Four years ago, Sila Luis was indicted on charges of Medicare fraud. The government alleged that she had obtained as much as $45 million illegally but had spent almost all of it, leaving her with approximately $2 million in assets. Hoping to ensure that Luis’s remaining assets would be available to pay fines and restitution if she were convicted, the government went to court. Relying on a federal statute that allows courts to freeze property equivalent in value to the proceeds of health-care crimes like those with which Luis has been charged, the government asked a federal trial court to issue a pretrial order to freeze all of Luis’s assets, including the “untainted” ones – that is, money not connected to her alleged crimes. Luis argued that an order which would prevent her from using her untainted assets to hire the attorney of her choice to defend her at trial would violate the Sixth Amendment to the Constitution, which guarantees that, in all criminal cases, the defendant has a right “to the assistance of counsel for his defense.”  Although lower courts rejected that argument, yesterday five Justices of the Supreme Court agreed with Luis, in a decision which demonstrates once again that the Court does not always divide on traditional ideological lines.

Justice Stephen Breyer had the eight-member Court’s main opinion, which drew the support of Chief Justice John Roberts and Justices Ruth Bader Ginsburg and Sonia Sotomayor.   For Breyer, it comes down to a balancing test. On the one hand, the Sixth Amendment right to hire the lawyer of your choice, while not unlimited, is a fundamental one, which would be undermined by allowing courts to freeze a defendant’s “untainted” assets. On the other hand, although the government’s interest in ensuring that a defendant’s assets are available to pay fines or restitution is certainly important, Breyer concludes, that interest is outweighed by the defendant’s constitutional right to his counsel of choice – particularly when the defendant may still have “tainted” assets – that is, assets that are the fruits of his crimes. Moreover, Breyer added, allowing the government to freeze “untainted” assets in a case like Luis’s “would have no obvious stopping place,” because Congress could enact new laws to allow similar asset freezes in cases involving other kinds of crimes.

Justice Clarence Thomas agreed with the Breyer plurality that freezing Luis’s assets violates the Sixth Amendment, but for a different reason. Thomas would eschew the plurality’s “balancing approach” and look just at the text of the Sixth Amendment and the state of the law when that amendment was ratified. And at that time, he explained, the Sixth Amendment was understood to guarantee only the right to hire a lawyer to represent you in a criminal case; there was no broader right to have the government provide you with a lawyer. That right would have been “meaningless,” he continued, if a defendant could not use his own, untainted money to do so.

Justice Anthony Kennedy dissented, in an opinion joined by Justice Samuel Alito. In their view, the plurality’s ruling is contrary to two of the Court’s earlier decisions – Caplin & Drysdale v. United States and United States v. Monsanto – that “make clear that a defendant has no Sixth Amendment right to spend forfeitable assets (or assets that will be forfeitable) on an attorney.” (Luis’s case is different, Breyer contends, because the assets that the government wants to freeze are unconnected to her alleged offenses.) What’s more, Kennedy continues, the decision will create “perverse incentives” for defendants to spend the fruits of their crime right away, knowing that they can then use their own money to pay for their attorneys.

Justice Elena Kagan also dissented. She explained that she regards the Court’s earlier decision in Monsanto as “troubling”: given the presumption that a defendant is innocent until proven guilty, and the fact that the government will only have a right to the defendant’s assets if he is convicted, she was “not altogether convinced” that the government’s interest in recovering the defendant’s assets should outweigh the defendant’s right to hire his attorney of choice. But it ultimately does not matter, Kagan reasoned, because Luis had not asked the Court to overrule its decision in Monsanto, which therefore remains the law of the land.

Luis’s case now goes back to the lower courts, where she will presumably be allowed to use her “untainted” funds to pay (within reason) her attorney’s fees. And more broadly, the federal government will no longer be able to freeze untainted funds in similar cases. But it’s not clear how significant the effect of this decision will actually be: after all, the government will still be able to freeze “tainted” assets, and the Breyer opinion emphasized that courts can use tracing rules to distinguish between tainted and untainted assets when the two are intermingled.

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Posted in Luis v. U.S., Analysis, Featured, Merits Cases

Recommended Citation: Amy Howe, Opinion analysis: Pretrial freeze of “untainted” assets violates the Sixth Amendment right to counsel of choice, SCOTUSblog (Mar. 31, 2016, 12:48 PM), http://www.scotusblog.com/2016/03/opinion-analysis-pretrial-freeze-of-untainted-assets-violates-the-sixth-amendment-right-to-counsel-of-choice/