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NOTICE: This opinion is subject to formal revision before publication in
the preliminary print of the United States Reports. Readers are
requested to notify the Reporter of Decisions, Supreme Court of the
United States, Washington, D.C. 20543, of any typographical or other
formal errors, in order that corrections may be made before the
preliminary print goes to press.
SUPREME COURT OF THE UNITED STATES
--------
No. 91-781
--------
UNITED STATES, PETITIONER v. A PARCEL OF ____
LAND, BUILDINGS, APPURTENANCES AND IM-
PROVEMENTS, KNOWN AS 92 BUENA VISTA
AVENUE, RUMSON, NEW JERSEY, ET AL.
ON WRIT OF CERTIORARI TO THE UNITED
STATES COURT OF APPEALS FOR THE THIRD
CIRCUIT
[February 24, 1993]
JUSTICE STEVENS announced the judgment of the Court and delivered an opinion,
in which JUSTICE BLACKMUN, JUSTICE O'CONNOR, and JUSTICE SOUTER join.
The question presented is whether an owner's lack of knowledge of the fact
that her home had been purchased with the proceeds of illegal drug transactions
constitutes a defense to a forfeiture proceeding under The Comprehensive Drug
Abuse Prevention and Control Act of 1970, S511(a), 84 Stat. 1276, as amended, 21
U. S. C. S881(a)(6). (Ftnote. 1) (Ftnote. 1)
____________________
1) The statute provides: 1)
"The following shall be subject to forfeiture to the United States and no
property right shall exist in them:
. . . . .
"(6) All moneys, negotiable instruments, securities, or other things of
value furnished or intended to be furnished by any person in exchange for a
controlled substance in violation of [21 U. S. C. SS801-904], all proceeds
traceable to such an exchange, and all moneys, negotiable instruments, and
securities used or intended to be used to facilitate any violation of this
subchapter, except that no property shall be forfeited under this paragraph, to
the extent of the interest of an owner, by reason of any act or omission
established by that owner to have been committed or omitted without the
knowledge or consent of that owner." 91-781 - OPINION
2 UNITED STATES v. 92 BUENA VISTA AVE., RUMSON ____
I
On April 3, 1989, the Government filed an in rem action against the parcel of ______
land in Rumson, New Jersey, on which respondent's home is located. The verified
complaint alleged that the property had been purchased in 1982 by respondent
with funds provided by Joseph Brenna that were "the proceeds traceable to an
[unlawful] exchange for a controlled substance," App. 13, and that the property
was therefore subject to seizure and forfeiture under S881(a)(6). Id., at ____
15. (Ftnote. 2) (Ftnote. 2)
On April 12, 1989, in an ex parte proceeding, the District Court determined ________
that there was probable cause to believe the premises were subject to
forfeiture, and issued a summons and warrant for arrest authorizing the United
States Marshal to take possession of the premises. Respondent thereafter
asserted a claim to the property, was granted the right to defend the
action, (Ftnote. 3) and filed a (Ftnote. 3)
____________________
2) See n. 1, supra. The complaint also alleged that the property had been 2) _____
used in 1986 to facilitate the distribution of proceeds of an illegal drug
transaction, and was therefore subject to forfeiture pursuant to S881(a)(7),
which provides:
"The following shall be subject to forfeiture to the United States and no
property right shall exist in them:
. . . . .
"(7) All real property, including any right, title, and interest (including
any leasehold interest) in the whole of any lot or tract of land and any
appurtenances or improvements, which is used, or intended to be used, in any
manner or part, to commit, or to facilitate the commission of, a violation of
this subchapter punishable by more than one year's imprisonment, except that no
property shall be forfeited under this paragraph, to the extent of an interest
of an owner, by reason of any act or omission established by that owner to have
been committed or omitted without the knowledge or consent of that owner."
No issue concerning the Government's claim under subparagraph (7) is presented
before us.
3) The United States Marshals Service entered into an agreement with 3)
respondent that allows her to remain in possession of the property pending the
outcome of the litigation. 91-781 - OPINION
UNITED STATES v. 92 BUENA VISTA AVE., RUMSON 3 ____
motion for summary judgment.
During pretrial proceedings, the following facts were established. In 1982,
Joseph Brenna gave respondent approximately $240,000 to purchase the home that
she and her three children have occupied ever since. Respondent is the sole
owner of the property. From 1981 until their separation in 1987, she maintained
an intimate personal relationship with Brenna. There is probable cause to
believe that the funds used to buy the house were proceeds of illegal drug
trafficking, but respondent swears that she had no knowledge of its origins.
Among the grounds advanced in support of her motion for summary judgment was
the claim that she was an "innocent owner" within the meaning of S881(a)(6).
The District Court rejected this defense for two reasons: First it ruled that
"the innocent owner defense may only be invoked by those who can demonstrate
that they are bona fide purchasers for value" (emphasis in ____________________
original). (Ftnote. 4) Second, the court read the statute to offer the innocent (Ftnote. 4)
owner defense only to persons who acquired an interest in the property before
the acts giving rise to the forfeiture took place. (Ftnote. 5) (Ftnote. 5)
____________________
4) "I find that the claimant cannot successfully invoke the `innocent 4)
owner' defense here, because she admits that she received the proceeds to
purchase the premises as a gift from Mr. Brenna. More particularly, I find that ____
where, as here, the government has demonstrated probable cause to believe that
property is traceable to proceeds from drug transactions, the innocent owner
defense may only be invoked by those who can demonstrate that they are bona fide
purchasers for value." 738 F. Supp. 854, 860 (NJ 1990). ____________________
5) "In particular, the `innocent owner defense' at issue provides that `no 5)
property shall be forfeited . . . to the extent of the interest of an owner, by ________
reason of any act or omission . . . committed or omitted without the knowledge
or consent of that owner.' 21 U. S. C. S881(a)(6) (emphasis supplied). This __________
language implies that the acts or omissions giving rise to forfeiture must be
committed after the third party acquires a legitimate ownership interest in the _____
property." Ibid. (Emphasis in original.) _____ 91-781 - OPINION
4 UNITED STATES v. 92 BUENA VISTA AVE., RUMSON ____
Respondent was allowed to take an interlocutory appeal pursuant to 28 U. S. C.
S1292(b). One of the controlling questions of law presented to the Court of
Appeals was:
"Whether an innocent owner defense may be asserted by a person who is not a
bona fide purchaser for value concerning a parcel of land where the govern-
ment has established probable cause to believe that the parcel of land was
purchased with monies traceable to drug proceeds." 742 F. Supp. 189, 192 (NJ
1990).
Answering that question in the affirmative, the Court of Appeals remanded the
case to the District Court to determine whether respondent was, in fact, an
innocent owner. The Court of Appeals refused to limit the innocent owner
defense to bona fide purchasers for value because the plain language of the
statute contains no such limitation, (Ftnote. 6) because it read the legislative (Ftnote. 6)
history as indicating that the term "owner" should be broadly
construed, (Ftnote. 7) and because the difference between the text of S881(a)(6) (Ftnote. 7)
and the text of the criminal forfeiture statute evidenced congressional intent
not to restrict the civil section in the same way. (Ftnote. 8) (Ftnote. 8)
____________________
6) "Despite the appeal of this analysis, the plain language of the innocent 6)
owner provision speaks only in terms of an `owner' and in no way limits the term
`owner' to a bona fide purchaser for value." 937 F. 2d 98, 101 (CA3 1991).
7) "Furthermore, in United States v. Parcel of Real Property Known as 6109 7) _____________ ______________________________________
Grubb Road, 886 F. 2d 618 (3d Cir. 1989), we determined, after reviewing the__________
legislative history of section 881(a)(6), that `the term "owner" should be
broadly interpreted to include any person with a recognizable legal or equitable
interest in the property seized.' Id. at 625 n. 4 (quoting 1978 U. S. Code ___
Cong. & Admin. News at 9522-23)." Id., at 101-102. ____
8) "Moreover, as the district court pointed out, the criminal forfeiture 8)
statute, section 853, is explicitly limited to bona fide purchasers for value,
while in section 881 Congress omitted such limiting language. We believe that
such a difference was intended by Congress." Ibid. ____ 91-781 - OPINION
UNITED STATES v. 92 BUENA VISTA AVE., RUMSON 5 ____
The Court of Appeals also rejected the argument that respondent could not be
an innocent owner unless she acquired the property before the drug transaction
occurred. In advancing that argument the Government had relied on the "relation
back" doctrine embodied in S881(h), which provides that "[a]ll right, title and
interest in property described in subsection (a) of this section shall vest in
the United States upon commission of the act giving rise to forfeiture under
this section." The court held that the relation back doctrine applied only to
"property described in subsection (a)" and that the property at issue would not
fit that description if respondent could establish her innocent owner defense.
The court concluded that the Government's interpretation of S881(h) "would
essentially serve to emasculate the innocent owner defense provided for in
section 881(a)(6). No one obtaining property after the occurrence of the drug
transaction - -including a bona fide purchaser for value - -would be eligible to
offer an innocent owner defense on his behalf." 937 F. 2d 98, 102 (CA3 1991) at
9a.
The conflict between the decision of the Court of Appeals and decisions of the
Fourth and Tenth Circuits, see In re One 1985 Nissan, 889 F. 2d 1317 (CA4 1989); _______________________
Eggleston v. Colorado, 873 F. 2d 242, 245-248 (CA10 1989), led us to grant_________ ________
certiorari, 503 U. S. ___ (1992). We now affirm.
II
Laws providing for the official seizure and forfeiture of tangible property
used in criminal activity have played an important role in the history of our
country. Colonial courts regularly exercised jurisdiction to enforce English
and local statutes authorizing the seizure of ships and goods used in violation
of customs and revenue laws. (Ftnote. 9) (Ftnote. 9)
____________________
9) "Long before the adoption of the Constitution the common law courts in 9)
the Colonies - -and later in the states during the period of Confederation - -
were exercising jurisdiction in rem in the enforcement of forfeiture statutes. _______
Like the Exchequer, in cases of seizure on navigable waters they exercised a
jurisdiction concurrently with the courts of admiralty. But the vice-admiralty
courts in the Colonies did not begin to function with any real continuity until
about 1700 or shortly afterward. See Andrews, Vice-Admiralty Courts in the
Colonies, in Records of the Vice-Admiralty Court of Rhode Island, 1617-1752 (ed.
Towle, 1936), p. 1; Andrews, The Colonial Period of American History, vol. 4,
ch. 8; Harper, The English Navigation Laws, ch. 15; Osgood, the American
Colonies in the 18th Century, vol. 1, pp. 185-222, 299-303. By that time, the
jurisdiction of common law courts to condemn ships and cargoes for violation of
the Navigation Acts had been firmly established, apparently without question,
and was regularly exercised throughout the colonies. In general the suits were
brought against the vessel or article to be condemned, were tried by jury,
closely followed the procedure in Exchequer, and if successful resulted in
judgments of forfeiture or condemnation with a provision for sale." C. J. _____
Hendry Co. v. Moore, 318 U. S. 133, 139-140 (1943) (footnotes omitted). __________ _____ 91-781 - OPINION
6 UNITED STATES v. 92 BUENA VISTA AVE., RUMSON ____
Indeed, the misuse of the hated general warrant is often cited as an important
cause of the American Revolution. (Ftnote. 10) (Ftnote. 10)
The First Congress enacted legislation authorizing the
____________________
10) Writing for the Court in Stanford v. Texas, 379 U. S. 476, 481-482 10) ________ _____
(1965). Justice Stewart explained: "Vivid in the memory of the newly indepen-
dent Americans were those general warrants known as writs of assistance under
which officers of the Crown had so bedeviled the colonists. The hated writs of
assistance had given customs officials blanket authority to search where they
pleased for goods imported in violation of the British tax laws. They were
denounced by James Otis as `the worst instrument of arbitrary power, the most
destructive of English liberty, and the fundamental principles of law, that ever
was found in an English law book,' because they placed `the liberty of every man
in the hands of every petty officer.' The historic occasion of that
denunciation, in 1761 at Boston, has been characterized as `perhaps the most
prominent event which inaugurated the resistance of the colonies to the
oppressions of the mother country. "Then and there," said John Adams, "then and
there was the first scene of the first act of opposition to the arbitrary claims
of Great Britain. Then and there the child Independence was born."' Boyd v. ____
United States, 116 U. S. 616, 625." _____________ 91-781 - OPINION
UNITED STATES v. 92 BUENA VISTA AVE., RUMSON 7 ____
seizure and forfeiture of ships and cargos involved in customs
offenses. (Ftnote. 11) Other statutes authorized the seizure of ships engaged (Ftnote. 11)
in piracy. (Ftnote. 12) When a ship was engaged in acts of "piratical (Ftnote. 12)
aggression," it was subject to confiscation notwithstanding the innocence of the
owner of the vessel. (Ftnote. 13) Later statutes involved the seizure and (Ftnote. 13)
forfeiture of distilleries and other property used to defraud the United States
of tax revenues from the sale of alcoholic beverages. See, e.g., United States ____ _ _____________
v. Stowell, 133 U. S. 1, 11-12 (1890). In these cases, as in the piracy cases, _______
the innocence of the owner of premises leased to a distill-
____________________
11) See e.g., SS12, 36, 1 Stat. 39, 47; SS13, 14, 22, 27, 67, 1 Stat. 11) ____ _
157-159, 161, 163-164, 176.
12) See The Palmyra, 12 Wheat. 1, 8 (1827). 12) ___________
13) "The next question is, whether the innocence of the owners can withdraw 13)
the ship from the penalty of confiscation under the act of Congress. Here,
again, it may be remarked that the act makes no exception whatsoever, whether
the aggression be with or without the co-operation of the owners. The vessel
which commits the aggression is treated as the offender, as the guilty
instrument or thing to which the forfeiture attaches, without any reference
whatsoever to the character or conduct of the owner. The vessel or boat (says
the act of Congress) from which such piratical aggression, &c., shall have been
first attempted or made shall be condemned. Nor is there any thing new in a
provision of this sort. It is not an uncommon course in the admiralty, acting
under the law of nations, to treat the vessel in which or by which, or by the
master or crew thereof, a wrong or offense has been done as the offender,
without any regard whatsoever to the personal misconduct or responsibility of
the owner thereof. And this is done from the necessity of the case, as the only
adequate means of suppressing the offense or wrong, or insuring an indemnity to
the injured party. The doctrine also is familiarly applied to cases of
smuggling and other misconduct under our revenue laws; and has been applied to
other kindred cases, such as cases arising on embargo and non-intercourse acts.
In short, the acts of the master and crew, in cases of this sort, bind the
interest of the owner of the ship, whether he be innocent or guilty; and he
impliedly submits to whatever the law denounces as a forfeiture attached to the
ship by reason of their unlawful or wanton wrongs." United States v. Brig Malek _____________ __________
Adhel, 2 How. 210, 233-234 (1844). ______ 91-781 - OPINION
8 UNITED STATES v. 92 BUENA VISTA AVE., RUMSON ____
er would not defeat a decree of condemnation based on the fraudulent conduct of
the lessee. (Ftnote. 14) (Ftnote. 14)
In all of these early cases the Government's right to take possession of
property stemmed from the misuse of the property itself. Indeed, until our
decision in Warden v. Hayden, 387 U. S. 294 (1967), the Government had power to ________________
seize only property that "`the private citizen was not permitted to
possess.'" (Ftnote. 15) The holding in that case (Ftnote. 15)
____________________
14) "Beyond controversy, the title of the premises and property was in the 14)
claimant; and it is equally certain that he leased the same to the lessee for
the purposes of a distillery, and with the knowledge that the lessee intended to
use the premises to carry on that business, and that he did use the same for
that purpose.
"Fraud is not imputed to the owner of the premises; but the evidence and the
verdict of the jury warrant the conclusion that the frauds charged in the
information were satisfactorily proved, from which it follows that the decree of
condemnation is correct, if it be true, as heretofore explained, that it was the
property and not the claimant that was put to trial under the pleadings; and we
are also of the opinion that the theory adopted by the court below, that, if the
lessee of the premises and the operator of the distillery committed the alleged
frauds, the government was entitled to a verdict, even though the jury were of
the opinion that the claimant was ignorant of the fraudulent acts or omissions
of the distiller." Dobbins's Distillery v. United States, 96 U. S. 395, 403-404 ____________________ _____________
(1878).
15) "Thus stolen property - -the fruits of crime - -was always subject to 15)
seizure. And the power to search for stolen property was gradually extended to
cover `any property which the private citizen was not permitted to possess,'
which included instrumentalities of crime (because of the early notion that
items used in crime were forfeited to the State) and contraband. Kaplan, Search
and Seizure: A No-Man's Land in the Criminal Law, 49 Calif. L. Rev. 474, 475.
No separate governmental interest in seizing evidence to apprehend and convict
criminals was recognized; it was required that some property interest be
asserted. The remedial structure also reflected these dual premises. Trespass,
replevin, and the other means of redress for persons aggrieved by searches and
seizures, depended upon proof of a superior property interest. And since a
lawful seizure presupposed a superior claim, it was inconceivable that a person
could recover property lawfully seized." Warden v. Hayden, 387 U. S. 294, ______ ______
303-304 (1967). 91-781 - OPINION
UNITED STATES v. 92 BUENA VISTA AVE., RUMSON 9 ____
that the Fourth Amendment did not prohibit the seizure of "mere evidence" marked
an important expansion of governmental power. See Zurcher v. Stanford Daily, _________________________
436 U. S. 547, 577-580 (1978) (STEVENS, J., dissenting).
The decision by Congress in 1978 to amend the Comprehensive Drug Abuse
Prevention and Control Act of 1970, 84 Stat. 1236, to authorize the seizure and
forfeiture of proceeds of illegal drug transactions, see 92 Stat. 3777, also
marked an important expansion of governmental power. (Ftnote. 16) Before that (Ftnote. 16)
amendment, the statute had authorized forfeiture of only the illegal substances
themselves and the instruments by which they were manufactured and
distributed. (Ftnote. 17) The original forfeiture provisions of (Ftnote. 17)
____________________
16) A precedent for this expansion had been established in 1970 by the 16)
Racketeer Influenced and Corrupt Organizations Act (RICO), see 18 U. S. C.
S1963(a). Even RICO, however, did not specifically provide for the forfeiture
of "proceeds" until 1984, when Congress added S1963(a)(3) to resolve any doubt
whether it intended the statute to reach so far. See S. Rep. No. 98-225,
pp. 191-200 (1983); Russello v. United States, 464 U. S. 16 (1983). ________ _____________
17) Section 511(a) of the 1970 Act, 84 Stat. 1276, provided: 17)
"The following shall be subject to forfeiture to the United States and no
property right shall exist in them:
"(1) All controlled substances which have been manufactured, distributed,
dispensed, or acquired in violation of this title.
"(2) All raw materials, products, and equipment of any kind which are used,
or intended for use, in manufacturing, compounding, processing, delivering,
importing, or exporting any controlled substance in violation of this title.
"(3) All property which is used, or intended for use, as a container for
property described in paragraph (1) or (2).
"(4) All conveyances, including aircraft, vehicles, or vessels, which are
used, or are intended for use, to transport, or in any manner to facilitate the
transportation, sale, receipt, possession, or concealment of property described
in paragraph (1) or (2), except that - -
"(A) no conveyance used by any person as a common carrier in the transaction
of business as a common carrier shall be forfeited under the provisions of this
section unless it shall appear that the owner or other person in charge of such
conveyance was a consenting party or privy to a violation of this title or title
III; and
"(B) no conveyance shall be forfeited under the provisions of this section by
reason of any act or omission established by the owner thereof to have been
committed or omitted by any person other than such owner while such conveyance
was unlawfully in the possession of a person other than the owner in violation
of the criminal laws of the United States, or of any State.
"(5) All books, records, and research, including formulas, microfilm, tapes,
and data which are used, or intended for use, in violation of this title." 91-781 - OPINION
10 UNITED STATES v. 92 BUENA VISTA AVE., RUMSON ____
the 1970 statute had closely paralleled the early statutes used to enforce the
customs laws, the piracy laws, and the revenue laws: They generally authorized
the forfeiture of property used in the commission of criminal activity, and they
contained no innocent owner defense. They applied to stolen goods, but they did
not apply to proceeds from the sale of stolen goods. Because the statute, after
its 1978 amendment, does authorize the forfeiture of such proceeds and also
contains an express and novel protection for innocent owners, we approach the
task of construing it with caution.
III
The Court of Appeals correctly concluded that the protection afforded to
innocent owners is not limited to bona fide purchasers. The text of the statute
is the strongest support for this conclusion. The statute authorizes the
forfeiture of moneys exchanged for a controlled substance, and "all proceeds
traceable to such an exchange," with one unequivocal exception:
"[N]o property shall be forfeited under this paragraph, to the extent of the
interest of an owner, by reason of any act or omission established by that
owner to have been committed or omitted without the knowledge or consent of
that owner." 21 U. S. C. S881(a)(6). 91-781 - OPINION
UNITED STATES v. 92 BUENA VISTA AVE., RUMSON 11 ____
The term "owner" is used three times and each time it is unqualified. Such
language is sufficiently unambiguous to foreclose any contention that it applies
only to bona fide purchasers. Presumably that explains why the Government does
not now challenge this aspect of the Court of Appeals' ruling.
That the funds respondent used to purchase her home were a gift does not,
therefore, disqualify respondent from claiming that she is an owner who had no
knowledge of the alleged fact that those funds were "proceeds traceable" to
illegal sales of controlled substances. Under the terms of the statute, her
status would be precisely the same if, instead of having received a gift of
$240,000 from Brenna, she had sold him a house for that price and used the
proceeds to buy the property at issue.
IV
Although the Government does not challenge our interpretation of the statutory
term "owner", it insists that respondent is not the "owner" of a house she
bought in 1982 and has lived in ever since. Indeed, it contends that she never
has been the owner of this parcel of land because the statute vested ownership
in the United States at the moment when the proceeds of an illegal drug
transaction were used to pay the purchase price. In support of its position,
the Government relies on both the text of the 1984 amendment to the statute and
the common-law relation back doctrine. We conclude, however, that neither the
amendment nor the common-law rule makes the Government an owner of property
before forfeiture has been decreed.
In analyzing the Government's relation back argument, it is important to
remember that respondent invokes the innocent owner defense against a claim that
proceeds traceable to an illegal transaction are forfeitable. The Government________
contends that the money that Brenna received in exchange for narcotics became
Government 91-781 - OPINION
12 UNITED STATES v. 92 BUENA VISTA AVE., RUMSON ____
property at the moment Brenna received it and that respondent's house became
Government property when that tainted money was used in its purchase. Because
neither the money nor the house could have constituted forfeitable proceeds
until after an illegal transaction occurred, the Government's submission would
effectively eliminate the innocent owner defense in almost every imaginable case
in which proceeds could be forfeited. It seems unlikely that Congress would
create a meaningless defense. Moreover, considering that a logical application
of the Government's submission would result in the forfeiture of property
innocently acquired by persons who had been paid with illegal proceeds for
providing goods or services to drug traffickers, (Ftnote. 18) the burden of (Ftnote. 18)
persuading us that Congress intended such an inequitable result is especially
heavy.
The Government recognizes that the 1984 amendment did not go into effect until
two years after respondent acquired the property at issue in this case. It
therefore relies heavily on the common-law relation back doctrine applied to in __
rem forfeitures. That doctrine applied the fiction that property used in___
violation of law was itself the wrongdoer that must be held to account for the
harms it had caused. (Ftnote. 19) Because the property, or "res", was treated (Ftnote. 19)
as the wrongdoer, it was appropriate to regard it as the actual party to the in __
rem forfeiture proceeding. Under the relation back doctrine, a decree of___
forfeiture had the effect of vesting title to the offending res in the Govern-
____________________
18) At oral argument the Government suggested that a narrow interpretation 18)
of the word "proceeds" would "probably" prevent this absurdity, see Tr. of Oral
Arg. 27. The Government's brief, however, took the unequivocal position that
the statute withholds the innocent owner defense from anyone who acquires
proceeds after the illegal transaction took place. See Brief for United States
10, 21, 25, 27.
19) See Calero-Toledo v. Pearson Yacht Leasing Co., 416 U. S. 663, 680-684 19) _____________ __________________________
(1974). 91-781 - OPINION
UNITED STATES v. 92 BUENA VISTA AVE., RUMSON 13 ____
ment as of the date of its offending conduct. Because we are not aware of any
common-law precedent for treating proceeds traceable to an unlawful exchange as
a fictional wrongdoer subject to forfeiture, it is not entirely clear that the
common-law relation back doctrine is applicable. Assuming that the doctrine
does apply, however, it is nevertheless clear that under the common-law rule the
fictional and retroactive vesting was not self-executing.
Chief Justice Marshall explained that forfeiture does not automatically vest
title to property in the Government:
"It has been proved, that in all forfeitures accruing at common law,
nothing vests in the government until some legal step shall be taken for the
assertion of its right, after which, for many purposes, the doctrine of
relation carries back the title to the commission of the offence." United ______
States v. Grundy, 3 Cranch 337, 350-351 (1806). (Ftnote. 20) (Ftnote. 20) ______ _______
____________________
20) In his dissent, JUSTICE KENNEDY advocates the adoption of a new common 20)
law rule that would avoid the need to construe the terms of the statute that
created the Government's right to forfeit proceeds of drug transactions. Under
his suggested self-executing rule, patterned after an amalgam of the law of
trusts and the law of secured transactions, the Government would be treated as
the owner of a secured or beneficial interest in forfeitable proceeds even
before a decree of forfeiture is entered. The various authorities that he cites
support the proposition that if such an interest exists, it may be extinguished __
by a sale to a bona fide purchaser; they provide no support for the assumption
that such an interest springs into existence independently. As a matter of
common law, his proposal is inconsistent with Chief Justice Marshall's statement
that "nothing vests in the government until some legal step shall be taken," and
with the cases cited by JUSTICE SCALIA, post, at 2. As a matter of statutory ____
law, it is improper to rely on S881(a) as the source of the government's
interest in proceeds without also giving effect to the statutory language
defining the scope of that interest. That a statutory provision contains
"puzzling" language, or seems unwise, is not an appropriate reason for simply
ignoring its text.
JUSTICE KENNEDY'S dramatic suggestion that our construction of the 1984
amendment "rips out," post, at 7, the "centerpiece of the nation's drug ____
enforcement laws," post, at 5, rests on what he characterizes as the "safe" ____
assumption that the innocent owner defense would be available to "an associate"
of a criminal who could "shelter the proceeds from forfeiture, to be reacquired
once he is clear from law enforcement authorities." Post, at 6. As a matter of ____
fact, forfeitable proceeds are much more likely to be possessed by drug dealers
themselves than by transferees sufficiently remote to qualify as innocent
owners; as a matter of law, it is quite clear that neither an "associate" in the
criminal enterprise nor a temporary custodian of drug proceeds would qualify as
an innocent owner; indeed, neither would a sham bona fide purchaser. 91-781 - OPINION
14 UNITED STATES v. 92 BUENA VISTA AVE., RUMSON ____
The same rule applied when a statute (a statute that contained no specific
relation back provision) authorized the forfeiture. In a passage to which the
Government has referred us, (Ftnote. 21) we stated our understanding of how the (Ftnote. 21)
Government's title to forfeited property relates back to the moment of
forfeitability:
"By the settled doctrine of this court, whenever a statute enacts that upon
the commission of a certain act specific property used in or connected with
that act shall be forfeited, the forfeiture takes effect immediately upon the
commission of the act; the right to the property then vests in the United
States, although their title is not perfected until judicial condemnation; _________________________________________________________________
the forfeiture constitutes a statutory transfer of the right to the United
States at the time the offence is committed; and the condemnation, when ____
obtained, relates back to that time, and avoids all intermediate sales and ________
alienations, even to purchasers in good faith." United States v. Stowell, _____________ _______
133 U. S., at 16-17 (emphases added).
If the Government wins a judgment of forfeiture under the common-law rule -
which applied to common-law forfeitures and to forfeitures under statutes
without specific relation back provisions - the vesting of its title in the
property relates back to the moment when the property
____________________
21) See Pet. for Cert. 9-10; Brief for United States 17. 21) 91-781 - OPINION
UNITED STATES v. 92 BUENA VISTA AVE., RUMSON 15 ____
became forfeitable. Until the Government does win such a judgment, however,
someone else owns the property. That person may therefore invoke any defense
available to the owner of the property before the forfeiture is decreed.
In this case a statute allows respondent to prove that she is an innocent
owner. And, as the Chief Justice further explained in Grundy, if a forfeiture ______
is authorized by statute, "the rules of the common law may be dispensed with," 7
U. S., at 351. Congress had the opportunity to dispense with the common-law
doctrine when it enacted S881(h); as we read that subsection, however, Congress
merely codified the common-law rule. Because that rule was never applied to the
forfeiture of proceeds, and because the statute now contains an innocent owner
defense, it may not be immediately clear that they lead to the same result.
The 1984 amendment provides:
"All right, title, and interest in property described in subsection (a) of
this section shall vest in the United States upon commission of the act
giving rise to forfeiture under this section." 21 U. S. C. S881(h).
Because proceeds traceable to illegal drug transactions are a species of
"property described in subsection (a)," the Government argues that this
provision has the effect of preventing such proceeds from becoming the property
of anyone other than the United States. The argument fails.
Although proceeds subject to S881(h) are "described" in the first part of
subsection (a)(6), the last clause of that subsection exempts certain proceeds -
proceeds owned by one unaware of their criminal source - from forfeiture. As
the Senate Report on the 1984 amendment correctly observed, the amendment
applies only to "property which 91-781 - OPINION
16 UNITED STATES v. 92 BUENA VISTA AVE., RUMSON ____
is subject to civil forfeiture under section 881(a)." (Ftnote. 22) Under (Ftnote. 22)
S881(a)(6), the property of one who can satisfy the innocent owner defense is
not subject to civil forfeiture. Because the success of any defense available
under S881(a) will necessarily determine whether S881(h) applies, S881(a)(6)
must allow an assertion of the defense before S881(h) ______
applies. (Ftnote. 23) (Ftnote. 23)
Therefore, when Congress enacted this innocent owner defense, and then
specifically inserted this relation back provision into the statute, it did not
disturb the common-law rights of either owners of forfeitable property or the
____________________
22) The Report provides: 22)
"Section 306 also adds two new subsections at the end of section 881. The
first provides that all right, title, and interest in property which is subject _________________________
to civil forfeiture under section 881(a) vests in the United States upon the_________________________________________
commission of the acts giving rise to the forfeiture." S. Rep. No. 98-225, p.
215 (1983) (emphasis added).
23) The logic of the Government's argument would apparently apply as well to 23)
the innocent owner defense added to the statute in 1988. That amendment
provides, in part:
"[N]o conveyance shall be forfeited under this paragraph to the extent of an
interest of an owner, by reason of any act or omission established by that owner
to have been committed or omitted without the knowledge, consent, or willful
blindness of the owner." S6075(3)(C), 102 Stat. 4324. That amendment
presumably was enacted to protect lessors like the owner whose yacht was
forfeited in a proceeding that led this Court to observe:
"It therefore has been implied that it would be difficult to reject the
constitutional claim of an owner whose property subjected to forfeiture had been
taken from him without his privity or consent. See, id., at 364; Goldsmith- ___ __________
Grant Co. v. United States, 254 U. S., at 512; United States v. One Ford Coupe__________ _____________ _____________ ______________
Automobile, 272 U. S., at 333; Van Oster v. Kansas, 272 U. S., at 467.__________ __________ ______
Similarly, the same might be said of an owner who proved not only that he was
uninvolved in and unaware of the wrongful activity, but also that he had done
all that reasonably could be expected to prevent the proscribed use of his
property; for, in that circumstance, it would be difficult to conclude that
forfeiture served legitimate purposes and was not unduly oppressive. Cf.
Armstrong v. United States, 364 U. S. 40, 49 (1960)." Calero-Toledo v. Pearson_________ _____________ _____________ _______
Yacht Leasing Co., 416 U. S. 663, 689-690 (1974). (footnote omitted). _________________ 91-781 - OPINION
UNITED STATES v. 92 BUENA VISTA AVE., RUMSON 17 ____
Government. The common-law rule had always allowed owners to invoke defenses
made available to them before the Government's title vested, and after title did ______ ___
vest, the common-law rule had always related that title back to the date of the
commission of the act that made the specific property forfeitable. Our decision
denies the Government no benefits of the relation back doctrine. The Government
cannot profit from the common-law doctrine of relation back until it has
obtained a judgment of forfeiture. And it cannot profit from the statutory
version of that doctrine in S881(h) until respondent has had the chance to
invoke and offer evidence to support the innocent owner defense under
S881(a)(6).
V
As a postscript we identify two issues that the parties have addressed, but
that need not be decided.
The Government has argued that the Court of Appeals' construction of the
statute is highly implausible because it would enable a transferee of the
proceeds of an illegal exchange to qualify as an innocent owner if she was
unaware of the illegal transaction when it occurred but learned about it before
she accepted the forfeitable proceeds. Respondent disputes this reading of the
statute and argues that both legislative history and common sense suggest that
the transferee's lack of knowledge must be established as of the time the
proceeds at issue are transferred. (Ftnote. 24) Moreover, whether or not the (Ftnote. 24)
text of the statute is sufficiently ambiguous to justify resort to the
legislative history, equitable doctrines may foreclose the
____________________
24) See Brief for Respondent 31-32, 37-38; Tr. of Oral Arg. 38. The 24)
several amici make the same point, see Brief for American Bankers Association as _____
Amicus Curiae 15; Brief for Federal Home Loan Mortgage Corporation as Amicus_____________ ______
Curiae 11-12; Brief for American Land Title Association et al. as Amici Curiae______ ____________
11-12; Brief for Dade County Tax Collector et al. as Amici Curiae 16-17. ____________ 91-781 - OPINION
18 UNITED STATES v. 92 BUENA VISTA AVE., RUMSON ____
assertion of an innocent owner defense by a party with guilty knowledge of the
tainted character of the property. In all events, we need not resolve this
issue in this case; respondent has assumed the burden of convincing the trier of
fact that she had no knowledge of the alleged source of Brenna's gift in 1982,
when she received it. (Ftnote. 25) In its order denying respondent's motion for (Ftnote. 25)
summary judgment, the District Court assumed that respondent could prove what
she had alleged, as did the Court of Appeals in allowing the interlocutory
appeal from that order. We merely decide, as did both of those courts, whether
her asserted defense was insufficient as a matter of law. (Ftnote. 26) At oral (Ftnote. 26)
argument, the Government also suggested that the statutory reference to "all
proceeds traceable to such an exchange" is subject to a narrowing construction
that might avoid some of the harsh consequences suggested in the various amici _____
briefs expressing concerns about the impact of the statute on real estate
titles. See Tr. of Oral Arg. 5-10, 19-25. If a house were received in exchange
for a quantity of illegal substances and that house were in turn exchanged for
another house, would the traceable proceeds consist of the first house, the
second house, or both, with the Government having an election between the two?
Questions of this character are not embraced within the issues that we granted
certiorari to resolve, however, and for that reason, see Yee v. Escondido, 503 ___ _________
U. S. ___, (1992) (slip op., at 13-16), we express no opinion concerning the
proper construction of that statutory term.
____________________
25) "The statute should be read to require that the owner assert his lack 25)
of knowledge of the criminal transaction at the time of the transfer. Since
Goodwin did not have any knowledge of the alleged criminal transaction until
long after the transfer, she should be protected by the innocent owner clause."
Brief for Respondent 37-38.
26) If she can show that she was unaware of the illegal source of the funds 26)
at the time Brenna transferred them to her, then she was necessarily unaware
that they were the profits of an illegal transaction at the time of the transac-
tion itself. 91-781 - OPINION
UNITED STATES v. 92 BUENA VISTA AVE., RUMSON 19 ____
The judgment of the Court of Appeals is affirmed.
It is so ordered. _________________
