Summary
The Pennsylvania Superior Court held that the trial court was required to conduct an evidentiary hearing to determine whether assets paid to a law firm as a criminal-defense retainer were traceable to an illegal drug transaction and therefore subject to forfeiture. The court vacated the order dissolving the temporary restraining order and dismissing the Commonwealth’s preservation motion, and remanded for the required hearing.
Topics
Practice areas
Questions Presented
- Whether Pennsylvania's controlled-substances forfeiture statute required an evidentiary hearing to determine whether restrained funds were traceable to an illegal drug transaction before the temporary restraining order could be vacated or continued.
- Whether the trial court erred by resolving the statutory and constitutional objections summarily without first determining whether the funds were subject to forfeiture.
Holdings
- The trial court was required to conduct an evidentiary hearing to determine whether the assets paid to the law firm were proceeds traceable to an illegal drug exchange and therefore subject to forfeiture under 42 Pa.C.S. § 6801(a)(6)(i)(A).
- The allocation of the burden under § 6802(j) was not ripe for adjudication before the threshold determination that the restrained funds were traceable to an illegal drug exchange. If the Commonwealth proves traceability, the burden then shifts to the claimant as provided by § 6802(j).
Key quotations
“the plain wording of Section 6802(f) and (g) contemplates the holding of an evidentiary hearing to meet the threshold problem of ascertaining the source of the funds, monies or proceeds and to determine if its/their source is traceable to an illegal drug transaction.” (49)
“At the hearing to be held on remand, the determination to be made is whether the restrained assets are traceable to an illegal drug exchange, thus subjecting them to forfeiture proceedings.” (52)
Factual background
Joseph E. Hess was arrested and charged with selling and delivering one-quarter pound of cocaine and conspiring to sell and deliver it. He retained William Costopoulos and his law firm, which required a significant cash retainer. The Commonwealth alleged that Hess lacked other means to obtain the retainer and that the money paid to the law firm was directly traceable to illegal drug trafficking. The trial court restrained the funds temporarily but later vacated the order without determining their source through an evidentiary hearing.
Procedural history
Hess was arrested and charged with selling and delivering cocaine and conspiracy. The Commonwealth sought to restrain a cash retainer paid to Hess's law firm, alleging that the funds were proceeds traceable to illegal drug trafficking. The trial court issued a temporary restraining order, but later vacated it and dismissed the preservation motion without conducting the evidentiary hearing contemplated by the forfeiture statute. The Superior Court vacated that order and remanded for an evidentiary hearing.
Remand instructions
The trial court must conduct an evidentiary hearing to determine whether the restrained assets are traceable to an illegal drug exchange and therefore subject to forfeiture under 42 Pa.C.S. § 6801. If the Commonwealth establishes traceability, the statutory burden-shifting provisions of § 6802(j) apply and the restraining order remains in effect through the forfeiture proceedings.