Legal Briefs

Batato v. United States

Megaupload.com was once the 13th most popular website on the internet, with more than 82 million unique visitors and a billion total page views during its seven-year operation. The site allowed people to store files on the cloud for later use—and some users inevitably stored copyrighted TV shows, films, songs, and software. In 2012, the U.S. government charged the site’s owner, Kim Dotcom, and its operators with conspiracy to commit copyright infringement. The defendants are currently resisting extradition to the United States (Dotcom lives in New Zealand), as is their right under extradition treaties. In 2014, the seemingly frustrated government moved to seize the defendants’ considerable assets in a civil forfeiture action, claiming that the assets are probably connected to the alleged criminal activity. Civil forfeiture laws allow prosecutors to bring a civil action against property itself, rather than having to charge an actual defendant of wrongdoing before taking their property. In turn, because the action is civil rather than criminal, the law does not provide a would-be defendant with full criminal procedural protections that would come with a criminal trial. Thus, under this legal fiction, government has a substantially easier path to take title or permanently keep a person’s property. The government had a major problem in this case, however, as the assets that they were seeking to seize were not located in the United States, but in Hong Kong and New Zealand. Under traditional rules of in rem jurisdiction—a legal theory that allows courts to gain jurisdiction over property—the court must have “control” over the property to assert this type of jurisdiction. Despite this impediment to the government’s case, the district court ignored these traditional rules and exercised jurisdiction over the defendant’s assets. To make matters worse, the court also “disentitled” the defendants under the “fugitive disentitlement” doctrine from presenting evidence that their property was not subject to seizure. Fugitive disentitlement has historically been applied only to criminals who escaped custody while appealing a conviction, the idea being that a court could decide to dismiss the appeal because any judgment would be unenforceable against an absent defendant. As noted, under civil forfeiture laws, the government can civilly take property without an underlying criminal conviction based only on the allegation of a crime. Those whose property has been seized can get it back by proving that their property is “innocent.” The district court, however, prevented the defendants from even making that argument by upholding the government’s theory that fugitive disentitlement applies in civil asset forfeiture cases. Because the defendants aren’t coming to the United States to defend their property, the government argued, they are “fugitives” who have lost the ability to defend against that seizure. Cato, along with several other Amici, urged the U.S. Court of Appeals for the Fourth Circuit to overturn the district court’s ruling, but the Fourth Circuit upheld the lower court. Undeterred, Cato has now joined with the Institute for Justice, DKT Liberty Project, Drug Policy Alliance, Americans for Forfeiture Reform, and California Attorneys for Criminal Justice asking the Supreme Court to take the case. We argue that civil forfeiture has become unmoored from its historical origins and threatens fundamental rights. Moreover, expanding in rem jurisdiction to property not within the control of the courts will only further expand this constitutionally suspect practice. Finally, we argue that using fugitive disentitlement in civil forfeiture proceedings against non-fugitives violates the Fifth Amendment’s Due Process Clause, which requires an opportunity to be heard and an opportunity to defend against government-initiated actions against your property—even if you’re a dotcom millionaire living abroad.

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