State v. Rey, A16-0198

• Decision Date: 09 January 2017
• Docket Number: A16-0198
• Citation: 890 N.W.2d 135
• Parties: STATE of Minnesota, Respondent, v. Emile REY, Appellant.
• Court: Minnesota Court of Appeals

890 N.W.2d 135

STATE of Minnesota, Respondent,

v.Emile REY, Appellant.

A16-0198

Court of Appeals of Minnesota.

Filed January 9, 2017

Review Granted March 28, 2017

Lori Swanson, Attorney General, St. Paul, Minnesota; and James C. Backstrom, Dakota County Attorney, Tricia A. Loehr, Assistant County Attorney, Hastings, Minnesota (for respondent)

Cathryn Middlebrook, Chief Appellate Public Defender, Sharon E. Jacks, Assistant Public Defender, St. Paul, Minnesota (for appellant)

Considered and decided by Ross, Presiding Judge; Schellhas, Judge; and Muehlberg, Judge.

OPINION

MUEHLBERG,Judge^*

Appellant Emile Rey challenges his obligation to pay restitution in the amount of $66,000, arguing that: the identity-theft statute, which authorized the district court to order restitution, violates his substantive and procedural due-process rights; the district court abused its discretion because it failed to consider his ability to pay restitution; and the restitution amounted to an unconstitutional fine. We affirm.

FACTS

Rey pleaded guilty to one count of identity theft involving more than eight direct victims. See Minn. Stat. § 609.527, subds. 2, 3(5) (2014). He admitted that he obtained cloned¹ credit cards between February and June 2015, using the credit of at least 66 victims without their permission. He used the cloned cards to purchase gift cards for personal use. Before sentencing, the state contacted 13 of the 66 victims and received six victim-impact statements.

At Rey's sentencing hearing, the district court ordered him to pay $66,000 in restitution, $1,000 to each direct victim, under the minimum-restitution provision of the statute. See id. , subd. 4. Rey requested a hearing to challenge the amount of restitution. He argued that the minimum-restitution provision was unconstitutional because it violated his substantive and procedural due-process rights and that the restitution amounted to an unconstitutional fine. The district court explained that it was under an affirmative obligation to order $1,000 to each direct victim, implicitly concluding that a victim only needed to meet the definition of a direct victim to be entitled to restitution. Rey waived the restitution hearing.² This appeal follows.

ISSUES

I. Does the minimum-restitution provision in Minnesota Statutes section 609.527, subdivision 4, violate Rey's substantive due-process rights?

II. Does the minimum-restitution provision in Minnesota Statutes section 609.527, subdivision 4, violate Rey's procedural due-process rights?

III. Did the district court fail to consider Rey's ability to pay before ordering restitution?

IV. Is the minimum-restitution provision in Minnesota Statutes section 609.527, subdivision 4, an unconstitutional fine?

ANALYSIS

A district court has broad discretion to order restitution. State v. Tenerelli , 598 N.W.2d 668, 671 (Minn. 1999). Unlike fines, which are typically punitive in nature, the aim of restitution is to either rehabilitate a defendant or compensate the victim. State v. Fader , 358 N.W.2d 42, 48 (Minn. 1984). Generally, restitution may cover, but is not limited to, "any out-of-pocket losses resulting from the crime." State v. Palubicki , 727 N.W.2d 662, 666 (Minn. 2007) (citing to the general restitution statute, Minn. Stat. § 611A.04, subd. 1(a) (2006) ). Victims need not actually make a request before a district court may order restitution. State v. Gaiovnik , 794 N.W.2d 643, 652 (Minn. 2011). Nevertheless, a factual basis must be demonstrated to support the restitution ordered. State v. Latimer , 604 N.W.2d 103, 105 (Minn. App. 1999). But under the identity-theft statute, the district court "shall order" $1,000 to each direct victim of identity theft. Minn. Stat. § 609.527, subd. 4 ; Anderson v. State , 794 N.W.2d 137, 140-41 (Minn. App. 2011) (explaining that the specific provisions of the identity-theft statute, which do not require proof of loss, control over the general restitution procedures, which require proof of loss), review denied (Minn. Apr. 27, 2011); see Minn. Stat. § 645.26, subd. 1 (2014) (designating special provisions as an exception to general provisions where both may be irreconcilable).

Rey challenges his restitution obligation, arguing that the minimum-restitution provision is unconstitutional because it violates his substantive and procedural due-process rights. The constitutionality of a statute presents a question of law, which we review de novo. State v. Bussmann , 741 N.W.2d 79, 82 (Minn. 2007). "Minnesota statutes are presumed constitutional, and our power to declare a statute unconstitutional should be exercised with extreme caution and only when absolutely necessary." In re Haggerty , 448 N.W.2d 363, 364 (Minn. 1989). The party challenging constitutionality bears the burden to demonstrate that the statute is unconstitutional beyond a reasonable doubt. State v. Craig , 826 N.W.2d 789, 791 (Minn. 2013).

I. Minnesota Statutes section 609.527, subdivision 4, does not violate Rey's substantive due-process rights.

The Due Process clauses of the United States and Minnesota Constitutions prohibit the government from depriving a person of "life, liberty, or property, without due process of law." U.S. Const. amends. V, XIV ; Minn. Const. art I, § 7. Substantive due process protects a fundamental right against "arbitrary, wrongful government actions regardless of the fairness of the procedures used to implement them." State v. Hill , 871 N.W.2d 900, 905–06 (Minn. 2015) (quotation and citation omitted). "This protection limits what the government may do in both its legislative and its executive capacities." Id. (citing Cty. of Sacramento v. Lewis , 523 U.S. 833, 846, 118 S.Ct. 1708, 1716, 140 L.Ed.2d 1043 (1998) ). When a law is challenged under the due-process clause, we apply an appropriate level of scrutiny to the law depending on whether a fundamental right is implicated. In re Linehan , 594 N.W.2d 867, 872 (Minn. 1999) ; Gustafson v. Comm'r of Human Servs. , 884 N.W.2d 674, 683 (Minn. App. 2016). If the law does not implicate a fundamental right, the state need only show that the law has a rational basis to serve a legitimate state interest. Gustafson , 884 N.W.2d at 683. If a law does implicate a fundamental right, that law will only stand if the state can show that it serves a compelling interest and is narrowly tailored to fit that interest. Linehan , 594 N.W.2d at 872 ; Gustafson , 884 N.W.2d at 683.

To address Rey's constitutional challenges, we must initially examine whether the minimum-restitution provision of the identity-theft statute implicates a fundamental right. A fundamental right is one that is so deeply rooted in our nation's history and tradition that neither liberty nor justice would exist if the right was sacrificed. Washington v. Glucksberg , 521 U.S. 702, 720–21, 117 S.Ct. 2258, 2268, 138 L.Ed.2d 772 (1997). But Minnesota courts have been reluctant to expand the concept of substantive due process because "guideposts for responsible decision-making in this unchartered area are scarce and open-ended." Hill , 871 N.W.2d at 905–06 (quotation and citation omitted).

Rey generally asserts that the minimum-restitution provision infringes on a fundamental right to property; specifically, the right to acquire and dispose of his money as he chooses. We disagree. Beyond the mere assertion that a fundamental right is implicated, Rey makes no effort to describe the right. Minnesota courts have never held that the right to property is a fundamental right that shields an individual from paying restitution for crimes of which he or she has been duly convicted. See, e.g. , Minn. Stat. § 611A.04 (2014) (giving victims of crimes a statutory right to receive restitution); Hughes v. State , 815 N.W.2d 602, 606 (Minn. 2012) (upholding restitution obligation under procedural due-process analysis); Gaiovnik , 794 N.W.2d at 650–51 (explaining that a plain language interpretation of restitution statute supports a conclusion that the legislature intended to give district courts authority to order restitution). Just as the victim's rights to property are forfeited by way of a defendant's criminal act, so too are the defendant's rights to property so far as is required to make the victim whole. Cf. United States v. Knights , 534 U.S. 112, 119, 122 S.Ct. 587, 591, 151 L.Ed.2d 497 (2001) ("Just as other punishments for criminal convictions curtail an offender's freedoms, a court granting probation may impose reasonable conditions that deprive the offender of some freedoms enjoyed by law-abiding citizens."); Wolff v. McDonnell , 418 U.S. 539, 556, 94 S.Ct. 2963, 2975, 41 L.Ed.2d 935 (1974) ("[T]he fact that prisoners retain rights under the Due Process Clause in no way implies that these rights are not subject to restrictions imposed by the nature of the regime to which they have been lawfully committed.").

Because no fundamental right is implicated, we address the constitutionality of the minimum-restitution provision under the rational-basis test. Under that test, we will uphold a statute so long as it bears a rational relationship to a legitimate purpose. Gustafson , 884 N.W.2d at 683. Rey acknowledges that the state has a legitimate interest to order restitution to compensate victims of crimes. He argues, however, that the minimum-restitution provision does not bear a rational relationship to that purpose because the $1,000 amount to each victim is untethered to a victim's actual loss. We disagree. The identity-theft statute is clear and unambiguous; under a plain reading of the statute, restitution is unquestionably tied to direct victims of identity theft. See Minn. Stat. § 609.527, subd. 1(b) (defining a direct victim as any person whose identity has been transferred, used, or possessed in violation of the identity theft statute); Minn. Stat. § 611A.01(b) (2014) (defining a victim as one who incurs a loss or harm as a result of the crime).³

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