UNITED STATES OF AMERICA v. BEN BANE; UNITED STATES OF AMERICA v. GREGORY BANE
No. 18-10232
No. 18-11086
United States Court of Appeals for the Eleventh Circuit
January 24, 2020
D.C. Docket No. 8:09-cr-00352-VMC-MAP-1; D.C. Docket No. 8:09-cr-00352-VMC-MAP-2
[PUBLISH]
UNITED STATES OF AMERICA, Plaintiff-Appellee,
versus
BEN BANE, Defendant-Appellant.
UNITED STATES OF AMERICA, Plaintiff-Appellee,
versus
GREGORY BANE, Defendant-Appellant.
Appeals from the United States District Court for the Middle District of Florida
(January 24, 2020)
Before WILLIAM PRYOR, MARTIN, and SUTTON,* Circuit Judges.
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 jointly 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
I. BACKGROUND
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,
That forfeiture notice came to fruition after a jury convicted Ben and Greg. The district court granted the government‘s motion for a preliminary order of forfeiture in the amount of $5,846,684.54 and a preliminary order of forfeiture for substitute assets. See
Several years later, Ben and 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).
Ben and Greg believed that the rule from Honeycutt should apply to them, but they struggled to find a way to bring that claim in the district court. Ben had a pending motion to vacate his sentence,
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).
III. DISCUSSION
The parties invite us to decide many issues in these appeals, such as whether 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 claim 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
forfeiture liability is a complaint about the loss of their property—caused by the preliminary order of forfeiture. Assured that we have jurisdiction to hear these appeals, we turn to procedural default.
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.
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
“the courts’ statutory or constitutional power to adjudicate the case.” United States v. Cotton, 535 U.S. 625, 630 (2002) (internal quotation marks omitted); see also Morrison v. Nat‘l Austl. Bank Ltd., 561 U.S. 247, 254 (2010); Union Pac., 558 U.S. at 81. Federal district courts have statutory power to adjudicate prosecutions of federal offenses.
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, which 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.
This argument fails because the forfeiture notice is included in the indictment to provide the defendant with notice, not to invoke the subject-matter jurisdiction of the district court. Forfeiture is not a federal offense. Libretti v. United States, 516 U.S. 29, 38–39 (1995). It is only “an element of the sentence imposed following conviction” of a federal offense. Id. (first emphasis added). Although the Federal Rules require the charging document to contain notice of the forfeiture, they require the government to designate that notice in a manner different from the charged federal offenses, which are laid out in counts. See
Ben and Greg also argue that a Honeycutt error is jurisdictional because the district court acted 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
Cotton, 535 U.S. at 630. To the extent that later decisions have suggested
of restitution greater than the amount the statute permits, like a Honeycutt error, is not jurisdictional.
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, procedural 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 quotation 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
Court and every other circuit to have considered the issue decided that joint-and-several liability applies in the forfeiture context. See, e.g., United States v. Caporale, 806 F.2d 1487, 1506 (11th Cir. 1986) (holding that joint-and-several liability applies to the forfeiture statute for the Racketeer Influenced and Corrupt Organizations Act); United States v. Newman, 659 F.3d 1235, 1244 (9th Cir. 2011) (affirming joint-and-several forfeiture liability and citing decisions from the Fourth, Fifth, and Sixth Circuits for support).
The novelty of a claim may constitute cause for excusing the procedural
35 (1986); Ross, 468 U.S. at 13–14, or when the building blocks of the claim were available to counsel. McCoy v. United States, 266 F.3d 1245, 1258–59 (11th Cir. 2001).
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 interpretation 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.
The second requirement for overcoming procedural default is prejudice. But overcoming the procedural-default bar requires both cause and prejudice, not one or the other. McKay, 657 F.3d at 1196. So their failure to establish cause is fatal, as is their failure to make an argument about prejudice until their reply briefs. Riechmann v. Fla. Dep‘t of Corr., 940 F.3d 559, 579 (11th Cir. 2019).
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
opted to obtain Greg‘s property through forfeiture instead of restitution, but nothing suggests that it would not have turned to restitution instead if it had known that forfeiture was unavailable. If it had, Greg would be in the same position he is in now.
IV. CONCLUSION
We AFFIRM the judgment in favor of the United States.
MARTIN, Circuit Judge, concurring in part and dissenting in part:
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), require 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 healthcare-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 convicted at trial, the
District Court granted the government‘s motion for a preliminary forfeiture order holding both Ben and Greg “jointly and severally liable” for the total forfeiture amount pursuant to
The District Court took its authority to hold Greg Bane jointly and severally liable for all proceeds of the conspiracy from
other defendants or co-conspirators; it authorized the Government to confiscate assets only from the defendant who initially acquired the property and who bears responsibility for its dissipation.” Honeycutt, 137 S. Ct. at 1634. The Court expressed concern that permitting the government to confiscate substitute assets from other co-conspirators would be to “allow the Government to circumvent Congress’ carefully constructed statutory scheme.” Id.
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.
See In re Bonner, 151 U.S. 242, 256, 14 S. Ct. 323, 325 (1894) (holding that a sentencing court was “without jurisdiction” to pass sentences that transcended its power); In re Mills, 135 U.S. 263, 270, 10 S. Ct. 762, 764 (1890) (same); Ex parte Lange, 85 U.S. (18 Wall) 163, 177 (1873) (holding that a sentence greater than what the legislature authorized was “void . . . , because in excess of the authority of the court, and forbidden by the Constitution“). It is true that, at the time these late nineteenth-century cases were decided, the Supreme Court employed a “somewhat expansive” interpretation of jurisdiction in the service of correcting clear constitutional violations through habeas corpus relief. United States v. Cotton, 535 U.S. 625, 630, 122 S. Ct. 1781, 1784 (2002) (quoting Custis v. United States, 511 U.S. 485, 494, 114 S. Ct. 1732, 1737 (1994)). The majority notes that the Supreme Court has since narrowed its understanding of jurisdictional error in some respects. For example, in Cotton, the Supreme Court overruled Ex parte Bain, 121 U.S. 1, 7 S. Ct. 781 (1887), when it held that defects in an indictment are not jurisdictional insofar as they “do not deprive a court of its power to adjudicate a case.” Cotton, 535 U.S. at 630, 122 S. Ct. at 1785. But Cotton offers little guidance here because it did not address the question of whether the imposition of a sentence beyond the power granted by statute raises a jurisdictional question. I believe it does.
Montgomery and Welch demonstrate the continued relevance of the “jurisdictional
colleague ably described this in Lester v. United States, 921 F.3d 1306, 1310 (11th Cir. 2019) (W. Pryor, J., respecting the denial of rehearing en banc). The Montgomery Court, for example, relied heavily on the reasoning of Ex parte Siebold, 100 U.S. 371 (1879), in holding that convictions and punishments that are beyond the government‘s power to impose are “not just erroneous but contrary to law and, as a result, void.” Montgomery, 136 S. Ct. at 731 (citing Siebold, 100 U.S. at 376). There was similar thinking from the Supreme Court after it struck down the residual clause of the Armed Career Criminal Act as void for vagueness in Johnson v. United States, 135 S. Ct. 2551 (2015). Welch established retroactive application of Johnson because it “affected the reach of the underlying statute.” Welch, 136 S. Ct. at 1265. After Johnson rendered the residual clause “invalid,” Welch said that portion of the statute could “no longer mandate or authorize any sentence.” Id. This must be right, because courts are “prohibited from imposing criminal punishment beyond what Congress in fact has enacted by a valid law.” Id. at 1268. For well over a century, the Supreme Court has characterized such sentences as “void.” See In re Bonner, 151 U.S. at 256.
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.
Montgomery, 136 S. Ct. at 731. Based on this precedent, it must be true that objections to punishments imposed in excess of a court‘s authority “can never be waived by parties,” even if that punishment was a forfeiture judgment, as opposed to a carceral sentence. See Peter, 310 F.3d at 712.
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
punishment, where they have been imposed beyond the authority granted by statute.
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
curiam) (describing the distinct roles played by restitution and forfeiture in criminal sentencing). Because restitution orders do not serve the purpose of punishment, Cobbs‘s ruling about restitution does not govern what we must do here.
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.