United States v. Frank Amodeo , 916 F.3d 967 ( 2019 )

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[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
Nos. 15-12643 & 16-15687
________________________
D.C. Docket No. 6:08-cr-00176-JA-GJK-1
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
FRANK AMODEO,
Defendant-Appellant.
________________________
Appeals from the United States District Court
for the Middle District of Florida
_______________________
(February 21, 2019)
Before WILLIAM PRYOR and ROSENBAUM, Circuit Judges, and MOORE, *
District Judge.
WILLIAM PRYOR, Circuit Judge:
*
Honorable K. Michael Moore, United States District Chief Judge for the Southern District of
Florida, sitting by designation.
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This appeal presents the question whether a criminal defendant has standing
to appeal the partial vacatur of the final forfeiture order entered in his case. Frank
Amodeo pleaded guilty to involvement in a criminal scheme to divert his clients’
payroll taxes. He agreed to forfeit many assets, including the ownership of two
shell corporations. The district court entered a preliminary forfeiture order that
divested Amodeo of those assets. After no third parties asserted an interest in the
corporations, the court entered a final forfeiture order that transferred ownership of
them to the government. Years later, the corporations were named as defendants in
a lawsuit brought by victims of Amodeo’s scheme. The government then moved to
vacate the final forfeiture order as to the corporations, and the district court granted
that motion. Amodeo appeals the partial vacatur on the ground that the district
court lacked the authority to enter it. But because the partial vacatur caused him no
injury, Amodeo lacks standing to complain about it. We dismiss his appeal for lack
of jurisdiction.
I. BACKGROUND
Frank Amodeo instigated a criminal scheme to divert his clients’ payroll
taxes to his companies’ bank accounts instead of remitting that money to the
Internal Revenue Service. After a grand jury returned a 27-count indictment,
Amodeo reached a plea agreement with the government. He pleaded guilty to
conspiracy to defraud the United States, failure to collect and remit payroll taxes,
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and obstruction of an agency investigation. He agreed to forfeit many assets,
including approximately $180 million, multiple properties, luxury cars, a Lear jet,
and the ownership of several corporations. This appeal concerns two of those
corporations: AQMI Strategy Corporation and Nexia Strategy Corporation.
The district court entered a preliminary forfeiture order for the assets listed
in Amodeo’s plea agreement, including AQMI and Nexia. The preliminary
forfeiture order stated that it “shall be a final order of forfeiture as to the defendant,
Frank L. Amodeo.” The district court sentenced Amodeo to 270 months of
imprisonment followed by three years of supervised release.
The government then moved for a final forfeiture order. No third parties
claimed an interest in the corporations. The district court granted the motion and
entered the final forfeiture order. It ordered that Amodeo’s assets, including the
corporations, were “condemned and forfeited to the United States,” so “clear title
to the property is now vested in the United States.”
Amodeo appealed the final forfeiture order, but we dismissed his appeal for
lack of jurisdiction. United States v. Amodeo, No. 09-16170 (11th Cir. Mar. 26,
2010). We explained that Amodeo lacked standing to appeal the final forfeiture
order because the preliminary forfeiture order “fully and finally resolved all of
Frank Amodeo’s interests in the properties referenced in the . . . final forfeiture
order.” Id. at 1. Amodeo’s lack of standing meant this Court lacked jurisdiction
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over his appeal. Id. Amodeo also appealed his conviction, which we affirmed.
United States v. Amodeo, 387 F. App’x 953 (11th Cir. 2010).
A few years later, victims of Amodeo’s scheme filed a complaint against
several corporations, including the forfeited AQMI and Nexia. See Complaint at 3,
Palaxar Grp. v. Williams, No. 6:14-cv-00758-ORL-28GJK (M.D. Fla. Sept. 18,
2013), ECF No. 1. After AQMI and Nexia were served as defendants in the suit,
the government moved to vacate the final forfeiture order only as to those
corporations. The government explained that both corporations were shell
corporations without any assets and that it had sought their forfeiture “to prevent
their continued illegal use by [Amodeo] and to deprive [him] of any economic
value that the corporations may have.” The government informed the district court
that it would not defend either corporation in the Palaxar suit and “believe[d]
it . . . in the best interest of the [g]overnment to divest ownership of Nexia and
AQMI.” The district court granted the motion and vacated the final forfeiture order
as to AQMI and Nexia. The final forfeiture order “otherwise remain[ed] in effect.”
Amodeo moved to reconsider the partial vacatur on the ground that the
district court lacked jurisdiction to alter the final forfeiture order, but the district
court denied his motion. The court confirmed that it had vacated only the final
forfeiture order in part, not the preliminary forfeiture order. It explained that,
“[j]ust as Amodeo lacked standing to challenge the final order of forfeiture on
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appeal, Amodeo also lack[ed] standing to challenge the partial vacatur of that
order.” Amodeo appealed the denial of his motion to reconsider the partial
vacatur—the appeal before us now.
Meanwhile, Amodeo moved to intervene in the pending Palaxar suit. He
contended that the partial vacatur of the final forfeiture order restored his
ownership of AQMI and Nexia. The district court denied the motion, and we
affirmed that denial. See Palaxar Grp. v. Williams, 714 F. App’x 926, 928–29
(11th Cir. 2017). We concluded that the partial vacatur did not return the
ownership of the corporations to Amodeo because “the preliminary forfeiture
order, which divested Mr. Amodeo of his ownership interest, was never disturbed.”
Id. at 929 & n.4. We explained that “[t]he government did not return its interest in
AQMI to Mr. Amodeo; instead, the government relinquished its ownership interest
after AQMI was sued.” Id. at 928. And we noted that “[a] previous panel of this
court recognized as much, and we have no basis or reason to reach a different
conclusion.” Id. at 928–29.
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II. STANDARD OF REVIEW
We review de novo questions of our jurisdiction. United States v.
Cartwright, 413 F.3d 1295, 1299 (11th Cir. 2005).
III. DISCUSSION
Amodeo argues that the district court lacked jurisdiction to partially vacate
the final forfeiture order, but we lack jurisdiction to consider that question in this
appeal. “On every writ of error or appeal, the first and fundamental question is that
of jurisdiction, first, of this court, and then of the court from which the record
comes.” Mansfield, C. & L.M. Ry. Co. v. Swan, 111 U.S. 379, 382 (1884)
(emphases added); accord Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 94–
95 (1998); Bender v. Williamsport Area Sch. Dist., 475 U.S. 534, 547 (1986);
Great S. Fire Proof Hotel Co. v. Jones, 177 U.S. 449, 453 (1900); Castleberry v.
Goldome Credit Corp., 408 F.3d 773, 779 (11th Cir. 2005). So this Court must
satisfy itself of its jurisdiction before we can address whether the district court had
jurisdiction. See Peppers v. Cobb County, 835 F.3d 1289, 1296 (11th Cir. 2016)
(“[W]e are obliged first to consider our power to entertain the claim.”).
That this Court must first satisfy itself of our own jurisdiction is a rule
without exception: “Without jurisdiction[,] the court cannot proceed at all in any
cause.” Steel Co., 523 U.S. at 94 (quoting Ex parte McCardle, 74 U.S. 506, 514
(1868)). “[J]urisdiction is power to declare the law,” so when it does not exist, “the
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only function remaining to the court is that of announcing the fact and dismissing
the cause.” Id. To do otherwise would “violate[] the fundamental constitutional
precept of limited federal power” and so “offend[] fundamental principles of
separation of powers.” Univ. of S. Ala. v. Am. Tobacco Co., 168 F.3d 405, 409–10
(11th Cir. 1999) (citations and internal quotation marks omitted).
Amodeo argues that the doctrine of standing does not apply to his criminal
case, but Article III of the Constitution, from which standing derives, governs our
jurisdiction in every type of case. Article III vests the judiciary with jurisdiction
only over “Cases” and “Controversies.” U.S. Const. Art. III, § 2. To have a case or
controversy, a litigant must establish that he has standing, which must exist
“throughout all stages of litigation.” Hollingsworth v. Perry, 570 U.S. 693, 705
(2013). “That means that standing must be met by persons seeking appellate
review, just as it must be met by persons appearing in courts of first instance.” Id.(quoting Arizonans for Official English v. Arizona, 520 U.S. 43, 64 (1997)); see
also Wolff v. Cash 4 Titles, 351 F.3d 1348, 1353 (11th Cir. 2003) (“Litigants must
establish their standing not only to bring claims, but also to appeal judgments.”).
To establish appellate standing, a litigant must “prove that he has suffered a
concrete and particularized injury that is fairly traceable to the challenged conduct,
and is likely to be redressed by a favorable judicial decision.” Hollingsworth, 570
U.S. at 704.
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In the context of appellate standing, the primary meaning of the injury
requirement is adverseness: “Only a litigant who is aggrieved by the judgment or
order may appeal.” Wolff, 351 F.3d at 1354 (citation and internal quotation marks
omitted). “For there to be . . . a case or controversy, it is not enough that the party
invoking the power of the court have a keen interest in the issue,” Hollingsworth,
570 U.S. at 700; he “must seek relief for an injury that affects him in a personal
and individual way,” id. at 705 (citation and internal quotation marks omitted). So
an appellant “must possess a direct stake in the outcome of the case.” Id. To
establish standing in a forfeiture proceeding, we have looked to whether the litigant
has an interest in the property subject to the forfeiture because, absent an interest in
that property, there is no case or controversy. United States v. $38,000.00 in U.S.
Currency, 816 F.2d 1538, 1543 (11th Cir. 1987).
Amodeo argues that he has standing because the ownership of the
corporations might have reverted to him when the district court partially vacated
the final forfeiture order, but we disagree. Forfeiture divests a criminal defendant
of property that can be described generally as the fruits of his crime. Under Federal
Rule of Criminal Procedure 32.2, criminal forfeiture is split into two phases: the
first phase concerns the defendant’s ownership of the property to be forfeited, and
the second phase concerns any third party’s ownership of that property.
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When, as Amodeo did, a criminal defendant pleads guilty and agrees to the
forfeiture, the district court must promptly enter a preliminary forfeiture order.
Fed. R. Crim. P. 32.2(b)(1)–(2). “At sentencing—or at any time before sentencing
if the defendant consents—the preliminary forfeiture order becomes final as to the
defendant.” Fed. R. Crim. P. 32.2(b)(4)(A) (emphasis added). Although the
preliminary forfeiture order is final as to the defendant, it “remains preliminary as
to third parties until the ancillary proceeding is concluded.” Id. The defendant may
appeal the preliminary forfeiture order. Fed. R. Crim. P. 32.2(b)(4)(C).
The district court conducts an ancillary proceeding so that third parties can
assert their interest in the property. Fed. R. Crim. P. 32.2(c). Although it occurs in
the context of criminal forfeiture, the ancillary proceeding is civil in nature. United
States v. Davenport, 668 F.3d 1316, 1323 (11th Cir. 2012). The ancillary
proceeding exists to determine whether a third party has an interest in the property
that the defendant has already forfeited—not to relitigate the preliminary order’s
finding of forfeitability. Id. at 1321. So the ancillary proceeding determines
whether a third party or the government will obtain the forfeited property.
After the district court accounts for the interest of any third parties, it must
enter a final forfeiture order. Fed. R. Crim. P. 32.2(c)(2). A defendant “generally
has no standing to participate in the ancillary proceeding.” United States v. Pelullo,
178 F.3d 196, 202 (3d Cir. 1999). And he cannot appeal the final forfeiture order
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because it “has no bearing on the defendant’s rights.” United States v. Flanders,
752 F.3d 1317, 1343 (11th Cir. 2014).
Amodeo’s argument that he potentially owns the corporations due to the
partial vacatur is mistaken. The preliminary forfeiture order extinguished all of
Amodeo’s interest in the corporations. United States v. Gross, 213 F.3d 599, 600
(11th Cir. 2000). In fact, Amodeo expressly agreed that “the preliminary order of
forfeiture shall be final as to the defendant at the time it is entered.” So when the
district court completed the first phase of the forfeiture by entering the preliminary
forfeiture order, Amodeo had given up his interest in the corporations. Because no
third parties asserted an interest during the ancillary proceeding, the government
took ownership of the corporations when the district court entered the final
forfeiture order.
The partial vacatur of the final forfeiture order did not revive Amodeo’s
ownership of the corporations. When an order is vacated, “the rights of the parties
are left as though no such judgment had ever been entered.” United States v. De La
Mata, 535 F.3d 1267, 1276–77 (11th Cir. 2008) (quoting 49 C.J.S. Judgments
§ 357 (2008)). When the district court vacated the final forfeiture order, it vacated
only the “Final Forfeiture Order (Doc. 177) . . . to the extent it pertains to Nexia
Strategy Corporation and AQMI Strategy Corporation.” Considering where the
parties would stand had the district court never entered a final forfeiture order,
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Amodeo would still lack any interest in the corporations because he forfeited it
under the preliminary forfeiture order—which remains intact.
We have twice ruled that Amodeo had no interest left in the corporations
after the entry of the preliminary forfeiture order. We first concluded that Amodeo
lacked standing to appeal the final forfeiture order because the “preliminary order
of forfeiture fully and finally resolved all of Frank Amodeo’s interests in the
properties referenced in the . . . final forfeiture order.” Amodeo, No. 09-16170, at
1. Then, several years later, we ruled that the district court correctly denied
Amodeo’s motion to intervene in Palaxar because he lacked an interest in the
defendant-corporations. 714 F. App’x at 928. We concluded that “[t]he
government did not return its interest in AQMI to Mr. Amodeo [after the partial
vacatur]; instead, the government relinquished its ownership interest after AQMI
was sued.” Id. We again explained that “the preliminary forfeiture order, which
divested Mr. Amodeo of his ownership interest, was never disturbed.” Id. at 929
n.4. Today, we reach the same conclusion for a third time: Amodeo has no interest
in either AQMI or Nexia.
That conclusion means that Amodeo lacks standing to appeal the partial
vacatur. We have “consistently adhered to one major proposition without
exception: One who has no interest of his own at stake always lacks standing.”
United States v. Weiss, 467 F.3d 1300, 1311 (11th Cir. 2006) (emphasis omitted)
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(citation and internal quotation marks omitted). Because the partial vacatur did not
restore Amodeo’s ownership of the corporations, or impose their potential
liabilities on him, he has no interest at stake. That is, the partial vacatur did not
aggrieve—or even affect—Amodeo, so he has suffered no injury from it. To put
standing in the “more pedestrian terms” used by Justice Scalia, “it is an answer to
the very first question that is sometimes rudely asked when one person complains
of another’s actions: ‘What’s it to you?’” Antonin Scalia, The Doctrine of Standing
as an Essential Element of the Separation of Powers, 17 Suffolk U. L. Rev. 881,
882 (1983). Amodeo lacks standing because the “it”—the partial vacatur—is
nothing to him.
Because Amodeo lacks standing, we must “dismiss this appeal regardless of
whether or not the district court possessed authority to vacate the [final] order[] of
forfeiture.” United States v. Cone, 627 F.3d 1356, 1359 (11th Cir. 2010). Amodeo
protests that it would be perverse if the district court could enter an order without
jurisdiction and with no possibility of review, but the authority of the district court
can be litigated in a case or controversy between parties who—unlike Amodeo—
have a real interest in the effects of the partial vacatur, if any such parties exist.
Even if they do not, the argument that if Amodeo “ha[s] no standing to sue, no one
would have standing, is not a reason to find standing.” Schlesinger v. Reservists
Comm. to Stop the War, 418 U.S. 208, 227 (1974). The assumption that “the
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business of the federal courts is correcting . . . errors, and that ‘cases and
controversies’ are at best merely convenient vehicles for doing so and at worst
nuisances that may be dispensed with when they become obstacles to that
transcendent endeavor,” “has no place in our constitutional scheme.” Valley Forge
Christian Coll. v. Ams. United for Separation of Church & State, Inc., 454 U.S.
464, 489 (1982). We are a court of limited jurisdiction, Kokkonen v. Guardian Life
Ins. Co. of Am., 511 U.S. 375, 377 (1994), and Article III of the Constitution does
not extend our jurisdiction to consider the question presented in this appeal.
IV. CONCLUSION
We DISMISS Amodeo’s appeal for lack of jurisdiction.
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ROSENBAUM, Circuit Judge, concurring in the judgment:
I agree that Frank Amodeo has no standing here. But I write separately
because I respectfully disagree with the panel opinion’s conclusion that Article III
standing must always be determined first when more than one non-merits issue could
dispose of a case. Rather, no unyielding jurisdictional hierarchy exists, and courts
retain discretion to dispose of a case on any non-merits, threshold basis when no
ready answer to any such non-merits question is immediately obvious.
The Supreme Court has explained that “a federal court has leeway to choose
among threshold grounds for denying audience to a case on the merits.” (citations
and quotation marks omitted). Sinochem Int’l Co. v. Malaysia Int’l Shipping Corp.,
549 U.S. 422, 431 (2007). “[T]here is no mandatory sequencing of jurisdictional
issues.” Id. (citation and quotation marks omitted). For example, a federal court
need not establish subject-matter jurisdiction before dismissing for lack of personal
jurisdiction. Id. “Nor must a federal court decide whether the parties present an
Article III case or controversy before abstaining under [an abstention doctrine].” Id.In determining which non-merits issue to address, a court may properly
consider factors like “convenience, fairness, and judicial economy.” Id. at 432. So
of course, if “a court can readily determine that it lacks jurisdiction over the cause
or the defendant, the proper course would be to dismiss on that ground.” Id. at 436.
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But at bottom, “[j]urisdiction is vital only if the court proposes to issue a judgment
on the merits.” Id. at 431 (citation and quotation marks omitted).
This case raises two non-merits, jurisdictional 1 questions: whether Amodeo
has Article III standing and whether federal courts have subject-matter jurisdiction
to partially vacate a final order of forfeiture in the circumstances of this case.
On the issue of standing, the panel opinion attempts to distinguish between
appellate and district-court jurisdiction. But even assuming, arguendo, that
Sinochem’s sequencing rules do not apply to jurisdictional issues unique to our
appellate jurisdiction, the panel opinion forgets that Amodeo has the same basis for
being heard by us as he had for being heard by the district court. No intervening
change affected Amodeo’s standing between the time the district court decided that
he had no standing and the time Amodeo appealed that ruling to us. Our jurisdiction
in terms of standing turns on whether Amodeo had standing below, and if he did not,
we must dismiss the case for lack of jurisdiction. We therefore confront the same
jurisdictional question in terms of Article III standing that the district court did.
Similarly, we also face the same jurisdictional question that the district court
did as to whether federal courts have power to grant the government’s requested
1
The fact that these are both non-merits questions is enough to give us discretion to take either
question first, as “[j]urisdiction is vital only if the court proposes to issue a judgment on the
merits.” Sinochem, 549 U.S. at 431. It just so happens that both non-merits issues here are
jurisdictional.
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partial vacatur of the final order of forfeiture in this case. Because federal courts are
courts of limited subject-matter jurisdiction, we must always consider whether
subject-matter jurisdiction exists to grant a party’s requested relief. Thermoset Corp.
v. Bldg. Materials Corp of Am., 849 F.3d 1313, 1316-17 (11th Cir. 2017). If we find
that the district court did not have jurisdiction to grant the government’s request, all
we can do is vacate the illegal order that the district court—and federal courts in
general—had no authority to enter and dismiss the case. Id. at 1321.
In considering our jurisdiction, then, we face the same two threshold questions
as did the district court. Under Sinochem, if no answer to either question is readily
apparent, we may exercise our discretion to address either issue first.
Here, however, the answer to the standing question is immediately obvious.
Amodeo cannot make a colorable claim that he has standing. In fact, we have
previously reached exactly this same conclusion in Amodeo’s case. In Amodeo’s
direct appeal from the final order of forfeiture, we unambiguously held that he lacked
standing because the preliminary order of forfeiture already “fully and finally
resolved all of” Amodeo’s interests in the relevant properties—including the two
companies at issue in this case. See United States v. Amodeo, No. 09-16170 (11th
Cir. Mar. 26, 2010). And even after the district court partially vacated the final order
of forfeiture, we held that the preliminary order of forfeiture continued to govern, so
Amodeo still had no interest in the two companies at issue here. Palaxar Grp. v.
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Williams, 714 App’x 926, 928-29 & n.4 (11th Cir. 2017). In short, it is immediately
obvious that Amodeo has no standing, and his appeal is properly dismissed on that
basis.
Yet the panel opinion goes further and imposes mandatory sequencing of non-
merits issues by placing Article III standing unyieldingly before all other
jurisdictional questions. Majority Op. at 6 (“That this Court must first satisfy itself
of our own jurisdiction is a rule without exception . . . .”). That contravenes
Sinochem’s clear directive that “there is no mandatory sequencing of jurisdictional
issues.”2 Sinochem, 549 U.S. at 431 (citation and quotation marks omitted). And so
I concur only in the panel opinion’s judgment.
2
To be clear, under Sinochem, if no obvious answer existed to either of the jurisdictional questions
we face today—if, say, Amodeo’s standing turned on complicated questions of fact, or if the legal
analysis for standing were mired in inter-Circuit splits—then we could first consider the question
of the district court’s jurisdiction to grant the government’s requested relief. But as I have
described, as a matter of fact, that is not the case here.
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