Jane Doe v. Alan Hesketh , 828 F.3d 159 ( 2016 )

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
No. 15-1381
_____________
JANE DOE,
THE VICTIM IN THE “DISNEY
WORLD GIRL” OR “INTERNET GIRL”
CHILD PORNOGRAPHY SERIES
formerly known as MASHA ALLEN
v.
ALAN HESKETH; RICHARD CARINO; GEORGE ELIOT
KABACY; MATTHEW ALAN MANCUSO; DAN W.
JOACHIM; RANIER GEROW; DOUGLAS MICHAEL
STUM; RICHARD SCHEIRING; CHARLES LINDAUER;
JOSEPH MARCUS; WILLIAM GEORGE GAMMON;
STEPHEN JABBOUR; ALBERT NOAH ABRAMS;
MAYER FINKELSTEIN, SUED IN THEIR INDIVIDUAL
CAPACITIES AND AS REPRESENTATIVES OF A
CLASS OF PERSONS SIMILARLY SITUATED
Jane Doe,
Appellant
_____________
APPEAL FROM THE UNITED STATES DISTRICT
COURT FOR THE EASTERN DISTRICT OF
PENNSYLVANIA
(E.D. Pa. No. 2-13-cv-04935)
District Judge: Honorable Stewart Dalzell
Argued: October 28, 2015
_________________
Before: GREENAWAY, JR., SCIRICA and ROTH, Circuit
Judges.
(Filed: July 5, 2016)
Sidney L. Moore, III, Esq. [ARGUED]
The Moore Law Firm
1201 Peachtree Street
400 Colony Square, Suite 2000
Peachtree, GA 30361
Counsel for Appellant
Stanley W. Greenfield, Esq. [ARGUED]
Greenfield & Kraut
1040 Fifth Avenue
Pittsburgh, PA 15219
Counsel for Appellee
_________________
OPINION
__________________
2
GREENAWAY, JR., Circuit Judge.
Section 2255 of Title 18 of the U.S. Code (also known
as Masha’s Law) provides a civil right of action in federal
district court to victims of several federal crimes, including
sexual exploitation of a child and various child pornography
offenses. This case requires us to decide whether a restitution
award for a criminal offense bars a later-filed civil claim by a
victim under § 2255 based on that same offense. Because we
find that § 2255 permits such a claim, and collateral estoppel
is not appropriate in this case, we will reverse the District
Court’s judgment dismissing the plaintiff’s complaint. We
will also vacate the District Court’s judgment setting aside a
default entered against the defendant and remand for further
proceedings.
I. BACKGROUND
A. Factual Background
Plaintiff–Appellant Jane Doe (formerly known as
Masha Allen) was adopted from Russia by Defendant–
Appellee Matthew Alan Mancuso when she was five years
old. Over the course of the following five years, Mancuso
sexually abused Doe and documented the abuse in a series of
photographs and videos. Mancuso copied these media and
distributed them through chat rooms on the internet in
exchange for media documenting the sexual abuse of other
children. Mancuso’s photographs and videos became popular
among viewers of child pornography and he was
subsequently arrested after a law enforcement investigation
identified him as Doe’s abuser. Following his arrest, a
federal grand jury in the Western District of Pennsylvania
returned a two-count indictment against Mancuso: count one
3
charged Mancuso with sexual exploitation of a minor in
violation of 18 U.S.C. § 2251(a); and count two charged
Mancuso with possession of material depicting the sexual
exploitation of a minor in violation of 18 U.S.C.
§ 2252(a)(4)(B).
Mancuso entered into a plea agreement. He agreed to
plead guilty to count one of the indictment (sexual
exploitation) and the government agreed to dismiss count two
(possession of child pornography). In the plea agreement,
Mancuso made several affirmations that would affect his
sentence. He “acknowledge[d] his responsibility for the
conduct charged in Count Two of the Indictment” and
“stipulate[d] that the conduct charged in that count may be
considered by . . . the District Court in imposing sentence.”
J.A. 216a. He also agreed to pay “mandatory restitution” to
Doe “under the Victim-Witness Protection Act, 18 U.S.C.
§§3663, 3663A and 3664” in the amount of $200,000. J.A.
216a–217a.
Pursuant to the plea agreement, the sentencing court
ordered Mancuso to fully fund a trust for the benefit of Doe in
the amount of $200,000 “pursuant to Title 18, United States
Code, Sections 2259(a) through 3663, 3663[A] and 3664.”1
1
18 U.S.C. § 3663 codifies the Victim and Witness
Protection Act (“VWPA”). The VWPA confers discretion
upon a sentencing court in the award of restitution: “The
court, when sentencing a defendant convicted of an offense
under this title . . . may order, in addition to . . . any other
penalty authorized by law, that the defendant make restitution
to any victim of such offense . . . .” 18 U.S.C.
§ 3663(a)(1)(A).
4
18 U.S.C. § 3663A codifies the Mandatory Victims
Restitution Act (“MVRA”). The MVRA instructs a
sentencing court to award mandatory restitution for, inter alia,
“crime[s] of violence.” Id. § 3663A(c).
18 U.S.C. § 2259 provides for mandatory restitution to
victims of, inter alia, the crimes codified at 18 U.S.C.
§§ 2251–2252C. It provides:
Notwithstanding section 3663 or 3663A, and in
addition to any other civil or criminal penalty
authorized by law, the court shall order
restitution for any offense under this chapter.
. . . The order of restitution under this section
shall direct the defendant to pay the victim
(through the appropriate court mechanism) the
full amount of the victim’s losses as
determined by the court . . . . [T]he term “full
amount of the victim’s losses” includes any
costs incurred by the victim for -- (A) medical
services relating to physical, psychiatric, or
psychological care; (B) physical and
occupational therapy or rehabilitation; (C)
necessary transportation, temporary housing,
and child care expenses; (D) lost income; (E)
attorneys’ fees, as well as other costs incurred;
and (F) any other losses suffered by the victim
as a proximate result of the offense. . . .
A court may not decline to issue an order under
this section because of . . . the fact that a victim
has, or is entitled to, receive compensation for
5
Sentencing Tr. at 19, United States v. Mancuso, No. 2:03-cr-
00161-TFM (W.D. Pa. Feb. 5, 2004).
B. Procedural History
Ten years after Mancuso’s criminal conviction, on
August 23, 2013, Doe filed the present civil suit under 18
U.S.C. § 2255 against a purported class of defendants in the
United States District Court for the Eastern District of
Pennsylvania. Doe named fourteen purported class
representative defendants in her complaint, including
Mancuso, and alleged that each defendant had violated a
predicate statute under § 2255.2 Doe sought damages against
his or her injuries from the proceeds of
insurance or any other source.
Id. § 2259(a), (b)(1), (b)(3), (b)(4)(B).
Each of these statutory restitution schemes is governed
by the procedures set forth at 18 U.S.C. § 3664, which
provides: “In each order of restitution, the court shall order
restitution to each victim in the full amount of each victim’s
losses as determined by the court and without consideration
of the economic circumstances of the defendant.” Id.§ 3664(f)(1)(A).
2
Before filing this appeal, Doe settled with one
purported class representative defendant who was dismissed
from the action with prejudice. The District Court dismissed
all the remaining purported class representative defendants
except Mancuso from the action for lack of personal
jurisdiction. The District Court did not reach the issue of
class certification.
6
Mancuso for his possession and distribution of child
pornography depicting her.3
On December 5, 2013, Mancuso was served with
process, but over the following nine months no counsel
entered an appearance on his behalf and he did not file a
responsive pleading. On September 22, 2014, the District
Court clerk docketed Doe’s application for an entry of default
against Mancuso. The next day, the clerk entered a default
against Mancuso for failure to plead or otherwise defend.
Following the entry of default, Mancuso’s attorney
was admitted pro hac vice to the Eastern District of
3
In her First Amended Complaint, Doe erroneously
alleged that Mancuso pleaded guilty to “possession and
distribution of child pornography.” J.A. 84a. Count two of
Mancuso’s indictment charges possession of child
pornography under 18 U.S.C. § 2252(a)(4)(B), but that charge
was dismissed by prosecutors pursuant to Mancuso’s plea
agreement.
On appeal, Doe reiterates that she seeks damages for
Mancuso’s possession and distribution of child pornography,
but erroneously suggests in her briefing that both possession
and distribution formed the basis for the charge against
Mancuso that was dismissed. Appellant Br. at 14–15.
Mancuso’s indictment does not contain a distribution charge
and counsel for Doe corrected the erroneous briefing
statement at oral argument. As we go on to explain, whether
Doe is seeking damages for Mancuso’s convicted charge,
dismissed charge, or uncharged conduct is of no import to our
analysis.
7
Pennsylvania and promptly filed a motion for relief from
default judgment4 and a motion to dismiss for failure to state
a claim. Mancuso argued that Doe’s civil claim against him
was barred by her prior receipt of restitution in his criminal
case because the sentencing judge intended to fully
compensate Doe for both the convicted and dismissed charges
in his indictment. The District Court agreed and, finding that
Mancuso had a meritorious defense to Doe’s suit, set aside
the default entered against Mancuso and granted his motion to
dismiss. This appeal followed.
II. JURISDICTION AND STANDARD OF REVIEW
The District Court had jurisdiction over Doe’s civil
suit under 28 U.S.C. § 1331. We have jurisdiction over this
appeal from the District Court’s judgment dismissing Doe’s
complaint against Mancuso under 28 U.S.C. § 1291. Given
the unusual procedural posture in this multi-party action, we
take this opportunity to explain our appellate jurisdiction
under § 1291.
Doe named fourteen defendants in her complaint,
including Mancuso. The District Court dismissed one
defendant with prejudice pursuant to a settlement, and
4
Although Mancuso filed a motion for relief from
default judgment with the District Court, the District Court
clerk had only entered a simple default against him. Thus, we
will construe the District Court’s judgment granting
Mancuso’s motion for relief from default judgment as a
vacatur of the default.
8
dismissed all the remaining defendants except Mancuso for
lack of personal jurisdiction without a designation that the
dismissals were with or without prejudice. In order to
examine our appellate jurisdiction, we assume without
deciding that the dismissals for lack of personal jurisdiction
were without prejudice.
Ordinarily, we do not have jurisdiction under
§ 1291 of an appeal in which any defendant was dismissed
below by the district court without prejudice. Erie Cty.
Retirees Ass’n v. Cty. of Erie, 220 F.3d 193, 201 (3d Cir.
2000). In such a case, the district court’s disposition of the
case is not deemed sufficiently “final” within the meaning of
§ 1291 because the plaintiff can re-file her claim against the
dismissed defendant. However, we have observed an
exception to this general rule in a situation where a claim
dismissed without prejudice cannot be re-filed, such as a
claim for which the statute of limitations has run. Brennan v.
Kulick, 407 F.3d 603, 606 (3d Cir. 2005). We have also
observed an exception in a situation where a plaintiff
renounces any intention to reinstate litigation on a claim
dismissed without prejudice. Tiernan v. Devoe, 923 F.2d
1024, 1031 (3d Cir. 1991). In these cases, the district court’s
disposition of the case is final because we are satisfied that
the dismissed claims will not be re-filed.
These exceptions fit well within the policies of § 1291,
which we have observed to be “minimizing the possibility of
piecemeal appeals, according due deference to trial court
judges, and promoting the conservation of judicial resources.”
Aluminum Co. of Am. v. Beazer E., Inc., 124 F.3d 551, 561
(3d Cir. 1997). If a dismissed claim will not be re-filed, there
will be no further proceedings in front of the district court
judge with respect to that claim and thus there is no
9
possibility of a future piecemeal appeal and the attendant
waste of appellate judicial resources.
In this case, the District Court concluded that it lacked
personal jurisdiction with respect to the dismissed defendants
and Doe indicated in supplemental briefing her belief that the
District Court’s dismissal operates to bar her from reasserting
the dismissed claims in the District Court. Accordingly, Doe
has renounced any intention to amend her complaint in the
District Court with respect to her allegations of jurisdiction in
Pennsylvania against the dismissed defendants. See
Allegheny Gen. Hosp. v. Philip Morris, Inc., 228 F.3d 429,
434 (3d Cir. 2000) (finding that a stipulation by parties filed
after a notice of appeal rendered an earlier district court order
“final and appealable”). Doe also indicated at oral argument
an intention to re-file against the dismissed defendants in
other courts in their home states in new actions. Although
Doe did not renounce any intention to re-file against the
dismissed defendants, we see no meaningful distinction to be
made for purposes of § 1291 between a case where a claim
will not be re-filed at all and a case where, as here, the
plaintiff has represented to our satisfaction that she will not
re-file a claim in the district court at issue.
Our conclusion finds support in our precedent. In
Beazer East, we held that:
Where the effect of a district court decision is to
accomplish all that the parties asked the court to
accomplish, and where the parties agree there
cannot be—and, by court order, there will not
be—any further proceedings in the district court
as part of the same action, the district court’s
10
decision must be considered final for purposes
of § 1291.
124 F.3d at 560. We similarly observed in GFL Advantage
Fund, Ltd. v. Colkitt that “[e]ven dismissals without prejudice
have been held to be final and appealable if they end [ ][the]
suit so far as the District Court was concerned . . . .” 272
F.3d 189, 198 n.3 (3d Cir. 2001) (second and third alterations
in original) (internal quotation marks omitted) (quoting Trent
v. Dial Med. of Fla., Inc., 33 F.3d 217, 220 (3d Cir. 1994)).5
5
We recognized an exception to this principle of
finality in Morton Int’l, Inc. v. A.E. Staley Mfg. Co., 460 F.3d
470 (3d Cir. 2006) for cases where district court proceedings
have concluded but may be reinstated in the future such that
we treat the later action as part of the prior action for
purposes of determining finality. In Morton, the district court
had dismissed claims against several defendants without
prejudice pending the outcome of non-binding alternative
dispute resolution (“ADR”) and expressly noted that the
dismissed claims could be re-filed if the ADR failed. Id. at
478. In finding a lack of appellate jurisdiction, we concluded
that the district court’s disposition of the case was not final
because, even though the plaintiff’s potential re-filing against
the dismissed defendants would technically occur in a
separate action, any “subsequently-initiated litigation
effectively will be part of the original action and controversy,
albeit with a new caption and docket number.” Id. at 479.
The present case does not fall within the exception in
Morton. If Doe re-files against the dismissed defendants, the
new actions will be filed in other courts and so the District
Court here has “accomplish[ed] all that the parties asked the
11
Other circuits have endorsed this principle as well.
See Hope v. Klabal, 457 F.3d 784, 790 (8th Cir. 2006) (“After
the voluntary dismissal [without prejudice], there was nothing
left for the district court to resolve, and the suit had ended as
far as that court was concerned, thereby creating a final
judgment.”); Am. Nat’l Bank & Trust Co. of Chi. v. Equitable
Life Assurance Soc’y of U.S., 406 F.3d 867, 875 (7th Cir.
2005) (“[T]he fact ‘[t]hat the dismissal was without prejudice
to filing another suit does not make the cause unappealable,
for denial of relief and dismissal of the case ended this suit as
far as the District Court was concerned.’” (second alteration
in original) (quoting United States v. Wallace & Tiernan Co.,
336 U.S. 793, 794 n.1 (1949))); De Tie v. Orange Cty., 152
F.3d 1109, 1111 (9th Cir. 1998) (concluding that an order
dismissing an action without prejudice was final for purposes
of appeal because “[t]he action . . . [was] over as far as the
district court [was] concerned”).
In assessing whether we have appellate jurisdiction,
we give § 1291 a “practical rather than technical
construction.” Bethel v. McAllister Bros., Inc., 81 F.3d 376,
381 (3d Cir. 1996) (internal quotation marks omitted)
(quoting Carr v. Am. Red Cross, 17 F.3d 671, 678 (3d Cir.
court to accomplish.” Id. at 479 (alteration in original)
(quoting Beazer E., 124 F.3d at 560). Accordingly, there is
no “potential for the district court to revisit the case,” id. at
480, and so any later actions filed by Doe in other courts
cannot fairly be considered part of the present action. If any
litigation takes place with respect to the dismissed defendants,
it will occur in truly separate actions in other courts.
12
1994)). Here, Doe’s stipulation that she will only re-file the
dismissed claims in other actions in other courts satisfies us
that the District Court proceedings in this case are concluded
and will not be reinstated. See Beazer E., 124 F.3d at 557(“[A]n appellate court must determine whether, at the time it
is examining its jurisdiction, there remain unresolved issues
to be adjudicated in the district court.”). As such, the policies
underlying § 1291 are not implicated—there is no risk of
further proceedings on the dismissed claims in front of the
District Court and thus no risk of this Court hearing
piecemeal appeals from the District Court proceeding.6
Thus, we conclude that the District Court’s disposition
with respect to the dismissed defendants in this action is final
within the meaning of § 1291 and permits us to hear Doe’s
appeal.7
6
In fact, based on the allegations in Doe’s complaint,
all of the dismissed defendants’ home states appear to be
outside of the Third Circuit and thus any future appellate
proceedings from the re-filed actions would not take place in
this Court. Denying appellate jurisdiction here would leave
us in the bizarre situation of waiting for each of Doe’s twelve
future suits to reach final judgment in other Circuits before
we hear her present appeal—even though those suits would
have no effect whatsoever on her appeal before this Court.
This result would serve none of § 1291’s purposes to avoid
piecemeal appeals, accord deference to the District Court, and
conserve judicial resources.
7
Mancuso argues that the District Court’s dismissal of
Doe’s claim against him cannot be a final order because the
District Court did not issue a Rule 54(b) certification. Rule
13
We exercise plenary review over the District Court’s
order dismissing Doe’s complaint for failure to state a claim.
Rea v. Federated Inv’rs, 627 F.3d 937, 940 (3d Cir. 2010). In
our review, we accept all factual allegations as true, construe
the complaint in the light most favorable to the plaintiff, and
determine whether, under any reasonable reading of the
complaint, Doe may be entitled to relief. Id. As a judgment
setting aside an entry of default is within the District Court’s
discretion, we review that judgment for abuse of discretion.
United States v. $55,518.05 in U.S. Currency, 728 F.2d 192,
194–95 (3d Cir. 1984).
54(b) provides: “[W]hen multiple parties are involved, the
court may direct entry of a final judgment as to one or more,
but fewer than all, . . . parties only if the court expressly
determines that there is no just reason for delay.” Fed. R.
Civ. P. 54(b).
Rule 54(b), by its own terms, applies only if a district
court enters final judgment with respect to one defendant, but
does not enter final judgment with respect to the remaining
defendants. Sears, Roebuck & Co. v. Mackey, 351 U.S. 427,
435 (1956). As we conclude above, we consider the District
Court’s dismissals for lack of personal jurisdiction in this case
to constitute final judgments for § 1291 purposes and thus
Rule 54(b) is not applicable. See Beazer E., 124 F.3d at 561
n.8 (“While unresolved claims existed, there were no
unresolved claims before [the district court] that required
further district court proceedings. For this reason, Rule
54(b) certification was unnecessary to allow [the] appeal.”).
14
III. ANALYSIS
We first examine the text of 18 U.S.C. § 2255 and its
place in Congress’s remedial scheme for child victims of sex
crimes. We then address whether collateral estoppel is
applicable to Doe’s claim.8 Finally, we turn to the default
entered against Mancuso in the court below.
A. Section 2255 and Congress’s Remedial Scheme
In construing a statute, we are guided by the principle
that “every exercise of statutory interpretation begins with an
examination of the plain language of the statute.” Rosenberg
v. XM Ventures, 274 F.3d 137, 141 (3d Cir. 2001). When the
statutory language is unambiguous, our inquiry is complete
and we ordinarily do not consider statutory purpose or
legislative history. S.H. ex rel. Durrell v. Lower Merion Sch.
Dist., 729 F.3d 248, 257 (3d Cir. 2013). In such a case, only
in the “rare circumstances” where a “literal application of the
statute will produce a result demonstrably at odds with the
intentions of its drafters . . . or where the result would be so
bizarre that Congress could not have intended it” is further
inquiry warranted. In re Segal, 57 F.3d 342, 346 (3d Cir.
1995) (internal citations and quotation marks omitted).
8
On appeal, the parties dispute whether the District
Court was correct in finding that the sentencing court’s
restitution order compensated Doe for both the convicted and
dismissed charge in Mancuso’s indictment. Because we find
that § 2255 permits a victim to bring a suit based on a
predicate offense even where she has received restitution for
that offense, we need not reach that issue.
15
The operative provision of § 2255 provides:
Any person who, while a minor, was a victim of
a violation of section 1589, 1590, 1591,
2241(c), 2242, 2243, 2251, 2251A, 2252,
2252A, 2260, 2421, 2422, or 2423 of this title
and who suffers personal injury as a result of
such violation, regardless of whether the injury
occurred while such person was a minor, may
sue in any appropriate United States District
Court and shall recover the actual damages such
person sustains and the cost of the suit,
including a reasonable attorney’s fee. Any
person as described in the preceding sentence
shall be deemed to have sustained damages of
no less than $150,000 in value.
18 U.S.C. § 2255(a).9 The language of the statute makes
clear that the civil right of action it provides is available to
9
The civil right of action in § 2255 was first passed in
1986. Child Abuse Victims’ Rights Act of 1986, Pub. L. No.
99-500, § 703(a), 100 Stat. 1783, 1783-74 to -75 (1986). It
was amended in 1998 to cover a wider array of predicate
crimes. Protection of Children from Sexual Predators Act of
1998, Pub. L. No. 105-314, § 605, 112 Stat. 2974, 2984
(1998). It was amended again in 2006 (at which time it
became known as Masha’s Law) to increase minimum
statutory damages from $50,000 to $150,000 and make clear
that an adult could bring suit based on a predicate crime that
took place while she was a minor. Masha’s Law, Pub. L. No.
109-248, § 707, 120 Stat. 587, 650 (2006). It was amended a
final time in 2013 to again widen the array of predicate
crimes and increase the statute of limitations from six years to
16
“any person” who, while a minor, was a victim of a violation
of a predicate statute resulting in personal injury.
We faced a similar question of statutory interpretation
in United States v. Alcan Aluminum, Inc., 25 F.3d 1174 (3d
Cir. 1994). In that case, the federal government had entered
into a consent decree with a group of defendants involving
the cleanup of a parcel of land containing hazardous
materials. Id. at 1178. The government later entered into
another consent decree with a second group of defendants
involving the cleanup of that same site. Id. at 1179. The
trustees of the parcel of land, on behalf of the first group of
defendants, moved to intervene under CERCLA in the
government’s second suit. Id. The relevant provision of
CERCLA provided:
In any action commenced under this chapter or
under the Solid Waste Disposal Act in a court
of the United States, any person may intervene
as a matter of right when such person claims an
interest relating to the subject of the action and
is so situated that the disposition of the action
may, as a practical matter, impair or impede the
person’s ability to protect that interest . . . .
Id. at 1180 n.6 (quoting 42 U.S.C. § 9613(i)).
The government, citing legislative history, contended
that intervention was limited to persons who sought to raise
health or environmental concerns. Id. at 1180–81. In
ten years. Violence Against Women Reauthorization Act of
2013, Pub. L. No. 113-4, § 1212(a), 127 Stat. 54, 143 (2013).
17
rejecting that limited construction of the statute, we observed
that the plain language of the intervention provision did not
so limit or qualify the right to intervene. Id. at 1180. We
expressed doubt that “Congress would have used the phrase
‘any person may intervene’ or ‘any action under this chapter’
if it had intended to restrict intervention to only those persons
raising a particular, but unidentified, claim.” Id.Similarly here, the text of 18 U.S.C. § 2255 in no way
limits the availability of the civil right of action to cases in
which a victim has not been compensated in the past by a
restitution order. We therefore find the statute to be
unambiguous for our purposes. Cf. Doe v. Boland, 630 F.3d
491, 498 (6th Cir. 2011) (rejecting an argument that § 2255
was not intended to cover an expert witness’s computer-aided
creation of child pornography images because “the words
Congress chose [in § 2255] offer no basis for drawing this
kind of line, and it is not our place to second guess the
judgment Congress put into law”).
Looking beyond the text of the statute here to limit the
statute’s application is not appropriate where allowing a civil
action under § 2255 to a child victim of a sex crime after her
receipt of criminal restitution cannot fairly be labelled a
bizarre result. In fact, such a construction of § 2255 is
consistent with Congress’s remedial scheme for child victims
of sex crimes. The procedures governing the award of
mandatory restitution under § 2259 provide: “Any amount
paid to a victim under an order of restitution shall be reduced
by any amount later recovered as compensatory damages for
the same loss by the victim in . . . any Federal civil
18
proceeding . . . .” 18 U.S.C. § 3664(j)(2).10 They further
provide: “A conviction of a defendant for an offense
involving the act giving rise to an order of restitution shall
estop the defendant from denying the essential allegations of
that offense in any subsequent Federal civil proceeding . . .
brought by the victim.” Id. § 3664(l).
With these provisions, Congress not only contemplated
that a victim who had received restitution could file a
subsequent civil action, but also provided procedures for that
very situation. These provisions ensure that a victim will not
have to re-litigate the conduct forming the basis of a criminal
conviction in a subsequent civil action and a defendant will
not be required to pay double damages for the same loss if a
subsequent civil action is successful. We can conceive of
10
The District Court concluded that several federal
appellate cases examining § 3664(j)(2) stand for the
proposition that the restitution laws do not permit double
recovery by victims. Doe v. Hesketh, 77 F. Supp. 3d 440, 450
(E.D. Pa. 2015). However, from that simple proposition, the
District Court erroneously concluded that the MVRA does
not permit victims to bring a civil suit after a restitution award
has been made. Id.As Doe correctly observes, § 3664(j)(2) does not
operate to bar a later-filed civil suit. To the contrary, it
expressly contemplates such a suit and, by providing a set-off,
ensures that any duplicative recovery in such a suit does not
violate the common law principle against double recovery.
We do not now decide to what extent, if any, the sentencing
court’s restitution order compensated Doe for the “same
loss,” 18 U.S.C. § 3664(j)(2), that underlies her civil claim.
19
several reasons for Congress’s determination that a victim
who has already received restitution should be permitted a
subsequent civil suit.
Congress may have wanted to give victims a chance to
prove a higher level of damages than that which a sentencing
court found during a limited factfinding proceeding as part of
sentencing.11 A victim’s participation in a sentencing court’s
determination of restitution is limited to conferring with the
government, id. § 3664(d)(1), submitting information to a
probation officer, id. § 3664(d)(2)(A)(vi), or potentially
providing testimony at the sentencing court’s discretion, id.
§ 3664(d)(4).12 A subsequent civil action allows a victim to
fully litigate the question of her damages to achieve
compensation for the full amount of her damages. And it
allows a victim the opportunity to prove those damages in
front of a jury—a procedure that is unavailable in the context
of criminal restitution in sentencing proceedings, id.
§ 3664(e). See U.S. Const. amend. VII; Curtis v. Loether,
11
The parties dispute whether the sentencing court’s
restitution order compensated Doe for her full damages. We
will not resolve this question of fact at this stage of the
proceedings.
12
The Crime Victims’ Rights Act (“CVRA”) provides
victims with additional rights in the restitution process,
including the right to be “reasonably heard” at sentencing and
the right to “full and timely restitution.” 18 U.S.C. § 3771.
However, the CVRA was passed into law on October 30,
2004, which was over eight months after Mancuso’s
sentencing. Justice for All Act of 2004, Pub. L. No. 108-405,
§ 102(a), 118 Stat. 2260, 2261 (2004).
20
415 U.S. 189, 194 (1974) (“The Seventh Amendment
[applies] to actions enforcing statutory rights, and requires a
jury trial upon demand, if the statute creates legal rights and
remedies, enforceable in an action for damages in the
ordinary courts of law.”).
The opportunity for a victim to fully litigate the
question of her damages in a civil action is even more
important for those victims who choose not to participate in a
sentencing court’s determination of restitution. See 18 U.S.C.
§ 3664(g)(1) (“No victim shall be required to participate in
any phase of a restitution order.”). By permitting a later civil
suit, Congress may have wanted to shield victims from
participating in the criminal sentencing of their victimizers
while the victims are so close in time to the damaging effects
of the offense. This concern is particularly acute in child
pornography cases as victims are children who have often
suffered horrific abuse and, as such, it may not be desirable to
have them participate in a sentencing proceeding.13 Section
2255’s statute of limitations protects such children by
providing an extension in cases where a “victim is still a
13
Congress’s recognition that the same may be true in
some civil suits is reflected in § 2255’s statutory damages
provision, which allows victims to obtain $150,000 in
compensation without participating in a damages hearing if
they so choose. See Doe v. Boland, 698 F.3d 877, 882 (6th
Cir. 2012) (“The point of a minimum-damages requirement
[in § 2255] is to allow victims of child pornography to
recover without having to endure potentially damaging
damages hearings. Were it otherwise, a fresh damages
hearing might inflict fresh wounds, increasing the child’s
suffering . . . .” (emphasis omitted)).
21
minor when the . . . statute of limitations would otherwise
have run.” Stephens v. Clash, 796 F.3d 281, 287 (3d Cir.
2015); see 18 U.S.C. § 2255(b).
Civil actions, such as that provided in § 2255, also
allow a victim to recover additional categories of damages not
compensable as part of restitution. For example, a civil
action allows a victim to recover for non-pecuniary damages,
such as pain and suffering or mental and emotional distress,
which may not be available under the restitution statutes. See
United States v. Berk, 666 F. Supp. 2d 182, 192 n.9 (D. Me.
2009) (expressing doubt that the mandatory restitution
provision in § 2259 was intended to permit restitution for pain
and suffering); Melanie Reid & Curtis L. Collier, When Does
Restitution Become Retribution?, 64 Okla. L. Rev. 653, 661
& n.31 (2012).
Certainly Congress could not have intended in
providing a remedy the opposite situation where § 2255 was
only available to victims who had not previously received
restitution. Section 2259 provides for mandatory restitution
to victims of the crimes codified at 18 U.S.C. §§ 2251–
2252A, see 18 U.S.C. § 2259(a), which are all predicate
offenses listed in § 2255 as forming the basis for a civil claim,
see 18 U.S.C. § 2255(a). If we accept the District Court’s
conclusion that an award of restitution bars a later-filed claim
under § 2255, then we would render § 2255 nothing more
than a “dead letter” with respect to those predicate offenses.
United States v. Jersey Shore State Bank, 781 F.2d 974, 977
(3d Cir. 1986).
Nor is our construction of the statute “demonstrably at
odds with the intentions of its drafters.” In re Segal, 57 F.3d
at 346 (internal quotation marks omitted) (quoting Taylor v.
22
Freeland & Kronz, 938 F.2d 420, 424 (3d Cir. 1991)). At
oral argument, counsel for Mancuso suggested that Congress
intended § 2255 to be available only to those victims who had
yet to receive payment in satisfaction of a prior criminal
restitution award. However, Mancuso has pointed to no
legislative history or other statutory provisions that evince
such an intent. Moreover, it is unlikely that Congress could
have reasonably concluded a victim would be more
successful in obtaining satisfaction of a civil judgment than a
criminal restitution order. See 18 U.S.C. § 3613A(a)(1)
(permitting a district court to revoke a defendant’s probation
or term of supervised release, resentence a defendant, hold a
defendant in contempt of court, enter an injunction against a
defendant, or order a sale of property of a defendant in order
to obtain compliance with a restitution order).
An examination of the legislative history of § 2255
does not provide any clear insight into whether Congress
intended the civil right of action in § 2255 to be available to
victims who had already received criminal restitution.
Congressional findings at the time of § 2255’s enactment
describe a “lack [of] effective remedies under Federal law”
for “exploitation victims.” Child Abuse Victims’ Rights Act
of 1986, Pub. L. No. 99-500, § 702(3), 100 Stat. 1783, 1783-
74 (1986). However, these findings were made prior to
Congress’s enactment of § 2259, which provided mandatory
restitution for the “full amount of [a] victim’s losses” to
victims of the child pornography predicate offenses listed in
§ 2255. 18 U.S.C. § 2259(b)(1).
Statements by legislators at the time of recent
amendments to § 2255 similarly do not speak on this
question, but suggest that the law’s general purpose is to
provide both compensation to child pornography victims and
23
a measure of deterrence to possessors and distributors of child
pornography. See 152 Cong. Rec. H5705-01 (daily ed. July
25, 2006) (statement of Rep. Gingrey) (“Currently, a person
who illegally downloads music faces penalties in civil court
that are three times as harsh as a person who downloads child
pornography. This horrible inequity was the inspiration
behind the introduction of Masha’s Law . . . .”); see also 151
Cong. Rec. S14187-03 (daily ed. Dec. 20, 2005) (statement of
Sen. Kerry) (“This legislation increases the civil penalties
recoverable by victims of child sexual exploitation, including
internet child pornography, to at least $150,000. This
increased penalty will serve as a deterrent to those who
disseminate and possess child pornography, as well as a
means of compensating victims of this terrible abuse.”). We
are satisfied that our construction of the statute to allow a
victim who has received criminal restitution to bring a civil
suit furthers these goals.
We therefore hold that 18 U.S.C. § 2255 permits a
victim to bring a civil claim for the violation of a predicate
statute even where that victim has previously received
criminal restitution for the same violation of that statute for
her purported full damages.14
14
In reaching this holding, we recognize that the
“amount paid to [the] victim under [the] order of restitution
shall be reduced by any amount later recovered as
compensatory damages for the same loss by the victim” in the
civil action. 18 U.S.C. § 3664(j)(2).
24
B. Collateral Estoppel15
Collateral estoppel prevents the re-litigation of a
factual or legal issue that was litigated in an earlier
proceeding. When examining the preclusive effect of a prior
federal court determination, we apply federal law principles
of collateral estoppel. See Paramount Aviation Corp. v.
Agusta, 178 F.3d 132, 145 (3d Cir. 1999). Collateral estoppel
is appropriate where: “(1) the identical issue was decided in a
prior adjudication; (2) there was a final judgment on the
merits; (3) the party against whom the bar is asserted was a
party or in privity with a party to the prior adjudication; and
(4) the party against whom the bar is asserted had a full and
fair opportunity to litigate the issue in question.” Del. River
Port Auth. v. Fraternal Order of Police, 290 F.3d 567, 573
n.10 (3d Cir. 2002) (internal quotation marks omitted)
(quoting Bd. of Trs. of Trucking Emps. of N. Jersey Welfare
Fund, Inc. v. Centra, 983 F.2d 495, 505 (3d Cir. 1992)). As
Doe was neither a party to Mancuso’s prior criminal
proceeding nor in privity with a party, and did not have a full
and fair opportunity to litigate the question of her damages,
we will not apply collateral estoppel to prevent Doe from
15
Although the District Court did not explicitly
examine the collateral estoppel effect of the sentencing
court’s determination of Doe’s losses, we find it desirable to
examine collateral estoppel in this case since we are uncertain
as to the legal principle under which the District Court found
Doe’s claim was barred. See Blunt v. Lower Merion Sch.
Dist., 767 F.3d 247, 303 n.73 (3d Cir. 2014).
25
litigating the question of her damages based on Mancuso’s
criminal conduct.16
Since Doe was not a party to Mancuso’s criminal
sentencing proceeding, collateral estoppel will only be
appropriate if she was in privity with the government. We
assess privity under the rubric laid out by the Supreme Court
in Taylor v. Sturgell, 553 U.S. 880 (2008). See Nationwide
Mut. Fire Ins. Co. v. George V. Hamilton, Inc., 571 F.3d 299,
310–12 (3d Cir. 2009). A nonparty will be found to be in
privity with a party to a proceeding where:
16
With respect to the first factor of the collateral
estoppel test (identity of issue), collateral estoppel would only
be appropriate if Doe sought to litigate an issue that was
previously decided by the sentencing court in Mancuso’s
criminal proceeding. As we explain supra note 8, the parties
dispute whether the sentencing court’s restitution order
compensated Doe for her damages with respect to the charge
against Mancuso that was dismissed. Given our conclusion
that Doe is not collaterally estopped on other grounds, we do
not reach this question.
As to the second factor (finality of judgment), the
sentencing court’s restitution order is sufficiently “final” to be
accorded preclusive effect because it conclusively determined
Mancuso’s restitution obligation. See 18 U.S.C. § 3664(o)
(“A sentence that imposes an order of restitution is a final
judgment . . . .”); Henglein v. Colt Indus. Operating Corp.,
260 F.3d 201, 209–10 (3d Cir. 2001).
26
1) the nonparty agrees to be bound by the
determination of issues in an action between
others;
2) a substantive legal relationship—i.e.[,]
traditional privity—exists that binds the
nonparty;
3) the nonparty was “adequately represented by
someone with the same interests who [wa]s a
party”;
4) the nonparty assumes control over the
litigation in which the judgment is rendered;
5) the nonparty attempts to bring suit as the
designated representative of someone who was
a party in the prior litigation; [or],
6) the nonparty falls under a special statutory
scheme that “expressly foreclos[es] successive
litigation by nonlitigants.”
Id. at 312–13 (second and fourth alterations in original)
(quoting Taylor, 553 U.S. at 894–95). Doe is not in privity
with the government under the two categories of privity
applicable to this case—category three and category six.
The interests of a victim and the government in a
restitution determination are not sufficiently similar for a
finding of privity. A victim’s interest in the context of
restitution is undoubtedly to achieve the maximum amount of
compensation for herself permissible under the law. A victim
such as Doe may be willing to assume the time and cost to
litigate the full extent of her damages in a trial as Doe has
27
chosen to do in her civil suit. By contrast, the interests of the
government in the restitution context are necessarily affected
by its responsibility to “represent the interest of society as a
whole.” Ferri v. Ackerman, 444 U.S. 193, 202–03 (1979);
see, e.g., Berk, 666 F. Supp. 2d at 186 n.3 (noting an “obvious
conflict” between the position of two victims and the
government in briefing before the court with respect to
whether the mandatory restitution provision in § 2259
contains a proximate cause requirement for compensable
losses).
Accordingly, the government has an interest in
securing a plea agreement that is palatable to the defendant in
order to avoid a lengthy and costly criminal trial in which it
may not prevail and an interest in achieving speedy
punishment for the purpose of deterrence. See Brady v.
United States, 397 U.S. 742, 752 (1970) (“For the State there
are . . . advantages—the more promptly imposed punishment
after an admission of guilt may more effectively attain the
objectives of punishment; and with the avoidance of trial,
scarce judicial and prosecutorial resources are conserved . . .
.”). These are not necessarily interests that the victim shares.
See Nationwide, 571 F.3d at 313 (“Under the ‘adequate
representation’ exception, the interests of the party and
nonparty must be squarely aligned . . . .”).
These varied interests are balanced by the government
as it decides whether to accept a plea agreement with a given
amount of restitution and render the government necessarily
less interested in litigating extensively to have Mancuso pay
the maximum amount of restitution permissible under the
28
law.17 The effect of these varied interests are particularly
acute in the present situation as the child victim in this case
had a limited ability to advocate on her behalf and instead
relied on a restitution amount that was derived from a plea
agreement negotiated between Mancuso and the government.
Nor can we find privity based on a conclusion that 18
U.S.C. § 2255 or the restitution statutes expressly foreclose a
subsequent civil claim under § 2255 once a victim has
received criminal restitution. As we explain above, the text
of § 2255 does not contain any indication that its application
is limited to those victims who did not previously receive
restitution. And, far from expressly foreclosing subsequent
civil claims, the restitution laws expressly contemplate such
claims. See 18 U.S.C. § 3664(j)(2); id. § 3664(l); cf. EEOC v.
U.S. Steel Corp., 921 F.2d 489, 495 (3d Cir. 1990) (“If
Congress did not believe that the individual’s claim would be
adequately pressed by the EEOC, it would surely have
preserved the individual’s right to bring suit either during or
after the EEOC suit.”).
Under the final factor of the collateral estoppel test,
Doe did not have a full and fair opportunity to litigate the
question of her damages in Mancuso’s sentencing proceeding.
17
While the sentencing court had an independent
statutory obligation under the restitution laws to ensure that
Doe was fully compensated by the restitution order, see 18
U.S.C. § 3664(f)(1)(A), the privity inquiry is confined to a
determination of whether the government had the same
interest as Doe in litigating the question.
29
During sentencing, the government is the party that advocates
for its desired level of restitution. See 18 U.S.C. § 3664(e).
As Doe was not a party to the prior criminal sentencing
proceeding, she had a limited opportunity to influence the
process. As we explain above, Doe’s participation in the
restitution process was limited by § 3664 to conferring with
the government, providing information to a probation officer
as to the extent of her losses, or providing testimony to the
sentencing court only if the sentencing court determined that
such testimony was warranted. See United States v. Brown,
744 F.2d 905, 910 (2d Cir. 1984) (“[T]he victim is not a party
to a sentencing hearing and therefore has only a limited
ability to influence the outcome. The victim cannot control
the presentation of evidence during . . . the sentencing hearing
and is not even guaranteed the right to testify about the extent
of his losses.”). There were no other provisions of the
restitution statutes that permitted Doe to influence the
sentencing court’s restitution decision. See United States v.
Stoerr, 695 F.3d 271, 279 (3d Cir. 2012).
We remain mindful of the fact that, at its core,
collateral estoppel is an equitable doctrine. See Jean
Alexander Cosmetics, Inc. v. L’Oreal USA, Inc., 458 F.3d
244, 255 (3d Cir. 2006). Thus, in addition to the four-factor
test for collateral estoppel, we recognize the equitable
exceptions to the general rule of collateral estoppel codified
in the Restatement (Second) of Judgments. Nat’l R.R.
Passenger Corp. v. Pa. Pub. Util. Comm’n, 288 F.3d 519,
525 (3d Cir. 2002). Relevant for our purposes is the equitable
exception that applies where “[t]he party against whom
preclusion is sought could not, as a matter of law, have
obtained review of the judgment in the initial action.”
Restatement (Second) of Judgments § 28. In this case, Doe
30
was not able to obtain appellate review because she was not a
party to the criminal proceeding during which Mancuso was
ordered to pay restitution.18 See Stoerr, 695 F.3d at 276–277;
Brown, 744 F.2d at 910. Despite the fact that Doe may have
believed, as she argues here, that the restitution award of
$200,000 did not compensate her for her full losses, she was
not permitted to appeal the sentencing court’s award to this
Court and thus cannot be bound by its determination.
Under the facts of this case, where the interests of Doe
and the government were not squarely aligned, she had a
limited ability to participate in the determination of her
restitution in front of the sentencing court, and she had no
18
We have on one occasion allowed a purported
victim to directly appeal a restitution order, but without an
examination of the purported victim’s standing to appeal. See
United States v. Kones, 77 F.3d 66 (3d Cir. 1996). We later
disavowed our assumption of jurisdiction in that decision,
noting that a “‘drive-by jurisdictional ruling[],’ in which
jurisdiction ‘ha[s] been assumed by the parties, and . . .
assumed without discussion by the [c]ourt,’ does not create
binding precedent.” Stoerr, 695 F.3d at 277 n.5 (alterations
in original) (quoting Steel Co. v. Citizens for a Better Env’t,
523 U.S. 83, 91 (1998)).
The CVRA accorded crime victims the right to petition
the Court of Appeals for a writ of mandamus based on a
denial of the right to be reasonably heard at sentencing or a
denial of the right to full restitution. See 18 U.S.C.
§ 3771(d)(3). However, as noted supra note 12, the
sentencing court’s restitution order pre-dated the passage of
the CVRA.
31
ability to seek appellate review of that determination, we are
of the firm belief that the application of collateral estoppel
would simply be inequitable and would offend the “deep-
rooted historic tradition that everyone should have his own
day in court.”19 Nationwide, 571 F.3d at 314 (internal
quotation marks omitted) (quoting Richards v. Jefferson Cty.,
517 U.S. 793, 798 (1996)). For these reasons, and because
the collateral estoppel test and exception set forth above
counsel against the application of the doctrine, we will not
apply collateral estoppel to bar Doe’s claim.
19
Moreover, we are particularly loath to apply
collateral estoppel to disrupt Congress’s remedial scheme
where Congress has expressly provided for estoppel with
respect to one aspect of a later-filed civil claim, but declined
to provide for estoppel with respect to a victim’s damages.
See 18 U.S.C. § 3664(l) (“A conviction of a defendant for an
offense involving the act giving rise to an order of restitution
shall estop the defendant from denying the essential
allegations of that offense in any subsequent Federal civil
proceeding . . . brought by the victim.”); cf. Taylor, 553 U.S.
at 903 (“Congress’ provision for FOIA suits with no statutory
constraint on successive actions counsels against judicial
imposition of constraints through extraordinary application of
the common law of preclusion.”). “The courts should not jam
judicially created doctrines such as res judicata into the gears
of Congress’ carefully crafted statutory machinery.” United
States v. Barnette, 10 F.3d 1553, 1561 (11th Cir. 1994).
32
C. Relief from Entry of Default
A judgment setting aside the entry of default is within
a district court’s discretion, $55,518.05 in U.S. Currency, 728
F.2d at 194–95, and may only be made “for good cause,” Fed.
R. Civ. P. 55(c). In exercising that discretion and
determining whether “good cause” exists, we have instructed
district courts to consider the following factors: “(1) whether
the plaintiff will be prejudiced; (2) whether the defendant has
a meritorious defense; [and] (3) whether the default was the
result of the defendant’s culpable conduct.” $55,518.05 in
U.S. Currency, 728 F.2d at 195.
The District Court rested its judgment setting aside the
entry of default against Mancuso solely on the finding that
Mancuso had a meritorious defense—specifically, that the
prior criminal restitution award barred Doe’s present civil
claim. The District Court did not address whether Doe would
be prejudiced by a vacatur of default or whether the default
was the result of Mancuso’s culpable conduct. Given that we
find Doe’s claim is not barred by the prior criminal restitution
award, and the District Court made no additional findings
with respect to its vacatur of default for us to review, we will
vacate the District Court’s judgment and remand to the
District Court for consideration anew of whether there is
“good cause” for setting aside the default entered against
Mancuso.
IV. CONCLUSION
For the foregoing reasons, we will reverse the
judgment of the District Court dismissing Doe’s complaint
against Mancuso, vacate the judgment of the District Court
33
setting aside the default entered against Mancuso, and remand
for further proceedings consistent with this opinion.
34