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Business Crimes BulletinFeaturesLitigationWhite Collar Crime

Circuit Split Over Joint and Several Liability for Forfeiture In White-Collar Crimes

By Evan T. Barr
February 01, 2023

In Honeycutt v. United States, 137 S. Ct. 1626 (2017), the U.S. Supreme Court ruled that co-conspirators convicted of federal narcotics violations could not be held jointly and severally liable for any criminal forfeiture judgment ordered in the case. Departing from years of past practice, the court held that forfeiture under the relevant drug statute instead would be limited solely to any property that a particular defendant actually acquired as a result of his or her participation in the criminal activity. At the time, many in the defense bar welcomed the ruling as a vital limitation on the government's sweeping ability to strip individual defendants of their assets without regard to their relative culpability.

But while Honeycutt was significant, the court in its ruling did not address whether it also applied outside the narcotics context, to forfeiture judgments imposed in white-collar cases. Courts have grappled with this uncertainty and now a circuit split has emerged as to whether the logic of Honeycutt should be extended to benefit defendants facing joint and several liability for forfeiture in connection with fraud or other economic crimes, where the amounts in question routinely exceed tens of millions of dollars.

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The Honeycutt Case

Prior to Honeycutt, the general rule in multi-defendant federal criminal cases (drug or otherwise) had long been that each convicted defendant could be held jointly and severally liable for the forfeiture of the entire proceeds of the offense conduct. As developed in tort law, under the doctrine of joint and several liability, a plaintiff who obtained a judgment against more than one party conveniently could collect the full amount from any one of the liable defendants. Applying joint and several liability to criminal forfeiture was deemed to be consistent with the well-known concept, first set forth in Pinkerton v. United States, 328 U.S. 640 (1946), that members of a conspiracy were liable for the reasonably foreseeable acts of other members in a coordinated scheme.

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