Margie Shephard v. United States, 735 F.3d 797

Margie P. Shephard pleaded guilty (written plea) to conspiracy to commit bank fraud and identity theft (18 U.S.C. § 371), aggravated identity theft (18 U.S.C. § 1028(a)), and obstruction of justice (18 U.S.C. § 1503).
The district court sentenced Shephard to imprisonment, supervised release, and ordered $8,918.36 in restitution.
Shephard filed a 28 U.S.C. § 2255 motion alleging ineffective assistance of counsel for failing to challenge the restitution amount and to locate seized funds that could reduce restitution.
The district court denied the § 2255 motion; Shephard appealed and obtained a certificate of appealability limited to counsel’s effectiveness regarding the restitution issue.
The government moved to dismiss the appeal, arguing restitution challenges are not cognizable in a § 2255 motion because § 2255 only affords relief that would affect custody.
The panel considered circuit precedent (United States v. Bernard) and addressed whether Matheny v. Morrison created a conflict that would allow Shephard’s claim to proceed.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether an ineffective-assistance claim attacking a restitution order is cognizable in a § 2255 motion	Shephard: counsel was ineffective for not contesting restitution/locating seized funds; this ineffective-assistance claim can be raised under § 2255	Government: § 2255 only permits relief that would affect release from custody; restitution-only challenges are not cognizable	The court held Bernard controls: restitution challenges (even as ineffective-assistance claims) are not cognizable under § 2255 because they do not seek release from custody; appeal dismissed
Whether Matheny created an intra-circuit conflict allowing Shephard’s § 2255 challenge	Shephard: Matheny suggests some sentencing-validity claims can proceed and thus may permit her challenge	Government: Matheny did not address cognizability of restitution under § 2255 and is not controlling on this point	The court held Matheny’s discussion was dicta and does not conflict with Bernard; Bernard governs

United States v. Bernard, 351 F.3d 360 (8th Cir.) (restitution challenges not cognizable in § 2255)
Matheny v. Morrison, 307 F.3d 709 (8th Cir.) (distinguishes venue and procedural route for sentencing-validity claims; did not decide restitution-cognizability under § 2255)
Passmore v. Astrue, 533 F.3d 658 (8th Cir.) (notation on dicta and stare decisis principles)