United States v. Robinson

• Decision Date: 14 June 2013
• Docket Number: No. 12–3064–STA–cgc.,12–3064–STA–cgc.
• Citation: 494 B.R. 715
• Parties: UNITED STATES of America, Appellant, v. James D. ROBINSON, Jr., Appellee.
• Court: U.S. District Court — Western District of Tennessee

494 B.R. 715

UNITED STATES of America, Appellant,

v.James D. ROBINSON, Jr., Appellee.

No. 12–3064–STA–cgc.

United States District Court,

W.D. Tennessee,

Western Division.

June 14, 2013.

Barbara M. Zoccola, U.S. Attorney's Office, Memphis, TN, for Appellant.

John E. Dunlap, Law Offices of John E. Dunlap, Thomas C. Fila, Cohen & Fila, Memphis, TN, for Appellee.

Jed G. Weintraub, U.S. Bankruptcy Court, Memphis, TN, pro se.

ORDER AND MEMORANDUM OF LAW

S. THOMASANDERSON, District Judge.

This matter comes before the Court on appeal from the United States Bankruptcy Court for the Western District of Tennessee.Appellant United States of America (“United States”) appeals the decision of the Bankruptcy Court that the automatic stay of 11 U.S.C. § 362(a) bars enforcement of restitution orders as against the property of a bankruptcy estate and that 18 U.S.C. § 3613(a) does not allow the United States to routinely enforce such orders against property of a bankruptcy estate.On consideration of the issues and arguments, the CourtREVERSES the United States Bankruptcy Court and holds that 18 U.S.C. § 3613 serves to exempt enforcement of criminal restitution orders from the automatic stay as against all property of the person ordered to pay, including property nominally included in the bankruptcy estate.

BACKGROUND

The parties do not appear to dispute the Bankruptcy Court's findings of fact.The Court recites them here to provide context for the issues of law presented.

On November 27, 1996, AppelleeJames D. Robinson(“Robinson”) pleaded guilty to charges of mail fraud and aiding and abetting under 18 U.S.C. §§ 1341and1342.The United States District Court for the Western District of Tennessee entered an Order of Judgment in a Criminal Case, requiring Robinson's imprisonment for 97.5 months, requiring Robinson to undergo three months of supervised release, and directing Robinson to pay criminal restitution in the amount of $286,875.00.(Order of Judgment, United States v. Robinson, 2:95–cr–20252–BBD, D.E. # 249).

On March 4, 1997, Robinson pleaded guilty to charges of wire fraud and aiding and abetting under 18 U.S.C. §§ 1342and1343.The United States District Court for the Western District of Tennessee entered an Order of Judgment in a Criminal Case, requiring Robinson's imprisonment for twenty-four months and directing Robinson to pay criminal restitution in the amount of $100,000.00.(Order of Judgment II, United States v. Robinson, 2:96–cr–20161–JSG, D.E. # 20).

On May 7, 2012, Robinson filed for protection under Chapter 13 of the United States Bankruptcy Code.(Memorandum and Orderat 3, D.E. # 1–2).As of the commencement of the Chapter 13 case, Robinson had paid $7,779.44 of the $286,875.00 restitution order and $200.00 of the $100,000.00 restitution order.( Id.).Pursuant to 11 U.S.C. § 521, Robinson filed a schedule of assets with the Bankruptcy Court, listing an IRA account valued at $47,000.00, a tax refund valued at $4,500.00, and three automobiles: a 2006 Toyota Highlander valued at $6,000.00, a 2001 Toyota Solara valued at $2,000.00, and a 1991 Infiniti i30 valued at $900.00.( Id.)Robinson claimed the full amount of his IRA and $1,500 of the value of the Highlander as exempt under Tennessee law.( Id.)Robinson also filed a schedule of debts with the Bankruptcy Court, listing the Department of Justice as an unsecured creditor in the amount of $283,101.00.( Id.)Robinson further disclosed monthly income of $4,983.33 to the Bankruptcy Court.( Id.)

The United States filed a Motion for Declaratory Judgment or Alternatively for Dismissal or Termination of Stay on June 26, 2012, asking the Bankruptcy Court to declare 11 U.S.C. § 362's automatic stay provisions inapplicable to collection of criminal restitution under either 18 U.S.C. § 3613(a) or 11 U.S.C. § 362(b)(1); in the alternative, the United States asked for a determination that the United States was entitled to general relief from the automatic stay.( Id.)The Bankruptcy Court held that the so-called “criminal action or proceeding” exception to the automatic stay under 11 U.S.C. § 362(b)(1) allowed the United States to enforce a restitution order against property of the debtor, but not against property of the bankruptcy estate.The Bankruptcy Court further held 18 U.S.C. § 3613(a), did not speak to enforcement of a fine or restitution order against property of the bankruptcy estate, so did not allow the United States to pierce § 362(a)'s stay of action against property of the bankruptcy estate.The Bankruptcy Court also found the United States had not shown sufficient cause to terminate the automatic stay in its entirety; however, the Bankruptcy Court determined the United States had shown sufficient cause to terminate the automatic stay as to Robinson's IRA account and two of Robinson's vehicles.The United States timely appealed the Bankruptcy Court's determination on the issue of whether the automatic stay applied to protect property of the bankruptcy estate against the United States' efforts to enforce a criminal restitution order.

JURISDICTION AND STANDARD OF REVIEW

“The district courts of the United States shall have jurisdiction to hear appeals ... from final judgments, orders, and decrees” of the bankruptcy courts.¹The District Court for the Western District of Tennessee has authorized appeals of final orders of the Bankruptcy Court for the Western District of Tennessee to the Bankruptcy Appeals Panel(“Panel”) for the Sixth Circuit Court of Appeals, and in the ordinary course of business the Panel hears all such appeals.²However, an appellant may, at the time of appeal, elect to have a district court hear his appeal.³The United States has so elected in this matter.⁴

A district court reviews the factual findings of a bankruptcy court for clear error.⁵However, a district court reviews the bankruptcy court's determinations of law de novo.⁶As statutory interpretation is a purely legal question, the Court will review the Bankruptcy Court's order de novo.⁷

ANALYSIS

I.

Commencement of a case under Title 11(“the Bankruptcy Code”) creates a bankruptcy estate, consisting inter alia of and subject to certain exceptions not applicable here “all legal or equitable interests of the debtor in property as of the commencement of the case.”⁸Section 362(a) of the Bankruptcy Code creates various stays by operation of law on the filing of a bankruptcy petition (“the automatic stay”).⁹The automatic stay, in relevant part, applies to:

(1) the commencement or continuation, including the issuance or employment of process, of a judicial, administrative, or other action or proceeding against the debtor that was or could have been commenced before the commencement of the case under this title, or to recover a claim against the debtor that arose before the commencement of the case under this title;

(2) the enforcement, against the debtor or against property of the estate, of a judgment obtained before the commencement of the case under this title;

(3) any act to obtain possession of property of the estate or of property from the estate or to exercise control over property of the estate;

(4) any act to create, perfect, or enforce any lien against property of the estate;

(5) any act to create, perfect, or enforce against property of the debtor any lien to the extent that such line secures a claim that arose before the commencement of the case under this title;

(6) any act to collect, assess, or recover a claim against the debtor that arose before the commencement of the case under this title[.]¹⁰

However, 18 U.S.C. § 3613 provides “[n]ot withstanding any other Federal law ... a judgment imposing [restitution] may be enforced against all property or rights to property of the person [ordered to pay restitution.]”¹¹Section 3613 goes on to enumerate three exceptions not applicable here.¹²

II.

The learned Bankruptcy Court, noting that 18 U.S.C. § 3613(a) is “powerful and far-reaching,” nevertheless concluded it “does not allow [an] order of restitution to be routinely enforced against property of the estate, absent authorization of the bankruptcy court.”¹³The Bankruptcy Court then gave a detailed explanation of the distinctions between property of the estate, property of the debtor, the bankruptcy estate, and the debtor under Bankruptcy Law.However, the Bankruptcy Court does not explain why, in particular, the Bankruptcy Code should be exempt from the “powerful and far-reaching” effect of § 3613, and here is where the Court arrives at a conclusion contrary to that reached by the Bankruptcy Court.

A.

It seems beyond dispute, and it appears at this stage of the proceedings the parties do not dispute, that the United States may enforce a criminal fine or restitution order as against a debtor in bankruptcy personally.The Bankruptcy Court found the necessary statutory authority for so holding in the language of § 362(b)(1), determining § 362(b)(1) allowed the United States, while enforcing a criminal fine or restitution order, to ignore the automatic stay with respect to the debtor or the debtor's property only.However, it is the opinion of the Court that the operation of § 3613(a) renders the Bankruptcy Code's distinctions between the debtor, property of the debtor, the bankruptcy estate, and property of the bankruptcy estate a nullity, and that § 3613(a)'s express language prevents the application § 362(a)'s various stays to the United States' efforts to enforce a criminal fine or restitution order.

“[W]hen ‘the statute's language is plain, the sole function of the courts—at least where the disposition required by the text is not absurd—is to enforce it by its terms.’ ”¹⁴The Court finds Congress' language exceedingly clear: “[n]ot withstanding any other Federal law” means the provisions of § 3613 apply without regard to any other federal enactment.¹⁵“[T]he use of such a ‘notwithstanding’ clause clearly signals the drafter's intention that the...