Opinion ID: 2981974
Heading Depth: 2
Heading Rank: 1

Heading: jurisdiction

Text: Gallion argues that the district court lacked jurisdiction when it entered the Final Order because, at that time, the mandate had not yet issued in the appeal of the underlying criminal case. His argument rests on the general rule that the filing of a notice of appeal “confers jurisdiction on the court of appeals and divests the district court of its control over those aspects of the case involved in the appeal.” Taylor v. KeyCorp, 680 F.3d 609, 616 (6th Cir. 2012) (quoting Griggs v. Provident Consumer Disc. Co., 459 U.S. 56, 58 (1982) (per curiam)). Under this rule, “the filing of a timely 9 and sufficient notice of appeal transfers jurisdiction from the district court to the court of appeals with respect to any matters involved in the appeal . . . until the district court receives the mandate of the court of appeals.” United States v. Krzyske, 857 F.2d 1089, 1093 (6th Cir. 1988)). The Government responds with a reference to Fed. R. Crim. P. 32.2. Rule 32.2 explicitly provides for a district court’s jurisdiction over ancillary third-party proceedings during the pendency of an appeal: (d) Stay Pending Appeal. If a defendant appeals from a conviction or an order of forfeiture, the court may stay the order of forfeiture on terms appropriate to ensure that the property remains available pending appellate review. A stay does not delay the ancillary proceeding or the determination of a third party’s rights or interests. If the court rules in favor of any third party while an appeal is pending, the court may amend the order of forfeiture but must not transfer any property interest to a third party until the decision on appeal becomes final, unless the defendant consents in writing or on the record. Fed. R. Crim. P. 32.2(d) (emphasis added). The advisory committee notes to Rule 32.2(d) provide further guidance: Subdivision (d) makes clear . . . that a district court is not divested of jurisdiction over an ancillary proceeding even if the defendant appeals his or her conviction. This allows the court to proceed with the resolution of third party claims even as the appellate court considers the appeal. Otherwise, third parties would have to await the conclusion of the appellate process even to begin to have their claims heard. Fed. R. Crim. P. 32.2(d) advisory committee’s note (2000) (emphasis added); see also United States v. Christunas, 126 F.3d 765, 768 (6th Cir. 1997) (holding, prior to the adoption of Rule 32.2 in 2000, that a district court may retain “limited authority to decide matters not inconsistent with the pendency of the appeal, i.e., third party claims”). Rule 32.2(d)’s provision for continued jurisdiction over ancillary proceedings is consistent with the concept that “a timely notice of appeal . . . does not divest a district court of jurisdiction 10 over matters collateral to the main cause of action.” AAA Venetian Blind Sales, Inc. v. Beaulieu of Am., Inc., 124 F.3d 196 (6th Cir. 1997) (unpublished table decision) (holding that a district court may proceed in determining and awarding attorney fees after the notice of appeal has been filed); see Griggs, 459 U.S. at 58. In the context of a criminal forfeiture, a third-party claim on a defendant’s forfeited assets is not an “aspect[] of the case involved in the appeal.” Griggs, 459 U.S. at 58. Rule 32.2(c)(4) states as much when it notes that the ancillary proceeding in which the district court would resolve a third party’s petition is “not part of sentencing.” Accordingly, a district court need not wait for the mandate to issue before addressing third-party claims through such a proceeding. Gallion protests that we should distinguish the Final Order from the ancillary proceedings that precede it. The ancillary proceedings relate to the question of third-party ownership of assets, and therefore they may be collateral. But the Final Order itself, he argues, is tied directly to the issue of the forfeitability of the defendant’s assets in the defendant’s pending appeal, which suggests that the district court must regain jurisdiction over the defendant and the core issues of conviction and sentence before it can enter the Final Order. We are unconvinced. A Final Order, as was ultimately entered in this case, decides only the claims of third parties—not defendants. According to Rule 32.2, the district court’s preliminary forfeiture order becomes final as to the defendant “[a]t sentencing—or at any time before sentencing if the defendant consents.” Fed. R. Crim. P. 32.2(b)(4)(A). Thus, at sentencing, “[a] preliminary forfeiture order terminates all issues presented by the defendant and leaves nothing to be done except to enforce by execution what has been determined.” Christunas, 126 F.3d at 768. In fact, a separate Final Order becomes necessary only if a third party files a petition asserting an interest in the property. See Fed. R. Crim. P. 32.2(c)(2) (“If no third party files a timely petition, the preliminary 11 order becomes the final order of forfeiture . . . .”). As a result, a defendant wishing to appeal a forfeiture must appeal the original preliminary order as entered in the judgment, and cannot appeal the later-issued Final Order. Christunas, 126 F.3d at 768–69. Thus, Gallion errs in asserting that the Final Order is “tied directly” to the issue of forfeitability of the defendant’s assets. It is not. The continuing validity of the Final Order as to the third parties does depend on affirmance of the preliminary order as to the defendant. But the test of whether an issue is collateral to a claim on appeal, and therefore whether a district court may retain jurisdiction, runs in the other direction: it considers whether the action by the district court would “alter the status of the case as it rests before the Court of Appeals.” Dayton Indep. Sch. Dist. v. U.S. Mineral Prods. Co., 906 F.2d 1059, 1063 (5th Cir. 1990) (internal quotation marks omitted). Gallion has not explained how the entry of the Final Order in this case—which determines only his rights (and other third parties’ rights) to the forfeited property—could or would alter the status of his father’s criminal appeal. It follows that the district court had jurisdiction to enter the Final Order prior to the issuance of the mandate. The First Circuit reached the same conclusion under similar circumstances in United States v. Hurley, 63 F.3d 1, 23-24 (1st Cir.1995). In that case, the court considered whether a notice of appeal divested the district court of jurisdiction over a motion for substitution of assets: Under these circumstances, we see no reason why the taking of the appeal should divest the district court of authority to enter an order forfeiting substitute property. Appellants do not provide any reason to think that this would interfere with, or contradict, the court of appeals’ consideration of the original judgment of a conviction and sentence, including the initial forfeiture order. Avoiding such interference and inconsistency is the purpose of the general rule barring district court proceedings during the pendency of an appeal. There is no reason to extend this ban further than its own rationale. 12 Of course, the substitute assets order, if one is eventually made, may give rise to new issues for appeal, but a new appeal can be taken directly from this order. Similarly, a decision of the appeals court on the original conviction could undermine the substitute assets order (e.g., by overturning the conviction itself or the initial forfeiture), but a substitute assets order can then be undone or overturned. After all, determination of counsel fees in a section 1983 case presents the same problem and is resolved in precisely this manner. Hurley, 63 F.3d at 23–24 (internal citations omitted). Here, as in Hurley, the Final Order may give rise to new issues of appeal, but Gallion can take—and has taken—an appeal directly from the order. Id. at 24. And it is true that a reversal of the district court’s judgment in his father’s criminal appeal could have undermined the Final Order; but if that had happened, the Final Order could have been subsequently “overturned or undone” to reflect the new status quo. Id. Gallion raises the specter of duplicative litigation, contending that a finding of jurisdiction in cases like this would put a third party in the position of pursuing a costly and unripe appeal to block an eviction. This may be true, but it is for just this reason that the criminal-forfeiture statute authorizes district courts to “restrain or stay the sale or disposition of the property pending the conclusion of any appeal of the criminal case giving rise to the forfeiture, if the [third party] demonstrates that proceeding with the sale or disposition of the property will result in irreparable injury, harm, or loss to him.” 21 U.S.C. § 853(h). Moreover, the language of § 853(h) itself clarifies that the district court “has the authority to decide whether to allow the government to dispose of forfeited property pending an appeal.” United States v. Messino, 907 F. Supp. 1231, 1233 (N.D. Ill. 1995). If the district court has the discretion to stay the sale of forfeited property, presumably it also has the discretion to allow the sale of the property. “The logical corollary is that the district court retains jurisdiction over forfeiture matters while an appeal is pending.” Id. While the better practice here may have been for the district 13 court to wait a few weeks to enter the Final Order—a prudent delay so as to avoid the possibility that the Final Order would later have to be amended—we conclude that the court had jurisdiction to act when it did.