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PA: Hands off! Ruling makes it tougher for state to seize private property

By   /   December 6, 2012  /   No Comments

By Eric Boehm | PA Independent

FORFEITURE: In a decision filed last month, Commonwealth Court Judge Dan Pellegrini called the state’s civil asset forfeiture law “state-sanctioned theft” and ordered a lower court to re-examine a recent forfeiture case in Centre County.

HARRISBURG – A Commonwealth Court ruling is being hailed as a victory for property rights and a small blow against civil asset forfeiture laws, which allow the state to seize private property that may be connected to a crime.

In a decision filed last month, Commonwealth Court Judge Dan Pellegrini called the state’s civil asset forfeiture law “state-sanctioned theft” and ordered a lower court to re-examine a recent forfeiture case in Centre County. Though the state is expected to appeal the ruling, Pellegrini’s decision may set a new precedent for these types of cases, making it more difficult for the state to seize private property believed to have been used in a crime and guaranteeing defendants the chance to be heard in court before property is taken.

“It’s a win for property owners. It’s a win for property rights in the commonwealth of Pennsylvania,” said Steven Passarello, the Blair County attorney who argued the case before the state court.

The underlying court case dealt with the forfeiture of a gas station owned by Gregory Palazzari, which he bought in September 2002, according to court documents.

The station was known as Greg’s Sunoco at 605 University Drive in State College.

In 2009, Palazzari was arrested on charges of trafficking in drugs. The state moved to seize the gas station because it thought Palazzari was using the facility to store and deal drugs, according to court documents.

Palazzari was later found guilty and is serving five to 10 years in prison, but Passarello entered the case and contested the seizure of the gas station.

According to court documents, Passarello argued there should have been a hearing on forfeiture of the gas station, because its value was disproportional to the crimes charged. In other words, the gas station is worth substantially more than value of the drugs sold on the premises, and the state should not be allowed to seize its full value.

Pennsylvania civil forfeiture laws allow the state to ask a judge for a summary judgment, which essentially means the judge can rule without a hearing on the merits of the case.

But when that ruling was appealed to the Commonwealth Court, a plurality of the court overturned the lower ruling.

PELLEGRINI: Commonwealth Court Judge Dan Pellegrini

In the majority opinion, Pellegrini wrote that forfeiture cases in Pennsylvania should be viewed as “quasi-criminal” instead of civil, so hearings and possibly even jury trials would be required before the government can seize property.

Because a forfeiture proceeding is quasi-criminal punitive proceeding, the General Assembly mandated a hearing requiring the Commonwealth to present evidence in open court, much like it has to do in a criminal proceeding where similar constitutional principles are implicated and not just do it on the papers,” the judge wrote.

This ruling could set a new precedent in Pennsylvania, requiring the state to have a hearing before a judge in all asset forfeiture cases. That means the accused defendant or convict would have a chance to be heard by a judge before the state could seize any property.

“It allows them to take people’s property without due process and hearings,” said Passarello. “At least this ruling gives you the opportunity to be heard.”

Passarello said he expects the state to appeal the ruling to the state Supreme Court.  The state attorney general’s office did not return calls for comment on the case or to talk about its plans regarding appeal.

Richard Long, executive director of the Pennsylvania District Attorneys Association, said he expects the case to be appealed to the Supreme Court, because Pellegrini’s decision seems to run counter to “decades” of court precedent regarding Pennsylvania forfeiture laws.

Long said the state should be able to seize private property when used in connection with a crime.

“It is being used in the furtherance of criminal activity that is detrimental to society at large,” said Long.

Larry Salzman, an attorney with the Institute for Justice, a libertarian law firm that works to challenge forfeiture laws, said those laws represent one of the most serious assaults on property rights today.

In many states, including Pennsylvania, police departments and prosecutors get a portion of the proceeds for their own budgets.

“So forfeiture becomes a means by which law enforcement agencies can pad their budgets, so they end up with a direct and perverse financial incentive to pursue forfeitures very aggressively,” Salzman said.

The Institute for Justice was not involved in the Palazzari case, but after reviewing Pellegrini’s ruling, Salzman said the decision was a modest first step toward better protecting property rights in the state.

MCGINLEY: Commonwealth Court Judge Bernard McGinley

“This case in Pennsylvania at least makes the government come into court with real evidence and hold a hearing,” he said. “But it doesn’t change this perverse incentive and it doesn’t change the fact that someone could lose their property without being convicted of a crime.”

Commonwealth Court Judge Bernard McGinley, in a dissenting opinion, agreed that forfeiture proceedings are “quasi-criminal” in nature, but said they remain, ultimately, civil hearings.

“The opportunity to be heard does not require the equivalent of an evidentiary hearing in every case,” McGinley wrote.

In some situations, he wrote, conducting a hearing would be wasteful when the facts are not in dispute, the judge wrote.

Contact Boehm at Eric@PAIndependent.com and follow @PAIndependent on Twitter.

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Eric is a reporter for Watchdog.org and former bureau chief for Pennsylvania Independent. He lives in Minneapolis, Minnesota, where he enjoys great weather and low taxes while writing about state governments, pensions, labor issues and economic/civil liberty. Previously, he worked for more than three years in Harrisburg, Pennsylvania, covering Pennsylvania state politics and occasionally sneaking across the border to Delaware to buy six-packs of beer. He has also lived (in order of desirability) in Brussels, Belgium, Pennsburg, Pa., Fairfield, Conn., and Rochester, N.Y. His work has appeared in Reason Magazine, National Review Online, The Freeman Magazine, The Philadelphia Inquirer, The Washington Examiner and elsewhere. He received a bachelor's degree from Fairfield University in 2009, but he refuses to hang on his wall until his student loans are fully paid off sometime in the mid-2020s. When he steps away from the computer, he enjoys drinking craft beers in classy bars, cheering for an eclectic mix of favorite sports teams (mostly based in Philadelphia) and traveling to new places.

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