United States v. Evelyn Johnson ( 2018 )

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 18-1313
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
EVELYN JOHNSON,
Defendant-Appellant.
____________________
Appeal from the United States District Court
for the Southern District of Illinois.
No. 15-CR-30152-NJR-01 — Nancy J. Rosenstengel, Judge.
____________________
ARGUED OCTOBER 31, 2018 — DECIDED DECEMBER 21, 2018
____________________
Before FLAUM, EASTERBROOK, and BRENNAN, Circuit Judg-
es.
EASTERBROOK, Circuit Judge. After pleading guilty to pre-
paring false tax returns for her clients, 26 U.S.C. §7206(2),
Evelyn Johnson was sentenced to 18 months in prison, to be
followed by one year’s supervised release. The judgment in-
cludes $79,325 in restitution—the amount that Johnson’s cli-
ents unlawfully avoided paying (with respect to the counts
2 No. 18-1313
of conviction) that had not been collected from the taxpayers
before sentencing. Johnson does not contest her convictions
or the length of her sentences. But she says that the prosecu-
tion should have told the judge how much more it might col-
lect from her clients, which could affect how much she owes
in restitution.
Johnson contends that the amount received from the tax-
payers is exculpatory material that should have been re-
vealed under Brady v. Maryland, 373 U.S. 83 (1963). Yet the
collections were not concealed. The presentence report
showed the court and Johnson that the United States already
had collected substantial sums (the original loss figure ex-
ceeded $150,000) and was trying to obtain from taxpayers
the rest of what they should have paid in the first place.
Johnson was free to ask how much more had been collected
by the date of sentencing but did not do so. Brady does not
apply when information is available for the asking. See, e.g.,
United States v. Morris, 80 F.3d 1151, 1170 (7th Cir. 1996);
United States v. Wilson, 901 F.2d 378, 380 (4th Cir. 1990).
The restitution statute, not the Constitution, determines
the prosecution’s duty—and the duty is one of credit against
the judgment, not of disclosure during the sentencing hear-
ing. The $79,325 figure reflects taxes still outstanding be-
cause of Johnson’s fraud. But the parties disagree about
whether tax collections are credited against that award.
The United States contends that 18 U.S.C. §3664(f)(1)(B)
entitles it to collect the full $79,325 from Johnson and to keep
whatever it receives from the taxpayers—and this despite
the norm against double recovery. See Paroline v. United
States, 572 U.S. 434 (2014); Restatement (Second) of Torts
§885(3) (1979). If collections from taxpayers don’t affect the
No. 18-1313 3
restitution obligation, there’s no need to disclose the collec-
tions to Johnson, let alone credit them against the award. But
that’s not what §3664(f)(1)(B) says. It provides:
In no case shall the fact that a victim has received or is entitled to
receive compensation with respect to a loss from insurance or
any other source be considered in determining the amount of
restitution.
This is a statutory version of the collateral-source doctrine,
familiar in tort law. See Restatement (Second) of Torts
§920A(2). It deals with setting the base amount of restitution,
United States v. Malone, 747 F.3d 481, 488 (7th Cir. 2014), not
with how collections from joint wrongdoers are credited.
(The taxpayers are culpable for signing and filing the false
returns that Johnson prepared.)
The United States’ interpretation would bring
§3664(f)(1)(B) into conflict with §3664(j), which does deal
with credits for third-party collections:
(1) If a victim has received compensation from insurance or any
other source with respect to a loss, the court shall order that res-
titution be paid to the person who provided or is obligated to
provide the compensation, but the restitution order shall provide
that all restitution of victims required by the order be paid to the
victims before any restitution is paid to such a provider of com-
pensation.
(2) 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—
(A) any Federal civil proceeding; and
(B) any State civil proceeding, to the extent provided by the
law of the State.
Section 3664(j)(1) completes the picture with respect to in-
surance and similar payments: these do not reduce the
4 No. 18-1313
amount of the restitution award (per §3664(f)(1)(B)), and the
wrongdoer must reimburse the source of those benefits. Sec-
tion 3664(j)(2) covers “compensatory damages”, which re-
duce the amount the wrongdoer pays in restitution. This is
the standard joint-and-several-liability approach of tort law,
which applies to collections under §3664 too. Victims get just
a single recovery. And since Johnson will receive credit
against the restitution award for whatever the United States
collects from the taxpayers, it was unnecessary to disclose
the details of collection activities before the district judge de-
termined the base restitution award.
Perhaps one could doubt that the collection of back taxes
counts as “compensatory damages” under §3664(j)(2), but
neither party to this appeal has taken issue with cases hold-
ing that tax collections must be credited against restitution
awards in criminal prosecutions. Indeed, courts see this as
such an easy question that they have treated the issue in
non-precedential decisions. See United States v. Smith, 398
Fed. App’x 938, 941–42 (4th Cir. 2010); United States v. Hol-
land, 141 Fed. App’x 589, 591 (9th Cir. 2005); United States v.
Kerekes, 2012 U.S. Dist. LEXIS 115280 at *12 (S.D. N.Y. Aug. 15,
2012); Rozin v. CIR, T.C. Memo 2017-52 (Mar. 29, 2017). Two
courts of appeals have come to the same result without dis-
cussing §3664(j)(2). See United States v. Tucker, 217 F.3d 960,
962 (8th Cir. 2000); United States v. Helmsley, 941 F.2d 71, 102
(2d Cir. 1991). And it does not seem to us a stretch to apply
the label “damages” to collections of taxes wrongly unpaid
as a result of criminal fraud.
All remaining issues concern the terms of Johnson’s su-
pervised release. Before sentencing she signed a waiver of
her right to have these conditions read aloud, and she now
No. 18-1313 5
contends that this violated the Due Process Clause of the
Fifth Amendment. But why? The proposed terms and condi-
tions were included in the presentence report, which John-
son had seen. The court offered her a choice: Have these
conditions read aloud as part of the sentencing or forego this
right. She chose to forego it, deeming the writing adequate.
We’ve recommended that district judges give defendants
this very choice. See, e.g., United States v. Bloch, 825 F.3d 862,
872 (7th Cir. 2016). Defendants are entitled to waive their
rights and do so routinely as part of guilty pleas or stipula-
tions. Johnson does not point to anything that made this
waiver involuntary. The court did not say or imply that
Johnson would suffer in any way (other than boredom) if
she demanded that the lengthy conditions be read verbatim
at sentencing. Having made a free choice, she is bound by
her decision and cannot now complain that the court did not
read these conditions aloud.
In addition to waiving the reading of these conditions,
Johnson also elected not to contest the substance of any. On
appeal, however, she objects to five of them. Her failure to
raise any of these objections in the district court limits our
review to plain error. United States v. Poulin, 809 F.3d 924,
930 (7th Cir. 2016); Bloch, 825 F.3d at 869. And we don’t see
any error, let alone plain error. We give just two examples.
One contested condition reads: “The defendant shall not
knowingly leave the judicial district without the permission
of the Court or the probation officer.” Johnson calls this
vague, but it isn’t. “Judicial district” is a statutory term. An-
yone can look up the boundaries of this district, see 28 U.S.C.
§93(c), and a person unable or unwilling to do that could
look at the presentence report, which lists all counties in the
6 No. 18-1313
district. What’s more, the word “knowingly” in this condi-
tion cures any potential vagueness. See Screws v. United
States, 325 U.S. 91, 102 (1945). If Johnson strays outside the
district by accident, she has not violated this condition.
Instead of dealing directly with the language of this con-
dition, Johnson relies on United States v. Ortiz, 817 F.3d 553,
555 (7th Cir. 2016), which found excessive vagueness in a
condition requiring the defendant to remain “within the ju-
risdiction” where he was being supervised. “The jurisdic-
tion” does not have a statutory definition. It could mean
anything from the city in which the probation office is locat-
ed to the judicial district to the limits of the court’s subpoena
power (generally the district plus 100 miles) to the bounda-
ries of the Seventh Circuit (Illinois, Indiana, and Wisconsin)
to the United States as a whole. Ortiz insisted that district
judges give better notice. The reference to “the judicial dis-
trict” was the result; it supplies the degree of specificity
missing from “the jurisdiction”; adding “knowingly” makes
things doubly safe for defendants. The language in John-
son’s case is exactly the sort of condition we have been urg-
ing district courts to employ.
Another contested condition reads: “The defendant shall
respond to all inquiries of the probation officer and follow
all reasonable instructions of the probation officer.” The first
part of this condition comes straight from a statute, 18 U.S.C.
§3563(b)(17), but Johnson asserts that the word “reasonable”
makes the second part excessively vague. We do not see
how. “Reasonable” is one of those protean words that resists
specification. It is ubiquitous in statutes and regulations, de-
signed for the protection of people who otherwise would be
beset by petty bureaucratic demands. Thomas v. Chicago Park
No. 18-1313 7
District, 534 U.S. 316, 324 (2002), holds that this word is per-
missible even in situations governed by the First Amend-
ment; it is certainly permissible in a criminal judgment.
Would Johnson think herself better off if the word were
deleted and she were obliged to do whatever the probation
officer said, however silly or obnoxious that command might
be? Does she want to face revocation of supervised release
for failing to stand on her head when commanded to do so,
or hoot like an owl in a restaurant? Johnson likely wants an
elaborate definition, rather than deletion of this protection,
but the history of tort law shows that any effort to define
“reasonable” is a fool’s errand. In United States v. Kappes, 782
F.3d 828, 860–62 (7th Cir. 2015), we recommended that dis-
trict judges add the word “reasonable” to another condition
(the one requiring defendants to submit to searches), so that
probation officers could not intrude without justification into
personal lives. Having deemed the word “reasonable” the
solution to a problem in Kappes, we are hardly going to de-
clare now that the word must be removed from all condi-
tions of supervised release.
Johnson’s remaining objections do not require separate
discussion.
AFFIRMED