A FEDERAL appeals court has dealt a serious blow to the government's asset forfeiture program, which is designed to fight drug trafficking and other crimes.
The court decision involved Carl and Mary Shelden, a Moraga, Calif., couple, who sold their home nearly 15 years ago to Ralph and Freddie Jean Washington. The Sheldens lent them $160,435.65 on a second mortgage. When the Washingtons were indicted under a federal racketeering law, the government seized the home.
For a decade, the Sheldens have battled the US in an effort to get back their money. During that time, the hillside house was improperly maintained, and suffered severe structural damage. Its value declined from $325,000 to $60,000.
A federal district judge and a federal claims court judge rejected the Sheldens' claim that the government was responsible for the decline in value of the home, and their now worthless mortgage.
Late last week, however, the US Court of Appeals for the Federal Circuit, in a unanimous, three-judge opinion, reversed the claims court and ordered that the Sheldens be paid ``just compensation.''
Following the verdict, Mr. Shelden told the Monitor: ``I feel as if I'm back in America again.''
The appeals court said the Sheldens should be paid ``because the United States took a well-recognized property right'' when it forfeited the house. Mortgage holders cannot foreclose on a house that has been forfeited by the government.
The court said the government, by failing to compensate the Sheldens, was guilty of an improper taking of their mortgage under the Fifth Amendment, which prohibits the taking of private property ``without just compensation.''
The court said the Sheldens would have to pay their own legal costs for the 10 years of litigation, however.
Federal officials now have at least three options: pay the claim; ask for a new appeals court hearing; or request a ruling from the US Supreme Court.
The appeals court decision continues a recent judicial trend of reining in federal officials, who have increasingly used civil forfeiture as a means to punish lawbreakers. Civil libertarians complain that too many innocent people are hurt by the crackdown.