United States v. Foster, CIVIL ACTION NO. 3:16-CR-0375-B

UNITED STATES OF AMERICA, Plaintiff, v. CAROLYN FOSTER, Defendant.

CIVIL ACTION NO. 3:16-CR-0375-B

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF TEXAS DALLAS DIVISION

September 12, 2019

MEMORANDUM OPINION AND ORDER

Before the Court are Defendant Carolyn Foster's Request for Hearing and Motion to Quash the Writ of Garnishment (Docs. 71 & 72), filed August 8, 2019. Foster requests a hearing pursuant to 28 U.S.C. § 3202(d). For the reasons discussed below, the Court GRANTS the motion to quash and to limit the garnishment to 25 percent of the periodic pension payments (Doc. 72). Therefore, the Court will not hold a hearing on the motion to quash and DENIES Defendant's request for a hearing (Doc. 71).¹

I.FACTUAL BACKGROUND

Foster pled guilty to federal program fraud, in violation of 18 U.S.C. § 666. Docs. 22, 28. On March 1, 2018, this Court ordered Foster to pay a special assessment of $100 and restitution of $600,000 to Grand Prairie Independent School District, as mandated by 18 U.S.C. § 3013 and the Mandatory Victim Restitution Act (MVRA), 18 U.S.C. §§ 3663A-3664. See Doc. 62, Judgment on Resentencing, ("Judgment"), 6-7.

Subsequently, the Government served writs of garnishment on garnishees JPMorgan Chase Bank, NA and Teacher Retirement System of Texas (TRS). Docs. 64-66. TRS has custody, control, or possession of a retirement account in Foster's name that has a monthly gross annuity of $4,905.65, from which it withholds $664.41 in federal income taxes. Doc. 67, TRS's Ans. to Appl. for Writ of Garnishment. JPMorgan Chase does not have any active accounts in Foster's name. Doc. 70, JPMorgan Chase's Ans. to Appl. for Writ of Garnishment.

Foster responded to the writs of garnishment by requesting a hearing and filing a motion to quash (Docs. 71-72). Foster is proceeding pro se in this matter, and her motion to quash is not clear on the specific grounds on which it rests. Foster's arguments appear to be that (1) the Government cannot garnish Foster's TRS annuity due to the separate criminal judgment ordering restitution; (2) the annuity does not fall under 18 U.S.C. § 3664(n), which the Government argues is an exception to the 25 percent limit on garnishment of earnings set out in 15 U.S.C. § 1673; (3) her financial situation has not changed since the criminal restitution judgment was entered; and (4) she needs the monthly pension in order to provide necessities for her family. Doc. 72, Def.'s Mot. to Quash ("Def.'s Br.").

As to the TRS annuity, the Government disputes these arguments and opposes the motion to quash. Doc. 73, Gov't's Obj. to Def.'s Mot. ("Gov.'s Obj."). Because JPMorgan does not currently hold any assets for Foster, the Government does not object to Foster's motion to quash as to the JPMorgan Chase garnishment. Id.

II.LEGAL BACKGROUND

Under 18 U.S.C. § 3556, courts must "order restitution in accordance with section 3663A, and may order restitution in accordance with section 3663." Under 18 U.S.C. § 3771(a)(6), crime victims have "[t]he right to full and timely restitution as provided in law." The MVRA requires "that the defendant make restitution to the victim of the offense." 18 U.S.C. §3663A. In ordering restitution under MVRA, the court "direct[s] the probation officer to collect information regarding the victims and amount of loss, and the defendant's financial situation." United States v. Roush, 452 F. Supp. 2d 676, 678 (N.D. Tex. 2006). The court then determines the victims and amount of loss. Id.; § 3664(e), (f)(1)(A). The Government must demonstrate the amount of loss, and the defendant must "demonstrate financial resources and financial needs of dependents." Roush, 452 F. Supp. 2d at 678; §3664(e). The court then uses this information to "direct the defendant to make a single lump-sum payment, partial payments at specified intervals, in-kind payments, or a combination of payments at specified intervals and in-kind payments." Roush, 452 F. Supp. 2d at 678; § 3664 (f)(2).

To ensure defendants make restitution to their victims, the MVRA allows the Government to use "all other available and reasonable means" to collect court-ordered restitution. 18 U.S.C. § 3664(m). One of these available means is 18 U.S.C. 3664(n), which allows the Government to collect restitution from "substantial resources from any source, including inheritance, settlement, orother judgment, during a period of incarceration."

III.ANALYSIS

A. Does the installment payment schedule in the criminal judgment preclude the Government from immediately garnishing Foster's pension?

The first issue is whether the Government can garnish any portion of the TRS annuity during Foster's incarceration.

Foster seemingly argues that the installment payment schedule in the criminal judgment, ordered by this Court under the procedures outlined in 18 U.S.C. § 3664, precludes the United States from immediately garnishing her pension in order to satisfy the restitution order. Doc. 72, Def.'s Br., ¶ 3.

Foster cites United States v. Roush for the proposition that if a district court includes a payment plan in a criminal judgment, the Government may not attempt to immediately collect the full amount of restitution. Doc. 72, Def.'s Br., ¶ 3. In Roush, the district court explained that "[p]ermitting the government to execute on the full amount of restitution at any time it chooses would plainly disrupt the balance set by the court when it established the payment schedule." 452 F. Supp. 2d at 681. The court interpreted its payment schedule as the exclusive method by which the Government could enforce the restitution obligation. Id.

This Court rejects Foster's argument, for two reasons. First, subsequent decisions in this circuit have seemed to limit Roush to its facts. In United States v. Ekong, the defendant argued that the Government could not require immediate restitution payments because the criminal judgment included an installment payment plan for restitution. 518 F.3d 285, 286 (5th Cir. 2007)(per curiam).The Fifth Circuit rejected this argument, explaining how the MVRA "provides the Government authority to enforce victim restitution orders in the same manner that it recovers fines and by all other available means." Id. (quoting United States v. Phillips, 303 F.3d 548, 550-51 (5th Cir. 2002)). Phillips explains that this governmental authority comes from § 3664(m). 303 F.3d at 551. The criminal judgment did not specifically preclude the government from immediately seeking restitution through garnishment. Id.; see also United States v. Urso, 2009 WL 2999521 at *2 (N.D.Tex. Sept. 18, 2009) ("The court has reviewed the underlying criminal judgment in Ekong and finds that it is very similar to the judgment against Joseph Urso."). In other words, the Fifth Circuit held that installment payment plans bind only the defendant-debtor; the Government, however, can seek the restitution in any manner available to it. See 18 U.S.C. § 3664(m); 18 U.S.C. §3613(a).

Moreover, the Fifth Circuit in United States v. Rand again allowed the Government to seek immediate payments of restitution, despite there being an installment plan issued by the court. 924 F.3d 140, 143 (5th Cir. 2019) (per curiam). The court concluded that "[s]o long as the judgment contains nothing to the contrary, the government may pursue immediate payment or an adjustment of the payment schedule, as it did here." Id.

Second, the payment plan here is different than that found in Roush. Unlike Roush, where the restitution was not immediately payable, see Roush, 452 F. Supp. 2d at 678, here, the judgment states that the "[r]estitution shall be payable immediately and any unpaid balance shall be payable during incarceration." Doc. 62, Judgment, 5. Additionally, the judgment here explicitly states that the "payment plan shall not affect the ability of the United States to immediately collect payment in full through garnishment." Id. Such explicit permission is more than enough to allow the Government to seek immediate garnishment, regardless of a payment plan, under the authoritygranted to it by § 3664(m). See Ekong, 518 F.3d at 286 (noting that immediate garnishment was allowed when there was "nothing in the criminal judgment to the contrary").²

Here, the judgment explicitly states that the restitution was payable immediately, and that the United States could seek immediate payment through garnishment. Doc. 62, Judgment, 5. It is Ekong, and not Hughes, that is applicable to this case. Therefore, the Court finds that the Government may under the MVRA seek immediate restitution payments.

B. Does Foster's Pension Plan Fall under 18 U.S.C. § 3664(n)?

The next issue is whether the Government can garnish all of the TRS annuity payments.

As mentioned, the MVRA allows the Government to seek restitution by all "available and reasonable means." 18 U.S.C. § 3664(m). Generally, the maximum amount of earnings that is subject to of garnishment is 25 percent of disposable earnings. 15 U.S.C. § 1673. Disposable earnings are those remaining after all legally required deductions, see 28 U.S.C. 3002(5), and include periodic payments to a pension program. Id. at § 3002(6). Both parties concede that the TRS payments here are earnings. Doc. 72, Def.'s Mot., ¶ 4; Doc. 73, Govt's Obj., 4. Without an exception, then, the Government would be limited to garnishing 25 percent of the periodic payments during Foster's incarceration.

But, the Government argues that it may garnish all of Foster's pension payments under 18 U.S.C. § 3664(n). Under § 3664(n), "[i]f a person obligated to provide restitution . . . receives substantial resources from any source, including inheritance, settlement, or other judgment, during a period of incarceration, such person shall be required to apply the value of such resources to any restitution . . . still owed." The Government argues that the payments from the pension plan are "substantial resources from any source," § 3664(n), and therefore are an available means of garnishment under the MVRA....