Commonwealth v. $34,440.00 US Cur. Apl of Falette ( 2017 )

[J-39-2017]
IN THE SUPREME COURT OF PENNSYLVANIA
MIDDLE DISTRICT
SAYLOR, C.J., BAER, TODD, DONOHUE, DOUGHERTY, WECHT, MUNDY, JJ.
COMMONWEALTH OF PENNSYLVANIA : No. 102 MAP 2016
:
: Appeal from the Order of the
v. : Commonwealth Court at No. 1021 CD
: 2014 dated April 19, 2016 Affirming the
: Order of the Monroe County Court of
$34,440.00 U.S. CURRENCY : Common Pleas, Civil Division, at No.
: 11208 Civil 2009 dated May 15, 2014,
: exited May 16, 2014.
APPEAL OF: RAFAEL FALETTE :
: ARGUED: May 9, 2017
OPINION
JUSTICE BAER DECIDED: December 19, 2017
In this discretionary appeal, we consider the burdens of proof applicable in civil in
rem forfeitures of currency under Pennsylvania’s Controlled Substances Forfeiture Act
(“Forfeiture Act”), 42 Pa.C.S. §§ 6801 - 6802 (repealed), which, inter alia, provides that
money is forfeitable to the Commonwealth upon proof of a “substantial nexus”1 to
certain prohibited drug activities under The Controlled Substance, Drug, Device and
Cosmetic Act (“Controlled Substance Act”), 35 P.S. §§ 780-101 - 780-144.2 More
1
Although the phrase “substantial nexus” does not appear anywhere in the text of the
Forfeiture Act, this Court has previously held that in an in rem forfeiture proceeding, the
Commonwealth bears the initial burden of demonstrating, by a preponderance of the
evidence, that a substantial nexus exists between the seized property and a violation of
the Controlled Substance Act. Commonwealth v. $6,425.00 Seized from Esquilin, 880
A.2d 523, 529 (Pa. 2005).
2
Relevant to the instant mater, the Forfeiture Act provides that there is no property right
in the following:
(continued…)
specifically, we consider whether the Commonwealth can satisfy its evidentiary burden
of proving a substantial nexus between the seized currency and prohibited drug activity
by relying solely upon the Forfeiture Act’s presumption at 42 Pa.C.S. § 6801(a)(6)(ii),
which provides that money found in close proximity to controlled substances is
rebuttably presumed to be the proceeds derived from the sale of a controlled substance,
and, if so, the related assessment of how this presumption can be rebutted.3
The Commonwealth Court in the case sub judice determined that proof of
proximity under the Subsection 6801(a)(6)(ii) presumption is sufficient to establish a
substantial nexus and that the innocent owner defense set forth at 42 Pa.C.S. § 6802(j)
(…continued)
(A) Money, negotiable instruments, securities or other things of value
furnished or intended to be furnished by any person in exchange for a
controlled substance in violation of The Controlled Substance, Drug,
Device and Cosmetic Act, and all proceeds traceable to such an
exchange.
(B) Money, negotiable instruments, securities or other things of value used
or intended to be used to facilitate any violation of The Controlled
Substance, Drug, Device and Cosmetic Act.
42 Pa.C.S. § 6801(a)(6)(i).
3
Subsection 6801(a)(6)(ii), which sets forth the rebuttable presumption, reads, in full, as
follows:
No property shall be forfeited under this paragraph, to the extent of the
interest of an owner, by reason of any act or omission established by the
owner to have been committed or omitted without the knowledge or
consent of that owner. Such money and negotiable instruments found in
close proximity to controlled substances possessed in violation of The
Controlled Substance, Drug, Device and Cosmetic Act shall be rebuttably
presumed to be proceeds derived from the selling of a controlled
substance in violation of the Controlled Substance, Drug, Device and
Cosmetic Act.
42 Pa.C.S. § 6801(a)(6)(ii).
[J-39-2017] - 2
provides the sole method by which claimants can rebut the presumption.4 Though we
agree that, generally, proof of proximity under the Subsection 6801(a)(6)(ii) rebuttable
presumption may be sufficient to satisfy the Commonwealth’s overall evidentiary burden
of proving a substantial nexus for the purpose of currency forfeitures, we hold that the
Commonwealth Court erred in concluding that the innocent owner defense provides the
sole basis for rebutting that presumption. Rather, for the reasons set forth below, we
conclude that the presumption may be rebutted by demonstrating that the seized
currency is not the proceeds of drug sales, independent of a claimant’s ability to satisfy
the innocent owner defense. If the Subsection 6801(a)(6)(ii) presumption has been
rebutted sufficiently, the burden of proof remains with the Commonwealth such that it
must put on further evidence of a nexus to drug activity beyond the mere propinquity
between the money and controlled substances. Because the Commonwealth Court
erred as a matter of law in holding otherwise, we vacate the Commonwealth Court’s
4
Subsection 6802(j) provides, in full, as follows:
Owner’s burden of proof.--At the time of the hearing, if the Commonwealth
produces evidence that the property in question was unlawfully used,
possessed or otherwise subject to forfeiture under section 6801(a) or
6801.1(a), the burden shall be upon the claimant to show:
(1) That the claimant is the owner of the property or the holder of a
chattel mortgage or contract of conditional sale thereon.
(2) That the claimant lawfully acquired the property.
(3) That it was not unlawfully used or possessed by him. In the
event it shall appear that the property was unlawfully used or
possessed by a person other than the claimant, then the claimant
shall show that the unlawful use or possession was without his
knowledge or consent. Such absence of knowledge or consent must
be reasonable under the circumstances presented.
42 Pa.C.S. § 6802(j).
[J-39-2017] - 3
order, vacate the trial court’s order, and remand to the trial court for further proceedings
consistent with this opinion.
I. Background
The facts underlying this matter are straightforward and largely undisputed. On
August 7, 2009, Juan Lugo (“Lugo”), a New Jersey resident, was driving with three
passengers in his sister’s vehicle on Interstate-80 in Monroe County, Pennsylvania,
when he was pulled over for tailgating. Upon approaching the vehicle, Pennsylvania
State Trooper Derek Felsman (“Trooper Felsman”) detected an odor of marijuana and
sought permission to conduct a search of the vehicle. Lugo consented to the search,
and Trooper Felsman uncovered ecstasy pills in the cigarette outlet in the center
console area of the vehicle and a small amount of marijuana by the rear passenger
door.5 Additionally, Trooper Felsman uncovered $34,440.00 in cash hidden in the
seatbelt attachment of the “b-pillar”6 on the passenger side of the vehicle. The
Pennsylvania State Police confiscated both the cash and the controlled substances.
Though Lugo admitted to Trooper Felsman that the controlled substances
belonged to him and were for his personal use, he denied ownership or knowledge of
the currency found in the vehicle. Similarly, the other passengers in the vehicle denied
having any knowledge of the recovered currency. Lugo was subsequently charged with
possession of a controlled substance for personal use (ecstasy), possession of a small
amount of marijuana for personal use, and possession of drug paraphernalia. Lugo
ultimately entered a guilty plea to misdemeanor possession of marijuana. Importantly,
5
The constitutional validity of the stop and subsequent consent to search is not
currently at issue before this Court.
6
A “b-pillar” is a post that connects a vehicle’s roof to its body at the rear of the front
door.
[J-39-2017] - 4
Lugo was never charged with any crime related to drug distribution or in connection with
the $34,440.00 in cash uncovered in the vehicle. Indeed, as will be discussed in further
detail infra, the Commonwealth averred in its subsequent forfeiture petition that Lugo
signed a waiver denying ownership of the currency. Commonwealth’s Petition for
Forfeiture and Condemnation at ¶ 7.
Following Lugo’s guilty plea, in a separate legal proceeding the Commonwealth
filed a petition for forfeiture and condemnation of the $34,440.00 under Subsection
6801(a)(6)(i) of the Forfeiture Act, which is the subject of the instant appeal. As noted,
the Commonwealth averred that Lugo admitted to ownership of the controlled
substances, but denied any knowledge of the currency, and that all occupants of the
vehicle signed waivers denying any knowledge or ownership of the currency.
Commonwealth’s Petition for Forfeiture and Condemnation at ¶ 7. Notwithstanding its
acknowledgment in this regard, the Commonwealth maintained that the currency was
forfeitable as proceeds traceable to an exchange of controlled substances. Id. at ¶ 8.
In response to the Commonwealth’s forfeiture petition, Appellant Rafael Falette
(“Falette”), who was not present in the vehicle during Lugo’s August 7, 2009, arrest,
filed an answer and new matter in which he claimed lawful ownership of the money. 7
Falette maintained that he was a longtime friend of Lugo’s sister, the record owner of
the vehicle in which the currency was found, and that the money represented the
proceeds of a recent personal injury lawsuit settlement. In support of his claim, Falette
submitted copies of two settlement checks, one dated June 17, 2009, in the amount of
$14,496.22 and a second dated July 16, 2009, in the amount of $23,303.33, for a total
7
Though Subsection 6802(a) of the Forfeiture Act provides that, in a forfeiture
proceeding, “the Commonwealth shall be the plaintiff and the property the defendant,”
for ease of discussion, we refer to Rafael Falette, the claimed owner of the $34,440.00,
as the appellant. 42 Pa.C.S. § 6802(a).
[J-39-2017] - 5
of $37,799.55. Appellant’s Answer and New Matter at ¶ 13; id. at Exhibits 1 and 2.
Falette claimed that after he initially deposited the settlement checks, he withdrew all of
the money in cash so that he could impress his friends. Thereafter, he concealed the
money in the b-pillar of the vehicle, purportedly because he did not want to utilize a
bank. Then, unbeknownst to him at the time, Lugo borrowed the car, resulting in his
arrest and the confiscation of the money.
Following a hearing, in which Trooper Felsman and Falette both testified, the trial
court granted the Commonwealth’s forfeiture petition. Initially, the trial court determined
that the Commonwealth sufficiently established a nexus under the Forfeiture Act based
upon, inter alia, the proximity between the minimal amount of drugs in the cigarette
outlet and rear passenger door and the money in the b-pillar. Trial Court Order,
5/15/2014, at 1; see also 42 Pa.C.S. § 6801(a)(6)(ii) (providing that money found in
close proximity to controlled substances is rebuttably presumed to be the proceeds
derived from the sale of a controlled substance).8 Moreover, the trial court found that
Falette’s testimony as to how he acquired the money was incredible and that his
8
In its two-page order granting the Commonwealth’s forfeiture petition, the trial court
also cited the following factors: the inconsistent statements made by the vehicle’s
occupants during the stop; the placement of the currency in the b-pillar; the packaging
of the money in two plastic bags; and the fact that the vehicle was registered to a third
party (Lugo’s sister). Trial Court Order, 5/15/2014, at 1. The trial court’s order did not
elaborate on how these factors supported the Commonwealth’s contention that the
seized money represented the proceeds of drug sales. Because the trial court did not
expand on this point in its Pa.R.A.P. 1925(a) opinion, it remains somewhat unclear to
what extent the trial court relied solely upon the Subsection 6801(a)(6)(ii) rebuttable
presumption in granting the Commonwealth’s forfeiture petition. As will be discussed in
further detail infra, however, the Commonwealth Court determined on appeal that the
Commonwealth sufficiently proved a nexus between the money and a violation of the
Controlled Substance Act via the Subsection 6801(a)(6)(ii) presumption. See
Commonwealth v. $34,440.00 U.S. Currency, 138 A.3d 102, 111 (Pa. Cmwlth. 2016)
(stating “the Commonwealth sufficiently established close proximity between the
$34,440.00 and the drugs thereby triggering the statutory rebuttable presumption, and it
had no obligation to present any more evidence”) (citation omitted).
[J-39-2017] - 6
purported rationale for withdrawing all of the money in cash, namely, to impress his
friends, was inconsistent with his action of concealing it within the b-pillar of someone
else’s vehicle. Trial Court Order, 5/15/2014, at 1. Accordingly, the court determined
that he failed to rebut the Commonwealth’s case by demonstrating the innocent owner
defense under Subsection 6802(j) of the Forfeiture Act because he did not establish that
he was the owner of the currency, that he lawfully obtained the currency, and that he did
not possess the currency for illegal purposes. 42 Pa.C.S. § 6802(j). Falette appealed
to the Commonwealth Court, arguing, inter alia, that the trial court erred in finding that
the Commonwealth sufficiently proved a nexus between the currency and illegal drug
activity.
In a divided 3-2 decision, an en banc panel of the Commonwealth Court affirmed
the trial court’s order granting forfeiture of the $34,440.00. Commonwealth v.
$34,440.00 U.S. Currency, 138 A.3d 102 (Pa. Cmwlth. 2016). The Commonwealth
Court observed that, in a forfeiture proceeding involving money, the Commonwealth
bears the initial burden of proving by a preponderance of the evidence that there is a
substantial nexus between the money being forfeited and a violation of the Controlled
Substance Act. Id. at 108. The court further determined, based upon its own
precedent, that the Commonwealth may satisfy this evidentiary burden simply by
proving that the currency was found in close proximity to controlled substances in
accord with the Subsection 6801(a)(6)(ii) rebuttable presumption. Id. at 110-111 (citing
Commonwealth v. $259.00 Cash U.S. Currency, 860 A.2d 228, 232 (Pa. Cmwlth. 2004)
(en banc)). Finally, the Commonwealth Court concluded that once the Commonwealth
establishes that money is forfeitable by utilizing the Subsection 6801(a)(6)(ii)
presumption, the burden then shifts to the claimant to demonstrate all of the elements of
the innocent owner defense under Subsection 6802(j), namely, that he owns the money,
[J-39-2017] - 7
that it was lawfully acquired by him, and that it was not unlawfully used or possessed by
him. Id. (citing, inter alia, 42 Pa.C.S. § 6802(j)(3)). Thus, the court held that the
innocent owner defense is the sole method of rebutting the Subsection 6801(a)(6)(ii)
presumption.
Applying its construction of the law to the facts presented, the Commonwealth
Court acknowledged that Lugo was charged only with possession of a small amount of
marijuana for personal use and that there was no evidence, apart from its proximity to
the small amount of drugs, linking the $34,440.00 to drug sales. However, the court
determined that these facts are irrelevant once the Subsection 6801(a)(6)(ii)
presumption is triggered. Id. at 110. The court concluded that the Commonwealth here
satisfied its burden of demonstrating that the drugs and cash were in close proximity
because both were found within arm’s-length of each other inside the vehicle, thus
triggering the Subsection 6801(a)(6)(ii) rebuttable presumption. Id. at 108-09. The
Commonwealth Court further held that Falette failed to rebut this presumption by
demonstrating the innocent owner defense because the trial court disbelieved his
explanation for how he got the money and why he concealed it in the b-pillar of the
vehicle. Id. at 111. Concluding that it could not disturb the trial court’s credibility
determinations, the Commonwealth Court affirmed the trial court’s order granting the
Commonwealth’s forfeiture petition. Id.
Judge Levitt authored a dissenting opinion, which was joined by then-President
Judge Pellegrini. The dissent would have held that the trial court misapplied the law in
concluding that the innocent owner defense is the only method of rebutting the
Subsection 6801(a)(6)(ii) presumption, and that it therefore erred in granting the
Commonwealth’s forfeiture petition. In the dissent’s view, the Subsection 6801(a)(6)(ii)
presumption can be rebutted by evidence that the seized currency does not represent
[J-39-2017] - 8
the proceeds of a drug exchange, independent of the claimant’s ability to demonstrate
all of the elements of the innocent owner defense. Id. at 117. The dissent observed
that this approach was utilized in Commonwealth v. Tate, 538 A.2d 903 (Pa. Super.
1988). In Tate, the Superior Court concluded that, although the rebuttable presumption
applied in that money was unquestionably found in close proximity to controlled
substances, the stipulated facts of record, which proved that the specific money in
question was not derived from drug sales, adequately rebutted the presumption. Tate,
538 A.2d at 906.
Because the adjudicated facts of record in this case indicated that Lugo was not
the owner of the $34,440.00, that he only possessed a small amount of marijuana for
personal use, and that he was neither charged nor convicted of any drug distribution
crimes, the dissent would have held that the Subsection 6801(a)(6)(ii) proximity
presumption was rebutted and that the burden of proof remained with the
Commonwealth to put on further evidence of a nexus between the money and illegal
activity under the Controlled Substance Act in order to satisfy its burden of proving a
prima facie case for forfeiture. $34,440.00 U.S. Currency, 138 A.3d at 117-18. The
dissent therefore concluded that the Commonwealth did not establish a prima facie
case for forfeiture, that Falette was not required to demonstrate the innocent owner
defense, and that the trial court’s rejection of Falette’s testimony was irrelevant. Id. at
119. Consequently, it would have reversed the trial court’s order granting forfeiture of
the $34,440.00.
This Court subsequently granted Falette’s petition for allowance of appeal,
limited to the following two questions, as phrased by Falette:
1. If the rebuttable presumption under Section 6801 is established, can a
finding that there is a “substantial nexus” be defeated by evidence of
record before the burden is shifted back to the claimant to establish that
he or she is the innocent owner?
[J-39-2017] - 9
2. Where the rebuttable presumption establishes that currency is
presumed to be proceeds of selling controlled substances, but the
Commonwealth’s evidence is inconsistent with selling of controlled
substances, can the presumption be defeated by the Commonwealth’s
own evidence?
Commonwealth v. $34,440.00 U.S. Currency, 158 A.3d 1245 (Pa. 2016).9
II. Analysis
It is unnecessary to explain in detail the parties’ arguments to this Court, as both
largely present the same substantive arguments discussed in our summary of the
Commonwealth Court opinions. Stated succinctly, Falette, the appellant herein, adopts
the posture of the dissent below and contends that the Commonwealth could not rely
solely upon the Subsection 6801(a)(6)(ii) presumption to establish a nexus between the
money and drug sales because the presumption that the money was derived from drug
sales was conclusively rebutted by evidence that Lugo possessed only a small amount
of drugs for personal use and did not own the money uncovered from the vehicle. 10
Conversely, the Commonwealth argues that the majority below correctly determined
that, once the Subsection 6801(a)(6)(ii) presumption is triggered, the Commonwealth
9
In his petition for allowance of appeal to this Court, Falette also argued (1) that the
Commonwealth Court erred in finding that the drugs were found within close proximity
of the currency because both were within arm’s reach inside the vehicle and (2) that the
Subsection 6801(a)(6)(ii) presumption, as interpreted by the Commonwealth Court,
violates the Fourteenth Amendment of the United States Constitution, the Excessive
Fine Clauses of the Eighth Amendment of the United States Constitution, and Article I,
Section 13 of the Pennsylvania Constitution. We specifically declined to review those
contentions, however, and we offer no opinion concerning their merits at this time.
Consequently, our recitation of the proceedings below and our corresponding legal
analysis focus on the discrete issues of statutory interpretation for which review was
granted.
10
The American Civil Liberties Union of Pennsylvania (“ACLU-PA”) filed an amicus brief
in support of Falette’s position.
[J-39-2017] - 10
has satisfied its burden of proving a substantial nexus and that the innocent owner
defense is the sole method of rebutting that presumption.11
In order to answer the questions presented in this appeal, we must interpret
Pennsylvania’s Forfeiture Act set forth at 42 Pa.C.S. §§ 6801-6802. Issues of statutory
interpretation present this Court with questions of law; accordingly, our standard of
review is de novo, and our scope of review is plenary. Pennsylvania Pub. Util. Comm’n
v. Andrew Seder/The Times Leader, 139 A.3d 165, 172 (Pa. 2016). This Court’s
interpretation of the Forfeiture Act, and indeed of all statutes, is guided by the Statutory
Construction Act, 1 Pa.C.S. §§ 1501-1991.
Pursuant to the Statutory Construction Act, the object of all statutory construction
is to ascertain and effectuate the General Assembly’s intention. 1 Pa.C.S. § 1921(a).
When the words of a statute are clear and free from ambiguity, the letter of the statute is
not to be disregarded under the pretext of pursuing its spirit. 1 Pa.C.S. § 1921(b).
Moreover, technical words and phrases that have acquired a peculiar and appropriate
meaning shall be construed according to such peculiar and appropriate meaning.
1 Pa.C.S. § 1903(a). However, when the words of a statute are not explicit, the General
Assembly’s intent may be ascertained by considering matters other than the statutory
language, such as the occasion and necessity for the statute, the circumstances of the
statute’s enactment, the object the statute seeks to attain, and the consequences of a
particular interpretation. 1 Pa.C.S. § 1921(c). When ascertaining the intention of the
General Assembly in the enactment of a statute, we presume that the General
Assembly did not intend a result that is absurd, impossible of execution, or
unreasonable. 1 Pa.C.S. § 1922(1). Finally, we observe that the law generally
11
The Pennsylvania District Attorneys Association filed an amicus brief in support of the
Commonwealth’s position.
[J-39-2017] - 11
disfavors forfeitures, requiring forfeiture statutes to be strictly construed. Commonwealth
v. 1997 Chevrolet and Contents Seized from Young, 160 A.3d 153, 193 (Pa. 2017).
Turning to the text of the Forfeiture Act at issue here, the relevant statutory
provisions provide as follows:
§ 6801. Controlled substances forfeiture.
(a) Forfeitures generally.--The following shall be subject to forfeiture to the
Commonwealth and no property right shall exist in them:
* * *
(6)(i) All of the Following:
(A) Money, negotiable instruments, securities or other things of
value furnished or intended to be furnished by any person in
exchange for a controlled substance in violation of The
Controlled Substance, Drug, Device and Cosmetic Act, and all
proceeds traceable to such an exchange.
(B) Money, negotiable instruments, securities or other things of
value used or intended to be used to facilitate any violation of
The Controlled Substance, Drug, Device and Cosmetic Act.
* * *
(ii) No property shall be forfeited under this paragraph, to the extent
of the interest of an owner, by reason of any act or omission
established by the owner to have been committed or omitted without
the knowledge or consent of that owner. Such money and
negotiable instruments found in close proximity to controlled
substances possessed in violation of The Controlled Substance,
Drug, Device and Cosmetic Act shall be rebuttably presumed to be
proceeds derived from the selling of a controlled substance in
violation of The Controlled Substance, Drug, Device and Cosmetic
Act.
* * *
§ 6802. Procedure with respect to seized property subject to liens and
rights of lienholders.
(j) Owner’s burden of proof.--At the time of the hearing, if the
[J-39-2017] - 12
Commonwealth produces evidence that the property in question was
unlawfully used, possessed or otherwise subject to forfeiture under section
6801(a) or 6801.1(a), the burden shall be upon the claimant to show:
(1) That the claimant is the owner of the property or the holder of a
chattel mortgage contract of conditional sale thereon.
(2) That the claimant lawfully acquired the property.
(3) That it was not unlawfully used or possessed by him. In the
event that it shall appear that the property was unlawfully used or
possessed by a person other than the claimant, then the claimant
shall show that the unlawful use or possession was without his
knowledge or consent. Such absence of knowledge or consent must
be reasonable under the circumstances.
42 Pa.C.S. §§ 6801-6802.12
Although the phrase “substantial nexus” does not appear anywhere in the
Forfeiture Act, this Court has previously held that in an in rem forfeiture proceeding, the
Commonwealth bears the initial burden of demonstrating, by a preponderance of the
evidence, that a substantial nexus exists between the seized property and a violation of
the Controlled Substance Act. Commonwealth v. $6,425.00 Seized from Esquilin, 880
A.2d 523, 529 (Pa. 2005) (“Esquilin”). More specifically, in a forfeiture proceeding
involving money, the Commonwealth bears the initial burden of proving either (1) that
the money was furnished or intended to be furnished in exchange for a controlled
12
While this case was pending on appeal, the General Assembly enacted the Civil
Asset Forfeiture Reform Bill, P.L. 247, No. 13 § 10, effective July 1, 2017, which
substantially altered the existing burden-shifting scheme for civil in rem forfeitures and
rephrased the language used in the rebuttable presumption. However, our construction
of Sections 6801 and 6802, which remain applicable in this appeal, is limited to the
contemporaneous legislative history, i.e., the history of the statute prior to its enactment.
1 Pa.C.S. § 1921(c)(7); Thomas Jefferson University Hospitals v. Philadelphia
Department of Labor and Industry, 162 A.3d. 384 (Pa. 2017). Consequently, we do not
look to the recent reforms by the Legislature to inform our interpretation of Sections
6801 and 6802. Moreover, it is beyond the scope of this opinion to discuss the specific
effect of the newly enacted statute on the Commonwealth’s burden in forfeiture
proceedings.
[J-39-2017] - 13
substance, (2) that the money represents proceeds traceable to such an exchange, or
(3) that the money was used or intended to be used to facilitate a violation of the
Controlled Substance Act. 42 Pa.C.S. § 6801(a)(6)(i)(A)-(B); Commonwealth v.
Marshall, 698 A.2d 576, 578 (Pa. 1997).
In establishing one of these three bases for currency forfeiture, the
Commonwealth need not produce evidence directly linking the seized property to illegal
activity, nor is a criminal prosecution or conviction required to establish the requisite
nexus. Esquilin, 880 A.2d at 529; see also Commonwealth v. One 1998 Ford Coupe
VIN No. 1FABP41A9JF143651, 574 A.2d 631, 633 n.2 (Pa. 1990) (observing that
conviction of a crime is not necessary to support an order of forfeiture); but cf.
Commonwealth v. Fontanez, 739 A.2d 152, 154 (Pa. 1999) (stating that, while not
dispositive, the fact that the appellant was never charged with a crime in relation to the
seized money is probative of whether the money was indeed contraband). Rather,
circumstantial evidence may suffice to establish a party’s involvement in drug activity.
Esquilin, 880 A.2d at 529. We have held that once the Commonwealth sustains its
initial burden of proving a substantial nexus between money and illegal drug activity, the
burden then shifts to the claimant, who can avoid forfeiture of the property if he
demonstrates that (1) he is the owner of the property, (2) he lawfully acquired the
property, and (3) the property was not unlawfully used or possessed by him. Id. (citing
elements of the innocent owner defense under Subsection 6802(j)); see also 1997
Chevrolet and Contents Seized from Young, 160 A.3d at 193 (stating that once the
Commonwealth satisfies its initial burden, “the burden shifts to the property owner to
demonstrate that he or she did not know of the conduct giving rise to the forfeiture; or
that the unlawful use or possession of the property was without his or her consent”).
[J-39-2017] - 14
The principles set forth above are well-settled, and our holding herein should not
be construed as disturbing the substantial body of case law interpreting the ordinary
burden-shifting scheme established by the Forfeiture Act. However, the instant matter
raises an issue of first impression for this Court, namely, the interplay between the
Subsection 6801(a)(6)(ii) rebuttable presumption, the Commonwealth’s overall burden
of proof in a forfeiture proceeding, and the Subsection 6802(j) innocent owner defense,
when the sole basis for finding a nexus is evidence that money was found in close
proximity to controlled substances.13
As a threshold matter, we conclude that, under the plain language of the
Subsection 6801(a)(6)(ii) presumption, the Commonwealth may satisfy its initial burden
of demonstrating a nexus between money and prohibited activity under the Controlled
Substances Act by relying solely upon the presumption that arises when money is
uncovered in close proximity to controlled substances. By its plain terms, Subsection
6801(a)(6)(i)(A) (regarding forfeiture of money) provides, inter alia, that one basis for
establishing a substantial nexus in currency forfeitures is by showing that the money
represents the proceeds of an exchange of controlled substances, i.e., the money is the
proceeds of a drug sale. See 42 Pa.C.S. 6801(a)(6)(i)(A) (providing that “proceeds
13
Though this Court observed in Esquilin, supra, that the money was found in
sufficiently close proximity to trigger the Subsection 6801(a)(6)(ii) presumption, we
considered this as merely one factor among several, including evidence that the
defendant was observed in the actual act of dealing drugs prior to his arrest for
possession with intent to deliver. 880 A.2d at 531-32. Accordingly, unlike the case sub
judice where the Commonwealth Court determined that the Commonwealth satisfied its
burden solely by using the presumption, see $34,440.00 U.S. Currency, 138 A.3d at
111 (stating “[o]nce the Commonwealth satisfied its burden by using the presumption,
the burden shifted to Falette”) (emphasis omitted), this Court’s ultimate determination in
Esquilin was based upon additional evidence that the money represented the proceeds
of drug transactions. Thus, while instructive in construing the overall statutory scheme
for currency forfeitures, Esquilin does not directly control our disposition of the instant
matter.
[J-39-2017] - 15
traceable” to an exchange of controlled substances are forfeitable). Subsection
6801(a)(6)(ii) (rebuttable presumption), in turn, directs trial courts to presume this basis
for forfeiture (namely, that the money represents the proceeds of drug sales) when the
money is found in close proximity to controlled substances. See 42 Pa.C.S.
§6801(a)(6)(ii) (stating “money and negotiable instruments found in close proximity to
controlled substances . . . shall be rebuttably presumed to be proceeds derived from the
selling of a controlled substance”). Accordingly, we agree with the Commonwealth’s
construction of the Forfeiture Act to the extent it argues that proving proximity may be
sufficient for proving a substantial nexus.
Having determined that proof of proximity may be sufficient to establish a
substantial nexus under Subsection 6801(a)(6)(ii), we turn to the Commonwealth
Court’s conclusion that the General Assembly intended to establish the innocent owner
defense as the sole method of rebutting the presumption that the seized money in
question was derived from drug sales. As noted, the Commonwealth Court below was
divided on this question and the Superior Court, which shares jurisdiction with the
Commonwealth Court in in rem forfeiture proceedings, has come to a different
conclusion as to how the Subsection 6801(a)(6)(ii) presumption can be rebutted. In
short, while the Commonwealth Court has held that the innocent owner defense is the
sole method of rebutting the Commonwealth’s prima facie case when it relies upon
nothing more than the Subsection 6801(a)(6)(ii) presumption, the Superior Court has
determined that the presumption can be rebutted, independent of a claimant’s ability to
demonstrate the innocent owner defense, as to the specific question of whether the
seized funds were in fact derived from drug sales. In order to resolve this apparent split
in authority, a close examination of these disparate approaches is warranted.
[J-39-2017] - 16
In disposing of the instant matter, the Commonwealth Court relied upon its prior
decision in Commonwealth v. $259.00 Cash U.S. Currency, 860 A.2d 228 (Pa. Cmwlth.
2004) (en banc). There, the Commonwealth Court addressed the role of the Subsection
6801(a)(6)(ii) presumption in a case in which the defendant in the underlying criminal
matter was arrested with $259.00 in cash and a single packet of heroin weighing one-
half of one-tenth of a gram on his person. Id. at 229. The defendant was charged with
possession of a controlled substance. Id. Following his guilty plea to that charge, he
was sentenced to 12 to 24 months of incarceration. Id. The Commonwealth then filed a
petition to forfeit the $259.00 found on the defendant based upon his simultaneous
possession of both the money and a controlled substance. Id. In response, the
defendant admitted to being a recovering drug addict and that he had relapsed prior to
his arrest. Id. He claimed, however, that the $259.00 was the remainder of a $365.24
paycheck he had recently received from his employer, and that he had just purchased a
$10 bag of heroin when he was arrested. Id. In support of his claim, he submitted a
printout of his wages provided by his employer. Id. The trial court, however,
determined that the defendant failed to rebut the presumption by demonstrating the
innocent owner defense under Subsection 6802(j). Id. at 230 (stating “[Defendant]
failed to establish that he lawfully acquired the money and that it was not unlawfully
used or possessed by him”) (quoting trial court opinion). Therefore, it granted the
Commonwealth’s forfeiture petition based upon the Subsection 6801(a)(6)(ii)
presumption. Id.On appeal, the Commonwealth Court affirmed the trial court’s order granting
forfeiture, concluding that the Commonwealth satisfied its burden of demonstrating a
nexus based upon the proximity presumption. Id. at 232 (affirming the trial court based
upon the claimant’s failure to rebut the statutory presumption). As noted above, the
[J-39-2017] - 17
Commonwealth Court in the case sub judice relied upon its decision in $259.00 Cash
U.S. Currency in concluding that Falette failed to rebut the Subsection 6801(a)(6)(ii)
presumption by demonstrating the innocent owner defense. See $34,440.00 U.S.
Currency, 138 A.3d at 111 (citing $259.00 Cash U.S. Currency and stating that “Falette
did not satisfy his burden of demonstrating that he lawfully acquired, possessed, and
used the cash as required under Section 6802(j) of the Forfeiture Act”).
Conversely, in Tate, supra, the Superior Court concluded that demonstrating the
innocent owner defense is distinct from rebutting the presumption that arises when
money is found in close proximity to controlled substances.14 In Tate, the defendant
was arrested after selling cocaine to an undercover police officer. Tate, 538 A.2d at
905. Following his arrest, the police uncovered a briefcase in the defendant’s vehicle,
which contained one quarter of a pound of cocaine and $1,950.00 in cash. Id.
Importantly, in the subsequent forfeiture proceeding, the Commonwealth stipulated to
the following facts: (1) the defendant borrowed $3,000.00 from a bank for travel
expenses incident to his purchase of cocaine that he intended to distribute; (2) the
defendant purchased the cocaine using a separate $20,000.00 fund of his own money,
14
Though Tate involved a prior version of the Forfeiture Act, codified at 35 P.S. § 780-
128-129, the relevant provisions, including the rebuttable presumption, are substantively
identical to Sections 6801 and 6802. See 35 P.S. § 780-128(a)(6)(ii), repealed by Act of
June 30, 1988, P.L. 464, No. 79, § 7, imd. effective) (providing that “[s]uch money and
negotiable instruments found in close proximity to controlled substances possessed in
violation of this act shall be rebuttably presumed to be the proceeds derived from the
selling of a controlled substance in violation of this act”). Additionally, in Tate, the
defendant was the claimant and the forfeiture petition was filed in connection with the
underlying criminal charges. As noted, in the case sub judice, the claimant is a third
party not directly involved with the underlying criminal offense. However, we discern no
basis for distinguishing between those cases in which the claimant and the defendant is
the same person, and those in which the claimant is a third-party with respect to
rebutting the presumption that arises when money is uncovered in close proximity to
controlled substances.
[J-39-2017] - 18
which represented the proceeds of a prior drug transaction; and (3) the $1,950.00 found
in the defendant’s briefcase was inside a white envelope marked with the bank’s logo
along with receipts documenting the defendant’s travel expenses. Id. at 904-05.
The Tate Court described the rebuttable presumption as “a means by which a
rule of substantive law is invoked to force the trier of fact to reach a given conclusion,
once the facts constituting its hypothesis have been established, absent contrary
evidence.” Id. at 906 (quoting Commonwealth v. Shaffer, 288 A.2d 727, 735 (Pa.
1972)). It further explained that a rebuttable presumption “forces the defendant to come
forth or suffer inevitable defeat on the issue in controversy.” Id. Though the
Commonwealth sought to rely upon the presumption that the $1,950.00 was derived
from the sale of controlled substances based upon the close proximity between the two
within the defendant’s briefcase, the Superior Court held that the presumption was
rebutted by the facts of record, which clearly demonstrated that the money was the
remainder of the bank loan, minus the defendant’s documented travel expenses. Id. at
906 (stating “we find under the factual circumstances of this case the presumption has
been adequately rebutted, lending no support to the Commonwealth’s burden of proof”).
The Superior Court made no reference to the innocent owner defense in its analysis of
whether the presumption was rebutted.
The Superior Court ultimately concluded, however, that the Commonwealth
nonetheless demonstrated a nexus even without the support of the rebuttable
presumption because it proved that the travel expenses were used to facilitate the
defendant’s violation of the Controlled Substance Act, an alternative basis for currency
forfeiture. Id. at 906-907; see also 42 Pa.C.S. § 6801(a)(6)(i)(B) (providing that money
is forfeitable if “used or intended to be used to facilitate any violation of The Controlled
Substance, Drug, Device and Cosmetic Act”). Thus, while it ultimately found that the
[J-39-2017] - 19
money was forfeitable based upon the additional evidence offered by the
Commonwealth, the Superior Court in Tate recognized that the presumption of a
substantial nexus raised through proximity of drugs and money can be rebutted without
proof of a claimant’s innocent owner status. The Superior Court subsequently reiterated
its holding in Tate in a case arising under Section 6801. See Commonwealth v. Giffin,
595 A.2d 101, 106 (Pa. Super. 1991) (holding that the presumption was sufficiently
rebutted by the claimant and stating that “the lower court correctly ruled that these facts
fail to sufficiently establish a nexus between the specific funds in question and any
violation of the Controlled Substance Act by appellee”) (emphasis in original).
Upon consideration of these competing interpretations, we find ourselves
substantially aligned with the Superior Court’s holding in Tate, and respectfully conclude
that the Commonwealth Court in the case sub judice committed an error of law by
conflating Falette’s burden to rebut the Subsection 6801(a)(6)(ii) presumption with his
burden to demonstrate the innocent owner defense under Subsection 6802(j). We
reach this conclusion based upon the plain language of the relevant statutory
provisions.
Initially, we note that, in the context of currency forfeitures, the Forfeiture Act
does not seek to target money possessed by those who are merely recreational drug
users. Rather, the Forfeiture Act provides that currency is forfeitable for one of three
specific reasons: (1) the money was furnished or intended to be furnished in exchange
for a controlled substance; (2) the money represents proceeds traceable to such an
exchange; or (3) the money was used or intended to be used to facilitate a violation of
the Controlled Substance Act. 42 Pa.C.S. § 6801(a)(6)(i)(A)-(B). The rebuttable
presumption set forth in Subsection 6801(a)(6)(ii) relates only to the second basis for
forfeiture, i.e., the money represents the proceeds of a sale of a controlled substance.
[J-39-2017] - 20
As the Superior Court in Tate correctly noted, this Court has previously described a
rebuttable presumption as a rule of substantive law designed to force a trier of fact to
reach a certain conclusion once a given set of facts are established, unless contrary
evidence is introduced. Commonwealth v. Shaffer, 288 A.2d 727, 735 (Pa. 1972) (citing
9 Wigmore, Evidence § 2491 (3rd ed. 1940)); see also Black’s Law Dictionary (10th ed.
2010) (defining “rebuttable presumption” as “[a]n inference drawn from certain facts that
establish a prima facie case, which may be overcome by the introduction of contrary
evidence”).15 In light of this definition, the Subsection 6801(a)(6)(ii) presumption is clear
to the extent it requires courts to presume that money found in close proximity to
controlled substances is presumptively derived from drug sales. By its plain terms,
Subsection 6801(a)(6)(ii) provides that this presumption is rebuttable and, thus, confers
an opportunity for claimants to persuade the court that the money has an alternative
origin. Importantly, however, the statute does not expressly set forth how this
presumption can be rebutted.
The Commonwealth Court here determined that only by demonstrating the
elements of the innocent owner defense can a claimant rebut the presumption. Looking
to the text of the innocent owner defense, however, nothing in Subsection 6802(j)
speaks in terms of rebutting the specific fact of seized currency being derived from drug
sales. Instead, Subsection 6802(j) provides that once the Commonwealth satisfies its
burden of demonstrating forfeitability under Subsection 6801(a), i.e., has established a
15
Though this definition refers to “contrary evidence,” we believe that in an appropriate
case, this may be in the form of evidence already submitted by the Commonwealth that
the claimant relies upon to satisfy his burden of persuasion. Indeed, in Tate, supra,
where the claimant did not introduce additional evidence, the Superior Court held that
the facts of record sufficiently rebutted the statutory presumption. Thus, we do not
believe that claimants necessarily carry a burden of production when seeking to rebut
the Subsection 6801(a)(2)(ii) presumption.
[J-39-2017] - 21
substantial nexus, the burden shifts to the claimant to show, notwithstanding this nexus,
that he had no involvement with the illegal drug activity and that his acquisition of the
property was lawful. 42 Pa.C.S. § 6802(j) (providing that the claimant must show that
he is the owner of the property, that he lawfully acquired the property, and that it was
not unlawfully used or possessed by him).
Thus, by its plain terms, the innocent owner defense does not require that
claimants disprove the Commonwealth’s evidence that the property in question was
unlawfully used. See Commonwealth v. Johnson, 26 A.3d 1078, 1090 (Pa. 2011)
(stating that, as a matter of statutory interpretation, “although one is admonished to
listen attentively to what a statute says; one must also listen attentively to what it does
not say”) (citations omitted). Instead, it establishes an affirmative defense that allows
claimants who had nothing to do with the underlying illegal activity to recover the
property by disassociating themselves from the Commonwealth’s evidence regarding
the nexus between the money and a violation of the Controlled Substance Act. Indeed,
this construction of Subsection 6802(j) is consistent with prior pronouncements from this
Court in which we described the innocent owner defense as a means of protecting a
property owner from the harsh result of forfeiture because of illegal drug use to which
the owner did not consent. 1997 Chevrolet and Contents Seized from Young, 160 A.3d
at 193; Commonwealth v. $2,523.48 U.S. Currency, 649 A.2d 658, 661 (Pa. 1994).
By way of example, had the Commonwealth in the case sub judice put forth
evidence that Lugo and his cohorts were en route to purchase drugs with the
$34,440.00, instead of relying upon the Subsection 6801(a)(6)(ii) rebuttable
presumption, it would have sufficiently demonstrated a prima facie case for forfeiture.
See 42 Pa.C.S. § (a)(6)(i)(A) (providing, inter alia, that money is forfeitable if intended to
be furnished in exchange for a controlled substance). Pursuant to Subsection 6802(j),
[J-39-2017] - 22
however, an innocent owner could demonstrate that the money belonged to him, that he
lawfully acquired it, and that he did not unlawfully use or possess it, notwithstanding the
fact that other individuals were planning on furnishing the money in exchange for a
controlled substance. We find that this example fairly illustrates why articulating the
innocent owner defense is distinct from rebutting the specific fact that uncovered
currency represents the proceeds of a drug transaction. Moreover, this view of the
function of the innocent owner defense is reinforced by the final clause in Subsection
6802(j), which requires that an innocent owner’s lack of knowledge of the drug activity
was reasonable under the circumstances. See 42 Pa.C.S. § 6802(j)(3) (“In the event it
shall appear that the property was unlawfully used or possessed by a person other than
the claimant, then the claimant shall show that the unlawful use or possession was
without his knowledge or consent. Such absence of knowledge or consent must be
reasonable under the circumstances.”). The inclusion of this latter clause in the
statutory scheme suggests that the General Assembly understood the innocent owner
defense to allow claimants to recover the seized property by disassociating themselves
from the underlying illegal activity, rather than requiring that they disprove the fact of the
underlying illegal activity. Conversely, Subsection 6801(a)(6)(ii) permits claimants to
rebut the specific presumption of illegal drug activity.
In summary, where the Subsection 6802(j) innocent owner defense allows
claimants to recover property notwithstanding its connection to drug activity, Subsection
6801(a)(6)(ii), by its plain terms, confers an opportunity to rebut the specific fact that the
seized money was derived from drug sales, independent of proving the innocent owner
defense. In this case, the Commonwealth Court conflated the innocent owner defense,
which, again, does not require claimants to disprove that illegal drug activity occurred,
[J-39-2017] - 23
with disproving that the specific money was derived from drug sales.16 We conclude
that such an interpretation of the Forfeiture Act is contrary to the plain meaning of the
relevant statutory provisions.
Additionally, our interpretation is consistent with the overarching purpose of the
Act and avoids the adverse consequences of the Commonwealth Court’s interpretation.
See 1 Pa.C.S. § 1921(c) (providing that the intent of the General Assembly may be
ascertained by considering the object the statute seeks to attain and the consequences
of a particular interpretation). As noted, in the context of currency forfeitures, the
General Assembly has evidenced a clear intent to target those who perpetuate the drug
trade, rather than those who are merely drug users. However, the Commonwealth
Court’s interpretation may undermine this overarching legislative directive. By holding
that the presumption can be defeated only via the innocent owner defense, trial courts
will be compelled to disregard the circumstances surrounding the seizure of the
currency in cases where it is clear that, notwithstanding proximity, the money had no
connection whatsoever to the seized drugs or drug sales. Had the Superior Court
utilized this interpretation in Tate, for example, it would have been compelled to find that
the money recovered from the claimant’s briefcase was specifically derived from drug
16
Respectfully, Chief Justice Saylor’s dissenting opinion engages in a similar analysis.
The dissent concludes that the innocent owner defense is the sole mechanism by which
a claimant can rebut the close proximity presumption, noting that this Court’s prior
decisions have made clear that “once the Commonwealth demonstrates the requisite
substantial nexus, the ‘Forfeiture Act directs that the burden shifts to the claimant’” to
establish the innocent owner defense. Dissenting Opinion, slip op. at 2 (Saylor, C.J.)
(quoting Esquilin, 880 A.2d. at 530). While we do not disagree with the dissent’s
observation as to the ordinary burden-shifting scheme once the Commonwealth has
made out a prima facie case, we conclude that no prima facie case is made where the
record fails to support the presumption that the specific money was derived from drug
sales. Accordingly, the burden never shifts to the claimant to establish the innocent
owner defense under such circumstances.
[J-39-2017] - 24
sales, notwithstanding clear record evidence suggesting it represented the remainder of
a bank loan. While the General Assembly undoubtedly intended to assist the
Commonwealth in meeting its burden of demonstrating a nexus in currency forfeitures
when it enacted the Subsection 6801(a)(6)(ii) presumption, we do not believe that it
meant to go so far as to require a trial court to make a finding that is patently
inconsistent with the evidence of record. See 1 Pa.C.S. § 1922(1) (directing courts to
presume that the General Assembly did not intend a result that is absurd).
For the reasons set forth above, we hold that proof of the innocent owner
defense is not required to rebut the Subsection 6801(a)(6)(ii) presumption and that trial
courts may make a determination as to whether the presumption has been rebutted
based upon the entirety of the record. Turning to the record in the case sub judice, the
Commonwealth correctly observes that the trial court here made specific factual findings
and credibility determinations regarding Falette’s innocent owner defense, i.e., the
source of the money and his explanation as to why he concealed it in the b-pillar of the
vehicle. However, it is unclear to what extent its findings in this regard were inexorably
intertwined with its erroneous view that Falette was required to demonstrate the
innocent owner defense in order to rebut the presumption that the money represented
the proceeds of drug sales. Because we hold that this conclusion constituted an error
of law, we remand to the trial court so that it may consider whether the record evidence
before it rebuts the presumption that the seized currency represents the proceeds of
drug sales, requiring the Commonwealth to put on additional evidence of a nexus to
support its prima facie case.
III. Conclusion
In summary, we hold that the rebuttable presumption set forth at 42 Pa.C.S.
§ 6801(a)(6)(ii) may be sufficient to satisfy the Commonwealth’s initial burden of
[J-39-2017] - 25
demonstrating a nexus between seized currency and prohibited drug activity under the
Controlled Substances Act. We further hold that it is not a necessary prerequisite to
demonstrate the elements of the innocent owner defense under 42 Pa.C.S. § 6802(j) in
order to rebut the presumption and that trial courts may consider the entirety of the
record in determining whether claimants have rebutted the presumption. In this case,
the Commonwealth Court conflated rebutting the presumption that arises when money
is uncovered in close proximity to controlled substances with articulating the innocent
owner defense. For this reason, we vacate the order of the Commonwealth Court,
vacate the order of the trial court, and remand to the trial court for further proceedings
consistent with this opinion.
Justices Todd, Donohue, Dougherty and Wecht join the opinion.
Chief Justice Saylor files a dissenting opinion in which Justice Mundy joins.
Justice Mundy files a dissenting opinion.
[J-39-2017] - 26