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Hands off! Ruling Makes it Tougher for State to Seize Private Property

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.

By Eric Boehm | PA Independent

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.

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.

“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.

Gilbert R Albright Jr December 08, 2012 at 07:24 PM
The Forfeiture Law is nothing more the unjust enrichment by the Government. It is a profit driven system. The more they take, the more they make. Just like with writing traffic tickets. Why should the State be entitled to confiscate a Gas Station simply because it was used to sell drugs? If your brother is selling Pot out of his $300,000 house does that give the State the right to take that property and confiscate it without any chance for the owner to contest it, just because they charge him with Drug Trafficking? This is nothing but State Sanctioned STEALING!
Gilbert R Albright Jr December 08, 2012 at 08:29 PM
Let's see, the State can't confiscate your property if you kill someone, assault someone, rape someone, rob someone, kidnap someone, commit arson, financial fraud, ebezzlement, business fraud, illegally sell guns and weapons, and on and on, BUT they can confiscate your property without giving you a chance to contest it if you are charged with Drug Trafficking. Something is wrong here! The article doesn't say if the siezure occurred before or after conviction. If it occurred before conviction this is outrageous.
James Kephart Jr. December 09, 2012 at 05:34 PM
Good point - too bad our disgrace of a gov't has no integrity - it's always all about getting more money in the hands of the gov't.
Mary Longley Halperin December 09, 2012 at 08:33 PM
How about the fact that if you can't pay your property taxes, the tax bureau can tack on any penalties & interest that it want to. And if you are unable to pay, they take your home and sell it! Seems like a similar situation to the one in the story.
DJ December 09, 2012 at 09:09 PM
That government is best which governs least. Henry David Thoreau

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