This police operation came only weeks after Mr. Bell's release from incarceration on other drug-related charges. Specifically, in 1992, Bell had pled guilty to three of seven counts for selling controlled substances, leading to his confinement until shortly before the events here at issue.

Mrs. Bell has subsequently been released from custody, but Mr. Bell remains incarcerated on the basis of a parole hold. To date, it appears that neither of these Debtors has been indicted for their role in the events of February 21, 1997.

See, e.g., United States v. Kingsley, 851 F.2d 16, 18 (1st Cir. 1988) ("[c]ivil forfeiture is an in rem proceeding brought against property either used to facilitate a crime or acquired as proceeds from a criminal venture. . . . In personam criminal forfeiture, on the other hand, is intended to directly punish persons convicted of a criminal offense by forcing them to forfeit the proceeds obtained as a result of that offense").

Such in personam forfeiture statutes find their origin in common law, where forfeiture of the property was a consequence of conviction of a crime. See, e.g., In re Palmyra, 25 U.S. (12 Wheat.) 1, 14, 6 L.Ed. 531 (1827); United States v. Long, 654 F.2d 911, 914 (3d Cir. 1981).

As one commentator has noted when surveying the issue:

Criminal forfeiture is a proceeding in personam, an action against the person. The government must establish criminal culpability before divestiture, as seizure is intended to punish convicted defendants. Because criminal forfeiture is substantially punitive, constitutional protections that attach to criminal proceedings are typically available to criminal forfeiture defendants.

Civil forfeiture, in contrast, is a proceeding in rem, an action against the thing. Generally, a judicial determination of guilt premised on the "taint doctrine" supports such seizure, [as] the thing's association with illegal activity presumably "taints" the property and renders it amenable to seizure. Personal culpability is not at issue, [since] the res itself is the defendant. Courts have traditionally found that in rem divestiture serves substantially "civil-remedial" rather than "criminal-punitive" purposes. Thus, courts routinely hold that the civil posture of asset forfeiture requires substantially less constitutional scrutiny than criminal proceedings.

David S. Romantz, Civil Forfeiture and the Constitution — a Legislative Abrogation of Rights and the Judicial Response: the Guilt of the Res, 28 SUFFOLK UNIV. L. REV. 387, (1994) (footnotes omitted).

Indeed, under Georgia law, an acquittal or dismissal of criminal charges does nothing to preclude civil forfeiture of an individual's property. See O.C.G.A. § 16-13-49(v).

Under Georgia law, for example, property shall be subject to civil forfeiture if it directly or indirectly has facilitated criminal activity. See O.C.G.A. § 16-13-49(d); see also Hinton v. State, 224 Ga. App. 49, 479 S.E.2d 424 (1996) (an item of property may be forfeited when it is either used by its owner to facilitate the sale of controlled substances or used by an operator to facilitate such sales with the owner's consent).

As one commentator has noted in surveying forfeiture's increasing level of utility, however:

One criticism of civil forfeiture is that it provides such an attractive financial incentive for law enforcement to seize property; seizure becomes more important than actually fighting drug use or other drug-related crimes. In fact, at least one state, Florida, has appointed a special commission to consider changes to its forfeiture laws in an effort to stop abuses associated with the confiscation of cash. Some critics of civil forfeiture even contend that money is distorting the mission of law enforcement and turning police officers into revenue collectors. . . . Certainly, underfunded and hard-pressed government and law enforcement agencies could easily become accustomed to the large revenue created through civil forfeiture of drug-related property. For example, in 1988, Sevier County, Utah, collected $890,000, approximately twenty-one percent of its total revenue, from fines and forfeitures. In 1991, Sevier County collected $680,000 in criminal fines, $345,000 of which came from alleged drug runners. The County also seized more than twenty vehicles. The county attorney is the highest paid official in Sevier County and the second-highest paid elected prosecutor in Utah, even though that office is staffed by only the county attorney, a part-time deputy attorney, and a secretary. Sevier County has benefitted from these funds in various ways. For example, the County has used drug money to help construct a nine million dollar jail complex, used seized vehicles as police cars, paid the salary of one police officer, funded school drug-prevention programs, and funded drug and alcohol rehabilitation programs. . . . Granted, cash that is seized under the drug forfeiture laws often funds beneficial projects. Nevertheless, given the stake that law enforcement agencies have in this "gold mine," the potential for substantial abuse exists. The official zeal for, and often dependence on, the proceeds from forfeiture warrants scrutiny of the methods of accomplishing cash forfeiture.

Judith D.Wolferts, In re One Hundred Two Thousand Dollars: Cash-Friendly Civil Forfeiture, 1993 UTAH L. REV. 971, 980-84 (footnotes omitted).

"Using forfeiture laws, the Justice Department, which includes the FBI and the Drug Enforcement Administration, seizes about $1 billion worth of private property annually." Linnet Myers, Forfeiture Laws: Fair or Foul? Americans Not Guilty of Crimes Decry Loss of Property, CHICAGO TR., March 12, 1996, at 6 (quoting Stefan Cassella, deputy chief of the Justice Department's asset forfeiture section). Indeed, as the Supreme Court has noted:

[T]he Government has a pecuniary interest in forfeiture that goes beyond merely separating a criminal from his ill-gotten gains; that legitimate interest extends to recovering all forfeitable assets, for such assets are deposited in a Fund that supports law-enforcement efforts in a variety of important and useful ways. . . . The sums of money that can be raised for law-enforcement activities this way are substantial, and the Government's interest in using the profits of crime to fund these activities should not be discounted.

Caplin Drysdale, Chartered, 491 U.S. 617, 629, 109 S.Ct. 2646, 2654, 105 L.Ed.2d 528 (1989).

Currently more than one hundred federal statutes make some provision for civil forfeiture. See Paul S. Grossman, Appellate Jurisdiction for Civil Forfeiture: The Case for the Continuation of Jurisdiction Beyond the Release of the Res, 59 FORDHAM L. REV. 679, 679 n. 7 (1991) (citations omitted); Lawrence A. Kasten, Note, Extending Constitutional Protection to Civil Forfeitures that Exceed Rough Remedial Compensation, 60 GEO. WASH. L. REV. 194, 195 n. 3 (1991) (citations omitted). Of those, most frequently analyzed and seen in application are the forfeiture provisions of the Controlled Substances Act, set forth at 21 U.S.C. § 881, and the provisions of the Money Laundering Control Act, set forth at 18 U.S.C. § 981. See generally Arthur W. Leach John G. Malcolm, Criminal Forfeiture: An Appropriate Solution to the Civil Forfeiture Debate, 10 Ga. St. U.L.Rev. 241 (1994); Steven L. Schwarcz Alan E. Rothman, Civil Forfeiture: A Higher Form of Commercial Law?, 62 FORDHAM L. REV. 287 (1993); Kelly McClure, Note, Federal Civil Forfeiture of Assets: How It Works and Why It Must, 11 U. BRIDGEPORT L. REV. 419 (1991). Likewise, in Georgia and most of its sister states, the governing criminal statute makes provision for criminal and civil forfeiture, establishing specific procedures therefor. See id; see also O.C.G.A. § 16-13-49.
Nonetheless, many commentators have questioned the appropriateness of a government's pursuing revenue production by way of its criminal code. See, e.g., Terrence G. Reed, The Defense Case for RICO Reform, 43 VAND. L. REV. 691, 703 (1990) ("[c]riminal forfeiture . . . was enacted as a new means to punish racketeers; it was never intended to be a bake sale for the Justice Department"); David J. Fried, Rationalizing Criminal Forfeiture, 79 J. CRIME CRIMINOLOGY 328, 365-66 (1988) ("the conflict between the federal government and third party claimants to forfeited assets should not be exacerbated by giving the Justice Department an institutional stake in defeating private claims"); see also Mary M. Cheh, Constitutional Limits on Using Civil Remedies To Achieve Criminal Law Objectives: Understanding and Transcending the Criminal-Civil Law Distinction, 42 HASTINGS L.J. 1325, 1354 n. 161 (1991) ("forfeiture may actually frustrate the goal of victim recompense by depleting the assets a criminal has available for civil restitution").

See e.g., Thorp v. State, 264 Ga. 712, 450 S.E.2d 416 (1994) (noting that constitutional prohibitions upon excessive fines apply with equal force to civil, in rem forfeiture actions); Swails v. State, 263 Ga. 276, 431 S.E.2d 101, cert. denied, 510 U.S. 1011, 114 S.Ct. 602, 126 L.Ed.2d 567 (1993) (finding that provisions mandating forfeiture proceedings without jury trial violate neither the seventh amendment to the federal Constitution nor Georgia Constitution 1983, Art. I, Sec. I, Para. XI); Porter v. State, 196 Ga. App. 31, 395 S.E.2d 360 (1990) (concluding that subsection (c) of O.C.G.A. § 16-1349 does not violate the equal protection and due process clauses of the United States Constitution); Tant v. State, 247 Ga. 264, 275 S.E.2d 312 (1981) (holding that O.C.G.A. § 16-13-49 affords adequate notice and hearing so as to comport with due process of requirements of federal Constitution and the Georgia Constitution).

As one commentator has noted in this regard:

In order to understand how civil forfeiture actions affect creditors, it is first necessary to understand the process by which creditors, such as financial institutions, extend credit. In making lending decisions and in determining interest rates and other lending terms, financial institutions consider factors such as the borrower's financial condition, management, and the likelihood of both default and potential recovery of principal and interest on defaulted loans. In assessing the default risk, financial institutions also consider their rights and remedies under the Uniform Commercial Code and the Bankruptcy Code and the likelihood of recoveries.

Notably absent from this "checklist" is the risk of civil forfeiture of the borrower's assets. It is, of course, impossible at the time of the credit decision to estimate the likelihood of civil forfeiture because the underlying illicit action that may give rise to the forfeiture is as yet undiscovered, and also because the bringing of such an action is politically determined. Furthermore, even if the financial institution were to assume the worst — that each borrower's assets would be subject to civil forfeiture — it is impossible to estimate how claims will be paid, if at all.

Steven L. Schwartz Alan E. Rothman, Civil Forfeiture: a Higher Form of Commercial Law?, 62 FORDHAM L. REV. 287, 303 (1993).

Like most statutes of its type, Georgia's forfeiture provision makes allowance for an innocent owner defense, whereby third parties may successfully challenge the propriety of a civil forfeiture. See O.C.G.A. § 16-13-49(e); see also State v. Sewell, 155 Ga. App. 734, 272 S.E.2d 514 (1980) (where nothing suggested an awareness by the creditor that the car subject to its security interest was being used for illegal transport of marijuana, the security interest was not forfeited). Generally speaking, however, a claimant person must hold some finite and articulable interest in the property to have standing to so oppose the forfeiture action. See Lockett v. State, 218 Ga. App. 289, 460 S.E.2d 857 (1995) (claimant did not have standing to contest forfeiture where claimant failed to demonstrate an ownership interest in the property); Chester v. State, 168 Ga. App. 618, 309 S.E.2d 897 (1983) (to have standing to contest a forfeiture, a party must have at least some property interest in the subject matter; that interest may be one of ownership, lease holder, or secured party, but there must be some substantial interest greater than an asserted "superior right of possession"); see also United States v. One Hundred Twenty-Two Thousand Forty-Three Dollars in United States Currency, 792 F.2d 1470, 1473 (9th Cir. 1986); United States v. One 1978 Piper Navajo PA-31 Aircraft, 748 F.2d 316, 319 (5th Cir. 1984) (interpreting the innocent owner defense under the federal system of civil forfeiture).

See e.g., US. v. $3,000 in Cash, 906 F. Supp. 1061 (E.D.Va. 1995) (the term "owner" as used in connection with innocent owner defense to forfeiture of property, is interpreted liberally but does not encompass those with undefined interests in the seized property; specifically, unsecured creditors generally lack standing to challenge forfeiture, because such unsecured creditors cannot show that they hold an interest in the specific property forfeited); U.S. v. 105,800 Shares of Common Stock of FirstRock Bancorp, Inc., 830 F. Supp. 1101 (N.D.Ill. 1993) (an investor in stock purchased during conversion of mutual savings association properly qualified as an unsecured creditor without standing to challenge civil forfeiture of stock as proceeds of bank fraud; the investor merely transferred $10,000 to account of its depositor, and did not assert any security interest); Crenshaw v. State, 206 Ga. App. 271, 425 S.E.2d 660 (1992) (under Georgia law, a general unsecured creditor lacks a cognizable interest sufficient to grant it standing to challenge a forfeiture action against seized currency).

As an in rem action, civil forfeiture makes the property itself the defendant in such proceedings. When successful, civil forfeiture results in all rights in the subject property being vested in the government, thereby establishing the government's title against the world. Compounding this effect, a "relation back" doctrine makes the government's rights of ownership effective, not from the date of a forfeiture judgment's entry, but instead upon the date that wrongful conduct allegedly occurred. Thus, whenever an item of property directly or indirectly facilitates the commission of a crime, a presumption effectively arises that the government should have superior title to that item. Cf United States v. 92 Buena Vista Avenue, 507 U.S. 111, 113 S.Ct. 1126, 122 L.Ed.2d 469 (1993) (holding that such relation back does not actually take effect until a forfeiture judgment has been rendered).

Compare Myron M. Sheinfeld, et al., Civil Forfeiture and Bankruptcy: the Conflicting Interests of the Debtor, Its Creditors and the Government, 69 AM. BANKR. L.J. 87 (1995) (pointing to the dangers of civil forfeiture's expanding role and contending that courts must insure that governments' pursuit of such claim not be given special treatment in bankruptcy), and Steven L. Schwartz Alan E. Rothman, Civil Forfeiture: a Higher Form of Commercial Law?, 62 FORDHAM L. REV. 287 (1993) (arguing that civil forfeiture laws must be reformed to provide that assets not directly used in criminal activity shall be forfeited only to the extent of a debtor's equity after all claims of innocent creditors have been satisfied), with Michael S. Linscott, Asset Forfeiture (Modern Anti-Drug Weapon): Is Bankruptcy A Defense?, 25 TULSA L.J. 617 (1990) (arguing that bankruptcy courts should give deference to the pendency of a civil forfeiture action).
This debate has gained substantial momentum from the entry of two recent Supreme Court decisions which circumscribed the forfeiture power. In the first of these twin decisions, United States v. 92 Buena Vista Ave., 507 U.S. 111, 113 S.Ct. 1126, 122 L.Ed.2d 469 (1993), the Supreme Court clarified the scope of the relation back doctrine, whereby forfeiture is said to vest retroactively to the point of wrongful conduct. Presented with the question of whether such relation back precluded the assertion of the innocent owner defense by a subsequent owner, the Court held that forfeiture does not automatically vest title to property in the government. Id. at 123, 113 S.Ct. at 1134. Thus, under the Buena Vista rationale, until a decree of forfeiture is entered, "someone else owns the property" and a third party acquiring an interest in the property "may therefore invoke any defense available to the owner of the property before the forfeiture is decreed." Id.
In the second of its watershed forfeiture opinions, Austin v. United States, 509 U.S. 602, 113 S.Ct. 2801, 125 L.Ed.2d 488 (1993), the Court called into question the very nature of the civil forfeiture remedy. Particularly, after examining the statute before it in detail, the Austin majority concluded that "forfeiture under [those] provisions constitutes `payment to a sovereign as punishment for some offense,' and, as such, is subject to the limitations of the Eighth Amendment's Excessive Fines Clause." Id. at 621, 113 S.Ct. at 2812 (citations omitted).
Collectively, of course, these holdings demonstrate that a State's forfeiture power does not exist without limitation. More importantly for bankruptcy purposes, however, the Austin and Buena Vista holdings reveal that a State's claim of ownership by forfeiture may be defeated by an intervening good faith holder of an interest in the subject property, see infra note 22, and that certain forfeiture actions may warrant a treatment which recognizes their true character. Cf. 11 U.S.C. § 726 (relegating claims "for any fine, penalty, or forfeiture" not involving compensation for actual pecuniary loss to a fourth level of priority in distribution).

See 11 U.S.C. § 362(b)(4) (5) (providing an exception from bankruptcy's automatic stay for any act by a governmental unit "to enforce such governmental unit's police or regulatory power").

While Bankruptcy Code section 362(a) automatically stays a wide array of collection and enforcement proceedings against the debtor and his property, section 362(b)(1) exempts from the stay "the commencement or continuation of a criminal action or proceeding against the debtor." See 11 U.S.C. § 362(b)(1). According to the House Report, the inclusion of this exception to the automatic stay stems from a broader concern that "[t]he bankruptcy laws are not [to be] a haven for criminal offenders." H.R. Rep. No. 95-595, p. 342 (1977), reprinted in U.S.C.C.A.N. 1978, p. 6299. To the extent, therefore, that a civil forfeiture action may be characterized as but an extension of the criminal justice process, not granting stay relief for such actions might be seen to run afoul of Congress' expressed intent to protect against such abuses of the system for relief in bankruptcy. Cf. 11 U.S.C. § 362(d) (providing for relief from bankruptcy's automatic stay for cause shown).

As the legislative history of the Code explains, "[t]hus, where a governmental unit is suing a debtor to prevent or stop violation of fraud, environmental protection, consumer protection, safety, or similar police or regulatory laws, or attempting to fix damages for violation of such a law, the action or proceeding is not stayed under the automatic stay." S.Rep. No. 95-989, at 52 (1978), reprinted in 1978 U.S.C.C.A.N. 5787, 5838.

Certain courts have held negatively on this question, reasoning that only those actions designed to protect public health should warrant such exception from bankruptcy's stay. See, e.g., United States v. One Parcel Commonly Known as Star Route Box 1328, Glenwood, Washington County, Oregon, 137 B.R. 802, 804 (D.Or. 1992) (assuming that the forfeiture cases before it had become subject to bankruptcy's automatic stay); Goff v. State of Oklahoma (In re Goff), 159 B.R. 33, 39 (Bankr.D.Okla. 1993) (holding that forfeiture was not an exercise of police or regulatory power). Other courts disagree, contending that the scope of valid "police and regulatory" functions should not be so arbitrarily limited. See State of Wisconsin v. Weller (In re Weller), 189 B.R. 467, 471 (Bankr.E.D.Wis. 1995) ("[u]nder the section 362(b)(4) exception, proceedings to enforce forfeitures and penalties are free to proceed to judgment, including the entry of a monetary judgment").

As a cardinal rule of statutory construction, the Court must give effect to each term of a given Bankruptcy Code provision whenever possible. See NORMAN J. SINGER, SUTHERLAND ON STATUTORY CONSTRUCTION § 46.06 (5th ed. 1992); see also United States v. Nordic Village, Inc., 503 U.S. 30, 112 S.Ct. 1011, 117 L.Ed.2d 181 (1992) (in statutory construction, each word is to be given effect); Cowart v. Nicklos Drilling Co., 505 U.S. 469, 476, 112 S.Ct. 2589, 2594, 120 L.Ed.2d 379 (1992) (repeating "the basic and unexceptional rule that courts must give effect to the clear meaning of statutes as written"). Thus, to the extent that the stay exception of section 362(b)(4) limits its application to acts otherwise stayed "under subsection (a)(1)," the court must presume that such an exception does not extend to acts stayed under section 362(b)(3) rather than section 362(b)(1).

As an aside, the Court notes that circumstances may provide the unsecured creditors with a degree of representation in bankruptcy that they normally would not enjoy under nonbankruptcy forfeiture law. In particular, Bankruptcy Code section 544 directs that the trustee, acting for the estate, may claim and assert "the rights and powers of . . . a bona fide purchaser of real property from the debtor." See 11 U.S.C. § 544(a)(3). Subject to the requirements of a given civil forfeiture statute, it consequently would appear that unsecured creditors may reap the benefits of an "innocent owner" defense's being asserted by the trustee on the bankruptcy estate's behalf, if and when the automatic stay is lifted to allow the continuation of such proceedings. Cf United States v. 92 Buena Vista Ave., 507 U.S. 111, 113 S.Ct. 1126, 122 L.Ed.2d 469 (1993) (noting that, until a decree of forfeiture is entered, "someone else owns the property" and a third party acquiring an interest in the property "may therefore invoke any defense available to the owner of the property before the forfeiture is decreed").

Like under most civil forfeiture statutes, forfeiture under Georgia's section 16-1349 relates back to the point of criminal conduct, such that the postpetition entry of a civil forfeiture judgment might otherwise have the effect of removing the subject property from the bankruptcy estate. See O.C.G.A. § 16-13-49(t)(1) (2); see also 11 U.S.C. § 541 (measuring the bankruptcy estate by reference to the debtor's rights in property at the time of filing). Rather than permitting such a complete and retroactive circumvention of the bankruptcy process, the Court only shall allow the State to establish its substantive entitlement to a forfeiture claim, which debt may thereafter be treated in accordance with bankruptcy's standard distribution mechanism. See, e.g., 11 U.S.C. § 726 (relegating claims "for any fine, penalty, or forfeiture" not involving compensation for actual pecuniary loss to a fourth level of priority in distribution); see also 11 U.S.C. § 1325 (directing that a Chapter 13 plan shall be confirmed, inter alia, if it provides each holder of an unsecured claim with a distribution not less than that which they would receive under Chapter 7 liquidation); see further 11 U.S.C. § 1327(b) (c) (providing that property of the estate shall vest in the debtor at confirmation, free and clear of any claims provided for by the plan); 11 U.S.C. § 1328(a) (providing Chapter 13 debtors with a discharge from debt obligations, subject only to the relevant limitation that no obligations of restitution or criminal fines may be discharged).