On March 30, the Supreme Court ruled 5-3 in Luis v. United States that “the pre-trial restraint of legitimate, untainted assets needed to retain counsel of choice violates the Sixth Amendment.” Stated affirmatively, the Court concluded criminal defendants have a Sixth Amendment right to use their own “innocent” property to pay a “reasonable fee” for the assistance of counsel.
The decision is a clear victory for criminal defendants, who may use their assets derived from sources unrelated to alleged criminal conduct to finance their legal defense. However, the Court’s attempt to draw a bright line around assets that cannot be seized pretrial still leaves room for disagreement between defense counsel and prosecutors over what assets are “untainted” or “innocent” and, of those, which are “needed” to pay a “reasonable fee” to defend against criminal charges.
Sila Luis was charged by a federal grand jury with paying illegal kickbacks and conspiring to defraud Medicare. The government sought a pretrial order from the United States District Court for the Southern District of Florida prohibiting Luis from dissipating the $2 million that remained in her possession after she had disposed of what the government estimated to be nearly $45 million in funds derived from illegal activities. The order was requested under a federal statute, 18 U.S.C. § 1345, that allows the government to obtain a pretrial freeze of a defendant’s illegally obtained assets or other “property of equivalent value” in cases concerning banking law violations and federal health care offenses. The parties agreed that the remaining $2 million contained at least some untainted funds, and Ms. Luis argued that by preventing her from using untainted assets to pay for her legal representation, the order violated her Sixth Amendment right to counsel of her choice. The District Court ruled against Ms. Luis and granted the order, holding that “there is no Sixth Amendment right to use untainted, substitute assets to hire counsel.” The Eleventh Circuit affirmed, and the Supreme Court granted certiorari.
The plurality opinion, written by Justice Breyer and joined by Chief Justice Roberts and Justices Ginsburg and Sotomayor, concluded that the District Court’s order violated Ms. Luis’ Sixth Amendment right to use her “innocent” assets to pay a “reasonable fee” for the assistance of counsel. Justice Breyer’s decision rested on three primary arguments. First, Justice Breyer weighed the government’s interest in securing a criminal asset forfeiture and the victim’s interest in obtaining restitution against the criminal defendant’s “fundamental right” to counsel under the Sixth Amendment, and concluded that the balance clearly tips in the defendant’s favor: “compared to the right to counsel of choice, these interests would seem to lie somewhat further from the heart of a fair, effective criminal justice system.” Second, based on a survey of the common law, Justice Breyer found a “historic preference” against preconviction forfeitures. Finally, the plurality reasoned that a contrary decision could encourage Congress to allow pretrial asset restraints in other cases and that, after being deprived of their assets by virtue of a pretrial asset freeze, criminal defendants would be forced to rely on the already overburdened system of public defenders.
Concurring in the judgment, Justice Thomas rejected the plurality’s balancing approach, focusing instead on the text of the Constitution and its common law backdrop. Justice Thomas observed that before the Supreme Court announced an indigent defendant’s right to publicly financed defense counsel, the Sixth Amendment served to protect a criminal defendant’s right “to employ a lawyer to assist in his defense.” This right would be subverted, Justice Thomas reasoned, if the government possessed unfettered power to seize a defendant’s assets before trial because, simply, “retaining an attorney requires resources.” Since constitutional rights “implicitly protect those closely related acts necessary to their exercise,” there must be a limit on the extent to which assets of a criminal defendant can be seized prior to conviction if the core of the Sixth Amendment right to counsel is to be preserved. Justice Thomas agreed that the line should be drawn between tainted and untainted assets, finding that the common law supported reserving untainted assets for use by criminal defendants in financing their legal defense.
In dissent, Justice Kennedy, joined by Justice Alito, criticized the plurality and Justice Thomas for adopting a rule that would create arbitrary distinctions among defendants, rewarding those who preserve their untainted assets and spend their ill-gotten funds first, while punishing otherwise identical defendants who dispose of their tainted and untainted assets in the reverse order. Justice Kennedy also argued that the plurality brushed aside the Court’s controlling precedents, mischaracterized the common law approach to pretrial forfeitures, ignored the will of Congress as embodied in the statute at issue and established a rule that would prove unworkable in practice.
Justice Kagan authored a separate dissent in which she pointedly questioned whether the government could lawfully freeze a defendant’s assets needed to hire an attorney prior to trial based only on probable cause that the funds will ultimately be forfeitable, but she nevertheless concluded that the Court’s decision in United States v. Monsanto, the correctness of which had not been challenged in these proceedings, required a decision in the government’s favor.
In cases where certain assets are clearly derived from untainted sources, the Court’s holding provides valuable and clear-cut protection for a criminal defendant. But practitioners in this area will recognize the validity of Justice Kennedy’s observation in his dissent that finding a clear line between tainted and untainted assets may be a difficult task. Although the plurality expressed confidence that “tracing” doctrines that are often applied in other contexts would provide the necessary guidance, experience suggests that in complex financial cases the identification and tracing of tainted assets can be challenging and contentious.
In addition, the Court’s holding leaves unaddressed the question of when innocent funds are “needed” to obtain counsel of choice, and what constitutes a “reasonable fee” for assistance of counsel. Based on the particular facts of the case, the Luis Court accepted that the government’s pretrial restraint of untainted assets would prevent the retention of private counsel of the defendant’s choice. This may not be as clear in other contexts, especially when the government seeks to freeze substantially less than all of a defendant’s remaining assets. Disagreements may also arise over what constitutes a “reasonable fee” for retaining defense counsel. As Justice Kennedy asked in his dissent, “[i]f Luis has a right to use the restrained substitute assets to pay for the counsel of her choice, then why can she not hire the most expensive legal team she can afford?”
Although the circumstances in which the Court’s decision in Luis can be directly and easily applied may be limited, the case may have broader implications. There appear to be several members of the Court, from across the ideological spectrum, who are sympathetic to the rights of the accused to mount a vigorous defense and to be treated, up until the moment of conviction, in a manner fully consistent with the presumption of innocence.