In a decision of significant importance to the white-collar world, the United States Supreme Court held yesterday that the Sixth Amendment right to counsel extends to permit those accused of crimes to use their “untainted” personal assets to fund their defense. Put another way, this means that if the government accuses you of a crime, and you have legitimate assets with which you want to pay the lawyer of your choice, the government can no longer stand between you and doing so.

A federal statute provides that a court may freeze some assets belonging to those accused of certain federal health care or banking laws. Those assets include: (1) property “obtained as a result of” the crime; (2) property “traceable” to the crime; and (3) other “property of equivalent value.” In October of 2012, a federal grand jury charged Sila Luis with such crimes (related to an alleged $45 million Medicare fraud scheme). Luis had about $2 million dollars remaining in her possession at the time, and the government secured a pretrial order prohibiting her from dissipating those assets, which belonged to the third category above, regardless of whether they had anything to do with her criminal conduct. The district court observed the potential Sixth Amendment complications presented in this case, but held that Amendment did not provide Luis a right to use her untainted assets to pay for her defense, and the Court of Appeals for the Eleventh Circuit affirmed.

The Supreme Court, in a decision divided along uncommon lines, reversed. It concluded that this pretrial restraint on the use of otherwise wholly legitimate assets violated the Sixth Amendment. In reaching this result, Justice Breyer (joined by Chief Justice Roberts and Justices Ginsburg and Sotomayor), reasoned that the nature and grave importance of the right to counsel, taken together with the type of untainted assets at issue led to this conclusion.

It is well-established that every criminal defendant is entitled to counsel of his or her choosing, and settled precedent provides that such persons are entitled “to be represented by an otherwise qualified attorney whom that defendant can afford to hire.” While the government argued that it, too, had a substantial interest (that of preserving criminal defendants’ assets to pay statutory penalties and restitution), the Court first reasoned that this interest was not weighty enough to counteract the criminal defendant’s need to use innocent funds to select counsel of his or her choosing. The Court also noted a lack of support for the government’s position in the common law, remarking that it could find “no decision of this Court authorizing unfettered, pretrial forfeiture of the defendant’s own ‘innocent’ property….” Moreover, it noted “as a practical matter” that to accept the government’s position may “unleash a principle of constitutional law that would have no obvious stopping place,” since Congress could simply “write more statutes” authorizing such pretrial forfeitures.

Justice Thomas, writing for himself, would have held that this balancing act unnecessary, indeed inappropriate, in light of his view that the Sixth Amendment’s “text and common-law backdrop” supplied all the authority necessary to hold such asset freezes unconstitutional.

This ruling is a significant victory for the Sixth Amendment right to counsel and for property rights. It is also a huge win for Luis, whose case will return to the district court, where she must now be permitted to pay her chosen lawyer with her untainted assets.