FILED MAY 27 2015 1 ORDERED PUBLISHED SUSAN M. SPRAUL, CLERK 2 U.S. BKCY. APP. PANEL OF THE NINTH CIRCUIT
3 UNITED STATES BANKRUPTCY APPELLATE PANEL 4 OF THE NINTH CIRCUIT 5 6 In re: ) BAP No. NV-14-1482-JuKuPa ) 7 DEBORAH LYNN PARTIDA, ) Bk. No. 2:13-bk-11710-LED ) 8 Debtor. ) ______________________________) 9 ) DEBORAH LYNN PARTIDA, ) 10 ) Appellant, ) 11 ) v. ) O P I N I O N 12 ) UNITED STATES, DEPARTMENT OF ) 13 JUSTICE, ) ) 14 Appellee. ) ______________________________) 15 16 Argued and Submitted on May 14, 2015 at Sacramento, California 17 18 Filed - May 27, 2015 19 Appeal from the United States Bankruptcy Court 20 for the District of Nevada 21 Honorable Laurel Elizabeth Davis, Bankruptcy Judge, Presiding 22 ________________________ 23 Appearances: Christopher P. Burke argued for appellant Deborah L. Partida; Roger W. Wenthe argued for appellee 24 United States. ________________________ 25 26 Before: JURY, KURTZ, and PAPPAS, Bankruptcy Judges. 27 28 1 JURY, Bankruptcy Judge: 2 3 This appeal arises from the bankruptcy court’s order 4 denying the chapter 131 debtor’s motion for contempt for 5 violation of the automatic stay. We conclude as a matter of law 6 that the enforcement provision of the Mandatory Victims 7 Restitution Act overrides the operation of the automatic stay 8 under § 362(a) and in so doing, authorizes the enforcement of 9 criminal restitution obligations against debtor and property of 10 the bankruptcy estate. We AFFIRM. 11 I. FACTS 12 No facts are in dispute. Before filing bankruptcy, Deborah 13 L. Partida (Debtor) was convicted of embezzlement and theft of 14 labor union assets. A criminal judgment was entered, sentencing 15 Debtor to serve eighteen (18) months in federal prison and to 16 pay criminal restitution penalties in the amount of $193,337.33. 17 As of March 5, 2013, when Debtor filed this chapter 13 case, 18 Debtor satisfied her term of incarceration but had not paid her 19 restitution obligation. Debtor listed the restitution 20 obligation in her schedules and the United States Department of 21 Justice (the Government) received notice of the bankruptcy 22 filing. Debtor’s chapter 13 plan was confirmed on March 6, 23 2014. 24 After Debtor received a notice of intent to offset and an 25 26 1 Unless otherwise indicated, all chapter and section 27 references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, and “Rule” references are to the Federal Rules of Bankruptcy 28 Procedure.
-2- 1 “Overdue Debtor Statement,” the Government garnished $272.47 2 from Debtor’s pension and $467.85 from her retirement benefits 3 on March 1, 2014. Debtor then filed a motion for contempt for 4 violation of the automatic stay against the Government in 5 bankruptcy court. On July 29, 2014, the bankruptcy court heard 6 oral arguments on the matter. On September 8, 2014, in an oral 7 ruling, the bankruptcy court denied the motion for contempt on 8 the ground that the Government’s actions were excepted from the 9 automatic stay under § 362(b)(1). The order denying Debtor’s 10 motion was entered on September 22, 2014, and Debtor filed a 11 timely notice of appeal. 12 II. JURISDICTION 13 The bankruptcy court had jurisdiction over this proceeding 14 under 28 U.S.C. § 157(b)(2)(G). We have jurisdiction under 28 15 U.S.C. § 158. 16 III. ISSUE 17 1. Whether the enforcement provision of the Mandatory Victims 18 Restitution Act overrides the operation of § 362(a) as to 19 the enforcement of criminal restitution orders; and 20 2. Whether the post-conviction enforcement of criminal 21 restitution orders is excepted from the automatic stay 22 under § 362(b)(1). 23 IV. STANDARD OF REVIEW 24 Questions of statutory interpretation are reviewed de novo. 25 United States v. Youssef, 547 F.3d 1090, 1093 (9th Cir. 2008). 26 We may affirm on any ground supported by the record. 27 Siriani v. Nw. Nat’l Ins. Co. (In re Siriani), 967 F.2d 302, 304 28 (9th Cir. 1992).
-3- 1 V. DISCUSSION 2 A. Notwithstanding the automatic stay under § 362(a), the 3 Mandatory Victims Restitution Act authorizes the 4 enforcement of criminal restitution orders against 5 Debtor and property of the bankruptcy estate. 6 Although the bankruptcy court based its decision on the 7 exception to the automatic stay provided by § 362(b)(1), the 8 significant threshold issue is whether the operation of the 9 automatic stay under § 362(a) is superseded by the subsequent 10 enactment of the Mandatory Victims Restitution Act (the MVRA) as 11 to the enforcement of restitution orders against Debtor and 12 property of the bankruptcy estate. 13 Section 362(a) details the various stays triggered upon a 14 bankruptcy filing. Subsection (2) provides that entities are 15 stayed from the enforcement of a prepetition judgment “against 16 the debtor or against property of the estate,” while subsection 17 (3) stays “any act to obtain possession of property of the 18 estate or of property from the estate or to exercise control 19 over property of the estate.” These two subsections of § 362(a) 20 were enacted as part of the Bankruptcy Act of 1978. 21 In direct conflict, the 1996 enactment of the MVRA provides 22 in relevant part that “[n]otwithstanding any other Federal law 23 (including section 207 of the Social Security Act)” the United 24 States may enforce a judgment imposing criminal fines “against 25 all property or rights to property of the person fined.” 18 26 U.S.C. § 3613(a), made applicable to criminal restitution awards 27 by 18 U.S.C. §§ 3664(m)(1)(A) and 3613(f). Debtor argued to the 28 bankruptcy court and reiterates here that the automatic stay
-4- 1 provided in § 362(a) trumps the MVRA. We disagree. 2 To answer whether Congress intended the MVRA to override 3 the effect of § 362(a), our analysis must start with the plain 4 language of the statute. Children’s Hosp. & Health Ctr. v. 5 Belshe, 188 F.3d 1090, 1096 (9th Cir. 1999). The Ninth Circuit 6 held that inclusion of the “all property or rights to property” 7 phrase in the enforcement provision of the MVRA clearly 8 articulates Congress’ intent to make all of a defendant’s assets 9 available to restitution orders. United States v. Novak, 476 10 F.3d 1041, 1046 (9th Cir. 2007) (en banc). 11 In Novak, the broad reach of the MVRA conflicted with the 12 preceding anti-alienation provision of ERISA. Id. In order to 13 square the two statutes, the Ninth Circuit found the MVRA 14 statutory language provided “guidance on how to resolve [the 15 statutory conflict], by specifying that all property is covered 16 ‘[n]otwithstanding any other Federal law.’” Id. (citing 18 17 U.S.C. § 3613(a)). The use of a “notwithstanding” clause 18 connotes an intention to supersede preceding conflicting 19 statutory provisions. Id. (citing Cisneros v. Alpine Ridge 20 Grp., 508 U.S. 10, 18 (1993).
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FILED MAY 27 2015 1 ORDERED PUBLISHED SUSAN M. SPRAUL, CLERK 2 U.S. BKCY. APP. PANEL OF THE NINTH CIRCUIT
3 UNITED STATES BANKRUPTCY APPELLATE PANEL 4 OF THE NINTH CIRCUIT 5 6 In re: ) BAP No. NV-14-1482-JuKuPa ) 7 DEBORAH LYNN PARTIDA, ) Bk. No. 2:13-bk-11710-LED ) 8 Debtor. ) ______________________________) 9 ) DEBORAH LYNN PARTIDA, ) 10 ) Appellant, ) 11 ) v. ) O P I N I O N 12 ) UNITED STATES, DEPARTMENT OF ) 13 JUSTICE, ) ) 14 Appellee. ) ______________________________) 15 16 Argued and Submitted on May 14, 2015 at Sacramento, California 17 18 Filed - May 27, 2015 19 Appeal from the United States Bankruptcy Court 20 for the District of Nevada 21 Honorable Laurel Elizabeth Davis, Bankruptcy Judge, Presiding 22 ________________________ 23 Appearances: Christopher P. Burke argued for appellant Deborah L. Partida; Roger W. Wenthe argued for appellee 24 United States. ________________________ 25 26 Before: JURY, KURTZ, and PAPPAS, Bankruptcy Judges. 27 28 1 JURY, Bankruptcy Judge: 2 3 This appeal arises from the bankruptcy court’s order 4 denying the chapter 131 debtor’s motion for contempt for 5 violation of the automatic stay. We conclude as a matter of law 6 that the enforcement provision of the Mandatory Victims 7 Restitution Act overrides the operation of the automatic stay 8 under § 362(a) and in so doing, authorizes the enforcement of 9 criminal restitution obligations against debtor and property of 10 the bankruptcy estate. We AFFIRM. 11 I. FACTS 12 No facts are in dispute. Before filing bankruptcy, Deborah 13 L. Partida (Debtor) was convicted of embezzlement and theft of 14 labor union assets. A criminal judgment was entered, sentencing 15 Debtor to serve eighteen (18) months in federal prison and to 16 pay criminal restitution penalties in the amount of $193,337.33. 17 As of March 5, 2013, when Debtor filed this chapter 13 case, 18 Debtor satisfied her term of incarceration but had not paid her 19 restitution obligation. Debtor listed the restitution 20 obligation in her schedules and the United States Department of 21 Justice (the Government) received notice of the bankruptcy 22 filing. Debtor’s chapter 13 plan was confirmed on March 6, 23 2014. 24 After Debtor received a notice of intent to offset and an 25 26 1 Unless otherwise indicated, all chapter and section 27 references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, and “Rule” references are to the Federal Rules of Bankruptcy 28 Procedure.
-2- 1 “Overdue Debtor Statement,” the Government garnished $272.47 2 from Debtor’s pension and $467.85 from her retirement benefits 3 on March 1, 2014. Debtor then filed a motion for contempt for 4 violation of the automatic stay against the Government in 5 bankruptcy court. On July 29, 2014, the bankruptcy court heard 6 oral arguments on the matter. On September 8, 2014, in an oral 7 ruling, the bankruptcy court denied the motion for contempt on 8 the ground that the Government’s actions were excepted from the 9 automatic stay under § 362(b)(1). The order denying Debtor’s 10 motion was entered on September 22, 2014, and Debtor filed a 11 timely notice of appeal. 12 II. JURISDICTION 13 The bankruptcy court had jurisdiction over this proceeding 14 under 28 U.S.C. § 157(b)(2)(G). We have jurisdiction under 28 15 U.S.C. § 158. 16 III. ISSUE 17 1. Whether the enforcement provision of the Mandatory Victims 18 Restitution Act overrides the operation of § 362(a) as to 19 the enforcement of criminal restitution orders; and 20 2. Whether the post-conviction enforcement of criminal 21 restitution orders is excepted from the automatic stay 22 under § 362(b)(1). 23 IV. STANDARD OF REVIEW 24 Questions of statutory interpretation are reviewed de novo. 25 United States v. Youssef, 547 F.3d 1090, 1093 (9th Cir. 2008). 26 We may affirm on any ground supported by the record. 27 Siriani v. Nw. Nat’l Ins. Co. (In re Siriani), 967 F.2d 302, 304 28 (9th Cir. 1992).
-3- 1 V. DISCUSSION 2 A. Notwithstanding the automatic stay under § 362(a), the 3 Mandatory Victims Restitution Act authorizes the 4 enforcement of criminal restitution orders against 5 Debtor and property of the bankruptcy estate. 6 Although the bankruptcy court based its decision on the 7 exception to the automatic stay provided by § 362(b)(1), the 8 significant threshold issue is whether the operation of the 9 automatic stay under § 362(a) is superseded by the subsequent 10 enactment of the Mandatory Victims Restitution Act (the MVRA) as 11 to the enforcement of restitution orders against Debtor and 12 property of the bankruptcy estate. 13 Section 362(a) details the various stays triggered upon a 14 bankruptcy filing. Subsection (2) provides that entities are 15 stayed from the enforcement of a prepetition judgment “against 16 the debtor or against property of the estate,” while subsection 17 (3) stays “any act to obtain possession of property of the 18 estate or of property from the estate or to exercise control 19 over property of the estate.” These two subsections of § 362(a) 20 were enacted as part of the Bankruptcy Act of 1978. 21 In direct conflict, the 1996 enactment of the MVRA provides 22 in relevant part that “[n]otwithstanding any other Federal law 23 (including section 207 of the Social Security Act)” the United 24 States may enforce a judgment imposing criminal fines “against 25 all property or rights to property of the person fined.” 18 26 U.S.C. § 3613(a), made applicable to criminal restitution awards 27 by 18 U.S.C. §§ 3664(m)(1)(A) and 3613(f). Debtor argued to the 28 bankruptcy court and reiterates here that the automatic stay
-4- 1 provided in § 362(a) trumps the MVRA. We disagree. 2 To answer whether Congress intended the MVRA to override 3 the effect of § 362(a), our analysis must start with the plain 4 language of the statute. Children’s Hosp. & Health Ctr. v. 5 Belshe, 188 F.3d 1090, 1096 (9th Cir. 1999). The Ninth Circuit 6 held that inclusion of the “all property or rights to property” 7 phrase in the enforcement provision of the MVRA clearly 8 articulates Congress’ intent to make all of a defendant’s assets 9 available to restitution orders. United States v. Novak, 476 10 F.3d 1041, 1046 (9th Cir. 2007) (en banc). 11 In Novak, the broad reach of the MVRA conflicted with the 12 preceding anti-alienation provision of ERISA. Id. In order to 13 square the two statutes, the Ninth Circuit found the MVRA 14 statutory language provided “guidance on how to resolve [the 15 statutory conflict], by specifying that all property is covered 16 ‘[n]otwithstanding any other Federal law.’” Id. (citing 18 17 U.S.C. § 3613(a)). The use of a “notwithstanding” clause 18 connotes an intention to supersede preceding conflicting 19 statutory provisions. Id. (citing Cisneros v. Alpine Ridge 20 Grp., 508 U.S. 10, 18 (1993). However, the full reach of the 21 “notwithstanding” language is determined “by taking into account 22 the whole of the statutory context in which it appears.” Id.; 23 Consejo de Desarrollo Economico de Mexicali, A.C. v. United 24 States, 482 F.3d 1157, 1168 (9th Cir. 2007). 25 In finding that the structure of the MVRA expressed a 26 general intention to override federal anti-alienation 27 provisions, the Ninth Circuit noted that the MVRA enforcement 28 provision’s specific inclusion of § 207 of the Social Security
-5- 1 Act served to give full effect to the “notwithstanding clause.” 2 Novak, 476 F.3d at 1047. Section 207 of the Social Security Act 3 protects Social Security benefits from debt collection actions 4 and “the operation of any bankruptcy or insolvency law”; no 5 other provision may be construed to “limit, supersede, or 6 otherwise modify the provisions of this section except to the 7 extent that it does so by express reference to this section.” 8 42 U.S.C. § 407. Cognizant of this, Congress clearly intended 9 the reach of the “notwithstanding” clause of the MVRA 10 enforcement provision to include any conflicting statutory 11 provisions, even making express reference where explicitly 12 required. Novak, 476 F.3d at 1047. It follows that there was 13 no need to specify other statutes because the sweeping breadth 14 of “all property or rights to property of the person fined” 15 taken together with the wide reach of “[n]otwithstanding any 16 other Federal law” was an unambiguous statement that the MVRA 17 enforcement provision overrides all conflicting federal 18 statutes. Id. at 1047-48. 19 By allowing restitution obligations to be enforced against 20 Social Security benefits, Congress prioritizes the enforcement 21 of restitution orders by making available moneys traditionally 22 protected from creditors in bankruptcy. The rationale then 23 follows that the MVRA authorizes the Government to reach 24 Debtor’s sources of income regardless of her bankruptcy and the 25 automatic stay. 26 Debtor makes two arguments in support of § 362(a) trumping 27 the MVRA: first, in not adding the MVRA as an exception under 28 § 362(b) as part of the 2005 BAPCPA amendments, Congress
-6- 1 implicitly expressed an intent that the MVRA would not override 2 the operation of the automatic stay; and second, the 2005 BAPCPA 3 amendments to certain subsections of § 362 reenacted all of 4 § 362(a) such that § 362(a) should be characterized as being 5 enacted after the MVRA. These arguments are not compelling. 6 First, the broad sweeping language of the MVRA enforcement 7 provision already accomplished an effective override of 8 § 362(a). As such the addition of the MVRA as an exception to 9 the stay under § 362(b) would be superfluous. Second, the 10 concept that an amendment to one part of a broad, multi-faceted 11 statute would make the entire statute deemed enacted on the 12 amendment date is supported by neither case law nor statutory 13 interpretation. The relevant parts of § 362(a), subsections (2) 14 and (3), were not amended. The MVRA was clearly adopted after 15 them and its enforcement provision was intended to override “any 16 other Federal law.” 18 U.S.C. § 3613(a). 17 Accordingly, by garnishing Debtor’s retirement and pension 18 the Government did not violate the automatic stay. Moreover, 19 because the MVRA enforcement provision precludes the application 20 of § 362(a) in this case, we need not decide whether § 362(b)(1) 21 provides an exception to the stay in this case. 22 VI. CONCLUSION 23 For this reason, we AFFIRM the bankruptcy court’s denial of 24 the motion for contempt. 25 26 27 28
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