United States v. Bajakajian

United States v. Bajakajian, 524 U. S. 321 (1998), is a U. S. Supreme Court case holding that asset forfeiture is unconstitutional when it is "grossly disproportional to the gravity of the defendant’s offense", citing the Excessive Fines clause of the Eighth Amendment. It was the first time the Court struck down the federal government's "aggressive use of forfeiture" and the only time it has held that an imposed fine was unconstitutional under the Eighth Amendment.

In 1994, Syrian immigrant Hosep Bajakajian and his family tried to fly from Los Angeles to Cyprus via Italy with $357,144 in their luggage in order to pay a debt. The federal government sought forfeiture of the entire sum under the Bank Secrecy Act (BSA), which requires all international currency transfers exceeding $10,000 in value to be reported on a Currency and Other Monetary Instruments Report (CMIR); the BSA also allows forfeiture of "any property, real or personal" in cases of violations. None of the money was found to have been connected with any other criminal action whatsoever. He was also initially charged with lying to customs, which was later dropped. Bajakajian pleaded guilty to failure to report and opted for a bench trial on the forfeiture of the $357,144. A United States district court judge found the forfeiture of the whole $357,144 to be grossly disproportionate and in violation of the Eighth Amendment. He ordered forfeiture of $15,000 in addition to the maximum fine of $5,000 and three years probation for failure to report. Bajakajian had been eligible for six months in prison, but the judge did not impose this sentence. In 1996, the U. S. Court of Appeals for the Ninth Circuit affirmed the district court's decision and stated its willingness to go further by ruling that the forfeiture of any of the currency was unconstitutional. Unfortunately for Bajakajian, he had not appealed the forfeiture to the Ninth Circuit and they were thus unable to set it aside.

As of 2015, there have been 150 federal circuit court decisions that relied on Bajakajian to conduct an excessiveness test, but only 4 of them have found excessive forfeiture. One commentator argues that this is due to lower courts applying the Bajakajian framework too rigidly. Bajakajian'''s application is being extended beyond forfeiture. In Duckworth v. United States (2011), the D. C. Circuit applied Bajakajian to the Magnuson–Stevens Fishery Conservation and Management Act, upholding fines imposed by NOAA. In United States v. Lessner (2007), the Third Circuit applied it to the Mandatory Victims Restitution Act, which established procedures to determine restitution for victims, and upheld a $938,965.59 restitution order. In United States v. Stebbins'' (2005), the Court of Appeals for the Armed Forces upheld a $75,000 fine to punish a soldier found guilty of raping a minor.