United States v. Edwards , 162 F.3d 87 ( 1998 )

Opinions of the United
1998 Decisions States Court of Appeals
for the Third Circuit
11-27-1998
United States v. Edwards
Precedential or Non-Precedential:
Docket 98-1055
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Recommended Citation
"United States v. Edwards" (1998). 1998 Decisions. Paper 269.
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Filed November 27, 1998
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 98-1055
UNITED STATES OF AMERICA
v.
ROBERT ALLEN EDWARDS a/k/a FIDEL SALIM
a/k/a JAMES F. WINTER, III a/k/a CHARLES KING
a/k/a DONALD W. COLEMAN,
Robert Allen Edwards,
Appellant
ON APPEAL FROM THE
UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
(D.C. Criminal No. 97-117-1)
Argued Under Third Circuit LAR 34.1(a)
October 8, 1998
Before: McKEE AND RENDELL, Circuit Judges,
DEBEVOISE, District Judge.*
(Opinion Filed: November 27, 1998)
_________________________________________________________________
*Honorable Dickinson Debevoise, United States Senior District Court
Judge for the District of New Jersey, sitting by designation.
Steven A. Feldman (ARGUED)
Of Counsel
Feldman and Feldman
Suite 206
1800 Northern Boulevard
Roslyn, NY 11576
Attorney for Appellant
Michael R. Stiles, United States
Attorney
Walter S. Batty, Assistant United
States Attorney, Chief of Appeals
Joseph Dominguez (ARGUED)
Assistant United States Attorney
615 Chestnut Street
Suite 1250
Philadelphia, PA 19106-4476
Attorneys for Appellee
OPINION OF THE COURT
RENDELL, Circuit Judge:
In this appeal, we are asked to determine whether the
Victim and Witness Protection Act ("VWPA") or the
Mandatory Victims Restitution Act ("MVRA") applies to the
imposition of restitution in sentencing a defendant who
committed his offenses prior to the effective date of the
statute but is convicted on or after its effective date. The
District Court found that although Edwards had no present
ability to pay restitution, full restitution should be imposed
under the MVRA. Edwards timely appealed to this court.
Both sides now agree that the District Court incorrectly
applied the MVRA to Edwards, and that the Victim and
Witness Protection Act (VWPA) should have been applied.1
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1. Appellant did not specifically argue that the VWPA, not the MVRA
applied, but did contend that the District Court should have made
findings regarding his financial ability to pay before ordering
restitution.
This finding is necessary only for cases under the VWPA. 18 U.S.C.
SS 3663, 3664.
2
We hold that the application of the MVRA to Edwards
constitutes a violation of the ex post facto prohibition, and
we accordingly reverse and remand for a determination of
whether restitution is appropriate for Edwards under the
VWPA.
I. Factual Background
Between December of 1992 and October of 1993,
Edwards was involved in various schemes involving
counterfeit checks, forged commercial checks, and stolen
travelers' checks. PSI P 1. Edwards was sentenced on
December 23, 1997, after pleading guilty to one count of
conspiracy, one count of bank fraud, seven counts of
money laundering, and one count of criminal forfeiture.
Potential monetary penalties included a fine range of
$12,500 to $5,000,000, restitution of $418,397.15, and a
special assessment of $500. PSI P 77, 81. The probation
office's review of Edwards's liabilities and assets indicated
that he had children to support, did not own property or
appear to have any assets of note, and had a total liability
of $92,854 of debts owed to credit card companies and
banks. PSI PP 61-68.
At sentencing, defense counsel argued that Edwards did
not have the ability to pay restitution, while the government
contended that restitution was mandatory for his offenses
under the MVRA. The district judge found that although the
defendant did not have the present ability to pay
restitution, the MVRA required restitution and ordered full
restitution in the amount of $418,397.15. (A. at 14, 16, 22).2
This court has jurisdiction pursuant to 28 U.S.C.S 1291
and 18 U.S.C. S 3742. As the ex post facto argument was
not raised before the District Court, plain error review
applies. See United States v. Dozier, 119 F.3d 239, 241 (3d
Cir. 1997).
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2. At sentencing, the Assistant United States Attorney indicated to the
District Court that Edwards' offenses required mandatory restitution. No
issue of an ex post facto prohibition was raised by counsel or the court.
A. at 22. Recently, the Justice Department has apparently adopted a
policy that the MVRA should not be applied to offenses predating its
enactment. Gov't Br. at 6.
3
II. The MVRA and the VWPA
In 1996, Congress passed the MVRA, or "Mandatory
Victims Restitution Act of 1996," Title II, Subtitle A of the
Antiterrorism and Effective Death Penalty Act of 1996, Pub.
L. No. 104-132, 110 Stat. 1214, codified in relevant part at
18 U.S.C. SS 3663A, 3664 (1996). The MVRA became
effective April 24, 1996, to the extent its application is
constitutionally permissible. See 18 U.S.C. S 2248 (statutory
notes). The MVRA makes restitution mandatory for
particular crimes, including those offenses which involve
fraud or deceit. See 18 U.S.C. S 3663A(c)(1)(A)(ii). If the
MVRA applies to a defendant, a court must order
restitution to each victim in the full amount of that victim's
losses, and the court cannot consider the defendant's
economic circumstances. See 18 U.S.C. S 3664(f)(1)(A).
While the MVRA clearly applies to convictions on or after its
effective date, its applicability to offenses committed before
that date is at issue here. See 18 U.S.C.S 2248 (statutory
notes).
The prior restitution statute, the Victim and Witness
Protection Act, or "VWPA," requires the court to consider
the economic circumstances of the defendant prior to
ordering restitution. In this Circuit, a District Court has to
make certain factual findings before ordering restitution
under the VWPA: 1) the amount of the loss sustained by
the victims; 2) the defendant's ability to pay that loss; and
3) how the amount of restitution imposed relates to any
loss caused by the conduct underlying the offense(s) at
issue. See Government of Virgin Islands v. Davis , 43 F.3d
41, 47 (3d Cir. 1994). Under the VWPA, an indigent
defendant can be made to pay restitution, but the court
must tailor its findings to a defendant's potential assets or
earning capacity. Id.
Neither side contests the fact that Edwards's crimes fall
under S 3663A if the MVRA applies to him. If the VWPA
applies to Edwards, however, the District Court erred by
failing to make the required factual findings prior to
imposing restitution. In order to determine which statute
applies, we must determine the constitutionality of applying
the MVRA to a defendant whose criminal conduct occurred
prior to the effective date of the statute.
4
III. Ex Post Facto Analysis
To fall within the ex post facto prohibition, a law must be
1) retrospective, that is, it must apply to events occurring
before its enactment; and 2) it must disadvantage the
offender affected by it by altering the definition of criminal
conduct or increasing the punishment for the crime. See
Lynce v. Mathis, ___ U.S. ___, 117 S. Ct. 891, 896 (1997).
The MVRA would be retrospective as applied to Edwards,
and it disadvantages him by holding him accountable for
the full amount of restitution, when under the VWPA, he
would, in all likelihood, not be held accountable for the full
amount. The question then is whether the MVRA altered
the definition of criminal conduct or increased the
punishment for Edwards's crimes. The MVRA did not alter
the definition of Edwards's criminal conduct, but it did alter
his fiscal responsibility for its consequences, and we must
determine whether, in so doing, it increased the
punishment for his crimes.
Most of the Courts of Appeals that have considered this
question have found that the retrospective application of
the MVRA violates the Ex Post Facto Clause because
restitution imposed as part of a defendant's sentence is
criminal punishment, not a civil sanction, and the shift
from discretionary to mandatory restitution increases the
punishment meted out to a particular defendant. See
United States v. Siegel, 153 F.3d 1256, 1259-1261 (11th
Cir. 1998); United States v. Bapack, 129 F.3d 1320, 1327
n.13 (D.C. Cir. 1997); United States v. Williams , 128 F.3d
1239, 1241 (8th Cir. 1997); United States v. Baggett, et al.,
125 F.3d 1319, 1322 (9th Cir. 1997); United States v.
Thompson, 113 F.3d 13, 14 n.1 (2d Cir. 1997); but see
United States v. Newman, 144 F.3d 531 (7th Cir. 1997).
In Williams, the Court of Appeals for the Eighth Circuit
viewed the express language of the MVRA as making clear
that mandatory restitution was a "penalty," and hence,
punishment for the purposes of ex post facto analysis. 128
F.3d at 1241.3 In Siegel, the Court of Appeals for the
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3. Section 3663A(a)(1) provides:
Notwithstanding any other provision of law, when sentencing a
defendant convicted of an offense [listed under this section] the
court shall order, in addition to, or in the case of a misdemeanor,
in addition to or in lieu of, any other penalty authorized by law,
that
the defendant make restitution to the victim of the offense . . . .
5
Eleventh Circuit focused on the language of S 3663A(a)(1)
describing restitution as a "penalty" and its own precedents
characterizing restitution as a criminal penalty to conclude
that restitution under the MVRA should be considered a
criminal penalty, and that the retroactive imposition of the
full amount of restitution would violate the Ex Post Facto
Clause. See 153 F.3d at 1259-60.4 The Court of Appeals for
the Ninth Circuit, in Baggett, focused not so much on the
punitive character of restitution, but on the change in
procedure for determining a defendant's responsibility for
restitution under the MVRA--from the VWPA procedure of
analyzing the defendant's financial circumstances before
determining the amount of restitution paid, to the MVRA's
procedure of ordering full restitution without considering
the defendant's economic circumstances--to find that the
retroactive application of the MVRA violated the Ex Post
Facto Clause. See id. at 1322.
Of the Circuits that have considered this question, only
the Court of Appeals for the Seventh Circuit, in United
States v. Newman, has determined that the retroactive
imposition of restitution under the MVRA does not violate
the Ex Post Facto Clause. In Newman, the court conceded
that the retroactive application of the MVRA would
disadvantage a defendant whose conduct occurred prior to
its effective date, but the court stated that since restitution
was essentially a civil penalty, and not punishment, the ex
post facto prohibition did not apply. See 144 F.3d at 538.5
_________________________________________________________________
4. Other Circuits have rejected the retroactive application of the MVRA
outright. See Bapack, 129 F.3d at 1327 n.13 (indicating that the
retroactive application of the MVRA would raise ex post facto concerns);
Thompson, 113 F.3d at 15 n.1 (concurring in the parties' agreement that
the retrospective application of the MVRA would be an ex post facto
violation).
5. In so finding, the Newman court relied on Kansas v. Hendricks, 117
S. Ct. 2072 (1997) and Hudson v. United States , 118 S. Ct. 488 (1997)
to determine whether restitution can be considered punishment. The
Seventh Circuit used the analysis set forth in Hudson to determine
whether restitution is, in fact, punishment: First, a court must first ask
whether the legislature, in establishing the "penalizing mechanism,
indicated either expressly or impliedly a preference" for a criminal or
civil
penalty. Hudson, 118 S. Ct. at 493. Second, if the legislature indicates
6
In so finding, the Newman court first looked to the
historical character of restitution as an equitable device,
and opined that restitution serves more as a form of
individual remedy than a criminal sanction. Id. Along these
lines, the Newman court stated that restitution serves to
"ensure that a wrongdoer does not procure any benefit
through his conduct at others' expense. . . . The criminal
law may impose punishments on behalf of all of society, but
the equitable payments of restitution in this context inure
only to the specific victims of a defendant's criminal
conduct and do not possess a similarly punitive character."
Id. at 538 (citations omitted).
In addition to surveying the historical characteristics of
restitution as a remedy, the Newman court also noted that
it had observed "the non-punitive character of restitution in
prior cases." Id. at 538-39 (citing cases). It did note,
however, that "our view of restitution is not universally
shared." Id. at 539 n.7 (citing cases, including United States
v. Sleight, 808 F.2d 1012, 1020 (3d Cir. 1987)). The
_________________________________________________________________
an intention to establish a civil penalty, a court must then inquire
whether the statutory scheme was so punitive in either purpose or effect
so as to transform what was clearly intended as a civil penalty into a
criminal penalty. Id. In determining whether a statutory scheme could be
so transformed, the Court set forth a multifactor analysis, and
emphasized that the factors had to be considered in relation to the face
of the statute in question and that only "the clearest proof " will
suffice
to override legislative intent. Id.
Our Circuit has used a somewhat different formulation from that set
forth in Hudson, namely, that a measure must pass a three-prong test:
1) actual purpose; 2) objective purpose; and 3) effect, to constitute non-
punishment. See Artway v. Attorney General, 81 F.3d 1235, 1263 (3d
Cir. 1996). If the legislature intends a particular measure to be
"punishment," or if retribution was one of its actual purposes, then it
must fail constitutional scrutiny; if, however, the" ``restriction of the
individual comes about as a relevant incident to a regulation,' " the
measure must be further analyzed. See id. The continued viability of
Artway is arguably in doubt in the wake of recent Supreme Court
precedent, but we need not reach the question here in light of the
relative clarity of both the statutory language and legislative purpose of
the MVRA. See, e.g., Hudson, ___ U.S. ___, 118 S. Ct. at 493 & n. 4; E.B.
v. Verniero, 119 F.3d 1077, 1093-94 (3d Cir. 1997).
7
Newman court also looked to the statutory language of the
MVRA and took issue with the Williams court's reading of
the plain language of the MVRA; instead, the court found
the MVRA's statutory scheme to be ambiguous as to the
"criminal" or "civil" nature of the penalty assessed under
S 3663A. See 144 F.3d at 539. After further review of the
historical character of restitution and general
characteristics of restitution as a remedy, the Newman
court concluded that the ambiguities found in the statute,
combined with the traditionally non-punitive character of
restitution, warranted a finding that restitution should be
considered a civil, rather than a criminal penalty, and that
the retroactive imposition of restitution under the MVRA
would not violate the Ex Post Facto Clause. See id. at 539-
40.
We find that the majority view of the Courts of Appeal is
the better view. Both the statutory scheme and the
legislative history of the MVRA point toward a
determination that restitution should be considered a form
of punishment under the statute. Section 3663A and
related provisions indicate that restitution is a criminal
penalty under the MVRA, as it is imposed as an integral
and necessary part of sentencing, supervised release, and
probation for the crimes it implicates. 18 U.S.C.SS 3556,
3563(a)(6)(A), 3563(b)(2), 3565, 3663A, 3664. Even if we
were mistaken as to the nature of the statutory scheme
itself, the legislative history of the MVRA leads to the same
conclusion. The legislative history indicates that Congress
intended mandatory restitution to be one means by which
the criminal justice system could be reformed into a system
that is more responsive to the needs of crime victims, as
mandatory restitution forces an individual defendant to
address the harm his crime has caused to the individual
victims of his crime and to society. See S. Rep. 104-179,
1996 U.S.C.C.A.N. 924, 925-26, 930-31; see also H. Rep.
104-16, reported at 1995 WL 43586 (Feb. 2, 1995), at 5-6,
10; 142 Cong. Rec. H3606 (daily ed., April 18, 1996); 141
Cong. Rec. S19278, S19280 (daily ed., Dec. 22, 1995);
Mandatory Victim Restitution: Hearing on S. 173 Before the
Comm. on the Judiciary of the United States Senate , 104th
Cong. 805 (1995) (statements of Senators Biden, Grassley,
and Nickles). In so stating, the legislative history also
8
evinces a Congressional intent to streamline the
administration of restitution within the criminal justice
system; to make mandatory restitution under the MVRA a
penalty separate from civil remedies available to the victims
of crime; and to caution that the administration of
mandatory criminal restitution should not take on the
procedural complications of civil proceedings--in other
words, to ensure that restitution under the MVRA is a form
of criminal penalty rather than civil redress. See S. Rep.
104-179, 1996 U.S.C.C.A.N. at 931-34; see also 141 Cong.
Rec. S19278, S19281 (daily ed., Dec. 22, 1995). Moreover,
the legislative history also indicates that mandatory
restitution should be considered a condition of a
defendant's supervised release and probation. See S. Rep.
104-179, 1996 U.S.C.C.A.N. at 927, 929; H. Rep. 104-16,
1995 WL 43586 at 5, 12. Both the language and the history
of the MVRA convince us that Congress intended the
restitution it mandated to be a form of criminal
punishment.
Further, this finding is consistent with our precedents
stating views regarding restitution for criminal defendants.
We previously have indicated that restitution is a form of
criminal penalty. See United States v. Sleight, 808 F.2d
1012, 1020 (3d Cir. 1987) ("While one purpose of
restitution under the Federal Probation Act is to make the
victim whole, restitution . . . is imposed as a part of
sentencing and remains inherently a criminal penalty.");
United States v. Palma, 760 F.2d 475, 478-79 (3d Cir.
1985) (finding that restitution imposed under the VWPA is
a criminal penalty, and distinguishing its imposition under
the VWPA from a civil proceeding in which restitution is
imposed).6 We have also noted that while criminal
restitution resembles a civil remedy and has compensatory
as well as punitive aspects, neither these resemblances to
civil judgments, nor the compensatory purposes of criminal
restitution, detract from its status as a form of criminal
penalty when imposed as an integral part of sentencing.
See United States v. Woods, 986 F.2d 669, 680-81 (3d Cir.
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6. We also note the retributive aspect of a statutory modification
mandating payment of restitution regardless of the defendant's means
based solely on the nature of the crime.
9
1993); United States v. Kress, 944 F.2d 155, 157-59 (3d
Cir. 1991); United States v. Pollak, 844 F.2d 145, 152-53
(3d Cir. 1988); see also United States v. Carrara, 49 F.3d
105, 108 (3d Cir. 1995) (discussing the historical character
and purposes of restitution in criminal law); Government of
Virgin Islands v. Davis, 43 F.3d 41, 47 (3d Cir. 1994)
(describing the compensatory purposes of restitution under
the VWPA).
Based on the foregoing, we find that under the MVRA,
restitution is punishment, and that the retrospective
application of that punishment to Edwards under the facts
of this case is a violation of the Ex Post Facto Clause and
plain error.7 Accordingly, we will reverse the imposition of
mandatory restitution and remand for the District Court to
make the appropriate factual findings and determination of
restitution under the VWPA for Edwards.
A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit
_________________________________________________________________
7. We have little difficulty concluding that the violation of the Ex Post
Facto Clause in this case was plain error based on the analysis and
holding we set forth in United States v. Dozier, 119 F.3d at 244-45.
10