[WSBARP] Legal Marijuana vs. Federal Forfeiture Law

Mon Jun 16 11:33:39 PDT 2014

There was also a separate presentation at the midyear  by a Pierce County
Prosecutor, bar disciplinary counsel and Professor Karen Boxx about
ethical issues related to I-504. The materials for that contain background
information not discussed in detail in the other presentation. 

John Riley

John M. Riley, III	 
Principal | Witherspoon • Kelley	 
jmr at witherspoonkelley.com |
<http://www.witherspoonkelley.com/people/john_m_riley_iii.php> Attorney
Profile |  <http://www.witherspoonkelley.com/documents/jmr.vcf> vCard	 

 <http://www.witherspoonkelley.com>  	 422 W. Riverside Ave, Ste 1100
Spokane, WA 99201 
(509) 624-5265 (office)
(509) 458-2728 (fax)
witherspoonkelley.com 

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From: wsbarp-owner at lists.wsbarppt.com
[mailto:wsbarp-owner at lists.wsbarppt.com] On Behalf Of Julie Vance
Sent: Monday, June 16, 2014 9:46 AM
To: WSBA RPPT Real Property Discussion Forum
Subject: RE: [WSBARP] Legal Marijuana vs. Federal Forfeiture Law

Has there been any further development on this conflict?  Advise?  I have
had my first client approach me about drafting a lease to protect his
assets while leasing to a licensed marijuana retailer.  Suggestions?

Sincerely

Julie A. Vance

Attorney At Law

PO Box 1224

514 S. Columbus Ave, Ste 8

Goldendale, WA 98620

Tel. (509) 773-4567

Fax (509) 773-3768

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From: WSBA RPPT Real Property Discussion Forum
[mailto:wsbarp at LISTSERV.NETHELPS.COM] On Behalf Of Bickel, Dwight
Sent: Tuesday, October 22, 2013 3:02 PM
To: wsbarp at LISTSERV.NETHELPS.COM
Subject: [WSBARP] Legal Marijuana vs. Federal Forfeiture Law

There is something I have been wondering related to the conflict between
the state and federal law.  It might be another thing for real property
lawyers to worry about.    Who will be willing to allow their real
property to be used as a distribution site?  Who will be willing to rely
upon a mortgage upon that land to secure a loan for that business?

The title companies see many instances where real property is obtained by
the United States under civil forfeiture law allowing confiscation of
property used in violation of certain laws (there is a long list) or
acquired with the profits from illegal activity.  There may be minimal
risk of federal prosecution or civil forfeiture for residential property,
especially due to possession or indoor farming by a tenant.  But consider
the risk of federal confiscation of property being used for high volume
sales of “recreational” marijuana.  The possession of that inventory and
its retail sale will be permitted by the license issued by Washington, but
will remain a crime under several federal laws.

Even if the owner of the land is not operating the business, the risk of
confiscation is about the same.  The landlord would have difficulty
asserting defense as an “innocent owner” where the landlord is aware the
tenant’s business holds large volumes of marijuana for sale to the public.
A lender for purchase of the Land is unlikely to be affected.  A lender
for a business loan probably will have actual knowledge.   

The value of that property (the land, inventory and money) would be
significant.  The DOJ report to Congress
<http://www.justice.gov/jmd/afp/02fundreport/2012affr/report1.htm>  states
$4.2 billion was deposited to the Assets Forfeiture Fund from forfeitures
last year, though only $5.6 million was from Washington state.   

Someone on this listserve will be asked to advise a business owner,
landlord or lender.  

Dwight Bickel

Phone: (206) 370-3189

E-mail:  <mailto:Dwight.Bickel at fntg.com> Dwight.Bickel at fntg.com

Civil Asset Forfeiture Reform Act of 2000

18 U.S.C. section 983. General rules for civil forfeiture proceedings.

‘(d) INNOCENT OWNER DEFENSE-

‘(1) An innocent owner’s interest in property shall not be forfeited under
any civil forfeiture statute. The claimant shall have the burden of
proving that the claimant is an innocent owner by a preponderance of the
evidence.

‘(2)(A) With respect to a property interest in existence at the time the
illegal conduct giving rise to forfeiture took place, the term ‘innocent
owner’ means an owner who--

‘(i) did not know of the conduct giving rise to forfeiture; or

‘(ii) upon learning of the conduct giving rise to the forfeiture, did all
that reasonably could be expected under the circumstances to terminate
such use of the property.

‘(B)(i) For the purposes of this paragraph, ways in which a person may
show that such person did all that reasonably could be expected may
include demonstrating that such person, to the extent permitted by law--

‘(I) gave timely notice to an appropriate law enforcement agency of
information that led the person to know the conduct giving rise to a
forfeiture would occur or has occurred; and

‘(II) in a timely fashion revoked or made a good faith attempt to revoke
permission for those engaging in such conduct to use the property or took
reasonable actions in consultation with a law enforcement agency to
discourage or prevent the illegal use of the property.

‘(ii) A person is not required by this subparagraph to take steps that the
person reasonably believes would be likely to subject any person (other
than the person whose conduct gave rise to the forfeiture) to physical
danger.

‘(3)(A) With respect to a property interest acquired after the conduct
giving rise to the forfeiture has taken place, the term ‘innocent owner’
means a person who, at the time that person acquired the interest in the
property--

‘(i) was a bona fide purchaser or seller for value (including a purchaser
or seller of goods or services for value); and

‘(ii) did not know and was reasonably without cause to believe that the
property was subject to forfeiture.

‘(B) An otherwise valid claim under subparagraph (A) shall not be denied
on the ground that the claimant gave nothing of value in exchange for the
property if--

‘(i) the property is the primary residence of the claimant;

‘(ii) depriving the claimant of the property would deprive the claimant of
the means to maintain reasonable shelter in the community for the claimant
and all dependents residing with the claimant;

‘(iii) the property is not, and is not traceable to, the proceeds of any
criminal offense; and

‘(iv) the claimant acquired his or her interest in the property through
marriage, divorce, or legal separation, or the claimant was the spouse or
legal dependent of a person whose death resulted in the transfer of the
property to the claimant through inheritance or probate,

except that the court shall limit the value of any real property interest
for which innocent ownership is recognized under this subparagraph to the
value necessary to maintain reasonable shelter in the community for such
claimant and all dependents residing with the claimant.

‘(4) Notwithstanding any provision of this subsection, no person may
assert an ownership interest under this subsection in contraband or other
property that it is illegal to possess.

‘(5) If the court determines, in accordance with this section, that an
innocent owner has a partial interest in property otherwise subject to
forfeiture, or a joint tenancy or tenancy by the entirety in such
property, the court may enter an appropriate order--

‘(A) severing the property;

‘(B) transferring the property to the Government with a provision that the
Government compensate the innocent owner to the extent of his or her
ownership interest once a final order of forfeiture has been entered and
the property has been reduced to liquid assets; or

‘(C) permitting the innocent owner to retain the property subject to a
lien in favor of the Government to the extent of the forfeitable interest
in the property.

‘(6) In this subsection, the term ‘owner’--

‘(A) means a person with an ownership interest in the specific property
sought to be forfeited, including a leasehold, lien, mortgage, recorded
security interest, or valid assignment of an ownership interest; and

‘(B) does not include--

‘(i) a person with only a general unsecured interest in, or claim against,
the property or estate of another;

‘(ii) a bailee unless the bailor is identified and the bailee shows a
colorable legitimate interest in the property seized; or

‘(iii) a nominee who exercises no dominion or control over the property.

****** 

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All opinions and comments in this message represent the views of the
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Information provided on this list should not be considered legal advice.
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All opinions and comments in this message represent the views of the
author and do not necessarily have the endorsement of the Washington State
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