July 3, 2013
United States of America, Plaintiff,
Kimberly Ann Meyer, Defendant.
LAWRENCE O. ANDERSON, District Judge.
On June 4, 2013, Defendant Kimberly Ann Meyer was indicted on three counts of Theft of Mail by Postal Employee, in violation of 18 U.S.C. § 1709, each count a Class D felony. See United States v. Monday, 614 F.3d 983 (9th Cir. 2010); 18 U.S.C. § 3581(b)(4).
At Defendant's initial appearance and arraignment, this Magistrate Judge concluded Defendant owns significant funds in a Thrift Savings Plan ("TSP"), earned during her former employment with the U.S. Postal Service, but, as explained below, conditionally appointed Assistant Federal Public Defender Elizabeth J. Kruschek to represent Defendant in this matter. (Doc. 8) Under penalty of perjury, Defendant completed and signed a financial affidavit, CJA Form 23, identifying the amount of TSP funds belonging to Defendant and informing the District Court that, inter alia, while she is currently unemployed and looking for employment per her release conditions, her husband is employed full time. (Sealed doc. 9)
During a subsequent hearing addressing Defendant's efforts to retain private counsel in the city where she resides, Defendant informed the Court her TSP money, apparently recently converted to a tax-deferred annuity voluntarily by Defendant, is not readily available to her in a large enough lump sum distribution to retain private counsel at this time due to restrictions on the maximum annual disbursements ($8, 000) she may withdraw. Additionally, she recently contacted three Yuma lawyers, each of whom requests his full payment of the retainer ($15, 000) up front before agreeing to represent Defendant in this matter. While she has overall more than enough money to hire private counsel if counsel would accept annual payments, she is unable to do so due to the annuity's annual withdrawal restrictions.
II. The Criminal Justice Act
The Sixth Amendment provides that "[i]n all criminal prosecutions, the accused shall enjoy the right... to have the Assistance of Counsel for his defence." U.S. Const. amend. VI. "[A]bsent a knowing and intelligent waiver, no person may be imprisoned for any offense, whether classified as petty, misdemeanor, or felony, unless he was represented by counsel at his trial." Argersinger v. Hamlin, 407 U.S. 25, 37 (1972); see also Gideon v. Wainwright, 372 U.S. 335, 344-45 (1963). As a consequence of the Supreme Court's constitutional mandate for defense counsel in criminal cases, Congress passed the Criminal Justice Act ("CJA") of 1964. United States v. Parker, 439 F.3d 81, 90 (2d Cir. 2006). "The CJA ensures that defendants who are financially unable to afford trial services necessary to an adequate defense are provided them in accordance with the Sixth Amendment.'" Id. (citations omitted). "The Criminal Justice Act provides that courts may furnish [ ] representation for any person financially unable to obtain adequate representation." In the Matter of Gerald R. Smith, 586 F.3d 1169, 1171-72 (9th Cir. 2009) (quoting 18 U.S.C. § 3006A(a)). The Ninth Circuit, however, "has very little precedent regarding the CJA compensation system." Id. at 1173.
Title 18 U.S.C. § 3006 (c) and (f) authorize a district court to order the payment, partial payment, or repayment of court-appointed attorney's fees and expenses if it finds that the defendant is financially able to pay such fees. See United States v. Lorenzini, 71 F.3d 1489, 1494 (9th Cir. 1995) ("[A] reimbursement order is improper if the court fails to find that the defendant has the current ability to repay the government for his attorney fees.") (internal quotation marks omitted); United States v. Seminole, 882 F.2d 441, 443 (9th Cir. 1989) ("The recoupment of [court-appointed counsel's] fees is controlled by 18 U.S.C. § 3006A(f) which requires the district court to make appropriate findings.") (citation omitted)).
Title 18 U.S.C. § 3006A(c) provides, in pertinent part, as follows:
[I]f at any time after the appointment of counsel the United States magistrate judge or the court finds that the person is financially able to obtain counsel or to make partial payment for the representation, it may terminate the appointment of counsel or authorize payment as provided in subsection (f), as the interests of justice may dictate....
18 U.S.C. § 3006A(c); see also United States v. Wilson, 597 F.3d 353, 358 (6th Cir. 2010) (affirming order requiring defendant to pay for legal services from federal public defender's office in the full amount of $52, 305 in reasonable monthly installments).
Additionally, subsection (f) permits a district court to order a defendant to reimburse government-paid attorneys' fees "[w]henever the United States magistrate judge or the court finds that funds are available for payment from or on behalf of a person furnished representation[.]" 18 U.S.C. § 3006A(f); see also United States v. Danielson, 325 F.3d 1054, 1076-77 (9th Cir. 2003); United States v. Allen, 596 F.2d 227, 232 (7th Cir. 1979) (Section 3006A(f) gives the district court authority to order reimbursement). "Such a finding must be based on the defendant's current assets, not on his ability to fund payment from future earnings." Danielson, 325 F.3d at 1077. A "[d]istrict court must base the reimbursement order on a finding that there are specific funds, assets, or asset streams (or the fixed right to those funds, assets or asset streams) that are (1) identified by the court and (2) available to the defendant for the repayment of the court-appointed attorneys' fees." United States v. Moore, 666 F.3d 313, 322 (4th Cir. 2012). See Guide to Judiciary Policy and Procedures, Volume 7, Chapter 2, Part A, Section 210.40.40 (2010).
Under the CJA, the defendant bears the burden of persuading the district court that he or she is financially unable to obtain counsel. United States v. Ellsworth, 547 F.2d 1096, 1098 (9th Cir. 1976), cert. denied, 431 U.S. 931 (1977)). Under § 3006A(f), the defendant also bears the burden of establishing by a preponderance of the evidence that the defendant is financially unable to reimburse the cost of representation. United States v. Frandsen, 2008 WL 5348235, at *1 (D. Mont. Dec. 19, 2008) (quoting United States v. Evans, 155 F.3d 245, 252 n. 8 (3rd Cir. 1998)) (citing United States v. Lefkowitz, 125 F.3d 608, 621 (8th Cir. 1997) and United States v. Harris, 707 F.2d 653, 660 (2nd Cir. 1983)) (internal quotation marks omitted). "Once a defendant has sufficiently met his burden to demonstrate an inability to pay [attorney's] fees, the court must proceed with a full inquiry into his actual ability to bear those costs." Id. (quoting Museitef v. United States, 131 F.3d 714, 716 (8th Cir. 1997) (citations internal quotation marks omitted)). The test for determining a defendant's ability to repay his attorney's fees in a criminal case "is whether repayment would cause such financial hardship as to make it impractical or unjust." Id. (citing United States v. Bracewell, 569 F.2d 1194, 1199 (2nd Cir. 1978)). The determination must be made "in light of the liquidity of the individual's finances, his personal and familial needs, or changes in his financial circumstances." Id. (citations omitted).
Federal courts have recognized "that CJA funds are a necessarily limited resource' and that the public has a strong interest in how its funds are being spent in the administration of criminal justice." United States v. Stevenson, 2012 WL 1038832, at *3 (W.D.Pa. March 28, 2012) (quoting Parker, 439 F.3d at 109). "Accordingly, [t]he reimbursement statute, which was duly enacted to carry out salutary policies and which provides for notice of the intended order of recoupment, creates a constitutionally proper ground for depriving a financially able defendant of available funds which, in fairness, should be remitted to the public coffers.'" Id. (quoting United States v. Bracewell, 569 F.2d 1194, 1197 (2nd Cir. 1977) (citation omitted)).
A district court's decision to order reimbursement under 18 U.S.C. § 3006A(f) is discretionary. Danielson, 325 F.3d at 1076-77; United States v. Griggs, 240 F.3d 974 (11th Cir. 2001) ("As with fee determinations, payment orders under § 3006A(f)... are left to the discretion of the trial [or magistrate] judge[.]"); United States v. Durka, 490 F.2d 478, 480 (7th Cir. 1973). While Section 3006A(f) does not specify how a district court should calculate the repayment of fees and expenses, the Ninth Circuit has held that a district court did not abuse its discretion in awarding attorney's fees by calculating defendant's reimbursement at the then current CJA rates. See United States v. Waldron, 270 Fed.Appx. 531, 534 (9th Cir. 2008) (district court ordered Waldron to repay his attorney's fees at CJA rates, up to $7, 000, the maximum compensation allowed under § 3006A(d)(2)). Section 3006A(f) also permits a district court to direct that funds be deposited in the U.S. Treasury when the court "finds that funds are available for payment from or on behalf of a person furnished representation." 18 U.S.C. § 3006A(f) ("[o]r to the court for deposit in the Treasury as a reimbursement to the appropriation, ...." for providing defender services). The Ninth Circuit in Waldron and district courts outside our circuit have ordered reimbursement payments be made to the clerk of court of the district court entering the order for payment into the United States Treasury. See Waldron, 270 Fed.Appx. at 533; Stevenson, 2012 WL 1038832, at *4; United States v. Page, 2011 WL 2224674, at *3 (S.D. Ill. June 8, 2011).
After making appropriate inquiries on the record, the Court finds that Defendant has a "fixed right" to her TSP-converted funds and the current ability to repay the U.S. Treasury for her attorney's fees and expenses, but she is simply unable to access all those funds, or a large enough portion of those funds, at this time to fully pay the retainer of a lawyer in private practice to represent her in this matter. Defendant "is financially able... to make partial payment for the representation, " 18 U.S.C. § 3006A(c), but none of the three lawyers she interviewed would undertake her representation and accept partial payments over time. Nevertheless, Defendant's inability to gain access to all her TSP-converted funds at this time to retain private counsel does not warrant findings that she is both financially unable to obtain adequate representation and should never be required to reimburse the United States taxpayers the reasonable costs of her defense in this criminal case. See, e.g., United States v. Kahan, 415 U.S. 239, 240-41 (1974) ( per curiam ) (defendant's access to $25, 000 in Totten trusts, revocable at defendant's will and purportedly created for his children as the intended donees, did not entitle him to appointed counsel as he "was not indigent, and did not have a right to appointment of counsel under the Sixth Amendment"); United States v. Pani, 2011 WL 4344336 (D. Mass. Aug. 3, 2011); In re Extradition of Patel, 2008 WL 896069, at *2 (D. Or. March 29, 2008) ("While his withdrawal of [Individual Retirement Account's] funds before he reaches age 59 1/2 may result in a penalty and withdrawal at any time subjects the funds to taxes if they went into the account tax free, the funds are nonetheless available to the respondent."); United States v. Medford, 608 F.Supp.2d 709 (W.D. N.C. April 16, 2009). This Magistrate Judge rejects the non-controlling and unpersuasive ruling to the contrary in United States v. Lexin, 434 F.Supp.2d 836 (S.D. Cal. 2006), which appears to be the minority view in the Ninth Circuit.
The Court finds that an order Defendant repay her attorney's fees and expenses would not cause Defendant such a financial hardship to render repayment of such fees and expenses either impractical or unjust; Defendant is financially able to make partial reimbursement payments over time for her representation; and the interests of justice dictate Defendant repay her attorney's fees and expenses as ordered herein.
Based on the foregoing,
IT IS ORDERED as follows:
1. Defendant's Federal Public Defender shall file under seal on or before January 31, 2014, and the last day of January of every year thereafter until the Federal Public Defender no longer represents Defendant in this case, a full and detailed itemization of the time and expenses she has incurred in representing Defendant in this action. The Government shall not have access to this information.
2. Defendant shall pay to the Clerk of Court for the District Court of Arizona the sum of money calculated at the current CJA hourly rate times the number of hours plus the costs of defense and ordered herein on or before February 28, 2014, and the last day of February of every year thereafter until paid in full, for deposit in the United States Treasury, where it will be credited to the Defender Services appropriation as reimbursement for Defendant's cost of defense pursuant to the provisions of 18 U.S.C. § 3006A. Defendant shall pay no less than $3, 000 per year, assuming her unpaid fees and costs exceed $3, 000 for the previous year, in which event she shall pay the lesser sum. A cashier's check or money order, made payable to "Clerk of Court, District Court of Arizona" shall be delivered to the Finance Department, First Floor, United States District Court for the District of Arizona, 401 W. Washington, SPC 1, Phoenix, Arizona XXXXX-XXXX.
The Clerk of Court is kindly directed to send a copy of this Order to Defendant to the address identified in her Pretrial Services report, sealed doc. 7, and all counsel of record.