By Lawrence Hurley
WASHINGTON (Reuters) - The Supreme Court on Tuesday limited the ability of criminal defendants facing federal charges to challenge a court's decision to freeze their assets before trial.
By a 6-3 vote, the court said defendants cannot use a pretrial hearing to challenge a grand jury's finding that there was probable cause that they committed a crime that required forfeiture.
The court's ruling did not alter existing law allowing defendants to ask courts to release seized assets if the funds in question cannot be traced to the alleged crime.
The case concerned Kerri Kaley, a sales representative for a subsidiary of Johnson & Johnson Inc who, along with her husband Brian, was indicted by federal prosecutors in Florida for reselling medical devices, including sutures, that she obtained from hospitals to which she had previously sold the same products.
The federal government had said in court papers that a ruling for the Kaleys would make it harder to seek restitution for victims, such as investors harmed by white-collar crime, after a defendant has used frozen assets to pay for legal expenses.
In the majority opinion, Justice Elena Kagan said that if the court had ruled for the Kaleys it would have "strange and destructive consequences" because judges would effectively be able to second-guess grand jury findings.
"The Kaleys here demand a do-over, except with a different referee," she wrote. In the United States, a grand jury of randomly selected citizens determines whether proposed criminal charges are supported by the evidence.
The court was split along non-ideological lines, with Chief Justice John Roberts, a conservative, joined in dissent by liberal justices Stephen Breyer and Sonia Sotomayor.
Roberts said the Kaleys deserved a hearing because of their need to use the assets to pay for their legal defense.
The court's ruling means that a defendant "may be hobbled in this way without an opportunity to challenge the government's decision to freeze those needed assets," he wrote.
The case is Kaley v. United States, U.S. Supreme Court, 12-464.
(Reporting by Lawrence Hurley; Editing by Howard Goller and Jonathan Oatis)