Pawnbrokers, Police, and Property Rights -- A Proposed Constitutional Balance
24 Pages Posted: 2 Jul 2015
Date Written: 1994
Imagine being a legitimate businessperson providing the valuable service of extending credit to individuals in the community who would not customarily receive credit. Further, imagine complying with all state laws regarding the business including a provision that requires you to maintain a detailed record noting all of the inventory of your business. Finally, suppose one day the police seize, retain, and ultimately dispose of a good portion of your inventory without providing you any compensation for the disposition. Life in the former Soviet Union or some Third World country? Unfortunately not. Events such as this are commonplace in many states; the unfortunate victims are pawnbrokers, who before the disposition had merely extended credit in the course of their business in return for taking an interest in the items which the police later seize and sell for their own benefit.
Indeed, just as detailed above, in many jurisdictions state law requires “each and every pawnshop and pawnbroker...to keep a record showing in detail all property pawned with them.” The police often have access to these records and can require the pawnbroker to report all of the pawnbroker's transactions directly to them. The alleged purpose for this is “to assist law enforcement authorities in tracking down stolen goods, and to minimize the use of pawnbrokers as ‘fences.’”
This common scenario implicates important due process concerns. To address these concerns, this article offers a solution to the due process issues raised by summary police seizure of pawnbrokers' property. In brief, this article suggests that a pawnbroker's interest in property disposed of by the police after their seizure should be preserved against everyone but a true owner who does not claim the proceeds of her insurance policy. Police departments should not profit from the seizure and disposition of property in a pawnbroker's possession. In formulating this solution, part I of this article asserts that present police practices involving the disposition of property from pawnbrokers are inherently unconstitutional. Part II, in turn, contends that police officers are personally liable for disposing of the property of pawnbrokers without due process. Finally, part III advocates a novel statutory solution which, as detailed below, accommodates the interests of the relevant parties.
Keywords: Due Process, Pawnbroker, Property Rights
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