Iowa Supreme Court ruling spells more trouble for state's controversial forfeiture policy

The Iowa Supreme Court on Friday threw up a significant roadblock into law enforcement's efforts to seize cash and other property it suspects is tied to crime.

The court ruled that officers can't force people to answer questions about the seized property as a condition for its return.

The decision also requires courts to decide whether law enforcement properly and legally seized items before granting a claim against a person’s property.

And it ends a practice that allowed prosecutors to strategically drop a forfeiture case just before a court hearing to avoid paying legal fees incurred by the people trying to get their property returned.

“This is a major decision,” said West Des Moines Attorney Dean Stowers, who argued the case before the Iowa Supreme Court. “It says, ‘We’re not going to let the state take advantage of people.'"

Iowa has been at the center of the national forfeiture controversy in recent years following a string of cases that raised questions about law enforcement seizing property and using the profits to fund their departments.

The Des Moines Register in 2016 published an investigation showing Iowa law enforcement agencies had collected more than $55 million and more than 4,200 vehicles since 1986 using the state's forfeiture law.

More: Iowa forfeiture 101

Pottawattamie search finds $45,000 in cash

The case ruled on Friday by the Iowa Supreme Court involved $45,000 in cash and a 16-year-old SUV seized from Jean Carlos Herrerra and Bryan Riccaldo following a traffic stop in September 2015 in Pottawattamie County.

Seeing the SUV traveling along Interstate 80, Iowa Department of Transportation Officer Kevin Killpack changed directions and pulled over the vehicle for traveling 74 miles per hour in a 70 mph zone.

Court documents show that Killpack had been trained earlier in 2015 that the make, model and year of that particular SUV was commonly used for transporting narcotics. After speaking with the two men separately, Killpack determined their reasons for traveling from New York to Los Angeles were inconsistent.

Herrera denied Killpack permission to search the vehicle, but the officer and two Pottawattamie County deputies searched it anyway, citing the disparities in the stories of Herrera and Riccaldo.

The officers ultimately seized almost $45,000 in a hidden compartment, along with the SUV, a soft-serve ice cream machine and tools.

Herrerra was issued a speeding citation but was never criminally charged.

Herrerra and Fernando Rodriguez — the vehicle's registered owner — argued that the stop, their detention, the search and the seizures violated their Constitutional rights against unreasonable searches and seizures.

They argued that a judge should first rule on their motion to suppress evidence in the case based on their contention that the search of their vehicle was illegal.

Herrera also argued he shouldn't have to provide answers to prosecutors about how he had obtained the property because it would violate his Fifth Amendment Privilege against self-incrimination.

Supreme Court orders case back to district level

The Supreme Court agreed.

"This puts Herrera to a difficult choice between asserting his privilege against self-incrimination or forgoing his claim for return of the contested property,” Iowa Supreme Court Justice Thomas Waterman wrote in the opinion.

At one point in the nearly three years of legal wrangling in the case, prosecutors did not object to returning the SUV to Rodriguez.

But once it was returned, prosecutors argued that Rodriguez was not eligible for reimbursement of his attorney costs, since the case had been dismissed.

The Iowa Supreme Court’s decisions Friday instructed Iowa’s district court to first rule on whether prosecutors had improperly conducted the seizure before resuming forfeiture proceedings for Herrera’s claims.

And for Rodriguez, the court ordered the district court to determine the amount of reasonable attorney fees he should be paid to reimburse his legal costs for getting his vehicle back.

The attorney fees cited in Friday’s ruling — an amount for both men before the matter was contested in the appeals and supreme courts — was around $9,000. Rodriguez’s truck in 2015 was valued at around $2,132.

Six of the seven Iowa Supreme Court justices concurred with the ruling. Justice Daryl Hecht took no part.

Iowa’s troubled forfeiture

Iowa's controversial history of forfeitures is well documented.

Spirit Lake restaurant owner Carole Hinders racked up more than $67,000 in attorney bills in her successful fight to regain nearly $33,000 seized from her business bank account.

She was accused, without ever being charged, of “structuring” deposits from the cash-only business to avoid federal reporting requirements.

In another case, two California gamblers last year obtained a $60,000 settlement from Iowa after they claimed that state troopers in 2013 illegally stopped their car and conducted a warrantless search to seize their $100,000 casino poker winnings.

The state paid the settlement and returned $90,000 of the seized cash.

Forfeiture profits are funneled back into law enforcement budgets. Critics contend the profits provide a “perverse” incentive for prosecutors and law enforcement.

The Institute for Justice, a Virginia-based nonprofit law firm that has studied the civil forfeiture system, has ranked Iowa as having among the most problematic forfeiture and personal property protection laws in the nation.

Louis Lavorato, a former Iowa Supreme Court justice, spoke out against some of the state’s forfeiture practices as part of the Register’s series in 2016.

"The cornerstone of our criminal justice system is that you're presumed innocent until proven guilty beyond a reasonable doubt," Lavorato said. "What they're doing runs counter to that, in my mind."

The Register’s report showed the number of Iowa forfeiture cases had more than tripled in the past three decades. Hundreds of forfeiture cases in recent years have gone uncontested, a result of legal costs and people’s fears of self-incrimination, the Register’s investigation showed.

There were no criminal charges linked with many of those forfeitures, state records show.

Concerns prompt legal change

Iowa lawmakers from both parties have voiced concern on the federal and state’s uses of forfeiture.

In response, Iowa lawmakers last year passed a law that mandates that someone must be convicted of a crime before the state can keep cash or property valued at $5,000 or less.

Critics praised the new Iowa law as being a step toward fixing forfeiture problems but also have said it doesn’t go far enough.

Among the ongoing concerns is the ability of law enforcement agencies to keep the profits from property they seize instead of the proceeds being diverted into, for example, the state’s general fund.

Calls to Tom Ferguson — an employee of the Iowa Attorney General’s office who also is the director of the Iowa County Attorneys Association — were not immediately returned Friday.

The association assists counties in their forfeiture efforts and it was unclear Friday whether it would give counties new directives in response to the Iowa Supreme Court ruling.

Pottawattamie County Attorney Matt Wilber said his office was following the forfeiture rules as they existed at the time of the seizures but "the claimants argued that they should not have to follow those rules."

"The District Court and Court of Appeals agreed with our position. The Supreme Court has now ordered that they are changing the rules, so we’ll follow the new rules," Wilber said.

The Supreme Court’s ruling likely will have a significant deterrent on the state bringing cases that it cannot support, said Glen Downey, a Des Moines attorney who has represented multiple people who have had their property seized.

“Especially in cases where large amounts of cash are seized but no contraband or other illegal items are found,” Downey said. “Those are the cases the state has often wanted to take the property but now must be cautious or risk not only the return of the property but a significant attorney fee as well.”