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The FBI violated private citizens’ constitutional rights when it seized contents from hundreds of safe deposit boxes during a 2021 raid on a Beverly Hills business suspected of money laundering, a federal appeals court ruled last week.

"This was a resounding victory, not just for our clients, but for the hundreds of people who've been stuck in a nightmare for years because of what the FBI did," Institute for Justice Senior Attorney Rob Frommer, who represented several plaintiffs in the case, told Fox News.

The U.S. 9th Circuit Court of Appeals found the bureau violated U.S. Private Vaults box holders’ Fourth Amendment rights against unreasonable searches and seizures by opening and cataloging the contents of 1,400 safe deposit boxes without individual criminal warrants for each.

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The Jan. 23 ruling reversed a 2022 lower court decision siding with the FBI and requires federal officials to destroy any inventory records of the hundreds of box holders not charged with a crime.

Agents took about $86 million in cash from the boxes in the March 2021 raid, as well as a trove of jewelry, gold bars and coins, silver and other valuables. In May of that year, the FBI "commenced administrative forfeiture proceedings" against an unspecified number of the boxes, according to court documents filed by the government.

Civil asset forfeiture is the process through which the government seizes money or other property believed to be linked to a crime, even if the owner isn't charged with a crime.

The FBI's raid on U.S. Private Vaults was part of its investigation into the company, which ultimately shut down and pleaded guilty to conspiracy to launder drug money. The government argued before the 9th Circuit that its warrant authorized the FBI to seize the deposit boxes and inventory their contents in accordance with standardized policy.

US Private Vaults exterior

The FBI seized an estimated $86 million in cash from hundreds of safe deposit boxes at U.S. Private Vaults in a March 2021 raid.  (Al Seib / Los Angeles Times via Getty Images)

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But unsealed court documents showed neither the FBI nor the U.S. Attorney's Office told the judge in their warrant request that agents planned to confiscate the contents of every box containing at least $5,000 in cash or belongings.

The warrant only authorized authorities to seize business computers, money counters and surveillance equipment. The judge also allowed them to seize safety deposit boxes and keys, but specifically wrote that agents should only "inspect the contents of the boxes in an effort to identify their owners … so that they can claim their property," and that the warrant "does not authorize a criminal search or seizure of the contents of the safety deposit boxes."

In its decision, the 9th Circuit panel wrote that the government had gone beyond the scope of its warrant and violated its own rules by taking inventory of property that wasn’t the subject of a warrant.

Circuit Judge Milan D. Smith Jr. wrote that it was "particularly troubling" that the government couldn’t explain the limitations to these types of inventory searches and questioned how they differed from the "limitless searches of an individual’s personal belongings" like those seen in colonial America.

"It was those very abuses of power, after all, that led to adoption of the Fourth Amendment in the first place," Smith wrote. 

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Jeni Pearsons, one of the plaintiffs in the class-action lawsuit, said the win was "incredibly gratifying."

"Hearing these judges just knock them down a peg and talk through the situation, this extraordinary overreach and an actual breaking of civil rights… it was just really, really gratifying," she told Fox News. 

Pearsons and her husband Michael Storc had $20,000 in silver and $2,000 in cash seized from their rented security deposit box during the raid. She teamed up with the Institute for Justice to fight for her property and ultimately prevailed, but said she found the FBI had lost the $2,000 when she went to reclaim it.

"I do think that the FBI is watching this case," Pearsons said. "And I hope that if they do continue with civil forfeiture processes, that they put structure in place so that it's transparent and that it's not just a free-for-all all, which is what this seems to be."

Jeni Pearsons stands outside US Private Vaults

Jeni Pearsons said the FBI had "no explanation" about where the $2,000 seized from her safe deposit box went. (Courtesy Institute for Justice)

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"It's a free-for-all all within a ridiculous defense," Pearsons added.

But Frommer said while this ruling helped "expose the government's attempt to steal innocent people's things," he doesn’t think it will end civil forfeiture abuse.

"I think this ruling on its own is important, but it won't stop the FBI's grasping hand," he told Fox News. "Yeah, they got their hand slapped just now. But unless there's real consequences, they'll just view this as a dry run for the next time."

The FBI declined to comment on the ruling. Thom Mrozek, a spokesperson for the U.S. Attorney’s Office in Los Angeles, declined to comment on the ruling but said the prosecutor's office was "prepared to destroy records of the inventory search, which is the relief sought by the plaintiffs in the case."