Caplin & Drysdale, Chartered v. United States

Background

A law firm represented Christopher Reckmeyer, who was indicted for running a large drug enterprise. After indictment a court froze assets the Government said were forfeitable under the federal forfeiture law. Reckmeyer paid the firm $25,000 into escrow and later pleaded guilty and agreed to forfeit most listed assets. The firm then asked the sentencing court for a share of the assets and argued either that the statute exempts attorney fees or that applying the statute to fees is unconstitutional. Lower courts split; the Fourth Circuit en banc rejected the firm’s claim, and the firm appealed to this Court.

Reasoning

The Court first found the statute contains no exemption for assets used to pay defense counsel. It then rejected constitutional challenges under the Sixth Amendment (right to chosen counsel) and the Fifth Amendment (due process). The Court explained that Congress’s relation-back rule vests title in the United States when the criminal act occurs, that the Government has substantial interests in recovering forfeitable assets (including funding law-enforcement activities through the Assets Forfeiture Fund), and that defendants have no right to spend another person’s money or to use property the Government may rightfully claim.

Real world impact

The decision means funds in a defendant’s possession that are forfeitable can be recovered by the Government even if they were paid to an attorney. Defendants in major drug and organized-crime cases may therefore find it harder to use seized assets to hire private counsel; private lawyers face the risk that fees might be subject to forfeiture. The ruling affirms the statute’s ordinary operation rather than creating a fee exemption.

Dissents or concurrances

Justice Blackmun dissented, arguing the statute could be read to avoid stripping defendants of their ability to retain private counsel and warning that fee forfeiture threatens the independence and survival of the private criminal defense bar.