12-5106 (L) United States v. Maynard and Ludwig **UNITED STATES COURT OF APPEALS** 1 2 **FOR THE SECOND CIRCUIT** 3 4 August Term, 2013 5 6 7 (Argued: November 21, 2013 Decided: February 24, 2014) 8 9 Docket Nos. 12-5106 (Lead), 12-5124 (Con) 10 11 - - - - - - - - - - - - - - - - - - - -x 12 13 UNITED STATES OF AMERICA, 14 15 Appellee , 16 17 - v.- 18 19 JOHN W. MAYNARD and JILL M. LUDWIG, 20 21 Defendants-Appellants

. 22 23 - - - - - - - - - - - - - - - - - - - -x 24 25 Before: KEARSE, JACOBS, and PARKER, Circuit 26 Judges

. 27 28 John Maynard and Jill Ludwig appeal from judgments of 29 the United States District Court for the District of Vermont 30 (Reiss, C.J. ) requiring them to pay restitution after a 31 series of bank robberies. Maynard and Ludwig contest paying 32 a bank’s expenses other than the money taken in the robbery. 33 We vacate the restitution component of the judgments and 34 remand to redetermine restitution. 35 36STEVEN L. BARTH, on behalf of 1 Michael L. Desautels, Federal 2 Public Defender for the District 3 of Vermont, Burlington, Vermont, 4 forAppellant John W. Maynard. 5 6 NANCY J. WAPLES, Hoff Curtis, 7 Burlington, Vermont, for 8 Appellant Jill M. Ludwig. 9 10 WILLIAM B. DARROW (Paul J. Van 11 de Graaf, on the brief ), on 12 behalf ofTristram J. Coffin, 13 United States Attorney for the 14 District of Vermont, Burlington, 15 Vermont, forAppellee. 16 17 DENNIS JACOBS, Circuit Judge : 18 19 John Maynard and Jill Ludwig appeal the restitution 20 component of judgments entered following their guilty pleas 21 on a series of bank robberies. Pursuant to the Mandatory 22 Victims Restitution Act of 1996 (“MVRA”), Pub. L. No. 104- 23 132, 110 Stat. 1214 (codified at 18 U.S.C. §§ 3663-64), the 24 United States District Court for the District of Vermont 25 (Reiss, C.J. ) imposed restitution in an amount consisting of 26 the money taken in the robberies and additional expenses 27 incurred by one of the victim banks. Maynard and Ludwig 28 object only to restitution for these additional expenses as 29 falling outside the provisions of the MVRA. For the 30 following reasons, we vacate the restitution component of 31 the judgments and remand to the district court. 32

2**BACKGROUND** 1 Maynard and Ludwig robbed five banks between September 2 and November 2011. 1Each time, one of the two entered the 3 bank alone, passed a note to the teller claiming possession 4 of a gun, and demanded money. Each robbery lasted only a 5 few minutes. Nobody was harmed. 6 The couple was arrested hours after the last robbery on 7 November 2, 2011. They were indicted on three bank-robbery 8 counts and one count of conspiracy. Ludwig pled guilty on 9 August 16, 2012 to one charge of bank robbery in violation 10 of 18 U.S.C. § 2113(a). The next month, Maynard pled guilty 11 to conspiracy in violation of 18 U.S.C. § 371. The two were 12 sentenced in December 2012. 13 In the sentencing phase, the Government sought 14 restitution under the MVRA, pursuant to 18 U.S.C. § 3663A. 15 More than half of the proposed restitution ($12,966) was to 16 repay the money taken during the robberies, and is 17 uncontested on appeal. The rest included certain expenses 18 paid by Merchants Bank, of which the following are the 19

1The date and place of the robberies are: 1) Merchants Bank, Rutland, Vt. on Sept. 7, 2011; 2) Lake Sunapee Bank, West Rutland, Vt. on Oct. 7, 2011; 3) TD Bank, Granville, N.Y. on Oct. 25, 2011; 4) TD Bank, Granville, N.Y. on Oct. 29, 2011; and 5) Citizens Bank, Poultney, Vt. on Nov. 2, 2011. 3subject of this appeal: 1) paid time-off for the bank’s 1 regular staff, and the pay of replacement staff ($7,991.68); 2 2) mileage expenses for the replacement staff ($213.34); 3) 3 the cost of wanted posters ($106.66); and 4) the cost of a 4 temporary security guard at the bank after the robbery 5 ($574.52). 6 At separate sentencing hearings, the Merchants Bank 7 teller testified about the anxiety and emotional harm she 8 suffered as a result of being held up. At Maynard’s hearing 9 only, the bank’s security officer, Robert O’Neill, testified 10 that the regular staff was sent home the day of the robbery 11 because the bank was a crime scene, and that the bank did 12 not reopen until it was released by law enforcement at the 13 end of the day. On the two days following, the bank 14 operated with temporary replacements while the regular staff 15 was given paid leave to handle any trauma associated with 16 the robbery. He explained that this was the bank’s usual 17 practice, and that taking care of employees in that way 18 served a business purpose. 19 Maynard and Ludwig contested the inclusion of the 20 bank’s expenses in the restitution order. The court found, 21 however, that the expenses claimed could be compensated 22

4because they were directly and proximately caused by the 1 robbery. The couple was sentenced, inter alia , to pay 2 restitution in the amount of $21,852.20 jointly and 3 severally. This amount included the expenses incurred by 4 Merchants Bank listed above. 5 6
**DISCUSSION** 7 While the MVRA serves the broad policy purpose of 8 assisting the victims of crime, it also enumerates the 9 specific losses compensable in a mandatory restitution 10 order. Maynard and Ludwig argue that Merchants Bank’s 11 expenses are not subject to restitution because they are not 12 among these enumerated harms. 13 14

**I** 15 Prior to 1982, federal courts were not permitted to 16 order restitution outside the probation context. SeeUnited 17
States v. Amato , 540 F.3d 153, 159 (2d Cir. 2008). The 18 Victim and Witness Protection Act of 1982 (“VWPA”), Pub. L. 19 No. 97-291, 96 Stat. 1248 (currently codified, as amended by 20 the MVRA, at 18 U.S.C. § 3663), afforded courts discretion 21 to impose restitution for specified kinds of harm. See 22
Amato , 540 F.3d at 159. 23

5The victims’ rights movement later inspired a review of 1 the judiciary’s use of restitution. In 1996, Congress 2 passed the MVRA to help victims and to hold offenders 3 accountable for the losses they inflict. 2SeeS. Rep. No. 4 104-179, at 17-18 (1995). 5 The MVRA made restitution mandatory for a broad swath 6 of offenses. 3See18 U.S.C. §§ 3663A(a)(1), (c). The 7 purpose of the MVRA “is to make victims of crime whole, to 8 fully compensate these victims for their losses and to 9 restore these victims to their original state of well10 being.” United States v. Boccagna , 450 F.3d 107, 115 (2d 11 Cir. 2006) (quoting United States v. Simmonds , 235 F.3d 826, 12 831 (3d Cir. 2000)) (internal quotation marks omitted). 13 When the MVRA controls, a court “shall require” the 14 defendant to pay restitution for the harms listed in the 15 statute. 18 U.S.C. § 3663A(b). 4No other expense 16

2While the MVRA started out as a separate bill, it was later placed within the Antiterrorism and Effective Death Penalty Act of 1996, Pub. L. No. 104-132, 110 Stat. 1214.

3The parties agree that the MVRA applies here because a bank robbery is a “crime of violence” under 18 U.S.C. § 3663A(c).

4The full text of 18 U.S.C. § 3663A(b) states: The order of restitution shall require that such defendant–-

61 (1) in the case of an offense resulting in damage to or loss or destruction of property of a victim of the offense–- (A) return the property to the owner of the property or someone designated by the owner; or (B) if return of the property under subparagraph (A) is impossible, impracticable, or inadequate, pay an amount equal to–- (i) the greater of–- (I) the value of the property on the date of the damage, loss, or destruction; or (II) the value of the property on the date of sentencing, less (ii) the value (as of the date the property is returned) of any part of the property that is returned; (2) in the case of an offense resulting in bodily injury to a victim–- (A) pay an amount equal to the cost of necessary medical and related professional services and devices relating to physical, psychiatric, and psychological care, including nonmedical care and treatment rendered in accordance with a method of healing recognized by the law of the place of treatment; (B) pay an amount equal to the cost of necessary physical and occupational therapy and rehabilitation; and (C) reimburse the victim for income lost by such victim as a result of such offense; (3) in the case of an offense resulting in bodily injury that results in the death of the victim, pay an amount equal to the cost of necessary funeral and related services; and

7reimbursement is made mandatory. There is no provision in § 1 3663A giving the district court discretion to order any 2 other restitution. 3 The broad scope of the MVRA is subject to some 4 limitations. Only a ‘victim’ (or the victim’s estate) is 5 entitled to restitution. See18 U.S.C. § 3663A(a)(1). The 6 term ‘victim’ is defined as “a person directly and 7 proximately harmed as a result of the commission of an 8 offense for which restitution may be ordered.” 18 U.S.C. § 9 3663A(a)(2). This causation principle also governs the 10 calculation of reimbursable loss. SeeUnited States v. 11 Gushlak , 728 F.3d 184, 194-95 (2d Cir. 2013). And only a 12 victim’s “actual loss” is compensable, not losses that are 13 hypothetical or speculative. Id.at 195. 14 “The procedures by which the sentencing court imposes a 15 restitution order are set forth in 18 U.S.C. § 3664.” 16 United States v. Marino , 654 F.3d 310, 317 (2d Cir. 2011); 17 see also18 U.S.C. § 3663A(d). Among other things, this 18 section prevents restitution from being conditioned or 19

(4) in any case, reimburse the victim 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. 8limited by a defendant’s ability to pay: “In each order of 1 restitution, the court shall order restitution to each 2 victim in the full amountof each victim’s losses as 3 determined by the court and without consideration of the 4 economic circumstances of the defendant.” 18 U.S.C. § 5 3664(f)(1)(A) (emphasis added). 6
7

**II** 8 The decisive issue on this appeal is whether expenses 9 other than those enumerated in § 3663A(b) are compensable 10 under the MVRA. We conclude they are not. 11 “We begin our interpretation of a federal statute with 12 the statutory text.” City of New York v. Permanent Mission 13 of India to the United Nations , 618 F.3d 172, 182 (2d Cir. 14 2010). It is apparent from the text of § 3663A that 15 unlisted harms are not compensable in restitution. Because 16 courts have no inherent authority to order restitution, 17 Congress must provide the authority. SeeUnited States v. 18
Casamento , 887 F.2d 1141, 1177 (2d Cir. 1989). Congress did 19 so through the MVRA, but chose to include only the four 20 categories of harms listed in § 3663A(b). If Congress 21 intended to include all harms directly and proximately 22

9caused by a defendant’s offense, it could have done so with 1 wording more simple and categorical. “Applying the rule of 2 statutory construction ‘ inclusio unius est exclusio 3 alterius ’--that to express or include one thing implies the 4 exclusion of the other”--it follows that Congress intended 5 to limit the restitutable harms covered by the MVRA. United 6 States v. Tappin, 205 F.3d 536, 540 (2d Cir. 2000). 7 The Government’s reliance on the statutory mandate to 8 impose restitution “in the full amount of each victim’s 9 losses,” 18 U.S.C. § 3664(f)(1)(A), is misplaced. The MVRA 10 provides that § 3664 is procedural rather than substantive. 11
See18 U.S.C. § 3663A(d); see alsoUnited States v. Cliatt , 12 338 F.3d 1089, 1093 (9th Cir. 2003) (stating § 3664 cannot 13 trump substantive restitution provisions because it is only 14 a procedural mechanism). Furthermore, the context of this 15 clause is that the “full amount” of loss be determined 16 “without consideration of the economic circumstances of the 17 defendant.” 18 U.S.C. § 3664(f)(1)(A). The provision 18 emphasizes only that courts may not decrease restitution to 19 account for the defendant’s ability to pay. Taken thus in 20 context, this clause cannot serve as the Government’s 21 springboard for restitution more broad than the text 22 specifies. 23

10The Government seems to suggest that any and all losses 1 are compensable to the extent that they were ‘directly and 2 proximately’ caused by a defendant’s offense. However, the 3 requirements of direct and proximate causation, see, e.g. , 4 Marino , 654 F.3d at 317, are necessary conditions for 5 restitution under the MVRA–-not sufficient ones. As the 6 statute makes clear, the harm must also come within one of 7 the categories enumerated in §3663A(b). 8 The Government’s cases do not support a broader 9 application of the MVRA. Many are mere applications of § 10 3663A(b)(1), which allows reimbursement for property loss. 11 See, e.g. , United States v. Qurashi , 634 F.3d 699, 702-05 12 (2d Cir. 2011) (allowing prejudgment interest for funds paid 13 out of life insurance funds to ensure the victim received 14 the “full amount” of their losses); United States v. Donaby, 15 349 F.3d 1046, 1051-55 (7th Cir. 2003) (damage to police car 16 in chase after bank robbery). 17 18

**III** 19 We now consider whether the specific costs incurred by 20 Merchants Bank fall within the enumerated harms of § 21 3663A(b). 22 23

11**A** 1 In the wake of the robbery, the bank was closed as a 2 crime scene for the afternoon, and the bank’s regular staff 3 stayed home the following two days to get over any stress 4 caused by the incident. The district court ordered Maynard 5 and Ludwig to pay restitution for the full amount of the 6 wages paid to the regular staff over this period of time. 7 However, given the goal of restoring victims “to their 8 original state of well-being,” Boccagna , 450 F.3d at 115 9 (internal quotation marks omitted), we need to take into 10 account that the bank would have paid the regular staff in 11 any event. Thus, the bank would enjoy a windfall if it 12 recovered compensation for the full amount of the regular 13 staff and replacement staff wages. 14 A portion of the regular staff wages is nevertheless 15 compensable because the bank derived no benefit from the 16 wages paid during the bank’s closure on the day of the 17 robbery. When a victim’s facility is required to close 18 temporarily for crime scene investigation, the associated 19 costs may well fall under the MVRA. See, e.g. , United 20 States v. Wilfong , 551 F.3d 1182, 1183-87 (10th Cir. 2008) 21 (lost work time due to evacuation after bomb threat); United 22

12States v. Quillen , 335 F.3d 219, 222-23 (3d Cir. 2003) 1 (closing mailroom due to contamination from anthrax); United 2
States v. De La Fuente , 353 F.3d 766, 768, 771-73 (9th Cir. 3 2003) (lost work hours for postal service employees during 4 decontamination resulting from receipt of a threatening 5 letter said to contain anthrax). To the extent the bank 6 paid its regular staff for the remainder of that day, 7 restitution is proper. 8 9

**B** 10 The wages for the temporary staff do not fall within 11 the enumerated harms of § 3663A(b). The temporary staff 12 wages did not compensate for losses such as destruction of 13 property or funeral expenses, and were not necessary to the 14 prosecution or investigation of the offense. See18 U.S.C. 15 § 3663A(b)(1), (3)-(4). The expense is arguably 16 attributable to the psychological recovery of the regular 17 staff present during the robbery; however, the MVRA 18 unambiguously limits recovery for psychological harm to 19 instances of “bodily injury.” 18 U.S.C. § 3663A(b)(2); see 20 alsoUnited States v. Reichow, 416 F.3d 802, 805-06 (8th 21 Cir. 2005). The Government characterizes the wages as a 22

13business expense absorbed by the bank, but the MVRA does not 1 include a business expense category. Because the temporary 2 staff wages fall outside the enumerated harms of § 3663A(b), 3 they may not be included in a restitution order. 5 4 The Government adduces cases in which loss of income 5 has been compensated after a robbery. The summary order 6 issued in United States v. Blagojevic , 331 F. Appx. 791, 794 7 (2d Cir. 2009), allowed restitution for lost income when the 8 owner of a jewelry store closed the store during peak season 9 due to trauma suffered from a robbery. But Blagojevicwas 10 decided on the plain error standard of review; the only 11 appellate issue was proximate causation, id.at 793-94; and 12 the order did not consider the types of harms compensable 13 under § 3663A. (On the whole, the case is a good example of 14 why summary orders lack precedential force.) The Government 15 also cites United States v. Tran , in which a teller who was 16 unable to work after a bank robbery was awarded restitution 17 for lost income. 234 F.3d 798, 804 (2d Cir. 2000), 18 overruled on other grounds by United States v. Thomas , 274 19 F.3d 655 (2d Cir. 2001) (in banc). However, the defendant 20

5Because we hold that the award for temporary staff wages was improper, it follows that the mileage expense for the temporary staff is likewise not allowable. 14challenged only the payment plan and not “the imposition of 1 restitution.” Id.at 812-13. 2 3
**C** 4 The only category of allowable expense in which the 5 wanted posters and the temporary security guard might be 6 located is § 3663A(b)(4), which requires defendants to 7 “reimburse the victim for . . . necessary . . . expenses 8 incurred during participation in the investigation or 9 prosecution of the offense or attendance at proceedings 10 related to the offense.” 18 U.S.C. § 3663A(b)(4) (emphasis 11 added). 12 We have not adopted a test for necessity in this 13 context. Our reading of a statutory text “‘necessarily 14 begins with the plain meaning of a law’s text and, absent 15 ambiguity, will generally end there.’” Dobrova v. Holder , 16 607 F.3d 297, 301 (2d Cir. 2010) (quoting Bustamante v. 17 Napolitano , 582 F.3d 403, 406 (2d Cir. 2009)) (internal 18 quotation mark omitted). “In conducting such an analysis, 19 we ‘review the statutory text, considering the ordinary or 20 natural meaning of the words chosen by Congress, as well as 21 the placement and purpose of those words in the statutory 22

15scheme.’” Id.(quoting United States v. Aguilar , 585 F.3d 1 652, 657 (2d Cir. 2009)). The dictionary definition of 2 “necessary” tends to be circular: essential or 3 indispensable. See10 The Oxford English Dictionary 275-76 4 (2d ed. 1989) (defining “necessary” as “indispensable, 5 requisite, essential, needful; that cannot be done 6 without”). But the plain meaning is not obscure. The 7 victim expenses that are recoverable as restitution under 18 8 U.S.C. § 3663A(b)(4) are expenses the victim was required to 9 incur to advance the investigation or prosecution of the 10 offense. 11 Generally, this Circuit takes a broad view of what 12 expenses are “necessary.” SeeUnited States v. Papagno , 639 13 F.3d 1093, 1101 (D.C. Cir. 2011) (citing Amato , 540 F.3d 14 153) (“In reaching our conclusion, we recognize that several 15 other courts of appeals have taken a broader view of the 16 restitution provision at issue here.”). But respect for the 17 limits of the statute is not a narrowing of it. 18 Two of our cases reflect the standard of necessity. 19
Amatoimposed restitution for attorney’s fees and accounting 20 costs incurred by an internal investigation that uncovered 21 fraud--notwithstanding that not all of the effort and 22

16expense was requested by the government. See540 F.3d at 1 159-60, 162 (noting that the victim had “assisted in 2 gathering and producing evidence necessary to the 3 government’s prosecution”). Likewise, in United States v. 4 Bahel , we affirmed restitution for legal fees incurred when 5 the United Nations hired outside counsel to conduct an 6 internal investigation rather than use on-staff lawyers. 7
See662 F.3d 610, 647-48 (2d Cir. 2011). 8 In both cases, the internal investigations paid for by 9 the victims unmasked fraud and led to investigations 10 conducted by the authorities. The expense of the internal 11 investigations was necessary because the entity had 12 interests to protect (the integrity of its ongoing 13 operations and reputation, at the least) as well as a duty 14 to protect those interests when faced with evidence, 15 indicia, or a grounded suspicion of internal misconduct, and 16 the investigation was a means calculated to achieve the 17 protection of those interests. 18 A bank’s production of wanted posters after a robbery 19 has occurred is by comparison, and in absolute terms, 20 gratuitous. The crime had been committed; there was no 21 especial likelihood that this bank would again be the victim 22

17of the same robbers; the police had an ongoing investigation 1 and did not seek the bank’s cooperation in postering the 2 neighborhood; and the bank had no interest to protect by an 3 independent investigatory effort--and certainly had no duty 4 to undertake it. 5 For many of the same reasons, the security guard served 6 no investigatory purpose. The guard provided additional 7 security for the bank after the robbery happened. If 8 additional security had been laid on permanently, it would 9 be necessitated by permanent security interests rather than 10 by the conduct of these defendants. As it happens, the 11 guard was hired on a short-term basis; but there is no 12 plausible showing that a second robbery of this branch by 13 these defendants was such an imminent peril or a risk that 14 the bank had a duty to take measures by posting a temporary 15 guard. 16 Because these expenses were not necessary to the 17 investigation or prosecution of the offense, and do not fall 18 within one of the other categories of harm enumerated in § 19 3663A(b), restitution for these expenses was improper. 20 21 22

18**CONCLUSION** 1 The restitution order properly included the amount of 2 money stolen during the bank robberies. For the foregoing 3 reasons, however, we conclude that the only portion of 4 Merchants’ expenses subject to restitution is the amount 5 paid to the bank’s regular staff while the bank was closed 6 as a crime scene. To that end, we vacate the restitution 7 component of the judgments and remand to determine the 8 amount of restitution consistent with this opinion. 9

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