Source: http://clelaw.lib.oh.us/Public/Decision/US/060517.html
Timestamp: 2017-09-24 01:13:49
Document Index: 557867845

Matched Legal Cases: ['§853', '§853', '§853', '§853', '§853', '§853', '§853', '§853', '§853', '§853', '§853', '§853', '§2462', '§2462', '§2462', '§2462', '§2462', '§2462', '§1003', '§1002', '§1002']

HONEYCUTT v. UNITED STATES
No. 16-142. Argued March 29, 2017--Decided June 5, 2017
Terry Honeycutt managed sales and inventory for a Tennessee hardware store owned by his brother, Tony Honeycutt. After they were indicted for federal drug crimes including conspiracy to distribute a product used in methamphetamine production, the Government sought judgments against each brother in the amount of $269,751.98 pursuant to the Comprehensive Forfeiture Act of 1984, which mandates forfeiture of “any property constituting, or derived from, any proceeds the person obtained, directly or indirectly, as the result of” certain drug crimes, 21 U. S. C. §853(a)(1). Tony pleaded guilty and agreed to forfeit $200,000. Terry went to trial and was convicted. Despite conceding that Terry had no controlling interest in the store and did not stand to benefit personally from the sales of the product, the Government asked the District Court to hold him jointly and severally liable for the profits from the illegal sales and sought a judgment of $69,751.98, the outstanding conspiracy profits. The District Court declined to enter a forfeiture judgment against Terry, reasoning that he was a salaried employee who had not received any profits from the sales. The Sixth Circuit reversed, holding that the brothers, as co-conspirators, were jointly and severally liable for any conspiracy proceeds.
Held: Because forfeiture pursuant to §853(a)(1) is limited to property the defendant himself actually acquired as the result of the crime, that provision does not permit forfeiture with regard to Terry Honeycutt, who had no ownership interest in his brother’s store and did not personally benefit from the illegal sales. Pp. 3–11.
(a) Section 853(a) limits forfeiture to property flowing from, §853(a)(1), or used in, §853(a)(2), the crime itself—providing the first clue that the statute does not countenance joint and several liability, which would require forfeiture of untainted property. It also defines forfeitable property solely in terms of personal possession or use. Section 853(a)(1), the provision at issue, limits forfeiture to property the defendant “obtained, directly or indirectly, as the result of” the crime. Neither the dictionary definition nor the common usage of the word “obtain” supports the conclusion that an individual “obtains” property that was acquired by someone else. And the adverbs “directly” and “indirectly” refer to how a defendant obtains the property; they do not negate the requirement that he obtain it at all. Sections 853(a)(2) and 853(a)(3) are in accord with this reading. Pp. 3–7.
(b) Joint and several liability is also contrary to several other provisions of §853. Section 853(c), which applies to property “described in subsection (a),” applies to tainted property only. See Luis v. United States, 578 U. S. ___, ___. Section §853(e)(1) permits pretrial asset freezes to preserve the availability of property forfeitable under subsection (a), provided there is probable cause to think that a defendant has committed an offense triggering forfeiture and “the property at issue has the requisite connection to that crime.” Kaley v. United States, 571 U. S. ___, ___. Section 853(d) establishes a “rebuttable presumption” that property is subject to forfeiture only if the Government proves that the defendant acquired the property “during the period of the violation” and “there was no likely source for” the property but the crime. These provisions reinforce the statute’s application to tainted property acquired by the defendant and are thus incompatible with joint and several liability. Joint and several liability would also render futile §853(p)—the sole provision of §853 that permits the Government to confiscate property untainted by the crime. Pp. 7–9.
(c) The plain text and structure of §853 leave no doubt that Congress did not, as the Government claims, incorporate the principle that conspirators are legally responsible for each other’s foreseeable actions in furtherance of their common plan. See Pinkerton v. United States, 328 U. S. 640. Congress provided just one way for the Government to recoup substitute property when the tainted property itself is unavailable—the procedures outlined in §853(p). And as is clear from its text and structure, §853 maintains traditional in rem forfeiture’s focus on tainted property unless one of §853(p)’s preconditions exists. Pp. 9–10.
816 F. 3d 362, reversed.
Sotomayor, J., delivered the opinion of the Court, in which all other Members joined, except Gorsuch, J., who took no part in the consideration or decision of the case.
No. 16-529. Argued April 18, 2017--Decided June 5, 2017
The Securities and Exchange Commission (SEC or Commission) possesses authority to investigate violations of federal securities laws and to commence enforcement actions in federal district court if its investigations uncover evidence of wrongdoing. Initially, the Commission’s statutory authority in enforcement actions was limited to seeking an injunction barring future violations. Beginning in the 1970’s, federal district courts, at the request of the Commission, began ordering disgorgement in SEC enforcement proceedings. Although Congress has since authorized the Commission to seek monetary civil penalties, the Commission has continued to seek disgorgement. This Court has held that 28 U. S. C. §2462, which establishes a 5-year limitations period for “an action, suit or proceeding for the enforcement of any civil fine, penalty, or forfeiture,” applies when the Commission seeks monetary civil penalties. See Gabelli v. SEC, 568 U. S. 442.
In 2009, the Commission brought an enforcement action, alleging that petitioner Charles Kokesh violated various securities laws by concealing the misappropriation of $34.9 million from four business-development companies from 1995 to 2009. The Commission sought monetary civil penalties, disgorgement, and an injunction barring Kokesh from future violations. After a jury found that Kokesh’s actions violated several securities laws, the District Court determined that §2462’s 5-year limitations period applied to the monetary civil penalties. With respect to the $34.9 million disgorgement judgment, however, the court concluded that §2462 did not apply because disgorgement is not a “penalty” within the meaning of the statute. The Tenth Circuit affirmed, holding that disgorgement was neither a penalty nor a forfeiture.
Held: Because SEC disgorgement operates as a penalty under §2462, any claim for disgorgement in an SEC enforcement action must be commenced within five years of the date the claim accrued. Pp. 5–11.
(a) The definition of “penalty” as a “punishment, whether corporal or pecuniary, imposed and enforced by the State, for a crime or offen[s]e against its laws,” Huntington v. Attrill, 146 U. S. 657, gives rise to two principles. First, whether a sanction represents a penalty turns in part on “whether the wrong sought to be redressed is a wrong to the public, or a wrong to the individual.” Id., at 668. Second, a pecuniary sanction operates as a penalty if it is sought “for the purpose of punishment, and to deter others from offending in like manner” rather than to compensate victims. Ibid. This Court has applied these principles in construing the term “penalty,” holding, e.g., that a statute providing a compensatory remedy for a private wrong did not impose a “penalty,” Brady v. Daly, 175 U. S. 148. Pp. 5–7.
(b) The application of these principles here readily demonstrates that SEC disgorgement constitutes a penalty within the meaning of §2462. First, SEC disgorgement is imposed by the courts as a consequence for violating public laws, i.e., a violation committed against the United States rather than an aggrieved individual. Second, SEC disgorgement is imposed for punitive purposes. Sanctions imposed for the purpose of deterring infractions of public laws are inherently punitive because “deterrence [is] not [a] legitimate nonpunitive governmental objectiv[e].” Bell v. Wolfish, 441 U. S. 520, n. 20. Finally, SEC disgorgement is often not compensatory. Disgorged profits are paid to the district courts, which have discretion to determine how the money will be distributed. They may distribute the funds to victims, but no statute commands them to do so. When an individual is made to pay a noncompensatory sanction to the government as a consequence of a legal violation, the payment operates as a penalty. See Porter v. Warner Holding Co., 328 U. S. 395. Pp. 7–9.
(c) The Government responds that SEC disgorgement is not punitive but a remedial sanction that operates to restore the status quo. It is not clear, however, that disgorgement simply returns the defendant to the place he would have occupied had he not broken the law. It sometimes exceeds the profits gained as a result of the violation. And, as demonstrated here, SEC disgorgement may be ordered without consideration of a defendant’s expenses that reduced the amount of illegal profit. In such cases, disgorgement does not simply restore the status quo; it leaves the defendant worse off and is therefore punitive. Although disgorgement may serve compensatory goals in some cases, “sanctions frequently serve more than one purpose.” Austin v. United States, 509 U. S. 602. Because they “go beyond compensation, are intended to punish, and label defendants wrongdoers” as a consequence of violating public laws, Gabelli, 568 U. S., at 451–452, disgorgement orders represent a penalty and fall within §2462’s 5-year limitations period. Pp. 9–11.
834 F. 3d 1158, reversed.
TOWN OF CHESTER, NEW YORK v. LAROE ESTATES, INC.
No. 16-605. Argued April 17, 2017--Decided June 5, 2017
Land developer Steven Sherman paid $2.7 million to purchase land in the town of Chester (Town) for a housing subdivision. He also sought the Town’s approval of his development plan. About a decade later, he filed this suit in New York state court, claiming that the Town had obstructed his plans for the subdivision, forcing him to spend around $5.5 million to comply with its demands and driving him to the brink of personal bankruptcy. Sherman asserted, among other claims, a regulatory takings claim under the Fifth and Fourteenth Amendments. The Town removed the case to a Federal District Court, which dismissed the takings claim as unripe. The Second Circuit reversed that determination and remanded for the case to go forward. On remand, real estate development company Laroe Estates, Inc. (respondent here), filed a motion to intervene of right under Federal Rule of Civil Procedure 24(a)(2), which requires a court to permit intervention by a litigant that “claims an interest related to the property or transaction that is the subject of the action, and is so situated that disposing of the action may as a practical matter impair or impede the movant’s ability to protect its interest, unless existing parties adequately represent that interest.” Laroe alleged that it had paid Sherman more than $2.5 million in relation to the development project and the subject property, that its resulting equitable interest in the property would be impaired if it could not intervene, and that Sherman would not adequately represent its interest. Laroe filed, inter alia, an intervenor’s complaint asserting a regulatory takings claim that was substantively identical to Sherman’s and seeking a judgment awarding Laroe compensation for the taking of Laroe’s interest in the property at issue. The District Court denied Laroe’s motion to intervene, concluding that its equitable interest did not confer standing. The Second Circuit reversed, holding that an intervenor of right is not required to meet Article III’s standing requirements.
1. A litigant seeking to intervene as of right under Rule 24(a)(2) must meet the requirements of Article III standing if the intervenor wishes to pursue relief not requested by a plaintiff. To establish Article III standing, a plaintiff seeking compensatory relief must have “(1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.” Spokeo, Inc. v. Robins, 578 U. S. ___, ___. The “ plaintiff must demonstrate standing for each claim he seeks to press and for each form of relief that is sought.” Davis v. Federal Election Comm’n, 554 U. S. 724 (internal quotation marks omitted). The same principle applies when there are multiple plaintiffs: At least one plaintiff must have standing to seek each form of relief requested in the complaint. That principle also applies to intervenors of right: For all relief sought, there must be a litigant with standing, whether that litigant joins the lawsuit as a plaintiff, a coplaintiff, or an intervenor of right. Thus, at the least, an intervenor of right must demonstrate Article III standing when it seeks additional relief beyond that requested by the plaintiff. That includes cases in which both the plaintiff and the intervenor seek separate money judgments in their own names. Pp. 4–6.
2. The Court of Appeals is to address on remand the question whether Laroe seeks different relief than Sherman. If Laroe wants only a money judgment of its own running directly against the Town, then it seeks damages different from those sought by Sherman and must establish its own Article III standing in order to intervene. The record is unclear on that point, and the Court of Appeals did not resolve that ambiguity. Pp. 6–8.
828 F. 3d 60, vacated and remanded.
ADVOCATE HEALTH CARE NETWORK et al. v. STAPLETON et al.
No. 16-74. Argued March 27, 2017--Decided June 5, 2017 1
The Employee Retirement Income Security Act of 1974 (ERISA) generally obligates private employers offering pension plans to adhere to an array of rules designed to ensure plan solvency and protect plan participants. “[C]hurch plan[s],” however, are exempt from those regulations. 29 U. S. C. §1003(b)(2). From the beginning, ERISA has defined a “church plan” as “a plan established and maintained . . . for its employees . . . by a church.” §1002(33)(A). Congress then amended the statute to expand that definition, adding the provision whose effect is at issue here: “A plan established and maintained for its employees . . . by a church . . . includes a plan maintained by an organization . . . the principal purpose . . . of which is the administration or funding of [such] plan . . . for the employees of a church . . . , if such organization is controlled by or associated with a church.” §1002(33)(C)(i). (This opinion refers to the organizations described in that provision as “principal-purpose organizations.”)
Held: A plan maintained by a principal-purpose organization qualifies as a “church plan,” regardless of who established it. Pp. 5–15.
(a) The term “church plan” initially “mean[t]” only “a plan established and maintained . . . by a church.” But subparagraph (C)(i) provides that the original definitional phrase will now “include” another—“a plan maintained by [a principal-purpose] organization.” That use of the word “include” is not literal, but tells readers that a different type of plan should receive the same treatment (i.e., an exemption) as the type described in the old definition. In other words, because Congress deemed the category of plans “established and maintained by a church” to “include” plans “maintained by” principal-purpose organizations, those plans—and all those plans—are exempt from ERISA’s requirements.
Had Congress wanted, as the employees contend, to alter only the maintenance requirement, it could have provided in subparagraph (C)(i) that “a plan maintained by a church includes a plan maintained by” a principal-purpose organization—removing “established and” from the first part of the sentence. But Congress did not adopt that ready alternative. Instead, it added language whose most natural reading is to enable a plan “maintained” by a principal-purpose organization to substitute for a plan both “established” and “maintained” by a church. And as a corollary to that point, the employees’ construction runs aground on the so-called surplusage canon—the presumption that each word Congress uses is there for a reason. The employees read subparagraph (C)(i) as if it were missing the two words “established and.” This Court, however, “give[s] effect, if possible, to every clause and word of a statute.” Williams v. Taylor, 529 U. S. 362. Pp. 5–12.
(b) Both parties’ accounts of Congress’s purpose in enacting subparagraph (C)(i) tend to confirm this Court’s reading that plans maintained by principal-purpose organizations are eligible for the church-plan exemption, whatever their origins. According to the hospitals, Congress wanted to ensure that churches and church-affiliated organizations received comparable treatment under ERISA. If that is so, this Court’s construction of the text fits Congress’s objective to a T, as a church-establishment requirement would necessarily disfavor plans created by church affiliates. The employees, by contrast, claim that subparagraph (C)(i)’s main goal was to bring within the church-plan exemption plans managed by local pension boards—organizations often used by congregational denominations—so as to ensure parity between congregational and hierarchical churches. But that account cuts against, not in favor of, their position. Keeping the church-establishment requirement would have prevented some plans run by pension boards—the very entities the employees say Congress most wanted to benefit—from qualifying as “church plans” under ERISA. Pp. 12–14.
No. 16–74, 817 F. 3d 517; No. 16–86, 810 F. 3d 175; and No. 16–258, 830 F. 3d 900, reversed.
1 Together with No. 16–86, Saint Peter’s Healthcare System et al. v. Kaplan, on certiorari to the United States Court of Appeals for the Third Circuit, and No. 16–258, Dignity Health et al. v. Rollins, on certiorari to the United States Court of Appeals for the Ninth Circuit.