WASHINGTON -- The federal government suffered a thumping defeat in the Supreme Court yesterday in its 15-year-old program of seizing money and property linked to drug crimes.
By a 6-3 vote, the court nullified the sweeping legal theory that has helped make the forfeiture program so successful that the government now owns large fleets of boats, cars and airplanes, stacks of currency and extensive, valuable real estate.
The ruling could block government efforts to seize vast amounts of property that once were held by drug criminals but have since shifted into the hands of innocent owners who got the property but knew nothing about the crimes.
The three dissenting justices said that the decision "rips out the most effective enforcement provisions in all of the [federal] drug forfeiture laws" and leaves the forfeiture program at the center of U.S. drug prosecutions "in quite a mess."
The decision grew out of the government's attempt to take a house owned and lived in by Beth Ann Goodwin in Rumson, N.J. For years, she was the girlfriend of Joseph Anthony Brenna, later convicted of a role in a $24 million marijuana smuggling operation.
In 1982, Brenna gave $216,000 in cash to Ms. Goodwin by having it wired to her by his lawyers. She used the money to buy the house in Rumson and has said that she had no idea the money consisted of proceeds of the marijuana operation.
The government, tracing the house back to the cash gift from Brenna, demanded that the house be transferred to government ownership. A federal judge ordered it seized, but a federal appeals court nullified the seizure, declaring that Ms. Goodwin should get a chance to show that she was an innocent owner of the property.
The government then took the case on to the Supreme Court and lost. It argued that the appeals court decision would make it easy for drug criminals to "launder" their ill-gotten gains by transferring them to someone else after the crime.
Since 1978, when Congress gave the government power to seize any property used by criminals in drug-trafficking along with all money gained in those transactions, the Justice Department has relied on a broad view of its rights to ownership of such property.
Its theory was that the government became the owner of the property the moment a drug crime involving that property occurred. The government got court orders temporarily seizing the property it claimed, and all that remained was for a judge to rule that the property was tied to drug crimes.
Essentially, the government's theory was that anyone who was an innocent owner of the property before the drug crime happened could claim it but that no one could make a valid claim dTC to being its owner after the crime, even if that person had no knowledge of the crime.
The court majority rejected that entire argument, ruling that the federal drug forfeiture law gives current owners of a property a chance to show that they knew nothing about the crimes -- a chance they must have before the property is forfeited to the government.
In those circumstances, the government has no right to own the property, even if it was part of a drug transaction, the majority said.
The government becomes the owner only if a court agrees that no one else claiming it has a right to it, according to the decision.
In Baltimore, U.S. Attorney Richard D. Bennett said that he had not heard about the opinion but that he does not expect the ruling to have a significant impact on the way his office handles forfeiture cases.
"This office has never been overzealous in the execution of forfeiture proceedings," Mr. Bennett said. "We have a very good track record with the use of forfeiture, and I don't think this will place any additional strain on us."
The main opinion against the government was written by Justice John Paul Stevens, joined by Justices Harry A. Blackmun, Sandra Day O'Connor, David H. Souter, and by Justice Antonin Scalia, joined by Justice Clarence Thomas.
Justice Anthony M. Kennedy dissented, joined by Chief Justice William H. Rehnquist and Justice Byron R. White. The dissenters argued that if the property was owned by a drug criminal at the time drug laws were broken, no one after that could obtain a valid title to it.