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United States v. Villongco

United States District Court, District of Columbia

June 13, 2017



          BERYL A. HOWELL Chief Judge.

         Pending before the Court is the government's motion for reconsideration, Gov't's Mot. Reconsideration Mem. Opinion & Order Def's Mot. Quash Writ of Garnishment ("Gov't's Mot."), ECF No. 57, of the decision granting the defendant's motion to quash the government's writ of garnishment as to certain retirement and brokerage accounts belonging to the defendant, see United States v. Villongco, C™- Action No. 07-9 (BAH), 2016 WL 3747508 (D.D.C. July 11, 2016). The government continues to press its entitlement to accelerate the defendant's payment of restitution by garnishing his retirement and brokerage accounts, notwithstanding a payment schedule ordered by the sentencing Court, who was apprised at the time of sentencing of the funds now targeted for garnishment. For the reasons set forth below, the government's motion is denied.

         I. BACKGROUND

         The factual background of this case is set out in this Court's prior memorandum opinion regarding the defendant's Motion to Quash the Writ of Continuing Non-Wage Garnishment ("Def's Mot. Quash"), ECF No. 46, which is fully incorporated here. See Villongco, 2016 WL 3747508, at *l-*3. In brief, the defendant was convicted in 2008 of conspiracy to defraud the government and mail fraud, in violation of 18 U.S.C. §§ 286 and 1341, for his part in a scheme to misappropriate funds from the Export-Import Bank of the United States. See Judgment and Commitment Order at 1, ECF No. 33; Statement of Offense at 1, ECF No. 11. Pursuant to the Mandatory Victims Restitution Act of 1996 ("MVRA"), the Judgment and Commitment Order provided that the defendant owed restitution in a total amount of "$14, 284, 652.78, to be paid jointly and severally with [defendant's] accomplices with credit to the defendant for amount already paid, " and that the defendant "shall pay the balance of any restitution owed at a rate of no less than $500.00 each month." Judgment and Commitment Order at 5-6. The defendant himself obtained only $150, 000 from the scheme, which he forfeited pursuant to his plea agreement prior to sentencing. See Consent Order of Forfeiture, ECF No. 6.

         Nearly eight years later, on March 4, 2016, the government filed an application for a writ of garnishment, seeking any property belonging to the defendant within the possession of Fidelity Investments. See Appl. Writ Continuing Non-Wage Garnishment, ECF No. 40. A 4Ol(k) retirement savings account with Fidelity Investments, having a value of at least $300, 000, was known to the sentencing Court at the time the Judgment and Commitment Order was entered. See Presentence Investigation Report, dated Feb 29, 2008, ¶¶ 64-64a, ECF No. 51. In a letter dated April 19, 2016, which was construed as a motion to quash, the defendant requested that the Court "rescind this collection effort and procedure" because "[t]here is no judg[]ment that [his] financial accounts be garnished." Def's Mot. Quash at 1. Prior to issuing its decision on the defendant's motion, the Court requested that the government, within two weeks, respond to the defendant's motion and "address the legal issues raised by" three circuit court cases: United States v. Hughes, 813 F.3d 1007 (D.C. Cir. 2016); United States v. Martinez, 812 F.3d 1200 (10th Cir. 2015); and United States v. Ekong, 518 F.3d 285 (5th Cir. 2007). See Min. Order, dated May 9, 2016 (citing Min. Order, dated May 5, 2016). In response, the government submitted a six-page memorandum opposing the defendant's motion, addressing the three appellate cases expressly identified by the Court in a single page. See Gov't's Mem. Opp'n Def.'s Mot. Quash Writ Garnishment ("Gov't's Opp'n Def.'s Mot"), ECF No. 49.

         Based on the defendant's motion, the government's opposition, the record in this matter, and the relevant authorities, including analysis of the three appellate cases referenced in the Court's prior Minute Order, the defendant's motion to quash was granted. See Order, dated July 11, 2016, ECF No. 54. The decision to grant the defendant's motion rests primarily upon two legal conclusions. First, although the MVRA contains "general enforcement provisions" mandating that restitution be ordered in the full amount of the victim's damages and permitting the government to enforce a restitution order using a variety of means, the statute also limits the government to the "specific terms of the restitution order, " including any "payment schedule imposed" by the Court, in seeking enforcement of such an order. See Villongco, 2016 WL 3747508, at *7-*8. Second, in this case, the government may collect only the amounts specified in the restitution order's payment schedule, notwithstanding both the Order's direction that payment shall be made "at a rate of no less than $500 each month" and the sentencing Court's oral pronouncement that restitution was "immediately payable, " because that language fails to manifest an intent to require the defendant to pay the full amount of restitution immediately. Id. at *8-*9.

         On August 8, 2016, the government timely filed a motion for reconsideration of the Court's decision, pursuant to Fed.R.Civ.P. 59(e). See Gov't's Mot. at 1. The defendant obtained pro bono counsel to represent him for purposes of the motion for reconsideration, see Def.'s Not. Entry Appearance & Mot. Extension Time, ECF No. 58, and filed his response on October 28, 2016, see Def.'s Resp. Gov't's Mot. Recons. ("Def.'s Resp."), ECF No. 61.[1] The government's motion for reconsideration is now ripe for consideration.


         "Unlike the Federal Rules of Civil Procedure, neither the Federal Rules of Criminal Procedure nor the Local Criminal Rules for this district provide for motions for reconsideration." United States v. Bagcho, No. CR 06-00334 (ESH), 2017 WL 27925, at *2 (D.D.C. Jan. 3, 2017) (citations omitted). Nevertheless, "the Supreme Court has recognized, in dicta, the utility of such motions, " and "at least two Circuits have explicitly held . . . that motions for reconsideration may properly be considered in criminal cases." United States v. Ferguson, 574 F.Supp.2d 111, 113 (D.D.C. 2008) (citing United States v. Dieter, 429 US. 6 (1976); United States v. Healy, 376 U.S. 75, 80 (1964); United States v. Fiorelli, 337 F.3d 282, 286 (3d Cir. 2003); United States v. Clark, 984 F.2d 31, 33-34 (2d Cir. 1993)). Accordingly, "judges in this district have assumed, without deciding, that they may consider motions for reconsideration in criminal cases." Bagcho, 2017 WL 27925, at *2 (citing United States v. Cooper, 947F.Supp.2d 108, 109 (D.D.C. 2013); United States v. Hong Vo, 978 F.Supp.2d 41, 47 (D.D.C. 2013); and United States v. Cabrera, 699F. Supp. 2d 35, 40 (D.D.C. 2010)).

         "Judges in this district have applied the standard contained in Rule 59(e) of the Federal Rules of Civil Procedure to motions for reconsideration of final orders in criminal cases." Hong Vo, 978 F.Supp.2d at 47 (distinguishing the legal standard applicable to motions for reconsideration concerning final orders from that concerning interlocutory orders) (citations omitted); see also Ferguson, 574 F.Supp.2d at 113 (based on the dicta in Dieter, 429 U.S. at 8, "the [c]ourt. . . proceed[ed] on the assumption that it may consider ... [a] motion for reconsideration" and applied the Fed.R.Civ.P. 59(e) standard of review). Notably, "[m]otions under FED. R. Civ. P. 59(e) are disfavored and relief from judgment is granted only when the moving party establishes extraordinary circumstances." Niedermeier v. Office of Baucus, 153 F.Supp.2d 23, 28 (D.D.C. 2001) (citation omitted). To prevail, the government "must demonstrate that (1) there has been an intervening change in controlling law; (2) there is new evidence; or (3) there is a need to correct clear error or prevent manifest injustice." Ferguson, 574 F.Supp.2d at 113 (citation omitted); see also Firestone v. Firestone, 76 F.3d 1205, 1208 (DC. Cir. 1996) ("A Rule 59(e) motion 'is discretionary' and need not be granted unless the district court finds that there is an 'intervening change of controlling law, the availability of new evidence, or the need to correct a clear error or prevent manifest injustice.'" (quoting Nat'l Trust v. Dep 't of State, 834 F.Supp. 453, 455 (D.D.C. 1993), off 'din part and rev'din part on other grounds sub nom. Sheridan Kalorama Historical Ass 'n v. Christopher, 49F.3d 750 (D.C. Cir. 1995))).

         "Absent a demonstrated intervening change of controlling law or new evidence, the law is well-settled that litigants may not use Rule 59(e) either to repeat unsuccessful arguments or to assert new but previously available arguments." Smith v. Lynch, 115 F.Supp.3d 5, 11 (D.D.C. 2015) (citing Exxon Shipping Co. v. Baker, 554 U.S. 471, 485 n.5 (2008) ("Rule 59(e) permits a court to alter or amend a judgment, but it 'may not be used to relitigate old matters, or to raise arguments or present evidence that could have been raised prior to the entry of judgment.'" (quoting 11 C. WRIGHT & A. MILLER, FEDERAL PRACTICE AND PROCEDURE § 2810.1, pp. 127-28 (2d ed. 1995) (footnotes omitted)))). Additionally, with regard to "clear error" under Rule 59(e), courts have imposed a "very exacting standard, " Bond v. U.S. Dep't of Justice, 286 F.R.D. 16, 22 (D.D.C. 2012), aff'd, No. 12-5296, 2013 WL 1187396 (D.C. Cir. Mar. 14, 2013) (quoting Lightfoot v. District of Columbia, 355 F.Supp.2d 414, 422 (D.D.C. 2005)). The "final judgment must be dead wrong to constitute clear error." Lardner v. FBI, 875 F.Supp.2d 49, 53 (D.D.C. 2012) (internal quotation marks omitted) (quoting Parts & Elec. Motors, Inc. v. Sterling Elec, Inc., 866 F.2d 228, 233 (7th Cir. 1988)). Similarly, "it is clear that 'manifest injustice' is an exceptionally narrow concept in the context of a Rule 59(e) motion, " Slate v. Am. Broad. Cos., 12 F.Supp.3d 30, 35 (D.D.C. 2013), and, thus, "must entail more than just a clear and certain prejudice to the moving party, but also a result that is fundamentally unfair in light of governing law." Id. at 35-36; cf. Associated Gen. Contractors of Cal, Inc. v. Cal. State. Council of Carpenters, 459U.S. 519, 536 (1983) ("[T]he judicial remedy cannot encompass every conceivable harm that can be traced to alleged wrongdoing.").


         The government does not assert any intervening change in controlling law, nor does it present any new evidence. See generally Gov't's Mem. Supp. Mot. Reconsideration of Mem. Opinion & Order Def's Mot. Quash Writ of Garnishment ("Gov't's Mem."), ECF No. 57-1. Accordingly, the motion for reconsideration can be granted only if the government has established the "need to correct a clear error or prevent manifest injustice." Firestone, 76 F.3d at 1208.

         In urging that reconsideration is warranted under this standard, the government has submitted a brief more than five times the length of its original opposition, raising two principal arguments regarding the scope of the government's powers under the MVRA and under the specific terms of the restitution order at issue to ...

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