A Florida mom who spent a third of her life savings on legal fees fighting the federal government over a wrongful seizure is urging the U.S. Supreme Court to take her case. Without ever being charged with a crime, Miladis Salgado lost over $15,000 when the DEA raided her home and seized her cash. After two years of court battles, Miladis finally won. And under federal law, property owners who “substantially prevail” in a civil forfeiture case are entitled to attorneys’ fees, costs, and interest.
But prosecutors deployed a tactic that lets the federal government weasel out of paying Miladis. Right before a judge was finally about to rule on her case, the federal government decided to return the seized property to Miladis and filed to dismiss the case “without prejudice,” which would allow prosecutors to refile the forfeiture lawsuit later on. Since Miladis didn’t technically win her case in court, federal courts ruled that she didn’t “substantially prevail” and wasn’t owed any legal fees.
Now representing Miladis, the Institute for Justice filed a cert petition on Tuesday calling on the U.S. Supreme Court to stop this tactic. Earlier this year, IJ secured a landmark victory when the High Court unanimously declared in Timbs v. Indiana that state civil forfeiture laws must comply with the Eighth Amendment’s ban on “excessive fines.” Granting cert, IJ argued, would build on the Timbs decision and offer the Supreme Court the opportunity to end “the judicially-created ‘get out of jail free’ card that allows the United States to evade financial responsibility for the harm it causes.”
Back in May 2015, Miladis was separated but still living under the same roof with her ex-husband, Wilson Colorado, who was involved in the garment business. That month the DEA received a tip that Colorado was a drug trafficker and raided the home. The tip was a bust for contraband, but a jackpot for assets. The DEA seized $55,600 in cash and over $130,000 in cashier’s checks that Colorado said he planned to spend on inventory for his business.
Agents also confiscated more than $15,000 in cash from Miladis, her entire life savings. Her money included family gifts to pay for her daughter’s quinceañera, which Miladis was forced to cancel. Neither Colorado nor Miladis were criminally charged. In fact, the lead DEA agent later admitted that the government had no evidence connecting either them to any criminal activity, a fact that didn’t stop the DEA from keeping the money.
While the civil forfeiture cases wound their way through federal court, Colorado was involved in a separate legal dispute with one of his garment suppliers in Florida court. But without access to his money, he was forced to defend the case without the help of an attorney. After he failed to comply with discovery orders, a state court entered a default judgment of over $318,000 against Colorado.
The federal government moved to dismiss the civil forfeiture lawsuits, arguing that because Colorado’s money would go to his supplier, regardless of who won, the forfeiture case was now “moot.” None of the government’s logic applied to Miladis or her money, yet the government wanted the entire case dismissed anyway.
Miladis objected. Since dismissals without prejudice may only be granted if the defendant wouldn’t “lose any substantial right,” Miladis argued that losing her ability to recover attorneys’ fees should qualify as a “substantial right.”
But both the district court and the Eleventh Circuit U.S. Court of Appeals sided with the government, and blocked Miladis from winning attorneys’ fees. The Eleventh Circuit further claimed that the dismissal made the proceedings a “nullity” and left “the parties as if the action had never been brought.”
In reality, Miladis was worse off. Since her attorney worked on a contingency-fee basis, Miladis ended up losing roughly one-third of the money that was originally seized from her to pay her legal fees.
As the Institute for Justice argued in its cert petition, Miladis and other innocent owners are caught in a “Catch-22:”
“In order for an innocent owner to be awarded attorneys’ fees under CAFRA, the government’s case against the money or property cannot be dismissed without prejudice. But the innocent owner cannot prevent the case from being dismissed without prejudice because, in these circuits, their right to be awarded attorneys’ fees has not yet vested.”
This tactic ignores both the legislative history and the plain text of the law. When the House of Representatives debated the Civil Asset Forfeiture Reform Act of 2000, it issued a report that made its intentions for reform quite clear. “Designed to make federal civil forfeiture procedures fair to property owners,” CAFRA would “give owners innocent of any wrongdoing the means to recover their property and make themselves whole after wrongful government seizures.” To that end, one of CAFRA’s provisions mandates paying attorney’s fees to owners who “substantially prevail.”
Moreover, to get the result prosecutors demand, courts literally read the word “substantially” out of the law. For instance, the Eleventh Circuit explicitly held that they would treat “substantially prevailed” the same as “prevailing party,” even though “substantially” is a well-known qualifier.
Since the cost of hiring an attorney can often dwarf the value of the seized property, many owners are forced to walk away. In fact, 88% of the Justice Department’s civil forfeiture cases never made it to a judge.
“The threat of paying attorneys’ fees is a critical check on government abuse,” noted Institute for Justice Senior Attorney Justin Pearson. “Otherwise, there is no disincentive to stop prosecutors from filing frivolous civil forfeitures against property belonging to innocent owners like Miladis.”
