In a rare retreat from its aggressive collection of funds owed by federal prisoners, the Federal Bureau of Prisons (BOP) has instructed staff at prisons located within the Ninth Circuit to cease demands for restitution payments from most prisoners owing such obligations.  The order was issued in the wake of Ward v. Chavez, 678 F.3d 1042 (9th Cir. 2012), in which a prisoner challenged the BOP’s authority to collect restitution from him under the Mandatory Victim Restitution Act (MVRA), 18 U.S.C. § 3664(f), without a schedule of payments made by the sentencing judge.  Ruling in favor of the prisoner under 28 U.S.C. § 2241, the Ninth Circuit held that the sentencing judge impermissibly delegated its authority under the MVRA by ordering immediate payment of restitution without specifying a payment schedule. 678 F.3d at 1051-52.

The Inmate Financial Responsibility Program

For the last several decades, the BOP has aggressively pursued collection of funds from prisoners owing financial sanctions through its Inmate Financial Responsibility Program (IFRP), 28 C.F.R. § 545.10 et seq. (BOP Program Statement 5380.08).  Such sanctions include those from the federal courts, i.e., special assessments under 18 U.S.C. § 3013, fines and court costs, and restitution under the MVRA and other provisions.  State court obligations and certain other debts are also subject to collection under the IFRP.  Framed as a “voluntary” program, the IFRP allows prison staff to “request” that prisoners make regular payments toward satisfaction of these obligations. 28 C.F.R. § 545.11.

Using a formula that bases payments on the total receipt of funds in the prisoner’s commissary account, not just those funds earned in prison work assignments, staff subtract a telephone stipend and use the balance to formulate a “commensurate payment,” either monthly or quarterly. PS 5380.08, at 9.

While participation in the program is deemed voluntary, numerous court decisions and prisoner representations indicate that while the regulation envisions staff “assist[ing] the inmate in developing a financial plan,” 28 C.F.R. § 545.10, the usual practice is for staff to present the prisoner with a payment schedule on a “take it or leave it” basis. See, e.g., Cordona v. Bledsoe, 681 F.3d 533, 537 (2d Cir. 2012)(BOP amount exceeding court recommendation).

A prisoner’s decision to decline voluntary participation in the IFRP carries consequences, some of them significant.  They include:

(1) Where applicable, “the Parole Commission will be notified of the [prisoner’s] failure to participate”;

(2) the prisoner will not receive any furlough, other than “possibly an emergency or medical furlough”;

(3) the prisoner will receive only the minimum pay for work assignments (typically five dollars a month);

(4) the prisoner “will not be assigned to any work detail outside the secure perimeter of the facility”;

(5) the prisoner will not be placed in UNICOR (the prison factory system, in which prisoners earn five to ten times the pay of regularly assigned work details);

(6) the prisoner will be restricted to a stringent spending limitation, usually $25.00 per month (versus the usual $320.00 per month limit);

(7) the prisoner will be quartered in the lowest housing status, {i.e.}, dormitory, four-man rooms, etc.;

(8) the prisoner will not be placed in any community-based programs; and other sanctions. 28 C.F.R. §§ 545.11(b)(d).

For many federal prisoners, IFRP participation begins and ends with satisfaction of the mandatory $100.00 (per count of conviction) special assessment fee.  For these prisoners, a typical payment is in the $25.00 per quarter minimum allowed under the program.  For prisoners subject to substantial restitution mandated in a bank robbery and other prosecutions, a monthly payment of several hundred dollars is not uncommon. See, e.g., United States v. Moore, 309 Fed. Appx. 648, 649 (3d Cir. 2009)($150.00 per month).

Ward v. Chavez and the MVRA

In the Ward case, petitioner Jack Ward filed a petition for a writ of habeas corpus, 28 U.S.C. § 2241, in the United States District Court for the District of Arizona, claiming that the BOP lacked authority to collect restitution from him under the IFRP.  Among other sanctions, Ward had been sentenced to restitution of $27,885.00 under the Mandatory Victim Restitution Act.

Ward’s claim centered on the fact that when his sentencing judge imposed restitution, he noted in the judgment that payment of the restitution was “due immediately.”  Because the MVRA directs that the court shall “specify in the restitution order the manner in which, and the schedule according to which, the restitution is to be paid,” 18 U.S.C. § 3664(f)(2), Ward contended that allowing the BOP to set such a schedule would be an impermissible delegation of judicial authority. 678 F.3d at 1046.

He lost.  The district court found that Ward had not exhausted his administrative remedies — Ward had claimed doing so would be futile — and, as to the merits, that the IFRP was a voluntary program and the sentencing court had not actually delegated its authority to the BOP. 678 F.3d at 1045.

Upon appeal to the Ninth Circuit, Ward prevailed, and the court reversed the district court’s denial of relief under § 2241.  Within the Ninth Circuit, there was a precedential basis for Ward’s position.  The court had previously held that a district court “simply does not have the authority to delegate its own scheduling duties, not to the probation office, not to the BOP, not to anyone else.” United States v. Gunning, 401 F.3d 1145, 1150 (9th Cir. 2005).  The catch with this prior case law was that the same court had also ruled that the BOP had the authority to encourage voluntary compliance with the IFRP. See, e.g., United States v. Lemoine, 546 F.3d 1042, 1049 (9th Cir. 2008).  However, in Lemoine, the sentencing judge had indeed set a payment schedule, and the BOP was seeking even more, “voluntarily.” Id. at 1046.  In Ward’s case, it did not.  This, the Ward court said, was the difference.

For a restitution order to be lawful, therefore, § 3664 required that the district court set a schedule in consideration of the defendant’s financial resources . . . [I]f the district court simply orders immediate payment and leaves it to another agency, like the BOP, to actually set the payment schedule that the statute obligates the court to determine, that order is unlawful, and the district court has abdicated in its duty to set the schedule “in consideration of” the financial circumstances of the defendant. 678 F.3d at 1050.

As such, the Ward court found that because the restitution order entered in his case was unlawful, the BOP thereafter lacked “authority to collect restitution payments from Ward through the IFRP.” 678 F.3d at 1051.  It ordered that the BOP cease its attempts to collect restitution from Ward under the IFRP. Id.

The BOP’s Memorandum Recognizing Ward

Ward was announced in May 2012, and, predictably, it has inspired numerous federal prisoners to bring challenges to their restitution payments. See, e.g., Adkins v. Sanders, 2013 U.S. Dist. LEXIS 36407 (C.D.Ca., 2/6/13)(claim based on Ward).

In response, the BOP issued a memorandum to prisoners housed at BOP facilities located within the Ninth Circuit.

NOTICE TO ALL INMATES CURRENTLY HOUSED IN BOP FACILITIES IN THE NINTH CIRCUIT

Pursuant to the Ninth Circuit decision of Ward v. Chavez, 678 F.3d 1042 (9th Cir. 2012), Bureau of Prisons inmates currently confined in the Ninth Circuit may request a review of Restitution Orders that are “due immediately” and which have no court-ordered payment schedule.  Upon request, a review of such restitution orders may take place during the inmate’s next scheduled Program Review, or review may occur upon request through the Administrative Remedy Process.  If the Unit Team find that the inmate’s restitution order is 1) dated on or after April 24, 1996, 2) is “due immediately” and 3) lacks a court-ordered payment schedule that can be applied during imprisonment, the Unit Team will no longer include the restitution order when determining the financial obligations subject to collection under the Inmate Financial Responsibility Program.

To date, there are no published cases indicating that other courts have followed the Ward rationale, nor is there any indication that BOP prisoners housed in prisons in other circuits have benefitted from the case.  However, in his recent email newsletter — which reaches thousands of prisoners across the country — criminal defense attorney Jeremy Gordon has spread the news.  “I want to encourage those litigators out there to push the issue through 28 U.S.C. § 2241 petitions,” he said, encouraging prisoners to challenge their restitution under the same theory.  (Attorney Gordon can be contacted via email, info(at)topfederallawyer(dot)com, and at Facebook.com/gordondefense).

What will become of Ward, and its effect on restitution sanctions within the BOP is not yet clear.  Undoubtedly, other courts of appeals will entertain the issue, and some may conclude, as did the dissenting judge in Ward, that challenges to restitution orders must be made before the sentencing court, and not a habeas corpus judge. See 678 F.3d at 1052 (Wallace, J., dissenting)(offering lengthy discussion as to the appropriateness of § 2241 in such cases).  Yet, there appears to be an ample basis for concluding that a § 2241 habeas corpus petition is in fact the appropriate vehicle for such claims since a prisoner cannot know that the BOP will try to collect restitution from him/her until incarcerated and because “petitions that challenge the manner, location, or conditions of a federal sentence’s execution must be brought pursuant to § 2241 in the custodial court.” Cornwell v. Sanders, 2013 U.S. Dist. LEXIS 26419 (C.D.Ca. 1/7/13)(citation omitted)(finding Ward claim cognizable under § 2241).

For now, at least, federal prisoners in at least a dozen institutions will no longer be “asked” to participate in IFRP without a court-ordered payment schedule for their restitution obligations.

About Christopher Zoukis, MBA

Christopher Zoukis, MBA, is the Managing Director of the Zoukis Consulting Group, a federal prison consultancy that assists attorneys, federal criminal defendants, and federal prisoners with prison preparation, in-prison matters, and reentry. His books include Directory of Federal Prisons (Middle Street Publishing, 2020), Federal Prison Handbook (Middle Street Publishing, 2017), Prison Education Guide (PLN Publishing, 2016), and College for Convicts: The Case for Higher Education in American Prisons (McFarland & Company, 2014).

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