Court Opinion

ID: 4192892
Source: CourtListenerOpinion
Date Created: 2017-08-03 17:03:11.480749+00
Date Added: 2024-06-11T14:40:23.259674
License: Public Domain

FILED
                                                             MAY 27 2015
 1                         ORDERED PUBLISHED
                                                        SUSAN M. SPRAUL, CLERK
 2                                                        U.S. BKCY. APP. PANEL
                                                          OF THE NINTH CIRCUIT

 3                  UNITED STATES BANKRUPTCY APPELLATE PANEL
 4                            OF THE NINTH CIRCUIT
 5
 6   In re:                        )      BAP No.    NV-14-1482-JuKuPa
                                   )
 7   DEBORAH LYNN PARTIDA,         )      Bk. No.    2:13-bk-11710-LED
                                   )
 8                  Debtor.        )
     ______________________________)
 9                                 )
     DEBORAH LYNN PARTIDA,         )
10                                 )
                    Appellant,     )
11                                 )
     v.                            )      O P I N I O N
12                                 )
     UNITED STATES, DEPARTMENT OF )
13   JUSTICE,                      )
                                   )
14                  Appellee.      )
     ______________________________)
15
16                    Argued and Submitted on May 14, 2015
                            at Sacramento, California
17
18                            Filed - May 27, 2015
19
               Appeal from the United States Bankruptcy Court
20                       for the District of Nevada
21    Honorable Laurel Elizabeth Davis, Bankruptcy Judge, Presiding
22                          ________________________
23   Appearances:     Christopher P. Burke argued for appellant Deborah
                      L. Partida; Roger W. Wenthe argued for appellee
24                    United States.
                           ________________________
25
26   Before:   JURY, KURTZ, and PAPPAS, Bankruptcy Judges.
27
28
 1   JURY, Bankruptcy Judge:
 2
 3        This appeal arises from the bankruptcy court’s order
 4   denying the chapter 131 debtor’s motion for contempt for
 5   violation of the automatic stay.        We conclude as a matter of law
 6   that the enforcement provision of the Mandatory Victims
 7   Restitution Act overrides the operation of the automatic stay
 8   under § 362(a) and in so doing, authorizes the enforcement of
 9   criminal restitution obligations against debtor and property of
10   the bankruptcy estate.    We AFFIRM.
11                                I.   FACTS
12        No facts are in dispute.     Before filing bankruptcy, Deborah
13   L. Partida (Debtor) was convicted of embezzlement and theft of
14   labor union assets.   A criminal judgment was entered, sentencing
15   Debtor to serve eighteen (18) months in federal prison and to
16   pay criminal restitution penalties in the amount of $193,337.33.
17   As of March 5, 2013, when Debtor filed this chapter 13 case,
18   Debtor satisfied her term of incarceration but had not paid her
19   restitution obligation.    Debtor listed the restitution
20   obligation in her schedules and the United States Department of
21   Justice (the Government) received notice of the bankruptcy
22   filing.   Debtor’s chapter 13 plan was confirmed on March 6,
23   2014.
24        After Debtor received a notice of intent to offset and an
25
26
          1
            Unless otherwise indicated, all chapter and section
27   references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532,
     and “Rule” references are to the Federal Rules of Bankruptcy
28   Procedure.

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 1   “Overdue Debtor Statement,” the Government garnished $272.47
 2   from Debtor’s pension and $467.85 from her retirement benefits
 3   on March 1, 2014.   Debtor then filed a motion for contempt for
 4   violation of the automatic stay against the Government in
 5   bankruptcy court.   On July 29, 2014, the bankruptcy court heard
 6   oral arguments on the matter.        On September 8, 2014, in an oral
 7   ruling, the bankruptcy court denied the motion for contempt on
 8   the ground that the Government’s actions were excepted from the
 9   automatic stay under § 362(b)(1).          The order denying Debtor’s
10   motion was entered on September 22, 2014, and Debtor filed a
11   timely notice of appeal.
12                              II.   JURISDICTION
13        The bankruptcy court had jurisdiction over this proceeding
14   under 28 U.S.C. § 157(b)(2)(G).        We have jurisdiction under 28
15   U.S.C. § 158.
16                                 III.    ISSUE
17   1.   Whether the enforcement provision of the Mandatory Victims
18        Restitution Act overrides the operation of § 362(a) as to
19        the enforcement of criminal restitution orders; and
20   2.   Whether the post-conviction enforcement of criminal
21        restitution orders is excepted from the automatic stay
22        under § 362(b)(1).
23                        IV.    STANDARD OF REVIEW
24        Questions of statutory interpretation are reviewed de novo.
25   United States v. Youssef, 547 F.3d 1090, 1093 (9th Cir. 2008).
26        We may affirm on any ground supported by the record.
27   Siriani v. Nw. Nat’l Ins. Co. (In re Siriani), 967 F.2d 302, 304
28   (9th Cir. 1992).

                                          -3-
 1                             V.    DISCUSSION
 2        A.   Notwithstanding the automatic stay under § 362(a), the
 3             Mandatory Victims Restitution Act authorizes the
 4             enforcement of criminal restitution orders against
 5             Debtor and property of the bankruptcy estate.
 6        Although the bankruptcy court based its decision on the
 7   exception to the automatic stay provided by § 362(b)(1), the
 8   significant threshold issue is whether the operation of the
 9   automatic stay under § 362(a) is superseded by the subsequent
10   enactment of the Mandatory Victims Restitution Act (the MVRA) as
11   to the enforcement of restitution orders against Debtor and
12   property of the bankruptcy estate.
13        Section 362(a) details the various stays triggered upon a
14   bankruptcy filing.   Subsection (2) provides that entities are
15   stayed from the enforcement of a prepetition judgment “against
16   the debtor or against property of the estate,” while subsection
17   (3) stays “any act to obtain possession of property of the
18   estate or of property from the estate or to exercise control
19   over property of the estate.”    These two subsections of § 362(a)
20   were enacted as part of the Bankruptcy Act of 1978.
21        In direct conflict, the 1996 enactment of the MVRA provides
22   in relevant part that “[n]otwithstanding any other Federal law
23   (including section 207 of the Social Security Act)” the United
24   States may enforce a judgment imposing criminal fines “against
25   all property or rights to property of the person fined.”   18
26   U.S.C. § 3613(a), made applicable to criminal restitution awards
27   by 18 U.S.C. §§ 3664(m)(1)(A) and 3613(f).   Debtor argued to the
28   bankruptcy court and reiterates here that the automatic stay

                                      -4-
 1   provided in § 362(a) trumps the MVRA.      We disagree.
 2        To answer whether Congress intended the MVRA to override
 3   the effect of § 362(a), our analysis must start with the plain
 4   language of the statute.   Children’s Hosp. & Health Ctr. v.
 5   Belshe, 188 F.3d 1090, 1096 (9th Cir. 1999).      The Ninth Circuit
 6   held that inclusion of the “all property or rights to property”
 7   phrase in the enforcement provision of the MVRA clearly
 8   articulates Congress’ intent to make all of a defendant’s assets
 9   available to restitution orders.      United States v. Novak, 476
10 F.3d 1041, 1046 (9th Cir. 2007) (en banc).
11        In Novak, the broad reach of the MVRA conflicted with the
12   preceding anti-alienation provision of ERISA.      Id.    In order to
13   square the two statutes, the Ninth Circuit found the MVRA
14   statutory language provided “guidance on how to resolve [the
15   statutory conflict], by specifying that all property is covered
16   ‘[n]otwithstanding any other Federal law.’”      Id. (citing 18
17   U.S.C. § 3613(a)).   The use of a “notwithstanding” clause
18   connotes an intention to supersede preceding conflicting
19   statutory provisions.   Id. (citing Cisneros v. Alpine Ridge
20   Grp., 508 U.S. 10, 18 (1993).   However, the full reach of the
21   “notwithstanding” language is determined “by taking into account
22   the whole of the statutory context in which it appears.”       Id.;
23   Consejo de Desarrollo Economico de Mexicali, A.C. v. United
24   States, 482 F.3d 1157, 1168 (9th Cir. 2007).
25        In finding that the structure of the MVRA expressed a
26   general intention to override federal anti-alienation
27   provisions, the Ninth Circuit noted that the MVRA enforcement
28   provision’s specific inclusion of § 207 of the Social Security

                                     -5-
 1   Act served to give full effect to the “notwithstanding clause.”
 2   Novak, 476 F.3d at 1047.   Section 207 of the Social Security Act
 3   protects Social Security benefits from debt collection actions
 4   and “the operation of any bankruptcy or insolvency law”; no
 5   other provision may be construed to “limit, supersede, or
 6   otherwise modify the provisions of this section except to the
 7   extent that it does so by express reference to this section.”
 8   42 U.S.C. § 407.   Cognizant of this, Congress clearly intended
 9   the reach of the “notwithstanding” clause of the MVRA
10   enforcement provision to include any conflicting statutory
11   provisions, even making express reference where explicitly
12   required.   Novak, 476 F.3d at 1047.   It follows that there was
13   no need to specify other statutes because the sweeping breadth
14   of “all property or rights to property of the person fined”
15   taken together with the wide reach of “[n]otwithstanding any
16   other Federal law” was an unambiguous statement that the MVRA
17   enforcement provision overrides all conflicting federal
18   statutes.   Id. at 1047-48.
19        By allowing restitution obligations to be enforced against
20   Social Security benefits, Congress prioritizes the enforcement
21   of restitution orders by making available moneys traditionally
22   protected from creditors in bankruptcy.   The rationale then
23   follows that the MVRA authorizes the Government to reach
24   Debtor’s sources of income regardless of her bankruptcy and the
25   automatic stay.
26        Debtor makes two arguments in support of § 362(a) trumping
27   the MVRA: first, in not adding the MVRA as an exception under
28   § 362(b) as part of the 2005 BAPCPA amendments, Congress

                                    -6-
 1   implicitly expressed an intent that the MVRA would not override
 2   the operation of the automatic stay; and second, the 2005 BAPCPA
 3   amendments to certain subsections of § 362 reenacted all of
 4   § 362(a) such that § 362(a) should be characterized as being
 5   enacted after the MVRA.    These arguments are not compelling.
 6   First, the broad sweeping language of the MVRA enforcement
 7   provision already accomplished an effective override of
 8   § 362(a).   As such the addition of the MVRA as an exception to
 9   the stay under § 362(b) would be superfluous.      Second, the
10   concept that an amendment to one part of a broad, multi-faceted
11   statute would make the entire statute deemed enacted on the
12   amendment date is supported by neither case law nor statutory
13   interpretation.   The relevant parts of § 362(a), subsections (2)
14   and (3), were not amended.       The MVRA was clearly adopted after
15   them and its enforcement provision was intended to override “any
16   other Federal law.”   18 U.S.C. § 3613(a).
17        Accordingly, by garnishing Debtor’s retirement and pension
18   the Government did not violate the automatic stay.      Moreover,
19   because the MVRA enforcement provision precludes the application
20   of § 362(a) in this case, we need not decide whether § 362(b)(1)
21   provides an exception to the stay in this case.
22                              VI.    CONCLUSION
23        For this reason, we AFFIRM the bankruptcy court’s denial of
24   the motion for contempt.
25
26
27
28

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