United States v. United States Coin & Currency

PETITIONER:United States
RESPONDENT:United States Coin & Currency
LOCATION:City of Los Angeles

DOCKET NO.: 5
DECIDED BY: Burger Court (1970-1971)
LOWER COURT: United States Court of Appeals for the Seventh Circuit

CITATION: 401 US 715 (1971)
ARGUED: Feb 25, 1969 / Feb 26, 1969
REARGUED: Oct 20, 1970
DECIDED: Apr 05, 1971

Facts of the case

Question

  • Oral Argument – February 25, 1969
  • Oral Reargument – October 20, 1970
  • Audio Transcription for Oral Argument – February 25, 1969 in United States v. United States Coin & Currency
    Audio Transcription for Oral Reargument – October 20, 1970 in United States v. United States Coin & Currency

    Audio Transcription for Oral Argument – February 26, 1969 in United States v. United States Coin & Currency

    Earl Warren:

    United States, petitioner versus United States Coin and Currency, etcetera.

    Mr. Lacovara.

    Philip A. Lacovara:

    Mr. Chief Justice and may it please the Court.

    I would like to resume this morning by restating briefly the Government’s basic position in this internal revenue forfeiture case and it is that unlike Marchetti and Grosso which involved criminal punishment for refusing to come forward to disclose information that would have been incriminatory.

    Internal revenue forfeitures of the type involved in this case do not involve any punishment for anyone’s invocation of the privilege against self-incrimination, rather we submit unlike the common law type of forfeiture which attached in persona upon the criminal conviction of a felon.

    Internal revenue forfeitures historically and legally are quite different, critically different we think for these purposes, and that liability or guilt if you choose to use that term attaches directly for the — to the property and not to any person, and the forfeiture is not punishment directed at anyone, but a simply a remedial device for safeguarding the public fisc.

    Potter Stewart:

    Of course, the property belongs to somebody.

    Philip A. Lacovara:

    Normally, the property belongs to someone, yes.

    Potter Stewart:

    The property means, it belongs to somebody.

    Philip A. Lacovara:

    The idea (Voice Overlap)

    Potter Stewart:

    The semantics, that’s —

    Philip A. Lacovara:

    Yes.

    Potter Stewart:

    The derivation of the word property.

    Philip A. Lacovara:

    That’s right.

    The forfeiture statutes like the one in question declare that property rights shall not exist in property in physical items any longer after certain conditions are met.

    So, there is undoubtedly an item that was at one point, someone’s property which no longer is his.

    Potter Stewart:

    And this was some eight — between $8,000.00 and $9,000.00 in this case.

    Philip A. Lacovara:

    This was $8,674.00 which belonged to someone we know not, Donald Angelini claims the property.

    It was in his pocket.

    It was seized when he was arrested at Sportsman’s Park in August of 1964.

    Potter Stewart:

    And the same rule that you’re contending for would have applied whether it had been five cents or $5 million?

    Philip A. Lacovara:

    That’s right.

    Potter Stewart:

    Has no relationship at all to any tax liability he might have had.

    So —

    Philip A. Lacovara:

    That’s correct.

    We think that indicates —

    Byron R. White:

    You mean an amount?

    Philip A. Lacovara:

    Pardon me?

    Byron R. White:

    You mean an amount?

    Potter Stewart:

    That’s what I meant.

    Philip A. Lacovara:

    The amount of — it’s a forfeiture, the value of the forfeitures unrelated to the amount of tax liability that the individual has.

    But I think it’s important to point out that the items which were the property of an individual are not necessarily owned by the person who has the tax liability, and that’s the essence of our position in arguing that internal revenue forfeitures are not penal.

    Hugo L. Black:

    May I ask you one question.

    Suppose the Congress had used the words, actual words, this should be considered as a punishment and the Government shall be allowed to get it as a punishment.

    Would Marchetti cover it?

    Philip A. Lacovara:

    I think we have a much more difficult case Your Honor and I think Boyd —

    Hugo L. Black:

    Would it be any doubt about it?

    Philip A. Lacovara:

    Boyd I think would then be — would probably be controlling in that situation.

    We think though that Boyd as explained by this Court in the case in which we principally rely Helvering against Mitchell in 303 U.S. explained —

    Hugo L. Black:

    By Justice Brandeis’ opinion?

    Philip A. Lacovara:

    Justice Brandeis’ opinion over the sole of dissent of Justice McReynolds.

    Justice Brandeis explained that Boyd was careful to distinguished between penal and remedial forfeitures and of course, Justice Bradley’s opinion does make that careful distinction and determines that the forfeiture in that case was one that was penal in the common law sense and that it attached because of the particular individuals, criminal liability, and Justice Bradley said that the Government in that case could have proceeded directly against the owner of the property for committing the crime and included in the judgment of criminal conviction, could have been a decree forfeiting this property.

    That was the common law method of forfeiting property.

    Justice Bradley carefully distinguished however the statutory forfeitures which are unconcerned with anyone’s criminal conviction or even with anyone’s amenability to criminal prosecution.

    Byron R. White:

    But what are the remedial forfeitures for?

    You say they are remedial —

    Philip A. Lacovara:

    That they are two purposes.

    Two purposes I’d say.

    One is to remove from circulation, the physical means, the where would all by which an activity has been carried on in violation of the internal revenue law so that tax liability has not been paid.

    This prevents a repetition of the same offense.

    It’s easiest to visualize in the case of (Voice Overlap)

    Byron R. White:

    Track violation?

    Philip A. Lacovara:

    Conducting a wagering business on which the occupational and excise tax has had not been paid.

    Byron R. White:

    So, it’s a failure to pay the tax you say is the legal violation not the filling of registry?

    Philip A. Lacovara:

    That’s correct.

    The cases and the statute focus on the use of the property in a way that is inconsistent the way in violation of the revenue laws, it’s carrying on in untaxed business.

    Byron R. White:

    Well this will make it even less likely that he can’t pay the tax or you can collect the tax?

    Philip A. Lacovara:

    I’m sorry, I don’t see that.

    Byron R. White:

    Well, if he takes all his money away from that he’s earned in gambling, how can he pay his tax that you say he hasn’t paid?

    Philip A. Lacovara:

    Well, this was the distinction I was trying to draw before.

    Philip A. Lacovara:

    The money is not necessarily his.

    The money is owned or (Voice Overlap)

    Byron R. White:

    Yes, but it is sometimes.

    Philip A. Lacovara:

    It sometimes is.

    Byron R. White:

    But it is here.

    Philip A. Lacovara:

    In the event, the individual has no more funds than are actually seized from him because they’ve been used in violation of the tax.

    I don’t think that the public revenues or in any way harm because by definition in that situation, the Government could not have obtained the any greater tax revenues —

    Byron R. White:

    But you don’t credit his tax liability?

    Philip A. Lacovara:

    No, for the simple reason that the seizures unrelated to his tax liability —

    Byron R. White:

    So, what’s the next — second purpose?

    Philip A. Lacovara:

    The second purpose, again explained in Helvering against Mitchell is that this type of forfeiture makes the Government hold for the cost of investigating a tax default, and it reimburses for the additional amount of time and effort that it takes to investigate a tax liability which has not been satisfied by voluntary response.

    Byron R. White:

    You say there’s no purpose — you wouldn’t say that the remedial type is — the remedial type of forfeiture has ever aimed thus encouraging people to pay their taxes?

    Philip A. Lacovara:

    Oh, it’s — I wouldn’t say it has no role or no effect in encouraging people to pay their taxes, but it’s not primarily designed for that purpose and historically, it’s focused is not upon the individual who has failed to pay the tax.

    Byron R. White:

    Well, assuming that it was, let us suppose Congress was perfectly clear that Congress intended the forfeiture provisions as to deter people from not paying or do encourage them to pay, would you be any worst shape than you are now?

    Philip A. Lacovara:

    Oh, I think I have to concede I’d be in slightly worst shape, but I think I’d be prepared to defend that because I was saying yesterday, the linchpin of our argument is the continuing validity of this wagering tax.

    Byron R. White:

    You can see that Marchetti — that Marchetti would cover a case where some pressure is utilized to force the person to come forward and pay his gambling tax.

    Philip A. Lacovara:

    No, I won’t concede that and the reason is this.

    The court, as far as I know, has not established a blanket rule that no sanction can attach to the invocation of the privilege.

    We think that the case that’s closest to this conceptually is the decision in Campbell Painting Company versus Reid last term in which as the Court will well remember.

    A New York statute which the court itself termed one that was intended to levy a penalty in order to deter people from invoking the privilege against self-incrimination, provided that a corporation which had contracts, corporation or individual which had contracts with the state would be ineligible for further contracts and would have its present contract cancelled if an officer or the individual having the contract refuse to testify before a grand jury and waive his privilege.

    In that decision over the dissent which pointed out that the financial consequences of this cancellation, were going to fall directly upon the individual who would invoke the privilege because he was of the president of a corporation and the principal shareholder.

    The court nevertheless held that the corporation was in no position to take advantage of a penalty imposed because of the president’s invocation of the privilege.

    We think this case is a fortiori because we reject the notion that — and Sixth Circuit in Dean is held and this Court in Helvering and other forfeiture case have held that forfeitures are to penalize anyone.

    But in any event —

    Thurgood Marshall:

    If he had taken out the gambling statute, you couldn’t have seized the money, could you?

    Philip A. Lacovara:

    Well, if he had not paid the excise taxes, the operation would still have been conducted in violation of the Wagering Tax Act.

    Thurgood Marshall:

    If he had bought the stamp and fill that all of these material and paid whatever — pay 10 cents in tax, you couldn’t have seized the money, could you?

    Philip A. Lacovara:

    No, that’s not true either because at the — the records shows that at Sportsman’s Park, there were other individuals apparently working for or at least with Mr. Angelini in taking non-pari-mutuel wagers.

    If any of those individuals were not registered, had not paid the occupational tax, the money that they collected would still have been collected and used as the statute says in violation of the internal revenue law.

    So, even though the money was not handed to Angelini who is lawfully registered, it was still subject to seizure.

    Thurgood Marshall:

    Although the book is in Sportsman’s Park bought stamps, you wouldn’t have been able to seize the money, is that right?

    Philip A. Lacovara:

    That’s correct.

    Byron R. White:

    And paid the tax?

    Philip A. Lacovara:

    Assuming they’d all comply with the internal revenue statutes, there’d be no basis for seizure on the statutes.

    Thurgood Marshall:

    So you see no connection between the stamp and the seizure?

    Philip A. Lacovara:

    The absence of the stamp is certainly the ingredient in this case as far as we were endeavored to prove that made this money either misused in violation of the internal revenue laws.

    Byron R. White:

    I suppose you argue that the Government instituting a forfeiture proceeding doesn’t itself incriminate this man or just the fact of forfeiture you first have to prove he’s been gambling.

    Philip A. Lacovara:

    We have —

    Byron R. White:

    (Voice Overlap) independent evidence.

    Philip A. Lacovara:

    We have to prove that someone was gambling and that this money was used in the course of an unregistered gambling operation.

    The Government of course bears the entire burden of proof.

    Byron R. White:

    And the —

    Philip A. Lacovara:

    That’s why it’s quite different from the Boyd case (Voice Overlap)

    Byron R. White:

    There something incriminating, it’s just close from the fact that you prove he’s been gambling.

    Philip A. Lacovara:

    Well, that’s true, but of course in Grosso and Marchetti, the same thing was true, but the court said we couldn’t prosecute.

    Thurgood Marshall:

    Why do you say unregistered gambling?

    Philip A. Lacovara:

    Because the occupational tax in Section 4411 —

    Thurgood Marshall:

    And the stamp?

    Philip A. Lacovara:

    Yes, the stamp evidence (Voice Overlap)

    Thurgood Marshall:

    Stamp is a registry.

    Philip A. Lacovara:

    No, Section — the next Section, the 4412 says that people required to pay the occupational tax are also required to register.

    In fact, as the Court said in Marchetti, the two things are handled (Voice Overlap)

    Thurgood Marshall:

    When you said unregistered gambling, I was trying to be sure with register you were talking about.

    Philip A. Lacovara:

    Well, I —

    Thurgood Marshall:

    You’re telling about the second one, not the stamp, the second one.

    Philip A. Lacovara:

    The court said quite correctly in Marchetti that the two are integrally related and it’s impossible to pay the occupational tax without registering.

    So, I don’t try to make any distinction on that point.

    Potter Stewart:

    How far is this remedy goes as a matter of statute, what if I violate the income tax law by paying a dollar less tax than I owe, can you take everything I have because all of it was involved (Voice Overlap)

    Philip A. Lacovara:

    No, the cases are fairly clear, these statutes are not new and they have been construed on literary hundreds of occasions.

    It has to be some property which is integrally related to the violation of the statute.

    Philip A. Lacovara:

    Now, perhaps if you’re adding machine had been involved in your computation of your tax liability and if you had violated the internal revenue laws by deliberately failing to pay.

    Potter Stewart:

    It’s in my pen and pencil I guess too.

    Philip A. Lacovara:

    Even your pen and pencil, that’s true, but your house wouldn’t be seized or your car.

    It’s only the property as the statute says that is used in violation of the statute.

    In the cases, including the cases relied on by the claimant, the various Court of Appeals decisions say that the focus is on the use of the property and that — there doesn’t have to be any specific intent to violate any particular internal revenue statute.

    Potter Stewart:

    Primitive concept isn’t it?

    Philip A. Lacovara:

    Well, ah —

    Potter Stewart:

    Diodance.

    Philip A. Lacovara:

    Exactly, it’s a fiction and no one contest that but it’s one that we think has some meaningful content to it and its one that the court in Goldsmith grant case in 284 U.S. said is so firmly fixed in Anglo-American jurisprudence that in the absence of compelling circumstances that I don’t think are presented in this case.

    The court should be reluctant to repudiate 600 years of our jurisprudence.

    It’s a fiction, but — because it does historically and legally operate, irrespective of the criminal liability of the owner, and because this Court is consistently sustained the constitutionality of this type of forfeiture, we think it critical that these statutes do not focus upon the criminal liability of the owner or the possibility that he might be able to resist prosecution as in Marchetti and Grosso by invoking the privilege against self-incrimination.

    The focus in this case, this type of forfeiture is on the property’s use, and we think that since property clearly has no privilege against self-incrimination, it’s inherently a personal privilege.

    We think the case follows rather logically from the Campbell Painting case where the court said there, the actual focus of the penalty in that case, again, I reiterate that we do not consider this type of forfeiture penalty and this Court has never treated as such.

    But in Campbell Painting, the penalty focused on a corporation which has no privilege, and the court said, the corporation therefore is in no position to complain that an individual, that the occasion for the penalty has been the invocation of the privilege by an individual.

    Byron R. White:

    What do you think, even if the — even if you’re right that the forfeiture wasn’t motivated by any desire to encourage the payment of the tax or to encourage registration, what do you think the operative effect of the forfeiture provision is? Do you think (Voice Overlap)?

    Philip A. Lacovara:

    I think as a factual matter, we can say fairly confidently that it does not provide any great impetus to an individual to come forward and register.

    Byron R. White:

    Or to pay the tax.

    Philip A. Lacovara:

    Or to pay the tax, because in fact, the — as this case illustrates; the man is not terribly disadvantaged by the seizure of this property.

    This was the bankroll used in conducting an illicit business.

    It’s just one of the risks of the game.

    I think, it could be fairly said that —

    Byron R. White:

    He says to himself “well, I can’t go to jail if I don’t pay under Marchetti, but —

    Philip A. Lacovara:

    The worst that can happen —

    Byron R. White:

    — I’m not going to lose my winnings (Voice Overlap)

    Philip A. Lacovara:

    The worst that can happen is that money which has been used in violation of this act which may or may not belong to me.

    In the Dean case in the Sixth Circuit, $300,000.00 is involved and the District Court said even now we seized from the home of the Dean’s, it apparently did not all belong to them because they provided the banking clearing house for the gambling operation.

    I think that illustrates that the lost does not necessarily fall on the person who otherwise would be compelled to come forward to pay the tax and to register.

    It’s not a direct cause on axis, prompting him to give incriminatory information.

    Hugo L. Black:

    If the money is forfeited, what’s the Government do with it?

    Philip A. Lacovara:

    It’s paid to the treasurer as part of internal revenue collections.

    Hugo L. Black:

    What uses it?

    Philip A. Lacovara:

    The Government — yes, the money is covered into the general treasury.

    Hugo L. Black:

    Is that true about automobiles —

    Philip A. Lacovara:

    The Government can either use them if seizing agency so determines or it can auction them off.

    Hugo L. Black:

    How many different kinds of forfeitures did the federal Government has?

    Philip A. Lacovara:

    Literary?

    Hugo L. Black:

    Any idea?

    Philip A. Lacovara:

    Literary, dozens; that is very violations of — literary, dozens of acts can result in certain types of forfeitures.

    There not all, we can see internal revenue forfeitures, some I think would be — we would have to in candor concede would be more of the penal kind in this type of case.

    Hugo L. Black:

    Are there any of them result in the forfeiture of people’s farms at any country?

    Philip A. Lacovara:

    The liquor laws.

    Violation of the laws regulating distilleries free (Voice Overlap)

    Hugo L. Black:

    — home.

    Philip A. Lacovara:

    Yes, sir.

    I would like to say that we have argued that in the event, the court determines that Marchetti and Grosso should apply to forfeitures of this type.

    The decision should not be made retroactive and should apply only to seizures made after the date of those decisions.

    We think the court’s power to make new constitutional rules prospective only now as well settled, and that each of the three factors to be considered counsels prospective application in this case.

    We have discussed the effect and the reliance in our brief.

    I would like to say that in terms of the purpose of the new rule, we suggest that the protection of the Fifth Amendment which would be the essential purpose of this rule would not be measurably advanced by applying it in this type of case, applying it retroactively when by definition, the individual has not come forward to waive his privilege and has not given any information which would be —

    William O. Douglas:

    Well, that would result in affirmance here then?

    Philip A. Lacovara:

    No, it would have a result in a reversal because the seizure (Voice Overlap)

    William O. Douglas:

    You want — you want to make this retroactive in this case?

    Philip A. Lacovara:

    No, we are the petitioner Mr. Justice Douglas, the Seventh Circuit has reversed the decree of forfeiture and our proposed judgment of at least would say the forfeiture, that the application of the Fifth Amendment should not bar seizures which took place as in this case, four and a half years before Grosso and Marchetti, so that the Seventh Circuit’s judgment should be reversed.

    William O. Douglas:

    I understand, but that’s the inconsistent with your philosophy that this rule should be made prospective.

    Philip A. Lacovara:

    No, the rule that I’m saying should be made prospective.

    If the court rejects our basic position is that Grosso and Marchetti can const — or the principles announced therein, can constitute a substantive defense to an internal revenue forfeiture proceeding.

    William O. Douglas:

    I see.

    Philip A. Lacovara:

    And in that situation, that rule would not apply at this proceeding and the Government would be entitled —

    William O. Douglas:

    I misunderstood you.

    Philip A. Lacovara:

    — $3,000.00.

    Philip A. Lacovara:

    I’d like to save any remaining time for rebuttal.

    Earl Warren:

    Alright.

    Philip A. Lacovara:

    Apparently, that’s academic.

    Earl Warren:

    Ms. Lavin?

    Anna R. Lavin:

    Mr. Chief Justice and may it please the Court.

    The Assistant Solicitor General made the statement that the seizure of this money did not disadvantage Mr. Angelini.

    I must immediately reply that it certainly did disadvantage Mr. Angelini.

    Mr. Angelini, they did go to jail and this money was the main evidence against him.

    He also said the money belongs to we know not whom.

    I submit that that is fairly well ignoring the record.

    Mr. Angelini claimed this money under oath as owner and that was never put into contest.

    It was conceited —

    Byron R. White:

    Is that the —

    Anna R. Lavin:

    Yes, sir?

    Byron R. White:

    Is the fact that he’s going to jail in this record?

    Anna R. Lavin:

    Oh, yes.

    Yes sir.

    Byron R. White:

    What did he go to jail for?

    Anna R. Lavin:

    For this violation under 4411 and 4412 — 7203 or 7302 for this particular operation, the Sportsman’s Park operation, arising out of this arrest —

    Byron R. White:

    What was he convicted for?

    Anna R. Lavin:

    He was convicted of willful failure to file under 4412 and willful failure to pay —

    Byron R. White:

    That conviction can’t stand.

    Anna R. Lavin:

    That conviction has already been served.

    Byron R. White:

    Oh, it’s already serve, that’s —

    Anna R. Lavin:

    Yes, sir.

    I might say also that that the Assistant Solicitor General yesterday overlooked that aside from the fine of $2,500.00 and the 60 days in jail, he also was given the 3-year probationary period. (Voice Overlap)

    Byron R. White:

    Since Marchetti and Grosso, this would not happen to him?

    Anna R. Lavin:

    This would not have had, no.

    Byron R. White:

    No.

    And the money would not have been use against him in the criminal —

    Anna R. Lavin:

    That’s true, yes sir.

    Byron R. White:

    Well, that has nothing to do with the issue before us now?

    Anna R. Lavin:

    I don’t think it does either.

    I guess what — I just want to point out that there has been some disadvantaged and the fact of his conviction was argued yesterday.

    I might say in regard to the proof on this libel, there was a showing that he hadn’t filed under 4411 and under the first decision of the Court of Appeals which affirmed the forfeiture.

    They said this amount of cash justified the inference that he was in the bookmaking business.

    This they termed as the ready cash theory, though he was not shown to have taken any of that money as wagers on the day that he was arrested.

    No wagers were seen being taken by him.

    He paid out no money in response to collection, the very wagers.

    When this Court vacated the decision of the Seventh Circuit —

    Byron R. White:

    It would have to be true — using the money to prove that he is a gambler would be true whether there was a forfeiture proceeding or not?

    Anna R. Lavin:

    That’s true.

    I’m talking about this particular trial, this particular trial.

    When this Court reversed and remanded for reappraisal of this forfeiture in the light of Marchetti and Grosso, their court reversed, finding that this forfeiture or what develops into a forfeiture, Mr. Angelini was a given a choice between self-incrimination and forfeiture of property and the Seventh Circuit found that it was impermissible.

    It’s of course clear that the obligation to register and pay the occupational tax under the Marchetti case was recognized as creating real and appreciable hazards to self-incrimination.

    I submit the question here is whether Mr. Angelini forfeits his property for failing to assume those assets and for refusal actually to waive his constitutional privilege.

    The Government of course argues that it should on several grounds.

    The Government in its brief —

    Byron R. White:

    Oh, I thought the Government said that the forfeiture was for refusing to pay the tax?

    Anna R. Lavin:

    And for refusing to register.

    This Court recognized in the Marchetti case that you couldn’t do one without the other.

    If you offer to pay the tax, they wouldn’t take it.

    Internal revenue wouldn’t take it unless you registered and incriminated yourself or ask what where obviously incriminatory question, certainly under Illinois law as well as most states in the United States.

    I think it’s interesting that the Government in its argument actually resisted on the application Boyd to this case.

    Yet, almost from the inception, the argument here yesterday, the Government relied on Boyd as authorizing seizure of these moneys.

    Last night, I went to Boyd and studied it very carefully.

    I wanted to determine what was the source of this argument that was made yesterday.

    I could only find a possible reference at page 623 of the Boyd opinion where the court was detailing antecedent history.

    In considering the statute that made it mandatory upon order of court for a man to deliver his private books and papers to determine whether or not he had paid the proper duties, the Supreme Court in Boyd said even the obnoxious writs of assistance didn’t go this far.

    They said, there when they entered into warehouses, unto ships, they at least were looking for stolen property or property which no duty had been paid.

    Anna R. Lavin:

    This they said was not as bad as what the contested statute in Boyd did.

    However, that court was not endorsing writs of assistance.

    It was merely say that this statute was even worse than that.

    It was saying that writs of assistance is obnoxious as they were, were not compelling a man’s testimony against himself out of his own mouth.

    At least according to the Boyd case, the writs of assistance allowed search for well, what was actually contraband.

    And in that sense, they weren’t as bad as the — a compelling a self-incrimination by a person’s prior papers.

    But as I said — private papers — but as I say, they were not endorsing searches in violation of the Fourth Amendment, nor can the Government here convert the words from Boyd into an endorsement of violation of the Fifth.

    The Government’s invocation of Boyd yesterday on argument, I submit, is both time-wise inappropriate and content-wise inappropriate.

    It is clear I think from our argument that we rely on Boyd and submit to this Court that the decision of the Seventh Circuit can only be reversed if Boyd is overruled and abandoned.

    The Government proposes to this Court that this forfeiture is remedial and not punitive.

    I’m not really entirely sure I understand this argument.

    I wasn’t sure when I receive the brief.

    If as I think it does, punitive means punishment for a wrong, then remedial as used here would seem to mean to compensate for a wrong.

    If that’s the argument, I submit to this Court, it must be rejected.

    The occupational tax, this as the Court knows, $50.00.

    The forfeiture here is over $8,600.00.

    It would seem that the sheer discrepancy between the amounts would defeat the argument.

    But even if that does not happen, I think the practicalities of the matter should.

    This $50.00 tax and the penalties and the interest that accrue on it have already been assessed independently by the Government and they have been collected.

    The Government’s own actions and — an independent assessment in collection reject the possibility that the seizure here is compensatory rather than punitive.

    I submit they are clearly punitive and therefore they are quasi criminal contrary to what the Government proposes.

    Potter Stewart:

    Suppose there — I didn’t understand the Government’s argument.

    This was compensatory, but merely that this is seizure of a thing, in rem sort of proceeding to get out of circulation and instrumentality that’s used in violation of tax laws.

    Like the seizure of a slot machine or dice or something like that.

    I didn’t understand the Government’s argument.

    To me, this is anyway compensatory because if the Government has and must has conceded and must concede, this would be same rule it would apply whether this is a five cents or $50 million.

    Anna R. Lavin:

    Yes, I understood that (Voice Overlap)

    Potter Stewart:

    — taking out of circulation as I say a slot machine or dice or roulette wheel, whatever.

    Anna R. Lavin:

    I understood that to be another fair argument Mr. Justice.

    I understood their argument to say that this is remedial and not punitive.

    Anna R. Lavin:

    This is a manner of taking offending articles out of circulation.

    I understand that the third argument is its in rem and you can’t avail yourself of the personal privilege of the claimant.

    Hugo L. Black:

    I don’t understand they were going to take it out of circulation.

    Anna R. Lavin:

    Well, that’s precise —

    Hugo L. Black:

    Although there’s been a circulation on their own part.

    Anna R. Lavin:

    That’s precisely what our answer to it would be, that theory of removal of this offending property from circulation.

    Money certainly isn’t offending.

    Certainly, it doesn’t offend me and I cannot conceive, as a matter of fact, the Government has admitted, they have no intention of taking it out of circulation.

    Slot machines, roulette wheels, those are taken out of circulation and destroyed; that’s not going to happen to this money.

    William J. Brennan, Jr.:

    Ms. Lavin —

    Anna R. Lavin:

    Yes, sir?

    William J. Brennan, Jr.:

    I — you said something about the $50.00 stamp, it was also — what is it, 10%, isn’t that the excise tax?

    Anna R. Lavin:

    Yes sir, that’s the excise tax.

    William J. Brennan, Jr.:

    And what — would that be at least 10% of $8,600.00 and the tax here or of course, it’s measured is not by his gross income from that gambling?

    Anna R. Lavin:

    You understand Mr. Justice Brennan that there was no proof that this money was paid as wagers, so the 10% could not attach those instances where in this masquerade on Sportsman’s Park prove have been shown that wagers had been taken by these men.

    That 10% tax has been assessed.

    William J. Brennan, Jr.:

    Oh, it has been?

    Anna R. Lavin:

    Yes, sir.

    William J. Brennan, Jr.:

    Any recollection of what the amount was?

    Anna R. Lavin:

    No.

    I don’t mind if I represent it, some of them I do but I —

    Byron R. White:

    But in any event, this forfeiture was for not paying the $50.00?

    Anna R. Lavin:

    Yes, sir.

    Byron R. White:

    Not for not paying —

    Anna R. Lavin:

    Oh, no that’s strictly on 4411 and 4412, 4401 doesn’t come into it.

    William J. Brennan, Jr.:

    Incidentally, I noticed in your brief, you don’t meet the Government’s argument resting on Mitchell?

    Anna R. Lavin:

    I didn’t see the Government’s argument resting on Mitchell.

    I noticed that Mitchell was cited three times in the brief.

    It was not expanded upon.

    I was somewhat surprise this morning to find that that was their principle area of reliance.

    Anna R. Lavin:

    You’re talking now of compensating the United States for the cost of its investigation?

    Is that the — the Solicitor General argued that this morning.

    It was him who argued in the brief.

    I was totally unprepared for it, but I would submit that this is not a very learned argument coming at somewhat as rather surprised that this really personal for the cost of investigation appears to have no equality, the case that follows this is we have to say 300,000 compensatory for the cost of investigation.

    Here for some reason, 8,600 is compensatory for the cost of investigation under their argument.

    It — rather what surprises me that in criminal cases, where cost of investigations of this type are made at least have never been assessed as valid cost, and I don’t see how validly these monies can be seize and say were compensating the Government for the use of their agents or whatever it might be.

    Thurgood Marshall:

    How much did you say the fine was in the criminal case?

    Anna R. Lavin:

    $2,500.00.

    Thurgood Marshall:

    That could help on the expenses?

    Anna R. Lavin:

    That could help.

    As to their in rem argument, the Government has argued that subject — property subject to forfeiture enjoys no privilege against self-incrimination which can be asserted to prevent their forfeiture.

    They say that this is an in rem proceeding brought against the property itself and it may not avail itself of the owner’s privilege against self-incrimination.

    We submit to this Court that this argument was refused long ago in the Boyd case, which rejected any argument that the technical character of a forfeiture as an in rem proceeding against the property had any effect on the right of the owner of the property to assert as a defense violation of his constitutional rights, and the court recognized this owner — the court in Boyd recognized the owner as a substantial party to the in rem suit, and therefore in a position to raise violations of his constitutional rights.

    I might say at this time that the case on which — well which the United States urged was in conflict with this case, wherein the Deans are claimants in its something against a 19 something.

    Their case differs substantially in this regard.

    Here, we have a man who is recognized as an owner by the trial court.

    The Boyd case says as an owner recognized is a substantial party and has right to raise his constitutional rights.

    I think it’s very important to recognize that in the Dean case, the trial court found that the Deans the claimants were not the owners of the property.

    Therefore actually, the Deans would have no standing in that lawsuit.

    Their claim as owner was rejected by the findings of the court.

    I think that’s a substantial difference between their case and this and I thought I would like to bring it to the Court’s attention.

    There is one basic difference, I might say, while we rely on Boyd, I mean we rely on Plymouth.

    There’s a basic difference between those cases and this one at bar.

    In those cases, the typical point was the prohibition in choosing in a forfeiture case, evidence illegally assert — secured from the owner.

    Here, we have kind of the other side of the coin.

    We — they claim forfeiture of property because the owner refused or omitted to give evidence against himself in violation of his constitutional rights, because if he had waived his constitutional rights, there would be no forfeiture here.

    The rational of this forfeiture action is the — the forfeiture of property for invoking the constitutional privilege, and I submit to this of course in the true sense of the word, this makes the constitutional privilege what has been used so often, this makes it cost.

    The Government makes a further argument that in the abstract, an owner could be entirely innocent of any wrongdoing or illegality and the property would still be subject to forfeiture.

    And in the abstract, that can be true.

    But here, necessary to forfeiture is the illegal intent of the possessor, and this Court in One 1958 Plymouth versus Pennsylvania made that eminently clear the difference between properties that are forfeitable per se and properties that require proof of the use in order for them to become forfeitable.

    Anna R. Lavin:

    Now, and it pointed out that when dealing with articles that are innocent as themselves as the money is here, the articles derive their contraband nature only from the acts or the intent of the possessor or user.

    The act of the intent of Mr. Angelini which is necessary to make this property subject to forfeiture is first the operation of a wagering business which is not illegal under federal law, and secondly, the failure to comply with the registration provisions of 4412 and the payment of the $50.00 under 4411.

    To have on the act, it would under Marchetti require that he incriminate himself.

    It is our submission most basically that no illegal intent can be inferred from the exercise of, or a refusal to waive constitutional rights.

    It’s our position that property can’t assume a contraband nature from such exercise or refusal by the possessor.

    And if it can’t derive a contraband nature from the acts or intent of the possessor, it’s not contraband and it is therefore not subject to forfeiture because the proof necessary to the derivative forfeiture has failed.

    I submit therefore that none of the Government’s arguments are going to suffice to forfeit these goods.

    I submit that the decision of the Seventh Circuit Court of Appeals should be affirmed.

    We then come to the aspect of this case that was not presented to the Seventh Circuit.

    This is the urging by the Government of strict prospective application of the Marchetti-Grosso decisions in forfeiture cases if this Court should determine that they applied forfeiture cases.

    I would also submit to this Court on that point that the Government has made no argument to encourage this Court validly to employ strict prospective application.

    Its own cases and I refer particularly to the case that most relies on Linkletter recognized that the general rule is retroactive application.

    It also recognized an exception to that rule where a decision, an earlier decision is overruled as this Court by Marchetti-Grosso overruled character in Louis.

    That rule is that intermediate cases finally decided should not be upset.

    This case of course is not finally decided.

    This standard of limited applicability refer to by this Court in Linkletter as being appropriate to a circumstance such as we have here is not even considered by the Government on this argument.

    It doesn’t enlighten us what if any havoc would ensue where the Marchetti-Grosso decisions made applicable to forfeiture cases or how they would it upset the administration of justice.

    They give us no countervailing considerations which this Court recognized were necessary to strict application of prospective application that would take this case out of the limited retroactivity rule.

    The Government’s whole argument relates to the potentialities of a volume of litigation relating to property forfeited in the past, finally forfeited, and they say that provides a sound and practical reason for this Court to apply prospective application.

    It pays no attention to cases not finally decided such as this.

    It gives no reason by this Court to not declare limited retroactivity in accordance with the rule pronounced in Linkletter.

    We submit the rule should be employed to cases such as this and finally decided and we further submit that no countervailing considerations have been suggested by the Government for not employing that rule.

    And some then, if the Court please, we submit to —

    Byron R. White:

    How was it prove that the — your client was a gambler?

    Anna R. Lavin:

    There was a month long surveillance at Sportsman’s Park.

    Byron R. White:

    Aright.

    Anna R. Lavin:

    Early in the month of August of 1963, he had been seen talking — oh, there was one occasion where a man came up to him and said something like tantamount of work, one occasion in the month.

    He was seen receiving money from bookmakers who were convicted or who pleaded guilty and he was seen giving the money, but not within a week of this particular day.

    Potter Stewart:

    Let say your client was operating at the racetrack, according to the evidence?

    Anna R. Lavin:

    Yes, according to the evidence, yes sir.

    Potter Stewart:

    Well, why would people bet with him at the racetrack instead of betting at the pari-mutuel window?

    Anna R. Lavin:

    Well, I don’t really know that, but I would suggest that they were getting better at.

    Potter Stewart:

    Because he didn’t have to pay any taxes?

    Anna R. Lavin:

    And he didn’t know in the racetrack either.

    Oh, there is, oh yes.

    There was evidence of that too.

    They were able to give credit betting and you can’t get credit betting at the pari-mutuel window.

    I have nothing further unless there are some questions.

    Thank you.

    Hugo L. Black:

    May I ask you if you can state briefly why you think Mitchell doesn’t apply.

    Anna R. Lavin:

    I already explained to Your Honor that I wasn’t unprepared for that.

    Hugo L. Black:

    I didn’t quite understand.

    Anna R. Lavin:

    I don’t think Mitchell applies if the case stands for what I understood from the oral argument because it sets no standard.

    How could one person be well hurt to the extent of maybe $300,000.00 as we have in the Sixth Circuit case in 8600 here or moreover?

    The purpose of agents is for the most part to investigate criminal activities.

    I have never seen and I don’t believe there is any basis or any incidents where investigative processes have been recognize as an assessable cost and I suggest on that account and I admit it’s kind of off the top of my head that I can’t see where it could logically be applied as a reason for forfeiting these moneys.

    Hugo L. Black:

    What about argument he made that you don’t have to put all the punishment in one case or the sanction, you referred to this as sanction that you could divide it up, I guess something like Black-Burger and you have civil sanction and a criminal sanction.

    Anna R. Lavin:

    Well, I have no problem with individual deeds having criminal and civil problems, but I — or sanctions, but I do say that what is inadmissible in a — for the purposes of a criminal sanction is certainly inadmissible for the purposes of the civil sanction.

    Hugo L. Black:

    Well, might it not be thoroughly legal here to impose this, whatever it is, but yet the — not bad because of the way they make a man confess his crime.

    Anna R. Lavin:

    I think that’s what makes it bad.

    Hugo L. Black:

    That’s the difference.

    Anna R. Lavin:

    As I think this Court in Marchetti clearly asks the Congress to adjust this statute.

    I think if I interpret your decision correctly, you are asking for immunity.

    Byron R. White:

    Oh yes, but the statute is now criminal part of the statute it’s been under enforceable?

    Anna R. Lavin:

    That’s right.

    Byron R. White:

    And so, it is no crime to not to affect if you don’t pay the tax and it’s just as though there never had been a criminal law or the sanction of registration or paying the tax.

    It’s just as though they’re just a special excise tax on gambling accompanied by-law which says that if you don’t pay your tax, you can have your winnings forfeited, and you must then say that the — that the forfeiture proceeding itself to standout to criminal proceeding.

    Anna R. Lavin:

    I think its quasi criminal.

    Byron R. White:

    And that, you must have picked on that?

    Anna R. Lavin:

    Yes.

    William O. Douglas:

    That gets you back to the Boyd case.

    Anna R. Lavin:

    Yes, sir.

    Earl Warren:

    Thank you Ms. Lavin.