United States v. Fleet

[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
No. 06-12454 SEPTEMBER 5, 2007
________________________ THOMAS K. KAHN
CLERK
D.C. Docket No. 05-00069-CR-3-002-MCR

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

versus

DAVID EMORY FLEET,

Defendant-Appellant.

________________________

Appeal from the United States District Court
for the Northern District of Florida
_________________________

(September 5, 2007)

Before CARNES, PRYOR and FARRIS,* Circuit Judges.

CARNES, Circuit Judge:

*
Honorable Jerome Farris, United States Circuit Judge for the Ninth Circuit Court of
Appeals, sitting by designation.
 This appeal presents the issue of whether the substitute property provision of

the federal criminal forfeiture statute, 21 U.S.C. § 853(p), preempts the homestead

exemption contained in the Florida Constitution and that state’s tenancy by the

entireties law.

I.

In October 2005 a jury found David Fleet guilty on twenty-one counts in a

multi-count superceding indictment stemming from his role in a fraudulent land-

swap arrangement that bilked two unwitting investors out of more than 11 million

dollars. The counts for which Fleet was convicted included charges of wire fraud,

aiding and abetting wire fraud, money laundering, aiding and abetting money

laundering, conspiracy to engage in money laundering, and making a materially

false statement to an FBI agent during the investigation.

The superceding indictment notified Fleet that if he were convicted on any

of the money laundering counts listed in the indictment, which charged a violation

of 18 U.S.C. § 1957, the government would seek forfeiture of any real or personal

property involved in or traceable to that money laundering. The forfeiture was

authorized under § 982(a)(1), which provides that anyone found guilty of violating

§ 1957 shall forfeit any property “involved in” or “traceable to” the crime. Section

§ 982(b)(1) incorporates the provisions of 21 U.S.C. § 853, the criminal forfeiture

2
statute. The indictment also notified Fleet that if the forfeitable property was

unavailable because of an act or omission on his part, the government would seek

forfeiture of any other property he owned up to the value of the property that was

subject to forfeiture under § 982(a)(1).

After Fleet’s conviction, the district court entered a preliminary order of

forfeiture that required him to forfeit $295,000 in cash to the government.

Although Fleet stipulated to that forfeiture amount, he did not have enough cash to

cover it. The government then filed a motion pursuant to 21 U.S.C. § 853(p)

asking the district court to amend its preliminary order of forfeiture to substitute

other property that Fleet owned which was not involved in or traceable to money

laundering.

Specifically, the government asked the district court to order the forfeiture

of Fleet’s interest in his house and three automobiles. Fleet owned one of those

vehicles outright, but he and his wife owned the other two cars and the house

jointly. Fleet opposed the government’s motion by arguing, among other things,

that the Florida Constitution’s homestead exemption, as well as that state’s

tenancy by the entireties law, shielded his home from forfeiture. Fleet never

disputed that Congress could override those state law provisions if it intended to

do so, but instead took the position that Congress had not intended to override

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them with the substitute property provision of § 853(p).

The district court rejected Fleet’s argument. It found that he had

“transferred, deposited into the name of third parties, or otherwise disposed of the

$295,000 in forfeited proceeds” with the result that the forfeited proceeds could

not be located through due diligence. Concluding that § 853(p) preempted the

Florida homestead exemption and tenancy by the entireties law, the court ordered

that the: “defendant’s indivisible one-half interest in the marital property is subject

to forfeiture as a substitute asset under § 853(p). As to the matter of the vehicles,

all of defendant’s interest in those vehicles is subject to forfeiture under § 853(p).”

(The order did not purport to forfeit the interest of Fleet’s wife in any of that

property, only his own interest.)

II.

Pressing the same argument here as he did in the district court, Fleet

contends that his interest in his home he owns jointly with his wife may not be

forfeited as a substitute asset under 21 U.S.C. § 853(p). The state law provisions

that Fleet relies on appear to protect the property in question to the extent that

state law can do so. The Florida Supreme Court has interpreted the homestead

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exemption, which is found in Article X, § 4 of the Florida Constitution1, to forbid

the civil or criminal forfeiture of homestead property. Butterworth v. Caggiano,

605 So. 2d 56, 61 (Fla. 1992). Likewise, a Florida appellate court has held that

under that state’s law governing entireties property, see generally Passalino v.

Protective Group Sec., Inc., 886 So. 2d 295, 296–97 (Fla. 4th DCA 2004),2

“neither spouse may sever or forfeit any part of the estate without the assent of the

1
The homestead exemption in Art. X, § 4 of the Florida Constitution provides in part:

(a) There shall be exempt from forced sale under process of any
court, and no judgment, decree or execution shall be a lien thereon,
except for the payment of taxes and assessments thereon,
obligations contracted for the purchase, improvement or repair
thereof, or obligations contracted for house, field or other labor
performed on the realty, the following property owned by a natural
person:
(1) a homestead, if located outside a municipality, to the extent of
one hundred sixty acres of contiguous land and improvements
thereon, which shall not be reduced without the owner’s consent by
reason of subsequent inclusion in a municipality; or if located
within a municipality, to the extent of one-half acre of contiguous
land, upon which the exemption shall be limited to the residence of
the owner or the owner’s family[.]

2
For a person to hold property in tenancy by the entireties six “unities” must be present:

(1) unity of possession (joint ownership and control); (2) unity of interest
(the interests in the account must be identical); (3) unity of title (the
interests must have originated in the same instrument); (4) unity of time
(the interests must have commenced simultaneously); (5) survivorship;
and (6) unity of marriage (the parties must be married at the time the
property became titled in their joint names).

Id. (citation omitted).

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other . . . .” Sitomer v. Orlan, 660 So. 2d 1111, 1113 (Fla. 4th DCA 1995). At the

same time, the federal substitute property forfeiture provision, 21 U.S.C. § 853(p),

does not exempt homestead or entireties property. So, there may be a conflict.

If there is a conflict, federal law prevails under the Supremacy Clause,

United States Const. Art. VI cl. 2, which is another way of saying that if Congress

intended for federal law to preempt state law, it does. If, however, Congress did

not intend for federal law to preempt state law, then there is no conflict and state

law is to be honored in applying the federal law. See Freightliner Corp. v. Myrick,

514 U.S. 280, 287, 115 S. Ct. 1483, 1487 (1995); Cliff v. Payco Gen. Am. Credits,

Inc., 363 F.3d 1113, 1122 (11th Cir. 2004); Pharm. Research & Mfrs. of Am. v.

Meadows, 304 F.3d 1197, 1206 (11th Cir. 2002). That is what Fleet contends we

have here, a situation where Congress did not intend for the provisions of the

federal statute to override state law.

Fleet’s contention relies on the fact that there is an express preemption

provision in the subsection that provides for forfeiture of facilitating and derived

property, 21 U.S.C. § 853(a), but none in the subsection that provides for

forfeiture of substitute property, § 853(p), which is what we are dealing with in

this case. This is how the relevant language of § 853 reads:

(a) Property subject to criminal forfeiture

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 Any person convicted of a violation of this subchapter or subchapter
II of this chapter . . . shall forfeit to the United States, irrespective of
any provision of State law–

(1) any property constituting, or derived from, any proceeds the
person obtained, directly or indirectly, as the result of such
violation;

(2) any of the person’s property used, or intended to be used, in
any manner or part, to commit, or to facilitate the commission
of, such violation; and
....

(p) Forfeiture of substitute property

(1) In general

Paragraph (2) of this subsection shall apply, if any property
described in subsection (a), as a result of any act or omission of
the defendant—
(A) cannot be located upon the exercise of due diligence;
(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.

(2) Substitute property

In any case described in any of subparagraphs (A) through (E)
of paragraph (1), the court shall order the forfeiture of any
other property of the defendant, up to the value of any property
described in subparagraphs (A) through (E) of paragraph (1), as
applicable.

21 U.S.C. § 853(a), (p) (emphasis added).

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 Fleet argues that by including an express preemption clause (“irrespective of

any provision of State law”) in § 853(a) but omitting one from § 853(p), Congress

must have intended to preempt state laws where the forfeiture is under the former

but not where it is under the latter; it must have meant that state laws are

preempted where facilitating or derived property is concerned, but not where

substitute property is concerned. The Latin version of his logic is inclusio unius

est exclusio alterius (“the inclusion of one is the exclusion of the other”). See

Russello v. United States, 464 U.S. 16, 23, 104 S. Ct. 296, 300 (1983) (“[W]here

Congress includes particular language in one section of a statute but omits it in

another section of the same Act, it is generally presumed that Congress acts

intentionally and purposely in the disparate inclusion or exclusion.” (quoting

United States v. Wong Kim Bo, 472 F.2d 720, 722 (5th Cir. 1972)) (alteration in

original)).

This is a seductive argument, and we have been seduced by it before.

In Myrick v. Freuhauf Corp., 13 F.3d 1516 (11th Cir. 1994), we were faced with

the question of whether the National Traffic and Motor Vehicle Safety Act

preempted state tort law in a case involving a traffic accident caused by allegedly

defective anti-lock brakes. Id. at 1518. The federal statute had a preemption

provision which did not reach that specific situation, id. at 1521, and from the

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inclusion of that express preemption clause we reasoned there could be no implied

preemption, id. at 1522 (“[W]hen there is an express pre-emption provision we

should not consider implied pre-emption . . . .”). In other words, the express

inclusion of one thing excludes the implied inclusion of another. We thought that

was pretty good logic, but the Supreme Court disagreed.

In disagreeing with our Myrick reasoning, the Supreme Court stated: “The

fact that an express definition of the pre-emptive reach of a statute ‘implies’—i.e.,

supports a reasonable inference—that Congress did not intend to pre-empt other

matters does not mean that the express clause entirely forecloses any possibility of

implied pre-emption.” Freightliner Corp., 514 U.S. at 288, 115 S. Ct. at 1488.

The Court did go on to find that there was no conflict between state and federal

law in that case, id. at 289, 115 S. Ct. at 1488, but made it clear that the existence

of an express preemption clause does not preclude a holding that there is implied

preemption beyond the scope of the express provision, id. at 287–88, 115 S. Ct. at

1487–88 (explicitly rejecting the argument that “implied pre-emption cannot exist

when Congress has chosen to include an express pre-emption clause in a statute”).

Five years after Myrick, the Supreme Court reiterated its stance: “[A] pre-

emption provision, by itself, does not foreclose (through negative implication)

‘any possibility of implied [conflict] pre-emption.’” Geier v. Am. Honda Motor

9
Co., 529 U.S. 861, 869, 120 S. Ct. 1913, 1919 (2000) (quoting Myrick, 514 U.S. at

288, 115 S. Ct. at 1488) (second alteration in original). In Irving v. Mazda Motor

Corp., 136 F.3d 764 (11th Cir. 1998), we recognized the Supreme Court’s

pronouncement in Myrick and stated that “implied preemption is possible despite

the presence of an express preemption clause.” Id. at 767 n.1 (citing Myrick, 514

U.S. at 286–87, 115 S. Ct. at 1487). It is all a matter of congressional intent,

Boyes v. Shell Oil Prods. Co., 199 F.3d 1260, 1267 (11th Cir. 2000), and the best

place to look for that is in what Congress said, in the wording of the statute. Id.

In describing the substitute property that may be forfeited, Congress spoke

broadly in commanding that “the court shall order the forfeiture of any other

property of the defendant.” 21 U.S.C. § 853(p)(2). “The word ‘shall’ does not

convey discretion. It is not a leeway word,” but a word of command. United

States v. Quirante, 486 F.3d 1273, 1275 (11th Cir. 2007). The word “any” is not

susceptible to fudging either. As the Supreme Court and this Court have said on

numerous occasions, “any” is a powerful and broad word. It does not mean some

or all but a few, but instead means all. E.g., United States v. Gonzales, 520 U.S.

1, 5, 117 S. Ct. 1032, 1035 (1997); United States v. Alvarez-Sanchez, 511 U.S.

350, 358, 114 S. Ct. 1599, 1604 (1994); Price v. Time, Inc., 416 F.3d 1327, 1336

(11th Cir. 2005); CBS Inc. v. PrimeTime 24 Joint Venture, 245 F.3d 1217, 1223

10
(11th Cir. 2001); Coronado v. Bank Atl. Bancorp, Inc., 222 F.3d 1315, 1321–22

(11th Cir. 2000); Merritt v. Dillard Paper Co., 120 F.3d 1181, 1185–86 (11th Cir.

1997). Phrased somewhat differently, “the scope of the ‘any’ adjective is plenty

wide to sweep in all of the noun category that follows.” Price, 416 F.3d at 1336.

The noun category that follows the word “any” here is “property,” and

Congress did not say that some or most substitute property could be forfeited, but

instead said that “any” of it could be, up to the value of the missing assets that

were used to facilitate, or were derived from, the crime. There is no stated

exception for homestead or entireties property. If it had meant to do so, Congress

could have excluded those types of property by name or said “except for property

protected from forfeiture under state law.”

That is what Congress did in the Bankruptcy Code—it explicitly exempted

from treatment as part of the bankruptcy estate property that is exempt under state

law, including homestead and entireties property. 11 U.S.C. § 522(b)(1) & (3)(A)-

(B). When Congress wants to exempt specific types or categories of property from

the reach of federal statutes, it includes language doing that, as it has done in the

Bankruptcy Code. When it wants all property to be swept within the ambit of

federal law, Congress uses terms like “any” without qualification or restriction, as

it has done in the criminal forfeiture provision governing substitute property.

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 Our construction of § 853(p) is reinforced by § 853(o), which mandates that

“[t]he provisions of this section shall be liberally construed to effectuate its

remedial purposes.” The remedial purpose of § 853 is to enforce “the old adage

that crime does not pay.” United States v. Monsanto, 491 U.S. 600, 614, 109 S.

Ct. 2657, 2665 (1989) (quotation marks omitted); see also S. Rep. No. 98-225, at

201–02, 212 (1983), as reprinted in 1983 U.S.C.C.A.N. 3182, 3384–85, 3395

(stating that the purpose of § 853(p) is to address “one of the most serious

impediments to criminal forfeitures. Presently, a defendant may succeed in

avoiding the forfeiture sanction simply by transferring his assets to another

[person] . . . or taking other actions to render his forfeitable property unavailable at

the time of conviction.”). That remedial purpose would be undermined if we

construed § 853(p) in a way that allowed convicted defendants to evade its

provisions by retaining their homestead or entireties property.

Our construction of § 853(p) is also reinforced by the Supreme Court’s

decision in United States v. Craft, 535 U.S. 274, 122 S. Ct. 1414 (2002), which

construed a statutory provision, 26 U.S.C. § 6321, granting the Internal Revenue

Service authority to place tax liens on “all property and rights to property . . .

belonging to” a delinquent taxpayer. Acting under that statute, the IRS had placed

a lien on a home that the taxpayer owned jointly with his wife in tenancy by the

12
entireties. Id. at 276, 122 S. Ct. at 1419. The wife brought an action against the

government to quiet title to the home, id. at 277, 122 S. Ct. at 1419, and the issue

the Supreme Court addressed was whether the taxpayer “had a separate interest in

the entireties property to which the federal tax lien attached.” Id. at 278, 122 S.

Ct. at 1420. In concluding that he did, the Court held that the broad statutory

language “all property and rights to property” showed a congressional intent to

bring entireties property within the operation of federal law. Id. at 283–88, 122 S.

Ct. at 1422–26. Just as the broad language of the tax lien provision was held to

cover entireties property in Craft, we hold that the broad language of the substitute

property forfeiture provision covers that type of property as well.

Our decision here is also consistent with United States v. Lot 5, Fox Grove,

Alachua County, Fla., 23 F.3d 359 (11th Cir. 1994), where we held that the federal

civil forfeiture statute, 21 U.S.C. § 881(a), which has no express preemption

clause, nonetheless preempts the homestead exemption contained in Florida’s

Constitution. Id. at 363; see also United States v. One Parcel of Real Estate at

3262 S.W. 141 Ave., Miami, Dade County, Fla., 33 F.3d 1299, 1301 n.6 (11th Cir.

1994) (“We have held that federal forfeiture law preempts the Florida homestead

exemption from forfeiture.”); United States v. Bollin, 264 F.3d 391, 421–24 (4th

Cir. 2001) (concluding that money defendant had placed in IRA account was

13
subject to restraining order because that money was potentially forfeitable as a

substitute asset under § 853(p) despite Georgia law shielding IRA funds).

Our decision, however, is not consistent with the Seventh Circuit’s decision

in United States v. Lee, 232 F.3d 556 (7th Cir. 2000). Although the Lee Court did

not address Florida’s homestead forfeiture exemption, it did decide that a

defendant’s interest in a Florida home that he and his wife owned jointly in

tenancy by the entireties was not subject to forfeiture as a substitute asset under §

853(p). Id. at 558–62. Oddly, the court in that case did not even mention

preemption, much less undertake a preemption analysis. Instead, it deferred to

Florida law at the expense of federal law. Id. at 560 (“We look to state property

law to determine whether [the defendant’s] interest in the Lee home was a

property interest subject to forfeiture.” (citation omitted)). After concluding that

Florida law forbids forfeiture of property held in tenancy by the entireties, the Lee

court engaged in a balancing-of-the-interests test:

[T]he only claim the government has to the . . . house arises because
the house could be treated as a substitute asset, pursuant to . . . 21
U.S.C. § 853(p). In such a case, the need to strike a balance between
the government’s interest in seizing the means for committing a crime
and the innocent spouse’s rights must be assessed differently. In our
view, there is no warrant for ignoring the nature of the property right
created by the state law—here, the Florida law of tenancy by the
entirety—in a substitute asset case.

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Id. at 561.

We disagree with the Lee decision. It is fundamentally wrong about which

law determines forfeitability. While state law defines the property interests a

defendant has, federal law determines whether those property interests are

forfeitable for the commission of a federal crime. United States v. Kennedy, 201

F.3d 1324, 1334 (11th Cir. 2000) (“[F]ederal law decides what interests are

subject to forfeiture.”); see also United States Const. Art. VI. cl. 2. Congress has

set out the law governing criminal forfeiture in 21 U.S.C. § 853. It is not the

province of courts to “strike a balance” between the competing interests.

Congress has already struck the balance. In doing so it has assessed those

interests, and courts should not reassess them. Courts have no business carving

out exceptions to statutory provisions. We should leave the carving to Congress.

Nothing that we say here is inconsistent with our decision in United States

v. One Single Family Residence Without Buildings Located at 15621 S.W. 209th

Ave., 894 F.2d 1511 (11th Cir. 1990). That was a civil forfeiture case in which we

concluded that property held in tenancy by the entireties could not be forfeited if

there is no indication that the defendant’s spouse knew of the defendant’s illegal

conduct. Id. at 1520. The difference is that with civil forfeiture “the second

clause of [21 U.S.C. §] 881(a)(7) expressly excepts the interest of an innocent

15
owner from forfeiture.” Id. at 1513. Unlike its civil forfeiture counterpart, the

criminal forfeiture statute involved in the present case contains no innocent owner

exception. United States v. Jimerson, 5 F.3d 1453, 1455 & n.4 (11th Cir. 1993).

Carving one out by judicial action not only would usurp the legislative role but

also would ignore an important distinction between civil and criminal forfeiture.

Civil forfeiture acts in rem against the seized property itself, but criminal

forfeiture acts in personam as a punishment against the party who committed the

criminal acts. United States v. Gilbert, 244 F.3d 888, 919 (11th Cir. 2001) (citing

United States v. Peters, 777 F.2d 1294, 1296 (7th Cir. 1985)). There is no

innocent spouse defense to criminal forfeiture because the only property being

forfeited is the interest that belongs to the defendant. The fact that the innocent

spouse, even though she retains her property interest, may be adversely affected by

the forfeiture of her guilty mate’s interest is no bar to forfeiture of his interest.

Jimerson, 5 F.3d at 1455 n.4.

III.

For all of these reasons, we hold that where the forfeiture of substitute

property is concerned, 21 U.S.C. § 853(p) preempts Florida’s homestead

exemption and tenancy by the entireties laws. It follows that the district court’s

order is AFFIRMED.

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