It's pretty easy to conclude that the FBI should have hired a towing company. That the car was wrecked proves the agent was incapable of driving it
We all know that federal, state and local governments have broad powers to seize assets from drug dealers and other persons suspected of crimes. Lately, there have been a number of seizure situations involving valuable cars that have gained widespread media attention.
In today's media world, the seizure of a Bugatti Veyron, six- or seven-figure Ferrari or Lamborghini or the like is an instant attention-grabber. But sometimes, the story gets even better when things go wrong.
In what has to be the most humorous example, the FBI seized a Ferrari F50 from a suspected drug dealer early in 2009. No official explanation was given as to why an FBI officer was driving the F50 to a storage warehouse after its seizure. The agent swore he was going only "35-45 mph" when he drove off the road and tore up the front end, rocker panel, front and rear fenders, and door. The likely six-figure damage was blamed on "bald tires."
Forfeiture laws and conflict of interest
Forfeiture laws have become commonplace and can apply in criminal and civil cases. Most are centered on seizure of property acquired with ill-gotten gains, while others require forfeiture of automobiles driven by drunk drivers. These laws have been lauded as effective weapons to combat fraudulent and criminal activity. They have also been criticized as short on due process, and creating conflicts of interest on the part of the agencies enforcing them. Proceeds from the sale of the seized property usually benefit the agency that made the seizure, arguably creating budgetary motivation for excessive application of these laws.
The cases described above also point out that law enforcement agencies are prone to chase high-profile targets. No doubt they are aware of the PR value of such cases. The publicity serves as testament to their ongoing efforts to fight crime, and also as a deterrent to lower-profile culprits who think they can stay under the radar.
As interesting as these philosophical debates might be, "Legal Files" asks a more practical question: When the police seize your Bugatti, Ferrari, or Lamborghini, what is their liability if the car gets damaged while under their control? To put the question another way, our cars of choice are often fragile and temperamental, and require high levels of care. Can the police treat them like another Toyota Camry?
Most people don't sweat a few scratches or dings
When the topic turns to criminal law, "Legal Files" always turns to Vancouver, Washington, attorney Steve Thayer. Thayer is one of the top criminal defense attorneys in Washington, and he's also a car guy. He pointed out that there aren't many cases of anyone bringing claims against the police when their seized cars get damaged.
"After all," he explained, "we're talking about U.S. Attorneys. They can put you in jail, and they have unlimited resources. You're talking about huge amounts of legal defense costs, which can often break you financially, if the government pulls out all the stops." Also, seizure cases generally carry the lower civil case burden of proof (preponderance of evidence), rather than the reasonable doubt of criminal cases (think O.J. Simpson-acquitted in the criminal case, liable in the civil case). The majority of seizure cases get settled because of the high risks, and whether the seized property is returned is part of the overall deal. Consequently, "most people are ecstatic if they can stay out of jail and get their cars back, and they don't sweat a few scratches or dings. But to answer the question, it's basically the law of bailments."
A bailment is a situation where you temporarily give your property to another. Simple examples are leaving your car with a repair shop or a storage facility. Generally, the law requires that the bailee exercise reasonable care to safeguard the car and keep it in the same condition.
The wrecked F50 seems to illustrate a clear case of liability. It's a valuable car, and it takes a certain level of skill to drive it. It's easy to conclude that the FBI should have hired a towing company to transport the car instead of allowing the agent to drive it. The fact that the car was wrecked in a one-car incident at 35 mph-45 mph proves that the agent was incapable of driving it.
But Thayer points out that whether the owner has any recourse depends on what happens with the prosecution and forfeiture. If he is convicted and the car is forfeited, the FBI has simply damaged its own car. But if he is exonerated and gets the car back, the FBI is probably liable for the damages.
Most of us think that a wrecked and repaired F50 is worth less than before the damage. Can the owner bring a claim for diminished value? While such a claim would be theoretically possible, "Legal Files" thinks "fat chance." After all, it's a jury question. A charged drug dealer, who many jurors might assume got off on some technicality, is unlikely to get much sympathy.
Third parties exempt
Another question is how far can the government go in tracing funds? For instance, what if someone is involved in a lot of business activities, and has made large expenditures and investments with what was later proven to be ill-gotten funds? Can the government "follow the money" and get it all back?
Generally, forfeiture laws allow seizure of property used in criminal activity (such as delivering drugs with your Lambo) or if it is owned by the person charged with the illegal activity. Property owned by a third party cannot usually be seized. For example, when the drug dealer uses his drug profits to buy a new F430, the Ferrari can be seized but the dealer can't be required to forfeit the money paid for the car. Similarly, if the funds are invested in a bona fide business, the government can seize the investment but cannot undo it and get the money back.
The primary exceptions are where the money is held by an entity controlled by the person, and where the third party knows where the money came from. If that third party is presumed to know the source of the funds, he can be charged with money laundering and similar crimes. At this point, the Fifth Amendment often comes into play, but that's another column.