Tuesday, January 8, 2019

On Restitution, Jury Factfinding and Original Meaning (1/8/19)

Restitution is a common feature in criminal tax convictions.  Although statutory restitution excludes the Title 26 tax crimes, restitution is allowed for the ubiquitous Klein conspiracy (the defraud conspiracy under 18 U.S.C. 371).  And, where statutory restitution is not available, DOJ Tax commonly requires contractual restitution in plea agreements.  I provide materials on restitution in tax cases at the end of this blog entry.

Today, I write two justices dissent to denial of certiorari yesterday in Hester v. United States (Sup. Ct. No. 17-9082), here.  The dissenting justices were Gorsuch, who drafted the dissent, and Sotomayor, who joined the dissent.  The dissent felt that the full court should consider whether a jury must determine restitution.  Current practice is that the judge determines restitution (unless the restitution is contracted by the parties).  Here are key excerpts (cleaned up except for key cases):
If you’re charged with a crime, the Sixth Amendment guarantees you the right to a jury trial. From this, it follows that the prosecutor must prove to a jury all of the facts legally necessary to support your term of incarceration. Apprendi v. New Jersey, 530 U. S. 466 (2000). Neither  is this rule limited to prison time. If a court orders you to pay a fine to the government, a jury must also find all the facts necessary to justify that punishment too. Southern Union Co. v. United States, 567 U. S. 343 (2012). 
But what if instead the court orders you to pay restitution to victims? Must a jury find all the facts needed to justify a restitution order as well? That’s the question presented in this case.  
* * * * 
[T]he government argues that the Sixth Amendment doesn’t apply to restitution orders because the amount of restitution is dictated only by the extent of the victim’s loss and thus has no “statutory maximum.”  But the government’s argument misunderstands the teaching of our cases.  We’ve used the term “statutory maximum” to refer to the harshest sentence the law allows a court to impose based on facts a jury has found or the defendant has admitted.  Blakely v. Washington, 542 U.S. 296, 303 (2004).  In that sense, the statutory maximum for restitution is usually zero, because a court can’t award any restitution without finding additional facts about the victim’s loss.  And just as a jury must find any facts necessary to authorize a steeper prison sentence or fine, it would seem to follow that a jury must find any facts necessary to support a (nonzero) restitution order. 
The government is not without a backup argument, but it appears to bear problems of its own.  The government suggests that the Sixth Amendment doesn’t apply to restitution orders because restitution isn’t a criminal penalty, only a civil remedy that compensates victims for their economic losses.  But the Sixth Amendment’s jury trial right expressly applies “[i]n all criminal prosecutions,” and the government concedes that restitution is imposed as part of a defendant’s criminal conviction.  Federal statutes, too, describe restitution as a “penalty” imposed on the defendant as part of his criminal sentence, as do our cases.  Besides, if restitution really fell beyond the reach of the Sixth Amendment’s protections in criminal prosecutions, we would then have to consider the Seventh Amendment and its independent protection of the right to a jury trial in civil cases. 
If the government’s arguments appear less than convincing, maybe it’s because they’re difficult to reconcile with the Constitution’s original meaning.  The Sixth Amendment was understood as preserving the historical role of the jury at common law.  And as long ago as the time of Henry VIII, an English statute entitling victims to the restitution of stolen goods allowed courts to order the return only of those goods mentioned in the indictment and found stolen by a jury.  In America, too, courts held that in prosecutions for larceny, the jury usually had to find the value of the stolen property before restitution to the victim could be ordered.   And it’s hard to see why the right to a jury trial should mean less to the people today than it did to those at the time of the Sixth and Seventh Amendments’ adoption.
Doug Berman's Sentencing Law and Policy Blog, Purported SCOTUS originalists and liberals, showing yet again that they are faint-hearted, refuse to consider extending jury trial rights to restitution punishments (1/7/19), here, has this to say after describing Gorsuch's dissent as "this lovely little opinion"):
So why does the jury trial still mean less to the people today facing restitution punishments than it did to those at the time of the Sixth and Seventh Amendments’ adoption?  The only answer I can provide is hinted in the title of post.  Supposed SCOTUS originalists like Chief Justice Roberts and Justices Thomas and Kavanaugh apparently do not want to here follow originalist principles to what would appear to be their logical conclusion.  Supposed SCOTUS liberals like Justices Ginsburg and Kagan do not want to here protect a certain type of right of a certain type of criminal defendant. (Justice Sotomayor, who never shrinks from following constitutional rights wherever she thinks they must extend, joined Justice Gorsuch's dissent here). 
Although Berman does not discuss it, I think Justice Alito's concurring opinion, here, is also worthy of note.  It is short and I quote it all:
The argument that the Sixth Amendment, as originally understood, requires a jury to find the facts supporting an order of restitution depends upon the proposition that the Sixth Amendment requires a jury to find the facts on which a sentence of imprisonment is based. That latter proposition is supported by decisions of this Court, see United States v. Booker, 543 U. S. 220, 230–232 (2005); Apprendi v. New Jersey, 530 U. S. 466, 478 (2000), but it represents a questionable interpretation of the original meaning of the Sixth Amendment, Gall v. United States, 552 U. S. 38, 64–66 (2007) (ALITO, J., dissenting). Unless the Court is willing to reconsider that interpretation, fidelity to original meaning counsels against further extension of these suspect precedents
JAT Further Offerings:

1.  For more on restitution in tax cases, see DOJ CTM 44.00 Restitution in Tax Cases, here.  Key excerpts:
Accordingly, in tax cases, the applicable statutes provide the following: (1) for tax offenses prosecuted under Title 18, restitution is mandatory and is ordered as an independent part of the sentence; and (2) for tax offenses prosecuted under Title 26, restitution is discretionary and is ordered as a condition of supervised release, but the defendant can agree to (and plea agreements should provide for) restitution ordered as an independent part of the sentence. 
Section 209 of the Mandatory Victims Restitution Act mandates that when negotiating plea agreements, prosecutors must give consideration “to requesting that the defendant provide full restitution to all victims of all charges contained in the indictment or information, without regard to the counts to which the defendant actually plead[s].” Pub. L. No. 104-132 § 209; 18 U.S.C. § 3551 note; see also Attorney General Guidelines for Victim and Witness Assistance, Art. V(D) (May 2012); Principles of Federal Prosecution, USAM §§ 9-16.320. To assist prosecutors with this statutory and Department requirement, standard language for the restitution portion of plea agreements in tax cases is included in § 44.09, infra. 
* * * * 
44.02[2] The VWPA and Plea Agreements 
 The VWPA also provides that district courts may order restitution “in any criminal case to the extent agreed to by the parties in a plea agreement.” 18 U.S.C. § 3663(a) (3). Thus, as part of a plea agreement in any criminal case (including pure Title 26 criminal tax cases), a defendant may agree to pay restitution. 18 U.S.C. § 3663(a)(3); see United States v. Anderson, 545 F.3d 1072, 1077-78 (D.C. Cir. 2008); United States v. Firth, 461 F.3d 914, 920 (7th Cir. 2006). In order for the district court to order restitution agreed to in a plea agreement, however, the plea agreement must clearly contemplate such an order. See United States v. Gottesman, 122 F.3d 150, 151-52 (2d Cir. 1997). As the Second Circuit put it in Gottesman, “[n]ot to put too fine a point on it (as Snagsby was wont to say in Bleak House), it would seem self-evident that for a court to order restitution under § 3663(a)(3), the plea agreement might be expected to mention the word ‘restitution.’” 122 F.3d at 151-52. 
More detailed discussions are contained in other sections of the CTM.  (The USAM is now the US Justice Manual, with the same sections.

2.  A reminder for students and practitioners that restitution for tax is assessed by the IRS as a tax without further predicate requirements (such as notices  of deficiency) and the assessment cannot be challenged.  See § 6201(a)(4).  See Excellent Presentation on Restitution in Tax Crimes Cases (Federal Tax Crimes Blog 5/20/18), here, which offers a recent slide presentation.

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