The opinion of the court was delivered by: WEBER
The United States has brought these forfeiture proceedings pursuant to the Drug Abuse Prevention Act, 21 U.S.C. § 881 et seq., seeking to have two parcels of real property forfeited on the theory that the properties were used to facilitate violations of the federal narcotics laws. See 21 U.S.C. § 881(a)(7).
Titles to both properties are held by Richard DiLoreto and his wife Jane, as tenants by the entirety.
Richard DiLoreto was convicted and sentenced by this Court on September 23, 1988, on one count of conspiracy to distribute cocaine, two counts of using a telephone to facilitate the distribution of cocaine, and two counts of failing to report income received from the sale of cocaine.
Claims to both properties herein have been filed by Richard and Jane DiLoreto, and on behalf of their five minor children. The claimants do not contest that the United States has met its burden of establishing probable cause to believe that both properties were used by Richard DiLoreto to store and sell cocaine. They also have not presented any evidence to rebut that showing. They have instead chose to defend against these forfeiture actions on two other bases. First, all of the claimants maintain that the provisions of 21 U.S.C. § 881 are unconstitutional. Secondly, Jane DiLoreto and the children assert that their interests are exempted from forfeiture by the innocent owner provision of 21 U.S.C. § 881(a)(7).
I. CONSTITUTIONALITY OF 21 U.S.C. § 881.
Claimants' constitutional attack on 21 U.S.C. § 881 is mounted on the premise that the statute is "essentially criminal" in nature, and that all the constitutional safeguards afforded to criminal defendants are therefore applicable. Thus, the question with which we are faced is "whether a [§ 881] forfeiture proceeding is intended to be, or by its nature necessarily is, criminal and punitive, or civil and remedial." United States v. One Assortment of 89 Firearms, 465 U.S. 354, 362, 79 L. Ed. 2d 361, 104 S. Ct. 1099 (1984), (citing Helvering v. Mitchell, 303 U.S. 391, 399, 82 L. Ed. 917, 58 S. Ct. 630 (1938)). While § 881 is a relatively recent enactment, the underlying question herein is not novel or new. As the Supreme Court recognized in 1938:
Forfeiture of goods or their value and the payment of fixed or variable sums of money are other sanctions which have been recognized as enforceable by civil proceedings since the original revenue law of 1789. In spite of their comparative severity, such sanctions have been upheld against the contention that they are essentially criminal and subject to the procedural rules governing criminal prosecutions.
Helvering, 303 U.S. at 400 (citations omitted).
Because determining whether a forfeiture proceeding is civil or "essentially criminal" is not always readily apparent, the Supreme Court in Helvering and its progeny has developed a specific analytical test, which is essentially one of statutory interpretation.
Our inquiry in this regard has traditionally proceeded on two levels. First we have set out to determine whether Congress in establishing the penalizing mechanism, indicated either expressly or impliedly a preference for one label or the other. See, One Lot Emerald Cut Stones v. United States, supra, [409 U.S. 232] at 236-237, [ 34 L. Ed. 2d 438, 93 S. Ct. 489] [(1972)]. Second, where Congress has indicated an intention to establish a civil penalty, we have inquired further whether the statutory scheme was so punitive either in purpose or effect as to negate that intention. See, Flemming v. Nestor, 363 U.S. 603, 617-621, [4 L. Ed. 2d 1435, 80 S. Ct. 1367] (1960). In regard to this latter inquiry, we have noted that "only the clearest proof could suffice to establish the unconstitutionality of a statute on such a ground." Id., at 617. See also One Lot Emerald Cut Stones v. United States, supra, [409 U.S.] at 237; Rex Trailer Co. v. United States, 350 U.S. 148, 154, [100 L. Ed. 149, 76 S. Ct. 219] (1956).
United States v. Ward, 448 U.S. 242, 248-249, 65 L. Ed. 2d 742, 100 S. Ct. 2636 (1980), quoted in One Assortment of 89 Firearms, 465 U.S. at 362-363.
Applying the first prong of the analysis to § 881 leads to the inescapable conclusion that Congress designed it to be a "civil in rem" proceeding rather than a criminal sanction. First of all, as noted in United States v. Premises Known as 2639 Meetinghouse, 633 F. Supp. 979, 994 (E.D.Pa. 1986), the Comprehensive Drug Abuse Protection and Control Act of 1970 includes § 881 within "Administrative and Enforcement Practices" (Part E) not "Offense and Penalties" (Part D). Secondly, the language of the section itself uses the label "civil forfeiture." United States v. D.K.G. Appaloosas, Inc. 829 F.2d 532, 543 (5th Cir. 1987). Thirdly, as in the forfeiture provision in One Assortment of 89 Firearms, 465 U.S. 354, 79 L. Ed. 2d 361, 104 S. Ct. 1099, Congress chose not to prescribe in § 881 the procedural mechanisms for effectuating a forfeiture. It instead incorporated by reference the procedures in an already existing body of civil forfeiture law - the customs law. "By creating such distinctly civil procedures for forfeitures . . . Congress has indicate[d] clearly that it intended a civil not a criminal sanction." One Assortment of 89 Firearms, 465 U.S. at 363 (quoting Helvering, 303 U.S. at 402) also quoted in D.K.G. Appaloosas, 829 F.2d at 543. Finally, we note the existence of 21 U.S.C. § 853, which is an express criminal forfeiture provision enacted by Congress in 1984. The fact that the statute "contains two separate and distinct provisions imposing sanctions and that these appear in different parts of the statute, helps to make clear the character of that here invoked," where the other is "obviously a criminal one." Helvering, 303 U.S. at 404, quoted in D.K.G. Appaloosas, 829 F.2d at 543. Accord United States v. $ 39,000 in Canadian Currency, 801 F.2d 1210, 1219 (10th Cir. 1986).
Having concluded that Congress clearly intended § 881 to be a remedial civil sanction rather than a criminal punishment, we must now determine whether "the clearest proof" exists that the purpose or effect of the forfeiture is so punitive that it negates the Congressional intent. As noted by the Fifth Circuit in D.K.G. Appaloosas, 829 F.2d at 544:
Only two factors appear to even raise the argument that section 881 is overwhelmingly punitive. First is the legislative history to section 881(a)(6), which focuses on the "penal nature of forfeiture statutes," Joint Explanatory Statement of Titles II and III, 124 Cong. Rec. S17647 (daily ed. Oct. 7, 1978), reprinted in 1978 U.S.Code Cong. & Adm. News 9496, 9518, 9522-23, second is one of the factors designated as "helpful" by the Court in One Assortment of 89 Firearms - the fact that the actions which give rise to forfeiture proceedings under section 881 may themselves entail criminal penalties.
We agree with that court's conclusion that these factors are "less than compelling." It has been long recognized that "Congress may impose both a criminal and a civil sanction in respect to the same act or omission." Helvering, 303 U.S. at 399. Congress has here chosen to do just that. Section 881 covers a broader range of conduct than is proscribed by § 853. See One Assortment of 89 Firearms, 465 U.S. at 363-364. In doing so, it reflects its primarily remedial purpose which includes
removing the incentive to engage in the drug trade by denying drug dealers the proceeds of illgotten gains, stripping the drug trade of its instrumentalities, including money, and financing Government programs designed to eliminate drug trafficking.
Premises Known as 2639 Meetinghouse, 633 F. Supp. 979 (citing 95th Cong., 2d Sess., 124 Cong. R. 23055-23057; 7 U.S. Code Cong. R. & Ad. News, 9496, 9523 (1978)).
Upon careful consideration of all the aforementioned factors, we agree with those courts which have found that § 881 is not so punitive in either purpose or effect as to require it to be considered a criminal provision D.K.G. Appaloosas, 829 F.2d 532; Premises Known as 2639 Meetinghouse, 633 F. Supp. 979. Also, United States v. $ 2,500 in United States Currency, 689 F.2d 10 (2d Cir. 1982), cert. denied sub nom. Aponte v. United States, 465 U.S. 1099, 80 L. Ed. 2d 123, 104 S. Ct. 1591 (1984); United States v. One 1970 Pontiac GTO, 2 Door Hardtop, 529 F.2d 65, 66 (9th Cir. 1976) (per curiam); and United States v. 30.80 Acres, Bruce Twp., Guilford City, N.C., 665 F. Supp. 422 (M.D. N.C. 1987). We therefore conclude that the claimants in a § 881 forfeiture action are not entitled to the wide range of constitutional protections afforded to a criminal defendant. Specifically, we conclude that they are not entitled to the protection that the presumption of innocence provides, nor are they entitled to impose upon the United States the burden of proof beyond a reasonable doubt. Congress may, therefore, place the burden of proof by a preponderance of the evidence upon the claimant, once the United States has established probable cause. $ 2,500 in United States Currency, 689 F.2d 10; One 1970 Pontiac GTO, 529 F.2d 65; 30.80 Acres, 665 F. Supp. 422; and Premises Known as 2639 Meetinghouse, 633 F. Supp. 979. See also United States v. $ 250,000 in United States Currency, 808 F.2d 895 (1st Cir. 1987); and Bramble v. Richardson, 498 F.2d 968 (10th Cir. 1974), cert. denied sub nom. Bramble v. Saxbe, 419 U.S. 1069, 42 L. Ed. 2d 665, 95 S. Ct. 656 (1974). Similarly, because § 881 is not a criminal sanction, claimants' argument that forfeiture herein would constitute cruel and unusual punishment in that it is disproportionate to the ...