United States v. George Marcus Hall
877 F.3d 676
| 6th Cir. | 2017Background
- In 2015 George Hall pled guilty to offenses and agreed to forfeit multiple Knox County real properties; the U.S. obtained preliminary forfeiture orders for those parcels.
- Knox County discovered Hall owed substantial delinquent property taxes and asserted a state-law tax lien (Tenn. Code Ann. § 67-5-2101) on the seized parcels.
- Knox County filed a late first § 853(n) claim and a timely second verified claim after an amended preliminary forfeiture order; it also moved for interlocutory sale of Knox County parcels.
- The United States offered to pay Knox County the present value of taxes, interest, and penalties accruing up to the date of a final forfeiture order, but argued Knox County cannot tax federal property after title vests.
- The district court dismissed Knox County’s second claim for lack of standing and denied interlocutory sale; it then entered a final forfeiture. Knox County appealed.
- The Sixth Circuit held Knox County had a colorable, legally cognizable interest (a tax lien) sufficient for Article III standing, vacated the final forfeiture order as to unresolved county interests, and affirmed denial of interlocutory sale.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to file a § 853(n) claim | County: its state-law tax lien is a cognizable interest; it has injury and redressability | Gov’t: county lacks a legally cognizable post-forfeiture interest; U.S. will pay taxes to date so no redress needed | Court: County has Article III standing based on a colorable tax-lien interest; district court erred to dismiss for lack of standing |
| Scope of county’s lien (pre- vs post-forfeiture accruals) | County: lien secures taxes, penalties, interest including some post-forfeiture accruals | Gov’t: Supremacy Clause precludes local taxation after federal title vests; U.S. will pay taxes accrued through final forfeiture | Court: lien covers taxes assessed before final forfeiture and penalties/interest accruing on those taxes; district court should determine exact scope on remand (summary judgment or hearing) |
| Redressability given government’s offer to pay | County: seeks interlocutory sale and/or full recognition of lien (including timing of payments) | Gov’t: its offer to pay satisfies county’s claim so no relief from court is needed | Court: government’s offer does not eliminate jurisdiction; a judicial order could provide additional or alternative relief (e.g., interlocutory sale), so redressability exists |
| Denial of interlocutory sale | County: sale would allow earlier receipt of taxes and protect county’s revenue | Gov’t: interlocutory sale unnecessary; risks/conflicts from multiple claimants | Court: affirmed denial — district court did not abuse discretion given risk of conflicting interests, likely lower sale price for encumbered property, and case complexity |
Key Cases Cited
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (standing requirements for injury-in-fact, traceability, redressability)
- United States v. Salti, 579 F.3d 656 (6th Cir.) (third-party standing in criminal forfeiture; look to local law to determine interest)
- United States v. $515,060.42 in U.S. Currency, 152 F.3d 491 (6th Cir.) (colorable ownership/security interest suffices for standing)
- United States v. Real Property & Residence Located at 4816 Chaffey Lane, 699 F.3d 956 (6th Cir.) (standards and deference for interlocutory sale decisions)
- McCulloch v. Maryland, 17 U.S. (4 Wheat.) 316 (Supremacy Clause principle that states cannot tax federal property)