United States District Court, Northern District of Illinois, E.D
August 20, 1964
UNITED STATES OF AMERICA, PLAINTIFF,
ONE 1962 FORD THUNDERBIRD SERIAL NUMBER 2Y83Z124318, DEFENDANT.
The opinion of the court was delivered by: Will, District Judge.
This is a proceeding instituted by a libel seeking forfeiture
of the vehicle-defendant pursuant to the provisions of 49 U.S.C. § 782,
which provides in relevant part as follows:
"Any vessel, vehicle, or aircraft which has been or
is being used in violation of any provision of
section 781 of this title, or in, upon, or by means
of which any violation of said section has taken or
is taking place, shall be seized and forfeited:
Provided, That no vessel, vehicle, or aircraft used
by any person as a common carrier in the transaction
of business as such common carrier shall be forfeited
under the provisions of this chapter unless it shall
appear that (1) in the case of a railway car or
engine, the owner, or (2) in the case of any other
such vessel, vehicle, or aircraft, the owner or the
master of such vessel or the owner or conductor,
driver, pilot, or other person in charge of such
vehicle or aircraft was at the time of the alleged
illegal act a consenting party or privy
thereto; * * *".
Intervenor, Hotpoint Employees' Credit Union (Credit Union) moves
to dismiss the libel, alleging that the statutory provision is
The following facts are admitted for the purposes of this
(1) Credit Union is the holder of a note, secured by
a chattel mortgage on the above-named vehicle.
(2) On September 18, 1962, a lien was duly recorded
with the Secretary
of State of Illinois against the motor vehicle title.
This lien is still in existence as security for the
amount due on the note.
(3) On or about March 21, 1963, the vehicle was
seized by the United States on the undisputed
allegation that Carlos Aulet, mortgagor and debtor to
the Credit Union, used the vehicle for the
transportation of narcotics in violation of
applicable federal laws.
Credit Union's challenge to the constitutionality of the
statute rests on three grounds; first, that it impairs the
obligation of a contract, inasmuch as forfeiture will cancel the
lien and the chattel mortgage; second, that the statute is vague,
indefinite and uncertain in that no provision is made for holders
of a security interest; and third, that the statute violates the
due process provisions of the Fifth Amendment to the Constitution
by taking the security interest of innocent lienors without
The first of these challenges may be disposed of in short
order. The contracts clause of the Constitution (Art. I, § 10) is
restricted to state action. It is not directed against the
federal government. The federal government need only adhere to
the due process requirements of the Fifth Amendment. Miller v.
Howe Sound Min. Co., 77 F. Supp. 540, 545 (E.D.Wash. 1948). No due
process argument can be maintained on this ground. A contractual
obligation is not impaired by a statute in effect prior to the
contract date. Oshkosh Waterworks v. Oshkosh, 187 U.S. 437, 446,
23 S.Ct. 234, 47 L.Ed. 249 (1903). The statute here involved was
enacted in 1939, long before Credit Union's contract.
Second, the statute is neither vague, indefinite nor uncertain.
If anything, it is the clarity of the statutory language, leaving
no room for a construction affording protection to innocent
lienors, which raises the question of its constitutionality. As
Judge Wilson of the Eastern District of Tennessee has observed,
"(t)he laws relating to forfeitures do cause one who is raised in
the traditions of the Anglo-American principles of justice and
who is committed to the constitutional principles of due process
and just compensation to search closely for a constitutional
violation." United States v. One 1961 Cadillac Hardtop
Automobile, 207 F. Supp. 693, 698 (E.D.Tenn. 1962). To be sure,
Congress has enacted more explicit statutes, stating
unqualifiedly that "no property rights shall exist in any such
property", 26 U.S.C. § 7302, United States v. One 1958 Pontiac
Coupe, 298 F.2d 421, 422 (7 Cir. 1962), just as it has, on
occasion, made provisions for innocent lienors in other
forfeiture enactments. See, e.g., § 26, National Prohibition Act,
41 Stat. 305, 315; see also, 18 U.S.C. § 3615, 3617. Where there
has been doubt as to the application of either a forfeiture
statute protecting innocent lienors or one which was silent, the
Supreme Court has held that the statute protecting innocent
lienors should apply. Richbourg Motor Co. v. United States,
281 U.S. 528, 50 S.Ct. 385, 74 L.Ed. 1016 (1930). No such doubt is
It is for Congress to select the language which expresses its
legislative judgments. The courts only ask if that expression
clearly communicates the result. We cannot, under the guise of
vagueness, nullify a statute which enacts a policy with which we
may not agree.
The third argument advanced by Credit Union, violation of the
due process clause of the Fifth Amendment, poses greater
difficulty. For clarity, this argument must be considered in
three parts; first, that forfeiture takes the property of an
innocent lienholder without just compensation; second, that in
making a statutory exception for common carriers, Congress has
traversed the bounds of due process by denying lien-holders the
equal protection of the law; and third, that while Congress has
provided a procedure for seeking remission of forfeiture, this
procedure fails to accord the necessary constitutional
protections to one seeking remission.
Turning to the first point, it is conceded that decrees of
forfeiture are well-established as exercises of governmental
power. Their roots, as the Supreme Court has noted, reach back to
the law of deodand and even to the Mosaic law. Goldsmith, Jr. —
Grant Co. v. United States, 254 U.S. 505, 510-511, 41 S.Ct. 189,
65 L.Ed. 376 (1921). Under these influences, the fiction of an in
rem proceeding has been maintained. It is the vehicle which is
the defendant. Were the fiction followed full-length, one might
argue that forfeiture is not a taking of property. It is as if
the obligation became worthless by virtue of the execution of the
debtor for a crime. Thus the lien, an obligation attached to the
car, becomes worthless when the car is forfeited. Just as
execution of the criminal was not a taking of the creditor's
property, so forfeiture is not a "taking" of the lien. We prefer,
however, to consider the statutory enactments on grounds more
suitable than those which stem from the fiction of an in rem
We reject any contention that, inasmuch as the personal
obligation underlying the lien remains, Credit Union suffers no
loss. Recordation of a lien creates a vested property right.
While the prior existence of the statute obviates any question of
due process as previously indicated, it does not necessarily
follow that a lienor's property right is, as a result of the
statute, conditional, and therefore subject to divestment by
forfeiture on the happening of a subsequent act. While every
contract is made subject to existing law, we are not satisfied
that this principle necessarily applies where the statutory
provisions are penal in nature. A forfeiture statute is a penal
statute. United States v. One 1947 Oldsmobile Sedan, 104 F. Supp. 159,
161 (1952). It is to be narrowly construed and we hesitate
to imply an intent to affect contracts from a statute which looks
only to criminal conduct and is wholly silent on contractual
rights unrelated to the criminal act. Credit Union has a property
right and, if forfeiture is decreed, it will be a taking of
property. The question is whether Congress may constitutionally
provide that this property be taken without compensation.
We find ourselves confronted with an instance where Congress
may provide for such a taking without compensation. Where
Congress, in the implementation of its constitutional powers,
provides for penalties such as forfeitures, such action is not a
taking of property in a constitutional sense. It is not an
instance of eminent domain, in which property is taken because
the use of such property is beneficial to the public. Rather, the
property interest is infringed because Congress has deemed it
necessary in order to preserve other incidents of the public
welfare. As such, it represents a federal exercise of a police
power to which the constitutional requirement of compensation is
inapplicable. See Hamilton v. Kentucky Distillers Co.,
251 U.S. 146, 156-157, 40 S.Ct. 106, 64 L.Ed. 194 (1919); United States v.
One 1961 Cadillac Hardtop Automobile, supra, 207 F. Supp. at 699.
By decreeing forfeiture of vehicles used to transport narcotics
in violation of federal internal revenue and interstate commerce
regulations, Congress has sought to establish a "secondary
defense against a forbidden use". Van Oster v. State of Kansas,
272 U.S. 465, 467, 47 S.Ct. 133, 134, 71 L.Ed. 354 (1926). While
as a legislator, we might express grave doubts as to the efficacy
of the policy as it affects innocent lienors, as a court, we
cannot say that the legislative judgment is constitutionally
Credit Union next points to the statutory provision (set out
supra) creating an exception for common-carrier vehicles in
circumstances where the common-carrier is innocent. It argues
that even if a forfeiture statute is constitutional, this statute
violates due process by depriving other innocent owners of the
equal protection of the law.
The common-carrier exception has been challenged once before.
United States v. One 1957 Oldsmobile Automobile, 256 F.2d 931 (5
Cir. 1958). There, the Fifth Circuit found that common-carriers
were a proper class for separate treatment. It noted that
"(t)he opportunity of the owner of a common carrier
to detect or prevent carriage by one of its
passengers * * * of a small quantity of narcotics is
obviously slight as compared with the opportunity of
the owner of an automobile * * *" 256 F.2d at 933.
Surely, the same principle would apply to credit unions, finance
companies and others in commercial channels whose contact with
the contraband is remote. However, even if this contention be
accurate, it does not bring us to the constitutional question. In
light of our earlier conclusions, the statute would be
nonetheless constitutional if it provided for forfeiture of
common-carrier vehicles as well. Clearly, Congress is not obliged
to exercise its constitutional powers to the fullest extent
possible. It may choose to stop short of the full exercise of its
power with respect to a particular class. If that class is
reasonable, the judicial inquiry ends. The fact that Congress has
determined not to except other classes is, again, a legislative
judgment. The wisdom of the policy does not present a
constitutional issue for the judiciary.
The last constitutional challenge raised concerns an additional
enactment, 19 U.S.C. § 1618, under which the Secretary of the
Treasury, upon finding that a forfeiture "was incurred without
willful negligence or without any intention on the part of
petitioner to defraud the revenue or to violate the law * * * may
remit or mitigate the (forfeiture) upon such terms and conditions
as he deems reasonable and just. * * *" Under Executive Order No.
6166, June 10, 1933, 5 U.S.C. § 124-132 and note, this authority
is transferred to the Attorney General in cases where judicial
proceedings are instituted. Credit Union's petition for remission
was denied by the Attorney General on August 26, 1963.
Credit Union urges that the relief provided by this section is
no relief at all, inasmuch as the Attorney General, after finding
an absence of "wilfull negligence", etc., is still vested with
discretion to deny remission of the forfeiture. Moreover, the
Administrative Procedure Act, 5 U.S.C. § 1001 et seq., does not
apply in such instances. There is no requirement of notice and
hearing and no possibility of judicial review of the
determination. It has been viewed simply as an "act of grace on
the part of the Cabinet officer". United States v. One 1946
Plymouth, 73 F. Supp. 88, 90 (E.D.N.Y. 1946). See also, United
States v. One 1957 Buick Roadmaster, 167 F. Supp. 597 (D.Mich.
Inasmuch as Congress may constitutionally provide for
forfeiture without the possibility of remission, we must reject
Credit Union's contention that the unlimited discretion vested in
the Attorney General makes the forfeiture an unconstitutional
taking of property.
It would appear that the grant of power to the Attorney General
may be so broad as to allow him to treat remission petitions of
two identically situated claimants in different ways. However,
the action of the Attorney General is not in issue in this
proceeding; it is wholly apart from the forfeiture decree.
Indeed, if the remission provisions suffer from a constitutional
infirmity, a successful challenge of that section would not
affect the constitutional provisions relating to forfeitures.
For the reasons stated above, 49 U.S.C. § 782 is constitutional
and intervenor's motion to dismiss the libel must be denied.
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