UNITED STATES OF AMERICA, Plaintiff-Appellee, versus BEN BANE, Defendant-Appellant. UNITED STATES OF AMERICA, Plaintiff-Appellee, versus GREGORY BANE, Defendant-Appellant.
Nos. 18-10232, 18-11086
United States Court of Appeals, Eleventh Circuit
January 24, 2020
(January 24, 2020)
Before WILLIAM PRYOR, MARTIN, and SUTTON,1 Circuit Judges.
WILLIAM PRYOR, Circuit Judge:
These appeals require us to decide whether Ben and Greg Bane may use a writ of error coram nobis to challenge a forfeiture judgment. After a jury convicted Ben and Greg of federal crimes related to their healthcare-fraud scheme, the district court imposed a forfeiture judgment, which stated that “the defendants are jоintly and severally liable” for the total proceeds of the scheme—$5,846,685. Neither Ben nor Greg challenged the forfeiture judgment on direct appeal, and the government obtained property from both Ben and Greg to satisfy their forfeiture obligations. After the Supreme Court held in Honeycutt v. United States, 137 S. Ct. 1626, 1630 (2017), that a different forfeiture statute does not permit joint-and-several liability, Ben and Greg filed motions for relief. The district court denied their motions, and they appealed. We affirm because Ben and Greg proсedurally defaulted their claims.
Ben and his son Greg committed healthcare-fraud offenses in connection with their operation of two companies. Ben owned and operated the companies and Greg was the Vice President of Operations. The companies provided medical equipment, such as portable oxygen, to Medicare patients. For Medicare to reimburse the companies for the portable oxygen, an independent lab had to determine that the oxygen was medically necessary. Instead of following that crucial step, the companies performed the testing themselves and told Medicare that they had used independent labs.
In 2010, a grand jury charged Ben and Greg by superseding indictment with one count of conspiracy to commit healthcare fraud,
Several years later, Ben аnd Greg saw an opportunity to challenge the forfeiture judgments when the Supreme Court interpreted a different forfeiture statute not to permit joint-and-several liability. Honeycutt, 137 S. Ct. at 1630; see also United States v. Elbeblawy, 899 F.3d 925, 941–42 (11th Cir. 2018) (holding that the reasoning of Honeycutt applies to the healthcare-fraud forfeiture statute).
II. STANDARDS OF REVIEW
“We review de novo questions of our jurisdiction.” United States v. Amodeo, 916 F.3d 967, 970 (11th Cir. 2019). We review the denial of a writ of error coram nobis for abuse of discretion. United States v. Peter, 310 F.3d 709, 711 (11th Cir. 2002). “[W]e may affirm for any reason supported by the record.” United States v. Al-Arian, 514 F.3d 1184, 1189 (11th Cir. 2008) (internal quotation marks omitted).
The parties invite us to decide many issues in these appeals, such as whеther Honeycutt announced a new rule that applies retroactively and whether a writ of error coram nobis may be used to challenge a forfeiture judgment, but we need not decide those questions to resolve these appeals. Even assuming that Honeycutt applies retroactively and that coram nobis may be used for this purpose, Ben and Greg are not entitled to relief because their failure to challenge their forfeiture judgments on direct appeal means they cannot challenge them now. But before we address their procedural default, we must first confirm that Ben and Greg have standing to bring this challenge.
A. Ben and Greg Have Standing.
A defendant has standing to challenge a preliminary order of forfeiture because that order causes his injury—the loss of his property. Amodeo, 916 F.3d at 972; United States v. Flanders, 752 F.3d 1317, 1343 (11th Cir. 2014). A final order of forfeiture, in contrast, is entered after the defendant has already lost ownership of the property and decides only third parties’ rights in the property. Amodeo, 916 F.3d at 972. Ben and Greg have standing because they are challenging the preliminary order of forfeiture. Their motions in the district court clаim that the district court erred when it held them jointly and severally liable for the forfeiture judgment. A complaint about the district court‘s method of determining their
B. Ben and Greg Procedurally Defaulted Their Claims.
When a defendant fails to make a claim on direct appeal, procedural default ordinarily bars him from making that claim on collateral review. McKay v. United States, 657 F.3d 1190, 1196 (11th Cir. 2011); Peter, 310 F.3d at 711. But the bar is not absolute. He can overcome it if he establishes cause and prejudice. McKay, 657 F.3d at 1196. Or he can avoid the procedural-default bar altogether, meaning he can raise a claim for the first time on collateral review without demonstrating cause and prejudice, if the alleged error is jurisdictional. Peter, 310 F.3d at 711–13.
Ben and Greg attempt to use both of those ways to avoid procedural default. They first argue that a Honeycutt error is jurisdictional, and if not, they have overcome the procedural default. We reject both arguments in turn.
1. A Honeycutt Error Is Not A Jurisdictional Error.
Ben and Greg argue that they are permitted to raise their Honeycutt claims for the first time on collateral review because a Honeycutt error is jurisdictional. The Supreme Court has instructed courts to use caution in labeling errors “jurisdictional.” See Union Pac. R.R. Co. v. Bhd. of Locomotive Eng‘rs & Trainmen Gen. Comm. of Adjustment, 558 U.S. 67, 81 (2009). Jurisdiction refers to
Ben and Greg rely on Peter to argue that a Honeycutt error is jurisdictional. They do not dispute that the indictment alleged that they engaged in conduct that qualifies as federal offenses. Instead, they focus on something else in the indictment: the forfeiture notice, whiсh stated that “the defendants are jointly and severally liable” for the total forfeiture amount. They contend that allegations of a type of liability that the forfeiture statute does not permit are the same as allegations of conduct that is not a federal offense.
Ben and Greg also argue that a Honeycutt error is jurisdictional because the district court aсted without authority when it used joint-and-several liability to impose a forfeiture amount above what the forfeiture statute permitted. See Honeycutt, 137 S. Ct. at 1631–32. They cite nineteenth-century Supreme Court decisions, such as Bigelow v. Forrest, 76 U.S. (9 Wall.) 339, 351 (1869), and Ex parte Lange, 85 U.S. (18 Wall.) 163, 176–77 (1873), to argue that when a district court exceeds its authority, it acts without jurisdiction.
This argument fares no better than their first. The Supreme Court has clarified that the concept of “jurisdiction” has narrowed since those decisions. See
2. Procedural Default Bars Ben‘s and Greg‘s Claims.
As a non-jurisdictional error, Ben and Greg needed to raise their Honeycutt claims on direct appeal to avoid procedural default. See McKay, 657 F.3d at 1196. Greg acknowledges that he did not challenge his forfeiture judgment on direct appeal, but he contends that procedural default does not apply because he “put the factual basis for his Honeycutt claim before the district court.” Even assuming that contention is true, prоcedural default applies because Greg did not challenge the forfeiture judgment on appeal. See United States v. Pearson, 940 F.3d 1210, 1213 n.6 (11th Cir. 2019) (citing McKay, 657 F.3d at 1196). So their failure to bring these claims on direct appeal means that they may not bring them now unless they can demonstrate cause and prejudice to overcome their procedural defaults. McKay, 657 F.3d at 1196. The cause-and-prejudice standard requires “showing cause for not raising the claim of error on direct appeal and actual prejudice from the alleged error.” Id. (alteration adopted) (internal quotаtion marks omitted). Ben and Greg have not made either showing.
Ben and Greg argue that they have established cause because it would have been novel and futile to challenge the imposition of joint-and-several liability on direct appeal. They contend that when the district court imposed the forfeiture, our
The novelty of a claim may constitute cause for excusing the procedural default, but only when the claim is truly novel, meaning that “its legal basis [was] not reasonably available to counsel.” Reed v. Ross, 468 U.S. 1, 16 (1984); Hargrave v. Dugger, 832 F.2d 1528, 1530–31 (11th Cir. 1987) (en banc). This exception to the procedural-default bar exists because the Supreme Cоurt has acknowledged that it would be pointless to require “a defendant to raise a truly novel issue” that his counsel is likely unaware of and that the court would likely “reject ... out of hand.” Ross, 468 U.S. at 15–16. In Hargrave, for instance, we concluded that the petitioner‘s claim was novel because he relied on a Supreme Court decision that announced a new constitutional right for capital defendants. 832 F.2d at 1531 (citing Lockett v. Ohio, 438 U.S. 586, 604 (1978)). In contrast, a claim is not novel when counsel made a conscious choice not to pursue the claim on direct appeal because of perceived futility, Smith v. Murray, 477 U.S. 527, 533-
Ben‘s and Greg‘s claims are not novel in any sense of the word. As long as they had access to the United States Code and dictionaries—the tools the Supreme Court used in Honeycutt—they could have raised their claims on direct appeal. See 137 S. Ct. at 1632–33. Honeycutt was simply a matter of statutory interpretation; the Supreme Court did not announce a new constitutional right or overturn any Supreme Court precedent. Id. An argument for an interpretаtion of a statute that is consistent with its ordinary meaning and structure is not something that counsel would not be aware of or that courts would reject ... out of hand.” Ross, 468 U.S. at 15. That leaves Ben and Greg with only perceived futility, which does not establish cause. Bousley v. United States, 523 U.S. 614, 623 (1998) (“[F]utility cannot constitute cause if it means simply that a claim was unacceptable to that particular court at that particular time.” (internal quotation marks omitted)); cf. McCarthan v. Dir. of Goodwill Indus.-Suncoast, Inc., 851 F.3d 1076, 1087 (11th Cir. 2017) (en banc) (explaining that a postconviction remedy is not “inadequate or ineffective” when using it to make a particular claim would likely fail because of adverse circuit precedent). Ben and Greg have failed to establish cause for not raising their claims on direct appeal.
Even if we were to look past these failures, Ben and Greg have not established prejudice. To establish prejudice, they would have to prove that they suffered actual prejudice, not merely “the possibility of prejudice.” Fordham v. United States, 706 F.3d 1345, 1350 (11th Cir. 2013). The error must have been one “of constitutional dimensions” and worked to their “actual and substantial disadvantage.” Id. Ben and Greg cannot satisfy this tough standard. It is undisputed that Ben was the owner and operator of the two companies and the mastermind behind the fraud. And he has failed to prove that he was not responsible for the entire proceeds of the fraud. See Honeycutt, 137 S. Ct. at 1635 (holding that “property the defendant himself actually acquired as the result of the crime” is subject to forfeiture). Greg also cannot establish prejudice because he has failed to prove that the government could not have obtained his same property through restitution instead of forfeiture. It is well established that the government may “double dip” by obtaining the same аmount in forfeiture and restitution. United States v. Hoffman-Vaile, 568 F.3d 1335, 1344 (11th Cir. 2009). The government
IV. CONCLUSION
We AFFIRM the judgment in favor of the United States.
The majority opinion is right to say that Ben and Greg Bane procedurally defaulted their claims contesting their joint and several liability for the forfeiture ordered in their cases. But in contrast to the majority, I believe Montgomery v. Louisiana, 577 U.S. __, 136 S. Ct. 718 (2016), and Welch v. United States, 578 U.S. __, 136 S. Ct. 1257 (2016), requirе us to hold that it was jurisdictional error for the District Court to impose joint and several forfeiture liability against Greg Bane. The majority declines to extend the reasoning in Montgomery and Welch to forfeiture judgments. My reading of the precedent suggests that we should. And “the doctrine of procedural default does not apply” to jurisdictional error. United States v. Peter, 310 F.3d 709, 713 (11th Cir. 2002) (per curiam). I write separately to set out why I believe Greg Bane‘s waiver did not bar him from challenging his forfeiture judgment.
Ben and Greg Bane were both convicted of healthсare-fraud offenses. However, the benefits each acquired from their crimes were dramatically different. Ben Bane stipulated that proceeds traceable to the offenses which he committed amounted to $5,846,684.54. But Greg Bane, unlike his dad, received only de minimis compensation for his role in the offenses. Mostly what Greg Bane got was his annual salary of approximately $30,000 for his work at the healthcare companies his father owned. Even so, after both Banes were convictеd at trial, the
The District Court took its authority to hold Greg Bane jointly and severally liable for all proceeds of the conspiracy from
Based on this Supreme Court ruling, I believe the District Court lacked the statutory authority to hold Greg Bane jointly and severally liable for the total forfeiture amount. This is not because of the method the District Court used to calculate Greg Bane‘s forfeiture liability, but because of the amount of liability that it in fact imposed, which was substantively greater than what Greg Bane had acquired through the offenses of which he was convicted. I recognize this record does not contain a careful accounting of the exact proceeds of the conspiracy that went to Greg Bane. But it is nevertheless clear that Greg Bane got substantially less than $5,846,684.54.1 Thus, the District Court imposed a total forfeiture amount not authorized by statute, and this, in my view, was jurisdictional error.
Longstanding Supreme Court precedent has it that when courts impose punishments beyond what the statute authorizes, they act beyond their jurisdiction.
Montgomery and Welch demоnstrate the continued relevance of the “jurisdictional rationale” articulated in the late-nineteenth century cases. My
True, Montgomery and Welch presented the slightly different question of whether new constitutional rules had retroactive effect. Nevertheless, they speak to the limits on the jurisdiction of courts to impose sentences not authorized by statute, insofar as courts have “no authority” to leave such sentences in place.
I am not persuaded by the majority‘s ruling that forfeiture judgments entered without statutory authority should be treated differently from unauthorized carceral sentences. “We have squarely held that ‘criminal forfeiture acts in personam as a punishment against the party who committed the criminal act.‘” Elbeblawy, 899 F.3d at 940 (alteration adopted) (quoting United States v. Fleet, 498 F.3d 1225, 1231 (11th Cir. 2007)). And we treat criminal forfeitures and incarceration similarly in other contexts. See, e.g., Jeffers v. United States, 432 U.S. 137, 155, 97 S. Ct. 2207, 2218 (1977) (holding that “[f]ines . . . are treated in the same way as prison sentences for purposes of double jeopardy and multiple punishment analysis“); United States v. Bajakajian, 524 U.S. 321, 328, 118 S. Ct. 2028, 2033 (1998) (holding that criminal forfeiture under
And unlike the majority, I do not read United States v. Cobbs, 967 F.2d 1555 (11th Cir. 1992) (per curiam), to preclude such a holding. The majority reasons that (1) since Cobbs applied plain-error review to a restitution order which was “beyond the statutory power of the court to impose,” id. at 1558, and (2) because this court does not apply plain-error review to jurisdictional errors, then (3) Cobbs must stand for the rule that restitution greater than the amount the statute permits is not jurisdictional error. Maj. Op. at 10. This is a weak justification for upholding a sentence not authorized by statute. Notably, the Cobbs court never discussed whether the error before it was jurisdictional. Indeed, the jurisdictional question does not appear to have been raised by the parties at all. What‘s more, Cobbs was an appeal from an order оf criminal restitution, not forfeiture, and they are different. 967 F.2d at 1556 (vacating criminal restitution order). Forfeiture “is meant to punish the defendant by transferring his ill-gotten gains to the United States.” United States v. Joseph, 743 F.3d 1350, 1354 (11th Cir. 2014) (per curiam). Restitution, in contrast, is intended “to ensure that victims ... are made whole for their losses” and is “not designed to punish the defendant.” United States v. Martin, 803 F.3d 581, 594–95 (11th Cir. 2015) (quotation marks omitted); see also United States v. Hernandez, 803 F.3d 1341, 1343–44 (11th Cir. 2015) (per
For these reasons, I would hold that the District Court‘s error in imposing a joint and several forfeiture award was jurisdictional and then reach the question of whether Greg Bane was entitled to relief. I respectfully dissent from the majority‘s decision to the contrary.