Can You Be Made to Forfeit Drug Money Your Co-Conspirators Got?

You cannot be forced to forfeit drug money that only your co-conspirators received. The Supreme Court held this unanimously on June 5, 2017, in Honeycutt v. United States, No. 16-142 (2017). For people who played a small part in a large drug conspiracy, that can mean the difference between a manageable forfeiture and a judgment they could never pay.

Federal Forfeiture

What the forfeiture statute says

Forfeiture means the government takes property connected to a crime. For certain drug crimes, federal law allows forfeiture of "any property constituting, or derived from, any proceeds the person obtained, directly or indirectly, as the result of" the crime. 21 U.S.C. § 853(a)(1).

What happened

Terry Honeycutt and his brother, Tony, were charged with conspiring to distribute methamphetamine. Tony pleaded guilty. Terry went to trial and was convicted.

Tony owned a hardware store where Terry worked. As part of his plea, Tony agreed to forfeit $200,000 in profits from the drug sales. The government also sought $69,751.98 from Terry. The district court refused, because Terry had no ownership interest in the store and did not personally benefit from the sales. The government conceded those points.

The Sixth Circuit reversed. It held that, as a conspirator, Terry was "jointly and severally liable," meaning responsible for the whole amount the conspiracy made.

What the Supreme Court held

The Supreme Court reversed. Writing for the Court, Justice Sotomayor gave an example. A farmer runs a marijuana ring and earns $3 million. He pays a college student $3,600 to deliver packages. Under joint and several liability, the student could be ordered to forfeit the full $3 million, even though he only received $3,600. The Court held § 853(a)(1) does not allow that. Here is the Court's explanation in its own words:

A creature of tort law, joint and several liability "applies when there has been a judgment against multiple defendants." McDermott, Inc. v. AmClyde, 511 U. S. 202, 220–221 (1994). If two or more defendants jointly cause harm, each defendant is held liable for the entire amount of the harm; provided, however, that the plaintiff recover only once for the full amount. See Restatement (Second) of Torts 875 (1977). Application of that principle in the forfeiture context when two or more defendants conspire to violate the law would require that each defendant be held liable for a forfeiture judgment based not only on property that he used in or acquired because of the crime, but also on property obtained by his co-conspirator. An example is instructive. Suppose a farmer masterminds a scheme to grow, harvest, and distribute marijuana on local college campuses. The mastermind recruits a college student to deliver packages and pays the student $300 each month from the distribution proceeds for his services. In one year, the mastermind earns $3 million. The student, meanwhile, earns $3,600. If joint and several liability applied, the student would face a forfeiture judgment for the entire amount of the conspiracy's proceeds: $3 million. The student would be bound by that judgment even though he never personally acquired any proceeds beyond the $3,600. This case requires determination whether this form of liability is permitted under 853(a)(1). The Court holds that it is not.

The Court's reasons, in plain terms:

• Section 853(a) reaches only property that flows from, or is used in, the crime. It focuses on what the defendant himself "obtained." You do not "obtain" property someone else acquired.
• Other parts of § 853 also focus on tainted property: the rules on when title passes, pretrial asset freezes, and the presumption about property acquired during the crime.
• Section 853(p) is the only part that lets the government take untainted "substitute property," and only in specific situations. Joint and several liability would make that section pointless.
• Congress did not adopt the rule that conspirators are responsible for each other's foreseeable acts (Pinkerton v. United States, 328 U.S. 640 (1946)) for forfeiture.

The Court's syllabus states the central holdings this way:

(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. 5 (2016). 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. 320 (2014). 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.

The Sixth Circuit's judgment was reversed, and the case was sent back for further proceedings.

Which circuits were overruled

Honeycutt rejected decisions from the Second, Third, Fourth, and Eighth Circuits that had allowed joint and several liability for § 853 forfeiture. See United States v. Van Nguyen, 602 F.3d 886, 904 (8th Cir. 2010); United States v. Pitt, 193 F.3d 751, 765 (3d Cir. 1999); United States v. McHan, 101 F.3d 1027 (4th Cir. 1996); United States v. Benevento, 836 F.2d 129, 130 (2d Cir. 1988) (per curiam).

Before Honeycutt, the D.C. Circuit had already rejected joint and several liability in United States v. Cano-Flores, 796 F.3d 83, 91 (D.C. Cir. 2015).

Can you raise Honeycutt after your case is over?

In Brandon Sample's view, Honeycutt is a very important decision, but it may be hard to use after a case is over. Federal forfeiture issues likely cannot be raised in a § 2255 motion, except possibly in the Sixth Circuit. Most courts have held that a motion under 28 U.S.C. § 2255 cannot be used to challenge money penalties like fines, restitution, and forfeiture. The reason is that § 2255 is for people challenging their custody, and a money penalty does not affect custody.

Honeycutt announced a new rule of statutory interpretation, so a petition under 28 U.S.C. § 2241 may be another option. But courts may apply a similar custody requirement under § 2241. These issues will need to be explored further in an appropriate case. If your case is still on direct appeal, or you have not yet been sentenced, the argument is far easier to make, so raise it now. If you were sentenced before Honeycutt or think it applies to your case, have a lawyer review your options, and bring the judgment and the forfeiture order.

See Honeycutt v. United States, No. 16-142 (2017). The Court's docket is here.

Facing a federal sentence? Book a consultation to talk it through with Brandon Sample.