U.S. v. Edwards, 98-1055

• Decision Date: 08 October 1998
• Docket Number: No. 98-1055,98-1055
• Citation: 162 F.3d 87
• Parties: UNITED STATES of America v. Robert Allen EDWARDS a/k/a Fidel Salim a/k/a James F. Winter, III a/k/a Charles King a/k/a Donald W. Coleman, Robert Allen Edwards, Appellant. . Argued Under Third Circuit LAR 34.1(a)
• Court: U.S. Court of Appeals — Third Circuit

Page 87

162 F.3d 87

UNITED STATES of America v. Robert Allen EDWARDS a/k/a Fidel Salim a/k/a James F.

Winter, III a/k/a Charles King a/k/a Donald W. Coleman,

Robert Allen Edwards, Appellant.

No. 98-1055.

United States Court of Appeals, Third Circuit.

Argued Under Third Circuit

LAR 34.1(a) Oct. 8, 1998.

Decided Nov. 27, 1998.

Steven A. Feldman (Argued), Of Counsel, Feldman and Feldman, Roslyn, N.Y., for Appellant.

Michael R. Stiles, United States Attorney, Walter S. Batty, Assistant United States Attorney, Chief of Appeals, Joseph Dominguez (Argued), Assistant United States Attorney, Philadelphia, PA, for Appellee.

Before: McKEE and RENDELL, Circuit Judges, DEBEVOISE, District Judge. ^*

OPINION OF THE COURT

RENDELL, Circuit Judge:

In this appeal, we are asked to determine whether the Victim and Witness Protection Act ("VWPA") or the Mandatory Victims Restitution Act ("MVRA") applies to the imposition of restitution in sentencing a defendant who committed his offenses prior to the effective date of the statute but is convicted on or after its effective date. The District Court found that although Edwards had no present ability to pay restitution, full restitution should be imposed under the MVRA. Edwards timely appealed to this court. Both sides now agree that the District Court incorrectly applied the MVRA to Edwards, and that the Victim and Witness Protection Act (VWPA) should have been applied. ¹ We hold that the application of the MVRA to Edwards constitutes a violation of the ex post facto prohibition, and we accordingly reverse and remand for a determination of whether restitution is appropriate for Edwards under the VWPA.

I. Factual Background

Between December of 1992 and October of 1993, Edwards was involved in various schemes involving counterfeit checks, forged commercial checks, and stolen travelers' checks. PSI p 1. Edwards was sentenced on December 23, 1997, after pleading guilty to one count of conspiracy, one count of bank fraud, seven counts of money laundering, and one count of criminal forfeiture. Potential monetary penalties included a fine range of $12,500 to $5,000,000, restitution of $418,397.15, and a special assessment of $500. PSI p 77, 81. The probation office's review of Edwards's liabilities and assets indicated that he had children to support, did not own property or appear to have any assets of note, and had a total liability of $92,854 of debts owed to credit card companies and banks. PSI pp 61-68.

At sentencing, defense counsel argued that Edwards did not have the ability to pay restitution, while the government contended that restitution was mandatory for his offenses under the MVRA. The district judge found that although the defendant did not have the present ability to pay restitution, the MVRA required restitution and ordered full restitution in the amount of $418,397.15. (A. at 14, 16, 22). ² This court has jurisdiction pursuant to 28 U.S.C. § 1291 and 18 U.S.C. § 3742. As the ex post facto argument was not raised before the District Court, plain error review applies. See United States v. Dozier, 119 F.3d 239, 241 (3d Cir.1997).

II. The MVRA and the VWPA

In 1996, Congress passed the MVRA, or "Mandatory Victims Restitution Act of 1996," Title II, Subtitle A of the Antiterrorism and Effective Death Penalty Act of 1996, Pub.L. No. 104-132, 110 Stat. 1214, codified in relevant part at 18 U.S.C. §§ 3663A, 3664 (1996). The MVRA became effective April 24, 1996, to the extent its application is constitutionally permissible. See 18 U.S.C. § 2248 (statutory notes). The MVRA makes restitution mandatory for particular crimes, including those offenses which involve fraud or deceit. See 18 U.S.C. § 3663A(c)(1)(A)(ii). If the MVRA applies to a defendant, a court must order restitution to each victim in the full amount of that victim's losses, and the court cannot consider the defendant's economic circumstances. See 18 U.S.C. § 3664(f)(1)(A). While the MVRA clearly applies to convictions on or after its effective date, its applicability to offenses committed before that date is at issue here. See 18 U.S.C. § 2248 (statutory notes).

The prior restitution statute, the Victim and Witness Protection Act, or "VWPA," requires the court to consider the economic circumstances of the defendant prior to ordering restitution. In this Circuit, a District Court has to make certain factual findings before ordering restitution under the VWPA: 1) the amount of the loss sustained by the victims; 2) the defendant's ability to pay that loss; and 3) how the amount of restitution imposed relates to any loss caused by the conduct underlying the offense(s) at issue. See Government of Virgin Islands v. Davis, 43 F.3d 41, 47 (3d Cir.1994). Under the VWPA, an indigent defendant can be made to pay restitution, but the court must tailor its findings to a defendant's potential assets or earning capacity. Id.

Neither side contests the fact that Edwards's crimes fall under § 3663A if the MVRA applies to him. If the VWPA applies to Edwards, however, the District Court erred by failing to make the required factual findings prior to imposing restitution. In order to determine which statute applies, we must determine the constitutionality of applying the MVRA to a defendant whose criminal conduct occurred prior to the effective date of the statute.

III. Ex Post Facto Analysis

To fall within the ex post facto prohibition, a law must be 1) retrospective, that is, it must apply to events occurring before its enactment; and 2) it must disadvantage the offender affected by it by altering the definition of criminal conduct or increasing the punishment for the crime. See Lynce v. Mathis, 519 U.S. 433, ----, 117 S.Ct. 891, 896, 137 L.Ed.2d 63 (1997). The MVRA would be retrospective as applied to Edwards, and it disadvantages him by holding him accountable for the full amount of restitution, when under the VWPA, he would, in all likelihood, not be held accountable for the full amount. The question then is whether the MVRA altered the definition of criminal conduct or increased the punishment for Edwards's crimes. The MVRA did not alter the definition of Edwards's criminal conduct, but it did alter his fiscal responsibility for its consequences, and we must determine whether, in so doing, it increased the punishment for his crimes.

Most of the Courts of Appeals that have considered this question have found that the retrospective application of the MVRA violates the Ex Post Facto Clause because restitution imposed as part of a defendant's sentence is criminal punishment, not a civil sanction, and the shift from discretionary to mandatory restitution increases the punishment meted out to a particular defendant. See United States v. Siegel, 153 F.3d 1256, 1259-1261 (11th Cir.1998); United States v. Bapack, 129 F.3d 1320, 1327 n. 13 (D.C.Cir.1997); United States v. Williams, 128 F.3d 1239, 1241 (8th Cir.1997); United States v. Baggett, et al., 125 F.3d 1319, 1322 (9th Cir.1997); United States v. Thompson, 113 F.3d 13, 14 n. 1 (2d Cir.1997); but see United States v. Newman, 144 F.3d 531 (7th Cir.1998).

In Williams, the Court of Appeals for the Eighth Circuit viewed the express language of the MVRA as making clear that mandatory restitution was a "penalty," and hence, punishment for the purposes of ex post facto analysis. 128 F.3d at 1241. ³ In Siegel, the Court of Appeals for the Eleventh Circuit focused on the language of § 3663A(a)(1) describing restitution as a "penalty" and its own precedents characterizing restitution as a criminal penalty to conclude that restitution under the MVRA should be considered a criminal penalty, and that the retroactive imposition of the full amount of restitution would violate the Ex Post Facto Clause. See 153 F.3d at 1259-60. ⁴ The Court of Appeals for the Ninth Circuit, in Baggett, focused not so much on the punitive character of restitution, but on the change in procedure for determining a defendant's responsibility for restitution under the MVRA--from the VWPA procedure of analyzing the defendant's financial circumstances before determining the amount of restitution paid, to the MVRA's procedure of ordering full restitution without considering the defendant's economic circumstances--to find that the retroactive application of the MVRA violated the Ex Post Facto Clause. See id. at 1322.

Of the Circuits that have considered this question, only the Court of Appeals for the Seventh Circuit, in United States v. Newman, has determined that the retroactive imposition of restitution under the MVRA does not violate the Ex Post Facto Clause. In Newman, the court conceded that the retroactive application of the MVRA would disadvantage a defendant whose conduct occurred prior to its effective date, but the court stated that since restitution was essentially a civil penalty, and not punishment, the ex post facto prohibition did not apply. See 144 F.3d at 538. ⁵ In so finding, the Newman court first looked to the historical character of restitution as an equitable device, and opined that restitution serves more as a form of individual remedy than a criminal sanction. Id. Along these lines, the Newman court stated that restitution serves to "ensure that a wrongdoer does not procure any benefit through his conduct at others' expense.... The criminal law may impose punishments on behalf of all of society, but the equitable payments of restitution in this context inure only to the specific victims of a defendant's criminal conduct and do not possess a similarly punitive character." Id. at 538 (citations omitted).

In addition to surveying the historical characteristics of restitution as a remedy, the Newman court also noted that it had observed "the non-punitive character of restitution in prior cases." Id. at 538-39 (citing cases). It did note, however, that "our view of restitution is not universally shared." Id. at 539 n. 7 (citing cases, including United States v. Sleight, 808 F.2d 1012, 1020...