Rel: January 13, 2023
Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-0650), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA OCTOBER TERM, 2022-2023
_________________________
SC-2022-0511 _________________________
Brighton Ventures 2 LLC
v.
State of Alabama
Appeal from Jefferson Circuit Court (CV-19-902016) _________________________
SC-2022-0512 _________________________ SC-2022-0511; SC-2022-0512; SC-2022-0514; SC-2022-0745; SC-2022- 0746; SC-2022-0747
St. John Life Center
Appeal from Jefferson Circuit Court (CV-19-902017) _________________________
SC-2022-0514 _________________________
Appeal from Jefferson Circuit Court (CV-19-902024) _________________________
SC-2022-0745 _________________________
2 SC-2022-0511; SC-2022-0512; SC-2022-0514; SC-2022-0745; SC-2022- 0746; SC-2022-0747
Appeal from Jefferson Circuit Court (CV-19-902016) _________________________
SC-2022-0746 _________________________
Appeal from Jefferson Circuit Court (CV-19-902017) _________________________
SC-2022-0747 _________________________
Appeal from Jefferson Circuit Court (CV-19-902024)
SHAW, Justice.
In these consolidated appeals, Brighton Ventures 2 LLC ("Brighton
3 SC-2022-0511; SC-2022-0512; SC-2022-0514; SC-2022-0745; SC-2022- 0746; SC-2022-0747
Ventures") and the St. John Life Center ("the Life Center") appeal from
a judgment of the Jefferson Circuit Court forfeiting $446,897.19 that was
found to have been used as bets or stakes as part of an illegal gambling
operation.1 We affirm.
Facts and Procedural History
The City of Brighton ("the City") has an ordinance permitting the
establishment of charitable bingo operations within its city limits. Under
that ordinance, a business may apply for and obtain a license to offer
bingo games, provided that the games comply with the provisions of the
ordinance and that the business itself has a named charity through which
it operates.
In early 2019, an application for a charity-bingo business license
was submitted to the City on behalf of Super Highway Bingo ("the
1These cases were brought as in rem actions in the circuit court. Brighton Ventures intervened in case nos. CV-19-902016 and CV-19- 902024, claiming an interest in the $27,955 and the funds in a BB&T Bank account that the State sought to condemn in those actions. The Life Center intervened in case no. CV-19-902017, claiming an interest in the funds in a Regions Bank account that the State also sought to condemn in that action. We have restyled each of the appeals to list either Brighton Ventures or the Life Center as the appellant challenging the circuit court's forfeiture judgment. 4 SC-2022-0511; SC-2022-0512; SC-2022-0514; SC-2022-0745; SC-2022- 0746; SC-2022-0747
casino"). On the application, the Life Center, a local charity, is listed as
the named charity. In February 2019, the City issued the requested
business license, and, in March 2019, the casino officially opened.
According to the record, Brighton Ventures was responsible for the day-
to-day operations of the casino and, in exchange for its management
services, received 85% of the casino's profits. The Life Center, in return,
received 15% of the casino's profits.
Around the time the casino opened, the Alabama Attorney
General's Office began an investigation into "electronic bingo" activity
occurring there. "Electronic bingo is illegal in Alabama." State v. Epic
Tech, LLC, [Ms. 1200798, Sept. 30, 2022] ____ So. 3d ____, ____ (Ala.
2022). As part of the investigation, Darryl Jackson went undercover into
the casino. Jackson later testified that the primary form of entertainment
offered to the casino's patrons was "electronic bingo" machines. According
to Jackson, to play the machines, a patron either inserted cash directly
into the machine or purchased a ticket from a cashier that could then be
used with the machine. The patron then pressed a button on the machine
to bet a certain number of credits on a particular game. Once the bet was
placed, the patron pressed a "play" button and the machine determined
5 SC-2022-0511; SC-2022-0512; SC-2022-0514; SC-2022-0745; SC-2022- 0746; SC-2022-0747
whether the player won or lost the game.
If the patron won, his credits went up; if he lost, his credits went
down. The patron could either play again or "cash out," at which point
the remaining credits would be printed on a receipt. The patron could
then redeem the credits for cash by presenting the receipt to a cashier;
the cashier would enter the information into a computer and give the
patron the credit balance in cash. According to Jackson, no other form of
business was offered at the casino.
The revenue generated from the machines each day was kept in the
casino's cashier area in locked boxes or in the casino's safe until it was
transported -- usually by an armed Brinks, Inc., courier truck -- to a bank
and then deposited into a specified account. According to the State,
typically, the revenue from the casino was deposited into an account at
BB&T Bank ("the main account") that was opened in the Life Center's
name. That account, the State said, was the "main account" out of which
all the money for the casino's expenses were transferred to other
accounts. Specifically, the money was then transferred into either the
Life Center's account at Regions Bank ("the Regions account") or into
Brighton Ventures' account with BB&T Bank ("the BB&T account"). The
6 SC-2022-0511; SC-2022-0512; SC-2022-0514; SC-2022-0745; SC-2022- 0746; SC-2022-0747
money deposited into the Regions account was used to pay the casino's
taxes and payroll. The money that was deposited into the BB&T account
was used primarily to pay the casino's expenses.
Following a month-long investigation, the State executed multiple
search warrants at the casino during which it seized, among other things,
over 200 "electronic bingo" machines and large sums of cash. The State
also executed search warrants on the main account, the Regions account,
the BB&T account, and a local Brinks facility. In addition to seizing from
the main account an amount that is undisclosed in the record, the State
also seized $27,955 in cash that was being held at the Brinks facility,
$50,060.19 from the Regions account, and $368,882 from the BB&T
account. The amount of money seized from those three sources totaled
$446,897.19.
Relevant to these appeals, the State then initiated separate actions,
petitioning the circuit court for an in rem civil forfeiture of the
$446,897.19 pursuant to § 13A-12-30(c), Ala. Code 1975, on the basis that
that money had been used as "bets" or "stakes" for illegal gambling at the
casino. Although Brighton Ventures and the Life Center were not
specifically named as defendants in the State's petitions, because they
7 SC-2022-0511; SC-2022-0512; SC-2022-0514; SC-2022-0745; SC-2022- 0746; SC-2022-0747
had ownership interests in the seized funds, they intervened in the
proceedings.
In their initial responses to the State's petitions, Brighton Ventures
and the Life Center denied that the funds seized were "used as bets or
stakes in gambling activity" as described in § 13A-12-30(c) and argued
that the State had unlawfully seized the funds. They also asserted
counterclaims in which they alleged, among other things, that forfeiture
of the funds constitutes an "excessive fine" in violation of the Excessive
Fines Clause of the Eighth Amendment to the United States
Constitution.
After the State filed replies to Brighton Ventures' and the Life
Center's counterclaims, in which it alleged various affirmative defenses,
it amended each of its petitions to clarify that it had obtained records
from the casino that indicated that the money it had seized was connected
to the casino's illegal gambling activities.
The State then moved to consolidate the cases. That motion was
granted.
The circuit court held a bench trial during which it heard testimony
from several witnesses, including Carl Johnson, the pastor of St. John
8 SC-2022-0511; SC-2022-0512; SC-2022-0514; SC-2022-0745; SC-2022- 0746; SC-2022-0747
Baptist Church in Dolomite and the executive director of the Life Center.
Johnson testified that he first considered partnering with the casino
when he heard that it "was a charity bingo [operation] that could help"
his nonprofit organization raise money. Johnson explained that Brighton
Ventures was the only entity responsible for running and managing the
casino and that the Life Center's only purpose was to serve as the named
charity for the casino's charity-bingo business license.
When asked about the money that the Life Center received from
the casino, Johnson admitted that he had no control over what funds
were deposited into the Regions account and that he had trusted
Brighton Ventures to manage that account. He also confirmed that the
sole reason the Life Center established the Regions account was so that
money from the casino could be held and later used for the casino's taxes
and payroll. Additionally, Johnson explained that, typically, once money
was deposited into the Regions account, it was then transferred to the
BB&T account to help pay for the casino's expenses.
The circuit court then heard testimony from the casino's
administrative assistant, Tearie Leslie, who testified that she was
responsible for handling all of the casino's expenses. According to Leslie,
9 SC-2022-0511; SC-2022-0512; SC-2022-0514; SC-2022-0745; SC-2022- 0746; SC-2022-0747
because the revenue generated by the casino each day was first deposited
into the main account before later being distributed to the BB&T account,
she often had to contact Johnson to get him to write checks out of the
Regions account. Although Leslie acknowledged that that system was
problematic, she said that they were working to improve the system
around the time the State executed its search warrants on the casino and
the subject bank accounts.
Vicki Wilson, a special agent with the Alabama Attorney General's
Office, also testified during the trial. Agent Wilson indicated that she was
the leader of the law-enforcement team that had executed the search
warrant at the casino. According to Agent Wilson, as a result of the
execution of the search warrant, law-enforcement officials were able to
collect over 200 gambling machines and $89,000 in cash from the casino.
When asked if she had a chance to observe how the casino's machines
worked, Agent Wilson said that she had observed one of her partners
playing a game on a machine and had noted that, before he could play
the game, he first had to place a "bet." Once that bet was placed, Agent
Wilson said, the machine proceeded with determining whether her
partner was the winner or loser of the game. From there, Agent Wilson
10 SC-2022-0511; SC-2022-0512; SC-2022-0514; SC-2022-0745; SC-2022- 0746; SC-2022-0747
said her partner had the option of placing another bet or "cashing out."
Agent Wilson stated that, based on all of those factors, she believed that
the casino's "electronic bingo" machines were, in fact, illegal gambling
machines that did not offer the legally permissible game of "bingo" as
defined by this Court in Barber v. Cornerstone Community Outreach,
Inc., 42 So. 3d 65 (Ala. 2009).
Finally, Jackson testified that he had a great deal of experience
investigating gambling operations in Alabama and that, as part of his
investigation for the State in this case, he had gone to the casino at least
three or four times and had used the machines. Jackson described what
he observed each time he played the machines and that the machines
were the only forms of business offered at the casino.
In addition to hearing the above testimony, the circuit court
reviewed a variety of exhibits, including Jackson's undercover video
footage of gameplay at the casino. The circuit court also examined
documents showing that money from the casino was transported and held
by Brinks and records showing numerous deposits of money from the
casino and transfers between the subject bank accounts. Following the
bench trial, the circuit court entered an order in favor of the State in
11 SC-2022-0511; SC-2022-0512; SC-2022-0514; SC-2022-0745; SC-2022- 0746; SC-2022-0747
which it stated the following:
"After consideration of all the evidence presented at the trial of these consolidated cases on November 8, 2021, and after consideration of all of the arguments and authorities cited by the parties, the Court hereby finds that the State has met its burden. This Court is reasonably satisfied that [the] seized accounts and funds are connected with illegal gambling activity, namely the bets and stakes wagered by patrons of the gambling establishments, [and] have been conclusively shown to exist in the seized accounts at issue in these consolidated matters. As such, this Court finds that they are illegal bets and stakes susceptible to forfeiture to the State pursuant to State law. See Ala. Code § 13A-1[2]-30(c) (1975)."
The circuit court then ordered the seized funds to be "transferred to the
General Fund in accordance with the provisions of" § 13A-12-30(c). It did
not, however, render a decision as to Brighton Ventures' and the Life
Center's counterclaims. Brighton Ventures and the Life Center each filed
posttrial motions that were denied.
In appeal nos. SC-2022-0511 and SC-2022-0514, Brighton Ventures
appealed the circuit court's order insofar as it directed the forfeiture of
the money seized from the Brinks facility and the BB&T account; in
appeal SC-2022-0512, the Life Center appealed the circuit court's order
insofar as it directed the forfeiture of the money seized from the Regions
12 SC-2022-0511; SC-2022-0512; SC-2022-0514; SC-2022-0745; SC-2022- 0746; SC-2022-0747
account.2 Because the counterclaims remained unresolved, this Court
remanded the cases in accordance with the policy stated in Foster v.
Greer & Sons, Inc., 446 So. 2d 605 (Ala. 1984), overruled on other grounds
by Ex parte Andrews, 520 So. 2d 507 (Ala. 1987).
Following a hearing on July 14, 2022, the circuit court entered an
amended final judgment in which it denied the counterclaims. Brighton
Ventures and the Life Center filed new notices of appeal, appeal nos. SC-
2022-0745, SC-2022-0746, and SC-2022-0747. All six appeals were
consolidated by this Court.
Standard of Review
The circuit court issued its judgment following a bench trial during
which evidence was presented ore tenus. We, therefore, apply the
following standard of review:
" ' "[W]hen a trial court hears ore tenus testimony, its findings on disputed facts are presumed correct and its judgment based on those findings will not be reversed unless the judgment is palpably erroneous or manifestly unjust." Philpot v. State, 843 So. 2d 122, 125 (Ala. 2002). " 'The presumption of correctness, however, is rebuttable and
2The Life Center also filed a separate appeal, appeal no. SC-2022- 0513, in which it challenged the seizure of the funds from the main account pursuant to another forfeiture petition. However, the Life Center later filed a motion to dismiss that appeal, which was granted. 13 SC-2022-0511; SC-2022-0512; SC-2022-0514; SC-2022-0745; SC-2022- 0746; SC-2022-0747
may be overcome where there is insufficient evidence presented to the trial court to sustain its judgment.' " Waltman v. Rowell, 913 So. 2d 1083, 1086 (Ala. 2005) (quoting Dennis v. Dobbs, 474 So. 2d 77, 79 (Ala. 1985)). "Additionally, the ore tenus rule does not extend to cloak with a presumption of correctness a trial judge's conclusions of law or the incorrect application of law to the facts." Id.' "
State v. $223,405.86, 203 So. 3d 816, 822 (Ala. 2016) (quoting Fadalla v.
Fadalla, 929 So. 2d 429, 433 (Ala. 2005)).
Discussion
I.
In their brief on appeal, Brighton Ventures and the Life Center
("the claimants") admit that the circuit court's conclusion that the seized
funds are connected with illegal gambling activity "is not palpably
wrong." Therefore, there is no dispute on appeal that the gambling
activity at the casino was illegal. However, the claimants contend that
the funds seized were a form of "gambling proceeds" that are not
specifically included in the categories of funds that may be forfeited
pursuant to § 13A-12-30(c) and, therefore, should not have been forfeited
to the State. The claimants further argue that, even if the seized funds
somehow constituted "bets" and "stakes" under § 13A-12-30(c), rather
than "gambling proceeds," the State failed to present any evidence in
14 SC-2022-0511; SC-2022-0512; SC-2022-0514; SC-2022-0745; SC-2022- 0746; SC-2022-0747
support of that finding during trial.
The claimants did not assert in either their posttrial motions or
their joint posttrial brief that the funds seized were "gambling proceeds"
and not "bets" or "stakes" that are subject to forfeiture under § 13A-12-
30(c). We also do not see the issue raised elsewhere. " '[I]t is a well-settled
rule that an appellate court's review is limited to only those issues that
were raised before the trial court. Issues raised for the first time on
appeal cannot be considered.' " Neal v. Neal, 856 So. 2d 766, 778 (Ala.
2002) (quoting Beavers v. County of Walker, 645 So. 2d 1365, 1372 (Ala.
1994)). However, the claimants did argue below that the evidence was
insufficient.
Section 13A-12-30 provides that the following are subject to
forfeiture:
"(a) Any gambling device or gambling record possessed or used in violation of this article [Title 13A, Chapter 12, 'Gambling Offenses'] is forfeited to the state, and shall by court order be destroyed or otherwise disposed of as the court directs.
"(b) Any vehicle possessed or used in violation of this article may be forfeited to the state and disposed of by court order as authorized by law.
"(c) Money used as bets or stakes in gambling activity in
15 SC-2022-0511; SC-2022-0512; SC-2022-0514; SC-2022-0745; SC-2022- 0746; SC-2022-0747
violation of this article is forfeited to the state and by court order shall be transmitted to the General Fund of the state."
(Emphasis added.)
Caselaw holds that funds used in illegal gambling activity similar
to the "gambling" or "electronic bingo" activity involved in these cases
constitute "bets" or "stakes" under § 13A-12-30(c). In Wade v. State, 986
So. 2d 1212 (Ala. Civ. App. 2007), law-enforcement officials executed a
search warrant at a gaming facility known as the "Joker's Wild Arcade"
and seized 74 video gaming machines, $18,362 in cash, and various $5
gift certificates. The State filed a petition, pursuant to § 13A-12-20 et
seq., Ala. Code 1975, seeking to condemn the seized gaming machines
and cash. During the proceedings, Jefferson County Sheriff's Deputy
Jack Self testified that, on three separate occasions, he had gone to the
facility and had observed that, after a patron inserted cash into one of
the gaming machines and played the game, the machine would then
increase or decrease the number of credits the patron had until either all
of the patron's credits were gone or the patron "cash[ed] out." 986 So. 2d
at 1216. If a patron chose to "cash out," the machine would print a ticket
showing the number of credits earned by the patron. Id. Upon
16 SC-2022-0511; SC-2022-0512; SC-2022-0514; SC-2022-0745; SC-2022- 0746; SC-2022-0747
presentment of the ticket, an attendant would then hand the patron cash
based on the number of credits that she had earned. Id. The defendants
did not offer any testimony or other evidence to refute the evidence that
had been presented by the State. The trial court entered an order finding
that the defendants' activities were part of an illegal gambling enterprise
and ordering, pursuant to § 13A-12-30, that the 74 gaming machines be
destroyed and that the cash seized be forfeited to the General Fund of the
State. Id. at 1216-17.
On appeal, it was argued that the forfeiture of the gambling
machines and money was unreasonable and not proper under Alabama
law. Citing § 13A-12-30, the Court of Civil Appeals explained:
"In this case, it is undisputed that an employee of the Joker's Wild Arcade paid [patrons] in cash as a result of their having earned credits on multiple gaming machines on multiple dates. The payment in cash as a reward for playing the gaming machines, in and of itself, violated the antigambling laws of this State.
"Additionally, it was undisputed at the forfeiture hearing that operation of the gaming machines was the only business being conducted on the premises of the Joker's Wild Arcade. Therefore, any money found on the premises of the Joker's Wild Arcade must have been received as 'bets' from the players or used as 'stakes' in furtherance of the business of the Joker's Wild Arcade."
17 SC-2022-0511; SC-2022-0512; SC-2022-0514; SC-2022-0745; SC-2022- 0746; SC-2022-0747
986 So. 2d at 1220. In the absence of evidence to the contrary, the Court
of Civil Appeals concluded, the "only reasonable inference to be drawn
from the evidence in the case was that all the gaming machines and all
the cash seized from the Joker's Wild Arcade were part and parcel of the
same illegal-gambling enterprise." Id. at 1221. The Court of Civil Appeals
held that, because "the seized gaming machines and seized cash had been
used in violating the antigambling laws," they were properly forfeited to
the State under § 13A-12-30. Id.
In these cases, the State presented a variety of evidence to show
that the funds seized were "[m]on[ey] used as bets or stakes in gambling
activity." § 13A-12-30(c). For example, Agent Wilson and Jackson both
clearly testified that the money generated by the casino was from "bets"
or "stakes" that were placed by patrons when they played the games on
the casino's machines and that this was the only form of business
conducted by the casino. Additionally, Johnson and Leslie testified that
the money earned by the casino each day was first deposited into the
main account before eventually being transferred into either the Regions
account or the BB&T account.
The State supported the testimony with copies of documents from
18 SC-2022-0511; SC-2022-0512; SC-2022-0514; SC-2022-0745; SC-2022- 0746; SC-2022-0747
Brinks showing that it was responsible for collecting money from the
casino at the end of each day. The State also presented copies of bank
statements and deposit slips for each of the subject accounts showing
large sums of money either being deposited into those accounts or being
transferred among them. The claimants did not offer any testimony or
evidence to refute the evidence presented by the State.
Based on the above evidence, like in Wade, any money seized from
the bank accounts at issue in these cases was first received as "bets" from
the players or used as "stakes" in furtherance of the casino's illegal
gambling activities before later being deposited into the subject bank
accounts or taken by a Brinks truck. Thus, under these circumstances,
the circuit court's determination that the funds seized were part and
parcel of an illegal gambling enterprise was not erroneous. Therefore, the
circuit court correctly concluded that the money at issue was
undisputedly used as "bets" or "stakes" in violation of Alabama's
antigambling laws and was, therefore, subject to forfeiture to the State
under § 13A-12-30(c).
II.
Next, the claimants argue that the forfeiture of the seized funds
19 SC-2022-0511; SC-2022-0512; SC-2022-0514; SC-2022-0745; SC-2022- 0746; SC-2022-0747
from Brinks and their respective bank accounts constitutes an excessive
fine in violation of the Excessive Fines Clause of the Eighth Amendment
to the United States Constitution. According to the claimants, gambling
offenses are either Class A or Class C misdemeanors under Alabama law,
see §§ 13A-12-21 through 13A-12-25 and § 13A-12-27, Ala. Code 1975,
and thus carry a fine of no more than either $6,000 or $500, respectively,
see § 13A-5-12(a)(1) and (3). Relying on United States v. Bajakajian, 524
U.S. 321 (1998), in which the Supreme Court of the United States
explained that certain forms of civil forfeiture violate the Excessive Fines
Clause if they are " 'grossly disproportionate to the gravity of a
defendant's offense,' " id. at 326 (citation omitted), the claimants argue
that, because the maximum fine applicable in this case would be $6,000
and the amount seized by and forfeited to the State was $446,897.19, the
forfeitures ordered by the circuit court were "obviously a gross violation
of the Excessive Fines Clause." The State argues, however, that its
seizure of the money at issue was a "nonpunitive," "traditional civil in
rem forfeiture" that falls outside the scope of the Excessive Fines Clause
of the Eighth Amendment. Accordingly, the State contends that the
proportionality standard announced in Bajakajian is inapplicable here
20 SC-2022-0511; SC-2022-0512; SC-2022-0514; SC-2022-0745; SC-2022- 0746; SC-2022-0747
and the forfeiture was appropriate in these cases.
The Eighth Amendment provides that "[e]xcessive bail shall not be
required, nor excessive fines imposed, nor cruel and unusual
punishments inflicted" and is applicable to the states through the
Fourteenth Amendment. See Timbs v. Indiana, 586 U.S. 586, ____, 139
S. Ct. 682, 687 (2019). At issue here is the clause "nor excessive fines
imposed," which, as the Supreme Court has explained, " 'limits the
government's power to extract payments, whether in cash or in kind, "as
punishment for some offense." ' " Timbs, 586 U.S. at ____, 139 S. Ct. at
687 (citations omitted).
In the context of in rem civil forfeitures like the one at issue in these
cases, the relevant inquiry in determining the applicability of the
Excessive Fines Clause is whether the forfeiture is punitive. See
Bajakajian, 524 U.S. at 331 n.6 ("Because some recent federal forfeiture
laws have blurred the traditional distinction between civil in rem and
criminal in personam forfeiture, we have held that a modern statutory
forfeiture is a 'fine' for Eighth Amendment purposes if it constitutes
punishment even in part, regardless of whether the proceeding is styled
[as being] in rem or in personam."). See also Timbs, 586 U.S. at ____, 139
21 SC-2022-0511; SC-2022-0512; SC-2022-0514; SC-2022-0745; SC-2022- 0746; SC-2022-0747
S. Ct. at 690 ("[C]ivil in rem forfeitures are fines for purposes of the
Eighth Amendment when they are at least partially punitive.").
"Forfeitures … are thus 'fines' [for purposes of the Excessive Fines
Clause] if they constitute punishment for an offense." Bajakajian, 524
U.S. at 328. If, however, a forfeiture is nonpunitive in nature, meaning
that it has the "hallmarks of traditional civil in rem forfeitures,"
including proceeding "against the currency itself" rather than
"obtain[ing] a criminal conviction of [the defendant] personally," it may
be deemed to "occupy a place outside the domain of the Excessive Fines
Clause" and, thus, not subject to the proportionality analysis in
Bajakajian. Id. at 331-32.
Although the issue has not been addressed by the appellate courts
of this State, at least one federal court has discussed whether the
forfeiture of proceeds from illegal gambling activity under § 13A-12-30(c)
constitutes a "fine" for the purposes of the Excessive Fines Clause. In
Pettway v. Marshall, No. 5:19-CV-1073-KOB, July 16, 2020 (N.D. Ala.
2020) (not reported in Federal Supplement), the plaintiffs in a federal
suit contended that an in rem forfeiture action pending in state court
seeking to forfeit illegal gambling funds under § 13A-12-30(c) violated the
22 SC-2022-0511; SC-2022-0512; SC-2022-0514; SC-2022-0745; SC-2022- 0746; SC-2022-0747
Excessive Fines Clause of the Eighth Amendment. The federal court
discussed the issue as follows:
"Plaintiffs' Count I fails because Plaintiffs incorrectly assume that the freeze of the BBVA account constituted a 'fine' under the Eighth Amendment. In the context of in rem civil forfeitures, the relevant inquiry in determining the applicability of the excessive fines clause is not the nomenclature of the mechanism by which a government seizes property -- e.g., civil, in rem forfeiture or criminal fine -- but whether the payment is punitive or remedial. See United States v. Bajakajian, 524 U.S. 321, 331 n.6 (1998) ('Because some recent federal forfeiture laws have blurred the traditional distinction between civil in rem and criminal in personam forfeiture, we have held that a modern statutory forfeiture is a "fine" for Eighth Amendment purposes if it constitutes punishment even in part, regardless of whether the proceeding is styled in rem or in personam.') See also Timbs v. Indiana, 139 S. Ct. 682, 690 (2019) ('civil in rem forfeitures are fines for purposes of the Eighth Amendment when they are at least partially punitive').
"… [N]on-punitive forfeitures fall outside the bounds of the Eighth Amendment. United States v. One Hundred Thirty Thousand Fifty-Two Dollars in United States Currency, 909 F. Supp. 1506, 1513 (M.D. Ala. 1995); Bajakajian, 524 [U.S.] at 328 (determining that forfeitures are fines only 'if they constitute punishment for an offense'); Browning-Ferris Indus. v. Kelco Disposal, 492 U.S. 257, 265 (1989) (explaining that a 'fine' is 'a payment to a sovereign as punishment for some offense').
"The instant case features neither a payment nor a punishment. In the underlying civil in rem forfeiture action in State court, the State of Alabama seeks forfeiture of the $15,500 in Plaintiffs' account pursuant to Ala. Code § 13A-12-
23 SC-2022-0511; SC-2022-0512; SC-2022-0514; SC-2022-0745; SC-2022- 0746; SC-2022-0747
30, which states that '[m]oney used as bets or stakes in gambling activity in violation of this article is forfeited to the state and by court order shall be transmitted to the general fund of the state.' In the [State's in rem action], the State of Alabama seeks recovery of the proceeds of allegedly illegal gambling activity. Unlike the forfeiture of property used in furtherance of illegal activity -- which, if punitive, requires an Eighth Amendment proportionality analysis to evaluate whether the forfeiture is excessive -- the '[f]orfeiture of proceeds cannot be considered punishment, and thus, subject to the excessive fines clause, as it simply parts the owner from the fruits of the criminal activity.' United States v. Nelson, No. 3:10-cr-23-J-32, 2012 U.S. Dist. LEXIS 20982, at *4 (M.D. Fla. Feb. 21, 2012) (emphasis added) (citing to United States v. Tilley, 18 F.3d 295 (5th Cir. 1994)) and United States v. Alexander, 32 F.3d 1231, 1236 (8th Cir. 1994)). See also Austin v. United States, 509 U.S. 602, 622 n.14 (1993) ('a fine that serves purely remedial purposes cannot be considered "excessive" in any event'); United States v. Masino, No. 3:16cr17, 2019 U.S. Dist. LEXIS 34862, at *34 n.18, 2019 WL 1045179 (N.D. Fla. Mar. 5, 2019) (distinguishing, in the context of a governmental forfeiture action to recover profit gleaned from an illegal bingo operation, between the 'forfeiture of only proceeds ... [of] criminally derived property' versus 'money legitimately obtained'); United States v. Levine, 905 F. Supp. 1025, 1031 (M.D. Fla. 1995) (finding that civil forfeiture of illegal proceeds is remedial rather than punitive)."
Additionally, other courts have recognized that the forfeiture of
proceeds from illegal activity is remedial, not punitive, and is, therefore,
not subject to the Excessive Fines Clause. United States v. Betancourt,
422 F.3d 240, 250 (5th Cir. 2005) (" '[T]he forfeiture of drug proceeds does
24 SC-2022-0511; SC-2022-0512; SC-2022-0514; SC-2022-0745; SC-2022- 0746; SC-2022-0747
not constitute punishment, and thus neither the Eighth Amendment
prohibition against excessive fines nor double jeopardy analysis is
applicable.' " (quoting United States v. Buchanan, 70 F.3d 818, 830 n.12
(5th Cir. 1995))); United States v. One Parcel of Real Prop. Described as
Lot 41, Berryhill Farm Estates, 128 F.3d 1386, 1395 (10th Cir. 1997)
(holding "as a matter of law that forfeiture of drug proceeds … can never
be constitutionally excessive"); United States v. Salinas, 65 F.3d 551, 554
(6th Cir. 1995) (holding that "forfeiture of drug proceeds is not
punishment, but is remedial in nature," because "one never acquires a
property right to proceeds"); and United States v. Alexander, 32 F.3d
1231, 1236 (8th Cir. 1994) ("Forfeiture of proceeds cannot be considered
punishment, and thus, subject to the excessive fines clause, as it simply
parts the owner from the fruits of the criminal activity.").
As in Pettway, these cases feature neither a payment nor a
punishment. As explained in Part I of the "Discussion" section of this
opinion, the seized funds in the underlying civil in rem forfeiture actions
in the circuit court constituted proceeds of illegal gambling activity -- i.e.,
"[m]oney used as bets or stakes in gambling activity" -- and, as in
Pettway, the forfeiture of those proceeds cannot be considered
25 SC-2022-0511; SC-2022-0512; SC-2022-0514; SC-2022-0745; SC-2022- 0746; SC-2022-0747
punishment because it "simply parts the owner from the fruits of the
criminal activity."
The claimants cite no caselaw indicating that the deprivation of
proceeds from illegal gambling activity is punitive and can therefore
constitute a "fine" under the Eighth Amendment. See Rule 28(a), Ala. R.
App. P. Instead, they rely on cases, such as Harris v. State, 821 So. 2d
177 (Ala. 2001), in which our appellate courts have addressed the
excessiveness of the forfeiture of property that was used in furtherance
of criminal activity and, therefore, determined the forfeiture to be
punitive in nature. In none of those cases, including Harris, however, did
our courts reject the punitive-versus-remedial distinction that must be
resolved before a proportionality analysis under the Eighth Amendment
can even apply.3 Under these circumstances, the claimants have failed to
demonstrate that they are entitled to relief, and, thus, the judgment of
the circuit court is affirmed.
3In Harris, the Court addressed an argument as to whether the seizure of proceeds from drug sales amounted to an excessive fine, but it did not hold, contrary to the above-cited federal caselaw, that such an analysis was required. Instead, the Court held that the forfeiture in that case would clearly not be excessive. 26 SC-2022-0511; SC-2022-0512; SC-2022-0514; SC-2022-0745; SC-2022- 0746; SC-2022-0747
SC-2022-0511 -- AFFIRMED.
SC-2022-0512 -- AFFIRMED.
SC-2022-0514 -- AFFIRMED.
SC-2022-0745 -- AFFIRMED.
SC-2022-0746 -- AFFIRMED.
SC-2022-0747 -- AFFIRMED.
Bolin, Wise, Bryan, Sellers, Mendheim, and Stewart, JJ., concur.
Mitchell, J., concurs in part and concurs in the result, with opinion,
which Parker, C.J., joins.
27 SC-2022-0511; SC-2022-0512; SC-2022-0514; SC-2022-0745; SC-2022- 0746; SC-2022-0747
MITCHELL, Justice (concurring in part and concurring in the result).
I agree with Part I of the main opinion -- the money seized was
"used as bets or stakes" under § 13A-12-30(c), Ala. Code 1975. I also
agree with the conclusion reached in Part II that the forfeiture was not a
"fine" within the meaning of the Excessive Fines Clause of the Eighth
Amendment to the United States Constitution. But, because § 13A-12-
30(c) authorizes the forfeiture of money as an instrumentality -- not as
proceeds -- of illegal gambling activity, I concur with Part II only to the
extent that it reaches the correct result.
A property forfeiture is a "fine" subject to the Excessive Fines
Clause when it is "at least partially punitive." Timbs v. Indiana, 586 U.S.
___, ___, 139 S. Ct. 682, 690 (2019) (citing Austin v. United States, 509
U.S. 602 (1993)). As the main opinion correctly notes, several federal
courts have held that any forfeiture -- even a criminal in personam
forfeiture -- of the proceeds (or fruits) of a crime is entirely nonpunitive. 4
4Othercourts have repudiated this view. See, e.g., United States v. Jalaram, Inc., 599 F.3d 347, 354 (4th Cir. 2010) (rejecting "the Government's argument that forfeiture of … the proceeds of a criminal conspiracy … is, by definition, nonpunitive"); United States v. Browne, 505 F.3d 1229, 1281-82 (11th Cir. 2007) (subjecting the forfeiture of proceeds under 18 U.S.C. § 1963(a)(3) to the Excessive Fines Clause); 28 SC-2022-0511; SC-2022-0512; SC-2022-0514; SC-2022-0745; SC-2022- 0746; SC-2022-0747
See, e.g., United States v. Betancourt, 422 F.3d 240, 250 (5th Cir. 2005);
United States v. One Parcel of Real Prop. Described as Lot 41, Berryhill
Farm Estates, 128 F.3d 1386, 1395 (10th Cir. 1997); United States v.
Salinas, 65 F.3d 551, 554 (6th Cir. 1995); United States v. Alexander, 32
F.3d 1231, 1236 (8th Cir. 1994). By contrast, the forfeiture of the
instrumentality of a crime is entirely nonpunitive only if it is in the form
of a traditional civil in rem proceeding -- that is, a proceeding "against
the [property] itself" that serves a "remedial purpose," neither "designed
to punish the offender" nor able to be "imposed upon innocent owners."
United States v. Bajakajian, 524 U.S. 321, 331-32 (1998).
The money forfeited here under § 13A-12-30(c) was forfeited as an
instrumentality of illegal gambling activity. The statute authorizes a
proceeding against "[m]oney used as bets or stakes in gambling activity
in violation of this article." § 13A-12-30(c) (emphasis added). In stark
contrast to the proceeds-forfeiture cases cited by the main opinion, § 13A-
United States v. Corrado, 227 F.3d 543, 552, 558 (6th Cir. 2000) (explaining how "courts can reduce the forfeiture [of illegal proceeds under 18 U.S.C. § 1963(a)(3)] … so as not to violate the Eighth Amendment prohibition against … 'excessive fines' " and applying the Excessive Fines Clause to the forfeiture of proceeds).
29 SC-2022-0511; SC-2022-0512; SC-2022-0514; SC-2022-0745; SC-2022- 0746; SC-2022-0747
12-30(c) makes no mention whatsoever of proceeds. 5 See, e.g.,
Betancourt, 422 F.3d at 250 (applying 21 U.S.C. § 853(a)(1), which
prescribes the forfeiture of "any property constituting, or derived from,
any proceeds the person obtained, directly or indirectly as the result of
such violation"); One Parcel, 128 F.3d at 1395 (applying 21 U.S.C. §
881(a)(6), which authorizes the forfeiture of "all proceeds traceable" to an
"exchange for a controlled substance or listed chemical"); Salinas, 65 F.3d
at 552, 554 (same); Alexander, 32 F.3d at 1233 (applying 18 U.S.C. §
1963(a)(3), which provides for the forfeiture of "any property constituting,
or derived from, any proceeds which the person obtained, directly or
indirectly, from racketeering activity or unlawful debt collection").
Rather, by limiting forfeiture to "[m]oney used … in violation of this
article," § 13A-12-30(c) prescribes the forfeiture of money only when it is
"the actual means by which an offense was committed" -- that is, an
5The Legislature has prohibited this Court from considering § 13A-12-30's title ("Forfeiture of gambling devices and gambling proceeds") as a matter of statutory construction. § 1-1-14(a), Ala. Code 1975 ("The classification and organization of the titles, chapters, articles, divisions, subdivisions and sections of this Code, and the headings thereto, are made for the purpose of convenient reference and orderly arrangement, and no implication, inference or presumption of a legislative construction shall be drawn therefrom."). 30 SC-2022-0511; SC-2022-0512; SC-2022-0514; SC-2022-0745; SC-2022- 0746; SC-2022-0747
instrumentality. Bajakajian, 524 U.S. at 333 n.8. And, because the
instrumentality forfeiture under § 13A-12-30(c) does not deviate from the
hallmarks of a traditional civil in rem forfeiture -- it is against the money
itself, based solely on its use in violation of the antigambling statutes,
and is effective regardless of the guilt of the money's owner -- the
forfeiture here was entirely nonpunitive and thus not subject to the
Excessive Fines Clause.
Because the main opinion is correct that the forfeiture here was
covered by § 13A-12-30(c) and not subject to the Excessive Fines Clause,
I concur in part and concur in the result.
Parker, C.J., concurs.