United States v. Ellen Swenson ( 2020 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, No. 18-30215
Plaintiff-Appellee,
D.C. No.
v. 1:13-cr-00091-
BLW-1
ELLEN SUZANN SWENSON,
Claimant-Appellant,
OPINION
DOUGLAS L. SWENSON; MARK A.
ELLISON; JEREMY S. SWENSON;
DAVID D. SWENSON,
Defendants.
Appeal from the United States District Court
for the District of Idaho
B. Lynn Winmill, Chief District Judge, Presiding
Argued and Submitted February 3, 2020
Seattle, Washington
Filed August 19, 2020
Before: MILAN D. SMITH, JR., N. RANDY SMITH, and
DANIEL A. BRESS, Circuit Judges.
Opinion by Judge Milan D. Smith, Jr.;
Partial Concurrence and Partial Dissent by Judge
N.R. Smith
2 UNITED STATES V. SWENSON
SUMMARY *
Criminal Law / Garnishment
In a case in which the government sought to enforce an
order pursuant to the Mandatory Victims Restitution Act
(MVRA) that Douglas Swenson pay restitution following
his conviction for wire and securities fraud, the panel
(1) reversed the district court’s order denying his wife
Suzann Swenson’s objections to a writ of garnishment
sought by the government against a bank account that held
Mrs. Swenson’s Social Security benefits, (2) vacated the
district court’s order directing the disposition of the funds
pursuant to the writ of garnishment, and (3) remanded for
further proceedings.
The panel held that the district court’s disposition order
pursuant to 28 U.S.C. § 3205(c)(7) is a final, appealable
order that this court has jurisdiction to review.
The panel held that the district court erred by concluding
that Mrs. Swenson’s Social Security benefits were subject to
garnishment to satisfy her husband’s restitution order. The
panel rejected the government’s contention that the funds are
subject to garnishment because Swenson has a right to Mrs.
Swenson’s Social Security benefits pursuant to community
property principles of Idaho law. The panel noted that the
Idaho Court of Appeals has ruled that the statutory scheme
of the Social Security Act is in actual conflict with, and thus
preempts, the state community property law that would
otherwise dictate the delineation of property; and that Mrs.
*
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
UNITED STATES V. SWENSON 3
Swenson’s benefits are therefore not a divisible community
asset. The panel wrote that because Mrs. Swenson’s benefits
are not Mr. Swenson’s property, and Mr. Swenson has no
right to them, the MVRA does not override the Social
Security Act’s anti-alienation provision as to Mrs.
Swenson’s benefits, and thereby permit the government to
reach them.
Judge N.R. Smith concurred that this court has
jurisdiction, and otherwise dissented. He wrote that the
MVRA allows the government to garnish the account
because Mr. Swenson has an interest in the account under
Idaho’s community property law, a conclusion the majority
avoids by ignoring the fact that federal law does not preempt
Mr. Swenson’s interest or otherwise bar the government
from garnishing it.
4 UNITED STATES V. SWENSON
COUNSEL
Jed W. Manwaring (argued) and Christy A. Kaes, Evans
Keane LLP, Boise, Idaho, for Claimant-Appellant.
William M. Humphries (argued), Assistant United States
Attorney; Bart M. Davis, United States Attorney; United
States Attorney’s Office, Boise, Idaho; for Plaintiff-
Appellee.
OPINION
M. SMITH, Circuit Judge:
Following a conviction for wire and securities fraud,
Douglas Swenson (Mr. Swenson) was ordered to pay
restitution pursuant to the Mandatory Victims Restitution
Act (MVRA), 18 U.S.C. § 3663A. The government sought
to enforce the restitution order pursuant to the Federal Debt
Collection Procedures Act (FDCPA), 28 U.S.C. §§ 3001–
3308. To do so, the government applied for a post-judgment
writ of garnishment against a bank account (Account 5784)
that held the Social Security benefits of Mr. Swenson’s wife,
Suzann Swenson (Mrs. Swenson), on the theory that those
funds were subject to garnishment pursuant to community
property principles of Idaho state law. Mrs. Swenson
objected to the writ. See 28 U.S.C. § 3205. The district court
denied Mrs. Swenson’s objections, concluding that the
MVRA’s enforcement provision, 18 U.S.C. § 3613(a)
(Section 3613(a)), overrides the protections afforded Social
Security benefits under the Social Security Act (SSA),
42 U.S.C. § 407(a), so the benefits were garnishable
community property. Mrs. Swenson appealed. We hold that
we have jurisdiction, following the district court’s entry of
UNITED STATES V. SWENSON 5
an order directing the disposition of the funds at issue
pursuant to the writ of garnishment. We also reverse the
district court’s disposition order and hold that Mrs.
Swenson’s Social Security benefits are not subject to
garnishment pursuant to the MVRA in connection with her
husband’s criminal restitution order.
FACTUAL AND PROCEDURAL BACKGROUND
On April 14, 2014, a jury found Mr. Swenson guilty of
44 counts of securities fraud and 34 counts of wire fraud.
Mr. Swenson was sentenced to 240 months in prison and
ordered to pay over $180 million in restitution pursuant to
the MVRA. On July 9, 2018, the government initiated
garnishment proceedings pursuant the FDCPA, and moved
for enforcement against certain bank accounts belonging to
one or both of the Swensons. 1 See 28 U.S.C. § 3205. The
1
The MVRA allows the government to enforce restitution orders
pursuant to the FDCPA or individual state laws. See In re Partida,
862 F.3d 909, 913 (9th Cir. 2017). The FDCPA “sets forth the exclusive
civil procedures for the United States . . . to recover a judgment on . . .
an amount that is owing to the United States on account of . . .
restitution.” United States v. Mays, 430 F.3d 963, 965 (9th Cir. 2005)
(quoting 28 U.S.C. §§ 3001(a)(1), 3002(3)(B)). 28 U.S.C. § 3205 sets
forth the procedures for garnishment if the government elects to proceed
under the FDCPA. As relevant here, those procedures provide that the
government may initiate garnishment proceedings by filing an
application for a writ of garnishment before the district court. 28 U.S.C.
§ 3205(b)(1). If the government satisfies the statutory requirements for
a writ, the district court issues a writ of garnishment, and the government
serves copies on the judgment debtor and the garnishee. Id. §§ 3205(b),
(c)(3). The garnishee, who is the person or entity with custody, control
or possession of the property subject to the writ, is directed to file an
answer describing the property. Id. § 3205(c)(4). The government and
the judgment debtor then have 20 days to file written objections to the
answer and request a hearing. Id. § 3205(c)(5). Within five days of the
hearing, or if no hearing is requested, the district court is required to enter
6 UNITED STATES V. SWENSON
government filed an application for a writ of garnishment
that encompassed four accounts: three held in Mrs.
Swenson’s name, including Account 5784, and one joint
account. Following receipt of an objection from Mrs.
Swenson, the government released two of the accounts held
in her name. Neither Mr. nor Mrs. Swenson objected to the
writ with respect to the jointly held account. At issue in this
appeal is Account 5784 held at Idaho Independent Bank, the
remaining account belonging to Mrs. Swenson. Mrs.
Swenson objected to the writ of garnishment for Account
5784, claiming that the funds it held consisted solely of
deposits of her Social Security benefits, and therefore were
exempt from garnishment because those funds were not
community property under Idaho law.
The district court denied Mrs. Swenson’s objections to
the writ of garnishment regarding Account 5784, reasoning
that her Social Security benefits were community property
because Mrs. Swenson earned the right to receive them while
working during her marriage to Mr. Swenson. The court
recognized that those benefits would not be garnishable in
“an action brought to collect on a common debt,” but
concluded that pursuant to Section 3613(a), “the protection
afforded [S]ocial [S]ecurity payments against common
garnishment proceedings or the division of community
property in divorce proceedings, has no relevance in a
collection action under the MVRA.” The district court
concluded that because Section 3613(a) “specifically
provides that a judgment ordering restitution may be
a disposition order “directing the garnishee as to the disposition of the
judgment debtor’s nonexempt interest in” the property. Id. § 3205(c)(7).
The garnishment terminates if (1) the court issues an order quashing the
writ; (2) the property in the garnishee’s possession is exhausted; or
(3) the debt for which the writ was issued is satisfied. Id. § 3205(c)(10).
UNITED STATES V. SWENSON 7
enforced against ‘all property or rights to property’ of the
defendant,” and a spouse’s retirement and pension benefits
are community property, the funds in Account 5784 were
“presumed community property and subject to continued
garnishment.” The district court entered an order denying
Mrs. Swenson’s objections with respect to Account 5784,
and Mrs. Swenson filed a notice of appeal.
However, in light of the notice of appeal, the government
did not seek, and the district court did not immediately enter,
an order directing the disposition of the garnished funds
pursuant to the FDCPA. See 28 U.S.C. § 3205(c)(7)
(requiring a court to enter an order directing the garnishee to
dispose of the debtor’s nonexempt property within five days
of a hearing). Following oral argument in this appeal, the
parties stipulated to suspend the appeal to allow further
proceedings in the district court. Thereafter, and as relevant
here, the district court entered disposition orders as to the
two remaining accounts subject to the writ of garnishment,
including Account 5784. We granted the parties’ subsequent
stipulation to augment the record with the district court’s
latest orders, and we resume the appeal.
STANDARDS OF REVIEW
Whether this court has subject matter jurisdiction is a
question we review de novo. Chang v. United States,
327 F.3d 911, 922 (9th Cir. 2003). We likewise review de
novo decisions involving the interpretation of federal
statutes like the MVRA, cf. UFCW Local 1500 Pension
Fund v. Mayer, 895 F.3d 695, 698 (9th Cir. 2018), and
“questions of law regarding the application of restitution
statutes,” United States v. Berger, 574 F.3d 1202, 1204 (9th
Cir. 2009).
8 UNITED STATES V. SWENSON
ANALYSIS
I. Appellate Jurisdiction
We have jurisdiction over “appeals from all final
decisions of the district courts of the United States.”
28 U.S.C. § 1291. The government initially sought to
dismiss this case for lack of appellate jurisdiction,
contending that the district court’s order denying Mrs.
Swenson’s objections to the writ of garnishment was not a
final appealable order. However, after Mrs. Swenson filed
the notice of appeal, and during a temporary suspension of
this appeal, the district court entered disposition orders
pursuant to 28 U.S.C. § 3205(c)(7), directing the garnishee
bank to disburse the funds held in the two accounts subject
to the writ of garnishment, including Account 5784.
Following those further proceedings in the district court, we
are satisfied this case is properly before us.
Our caselaw does not conclusively resolve which post-
judgment orders entered pursuant to the FDCPA are final for
purposes of appeal. In United States v. Mays, 430 F.3d 963
(9th Cir. 2005), we concluded that a district court’s denial of
a motion to dismiss a writ of garnishment was a final
judgment where there were “no other matters before the
district court relating to [the defendant’s] criminal case.”
United States v. Mays, 430 F.3d 963, 965 (9th Cir. 2005).
That holding turned on the fact that the denial order resolved
all pending matters in the criminal case, including the post-
judgment garnishment proceedings. Id. On that basis, we
distinguished United States v. Moore, 878 F.2d 331 (9th Cir.
1989), where the appeal involved an interlocutory order
denying the defendant’s motion to quash a writ of
UNITED STATES V. SWENSON 9
garnishment. 2 Id. at 331. On its face, Mays seems to hold
that orders denying motions to dismiss a writ of garnishment,
or other orders akin thereto, including denials of a debtors’
objections to the writ, can be final, appealable orders.
However, upon closer investigation, the district court in
Mays had entered an “order of garnishment” after the
defendant filed a notice of appeal. Consistent with 28 U.S.C.
§ 3205(c)(7), that order directed the garnishee to pay to the
government the garnished funds. See Order of Garnishment,
United States v. Mays, No. 98-cr-03213-JM, (S.D. Cal.
Aug. 4, 2004), ECF No. 83. Although the notice of appeal
concerned the denial of the motion to dismiss the writ of
garnishment and we otherwise did not address the district
court’s disposition order in our decision, see Mays, 430 F.3d
at 965, we assumed jurisdiction only after entry of the
disposition order.
The Fifth and Seventh Circuits have held that disposition
orders directing the release of funds for garnishment under
the FDCPA are final, appealable orders. See United States
v. Branham, 690 F.3d 633, 635 (5th Cir. 2012); United States
v. Kollintzas, 501 F.3d 796, 799, 801–02 (7th Cir. 2007);
United States v. Minneman, 6 Fed. App’x 422, 424 (7th Cir.
Apr. 24, 2001) (“The disposition order concludes the
garnishment proceedings and therefore that order, and not
the order denying the debtor’s objections, is the final order
2
Moore is distinguishable for another reason—that case was
decided before passage of the FDCPA, when the government would have
had to follow state procedural laws to garnish property pursuant to a
restitution order. See United States v. Parker, 927 F.3d 374, 379 (5th
Cir. 2019). That case did not determine which post-judgment
garnishment orders issued under the FDCPA are final for purposes of
appeal. Id.
10 UNITED STATES V. SWENSON
from which a debtor should appeal.”); see also United States
v. Grigsby, 630 F. App’x 838, 841 (10th Cir. Oct. 29, 2015).
We agree with the reasoning of our sister circuits that
disposition orders directing release of the garnished funds
conclude garnishment writ proceedings. Pursuant to the
FDCPA, the garnished funds remain in the garnishee’s
possession unless and until the court orders those funds
disbursed in a disposition order. See 28 U.S.C. § 3205(c)(7).
The denial of a judgment debtor’s objections may not be
final for any number of reasons, including, for example, if a
judgment debtor files a motion for reconsideration. A
disposition order (or termination of the garnishment
otherwise, see id. § 3205(c)(10)) concludes litigation of the
writ on the merits and is thus a final judgment for purposes
of appeal.
To the extent Mays held that the denial of objections to a
writ of garnishment is a sufficiently final order for purposes
of appellate jurisdiction, there is reason to question that
precedent. The district court below therefore advisedly
entered § 3205(c)(7) disposition orders when questions
about our jurisdiction were raised. Those orders concluded
litigation of the post-judgment writ proceedings on the
merits and left nothing more for the district court to resolve
regarding Mrs. Swenson. Because the district court entered
these disposition orders, it is clear we have appellate
jurisdiction. Whether Mays would have allowed us to
assume jurisdiction based merely on the denial of Mrs.
Swenson’s objections to the writ is thus no longer an issue
here.
For the reasons we have given, the district court’s
§ 3205(c)(7) disposition order is a final, appealable order
that we have jurisdiction to review. Cato v. Fresno City,
220 F.3d 1073, 1074 (9th Cir. 2000) (holding that the court
UNITED STATES V. SWENSON 11
“can assume jurisdiction based on a prematurely filed notice
of appeal when ‘subsequent events can validate [the]
prematurely filed appeal’” (quoting Anderson v. Allstate Ins.
Co., 630 F.2d 677, 681 (9th Cir. 1980))). 3
II. Whether Account 5784 is Subject to Garnishment
under the MVRA
Mrs. Swenson asserts that the district court erred by
concluding her Social Security benefits were subject to
garnishment to satisfy her husband’s criminal restitution
order under the MVRA. We agree.
The “MVRA rests on the recognition that ‘[i]t is essential
that the criminal justice system recognize the impact that
crime has on the victim, and, to the extent possible, ensure
that [the] offender be held accountable to repay these costs.’”
United States v. Novak, 476 F.3d 1041, 1043 (9th Cir. 2007)
(en banc) (emphasis added) (quoting S. Rep. No. 104-179,
at 18 (1995)). To ensure that accountability, Section 3613(a)
consolidated and strengthened the procedures available to
the government for collecting unpaid restitution. In re
Partida, 862 F.3d 909, 913 (9th Cir. 2017) (citing S. Rep.
No. 104-179, at 12). The statute provides:
The United States may enforce a judgment
imposing a fine in accordance with the
3
Because we hold that the disposition orders concluded the
garnishment proceedings at issue and there were no further claims, we
conclude that a Rule 54(b) certification of the disposition order was not
required for this appeal. Cf. United States v. Gila Valley Irrigation Dist.,
859 F.3d 789, 798–99 (9th Cir. 2017) (concluding that no Rule 54(b)
certification was required for appeal from order denying application to
sever water rights when “no additional applications . . remain[ed]
pending”).
12 UNITED STATES V. SWENSON
practices and procedures for the enforcement
of a civil judgment under Federal law or State
law. Notwithstanding any other Federal law
(including section 207 of the Social Security
Act), a judgment imposing a fine may be
enforced against all property or rights to
property of the person fined[.]
18 U.S.C. § 3613(a).
We have recognized from the breadth of the statute’s text
Congress’s intent to broaden the government’s collection
powers to reach all of a defendant’s assets. See, e.g.,
Partida, 862 F.3d at 913 (“By providing that the government
‘may enforce a judgment imposing a fine in accordance with
the practices and procedures for the enforcement of a civil
judgment under Federal law,’ the MVRA was broadening,
rather than curtailing, the government’s collection
powers.”); Novak, 476 F.3d at 1046 (“By its use of the ‘all
property or rights to property’ language, . . . Congress has
made quite clear that the totality of defendants' assets will be
subject to restitution orders.” (citation omitted)).
To effectuate that intent, Section 3613(a) explicitly
overrides conflicting federal laws that would otherwise
prohibit collection of a defendant’s assets pursuant to a
restitution order, including the SSA’s anti-alienation
provision, 42 U.S.C. § 407(a). 4 Novak, 476 F.3d at 1046
4
Section 207 of the SSA mandates that “[t]he right of any person to
any future payment . . . shall not be transferable or assignable, at law or
in equity, and none of the moneys paid or payable or rights existing under
this subchapter shall be subject to execution, levy, attachment,
garnishment, or other legal process, or to the operation of any bankruptcy
or insolvency law.” 42 U.S.C. § 407(a). It further specifies that “[n]o
other provision of law . . . may be construed to limit, supersede, or
UNITED STATES V. SWENSON 13
(“The Supreme Court has indicated as a general proposition
that statutory ‘notwithstanding’ clauses broadly sweep aside
potentially conflicting laws.”). Interpreting Section 3613(a),
we previously concluded that “by making clear that the
‘notwithstanding’ clause ‘includes’ the one federal anti-
alienation provision that demands explicit statutory override
[42 U.S.C. § 407(a)], Congress manifested that § 3613(a)
means what it says—that it reaches ‘all property or rights to
property’ not excepted . . . including property otherwise
covered by federally mandated anti-alienation provisions.”
Id. at 1048 (citation omitted). Accordingly, both the text of
Section 3613(a) and our caselaw make clear that, in the event
of a conflict where the SSA’s anti-alienation provision
would otherwise protect a defendant’s Social Security
benefits from collection, Section 3613(a) empowers the
government to garnish those benefits.
However, the question here is not whether Mr.
Swenson’s Social Security benefits are garnishable pursuant
to the MVRA, but whether his wife’s are. For Mrs.
Swenson’s Social Security benefits to be garnishable, they
must be considered Mr. Swenson’s property, or Mr.
Swenson must have a right to those benefits. See id. at 1061
(“[A] necessary prerequisite to enforcement of a restitution
order under MVRA” is determining a defendant’s “property
or rights to property.”).
The government contends Mr. Swenson has a right to
Mrs. Swenson’s Social Security benefits pursuant to
community property principles of Idaho law. But the Idaho
Court of Appeals has ruled that the statutory scheme of the
SSA is in actual conflict with, and thus preempts, the state
otherwise modify the provisions of this section except to the extent that
it does so by express reference.” Id. § 407(b).
14 UNITED STATES V. SWENSON
community property law that would otherwise dictate the
delineation of property. See Sherry v. Sherry, 701 P.2d 265,
270 (Idaho Ct. App. 1985). Mrs. Swenson’s benefits
therefore, according to the Idaho Court of Appeals, “are not
a divisible community asset.” 5 Id. The government
advances no alternative theory to support its claim that Mrs.
Swenson’s benefits are her husband’s property.
Because Mr. Swenson’s “property or rights to property”
does not include Mrs. Swenson’s Social Security benefits,
there is no clash between the MVRA and the SSA’s anti-
alienation provision, as it pertains to the funds in Account
5
Our dissenting colleague contends that we must first look to state
law to determine a defendant’s property rights. But state law does not
control when federal law preempts state law. The dissent’s reliance on
authority involving the application of state community property laws that
are not preempted by federal law thus is unavailing. See, e.g., United
States v. Elashi, 789 F.3d 547, 552 (5th Cir. 2015) (discussing two
unpublished decisions in which the 5th Circuit applied state community
property law to determine ownership interests in real property and a bank
account not purporting to hold Social Security benefits). Likewise, the
cases the dissent cites to support the contention that “the Social Security
Act often looks to and relies on state law to determine whether an
individual has rights or access to Social Security benefits” are inapposite.
Those cases apply state law to determine parentage where a child claims
entitlement to child survivor benefits by virtue of the child’s relation to
a deceased parent. See Vernoff v. Astrue, 568 F.3d 1102, 1104–12 (9th
Cir. 2009) (considering whether state law treated the claimant as a child
in order to be eligible for child survivor benefits); Woodward v. Comm’r
of Soc. Sec., 760 N.E.2d 257 (Mass. 2002) (upon certification from the
federal district court, answering whether children “resulting from
posthumous reproduction may enjoy the inheritance rights of ‘issue’
under the Massachusetts intestacy statute”). Those cases have no
application here, where no party disputes that Mr. and Mrs. Swenson are
legally married.
UNITED STATES V. SWENSON 15
5784, for the notwithstanding clause to resolve. 6 See
Frank’s Landing Indian Cmty. v. Nat’l Indian Gaming
Comm’n, 918 F.3d 610, 619 (9th Cir. 2019) (“[T]he word
‘notwithstanding’ demonstrates ‘which provision prevails in
the event of a clash.’” (quoting NLRB v. SW Gen., Inc.,
137 S. Ct. 929, 939 (2017)). We do not doubt that if Mr.
Swenson’s Social Security benefits were at issue, Section
3613(a) would override the SSA’s anti-alienation provision
as to his benefits, and the government would be able to
garnish them. But because Mrs. Swenson’s benefits are not
Mr. Swenson’s property, and Mr. Swenson has no right to
them, the MVRA does not override the anti-alienation
provision as to Mrs. Swenson’s benefits, and thereby permit
the government to reach them.
The government contends that the MVRA sweeps aside
the SSA’s anti-alienation provision generally, without
regard to the owner of the Social Security benefits at issue,
and with it, the actual conflict between the SSA’s statutory
scheme and state community property law. According to the
government, in the absence of the SSA’s anti-alienation
provision, state community property law governs the
characterization of Mrs. Swenson’s Social Security benefits.
Applying the community property presumption under Idaho
law, Mrs. Swenson’s benefits “were earned and obtained
during marriage and are thus presumed community property
under Idaho law.” Thus, according to the government, Mrs.
Swenson’s Social Security benefits are part of the
6
In reaching this conclusion, we do not impermissibly “bypass[]
state law,” as the dissent contends, any more than the Idaho court in
Sherry did. Nothing in the MVRA or SSA mandates the application of
state law when a state court holds that federal law prevails. Just as in
Novak, where federal law affected the scope of the defendant’s property
rights, 476 F.3d at 1061, the SSA is relevant to the delineation of
property in this case.
16 UNITED STATES V. SWENSON
community estate, and they are subject to garnishment to
satisfy Mr. Swenson’s restitution order. We disagree.
The government’s interpretation would transform the
MVRA from a procedural mechanism by which the
government collects debts, to a statute that redefines
property rights. The government’s position would allow it,
in effect, to create a property right in assets that do not
belong to the defendant in any context but MVRA
garnishment proceedings, for the sole purpose of taking it
away. In other words, the government would be allowed to
garnish assets that the defendant would otherwise have no
right to, simply because the defendant is subject to a
restitution order. 7
Our decision in Novak counsels against this
interpretation. In that case, we held that the government
could immediately garnish the corpus of a retirement plan
governed by ERISA only to the extent the plan entitled the
defendant to demand lump sum payments, and only when
those benefits did not require spousal consent to become
payable. Novak, 476 F.3d at 1063 (“[B]ecause the
government’s right is to step into the defendant’s shoes, it
will not be able unilaterally to cash out a retirement plan
when ERISA requires that lump sum payments be made
payable only with spousal consent.”). If the retirement plan
did not provide for lump sum payments, the government
would have been able to obtain only “post-retirement
payments that otherwise would have gone to the defendant.”
7
Our dissenting colleague also adopts this position, conflating the
MVRA’s intent to reach all of a defendant’s assets in garnishment
proceedings, with a permission for the government to “expand the pool”
of a defendant’s property beyond that which the defendant would have a
right to any other legal proceeding. There is simply no support for the
latter contention.
UNITED STATES V. SWENSON 17
Id. Thus, we concluded that the government could pursue
only those assets the defendant was entitled to under the
relevant federal statute in the absence of a restitution order.
Put another way, the government was entitled to collect on
property only to the same extent the defendant had a right to
it.
Applying that principle here, the government steps into
Mr. Swenson’s shoes and is entitled to enforce the restitution
order against all of his property, but only to the extent Mr.
Swenson himself is entitled to that property. Irrespective of
the restitution order, Mr. Swenson would have no right to
Mrs. Swenson’s Social Security benefits because the SSA
preempts application of Idaho state law community property
principles. See Sherry, 701 P.2d at 270. As a result, the
government is likewise prevented from obtaining those
benefits.
Because Mr. Swenson had no right to Mrs. Swenson’s
Social Security benefits, we conclude the district court erred
by finding that those benefits were subject to garnishment
pursuant to the MVRA. We REVERSE the order denying
Mrs. Swenson’s objections to the writ of garnishment,
VACATE the disposition order pertaining to Account 5784
and REMAND for further proceedings consistent with this
opinion.
18 UNITED STATES V. SWENSON
N.R. SMITH, Circuit Judge, concurring that we have
jurisdiction 1 and otherwise dissenting:
The critical question in this case is simple: Does Mr.
Swenson have rights to Account 5784 (“Account”)
“[n]otwithstanding any other Federal Law”? 18 U.S.C.
§ 3613(a). In other words, with the MVRA’s
“‘notwithstanding’ clause[] broadly sweep[ing] aside
potentially conflicting laws,” In re Partida, 862 F.3d 909,
912 (9th Cir. 2017) (quoting United States v. Novak,
476 F.3d 1041, 1046 (9th Cir. 2007) (en banc)), can the
government reach Mrs. Swenson’s Social Security benefits
by “step[ping] into [Mr. Swenson]’s shoes”? Novak, at
1063.
The MVRA “allow[s] the enforcement of criminal
restitution orders against ‘all property or rights to property,’
‘notwithstanding any other Federal law.’” Id. at 1046
(alterations adopted) (quoting 18 U.S.C. § 3613(a)). “By its
use of the ‘all property or rights to property’ language,
Congress has made quite clear that the totality of defendants’
assets will be subject to restitutions orders.” Id. (emphasis
added) (citation omitted). Indeed, “[t]he statutory language
‘all property and rights to property,’ is broad and reveals on
its face that Congress meant to reach every interest in
property.” Id. (alterations adopted) (emphasis added)
(quoting United States v. Nat’l Bank of Commerce, 472 U.S.
713, 719–20 (1985)).
In this case, the MVRA allows the government to garnish
the Account consisting solely of Mrs. Swenson’s Social
1
I agree with the majority’s conclusion that we have jurisdiction
over this appeal in light of the disposition order entered by the district
court.
UNITED STATES V. SWENSON 19
Security benefits, because Mr. Swenson has an interest in
this property under Idaho’s community property law. The
majority avoids this conclusion by ignoring the fact that
federal law does not preempt Mr. Swenson’s interest or
otherwise bar the government from garnishing the account.
Let me explain.
I. The proper analytical framework.
As a threshold matter, the majority failed to clearly
identify the proper analytical framework for determining
precisely what property is subject to garnishment under the
MVRA. The majority’s failure to engage in the proper
analysis results in its erroneous decision. 2
The application of the MVRA “involves questions of
both state and federal law.” Fourth Inv. LP v. United States,
720 F.3d 1058, 1067 (9th Cir. 2013). Thus, we apply the
MVRA in two steps: we must (1) determine a defendant’s
property or rights in property under state law, and then
(2) determine whether federal law allows the government to
garnish the property. Id. (noting that only “[a]fter
determining that the taxpayer has a property interest under
state law” should we consider whether such property can be
attached or garnished).
This analytical framework applied in cases in the tax-lien
context is instructive in the present context for two reasons.
First, the text of the MVRA indicates that courts should look
to the analogous tax-lien context for guidance regarding how
to execute a garnishment order. See 18 U.S.C. § 3613(c) (“A
fine imposed pursuant to the [MVRA] . . . is a lien in favor
2
Though I can’t go too hard on them, because our circuit has never
clearly resolved this issue.
20 UNITED STATES V. SWENSON
of the United States on all property and rights to property of
the person fined as if the liability of the person fined were a
liability for a tax assessed under the Internal Revenue Code
. . . .” (emphasis added)). This guidance makes sense
considering the close parallel in both language and structure
between the Internal Revenue Code’s provisions allowing
for tax liens and the MVRA’s provisions allowing for
garnishment. See Novak, 476 F.3d at 1049–50. Compare
26 U.S.C. § 6334(c) (“Notwithstanding any other law of the
United States (including section 207 of the Social Security
Act), no property or rights to property shall be exempt from
levy other than the property specifically made exempt by
subsection (a).”), with 18 U.S.C. § 3613(a)
(“Notwithstanding any other Federal law (including section
207 of the Social Security Act), a judgment imposing a fine
may be enforced against all property or rights to property of
the person fined, except that” expressly exempted by the
statute.).
Second, our sister circuits (that have addressed this
issue) have expressly and uniformly adopted the framework
set forth in the tax-lien cases. See United States v. Berry,
951 F.3d 632, 635 (5th Cir. 2020) (citing case law from the
tax lien context in support of the proposition that though
“[f]ederal law creates the lien, . . . state law defines the
property interests in which the lien attaches”); see also
United States v. Elashi, 789 F.3d 547, 548–52 (5th Cir.
2015) (noting that special assessments resulting form
garnishment orders issued pursuant to the MVRA “are
collected in the same manner as criminal fines and are
therefore treated in the same manner as federal tax liens”);
United States v. Smith, 768 F. App’x 926, 931 (11th Cir.
2019) (unpublished) (adopting the analytical framework
from the tax lien context in a case dealing with an MVRA
UNITED STATES V. SWENSON 21
restitution order). 3 For these reasons, the analogous tax-levy
context and the analyses of our sister circuits informs our
approach to the issue before us. 4
These cases provide a simple, two-step approach (set
forth above) to working out precisely what property the
government may reach: (1) courts must look to state law to
determine whether the defendant has property rights in the
property that the government seeks to reach; and (2) if the
defendant does have rights in that property, courts must
determine whether the defendant’s state-delineated rights
qualify as “property or rights to property” that the
government may garnish under the MVRA. 5 See Elashi,
3
For some reason, the majority attempts to make a factual
distinction between these cases and the one before us. Maj. Op. 14 n.5.
However, this does not change the underlying principle these cases
support—that the analytical framework from the tax-lien context is
relevant here.
4
It should be noted that the limited direction we do have in our
circuit is consistent with the two-step framework that should apply here.
Indeed, we stated in Novak that state law is the usual starting place for
our analysis. 476 F.3d at 1061 (“[S]tate law ordinarily informs the
delineation of ‘property’ . . . .”). Though we ultimately looked
exclusively to federal law in that case to determine the extent of the
defendant’s property rights, this exception to the general rule that state
law determines rights to property a person has is not applicable in this
case for the reasons discussed below. See infra at 28–30.
5
This straightforward analytical framework is drawn directly from
the tax-lien context. See Drye, 528 U.S. at 58 (instructing court to “look
initially to state law to determine what rights the [defendant] has in the
property the Government seeks to reach, then to federal law to determine
whether the [defendant]’s state-delineated rights qualify as ‘property’ or
‘rights to property’ within the compass of the federal . . . legislation”);
Morgan v. Commissioner, 309 U.S. 78, 80 (1940) (“State law creates
legal interests and rights. The federal . . . acts designate what interests
22 UNITED STATES V. SWENSON
789 F.3d at 552 (“Once state-law property interests are
defined, federal law controls the consequences.”); see also
Smith, 768 F. App’x at 931 (“As with a tax lien, state law
determines the nature of the legal interest a person has in the
property sought to be reached.”). Put differently, “Federal
law creates the [government’s right to garnish], but state law
defines the property interests to which the lien attaches.”
Berry, 951 F.3d at 635; accord Elashi, 789 F.3d at 552. This
is the proper framework for the analysis here.
II. Mr. Swenson has rights to Mrs. Swenson’s property
under Idaho law.
In concluding that Mr. Swenson has no rights to the
Account consisting of Mrs. Swenson’s Social Security
benefits, the majority claims to rely on state law. However,
federal law controls the majority’s interpretation of Mr.
Swenson’s property rights. Indeed, the majority relies on an
out-of-context preemption analysis to support its conclusion
that federal law limits Mr. Swenson’s rights to Mrs.
Swenson’s Account. As per the analysis set forth above, I
start with Idaho law.
A. Idaho law: a presumption of community
property.
In Idaho, “all property acquired after marriage” is
presumed to be community property that the government can
or rights, so created, shall be taxed.”); Fourth Inv. LP, 720 F.3d at 1067
(“The federal . . . statute itself ‘creates no property rights but merely
attaches consequences, federally defined, to rights created under state
law.’” (quoting United States v. Craft, 535 U.S. 274, 278 (2002))).
UNITED STATES V. SWENSON 23
garnish. 6 See Hoskinson v. Hoskinson, 80 P.3d 1049, 1062
(Idaho 2003) (holding that the baseline presumption under
Idaho state law is that “property acquired after marriage is
community property”); see also Action Collection Serv., Inc.
v. Seele, 69 P.3d 173, 178 (Idaho Ct. App. 2003) (noting that
a judgment creditor can garnish the non-debtor spouse’s
community property to satisfy a debt). Because Mrs.
Swenson earned the right to her Social Security benefits
while working during her marriage to Mr. Swenson, see
United States v. Swenson, No. 1:13-cr-00091-BLW, 2018
WL 4701783, at * 2 (D. Idaho Oct. 1, 2018), the moneys
resulting from these benefits are presumed to be community
property to which Mr. Swenson has a legal interest, see
Estate of Hull v. Williams, 885 P.2d 1153, 1157 (Idaho Ct.
App. 1994). Therefore, Mr. Swenson has a legal interest in
the Account.
B. Sherry’s recognition of the preemption of Idaho
law does not support the majority’s conclusion or
analysis.
In holding that the government may not garnish the
Account, the majority erroneously claims that Idaho law
supports its conclusion that Mr. Swenson has no rights in
Mrs. Swenson’s Social Security benefits. Maj. Op. 13–14.
6
Mrs. Swenson argues that the Account consisting of Social
Security benefits is not garnishable, because Idaho law exempts certain
retirement property from attachment or levy. See Idaho Code § 11-
604A. However, Mrs. Swenson ignores the fact that Idaho Code section
11-604A(2) expressly provides that its exemption from attachment is
only applicable “[u]nless otherwise provided by federal law.” In this
case, the MVRA renders inapplicable these Idaho state law limitations
on the attachment of Mrs. Swenson’s retirement accounts. See 18 U.S.C.
§ 3613(a) (noting that “a judgment imposing a fine may be enforced
against all property or rights to property of the person fined”).
24 UNITED STATES V. SWENSON
Not so. It is true that the Idaho Court of Appeals has
declared that Social Security benefits “are not a divisible
community asset” in divorce proceedings. See Maj. Op. 14
(quoting Sherry v. Sherry, 701 P.2d 265, 270 (Idaho Ct. App.
1985)). But, context is king. In Sherry, the Idaho Court of
Appeals did not declare that Social Security benefits are
separate property as a matter of Idaho law. 701 P.2d at 270.
Instead, and as the majority recognizes, see Maj. Op. 13–14,
the Sherry court reached its conclusion only because that is
the result federal law demanded in that particular instance,
Sherry, 701 P.2d at 270 (recognizing “the supremacy clause
of the United States Constitution requires that the federal law
be given effect over the state law” in that context). Thus, in
Sherry, the Idaho Court of Appeals never claimed to be
interpreting—much less actually changing or replacing—
Idaho’s long-standing community property regime; it merely
found that the Social Security Act—presumably, through
that Act’s anti-alienation provision 7—required preemption
7
It should be noted that the precise basis for the Social Security
Act’s preemption of Idaho’s community property law in Sherry is
unclear. Indeed, the Sherry court never explained the exact statutory
basis for preemption, instead quoting broad language from California
courts, noting that those courts’ opinions were “well reasoned,” and
concluding that “a ruling that [S]ocial [S]ecurity benefits are divisible
community assets would seriously interfere with the express statutory
scheme of the Social Security Act and is forbidden by the supremacy
clause of the United States Constitution.” 701 P.2d at 270 (alteration
adopted) (quoting In re Marriage of Nizenkoff, 135 Cal. Rptr. 189, 192
(Ct. App. 1976)). One case Sherry cites in its preemption discussion—
In re Marriage of Cohen—found preemption of California’s community
property regime based on § 207’s anti-alienation provision. 164 Cal.
Rptr. 672, 675–76 (Ct. App. 1980). The other two cases cited by Sherry
in support of preemption, In re Marriage of Hillerman and In re
Marriage of Nizenkoff, found preemption based on other pieces of the
Social Security Act’s framework—pieces that do not appear to be
applicable to the present situation. See In re Marriage of
UNITED STATES V. SWENSON 25
of Idaho’s community property regime in the context of the
division of Social Security benefits in divorce proceedings.
701 P.2d at 270.
This distinction between a court interpreting state law
and giving effect to federal law over state law is critical here,
where we are seeking to understand under step one of the
framework—what rights Mr. Swenson had under state law.
We recently recognized that a federal law’s preemption of
state laws does not fundamentally change, eliminate, or
replace the underlying state law:
Holding that a state law is preempted by
federal law does not . . . render the entire state
law “nonexistent” in the way that plaintiffs
argue. The state law continues to exist until
the legislature that enacted it repeals it. At
the same time, any portion of the law that is
preempted is unenforceable in court until
Congress removes the preemptive federal law
or the courts reverse course on the effect of
the federal law. See Jonathan F. Mitchell,
The Writ-of-Erasure Fallacy, 104 Va. L.
Hillerman, 167 Cal. Rptr. 240, 244–46 (Ct. App. 1980) (highlighting
conflict between California’s community property regime and the Social
Security Act’s family benefit plans—conflicts that don’t appear to be
present in this case); In re Marriage of Nizenkoff, 135 Cal. Rptr. at 191–
92 (discussing the fact that the Social Security Act has set up protections
for divorced spouses—similarly inapplicable here—that creates conflict
with California’s community property law). Therefore, though it appears
that § 207’s anti-alienation provision is the only reasonable basis for the
Social Security Act’s preemption of Idaho’s community property law in
Sherry, I cannot say for sure that this is the case. To the extent this
distinction matters, it provides yet another reason (in addition to those
noted in note 8, see infra at 26 n.8) for us to certify this question to the
Idaho Supreme Court.
26 UNITED STATES V. SWENSON
Rev. 933, 953 (2018) (“State statutes that
contradict ‘supreme’ federal law continue to
exist as ‘laws,’ even as they go unenforced,
and they would become enforceable if federal
law were amended or reinterpreted to remove
the conflict.”).
Close v. Sotheby’s, Inc., 909 F.3d 1204, 1209–10 (9th Cir.
2018) (alteration adopted); see also Armstrong v.
Exceptional Child Ctr., Inc., 575 U.S. 320, 325 (2015)
(noting that the Supremacy Clause merely “instructs courts
what to do when state and federal law clash”); Saikrishna B.
Prakash & John C. Yoo, The Origins of Judicial Review,
70 U. Chi. L. Rev. 887, 903 (2003) (noting that “the
Supremacy Clause establishes that the Constitution is
superior to unconstitutional federal statutes” and that
“[w]hen there is a conflict between the supreme law and state
. . . laws, state judges are to enforce the supreme law of the
land” (emphasis added)). Thus, the Idaho Court of Appeals’
conclusion that Social Security benefits “are not a divisible
community asset” did not change Idaho law; it merely
reflects that court giving federal law effect over Idaho’s
community property law in that specific context. 8 Sherry,
701 P.2d at 270.
8
To the extent my good colleagues disagree with me and believe
that Sherry actually changed Idaho’s community property law in the
context of Social Security benefits, they should have let the Idaho
Supreme Court decide this important question of Idaho law; the
esteemed justices on that court are, after all, the experts and authority on
Idaho law. And aside from the fact that they are unquestionably better
positioned to say what Idaho law is, I am sure they would be happy to
help this court out with the determination of this question. Moreover,
our speculation about the meaning of the state law would thus be
“particularly gratuitous” in these circumstances. Arizonans for Official
UNITED STATES V. SWENSON 27
In ignoring Idaho law, the majority summarily states that
“state law does not control when federal law preempts state
law.” Maj. Op. 14 n.5. This is undoubtedly true. However,
the two-step framework set forth above takes preemption
into account in step two of the analysis.
Put differently, the determination of whether Idaho’s
law—that all property obtained during marriage is
community property, Hoskinson, 80 P.3d at 1062—is
enforceable (i.e. preempted or not) should not be conflated
with the threshold question that must be answered in step
one: What is Idaho law? Only after this step-one question
has been answered should we ask whether federal law
nevertheless limits the defendant’s rights under step two of
the analysis. Indeed, whether Idaho law has been (or, here,
remains) preempted in this specific context turns on federal
law, Close, 909 F.3d at 1209–10, and is therefore a question
distinctly reserved for step two of the analysis—determining
whether, notwithstanding an individual’s state law rights, the
government can reach the property, see 18 U.S.C. § 3613(a).
But the majority conveniently casts aside Idaho’s law at step
one, thereby ridding it of the burden of explaining precisely
how or why state law is preempted in this specific context.
At bottom, the general principles of Idaho community
property law provides the answer. Under Idaho law, Mr.
Swenson does have rights to the Account, even assuming it
consists solely of Mrs. Swenson’s Social Security benefits.
See Hoskinson, 80 P.3d at 1062. The next question is
English v. Arizona, 520 U.S. 43, 79 (1997) (“Speculation by a federal
court about the meaning of [state law] in the absence of prior state court
adjudication” reaching that specific issue “is particularly gratuitous
when the state courts stand willing to address questions of state law on
certification from a federal court.” (alteration adopted) (quoting Brockett
v. Spokane Arcades, Inc., 472 U.S. 491, 510 (1985))).
28 UNITED STATES V. SWENSON
whether the government may garnish the property—i.e.,
whether federal law preempts state law or otherwise limits
the government’s ability to reach the property.
C. Novak’s context-specific analysis does not control.
The majority also states, albeit briefly, that this reliance
on federal law (through preemption) is justified, because the
Social Security Act affects the scope of Mr. Swenson’s
property rights. See Maj. Op. 15 n.6. But Novak, the lone
case upon which the majority relies for this proposition, does
not support the majority’s conclusion. See 476 F.3d 1041.
In Novak, the “key question” was whether a participant’s
contingency “interest in a retirement plan [was] ‘property or
a right to property’ under 18 U.S.C. § 3613(a).” Id. at 1060
(alterations adopted). In that case, we were trying to
determine whether the criminal defendant’s contingency
interests in an ERISA-covered retirement plan even
amounted to “property” in the first instance. Because the
nature and extent of an individual’s interests in such a plan
are “governed exclusively by federal law,” we looked to
federal law instead of state law to determine the nature and
extent of any existing property rights. Id. at 1061 (citing
29 U.S.C. § 1144(a)). In other words, in Novak, there quite
simply was no state law upon which we could rely to inform
the nature of the unique “species of property rights that
[t]here concern[ed] us.” Id. Federal law controlled whether
the defendant in Novak had a property interest in the
retirement benefits at issue through his contingent interests
in an ERISA retirement plan. Id. at 1060–62.
However, Novak does not control here. We expressly
noted in Novak that our reliance on federal law in delineating
the property rights in that case was context specific. Id.
at 1061 (relying exclusively on federal law “in the current
UNITED STATES V. SWENSON 29
context,” while acknowledging that “state law ordinarily
informs the delineation of ‘property’” (emphasis added)).
Our analysis here is different, because the context of this
case is different. For example, unlike the property at issue
in Novak, there is no question that the property at issue in
this case—moneys received solely through Mrs. Swenson’s
Social Security benefits—is “property” within the meaning
of the MVRA; it undoubtedly is. Additionally, there are no
complex, exclusively government-defined contingency
interests at stake here. The only question is whether Mr.
Swenson has a right to the moneys sitting in the Account.
Further, also distinct from the ERISA-covered
retirement plans at issue in Novak, whether an individual has
an interest in Social Security benefits is not governed
exclusively by federal law; the Social Security Act often
looks to and relies on state law to determine whether an
individual has rights or access to Social Security benefits. 9
See, e.g., Vernoff v. Astrue, 568 F.3d 1102, 1104–12 (9th Cir.
2009) (analyzing state law to determine whether an
individual qualified for child survivor benefits under the
Social Security Act); Woodward v. Comm’r of Soc. Sec.,
760 N.E.2d 257 (Mass. 2002) (looking to state law principles
to determine whether a wife was eligible for Social Security
survivor benefits). Thus, because Mr. Swenson’s interests
in the property at issue are not controlled exclusively by
9
The majority claims that the cases cited in support of this assertion
are inapposite, because “no party disputes that Mr. and Mrs. Swenson
are legally married.” Maj. Op. 14 n.5. The majority misses the point. I
do not cite these cases for to show factual similarity. I cite these cases
to show that, as a purely legal matter, the majority’s reliance on Novak
is misplaced, because the Social Security Act context is fundamentally
different than the ERISA context. While ERISA completely controls
whether someone has rights to ERISA-controlled retirement accounts;
the Social Security Act often looks to state law to delineate one’s rights
to benefits.
30 UNITED STATES V. SWENSON
federal law like the Novak defendant’s contingency interests
in ERISA-covered retirement plans in Novak, the majority
errs in bypassing state law in determining Mr. Swenson’s
rights to Mrs. Swenson’s Social Security benefits. 10
Thus, because (1) our analysis in Novak was context
specific and (2) unlike in Novak, federal law does not
exclusively govern the extent to which an individual has
rights to the property at issue, Novak does not support the
assertion that “the [Social Security Act] is relevant to the
delineation of property in this case.” Maj. Op. 15 n. 6. In
this case, Idaho law—not federal law—delineates the rights
Mr. Swenson has in the Account.
III. The government may garnish the Account.
Because Mr. Swenson has a state-law property interest
in the Account, the government has a broad right to garnish
the Account. See Novak, 476 F.3d at 1063 (stating that “the
government’s right is to step into the defendant’s shoes”
when executing a garnishment order). Indeed, the majority
agrees that none of the statutory exceptions to the MVRA’s
broad rights of garnishment apply in the present situation.
See 18 U.S.C. § 3613(a).
10
The majority claims that it does not impermissibly bypass state
law “any more than the Idaho court in Sherry did.” Maj. Op. 15 n.6. But
this is flatly untrue. The Sherry court understood and acknowledged that
Idaho law presumes that all property obtained during marriage is
community property. Then, operating from that baseline, it conducted
the relevant preemption analysis. All I ask is that the majority conduct
the same analysis: first acknowledging what Idaho law requires, then
analyzing whether federal law preempts Idaho law in this specific
context. The majority errs because it does not conduct this analysis; it
simply assumes preemption in this case without carrying out the relevant
context-specific examination.
UNITED STATES V. SWENSON 31
Section 207 of the Social Security Act—the provision
requiring preemption of Idaho’s community property regime
in Sherry—would ordinarily preempt Idaho’s community
property law, thereby rendering Idaho law unenforceable
and barring the government from garnishing Mrs.
Swenson’s Social Security benefits. See Sherry, 701 P.2d
at 270; see also Maj. Op. 17 (noting that, were it not for the
restitution order, “Mr. Swenson would have no right to Mrs.
Swenson’s Social Security benefits because the [Social
Security Act] preempts application of Idaho law community
property principles”). However, in the current context,
Congress has expressly removed this conflict. See 18 U.S.C.
§ 3613(a) (“Notwithstanding any other Federal law
(including section 207 of the Social Security Act), a
judgment imposing a fine may be enforced against all
property or rights to property of the person fined . . . .”);
Novak, 476 F.3d at 1048 (“[B]y making clear that the
‘notwithstanding’ clause ‘includes’ the one federal anti-
alienation provision that demands explicit statutory override
[42 U.S.C. § 407(a)], Congress manifested that § 3613(a)
means what it says—that it reaches ‘all property or rights to
property’ not excepted including property otherwise covered
by federally mandated anti-alienation provisions.” (citation
omitted)). Thus, unlike in Sherry, there is no conflict
between the Social Security Act’s anti-alienation provision
and Idaho community property law.
Idaho’s community property regime should therefore be
enforced in this case, because: (1) the MVRA does not
provide an exception from garnishment for this property, see
§ 3613(a); and (2) unlike in Sherry, there is no conflict
between state and federal law and is thus no barrier to the
government stepping into Mr. Swenson’s shoes and
garnishing the Account, see Close, 909 F.3d at 1209–10.
32 UNITED STATES V. SWENSON
This reading of the statute may lead to what some may
consider inequitable results. Indeed, it certainly is true that
this approach would allow the government “to garnish assets
that the defendant”—pursuant to federal law—“would
otherwise have no right to” in divorce proceedings. Maj. Op.
16. However, the very purpose of the MVRA was to expand
the pool of property available to the government’s reach
beyond what it would be in other contexts. 11 See Novak,
476 F.3d at 1046 (“By its use of the ‘all property or rights to
property’ language, Congress has made quite clear that the
totality of defendants’ assets will be subject to restitution
orders. The Supreme Court emphasized the breadth of the
‘all property or rights to property’ phrase in the context of
tax collection statutes: ‘The statutory language all property
and rights to property, . . . is broad and reveals on its face
that Congress meant to reach every interest in property . . . .”
(quoting Nat'l Bank of Commerce, 472 U.S. at 719–20
(citations and internal quotation marks omitted)).
Furthermore, through the implementation of the MVRA,
“Congress has specifically subordinated the goals of
economic rehabilitation and equitable distribution of assets
to the states’ interest in prosecuting criminals.” In re Gruntz,
202 F.3d 1074, 1086 (9th Cir. 2000) (en banc).
11
The majority claims that this assertion “conflat[es] the MVRA’s
intent to reach all of a defendant’s assets in garnishment proceedings,
with a permission for the government to ‘expand the pool’ of a
defendant’s property beyond that which the defendant would have a right
to [in] any other legal proceeding.” Maj. Op. 16 n.7. However, the
majority misconstrues my statement. I do not suggest that the MVRA
somehow expands the pool of the defendant’s property. It does not.
However, it does undeniably expand the pool of property within the
government’s reach by sweeping aside federal laws that would otherwise
limit that reach. See 18 U.S.C. § 3613(a).
UNITED STATES V. SWENSON 33
I certainly sympathize with the innocent wife’s situation
and would take no pleasure in allowing the government to
garnish her Social Security benefits. To be sure, Mrs.
Swenson has not been convicted of any wrongdoing. 12 But,
as the author of today’s majority opinion once stated, “for
better or worse, it has long been true in community property
jurisdictions that both spouses assume the risks—and
benefits—of the legal system. The case books are replete
with examples of seeming injustices to innocent spouses
where community property laws are applied.” See United
States v. Berger, 574 F.3d 1202, 1206 (9th Cir. 2009).
Idaho’s community property regime gives Mr. Swenson a
property interest in the Account, regardless of the fact that
the account solely consists of Mrs. Swenson’s Social
Security benefits. Therefore, the government can reach it
under the MVRA.
12
The majority makes much of the fact that Mrs. Swenson is not the
subject of the criminal proceedings or the garnishment order. See Maj.
Op. 11 (noting that the MVRA was enacted to “ensure that the offender
be held accountable” for their actions (alterations adopted) (quoting
Novak, 476 F.3d at 1043)); id. at 12 (recognizing “Congress’s intent to
broaden the government’s collection powers to reach all of a defendant’s
assets”). However, this consideration is irrelevant. Indeed, as the
majority has recognized, see Maj. Op. 13, the only relevant questions is
not who holds title to the property, but whether the criminal defendant—
here Mr. Swenson—has “rights to” the property. See § 3613(a). And in
this case, because Mr. Swenson has rights to the property at issue through
Idaho’s community property law, it doesn’t matter whether Mrs.
Swenson is innocent or guilty as sin; Mrs. Swenson’s Account consisting
solely of moneys stemming from her Social Security benefits can be
garnished by the government.