About the State of New York’s Main Asset Forfeiture Statute

Article 13-A of the Civil Practice Law and Rules (CPLR) serves as the primary source for guidelines governing asset forfeiture in the state of New York. This legal framework outlines the procedures, requirements, and rights associated with the forfeiture process, providing essential information for individuals and entities facing potential asset seizures. Familiarizing yourself with Article 13-A, and consulting an experienced asset forfeiture attorney like Steven L. Kessler, is crucial to understanding and navigating the complexities of New York’s asset forfeiture laws.

If you are looking for more information on Article 13-A and how it applies to your particular situation, contact our office online or call (888) 708-6009 today to request a consultation.

What Makes Article 13-A Unique

New York’s civil forfeiture law has a number of unique features that reflect the legislature’s efforts to ensure that the forfeiture process is fairer and more equitable. Unlike in federal civil forfeiture, the government – here, termed the “claiming authority,” which can be a state agency, a county, or a local district attorney’s office – cannot sue the property and see if the owner files a claim. Instead, the claiming authority must bring a civil action directly against the property owner.

Further, with the exception of a limited group of serious drug-related felony crimes (called “pre-conviction” crimes), there also must be a criminal proceeding against the property owner or a co-conspirator that arises from the same criminal activity as the forfeiture claim against the property (“post-conviction” crimes). And no property can be forfeited unless and until there is an actual felony conviction in the related criminal case. In this respect, the New York civil forfeiture statute is more in line with federal criminal forfeiture than federal civil forfeiture.

Article 13-A’s Third-Party Protections

Another unique feature of the New York civil forfeiture statute is the added protections it provides for those who have an interest in the property, but who are not charged with a crime. In federal criminal forfeiture law, these claimants are termed “third-party petitioners.” In New York, they are called “non-criminal defendants.” If the claiming authority wants to forfeit property from a noncriminal defendant, it must name that person or entity as a defendant in the civil forfeiture case and it must secure a conviction against a criminal defendant for the underlying criminal activity.

Release of Funds for Necessary Expenses

New York is also unique in authorizing the court to order the release of restrained funds to pay a forfeiture defendant’s living expenses, property expenses, and legal fees necessary to defend both the forfeiture proceeding and the related criminal case. To prevail on such a motion, the movant must demonstrate with admissible evidence that they have insufficient unrestrained funds to pay these expenses and fees. This provision often causes the claiming authority to agree to release such funds without a motion so long as the movant provides appropriate financial disclosure.

Fairness and Equity Provisions

Another unique provision in the New York civil forfeiture law permits the court, on motion of either party or on its own, to dismiss a forfeiture action or limit the forfeiture sought “in the interests of justice.” This provides the court with broad discretion to apply general principles of fairness and equity to any forfeiture action. This also reflects provisions requiring the forfeiture to be proportional to the criminal activity that forms the basis for the claims. These provisions, enacted in 1984, anticipated by more than a decade the groundbreaking United States Supreme Court decision in United States v. Bajakian, 524 U.S. 321 (1996), which held that the Excessive Fines Clause of the Eighth Amendment applies to forfeitures.

For assistance in navigating the unique aspects of Article 13-A, contact Steven L. Kessler today to request a consultation.

Revisions to Article 13-A

In 2019, Mr. Kessler was asked by the New York State Legislature to draft a ‘wish list’ of revisions to New York’s civil forfeiture law. Remarkably, every proposed revision he submitted was adopted nearly as written. These changes, the first significant revisions to the statute since 1990, added numerous provisions that increase protections for forfeiture defendants and ensure greater fairness in the forfeiture process.

Cause for Revisions

When Article 13-A was enacted in 1984, provisions such as those discussed above placed New York substantially ahead of federal forfeiture law and most other states in curbing abuse and protecting property owners. The next three and half decades, however, saw substantial development on the federal side, both statutorily — notably with the passage of the Civil Asset Forfeiture Reform Act of 2000 (CAFRA) — and in more recent United States Supreme Court decisions such as Luis v. United States, 136 S. Ct. 1083 (2016), and Honeycutt v. United States, 137 S. Ct. 1626 (2017).

New York’s forfeiture law during this period, however, not only remained relatively stagnant but became subject to increasing abuse, notably in the area of pretrial restraint. In Luis, the Supreme Court made it clear that untainted assets could not be restrained before trial. In Honeycutt, the Court held that the government could only forfeit or restrain proceeds the defendant “obtained” from the criminal activity. These two decisions brought New York’s forfeiture law into direct conflict with Supreme Court precedent.

In New York, claiming authorities had gotten in the habit of securing restraining orders in the tens or hundreds of millions of dollars, far exceeding any defendant’s assets, and using those orders to restrain every penny the defendants had, tainted or not. As a result, defendants were often compelled to make substantial concessions just to pay the bills and buy food. Further, some courts had imposed a requirement, not in the statute, that a defendant seeking to have restrained funds released to pay living expenses or legal fees had the burden of demonstrating that the funds sought to be released had no relationship to any alleged criminal activity. This placed added pressure on the defendants to accede to the claiming authority’s demands in exchange for an agreement to release funds.

What Changed With the 2019 Revisions to Article 13-A

The 2019 revisions sought to limit these abuses. First, it raised the claiming authority’s burden on a motion for pretrial restraint. The claiming authority must now demonstrate that any property sought to be restrained is traceable to the alleged criminal activity. Second, the statute was revised to delete the provision authorizing the claiming authority to commence an action seeking a money judgment. Now, money judgments are available only as an alternative remedy after trial, and only if the claiming authority secures a forfeiture judgment against specific property proven to be tainted.

The 2019 revisions also deleted the “common scheme or plan” provision in Article 13-A that had been interpreted to permit the claiming authority to impose ‘joint and several liability’ on forfeiture defendants. This further limited abuse of pretrial restraints and brought New York in line with the Supreme Court’s ruling in Honeycutt.

Finally, the 2019 revisions clarified the provision authorizing the release of funds to pay living and legal expenses. The revised statute makes clear that whether the funds sought to be released are tainted “shall not be a factor for the court in considering and determining a motion” for the pretrial release of funds. This clarifying language directly addressed the growing number of cases requiring the defendant to demonstrate that the restrained funds were untainted to secure their release to pay living and legal expenses.

Together, the 2019 revisions have successfully reduced abuse by the claiming authority of Article 13-A, most notably in the area of pretrial restraint.

Whether you are dealing with a pre-2019 asset forfeiture case or a more recent matter, Steven L. Kessler has the knowledge and experience to advise you. Call (888) 708-6009 or reach out to our offices online to request a consultation.