Federal Evidence Review

By enacting the Civil Asset Forfeiture Reform Act, 31 U.S.C. § 5332 (CAFRA), "Congress intended to end the practice of reliance on hearsay in civil forfeiture decisions” so that absent an exception to the hearsay rule, when deciding the merits of a civil forfeiture proceeding under CAFRA, hearsay testimony is not admissible as summary judgment evidence, in United States v. $92,203.00 in U.S. Currency, 537 F.3d 504, 510 (5th Cir. 2008) (No. 06-51033)

In 2000, Congress amended the Civil Asset Forfeiture Reform Act (CAFRA) to require the Government show by a preponderance of the evidence that property is subject to forfeiture. As part of this heightened standard of proof, the Government cannot use inadmissible or improper evidence in civil forfeiture proceedings. Rather, the scheme in forfeiture under the CAFRA is to treat civil forfeiture cases like all other civil litigation. Most prominently this means establishing forfeiture by a preponderance of admissible evidence and that evidence used in civil forfeiture proceedings must conform to the FRE. As explained the the Fifth Circuit in 2008, this imposed requirements in CAFRA civil forfeiture actions that "any affidavits submitted by the parties must be based on personal knowledge," and not inadmissible hearsay, even in a summary proceeding.

In the case, Defendant Garcia-Baeza was convicted of violating 31 U.S.C. § 5332, making it a crime to knowingly conceal more than $10,000.00 in cash in order to evade the federal currency reporting requirements (commonly known as “structuring”). The conviction was quickly followed by the government seeking the civil forfeiture of the $92,203.00. This was the unreported cash found on the defendant when he was arrested. The Government forfeiture action was based predominantly on an affidavit from Immigration and Customs Enforcement (ICE) agent Pena. The affidavit set forth “information ... either gathered in the course of my official duties or I know this information of my own personal knowledge.” The government sought, and the trial court, granted summary judgment based solely on Agent Pena’s affidavit. The defendant appealed, contending that the court impermissibly considered hearsay evidence in granting summary judgment. $92,203.00 in U.S. Currency, 537 F.3d at 506-08.

The circuit reversed and remanded. It noted that under the amended Civil Asset Forfeiture Reform Act (CAFRA), any evidence not admissible under the FRE, such as hearsay, was not permitted in deciding the merits of a civil forfeiture case. In interpreting the words of the amended act, the circuit concluded that “clearly … by enacting CAFRA, Congress intended to end the practice of reliance on hearsay in civil forfeiture decisions.” As a result of this the foundation for the trial court’s grant of summary judgment was undermined.

The circuit noted that the agent’s “affidavit was clearly not based on personal knowledge but instead was comprised primarily of hearsay statements. Indeed, it is undisputed that Agent Pena was not present when Garcia was initially pulled over … so any information regarding those events could have been obtained only through hearsay.” $92,203.00 in U.S. Currency, 537 F.3d at 508. The circuit rejected the government’s contention that the defendant’s statement to the officers who stopped him was an admission:

That assertion, however, is incorrect. While Garcia's admissions might not be hearsay, see Fed. R. Evid. 801(d)(2) (admission of a party-opponent is not hearsay), the law enforcement officers' statements to Agent Pena about Garcia's admissions are hearsay, see Fed. R. Evid. 805 (hearsay within hearsay is inadmissible unless both parts are shown to be admissible). Therefore, the affidavit clearly contained hearsay, was not based on personal knowledge, and, under normal summary judgment procedures, is not admissible. See Bolen v. Dengel, 340 F.3d 300, 313 (5th Cir. 2003); see also Fed. R. Civ. P. 56(e)(1) (requiring that affidavits be made on personal knowledge).

$92,203.00 in U.S. Currency, 537 F.3d at 508.

As the Government's only evidence for a summary judgment on the civil forfeiture claim was hearsay, and not admissible under the FRE, the Circuit reversed the grant of summary judgment. It remanded the case for further proceedings. The circuit noted that other authority exists that hearsay evidence may be considered in forfeiture proceedings, as an extension of the sentencing process. See, e.g., United States v. $129,727.00 U.S. Currency, 129 F.3d 486, 494 (9th Cir. 1997) (noting “this circuit’s settled rule allows hearsay evidence to be used to show probable cause for civil forfeiture”); see generally Libretti v. United States, 516 U.S. 29, 38-41 (1995) (forfeiture is part of the sentencing process).

But the standard had changed in 2000 with CAFRA altering "the procedures by which the Government could obtain a civil forfeiture." The Fifth Circuit explicitly noted that it was not considering forfeiture as part of the sentencing process:

“In response to Garcia’s motion to strike Agent Pena’s affidavit, the Government included two pages of the transcript from Garcia’s sentencing in his criminal case in which the district judge found by a preponderance of the evidence that Garcia was responsible for all $92,203.00 in the vehicle. However, this evidence was submitted after summary judgment briefing was complete, and a moving party is typically not permitted to submit new evidence after its initial brief unless the nonmoving party has an opportunity to respond. Garcia had no such opportunity to respond; therefore, we do not consider this evidence.”

$92,203.00 in U.S. Currency, 537 F.3d at 507 n.1.