THE U.S. ATTORNEY’S OFFICE FILES BRIEF IN 6TH. CIRCUIT SEEKING ACCOUNTING OF ANGELA FORDS HANDLING OF FEN PHEN MONIES. – Government seeks names of attorneys who shared legal fees with Angela Ford.

 

By LawReader Senior Editor Stan Billingsley – Feb. 17, 2012

 

The U.S. Attorneys’ office for the Eastern District, has been trying for close to a year to obtain an accounting by Angela Ford of the Fen Phen funds she had seized as a result of a Boone Circuit Court summary judgment which was subsequently overruled by the Ky. Court of Appeals (and is now on review to the Ky. Supreme Court).

 

Angela Ford has previously appealed the District Court Order by Federal District Judge Danny Reeves which ordered her to provide an accounting to the U.S. Government. In Dec. of 2011 Ford filed a second appeal and refused to disclose the names of the attorneys with whom she shared legal fees.

 

The following brief is a well written response to Ford’s appeal brief to the 6th. Circuit seeking to overrule Judge Reeves order for her to file an accounting with is court. The Government pointedly suggests the possibility that the entire contingent fee Ford paid to herself and others can be seized by the U.S. Government.

 

The Federal government in the Gallion –Cunningham criminal trial ordered restitution to the victims. Before the Federal Court could enforce that order Ford had already seized some $43 million dollars in Fen Phen assets from Gallion and Cunningham, and paid some $13 million to herself and “other lawyers”.

 

If the Federal restitution order is upheld, then the Fen Phen victims may be entitled to a $13 million refund from Ford and the attorneys she shared the contingent fee with.

 

 

CASE NO. 11-6187

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

 

UNITED STATES OF AMERICA PLAINTIFF-APPELLEE

V.

WILLIAM J. GALLION; SHIRLEY A. CUNNINGHAM, JR.; DEFENDANTS

MELBOURNE MILLS, JR.

and

ANGELA M. FORD APPELLANT

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF KENTUCKY

BRIEF OF THE PLAINTIFF-APPELLEE

UNITED STATES OF AMERICA

KERRY B. HARVEY

UNITED STATES ATTORNEY

CHARLES P.WISDOM JR.

APPELLATE CHIEF

BY: CHERYL D.MORGAN

WADE T. NAPIER

ASSISTANT UNITED STATES ATTORNEYS

260 W. VINE STREET, SUITE 300

LEXINGTON, KENTUCKY 40507-1612

(859) 233-2661

FAX (859) 233-2658

Cheryl.Morgan@usdoj.gov

Wade.Napier@usdoj.gov

COUNSEL FOR PLAINTIFF-APPELLEE

 

 

TABLE OF CONTENTS

Table of Authorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii

Statement Regarding Oral Argument . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v

Statement of the Issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Statement of the Case . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Summary of the Argument . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Argument . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Certificate of Service

Designation of District Court Documents

i

 

TABLE OF AUTHORITIES

I. Cases

Burak v. Scott,

29 F. Supp. 775 (D.D.C. 1939) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Dandridge v. Williams,

397 U.S. 471 (1970) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Falicia v. Advanced Tenant Servs, Inc.,

235 F.R.D. 5 (D.D.C. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Kokkonen v. Guardian Life Ins. Co. of America,

511 U.S. 375 (1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-7

Mohamed v. Kerr,

91 F.3d 1124 (8th Cir. 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13, 16

Pennsylvania Bureau of Corr. v. U.S. Marshals Serv.,

474 U.S. 34 (1985) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-9

Ramdass v. Angelone,

530 U.S. 156 (2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Sandpiper Vill. Condo. Ass’n Inc. v. Louisiana-Pacific Corp.,

428 F.3d 831 (9th Cir. 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Shelby Cnty. Health Care Corp. v. Majestic Star Casino,

581 F.3d 355 (6th Cir. 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

United States v. Beckner,

16 F. Supp. 2d 677 (M.D. La. 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

United States v. City of Detroit,

329 F.3d 515 (6th Cir. 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6, 7, 10-13

United States v. Davist,

481 F.3d 425 (6th Cir. 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

ii

United States v. Gallion,

No. 2:07-39-DCR, 2011 WL 4015586 (6th Cir. Sept. 9, 2011) . . . . . . . . . . . . 4, 7

United States v. Gordon,

393 F.3d 1044 (9th Cir. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

United States v. Int’l Bhd. of Teamsters,

266 F.3d 45 (2nd Cir. 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11, 12

United States v. Mills,

991 F.2d 609 (9th Cir. 1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

United States v. New York Tel. Co.,

434 U.S. 159 (1977) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6, 7, 10, 11, 13

United States v. Perry,

360 F.3d 519 (6th Cir. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-10

United States v. Pugh,

405 F.3d 390 (6th Cir. 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

United States v. Simmonds,

235 F.3d 826 (3d Cir. 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

United States v. Venneri,

782 F. Supp. 1091 (D. Md. 1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

United States v. Witham,

648 F.3d 40 (1st Cir. 2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5, 6, 9

United States v. Yielding,

657 F.3d 722 (8th Cir. 2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9-10

II. Statutes & Rules

18 U.S.C. § 3611 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6, 9

iii

18 U.S.C. § 3612 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6, 9

18 U.S.C. § 3612(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

18 U.S.C. § 3613 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6, 9

18 U.S.C. § 3613(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6, 9

18 U.S.C. § 3613(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

18 U.S.C. § 3613(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

18 U.S.C. § 3614 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6, 9

18 U.S.C. § 3615 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6, 9

18 U.S.C. § 3663A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

18 U.S.C. § 3663A(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

18 U.S.C. § 3664 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

18 U.S.C. § 3664(m)(1)(A)(i)(ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5, 9

18 U.S.C. § 3771 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

18 U.S.C. § 3771(a)(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

18 U.S.C. § 3771(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

18 U.S.C. § 3771(d)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

28 U.S.C. § 1651(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

28 U.S.C. § 3015(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

28 U.S.C. § 3202(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6, 9

FED. R. CIV.P. 69(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

iv

 

STATEMENT REGARDING ORAL ARGUMENT

The United States does not request oral argument.

v

 

 

STATEMENT OF THE ISSUE

Did the district court err in ordering a court-appointed crime victims’

advocate to provide the government with an accounting of funds that the advocate

received in a related state court action on behalf of victims?

 

STATEMENT OF THE CASE

Angela Ford appeals the district court’s orders requiring her to provide the

United States with a full and complete accounting of the funds she collected on

behalf of victims she represents in a related state court civil action against William

Gallion and Shirley Cunningham. [See R. 1308: Notice of Appeal; R. 1303:

Memorandum Opinion and Order; R. 1286: Motion to Alter Judgment; R. 1284:

Order.]

 

Gallion and Cunningham represented 440 individuals who obtained

a $200,450,000 settlement from the makers of the diet drug Fen-Phen. [R. 599:

Superseding Indictment.] On December 30, 2004, 407 of Gallion’s and

Cunningham’s clients hired Ford to file a civil action in state court against Gallion

and Cunningham for breach of the lawyers’ contractual, ethical, fiduciary, and

professional duties. [See R. 1283: Motion, Attachment 1.] In 2006, the state court

entered summary judgment and awarded the victims approximately $42,000,000 in

damages. [R. 1283: Motion at ¶¶ 1-2.] The defendants appealed. [See id.]

1

On June 14, 2007, a federal grand jury indicted Gallion and Cunningham for

using interstate wire transmissions in a scheme to defraud their clients. [R. 1:

Indictment; see R. 599: Superseding Indictment.] On August 16, 2007, the district

court appointed Ford to serve as an advocate for the victims of Gallion’s and

Cunningham’s crimes. [R. 54: Order.]

 

Thereafter, Ford obtained assets in partial satisfaction of the state court

judgment and made three distributions – in May 2008, February 2010, and

September 2010 – to her clients from the funds that she had collected. [R. 1268:

Motion.] The distributions were made pursuant to Ford’s contingency fee

arrangement with her clients. [Id.]

 

On April 4, 2009, Gallion and Cunningham were convicted in federal court

of defrauding their clients of a substantial portion of the $200,450,000 settlement.

[R. 820: Redacted Jury Verdict; R. 821: Redacted Jury Verdict.] On August 24,

2009, the district court sentenced Gallion to imprisonment for 300 months,

Cunningham to imprisonment for 240 months, and ordered Gallion and

Cunningham to pay $127,671,314.63 in restitution to 421 victims. [R. 971:

Amended Judgment at 2, 5; R. 972: Amended Judgment at 2, 5.]

 

On February 4, 2011, the state court of appeals reversed the $42,000,000

summary judgment, prompting the United States to request a complete accounting of all funds collected by Ford pursuant to the summary judgment, including monies “retained or distributed pursuant to fee agreements.” [R. 1283: Motion, (Emphasis added by LawReader throughout this brief.)

 

Attachment 1 (opinion), Attachment 2 (e-mail to Ford requesting a “complete

accounting of all funds. . . retained or distributed pursuant to fee agreements, or

otherwise held”), Attachment 4 (e-mail to Ford requesting, inter alia, a “complete

accounting of all funds. . . retained or distributed pursuant to fee agreements, or

otherwise held”), & Attachment 5 (letter to Ford requesting, with detailed

supporting law, “the status of funds collected pursuant to your contingent fee

agreements and funds not distributed to victims.”).] The district court granted the

United States’s motion and ordered Ford to provide a “full and complete

accounting” of all the funds, including the location of the funds, she had collected

in the state court case that had not been distributed to the victims. [R. 1284:

Order.]

 

Ford objected and moved the district court to alter, amend or vacate its order

to provide the accounting. [R. 1286: Motion to Alter Judgment.] Ford also filed

a motion to stay the district court’s order requiring her to submit the full and

complete accounting pending the resolution of her motion to alter or amend this

same order. [R. 1287: Motion.]

 

The district court denied Ford’s motion to stay, but permitted her to file the accounting in camera and under seal pending further orders. [R. 1288: Order.] On September 9, 2011, the court denied Ford’s motion to alter, amend or vacate and made Ford’s accounting available to the United States. [R. 1303: Memorandum Opinion and Order.] See United States v. Gallion,

No. 2:07-39-DCR, 2011 WL 4015586 (6th Cir. Sept. 9, 2011).

 

SUMMARY OF THE ARGUMENT

 

The district court did not abuse its discretion by ordering Ford, the court appointed crime victims’s advocate, to provide the United States with a full and complete accounting of the funds, which include her contingent legal fees, that she obtained pursuant to a reversed state court judgment. The district court had

jurisdiction under either the Mandatory Victims’ Restitution Act or the All Writs

Act to issue the order.

 

Ford erroneously argues that she could never become a judgment debtor.

Ford ignores the uncertainty of the state and federal court judgments, which are on appeal, and the legality of retaining legal fees paid by a client from a judgment that is subsequently reversed on appeal. Although the law of restitution generally will not require an attorney to repay legal fees paid by a client from a judgment that is subsequently reversed on appeal, restitution by the attorney is appropriate when such a payment is made, as here, pursuant to a contingent fee.

 

ARGUMENT

The Mandatory Victims’ Restitution Act (MVRA) requires a sentencing

court to award restitution to crime victims for property offenses involving fraud.

18 U.S.C. § 3663A(c)(1). The primary goal of the MVRA is to fully compensate

victims for their losses. United States v. Gordon, 393 F.3d 1044, 1053 (9th Cir.

2004) (citing United States v. Simmonds, 235 F.3d 826, 831 (3d Cir. 2000)).

 

A crime victim has “[t]he right to full and timely restitution as provided in law.”

Crime Victims’ Rights Act, 18 U.S.C. § 3771(a)(6). The United States must make

“best efforts to see that crime victims are notified of, and accorded,” this and other

enumerated rights. Id. § 3771(c)(1). The “crime victim or the crime victim’s

lawful representative, and the attorney for the Government may assert the

[victim’s] rights . . . .” Id. § 3771(d)(1). But the United States is “responsible for

the collection of unpaid restitution.” United States v. Witham, 648 F.3d 40, 45 (1st

Cir. 2011) (citing 18 U.S.C. § 3612(c)).

 

An order of restitution becomes a lien in favor of the United States on all property of the defendant at the time of entry of judgment. 18 U.S.C. § 3613(c); see United States v. Mills, 991 F.2d 609, 612 (9th Cir. 1993). The MVRA authorizes the United States to enforce an order of restitution in the same manner that it recovers fines, and “by all other available and reasonable means.” 18 U.S.C. § 3664(m)(1)(A)(i)(ii); Witham, 648 F.3d at 45

(citing 18 U.S.C. §§ 3611-3615). The MVRA also makes “‘all provisions’ of

§ 3613 ‘available to the United States for the enforcement of an order of

restitution.’” Witham, 648 F.3d at 45-46 (citing 18 U.S.C. § 3613(f)). And the

MVRA allows the United States to enforce a restitution order “in accordance with

the practices and procedures for the enforcement of a civil judgment under Federal

law or State law[,]” including the Federal Debt Collection Procedures Act

(FDCPA). Witham, 648 F.3d at 45-46 (citing 18 U.S.C. § 3613(a)) (internal

quotations omitted). The FDCPA authorizes the court to use the All Writs Act in

support of the FDCPA’s post-judgment remedies. 28 U.S.C. § 3202(a).

The All Writs Act provides the courts with the authority to issue and enforce

orders. “[T]he All Writs Act specifically authorizes a federal court ‘to issue such commands . . . as may be necessary or appropriate to effectuate and prevent the frustration of orders it has previously issued in exercise of jurisdiction otherwise obtained.’” United States v. City of Detroit, 329 F.3d 515, 522-23 (6th Cir. 2003) (citing United States v. New York Tel. Co., 434 U.S. 159, 174 (1977)). “The Supreme Court and all courts established by Act of Congress may issue all writs necessary or appropriate in aid of their respective jurisdictions and agreeable to the usages and principles of law.” The All Writs Act, 28 U.S.C. § 1651(a). The ancillary jurisdiction provided by the All Writs Act is proper “to enable a court to function successfully, that is, to manage its proceedings, vindicate its authority, and effectuate its decrees . . . .” Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375, 379-80 (1994).

 

And “[t]he All Writs Act permits courts to issue orders to nonparties . . . .” City of Detroit, 329 F.3d at 523. “The power conferred by the Act extends, under appropriate circumstances, to persons who, though not parties to the original action or engaged in wrongdoing, are in a position to frustrate the implementation of a court order or the proper administration of justice, and encompasses even those who have not taken any affirmative action to hinder justice.” New York Tel. Co., 434 U.S. at 174 (internal citations omitted); see also Sandpiper Vill. Condo. Ass’n Inc. v. Louisiana-Pacific Corp., 428 F.3d 831, 841 n.14 (9th Cir. 2005) (holding that Act provides district court with jurisdiction “to protect a prior judgment from threats by parties and nonparties alike”).

 

The district court ordered Ford to provide a “full and complete accounting”

of all the funds, including the location of the funds, she had collected in the state

court case that had not been distributed to the victims, and the court denied Ford’s

motion to alter, amend or vacate the order. [R. 1284: Order; R. 1286: Motion to

 

Alter Judgment; R. 1303: Memorandum Opinion and Order.] See Gallion, 2011

WL 4015586, at *1-6. The Court will review the district court’s initial assertion of

jurisdiction under the All Writs Act de novo. See United States v. Perry, 360 F.3d

519, 533 (6th Cir. 2004). The district court’s denial of Ford’s subsequent motion

to alter, amend or vacate is reviewable for abuse of discretion. See Shelby Cnty.

Health Care Corp. v. Majestic Star Casino, 581 F.3d 355, 375 (6th Cir. 2009).

A district court abuses its discretion when it applies an incorrect legal standard,

misapplies the correct legal standard, or relies upon clearly erroneous findings of

fact. United States v. Pugh, 405 F.3d 390, 397 (6th Cir. 2005).

 

Although the district court did not clarify the basis of its jurisdiction, stating only, assuming jurisdiction, that “the MVRA sets forth the exclusive procedures for enforcing a restitution order[,]” a “prevailing party may, of course, assert in a reviewing court any ground in support of his judgment, whether or not that ground was relied upon or even considered by the trial court.” Dandridge v. Williams, 397 U.S. 471, 476 n.6 (1970); see also United States v. Davist, 481 F.3d 425, 427 (6th Cir. 2007) (recognizing that Court “may affirm on any grounds supported by the record, even though different from the grounds relied on by the district court”). [See R. 1303:

Memorandum Opinion and Order at 6.]

The district court did not abuse its discretion by ordering Ford to provide the

United States with a full and complete accounting of the funds she obtained

pursuant to the reversed state court judgment. The district court had jurisdiction

under either the MVRA or the All Writs Act to issue the order. “The All Writs Act

is a residual source of authority to issue writs that are not otherwise covered by

statute. Where a statute specifically addresses the particular issue at hand, it is that

authority, and not the All Writs Act, that is controlling.” Pennsylvania Bureau of

Corr. v. U.S. Marshals Serv., 474 U.S. 34, 43 (1985); see Perry, 360 F.3d at 533

(citing Pennsylvania Bureau of Corr., 474 U.S. at 43). The MVRA authorizes the

United States to enforce an order of restitution in the same manner that it recovers

fines, and “by all other available and reasonable means.” 18 U.S.C.

§ 3664(m)(1)(A)(i)(ii); Witham, 648 F.3d at 45 (citing 18 U.S.C. §§ 3611-3615).

 

The MVRA specifically allows the United States to enforce a restitution order “in

accordance with the practices and procedures for the enforcement of a civil

judgment under Federal law or State law[,]” including the FDCPA. Witham, 648

F.3d at 45-46 (citing 18 U.S.C. § 3613(a)) (internal quotations omitted). And the

FDCPA authorizes the court to use the All Writs Act in support of the FDCPA’s

post-judgment remedies. 28 U.S.C. § 3202(a). Regardless, in the absence of

a controlling statute, the courts have found that the district court has jurisdiction

under the All Writs Act to enforce restitution orders. In United States v. Yielding,

657 F.3d 722, 726 (8th Cir. 2011), the court noted that the MVRA expanded the

Attorney General’s authority to enforce a sentencing court’s restitution order. The

court, also noting that a number of courts have upheld “as necessary and

appropriate in aid of this jurisdiction, orders issued under the All Writs Act

restraining a restitution debtor from diverting or concealing assets to avoid paying

restitution[,]” concluded that “a sentencing court has jurisdiction to enforce its

restitution order and may use the All Writs Act, when necessary and appropriate, to

prevent the restitution debtor from frustrating collection of the restitution debt.”

Id. at 727; see also United States v. Beckner, 16 F. Supp. 2d 677, 678-79 (M.D. La.

1998) (holding that court has jurisdiction under All Writs Act to require United

States to return restitution paid by defendant to non-federal victim when

defendant’s conviction set aside); United States v. Venneri, 782 F. Supp. 1091,

1094-95 (D. Md. 1991) (holding that court has jurisdiction under All Writs Act to

order putative crime victim to restore restitution). But the district court’s authority

under the All Writs Act is not unlimited. See Perry, 360 F.3d at 538 (holding that

district court does not have authority to vacate existing lien based on court’s right

to enforce MVRA orders under All Writs Act).

 

“In New York Telephone, the Supreme Court considered four major factors

for determining whether a writ issued to a nonparty under the All Writs Act was

within the district court’s discretion.” City of Detroit, 329 F.3d at 524. “[T]he

Court first examined the nonparty’s relationship to the controversy” and

“conclud[ed] that the phone company was not ‘a third party so far removed from

the underlying controversy that its assistance could not be permissibly

compelled.’” Id. at 524-25 (citing New York Tel. Co., 434 U.S. at 174). “A district

court may issue such a writ against any person with the ‘minimum contacts’ with the forum necessary to the court’s exercise of personal jurisdiction.” United States v. Int’l Bhd. of Teamsters, 266 F.3d 45, 50 (2nd Cir. 2001). “Second, the Court considered the burden that cooperation would impose on the nonparty.

 

Third, the court examined the nonparty’s interest in not providing assistance both from an ideological and financial perspective” and “conclud[ed] that because the telephone company had used pen registers in the past and because the FBI would compensate the company for its assistance, the company had no interest in not assisting.” City of Detroit, 329 F.3d at 525 (citing New York Tel. Co., 434 U.S. at 174-75).

 

“Lastly, the Court looked at the importance of the nonparty’s assistance to

fulfilling the goals of the order.” City of Detroit, 329 F.3d at 525 (citing New York

Tel. Co., 434 U.S. at 175).

 

Ford meets the New York Telephone test. Ford was not “so far removed

from the underlying controversy” that the court could not permissibly compel her

to provide an accounting of the funds that she had obtained in the state action. See

City of Detroit, 329 F.3d at 524-25 (citing New York Tel. Co., 434 U.S. at 174).

 

Indeed, Ford was “an active participant” in the case. [R. 1303: Memorandum

Opinion and Order at 6.] The district court appointed Ford to be the crime victims’

advocate pursuant to the Crime Victims’ Rights Act (CVRA), and she filed

numerous pleadings in the federal criminal case on behalf of the crime victims.

[Id. at 6; see R. 58: Response; R. 182: Motion to Quash; R. 580: Response;

R. 723: Motion in Limine; R. 726: Motion in Limine; R. 875: Motion for Order;

R. 893: Notice of Filing; R. 896: Reply; R. 920: Reply; R. 926: Motion for

Leave to Appeal; R. 929: Motion for Leave to File; R. 935: Response; R. 962:

Notice; R. 1224: Response; R. 1249: Motion for Victim Rights; R. 1260: Notice

of Filing; R. 1270: Response; R. 1285: Notice; R. 1286: Motion to Alter

Judgment; R. 1287: Motion; R. 1289: Sealed Document; R. 1290: Notice of

Filing.] Thus, Ford has the requisite “‘minimum contacts’ with the forum

necessary to the court’s exercise of personal jurisdiction.” See Int’l Bhd. of

Teamsters, 266 F.3d at 50.

 

Second, Ford should not be unduly burdened by the court’s order. The

information that Ford filed with the district court indicates that Ford has ready access to the information that the government seeks. [See R. 1286: Motion to Alter Judgment, Attachment 6; R. 1289: Sealed Document at 1-2.]

 

Third, any interest that Ford has in not complying with the court’s order is

secondary to the victims’ right to restitution. City of Detroit, 329 F.3d at 525

(citing New York Tel. Co., 434 U.S. at 174-75). Ford’s right is contingent on the

victims’ right to restitution. See Mohamed v. Kerr, 91 F.3d 1124, 1126-27 (8th

Cir. 1996). And to the extent that Ford’s personal privacy interests are implicated,

see Ford’s Brief at 24-25, she can redact any unrelated account information. The

United States did not seek “unfettered” access to Ford’s “personal assets” as Ford

claims. See Ford’s Brief at 24-25. The government’s request, consistent with the

district court’s order, sought only an accounting of undistributed funds that Ford

collected in the state court case. [See R. 1283: Motion; R. 1284: Order; R. 1303:

Memorandum Opinion and Order.]

 

Lastly, Ford’s assistance is important to fulfilling the primary goal of the

MVRA to fully compensate victims for their losses. City of Detroit, 329 F.3d at

525 (citing New York Tel. Co., 434 U.S. at 175). The MVRA and the Crime

Victims’ Rights Act require the United States to protect the crime victims’ rights.

Morever, no matter how unlikely Ford believes a final reversal of the state court

action, or an overturning of the federal court conviction, may ultimately be, the

United States is required to protect any funds, including contingent fees held by

Ford, that could revert to Gallion and Cunningham. In the event Ford is required

to restore restitution, the United States will need to know the identity, location, and

amount of the funds in order to enforce its right as the lien holder on behalf of the

victims. Indeed, Ford, as the court-appointed crime victims’ advocate, and as she

has acknowledged, has an affirmative duty to protect the victims’ rights. See 18

U.S.C. § 3771; 18 U.S.C. §§ 3663A, 3664. [See R. 875: Motion for Order at 1.]

Ford’s claim that the district court lacked jurisdiction to order her to provide

an accounting because “the MVRA . . . does not provide a statutory basis for

compelling discovery of Ford’s personal funds that cannot become the property of

Gallion and Cunningham[,]” see Ford’s Brief at 14-15, fails. As shown, the district

court’s order for an accounting of undistributed, yet collected, funds is enforceable

under either the MVRA or the All Writs Act. Moreover, Ford erroneously assumes

that she could never be a legitimate debtor. See Ford’s Brief at 15-17. The

possibility that a claim could be made by Gallion and Cunningham to the

undistributed funds collected by Ford has not been foreclosed by the state or

federal proceedings. And there is a possibility that these funds could become

subject to collection efforts by the United States. Not only could the state civil

case be overturned, but as indicated by the district court, even if the issue of

judgment priority is ignored, the argument that the federal restitution judgment

prevents a return of judgment funds collected by Ford ignores the possibility,

however remote, that Gallion’s and Cunningham’s federal criminal conviction

could be overturned. [R. 1303: Memorandum Opinion and Order.]

 

As the district court noted, “the fact remains that the judgment may eventually be reversed.

 

Moreover, this argument ignores the possibility that the reversal affected the

priority of the judgments, which would entitle the United States to the accounting regardless of the final outcome of the state case.” [Id. at 4.]

 

Notwithstanding her arguments, Ford has acknowledged the uncertainty of the state court judgment.

[R. 1300: Notice of Filing, Attachment 3 (transcript of Dec. 6, 2010, hearing) at

18-19.] And she recognizes that her argument rests on the validity of Gallion’s and

Cunningham’s convictions. See Ford’s Brief at 19 (“The Supremacy Clause

ensures that as long as the defendants’ convictions stand, no state court could order

Ford or the other victims to return the Gallion and Cunningham funds that have

been determined to be part of the defendants’ [federal] restitution obligation.”).

Gallion and Cunningham have appealed their convictions and sentences and until

those appeals are final, an uncertainty remains. [See R. 957: Notice of Appeal;

R. 970: Notice of Appeal.] See, e.g., Ramdass v. Angelone, 530 U.S. 156, 176

(2000) (noting “that the availability of postjudgment relief in the trial court or on

appeal renders uncertain the finality and reliability of even a judgment in the trial

court”).

 

Thus, Ford’s reliance upon the absolute certainty of the federal restitution

judgment is misplaced and potentially detrimental for the victims.

Ford’s argument that the attorney fees that she collected in the state court

can never become the property of Gallion and Cunningham because those fees

offset the amount of restitution that Gallion and Cunningham owe in the federal

case, see Ford’s Brief at 17-19, and her related claims that the federal court order

of restitution nullifies any state court order requiring her to restore restitution, see

Ford’s Brief at 19-21, and that the government’s request for an accounting was not

“reasonable” under the MVRA because “the funds in question could never become

the property of . . . Gallion and Cunningham,” see Ford’s Brief at 21-22, ignore the

uncertainty of the state and federal court judgments and the legality of retaining

legal fees paid by a client from a judgment that is subsequently reversed on appeal.

 

“Although . . . the law of restitution generally will not require an attorney to repay

legal fees paid by a client from a judgment that is subsequently reversed on appeal,

restitution by the attorney is appropriate where such a payment is made pursuant to a contingent fee.” Mohamed, 91 F.3d at 1126. An attorney has no greater right than the validity of the restitution award. See id. at 1126-27.

 

Ford also erroneously claims that the government’s request for an

accounting was not an “available” means of enforcing a restitution order under the

MVRA because “[n]o court has held that this provision allows the government to

subject a non-party to discovery by merely filing a motion.” See Ford’s Brief at

22.

 

The government, by statute, is entitled to “discovery regarding the financial

condition of the debtor in the manner in which discovery is authorized by the

Federal Rules of Civil Procedure in an action on a claim for a debt.” 28 U.S.C.

§ 3015(a).

 

Under Rule 69 of those rules, a “judgment creditor . . . may obtain

discovery from any person[,] including the judgment debtor . . . .” FED. R. CIV. P. 69(a)(2) (emphasis added). Ford’s reliance on Burak v. Scott, 29 F. Supp. 775, 776 (D.D.C. 1939), see Ford’s Brief at 23, is misplaced. As that court has since

recognized, Burak is not applicable when there is a close relationship between the nonparty and the judgment debtor and the judgment creditor is seeking business records rather than personal records. See Falicia v. Advanced Tenant Servs, Inc.,

235 F.R.D. 5, 8-9 (D.D.C. 2006).

 

CONCLUSION

 

The district court should be affirmed.

Respectfully submitted,

KERRY B. HARVEY

UNITED STATES ATTORNEY

CHARLES P.WISDOM JR.

APPELLATE CHIEF

By: s/ Cheryl D. Morgan

Wade T. Napier

Assistant United States Attorneys

260 W. Vine Street, Suite 300

Lexington, Kentucky 40507-1612

(859) 233-2661

FAX (859) 233-2658

Cheryl.Morgan@usdoj.gov

Wade.Napier@usdoj.gov

18

Case: 11-6187 Document: 006111215214 Filed: 02/14/2012 Page: 24

 

CERTIFICATE OF SERVICE

On February 14, 2012, I electronically filed this brief through the ECF

system, which will send the notice of docket activity to:

R. Kenyon Meyer

Stephen J. Mattingly

Attorneys for Angela Ford

s/ Cheryl D. Morgan

Assistant United States Attorney

Case: 11-6187 Document: 006111215214 Filed: 02/14/2012 Page: 25

 

APPELLEE’S DESIGNATION OF DISTRICT COURT DOCUMENTS

Record Entry Description of Document

1 Indictment

54 Order

58 Response

182 Motion to Quash

580 Response

599 Superseding Indictment

723 Motion in Limine

726 Motion in Limine

820 Redacted Jury Verdict

821 Redacted Jury Verdict

875 Motion for Order

893 Notice of Filing

896 Reply

920 Reply

926 Motion for Leave to Appeal

929 Motion for Leave to File

935 Response

957 Notice of Appeal

962 Notice

970 Notice of Appeal

971 Amended Judgment

972 Amended Judgment

1224 Response

Case: 11-6187 Document: 006111215214 Filed: 02/14/2012 Page: 26

1249 Motion for Victims Rights

1260 Notice of Filing

1268 Motion

1270 Response

1283 Motion

1284 Order

1285 Notice

1286 Motion to Alter Judgment

1287 Motion

1288 Order

1289 Sealed Document

1290 Notice of Filing

1300 Notice of Filing

1303 Memorandum Opinion and Order

1308 Notice of Appeal

 

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