intent to further the general remedial goals that have always been associated with in rem forfeitures.

Ruth Bader Ginsburg:

Mr. Gornstein, in that connection I’m a little confused.

What is the difference between criminal forfeiture and the civil in rem, because I had been I guess under the false impression that for civil forfeiture it could be an excessive fine to take the whole thing.

Ruth Bader Ginsburg:

I thought that was what Austin implied.

Irving L. Gornstein:

I think that the only thing that Austin held was that it was a fine, and then it did not decide how you would decide whether a fine was or was not excessive.

Now, the property that was seized in Austin itself may have been so incidentally involved in the offense that it couldn’t properly be characterized as an instrumentality of the offense, and if not, it could not be forfeited on an instrumentality theory.

Ruth Bader Ginsburg:

Can you explain the difference… is there any significant difference between the in personam criminal and the in rem civil for this purpose of judging the proportionality or the… how much can be forfeited without being too much?

Irving L. Gornstein:

For purposes of our first argument, that is, whether it is an instrumentality, there is no difference.

Ruth Bader Ginsburg:

No difference.

Irving L. Gornstein:

But for the purpose of our second argument, if you disagree with us on the first one, there is a difference, because the criminal forfeiture embodies the additional purpose of punishing the criminal defendant, whereas, to the extent that punishment is involved in civil in rem, it is punishment only of the owner.

Now, here the criminal defendant can be both the criminal defendant and the owner, and he can be punished in both ways in a criminal proceeding, but in a civil in rem proceeding the only person that is being punished, if anyone is being punished, is the owner of the property.

Ruth Bader Ginsburg:

Mr. Gorn–

–But as far as your instrumentality, it’s identical.

Irving L. Gornstein:

It would be the same exact analysis.

David H. Souter:

Mr. Gornstein, do the old cases on forfeiture of undutied cargos refer to the forfeited goods as being instrumentalities, or have we simply applied that term as a term of art?

Irving L. Gornstein:

The latter.

David H. Souter:

The latter, okay.

When did that develop?

I mean, it’s an odd usage, and I just like to–

Irving L. Gornstein:

Yeah.

David H. Souter:

–understand why we use those.

Irving L. Gornstein:

And I wish I had a full explanation for this, but I would say one of the sources of it was Justice Scalia’s concurring opinion in Austin, and I think a lot of the courts which use the phrase instrumentality to describe–

David H. Souter:

Quite recent law?

Irving L. Gornstein:

–Quite recent, yeah, that used the phrase instrumentality to describe the kind of property that has a sufficiently close connection to the offense and that could historically be subject to forfeiture.

David H. Souter:

Your… I’m sorry.

Irving L. Gornstein:

And a lot of the court of appeals that have struggled with this question since then have picked up on that phrase, and it’s–

David H. Souter:

Going back to Justice Kennedy’s question, we could simply stop using the word instrumentality here and consider the argument that the analogy is so close between the undisclosed currency here and the undutied property in the old in rem cases, that that would the basis for your–

Irving L. Gornstein:

–You absolutely could.

David H. Souter:

–without getting into this metaphysics.

Irving L. Gornstein:

You do not have to get into an elaborate discussion of what is and is not an instrumentality in this case.

You can decide this case based on its relationship to the early customs cases, and in the early customs cases, property was brought into the country without declaration it was subject to forfeiture.

Stephen G. Breyer:

That isn’t quite… I mean, the underlying issue, I think, which is possibly a point of agreement or disagreement with Judge Wallace, is that your view is, if something is an instrumentality, no matter how valuable, it is forfeitable if it’s involved in a crime, no matter how trivial, with the exception of parking offenses.

All right.

Stephen G. Breyer:

So that means that the Constitution would permit, in your view, the Taj Mahal, for example, to be forfeited if it was once used to sell a teaspoonful of marijuana or something like that.

Irving L. Gornstein:

I think not, because again that’s a… that historically has not been a way in which forfeiture law has been used.

Stephen G. Breyer:

Ah.

Well, now wait, then.

That’s interesting, because that’s what I was trying to drive at.

I thought your initial view was what I said, and now you have a limitation on that initial view, and you say it only applies where?

Irving L. Gornstein:

Well, I think in your example that… the question would be whether that was an instrumentality of the offense.

Stephen G. Breyer:

Oh, no, no, I’m assuming it was.

Irving L. Gornstein:

No, but what I’m saying is, that’s the inquiry, and what I would say is in that case the relationship of the property to the offense is so minor and incidental that it was never–

Stephen G. Breyer:

Let me make an example with the hypothetical where it is not minor and incidental.

People are called to the Taj Mahal deliberately in order to sell them the teaspoon of marijuana.

You know, it’s easy to do that, and I’m trying to get at the underlying point.

Is the underlying point correct, without limitation, no matter how valuable the property, it is forfeitable if used to commit a crime, no matter how trivial, and my difficulty, of course, if it’s without limitation, is how one would reconcile that with the excessive… what seems to be a prohibition of excessive fine.

Irving L. Gornstein:

–And I think that the… you start with the history of the early customs statutes.

Stephen G. Breyer:

Do I have it right, what your position is?

Irving L. Gornstein:

Well, I… with the provisos that I said, that there are two inquiries that have to be made.

The first is that it is sufficiently involved in the offense to be treated as an instrumentality, and if you’re running a business out of the Taj Mahal, yes, that certainly could be forfeited.

If there’s one transaction that takes place there, even on a single day, maybe or maybe not, but at some point yes, if you’re running a business out of the Taj Mahal and selling drugs out of there, that would be an instrumentality and could be forfeited as such.

Now, the reason that… there are two powerful reasons, it seems to us, why instrumentality forfeitures satisfy the Excessive Fines Clause, and the first is history.

If you look at the early forfeiture laws, they require forfeiture of goods brought into this country without declaration regardless of how valuable those goods were.

It could have been priceless jewelry or ordinary gems.

If those goods were brought into the country without declaration, they were subject to forfeiture as such.

This is the very same First Congress that proposed the Excessive Fines Clause, so I think we have to start with the understanding that that Congress did not view that kind of forfeiture as excessive.

We know from Austin that the Congress viewed it as a fine, so the only thing that we can understand from that Congress’ action is that they must have thought that that kind of forfeiture was not excessive because of the relationship of the property in the offense.

Antonin Scalia:

The argument made against that is that in the case of goods brought into the country illegally in that manner it’s not only an instrumentality of a crime, the goods themselves are contraband.

Irving L. Gornstein:

Well–

Antonin Scalia:

They have no business being in the country.

They are unlawfully here.

You could distinguish those cases on that basis, couldn’t you?

Irving L. Gornstein:

–Justice Scalia, I don’t think that is a fair characterization, because contraband as we understand it is something that is unlawful to possess.

Irving L. Gornstein:

The goods that were being brought into the country to sell were perfectly legal to sell as long as the appropriate duties were paid on them, and the fact that the–

John Paul Stevens:

Yes, but it’s as long as, but if it’s not–

Irving L. Gornstein:

–Here it’s perfectly legal to take money out of the country and transport it out of the country, but only as long as you make the report, and so it has the exact same relationship to the offense as the traditional… the goods in a customs offense.

John Paul Stevens:

–Well, why don’t you use the term contraband, rather than instrumentality, then.

Irving L. Gornstein:

Justice Stevens, I would be happy–

Then you’d be in–

Irving L. Gornstein:

–I would be happy to decide this case–

Antonin Scalia:

–You’ll take an opinion written that way.

Irving L. Gornstein:

–If you want to use the word contraband to describe this kind of property, that is fine with us.

John Paul Stevens:

No, but I’m just wondering why you didn’t argue it in those terms.

Irving L. Gornstein:

The reason that we did not argue it in those terms is that we understood the term contraband to mean property that is unlawful to possess, like–

William H. Rehnquist:

Like drugs, or–

Irving L. Gornstein:

–Like drugs, that’s right, that are… that sort of uniformly, with rare exceptions, unlawful to possess, not property that is legitimate to possess, but is used in the commission of the offense.

Now, I say… having said that, this is a peculiar kind of property instrumentality that looks like contraband and could be called the corpus of the offense, and if you want to decide the case on that basis by saying you can always forfeit the corpus of the offense because that–

William H. Rehnquist:

–I don’t think we need another phrase.

[Laughter]

But Mr. Gornstein, maybe we need two, because I take it on your theory nothing rides on whether these are ill-gotten gains, that is, not possessed lawfully, and are going to be devoted to an unlawful purpose, money laundering, and whether, as at least we must take this case, the possessor had a lawful right to possess and was going to use the money toward lawful ends.

So do I understand your position right that, for purposes of the amount of the forfeiture and the excessive fines, it doesn’t make any difference whether the funds were possessed totally lawfully or they were, indeed, ill-gotten gains?

Irving L. Gornstein:

–That’s correct.

As long as they were used in the commission of this offense, they are subject to forfeiture, and it is not excessive, in the same way that property imported into this country that is lawfully possessed and intended for a lawful purpose, to sell it, is also subject to forfeiture.

Ruth Bader Ginsburg:

May I ask, then, in that line, that… you’ve been candid about it, that it doesn’t matter that it’s… that the money is possessed legally, the crime is the failure to report.

The hypothetical that I think was given in one of the briefs is, suppose Congress decided to say that failure to report income, that the consequence of that will not be just the ordinary fines that they’re… that are now in place, but that for failure to report you forfeit whatever amount you fail to report.

Irving L. Gornstein:

Yes.

We view that question as not being one of… we view the earned income as not being an instrumentality of that offense.

There has been no historical tradition of treating earned income as an instrumentality of a failure to file an income tax return, and the relationship is different.

David H. Souter:

Yes, but what’s the historical precedent for treating undisclosed money in the same way that you’re–

Irving L. Gornstein:

Well, it is the very property that moves across the border without proper declaration.

David H. Souter:

–Yes, but your criterion in response to Justice Ginsburg was historical tradition, and there’s no historical tradition drawing the analogy that you want us to draw.

Irving L. Gornstein:

Well, I… in addition to there being no historical tradition, though, the relationship to the offense in that case is different, because earning income is a condition of having a duty to report, but the money is not physically used in the commission of the offense as it is here.

David H. Souter:

But the Government’s interest is even stronger, because the Government’s interest is not only an interest in having reports, it’s an interest in collecting the taxes.

Irving L. Gornstein:

And that’s right, and that’s why it may or may not be an excessive fine based on the value of the fine as against the gravity of the offense.

You would turn to that analysis.

We’re not saying that if there’s… a property is not an instrumentality it can’t be forfeited.

David H. Souter:

No, but if instrumentality is to be determined on the basis of some kind of sufficient relationship to the crime, then I would suppose there was a pretty good argument for treating the undisclosed income as an instrumentality.

You can’t commit the crime unless you have the income, and therefore it’s hard for me to understand why, if you’re going to treat the undisclosed exported money as an instrumentality without the benefit of a historical example, and you’re going to treat… and you’re going to define instrumentality as this close relationship, it’s hard to see why you don’t fall, it seems to me, into exactly the position that Justice Ginsburg suggests, that if we take your position, then we are, in fact, opening the door to exactly the total forfeiture of any undisclosed income subject to tax.

Why will that not be the conclusion?

Irving L. Gornstein:

Justice Souter, the historical analogy is much more complete in the case of currency, and the reason is that what the currency is doing, it is being physically transported across the border without declaration.

It is actually physically… the money is there, and it is being moved, and that is part of the offense of transporting money outside this country without proper declaration just like the traditional customs law.

John Paul Stevens:

But isn’t it possible the report could be made the day after they arrived abroad?

Irving L. Gornstein:

It is, but the–

John Paul Stevens:

Then the offense–

Irving L. Gornstein:

–The offense is still… part of the offense is physically transporting the money across the–

John Paul Stevens:

–What I’m saying is, every transportation of money across the border without reporting does not necessarily violate the statute if within 24 hours or so he files a report.

Irving L. Gornstein:

–Actually, on the receiving end that would be true.

On the export end–

John Paul Stevens:

So either way–

Irving L. Gornstein:

–you have to file the report–

John Paul Stevens:

–Either way, the… if it–

Irving L. Gornstein:

–But–

John Paul Stevens:

–If it doesn’t have to be absolutely simultaneous, I’m not sure your analogy follows.

Irving L. Gornstein:

–I… it seems to me that the analogy is still complete, because the money itself is… part of the offense is physically moving the money across the border, and the money is immediately and directly involved in the offense in the way that earned income is not, which it’s just earned over a period of time, and then in a calendar year you report on your income and tax–

John Paul Stevens:

But under the income tax you’ve got to make your report on such-and-such a day, whenever the return is due.

What if this statute said you’ve got to make your report on the same day you file your income tax return at a later–

Irving L. Gornstein:

–I don’t think that that makes a difference.

–It wouldn’t–

Irving L. Gornstein:

I don’t think that that makes a difference, and part… and one of… to go back to a question about, that this does not apply even when it is legitimate, found to be legitimate and intended for a lawful purpose, the reason that Congress imposed very serious penalties despite that is that there are many, many cases in which it is impossible for the Government to know at the moment of seizure whether or not property is intended for particular unlawful purposes like tax evasion, for like, money laundering, like large-scale drug-dealing.

And if it were the case that persons bent on those purposes knew that unless the Government knew at the moment of seizure that they were planning to export that money for those purposes, they would… that the money would be free and clear, they would have far less incentive to comply with the reporting requirements in the first place, and that would resurrect the very state of affairs that Congress faced when it enacted this law where–

Sandra Day O’Connor:

–Well, Mr. Gornstein, suppose we don’t share your enthusiasm for the instrumentality approach, and suppose that we’re more interested in proportionality, then what factors should guide us?

Irving L. Gornstein:

–The… this Court has set out in two areas the kind of approach that it uses when… to measure excessiveness in both the area of punitive damages and the area of cruel and unusual punishment, and the guiding factors, it seems to us, can be drawn from those opinions, but first of all you would have to say that the offense has to be, in terms of value… I’m sorry, the penalty in terms of value has to be grossly disproportionate to the gravity of the offense.

Second, you would always have to give deference–

Sandra Day O’Connor:

So here… let’s talk about it in terms of specifics.

Here the maximum fine was what, 250,000?

Irving L. Gornstein:

–It was.

Sandra Day O’Connor:

And the total amount seized was 300-some thousand.

Irving L. Gornstein:

350-plus.

Sandra Day O’Connor:

And you’d say that was proportional.

Irving L. Gornstein:

It certainly is proportional, but I think that, Justice O’Connor, it’s certainly one barometer of proportionality to look to the fine that’s imposed, but it’s not the only one, or even the most important one.

We would suggest that in measuring the seriousness of an offense you look first to the measure that this Court has always used as the best indicator of how seriously Congress regards an offense, and that’s the maximum period of incarceration, which here is 5 years’ imprisonment without any aggravating factors at all, and it’s 10 years’ imprisonment if the money is involved in other offenses, and from that you know that Congress regarded this as a very serious offense, and when you–

Antonin Scalia:

In a way it’s delightfully proportional, isn’t it?

What is the minimum, 10,000?

Is that where it starts?

Irving L. Gornstein:

–It does.

Antonin Scalia:

So if you take out just 10,000, that’s surely less of an offense than taking out 300,000, and if you take out only 10, it’s a relatively small offense, you forfeit only 10.

If you take out 300,000, you forfeit 300,000.

Irving L. Gornstein:

In that case, in that sense this law has a feature of almost perfect proportionality in that sense.

Antonin Scalia:

I am concerned about this, though.

You’re appealing in your argument on instrumentality to a doctrine which focuses on the use of the money in the offense, but in fact, what if this money didn’t belong to this individual?

What if it belonged to somebody else?

Irving L. Gornstein:

It could not be forfeited in a criminal proceeding, but it could be forfeited in a civil in rem proceeding.

Stephen G. Breyer:

To go back to proportionality for a second–

–Well, can I just finish?

I mean, we’re talking about the criminal one here, right?

Irving L. Gornstein:

It could not be forfeited… you can only forfeit the defendant’s property in a criminal proceeding.

Antonin Scalia:

But is it not possible that the Government has to be logical?

If it is indeed imposing the kind of a penalty that it did in customs violations, if it’s moving against the instrumentality, so to speak, it has to move against the instrumentality, no matter whom it belongs to.

But what it says in this statute is, if it belongs to the person who’s taking it out of the country we’re going to move against it, but if it doesn’t belong to him, we’re not going to move against it.

Now, might there not be some requirement that it be using that mode of punishment, moving against the property?

We’re not really doing that.

Irving L. Gornstein:

Justice Scalia, I don’t see what in the Constitution would require Congress to do that.

It seems to me it makes no sense constitutionally to say, if we had convicted this defendant and then filed an in rem proceeding it would be per se nonexcessive to take the property, but if we add it as a feature of a sentence in which the defendants is the property owner and we’ve taken it from him, that it’s somehow possibly an excessive fine, that Congress can try to accomplish more than one aim at a time, it can try to punish a criminal defendant and at the same time serve the long… the general goals of in rem forfeiture in that proceeding.

John Paul Stevens:

May I ask, does culpability have anything to do with it?

There’s two parts to that question.

One, is it relevant at all that this fellow told a number of falsehoods.

Secondly, is it relative at all, relevant at all that the money was acquired lawfully and not being laundered?

Are those two facts relevant or not?

Irving L. Gornstein:

Those two facts are not relevant, because what you are–

John Paul Stevens:

But you stressed the falsehoods in your brief.

You did put quite an emphasis on them.

Irving L. Gornstein:

–Justice Stevens, there is always the possibility that you would disagree with us that the offense itself was what you looked at, which is what we think is the proper analysis, and that’s–

Stephen G. Breyer:

Well, but… sorry.

Finish, please.

Irving L. Gornstein:

–I’m… and so it would… we went on, then, to address the particulars of this case on the theory that we’ve lost our first argument that you don’t look at those things.

Stephen G. Breyer:

On proportionality, just to follow up on this very question, the kinds of things that I used to look at on the Sentencing Commission and so forth, first you would look at the conduct, and for the worst conduct you’d get a higher sentence, and the second thing that you’d look at would be the harm done, and the more the harm done, the higher the sentence.

So 10,000 dollars to 350,000 is proportionate if, and only if, the 350,000 dollars means more harm than the 10,000, and the argument that it doesn’t is, it doesn’t here because what Congress is trying to stop is money laundering, drugs, a whole host of unlawful things, and here the judge agrees it’s nothing to do with it.

Irving L. Gornstein:

But–

Stephen G. Breyer:

So there was no… what his argument is that there’s no harm in this case that’s proportionate, and the culpability, of course, is the same whether you’re taking the 10 or the 350.

Now, that, I think, is the argument this is disproportionate, so I’d like you to address it.

Irving L. Gornstein:

–Well, there’s two points to that.

The first is that the money is still dangerous.

There is a dangerous–

Stephen G. Breyer:

Yes, of course it is, but it’s not… is it 30, 350 or 35 times as dangerous?

Irving L. Gornstein:

–I think that what–

Stephen G. Breyer:

Why, if it’s just going to somebody in Armenia who happened to lend him some money?

Irving L. Gornstein:

–No.

What I’m saying is that at the moment of seizure Congress has said we realize that you’re not going to know for sure where this money is headed for.

We’re going to treat it all as if it’s dangerous.

And then the only place where Congress said, okay, if it’s shown to involve in other offenses we’re going to take account of that, is by increasing the maximum authorized sentence from 5 years to 10 years, so up to 5 years’ imprisonment, a mandatory forfeiture, 250,000 dollar fine.

Congress said, all of this money that is unreported and is more than 10,000 dollars, this is dangerous money.

We have a dangerous situation on our hand, and we cannot be sure that at the moment of seizure anybody is going to know about that, and in order to get the right level of deterrence, we are going to have mandatory forfeiture.

Everybody is going to have to report, and if you do not… regardless of what your purposes are, and if… if you do not report, the money is going to be forfeited.

Antonin Scalia:

Mr. Gornstein, I had always thought that we approach this question of excessive fines on the basis of the statute and not the particulars of the individual case.

Let’s say a statute that provides for a fine of anywhere from 10 dollars to 500,000 dollars, is it your understanding that we would look at the individual case and the individual fine actually assessed and see how wicked was the person against whom the fine was assessed?

Did he lie, did he do this, that or the other thing?

Can it be adjudged just by looking at the statute?

Irving L. Gornstein:

Yes.

Justice Scalia, our position is that you do just look at it by the statute, and that’s the… Harmeline basically stands for that proposition, that Congress does not have to individualize sentences in that way.

William H. Rehnquist:

Thank you, Mr. Gornstein.

Mr. Blatt, we’ll hear from you.

James E. Blatt:

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

This case, a criminal in personam matter, is here because a district court determined that forfeiture of 357,144 dollars would be grossly disproportionate under the Eighth Amendment for a failure-to-declare offense.

The decision was based on the following factual findings by the district court: that the money involved was lawful money for a lawful purpose; that the crime was committed in reference to cultural differences, and that the lies that Mr. Bajakajian stated grew out of fear.

Mr. Bajakajian was sentenced with these fact–

William H. Rehnquist:

Could you explain… I don’t really understand the finding that the crime was committed because of cultural differences.

James E. Blatt:

–What happened in this matter, Mr. Chief Justice, is that my client, Mr. Bajakajian, is from Syria.

He was a minority there, an Armenian, and where he grew up he was very frightened and afraid of the Government in reference to moneys taken in and out.

When he left this country to pay a lawful debt, and he was going to Cyprus, not to Syria, he thought that he would be harmed, or the money might be taken from him if he showed how much money he had.

We indicated that to the district court.

The district court took that into consideration, and took also into consideration the lies that he made, which were primarily out of fear, when it came up with a grossly disproportionate analysis.

William H. Rehnquist:

So if one lies out of fear, it’s not the same thing as lying for some other motive.

James E. Blatt:

Yes, Your Honor.

It’s a factor that has to be considered in reference to whether the money was lawful, and for a lawful purpose, because it relates to the culpability.

If one lies not… if one lies because he or she is not involved in a criminal enterprise, but because they are frightened, and we’re not trying to excuse the culpability of Mr. Bajakajian, but it’s a factor for a court to consider in reference to punishment.

Antonin Scalia:

Do you think the Constitution Excessive Fines Clause has to be applied on a case-by-case basis, each individual case?

No matter how the statute reads, and even if the statute has been approved in a prior case, it’s only been approved as to that defendant under the facts of that case, and every single case involves, necessarily involves courts into the constitutional inquiry of whether, given this defendant’s culture, given all the other circumstances of the offense, this is excessive?

James E. Blatt:

Justice Scalia, I believe that.

Antonin Scalia:

It’s a lot of trouble.

I don’t know if courts can handle that kind of a burden.

I’d thought it’s just done on the face of the statute.

James E. Blatt:

I think they can handle that burden, Justice Scalia, because when we’re talking about the Eighth Amendment and punishment it’s the district court’s responsibility to weigh culpability and value.

Antonin Scalia:

So every different judge can come up with a different conclusion, I suppose, if each one just weigh, I think this is excessive, this isn’t excessive.

James E. Blatt:

Well, Justice Scalia, I think that’s always a possibility, yes.

District courts can come up with different determinations.

Anthony M. Kennedy:

And is the standard abuse of discretion?

James E. Blatt:

Yes, it is, Your Honor.

Anthony M. Kennedy:

Abuse of discretion is to determine what the meaning of excessiveness is under the Constitution?

James E. Blatt:

Yes.

Anthony M. Kennedy:

That’s a very strange doctrine, it seems to me.

James E. Blatt:

Well, when we’re… Your Honor, when we’re talking about–

Anthony M. Kennedy:

Are there any other constitutional provisions that are entrusted to the interpretation of the district courts under an abuse of discretion standard that you can think of?

James E. Blatt:

–In reference to statutory and constitutionally, no, Your Honor, but in reference to when we’re evaluating this on a proportionality analysis, under Austin and Alexander this Court made a determination that the Eighth Amendment applies in reference to forfeitures.

By the nature of the word excessive, it implies a proportionality or a comparison analysis, Your Honor, and in order to do that type of comparison, a judge, a district court judge would have to make a determination about culpability.

This was lawful money for a lawful purpose.

There was no criminal enterprise involved here.

Antonin Scalia:

What about a statute that says anyone who uses an unlawfully possessed firearm in the commission of a crime shall forfeit the firearm?

Is… can you say in the abstract whether that’s constitutional or not?

James E. Blatt:

I believe that, Your Honor, that would be entirely constitutional for the following reason.

That firearm is contraband.

It’s an illegal weapon.

It’s used in the furtherance of a crime.

This money was not contraband.

Antonin Scalia:

You acknowledge the existence of that doctrine, then, that… your quarrel here is just that it is not a contraband or instrumentality, whatever else you want to call it.

James E. Blatt:

I acknowledge that, Your Honor, that contraband and proceeds of contraband are forfeitable, but this is an instrument, allegedly an instrumentality of a crime, a means by which a crime is committed.

Antonin Scalia:

Do you think failure to register a firearm is any different from failure to notify the Government that you’re carrying currency?

James E. Blatt:

Under the statute it is, Your Honor, because the statute indicates that it’s not contraband to have the money and to transport the money outside of the country.

Antonin Scalia:

Okay, but if it is contraband, you acknowledge it doesn’t matter how much it’s worth.

James E. Blatt:

Correct.

Antonin Scalia:

I should have used, you know, a 12th Century valuable firearm, if there were any in the 12th Century.

James E. Blatt:

Correct, Your Honor.

If this money was from… laundered money, it was involved in some type of criminal enterprise.

Yes.

James E. Blatt:

Or if it was money that was going out of the country not to pay taxes, to avoid payment of taxes, then it would be tainted money, an instrumentality, but–

William H. Rehnquist:

What if, under Justice Scalia’s hypothesis, the defendant in the firearm case took the stand and said, well, in my country it’s perfectly legal to have a firearm, so I did it kind of for cultural reasons.

[Laughter]

James E. Blatt:

–Well, it depends on whether it was lawful or not.

I think that’s one factor that has to be considered, Mr. Chief Justice, and you have to look at the total context or totality of the circumstances.

This was an unusual case.

It is never easy at the district level to prove that in reference to a forfeiture that it’s lawful money for a lawful purpose, and the way we did that, we showed the cultural aspects, the man’s intent, and the district court made a factual determination in reference to this, that this was lawful money, and he made a factual determination as to reasons that he lied.

John Paul Stevens:

Did he make… did he really make that determination, or did he decide he… it had not been proved that it was unlawful?

James E. Blatt:

No, Your Honor.

He made a determination–

John Paul Stevens:

I thought there was some ambiguity about the whole story–

James E. Blatt:

–Well, the ambiguity lay with the Government’s position that they couldn’t really prove or disprove certain facts, but the district judge indicated that this was lawful money for a lawful person… for a lawful purpose, and that much has been proven.

That is in the record.

John Paul Stevens:

–Did he prove that taxes had been paid on it?

James E. Blatt:

The taxes had been paid on it, Your Honor, yes.

Stephen G. Breyer:

Can you go back for a second, because I’m now concerned… Mr. Gornstein answered me and Justice Scalia picked up a point that I’d not focused on, which is that this is a mandatory forfeiture statute.

It says the defendant shall forfeit.

Now, I can understand a statute that says the convicted person in a case of robbery must pay a penalty up to 5 million dollars as well as prison, and then a person take 1 dollar, and the judge imposes 5 million dollars, and you say, well, that’s way disproportionate, but the statute said may, and I think his point is here that the statute says shall, and so what Congress is saying here is, you shall.

You have to.

The judge has no discretion, and where the judge has no discretion you would look to see whether Congress is being reasonable in writing that statute, shall, and not looking to those factors.

Now, is there… does that trigger anything in your mind, any instance where despite this kind of mandatory statutory provision the courts nonetheless looked into the way in which the provision applied to a particular case and said, it’s unconstitutional because of the way it applies here?

Does that trigger anything?

James E. Blatt:

Yes, it does, Justice Breyer.

Stephen G. Breyer:

What is that?

James E. Blatt:

Because under Austin and Alexander this Court indicated that the Eighth Amendment in reference to excessive fine does apply.

On the remand of Alexander–

Stephen G. Breyer:

Yes.

James E. Blatt:

–When that case was decided there was a breakdown by Alexander using the Busher Ninth Circuit standards of what proportionality should be, and they looked at the value of the crime–

Stephen G. Breyer:

Yes, but was that a case in which the fine that was imposed, or the for–

James E. Blatt:

–Forfeiture.

Stephen G. Breyer:

–I don’t know if it was a fine… was mandatory under the statute.

James E. Blatt:

Yes, it was.

Stephen G. Breyer:

It was.

They had to impose, so–

James E. Blatt:

One of the problems in the Government’s position is that they indicate that the Eighth Amendment does apply.

However, they go on to state that the particular liquidated damage forfeiture can never be grossly disproportionate.

It doesn’t matter whether it’s 10,001 dollars, or 3 million dollars.

It’s always going to be the same, no matter in reference to culpability and value.

Antonin Scalia:

–Well, isn’t that the case with respect to the importation of goods to the country without paying customs duties?

James E. Blatt:

In One Lot Emerald, Your Honor–

Antonin Scalia:

You bring in the moonstone, don’t you forfeit the moonstone?

James E. Blatt:

–You forfeit the moonstone… assuming you buy the moonstone legally, Your Honor, and you fail to report it and then fail to pay the duty, pursuant to the statute, once you fail to pay the duty it becomes contraband, and that property becomes tainted.

We don’t have that situation here.

Antonin Scalia:

All right, but so long as you make that limitation upon your argument, there’s nothing wrong about forfeiting something that’s worth an enormous value so long as it’s done within the historical context of something that is called contraband or instrumentality, whatever–

James E. Blatt:

That is correct, Your Honor.

If it’s contraband, or proceeds from contraband, or if it fits into the historical standard as–

Anthony M. Kennedy:

–But why is it that a metaphysical label then changes whether or not in fact it’s excessive?

James E. Blatt:

–I would agree with you, Your Honor, in that, because the legal fiction–

Anthony M. Kennedy:

Well then… then I think you have to answer Justice Scalia that you cannot–

–Right.

Give me back the moonstone.

–necessarily forfeit the moonstone.

We get the moonstone back now.

James E. Blatt:

–I like that moonstone, but… I see what you’re saying, Your Honor.

I think the problem is, is how we evaluate an instrumentality.

An instrumentality is a means by which.

We have property divided in three areas, contraband, proceeds of contraband, and an instrumentality, and contraband and proceeds of contraband have always been a strong remedial interest, and have been forfeited.

Instrumentality, there has to be a connection.

In this particular case, and I would agree from a common, practical point of view, we’re splitting hairs.

When we’re talking about an instrumentality, should it really relate to a substantial connection?

James E. Blatt:

I believe there should be some type of cutoff point in reference to instrumentality, but the historical legal fiction doesn’t really fit any more.

In other words, it’s… we now look under modern times that the… in reference to the property, as to the use of the property, and not truly in relation to its respect as to how it was used during piracy times.

I think the key issue in this matter is whether the district court used the appropriate standard of grossly disproportionate when it forfeited approximately 15,000 dollars.

Ruth Bader Ginsburg:

Mr. Blatt–

–Well–

–then I mistook your position.

I thought your position was, if the money is clean, then any forfeiture was excessive and you don’t get into the proportionality.

I thought that’s what your first position was.

James E. Blatt:

No, I–

Ruth Bader Ginsburg:

That if nothing is involved other than failure to report–

James E. Blatt:

–No.

My… excuse me, Justice Ginsburg.

The first… in reference to the instrumentality argument, I was arguing that it really wasn’t an instrumentality.

It is a crime of omission.

It was not contraband.

It doesn’t fit under the traditional historical standard of what an instrumentality is.

David H. Souter:

–Well, it’s a crime of omission when one fails to declare the imported goods and pay the duty.

James E. Blatt:

Yes.

David H. Souter:

And there is a… I don’t think the labels matter, but there is a sense in which the word contraband is used to describe the undutied goods.

Why isn’t that analogy just as good when the person taking currency out fails to declare it?

James E. Blatt:

Justice Souter, the reason it’s not as good is that… is because in One Lot Emerald you had to pay a duty.

Once you did not pay that duty, by statute it became contraband.

David H. Souter:

Why should that be the point of distinction?

The concern… there is a general concern with undutied goods, and that is, they come into the country at a competitive advantage.

The… quite apart from the Government’s loss of revenue, they tend to compete with products within the country, and therefore one of the objects of a duty is to try to even those odds.

In this case, the Government’s concern with exporting unreported funds is, if one is allowed to do that it tends to facilitate tax evasion, skimming of illegal profits, and so on.

In each case, there is a social ill which is one of the objects of declaring, or declaring and taxing these goods.

Why isn’t the social object that underlies the money-reporting requirement sufficient to support the analogy between that and the undutied goods?

Why should the fact of the tax be crucial?

James E. Blatt:

I think the Court is correct, that if… that in reference to splitting hairs in this matter, if we’re going to evaluate it, there is a strong remedial interest, and we’ve never denied this in our brief, that the Government should have the opportunity to determine what funds are leaving this country, and that’s equally as strong remedial interest in reference to smuggled goods.

James E. Blatt:

The problem here is one of semantics.

In reference to an instrumentality, it’s not a means by which a crime or contraband was conveyed.

David H. Souter:

Well, this is a means or not a means in the same sense that the undutied goods are means or not means.

James E. Blatt:

That is correct, Your Honor.

That is correct.

David H. Souter:

Whatever you call it, it’s in the same relation to the person who owns the goods.

James E. Blatt:

Whatever you call it there’s a substantial connection, but where we disagree with the Government is that when they see the substantial connection, but-for, and/or an instrumentality, that’s where their position ends.

If it’s an instrumentality, it all must be forfeited, and there’s no really proportionality analysis.

If it’s an instrumentality, we take it all, irregardless of culpability, irregardless of whether the money–

David H. Souter:

So is it your argument simply that the Government may not assume and this Court may not assume that the undutied goods are, per se, forfeitable?

James E. Blatt:

–That is correct.

David H. Souter:

They’re all in the same boat, and we’ve got to go through the same proportionality analysis on the undutied goods that we would, on your theory, on the unreported money.

James E. Blatt:

That is correct, Your Honor.

In other words, we have the first issue as to the connection, and once… because this is a forfeiture, because the Eighth Amendment does apply in reference to punishment, there has to be a second analysis as to whether it is grossly disproportionate or not.

David H. Souter:

All right.

Now, what about the Government’s argument, one argument in response to that that if it is, in fact, a threat of certain social ills to allow the export of unreported currency, the more you allow to be exported, the greater the social ill.

James E. Blatt:

That is–

David H. Souter:

So that there is, as Mr. Gornstein said, in this kind of case as opposed to the Taj Mahal case for example, there really is a kind of inherent proportionality involved in seizure of the entire amount, whatever that amount may be.

James E. Blatt:

–Your Honor, with all due respect, I don’t see an inherent proportionality.

This was money that had been earned–

David H. Souter:

If I’m likely to be skimming profits, the more money I take out, the more profit I’m likely to be skimming.

James E. Blatt:

–That is correct, Your Honor, and that goes to culpability.

This money wasn’t received for money laundering or anything illegal, and it was not for an illegal purpose.

The examples–

Antonin Scalia:

Don’t you think it’s worse to sneak out 350,000 dollars than it is to sneak out 10,000 dollars?

Do you think that they are crimes of equivalent proportion?

James E. Blatt:

–It depends on the reasoning.

If we’re talking about punishment, Your Honor, we’re talking about–

Antonin Scalia:

All other factors being equal, is it not worse to take out 350,000 dollars than it is to… like–

James E. Blatt:

–Yes, it is, Your Honor.

Antonin Scalia:

–Approximately 35 times worse.

James E. Blatt:

Yes, it is.

Stephen G. Breyer:

No, it isn’t.

I mean,–

James E. Blatt:

It is a factor to consider.

Stephen G. Breyer:

–That is a principle in punishment law I’ve never seen anywhere, that it is proportionately worse.

James E. Blatt:

Well–

Stephen G. Breyer:

I mean, every bit of punishment law I’ve ever seen suggests that it does increase in culpability, but not proportionately.

James E. Blatt:

–Well–

Stephen G. Breyer:

That’s… at least, maybe your experience is different on that.

James E. Blatt:

–Well, Justice Breyer, what I’m indicating is that it has an effect on the culpability.

Obviously, if someone is taking out millions of dollars for an unlawful purpose–

Stephen G. Breyer:

Yes, it’s worse.

There’s no question.

James E. Blatt:

–It’s much worse.

Stephen G. Breyer:

It’s worse, but I have not seen proportionality in respect to punishment proportional to the amount of dollars.

James E. Blatt:

What I meant, Your–

Stephen G. Breyer:

And there’s a lot to the contrary.

James E. Blatt:

–What I meant, Your Honor, was in reference to culpability.

If the Eighth Amendment is going to apply, which this Court has indicated that it should concerning excessive fines, then–

Stephen G. Breyer:

Now, if that’s so, suppose I accept your argument that say in an environmental case they’re not going to forfeit the factory because some, you know, stuff spilled out the pipe intentionally, because I got that far, assume.

Now, suppose we’re also, because of this Alexander that you cited… it’s Alexander, right?

James E. Blatt:

–Yes, Your Honor.

Stephen G. Breyer:

You’re quite right, it said shall forfeit.

Now, suppose because of that we have to look at the application case-by-case.

Still I’m back to where Justice O’Connor started.

It’s very hard to believe that all we’re going to do is in every single case start looking as to whether there’s an abuse of discretion.

Is there not some standard that you’ve come across that could catch the extreme cases that wouldn’t involve an analysis case by case, instant by instance, of whether the judge somehow went a little wrong, or, in your view, do you have to conduct that under the Constitution?

How do you, in other words, give what we call a margin of appreciation to the judge to make some kind of mistake before the Constitution comes into play?

James E. Blatt:

I don’t know the answer to that, Your Honor.

James E. Blatt:

I don’t know the answer.

Ruth Bader Ginsburg:

Well, what are the standards that you would say?

So here’s this 47, whatever it is.

You have already disabused me of one notion, that because they’re not ill-gotten gains the Government can’t take any of it, so you say the Government can take some of it, so how much is too much?

How do we know?

James E. Blatt:

Well, we used a standard, Your Honor, of grossly disproportionate.

We look at the value, we look at the culpability, we look at the harm that could be caused in reference to this to the Government.

Once the information was found there was no harm to the Government.

They now have the information.

Ruth Bader Ginsburg:

Well, where does one… you said we look at this, that, and the other thing.

Where does one go to find those guides?

James E. Blatt:

We look at the Alexander remand.

We look at Busher.

In those… and in that particular case they evaluated the harshness of the penalty in light of the gravity of the offense.

They evaluated the defendant’s culpability.

They looked at the dollar volume of the loss, the existence of any benefit to the defendant, which there was none in this particular case, and the–

Ruth Bader Ginsburg:

Are you telling me essentially that you think that Judge Wallace, then was it Chief Judge Wallace, got it basically right?

James E. Blatt:

–Yes, I do, Your Honor.

Ruth Bader Ginsburg:

So he used the right factors, and–

James E. Blatt:

I think that Judge Davies, the district court used the exact factors that were necessary in this matter.

He looked at this matter as to whether it was grossly disproportionate.

He looked at the lawfulness–

Ruth Bader Ginsburg:

–Oh, so you… the district judge.

Then Judge Wallace–

James E. Blatt:

–The district court, and the–

Ruth Bader Ginsburg:

–There’s a difference, because Judge… I think his position was most favorable to yours, but you reject that.

James E. Blatt:

–Judge Wallace has gave a concurring opinion where he disagreed with the Ninth Circuit expansion of this particular area, and–

Ruth Bader Ginsburg:

And didn’t he say that the 15,000 he was letting stand because you hadn’t challenged it?

James E. Blatt:

–That was the district court, Your Honor.

The… Judge Wallace indicated in his concurring opinion that he was allowing the 15,000 because he did not feel it was abuse of discretion, and he agreed with the proportionality analysis.

James E. Blatt:

What I am saying, Your Honor, is that the district court applied the correct standard of grossly disproportionate.

It looked at all the factors that I’ve indicated just now and came up with a decision that the 5,000 dollar fine… it was a 5,000 dollar fine under the guidelines, not 250,000 dollar, and probation, that based upon that he was going to add an additional 15,000 dollar for what he considered what a small fine would be under the guidelines, and the Government expense in this matter.

John Paul Stevens:

May I ask you a question on your proportionality approach?

It seems to me that one of the problems in this area is that it’s sort of a prophylactic statute.

We’re not sure what’s going to happen to all this money, and supposing the person violating the statute takes the Fifth Amendment, says I’m not going to tell you what I’d do.

I have a constitutional right to secrecy.

I didn’t want… if I’d filed the report, somebody would have found out about it.

There are no protections on secrecy.

He just isn’t going to tell, and the Government has no way of finding out.

What’s your proportionality analysis there?

Do you assume he’s guilty of something really bad because he won’t talk about it, or he’s perfectly innocent?

James E. Blatt:

I don’t really assume either, but he has not met his burden, Your Honor.

The defendant, by his failure to report, should have the burden, as it was in this particular case.

We had the burden to show that this money was lawful and for a lawful purpose, and that it would be not grossly disproportionate.

The defendant should have the burden in these matters when he commits a crime and then tries to obtain the moneys in reference to the forfeiture.

David H. Souter:

I’m trying to understand your application of gross disproportionality here.

In the garden variety case of gross disproportionality I think one of the things, one of the principal things that we do is to compare sentences and individuals.

It’s hard to do that here, I guess, because we don’t have a long string of forfeitures to compare it to.

Are you really saying, when you use the gross disproportionality criterion, and you then point out the factors that a judge should consider in applying it, are you really saying that any judge who makes a gross disproportionality analysis and refers to all of the relevant factors as you have listed them, should be upheld unless we can say that his determination as such was simply unreasonable or irrational?

Is that what gross disproportionality here means?

In other words, it’s a standard that goes to the care of the judge or relevant considerations, as opposed to a standard that goes to real comparisons between this instance, that instance, and the other instance.

James E. Blatt:

Yes, that’s what I’m saying, Your Honor, because if we’re going to look at real comparisons, when you evaluate a forfeiture, it’s a matter of comparing the value in reference to what is going to be forfeited to the serious nature or extensive nature of the crime.

William H. Rehnquist:

Well, then we could have… you know, we have 700 district judges in the country, and we could have 700 different results, all of them correct under that standard, I suppose.

James E. Blatt:

That’s a possibility, Your Honor, but in the… Mr. Chief Justice.

William H. Rehnquist:

You think that’s desirable?

James E. Blatt:

I think it is under this fashion.

When we’re examining, Your Honor, under a forfeiture statute, it shouldn’t be the district court’s position to compare what happened in another district involving another factual situation that could be entirely different.

Each factual situation, because it’s punishment and culpability are involved and different values are involved, have to be decided by that district judge.

William H. Rehnquist:

Well, of course, you’ve got not only a prohibition against excessive fines, but a prohibition against cruel and unusual punishment.

Could this be imported into the sentencing phase of criminal cases and say, you know, whatever Congress says each district judge has just got to figure out what the right punishment is to make sure it isn’t cruel and unusual?

James E. Blatt:

Well, excessive fines have been distinguished significantly from cruel and unusual punishment, Your Honor, and the… frankly, I feel that the district court can make that decision.

Yes, there’s going to be differences, but that district court has all of those particular facts in that particular case, and they would be best able to make that determination as to whether a fine is excessive.

Ruth Bader Ginsburg:

So you do reject the… I’m sorry I got the judges mixed up.

The Ninth Circuit majority said, no forfeiture at all here because these were lawfully possessed funds, so you’re not defending that position, then.

James E. Blatt:

No, I’m not, Your Honor, and our position at the district court level was, we conceded that the funds were subject to forfeiture, but requested a proportionality examination.

The law was changed significantly in the interim, where 69,000 and El Dorado came out by the Ninth Circuit, where they held the instrumentality test, and that test was used in reference to our briefs.

I think a instrumentality, substantial connection, or some form of cutoff or threshold is necessary, but once that threshold is met, a standard of proportionality in criminal in personam matters needs to be developed as to what is grossly disproportionate.

Ruth Bader Ginsburg:

And your best guide to the development is what the district court did here?

James E. Blatt:

I think the district court did a good job, Your Honor, I really do, because they evaluated all the factors, whether the money was lawfully obtained–

Ruth Bader Ginsburg:

So what guide should an appellate court… this is one district judge out of, what–

James E. Blatt:

–The guide–

Ruth Bader Ginsburg:

–did the Chief Justice say, 700?

James E. Blatt:

–Yes.

Justice Ginsburg, the guide that I would give, and based upon the Alexander remand and Busher, and I do not mean to be presumptuous, is looking at a totality of the circumstances, the gravity of the offense, whether the property was lawfully obtained and for a lawful purpose, the dollar volume of the loss, the existence of a benefit that was to be gained by the defendant… in this case there was none… and whether this was part of a criminal enterprise.

I’m sure there are many more factors that this Court could consider.

I’m just naming a few.

Antonin Scalia:

We’ve been enforcing customs laws in this country for over 200 years.

Do you know of a single case in which the forfeiture of undutied goods has been declared to be an excessive fine, by any court?

James E. Blatt:

There has not been one single case, Your Honor, in reference to that.

Antonin Scalia:

That’s what you’re saying the Constitution has been requiring all these 200 years.

James E. Blatt:

That is correct, Your Honor, but after Austin and Alexander, where the Court indicated that fines… that forfeitures can be considered fines, and therefore punishment does apply, and the Eighth Amendment does apply.

That has changed things.

That has… in other words, there is now a review in reference to excessiveness concerning the Eighth Amendment, and excessiveness implies an evaluation.

Stephen G. Breyer:

What about, in terms of a constitutional limit, a word like shocking?

James E. Blatt:

Shocking?

Mm-hmm.

James E. Blatt:

Well, grossly disproportionate, Your Honor, to me is as close to strict liability as one could get.

I think it’s a difficult burden for a defendant to meet under the district court’s standards, in a district court, and it’s a word, it’s a concept that I think district courts are familiar with.

Shockingly, I’m not too familiar with that.

I would like–

Ruth Bader Ginsburg:

Shocks the conscience.

James E. Blatt:

–Will shock the conscience?

I like that, and I think, Your Honor, that taking… no one is denying that this… the Government has a strong remedial interest, but perhaps there is something that shocks the conscience when lawful money for a lawful purpose is taken entirely, without any concept of culpability, and I would respectfully indicate that–

Ruth Bader Ginsburg:

Well, except the district said, and the Government I think concedes they must show that the defendant knew about the reporting requirement and knew that it was illegal to take out more than X amount of dollars.

James E. Blatt:

–No, Your Honor.

It’s a strict liability type of situation.

You don’t have to know.

If you don’t… if you go there and you have the money–

Ruth Bader Ginsburg:

I thought the Government… maybe I’m wrong about this.

I thought the Government conceded that it must prove the defendant knew it was unlawful not to report that he was carrying in excess of 10,000 dollar.

James E. Blatt:

–No, I don’t believe that’s the case, Your Honor.

If you go out of the money… if you go out of the country without the money… I mean, without declaring it, for whatever reasons, ignorance of the law, not knowing–

Ruth Bader Ginsburg:

But there was no such thing here, because the agent told him.

James E. Blatt:

–Oh, he knew.

Ruth Bader Ginsburg:

You know–

James E. Blatt:

No question about it, he knew, and he lied, but I would ask the Court to seriously consider at this time developing a proportionality analysis.

William H. Rehnquist:

Thank you, Mr. Blatt.

James E. Blatt:

Thank you, Your Honor.

William H. Rehnquist:

The case is submitted.