[UPDATE: At the Volokh Conspiracy blog, Ilya Somin posted this past August a lengthy post on the intersection between constitutional law and asset forfeiture.]

Columnist Mark Steyn has penned a withering critique of civil asset forfeiture, asserting that the practice violates property rights guaranteed eight centuries ago:

In the year 1215, Magna Carta provided a freeman of England with the right to a trial in a fixed, local law court, and protected him from being “amerced [fined] for a slight offence, except in accordance with the degree of the offence; and for a grave offence he shall be amerced in accordance with the gravity of the offence, yet saving always his contentment; and a merchant in the same way, saving his merchandise” – i.e., even for a “grave offence,” a man shall not be deprived of the ability to make his living.

Civil asset forfeiture allows state agencies (usually law enforcement agencies) to confiscate property they believe has been used in the commission of a serious crime. Even if the defendant is ultimately exonerated at trial, regulations make it difficult or impossible to recover the seized assets.

Steyn is a favorite of conservatives, but criticism of asset forfeiture comes from across the political spectrum.  The ACLU has likened the practice to "highway robbery," while a Forbes Magazine column called it "one of the most serious assaults on private property rights in the nation today."  This summer, The New Yorker published an expose on some of the abuses inherent with the practice.

The case pointed out by Steyn, which was highlighted in a feature in the Economist, appears to be particularly egregious, and should merit serious consideration by the business community. The Economist reported:

Terry Dehko and his daughter Sandy Thomas (pictured) run a grocery store in Fraser, Michigan. It sells everything from bread to hand-made sausages. Fairly often, someone takes cash from the till and puts it in the bank across the street. Deposits are nearly always less than $10,000, because the insurance covers the theft of cash only up to that sum.

In January, without warning, the government seized all the money in the shop account: more than $35,000. The charge was that the Dehkos had violated federal money-laundering rules, which forbid people to “structure” their bank deposits so as to avoid the $10,000 threshold that triggers banks to report a transaction to the Internal Revenue Service (IRS).

Prosecutors offered no evidence that the Dehkos were laundering money or dodging tax. Indeed, the IRS gave their business a clean bill of health last year. But still, the Dehkos cannot get their cash back. “They offered us 20%,” says Ms Thomas, “But if we settle, it looks like we’re guilty of something, which we’re not.”

Steyn's customarily pithy analysis is worth reading:

First, they pass a stupid law that has the effect of making millions of routine, law-abiding transactions appear suspicious (in this case, deposits over $10,000). Then, the vast bloated support state of the Republic of Hyper-Regulation adjusts accordingly (in this case, insurers who’ll cover a mugging of $9,975 decline to cover one of $10,037). But by then, just to cover themselves coming and going, Washington has passed another stupid law making it an additional crime to avoid committing the original crime (thus, “structuring” your deposits to avoid the $10,000 threshold).

[Note: Steyn's promise (or threat, depending on your views) to run for the Senate appears to be tongue-in-cheek.]