United States v. Kunuz Mohammed-Ali , 822 F.3d 312 ( 2016 )

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 16a0119p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
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UNITED STATES OF AMERICA, ┐
Plaintiff-Appellee, │
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│
v. > No. 15-6003
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KUNUZ MOHAMMED-ALI, et al., │
Defendants, │
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FREE AT LAST BAIL BONDS, INC.; INDIANA │
LUMBERMENS MUTUAL INSURANCE COMPANY, │
Defendants-Appellants. │
┘
Appeal from the United States District Court
for the Western District of Tennessee at Memphis.
No. 2:13-cv-02058—Sheryl H. Lipman, District Judge.
Decided and Filed: May 17, 2016
Before: BOGGS and KETHLEDGE, Circuit Judges; STAFFORD, District Judge.*
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COUNSEL
ON BRIEF: Richard S. Townley, BALLIN, BALLIN & FISHMAN, P.C., Memphis,
Tennessee, for Appellants. Barbara M. Zoccola, UNITED STATES ATTORNEY’S OFFICE,
Memphis, Tennessee, for Appellee.
KETHLEDGE, J., delivered the opinion of the court in which BOGGS, J., joined.
STAFFORD, D.J. (pp. 6–7), delivered a separate dissenting opinion.
*
The Honorable William H. Stafford, Jr., Senior United States District Judge for the Northern District of
Florida, sitting by designation.
1
No. 15-6003 United States v. Mohammed-Ali, et al. Page 2
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OPINION
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KETHLEDGE, Circuit Judge. In March 2010, Free at Last Bail Bonds (“Free”) and Fuad
Hamza jointly and severally secured a $75,000 appearance bond on behalf of Kunuz
Mohammed-Ali, an Ethiopian national (and Hamza’s cousin) who had been charged with
smuggling a controlled substance, namely khat, into the United States in violation of 18 U.S.C.
§ 545. One condition of the sureties’ obligation was that Mohammed-Ali “comply with all
conditions of release imposed by this court,” which included that Mohammed-Ali wear a GPS
ankle bracelet. But 15 months later—at Mohammed-Ali’s request and without objection from
the government—the district court entered an order allowing him to remove the ankle bracelet.
Neither Mohammed-Ali’s counsel (a Federal Defender), nor the prosecutor, nor the court itself
provided the sureties with notice of Mohammed-Ali’s motion to remove the bracelet or of the
court’s order granting it. Thereafter Mohammed-Ali fled to Ethiopia. The government then filed
a civil complaint seeking judgment against the sureties in the amount of the appearance bond.
The district court granted summary judgment to the government in that action, reasoning that
Free had constructive notice of the motion to remove the ankle bracelet because Free could have
accessed the docket for Mohammed-Ali’s case by means of the court’s electronic-filing system.
We disagree with that conclusion and reverse.
“Liability on a bond is a matter of contract[.]” United States v. King, 349 F.3d 964, 966
(7th Cir. 2003). Bond agreements allocate risk, so when determining a surety’s liability “the
right question to ask is what risk [the surety] agreed to accept.” Id. at 967. Here, the risk the
sureties agreed to accept was that Mohammed-Ali might flee notwithstanding his conditions of
release, which included the government’s monitoring of his whereabouts by means of his GPS
ankle bracelet. That risk included the possibility that Mohammed-Ali might saw off his ankle
bracelet and then flee. What the sureties did not bargain for, however, was that the district court
would remove the bracelet for him.
No. 15-6003 United States v. Mohammed-Ali, et al. Page 3
That change in the conditions of Mohammed-Ali’s release was plainly material. A
district court should not order a material change to a bond’s conditions without first providing
the sureties “notice and an opportunity to be heard—and to revoke their commitments if the
judge alters the terms of release over their opposition.” Id. at 966; see also Reese v. United
States, 76 U.S. 13, 21 (1869). If the surety has notice of a change and consents to it, the surety
remains liable. Absent notice and an opportunity to revoke, however, “a material change in risk
can discharge the surety’s obligation[.]” King, 349 F.3d at 967; see also United States v. Casey,
671 F.2d 975, 977 (6th Cir. 1982) (“a material increase in risk discharges a surety”). Hence the
question here is whether the sureties—specifically Free, which brought this appeal—were given
notice of the motion to remove Mohammed-Ali’s bracelet and an opportunity to revoke their
commitments if the motion were granted.
We begin and end with the question of notice. The district court freely acknowledged
that Free did not, in fact, have notice of Mohammed-Ali’s motion to remove his ankle bracelet.
By some dereliction nobody told the sureties about it. But the district court reasoned that “Free
at Last received notice”—by which it meant constructive notice—“via the Court’s electronic
filing system[.]” Op. at 8. What the court meant, specifically, was that the court’s electronic-
filing system “allows public access to court filings,” id., and thus Free could have checked the
docket for itself to see that Mohammed-Ali had moved to eliminate the principal impediment to
his flight.
That notice was weak tea, and for several reasons we hold it was inadequate. The first is
that the Criminal Rules themselves imply that, when a surety is entitled to notice, the surety is
entitled to better notice than the sureties got here. Just as a surety is entitled to notice of a
motion to modify a bond’s conditions, so too a surety is entitled to notice of the government’s
motion to enforce the surety’s liability. See Fed. R. Crim. P. 46(f)(3). And to provide notice of a
government’s motion to enforce the surety’s liability, “the clerk must promptly mail a copy to
the surety at its last known address.” Fed. R. Crim. P. 46(f)(3)(C). As to a motion to enforce the
surety’s liability, therefore, the mere existence of the court’s electronic-filing system is not
enough. We see no reason why the answer should be different for a motion that leads to the
No. 15-6003 United States v. Mohammed-Ali, et al. Page 4
condition—namely, flight—that creates the surety’s liability in the first place. That is not to say
that notice for both kinds of motions must take precisely the same form, i.e., a mailing from the
district clerk. But it is to say, as to a motion to modify the bond’s conditions, that someone—the
defendant, the prosecutor, the court—must “send the notice forward” to the surety. King,
349 F.3d at 966.
The second reason is practical. Motions to modify a bond’s conditions are rare as
compared to all the other kinds of motions filed in criminal cases. The district court’s approach
would require a surety frequently if not constantly to sift through all those motions, in all the
surety’s cases (Free says it has 500 at any given time), to see whether, amidst all that chaff,
someone has filed a motion to modify a bond’s conditions. Someone will eventually pay for all
that effort, and that person will likely be the defendant himself (or the friends and family who
help pay for the surety’s services). A similar approach would be for the surety to sign up for
electronic mailings of all filings in the surety’s cases, but that would just bring the same baskets
of chaff to the surety’s email inbox rather than to its internet browser. A more efficient and
likely more effective alternative would simply be to require the defendant, the prosecutor, or the
court to send the surety an email, or a piece of paper, in the rare instances when someone moves
to modify a bond’s conditions.
Finally, not every surety is as sophisticated as Free and thus as capable of navigating a
court’s electronic-filing system (assuming they even know it exists). This case illustrates the
point: Mohammed-Ali’s cousin, Fuad Hamza, pledged his house as security for the bond and
was jointly and severally liable with Free for the bond’s amount. Perhaps Hamza, or others
situated like him in future cases, would know from the criminal defendant himself that the
conditions of his release had been modified in some material way. But if Hamza denied it, the
court would likely need to hold an evidentiary hearing on the matter, which would waste the
resources of everyone concerned. The better approach is to send the surety an email or piece of
paper.
None of the relevant circuit cases are to the contrary, because none involved a change to
the bond’s conditions. In United States v. Craft, 763 F.2d 402, 404 (11th Cir. 1985), “the terms
No. 15-6003 United States v. Mohammed-Ali, et al. Page 5
of the bonds were never changed[.]” And in both Stuyvesant Ins. Co. v. United States, 410 F.2d
524, 526 (8th Cir. 1969), and United States v. Egan, 394 F.2d 262, 266 (2d Cir. 1968), the
district courts had merely exercised discretion granted to them by the terms of the bonds
themselves. Those cases have little to say, therefore, about a surety’s rights with respect to the
material change at issue here.
The sureties did not receive notice of the motion to modify the bond’s conditions in this
case. And by granting that motion the district court altered the risk the sureties agreed to accept.
Justice therefore “does not require bail forfeiture[,]” Fed. R. Crim. P. 46(f)(2)(B), or in our view
even permit it. The district court’s judgment is reversed, and the case remanded with
instructions to render judgment in favor of Free.
No. 15-6003 United States v. Mohammed-Ali, et al. Page 6
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DISSENT
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STAFFORD, District Judge, dissenting. Because I do not agree that the district court
abused its discretion in declining to set aside the bond forfeiture, I must respectfully dissent.
The Rules of Criminal Procedure provide that a court “must declare a bail forfeited if a
condition of the bond is breached.” Fed. R. Crim. P. 46(f)(1) (emphasis added). The court may,
however, “set aside in whole or in part a bail forfeiture upon any condition the court may impose
if . . . it appears that justice does not require bail forfeiture.” Id. R. 46(f)(2). Further, the court
may, after entering a judgment of default, “remit in whole or in part the judgment under the same
conditions specified in Rule 46(f)(2).” Id. R. 46(f)(4). “[I]n reviewing a district court’s decision
to deny a request to set aside a bond forfeiture or denying remission after judgment, the standard
of review is whether the district court’s actions were arbitrary and capricious.” United States v.
Parrett, 486 F. App’x 544, 547 (6th Cir. 2012) (internal quotation marks omitted). A district
court abuses its discretion when it acts in an arbitrary or capricious manner. Id.; see also United
States v. Cornett, 767 F.2d 922, 922 (6th Cir. 1985) (unpublished decision) (stating that “[i]n
order to reverse the trial court's refusal to set aside or remit [a bond forfeiture], we must find an
abuse of discretion”); United States v. Gonzalez, 452 F. App’x 844, 845 (11th Cir. 2011) (noting
that district court has “virtually unbridled discretion” in dealing with matters of bond forfeiture
under Fed. R. Crim. P. 46(f)(2) and (f)(4)).
Here, the district court determined that Free at Last had constructive notice—through the
court’s electronic case filing system—of a material change in Mohammed-Ali’s bond conditions
(removal of GPS ankle bracelet) and that Free at Last failed to demonstrate that “justice d[id] not
require bail forfeiture.” Fed. R. Crim. P. 46(f)(2). Among other things, the district court noted
that (1) Free at Last is a “sophisticated party” whose bond agreement did not require notice to the
surety as to any orders the court entered; (2) the burden on sureties to monitor cases in 2010,
when federal courts commonly used electronic filing and noticing systems, was not onerous;
(3) despite an online public docket that could be easily monitored, Free at Last did not monitor
No. 15-6003 United States v. Mohammed-Ali, et al. Page 7
the docket in this or any of the other many cases in which it issued bonds; (4) Mohammed-Ali
was out on bond without a GPS ankle bracelet for approximately eighteen months before he fled
to Ethiopia in November 2012;1 and (5) Mohammed-Ali appeared in court four times during
that eighteen-month period, which means that—presumably—he would not have been difficult
for Free at Last to contact. Specifically, he appeared in court to enter a guilty plea on July 15,
2011, for status conferences on March 29 and May 16, 2012, and for sentencing on August 23,
2012, all while wearing no GPS ankle bracelet.
Given these circumstances, the district court concluded that it was “not unreasonable to
expect that Free at Last would have checked the docket at least once during that time to
determine how the case was progressing and whether there were any changes that might
necessitate a re-evaluation of its commitment.”2 Having determined that Free at Last not only
received constructive notice of the change in bond conditions and but also failed to demonstrate
that justice did not require bail forfeiture, the district court concluded, in its discretion, that Free
at Last was not entitled to have the bond forfeiture set aside based on its failure to receive actual
notice of a material change in the bond terms. The district court’s refusal to remit the bond
forfeiture in this case was not arbitrary, capricious, an abuse of discretion, or contrary to law; and
we should accordingly affirm.
1
One of Mohammed-Ali’s bond conditions—one that was never changed—was that he surrender his
passport to Pretrial Services.
2
If a Free at Last representative had had a face-to-face encounter with the defendant at any time during the
eighteen months when he wore no ankle bracelet, or at least made some contact with the clerk, the defendant’s
probation officer, or other court official, that representative could have learned—or seen with his or her own eyes—
that the defendant was not wearing an ankle bracelet.