UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT UNITED STATES OF AMERICA, No.22-16128

Plaintiff-Appellee, D.C. No. 2:21-mc-00098- v. TLN-AC MICHAEL BRUMBAUGH, Successor Trustee of The Castana OPINION Trust, Dated March 4, 2009, and Administrator of the Estate of David Zinnel,

Claimant-Appellee, STEVEN ZINNEL,

Defendant-Appellant.

Appeal from the United States District Court for the Eastern District of California Troy L. Nunley, District Judge, Presiding

Submitted May 14, 2025* San Francisco, California * The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). 2 USA V. ZINNEL

Filed June 9, 2025

Before: Carlos T. Bea and Ana de Alba, Circuit Judges, and Jeffrey Vincent Brown,** District Judge.

Opinion by Judge de Alba

SUMMARY***

Federal Debt Collection Procedures Act of 1990

The panel vacated the district court’s final order of garnishment in the government’s application for a writ of garnishment under the Federal Debt Collection Procedures Act of 1990 (FDCPA), seeking to seize funds from a TD Ameritrade Clearing, Inc., Individual Retirement Account that petitioner Steven Zinnel owned. A jury convicted Zinnel of bankruptcy fraud, money laundering, and other financial crimes. The district court overruled Zinnel’s objections to the writ of garnishment, and ordered TD Ameritrade to pay the district court clerk for unpaid restitution and unpaid fines, and pay the U.S. Department of Justice $150,000 as a litigation surcharge. The panel held that the appeal was not moot even though TD Ameritrade made all payments required by the final

** The Honorable Jeffrey Vincent Brown, United States District Judge for the Southern District of Texas, sitting by designation. *** This summary constitutes no part of the opinion of the court. It has been prepared by court staff for the convenience of the reader. USA V. ZINNEL 3

garnishment order. Assuming Zinnel prevails on appeal and on remand in the district court, the district court could vacate the portion of the garnishment order requiring TD Ameritrade to disburse $650,000 for the unpaid fines and the litigation surcharge and direct the United States to return the funds to TD Ameritrade. That it may be impossible for Zinnel to recover the $512,047 the district court clerk paid to Zinnel’s victims did not affect the analysis. Because the court may fashion a partial remedy here, the appeal is not moot. The panel held that the district court erred in denying Zinnel’s timely motion to transfer the garnishment proceedings to the district in which he purportedly resided. Agreeing with the Sixth and Eleventh Circuits, the panel held that the plain language of section 3004 of the FDCPA imposed a mandatory obligation on the district court to transfer the proceedings. The panel held that the proper remedy was to vacate the final garnishment order. Disagreeing with the Sixth Circuit, the panel held that the Supreme Court’s opinion in Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26 (1998), foreclosed the contention that a district court’s violation of § 3004(b)(2) was amenable to harmless error analysis; rather, it was the type of violation that necessarily affected the debtor’s “substantial rights.” 28 U.S.C. § 2111. 4 USA V. ZINNEL

COUNSEL Lynn T. Ernce, Assistant United States Attorney; Philip A. Talbert, United States Attorney; United States Department of Justice, Office of the United States Attorney, Sac