U.S. v. Palma

• Citation: 760 F.2d 475
• Decision Date: 16 April 1985
• Docket Number: No. 84-5446,84-5446
• Parties: UNITED STATES of America, Appellee, v. Joseph PALMA, Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (3rd Circuit)

Page 475

760 F.2d 475

UNITED STATES of America, Appellee, v. Joseph PALMA, Appellant.

No. 84-5446.

United States Court of Appeals Third Circuit.

Argued Feb. 5, 1985.

Decided April 16, 1985.

Joseph T. Wright, Jr. (Argued), McHale & Clark, Scranton, Pa., for appellant.

David Dart Queen, U.S. Atty., Robert J. Nolan (Argued), Asst. U.S. Atty., Scranton, Pa., for appellee.

Before SEITZ, GIBBONS and SLOVITER, Circuit Judges.

OPINION OF THE COURT

SEITZ, Circuit Judge.

In this appeal Joseph Palma challenges the constitutionality of the restitution provisions of the Victim and Witness Protection Act of 1982 (the "VWPA"). 18 U.S.C. Secs. 3579 and 3580 (1982). While Palma pled guilty to criminal charges and does not contest the validity of the plea on appeal, he appeals from the sentence to the extent that it orders restitution pursuant to the VWPA. Jurisdiction for this appeal exists pursuant to 28 U.S.C. Sec. 1291 (1982).

I.

On March 26, 1984, Palma pled guilty to charges of embezzling a substantial sum of money from his employer, the Old Forge Bank of Old Forge, Pennsylvania (the "Bank"), in violation of 18 U.S.C. Sec. 656 (1982). To assist the district court in imposing a sentence, the probation service of the court conducted a presentence investigation. The presentence report, in accordance with Rule 32(c) of the Federal Rules of Criminal Procedure, contained information pertaining to the degree of harm sustained by the Bank. The report also contained an analysis of Palma's financial circumstances and included a financial statement submitted by Palma.

The report indicated that the Bank had sustained losses in the amount of $1,581,200, that it was insured for losses resulting from embezzlement, and that the insurance policy carried a $10,000 deductible. Palma's financial statement revealed that he had a certificate of deposit with the Bank for approximately $79,000, and had accrued benefits in an employee profit sharing plan in excess of $30,000.

Palma and his attorney were afforded an opportunity to review the presentence report prior to sentencing. At the sentencing hearing, Palma presented witnesses who testified as to his good character and his reputation as a hard-working and loving family man. Mrs. Palma testified that her husband had been employed with the Bank for a period of twelve years and had been making approximately $300 per week in his last year of employment. She also testified that in 1983, Palma had opened a small grocery store. On cross-examination, Mrs. Palma testified that she was aware that her husband gambled and that she would sometimes accompany him to Atlantic City where they were treated like a king and queen. Palma did not testify in his own behalf.

At the close of Palma's presentation of witnesses, the attorneys for each side were permitted to make statements to the court. Palma's counsel stated, without contradiction from the Government, that Palma admitted to having misappropriated the $1,521,200, but claimed to have gambled away the entire sum. The attorney then argued that given Palma's present net worth and future earning capacity, it would be impossible for him to repay the entire amount embezzled.

The district court sentenced Palma to five years imprisonment and ordered him to pay a fine of $5,000. Although the court expressed some doubt about Palma's ability to repay the full amount in question, it further directed that

[p]ursuant to the Victim and Witness Protection Act of 1982 as a special condition of parole the defendant is ordered to make restitution to the [Bank] in the sum of $1,581,200 in such installments that shall not be later than five years after the end of the term of imprisonment previously imposed.

App. at 39. Subsequently, Palma moved to have the restitution provisions of the VWPA declared unconstitutional. The district court denied the motion, and Palma appealed.

II.

Palma reasserts his constitutional challenge on appeal. In the alternative, he contends that the district court abused its discretion in ordering him to make restitution of the full amount embezzled. We will address Palma's constitutional arguments first. In so doing, we note that at least five other circuits have upheld the restitution provisions of the VWPA against similar constitutional challenges. See United States v. Keith, 754 F.2d 1388 (9th Cir.1985); United States v. Watchman, 749 F.2d 616 (10th Cir.1984); United States v. Brown, 744 F.2d 905 (2d Cir.), cert. denied, --- U.S. ----, 105 S.Ct. 599, 83 L.Ed.2d 708 (1984); United States v. Satterfield, 743 F.2d 827 (11th Cir.1984); United States v. Florence, 741 F.2d 1066 (8th Cir.1984).

A. Due Process

Palma contends that the restitution provisions of the VWPA violate his Fifth Amendment right to due process of law. A criminal defendant must be afforded some degree of due process at a sentencing proceeding. See Townsend v. Burke, 334 U.S. 736, 68 S.Ct. 1252, 92 L.Ed. 1690 (1948). However, the same degree of due process protection need not be afforded during the sentencing phase of a criminal proceeding as would be required at trial. United States v. Davis, 710 F.2d 104, 106 (3d Cir.1983) (only minimal due process protection required at sentencing).

Palma argues that the procedures for ordering restitution are constitutionally inadequate because they do not provide for a meaningful opportunity to challenge a victim's claim for restitution. He maintains that a criminal defendant will be "chilled" from objecting to restitution at the sentencing hearing out of fear that any such objection may jeopardize his opportunity for a more lenient sentence.

It is well-settled in the procedural due process context that "[a] party has standing to challenge the constitutionality of a statute only insofar as it has an adverse impact on his own rights." County Court of Ulster County v. Allen, 442 U.S. 140, 154-55, 99 S.Ct. 2213, 2223-24, 60 L.Ed.2d 777 (1979). We need not hypothesize whether a different defendant under a different set of facts might feel constrained from contesting a potential restitution award and whether the statute as applied in that context would be constitutionally impermissible. Instead, we limit our inquiry into the constitutionality of the VWPA as applied to the particular facts of this case.

At the sentencing hearing, Palma was afforded, and indeed took advantage of, the opportunity to present witnesses in support of his factual claims. He does not contend that this opportunity to be heard was in any way inadequate. Given this set of facts we cannot say that Palma's due process rights have been violated.

Palma further contends that the VWPA violates due process because it improperly requires the sentencing judge to determine complex issues regarding the amount of damages. Essentially he maintains that the district court judge is not equipped, in the context of a sentencing proceeding, to resolve complicated damages disputes. This contention must likewise fail when evaluated in light of the present case. Since Palma admitted to having taken the entire $1,581,200, there were no complex issues of damages here. For the foregoing reasons, we do not believe that the imposition of restitution by the district court denied Palma due process of law.

B. Equal Protection

Two arguments are presented in support of Palma's contention that the VWPA violates the equal protection component of the Fifth Amendment. First, Palma contends that the VWPA lacks ascertainable standards to guide the district court in determining the amount of restitution, if any, to award in a particular case. The absence of ascertainable standards, he argues, will result in widely disparate sentences among criminal defendants. The Eleventh Circuit specifically addressed this contention, reasoning that "disparate treatment of similarly situated individuals at sentencing is not constitutionally impermissible." United States v. Satterfield, 743 F.2d at 841. Thus, even assuming that Palma's contention is a correct one, "[t]he likelihood of disparate awards provides no basis for invalidating the statute." Id. at 842.

We agree with the Eleventh Circuit that a district court judge must be given considerable discretion in determining the appropriate sentence for a convicted offender. Williams v. Illinois, 399 U.S. 235, 243, 90 S.Ct. 2018, 2023, 26 L.Ed.2d 586 (1970); United States v. Garcia, 544 F.2d 681, 685 (3d Cir.1976). Application of the restitution provisions of the VWPA will invariably result in some sentencing disparity since the statute authorizes the sentencing judge to consider the particular losses sustained by the victim and the financial circumstances of the defendant. See 18 U.S.C. Sec. 3580(a). The individualized focus of the VWPA necessitates the exercise of judicial discretion in the sentencing process. So long as this discretion is properly exercised, however, the mere disparity in sentences under the VWPA does not offend equal protection. See Jones v. Superintendent of Rahway State Prison, 725 F.2d 40, 43 (3d Cir.1984) (no equal protection violation where there was no contention that sentencing disparity was the result of discrimination based on race, sex or similar grounds).

Palma's second equal protection challenge deals with section 3579(g) of the VWPA which provides:

If [a] defendant is placed on probation or paroled under this title, any restitution ordered under this section shall be a condition of such probation or parole. The court may revoke probation and the Parole Commission may revoke parole if the defendant fails to comply with such order. In determining whether to revoke probation or parole, the court or Parole Commission shall consider the defendant's employment status, earning ability, financial resources, the willfulness of the defendant's failure to pay, and any other special circumstances that may have a bearing on the defendant's ability to pay.

18 U.S.C. Sec. 3579(g). Palma contends that this provision is...