Today Kim Dotcom and the other defendants, in what is called the largest criminal copyright case in history, filed a petition to the United States Supreme Court for relief against "fugitive disentitlement" and forfeiture of assets.
This is a summary of the
Petition below:
This case arises from a civil forfeiture action related to a separate criminal case, in which the Government indicted a group of foreign defendants (Petitioners here) on a novel theory of secondary criminal copyright liability. Because Petitioners are lawfully invoking their rights to contest extradition, the Government’s novel theory for prosecuting has yet to be tested in the criminal case.
More than two years after filing the criminal indictment, the Government filed a separate civil action seeking forfeiture of Petitioners’ foreign assets. When Petitioners submitted claims to those assets, the Government successfully moved to strike the claims at the threshold. According to the decisions below, Petitioners’ participation in extradition proceedings—and failure to voluntarily leave their homes, families, and businesses to travel to the United States—has rendered them “fugitives” who seek “to avoid...prosecution” and who therefore should be “disentitled” from contesting forfeiture. 28 U.S.C. § 2466(a)(1). Civil forfeiture has been ordered for this reason alone.
This Court has previously admonished that the “harsh sanction” of fugitive disentitlement in a civil forfeiture action is “most severe and so could disserve the dignitary purposes for which it is invoked,” be- cause it “foreclos[es] consideration of claims on the merits.” Degen v. United States, 517 U.S. 820, 827– 29 (1996) (unanimously reversing resort to fugitive disentitlement under inherent authority). The Court noted that it “ha[d] held it unconstitutional to use disentitlement similar to this as punishment for rebellion against the United States,” but left open the question of “whether enforcement of a disentitlement rule under proper authority would violate due process.” 517 U.S. at 828 (citations omitted). Nonetheless, a divided panel of the Fourth Circuit affirmed civil forfeiture based on fugitive disentitlement.
The Fourth Circuit’s panel decision added to one circuit split by affirming the exercise of in rem jurisdiction over foreign property within the exclusive custody and control of foreign courts. It also compounded two other circuit splits by affirming forfeiture on the ground that the foreigners who own the property should, at the very threshold (without benefit of any discovery or evidentiary hearing), be deemed fugitives who are disentitled from defending their property against civil forfeiture—even while they are lawfully contesting their extradition to the United States through the courts in their home countries, pursuant to treaty rights.
If left undisturbed, the Fourth Circuit’s decision enables the Government to obtain civil forfeiture of every penny of a foreign citizen’s foreign assets based on unproven allegations of the most novel, dubious United States crimes. And the Government can do so without affording a foreign defendant any opportunity to challenge in court whether the foreign assets are traceable to criminal conduct, whether the Government’s allegations are sufficient to establish the charged crime, or even whether the charged “crime” is a crime at all. Civil forfeiture would be a fait accompli just as soon as the Government moves to strike a foreign claimant’s initial submission, invokes fugitive disentitlement, and notes that the foreign claimant remains abroad while lawfully contesting extradition. By nonetheless affirming in all respects, the Fourth Circuit has ratified a worrisome new playbook for the Government to use against foreign nationals whom it indicts while they are abroad: any foreign defendant who dares exercise rights to contest extradition may be deemed a fugitive whose foreign assets are immediately forfeitable to the United States. In other words, according to the decision below, foreign defendants must either abandon their rights to challenge extradition or else forever forfeit their assets (and, correspondingly, their ability to fund a criminal defense).
Read the full Petition here.