[00:00:04] Speaker 03:
Good morning, Assistant Federal Defender Dan Polson.

[00:00:07] Speaker 03:
I'm representing James Wells.

[00:00:10] Speaker 03:
I'm going to reserve five minutes for rebuttal.

[00:00:13] Speaker 03:
The question presented in this case is not whether the mandatory victims restitution act and a restitution judgment enforced or issued through the MVRA is applicable to a thrift savings plan account.

[00:00:25] Speaker 03:
The question is whether the government is entitled to a lump sum distribution, a cash out of the TSP plan,

[00:00:32] Speaker 03:
even though the terms of the plan prohibit the defendant from doing so.

[00:00:36] Speaker 03:
This court ruled in United States versus Novak that when the government is enforcing a restitution order, the government steps into the defendant's shoes and can only assert whatever immediate property interests the defendant can assert.

[00:00:50] Speaker 03:
So if the terms of the plan prohibit the defendant from making a lump sum distribution without spousal consent, then the government is similarly prohibited.

[00:01:00] Speaker 03:
It is undisputed in this case that the terms of the Federal Employee Retirement Systems Act, which controls the Thrift Savings Plan, automatically gives spouses of TSP Plan members a right to a joint and survivor's annuity.

[00:01:14] Speaker 03:
There are stringent protections for that any time a distribution is made from an account

[00:01:19] Speaker 03:
that has more than $3,500 can only be made with the spouse's waiver of their annuity rights in writing.

[00:01:27] Speaker 01:
So in every respect, FERSA gives... Does the government dispute that if defendant tried to do what the government did, he could not?

[00:01:34] Speaker 03:
I don't think the government's disputing that Mr. Wells would not be allowed to- Mr. Wells himself would not be allowed to do that, too.

[00:01:42] Speaker 03:
Correct.

[00:01:42] Speaker 03:
And really, the FRTIB, which administers the TSP, has promulgated regulations under subpart G of 5 CFR, part 6050, which addresses the rights of spouses.

[00:01:54] Speaker 02:
Mr. Poulsen, here's my principal question.

[00:01:59] Speaker 02:
First, the federal employment retirement system is very similar to ERISA.

[00:02:06] Speaker 02:
And so that makes Novak seem very similar and applicable.

[00:02:11] Speaker 02:
There's one difference that I wanted you to comment on though, and that's under section 8437, the E2 and E3 provisions.

[00:02:20] Speaker 02:
And those are the provisions that talk about the anti-alien age and then the exceptions to it.

[00:02:27] Speaker 02:
And as I understand it, there have been several over the years

[00:02:29] Speaker 02:
And that's where there's an exception for child support and then we have the MVRA enforcement of an order for restitution and then later on obligations for members of Congress, I think.

[00:02:43] Speaker 02:
And does that put us in a different bucket than what happened in Novak where Congress is calling out specifically

[00:02:52] Speaker 02:
these exceptions.

[00:02:55] Speaker 02:
Does that allow the government then to seek a lump sum payment from the TPS because of what Congress has called out there?

[00:03:03] Speaker 03:
So I don't think that the government has a right under the MVRA to take property that the defendant doesn't have, that the defendant does not have an immediate right to control.

[00:03:14] Speaker 03:
And with respect to FERSA and 8437E3, the government is trying to

[00:03:20] Speaker 03:
graphed on language that just does not appear.

[00:03:24] Speaker 03:
So first it simply says that a restitution order can be enforced against the Thrift Savings Plan.

[00:03:29] Speaker 03:
It says nothing about the scope of the government's property rights.

[00:03:33] Speaker 02:
Well, it says the balance in the account shall be subject to legal process for the enforcement of, and then it goes into different things, including the MVRA.

[00:03:41] Speaker 02:
So why wouldn't that language suggest that the balance of the Thrift Savings Fund could be reached by the government for a restitution order?

[00:03:54] Speaker 02:
Even if the defendant could or could not reach it themselves?

[00:03:57] Speaker 03:
Well, I think what the government is asking this court to do is to read certain terms in isolation and then ignore the overarching statutory and regulatory framework.

[00:04:07] Speaker 03:
Okay, we're reading this language in context.

[00:04:10] Speaker 03:
So what has Congress done when we know that Congress has given spouses

[00:04:14] Speaker 03:
an entitlement that given them a property right in their TSP income.

[00:04:18] Speaker 03:
That's Congress's recognition that spouses have rights to retirement income.

[00:04:25] Speaker 03:
And elsewhere, the first says that the spousal waiver requirements can only be excused in very narrow circumstances.

[00:04:35] Speaker 03:
That's where the spouse's whereabouts can't be ascertained or where extraordinary circumstances make the waiver inappropriate.

[00:04:43] Speaker 03:
So it would be very strange to say that 8437E, which says nothing about spousal rights, says nothing about waiving spousal rights, that Congress intended by that silence to then displace or nullify those very specific provisions that govern when spousal waiver can itself be waived.

[00:05:02] Speaker 04:
I wonder if you have to look at the different interests here.

[00:05:05] Speaker 04:
Why should the spousal provisions have the effect of protecting the defendant?

[00:05:12] Speaker 04:
a convicted murderer as compared to the estates of his victims.

[00:05:17] Speaker 03:
Well, and again, going back to Novak, what this court said, and this court was weighing and balancing those competing interests and said that when we're looking at restitution judgments, we're going to analogize it to a tax levy.

[00:05:27] Speaker 04:
So again, the government steps into the defendant's shoes, and that makes sense because— Well, yes, and in the tax levy context, and I know about Novak, but

[00:05:40] Speaker 04:
This may be the extraordinary circumstance, because I get it.

[00:05:43] Speaker 04:
The spouse may have some protected by the statute.

[00:05:49] Speaker 04:
But why does defendant have any protection?

[00:05:52] Speaker 04:
I don't even understand how the pushing this into the garnishment context makes any sense whatsoever.

[00:05:58] Speaker 04:
The garnishment cap, the 25% cap, is intended to make sure that the person who gets earnings can still take care of his needs

[00:06:09] Speaker 04:
with some part of the earnings.

[00:06:12] Speaker 04:
But your client's serving a life sentence.

[00:06:16] Speaker 04:
Why should he be entitled to protect some portion of the Thrift Savings Plan, characterized or acknowledged, I guess, by the government as earnings, from the estates of the people he killed?

[00:06:32] Speaker 03:
Well, because the MVRA, going back to the statutory language and what the court's power

[00:06:37] Speaker 03:
The court's power is only to see or is only to attach the defendant's property or right to property and not to trample on the rights of spouses.

[00:06:45] Speaker 04:
And I would say that- Well, against the rights of spouses.

[00:06:47] Speaker 04:
I get that.

[00:06:48] Speaker 04:
I'm not sure it should be read as broadly or why the extraordinary case exception that seems to be built into the trust savings plan shouldn't be exercised in a case when the beneficiary is not just the spouse.

[00:07:04] Speaker 04:
The principal beneficiary of your argument appears to be defendant.

[00:07:07] Speaker 03:
Well, I don't think we're going to be, I'll put it this way, the law is the law, and Ms.

[00:07:13] Speaker 03:
Wells is a person who exists.

[00:07:16] Speaker 03:
She has an expect and she has an entitlement.

[00:07:19] Speaker 03:
She has a protected property right, and the statute is very clear about this.

[00:07:23] Speaker 04:
But how does that extend to protect Mr. Wells, the murderer?

[00:07:27] Speaker 04:
who doesn't need the income to support himself and his family, because he's incarcerated for life.

[00:07:33] Speaker 03:
Because his wife has a right to those funds.

[00:07:36] Speaker 04:
So why do we protect him in the process of protecting her?

[00:07:38] Speaker 04:
Isn't there some way to carve those two out?

[00:07:40] Speaker 03:
Well, the question is, do we just disregard her rights altogether?

[00:07:43] Speaker 03:
Wait, wait, wait.

[00:07:44] Speaker 04:
What I said is, is there no way to protect her without protecting him?

[00:07:49] Speaker 04:
I'm not sure that's the case.

[00:07:51] Speaker 04:
I mean, suppose the TSP may not be able to do it by seizing everything that's there.

[00:07:58] Speaker 04:
But perhaps it's required to recognize that she has some rights and protect her interest without having as a result let the murderer

[00:08:09] Speaker 04:
get the principal benefit, getting the lion's share.

[00:08:12] Speaker 03:
So understand that Mr. Wells ended up getting a significant tax liability, right?

[00:08:16] Speaker 03:
He's got a $65,000.

[00:08:17] Speaker 04:
I'm not much concerned about his tax liability right now.

[00:08:19] Speaker 03:
What I'm saying is that that goes to his abilities.

[00:08:21] Speaker 03:
Yes.

[00:08:22] Speaker 01:
If we were to agree with you that just, I think the only issue is whether the government can take the entire

[00:08:30] Speaker 01:
account, including any portion that Ms.

[00:08:33] Speaker 01:
Wells did not consent to being taken that she is entitled to.

[00:08:38] Speaker 01:
If we agreed with you that the government could not do that, could the government still collect some portion of what Mr. Wells is entitled to from his TSB account?

[00:08:48] Speaker 03:
So if you read Novak and the holding in that case is that if the defendant doesn't have a right to a unit to

[00:08:53] Speaker 03:
a lump sum cash out on their retirement plan, then the government is similarly prohibited.

[00:08:58] Speaker 01:
And certainly, if Mr. Wells- Well, whatever Mr. Wells is entitled to, can the government take?

[00:09:02] Speaker 03:
So Mr. Wells, I believe, is entitled to a mandatory monthly distribution from the TSP plan.

[00:09:11] Speaker 03:
The government can certainly garnish that.

[00:09:12] Speaker 03:
Monthly payments from the plan can be garnished.

[00:09:15] Speaker 03:
But what the government did here, and I want to talk about the procedural history of this case,

[00:09:19] Speaker 03:
because what the government did was essentially an end run around Novak relying on a semantic sleight of hand.

[00:09:25] Speaker 03:
And I want to stress that nothing that they're arguing exists when they talk about an administrative collection or administrative process that doesn't exist under the TSP regulations that the government is citing.

[00:09:36] Speaker 03:
And the government's argument throughout has been this very fanciful interpretation of these very technical regulations which are describing the mechanics of the payout process.

[00:09:45] Speaker 02:
But ultimately what the government is arguing is about

[00:09:50] Speaker 02:
Ultimately, what we're concerned with is the statutory interpretation, that 8437 provision that I have mentioned at the start of the argument.

[00:09:58] Speaker 02:
Let me ask you this, how does this work in a child support context, right?

[00:10:03] Speaker 02:
Not MVRA.

[00:10:05] Speaker 02:
If there is a criminal defendant who's been sentenced and owes child support to a former, to a minor son from a former marriage, could the current spouse block

[00:10:20] Speaker 02:
child support payments or, you know, or TSP to be, to reach the, for child support?

[00:10:28] Speaker 02:
In other words, would a current spouse be able to block an enforcement action to recover child support payments that the defendant owes?

[00:10:38] Speaker 03:
That's an interesting question.

[00:10:41] Speaker 03:
I would say that whether or not the government has the right to vindicate the interests of the defendant's former spouse is sort of incidental, I think.

[00:10:51] Speaker 02:
Well, I mean, I think what gets to the heart of this thing for me is does 8437 express some sort of a carve-out, because there are no comparable 8437-type provisions in Novak, are there?

[00:11:05] Speaker 03:
So ERISA just says that, I mean, there are different types of plans under ERISA.

[00:11:10] Speaker 03:
So an ERISA plan can provide— The limitations on anti-alien age.

[00:11:15] Speaker 03:
Right.

[00:11:16] Speaker 03:
And so this court said that those anti-alien age provisions have to yield to the fact that the MPRA says that notwithstanding any other provision of law, the government can enforce a restitution judgment.

[00:11:28] Speaker 03:
Particular language of fursa, I don't think is quite as sweeping as as your honor suggested.

[00:11:33] Speaker 03:
Again, my understanding is that 8437 E3 arose because there was a conflict between the IRS and the TSP over whether restitution judgments were enforceable at all.

[00:11:43] Speaker 03:
against a TSP account.

[00:11:45] Speaker 03:
But again, authorization for the government to apply a restitution judgment against a TSP account doesn't tell us the scope of that power and whether or not that includes the right to basically override the statutory rights of spouses.

[00:11:59] Speaker 03:
And again, the government is asking that we basically wish away the statutory rights of spouses.

[00:12:06] Speaker 03:
The rights of spouses do not just magically disappear any time the government wants, you know, finds them inconvenient.

[00:12:11] Speaker 04:
What about the question posed from Judge Sanchez, as I understand it has to do with how far does 8437 reach?

[00:12:19] Speaker 04:
He's moved from spousal part to child support.

[00:12:26] Speaker 04:
Can 8437 be read in effect to take all of this out of the consumer credit statute

[00:12:36] Speaker 04:
which provides the 25% camp and garnishment and so forth.

[00:12:40] Speaker 04:
So to say that we're in a different world here, and for at least some of the uses identified in 8437, it's not subject to the garnishment limitation.

[00:12:54] Speaker 03:
So as far as whether or not the CCPA applies, that's a separate question.

[00:13:00] Speaker 03:
And the court already ruled.

[00:13:01] Speaker 03:
And again, this case already went

[00:13:03] Speaker 03:
back to the district court once already to decide whether or not Mr. Wells' income streams from his retirement pension plan and the TSP accounts qualified as funds.

[00:13:13] Speaker 03:
And the court ruled that they were, or this court found that ultimately these various revenue streams were subject to the SBA.

[00:13:22] Speaker 03:
And what happened, I think, on remand is that the government

[00:13:26] Speaker 03:
Essentially got a back got a second bite at the apple by misleading the defense about its its its position the government You're seeing your argument on that.

[00:13:34] Speaker 01:
I think you wanted to reserve your time.

[00:13:36] Speaker 03:
Okay.

[00:13:36] Speaker 00:
Thank you May please the court your honors Glenn Shadner with the district of Alaska on behalf of the United States

[00:13:48] Speaker 00:
I'll start briefly with where my colleague left off, where the government was misleading in their actions.

[00:13:55] Speaker 00:
But when this came back on remand, the district court ordered two rounds of briefing done by both parties.

[00:14:00] Speaker 00:
The government outlined an entirety, 80, the process they would follow under the administrative regulations proffered by the TSP, which was 1653, 31 through 36.

[00:14:11] Speaker 00:
They outlined them.

[00:14:12] Speaker 00:
said this is how this is going to work.

[00:14:14] Speaker 00:
We want to go this route and we're going to actively not seek a garnishment.

[00:14:17] Speaker 00:
Not only did they put it in writing when they had a restitution hearing on the issue, the prosecutor at the time stood up and told the court

[00:14:26] Speaker 00:
We don't want a garnishment.

[00:14:27] Speaker 00:
We want to go this route and let the FRTIB, the Federal Retirement Thrift Investment Board, who runs the TSP, let them determine what is available in the TSP for the benefit of the victims.

[00:14:38] Speaker 00:
So the idea that this was somehow underhanded or not out in the open, I think, is contradicted by the record itself.

[00:14:45] Speaker 04:
I'm not worried about the so-called underhanded part, but I am worried about our prior opinion in this case, which

[00:14:56] Speaker 04:
says the district court was required to determine whether each of the benefit income streams constituted earnings.

[00:15:04] Speaker 04:
And then there's a citation to the statute.

[00:15:07] Speaker 04:
If so, the MVRA limited garnishment of those funds to 25%.

[00:15:13] Speaker 04:
Our court seems to be saying that 25% garnishment cap applies if these are earnings, and the government has now conceded these are earnings.

[00:15:22] Speaker 04:
So it may be that none of this actually came up before the prior argument, but how are we not bound by what our court's opinion says, which seems to say if they're earnings acknowledged now by the government, then the 25% garnishment cap applies.

[00:15:39] Speaker 00:
Yes, Your Honor.

[00:15:41] Speaker 00:
I believe at the end of the opinion by the Ninth Circuit, during the remand, it says that we remand it for further proceedings on this issue, discussing the earnings.

[00:15:49] Speaker 00:
And when it comes back about the earnings issue for the CCPA, the Court is bound by the MVRA still to then make a determination.

[00:15:58] Speaker 00:
We're at a situation now where the Court had previously said, we're going to go above the cap using the All Writs Act and use 80% of someone's retirement for restitution.

[00:16:09] Speaker 00:
Because of the Ninth Circuit's ruling, the court knew they could not do that.

[00:16:12] Speaker 00:
So now they're back in a situation where they have to follow the MVRA and make sure they are considering the entire full picture that is available to the victims from the earnings.

[00:16:21] Speaker 00:
So they were still gonna have to follow the MVRA when they came back.

[00:16:24] Speaker 00:
And they did make a determination as the earnings for three of the federal retirements that Mr. Wells is entitled to.

[00:16:30] Speaker 01:
And the reason why there wasn't a determination below

[00:16:34] Speaker 01:
about whether the TSP funds were earnings is because the government represented they weren't going to try to garnish them, right?

[00:16:42] Speaker 01:
But is there any dispute at this point that normal TSP funds would qualify as earnings?

[00:16:52] Speaker 00:
That wasn't taken up on remand, Your Honor.

[00:16:57] Speaker 00:
The way it was phrased was, since we're not garnishing, we don't need to get to the question of earnings since the CCPA wouldn't be implicated then.

[00:17:03] Speaker 02:
But that's the problem because if they are earnings, our prior panel decision would say that they are subject to the 25% cap.

[00:17:12] Speaker 02:
So part of the problem is no one ever went to tee up that issue, whether the TSP funds are earnings, leaving us in the dark about what to do with this.

[00:17:23] Speaker 00:
Yes, Your Honor.

[00:17:25] Speaker 00:
It's corrected that it was not teed up.

[00:17:26] Speaker 00:
It was basically argued that since we're not going to be using a writ of garnishment, there'd be no garnishment order, that it would not be... Essentially, there's no need to get into... We understand what happened.

[00:17:36] Speaker 01:
Is your position now that it's still an open question of whether these TSB funds are earnings, or would you concede that they are earnings?

[00:17:48] Speaker 00:
I would say it's an open question, and there was no factual record made about it, Your Honor.

[00:17:52] Speaker 04:
Someplace you've got a statement that the government at that point took the position that there were earnings.

[00:18:00] Speaker 04:
I didn't see a denial of that in your brief.

[00:18:02] Speaker 04:
You may be saying, well, but it never got taken up.

[00:18:06] Speaker 04:
I can go back and find it, but I came away from the opening brief understanding the government wasn't disputing that.

[00:18:15] Speaker 04:
It was now saying, but the whole thing is irrelevant because we're going this different route.

[00:18:19] Speaker 04:
It goes back to the core question, does the government

[00:18:22] Speaker 04:
today or before the district court on remand dispute that the TSP money qualifies as earnings.

[00:18:31] Speaker 00:
The first part of that statement, Your Honor, I know that the government took the position that the other three retirements were earnings.

[00:18:38] Speaker 00:
I do not believe they

[00:18:39] Speaker 00:
My memory is that we did not take the position that the TSP was earnings.

[00:18:42] Speaker 00:
We do dispute that the TSP would be earnings under the CCPA.

[00:18:46] Speaker 01:
My understanding of the government's position was that even assuming they are earnings, we're allowed to do what we did.

[00:18:53] Speaker 01:
That's correct.

[00:18:54] Speaker 01:
Which is to take 100% of the account balance, notwithstanding the lack of spousal consent under this regulatory procedure.

[00:19:05] Speaker 01:
Correct.

[00:19:05] Speaker 01:
And I understand planners argue me as that's just

[00:19:07] Speaker 01:
That regulation that the government is attempting to rely on just explains the process for collecting what are otherwise statutorily authorized takings, for want of a better word, and then the dispute really here is whether that

[00:19:28] Speaker 01:
Taking of the entire account was actually staturally, statutorily authorized.

[00:19:34] Speaker 01:
And you're saying, is the government's position, the regulation in itself is the source of the authority to take the entire balance?

[00:19:42] Speaker 01:
What is the statutory authority for the government to take the entire balance, even without spousal consent?

[00:19:51] Speaker 00:
We would say the regulation itself provides the framework for the authority for the government to act and how the government must act, which is backed up by the statute 843073.

[00:20:02] Speaker 00:
So since 2009, essentially, the government's had the ability to collect in this method.

[00:20:07] Speaker 01:
And is there any other court that has held that the entire TSB account balance can be taken without spousal consent?

[00:20:16] Speaker 00:
To my knowledge, Your Honor, no other court has

[00:20:20] Speaker 00:
looked at this question at all.

[00:20:21] Speaker 00:
I don't think this 8437E3 or the administrative regulations that relate to it have been evaluated for restitution context.

[00:20:31] Speaker 02:
So what's your best argument for saying that 8347E3 puts you in a different context than Novak?

[00:20:40] Speaker 00:
Yes, Your Honor.

[00:20:43] Speaker 00:
In part three, it starts out, it says, we therefore proceed to clarify the extent in which a garnishment pursuant to the MVRA can require retirement plans to immediately turn over the entire present value of a participant's interest.

[00:20:55] Speaker 00:
We're not in a situation when the government is coming before the court and requesting authority to garnish, like any other route of garnishment.

[00:21:02] Speaker 00:
What the, what NOVAC outlines is, here's limitations when the government is seeking to garnish, specifically with a court order.

[00:21:08] Speaker 00:
And it also recognizes that whether or not the government can garnish, even in a garnishment setting, whether or not the government can collect is dependent on the structure of the retirement plan itself.

[00:21:21] Speaker 00:
So some you can, you can, and some you cannot.

[00:21:24] Speaker 00:
In this situation, the retirement plan, the TSP, they've promulgated their own rules to say, you can take this, you can take these funds simply with a restitution order, which is effectively proof of the judge.

[00:21:36] Speaker 01:
I'll put a finer point on it.

[00:21:37] Speaker 01:
Novak, when I think of Novak, I think Novak is saying the government steps into the shoes of the defendant and all these statutory schemes.

[00:21:49] Speaker 01:
When the statute says, you know, these kinds of funds are subject to the MVRA or any other kind of tax lien or all these other things, the government steps into the shoes of the defendant.

[00:22:03] Speaker 01:
So to adopt your position here would be the one time where the government doesn't just step into the shoes of the defendant, but the government actually has more entitlement to the funds than the defendant themself.

[00:22:18] Speaker 01:
Is there any other case, any other time where the statute has authorized the government to collect funds in a way that the defendant themselves could not?

[00:22:28] Speaker 00:
I'm not aware of any other statute that allows that, Your Honor.

[00:22:31] Speaker 00:
I would differ slightly on how you phrased that, though I think largely in agreement, that the government is saying we are not limited by the restraints put onto the property rights of the defendant.

[00:22:42] Speaker 00:
There's no question the property is his.

[00:22:45] Speaker 00:
He just has constraints built into the TSP plan which say, yes, it's your property, but you cannot execute on it without permission of your spouse.

[00:22:52] Speaker 00:
The TSP has set aside its own mechanism for the government to

[00:22:57] Speaker 00:
access that same property, but without the same constraints.

[00:23:00] Speaker 01:
That's the regulation, you're saying.

[00:23:01] Speaker 00:
Yes, Your Honor.

[00:23:03] Speaker 04:
I ask you to look to 8437, which is where enforcement of an order for restitution or the statute pertaining to the Thrift Saving Fund may open the door and seems to be the premise of the government's contention that it can

[00:23:26] Speaker 04:
separate and apart from the CCPA.

[00:23:30] Speaker 04:
I got lost in the acronym.

[00:23:35] Speaker 04:
So there are lots of things there.

[00:23:37] Speaker 04:
Judge Ange has mentioned child support.

[00:23:40] Speaker 04:
There's a reference to alimony payments.

[00:23:42] Speaker 04:
There are several other references.

[00:23:46] Speaker 04:
Has it been determined in any other court context that

[00:23:53] Speaker 04:
Other exceptions, other provisions listed in 8437E3 are similarly capable of execution without the CCPA limitation?

[00:24:11] Speaker 00:
Not to my understanding today, Your Honor.

[00:24:12] Speaker 00:
I don't know of any case law determining that.

[00:24:15] Speaker 02:
Or what about spousal rights limitations?

[00:24:18] Speaker 00:
Going to your hypothetical, you offered your honor about spousal rights with the child support.

[00:24:25] Speaker 00:
I have not seen any discussing that where the subsequent spouse could therefore block child support payments to the children of the first relationship.

[00:24:36] Speaker 00:
I haven't seen any along those lines, but that in theory would be

[00:24:39] Speaker 02:
The difficulty with the government's position is that Novak talks about the tax levy context and says the MVRA is written very similarly to the tax levy statute.

[00:24:52] Speaker 02:
And as Judge Song pointed out, in both circumstances, the government can do no more than just step into the defendant's shoes.

[00:25:00] Speaker 02:
So one way this panel could construe 8437 is just saying it makes these funds available for restitution in the same manner as it would in other ways, such as tax levies, but no more, no less than the way that we've done it in other ways with a tax levy.

[00:25:18] Speaker 02:
And so all the government can do is just step into the defendant's shoes.

[00:25:22] Speaker 02:
Why is that not the better way to analyze the statute and have it be consistent with Novak?

[00:25:29] Speaker 00:
Well, again, we don't believe what we're doing, the way we are collecting is inconsistent with Novak, since Novak specifically is dealing with a garnishment, a rear of garnishment, the power vested by the court to let the debtor to stand in the shoes of the, sorry, the creditor to stand in the shoes of the debtor.

[00:25:46] Speaker 00:
We don't believe that we are subject to that same limitation because

[00:25:54] Speaker 00:
When the when the government is acting under this the authority of eighty four thirty seven they are able to simply rely on the restitution judgment in any other context for garnishment we couldn't take the judgment and say.

[00:26:10] Speaker 00:
Wells Fargo, you have $400,000 for a defendant.

[00:26:12] Speaker 00:
Please let us have it.

[00:26:13] Speaker 00:
Here's the judgment.

[00:26:14] Speaker 00:
We would have to have a specific writ of garnishment ordered in the judgment saying, Wells Fargo, you need to give those funds to the government on behalf of the victims.

[00:26:22] Speaker 01:
And part of the difficulty I have with this argument is because you're relying on the regulation that says this is how the government can essentially take the whole balance as long as you check all these boxes.

[00:26:34] Speaker 01:
But the statute itself protects the right of spouses, so I'm not sure how the regulation can say essentially authorize the government to override the spouses simply by following the correct process.

[00:26:50] Speaker 00:
So we would argue, Your Honor, that the statute protects the rights of the spouses from disbursement of the funds on behalf of the employee or the member that's part of the plan and the DSP.

[00:27:00] Speaker 00:
It does not protect them from any type of forfeiture of the funds that are basically occurring here, where the MVRI... Right.

[00:27:06] Speaker 01:
So I don't think you can rely on the regulation for that argument, though.

[00:27:09] Speaker 01:
So what is the statutory source for that argument?

[00:27:12] Speaker 01:
Where do you base that in the statutory text?

[00:27:15] Speaker 01:
That essentially that Congress said, you know, we're going to protect the rights of spouses against their own spouse, but not against the government.

[00:27:27] Speaker 00:
We would be relying on 8437E3 solely.

[00:27:29] Speaker 00:
That's solely.

[00:27:31] Speaker 00:
Solely, Your Honor.

[00:27:33] Speaker 00:
And I guess also the statute that gives the executive director of the TSP, so that's 5 U.S.C.

[00:27:39] Speaker 00:
84, sorry, 8471C1, its rulemaking authority to.

[00:27:44] Speaker 01:
That's where we ran into a little bit of a bright problem, but that's, yeah, okay.

[00:27:47] Speaker 00:
And so essentially, Your Honors, we are not trying to overrule Novak with Novak's good law.

[00:27:56] Speaker 00:
We just see ourselves in a situation where under 18 U.S.C.

[00:27:59] Speaker 00:
3664 M1A, all available means available to the government, we're supposed to pursue restitution on behalf of the victims.

[00:28:05] Speaker 00:
We have two families here who, there's a public policy of making the victims whole.

[00:28:11] Speaker 00:
And you have the policy of the spousal interests who, you know, the innocent spouse, so to say.

[00:28:16] Speaker 00:
The innocent spouse in this case is covered by the MVRA when the court recognizes there's three federal retirements that they have access to that the government cannot pursue this type of collection action for.

[00:28:26] Speaker 00:
We're limited to this collection action only under the TSP.

[00:28:29] Speaker 00:
And our argument is that's solely within H3P3.

[00:28:33] Speaker 00:
Thank you.

[00:28:33] Speaker 00:
And that's all I have, Your Honors.

[00:28:34] Speaker 00:
Thank you.

[00:28:45] Speaker 03:
when i was writing my brief in this case it was sort of a challenge to try to come up with uh...

[00:28:49] Speaker 03:
a succinct explanation of why the government's argument is so flawed because there were so many canons of statutory construction that they have just completely blown right past.

[00:28:59] Speaker 03:
Again, they are asking that this court engraft into 8437E language that just does not appear.

[00:29:05] Speaker 01:
Well, counsel, I mean, Candon, my biggest problem, the thing that I think that term statutory text that creates the most ambiguity for me is the reference to the balance in the account, right?

[00:29:19] Speaker 01:
I mean, it's ambiguous at best, right, as to whether that's essentially overriding the spousal rights to part of that balance and authorizing the government under the MVRA to take the whole balance or whether we have to read that as I think what you're saying in the entire statutory context.

[00:29:43] Speaker 01:
as just saying, yes, the balance is available to the same extent as it is available to the defendant themselves under Novak.

[00:29:52] Speaker 01:
So I mean, what's your best statutory interpretation argument for why your resolution of the ambiguity should prevail?

[00:29:59] Speaker 03:
So again, the phrase balance is doing a lot of analytical work in that question that you just asked.

[00:30:04] Speaker 03:
You're asking that the word balance means that the government gets to do whatever it wants.

[00:30:08] Speaker 03:
And never mind the fact that there are very specific provisions that address this very subject.

[00:30:13] Speaker 03:
We're just gonna interpret the word balance out of context, and we're going to extrapolate all these inferences.

[00:30:19] Speaker 03:
Again, if you're looking at the overall statutory scheme, as this court must, it is a cardinal rule that you look at the terms in context.

[00:30:27] Speaker 03:
It would be very strange that Congress intended to abolish, nullify, or modify the rights of spouses that have been carefully considered.

[00:30:36] Speaker 03:
Again, the whole purpose of this is to give spouses rights to income.

[00:30:41] Speaker 02:
But if I'm looking at the spousal protection language, it talks about

[00:30:45] Speaker 02:
A married employee or member may withdraw all or part of the Thrift Savings Fund or change a withdrawal election unless... So isn't that different than the context of the government trying to seek a restitution order?

[00:31:01] Speaker 02:
It's not about a member trying to withdraw or dissipate funds in a TSP that would injure the spouse.

[00:31:09] Speaker 02:
It's about the government coming in.

[00:31:11] Speaker 03:
Well, and again, going back to Novak, and I hate to be beating a dead horse here, but this court already engaged with these questions in Novak.

[00:31:18] Speaker 03:
And what this court said is, like, we're looking at the defendant's property, the defendant's immediate property rights.

[00:31:25] Speaker 03:
We don't just disregard the rights of spouses just because we think the defendant did a bad thing.

[00:31:30] Speaker 03:
those rights just don't magically disappear.

[00:31:32] Speaker 01:
I guess we get to Novak unless this statute expressly authorizes the government to have more than the defendant's rights and I think what you're arguing is saying is this essentially this provision is too ambiguous and you have to read in context to be read as an aspects essentially authorization of the government to have more rights than

[00:31:52] Speaker 01:
to these funds than the defendant themselves.

[00:31:55] Speaker 01:
Is there anything else besides the statutory context, whether it be legislative history, canons of interpretation, anything else that you would rely on in terms of a textual argument?

[00:32:05] Speaker 03:
Yeah, I'd say also we want to interpret provisions in harmony.

[00:32:09] Speaker 03:
We don't want to assume that there's been some sort of implicit repeal of other provisions.

[00:32:15] Speaker 03:
And here's the thing is that, going back to the word balance, I mean, the government can enforce a restitution judgment against the TSP plan.

[00:32:21] Speaker 03:
There's no question about that.

[00:32:23] Speaker 03:
The question is how much and the mechanism, the ways by which they do that.

[00:32:28] Speaker 03:
And I really do want to stress that the government's arguments following remand

[00:32:32] Speaker 04:
can only be characterized as deceptive and misleading and I really Well, maybe you need to own up to the fact Maybe you need to own up to the fact the principal beneficiary of the position you're arguing appears to be the defendant himself

[00:32:46] Speaker 03:
Well, I'd say that Mrs. Wells is a real person, and if Mr. Wells dies and those TSP funds are there, she's entitled to that.

[00:32:56] Speaker 03:
She's entitled to an annuity.

[00:32:58] Speaker 03:
Congress created that specifically to protect the rights of spouses, and going back to Novak,

[00:33:03] Speaker 03:
This court said that we're going to defer to Congress's decision to protect blameless dependents from the plan holder squandering their assets.

[00:33:15] Speaker 03:
And whether it's being squandered because the defendant is trying to cash out the plan without their spouse's knowledge, or whether the defendant has committed an offense.

[00:33:23] Speaker 03:
And by the way, Mrs. Wells is not a party in this case.

[00:33:26] Speaker 03:
She's not a co-defendant.

[00:33:27] Speaker 03:
She is the prototypical blameless dependent.

[00:33:30] Speaker 03:
And the government is trying to take away property that she has a valid right to.

[00:33:35] Speaker 03:
Going back to the government's argument that they were, you know, above board when this case was remanded after the last appeal, you know, the government, I think, hit the ball.

[00:33:43] Speaker 04:
There's no question about that.

[00:33:44] Speaker 04:
Don't go there.

[00:33:46] Speaker 03:
Don't go there.

[00:33:46] Speaker 03:
Okay.

[00:33:47] Speaker 03:
Well, I'm going to leave it at that.

[00:33:48] Speaker 03:
I thank you so much for your time.

[00:33:49] Speaker 01:
Thank you, Council, for your arguments.

[00:33:51] Speaker 01:
And I believe this matter is submitted and we are adjourned for the day.