McIntosh v. United States - Post-Decision SCOTUScast

On April 17, 2024, the Supreme Court issued its ruling in McIntosh v. United States. At issue was whether a district court’s failure to comply with Federal Rule of Criminal Procedure 32.2(b)(2)(B)’s requirement to enter a preliminary order imposing criminal forfeiture before sentencing bars a judge from ordering forfeiture at sentencing subject to harmless-error principles on appellate review.

Join us to hear Stefan Cassella break down the decision and discuss its potential ramifications.

Featuring:
Mr. Stefan Cassella, CEO, Asset Forfeiture Law, LLC

Episode Transcript

(00:02):
Welcome to scot Discust, a projectof the Federalist Society for Law and Public
Policy Studies. Our contributors joined usfrom around the country to bring you expert
commentary on US Supreme Court cases asthey are argued and the decisions are issued.
The Federalist Society takes no position onparticular legal or public policy issues.
All expressions are those of the speaker. Hello, and welcome to SCO Discust.

(00:30):
I'm your host, Kyle hammernis On, behalf of the Faculty division of
the Federalist Society. We are heretoday to discuss McIntosh versus United States,
in which the Supreme Court issued anine zero decision on April seventeenth, twenty
twenty four. It is my honorto introduce our guests today, Stephan Cassella.
Stephen serves as an expert witness andconsultants law enforcement agencies and the private

(00:54):
sector as the CEO of Asset ForfeitureLaw LLC. Previously, he was the
Deputy Chief and then the Chief ofthe Asset Forfeiture and Money Laundering Section in
the US Attorney's Office in Baltimore,Maryland. And with that, I'd like
to turn things over to our guestto discuss the overview of the case and
the court's decision. Well, thankyou very much. This was a criminal

(01:15):
forfeiture procedural decision, and the Courthas not made many decisions on that particular
aspect of asset forfeiture, so it'sunusual in that regard. But it's strictly
a case of statutory interpretation, andin fact it's a case of the interpretation

(01:37):
of a rule of criminal procedure thatwas last amended in two thousand and nine,
and this is the first time theSupreme Court has had any occasion to
write about it. The criminal forfeitureis part of the sentence in a criminal
case. So just as the accountof time a defendant might be incarcerated for

(01:57):
the amount of fine he might payor the amount of restitution he might be
ordered to pay, the amount ofa criminal forfeiture or whether there's even going
to be a criminal forfeiture does notcome up until there's a conviction at that
time. According to the rules,and the rule in question is Rule thirty
two point two Federal Rules of CriminalProcedure, there are three things that the

(02:22):
court needs to do after there's aconviction in a case. In which forfeiture
is requested by the government. Thefirst is to ascertain whether the defendant wants
the jury retained to consider the forfeiture. The second is to enter a preliminary
order of forfeiture sufficiently in advance ofsentencing to allow the parties to comment and

(02:46):
to suggest any corrections. And thethird is at sentencing to include the forfeiture
in the oral announcement of the sentenceand in the written judgment. And it's
the second of those that was issuehere. The rule says that unless doing
so is impractical, the trial judgeshould enter a preliminary order of forfeiture in

(03:12):
advance of sentence, sufficiently in advanceivesentence to allow the parties to comment and
to suggest corrections. And the courtdid not do that in Macintosh's case.
So when it came to sentencing,there was some interlocatory appeal up to the
Supreme Court and back again, butthat's not relevant up to the Court of
Appeals, but that's not relevant here. When it came to sentencing, the

(03:36):
court went ahead and entered the forfeitureorder, and mister Macintosh's counsel argues that
because the court didn't follow the ruleabout entering preliminary orders, that that was
fatal and that the court was nowbarred from entering the order. The District
Court disagreed and said, no,it's requirement in the rule about entering your

(04:00):
preliminary order as a time related directive. It's not a mandatory, rigid rule,
and it does not bar me fromgoing ahead and entering the forfeiture order
subject to a harmless error analysis,and the court found any error was harmless.
The defendant was well aware from theindictment and from all the proceedings during
the case he'd gotten a bill ofparticulars that the government was going to seek

(04:24):
porpraiture, and so this didn't apprejudicehim that the court didn't enter the puliminary
He appealed to the Second Circuit.The Second Circuit agreed with the District Court,
there was no error, and hefiled a third petition and the case
goes to the Supreme Court. Wasargued just a few weeks ago. A
unanimous court says the lower courts wereboth correct. This was a time related

(04:46):
directive and there was no fatal errorthat precluded the district Court from entering the
forfeiture order, which, of courseis significant because mister Macintosh had been convicted
of several hobst robberies. He hadobtained seventy five thousand dollars in proceeds and
it had used the money to buya BMW, and the government wanted to

(05:08):
take the BMW and it would havebeen a windfall to him if the district
court's failure to enter the preliminary orderof forfeiture barred the forfeiture. So the
court says there was not There wasan error, certainly, but it was
not a fatal error, and therewas no reason the court could not proceed,
so the property was forfeited. Sowhat's unusual about this case is that

(05:32):
generally the Supreme Court only grants certto resolve a split in the circuits,
were to resolve a constitutional issue.There's no constitutional issue here. It's purely
a matter of procedure, and theCourt found that as a matter of procedure
interpreting the rule, that this wasnot anything more than a time related directive.

(05:55):
They had three reasons for that,by the way. That one was
that the rule itself says unless doingso is impractical, which suggests that this
is not a rigid rule. Asecond that the rule is directed at what
the court should do, not atwhat the government should do. So it
wasn't the government's violation, it wasthe judges violation. And then also there

(06:20):
was no provision in Rule thirty twopoint two which suggests in any way what
the sanction should be for the court'sfailure to do this. In other situations
in which the Court has found arule to be rigid and requires somewhere severe
sanction, the rule itself provides forthat, and there was no such provision

(06:44):
in this rule that suggests any kindof detriment to the government's forfeiture action if
the rule is not followed. So, for all those reasons, the court
said there was no preclusion of theforfeiture. But why did they grantser when
there was no split in the circuitson this question. In fact, every
court that has addressed the issue hasfound exactly the same way, And the

(07:12):
reason is that the defendant mister Macintosh, in making his cert petition, conflated
two different rules. There is anotherRemember I said there were three different stages
in the preceding. The third stageis what the what the rule says the
court must do at the sentencing hearingitself, and if the court fails to

(07:35):
make the forfeiture part of the oralannouncement of the sentence and included in the
judgment. The circuits are split asto whether that is fatal or is not
fatal. Some courts say that ifthe court doesn't impose it as part of
his sentence, that's too late tofix it later. Other courts say otherwise.

(07:57):
Now, that's a question on whichthe Court might have have someday to
grant to resolve a split in thecircuits, but it didn't do that in
this case because that wasn't the issuein this case. In this case,
the issue was the preliminary order,and there was no split in the circuits.
But it appears from the cert petitionthat Council cited the cases on the

(08:18):
latter rule in suggesting that there wasa split in the circuits, and the
Court took the case and then foundthat there was no significant controversy. In
fact, there's a footnote that JusticeSodo Mayor, who wrote the opinion for
the unanimous court drops it says,it looks like there's less than meets the
eye when it comes to a splitin the circuits, and what she's referring

(08:41):
to was exactly the point that I'mmaking that the split was on a different
rule, not on this one.Now the only other. So one other
interesting thing about the opinion is thatthe court says, well, while the
error was the judge's error, andwhile the rule doesn't play any responsibility on

(09:01):
the government in this instance, JusticeDepartment policy is nevertheless to tell its prosecutors
to remind judges of their duty todo what the rule requires. Justice Department
policy requires or instructs its prosecutors tosubmit a proposed preliminary order in advance of

(09:24):
sentence so that the court is remindedof its duty to do so. And
the government did not do that inthis case. And the court says,
we hope, well, I thinkher phrase just as so too. My
ours phrase is this is an instancewhich the government failed to follow its policy,
which this court considers to be arare occurrence, suggesting that the court

(09:48):
would look with this favor if thiskind of problem occurs frequently in the future.
And so that's something that Justice Department, I'm sure will be reminding its
prosecutors about. That was a greatoverview of just the case in general,
and the decision I did want toask right about you know, what you

(10:09):
see or what you may want topredict going forward, especially regarding the litigation
surrounding that other section that you mentioned, but also what before we get to
that, what would be the remedyfor for mistake like this that happens,
right, I mean, whether it'sthe judges or now possibly if the prosecutors

(10:31):
fail to remind the judges, whatwhat would be the remedy for that?
Well, what the court says isthat it's still subject to harmless error analysis.
So if you have a situation whereyou come to sentencing and the and
the defendant had no clue that thegovernment was seeking forfeiture, he is totally
surprised that he could argue prejudice becausehe could say, the court was supposed

(10:56):
to enter a preliminary order before sentencedto give me no notice of what was
going to happen here, and mycouncilor would have then had time to suggest
that the amount of the money judgmentthe government was seeking, or the forfeiture
of the BMW or whatever it is, was mistaken for whatever reason lack of
sufficient evidence to meet the preponderance standard, or they just named the wrong asset

(11:18):
or they calculated it wrong, thenhe could argue that the error was not
harmless and so that would be theremedy. But in this case, the
government had included a forfeiture notice inthe indictment and had served him with a
bill of particulars indicating that it wasseeking the forfeiture of his BMW. They
just hadn't reminded the judge that wassupposed to enter a preliminary order before sentencing.

(11:41):
And the court said, in thatinstance, it's a harmless error.
Ah, right, And then regardingthe other section right, section B of
that or sorry section four before before. Yeah, So do you expect to
see them grant sert on a casein the coming years or do you think

(12:07):
that this is so rare that itthat it really will not get up to
the court. I think that they'llprobably let the issue percolate in the in
the circuits for a while longer,because now there is some guidance for the
court from the court on what theconsiderations are. Remember, I said there
were three factors that they considered indetermining that the rule in question, the

(12:33):
preliminary order rule which rule be twowas not was only a time to rated
related directive. Two of those suggestthe violation of the of the third part
will BE four would be time relatedas well. It doesn't include any sanction
uh in the rule itself, andit is directed at something the court should

(12:58):
do, it doesn't. It's notdirected to some the litigants should do,
and that the government is certain toargue of citing those two points in Macintosh
that the failure to enter the orderof forfeiture as part of the oral announcement
its sentencing likewise is only a timerelated directive, and that the failure to

(13:20):
enter it is not fatal and itwill make that argument in all of the
circuits where the issue has not yetbeen resolved, and that's most of them.
Only two circuits have held that it'sa fatal error. But in support
of the argument that it's a fatalerror, defendants are likely to argue the
third point, which is that,whereas the Prilminary Order provision talks about unless

(13:43):
doing so is impractical and has vaguelanguage like sufficiently in advance of sentence,
Rule BE four is very specific.The court must enter the the forfeiture is
part of the oral announcement of thesentence and must include it in the judgment,
and defendants will argue that means thata defendant is entitled to know all

(14:05):
aspects of his sentence at one time. How long am I going to jail,
what's the period of supervisory release,what fine shall I pay? What
special assessment, what restitution? Andwhat forfeiture order? All at one time.
So there will be some tension becausethe three factors that the court through
Justice Sodo mayor considered go two differentways when you apply them to rule before

(14:28):
and so will there continue to bea split in the circuits. Will the
two circuits that said that this isa fatal rule, I'm sorry, a
fatal error change their minds now thatthey've seen the analysis in Macintosh? Or
will other circuits say that those courtswere correct now that they've seen the analysis
in Bank McIntosh. And I suspectwe'll see a continue its continuous evolution of

(14:50):
the law. Unfortunately, it's notall that rare. It's not all that
rare for a judge to sentence thedefendant and fail to enter the forfeiture order.
Then in there either because the prosecutorforgets to remind the judge, or
because the prosecutor brings it up,but the judge says, I'm not ready.
Why don't we do it next week? Or you know, something else

(15:11):
like that happens. I mean,there was a famous, famous among forfeiture
practitioners colloqui one time where the judgesays to the prosecutor, what about the
forfeiture is at the sentencing hearing,And the prosecutor says, oh, your
honor, they will take care ofthat later, meaning somebody else in the
office who handles forfeitures. And no, they don't handle that later. It

(15:33):
has to be the rule says,do it at sentencing. Now, there
is a provision in the rules elsewherethat says if it's not possible to calculate
the exact amount of the forfeiture judgment, or not possible to identify all the
specific property, the court can enterand order at sentencing. In general terms,

(15:54):
in other words, the defendant shellforfeit all proceeds of his crime and
leave the amount of the calculation toa later hearing that would comply with the
rule. Then everybody agrees, they'dbe no fatal error. But if the
judge does nothing and just and thenthen a week later, a month later,
a year later, the prosecutor says, oh, by the way,

(16:15):
you're honor you remember that sentencing wedid some time ago. We never got
a forfeiture order. That's the situationwhere some courts say too late, and
some courts say it's okay, allright. Well, thank you so much
for breaking it down for us.Steph really really enjoyed having you on.
Thank you so much. Thank youfor listening to this episode of SCO Discast.

(16:38):
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(16:59):
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(17:30):
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