Simmons v. Mischel

Background

Joyce Marie Simmons, a federal prisoner who had previously been confined at the Federal Correctional Institution in Dublin, California, sued several prison officials for alleged constitutional violations. The only remaining claim was a claim for damages against the United States under the Federal Tort Claims Act, based on alleged supervisory negligence related to an alleged battery by Ashley Phillips.

The parties settled the action on July 22, 2020, for $2,500. Their written settlement agreement stated that it did not waive or modify federal offsets that might apply to the settlement proceeds. The United States asked the Judgment Fund to send the money to Simmons’s bank, but the Treasury did not do so because the money was offset through the Treasury Offset Program.

The United States later determined that the offset was based on a 2009 criminal restitution order against Simmons. It notified Simmons and advised her to pursue an administrative challenge and, if necessary, seek relief in her criminal case. The United States then moved to dismiss this action based on the settlement agreement.

Court’s analysis

The parties did not dispute that the settlement agreement was valid and enforceable. The question was whether the United States had complied with the agreement by applying the $2,500 to Simmons’s restitution obligation rather than transferring the money to her bank account.

The court concluded that the United States had fulfilled its settlement obligation. It had provided the agreed $2,500 payment, although the payment was subject to an offset. The court reasoned that applying the funds to Simmons’s restitution obligation gave her a $2,500 financial benefit, even though she did not receive the money directly.

The court also explained that federal law authorizes the Treasury to collect qualifying federal debts by withholding payments owed by federal agencies. The United States submitted evidence that Simmons had been notified of the offset and that her restitution obligation was eligible for the offset program. Simmons said she did not remember receiving the notice, but she did not otherwise dispute that notice had been provided or that the restitution obligation was eligible for offset.

The court did not allow Simmons to challenge the validity of the offset in this action as an initial matter. It held that she first had to exhaust administrative remedies with the U.S. Attorney’s Office for the Northern District of Texas. The court noted that Simmons could pursue her argument that the debt was not yet due through that process. It also observed that her argument appeared inconsistent with the criminal judgment, which stated that restitution was payable immediately, although payment conditions applied during supervised release.

Disposition

The court granted the United States’ motion to dismiss. It dismissed the action without prejudice and directed that Simmons must first exhaust administrative remedies if she wished to challenge the application of the $2,500 settlement payment to her restitution obligation. The clerk was directed to close the file.