Chicago Mayor Introduces Major Reforms to Punitive Vehicle Impound Program

Chicago Mayor Lori Lightfoot announced Wednesday that her office is introducing a package of legislation to reform the city's punitive vehicle impound program, which was the subject of a 2018 Reason investigation and several ongoing civil rights lawsuits.

Lightfoot's proposed ordinance would reduce impound fines and cap storage fees, end impoundments for many non-driving offenses, and add an "innocent owner" defense for those whose cars were used without their knowledge.

"It is critical that we take this step to help residents that for far too long have suffered at a disproportional impact from an outdated program that too frequently resulted in thousands of dollars in fines and loss of personal property," Lightfoot said in a press release. "Today marks another monumental step in our work to right the wrongs of the past and offer assistance to residents that need it the most, but while we take this step today, we also realize that there is still work to be done and will remain diligent in our approach to build a fairer, more equitable Chicago."

The legislation follows investigations by Reason, WBEZ, and ProPublica Illinois that showed that Chicago's massive vehicle impound program regularly ensnared innocent owners and low-income residents, soaking them in thousands of dollars of fines and storage fees, regardless of their ability to pay. Chicago seizes cars for a litany of offenses, including drug crimes, and even in cases where owners beat criminal charges, they're still forced to also go through the city's quasi-judicial administrative hearings court, where low standards of evidence and few procedural protections almost always ensure that defendants and up in debt and bereft of their cars.

For example, Reason profiled the case of Spencer Byrd, a Chicago-area auto mechanic whose Cadillac was seized and impounded after he was pulled over by the police. Byrd was giving a customer, a man he said he'd never met before, a ride, and when police searched the passenger they discovered heroin in his pocket. Byrd was never charged with a crime, and he in fact beat a civil asset forfeiture case against his car in Illinois state court, where a judge ruled he was an innocent owner.

However, Chicago refused to release Byrd's car, which the city was simultaneously claiming under its municipal code. Byrd was forced to go through the Chicago's Byzantine impound hearing process, where an administrative law judge found he was liable for having illegal drugs in his car

Former Chicago Mayor Rahm Emanuel steeply raised impound fines in 2011 as part of a larger strategy of using fines and fees to close the city's budget gaps, but Lightfoot's press release notes that revenues from the impound program actually declined after 2011. WBEZ's investigation found that the city sells impounded cars to its sole towing contractor at scrap prices—far below their actual value. Meanwhile, Chicago has become a national leader in Chapter 13 bankruptcy filings by residents, which allows those with regular incomes to develop payment plans to repay their debts.

"The evidence is clear: when cities rely on police to generate revenue through fines and fees, it's a lose-lose situation for both residents and their local government," Priya Sarathy Jones, national policy and campaigns director at the Fines and Fees Justice Center, said in a statement. "This is an important step to improve Chicago's economy and to roll back policies that result in unnecessary encounters between police and residents."

Last April, the Institute for Justice, a libertarian public interest law firm, filed a civil rights lawsuit against Chicago, alleging that the city's impound scheme violates the Illinois and U.S. Constitution's protections against excessive fines and unreasonable seizures, as well as due process protections.

Byrd is one of the named plaintiffs in the lawsuit. Two of the other plaintiffs, Jerome Davis and Veronica Walker-Davis, had their car seized by the city after they dropped it off at a mechanic, who drove it on a suspended license and was pulled over.

"I'm thinking that I'm just going to go and give a statement, show proof that my car wasn't in my possession, and everything will be okay, but in fact it turned into a last year. "I felt like I was pretty much in The Twilight Zone."

Because there is currently no innocent owner defense, the couple was found liable for fines and fees. Here's what happened next:

The couple managed to find a pro bono lawyer and negotiate their fine down to $1,170, but when they arrived with cash in hand, they were told the registration on their car had lapsed in the more than six months it had been sitting in an impound lot, and the city would not release it without a current registration.

Walker-Davis rushed the next day to get their registration renewed, which cost another $101, and got the city to agree to extend the deadline for the couple to pay their impound fines. In an email provided to Reason, a lawyer for Chicago's law department wrote to the couple: "The City will agree to extend the time for you to pay the settlement agreement to 4/12/19."

But when the couple showed up to retrieve their car on April 10, it was gone. The city had already sold it off.

Institute for Justice attorney Diana Simpson said in a press release today that Lightfoot's proposed reforms "are a strong first step to improving the city's impound racket that ensnares tens of thousands of Chicagoans each year." 

"Unfortunately, her proposed ordinance does not go far enough to right the wrongs of the city's impound scheme," Simpson continues. "It still does not fix the burdensome and confusing system that owners must traverse to get their cars back. The city still unconstitutionally ransoms people's cars, refusing to release them until owners have paid all fines and fees that might be due—even without a judge finally determining the car was properly impounded. And the reforms do nothing to help most people who have already been victimized by the impound program, including those whose cars the city has destroyed."

Chicago's impound program is being challenged in a separate lawsuit by Andrea Santiago, a Chicago woman with multiple sclerosis whose van, which included a $10,000 wheelchair lift, was improperly towed and destroyed last year.