UNITED STATES v. ROBLERO RAMIREZ

UNITED STATES of America, Plaintiff–Appellee v. Reynaldo ROBLERO–RAMIREZ, Defendant–Appellant.

No. 11–3832.

-- June 17, 2013

Before RILEY, Chief Judge, BYE and BENTON, Circuit Judges.

Reynaldo Roblero–Ramirez pled guilty to reentering the United States illegally after being deported for an aggravated felony conviction, in violation of 8 U.S.C. § 1326(a) and (b)(2). The district court imposed a sixteen level sentence enhancement under United States Sentencing Guidelines (U.S.S.G. or Guidelines) § 2L 1.2(b)(1)(A)(ii) after finding that Roblero–Ramirez previously had been convicted of a crime of violence. Because Roblero–Ramirez's 2006 Nebraska conviction for manslaughter was not a conviction for a crime of violence within the meaning of the applicable Guideline, we reverse and remand for resentencing.

I. BACKGROUND

A. Factual Background

On May 25, 2011, Fayetteville, Arkansas, Police Department officers (Fayetteville officers), encountered Roblero–Ramirez, a Guatemalan citizen, while investigating a domestic disturbance. United States Immigration and Customs Enforcement (ICE) officers alerted the Fayetteville officers that Roblero–Ramirez was suspected of immigration violations. The Fayetteville officers arrested Roblero–Ramirez on a state charge for obstructing governmental operations, and released him into ICE custody on May 26, 2011.

Roblero–Ramirez told the ICE officers he had illegally reentered the United States in February 2010, after having been deported. The ICE officers reviewed Roblero–Ramirez's alien registration file, which indicated Roblero–Ramirez was removed from this country on May 3, 1996; July 21, 2000; and January 3, 2008. The file also revealed that in March 2006, Roblero–Ramirez was sentenced after pleading guilty in Nebraska state court to manslaughter, in violation of Nebraska Revised Statute § 28–305.

B. Procedural History

Roblero–Ramirez pled guilty to illegal reentry into the United States after being deported for an aggravated felony conviction (manslaughter), in violation of 8 U.S.C. § 1326(a) and (b)(2). The district court conducted a thorough survey of the fifty states' and the federal manslaughter laws. The district court then focused on Nebraska Revised Statute § 28–305 where it described “the offense of killing another person without malice upon a sudden quarrel.” The district court concluded under its analysis “that [the § 28–305] definition squarely comports with the generic definition of manslaugter as it's adopted in a majority of the states.” Over Roblero–Ramirez's objection, the district court at sentencing increased Roblero–Ramirez's base offense level by sixteen levels, reasoning Roblero–Ramirez's 2006 Nebraska manslaughter conviction constituted a crime of violence under U.S.S.G. § 2L1.2(b)(1)(A)(ii). With this increase, the district court calculated an advisory Guidelines range of 46 to 57 months (level 21, category III). The district court sentenced Roblero–Ramirez to 46 months imprisonment.

The assistant federal public defender (FPD) representing Roblero–Ramirez on appeal filed a brief pursuant to Anders v. California, 386 U.S. 738, 744, 87 S.Ct. 1396, 18 L.Ed.2d 493 (1967), asking this court “to determine whether there exist[ ] any non-frivolous issues for appeal” and moved to withdraw from representing Roblero–Ramirez. We denied the FPD's motion to withdraw, stating “a nonfrivolous issue exists as to whether the crime of manslaughter under the relevant Nebraska statute, as defined by the Nebraska courts at the time of Roblero–Ramirez's conviction, comported with the generic, contemporary definition of manslaughter.” The FPD filed a merits brief consistent with our order, requesting oral argument “only if the Court deems it necessary to assist in its decisional process.” On March 8, 2013, we scheduled this case for oral argument. On March 18, the FPD moved to waive oral argument. We granted this motion and accepted the case on the briefs, without oral argument.

II. DISCUSSION

A. Standard of Review and Applicable Law

Roblero–Ramirez argues the district court erred in imposing the sixteen level sentence enhancement under U.S.S.G. § 2L1.2(b)(1)(A)(ii) because Roblero–Ramirez's Nebraska manslaughter conviction was not a “crime of violence” as the term is used in the Guideline. We review this question of law de novo. See United States v. Medina–Valencia, 538 F.3d 831, 833 (8th Cir.2008). Under § 2L1.2(b)(1)(A)(ii), “[i]f the defendant previously was deported, or unlawfully remained in the United States, after · a conviction for a felony that is · a crime of violence,” the sentencing court should increase the defendant's base offense level by sixteen levels. The commentary on this provision explains the phrase “crime of violence” includes a manslaughter conviction “under federal, state, or local law.” Id. cmt. n. 1(B)(iii).1

B. Categorical Approach

We determine whether a prior conviction constitutes manslaughter under this Guideline using a categorical approach. See Medina–Valencia, 538 F.3d at 833. “Under this approach, we look ‘not to the facts of the particular prior case,’ but instead to whether ‘the state statute defining the crime of conviction’ categorically fits within the ‘generic’ federal definition of a corresponding” crime of violence. Moncrieffe v. Holder, 596 U.S. ––––, ––––, 133 S.Ct. 1678, 1684, ––– L.Ed.2d ––––, –––– (2013) (quoting Gonzales v. Duenas–Alvarez, 549 U.S. 183, 186, 127 S.Ct. 815, 166 L.Ed.2d 683 (2007)). By “generic” federal definition of a crime of violence, we mean the “sense in which the term is now used in the criminal codes of most States.” Taylor v. United States, 495 U.S. 575, 598, 110 S.Ct. 2143, 109 L.Ed.2d 607 (1990).

The categorical approach ensures the defendant's prior conviction “necessarily involved facts equating to the generic federal offense .” Moncrieffe, 569 U.S. at ––––, 133 St. Ct. at 1684 (quoting Shepard v. United States, 544 U.S. 13, 24, 125 S.Ct. 1254, 161 L.Ed.2d 205 (2005)) (alterations and quotation marks omitted). We only consider the statutory elements of the prior offense, not the underlying conduct, so “we must presume that the conviction ‘rested upon nothing more than the least of the acts' “ proscribed by the state law “and then determine whether even those acts are encompassed by the generic federal offense.” Id. at 1684–85 (quoting Johnson v. United States, 559 U.S. 133, 137, 130 S.Ct. 1265, 176 L.Ed.2d 1 (2010)) (alteration omitted). “Whether the noncitizen's actual conduct” was sufficient to satisfy this generic federal definition “ ‘is quite irrelevant.’ “ Id. at 1684 (quoting United States ex rel. Guarino v. Uhl, 107 F.2d 399, 400 (2d Cir.1939) (L.Hand, J.)). Thus, the categorical approach “asks what offense the noncitizen was ‘convicted’ of, not what acts he committed.” Id. at 1685 (internal citation omitted).

When a state statute of conviction is overinclusive, meaning the statute proscribes conduct that is consistent with the generic federal offense as well as conduct that is not, we apply the modified categorical approach to determine which of several, separately described crimes encompassed by the statute formed the basis of the defendant's conviction. See id. at 1684–85; Medina–Valencia, 538 F.3d at 833. Even under this modified approach, we do not consider what the defendant's actual conduct might have been. See id. We look only “to the charging documents, plea agreement, jury instructions, or comparable judicial records to determine whether the prior offense qualifies” as a crime of violence. Id.

This categorical approach “serves [the] ‘practical’ purpose[ of] promot[ing] judicial and administrative efficiency by precluding the relitigation of past convictions in minitrials conducted long after the fact.” Id. at, 133 S.Ct. at 1690 (quoting Chambers v. United States, 555 U.S. 122, 125, 129 S.Ct. 687, 172 L.Ed.2d 484 (2009)). This approach also avoids “ ‘potential unfairness' “ to defendants who might have difficulty establishing in a subsequent federal action the factual circumstances upon which the prior state conviction was based. Id . (quoting Taylor, 495 U.S. at 601). Even so, the categorical approach “is not an invitation to apply ‘legal imagination’ to the state offense; there must be ‘a realistic probability, not a theoretical possibility, that the State would apply its statute to conduct that falls outside the generic definition of a crime.’ “ Id. at ––––, 133 S.Ct. at 1684–85 (quoting Duenas–Alvarez, 549 U.S. at 193).

C. Crime of Violence

Nebraska Revised Statute § 28–305 provides “[a] person commits manslaughter if he kills another without malice, either upon a sudden quarrel, or causes the death of another unintentionally while in the commission of an unlawful act.” This statute proscribes two separate offenses: “sudden quarrel” manslaughter and “unlawful act” manslaughter. See State v. Pettit, 233 Neb. 436, 445 N.W.2d 890, 896 (Neb.1989). The parties agree Roblero–Ramirez was convicted under the sudden quarrel provision. Under the categorical approach, we must decide whether Nebraska's sudden quarrel prohibition fits within the definition of generic federal manslaughter. See Medina–Valencia, 538 F.3d at 833.

Roblero–Ramirez contends generic federal manslaughter requires intentional or reckless conduct, whereas the Nebraska statute criminalizes involuntary killing, i.e., unintentional conduct. The government agrees generic federal manslaughter requires, at least, a mens rea of recklessness. Our court has not considered the mens rea requirement for the generic federal manslaughter definition, but a number of our sister circuits have. All courts to address the issue agree with Roblero–Ramirez that generic manslaughter requires a mens rea of recklessness, at least. See United States v. Armijo, 651 F.3d 1226, 1236 (10th Cir.2011) (deciding generic manslaughter requires “purposeful or intentional behavior”); United States v. Hernandez–Rojas, 426 F. App'x 67, 70 (3d Cir.2011) (stating “ ‘generic, contemporary manslaughter · requires a recklessness mens rea ’ “ (quoting United States v. Dominguez–Ochoa, 386 F.3d 639, 646 (5th Cir.2004))); United States v. Peterson, 629 F.3d 432, 436–37 (4th Cir.2011) (deciding the mens rea required for generic federal manslaughter is “reckless” or “intentional” conduct); see also United States v. Gomez–Leon, 545 F.3d 777, 791, 795 (9th Cir.2008) (noting “the modern view appears to be that recklessness is an element of contemporary manslaughter” and “the notion of manslaughter is reserved for conduct that includes a more culpable mental state than mere negligence”). We need not decide at this time whether generic manslaughter requires “purposeful or intentional behavior,” Armijo, 651 F.3d at 1236, or mere “recklessness,” Dominguez–Ochoa, 386 F.3d at 646, because under either standard, the Nebraska manslaughter offense of which Roblero–Ramirez was convicted is broader than its generic federal counterpart.

Until 1994, the Nebraska courts interpreted the sudden quarrel manslaughter component of § 28–305 to prohibit the intentional killing of another, upon a sudden quarrel. See State v. Jones, 245 Neb. 821, 515 N.W.2d 654, 658 (Neb.1994) (citing Pettit, 445 N.W.2d at 905). In 1994, the Nebraska Supreme Court in Jones departed from this formulation. See id. at 658–59. Reasoning “ ‘the words “voluntary” and “involuntary” have not been a part of Nebraska's manslaughter statute since 1873,’ “ id. at 658 (quoting Pettit, 445 N.W.2d at 912 (Fahrnbruch, J., dissenting)), the Jones court determined “there is no requirement of an intention to kill in committing manslaughter. The distinction between second degree murder and manslaughter upon a sudden quarrel is the presence or absence of an intention to kill,” id. at 659. No Nebraska case thereafter required a reckless mens rea under the Jones interpretation. Cf. State v. Woods, 249 Neb. 138, 542 N.W.2d 410, 416 (Neb.1996) (following Jones, and instructing the district court on remand “to remove the word ‘intent’ from the manslaughter instruction”). Under the categorical approach, we cannot conclude Roblero–Ramirez's Nebraska manslaughter conviction, as interpreted by the Nebraska Supreme Court at the time, equates to the generic federal crime of manslaughter.

We recognize the Nebraska Supreme Court later overruled Jones, and reinstated Pettit, in State v. Smith, 282 Neb. 720, 806 N.W.2d 383, 394 (Neb.2011) (holding “an intentional killing committed without malice upon a ‘sudden quarrel,’ as that term is defined by our jurisprudence, constitutes the offense of manslaughter”). Although a Nebraska manslaughter conviction under the Smith–Pettit interpretation probably meets the mens rea requirement for generic federal manslaughter, see Armijo, 651 F.3d at 1236, the Smith–Pettit interpretation was not Nebraska law when Roblero–Ramirez was convicted in 2006.

We also recognize the district court was not made aware, during its thorough sentencing analysis, of the Nebraska Supreme Court's unusual interpretation in 2006 of manslaughter under § 28–305. Roblero–Ramirez's federal public defender advised the district court that no precedent allowed the court to “look at case law such as the · Nebraska v. Smith case.” However, the Nebraska manslaughter law for sudden quarrel in 2006 was overinclusive.

The district court's imposition of a sixteen level criminal history category enhancement under U.S.S.G. § 2L1.2(b)(1)(A)(ii) was a “ ‘non-harmless error,’ “ United States v. Tomac, 567 F.3d 383, 386 (8th Cir.2009) (quoting United States v. Spikes, 543 F.3d 1021, 1023 (8th Cir.2008)) (alteration omitted). Roblero–Ramirez is entitled to a new sentencing. See United States v. Barrientos, 670 F.3d 870, 873 (8th Cir.2012) (remanding for resentencing because the district court incorrectly calculated the defendant's criminal history points under the Guidelines).

III. CONCLUSION

We reverse and remand for resentencing, consistent with the Nebraska Supreme Court's manslaughter precedent at the time of Roblero–Ramirez's 2006 conviction and with our opinion today. On remand, the district court may apply further the modified categorical approach as may be appropriate.

FOOTNOTES

1.  The comment also defines “crime of violence” to include “any other offense under federal, state, or local law that has as an element the use, attempted use, or threatened use of physical force against the person of another.” The government has not proposed Roblero–Ramirez's crime of conviction qualifies as a crime of violence under this catch-all provision, so we do not consider that issue. See United States v. Greene, 513 F.3d 904, 906–07 (8th Cir.2008) (deciding the government waived an argument it did not raise at sentencing or in its opening appellate brief).

RILEY, Chief Judge.

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UNITED STATES v. CASTEEL

UNITED STATES of America, Plaintiff–Appellee v. Tiran Rodez CASTEEL, also known as Tiran R. Casteel, Defendant–Appellant.

United States of America, Plaintiff–Appellee v. Tiran Rodez Casteel, also known as Tiran R. Casteel, Defendant–Appellant.

Nos. 11–3717, 12–2707.

-- June 21, 2013

Before RILEY, Chief Judge, WOLLMAN and GRUENDER, Circuit Judges.

Paul Rosenberg, argued, Des Moines, IA, for Appellant.Shannon Leigh Olson, argued, Des Moines, IA, for Appellee.

Separate juries convicted Tiran Rodez Casteel (Casteel) of (1) carjacking, using or carrying a firearm in relation to a violent crime, obstructing justice, and witness tampering in the first trial; and (2) two counts of being a felon in possession of a firearm in the second. After the first trial, the district court1 sentenced Casteel to 319 months imprisonment for the first four convictions. At a separate sentencing after the second trial, the district court sentenced Casteel to 63 months for each of the firearms counts, to be served concurrently with each other and Casteel's four other counts of conviction. Casteel appeals, and we affirm.

I. BACKGROUND

A. Facts

On September 11, 2008, at approximately 11:30 p.m., Darlene Eitzen, a 76–year–old widow, was awake and alone in her Iowa farmhouse when two gunmen, later determined to be Casteel and his son Devan Casteel2 (collectively, Casteels), forced their way into Eitzen's home and robbed her. Devan held Eitzen in a chair at gunpoint while Casteel searched the house for valuables.

Eitzen suspected the robbers were responsible for a July 27, 2008 burglary of part of her deceased husband's coin collection because they seemed familiar with her house and the coin collection. Investigators later learned that in the days following the July 2008 burglary the Casteels sold more than $10,000 worth of coins at a coin shop in St. Joseph, Missouri.

The Casteels' armed robbery of Eitzen lasted about an hour. Eitzen spent most of the hour at gunpoint. Before the Casteels left, Devan twice warned Eitzen not to move from her chair because someone would be watching her. After the robbers left, Eitzen did not leave the chair for about forty-five minutes to an hour because she “was scared that they were out there and may even shoot [her].”

Once she felt safe enough to move, Eitzen tried to call for help, but the Casteels had cut the telephone lines. Eitzen later discovered her cell phone in a cup of water. Eitzen looked out the window and learned the Casteels had stolen her car. With no other way to summon help, Eitzen walked in the rain to a neighboring farmhouse where she called the local sheriff to report the robbery. When Deputy Jake Daly arrived at the neighbor's house at approximately 1:30 a.m. on September 12, 2008, he found Eitzen frightened and crying.

The robbery investigation quickly focused on the Casteels. Later in the morning on September 12, Casteel, a convicted felon, purchased two firearms from Special Agent Paul White, who, unrelated to the robbery investigation, was working undercover for the federal Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). Devan placed the firearms in the backseat of the Casteels' green 1996 Pontiac Bonneville.

Shortly thereafter, ATF officers arrested Casteel for being a felon in possession of a firearm and Devan for aiding and abetting the firearm purchase. After the Casteels were in custody, ATF Agent Tully Kessler photographed and searched the Pontiac Bonneville incident to the arrests. In addition to the two firearms Casteel had just purchased, Agent Kessler discovered coins in a bank bag and coin box. Agent Kessler seized the firearms, but did not retrieve the coins at that time because they were not related to the firearms investigation.

Agent Kessler asked Iowa State Trooper John Hitchcock, who was assisting with the undercover operation, whether any robberies had been reported. Upon learning of the Eitzen robbery, law enforcement officers secured the Bonneville and obtained a search warrant for the car. Further investigation tied the coins to the Eitzen robbery.

A subsequent search of the house the Casteels shared with Casteel's girlfriend, Anna Dawn Hutt, revealed additional robbery evidence, including more coins; a map officers described as a “back way” to Eitzen's house through farm fields; computer evidence of internet searches about the Eitzens and rare coins; and an all-terrain vehicle (ATV) with burglary tools and fresh vegetation on it.

The robbery investigation also revealed Casteel had recruited others to take part in the robbery. Nathan Wilcoxson, Hutt's son, testified Casteel recruited him to rob Eitzen, and Wilcoxson even took part in a “dry run” with the Casteels before the robbery. Wilcoxson went with the Casteels to Eitzen's farm one night, but they aborted the robbery because it was too late to carry out Casteel's plan, which required Eitzen to be awake.

Wilcoxson testified Casteel instructed him “[a]fter the door was kicked in [Wilcoxson] was supposed to run to [Eitzen's] chair and hold her down while the other person went upstairs and got the coins .” If Eitzen resisted, Wilcoxson was to do “[a]nything in [his] power” to make her comply, including “[p]istol-whip her, hit her.” In attempting to recruit Timothy Blank to travel with Casteel by ATV to a house where they could rob the residents of their gold at gunpoint, Casteel warned Blank the robbers might have to kill their victims if the robbers used each other's names or the victims otherwise recognized them.

After his arrest, Casteel sought Wilcoxson's help in preventing Eitzen from testifying. While awaiting trial, Casteel made phone calls and wrote letters to Wilcoxson that Wilcoxson understood to mean Casteel wanted Wilcoxson to kill or harm Eitzen to prevent her from testifying against Casteel or, alternatively, arrange for someone else to “take care of business [Casteel's] way” so Eitzen would not “show up on the stand.” The government introduced transcripts of the calls and copies of the letters at trial in support of Wilcoxson's testimony. Casteel's cellmate, Anthony Formaro, testified Casteel spoke with him about arranging to have Eitzen “eliminated from existence on this earth.”

B. Procedural History

On February 19, 2009, a grand jury charged the Casteels in a nine-count third superseding indictment. Counts 1 and 3 charged Casteel with being a felon in possession of a firearm, in violation of 18 U.S.C. §§ 922(g)(1), 924(a)(2), and 2. Count 1 related to Casteel's purchase of a Winchester 12–gauge shotgun at a garage sale; Count 3 related to Casteel's purchase of the two firearms from Special Agent White. Count 2 charged Devan with knowingly transferring a firearm to a felon, in violation of 18 U.S.C. §§ 922(d) and 924(a)(2).

Count 4 charged Casteel and Devan with carjacking, in violation of 18 U.S.C. §§ 2119 and 2. Counts 5 and 7 respectively charged Casteel and Devan with using or carrying a firearm and brandishing that firearm in relation to the violent federal crimes of carjacking and robbery, in violation of 18 U.S.C. § 924(c)(1)(A)(i) and (ii). Count 6 charged the Casteels with affecting commerce by robbery, in violation of 18 U.S.C. §§ 1951 and 2. Count 8 charged Casteel with obstruction or attempted obstruction of justice, in violation of 18 U.S.C. § 1503, and Count 9 charged Casteel with tampering with a witness by attempting to kill, in violation of 18 U.S.C. § 1512(a)(1)(A).

Before trial, the district court partially granted Casteel's motion to sever the firearms charges, finding the evidence related to Casteel's prior felony conviction would create a “high risk of prejudice” as to the remaining counts. The district court denied Casteel's motions to suppress evidence seized from the Bonneville and to exclude evidence related to the earlier robbery of Eitzen's residence.

On November 20, 2009, the jury convicted Casteel of all four counts submitted against him in the first trial. Casteel filed post-trial motions, which the district court denied.

Before sentencing, Casteel was twice evaluated by Dr. Dan Rogers, a clinical psychologist who had previously found Casteel incompetent to stand trial on fraud charges in 2004. In 2010 and 2011, Dr. Rogers concluded Casteel suffered from paranoid schizophrenia with depression, dementia, and mental retardation. Dr. Rogers opined Casteel was incompetent, and unlikely to have his competence restored.

On January 3, 2011, Casteel moved for a competency hearing pursuant to 18 U.S.C. § 4241(a). On the government's motion, the district court ordered a mental evaluation pursuant to 18 U.S.C. §§ 4241 and 4247. Beginning in April 2011, Dr. Ronald Nieberding, a forensic psychologist with the United States Department of Justice, observed Casteel on a nearly daily basis for six to eight weeks, frequently interacting with him. Dr. Nieberding concluded Casteel suffered from “mild symptoms of an underlying Schizoaffective Disorder,” but “appear[ed] to maintain an accurate factual and rational understanding of his current legal case” and “appear[ed] capable of consulting with, and assisting counsel at the” time of evaluation.

On September 14, 2011, the district court held a competency hearing at which Dr. Rogers, Dr. Nieberding, and Dr. Loren Olson, a psychiatrist, testified. Dr. Rogers and Dr. Nieberding each testified consistently with their reports. Dr. Olson did not opine as to Casteel's competency. Dr. Olson testified Dr. Rogers's and Dr. Nieberding's diagnoses seemed supported by their testing and that the diagnostic difference in this case between schizophrenia and schizoaffective disorder was minimal.

After the hearing, the district court determined Casteel suffered from some form of mental illness, but concluded Casteel was competent to proceed with sentencing. See 18 U.S.C. § 4241(d). In reaching that conclusion, the district court found Dr. Nieberding's determination of competence more credible than Dr. Rogers's contrary determination. The district court also denied Casteel's request to retroactively declare Casteel unfit to stand trial. On November 22, 2011, the district court sentenced Casteel to 319 months imprisonment and 5 years supervised release.

On February 29, 2012, after a two-day trial, a separate jury convicted Casteel of two counts of being a felon in possession of a firearm. The district court denied Casteel's pro se motion for judgment of acquittal. On July 11, 2012, the district court sentenced Casteel to 63 months on each of those counts to run concurrently with each other and with Casteel's 319–month sentence for his other counts of conviction. Casteel appeals his convictions and sentences.3

II. DISCUSSION

A. Competency

Casteel challenges the district court's competency rulings. “The conviction of an incompetent person is a violation of due process.” United States v. Rickert, 685 F.3d 760, 765 (8th Cir.2012) (citing Pate v. Robinson, 383 U.S. 375, 378 (1966)). “[A] defendant must be competent at all stages of the prosecution, including sentencing.” Id. A defendant is competent to stand trial or face sentencing “if he ‘has sufficient present ability to consult with his lawyer with a reasonable degree of rational understanding’ and ‘has a rational as well as factual understanding of the proceedings against him.’ “ Id. (quoting Dusky v. United States, 362 U.S. 402, 402 (1960) (per curiam)).

Section 4241(a) “directs the district court to grant a motion for a competency hearing when ‘there is reasonable cause to believe that the defendant may presently be suffering from a mental disease or defect rendering him mentally incompetent to the extent that he is unable to understand the nature and consequences of the proceedings against him or to assist properly in his defense.’ “ Id. (quoting 18 U.S.C. § 4241(a)). “The Constitution also requires an adequate hearing if there is sufficient doubt about the accused's competence.” Id. “In order to make a determination of competency, the district court should consider the behavior, demeanor, and prior psychiatric history of the defendant.” United States v. Turner, 644 F.3d 713, 721 (8th Cir.2011).

We review the district court's “decision not to order a competency evaluation or hold a competency hearing” for an abuse of discretion, id. at 723, and its “finding of competency for clear error,” United States v. Kiderlen, 569 F.3d 358, 363 (8th Cir.2009). See also Indiana v. Edwards, 554 U.S. 164, 177 (2008) (recognizing “the trial judge · will often prove best able to make more fine-tuned mental capacity decisions, tailored to the individualized circumstances of a particular defendant”).

Importantly, “not every manifestation of mental illness demonstrates incompetence.” Vogt v. United States, 88 F.3d 587, 591 (8th Cir.1996) (internal marks omitted). That a defendant suffers from a mental deficiency or demonstrates “bizarre, volatile, and irrational behavior” does not necessarily make him incompetent to stand trial. Id. (internal marks omitted). A defendant's competency is not static and may change over even a short period of time. See Lyons v. Luebbers, 403 F.3d 585, 593 (8th Cir.2005) (noting that a district court must remain alert to changing circumstances that may indicate that a defendant who was competent at the commencement of trial has become incompetent).

United States v. Ghane, 593 F.3d 775, 779 (8th Cir.2010).

1. Retroactive Determination

After his conviction in the first trial but before sentencing, Casteel requested that the district court make a retroactive determination of Casteel's competency at trial. The district court “decline[d] to make a retroactive determination regarding [Casteel's] competency to have stood trial,” questioning the court's authority under 18 U.S.C. § 4241 and Fed.R.Crim.P. 33(b)(2). The district court also determined the circumstances in Casteel's case did not warrant a retroactive competency determination. See Speedy v. Wyrick, 702 F.2d 723, 725 (8th Cir .1983) (stating “the test for determining whether a trial court should sua sponte order a competency hearing” under the rule of Pate ); Harkins v. Wyrick, 552 F.2d 1308, 1311 (8th Cir.1977) (explaining a post-conviction evaluation of a defendant's competency “is the proper remedy for wrongful denial of a pretrial [competency] hearing” when “a meaningful hearing · is still possible”). Casteel contends “the court below errored [sic] in failing to address whether Casteel was mentally competent during his trial.” We disagree.

Even if we assume the district court had the authority to grant Casteel a retroactive competency determination more than a year after judgment, Casteel fails to persuade us the district court committed reversible error in denying his requested relief. In arguing a retroactive competency determination was necessary, Casteel's counsel states, “Counsel beliefs [sic] that the Government, and perhaps the Court, will rely partially on Casteel's pretrial conduct and trial demeanor to assess his competency,” but Casteel fails to point to anything in Casteel's pretrial conduct and trial demeanor that would have alerted the district court to any competency issue at the time of trial. At oral argument, Casteel, through counsel, conceded Casteel made no irrational or incomprehensible comments nor had any outbursts before the district court.

Relying exclusively on Dr. Rogers's competency hearing testimony, Casteel maintains “[t]he record shows he was never restored to competence” after 2004. But Casteel acknowledges he is unable to say whether the district court, at the time of trial, was even aware of Casteel's 2004 incompetency determination. Casteel also ignores the other record competency evidence, including “the 2005 competency restoration examination that determined [Casteel's] competency had been restored” and Dr. Nieberding's competence determination, which the district court found “consistent with its own observations of [Casteel]” during and after trial. Mindful of “the district court's institutional advantage over the court of appeals in evaluating the demeanor of the defendant,” Rickert, 685 F.3d at 767, we conclude the district court did not abuse its discretion in deciding Casteel's circumstances did not warrant a retroactive competency determination. See Turner, 644 F.3d at 725–26 (concluding the trial court did not abuse its discretion in failing to order a competency hearing despite the defendant's prior diagnosis of paranoid schizophrenia and “bizarre or irrational” behavior at trial).

2. Firearms Trial and Sentencing

Casteel also contends the district court clearly erred in finding him competent (1) to stand trial for the firearms charges, and (2) at the time of each sentencing. Casteel's claims again fall short. Although he contends “[t]he expert testimony presented at the September 14th competency hearing clearly showed that [Casteel]'s mental health disorders have not resolved,” Casteel acknowledges “whether Tiran Casteel lacks competency is a close call” that “may hinge on the [district court's] own observations.”

The district court cited several compelling reasons for crediting Dr. Nieberding's conclusion that Casteel was competent despite his mental illness, rather than Dr. Rogers's contrary opinion. First, the district court questioned Dr. Rogers's determination that Casteel's current level of cognitive functioning was similar to what it was in 2004, despite the 2005 evaluation indicating Casteel's competency had been restored.

Second, the district court expressed concern about “the accuracy of some [of] the facts relied upon by Dr. Rogers” in concluding Casteel did not understand the proceedings against him. In particular, the district court questioned Dr. Rogers's surprise that Casteel, notwithstanding his familiarity with jails and prisons, did not understand that his letters about silencing Eitzen would not remain private. To the contrary, the district court reasonably found Casteel's coded language in his letters, “presumably to avoid detection,” supported “the exact opposite conclusion than that reached by Dr. Rogers” and demonstrated Casteel understood the proceedings against him because he sought to eliminate Eitzen as a key witness.

Third, the district court credited Dr. Nieberding's opinion because Dr. Nieberding interacted with Casteel more frequently and for a longer period than Dr. Rogers. Finally, as noted above, the district court determined Dr. Nieberding's determination of competence was more consistent with the court's own observations of Casteel's behavior during and after trial. “[I]t is ‘certainly within a district court's province to choose one expert's opinion over a competing qualified expert's opinion.’ “ United States v. DeCoteau, 630 F.3d 1091, 1096 (8th Cir.2011) (quoting Ghane, 593 F.3d at 781). The district court did not err in finding Casteel competent to stand trial and to proceed with sentencing.

B. Sufficiency of the Evidence—Felon in Possession

On August 2, 2008, Dennis Caudill of Coin, Iowa, held a garage sale at which he offered a Winchester 12–gauge shotgun for sale. The Casteels stopped at the sale, and Casteel picked up the shotgun, “looked it over,” and “made sure it worked.” On August 10, 2008, the Casteels returned to Caudill's residence unannounced, and Casteel negotiated the purchase of the shotgun for $300 cash. After Casteel exchanged the cash for the shotgun, Casteel handed the gun to Devan, who put the gun in the car. Caudill also signed a receipt Casteel prepared indicating Caudill sold the gun to Devan.

Later that month, Casteel negotiated the sale of the shotgun, along with two other guns, to Ricky Dean Rivers. Although Devan did not participate in the negotiations, Casteel advised Rivers that Rivers needed to pay Devan because Casteel “wasn't supposed to have guns.”

On September 12, 2008, Special Agent White, responding to an online advertisement as part of an undercover operation, arranged to meet Casteel at the America's Best Value Inn to sell Casteel two firearms—a Ruger .40 caliber pistol and a Colt Delta Elite 10 mm pistol. Casteel exchanged several e-mails and phone calls with officers regarding the firearms. Casteel, who was using the alias “Don Hutt,” arrived at the parking lot in the green Pontiac Bonneville driven by Devan.

Special Agent White showed the firearms to Casteel to inspect. Casteel first picked up and inspected the Colt, working the slide and removing and replacing the magazine. Casteel then examined the Ruger. While inspecting the firearms, Casteel told Special Agent White that the Casteels had an extensive collection and had recently purchased a large number of guns at auction. After inspecting the guns, Casteel pulled thirty twenty-dollar bills from his pocket to cover the $600 purchase price and gave the money to Special Agent White. Devan, who remained quiet during the negotiations, took the two firearms and placed them in the back seat of the Bonneville. Special Agent White's support team then arrested the Casteels.

On February 29, 2012, a jury convicted Casteel of being a felon in possession of a firearm as charged in Counts 1 and 3 of the indictment. To convict Casteel of possessing a firearm in violation of § 922(g), the government had to prove beyond a reasonable doubt (1) Casteel previously was “convicted of a crime punishable by a term of imprisonment exceeding one year”; (2) Casteel “knowingly possessed a firearm[;] and (3) the firearm” Casteel possessed moved “in or affect[ed] interstate commerce.” See United States v. Porter, 687 F.3d 918, 921 (8th Cir.2012). Casteel only challenges the sufficiency of the evidence of firearm possession.

“We review the sufficiency of the evidence de novo, ‘viewing evidence in the light most favorable to the government, resolving conflicts in the government's favor, and accepting all reasonable inferences that support the verdict.’ “ United States v. Teague, 646 F.3d 1119, 1121–22 (8th Cir.2011) (quoting United States v. Piwowar, 492 F.3d 953, 955 (8th Cir.2007)). We reverse “only if no reasonable jury could have found guilt beyond a reasonable doubt.” United States v. Herbst, 666 F.3d 504, 510 (8th Cir.2012). “ ‘When a sufficiency argument hinges on the interpretation of a statute, we review the district court's statutory interpretation de novo.’ “ United States v. Reed, 668 F.3d 978, 982 (8th Cir.2012) (quoting United States v. Gentry, 555 F.3d 659, 664 (8th Cir.2009)).

On appeal, Casteel maintains his “possession of the firearms alleged in counts 1 and 3 was simply a fleeting pre-purchase handling or inspection that does not arise [sic] to ‘possession’ for purposes of 18 U.S.C. § 92[2](g).” In Casteel's view, “[t]he evidence shows, even in a light most favorabl[e] to the government, that Tiran Casteel at most momentarily handled and inspected the guns prior to their purchase by his son Devan” and “[t]he ATF and Dennis Caudill never relinquished possession or control: the firearms were merely on display prior to purchase.”

“We have held that police observation of defendant's brief possession of a firearm is sufficient to support a conviction,” but left “open the question whether the duration of possession might ever be relevant to a finding of knowing possession.” United States v. Byers, 603 F.3d 503, 507 (8th Cir.2010); see also United States v. Wright, 682 F.3d 1088, 1090–91 (8th Cir.2012) (noting we have not adopted a “transitory or innocent possession” defense). Casteel's unduly narrow view of possession is at odds with the great weight of authority of other circuits deciding this issue.4 We need not decide whether to join those circuits to resolve this appeal.

Casteel did not object to the district court's jury instruction regarding possession or offer a separate instruction on his “fleeting” possession theory. See United States v. Ali, 63 F.3d 710, 717 n. 9 (8th Cir.1995) (“Because defendant failed to seek a proper instruction on his innocent possession theory, we need not, and do not, decide at this time whether an ‘innocent reasons' defense is available under § 922(g).”). And the district court permitted Casteel to argue to the jury that “touching, inspecting and negotiating a price” for the firearms in connection with Casteel's business of buying and selling used goods with Devan was not possession. Cf. United States v. Stover, 822 F.2d 48, 50 (8th Cir.1987) (deciding the defendant waived any claim of error when the district court provisionally permitted the defendant to argue innocent possession, but the defendant made no such argument).

After hearing Casteel's argument, the jury rejected Casteel's defense. Whatever the contours of any innocent or transitory possession defense to conviction under § 922(g) that may exist, the jury was not required to accept Casteel's theory, especially under the circumstances of this case. The evidence adduced at trial, viewed “ ‘in the light most favorable to the government,’ “ along with “ ‘all reasonable inferences that support the verdict,’ “ would permit a reasonable jury to conclude Casteel's possession of all three firearms was neither fleeting nor innocent. Teague, 646 F.3d at 1121–22 (quoting Piwowar, 492 F.3d at 955). The jury heard testimony that Casteel located firearms for purchase, looked them over, picked them up, inspected them, made sure they worked, negotiated a price, and paid for the firearms before passing them to his adult son Devan, presumably to be added to their extensive collection. The jury reasonably found Casteel possessed the firearms as required for conviction under § 922(g).

C. Suppression of Evidence

After officers arrested the Casteels in the motel parking lot, Agent Kessler photographed and searched the Bonneville incident to the arrests. In addition to the two firearms, Agent Kessler discovered coins in a bank bag and coin box. Agent Kessler seized the firearms, but did not retrieve the coins at that time because they were not related to his firearms investigation. After learning of the Eitzen robbery from Trooper Hitchcock, law enforcement officers secured the Bonneville and obtained a search warrant for the car.

Casteel argues “[t]he initial search of the Bonneville automobile violated [his] Fourth Amendment right to be free from unreasonable search and seizure.” See Katz v. United States, 389 U.S. 347, 357 (1967) (“[S]earches conducted outside the judicial process, without prior approval by judge or magistrate, are per se unreasonable under the Fourth Amendment—subject only to a few specifically established and well-delineated exceptions.”) (footnote omitted). Casteel argues the search was improper under Arizona v. Gant, 556 U.S. 332 (2009), in which the Supreme Court held the following:

Police may search a vehicle incident to a recent occupant's arrest only if the arrestee is within reaching distance of the passenger compartment at the time of the search or it is reasonable to believe the vehicle contains evidence of the offense of arrest. When these justifications are absent, a search of an arrestee's vehicle will be unreasonable unless police obtain a warrant or show that another exception to the warrant requirement applies.

Gant, 556 U.S. at 351. According to Casteel, the district court should have suppressed the evidence of the robbery because the Casteels were handcuffed and secured away from the Bonneville and “[t]here was no reason for the agents officers believe [sic] evidence of the crime of arrest, possession of a firearm as a felon, would be found within the vehicle” once agents seized the firearms.

The district court denied Casteel's motion to suppress, finding Agent Kessler had probable cause to search the bank bag and coin box for paperwork evidencing the crime of being a felon in possession of a firearm. “When reviewing the denial of a motion to suppress, we review the district court's factual findings for clear error and the legal question of whether the Fourth Amendment was violated de novo.” United States v. Salamasina, 615 F.3d 925, 929 (8th Cir .2010). We reverse only if the denial “ ‘is unsupported by substantial evidence, based on an erroneous interpretation of applicable law, or, based on the entire record, it is clear a mistake was made.’ “ Id. (quoting United States v. Harper, 466 F.3d 634, 643 (8th Cir.2006)). The district court did not err in finding “no constitutional defect” with respect to the search.

We agree with the government that “[t]he circumstances of this crime provided ‘reason to believe’ there was additional evidence of the crime to be found in [the Bonneville], even after the firearms Casteel bought from ATF agents had been removed from the car.” See Gant, 556 U.S. at 344. Agent Kessler testified he searched the bank bag and coin box for ammunition and paperwork related to the firearms investigation. As the district court observed, that paperwork could have included printouts of Casteel's internet communications with the ATF, a map to the meeting location, or the receipt book Casteel filled out when he purchased the firearms from Special Agent White—all potential evidence of the crime of arrest. The officers' reasonable belief that there was additional evidence of the crime of arrest in the car supported their search of the box and bag containing the coins.

The officers were also permitted to rely on our then-binding pre-Gant precedent holding that when a police officer “ ‘has made a lawful custodial arrest of the occupant of an automobile, he may, as a contemporaneous incident of that arrest, search the passenger compartment of that automobile’ “ even “where the arrestee has exited the vehicle and has been handcuffed and placed in a police officer's patrol car,” United States v. Hrasky, 453 F.3d 1099, 1100–01 (8th Cir.2006) (quoting New York v. Belton, 453 U.S. 454, 459–60 (1981), and applying Belton's longstanding “bright-line” rule). See Davis v. United States, 564 U.S. ––––, ––––, 131 S.Ct. 2419, 2429 (2011) (upholding the admission of evidence obtained pursuant to a pre-Gant search of an automobile incident to the arrest of its occupants in reliance upon pre-Gant precedent authorizing such a search); United States v.. Tschacher, 687 F.3d 923, 933 (8th Cir.2012). “[S]earches conducted in objectively reasonable reliance on binding appellate precedent are not subject to the exclusionary rule.” Davis, 564 U.S. at ––––, 131 S.Ct. at 2423–24. The district court properly denied Casteel's motion to suppress.

D. Sentencing

Casteel contends “the district court committed two sentencing errors in failing to group all indictment offenses and in awarding three criminal history points for convictions contained in the same indictment as the offense of conviction.” In addition to denying error, the government asserts any sentencing error was harmless because the district “court imposed the sentences from Casteel's second trial wholly concurrently to those from his first trial,” leaving “no impact on the ultimate length of [Casteel's] sentence.”

We must disregard “[a]ny error, defect, irregularity, or variance that does not affect [Casteel's] substantial rights.” Fed.R.Crim.P. 52(a). When pressed at oral argument, Casteel could not articulate any harm he has suffered as a result of the district court's purported sentencing errors that affects his substantial rights. As such, we see no compelling reason to remand for resentencing. See United States v. Allmon, 500 F.3d 800, 806–07 (8th Cir.2007) (finding no prejudice to the defendant's substantial rights and no miscarriage of justice where a sentencing error did not increase the defendant's sentence beyond concurrent sentences properly imposed for other crimes); United States v. Moyer, 182 F.3d 1018, 1023 (8th Cir.1999) (concluding any sentencing error was harmless because the sentences for the challenged counts ran “concurrent to, and [were] shorter than” the sentences imposed for other counts of conviction).

E. Other Claims

Casteel's remaining challenges to the sufficiency of the evidence of carjacking and the admission of evidence related to the July 27, 2008 burglary are foreclosed by our rejection of identical claims in Devan's direct appeal. See Casteel, 663 F.3d at 1019–22. Indeed, in conceding our opinion in Casteel “squarely resolved or rejected” his remaining claims on the “exact same facts,” Casteel admitted at oral argument he had no new arguments, information, or facts for the court to consider.

III. CONCLUSION

We affirm.

FOOTNOTES

1.  The Honorable Robert W. Pratt, United States District Judge for the Southern District of Iowa.

2.  We affirmed Devan's convictions in United States v. Casteel, 663 F.3d 1013, 1015, 1022 (8th Cir.2011).

3.  We have appellate jurisdiction pursuant to 28 U.S.C. § 1291.

4.  See United States v. Matthews, 520 F.3d 806, 810 (7th Cir.2008) (deciding picking up firearms for a few seconds to inspect them “for the purpose of arranging a sale” was “precisely what section 922 was meant to prevent”); United States v. Gilbert, 430 F.3d 215, 218 (4th Cir.2005) (holding § 922(g) “in no way invites investigation into why the defendant possessed a firearm or how long that possession lasted”); United States v. Gaines, 295 F.3d 293, 300 (2d Cir.2002) (concluding evidence showing the defendant actually holding firearms while inspecting them before purchase was sufficient evidence of possession “however briefly it occurred”); United States v. Lane, 267 F.3d 715, 718 (7th Cir.2001) ( “Because a defendant can shoot a gun so quickly and easily once he holds it in his hands, we conclude that evidence showing that a felon held a gun is by itself a factor indicating that the defendant had the ability to exercise direct control over the firearm.”) (internal marks and quotation omitted); United States v. Adkins, 196 F.3d 1112, 1115 (10th Cir.1999) (discussing the “fleeting possession theory,” but finding it did not apply) overruled on other grounds by Chambers v. United States, 555 U.S. 122 (2009); United States v. Parker, 566 F.2d 1304, 1306 (5th Cir.1978) (explaining the fact “[t]hat possession is momentary is immaterial” under 26 U.S.C. § 5861 because “[t]he statute is written in absolute terms”); but cf. United States v. Mason, 233 F.3d 619, 624 (D.C.Cir.2000) (recognizing an innocent possession defense to a § 922(g)(1) charge provided “(1) the firearm was attained innocently and held with no illicit purpose and (2) possession of the firearm was transitory”).

RILEY, Chief Judge.

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UNITED STATES v. WIRTH

UNITED STATES of America, Plaintiff–Appellee v. Jeffrey John WIRTH, Defendant–Appellant.

No. 12–3368.

-- June 27, 2013

Before WOLLMAN and COLLOTON, Circuit Judges, and HOLMES,District Judge.1

William J. Otteson, AUSA, argued, Minneapolis, MN, for Plaintiff–Appellee.Jennifer M. Robbins, argued, Minneapolis, MN (Christopher William Madel and Aaron Rainbow Thom, on the briefs), for Defendant–Appellant.

Jeffrey John Wirth appeals from the district court's2 restitution order of $6,457,500, representing the amount of taxes Wirth owed but failed to pay from 2003 to 2005. He argues that the district court erred by relying on the testimony of an Internal Revenue Service (IRS) agent when calculating the amount of actual loss because the agent's calculations were not sufficiently supported by evidence and were otherwise erroneous. He also challenges the sufficiency of the evidence and argues that the district court erred by considering conduct outside the scope of the plea agreement, by failing to establish a restitution payment schedule, and by awarding restitution despite the complexity of the calculation thereof. We affirm.

I. Background

In 1988, Wirth, a certified public accountant (CPA) and honors accounting graduate, became the sole shareholder, owner, president, and CEO of The Wirth Companies (TWC), a Subchapter S corporation that managed approximately thirty other corporations and partnerships, all of which were owned, almost exclusively, by Wirth. Through these entities, Wirth developed and managed commercial real estate. Wirth's then-wife, Holly, served as TWC's CFO from 1988 until her separation from Wirth in 2006. From 1995 until 2009, Paul Fox served as TWC's controller, director of operations, and ultimately vice president of real estate services. Since the early 1990s, Wirth and Holly had their and TWC's tax returns prepared by Michael Murry, a CPA.

In 2007, the IRS commenced a civil audit of one of Wirth's companies. Thereafter, the audit expanded to TWC and to Wirth and Holly individually. In late 2007 or early 2008, the matter was referred to the IRS criminal division, thereby suspending the civil audit.

On August 17, 2011, a grand jury returned an indictment against Wirth, Holly, and Murry, charging, among other things, that they had conspired from or before January 2003 through at least February 2010 to defraud the United States by unlawfully evading the tax obligations of TWC, Wirth, and Holly, in violation of 18 U.S.C. § 371. On May 11, 2012, Wirth entered into a written plea agreement with the government, under which he pleaded guilty to the conspiracy-to-defraud charge in return for the dismissal of all other charges.

Wirth agreed to the following facts in the plea agreement. From at least 2003 and continuing until at least October 2006, he conspired with Holly and Murry to evade his, TWC's, and Holly's tax obligations. Specifically, he and Holly spent TWC's and several other Wirth-owned businesses' money for personal expenditures, including non-business travel and meals. He and Holly caused such spending to be recorded falsely on TWC's books and tax returns as business expenses. This false recording caused TWC's taxable business income to be understated falsely and reduced passthrough income flowing to his individual income tax returns. Wirth and Holly also failed to report on their federal tax returns as distributions more than $2 million in company money spent in 2003 to fund the purchase of an island in St. Alban's Bay, Lake Minnetonka, on which they planned to build a home for themselves, as well as at least $3 million in company money spent from 2003 to 2006 to fund the home's design and construction. From 2002 through 2005, Wirth grossly understated his reported wages at TWC—claiming only $12,000 per year—which resulted in his and TWC's underpayment of employment taxes. From 2003 through 2006, he caused to go unreported on TWC's tax returns substantial amounts of fee income earned by TWC during the construction and development of two properties, which caused the amount of adjusted gross income, taxable income, and total tax shown on his and Holly's income tax returns to be understated. Wirth, Holly, and Murry also caused year-end adjustments to TWC's and the related businesses' tax returns by recording management fees to reduce overall taxable income to nearly zero. These entries had no business purpose, reduced income from profitable companies, and increased income to nonprofitable companies.

The parties reached no agreement on the amount of restitution. At the government's request, the district court held a restitution hearing on September 14, 2012. At the hearing, IRS Agent Nona Bosshart and defense expert Rodney Oakes, a former IRS agent of some thirty-three years' experience, testified.

On September 19, 2012, the district court sentenced Wirth to 54 months' imprisonment and ordered $6,457,500 in restitution, consisting of $2,132,760 for the year ending December, 31, 2003; $1,474,011 for the year ending December 31, 2004; and $2,850,729 for the year ending December 31, 2005. The district court based its restitution order on the following findings, among others: that the restitution calculation was not so complex as to preclude the entry of such an award; that Bosshart's testimony “was thorough, exhaustive and credible”; that Wirth had improperly deducted a wide array of expenses and understated his wages; that Wirth benefitted from Bosshart's application of a 39–year straight-line depreciation method; that Wirth failed to offer credible evidence that he was entitled to the benefit of net operating losses (NOLs) from 2002 and 2007; that the government, in all likelihood, had understated Wirth's tax obligations; and that any confusion regarding the restitution calculation was a product of Wirth's poor bookkeeping. By way of a restitution payment schedule, the district court ordered that “[o]ver the period of incarceration the defendant shall make payments of either quarterly installments of a minimum of $25 if working non-UNICOR or a minimum of 50% of monthly earnings if working UNICOR. It is recommended that the defendant participate in the Inmate Financial Responsibility Program while incarcerated.”

II. Discussion

“We review the district court's decision to order restitution for abuse of discretion and its underlying fact determinations for clear error.” United States v. Gregoire, 638 F.3d 962, 973 (8th Cir.2011). “To the extent the district court interpreted the Mandatory Victims Restitution Act (MVRA) to determine its obligations in awarding restitution, we review those interpretations de novo.” United States v. Frazier, 651 F.3d 899, 903 (8th Cir.2011). “While the amount of loss calculation looks to the greater of actual or intended loss, the amount of restitution under the MVRA cannot exceed the actual, provable loss realized by the victims.” United States v. Alexander, 679 F.3d 721, 731 (8th Cir.2012) (internal quotation marks and citation omitted). “The government bears the burden of proving the amount of restitution based on a preponderance of the evidence.” Frazier, 651 F.3d at 903.

A. Bosshart's Restitution Calculation

Wirth argues that the district court erred in adopting Bosshart's restitution calculation. Specifically, he argues that Bosshart erred in her calculations and improperly based her calculations on unsupported and inaccurate assumptions.

Wirth first argues that Bosshart failed to afford him the benefit of NOLs from 2002 and 2007. He argues that he was given the benefit of a NOL from 2006 and that Oakes testified that if he were afforded the benefit of NOLs from 2002 and 2007 there would be no actual loss to the government and thus no restitution. The district court concluded that Wirth was not entitled to the benefit of the claimed 2002 or 2007 NOLs because they were “not credibly based on reliable tax return information[.]” Bosshart testified that, in making her adjustments and calculations, she did not afford Wirth the benefit of the claimed 2002 or 2007 NOLs because she did not find them credible, because the 2002 records were closed, and because Wirth could seek the benefit of the NOLs at later collection proceedings. Considering Bosshart's testimony, the scope of Wirth's tax fraud, the disarray of his accounting records, and that the NOLs were included in tax returns prepared by Murry, we cannot say that the district court clearly erred in finding that Wirth was not entitled to the benefit of the claimed 2002 and 2007 NOLs at this time.

Wirth next argues that Bosshart erroneously assumed that he had zero basis in his businesses. Bosshart testified that Wirth, as a shareholder, was responsible for tracking his basis; that he failed to do so; and that treating him as having zero basis was thus proper. Bosshart's zero-basis assumption was also supported by her testimony regarding a “letter that discussed there was no basis” and that Fox told her that he “repeatedly heard Mike Murry tell [Wirth] that he had no basis[,]” which was itself supported by Murry's admission in his own sentencing memorandum. Based on the foregoing, the district court did not clearly err in finding that Wirth had zero basis in his businesses.

Wirth also contends that Bosshart improperly applied a 39–year straight-line depreciation method to certain hard assets having a far shorter life than 39 years. He relies on Oakes's testimony that an accelerated depreciation rate and shorter life would have been more appropriate for these items. Bosshart testified and produced exhibits demonstrating that she had made adjustments by applying the 39–year straight-line depreciation method to certain previously unrecognized capitalized costs, which arose from previously unreported development fees, and that doing so was to Wirth's benefit. In these circumstances, the district court did not clearly err in relying on Bosshart's testimony and exhibits over Oakes's contrary testimony.

Finally, Wirth argues that Bosshart erroneously assumed that he had used TWC loan proceeds to pay for personal expenses when calculating capital gains distribution in excess of basis. He argues that the loans instead went directly to TWC to be used to manage its properties, which themselves did not have checking accounts. Wirth acknowledged in the plea agreement that he had failed to report millions of dollars worth of distributions—not loans—of TWC money that he used for his personal benefit. Moreover, Bosshart testified regarding Wirth's use of loan proceeds, and the government introduced exhibits supporting her testimony and explaining her calculations. Wirth has not shown that the district court clearly erred in adopting this aspect of Bosshart's calculations.

B. Sufficiency of the Evidence

Wirth challenges the sufficiency of the evidence, arguing that the exhibits were vague and that Bosshart's testimony was insufficient. He argues that the government failed to explain its analysis in detail and that the district court should have more thoroughly explained its findings.

As recounted above, to establish actual loss the government offered Bosshart's lengthy testimony, as well as a wealth of exhibits summarizing and otherwise explaining Bosshart's adjustments and calculations.3 See United States v. Ellefsen, 655 F.3d 769, 782 (8th Cir.2011) (amount of restitution proven by summary document, supporting explanatory documents, IRS agent testimony, Revenue Agent Reports, and certified IRS transcripts). We conclude that the district court did not abuse its discretion in finding that the government met its burden of proving actual loss by a preponderance of the evidence. See United States v. Lewis, 557 F.3d 601, 615 (8th Cir.2009) (no clear error in restitution calculation involving “approximations and rounding”); United States v. Farrington, 499 F.3d 854, 861 (8th Cir.2007) ( “Farrington's mere assertion of potential double-counting, without any factual support, does not establish an abuse of discretion in determining the restitution amount.”). In light of TWC's abysmal bookkeeping records (described as “terrible” by defense witness Oakes), Wirth is hardly in a position to insist that the district court's restitution award be calculated with Pythagorean precision. See United States v. Pierce, 479 F.3d 546, 554 (8th Cir.2007) (“In this case, the difficulty in calculating a precise amount of loss is attributable to the lack of sufficient financial records [maintained by the defendants].”). For these reasons also, we conclude that the district court's oral and written findings were sufficiently thorough to support its restitution order.

C. Conduct Outside the Plea Agreement

Wirth next challenges the inclusion of certain boating-related expenses in the restitution award, arguing that because he did not stipulate to the unlawful deduction of these expenses in the plea agreement, the district court should not have ordered restitution arising therefrom. In the plea agreement, Wirth stipulated that he “spen[t] substantial amounts of TWC and several other Wirth-owned businesses' · money for personal expenditures[.]” The boating-related expenses were thus within the scope of his stipulation. Moreover, because “victim restitution may be ordered for criminal conduct that is part of a broad scheme to defraud, without regard to whether the defendant is convicted for each fraudulent act in the scheme[,]” Farrington, 499 F.3d at 861 (quoting United States v. Ross, 279 F.3d 600, 609 (8th Cir.2002)), greater particularity was not required.

Wirth also challenges the district court's finding that the boating-related expenses were unlawfully deducted as business expenses. Bosshart testified that witnesses had stated that “there was very little, if any, business use going on on that boat.” In disputing the accuracy of this testimony, Wirth offers exhibits which, he asserts, establish that the boating-related expenses were indeed properly deducted business expenses.4 Even considering the exhibits, we conclude that the district court did not clearly err by relying on Bosshart's testimony that the boating-related expenses were personal expenses that were unlawfully deducted as business expenses.

D. Payment Schedule

Wirth argues that the district court failed to establish a restitution payment schedule. The MVRA requires that the district court, “[u]pon determination of the amount of restitution owed to each victim, · specify in the restitution order the manner in which, and the schedule according to which, the restitution is to be paid[.]” 18 U.S.C. § 3664(f)(2). “In this case, where restitution is mandatory, the district court nevertheless has substantial discretion in determining how that mandatory restitution is to be paid[.]” United States v. Vanhorn, 344 F.3d 729, 731 (8th Cir.2003) (internal citations omitted).

As stated above, the district court did establish a restitution payment schedule. Wirth argues that the payment schedule has no practical effect because the amount he must pay, if any, is only nominal. The MVRA, however, authorizes a district court to order such payments. See 18 U.S.C. § 3664(f)(3)(B). The scheduling of such payments was reasonable given the state of Wirth's personal finances and the pendency of bankruptcy proceedings (both of which were detailed in the presentence report's factual findings adopted by the district court), as well as the likelihood of future, related collection proceedings. See 26 U.S.C. § 6201(a)(4)(A) (“The Secretary shall assess and collect the amount of restitution under an order pursuant to section 3556 of Title 18, United States Code, for failure to pay any tax imposed under this title in the same manner as if such amount were such tax.”); United States v. Tucker, 217 F.3d 960, 962 (8th Cir.2000) (“Of course, any amounts paid to the IRS as restitution must be deducted from any civil judgment IRS obtains to collect the same tax deficiency.”). Accordingly, Wirth's arguments fail.

E. Complexity Exception

Lastly, Wirth argues that the district court erred by not invoking the MVRA's complexity exception, 18 U.S.C. § 3663A(c)(3)(B). Under § 3663A(c)(3)(B), the district court may decline to award restitution if “determining complex issues of fact related to the cause or amount of the victim's losses would complicate or prolong the sentencing process to a degree that the need to provide restitution to any victim is outweighed by the burden on the sentencing process.”

In rejecting Wirth's complexity argument, the district court explained that Wirth's case was a “straightforward fraud case with a single identified victim” and that “[t]he tracking of the payments and receipts by the Government was a fairly simple draw method to estimate tax loss[.]” Only two witnesses were called at the restitution hearing, which lasted only one day, and the number of exhibits concerning restitution was not overwhelming. In these circumstances, the district court did not abuse its discretion by not applying the complexity exception set forth in § 3663A(c)(3)(B).

III. Conclusion

The district court's restitution order is affirmed. The government's motion to strike portions of Wirth's appendix and brief is denied as moot.

FOOTNOTES

2.  The Honorable Ann D. Montgomery, United States District Judge for the District of Minnesota.

3.  Wirth also contends that he was denied a meaningful opportunity to challenge the government's restitution calculation before and during the restitution hearing. We find this argument unpersuasive. In response to a prehearing request by Oakes for additional calculations, the government responded that it “ha[d] already disclosed all calculations and backup schedules relative to its restitution calculation.” Wirth was also afforded an opportunity to challenge Bosshart's calculations at the restitution hearing—an opportunity that his counsel utilized through thorough cross-examination and the introduction of conflicting testimony.

4.  The government moves to strike these and other exhibits on the basis that they were not first offered to the district court. Because we find Wirth's reliance on the disputed exhibits unavailing, we deny the motion as moot.

WOLLMAN, Circuit Judge.

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RASKAS v. JOHNSON JOHNSON PPC

Daniel RASKAS, Plaintiff–Appellee v. JOHNSON & JOHNSON; McNeil–PPC, Inc., Defendants–Appellants.

Marjie Levy, Plaintiff–Appellee v. Pfizer, Inc., Defendant–Appellant.

Leslie Yoffie, Plaintiff–Appellee v. Bayer Healthcare LLC, Defendant–Appellant.

No. 13–1996.

-- June 26, 2013

Before WOLLMAN, MELLOY, and GRUENDER, Circuit Judges.

Thomas Walsh, Dan Ball, Christopher J. Schmidt, Saint Louis, MO., Steve Brody, Washington, DC., for Appellants Johnson & Johnson and McNeil–PPC, Inc.Robyn Eileen Bladow, Shaun Paisley, Los Angeles, CA., James Patrick Muehlberger, Douglas B. Maddock, Jr., Kansas City, MO, for Appellant Pfizer Inc.Eugene A. Schoon, Susan A. Weber, Chicago, IL., Terry Lueckenhoff, Saint Louis, MO, for Bayer Healthcare, LLC.Richard Steven Cornfeld, Saint Louis, MO, for appellee.

Johnson & Johnson, McNeil–PPC, Pfizer, Inc., and Bayer Healthcare LLC (collectively, “Defendants”) appeal the district court's remand order. The district court held that Defendants failed to establish the amount in controversy requirement under the Class Action Fairness Act (“CAFA”), codified in relevant part at 28 U.S.C. § 1332(d)(2). The district court therefore found a lack of subject matter jurisdiction. Because we determine that Defendants met the amount in controversy requirement, we reverse and remand to the district court.

I. Background

Marjie Levy, Leslie Yoffie, and Daniel Raskas (collectively, “Plaintiffs”) filed three separate putative class-action suits in Missouri state court, alleging Defendants violated the Missouri Merchandising Practices Act, Mo.Rev.Stat. § 407.010 et seq., and conspired with unknown third parties to deceive customers into throwing away medications after their expiration dates, knowing that the medications were safe and effective beyond the expiration date. Marjie Levy sued Pfizer for its use of expiration dates on its Advil products; Leslie Yoffie sued Bayer for its use of expiration dates on Bayer Aspirin; and Daniel Raskas sued Johnson & Johnson and McNeil–PPC for their use of expiration dates on Tylenol Cold Multi–Symptom. Defendants removed to the United States District Court for the Eastern District of Missouri under CAFA. Each plaintiff filed a motion to remand claiming that CAFA's $5 million amount in controversy requirement was not met. The district court then consolidated the motions for a single hearing.

Defendants' evidence to establish the amount in controversy requirement consisted of data on sales of their respective medications in Missouri during the five-year statute of limitations time period. See Mo.Rev.Stat. § 516.210. Plaintiffs countered that these sales figures were insufficient to satisfy the amount in controversy requirement, as Plaintiffs are only seeking to recover damages for medications discarded and replaced.

The district court granted the motion to remand. The court found that Defendants had not met their burden of establishing the amount in controversy requirement, stating:

Defendants have provided extensive data of sales of their respective products in question to citizens of Missouri. However, defendants do not propose a logical formula for calculating the potential damages in this case using only the total sales data provided. In fact, none of the defendants presents such a formula or methodology for calculating the potential damages, but rather asks the court to presume that the amount in controversy must satisfy the jurisdictional threshold based on the high sales figures alone. This type of speculation is not sufficient to satisfy the jurisdictional burden on defendants. As explained in Ongstad v. Piper Jaffray & Co., 407 F.Supp.2d 1085, 1092 (D.N.D.2006), “[n]either party has provided the Court with a reliable method to determine, or even guesstimate,” the value of the medication in controversy in these cases. Therefore, I agree with other courts that have considered this issue that because the amount of damages is indeterminable at this stage of the proceedings, defendants have not met their burden of establishing subject matter jurisdiction over this case.

Defendants filed a request with this Court for review of the remand order pursuant to 28 U.S.C. § 1453(c). We granted the request.

II. Analysis

“We review de novo a district court's order to remand a removed case for lack of subject matter jurisdiction.” Bell v. Hershey Co., 557 F.3d 953, 956 (8th Cir.2009). CAFA “confers federal jurisdiction over class actions where, among other things, 1) there is minimal diversity; 2) the proposed class contains at least 100 members; and 3) the amount in controversy is at least $5 million in the aggregate.” Plubell v. Merck & Co., 434 F.3d 1070, 1071 (8th Cir.2006) (citing 28 U.S.C. § 1332(d)). The district court determined “the issue of federal jurisdiction in [the current cases] centers on the amount in controversy.”

“[A] party seeking to remove under CAFA must establish the amount in controversy by a preponderance of the evidence·” Bell, 557 F.3d at 958. Here, in order to meet their respective burdens, each defendant relies on its own sales figures in Missouri during the relevant statutory time period. The district court found, and Plaintiffs argue on appeal, that these figures cannot establish the amount in controversy because they are overinclusive, as Plaintiffs are only attempting to recover damages for the medications wrongfully discarded and replaced due to Defendants' practices. However, when determining the amount in controversy, the question “ ‘is not whether the damages are greater than the requisite amount, but whether a fact finder might legally conclude that they are.’ “ Id. at 959 (quoting Kopp v. Kopp, 280 F.3d 883, 885 (8th Cir.2002); see also Pretka v. Kolter City Plaza II, Inc., 608 F.3d 744, 754 (11th Cir.2010) (“The point is that a removing defendant is not required to prove the amount in controversy beyond all doubt or to banish all uncertainty about it.”).

Other circuits have rejected similar overinclusive arguments. In Spivey v. Vertrue, Inc., the plaintiffs filed a class action lawsuit in state court to recover alleged unauthorized credit card charges. 528 F.3d 982, 983 (7th Cir.2008). The defendant removed to federal district court under CAFA and submitted an affidavit detailing its total credit card charges to establish the amount in controversy requirement. Id. at 985. The district court held that this was insufficient to establish the amount in controversy because the defendant “did not concede that more than $5 million in charges was unauthorized.” Id. The Seventh Circuit reversed, finding that the total charges were sufficient to meet the defendant's burden because plaintiffs' claim that they were subjected to some unlawful charges put into controversy the propriety of all of the charges, and the sum of all of the charges exceeded $5 million. Id. at 985–86.

Similarly, the Ninth Circuit held that evidence of total charges for landline telephone services was sufficient to meet the amount in controversy requirement in a class-action suit alleging the defendant unlawfully charged some customers for landline telephone service without their consent. Lewis v. Verizon Commc'ns, Inc., 627 F.3d 395, 400–02 (9th Cir.2010). Relying on Spivey, the court held that the total charges established the amount in controversy requirement because “[t]he amount in controversy is simply an estimate of the total amount in dispute, not a prospective assessment of defendant's liability.” Id. at 400.

In the current case, each defendant's affidavit detailing the total sales of their respective medications in Missouri meets the amount in controversy requirement. First, defendant Pfizer produced an affidavit stating that sales from the relevant Advil products were over $14 million. Next, defendants Johnson & Johnson and McNeil–PPC produced an affidavit stating their total sales of Tylenol Cold Multi–Symptom as $3.3 million. When considering the total sales in conjunction with the request for punitive damages the amount in controversy requirement is met. See Mo.Rev.Stat. § 510.265.1(2) (limiting punitive damages to up to “[f]ive times the net amount of the judgment”); Hervey v. Mo. Dep't of Corr., 379 S.W.3d 156, 165 (Mo.2012) (holding that “net amount of the judgment” for purposes of calculating punitive damages includes the attorney's fee award); see also OnePoint Solutions, LLC v. Borchert, 486 F.3d 342, 348 (8th Cir.2007) (stating that punitive damages can be included when determining the amount in controversy). Finally, defendant Bayer provided an affidavit stating that its sales from certain Bayer Aspirin products were over $19 million.1 All of these sales figures are sufficient to establish the amount in controversy requirement by a preponderance of the evidence.

“Once the proponent of federal jurisdiction has explained plausibly how the stakes exceed $5 million,” as Defendants have in this case, “then the case belongs in federal court unless it is legally impossible for the plaintiff to recover that much.” Spivey, 528 F.3d at 986 (internal citation omitted). Even if it is highly improbable that the Plaintiffs will recover the amounts Defendants have put into controversy, this does not meet the legally impossible standard. See Keeling v. Esurance Ins. Co., 660 F.3d 273, 275 (7th Cir.2011) (stating that the “legally impossible” test is not met even if it is “improbable” that plaintiffs will recover the entire amount that the defendants established as being “in controversy”).

Further, Defendants are not required to provide a “formula or methodology for calculating the potential damages” more accurately, as the district court held. We have specifically rejected the need for this kind of formula or methodology, as it would require a defendant to “confess liability” for the entire jurisdictional amount. Hartis v. Chicago Title Ins. Co., 694 F.3d 935, 945 (8th Cir.2012) (quoting Spivey, 528 F.3d at 986); see also Lewis, 627 F.3d at 400 (“To establish the jurisdictional amount, [the defendant] need not concede liability for the entire amount, which is what the district court was in essence demanding by effectively asking [the defendant] to admit that at least $5 million of the billings were ‘unauthorized’ within the meaning of the complaint.”).

Plaintiffs also argue that Defendants' affidavits are insufficient to establish the amount in controversy requirement because they contain inadmissible hearsay. We reject Plaintiffs' argument. As we have recently stated, “[t]he removing party's ‘burden of describing how the controversy exceeds $5 million’ constitutes ‘a pleading requirement, not a demand for proof.’ “ Hartis, 694 F.3d at 944–45 (quoting Spivey, 528 F.3d at 986); see also Pretka, 608 F.3d at 755 (“The substantive jurisdictional requirements of removal do not limit the types of evidence that may be used to satisfy the preponderance of the evidence standard. Defendants may introduce their own affidavits, declarations, or other documentation—provided of course that removal is procedurally proper.”).

III. Conclusion

For the foregoing reasons, we vacate the district court's order and remand for a disposition on the merits.

FOOTNOTES

1.  The district court held that Bayer's affidavit could not be used to establish the amount in controversy because it included sales from various Bayer Aspirin products, and Plaintiffs only intended to include a product named “Genuine Bayer Aspirin.” However, Plaintiffs's complaint describes the medication in controversy as “Bayer Aspirin” or “Bayer Aspirin products.” The complaint never appears to limit the medication to “Genuine Bayer Aspirin,” and Plaintiffs cannot attempt to limit the medication after the fact to defeat jurisdiction. See Hargis v. Access Capital Funding, LLC, 674 F.3d 783, 789–90 (8th Cir.2012) (stating that CAFA jurisdiction is determined by “the operative complaint at the time of removal”).

MELLOY, Circuit Judge.

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WILLIAMSON v. HARTFORD LIFE AND ACCIDENT INSURANCE COMPANY

Linda WILLIAMSON, on behalf of herself and all others similarly situated, Plaintiff–Appellant v. HARTFORD LIFE AND ACCIDENT INSURANCE COMPANY, Defendant–Appellee.

No. 12–3425.

-- June 19, 2013

Before COLLOTON and SHEPHERD, Circuit Judges, and ROSE,District Judge.1

Tom G. Pirmantgen, argued, Jefferson City, MO (Tom G. Pirmantgen, and John H. Lake, on the brief), for appellant.Robert D. Helfand, argued, Simsbury, CT (Brant Mitchell Laue, Robert D. Helfand, and John W. Herrington, on the brief), for appellee.

[Published]

Plaintiff–Appellant Linda Williamson (“Williamson”) filed this action on behalf of herself and all others similarly situated, seeking interest on benefits she received under an Accidental Death and Dismemberment (“ADD”) insurance policy issued by Defendant–Appellee Hartford Life and Accident Insurance Company (“Hartford”). The parties filed cross-motions for summary judgment, and the district court2 reached a decision on the merits before ruling on whether to certify the class. The district court granted Hartford's motion and denied Williamson's motion. The district court determined that the policy is predominantly a group policy issued to a group policyholder in Tennessee, so the law of Tennessee applies to the dispute regarding whether interest is owed. The district court concluded that Hartford does not owe interest because the policy affords Hartford the right to investigate claims, and interest would not be “due” until completion of the investigation of any given claim. The district court then denied Williamson's motion to amend the judgment. We affirm, although with different reasoning than that employed by the district court.

I. BACKGROUND

Williamson's spouse was killed in an automobile accident on September 12, 2007, and she received benefits under ADD insurance policy number ADD–10900, issued by Hartford. Appellant's App. at 79, 80, 85, 88, 111. Over 14 months elapsed from the date of the claim to the date of payment. Id. at 97–99, 80, 111. Hartford did not pay any interest on the claim. The policy does not provide for interest. Id. at 57–74.

Williamson filed this action on behalf of herself and the alleged approximately 13,000 similarly situated beneficiaries who were not paid interest by Hartford on their paid claims under ADD–10900. Id. at 12–18, 240. Williamson seeks, inter alia, a declaratory judgment that Hartford must pay interest on claims for benefits under Tennessee Code Annotated section 47–14–109. Id. at 17–18. No judgment has been entered against Hartford in this matter and there is no dispute that Williamson's benefits were paid. Williamson seeks “pre-judgment interest as provided by law,” although it is not clear whether this is a separate period of interest from the statutory interest sought. Id. at 18, 359. Jurisdiction is premised on diversity. Id. at 12–13.

II. STANDARDS OF REVIEW

We review the district court's grant of summary judgment de novo. Reuter v. Jax Ltd., Inc., 711 F.3d 918, 919–20 (8th Cir.2013) (citation omitted). Summary judgment is appropriate only if, after viewing the evidence in the light most favorable to the non-movant and affording the non-movant all reasonable inferences, there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law. Preston v. City of Pleasant Hill, 642 F.3d 646, 651 (8th Cir.2011) (citations omitted); Fed.R.Civ.P. 56(a). We also conduct de novo review of the district court's interpretation of state law, Orion Fin. Corp. of S.D. v. Am. Foods Group, Inc., 281 F.3d 733, 738 (8th Cir.2002) (citation omitted), and the interpretation of contractual provisions of an insurance policy. Fuller v. Hartford Life Ins. Co., 281 F.3d 704, 706 (8th Cir.2002) (citation omitted).

III. DISCUSSION

The parties disagree on whether Tennessee law or Missouri law applies.3 Within each state's law, however, the parties agree on the particular state statutes that govern Williamson's claim for interest. This Court need not decide the choice-of-law question because whichever statute applies, Williamson's claim fails.4 We hold that Williamson is not entitled to interest under either state's statute.

A. Missouri Law

The Missouri statute provides:

Creditors shall be allowed to receive interest at the rate of nine percent per annum, when no other rate is agreed upon, for all moneys after they become due and payable, on written contracts, and on accounts after they become due and demand of payment is made; for money recovered for the use of another, and retained without the owner's knowledge of the receipt, and for all other money due or to become due for the forbearance of payment whereof an express promise to pay interest has been made.

Mo.Rev.Stat. § 408.020 (2000) (emphasis added). Pursuant to the statute, creditors shall be allowed to receive interest for all moneys after they become “due and payable.” Id. Williamson does not dispute Hartford's argument that under Missouri law and the policy language, Hartford paid the benefit to her when it was payable. Under Missouri law, Williamson is not entitled to interest.

B. Tennessee Law

Assuming that Tennessee law applies, the parties dispute whether subsection (b) or (c) of Tennessee Code Annotated section 47–14–109 applies to interest on an insurance benefit. Subsection (c) states: “In all other cases, the time from which interest is to be computed shall be the day when the debt is payable, unless another day be fixed in the contract itself.” Tenn.Code Ann. § 47–14–109(c) (2001) (emphasis added). Pursuant to the statute, unless the contract states otherwise, interest begins to run when the debt is “payable.” Id. For purposes of this case, we hold that the debt was “payable” at the time of payment designated in the policy .5 Hartford paid the benefit to Williamson within the time of payment designated in the policy. See Appellant's App. at 73, 80. Williamson is not entitled to interest under subsection (c).

Subsection (b) states: “Liquidated and settled accounts, signed by the debtor, shall bear interest from the time they become due, unless it is expressed that interest is not to accrue until a specific time therein mentioned.” Tenn.Code Ann. § 47–14–109(b) (2001) (emphasis added). Assuming without deciding that (b) applies, the question is whether the word “due” means interest accrues at an earlier time than when it is “due and payable.” As a federal court sitting in diversity, our role is to interpret state law, not to fashion it. Orion Fin. Corp. of S.D., 281 F.3d at 738. This Court's task with respect to an unsettled issue of state law “is to predict how the highest court in the state would rule on the issue.” Smith v. Chem. Leaman Tank Lines, Inc., 285 F.3d 750, 754 (8th Cir.2002) (citation omitted). A federal court must follow the announced state law in a diversity action unless there are very persuasive grounds for believing the state's highest court would no longer adhere to it. Id. at 755 (quotation omitted).

In a 1977 decision, the Tennessee Supreme Court stated:

any written instrument, signed by the debtor, whereby he promises to pay to a person named a definite sum of money, for a valuable consideration stated, at a definite time, upon a specified condition, is within the provision of the statute, and will bear interest from the time of payment designated, upon proof of the happening of the contingency that makes the condition effective ·

Performance Sys., Inc. v. First Am. Nat'l Bank, 554 S.W.2d 616, 618 (Tenn.1977) (emphasis added).6 The Tennessee Court of Appeals applied Performance Systems to section 47–14–109(b) in Jaffe v. Bolton, 817 S.W.2d 19, 28 & n. 1 (Tenn.Ct.App.1991). Jaffe applied the first part of the above quotation from Performance Systems (“any written instrument · upon a specified condition”) in determining that a fixed obligation to pay installments of rent pursuant to a lease agreement comes within the import of the statute and entitles the plaintiff to receive prejudgment interest as a matter of right. 817 S.W.2d at 28 & n. 1 (citing Performance Sys., Inc., 554 S.W.2d at 618). Jaffe demonstrates the Tennessee Court of Appeals's use of Performance Systems to interpret the statute.

Relying upon Performance Systems as a predictor, the Tennessee Supreme Court would likely construe “due” in section 47–14–109(b) to mean the time of payment designated in the policy. In other words, the Tennessee Supreme Court would not likely interpret “due” to mean the date of loss. The court would likely decide that the word “due” does not mean interest accrues at an earlier time than when it is “due and payable.” Regarding the time of payment designated, the policy at issue states: “Time of Claim Payment: We will pay any benefit due as soon as possible after we receive proof of loss and other forms that may be necessary to adjudicate the claim.” Appellant's App. at 73. As stated previously, Hartford paid the benefit to Williamson within the time of payment designated in the policy. See id. at 73, 80. Under subsection (b), therefore, Williamson is not entitled to interest.

IV. CONCLUSION

For the foregoing reasons, the judgment of the district court is affirmed.

ROSE, District Judge.

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INDIGO LR LLC v. ADVANCED INSURANCE BROKERAGE OF AMERICA INC

INDIGO LR LLC; Chris Eakin, on behalf of themselves and other similarly situated, Plaintiffs–Appellants v. ADVANCED INSURANCE BROKERAGE OF AMERICA INC., also known as Advanced Insurance Administration; Matt Lile; Employers Choice Health Plan, Defendants–Appellees.

No. 12–3119.

-- June 21, 2013

Before LOKEN and GRUENDER, Circuit Judges, and PHILLIPS, District Judge.1

Luther Oneal Sutter, argued, Benton, AR, for appellant.David Michael Donovan, argued, Little Rock, AR, for appellee.

Indigo LR, LLC (“Indigo”) and one of its employees, Chris Eakin, appeal the district court's2 dismissal of their claims for breach of contract, negligence, conspiracy, and violations of ERISA and RICO against Advanced Insurance Brokerage of America, also known as Advanced Insurance Administration (“Advanced”), and Matt Lile. For the reasons discussed below, we affirm the district court's dismissal without prejudice for lack of standing.

I. Background

Indigo operates a clothing store in Little Rock, Arkansas. During the time period relevant to this case, Indigo provided a self-funded health insurance plan for its employees through the Employers Choice Health Plan. The Employers Choice Health Plan was operated by Advanced, a third-party administrator, and Cosmopolitan Life Insurance Company (“Cosmo”), an excess insurer. Although the relationship between Advanced and Cosmo is not clear from the record, Lile was both an owner of Advanced and a minority shareholder of Cosmo.

Under the plan, Indigo paid an annual retention to Advanced in monthly installments. If Indigo submitted a covered claim on behalf of an employee, Advanced paid first on that claim from Indigo's retention fund. To the extent any claim exceeded the amount then residing in Indigo's retention fund, Indigo was required to pay the excess itself and then seek reimbursement under the Cosmo excess policy.

Eakin, an Indigo employee, had knee surgery in July 2008. Indigo timely submitted a claim to Advanced, but payment on the claim was not made due to financial problems at Cosmo. In March 2009, the Arkansas Insurance Commissioner obtained a state-court order placing Cosmo into receivership. The order enjoined any claims or litigation against Cosmo or the receiver. The receiver notified Indigo that, pursuant to the plan, Indigo would have to pay Eakin's medical costs and then submit the bills to the receiver for reimbursement. The receiver was cautiously optimistic that all claims submitted under Cosmo policies could be paid in full eventually. Accordingly, Indigo paid Eakin's medical bills and sought reimbursement from the receiver.

Indigo and Eakin filed suit against Advanced, Cosmo, and Lile in June 2009, but the district court stayed the suit pending resolution of the receivership. Indigo and Eakin were granted a voluntary dismissal of that suit without prejudice. By December 2009, the receiver had paid half of Indigo's submitted claim under the Cosmo policy. Indigo and Eakin filed this lawsuit in August 2010 against Advanced and Lile (but not Cosmo this time), alleging breach of contract, negligence, conspiracy, and violations of ERISA and RICO on the theory that Advanced and Lile had intentionally delayed payments on valid claims. After Advanced and Lile removed the case to federal district court, Indigo and Eakin amended their complaint to plead a class action. At a class certification hearing in September 2011, the receiver testified that he anticipated Indigo's claim under the Cosmo policy would be reimbursed in full. At the close of the receiver's testimony, the court asked him to elaborate on the likelihood that all submitted claims would be paid in full. The receiver explained that there were sufficient funds to cover all submitted claims to date and the period for accepting additional claims was about to expire.

In March 2012, while a decision on class certification was on hold pending settlement efforts, the receiver indeed paid the remaining half of Indigo's submitted claims. Indigo notified the district court of the payment and requested the opportunity for supplemental briefing on its impact. The district court accepted supplemental briefing from both parties, including an affidavit from the receiver stating that all claims submitted under the Cosmo policy had been paid in full. The district court then dismissed the complaint without prejudice for lack of standing, holding that Indigo's injury had been fully redressed and that Eakin never had a cognizable injury.3 On appeal, Indigo argues that, despite receiving full reimbursement from the receiver, it suffered an injury because a monthly retention amount it had paid to Advanced was neither credited towards Eakin's medical costs nor repaid to Indigo.

II. Discussion

We review the issue of standing de novo. St. Paul Area Chamber of Commerce v. Gaertner, 439 F.3d 481, 484 (8th Cir.2006). To establish standing, a plaintiff must demonstrate that it suffered “(1) an ‘injury-in-fact’ that (2) is ‘fairly · trace[able] to the challenged action of the defendant’ and (3) is ‘likely · [to] be redressed by a favorable decision’ in court.” ABF Freight Sys., Inc. v. Int'l Bhd. of Teamsters, 645 F.3d 954, 958 (8th Cir.2011) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560–61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992)).

“Since they are not mere pleading requirements but rather an indispensable part of the plaintiff's case, each element [required to demonstrate standing] must be supported in the same way as any other matter on which the plaintiff bears the burden of proof, i.e ., with the manner and degree of evidence required at the successive stages of the litigation.” Lujan, 504 U.S. at 561. Here, the dismissal for lack of standing occurred at an atypical stage of the litigation—after an evidentiary hearing and supplemental briefing with additional affidavits in association with a motion for class certification. A motion for class certification may result in the preliminary resolution of factual disputes, see Luiken v. Domino's Pizza, LLC, 705 F.3d 370, 372 (8th Cir.2013), and the district court's factual determinations at this stage are accepted unless they are clearly erroneous, Blades v. Monsanto Co., 400 F.3d 562, 566 (8th Cir.2005).

The district court credited the receiver's affidavit stating that Indigo was reimbursed for the entirety of the claim it submitted to the receiver for Eakin's medical costs, and Indigo does not dispute this factual finding. Instead, Indigo argues on appeal that “the Receiver · refused to give the plans credit for the retention they paid to [Advanced].” In other words, Indigo asserts that (1) it paid a retention amount to Advanced that should have been used to pay a first portion of Eakin's medical bills, (2) Advanced never paid that first portion or returned the retention amount to Indigo, and (3) the receiver also did not reimburse Indigo for that first portion (because Cosmo, an excess insurer, never was liable for that first portion).

The difficulty with Indigo's theory of injury is that Indigo presented no evidence to show that it was out-of-pocket for any retention amount. Indigo argues that the following exchange with the receiver at the class certification hearing supports its theory:

Q. But my question and the reason we're here is, you've done no analysis to determine in my hypothetical here if this plan had paid their monthly [retention] payments ·, you're not taking into consideration that payment when determining whether or not to pay-Cosmo should pay claims, are you?

A. I'm not, no.

Q. All right. So we had at least 64, 74 plans that were paying · the retention that Cosmo wasn't able to fund; correct?

A. It's not Cosmopolitan's obligation to fund that.

Q. It was the plan's obligation.

A. The money was paid to [Advanced], which included the retention amount. Any retention amount held by [Advanced] should have been used to pay claims, and then if there was any claims paid after that by the employer, Cosmopolitan was liable under the treaty.

This testimony, however, is simply an acknowledgment by the receiver that retention payments by Advanced to the sixty-plus plans it administered were generally outside Cosmo's purview, not evidence that any particular plan was denied the benefit of its retention payments. Indigo fails to direct us to any evidence in the record that Indigo made the relevant retention payment to Advanced or that Indigo maintained a balance in its retention fund at Advanced that should have been available to cover Eakin's medical expenses. Indigo also fails to direct us to any evidence in the record that a portion of Eakin's medical bills corresponding to the retention amount was omitted from its claim to the receiver. The sole relevant evidence before the district court was the receiver's statement that all claims had been fully reimbursed. Based on this record, we cannot say that the district court clearly erred in finding that the receiver's reimbursement fully redressed any injury suffered by Indigo. See F. T.C. v. Lundbeck, Inc., 650 F.3d 1236, 1239 (8th Cir.2011) (“If the district court's fact-findings are ‘plausible in light of the record viewed in its entirety,’ they must be affirmed ·” (quoting Moore v. Forrest City Sch. Dist., 524 F.3d 879, 884 (8th Cir.2008))).4

Indigo raises several other arguments in support of standing, but none of them are applicable. First, Indigo argues that defendants cannot moot a putative class action simply by paying the claims of the named plaintiffs. See Deposit Guar. Nat'l Bank v. Roper, 445 U.S. 326, 339, 100 S.Ct. 1166, 63 L.Ed.2d 427 (1980) (“Requiring multiple plaintiffs to bring separate actions, which effectively could be ‘picked off’ by a defendant's tender of judgment before an affirmative ruling on class certification could be obtained, obviously would frustrate the objectives of class actions·”). Here, defendants Advanced and Lile did not pay Indigo's claim; the receiver for Cosmo, an independent actor, did. Second, Indigo argues that it successfully pled a cause of action under ERISA, but pleading the elements of an ERISA claim does not obviate the need to establish Article III standing. See Braden v. Wal–Mart Stores, Inc., 588 F.3d 585, 591 (8th Cir.2009) (noting that a plaintiff “must have both Article III standing and a cause of action under ERISA” to survive dismissal). Third, Indigo argues that standing is present due to the risk of harm from some prospective injury, but Indigo switched to a new health plan in February 2009, and Advanced and Cosmo are out of business, rendering any future harm from repeated conduct highly unlikely. Finally, Indigo argues that a defendant's voluntary cessation of alleged illegal conduct does not automatically moot a case. See Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 189, 120 S.Ct. 693, 145 L.Ed.2d 610 (2000). As discussed above, however, the problem here is that Indigo has failed to show how any injury has arisen, or might arise in the future, from the alleged conduct.

Accordingly, we agree with the district court that Indigo has failed to establish standing.

III. Conclusion

For the foregoing reasons, we affirm the district court's dismissal without prejudice for lack of standing.

GRUENDER, Circuit Judge.

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