United States v. Terlingo

Opinions of the United
2003 Decisions States Court of Appeals
for the Third Circuit
4-24-2003
USA v. Terlingo
Precedential or Non-Precedential: Precedential
Docket 02-1640
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PRECEDENTIAL
Filed April 23, 2003
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
Nos. 02-1640, 02-1641 and 02-1642
UNITED STATES OF AMERICA
v.
DOMENICK TERLINGO, TARA TERLINGO, and
DOMENICK L. TERLINGO
Domenick Terlingo, Appellant in No. 02-1640
Tara Terlingo, Appellant in No. 02-1641
Domenick L. Terlingo, Appellant in
No. 02-1642
On Appeal From the United States District Court
For the Eastern District of Pennsylvania
(D.C. Crim. Nos. 99-525-06/07/08)
District Judge: Honorable Jan E. DuBois
Submitted Under Third Circuit LAR 34.1(a)
January 21, 2003
Before: BECKER, Chief Judge, NYGAARD and
AMBRO, Circuit Judges.
(Filed: April 23, 2003)
F. EMMETT FITZPATRICK, ESQUIRE
NIALENA CARVASOS, ESQUIRE
F. Emmett Fitzpatrick, P.C.
926 Public Ledger Building
610 Chestnut Street
Philadelphia, PA 19106
Attorneys for Appellants
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PATRICK L. MEEHAN
United States Attorney
LAURIE MAGID
Deputy United States Attorney
for Policy and Appeals
ROBERT A. ZAUZMER
Assistant United States Attorney
Senior Appellate Counsel
THOMAS M. ZALESKI
Assistant United States Attorney
Office of the United States Attorney
for the Eastern District of
Pennsylvania
615 Chestnut Street
Philadelphia, PA 19106
Attorneys for Appellee
OPINION OF THE COURT
BECKER, Chief Judge:
This is a sentencing appeal brought by defendants
Domenick Terlingo, Tara Terlingo, and Domenick L.
Terlingo, who were convicted by a jury of conspiracy to
transport stolen vehicles in interstate commerce. The
Terlingos assert that the order of restitution imposed by the
District Court is invalid because it was imposed more than
ninety days after sentencing, in contravention of the
following provision of 18 U.S.C. § 3664(d)(5):
If the victim’s losses are not ascertainable by the date
that is 10 days prior to sentencing, the attorney for the
Government or the probation officer shall so inform the
court, and the court shall set a date for the final
determination of the victim’s losses, not to exceed 90
days after sentencing. (Emphasis added).
The Government submits that the District Court was
correct to rule that because the delay was the fault of the
defendants it would equitably toll the time-bar and allow
the hearing to take place outside the ninety-day limit. This
appeal raises a question of first impression for this Court:
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is the 18 U.S.C. § 3664(d)(5) time limit subject to equitable
tolling, and if so, under what circumstances? Because we
conclude that this time limit is subject to equitable tolling
when the delay is caused in significant part by the
defendant, we will affirm the judgment of the District Court.
I.
Between March 1995 and May 1997, the Terlingos
participated in a scheme to steal and sell luxury
automobiles after changing their vehicle identification
numbers. In December 2000, a jury convicted the Terlingos
of one count of conspiracy to transport stolen vehicles in
interstate commerce in violation of 18 U.S.C. § 371. On
October 9, 2001, the District Court sentenced Domenick
Terlingo to eighteen months imprisonment and three years
supervised release, and on October 11, 2001 it sentenced
both Tara and Domenick L. Terlingo to three years
probation and six months house arrest.
At the request of the Government, because it needed
more time to obtain necessary documents, the District
Court did not address the issue of restitution at the
defendants’ sentencing hearings but rather delayed entry of
a restitution order pursuant to 18 U.S.C. § 3664(d)(5). On
December 21, 2001, the District Court ordered counsel for
both parties to report jointly to the Court on the status of
the restitution issue on or before January 7, 2002, a date
ninety days after Domenick Terlingo’s sentencing. In a
December 28, 2001 letter to the District Court, the
Government requested that the Court schedule the
restitution hearings for Domenick, Tara, and Domenick L.
on the 7th, 8th, and 9th of January, 2002, respectively. In
response, the District Court scheduled a hearing for all
three Terlingos on January 7, 2002.
On January 4, 2002, however, the defendants moved for
a continuance of the restitution hearing, representing that
they were unprepared to go forward because the
Government had not timely provided them with the
necessary discovery. In addition, defendants’ counsel
informed the District Court that they would be unable to
attend the January 7th hearing because they were
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scheduled for trial on another matter in the Eastern
District of Pennsylvania. The Government opposed this
request for a continuance, but the District Judge granted
the motion, apparently to accommodate his District Court
colleague’s trial schedule.
The District Court did not hold the restitution hearing
until February 25, 2002, at the conclusion of which it
ordered Domenick Terlingo to pay $46,534.16, and both
Tara and Domenick L. Terlingo to pay $5,000 in restitution.
Because this hearing took place outside the ninety-day
period specified by § 3664(d)(5), the defendants appealed.
II.
A.
Under the plain language of § 3664(d)(5), the district
court “shall” set a date for the final determination of the
victim’s losses to occur within ninety days of sentencing.
After argument by counsel for the defendants and the
government on the applicability of the ninety-day time bar,
the District Court rejected the defendants’ argument and
made the following findings:
I think that there is absolutely no bad faith on the part
of the defense. I think the government missed a
deadline, almost missed a deadline. If they had really
missed the deadline, if I hadn’t scheduled a hearing for
January 7th, I might rule differently, but I’m ruling
now, taking Stevens, U.S. v. Stevens and extending it
just one step further, I scheduled a restitution portion
of the sentencing in this case for January 7th, I
continued that restitution hearing at the request of the
defendants. They had a legitimate request, the notice
was short. It was short because the government didn’t
request the hearing and they failed to respond to an
order directing that they submit a status report in 60
days, but in any event, the hearing would have gone
forward on January 7th, within the ninety days, had
the defense counsel not been on trial.
And, under those circumstances, again, absolutely no
bad faith, I’m taking the Stevens rationale and I’m
5
ruling that because the continuance was not the fault
of the Government, it was at the request of the defense,
a legitimate request, I am not going to bar the
Government from presenting restitution arguments and
from seeking a restitution order in this case.
As we read the record, these findings are supported. The
defendants argue that the entire fault for the delay in the
issuance of a restitution order lay with the government
because the government failed to turn over discovery in a
timely fashion before the date of the scheduled hearing. The
District Court’s findings, which, as noted above, are
supported, undermine that contention. This is not the end
of our inquiry, however; we must still determine whether
the District Court erred in determining that the § 3664(d)(5)
time-bar is subject to equitable tolling, and if it was correct
in so finding, whether it was also correct in concluding that
equitable tolling was appropriate under the facts of this
case.
We begin with the threshold question whether the time
limit of § 3664 (d)(5) is subject to equitable tolling at all.
Two Courts of Appeals have answered this question in the
affirmative. In United States v. Stevens, 211 F.3d 1 (2d Cir.
2000), relied upon by the District Court, the Court of
Appeals for the Second Circuit concluded that the time
limit must be tolled when the restitution hearing was
delayed due to the bad faith tactics of the defendant.
Similarly, in United States v. Dando, 287 F.3d 1007, 1011
(10th Cir. 2002), the Court of Appeals for the Tenth Circuit
plainly stated that the “statute’s time prescriptions . . . are
subject to equitable tolling” and cited to Stevens and to
Carlisle v. United States, 517 U.S. 416, 435
(1996)(Ginsburg, J., concurring)(observing that “limitations
periods generally” are subject to equitable tolling).
In addition, in United States v. Maung, 267 F. 3d 1113,
1122 (11th Cir. 2001), the Court of Appeals for the
Eleventh Circuit implied that the limit is tollable because
“[a]llowing the defendant’s own bad faith delay to foreclose
the entry of a restitution order could conceivably put
restitution in some cases in the defendant’s own
discretion.” The Court was therefore unwilling to say “that
the 90-day limitation is inexorable and can never be
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equitably tolled. We have no occasion to decide that issue
in this case, anyway.” Id.B.
The Supreme Court has not directly addressed the issue
at bar, nor has the Court laid down any hard and fast rules
for determining what kinds of statutes are subject to
equitable tolling. It is possible, however, to glean some
guidance on the issue from a handful of Supreme Court
decisions. In addition to Justice Ginsburg’s statements on
the matter in Carlisle, supra, the Supreme Court spoke in
some depth on the application of equitable tolling in certain
situations in Irwin v. Department of Veterans Affairs, 498
U.S. 89 (1990). In that case, the Court noted that “[t]ime
requirements in lawsuits between private litigants are
customarily subject to ‘equitable tolling.’ Indeed, we have
held that the statutory time limits applicable to lawsuits
against private employers under Title VII are subject to
equitable tolling.” Id. at 95 (internal citations omitted). The
Court concluded that, in the context of a Title VII action
against the government, “the same rebuttable presumption
of equitable tolling applicable to suits against private
defendants should also apply to suits against the United
States.” Id. at 95-96. This language does not subsume the
situation before us, of course, but it surely indicates
general approval of the widespread applicability of equitable
tolling principles.
The Supreme Court’s discussion of equitable tolling in
United States v. Brockamp, 519 U.S. 347 (1997), also
provides guidance as to what kinds of statutes are subject
to equitable tolling. In Brockamp, the Court determined that
the time limits for filing tax refund claims set forth in
§ 6511 of the Internal Revenue Code were not subject to
equitable tolling. The Court’s reasoning is instructive, so we
rescribe it at length:
Section 6511 sets forth its time limitations in
unusually emphatic form. Ordinarily limitations
statutes use fairly simple language, which one can
often plausibly read as containing an implied
“equitable tolling” exception. See, e.g., 42 U.S.C.
7
§ 2000e-16(c) (requiring suit for employment
discrimination to be filed “[w]ithin 90 days of receipt of
notice of final [EEOC] action . . .”). But § 6511 uses
language that is not simple. It sets forth its limitations
in a highly detailed technical manner, that,
linguistically speaking, cannot easily be read as
containing implicit exceptions. Moreover, § 6511
reiterates its limitations several times in several
different ways. . . .
In addition, § 6511 sets forth explicit exceptions to its
basic time limits, and those very specific exceptions do
not include “equitable tolling.” See § 6511(d)
(establishing special time limit rules for refunds related
to operating losses, credit carrybacks, foreign taxes,
self-employment taxes, worthless securities, and bad
debts) . . . .
To read an “equitable tolling” provision into these
provisions, one would have to assume an implied
exception for tolling virtually every time a number
appears. To do so would work a kind of linguistic
havoc. Moreover, such an interpretation would require
tolling, not only procedural limitations, but also
substantive limitations on the amount of recovery — a
kind of tolling for which we have found no direct
precedent.
Id. at 350-52.
In contrast to the IRS provision discussed in Brockamp,
the time-limit of § 3664(d)(5) looks very much like that of 42
U.S.C. § 2000e-16(c), which the Court pointed to as an
example of a statute subject to equitable tolling; and
§ 3664(d)(5) does not remotely resemble the complicated tax
time limits the Brockamp Court held were not subject to
equitable tolling. 18 U.S.C. § 3664(d)(5)’s ninety-day
requirement is not set forth “in unusually emphatic form”
or in a “highly detailed technical manner,” but rather
“use[s] fairly simple language.” In addition, there are no
built-in time limit exceptions to § 3664(d)(5). In light of
Justice Ginsburg’s observation that “limitations periods
generally” are subject to equitable tolling, Carlisle, 517 U.S.
at 435 (Ginsburg, J., concurring), and the fact that the
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time-limit at issue here is nearly identical to one that the
Brockamp Court stated could be “plausibly read as
containing an implied ‘equitable tolling’ exception,” we
conclude that the ninety-day time limit of § 3664(d)(5) is
subject to equitable tolling. Brockamp, 519 U.S. at 350.
C.
This conclusion is buttressed by looking to the purpose
of the ninety-day time limit. As the Court of Appeals for the
Second Circuit concluded in Stevens, it appears that the
time limit was not created for the benefit of the convicted
criminal, but to protect the victims of the crimes of which
he has been convicted. Senate Report No. 104-179, which
was adopted as the Conference Report for the Victim
Restitution Act of 1995, stated that “[t]he committee . . .
intends that . . . the defendant’s assets and ability to pay
be subject to strict review by the court. In particular, the
committee is concerned that defendants not be able to
fraudulently transfer assets that might be available for
restitution.” On the basis of this language, the Stevens
Court concluded that “[i]n our view, the 90-day limit on the
entry of a restitution order is more consistent with
Congress’s concerns about preventing the dissipation of a
defendant’s assets, than with protecting a defendant from a
drawn-out sentencing process,” Stevens, 211 F.3d at 4 n.2,
and that “Congress could not have intended to permit
offenders to subvert the VWPA by using dilatory
maneuvering to defeat a sentence of restitution.” Id. at 4.1
On the basis of this theory, it makes sense to grant
equitable tolling, on behalf of the government representing
the victims, if the defendant has, in bad faith, delayed to
the point where the restitution order is untimely. A time
limit that is intended to benefit the victims should not fall
prey to the delaying tactics of a defendant who has every
1. The Maung Court cautioned that “we may only look to legislative
history if [the] plain meaning produces ‘a result that is not just unwise
but is clearly absurd.’ ” Maung, 267 F. 3d at 1121. The Court also
acknowledged, however, that allowing the defendant to cause the delay
of the restitution order past the 90-day limit might produce such an
absurd result.
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incentive to ensure that the restitution order does not fall
within the 90-day period. We note too that, as the Court
explained in Brice v. Secretary of Health and Human
Services, 240 F.3d 1367, 1373 (Fed. Cir. 2001), “the
doctrine of equitable tolling is designed to prevent harsh
and unjust results . . .”; see also Spencer v. Sutton, 239
F.3d 626, 630 (4th Cir. 2001) (“. . . equitable tolling is
available only in ‘those rare instances where — due to
circumstances external to the party’s own conduct — it
would be unconscionable to enforce the limitation period
against the party and gross injustice would result.’ ”). Such
a harsh result could occur where the defendant’s bad faith
delay causes the victims of his crimes to be denied
restitution. Since it may also make sense to grant equitable
tolling to the government as long as the delay is caused by
the defendant in significant part for any reason, even if
there is no bad faith involved, we turn to the second major
legal issue before us. Having determined that equitable
tolling can apply to 18 U.S.C. § 3664 (d)(5), under what
circumstances should it apply?
D.
In United States v. Maung, 267 F. 3d 1113 (11th Cir.
2001), the defendant was not responsible for the fact that
the restitution hearing did not occur during the ninety-day
period. The government argued that, nonetheless, the 90-
day statutory period should be tolled because it would
cause the defendant no prejudice. The Court rejected this
argument, noting that there is no prejudice requirement in
the statute. In analyzing the tolling question, the Court
relied on the prescription that when the meaning of a
statute is clear on its face, a court may only look to
legislative history “if that plain meaning produces ‘a result
that is not just unwise but is clearly absurd.’ ” Id. at 1121.
The Court then reasoned that a “strict [non-tollable] 90-day
limit might produce an absurd result in cases where the
defendant’s own bad faith causes the entry of the order to
be delayed beyond 90 days.” Id. at 1122. In the facts before
it, however, “[t]he delay . . . was not caused by obstruction
or bad faith tactics of the defendant. By all accounts, the
parties negotiated in good faith, but were unable to reach
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agreement on the amount of restitution. There is no
indication that the defendant was any more at fault for the
delay than the government. In this situation, it is not
plainly absurd to let the chips fall where the plain language
of the statute indicates they should.” Id.Under the Maung Court’s interpretation of § 3664(d)(5),
equitable tolling will not apply when the fault for the delay
is shared by the parties. It appears from the quoted
language that the Maung Court would have found that
equitable tolling did not apply even if the delay had been
caused by the defendant, as long as he had not acted in
bad faith. The Court left open the possibility, however, that
equitable tolling would apply when the delay was caused by
the defendant’s bad faith, as in that situation alone a strict
reading of the ninety-day limit “might produce an absurd
result.”2
The Court of Appeals for the Tenth Circuit came to a
different conclusion in United States v. Dando, 287 F. 3d
1007 (10th Cir. 2002). In that case, the District Court had
been prepared to enter the restitution order within the
ninety-day period, but defense counsel twice asked that the
order be delayed, the first time because his client was not
present, and the second time to allow for an evidentiary
hearing concerning the amount of restitution. After stating
that the statute’s time-bar provision is subject to equitable
tolling, the Dando Court concluded that “the Government
moved to file a restitution order well within the ninety-day
time frame established by the statute” and “the delay was
due to Defendant’s request for a continuance and for an
evidentiary hearing. Where a defendant’s own conduct
delayed the timely entry of a restitution order, the
defendant cannot insist on strict conformity with the
statute’s time prescriptions.” Id. at 1011. Under the Dando
formula then, bad faith on the part of the defendant is not
necessary; equitable tolling will apply as long as the delay
was caused by the defendant, rather than by the
government.
2. The Court went on to state: “For that reason, we are not willing to say
that the 90-day limitation is inexorable and can never be equitably
tolled. We have no occasion to decide that issue in this case, anyway.”
Id. at 1122.
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The third case to address equitable tolling in this context
is United States v. Stevens, 211 F.3d 1 (2d Cir. 2000). As in
the other cases, the restitution order in Stevens came after
the end of the 90-day period. In that case, however, the
delay was caused by the defendant’s bad faith behavior.
The Court determined that the defendant “himself caused
the extended delay. The restitution order could not be
issued . . . because . . . ‘[the defendant] has been
stonewalling from the beginning and [has continued] to
stonewall’ . . . and has been ‘flouting the authority of the
court’ by concealing significant assets from the prosecutors.
. . .” Id. at 4. The Court concluded that “to vacate the
restitution order where the defendant himself ran out the
90-day clock would be to reward him for willful defiance of
the court’s orders.” Id. at 5.
Having surveyed the extant caselaw, it is clear that,
because the statute is designed to protect the victims of the
crimes in question, equitable tolling should apply to
situations in which the convicted individual’s bad faith
tactics caused the delay. This result is consistent with
Stevens and Dando, and not inconsistent with Maung. We
also conclude, because equitable tolling is generally
available in situations in which, in its absence, there will be
a harsh or unjust result, that even in the absence of any
bad faith behavior the statute must be equitably tolled
when the delay is caused in significant part by the
defendant. The statute is designed to protect the interests
of the defendant’s victims, and injustice will result if the
dictates of the statute can be avoided by a delay caused by
the actions of the defendant, in bad faith or not. If the
defendant played no significant part in causing the delay,
however, equitable tolling will not be available.
In the case at bar, it is clear that there was no bad faith
on the part of the defendants. Still, the defendants were, in
significant part, the cause of the delay because their
lawyers could not appear at, and moved to continue, the
originally scheduled restitution hearing. Equitable tolling
was therefore proper, and the District Court did not err
when it tolled the ninety-day time limit.
The judgment of the District Court will be affirmed.
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A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit