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United States v. Beam Bros. Trucking, Inc.

United States District Court, W.D. Virginia, Harrisonburg Division

April 13, 2017

UNITED STATES OF AMERICA
v.
BEAM BROS. TRUCKING, INC., et al.

          MEMORANDUM OPINION

          Michael F. Urbanski, United States District Judge

         On March 16, 2017, the grand jury handed down a 126-count indictment against defendants Beam Bros. Trucking, Inc., Beam Bros. Holding Corporation, LLC (collectively, "Beam Bros."), Gerald C. Beam, Garland W. Beam, Shaun C. Beam, and Nickolas Kozel. A notice of forfeiture advises that, upon conviction, the government will seek forfeiture of certain property pursuant to both the civil forfeiture statute, 18 U.S.C. § 981(a)(1)(C) and 28 U.S.C. § 2461(c), as well as the criminal forfeiture statute, 18 U.S.C. § 982(a)(1). The notice further provides that the property to be forfeited includes, but is not limited to, a $40, 000, 000 money judgment.

         According to defendants, this notice of forfeiture has jeopardized the continued financing of Beam Bros.' operations. The majority of Beam Bros.' business involves the delivery of U.S. Mail up and down the east coast and to points west of the Mississippi. According to defendants, continued financing is essential to the timely and consistent delivery of mail pursuant to Beam Bros.' existing postal contracts.

         At the time defendants brought this issue to the court's attention on April 6, 2017, defendants' concern centered on its revolving lines of credit extended through Branch Banking & Trust (BB&T) and, by extension, its fueling credit through Pilot Travel Centers. Defendants sought certain assurances from the government as to its intentions regarding forfeiture, in an effort to satisfy BB&T's concerns about continuing to fund Beam Bros.' post-indictment operations. In that endeavor, defendants requested an emergency hearing, which was held via conference call on April 6, 2017. At that hearing, the government indicated it could not involve itself in Beam Bros.' financial relationship with a third-party lender, and it declined to provide any assurances as to its forfeiture intentions.

         Defendants then turned to the court for assistance. On the evening of April 6, 2017, defendants filed an emergency motion seeking a decree nisi (ECF No. 58), which is currently pending before the court. In this motion, defendants seek entry of an order pursuant to the All Writs Act, 28 U.S.C. § 1651, providing:

1. Any funds received and paid back to BB&T, or other funding source, for maintaining lawful operations of Beam Bros, post-indictment, are not subject to forfeiture or restraint in this case;
2. That BB&T or other third party funding source that received or receives post-indictment monetary repayments from Beam Bros, is not subject to any claw-back or disgorgement of those payments as substitute assets.

         Subsequent briefing reveals that in order to secure funding to pay fuel costs and carry Beam Bros, to die next round of contract payments by the U.S. Postal Service, defendants were forced to enter into a forbearance agreement with BB&T that requires the company to file Chapter 11 bankruptcy no later than Friday, April 14, 2017. Defendants acknowledge that "[a]t this point, it is doubtful that an order from this Court will turn BB&T Bank from its current path." Defs.' Reply Br., ECF No. 60, at 3. However, they represent they have another potential source of funding on the horizon, and a court order is still necessary to preserve that option and avoid bankruptcy. The parties appeared for a second hearing via conference call on April 10, 2017, at which defendants stated that court intervention is "absolutely necessary" to prevent the complete destruction of the company. The government opposes entry of any decree concerning forfeiture at this preliminary stage of the criminal proceedings.

         The court appreciates defendants' plight. There has been no conviction in this case, and the court is mindful of the burden these allegations have placed on Beam Bros., notwithstanding the presumption of innocence. Nevertheless, the court cannot issue an advisory opinion to a third-party lender on the issue of forfeiture. As such, defendants' requested relief must be DENIED.

         I.

         In seeking a decree nisi, defendants invoke the All Writs Act, 28 U.S.C. § 1651, which provides:

(a) The Supreme Court and all courts established by Act of Congress may issue all writs necessary or appropriate in aid of their respective jurisdictions and agreeable to the usages and principles of law.
(b) An alternative writ or rule nisi may be issued by a justice or judge of a court which has jurisdiction.

28 U.S.C. § 1651. Black's Law Dictionary defines a "rule nisi" or "decree nisi" as: "A court's decree that will become absolute unless the adversely affected party shows the court, within a specified time, why it should be set aside." Black's Law Dictionary (10th ed. 2014).

         While § 1651 specifically references writs issued in aid of jurisdiction, the Supreme Court "has repeatedly recognized the power of a federal court to issue such commands under the All Writs Act as may be necessary or appropriate to effectuate and prevent the frustration of orders it has previously issued in its exercise of jurisdiction otherwise obtained." United States v. N.Y. Tel. Co.. 434 U.S. 159, 172 (1977). Indeed, "[u]nless appropriately confined by Congress, a federal court may avail itself of all auxiliary writs as aids in the performance of its duties, when the use of such historic aids is calculated in its sound judgment to achieve the ends of justice entrusted to it." Id. at 172-73 (quoting Adams v. United States ex rel. McCann, 317 U.S. 269, 273(1942)).

         That said, "[t]he All Writs Act is a residual source of authority to issue writs that are not otherwise covered by statute. Where a statute specifically addresses the particular issue at hand, it is that authority, and not the All Writs Act, that is controlling." Penn. Bureau of Correction v. U.S. Marshals Serv.. 474 U.S. 34, 42 (1985). The Act "empowers federal courts to fashion extraordinary remedies when the need arises;" however, "it does not authorize them to issue ad hoc writs whenever compliance with statutory procedures appears inconvenient or less appropriate." Id.

         II.

         The court cannot issue a decree nisi and grant defendants the relief they ...


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