District courts have jurisdiction to order officers of the court—such as attorneys who have entered an appearance in a criminal case—to provide an accounting of fees even if those fees are in the attorney’s personal financial accounts. A district court’s jurisdiction to do so exists upon a Government motion (and does not require a subpoena). Ordinarily, a judgment creditor cannot discover the personal assets of a non-party. But a recent decision by the United States Court of Appeals for the Sixth Circuit represents a departure from the Federal Rules of Civil Procedure and may greatly expand the Government’s ability to discover attorney fees in cases involving restitution.
The case involved the prosecution of several attorneys alleged to have defrauded their clients in regard to the settlement of fen-phen litigation. The defendants were subject to a variety of litigation regarding the underlying conduct and the Government sought a significant restitution judgment in the criminal case. To help address the criminal restitution issues and the rights of the victims, the criminal court appointed an attorney (Ford) to be the victims’ legal representative. Ford filed a number of pleadings and appeared at hearings in the criminal case. Ford, in additional to her court-appointed role, also represented a subset of the victims in civil litigation in state court—from which she had achieved a $42 million judgment and had collected approximately $40.2 million. The criminal case subsequently resulted in a $127.7 million restitution judgment.
But on appeal, the intermediate state court overturned Ford’s civil judgment (the state Supreme Court accepted discretionary review, but had not decided the case at the time of the Sixth Circuit’s decision). The Government, concerned that the defendants could reverse Ford’s collection efforts, requested Ford to provide a detailed accounting of how the collected funds had been dispersed (Ford had dispersed most to her clients minus her fees and costs). Ford had already provided most of the information to the Government before the request—with the only exception being the location of her attorney’s fees. Ford objected to providing the location of her attorney’s fees and the Government moved to compel. The District Court granted the Government’s motion.
In affirming the judgment, the Court of Appeals could not point to any particular provision of the Mandatory Victims Restitution Act that authorized the District Court’s jurisdiction (because there likely is no provision that does so). Rather, the Court relied on general language in the MVRA that authorizes an order of restitution to be enforced by any “available and reasonable means.” 18 U.S.C. § 3664(m)(1)(A)(ii). The Court found the order reasonable because Ford was an officer of the court. The Court also emphasized the “unique relationship” Ford had because of her roles in both the criminal and the civil litigation. Ford’s dual role may provide a mechanism for distinguishing this case from any effort by the Government to obtain similar information from defense counsel, but the Sixth Circuit’s reasoning may greatly expand the Government’s ability to discover the location, source, and amount of fees in criminal cases involving restitution.
The case discussed above is United States v. Gallion, 11-6187 (6th Cir. November 2, 2012).