When do asset preservation orders evade judicial review? State v. Steed Explained

In State v. Steed, the Utah Supreme Court addressed whether challenges to asset preservation orders can proceed despite technical mootness, providing important guidance on when issues are “likely to evade review.”

Background and Facts

The State obtained a freeze order on over $3 million of Frank and Joan Steed’s assets under Utah’s Asset Preservation Statute to secure anticipated restitution in a criminal tax case. The freeze order remained in place for more than two years while the Steeds were prosecuted and convicted. After paying their tax obligations from the frozen funds, the Steeds challenged the statute’s constitutionality both facially and as applied, arguing violations of due process and takings clauses. Due to Mr. Steed’s deteriorating health, they conceded technical mootness.

Key Legal Issues

The court addressed whether the Steeds’ constitutional challenge qualified for the mootness exception, which applies when issues (1) affect the public interest, (2) are likely to recur, and (3) because of their brief duration, are likely to evade review. The dispositive question was whether asset preservation orders are “likely to evade review.”

Court’s Analysis and Holding

The court clarified that the proper standard requires issues to be “likely to evade review,” rejecting prior language about issues merely “capable of evading review” as overly broad. The court distinguished inherently short-duration issues like elections and bar admissions from asset preservation orders, which persist until criminal matters resolve and can be challenged through certification or interlocutory appeal. While defendants may prioritize criminal defense over civil challenges, this strategic choice does not make the underlying issue inherently short in duration.

Practice Implications

Practitioners facing asset preservation orders should consider immediate procedural options to avoid mootness problems. The court noted that defendants could seek certification under Rule 54(b) or permission for interlocutory appeal under Rule 5. The decision also signals that Utah courts will scrutinize mootness exceptions more carefully, focusing on the inherent nature of legal issues rather than tactical decisions parties might make. Associate Chief Justice Lee’s concurrence, advocating to overrule the more permissive McBride standard, suggests potential future tightening of mootness doctrine exceptions.