High Court Asked to Overturn Michigan Property-Seizure Law

Michigan law that lets prosecutors seize property used in a crime even if an owner was oblivious to the infraction. The issue is important to the banking industry because the Michigan law jeopardizes lenders who hold liens on cars or houses involved in crimes. The case was brought by a woman whose husband police caught in their car while he was having sex with a prostitute. The car was seized. Michael Crotty, the American Bankers Association's deputy general counsel for litigation, said that if the Michigan Supreme Court's decision to uphold the law was not overturned, bankers would be forced to restrict credit to anyone they suspect might commit a crime. Banks would be forced to conduct extensive background checks of all loan applicants, he said. Otherwise, lenders would risk losing their collateral, according to Mr. Crotty. Michigan officials used nuisance-abatement laws to seize the car owned by John and Tina Bennis but refused to compensate Mrs. Bennis. Larry L. Roberts, an assistant prosecuting attorney for Wayne County, Mich., told the justices that the police have the power to seize all property used in criminal acts, regardless of whether the owner was aware of the illicit use. "We have to reaffirm the police power of the state," he told the court. Several justices didn't appear to be swayed. They asked if the state could seize a rented or stolen car used in the commission of a crime. Mr. Roberts said the state would impound the car, but would use its discretion to return it to the rental car company or the owner who reported it stolen. Justice David Souter questioned that logic. "Why shouldn't the wife be in exactly the same position as the rental car company?" he asked. The answer also troubled Mr. Crotty, who has been following this case closely. "Give me a break," Mr. Crotty said. "That is a meaningless concession. The very idea you can exercise discretion means they can come after you if they change their mind. We need a greater constitutional protection." Mr. Roberts said innocent owners, such as Mrs. Bennis or financial institutions, could sue the guilty party for compensation. Mrs. Bennis' attorney, Stefan B. Herpel, said the due process clause in the U.S. Constitution requires the government to compensate innocent owners for their stake in seized properties. He also said Mrs. Bennis had no way to know her husband would solicit a prostitute, so she shouldn't be punished for his crime.