United States v. Stoerr

• Citation: 695 F.3d 271
• Decision Date: 21 June 2012
• Docket Number: No. 11–2787.,11–2787.
• Parties: UNITED STATES of America v. Norman STOERR. Sevenson Environmental Services,* Appellant. * pursuant to FRAP 12(a).
• Court: U.S. Court of Appeals — Third Circuit

695 F.3d 271

UNITED STATES of America

v.Norman STOERR.

Sevenson Environmental Services,* Appellant.

* pursuant to FRAP 12(a).

No. 11–2787.

United States Court of Appeals,Third Circuit.

Submitted Under Third Circuit

LAR 34.1 June 21, 2012.

Filed: Aug. 28, 2012.

Lawrence S. Lustberg, Esq., Gibbons P.C., Newark, NJ, for Appellant, Sevenson Environmental Services, Inc.

Minryu Kim, Esq., Alan J. Bozer, Esq., Phillips Lytle LLP, Buffalo, NY, for Appellant, Sevenson Environmental Services, Inc.

Mark E. Coyne, Esq., Chief, Appeals Division, United States Attorney's Office, Newark, NJ, for Appellee, United States of America.

Sharis A. Pozen, Esq., Acting Assistant Attorney General (Did not enter an appearance), Scott D. Hammond, Esq., Deputy Assistant Attorney General (Did not enter an appearance), John P. Fonte, Esq., John J. Powers, III, Esq., Finnuala K. Tessier, Esq., United States Department of Justice, Antitrust Division, Washington, DC, for Appellee, United States of America.

Before: AMBRO, VANASKIE and ALDISERT, Circuit Judges.

OPINION

VANASKIE, Circuit Judge.

Norman Stoerr was convicted of participating in an illegal bid rigging and kickback scheme in connection with his employment at Sevenson Environmental Services, Inc. (“Sevenson”). Sevenson, a non-party to the underlying criminal proceeding, voluntarily compensated one of Stoerr's victims, Tierra Solutions, Inc. (“Tierra”). At Stoerr's sentencing, Sevenson sought restitution under the Mandatory Victims Restitution Act (“MVRA”), 18 U.S.C. § 3663A et seq., for reimbursement of the amount that it paid as compensation to Tierra. The District Court denied Sevenson's request for restitution, instead ordering that Stoerr pay restitution to Tierra. Sevenson now attempts to appeal Stoerr's sentence, contending that the District Court erred in declining to grant its request for restitution. We will dismiss Sevenson's appeal because, as a non-party, it lacks standing to appeal.

I.

On July 23, 2008, Stoerr pled guilty to bid rigging, in violation of 15 U.S.C. § 1; conspiracy to provide kickbacks and to defraud the United States, in violation of 18 U.S.C. § 371; and assisting in the preparation of false tax returns, in violation of 26 U.S.C. § 7206(2). The convictions stemmed from kickback payments that Stoerr solicited and accepted from sub-contractors in connection with projects managed by Sevenson, his employer from 1980 to October 2003.

Sevenson obtained contracts in 2000 and 2004 with the United States Army Corps of Engineers to perform remediation services as the prime contractor at the Federal Creosote Superfund Site (“Federal Creosote”) in Manville, New Jersey. From 1999 to 2007, Sevenson also had a contract with Tierra, a private company, to perform remediation services as the general contractor at the Diamond Alkali Superfund Site (“Diamond Alkali”) in Newark, New Jersey. The Environmental Protection Agency was responsible for paying Sevenson for its services at Federal Creosote, and Tierra was responsible for paying Sevenson for its services at Diamond Alkali. At both project sites, Sevenson hired sub-contractors, and then sought reimbursement from the payer for the sub-contractor charges, plus a fee equal to a fixed percentage of the sub-contractor charges.

From 2000 to 2002, Stoerr was the superintendent at Diamond Alkali, and from 2002 to 2003, he was the assistant project manager/contracts administrator at Federal Creosote. At Diamond Alkali, Stoerr was responsible for soliciting vendors, and at Federal Creosote, he was responsible for soliciting bids for sub-contracts. In both positions, he reported to Gordon McDonald, the project manager.

From 2000 to 2004, Stoerr, at McDonald's direction, solicited and accepted kickbacks valued at $77,132 from subcontracting companies National Industrial, Inc. (“National Industrial”), JMJ Environmental Services, Inc. (“JMJ”), Bennett Environmental Inc., and Haas Sand & Gravel LLC.¹ In return for the kickbacks, Stoerr and McDonald treated the sub-contracting companies favorably in awarding subcontracts for the Federal Creosote and Diamond Alkali projects.

Stoerr and McDonald passed the cost of the kickbacks on to Tierra and to the EPA by including the amount of the kickbacks in the sub-contractors' invoices that they submitted for reimbursement. In total, the District Court determined that Stoerr's and McDonald's scheme resulted in losses of $134,098.96 to the EPA and $257,129.22 to Tierra. Of the $257,129.22 in losses to Tierra, the District Court found that $25,000 related to kickback payments from National Industrial and its partial owner, Victor Boski, and $232,129.22 related to kickback payments from JMJ and its owner, John Drimak Jr.

After Sevenson learned of the kickbacks scheme, it paid Tierra $202,759.04 to compensate it for its losses relating to the JMJ and Drimak scheme, and $38,158.11 to compensate it for its losses relating to the National Industrial and Boski scheme. It then commenced a civil action against Stoerr in state court to recover its losses, and sought restitution in connection with Stoerr's sentencing.

Regarding Stoerr's sentencing, Sevenson filed letters with the United States Probation Office and with the District Court, seeking restitution from Stoerr under the MVRA. The MVRA “compels a sentencing court to order a defendant convicted of certain crimes, including crimes against property, to make restitution to his victim.” United States v. Aguirre–Gonzalez, 597 F.3d 46, 51 (1st Cir.2010) (emphasis omitted) (quoting United States v. Innarelli, 524 F.3d 286, 292–93 (1st Cir.2008)) (internal quotation marks omitted). In particular, the MVRA provides that “[i]n each order of restitution, the court shall order restitution to each victim in the full amount of each victim's losses as determined by the court and without consideration of the economic circumstances of the defendant.” 18 U.S.C. § 3664(f)(1)(A). The MVRA also provides that “[i]f a victim has received compensation from insurance or any other source with respect to a loss, the court shall order that restitution be paid to the person who provided or is obligated to provide the compensation.” § 3664(j)(1). Sevenson claimed that it was entitled to restitution because it reimbursed Tierra for its losses.²

On May 23, 2011, the District Court conducted Stoerr's sentencing, during which it denied Sevenson's request for restitution. In declining to grant restitution to Sevenson, the District Court determined that Tierra, rather than Sevenson, was Stoerr's victim. Moreover, the District Court noted that “Sevenson has the opportunity to pursue a civil remedy here.” (A.201.)

The District Court sentenced Stoerr to a five-year period of probation and ordered restitution in the amount of $391,228.18, with $134,098.96 apportioned to the EPA and $257,129.22 apportioned to Tierra. The District Court's order provided that Stoerr was jointly and severally liable for $232,192.22 of the Tierra payment with his co-conspirator, Drimak, whom the District Court had previously ordered to pay $232,192.22 in restitution to Tierra. Because Stoerr lacked the financial ability to make the restitution payments in full, the District Court ordered him to pay $250 per month.

On June 22, 2011, the District Court ordered that Stoerr's obligation to pay Tierra $25,000 for the losses relating to the National Industrial and Boski scheme was satisfied because “Tierra ... received full compensation” for its losses stemming from that scheme. (A.173.) The District Court also ordered that Sevenson's $202,759.04 payment to Tierra counted towards Stoerr's $232,129.22 restitution obligation relating to Tierra's losses from the JMJ and Drimak scheme, and reduced Stoerr's remaining restitution obligation to Tierra to $29,370.18.

Sevenson moved for reconsideration of the District Court's restitution order, which the District Court denied. Sevenson then filed a notice of appeal. The Government moved to dismiss Sevenson's appeal, arguing that Sevenson, as a non-party, is unable to appeal Stoerr's sentence. We referred the Government's motion to our merits panel and now consider the Government's motion together with the parties' merits briefs.

II.

Sevenson contends that the District Court erred in failing to award it restitution in compensation for its payments to Tierra, because the MVRA requires district courts to order restitution to any entity that has compensated the crime victim. See18 U.S.C. § 3664(j)(1) (“If a victim has received compensation from insurance or any other source with respect to a loss, the court shall order that restitution be paid to the person who provided ... the compensation....”). Although Sevenson acknowledges that it is not a party to Stoerr's criminal proceedings, it asserts that it nonetheless has a right to appeal the District Court's restitution order as a non-party payer of compensation to a victim under the MVRA.

The Government responds that Sevenson cannot appeal, because non-parties are unable to appeal a criminal defendant's final judgment and sentence. The Government also contends that the District Court did not abuse its discretion in ordering restitution payments to Tierra rather than to Sevenson, because district courts must fully compensate victims for their losses under § 3664(f)(1)(A), and because Stoerr is jointly and severally liable for the $232,192.22 restitution payment with Drimak. We will dismiss Sevenson's appeal, because Sevenson, as a non-party, lacks standing to appeal Stoerr's sentence.

A.

To have standing to appeal, the appellant “must be aggrieved by the order of the district court from which it seeks to appeal.” ³IPSCO Steel (Ala.), Inc. v. Blaine Constr. Corp., 371 F.3d 150, 154 (3d Cir.2004) (quoting McLaughlin v. Pernsley, 876 F.2d 308, 313 (3d Cir.1989)) (internal quotation marks omitted). Ordinarily, only parties to a proceeding adversely affected by the judgment entered in that proceeding are aggrieved by the...