Supreme Court Decision Shows How Excessive Fines Threaten Property Rights

by Matt Miller

February 20, 2019

Today’s U.S. Supreme Court ruling in a landmark civil forfeiture case will reverberate all the way to an ongoing property rights case in Miami Beach, Florida.

In the Supreme Court case, Timbs v. Indiana, Tyson Timbs pleaded guilty to selling heroin to an undercover police officer. On the basis of this plea, police seized his $42,000 Land Rover. Timbs then sued to recover the vehicle on the theory that the seizure violated the Eighth Amendment’s ban on excessive fines. Both the trial court and an Indiana appellate court agreed with Timbs. The Indiana Supreme Court reversed these rulings not because it thought the seizure was constitutional, but because of an open legal question about whether the Eighth Amendment’s ban on excessive fines applies to the states via the Fourteenth Amendment.

In a unanimous decision, the Supreme Court held that the excessive-fines clause of the Eighth Amendment does apply to the states, which means that Timbs will get his Land Rover back once Indiana courts sort out the case on remand. The decision is an important victory for property rights in the fight against civil forfeiture abuse. (The Goldwater Institute filed an amicus brief in the case, urging the Court to rule in Timbs’s favor.)

Timbs also raises an important question: If it is unconstitutional to take someone’s $42,000 Land Rover because they sold heroin to an undercover police officer, isn’t it also unconstitutional to fine someone $100,000 for doing nothing more than listing their home on Airbnb or HomeAway? Because that is exactly what Miami Beach, Florida, is currently doing. The city’s fines for conducting short-term rentals start at $20,000 for the first offense and escalate to $100,000 for the fifth and subsequent offenses. To be clear: Miami Beach imposes these fines for the simple act of renting one’s home—or a room in one’s home—on a short-term basis. These fines are not just imposed on nuisance or party houses. They are imposed on anyone who is caught renting their home on Airbnb, HomeAway, or other home-sharing service.

Miami Beach’s fines for short-term rentals are not only the highest in the nation; they are also unconstitutional, as the Timbs decision makes perfectly clear. That is why the Goldwater Institute is currently litigating the issue in Florida trial court. Miami Beach argues that the fines are necessary in order to deter short-term rentals. Putting aside the question of whether cities should have the right to stop people from engaging in the age-old practice of home-sharing at all, Miami Beach’s argument demonstrates why constitutional prohibitions on excessive fines are so important to protecting individual liberties.

Because it possesses the power to arrest and imprison you, the government can theoretically deter almost any behavior it doesn’t approve of. Even common misdemeanors like speeding could be eliminated overnight if the government could imprison you for 20 years for driving 56 in a 55 mph zone. But might does not make right, and constitutional prohibitions against excessive penalties serve to protect citizens from the asymmetrical nature of governmental power. Indeed, in Timbs, the Court acknowledged that the right to be free from excessive fines is a “fundamental” right, and that “all 50 States have a constitutional provision prohibiting the imposition of excessive fines either directly or by requiring proportionality.”

Miami Beach may be correct that imposing absurd fines on peaceful homeowners will stop them from conducting short-term rentals, but that does not make its scheme constitutional. There are limits to how much the government can punish us for breaking the law—limits embodied in the excessive-fines clauses of the U.S. and all state constitutions, including the Florida Constitution.

“For good reason, the protection against excessive fines has been a constant shield throughout Anglo-American history: Exorbitant tolls undermine other constitutional liberties,” held the Timbs court. The prohibition is “both fundamental to our scheme of ordered liberty and deeply rooted in this Nation’s history and tradition.” Timbs was both a major victory against civil forfeiture abuse and a crucial first step in the ongoing battle to protect private property rights in Indiana, in Florida, and across the nation.

Matt Miller is a Senior Attorney at the Goldwater Institute. He represents the plaintiff in the Miami Beach home-sharing case Nichols v. City of Miami Beach.