Caplin & Drysdale Chartered v. United States

491 U.S. 617 (1989)

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Nature of the Case

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Facts

Reckmeyer (D) was charged in a multi-count indictment with running a massive drug importation and distribution scheme. The scheme was alleged to be a continuing criminal enterprise (CCE), in violation of 21 U.S.C. § 848. The statute authorizes forfeiture to the Government of 'property constituting, or derived from . . . proceeds . . . obtained' from drug-law violations, § 853(a). The indictment sought forfeiture of specified assets in D's possession. The District Court entered a restraining order forbidding D to transfer any of the listed assets that were potentially forfeitable. Earlier, D had retained Caplan (P) to represent him in the ongoing grand jury investigation which resulted in the January 1985 indictments. D paid the firm $25,000 for preindictment legal services a few days after the indictment was handed down. P placed the monies in an escrow account. P represented D following the indictment. D moved to modify the restraining order to permit him to use some of the restrained assets to pay P's fees. Before the Court could conduct a hearing, D entered a plea agreement with the Government. D pleaded guilty and agreed to forfeit all of the specified assets listed in the indictment. After the plea was entered, the District Court denied his earlier motion to modify the restraining order. P filed a petition under § 853(n), which permits third parties with an interest in forfeited property to ask the sentencing court for an adjudication of their rights to that property. P claimed an interest in $170,000. P argued that assets used to pay an attorney were exempt from forfeiture and if not, the failure of the statute to provide such an exemption rendered it unconstitutional. The District Court granted P's claim for a share of the forfeited assets. The Fourth Circuit affirmed. The failure to make provisions for attorney's fees out of forfeited assets impermissibly infringed a defendant's Sixth Amendment right to the counsel of his choice. En banc that decision was reversed. The Supreme Court granted certiorari.