cdTOCtest

1126, 122 L.Ed.2d 469 (1993), the Court held that
federal statutory innocent owner protection extends to
bona fide donees of property that would be forfeitable as
derivative contraband in the hands of the donor.

New Jersey courts have extended innocent-owner
protection to a bona fide purchaser for value. In State v.
Somerset Central Corp., 216 N.J. Super. 716 (App. Div.
1987), a boat owner had fraudulently claimed the loss of
his boat at sea and collected the boat’s value from his
insurance company. Three years later, the defendant
corporation with no knowledge of the fraud purchased
the boat from the owner. The court refused to enforce
forfeiture against the purchaser, following State v. 1979
Pontiac Trans Am, 98 N.J. 474 (1985), and reading
innocent owner protection into the statute before it was
amended to provide that protection explicitly. But see
Kutner Buick, Inc. v. Strelecki, 118 N.J. Super. 89 (Ch.
Div. 1970) (enforcing pre-Chapter 64 forfeiture against
innocent owner).

The relation-back doctrine, like statutory innocent
owner protection, bears on title to derivative contraband.
Under New Jersey’s forfeiture statute, “title to property
forfeited under [Chapter 64] shall vest in the entity
funding the prosecuting involved at the time the
property was utilized illegally or in the case of proceeds,
when received.” N.J.S.A. 2C:64-7. Obviously, if strictly
applied, or applied despite innocent owner protection,
the doctrine would nullify the rights of innocent owners
whether they acquired title before or after the illegal
activity. In Farley v. $168,400.97, 55 N.J. 31 (1969),
the Court applied the doctrine to give priority over a
federal tax lien to New Jersey’s title to gambling proceeds.
The Court held that “when a statute provides for a
forfeiture, the forfeiture takes place upon the occurrence
of the forbidden act or omission ..., and the sovereign’s
title is in no sense inchoate ....” Id. at 40. “The judgment
which settles the dispute does not initiate the title; it
serves only to confirm the title by dissipating claims
against it.” Id.

The Appellate Division has viewed Farley as an
expression of “pre-Code” relation-back analysis only. See
State v. Am. Banking Ins. Co. of Fla., 263 N.J. Super. 124
(App. Div. 1993). In American Banking the Appellate
Division determined that the relation-back provisions of
N.J.S.A. 2C:64-7 modify pre-Code case law, and noted
that for derivative contraband, only the judgment of
forfeiture relates back. State v. Am. Banking Ins. Co. of
Fla., 263 N.J. Super. at 132 (citing State v. Cavassa, 228
N.J. Super. at 208).

B. Nexus

Interpreting the civil forfeiture statute, the New

Jersey Supreme Court held that when the property

sought to be forfeited is derivative contraband, the State

must demonstrate by a preponderance of evidence that

the property has been used or is intended to be used in

furtherance of an unlawful activity or is proceeds of illegal

activity. State v. Seven Thousand Dollars, 136 N.J. 223

(1994). The Court noted that the illegal activity must

constitute an indictable crime, but rejected any

requirement that the owner must actually be indicted for

the crime before forfeiture may occur. Id.; see also State v.

1988 One Honda Prelude, 252 N.J. Super. 312 (App. Div.

1991).

Additionally, when the State seeks to forfeit

derivative contraband, it must demonstrate by a

preponderance of the evidence, a direct causal

relationship between the use of the property and the

crime allegedly committed or intended to be committed.

The burden on the State includes a requirement that the

connection be shown to be “proximate and substantial.”

State v. Seven Thousand Dollars, 136 N.J. at 234-235. See

also State v. One 1985 Ford Bronco, 261 N.J. Super. 643

(App. Div. 1993) (relying on Attorney General’s

Forfeiture Guidelines, Guideline 3, ”Forfeiture and the

Underlying Criminal Offense“).

Not every unlawful activity supports civil in rem

forfeiture. The term “unlawful activity” in N.J.S.A.

2C:64-1a has been interpreted to refer only to crimes.

State v. One 1979 Chevrolet Camaro Z-28, 202 N.J. Super

22 (App. Div. 1985). Forfeiture provisions do not apply

to traffic offenses or disorderly persons offenses. Id.

Possessory crimes can result in forfeiture if the State

demonstrates that the property to be forfeited was

“utilized the furtherance of’ or “to facilitate” the criminal

possession or has “become an integral part” of illegal or

unlawful activity, or was intended to. N.J.S.A. 2C:64-

1a(2) and (3). See, e.g., State v. One 1979 Chevrolet Z -

28 , 202 N.J. Super. at 231; see also, State v. A 1971

Datsun, 139 N.J. Super. 186 (App. Div. 1976); Ben Ali

v. Towe, 30 N.J. Super 19 (App. Div. 1954).

C. Jury Trial

State v. One 1990 Honda Accord, 154 N.J. 373,

clarification denied, 156 N.J. 378 (1998), held that the

owner of derivative contraband is entitled to a jury trial

in an action to forfeit the property pursuant to Chapter

64 of New Jersey’s civil forfeiture statute. In essence, the

Court invalidated the statutory summary procedure