United States v. Bane

948 F.3d 1290

UNITED STATES of America, Plaintiff-Appellee,

v.Ben BANE, Defendant-Appellant.

United States of America, Plaintiff-Appellee,

v.Gregory Bane, Defendant-Appellant.

No. 18-10232

No. 18-11086

United States Court of Appeals, Eleventh Circuit.

January 24, 2020

Holly Lynn Gershow, Linda Julin McNamara, U.S. Attorney Service - Middle District of Florida, U.S. Attorney's Office, Tampa, FL, for Plaintiff-Appellee in No. 18-10232.

Lennon Haas, Seyfarth Shaw, LLP, Atlanta, GA, for Defendant-Appellant in No. 18-10232.

Holly Lynn Gershow, U.S. Attorney Service - Middle District of Florida, U.S. Attorney's Office, Tampa, FL, for Plaintiff-Appellee in No. 18-11086.

Thomas Vernon Burch, Brooks Land, Erin Munger, Matthew Noxsel, Spencer Woody, University of Georgia School of Law, Athens, GA, for Defendant-Appellant in No. 18-11086.

Louis K. Fisher, Jones Day, Washington, DC, Elizabeth G. Bentley, Jones Day, Minneapolis, MN, David Oscar Markus, Markus/Moss, PLLC, Miami, FL, for Amicus Curiae in No. 18-11086.

Before WILLIAM PRYOR, MARTIN, and SUTTON,^* 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 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 , ––– U.S. ––––, 137 S. Ct. 1626, 1630, 198 L.Ed.2d 73 (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 procedurally defaulted their claims.

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, 18 U.S.C. §§ 287, 371, 1001, 1347, five counts of healthcare fraud, id. §§ 2, 1347, and four counts of making false claims for reimbursement to a healthcare benefit program, id. §§ 2, 287. The indictment also contained a forfeiture notice, which stated that the government was entitled to forfeit "any and all right, title, and interest [the Banes] may have in any property, real or personal, that constitutes or is derived, directly or indirectly, from gross proceeds traceable to the commission of the offense." See id. § 982(a)(7); see also 21 U.S.C. § 853(p). The forfeiture notice estimated that the proceeds of the offense totaled $5,000,000 and said that "the defendants are jointly and severally liable."

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 18 U.S.C. § 982(a)(7) ; 21 U.S.C. § 853(p). Ben and the government had stipulated that "the amount of proceeds traceable to the commission of the offenses for which he was convicted, and the forfeiture money judgment amount that should be entered by the Court at sentencing, is $5,846,684.54." As with the forfeiture notice in the indictment, the preliminary order of forfeiture stated that "the defendants are jointly and severally liable" for the total forfeiture amount. Consistent with joint-and-several liability, the order listed property—belonging to Ben and Greg—that was subject to forfeiture. The preliminary order of forfeiture became final as to Ben and Greg when the district court included it in their final judgments. And in November 2011, the district court granted the government’s motion for a final order of forfeiture. Neither Ben nor Greg appealed the preliminary or final orders.

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, 28 U.S.C. § 2255, and filed a motion based on Honeycutt in that proceeding. He then filed a motion for summary judgment to encourage the district court to rule on the pending Honeycutt motion. Greg filed a "Motion In Opposition" to the forfeiture judgment.

The district court struck Ben’s motion for summary judgment because it concluded that he was challenging the final order of forfeiture and lacked standing to bring that challenge. And it denied Greg’s motion as untimely because Greg filed it "more than six years after his sentencing." Ben and Greg appealed, and we appointed counsel. Their counsel now argue that the appropriate vehicle for the claims is the common-law writ of error coram nobis .

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.

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, 130 S.Ct. 584, 175 L.Ed.2d 428 (2009). Jurisdiction refers to "the courts’ statutory or constitutional power to adjudicate the case." United States v. Cotton , 535 U.S. 625, 630, 122 S.Ct. 1781, 152 L.Ed.2d 860 (2002) (internal quotation marks omitted); see also Morrison v. Nat’l Austl. Bank Ltd. , 561 U.S. 247, 254, 130 S.Ct. 2869, 177 L.Ed.2d 535 (2010) ; Union Pac. , 558 U.S. at 81, 130 S.Ct. 584. Federal district courts have statutory power to adjudicate prosecutions of federal offenses. 18 U.S.C. § 3231. Because the prosecution must be for a federal offense, we have held that when an indictment affirmatively alleges conduct that is not a federal offense, it does "not invoke the district court’s...