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SUPREME COURT OF THE UNITED STATES
_________________
No. 16–142
_________________
TERRY MICHAEL HONEYCUTT, PETITIONER
v.
UNITED STATES
on writ of certiorari to the united states
court of appeals for the sixth circuit
[June 5, 2017]
Justice Sotomayor delivered the opinion of the
Court.
A federal statute— 21 U. S. C. §853—mandates
forfeit-ure of “any property constituting, or derived from, any
proceeds the person obtained, directly or indirectly, as the result
of” certain drug crimes. This case concerns how §853 operates when
two or more defendants act as part of a conspiracy. Specifically,
the issue is whether, under §853, a defendant may be held jointly
and severally liable for property that his co-conspirator derived
from the crime but that the defendant himself did not acquire. The
Court holds that such liability is inconsistent with the statute’s
text and structure.
I
Terry Michael Honeycutt managed sales and
inventory for a Tennessee hardware store owned by his brother, Tony
Honeycutt. After observing several “ ‘edgy looking
folks’ ” purchasing an iodine-based water-purification product
known as Polar Pure, Terry Honeycutt contacted the Chattanooga
Police Department to inquire whether the iodine crystals in the
product could be used to manufacture methamphetamine. App. to Pet.
for Cert. 2a. An officer confirmed that individuals were using
Polar Pure for this purpose and advised Honeycutt to cease selling
it if the sales made Honeycutt “ ‘uncomfortable.’ ”
Ibid. Notwithstanding the officer’s advice, the store
continued to sell large quantities of Polar Pure. Although each
bottle of Polar Pure contained enough iodine to purify 500 gallons
of water, and despite the fact that most people have no legitimate
use for the product in large quantities, the brothers sold as many
as 12 bottles in a single transaction to a single customer. Over a
3-year period, the store grossed roughly $400,000 from the sale of
more than 20,000 bottles of Polar Pure.
Unsurprisingly, these sales prompted an
investigation by the federal Drug Enforcement Administration along
with state and local law enforcement. Authorities exe-cuted a
search warrant at the store in November 2010 and seized its entire
inventory of Polar Pure—more than 300 bottles. A federal grand jury
indicted the Honeycutt brothers for various federal crimes relating
to their sale of iodine while knowing or having reason to believe
it would be used to manufacture methamphetamine. Pursuant to the
Comprehensive Forfeiture Act of 1984, §303, 98Stat. 2045, 21 U. S.
C. §853(a)(1), which mandates forfeiture of “any proceeds the
person obtained, directly or indirectly, as the result of” drug
distribution, the Government sought forfeiture money judgments
against each brother in the amount of $269,751.98, which
represented the hardware store’s profits from the sale of Polar
Pure. Tony Honeycutt pleaded guilty and agreed to forfeit $200,000.
Terry went to trial. A jury acquitted Terry Honeycutt of 3 charges
but found him guilty of the remaining 11, including conspiring to
and knowingly distributing iodine in violation of §§841(c)(2),
843(a)(6), and 846.
The District Court sentenced Terry Honeycutt to
60 months in prison. Despite conceding that Terry had no
“controlling interest in the store” and “did not stand to benefit
personally,” the Government insisted that the District Court “hold
[him] jointly liable for the profit from the illegal sales.” App.
to Pet. for Cert. 60a–61a. The Government thus sought a money
judgment of $69,751.98, the amount of the conspiracy profits
outstanding after Tony Honeycutt’s forfeiture payment. The District
Court declined to enter a forfeiture judgment, reasoning that
Honeycutt was a salaried employee who had not person-ally received
any profits from the iodine sales.
The Court of Appeals for the Sixth Circuit
reversed. As co-conspirators, the court held, the brothers are
“ ‘jointly and severally liable for any proceeds of the
conspiracy.’ ” 816 F. 3d 362, 380 (2016). The court
therefore concluded that each brother bore full responsibility for
the entire forfeiture judgment.
Ibid.
The Court granted certiorari to resolve
disagreement among the Courts of Appeals regarding whether joint
and several liability applies under §853.[
1] 580 U. S. ___ (2016).
II
Criminal forfeiture statutes empower the
Government to confiscate property derived from or used to
facilitate criminal activity. Such statutes serve important
governmental interests such as “separating a criminal from his
ill-gotten gains,” “returning property, in full, to those
wrongfully deprived or defrauded of it,” and “lessen[ing] the
economic power” of criminal enterprises.
Caplin & Drysdale,
Chartered v.
United States, 491 U. S. 617 –630
(1989). The statute at issue here—§853—mandates forfeiture with
respect to persons convicted of certain serious drug crimes. The
question presented is whether §853 embraces joint and several
liability for forfeiture judgments.
A creature of tort law, joint and several
liability “applies when there has been a judgment against multiple
defendants.”
McDermott, Inc. v.
AmClyde, 511
U. S. 202 –221 (1994). If two or more defendants jointly cause
harm, each defendant is held liable for the entire amount of the
harm; provided, however, that the plaintiff recover only once for
the full amount. See Restatement (Second) of Torts §875 (1977).
Application of that principle in the forfeiture context when two or
more defendants conspire to violate the law would require that each
defendant be held liable for a forfeiture judgment based not only
on property that he used in or acquired because of the crime, but
also on property obtained by his co-conspirator.
An example is instructive. Suppose a farmer
masterminds a scheme to grow, harvest, and distribute mari-juana on
local college campuses. The mastermind recruits a college student
to deliver packages and pays the student $300 each month from the
distribution proceeds for his services. In one year, the mastermind
earns $3 million. The student, meanwhile, earns $3,600. If joint
and sev-eral liability applied, the student would face a forfeiture
judgment for the entire amount of the conspiracy’s proceeds: $3
million. The student would be bound by that judgment even though he
never personally acquired any proceeds beyond the $3,600. This case
requires determination whether this form of liability is permitted
under §853(a)(1). The Court holds that it is not.
A
Forfeiture under §853 applies to “any person”
convicted of certain serious drug crimes. Section 853(a) limits the
statute’s reach by defining the property subject to forfeit-ure in
three separate provisions. An understanding of how these three
provisions work to limit the operation of the statute is helpful to
resolving the question in this case. First, the provision at issue
here, §853(a)(1), limits forfeit-ure to “property constituting, or
derived from, any proceeds the person obtained, directly or
indirectly, as the result of” the crime. Second, §853(a)(2)
restricts forfeiture to “property used, or intended to be used, in
any manner or part, to commit, or to facilitate the commission of,”
the crime. Finally, §853(a)(3) applies to persons “convicted of
engaging in a continuing criminal enterprise”—a form of
conspiracy—and requires forfeiture of “property described in
paragraph (1) or (2)” as well as “any of [the defendant’s] interest
in, claims against, and property or contractual rights affording a
source of control over, the continuing criminal enterprise.” These
provisions, by their terms, limit forfeiture under §853 to tainted
property; that is, property flowing from (§853(a)(1)), or used in
(§853(a)(2)), the crime itself. The limitations of §853(a) thus
provide the first clue that the statute does not countenance joint
and several liability, which, by its nature, would require
forfeiture of untainted property.
Recall, for example, the college student from
the earlier hypothetical. The $3,600 he received for his part in
the marijuana distribution scheme clearly falls within §853(a)(1):
It is property he “obtained . . . as the result of” the
crime. But if he were held jointly and severally liable for the
proceeds of the entire conspiracy, he would owe the Government $3
million. Of the $3 million, $2,996,400 would have no connection
whatsoever to the student’s participation in the crime and would
have to be paid from the student’s untainted assets. Joint and
several liability would thus represent a departure from §853(a)’s
restriction of forfeiture to tainted property.
In addition to limiting forfeiture to tainted
property, §853(a) defines forfeitable property solely in terms of
personal possession or use. This is most clear in the specific text
of §853(a)(1)—the provision under which the Government sought
forfeiture in this case. Section 853(a)(1) limits forfeiture to
property the defendant “obtained . . . as the result of”
the crime. At the time Congress enacted §853(a)(1), the verb
“obtain” was defined as “to come into possession of” or to “get or
acquire.” Random House Dictionary of the English Language 995
(1966); see also 7 Oxford English Dictionary 37 (1933) (defining
“obtain” as “[t]o come into the possession or enjoyment of
(something) by one’s own effort, or by request; to procure or gain,
as the result of purpose and effort”). That definition persists
today. See Black’s Law Dictionary 1247 (10th ed. 2014) (defining
“obtain” as “[t]o bring into one’s own possession; to procure, esp.
through effort”); cf.
Sekhar v.
United States, 570
U. S. ___, ___–___ (2013) (slip op., at 4–5) (“Obtaining
property requires ‘. . . the acquisition of
property’ ”). Neither the dictionary definition nor the common
usage of the word “obtain” supports the conclusion that an
individual “obtains” property that was acquired by someone else.
Yet joint and several liability would mean just that: The college
student would be presumed to have “obtained” the $3 million that
the mastermind acquired.
Section 853(a)(1) further provides that the
forfeitable property may be “obtained, directly or indirectly.” The
adverbs “directly” and “indirectly” modify—but do not erase—the
verb “obtain.” In other words, these adverbs refer to how a
defendant obtains the property; they do not negate the requirement
that he obtain it at all. For instance, the marijuana mastermind
might receive payments directly from drug purchasers, or he might
arrange to have drug purchasers pay an intermediary such as the
college student. In all instances, he ultimately “obtains” the
property—whether “directly or indirectly.”
The other provisions of §853(a) are in accord
with the limitation of forfeiture to property the defendant himself
obtained. Section 853(a)(2) mandates forfeiture of prop-erty used
to facilitate the crime but limits forfeiture to “the person’s
property.” Similarly, §853(a)(3) requires forfeit-ure of property
related to continuing criminal enterprises, but contrary to joint
and several liability principles, requires the defendant to forfeit
only “his interest in” the enterprise.
Section 853(a)’s limitation of forfeiture to
tainted property acquired or used by the defendant, together with
the plain text of §853(a)(1), foreclose joint and several liability
for co-conspirators.
B
Joint and several liability is not only
contrary to §853(a), it is—for the same reasons—contrary to several
other provisions of §853. Two provisions expressly incorporate the
§853(a) limitations. First, §853(c) provides that “[a]ll right,
title, and interest in property described in subsection
(a)”—
e.g., tainted property obtained as the result of or
used to facilitate the crime—“vests in the United States upon the
commission of the act giving rise to forfeiture.” Consistent with
its text, the Court has previously acknowledged that §853(c)
applies to tainted property only. See
Luis v.
United
States, 578 U. S. ___, ___ (2016) (slip op., at 8).
Second, §853(e)(1) authorizes pretrial freezes
“to preserve the availability of property described in subsection
(a) . . . for forfeiture.” Pretrial restraints on
forfeitable property are permitted only when the Government proves,
at a hearing, that (1) the defendant has committed an offense
triggering forfeiture, and (2) “the property at issue has the
requisite connection to that crime.”
Kaley v.
United
States, 571 U. S. ___, ___ (2014) (slip op., at 3); see
also
id., at ___, n. 11 (slip op., at 15, n. 11)
(“[F]orfeiture applies only to specific assets”).
Another provision, §853(d), does not reference
subsection (a) but incorporates its requirements on its own terms.
Section 835(d) establishes a “rebuttable presumption” that property
is subject to forfeiture only if the Government proves that “such
property was acquired by [the defendant] during the period of the
violation” and that “there was no likely source for such property
other than” the crime. Contrary to all of these provisions, joint
and several liability would mandate forfeiture of untainted
property that the defendant did not acquire as a result of the
crime.
It would also render futile one other provision
of the statute. Section 853(p)—the sole provision of §853 that
permits the Government to confiscate property untainted by the
crime—lays to rest any doubt that the statute permits joint and
several liability. That provision governs forfeiture of “substitute
property” and applies “if any property described in subsection (a),
as a result of any act or omission of the defendant” either:
“(A) cannot be located upon the exercise of
duediligence;
“(B) has been transferred or sold to, or
deposited with, a third party;
“(C) has been placed beyond the jurisdiction of
the court;
“(D) has been substantially diminished in
value; or
“(E) has been commingled with other property
which cannot be divided without difficulty.” §853(p)(1).
Only if the Government can prove that one of
these five conditions was caused by the defendant may it seize “any
other property of the defendant, up to the value of” the tainted
property—rather than the tainted property itself. §853(p)(2). This
provision begins from the premise that the defendant once possessed
tainted property as “described in subsection (a),” and provides a
means for the Government to recoup the value of the property if it
has been dissipated or otherwise disposed of by “any act or
omission of the defendant.” §853(p)(1).
Section 853(p)(1) demonstrates that Congress
contemplated situations where the tainted property itself would
fall outside the Government’s reach. To remedy that situation,
Congress did not authorize the Government to confiscate substitute
property from other defendants or co-conspirators; it authorized
the Government to confiscate assets only from the defendant who
initially acquired the property and who bears responsibility for
its dissipation. Permitting the Government to force other
co-conspirators to turn over untainted substitute property would
allow the Government to circumvent Congress’ carefully constructed
statutory scheme, which permits forfeiture of substitute property
only when the requirements of §§853(p) and (a) are satisfied. There
is no basis to read such an end run into the statute.
III
Against all of this, the Government asserts
the “bedrock principle of conspiracy liability” under which
“conspirators are legally responsible for each other’s foreseeable
actions in furtherance of their common plan.” Brief for United
States 9; see also
Pinkerton v.
United States, 328
U. S. 640 (1946) . Congress, according to the Government, must
be presumed to have legislated against the background principles of
conspiracy liability, and thus, “when the traceable proceeds of a
conspiracy are unavailable, [§]853 renders conspirators jointly and
severally liable for the amount of the proceeds foreseeably
obtained by the conspiracy.” Brief for United States 10. Not
so.
The plain text and structure of §853 leave no
doubt that Congress did not incorporate those background
principles. Congress provided just one way for the Government to
recoup substitute property when the tainted property itself is
unavailable—the procedures outlined in §853(p). And, for all the
Government makes of the background principles of conspiracy
liability, it fails to fully engage with the most important
background principles underlying §853: those of forfeiture.
Traditionally, forfeiture was an action against
the tainted property itself and thus proceeded
in rem; that
is,proceedings in which “[t]he thing [was] primarily considered as
the offender, or rather the offence [was] attached primarily to the
thing.”
The Palmyra, 12 Wheat. 1, 14 (1827). The forfeiture
“proceeding
in rem st[ood] independent of, and wholly
unaffected by any criminal proceeding
in personam” against
the defendant.
Id., at 15. Congress altered this distinction
in enacting §853 by effectively merging the
in rem
forfeiture proceeding with the
in personam criminal
proceeding and by expanding forfeiture to include not just the
“thing” but “property . . . derived from . . .
any proceeds” of the crime. §853(a)(1). But as is clear from its
text and structure, §853 maintains traditional
in rem
forfeiture’s focus on tainted property unless one of the
preconditions of §853(p) exists. For those who find it relevant,
the legislative history confirms as much: Congress altered the
traditional system in order to “improv[e] the procedures applicable
in forfeiture cases.” S. Rep. No. 98–225, p. 192 (1983). By
adopting an
in personam aspect to criminal forfeiture, and
providing for substitute-asset forfeiture, Congress made it easier
for the Government to hold the defendant who acquired the tainted
property responsible. Congress did not, however, enact any
“significant expansion of the scope of property subject to
forfeiture.”
Ibid.[
2]
IV
Forfeiture pursuant to §853(a)(1) is limited
to property the defendant himself actually acquired as the result
of the crime. In this case, the Government has conceded that Terry
Honeycutt had no ownership interest in his brother’s store and did
not personally benefit from the Polar Pure sales. App. to Pet. for
Cert. 60a. The District Court agreed.
Id., at 40a. Because
Honeycutt never obtained tainted property as a result of the crime,
§853 does not require any forfeiture.
The judgment of the Court of Appeals for the
Sixth Circuit is reversed.
It is so ordered.
Justice Gorsuch took no part in the
consideration or decision of this case.
