Calero-Toledo v. Pearson Yacht Leasing Co., 416 U.S. 663 (1974)

Calero-Toledo v. Pearson Yacht Leasing Co.

No. 73-157

Argued January 7, 1974
Decided May 15, 1974
416 U.S. 663

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE

DISTRICT OF PUERTO RICO

Syllabus

A pleasure yacht, which appellee had leased to Puerto Rican residents, was seized, pursuant to Puerto Rican statutes providing for forfeiture of vessels used for unlawful purposes, without prior notice to appellee or the lessees and without a prior adversary hearing, after authorities had discovered marihuana aboard her. Appellee was neither involved in nor aware of a lessee’s wrongful use of the yacht. Appellee then brought suit challenging the constitutionality of the statutory scheme. A three-judge District Court, relying principally on Fuentes v. Shevin, 407 U.S. 67, held that the statutes’ failure to provide for pre-seizure notice and hearing rendered them unconstitutional, and that, as applied to forfeit appellee’s interest in the yacht, they unconstitutionally deprived an innocent party of property without just compensation.

Held:

1. The statutes of Puerto Rico are "State statute[s]" for purposes of the Three-Judge Court Act, and hence a three-judge court was properly convened under that Act, and direct appeal to this Court was proper under 28 U.S.C. § 1253. Pp. 669-676.

2. This case presents an "extraordinary" situation in which postponement of notice and hearing until after seizure did not deny due process, since (1) seizure under the statutes serves significant governmental purposes by permitting Puerto Rico to assert in rem jurisdiction over the property in forfeiture proceedings, thereby fostering the public interest in preventing continued illicit use of the property and in enforcing criminal sanctions; (2) pre-seizure notice and hearing might frustrate the interests served by the statutes, the property seized often being of the sort, as here, that could be removed from the jurisdiction, destroyed, or concealed, if advance notice were given; and (3), unlike the situation in Fuentes v. Shevin, supra, seizure is not initiated by self-interested private parties, but by government officials. Pp. 676-680.

3. Statutory forfeiture schemes are not rendered unconstitutional because of their applicability to the property interests of innocents, and here the Puerto Rican statutes, which further punitive and deterrent purposes, were validly applied to appellee’s yacht. Pp. 680-690.

363 F.Supp. 1337, reversed.

BRENNAN, J., delivered the opinion of the Court, in which BURGER, C.J., and WHITE, MARSHALL, BLACKMUN, POWELL, and REHNQUIST, JJ., joined, and in Parts I and II of which STEWART, J., joined. WHITE, J., filed a concurring opinion, in which POWELL, J., joined, post, p. 691. STEWART, J., filed a separate statement; post, p. 690. DOUGLAS, J., filed an opinion dissenting in part, in which STEWART, J., joined in part, post, p. 691.