Economic Theory Applied to Civil Forfeiture: Efficiency and Deterrence through Reallocation of External Costs

Punishment for drug crimes includes not only penal sanctions, but economic sanctions in the form of property forfeiture as well. Based on broad statutory language, the government appears to seize property in amounts disproportionate to the crime committed. The author contends that forfeiture lacking proportionality risks violating the Eighth Amendment\u27s prohibition of excessive fines and distributes wealth in an economically inefficient manner. The United States Supreme Court mandated an Eighth Amendment proportionality inquiry in civil forfeiture cases in the 1993 case of Austin v. United States. This Note proposes that courts imposing forfeiture abide by this mandate by engaging in a proportionality analysis which fosters deterrence and economic efficiency through reallocation of the external costs generated by drug crimes. This analysis gauges proportionality by a formula incorporating the magnitude of the crime, the damage caused, and the amount of sanctions necessary to deter