U.S. Surpeme Court

SCOTUS rules against couple seeking to use frozen funds to pay defense lawyer

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A couple seeking to use frozen funds to pay a lawyer are not entitled to a post-indictment hearing in an attempt to prove the charges against them are baseless, the U.S. Supreme Court has ruled.

The court ruled in a 6-3 opinion (PDF) that Kerri and Brian Kaley were not entitled to “a judicial re-determination of the conclusion the grand jury already reached: that probable cause supports this criminal prosecution.” Justice Elena Kagan wrote the majority opinion. Chief Justice John G. Roberts Jr. dissented in an opinion joined by Justices Stephen G. Breyer and Sonia Sotomayor.

Courts generally allow hearings for indicted defendants who want to show frozen funds were not related to the charged crime and should be available to pay their lawyer. But courts have split on whether defendants can contest probable cause of the crime that permits forfeiture. Kagan said a “do-over” hearing on the second issue could lead to inconsistent findings, undermining the integrity of the criminal justice system and the grand jury’s role.

Kerri Kaley, who worked for a Johnson & Johnson subsidiary, was accused with her husband of conspiring to sell stolen prescription medical devices on the black market. They contended they were legally entitled to resell surplus or outmoded medical devices that hospitals didn’t use.

In his dissent, Roberts said the prosecution initially conceded it could trace only $140,000 to charged crimes against the Kaleys. But a superseding indictment added a count of conspiracy to commit money laundering, allowing the government to use a broader forfeiture provision. As a result, the government said much more was subject to forfeiture: more than $2 million, a $500,000 certificate of deposit set aside to pay for counsel, and the Kaleys’ home.

Roberts said the hearing sought by the Kaleys would not merely relitigate grand jury proceedings. The issue, he said, is whether probable cause exists to believe that the Kaleys’ assets are forfeitable. “The Kaleys would have the opportunity to tell their side of the story—something the grand jury never hears,” he said.

“Few things could do more to ‘undermine the criminal justice system’s integrity’ than to allow the government to initiate a prosecution and then, at its option, disarm its presumptively innocent opponent by depriving him of his counsel of choice—without even an opportunity to be heard,” Roberts wote. “Federal prosecutors, when they rise in court, represent the people of the United States. But so do defense lawyers—one at a time. In my view, the court’s opinion pays insufficient respect to the importance of an independent bar as a check on prosecutorial abuse and government overreaching. Granting the government the power to take away a defendant’s chosen advocate strikes at the heart of that significant role.”

Hat tip to SCOTUSblog, which notes the unusual lineup in the case, Kaley v. United States.

Prior coverage:

ABAJournal.com: “Ideological lines blurred in SCOTUS arguments on right to challenge asset freeze”

ABAJournal.com: “ABA supports right to hearing when courts freeze assets needed to pay counsel”

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