Real Estate & Property Law

Federal Government's Brief In Opposition In AmeriSource: Is Destruction of Evidence Seized From Innocent Third Party A Taking?

By Robert Thomas (inversecondemnation.com)

The Solicitor General has filed the United States' Brief in Opposition in AmeriSource Corp. v. United States, No. 08-497 (cert. petition filed Oct. 15, 2008).

In that case, a pharmaceutical company whose legal prescription drugs were seized as evidence against a third party by the federal government which then let the expiration date pass rendering the drugs worthless, sought compensation in the Court of Federal Claims. The petition presents a single Question Presented:

Whether it is a taking compensable under the Fifth Amendment for the  Government to seize (and not return) an innocent third party?s property for use as evidence in a criminal prosecution, if the property is not itself contraband, is not the fruits of criminal activity, and has not been used in criminal activity.

The government's brief frames the question slightly differently:

Whether the government?s seizure of personal property for use as evidence in a criminal matter effected a taking requiring just compensation under the Fifth Amendment when the property was associated with criminal activity but its owner was not involved in that criminal activity.

The Federal Circuit held that the seizure as evidence was not a taking for public use because the seizure was an exercise of the government's "police power," and not an exercise of eminent domain. This conclusion added little to the analysis because the Supreme Court has held that the police power and the public use clause are "coterminous," Hawaii Housing Auth. v. Midkiff, 467 U.S. 229 (1984), and in order to seek compensation in the CFC, the property owner must concede the validity of the government action.  

The government's brief takes a different approach, arguing that the obligation to provide criminal evidence is a "background principle" inherent in the ownership of property, and thus not compensable:

The Court has also stated that background legal principles help to define the circumstances under which property is "enjoyed under an implied limitation and must yield to the police power" without triggering compensation. Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 1027 (1992) (quoting Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 413 (1922)). As the Court explained in Lucas, "[i]n the case of personal property, * * * the State?s traditionally high degree of control over commercial dealings" creates the "possibility that new regulation might even render [an owner's] property economically worthless (at least if the property?s only economically productive use is sale or manufacture for sale)." Id. at 1027-1028. In the current case, petitioner?s ownership of the seized drugs was subject to its obligation to provide evidence in criminal matters if called upon to do so.

BIO at 8-9. The cert petition and links to the Federal Circuit's opinion are posted here.

Full post as published by inversecondemnation on February 18, 2009 (boomark / email).