WASHINGTON, June 28 - In a significant setback for prosecutors, the
Supreme Court ruled unanimously today that the Constitution limits the
Government's authority to seize the homes, businesses and other property
of criminals and suspects. Rejecting the Justice Department's
argument in two cases, the Court found that the Eighth Amendment clause
that bars "excessive fines" requires that there must be some
relationship between the gravity of an offense and the property that is
seized. 

The Justices were divided about the smaller complexities of the cases
and whether the First Amendment could be applied to limit the seizure of
books and other material in an obscenity case.

But their general and unopposed holding about the application of the
Eighth Amendment to the area signals a new direction for criminal and
civil procedures that govern when and how the government can confiscate
items like cars from suspected drug smugglers; businesses from accused
mobsters and cash from alleged money launderers. 

The Government had argued that forfeiture actions are not punitive but
"remedial" and that the guilt or innocence of the properly owner is
"constitutionally irrelevant."  The Court did not decide whether the
owner's innocence is relevant or even spell out when the Eighth
Amendment is violated. Instead, it sent the cases back to the lower
courts to devise their own rules about when the seizure of assets is
unconstitutionally excessive. In so doing, the justices virtually
guaranteed that they would have to revisit an issue they did not address
in today's ruling.

In one case the Court narrowly rejected a First Amendment challenge to
the Government's seizure authority under the Federal racketeering law.
The Justices decided by a vote of 5 to 4, ruling that the First
Amendment did not prohibit prosecutors from taking an entire chain of
adult bookstores and movie houses and then destroying thousands of books
and other material after finding several obscene items for sale.

Powerful New Tool

Nonetheless, the Eighth Amendment precedent set in both cases gives
defendants a powerful new tool for fighting back when the Government
seizes properly, an action that often occurs even before there is a
conviction. It was the end of a difficult Supreme Court term (or
prosecutors in a rapidly growing area of the law, and it demonstrated
the Justices' concern with the increase aggressive use of forfeiture
laws.

In two other cases decided earlier this term, and on narrower grounds,
the Court limited the authority of prosecutors to seize money, homes,
cars and other assets from drug dealers, white-collar criminals,
mobsters, illegal aliens and people suspected of committing crimes. And.
in March, the Court agreed to decide whether the Government can seize
property that has been used in drug crimes without giving the owner
advance notice and a chance to contest the action in a hearing. That
case will be heard next term.

Prosecutors have increasingly used forfeitures since the mid-1980's,
when Congress began to adopt more laws that broadened their authority
against drug smugglers, money launderers and savings and loan executives
suspected of looting their institutions. By the end of 1992 the Federal
Government had seized $2 billion in property, up from $33 million in
1979.  Property worth billions more have been sold at auction.

Attacks in Congress

The procedure for forfeitures that critics and Civil liberties groups
contend unfairly favors the Government has recently come under attack
from conservative Republicans like Representative Henry J. Hyde of
Illinois, as well as liberal Democrats like Representative John
Conyers, Jr., of Michigan.  Mr. Hyde has introduced legislation and Mr.
Conyers is drafting a bill which would make it more difficult for
prosecutors to take property. 

In one case decided today, a North Dakota man had lost his car-repair
business and his mobile trailer after selling two grams of cocaine to an
undercover agent. The Government had disputed the contention of the
defendant, Richard Lyle Austin, that the seizure under a civil
forfeiture law had violated the "excessive fines" clause.

The Government maintained that the Federal laws that gave it the
authority to take Mr, Austin's home and business were remedial because
they were intended to permit the removal of tools of the drug trade. It
had also said the seizure was a proper way of repaying the government
for the expense of law enforcement.

Justice Harry A. Blackmun, who wrote the Court's unanimous opinion in
the case. Austin v. United States, found that the Eighth Amendment
applied to both civil and criminal proceedings and that the forfeiture
laws had been intended at least in part to punish the property owner.

Property as Wrongdoer

While common sense may make that conclusion seem obvious, courts have
generally employed a legal fiction that have made the proposition
debatable.  The fiction is that the property, not the individual, is the
wrongdoer, a concept That has enabled the Government to impose a greater
procedural burden on the property owners and make their guilt
irrelevant.

But Justice Blackmun's opinion which was also signed by Justices Byron
R. While, John Stevens, Sandra Day O'Connor and David H. Souter,
appeared to question the use of legal fiction as a matter of
constitutional law.

"If forfeiture had been understood not to punish the owner, there would
have been no reason to reserve the case of a truly innocent owner,"
Justice Blackmun said. "Even though this Court has injected the
'innocence' of the owner as a common-law defense to forfeiture, it
consistently has recognized that forfeiture serves, at least in part, to
punish the owner."

In a concurring opinion. Justice Antonin Scalia said the measure of a
forfeiture's excessiveness should be the relationship between the seized
property and the offense. Justice Anthony M. Kennedy also wrote a
concurring opinion in which he questioned Justice Blackmun's reading of
the history of forfeiture laws. He was joined by Chief Justice William H.
Rehnquist and Justice Clarence Thomas.

2 Arguments Raised

In the second case, Alexander v. United States, the owner of a chain of
adult bookstores and movie houses forfeited his businesses and almost $9
million in profits after he was convict of racketeering by selling
obscene material.  The defendant, Ferris J. Alexander of Minnesota, had
raised the Eighth Amendment argument. He had also maintained that the
seizure violated his First Amendment rights by taking and then
destroying thousands of copies of books and other materials that were
not obscene. While unanimously upholding his Eighth Amendment claim, the
Court in an opinion written by Chief Justice Rhenquist, rejected the
First Amendment argument by a vote of 5 to 4.

In dissent, Justice Kennedy said the Court's decision was "a grave
repudiation of First Amendment principles." "Until now, I had thought
one could browse through any book or film store in the United States
without fear that the proprietor had chosen each item to avoid risk to
the whole inventory, and Indeed to the business itself," Justice Kennedy
wrote. "This ominous, onerous threat undermines free speech and press
principles essential to our personal freedom."

Justice Kennedy's opinion was joined by Justices Blackmun and Stevens. 
In a separate opinion, Justice Souter agreed with the majority
that there was no impermissible prior restraint. But he also agreed with
the  dissent that the First Amendment forbids the forfeiture of any
material that is not found to be obscene.