Posted on March 2, 2014, by Brandon Crawford
The Supreme Court decides that a defendant has no right to challenge the pretrial seizure and freezing of assets, even when the defendant needs the assets to hire a lawyer.
In 2005, Kerri Kaley, a medical equipment sales rep, learned that the Food and Drug Administration suspected she was stealing prescription medical devices from hospitals and selling the equipment for personal gain. Kerri's husband, Brian Kaley, was also being investigated for shipping the medical devices and depositing some of the funds in his business account.
Using their home as collateral, the Kaleys obtained an equity line of credit in order to pay expenses and attorney's fees during the investigation, which lasted two years. A grand jury finally indicted the Kaleys, along with another sales rep named Jennifer Gruenstrass, in early 2007. The indictment included a forfeiture demand for all property constituting "proceeds" of the charges "and all property traceable to such property."
The Government also obtained a protective order to freeze the Kaleys' assets, including their marital residence and the funds they acquired during the investigation. The Kaleys asked the court to vacate the order in an effort to use the remaining equity in their home to retain counsel for trial. They argued that the Fifth and Sixth Amendments entitled them to a pretrial hearing, at which they would challenge whether the medical devices were stolen.
The judge granted the Kaleys a hearing, but barred them from presenting any evidence suggesting the medical devices were not actually stolen. The judge also found the Kaleys' constitutional right to an attorney of their own choosing was not violated because they could afford other competent counsel if they liquidated their other assets, including their childrens' college savings account.
The Kaleys decided to pursue an interlocutory appeal in the Eleventh Circuit. As the appeal was resolved, the other indicted sales rep, Jennifer Gruenstrass, who retained her counsel of choice because her assets were not frozen, went to trial and was acquitted. The Kaleys, still fighting for access to their money, eventually landed in the United States Supreme Court. The Court released its decision on February 25, 2014.
Describing the right to hire an attorney of choice as "the root meaning of the Sixth Amendment," Justice Kagan goes on to explain that a freeze depriving a defendant of this right is erroneous "only when the grand jury should never have issued the indictment." Chief Justice Roberts, along with Justice Breyer and Justice Sotomayor, disagreed.
Chief Justice Roberts clarified that previous decisions by the Court reserved the crucial question of whether a defendant had the right to be heard before the Government could freeze assets the defendant needs to retain his counsel of choice. He wrote, "There was good reason for that caution. The possibility that a prosecutor could elect to hamstring his target by preventing him from paying his counsel of choice raises substantial concerns about the fairness of the entire proceeding."
A grand jury's finding has always determined if an accused will go to trial. Now, it will also determine if an accused will be able to defend herself at trial. While the majority hung its hat on the "history of the grand jury institution," the dissent analyzed the situation a bit differently: "Common sense tells us that secret decisions based on only one side of the story will prove inaccurate more often than those made after hearing from both sides."
In deciding that defendants can be deprived of the means to defend themselves without even a simple hearing, the majority simply missed the mark.
You can read the full opinion here.