United States v. Witham

• Decision Date: 08 June 2011
• Docket Number: No. 10–1814.,10–1814.
• Citation: 648 F.3d 40
• Parties: UNITED STATES, Appellant,v.Wayne WITHAM, Defendant, Appellee.
• Court: U.S. Court of Appeals — First Circuit

648 F.3d 40

UNITED STATES, Appellant,

v.Wayne WITHAM, Defendant, Appellee.

No. 10–1814.

United States Court of Appeals, First Circuit.

Submitted March 30, 2011.Decided June 8, 2011.

Seth R. Aframe, Assistant United States Attorney, John P. Kacavas, United States Attorney, and Michael T. McCormack, Assistant United States Attorney, on brief for appellant.Wayne Witham, pro se.Before LYNCH, Chief Judge, BOUDIN and THOMPSON, Circuit Judges.LYNCH, Chief Judge.

This case raises a narrow but important question. In light of the Mandatory Victim Restitution Act of 1996 (MVRA), Pub.L. No. 104–132, §§ 201–211, may the United States meet its obligation to enforce an order of restitution to a private-party victim of a crime by use of the Federal Debt Collection Procedure Act (FDCPA), 28 U.S.C. §§ 3001–3308, including its garnishment procedure, § 3205?

In a decision that predated the applicability of the MVRA, United States v. Bongiorno, 106 F.3d 1027 (1st Cir.1997), this court held that the government could not use the FDCPA to enforce a private-victim restitution order because such restitution was not a debt “owing to the United States” under the FDCPA. See 28 U.S.C. §§ 3001(a), (c); 3002(3); Bongiorno, 106 F.3d at 1036–40; see also United States v. Rostoff, 164 F.3d 63, 69 (1st Cir.1999); United States v. Timilty, 148 F.3d 1, 5 (1st Cir.1998).

The question not answered in Bongiorno and now before us is whether the MVRA has since given the United States authority to use the FDCPA's collection procedures to enforce restitution orders for the benefit of private victims. The district court, finding that our prior precedent still controlled the question, held that the United States had no such authority. We reverse, holding that the MVRA authorizes the United States to invoke FDCPA procedures to enforce all restitution orders, including those in favor of private-party victims.¹

I. Factual Background

The basic facts underlying the narrow legal question we face are not disputed.

On January 26, 2000, appellee Wayne Witham was indicted for his part in a conspiracy that, from 1995 to 1997, stole computer parts and memory from Digital Equipment Corporation and sold them to a co-conspirator's business, which sold used computer systems and components. The conspiracy's three couriers, including Witham, received payment for the stolen goods by check, with the payments split among several checks when the total payment exceeded $10,000, the amount that would trigger financial institutions' reporting requirements under the Bank Secrecy Act. See 31 U.S.C. § 5313(a); 31 C.F.R. 1010.311.

Witham pled guilty on May 23, 2000 to one count of conspiring to defraud the United States and to structure transactions to evade reporting requirements, 18 U.S.C. § 371; one count of conspiring to receive and transport stolen property in interstate commerce, 18 U.S.C. § 371; nine counts of both structuring and aiding and abetting in structuring individual check transactions to evade reporting requirements, 31 U.S.C. § 5324(a)(3); 18 U.S.C. § 2; and two counts of tax evasion stemming from his failure to report his illegal income, 26 U.S.C. § 7201. His plea agreement included a statement that “the Court may also order the defendant to make restitution under 18 U.S.C. § 3663 to victims included in the count(s) to which he agrees to plead guilty.” On October 30, 2000, Witham was sentenced to thirty-three months imprisonment, followed by thirty-six months supervised release. He was also ordered to pay, jointly and severally with one co-conspirator, restitution of $800,000 plus 6.241% interest. The restitution was ordered paid to Compaq, which had acquired the victim, Digital Equipment Corporation, in 1998.

Under the terms of an agreement with the probation office, Witham was supposed to pay $200 each month toward his restitution obligation. His first payment was scheduled for January 5, 2004. He “got behind” on those payments, and made only eighteen payments sporadically over the next several years. Further, he made only one of those eighteen payments—of $100 on May 14, 2008—after his supervised release period ended in July 2007.

Witham works seasonally as a contract union millwright for approximately ten months per year, collecting unemployment during the other months. The district court found that he could expect an income ranging between $50,000 and $60,000 a year, though he earned significantly more, $91,000, in 2009. On September 8, 2009, pursuant to the FDCPA's garnishment procedure, 28 U.S.C. § 3205, the United States filed an application for a writ of continuing garnishment ordering Witham's employer, Seimens Generation Services, to garnish 25% of Witham's disposable (i.e., after-tax) earnings.² The writ was issued by the Clerk of Court the next day.

At a November 30, 2009 hearing on the garnishment, the court reduced the garnishment to $200 per month, pending a deposition of Witham to determine his earnings and expenses, which Witham had not accurately reported to the district court. After the deposition and a second hearing, the district court ordered on January 28, 2010 that $200 a month continue to be garnished, stating that this amount was “fair, reasonable, and practical” and balanced repaying the victim with the “defendant's rehabilitation, the need for him to be self-sufficient, and his obligations of support” for his adult children. United States v. Witham, No. 00–CR–17–2, 2010 WL 2465355, at *1 (D.N.H. Jan. 28, 2010).

The United States moved for reconsideration, arguing that the court had misconstrued its discretion under 28 U.S.C. § 3013 in imposing so low a monthly payment toward the restitution obligation.³ The district court granted the motion for reconsideration, but ordered further briefing on, among other issues, the question of whether First Circuit precedent prohibited the government from using the FDCPA garnishment procedure to collect restitution on behalf of a private party. See Bongiorno, 106 F.3d at 1036–40; see also Rostoff, 164 F.3d at 69; Timilty, 148 F.3d at 5. The government replied that the First Circuit precedents referred to by the district court all interpreted a superseded statutory restitution scheme, and that under the MVRA, the government may use FDCPA procedures to enforce restitution owed to private victims.

On June 4, 2010, the district court vacated its January 28 order of continuing garnishment and held that First Circuit precedent did foreclose the government from invoking the FDCPA to collect restitution owed to a private victim under the MVRA, because by its own terms the FDCPA applies only to debts that are “owing to the United States.” 28 U.S.C. § 3002(3); United States v. Witham, 757 F.Supp.2d 91, 92 (D.N.H.2010).⁴

The government appeals this order, arguing that under the MVRA, the fact that the FDCPA does not apply on its own terms to restitution owed to private victims is not controlling. The MVRA, it argues, made the authority of the United States to enforce all restitution orders coextensive with its authority to enforce fines, which, no one disputes, includes the authority to invoke FDCPA procedures. Witham argues that the district court was correct to find that prior precedent controlled the outcome of the case, because the FDCPA's definition of “debt” continues to be the dispositive question of statutory interpretation.

II. Analysis

A. The Statutory Scheme Has Changed Since Bongiorno

Through a series of enactments from 1982 to 1996, Congress has provided that criminals, in addition to paying fines to the United States as penalties for their crimes, should pay restitution both to the private individuals and institutions victimized by their crimes and to the United States when it is the victim. Each successive enactment has strengthened the procedures for imposing and enforcing restitution orders. The statutory scheme began with the Victim and Witness Protection Act of 1982 (VWPA), Pub.L. No. 97–291, § 5. As relevant to this case, the scheme was amended as part of the broader Sentencing Reform Act of 1984, Pub.L. No. 98–473, title II, ch. II, § 212, to enhance the power of the United States, but not private victims, to use new federal fine collection statutes to collect restitution.⁵ Unhappy about the pace of enforcement of restitution orders, Congress enacted the MVRA in 1996, making a number of changes to the restitution scheme. It is the effect of these changes that is in question in this case.

Under the original 1982 VWPA, if a defendant failed to pay restitution ordered by a federal court, either the United States or the victim named in the restitution order could enforce the order “in the same manner as a judgment in a civil action.” 18 U.S.C. § 3663(h)(1)(B), (2), repealed by Pub.L. No. 104–132, § 205(a)(2). Judgments in civil actions can be satisfied by following the procedures available under the law of the state in which the court is located, except that “a federal statute governs to the extent it applies.” Fed.R.Civ.P. 64(a) (judgment of property); Fed.R.Civ.P. 69(a)(1) (money judgment) (emphasis added); see also Bongiorno, 106 F.3d at 1040 (describing federal government's enforcement options at the time of the case). The 1984 amendment left this enforcement mechanism intact.

The FDCPA, Pub.L. No. 101–647, §§ 3601–3631, was enacted in 1990, eight years after the VWPA. By its terms, the statute provides “civil procedures for the United States ... to recover judgment on a debt,” and “shall not apply with respect to an amount owing that is not a debt.” 28 U.S.C. § 3001(a)(1), (c). As relevant to orders of restitution, the statute defines “debt” as “an amount that is owing to the United States.” Id. § 3002(3)(B). We have recognized that the FDCPA only extends to “those obligations owing to the federal government.” Bongiorno, 106 F.3d at 1036.

In Bongiorno, a case under the Child Support Recovery Act, this court held that “a debt cannot be eligible for inclusion under...