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Can a Federal Judge make findings that substantially affects the property interests of third persons who are not and never were before the court {no action commenced against them, and no process) during the course of criminal sentencing proceedings directed at defendant parties in that case? And if there is no authority for making such a finding, what would be the remedy where the Court ordered the property of the other persons to be sold, again without issuing service to said persons?

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A court can have jurisdiction over property in rem without personal service upon all persons who may claim an interest in the property.

Typically, this is done by providing some form of service (such as notice by mail) upon people who are known to have an interest in the property, and an alternative to service directed at an individual (such as notice by posting at the property, by publication of a notice in a public place, or by publication of a notice in a newspaper where the property is located).

Civil forfeiture often involves this kind of indirect notice to unknown parties by publication.

what would be the remedy where the Court ordered the property of the other persons to be sold, again without issuing service to said persons

The ruling of the criminal court is not binding on people who were not served with process in the original action (either personally, if known, or by publication or some other similar means, if not known to the court) in another legal proceeding. But if a claim becomes moot, there may be not remedy available of a violation of one's rights.

They could conceivably bring an action to quiet title, or the equivalent, or an action in replevin, which would not be bound by the Court's findings since the third-parties weren't a party to it, and an injunction on the sale could be sought in that case, if it wasn't too late.

But, if the third-parties had actual notice of the pending criminal action, the better option would probably be to file a motion in the criminal action to intervene with respect to disposition of the property.

Takings of property in the context of the criminal justice system are not "takings" in the 5th Amendment constitutional sense, for which an inverse condemnation action are available, although there is still a due process requirement, which isn't met without some effort to give potential known or unknown third-party claimants notice of the sale.

If there was a court ordered sale, any claim would probably be against the proceeds of the sale, and not against a bona fide purchaser for value at a court ordered sale regularly conducted.

Of course, this presumes that the property is not contraband (you can't make a legal claim to cocaine even if you own it).

If the defendants did not give you notice of your ownership interest, and this resulted in you not being able to intervene in the criminal action, you could also sue the defendant for breaching duties owed to you as a fellow property owner of the property disposed of in the criminal action.

Ultimately, this is not an enviable position to be in, and the likelihood of a court effectively destroying your property interest in the property subject to the criminal proceeding in a manner that there is no economically efficient remedy to address is significant.

Some of the relevant case law is discussed at another answer I wrote on a related topic. See also this answer on civil forfeiture.

One of the leading U.S. Constitutional law cases on the topic is Hudson v. Palmer, 468 U.S. 517, 533, 104 S.Ct. 3194, 82 L.Ed.2d 393 (1984) (“For intentional, as for negligent deprivations of property by state employees, the state's action is not complete until and unless it provides or refuses to provide a suitable post-deprivation remedy.”).

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  • ohwilleke, thank you for your answer. Maybe I should explain just a few more details.
    – Randy
    Feb 16, 2021 at 1:28
  • @Randy I am going to decline to address your more specific facts as I would risk exposing attorney client-privileged and attorney work product analysis that I have developed for a client in a similar case, even though it is a very interesting question that might he informative to readers here.
    – ohwilleke
    Feb 16, 2021 at 16:36
  • @ ohwilleke, Are you available for private consultation?
    – Randy
    Feb 16, 2021 at 20:00
  • @Randy No. Not on something related to this point.
    – ohwilleke
    Feb 19, 2021 at 23:53

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