U.S. v. Soderling
| Decision Date | 08 November 1991 |
| Docket Number | 90-10097,Nos. 88-1216,90-10451,89-10645,89-10657,90-10096,90-10452,90-10033,89-10661,88-1217,91-10411 and 89-10658,90-10016,91-10410,s. 88-1216 |
| Citation | 970 F.2d 529 |
| Parties | UNITED STATES of America, Plaintiff-Appellee, and Federal Deposit Insurance Corporation, Claimant-Appellee, v. Leif D. SODERLING, Defendant-Appellant. In re Paul B. ANDREW, C.P.M., Receiver. UNITED STATES of America; Federal Deposit Insurance Corporation, Plaintiffs-Appellees, v. Jay S. SODERLING, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Leif SODERLING, Defendant-Appellant. (Three Cases) UNITED STATES of America, Plaintiff-Appellee, v. Jay S. SODERLING, Defendant-Appellant. (Four Cases) UNITED STATES of America, Plaintiff-Appellee, v. Leif D. SODERLING; Jay S. Soderling, Defendants-Appellants. UNITED STATES of America, Plaintiff-Appellee, v. Leif SODERLING; Jay S. Soderling, Defendants-Appellants. United States of America, Plaintiff-Appellee, v. Leif D. SODERLING; Jay S. Soderling, Defendants-Appellants. UNITED STATES of America, Plaintiff-Appellee, v. Leif D. SODERLING; Jay S. Soderling, Defendants-Appellants. UNITED STATES of America, Plaintiff-Appellee, v. Leif SODERLING, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Jay S. Soderling, in pro. per.
Leif D. Soderling, in pro. per.
Charles B. Burch, Chief Asst. U.S. Atty., San Francisco, Cal., for plaintiff-appellee.
Appeals from the United States District Court for the Northern District of California.
Before: FLETCHER, WIGGINS and KOZINSKI, Circuit Judges.
Defendants Jay and Leif Soderling challenge restitution orders imposed by the district court under the Victim and Witness Protection Act. Facts
"Seventy-five percent of the failures of FSLIC-insured institutions between 1934 and 1986 occurred after 1979." Note, FIRREA: Controlling Savings and Loan Association Credit Risk Through Capital Standards and Asset Restrictions, 100 Yale L.J. 149, 152 (1990). 1 Included within that statistic is Golden Pacific Savings and Loan Association, then owned and operated by brothers Jay and Leif Soderling. While in control of Golden Pacific, the Soderlings engaged in a number of questionable transactions, eventually drawing the unwanted attention of the federal government. In short order, the government charged the Soderlings with one count of misapplication of funds in violation of 18 U.S.C. § 657 and one count of purposefully overvaluing property in violation of 18 U.S.C. § 1014.
A. The Original Restitution Order: After charging the Soderlings, the government continued its investigation of the twosome, focusing on five other allegedly illegal transactions engineered by the Soderlings and effectuated through Golden Pacific. Aware of this ongoing investigation, the Soderlings struck a deal: They agreed to plead guilty to the two counts contained in the pending information and to make restitution for the losses stemming from those two offenses and from the other five transactions, all in return for the government's agreement not to prosecute them for offenses arising out of the other five transactions. 2
The government and the Soderlings then brought their plea agreement to the district court. After fully and openly exploring the agreement, the district court accepted it and sentenced the Soderlings. 3 In accordance with the plea agreement, the court ordered the Soderlings to make restitution for losses stemming from the seven transactions in question. It constructed this order under the authority of both the Federal Probation Act (FPA) and the Victim and Witness Protection Act (VWPA). 4 At the time of sentencing, the Soderlings did not challenge either the district court's authority to fashion the restitution order or the amount of restitution required by that order.
B. The Contempt Restitution Order: Not long after the Soderlings were sentenced and ordered to pay restitution, the government began to suspect that the brothers were purposely wasting their assets and avoiding their obligation to make restitution. It thus moved to have the district court issue a temporary restraining order preventing the Soderlings and related parties from disposing of any assets within the Soderlings' control. The district court agreed with the government and issued the TRO.
The TRO, however, didn't stop the Soderlings: They continued to squander the assets within their control. This now amounted to criminal contempt because it violated a lawful court order, and the district court found them guilty of such. And as a condition of probation for the Soderlings' contempt convictions, the district court once again ordered them to make restitution in the full amount of the original restitution order.
C. Challenging the Restitution Orders: The Soderlings did not challenge the legality of either the original or the contempt restitution orders when they were first imposed. Eventually, however, they questioned the court's authority to issue either order. The orders were unlawful, they believed, because they covered losses not caused by the conduct underlying their respective offenses of conviction. Thus, they brought a motion under former Federal Rule of Criminal Procedure 35(a) to correct their sentences. The district court denied their motion as to the original restitution order but granted it as to the contempt restitution order. To correct the illegal portion of the contempt restitution order, the court modified it to reflect only the loss of assets caused by the Soderlings' contumacious conduct that would have otherwise been available to pay down the original restitution order (an amount totaling $333,677). The contempt restitution order also was made payable only to the extent the Soderlings did not fully satisfy the original restitution order. The Soderlings appealed the district court's rulings as to both restitution orders. 5
The primary question on appeal is whether the amount of restitution the Soderlings agreed to pay as part of their plea bargain was authorized by law. 6 It is undisputed that this amount is greater than the loss caused by the offenses to which the Soderlings pleaded guilty. It is also undisputed that the amount of the Soderlings' restitution, if authorized at all, can now be authorized only under the VWPA because when the Soderlings' probation was revoked, their obligation to pay restitution under the FPA simultaneously terminated. Thus, the Soderlings contend, the reasoning of Hughey v. United States, 495 U.S. 411, 110 S.Ct. 1979, 109 L.Ed.2d 408 (1990), requires a reversal here, for the Supreme Court in Hughey held that the VWPA authorizes restitution "only for losses caused by the conduct underlying the offense of conviction." Id. at 416, 110 S.Ct. at 1982. The government, on the other hand, argues that the Hughey rule permits a defendant to agree in a fully bargained-for plea agreement to make restitution for losses caused by offenses other than those to which he pleads guilty in return for a promise by the government not to prosecute the defendant for those other offenses.
A. Between 1983 and 1987, a federal district court could order a defendant to pay restitution under two different statutes. The first statute, the Federal Probation Act, provided that a probationer "[m]ay be required to make restitution or reparation to aggrieved parties for actual damages or loss caused by the offense for which conviction was had." 18 U.S.C. § 3651. This statute was repealed on November 1, 1987. The second statute, the Victim and Witness Protection Act, provided that "a defendant convicted of an offense" may be required to "make restitution to any victim of such offense." 18 U.S.C. § 3663(a)(1). This statute became effective January 1, 1983, and is still in effect.
The government argues that because the language of these two statutes is nearly identical, our precedents interpreting the FPA apply equally to the VWPA. And our FPA precedents clearly allow restitution to be ordered for losses stemming from offenses other than those on which there was a conviction if the defendant agrees to such in a plea bargain in return for a promise by the government to drop or not pursue the other offenses. United States v. Whitney, 785 F.2d 824, 825-26 (9th Cir.1986), amended, 838 F.2d 404, 404 (1988); United States v. Black, 767 F.2d 1334, 1343 (9th Cir.), cert. denied, 474 U.S. 1022, 106 S.Ct. 574, 88 L.Ed.2d 557 (1985); Phillips v. United States, 679 F.2d 192 194-96 (9th Cir.1982). The government also points to United States v. Duvall, 926 F.2d 875, 877 (9th Cir.1991), where we concluded that the Phillips interpretation of the FPA survived Hughey.
We find the government's reasoning persuasive. The language and purpose of the FPA and VWPA as they relate to the limitation on restitution to losses caused by the offense of conviction are nearly identical. Indeed, "[t]he FPA's provision for restitution is more specifically tied to the offense of conviction than the language of the VWPA." United States v. Cook, 952 F.2d 1262, 1264 n. 3 (10th Cir.1991). It follows that if the FPA allows restitution beyond the offense of conviction when the defendant agrees to such in a plea agreement, so too does the VWPA. Moreover, in 1950, decades before Hughey was decided, we adopted an interpretation of the FPA strikingly similar to Hughey's interpretation of the VWPA. Compare Karrell v. United States, 181 F.2d 981, 986 (9th Cir.) (restitution under FPA is limited to losses sustained by the victim as a result of the offense for which the defendant was convicted), cert. denied, 340 U.S. 891, 71 S.Ct. 206, 95 L.Ed. 646 (1950), with Hughey, 495 U.S. at 420, 110 S.Ct. at 1984 (). The Phillips court concluded that its rule was consistent with Karrell. 679 F.2d at 194. We are therefore compelled to conclude,...
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