USA v. Kerry De Cay, et al

Filing

REVISED PUBLISHED OPINION FILED. [6631325-2] [09-30218]

USA v. Kerry De Cay, et al

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REVISED October 19, 2010 IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT
United States Court of Appeals Fifth Circuit

FILED
N o . 09-30218 September 20, 2010 Lyle W. Cayce Clerk U N IT E D STATES OF AMERICA, Plaintiff - Appellee v. K E R R Y DE CAY; STANFORD BARRE, Defendants - Appellants L O U I S I A N A SHERIFFS PENSION AND RELIEF FUND, Garnishee - Appellant

A p p e a l from the United States District Court for the Eastern District of Louisiana

Before JONES, Chief Judge, and KING and HAYNES, Circuit Judges. H A Y N E S , Circuit Judge: K e r r y DeCay, Stanford Barre, and the Louisiana Sheriffs Pension and R e lie f Fund ("LSPRF") appeal the district court's order granting garnishment of D e C a y 's contributions to and Barre's monthly benefits from state pension funds h e ld by the LSPRF. We conclude that the United States may garnish DeCay's a n d Barre's retirement benefits to satisfy a criminal restitution order, but that t h e United States is limited to garnishing twenty-five percent of Barre's monthly

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No. 09-30218 p e n s io n benefit. Accordingly, we REVERSE the district court's entry of the final g a r n is h m e n t orders as to Barre, AFFIRM as to DeCay, and REMAND for p r o c e e d in g s consistent with our holding. I. Factual & Procedural Background K e r r y DeCay and Stanford Barre pleaded guilty to one count each of mail fr a u d , conspiracy to commit mail fraud, and obstruction of justice for their roles in a scheme to defraud the City of New Orleans ("the City"). At sentencing, the d is tr ic t court determined that the City had suffered an injury compensable u n d e r the Mandatory Victims Restitution Act ("MVRA"), and ordered DeCay and B a r r e to pay $1,064,362.15, jointly and severally, in restitution. After judgment w a s entered, the United States moved for writs of garnishment under the F e d e r a l Debt Collection Procedures Act ("FDCPA") seeking seizure of the d e fe n d a n t s ' interests in their pension funds to satisfy the restitution order. The d is t r ic t court found that the statutory prerequisites to garnishment were s a t is fie d , see 28 U.S.C. § 3205(b), and issued the writs of garnishment to the LSPRF. The LSPRF answered the garnishment orders by stating that DeCay c u r r e n t ly was eligible only for an immediate lump-sum withdrawal of the $ 7 7 ,8 9 8 he had contributed toward his retirement and that Barre was currently r e c e iv in g a monthly pension benefit of $2,464.72. The LSPRF asserted that the p e n s io n benefits were exempt from seizure under federal and Louisiana law and t h a t enforcement of the writs against it as garnishee would violate the Tenth A m e n d m e n t to the United States Constitution. The LSPRF also argued that, to t h e extent that garnishment is proper, the United States failed to follow the a p p r o p r ia te formal procedures to withdraw DeCay's employee contributions. Regarding Barre, the LSPRF argued that even if garnishment were proper, the C o n s u m e r Credit Protection Act ("CCPA") limits the United States' right to g a r n is h Barre's pension to twenty-five percent of his monthly benefit. 2

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No. 09-30218 D e C a y , proceeding pro se, adopted the LSPRF's brief. Barre also objected t o the writ of garnishment against him, asserting that the Tenth Amendment p r e c lu d e s the United States from garnishing his pension benefits and, in the a lt e r n a t iv e , that the CCPA prohibits the United States from garnishing more t h a n twenty-five percent of his pension benefits. The district court overruled the appellants' objections to the garnishment w r it s and held that the United States could garnish the entire amount of D e C a y 's contributions to the LSPRF ($77,898), as well as the full amount of the m o n th ly benefits paid by the LSPRF to Barre ($2,464.72). Accordingly, the d is t r ic t court entered final orders of garnishment compelling the LSPRF to im m e d ia t e ly pay the United States $77,898, representing the present cash-out v a lu e of DeCay's employee contributions to the LSPRF, as well as 100% of any fu t u r e distributions of pension funds due to Barre. The LSPRF and Barre filed m o t io n s for a new trial or to alter or amend the judgment. DeCay adopted the L S P R F 's motion. The district court denied the motions. The LSPRF, DeCay, and Barre filed the instant appeal.1 They assert that t h e garnishment orders violate federal and Louisiana law, including the Tenth A m e n d m e n t to the United States Constitution. The appellants argue in the a lt e r n a t iv e that, if garnishment is proper, the district court erred by not r e q u ir in g the United States to complete certain formalities before withdrawing D e C a y 's employee contributions and by allowing the United States to garnish t h e full amount of Barre's monthly pension benefit. II. Standard of Review W e review a district court's construction and application of a statute de n o v o . United States v. Williams, 602 F.3d 313, 315 (5th Cir. 2010); see also
The LSPRF timely filed an appeal from the final orders of garnishment entered against DeCay and Barre. Barre timely appealed the final order of garnishment entered against him. DeCay filed a notice of appeal from the denial of his adopted motion for a new trial or to alter or amend the judgment.
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No. 09-30218 U n ite d States v. Anderson, 559 F.3d 348, 352 (5th Cir. 2009) (stating that this c o u r t reviews the constitutionality of a federal statute de novo). Similarly, the " p r e e m p t iv e effect of a federal statute is a question of law that we review de n o v o ." Franks Inv. Co. LLC v. Union Pac. R.R. Co., 593 F.3d 404, 407 (5th Cir. 2 0 1 0 ). III. Standing B e fo r e we address the merits of the appellants' arguments, we must d e t e r m i n e whether the LSPRF has standing to assert arguments on appeal. United States v. Holy Land Found. for Relief & Dev., 445 F.3d 771, 779 (5th Cir. 2 0 0 6 ) ("When standing is placed in issue in a case, the question is whether the p e r s o n whose standing is challenged is a proper party to request an adjudication o f a particular issue and not whether the issue itself is justiciable.") (internal q u o t a t io n marks and citation omitted). The United States asserts that the L S P R F lacks standing to object to the writs of garnishment because the LSPRF d o e s not have a personal interest in the retirement benefits and thus has not s u ffe r e d an injury-in-fact. In addressing a plaintiff's standing, the Supreme Court has required: (1 ) `injury in fact,' by which we mean an invasion of a legally p r o t e c te d interest that is (a) concrete and particularized, and (b) a c t u a l or imminent, not conjectural or hypothetical; (2) a causal r e la tio n s h ip between the injury and the challenged conduct, by w h ic h we mean that the injury fairly can be traced to the c h a lle n g e d action of the defendant, and has not resulted from the in d e p e n d e n t action of some third party not before the court; and (3 ) a likelihood that the injury will be redressed by a favorable d e c is io n , by which we mean that the prospect of obtaining relief fr o m the injury as a result of the favorable ruling is not too s p e c u la tiv e . N e . Fla. Chapter of the Assoc. Gen. Contractors of Am. v. City of Jacksonville, 508 U .S . 656, 663-64 (1993) (internal citations and quotation marks omitted). The S u p r e m e Court further has observed that the nature and extent of the facts that 4

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No. 09-30218 m u s t be alleged to establish standing "depends considerably upon whether the p la in t iff is himself an object of the action . . . at issue. If he is, there is ordinarily l it t le question that the action or inaction has caused him injury, and that a ju d g m e n t preventing or requiring the action will redress it." Lujan v. Defenders o f Wildlife, 504 U.S. 555, 561-62 (1992). But when "a plaintiff's asserted injury a r is e s from the government's allegedly unlawful regulation (or lack of r e g u la tio n ) of someone else, much more is needed." Id. at 562. Of course, the LSPRF did not come to court seeking relief. The United

S t a te s obtained an order compelling the LSPRF to turn over funds in its p o s s e s s io n representing any interest DeCay and Barre may have in any property s u b je c t to the LSPRF's control, thus drawing the LSPRF into the instant lit ig a t io n . The writs of garnishment compel the LSPRF to take particular action, a n d the LSPRF asserts that the ordered action is unconstitutional under the T e n t h Amendment and, as to DeCay, subjects it to potential double exposure in t h e future. In essence, the LSPRF is saying to the court "you can't make me do t h is ." Having been brought before the court involuntarily by another party, we c o n c lu d e that the LSPRF has the ability to say it cannot be the object of such c o u r t actions. 2 Accordingly, the LSPRF, as the object of the writ of garnishment a n d as a sovereign entity, has standing to assert that the United States lacks the

Of course whether LSPRF has standing to make the argument is distinct from whether the argument has merit, a matter we address later.

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No. 09-30218 c o n s t it u t io n a l authority to compel it to release the funds.3 See Lujan, 504 U.S. a t 561; Holy Land Found., 445 F.3d at 780.4 W e need not decide whether the LSPRF has standing to raise the r e m a in in g objections to garnishment because DeCay and Barre plainly have s t a n d in g to assert exemptions to the garnishment of their property. Because D e C a y and Barre raise the same objections to garnishment that the LSPRF m a k e s , this court has jurisdiction to decide the case. See Arlington Heights v. M e tr o . Hous. Dev. Corp., 429 U.S. 252, 263-64 (1977) ("In the ordinary case, a p a r ty is denied standing to assert the rights of third persons. But we need not d e c id e whether the circumstances of this case would justify departure from that p r u d e n t ia l limitation . . . [f]or we have at least one individual plaintiff who has d e m o n s t r a t e d standing to assert these rights as his own."); see also Horne v. F lo r e s , 129 S. Ct. 2579, 2592 (2009) ("Because the superintendent clearly has s t a n d in g to challenge the lower courts' decisions, we need not consider whether t h e Legislators also have standing to do so."). Having concluded that the

a p p e lla n t s possess standing to challenge the final orders of garnishment, we now t u r n to the merits of this dispute.

The LSPRF's position in this case is similar to that of a garnishee asserting that the district court lacks personal jurisdiction over it or a foreign garnishee asserting immunity as a defense to the garnishment order. We have never held that a garnishee in either of those situations lacks standing to object to the garnishment proceeding. See, e.g., FG Hemisphere Assocs., LLC v. Republique du Congo, 455 F.3d 575, 584 (5th Cir. 2006) ("The sovereign immunity claim may be raised by a garnishee as well as a foreign sovereign."); Stena Rederi AB v. Comision de Contratos del Comite Ejecutivo Gen., 923 F.2d 380, 391-92 (5th Cir. 1991) (holding that the district court lacked personal jurisdiction over the garnishee and that the garnishee, as an agency of a foreign state, was "entitled to invoke the shield of sovereign immunity, whether against direct claims or an indirect writ of garnishment"). Because of our conclusion that the double exposure question is not ripe, see infra at Section IV.C., we do not decide whether LSPRF has standing to urge its argument that the court's order subjects it to double exposure.
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No. 09-30218 IV . Merits T h e MVRA makes restitution mandatory for certain crimes, "including any o ffe n s e committed by fraud or deceit," 18 U.S.C. § 3663A(a)(1), (c)(1)(A)(ii), and a u t h o r iz e s the United States to enforce a restitution order in accordance with its c iv il enforcement powers.5 The MVRA broadly permits the United States,

n o tw it h s t a n d in g any other federal law, to enforce a restitution order "against all p r o p e r t y or rights to property of the person fined." § 3613(a). Section 3613 of t h e MVRA sets forth several enumerated exceptions to the United States' a u t h o r it y to garnish any and all of the debtor's property to satisfy a restitution o r d e r ; however, the statute does not exempt state-run pension plans.6 Further, § 3613(a)(2) explicitly states that the exemptions contained in the FDCPA, 28 U .S .C . § 3014, do not apply to the enforcement of a federal criminal judgment. The appellants collectively make three arguments why the district court e r r e d in issuing the final garnishment orders against Barre and Decay. First, t h e appellants assert that the defendants' pension benefits are exempt from g a r n is h m e n t under federal and state law. Second, Barre argues that, if the U n ite d States may garnish his retirement benefits, the CCPA limits the United S t a te s to garnishment of twenty-five percent of his monthly pension benefits. Third, the LSPRF, joined by DeCay, asserts that, if the United States is allowed t o garnish Decay's contributions into his retirement, the United States is

The FDCPA sets forth the civil enforcement procedures used by the United States to recover monies owed under a restitution order. 28 U.S.C. § 3001(a)(1). The MVRA incorporates most of the exemptions contained in § 6334(a)of the Internal Revenue Code, which exempts particular property from levy for payment of federal taxes. The only § 6334 exemption relevant to pension plans applies to four types of federally authorized pension plans, including Railroad Retirement Act pensions, Railroad Unemployment Insurance Act pensions, and pensions received by certain military-service persons. I.R.C. § 6334(a)(6). None of these exemptions are applicable to the pension benefit plan at issue in the instant case.
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No. 09-30218 r e q u ir e d to apply for a withdrawal of DeCay's employee contributions. We a d d r e s s each of these arguments in turn. A. Garnishment of Pension Benefits Under the MVRA T h e appellants assert that the United States may not garnish pension b e n e fits under the MVRA because (1) § 401(a)(13) of the Internal Revenue Code (" I R C " ) makes pension benefits inalienable; (2) the Tenth Amendment to the U n ite d States Constitution precludes the United States from garnishing pension fu n d s controlled by the LSPRF; and (3) Louisiana constitutional and statutory la w exempt pension benefits from garnishment. 1. IRC § 401(a)(13) T h e LSPRF argues that the defendants' pension benefits are exempt from g a r n is h m e n t because the IRC prohibits the assignment or alienation of r e t ir e m e n t benefits. I.R.C. § 401(a)(13)(A). Section 401(a)(13)(A) states that "[a] t r u s t shall not constitute a qualified trust under this section unless the plan of w h ic h such trust is a part provides that benefits provided under the plan may n o t be assigned or alienated." This circuit has never addressed whether

§ 3613(a) of the MVRA overrides § 401(a)(13) of the IRC. Section 3613(a) of the MVRA states that "Notwithstanding any other F e d e r a l law . . . a judgment imposing a fine may be enforced against all property o r rights to property of the person fined." (emphasis added). This language is q u a lifie d only by the enumerated exceptions contained in § 3613(a)(1)­(3). We c o n c lu d e that the language in § 3613(a) authorizing the United States to enforce a garnishment order against "all property or rights to property" of the debtor, " [n ]o t w it h s t a n d in g any other Federal law," is sufficient to override the antia lie n a t io n provision of the IRC. Several factors compel us to conclude that the M V R A allows garnishment of a defendant's retirement benefits to satisfy a c r im in a l restitution order.

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No. 09-30218 F ir s t , the Supreme Court has recognized that the use of a "notwithstanding" clause signals Congressional intent to supersede conflicting p r o v is io n s of any other statute. Caseros v. Alpine Ridge Group, 508 U.S. 10, 18 (1 9 9 3 ) ("[T]he use of such a `notwithstanding' clause clearly signals the drafter's in t e n t ion that the provisions of the `notwithstanding' section override conflicting p r o v is io n s of any other section. Likewise, the Courts of Appeals generally have in t e r p r e t e d similar `notwithstanding' language . . . to supersede all other laws, s t a t in g that a clearer statement is difficult to imagine.") (internal quotation m a r k s and citations omitted). The appellants argue that the "notwithstanding" clause is insufficient to o v e r r id e the anti-alienation language in § 401(a)(13) of the IRC under the S u p r e m e Court's decision in Guidry v. Sheet Metal Workers National Pension F u n d , 493 U.S. 365 (1990). In Guidry, the Supreme Court was faced with the q u e s tio n of whether § 501(b) of the Labor-Management Reporting and Disclosure A c t of 1959 ("LMRDA")--which provided pension funds with a private right of a c t io n to "recover damages or secure an accounting or other appropriate relief fo r the benefit of the labor organizations"--allowed the government to create a c o n s t r u c t iv e trust on a defendant's pension benefits. The Court held that the " o t h e r appropriate relief" language in the LMRDA was insufficient to override t h e anti-alienation provision in § 206(d) of the Employee Retirement Income S e c u r it y Act ("ERISA"). Id. at 375-76 ("We do not believe that congressional in t e n t would be effectuated by reading the LMRDA's general reference to `other a p p r o p r ia te relief' as overriding an express, specific congressional directive that p e n s io n benefits not be subject to assignment or alienation."). Unlike the general "other appropriate relief" language contained in the L M R D A , the "notwithstanding any other Federal law" clause signals a clear C o n g r e s s io n a l intent to override conflicting federal law. Indeed, we agree with o u r sister circuit that "it appears that Congress accepted the Supreme Court's 9

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No. 09-30218 in v it a t io n in Guidry by enacting the [MVRA]." United States v. Irving, 452 F.3d 1 1 0 , 126 (2d Cir. 2003); see also United States v. Novak, 476 F.3d 1041, 1053 (9th C ir . 2007) (en banc) ("In sum, all standard principles of statutory construction s u p p o r t the conclusion that MVRA authorizes the enforcement of restitution o r d e r s against retirement plan benefits, the anti-alienation provision of ERISA n o t w i t h s t a n d i n g ." ) . Our conclusion is bolstered by the fact that Congress

e x e m p t e d certain retirement plans from garnishment under the MVRA, see § 3613(a)(1) (incorporating the exemptions in IRC § 6334(a)(6) for certain federal a n n u ity and pension payments), but did not include state-run pension plans in t h e list. Cf. Waggoner v. Gonzales, 488 F.3d 632, 636 (5th Cir. 2007) ("The canon o f statutory construction `expressio unius est exclusio alterius (the expression of o n e thing is the exclusion of another)' indicates that [the listed ground] is the o n ly requirement.") (citation omitted). S e c o n d , reading § 3613(a) to allow garnishment of the defendants' r e t ir e m e n t benefits is consistent with the MVRA's statutory scheme and p u rpose. The only property exempt from garnishment under § 3613(a) is

p r o p e r t y that the government cannot seize to satisfy the payment of federal in c o m e taxes. 18 U.S.C. § 3613(a). Section 3613(c) underscores the

C o n g r e s s io n a l directive that restitution orders should be satisfied in the same m a n n e r as tax liabilities. 18 U.S.C. § 3613(c) (stating that an order of restitution im p o s e d under this chapter "is a lien in favor of the United States on all property a n d rights to property of the person fined as if the liability of the person fined w e r e a liability for a tax assessed under the Internal Revenue Code of 1986") (e m p h a s is added). As we have already recognized, pension plan benefits are s u b je c t to levy under the IRC to collect unpaid taxes. See Shanbaum v. United S ta te s , 32 F.3d 180, 183 (5th Cir. 1994); see also Irving, 452 F.3d at 126 ("ERISA p e n s io n plans are not exempted from payment of taxes under 26 U.S.C. § 6334 [o f the IRC], and thus they should not be exempted from payment of criminal 10

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No. 09-30218 fin e s . . . . Moreover, § 3613(c) [of the MVRA] demands that criminal fines in fa v o r of the United States should be enforced in the same manner as a tax lia b ilit y would be enforced."). Third, other circuit and district courts have concluded that the United S t a te s may garnish a defendant's pension benefits to satisfy a restitution order, d e s p it e similar anti-alienation language contained in § 206(d) of ERISA. See I r v in g , 452 F.3d at 126; Novak, 476 F.3d at 1053; United States v. Lazorwitz, 411 F . Supp. 2d 634, 637 (E.D.N.C. 2005) (holding that "neither ERISA's antia lie n a t io n provision, 29 U.S.C. § 1056(d)(1), nor the anti-alienation provision in t h e Internal Revenue Code, 26 U.S.C. § 401(a)(13), provide a bar to the g a r n is h m e n t of a qualified pension plan"). Section 206(d) of ERISA states: "Each p e n s io n plan shall provide that benefits provided under the plan may not be a s s ig n e d or alienated." 29 U.S.C. § 1056(d)(1). We find these cases persuasive, s e e Patterson v. Shumate, 504 U.S. 753, 759 (1992) (referring to IRC § 401(a)(13) a n d ERISA § 206(d) as "coordinate section[s]" containing "similar restrictions"), a n d conclude that § 3613(a) of the MVRA authorizes the United States to g a r n is h retirement benefits, notwithstanding the anti-alienation provision in § 401(a)(13) of the IRC. 2. The Tenth Amendment T h e appellants also argue that the garnishment writs violate the Tenth A m e n d m e n t to the United States Constitution. This claim hinges on the

a p p e lla n t s ' contention that federal law does not govern state-run benefit plans a n d the MVRA does not supersede Louisiana's broad police powers. We reject t h e appellants' Tenth Amendment argument. The Tenth Amendment declares that "powers not delegated to the United S t a te s by the Constitution, nor prohibited by it to the States, are reserved to the S t a te s respectively, or to the people." U.S. CONST. amend. X. When Congress p r o p e r ly exercises its authority under an enumerated constitutional power, the 11

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No. 09-30218 T e n t h Amendment is not implicated. See New York v. United States, 505 U.S. 1 4 4 , 156 (1992); Deer Park Indep. Sch. Dist. v. Harris County Appraisal Dist., 1 3 2 F.3d 1095, 1099 (5th Cir. 1998). The appellants do not contest that Congress p a s s e d the MVRA and FDCPA pursuant to an enumerated constitutional power.7 N o r do the appellants contest that the Necessary and Proper Clause grants C o n g r e s s the authority to craft appropriate penalties to enforce its criminal laws. United States v. Comstock, 130 S. Ct. 1949, 1958 (2010) ("Neither Congress' p o w e r to criminalize conduct, nor its power to imprison individuals who engage in that conduct, nor its power to enact laws governing prisons and prisoners, is e x p lic it ly mentioned in the Constitution. But Congress nonetheless possesses b r o a d authority to do each of those things in the course of `carrying into E x e c u tio n ' the enumerated powers `vested by' the `Constitution in the G o v e r n m e n t of the United States,' Art. I, § 8, cl. 18 - - authority granted by the N e c e s s a r y and Proper Clause.").8 T h e appellants assert that allowing the United States to garnish pension b e n e fits administered by the LSPRF violates the Tenth Amendment because the fe d e r a l government is interfering with state administration of pension benefits. The appellants' argument here is misdirected. Garnishing DeCay's and Barre's p e n s io n benefits has no effect on Louisiana state law; rather it penalizes DeCay a n d Barre for violating federal law. While the LSPRF is implicated as a

g a r n is h e e , its pension system is not altered by requiring the LSRPF to pay the

It is also undisputed that Congress had the authority to convict Barre and DeCay of the predicate crimes underlying the restitution order. See, e.g., United States v. Brumley, 116 F.3d 728, 730 (5th Cir. 1997) (holding that the Commerce Clause supports the mail fraud criminal statute). The parties submitted letters briefing the impact of the Supreme Court's decision in Comstock on the instant case. See FED. R. APP. P. 28(j). We agree with the Government that Comstock supports a conclusion that Congress properly exercised its authority to enact the MVRA making restitution mandatory for particular crimes and that, pursuant to this authority, the United States may garnish a defendant's state pension benefits.
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No. 09-30218 U n ite d States, rather than the judgment-debtors. Further, to the extent that a s t a t e desires to participate in the management of pension benefits, it must s u b m it to federal criminal and civil laws allowing for debt-collection measures. 28 U.S.C. § 3003(d) (stating that the FDCPA "shall preempt State law to the e x te n t such law is inconsistent with a provision of this chapter"). The federal g o v e r n m e n t 's inability to garnish state-run pension benefits would substantially im p a ir the effectiveness of the FDCPA and MVRA. See United States v. Phillips, 3 0 3 F.3d 548, 551 (5th Cir. 2002) ("The FDCPA . . . provides a uniform system fo r prosecutors to follow rather than resorting to the non-uniform procedures p r o v id e d by the states."). Because the United States has the constitutional a u t h o r it y to impose mandatory restitution for particular federal crimes and seek g a r n is h m e n t of any available resources to satisfy that restitution order, we reject t h e appellants' Tenth Amendment challenge. 3. Louisiana Law T h e appellants assert that the United States lacks the authority to garnish D e C a y 's and Barre's pension benefits because Louisiana law precludes e n fo r c e m e n t of a restitution order against pension benefits. See LA. CONST. art. X , § 29(E)(5)(a) (1974); LA. REV. STAT. § 11:2182 (1991). To the extent Louisiana la w is inconsistent with the FDCPA and MVRA, Louisiana law is preempted. 28 U.S.C. § 3003(d); see also United States v. Wilson, No. CR-305-008, 2007 WL 4 5 5 7 7 7 4 , at *1 n.2 (S.D. Ga. Dec. 20, 2007) ("To the extent that state law . . . c o n flic ts with federal law authorizing the garnishment of Defendant's pension b e n e fits , it is preempted."); United States v. McClanahan, No.3:03-00053, 2006 W L 1455698, at *4 (S.D. W. Va. May 24, 2006) ("Although West Virginia p r o h ib it s the garnishment of state pensions, federal law expressly preempts s t a t e exemptions when the federal government is attempting to collect a fine or r e s t it u t io n ." ).

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No. 09-30218 I n sum, the MVRA authorizes the United States to use its civil e n fo r c e m e n t powers to garnish a defendant's retirement plan benefits, n o tw it h s t a n d in g the fact that pension benefits are generally inalienable under fe d e r a l and state law. B. The CCPA's Limitation on Garnishment of Disposable Earnings T h e LSPRF and Barre assert that, even if Barre's retirement benefits are s u b je c t to garnishment, the United States cannot garnish more than twenty-five p e r c e n t of Barre's monthly pension benefits under § 303 of the CCPA. Section 3 6 1 3 (a ) ( 3 ) of the MVRA states that the protections of the CCPA shall apply to e n fo r c e m e n t of the judgment under either federal or state law. The CCPA p r o v id e s that t h e maximum part of the aggregate disposable earnings of an in d iv id u a l for any workweek which is subjected to garnishment may n o t exceed (1 ) 25 per centum of his disposable earnings for that w e e k , or ( 2 ) the amount by which his disposable earnings for t h a t week exceed thirty times the Federal minimum h o u r ly wage prescribed by section 206(a)(1) of Title 29 in effect at the time the earnings are payable, whichever is less. In the case of earnings for any pay period other t h a n a week, the Secretary of Labor shall by regulation prescribe a m u lt ip le of the Federal minimum hourly wage equivalent in effect t o that set forth in paragraph (2). 15 U.S.C. § 1673(a). The parties dispute whether Barre's monthly benefit payments constitute " e a r n in g s " under the CCPA. The CCPA defines "earnings" as "compensation p a id or payable for personal services, whether denominated as wages, salary, c o m m is s io n , bonus, or otherwise, and includes periodic payments pursuant to a p e n s io n or retirement program." 15 U.S.C. § 1672(a) (emphasis added).

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No. 09-30218 T h e Supreme Court has cautioned that the terms "earnings" and " d is p o s a b le earnings" under the CCPA are "limited to `periodic payments of c o m p e n s a tio n and (do) not pertain to every asset that is traceable in some way t o such compensation.'" Kokoszka v. Belford, 417 U.S. 642, 651 (1974) (citation o m it t e d ). Here, the question is whether payments made from an employer's r e t ir e m e n t program to an employee are too attenuated to be considered " e a r n in g s " under the CCPA. The district courts around the country have divided over whether monthly p e n s io n -b e n e fit payments constitute "earnings" under the CCPA. Several

d is t r ic t courts have concluded that "once passed to a retirement account or a n n u ity in the hands of the employee, the funds in the account or annuity are n o t `earnings' under the CCPA, and thus not subject to the 25% cap, even if they a r e distributed in periodic payments--in other words, the distributions from the fu n d to the defendant are not `disposable earnings' under § 303." United States v . Belan, No. 2:07-x-50979, 2008 WL 2444496, at *3 (E.D. Mich. June 13, 2008); s e e also United States v. Crawford, F-04-0200, 2006 WL 2458710, at *2-3 (E.D. C a l. Aug. 22, 2006); United States v. Laws, 352 F. Supp. 2d 707, 713-14 (E.D. Va. 2 0 0 4 ). However, at least one district court has reached the opposite conclusion a n d held that periodic payments of retirement benefits are "earnings" under the CCPA. McLanahan, 2006 WL 1455698, at *3 (holding that "under clear

s t a t u t o r y language, it appears that the Government may garnish only 25% of the D e fe n d a n t 's pension"). We find the statutory language unambiguous and hold that the United S t a te s may garnish only twenty-five percent of Barre's monthly pension benefits. The statute explicitly defines "earnings" to include "periodic payments made p u r s u a n t to a pension or retirement program." 15 U.S.C. § 1672(a)(emphasis a d d e d ). The term "pursuant to" is generally defined as "in compliance with; in a c c o r d a n c e with; under [or] . . . as authorized by . . . [or] in carrying out." 15

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No. 09-30218 B LACK'S LAW DICTIONARY (8th ed. 2004).9 The parties do not dispute the terms o f the pension plan or that the plan entitles Barre to monthly pension-benefit p a y m e n t s . Because the United States does not dispute that the terms of the p e n s io n plan authorize Barre to receive monthly pension benefits, we conclude t h a t the payments are being made "pursuant to" the pension fund and therefore c o n s t it u t e "earnings" under the CCPA.1 0 Accordingly, we conclude that the U n ite d States may not garnish more than twenty-five percent of Barre's monthly p e n s io n benefits under the CCPA. C. Formalities of DeCay's Cash-Out F in a lly , the LSPRF asserts that the district court erred by allowing the U n ite d States to cash-out DeCay's contributions to his retirement account w it h o u t applying for a refund. The LSPRF asserts that the garnishment order a s to DeCay is either improper or incomplete because the United States did not a p p ly for a withdrawal of DeCay's benefits. The final garnishment order issued b y the district court compels the LSPRF to "immediately pay to the United

We observe that the cases cited by the United States misquote the statutory language defining "earnings" in concluding that payments to a pension fund are earnings, whereas payments from a pension fund are not. Those cases mistakenly quote the statutory definition of earnings as limited to "periodic payments to a pension or retirement program." See Belan, 2006 WL 2444496, at *3, Laws, 352 F. Supp. 2d at 713; Aetna Cas. & Sur. Co., 965 F. Supp. 104, 109 (D. Mass. 1996). We conclude that the "pursuant to" phrase includes periodic payments from the pension fund to the employee if the payments are being made in accordance with the terms of the plan. Our conclusion is also consistent with the legislative history and Congressional intent behind the passage of § 303 of the CCPA. In passing the CCPA, Congress was attempting to combat the problems of unemployment and bankruptcy that frequently resulted from the unrestricted garnishment of a debtor's wages. H.R. REP. NO. 1040, 90th Cong., 2d Sess. (1968), reprinted in 1968 U.S.C.C.A.N. 1962, 1979. The Committee explicitly recognized that unrestricted garnishment of a debtor's wages frequently resulted in "a disruption of employment, production, and consumption," harming the debtor and interstate commerce. Id. at 1063. Retirement benefits, like wages, are intended to provide a "continued means of support" and subsistence for a judgment-debtor and his family. Congress incorporated § 303 of the CCPA into the MVRA, recognizing that the purpose of a restitution order would be thwarted if it simultaneously turned the judgment-debtor into a ward of the state and denied the debtor the ability to "insure a continued means of support" for him and his family.
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No. 09-30218 S t a te s of America the amount of $77,898.00, which represents the present casho u t value of DeCay's pension account with the LSPRF." The parties do not dispute that DeCay is currently entitled to cash-out his e m p lo y e e contributions, and the LSPRF does not suggest that DeCay's right to c a s h -o u t his contributions is in any way conditional. Instead, the LSPRF

a s s e r t s that the United States must apply for a refund of DeCay's contributions b e c a u s e the LSPRF may be subject to future liability if the United States is not fo r c e d to execute paperwork waiving DeCay's future pension benefits. Louisiana la w requires a pension beneficiary to apply for a reimbursement of his employee c o n t r ib u t io n s , thereby extinguishing the employee's rights in the pension fund. See LA. REV. STAT. ANN. § 11:2175(C)(1) (1995) (stating that an eligible member " m a y apply for and obtain a refund of the amount of his contributions by making a p p lic a t io n on the form furnished by the fund . . . A refund automatically cancels a ll rights in the fund"). The United States argues that DeCay is adequately protected from future l i t ig a t io n by the FDCPA, and thus its failure to abide by Louisiana law is in c o n s e q u e n t ia l. Section 3206 of the FDCPA states: A person who pursuant to an execution or order issued u n d e r this chapter by a court pays or delivers to the U n it e d States . . . money or other personal property in w h ic h a judgment debtor has or will have an interest, o r so pays a debt such person owes the judgment d e b t o r , is discharged from such debt to the judgment d e b t o r to the extent of the payment or delivery. The United States thus asserts that it was not required to apply formally for a w it h d r a w a l of DeCay's employee contributions because § 3206 insulates the L S P R F from litigation and waives DeCay's rights to any future pension benefits.

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No. 09-30218 W e conclude that LSPRF has not sufficiently established that it is c u r r e n t ly subject to a risk of double exposure upon payment of the $77,898;1 1 a c c o r d in g ly , the matter is not ripe for our resolution at this point. V. Conclusion W e conclude that the United States may garnish the defendants' r e t ir e m e n t benefits to satisfy a criminal restitution order, but the CCPA limits t h e United States' authority to garnish Barre's pension benefits to twenty-five p e r c e n t of his monthly payment. Accordingly, we REVERSE the final orders of g a r n is h m e n t entered against Barre, AFFIRM as to DeCay, and REMAND the c a s e to the district court for entry of final garnishment orders consistent with o u r holding in this case.

The United States clearly has the right to obtain the cash-out in question. The fact that DeCay possessed the option to either cash-out his retirement account or wait and receive future monthly benefits allows the United States to seek an order compelling the LSPRF to cash-out DeCay's benefits. Cf. United States v. Nat'l Bank of Commerce, 472 U.S. 713, 724-26 (1985) (holding that the right to withdraw funds under state law is a right to property and the IRS may secure--and thus withdraw the funds--by executing a levy); Kane v. Capital Guardian Trust Co., 145 F.3d 1218, 1223 (10th Cir. 1998) ("In the notice of levy, the IRS exercised Kane's right to receive the cash value of his mutual fund shares when it directed [the garnishee] to liquidate the IRA and send it the cash proceeds."); United States v. Metro. Life Ins., 874 F.2d 1497, 1500 (11th Cir. 1989) ("[U]nder state law the taxpayer had the right to withdraw the full value of the annuity. The issue is whether the right is sufficient to obligate the [garnishee] under section 6332(a) to surrender the funds subject to the withdrawal right to the IRS upon receipt of the notice of levy. We hold that it is.").

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