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Sixth Circuit Announces District Court Has Power to Waive Interest on Restitution Post-Sentencing, Resulting in Circuit Split

by Dale Chappell

Acknowledging a circuit split on the issue, the U.S. Court of Appeals for the Sixth Circuit held that district courts have the authority to waive interest on restitution post-sentencing.

Edmund Phillips was nearing release and filed a motion in the U.S. District Court for the Western District of Michigan to waive the interest on his restitution owed. He was sentenced in 2001 for three counts of armed robbery and, in addition to 21 years in prison, he was ordered to pay over $51,000 in restitution to the victims. During his time in prison, he managed to pay down his outstanding restitution amount to $13,191.04, but he owed an additional $25,550.51 in interest. The district court denied his motion, holding that it lacked subject-matter jurisdiction to modify a restitution order after sentencing.

On appeal, Phillips cited his “limited financial resources” as a ground for waiving the interest owed and that the district court did, in fact, have jurisdiction to waive the interest under 18 U.S.C. § 3612(f)(3). That statutes provides, in relevant part: “If the court determines that the defendant does not have the ability to pay interest under this subsection, the court may (A) waive the requirement for interest; (B) limit the total of interest payable to a specific dollar amount; or (C) limit the length of the period during which interest accrues.”

The Court stated: “Nothing in this language limits its applicability to the initial sentencing.” It reasoned that because a defendant’s ability to pay can change dramatically over the years coupled with the fact that interest is payable only after all principal has been paid, it indicates that “a court may waive the interest requirement after sentencing.”

The Government opposed Phillips’ motion, arguing that another statute, 18 U.S.C. § 3664(o), contains an exhaustive list of exceptions that allow modification of interest. That statute provides a list of events and statutes when interest may be modified or waived. Section 3612(f)(3) is not on that list, so the Government argued that this means it is not one of the situations where the district court is authorized to waive Phillips’ interest on restitution post-sentencing.

But the Court disagreed. “Section 3664(o) does not list a series of exceptions under which a court may modify a restitution order that becomes a final judgment,” the Court stated. “Instead, by its literal terms it provides that a sentence imposing an order of restitution is ‘final ... notwithstanding the fact that’ such a sentence can be changed in the five listed ways,” according to the Court. It continued, “This is not a list of exceptions to when an order of restitution is final, but rather a list of possibilities that do not create an exception. This is because ‘notwithstanding’ does not mean ‘except’ or ‘unless.’ Rather, it means ‘despite.’” Following a very detailed discussion involving the use of illuminating examples, the Court concluded, “because the word ‘notwithstanding’ is used in § 3664(o) rather than ‘unless’ or ‘except,’ § 3664(o) cannot be read to make § 3664(o)(1)(A)-(D) & (2) an exclusive list.”

The Court noted that three other circuits have reached the opposite conclusion, i.e., § 3664(o) does provide an exclusive list of ways a final restitution judgment may be modified by characterizing the listed ways as exceptions and because § 3617(f) isn’t on the list it can’t be used to modify restitution interest after sentencing. See United States v. Puentes, 803 F.3d 597 (11th Cir. 2015); United States v. Wyss, 744 F.3d 1214 (10th Cir. 2014); United States v. Grant, 715 F.3d 552 (4th Cir. 2013) (same interpretation in dictum).

Nevertheless, the Court clearly wasn’t impressed with their reasoning, stating
“[h]owever, those decisions did not analyze the definition of ‘notwithstanding’ and its overall function in the statutory scheme. They instead took a more purpose-based approach, concluding that Congress would not have crafted the list in § 3664(o) if it did not intend to make it exclusive.” The Court declared that this was “not a particularly compelling conclusion to be drawn from the ‘notwithstanding’ language.”

Thus, the Court ruled that § 3612(f)(3) empowers courts to waive interest on restitution obligations based upon ability to pay, reasoning that “the statute is best read unrestrictively to permit post-sentencing waiver.”

Accordingly, the Court reversed the district court’s denial of Phillips’ motion to waive interest and remanded the case for further proceedings in light of its opinion. See: United States v. Phillips, 9 F.4th 382 (6th Cir. 2021). 

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Related legal cases

United States v. Phillips

United States v. Puentes

United States v. Wyss

United States v. Grant



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