Kaley v. United States

What This Case Is About

Kerri and Brian Kaley were indicted for reselling stolen medical devices and laundering the proceeds. The government obtained a pre-trial restraining order freezing their assets — including money they needed to pay their attorney. The Kaleys wanted to challenge the factual basis for the indictment at a hearing to vacate the asset freeze. The Supreme Court held they could not: a grand jury’s probable cause finding is conclusive, and defendants cannot relitigate it in a hearing about frozen assets.

The Facts

The Kaleys were charged with transporting stolen medical devices and money laundering. Under federal forfeiture law, the government obtained a restraining order freezing their assets before trial. The Kaleys moved to vacate the order, arguing they needed the frozen funds to hire their chosen attorney. They wanted a hearing where a judge would independently determine whether probable cause supported the charges — essentially allowing them to challenge the strength of the indictment.

The district court allowed them to challenge whether the specific assets were traceable to the alleged crimes but refused to let them challenge the grand jury’s underlying probable cause determination. The Eleventh Circuit affirmed.

What the Court Decided

The Supreme Court affirmed 6-3, holding that a grand jury’s probable cause finding cannot be relitigated in a hearing to vacate a pre-trial asset restraint. Justice Kagan wrote for the majority, emphasizing the “fundamental and historic commitment of the criminal justice system to entrust probable cause findings to a grand jury.”

The Court reasoned that allowing a judge to second-guess the grand jury could produce “two inconsistent findings governing different aspects of one criminal proceeding” — a judge might find probable cause lacking while the defendant faces trial premised on the grand jury’s finding that probable cause exists. This “legal dissonance” would undermine the criminal justice system’s integrity and the grand jury’s constitutional role.

Applying the Mathews v. Eldridge balancing test, the Court found the government’s interest substantial, and the risk of erroneous deprivation low given the grand jury’s independent probable cause determination.

Why This Case Matters for Your § 1983 Case

Although Kaley is a criminal forfeiture case, it has implications for § 1983 litigation:

• Probable cause and grand jury indictments: If your § 1983 case involves a malicious prosecution or false arrest claim, and the defendant was indicted, Kaley reinforces that a grand jury indictment creates a strong presumption of probable cause. This can be difficult (though not impossible) to overcome.
• Due process in asset restraints: If the government freezes your assets before trial, Kaley limits your ability to challenge the underlying charges at a hearing on the freeze. You can challenge the traceability of specific assets to the alleged crime, but not the probable cause for the charges themselves.
• Right to counsel: The dissent (Chief Justice Roberts) argued forcefully that freezing a defendant’s assets — including funds needed to hire counsel — implicates the Sixth Amendment right to counsel of choice. This concern may be relevant if government action in your case effectively deprived you of legal representation.

Key Takeaway

A grand jury indictment conclusively establishes probable cause for purposes of pre-trial asset restraints — defendants cannot relitigate the factual basis for the charges at a hearing to unfreeze assets, even when those assets are needed to pay for legal counsel.