United States District Court, D. South Dakota, Western Division
JEFFREY L. VIKEN, CHIEF JUDGE.
convicted defendant Scott Thompson of making false claims,
submitting false documents to a United States agency,
committing fraud by wire and receiving stolen government
money. (Docket 217). The sentence the court imposed on
defendant included restitution. (Docket 283). After
defendant's restitution payment schedule commenced, he
filed a motion to stay restitution on November 25, 2016.
(Docket 303). Before the court scheduled a hearing on
defendant's motion, the United States Probation Officer
supervising defendant notified the court that defendant
stopped making payments after November 28,
hearing on defendant's motion, the court determined,
“[p]ursuant to 18 U.S.C. § 3664(k),
defendant's motion constitutes a notification of his
change in economic circumstances.” (Docket 311). The
court amended defendant's payment schedule and denied his
motion to stay restitution as moot. Id. Amended
judgments were entered consistent with the order. (Dockets
312 & 313). The court also ordered status conferences
every six months to monitor defendant's progress with
a status conference, defendant provided the court with a
debtor statement from the United States Department of
Justice. (Docket 316). The debtor statement indicates
defendant owes $21, 534.46 as a penalty. (Docket 316-1). The
court determined the penalty was not consistent with the
court's judgment imposing restitution and prohibited the
Department of Justice from collecting the $21, 534.46
penalty. (Docket 316).
government claims the court's order on the penalty is
contrary to applicable law. (Docket 319). The government
moves the court to alter or amend its judgment pursuant to
Rule 59(e) of the Federal Rules of Civil Procedure.
Id. According to the government, only the Office of
the Attorney General-not the court-has authority to decide
whether the $21, 534.46 penalty against defendant is
collected. (Docket 320). The government asserts the penalty
was imposed because defendant failed to comply with his
restitution payment schedule. Id. In response,
defendant claims the court's decision to amend his
payment schedule under 18 U.S.C. § 3664(k) means he did
not fail to meet his restitution obligations. (Docket 327).
59(e) provides, “[a] motion to alter or amend a
judgment must be filed no later than 28 days after the entry
of the judgment.” Fed.R.Civ.P. 59(e). On March 26,
2018, the court entered the order the government challenges.
(Docket 316). The government filed its Rule 59(e) motion on
April 19, 2018, before 28 days passed. (Docket 319). The
motion is timely.
Rule of Civil Procedure 59(e) was adopted to clarify a
district court's power to correct its own mistakes in the
time period immediately following entry of judgment.”
Chapman v. Hiland Partners GP Holdings, LLC, 862
F.3d 1103, 1110-11 (8th Cir. 2017) (quoting Innovative
Home Health Care, Inc. v. P.T.-O.T. Assocs. of the Black
Hills, 141 F.3d 1284, 1286 (8th Cir. 1998)). “Rule
59(e) motions serve the limited function of correcting
‘manifest errors of law or fact or to present newly
discovered evidence.' ” United States v. Metro.
St. Louis Sewer Dist., 440 F.3d 930, 933 (8th Cir. 2006)
(quoting Hagerman v. Yukon Energy Corp., 839 F.2d
407, 414 (8th Cir. 1988)). “ ‘Such motions cannot
be used to introduce new evidence, tender new legal theories,
or raise arguments which could have been offered or raised
prior to entry of judgment.' ” Id.
(quoting Hagerman, 839 F.2d at 414). District courts
have broad discretion when considering whether to grant a
motion to amend or alter a judgment under Rule 59(e).
United States v. Lauersen, the United States Court
of Appeals for the Second Circuit analyzed the restitution
statute applicable to this case:
Section 3612 concerns the collection of unpaid criminal fines
or restitutions. As relevant here, the Attorney General is
“responsible for collection of an unpaid fine or
restitution” that the district court properly
certifies. 18 U.S.C. § 3612(c). If a defendant is more
than 30 days late paying a fine or restitution, he is
delinquent. Id. § 3572(h). If a defendant is
then delinquent for more than 90 days, he is in default.
Id. § 3572(i). Section 3612 mandates
substantial financial penalties for delinquency or default of
a fine or restitution: “the defendant shall pay”
10% of the principal amount that is delinquent and an
additional 15% of the principal amount that is in default.
Id. § 3612(g); United States v.
Pescatore, 637 F.3d 128, 144 (2d Cir. 2011).
In addition, Section 3612 requires that defendants
“shall pay interest, ” according to a statutory
formula, on fines or restitutions not paid in full within
fifteen days of the judgment. 18 U.S.C. §
3612(f)(1)-(2). Congress specified that a district court may
waive or modify the interest due if it “determines that
the defendant does not have the ability to pay
interest.” Id. § 3612(f)(3). Moreover,
Congress empowered the Attorney General to waive all or part
of the interest or penalty if it determined that
“reasonable efforts to collect the interest or penalty
are not likely to be effective.” Id. §
These requirements regarding payment of interest and
delinquency and default penalties date back to the Criminal
Fine Improvements Act of 1987, Pub. L. No. 100-185, §
11, 101 Stat. 1279, 1283-85 (1987). Congress added both the
interest and penalty requirements at the same time, in the
same statute. As is true today, Congress provided that both
district courts and the Attorney General may waive all or
part of the specified interest on fines. However, Congress
provided that only the Attorney General may waive all or part
of specified delinquency and default penalties. Congress
could have given district courts similar authority for
delinquency and default penalties, but it did not.
648 F.3d 115, 116 (2d Cir. 2011) (per curiam).
on the government's representations in its Rule 59(e)
motion and memorandum, the court finds the government imposed
the $21, 534.46 penalty on defendant pursuant to 18 U.S.C.
§ 3612. The court's information from defendant's
supervising Probation Officer provides further support for
finding the penalty resulted from failure to make restitution
payments. Because the origin of the penalty is 18 U.S.C.
§ 3612, defendant's claim that the court found he
complied with his payment schedule does not free him from the
penalty. See Lauersen, 648 F.3d at 117 (“Nor
does 18 U.S.C. § 3664(k) provide a district court with
authority to waive all or part of delinquency or default
penalty is imposed under 18 U.S.C. § 3612,
“Congress provided that only the Attorney General may
waive all or part of specified delinquency and default
penalties. Congress could have given district court's
similar authority for delinquency and default penalties, but
it did not.” Lauersen, 648 F.3d at 116; 18
U.S.C. § 3612. Consequently, the court alone may not
prohibit the government from collecting the $21, 534.46
penalty. See Lauersen, 648 F.3d at 116-18 (“We
conclude that the district court correctly interpreted
Section 3612(h) as authorizing only the Attorney General, in
its discretion, to waive all or part of delinquency and
default penalties properly assessed pursuant to Section
3612(g).”). Congress ...