U.S. v. Papagno

• Citation: 639 F.3d 1093
• Decision Date: 26 April 2011
• Docket Number: No. 09–3002.,09–3002.
• Parties: UNITED STATES of America, Appelleev.Victor PAPAGNO, Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)

639 F.3d 1093

UNITED STATES of America, Appellee

v.Victor PAPAGNO, Appellant.

No. 09–3002.

United States Court of Appeals, District of Columbia Circuit.

Argued Oct. 21, 2010.Decided April 26, 2011.

Appeal from the United States District Court for the District of Columbia (No. 1:08–cr–00259).Beverly G. Dyer, Assistant Federal Public Defender, argued the cause for appellant. With her on the briefs was A.J. Kramer, Federal Public Defender. Neil H. Jaffee, Assistant Federal Public Defender, entered an appearance.Jeremy S. Barber, Assistant U.S. Attorney, argued the cause for appellee. With him on the brief were Ronald C. Machen, Jr., U.S. Attorney, and Roy W. McLeese III and Elizabeth Trosman, Assistant U.S. Attorneys.Before: GRIFFITH and KAVANAUGH, Circuit Judges, and EDWARDS, Senior Circuit Judge.Opinion for the Court filed by Circuit Judge KAVANAUGH.KAVANAUGH, Circuit Judge:

Victor Papagno had a goal: to collect two of every kind of computer or, as he phrased it, to build the “Noah's Ark of Computer land.” Unable to buy such a collection, he decided to steal it. Over 10 years, he pilfered 19,709 pieces of computer equipment from his employer, the Naval Research Laboratory.

After he was caught, Papagno pled guilty and was sentenced to 18 months in prison.

At sentencing, the Government requested that the Court order Papagno to pay the Naval Research Laboratory about $160,000 in restitution. That amount would cover the costs the Laboratory incurred in conducting an internal investigation of the wrongdoing. The Government argued that such restitution was required under the Mandatory Victims Restitution Act. See 18 U.S.C. § 3663A(b)(4). That Act mandates restitution to certain crime victims “for lost income and necessary child care, transportation, and other expenses incurred during participation in the investigation or prosecution of the offense or attendance at proceedings related to the offense.” Id.

The question in this case is whether the costs of the Naval Research Laboratory's internal investigation constituted “necessary ... expenses incurred during participation in the investigation or prosecution of the offense.” The District Court agreed with the Government that the costs of the internal investigation qualified under that statute. The Court therefore ordered Papagno to pay restitution for the $160,000 expended by the Laboratory during its internal investigation.

The statute authorizes restitution for “necessary ... expenses incurred during participation in the investigation or prosecution of the offense.” We do not read that text to authorize restitution for the costs of an organization's internal investigation, at least when (as here) the internal investigation was neither required nor requested by the criminal investigators or prosecutors. In our view, an internal investigation that is neither required nor requested by criminal investigators or prosecutors does not entail the organization's “ participation in the investigation or prosecution of the offense.” Id. (emphasis added). Our conclusion is supported by the existence of other restitution statutes—not applicable here—in which Congress provided for restitution in terms that plainly cover the costs of an internal investigation. Our conclusion is further buttressed by the statutory term “necessary”: The costs of an internal investigation cannot be said to be necessary if the investigation was neither required nor requested by criminal investigators or prosecutors.

We reverse the District Court's judgment ordering restitution.

I

Victor Papagno was a computer specialist employed by the Naval Research Laboratory in the District of Columbia. In 1997, he began to steal from the Laboratory. Papagno apparently thought nobody would notice when he took home computer equipment.

For 10 years, Papagno stole computers, monitors, printers, and other items. He stockpiled them in his basement, a friend's father's basement, another friend's storage locker, and a two-story, four-car, 2,775–square–foot detached garage Papagno built to store his collection. By August 2007, he had taken home 19,709 pieces of computer equipment—an average of 37 items per week, every week, for 10 years. The Naval Research Laboratory apparently never noticed that its property was missing.

The Naval Criminal Investigative Service—in essence, the Navy's equivalent of the FBI—first learned of the theft in 2007. The NCIS was tipped off by Papagno's wife—as might be expected, now his ex-wife. Investigators then obtained a search warrant and discovered the medley of machines Papagno had collected. The subsequent criminal prosecution of Papagno was conducted by the United States Attorney's Office for the District of Columbia. Prosecutors from that office eventually filed an information, and Papagno pled guilty.

Meanwhile, the Naval Research Laboratory recovered almost everything that Papagno stole. For reasons that remain unclear, however, the Laboratory then spent an additional $159,183.15 on an elaborate 3,500–hour internal investigation regarding property that was worth as little as $120,000. There is no evidence suggesting that the criminal investigators from the NCIS or the prosecutors from the U.S. Attorney's Office asked the Naval Research Laboratory to conduct its internal investigation. The Government does not dispute that Laboratory officials ordered the internal investigation “for their own purposes.”

At sentencing, the Government argued that the Mandatory Victims Restitution Act required Papagno to pay for the costs of the Naval Research Laboratory's internal investigation. The District Court agreed with the Government and ordered Papagno to reimburse the Naval Research Laboratory for the $159,183.15 cost of its internal investigation. The issue on appeal concerns statutory interpretation; our review of the District Court's interpretation is de novo. See United States v. Ventura, 565 F.3d 870, 875 (D.C.Cir.2009); see also Icicle Seafoods, Inc. v. Worthington, 475 U.S. 709, 714, 106 S.Ct. 1527, 89 L.Ed.2d 739 (1986) (if an appellate court “believe [s] that the District Court's factual findings [are] unassailable, but that the proper rule of law was misapplied to those findings, it [may] reverse [ ] the District Court's judgment”); Pullman–Standard v. Swint, 456 U.S. 273, 287, 102 S.Ct. 1781, 72 L.Ed.2d 66 (1982) (“if a district court's findings rest on an erroneous view of the law, they may be set aside on that basis”); Harry T. Edwards & Linda A. Elliott, Federal Standards of Review 5 (2007).

II

The relevant statute in this case requires restitution “for lost income and necessary child care, transportation, and other expenses incurred during participation in the investigation or prosecution of the offense or attendance at proceedings related to the offense.” 18 U.S.C. § 3663A(b)(4). The question is whether the costs of the Naval Research Laboratory's internal investigation were “necessary ... expenses incurred during participation in the investigation or prosecution of the offense.” Id. (emphasis added).

A

We begin with an overview of the statutory landscape with respect to restitution.

Federal courts may order restitution only when statutes authorize restitution. Until 1982, federal law authorized restitution only as part of a defendant's probation. That changed when Congress passed and President Reagan signed the Victim and Witness Protection Act of 1982. Pub.L. No. 97–291 § 3579, 96 Stat. 1248, 1253 (codified at 18 U.S.C. § 3663). A product of the victims' rights movement that had picked up steam in the 1970s, that Act provides federal courts with discretionary authority to order restitution to victims of most federal crimes. See John W. Gillis & Douglas E. Beloof, The Next Step for a Maturing Victim Rights Movement: Enforcing Crime Victim Rights in the Courts, 33 McGeorge L. Rev. 689, 690 (2002). The statute authorizes restitution for three categories of costs: (1) the value of lost property; (2) the expenses of recovering from bodily injury, such as medical expenses; and (3) funeral costs. See Pub.L. No. 97–291 § 3579(b)(1) (codified at 18 U.S.C. § 3663(b)(1)) (lost property); id. § 3579(b)(2) (codified at 18 U.S.C. § 3663(b)(2)) (bodily injury); id. § 3579(b)(3) (codified at 18 U.S.C. § 3663(b)(3)) (funeral costs).

Legislation enacted in 1994 authorized another category of costs in a § 3663 restitution order. That new provision empowers courts to “reimburse the victim for lost income and necessary child care, transportation, and other expenses related to participation in the investigation or prosecution of the offense or attendance at proceedings related to the offense.” Pub.L. No. 103–322 § 40504, 108 Stat. 1796, 1947 (codified at 18 U.S.C. § 3663(b)(4)). That language, as we will explain, is similar to the language employed in the mandatory restitution statute at issue in this case.

In 1996, Congress passed and President Clinton approved the statute at issue here—the Mandatory Victims Restitution Act. Pub.L. No. 104–132 § 204, 110 Stat. 1214, 1227 (1996) (codified at 18 U.S.C. § 3663A). As its title indicates, that Act requires restitution in certain federal cases involving a subset of the crimes covered by the Victim and Witness Protection Act of 1982. (Recall that under the 1982 Act, restitution is discretionary, not mandatory.) The subset of crimes subject to mandatory restitution includes certain violent crimes and property crimes. For the crimes to which it applies, the Mandatory Victims Restitution Act of 1996 requires restitution for the same four categories of costs covered by the 1982 discretionary Victim and Witness Protection Act, as amended: (1) lost property; (2) the expenses of recovering from bodily injury, such as medical expenses; (3) funeral costs; and (4) “lost income and necessary child care, transportation, and other expenses incurred during participation in the investigation or prosecution of the offense or attendance at...