FSA Earned-Time Credits Cannot Shorten Supervised Release; § 2241 Becomes Moot After Transfer to Prerelease Custody

I. Introduction

In Rivera-Perez v. Stover (2d Cir. Mar. 26, 2026), the Second Circuit addressed an issue of first impression in the Circuit about the scope of earned-time credits under the First Step Act (“FSA”). Raul Rivera-Perez (a federal inmate at FCI Danbury when he filed) petitioned under 28 U.S.C. § 2241, alleging that the Bureau of Prisons (“BOP”) miscalculated his FSA credits and unlawfully prevented his transfer to prerelease custody (home confinement or an RRC).

After he filed, Rivera-Perez was transferred to a residential reentry center (“RRC”), and the Warden (Rick Stover) argued the habeas case was moot. The district court agreed the transfer request was moot, but sua sponte reframed the petition as seeking to apply “unused” FSA credits to reduce the length of Rivera-Perez’s court-imposed supervised release term. It then granted relief on that theory.

The appeal therefore presented two tightly linked questions: (1) whether 18 U.S.C. § 3632(d)(4)(C) authorizes application of FSA credits to reduce the length of supervised release (as opposed to starting supervised release earlier), and (2) if not, whether the habeas petition became moot once Rivera-Perez reached prerelease custody and the BOP had applied the maximum credits available to accelerate his supervised-release start date.

II. Summary of the Opinion

The Second Circuit vacated and remanded with instructions to dismiss as moot. It held that:

  • FSA earned-time credits under 18 U.S.C. § 3632(d)(4)(C) cannot be used to reduce a prisoner’s term of supervised release.
  • Instead, credits may be applied only to advance the prisoner’s transition from imprisonment into prerelease custody or to begin supervised release earlier (up to the statutory cap referenced in 18 U.S.C. § 3624(g)).
  • Because Rivera-Perez had been transferred to an RRC and had already received the maximum application of credits to accelerate the start of supervised release, the court could grant no further effectual relief; the case was therefore moot.

Judge Jacobs concurred, emphasizing (i) that the ambiguity in “toward” is resolved by the statute’s assignment of implementation to BOP (which lacks authority to change a judicially imposed supervised-release term), and (ii) that “unused” credits are not “wasted” because the programs themselves provide rehabilitative benefits. Judge Nathan dissented, arguing the text (“toward time in … supervised release”) most naturally authorizes credits to shorten supervised release and that the majority’s reading improperly shifts the statutory object from “time in” supervised release to time in prison.

III. Analysis

A. Precedents Cited (and How They Shaped the Decision)

1. Mootness and the “Case or Controversy” Requirement

  • Simon v. E. Kentucky Welfare Rts. Org. and Klein ex rel. Qlik Techs., Inc. v. Qlik Techs., Inc.: Used to frame Article III limits and situate mootness as a distinct jurisdictional inquiry.
  • Genesis Healthcare Corp. v. Symczyk: Provided the controlling formulation that an action becomes moot when an intervening event deprives the litigant of a “personal stake” such that the case can no longer proceed.
  • Knox v. Serv. Emps. Int'l Union, Loc. 1000: Supplied the “effectual relief” test—if it is impossible to grant any effective relief, the matter is moot. This became dispositive once the court rejected the supervised-release reduction theory.

2. Statutory Interpretation and Reading Text in Context

  • Spadaro v. U.S. Customs & Border Prot.: Anchored the “plain meaning” starting point.
  • In re Med Diversified, Inc.: Supported the proposition that if competing interpretations are “reasonably susceptible,” the text is ambiguous.
  • L.S. v. Webloyalty.com, Inc. and King v. Burwell: Central to the court’s method: words must be interpreted in context; courts construe statutes as integrated schemes rather than isolated clauses.
  • Yates v. United States and In re Soussis: Reinforced that dictionary definitions inform meaning but cannot substitute for contextual statutory analysis.
  • Food & Drug Admin. v. Brown & Williamson Tobacco Corp.: Provided the “coherent regulatory scheme” principle, leading the panel to read § 3632(d)(4)(C) in tandem with § 3624(g).
  • Dubin v. United States: Allowed limited reliance on headings to resolve interpretive doubt (while not treating headings as dispositive).
  • Romag Fasteners, Inc. v. Fossil, Inc.: Used to criticize the district court’s remedial “workaround” as effectively adding procedural machinery not found in the statute.
  • Griffin v. Oceanic Contractors, Inc.: Supported avoiding interpretations that yield “absurd results” when a plausible alternative exists.

3. Sentencing Structure, Supervised Release, and Institutional Roles

  • United States v. Rasheed: Clarified that prerelease custody (RRC/home confinement) remains part of the term of imprisonment because inmates remain in BOP custody—supporting the view that FSA credits operate within the custody-to-release transition.
  • United States v. Johnson and Mont v. United States: Cited to emphasize that supervised release serves rehabilitative and transitional functions—undercutting the notion that Congress silently empowered administrative shortening of supervision terms.

4. Circuit Split Authorities on the FSA Credit Question

  • Hargrove v. Healy: A key persuasive authority aligned with the Second Circuit’s result: FSA credits may reduce imprisonment (accelerate transfer) but not supervised-release length; heavily relied on the linkage to § 3624(g).
  • Guerriero v. Miami RRM, United States v. Malik, Stinson v. Martinez, and dicta in Valladares v. Ray: Cited to show broader alignment (even if some were unpublished) that “toward supervised release” means earlier entry into supervised release.
  • Gonzalez v. Herrera: The principal contrary authority; the Second Circuit expressly rejected its reading that the first sentence independently authorizes shortening supervised release “time in” supervision.

B. Legal Reasoning

1. The interpretive pivot: ambiguity of “toward” resolved by statutory context

The panel accepted that the phrase “applied toward time in … supervised release” can bear two plausible meanings if read in isolation: (i) reduce the amount of time spent on supervised release, or (ii) move the prisoner “in the direction of” supervised release by accelerating its commencement. The decisive move was contextual: the very next sentence mandates that “[t]he Director of the Bureau of Prisons shall transfer eligible prisoners, as determined under section 3624(g), into prerelease custody or supervised release.” That language, in the court’s view, unambiguously describes an earlier transfer from imprisonment into a different status—not a post-transfer reduction of the duration of supervised release.

2. The cross-reference to § 3624(g) supplies operational meaning

Because § 3632(d)(4)(C) directs BOP action “as determined under section 3624(g),” the court treated § 3624(g) as the statute’s operating manual. Section 3624(g)(3) provides that BOP may transfer a prisoner “to begin [the] term of supervised release at an earlier date, not to exceed 12 months, based on the application of time credits under section 3632.” That textual linkage made “toward supervised release” mean “toward the start of supervised release,” subject to a one-year cap.

3. Structural coherence: the court rejected a “two-mechanism” reading inside one subsection

The district court (and the Ninth Circuit) treated § 3632(d)(4)(C) as establishing two distinct mechanisms: (i) sentence-one reduces time in prerelease custody/supervised release, while (ii) sentence-two authorizes early transfer. The Second Circuit found that implausible because it would create an incongruous, under-specified system—particularly where Congress expressly specified BOP as implementing authority and expressly tied transfer eligibility to § 3624(g)’s guardrails.

4. Guardrails and institutional competence: why “supervised release reduction” did not fit

The court emphasized that Congress built detailed eligibility limits and caps into § 3624(g) for early transfer decisions (e.g., risk assessment; the 12-month ceiling). If sentence-one independently authorized reducing supervised release, those guardrails would not apply, potentially permitting large or total reductions without the statutory constraints Congress expressly imposed for early release decisions. The panel also stressed that supervised release is a judicially imposed component of sentence administered by Probation, and that the FSA provision’s passive voice and lack of implementing actor would be a surprising way to empower non-judicial modification of a court-imposed term (particularly alongside 18 U.S.C. § 3583(e)’s judicial termination framework).

5. Mootness followed automatically from the statutory holding

Once the court held FSA credits cannot shorten supervised release, Rivera-Perez’s remaining requested “benefit” (applying “unused” credits to supervision length) was not legally available. Because he had already been transferred to prerelease custody and received the maximum permissible acceleration to supervised release, there was no further effective relief a court could order. The petition was therefore moot before the district court’s judgment, requiring vacatur and dismissal.

C. Impact

  • Second Circuit rule on FSA credits: The decision establishes that in the Second Circuit, § 3632(d)(4)(C) credits may accelerate transfer into prerelease custody or the start of supervised release (up to the statutory cap), but cannot reduce the length of supervised release.
  • Habeas litigation consequence: § 2241 petitions seeking only earlier prerelease placement become moot once the prisoner receives that placement, absent some other legally available collateral relief.
  • Deepened circuit split: The opinion expressly rejects Gonzalez v. Herrera (9th Cir.), sharpening a split that may invite Supreme Court review given the practical stakes for BOP administration and supervised-release duration.
  • Separation of functions: The reasoning reinforces a boundary: BOP implements custody-related credits and transfers; altering supervised release is a sentencing function primarily governed by judicial mechanisms such as 18 U.S.C. § 3583(e).

IV. Complex Concepts Simplified

  • Prerelease custody (RRC/home confinement): A less restrictive form of confinement near the end of a sentence. Importantly, the inmate remains in BOP custody (as emphasized via United States v. Rasheed).
  • Supervised release: A court-imposed period of community supervision after imprisonment, administered by Probation. It is part of the sentence, not administered by BOP.
  • FSA earned-time credits: Statutory credits earned for participating in qualifying programs/activities. The key dispute here was whether credits can (a) only move a prisoner into prerelease/supervised release earlier, or also (b) shorten time spent on supervised release.
  • Mootness: Even if a case started as a live controversy, it must be dismissed if events make it impossible for a court to provide meaningful relief.
  • Reading statutes “in context”: Courts do not interpret a phrase alone; they interpret it alongside surrounding text, cross-references, structure, and the overall statutory scheme.

V. Conclusion

Rivera-Perez v. Stover announces a clear Second Circuit rule: FSA earned-time credits under 18 U.S.C. § 3632(d)(4)(C) facilitate earlier movement from imprisonment into prerelease custody or an earlier start to supervised release (as operationalized and capped by 18 U.S.C. § 3624(g)), but they do not authorize reducing the length of a judicially imposed supervised-release term. With that statutory interpretation in place, the court applied ordinary Article III mootness principles and required dismissal once Rivera-Perez had already received the only legally available credit-based relief.