Excessive fines and fees that unfairly target low-income people are increasingly being used by legislatures and city councils across the country to fill budget gaps.

We filed an amicus curiae brief with the U.S. Court of Appeals for the Seventh Circuit Court of Appeals in Grashoff v. Payne, an Indiana case that concerns a low-income woman who faces ruinous financial penalties for failure to report part-time income at the YMCA when applying for unemployment benefits. Susan Grashoff was overpaid roughly $3,000. Pursuant to a state statute, Indiana ordered her to return that amount and punished her—a person who could not afford food and shelter—with more than $8,000 in punitive fines and forfeitures. Until Ms. Grashoff pays the entire amount of the penalty, she is not eligible for unemployment benefits and is trapped in a cycle of debt, poverty, and unemployment.

A federal district court in Indiana denied Ms. Grashoff’s claims under the Excessive Fines Clause of the Eighth Amendment against the Indiana statute governing the penalty in her case on its face and as applied to her.  We joined the National Center for Law and Economic Justice, the Fines and Fees Justice Center, the Shriver Center on Poverty Law, the R Street Institute, the national ACLU, ACLU of Wisconsin, and the ACLU of Indiana in filing an amicus brief to the U.S. Court of Appeals for the Seventh Circuit in support of Ms. Grashoff.

We argue that the Excessive Fines Clause of the Eighth Amendment protects against financially ruinous penalties, like the fine and forfeiture challenged in Grashoff.  Based on the Supreme Court’s landmark 2019 opinion in Timbs v. Indiana and the historical roots of the Excessive Fines Clause, which extend back to the Magna Carta, we argue that the test applied to determine whether a financial penalty is unconstitutional requires considering whether it is proportional not just to the seriousness of the offense, but also in light of the limited financial circumstances of the individual being punished.

Our brief also provides context for the application of the Excessive Fines Clause test to Grashoff by detailing the nationwide rise in excessive fines and fees used to fund state and local governments, including in Chicago and Wisconsin. It provides additional evidence that government overreliance on fines and fees to generate revenue is exacerbated by the COVID-19 recession, harms poor people and their communities, and disproportionately impacts communities of color.

Date filed

Court

U.S. Court of Appeals for the Seventh Circuit