Consolidation of Seizure and Forfeiture Regulations under CAFRA – DEA Proposed Rulemaking

By John A. Gilbert & Karla L. Palmer –

On May 9, 2011, the Drug Enforcement Administration ("DEA") published a proposed rulemaking addressing the “Consolidation of Seizure and Forfeiture Regulations” to conform with the Civil Asset Forfeiture Reform Act ("CAFRA") of 2000.  When finalized, the rule will consolidate regulations within the Department of Justice governing the seizure and administrative forfeiture of property by the Bureau of Alcohol, Tobacco, Firearms and Explosives ("ATF"), the DEA, and Federal Bureau of Investigation ("FBI").  The rule also will update existing regulations so that they are consistent with other authority and current forfeiture practices.  Of particular note, by consolidating the forfeiture regulations, the proposed rule replaces the current DEA forfeiture regulations at 21 C.F.R. Part 1316, subparts E and F, and amends 28 C.F.R. Part 8 (formerly covering FBI forfeiture authority) to consolidate under one regulation the seizure and forfeiture procedures for these three DOJ agencies.

Under the proposed rule, consistent with CAFRA’s statutory requirements, the government must send administrative forfeiture notices within 60 days of seizure (or 90 days of state or local seizures that are adopted by the federal government).  If the agency fails to act, the agency must release property pending compliance with further procedures unless the agency official receives a limited, single 30-day extension.  The notice of administrative forfeiture must set forth the specific deadline for the forfeiture proceedings, which proceedings must be at least 35 days from the mailing of the personal notice and must occur by the date specifically set forth in that notice.  Proposed § 8.9 describes the requirements for both notice by publication (now including internet publication) and personal notice.  In order to contest a forfeiture, interested individuals must file a claim under oath, in no particular form, including a statement of the claimant’s interest in the property. 

The claimant is not required to post a bond, contrary to the past DEA forfeiture regulation.  Once the agency receives a claim, the agency must either return the property or suspend the administrative forfeiture proceeding and transmit the claim to the U.S. Attorney for the commencement of judicial proceedings.  The proposed regulations note that a pending administrative proceeding does not bar the government from seeking forfeiture of the same property in a criminal case.  If the government commences a timely administrative forfeiture proceeding, yet receives no claim concerning the seized property, then the appropriate administrative official can declare the property forfeited.  Id. (proposed) § 8.12.  The deadline for filing a claim is 35 days after receipt of personal notice from the seizing agency.  If the government does not file a complaint to commence forfeiture proceedings within 90 days after seizure, it must return the property.  The claimant has 30 days after service to file a claim, and 20 days after filing a claim to file an answer. 

Of particular note, proposed § 8.14 adds a provision allowing for the pre-forfeiture disposition of seized property when that property is likely to perish, waste, be greatly diminished in value, or when the expense of holding the property is disproportionate to its value.  Although no bond is required to file a claim, a property owner may post a “substitute monetary amount” equal to the value of the seized property, and upon approval of the appropriate official, the property will be released — if the property is not needed as evidence of a violation of law, contraband, and has no “characteristics that particularly suit it for use in illegal activities.”  Id. § 8.14.   

A claimant may be entitled to immediate release of property in instances of hardship pending the completion of forfeiture proceedings, without the need to post any monetary amount.  The grounds for hardship are set forth in proposed § 8.15, and include the following: (1) the claimant has a possessory interest in the property; (2) the claimant has sufficient ties to the community to provide assurance that the property will be available at the time of trial; (3) possession by the government pending final disposition of forfeiture proceedings would cause substantial hardship to the claimant, such as preventing ongoing business, preventing an individual from working or leaving an individual homeless; (4) the hardship outweighs the risk that the property will be damaged or destroyed pending completion of proceedings; and (5) the seized property is not contraband, intended to be used on violation of the law, or particularly suited for use in criminal activities.  The proposed § 8.16 affirms that the government is not liable for attorneys’ fees in administrative forfeiture proceedings, regardless of outcome. 

Subpart B of proposed § 8.17 addresses expedited forfeiture proceedings for property seizures based on violations involving possession of personal use quantities of a controlled substance.  These newly-numbered regulations are in part the same as the regulations that were previously set forth at 21 C.F.R. Part 1316, subpart  F, but for one omission:  The new regulations eliminate the provisions applicable to expedited drug-related conveyance seizures because the underlying statute (CAFRA) provides no statutory basis for such regulations.  Thus, the provisions of former 21 C.F.R. Part 1316 subpart F that will remain in proposed § 8.17 deal with property seized for administrative forfeiture involving controlled substances in personal use quantities, including procedures for obtaining expedited release of seized property and the posting of a bond for that expedited release pending further proceedings.

Part 9 of the proposed rule deals with remission or mitigation of administrative, civil and criminal forfeitures.  The proposed regulation states that the purpose of the regulation is to provide a basis for partial or total remission of forfeiture for those who have an interest in the forfeited property, but did not have knowledge of, and took no part in, the conduct that caused the forfeiture.  Remission and mitigation functions that fall within the jurisdiction of the DEA will now be delegated to the DEA Forfeiture Counsel; the proposed regulations now contain far more detail about filing a petition for remission than the current DEA regulations.  

Public comments must be submitted on or before July 8, 2011.