Title: Commonwealth v. Henry
Citation: N/A
Docket Number: SJC-11965
State: Massachusetts
Issuer: Massachusetts Supreme Court
Date: August 8, 2016

NOTICE:  All slip opinions and orders are subject to formal 
revision and are superseded by the advance sheets and bound 
volumes of the Official Reports.  If you find a typographical 
error or other formal error, please notify the Reporter of 
Decisions, Supreme Judicial Court, John Adams Courthouse, 1 
Pemberton Square, Suite 2500, Boston, MA, 02108-1750; (617) 557-
1030; SJCReporter@sjc.state.ma.us 
 
SJC-11965 
 
COMMONWEALTH  vs.  KIM HENRY. 
 
 
 
Essex.     February 10, 2016. - August 8, 2016. 
 
Present:  Gants, C.J., Spina, Cordy, Botsford, Duffly, Lenk, & 
Hines, JJ. 
 
 
 
Restitution.  Practice, Criminal, Probation, Restitution.  
Supreme Judicial Court, Superintendence of inferior courts. 
 
 
 
 
Complaint received and sworn to in the Salem Division of 
the District Court Department on November 7, 2013.  
 
 
A proceeding to determine restitution was had before 
Michael C. Lauranzano, J. 
 
 
The Supreme Judicial Court granted an application for 
direct appellate review.  
 
 
 
Rebecca Kiley, Committee for Public Counsel Services, for 
the defendant. 
 
Kenneth E. Steinfield, Assistant District Attorney, for the 
Commonwealth. 
 
Matthew R. Segal & Jessie J. Rossman, for the American 
Civil Liberties Union Foundation of Massachusetts, amicus 
curiae, submitted a brief. 
 
 
2 
 
 
 
GANTS, C.J.  This case presents two issues on appeal:  
first, whether a defendant's ability to pay should be considered 
by a judge in deciding whether to order restitution as a 
condition of probation and in deciding the amount of any such 
restitution; and second, where goods are stolen from a retail 
store, whether the amount of the victim's actual economic loss 
for purposes of restitution is the replacement value or the 
retail sales value of the stolen goods.  As to the first issue, 
we hold that in determining whether to impose restitution and 
the amount of any such restitution, a judge must consider a 
defendant's ability to pay, and may not impose a longer period 
of probation or extend the length of probation because of a 
defendant's limited ability to pay restitution.  As to the 
second issue, we hold that, in cases of retail theft, the amount 
of actual economic loss for purposes of restitution is the 
replacement value of the stolen goods unless the Commonwealth 
proves by a preponderance of the evidence that the stolen goods 
would otherwise have been sold, in which case the retail sales 
value is the better measure of actual loss.1   
 
Background.  The defendant was employed as a cashier at a 
Walmart department store in Salem.  A Walmart video camera 
captured the defendant "free-bagging" items; that is, with 
                                                          
 
 
1 We acknowledge the amicus brief submitted by the American 
Civil Liberties Union of Massachusetts. 
3 
 
 
certain customers, she placed some store items into bags without 
scanning the items at the cash register, so that these customers 
received these items without paying for them.  As a result, in 
November, 2013, a complaint issued in the Salem Division of the 
District Court Department alleging that the defendant stole the 
property of Walmart having a value of more than $250 pursuant to 
a single larcenous scheme on various dates between July 20 and 
September 4, 2013, in violation of G. L. c. 266, § 30 (1).  In 
April, 2014, the defendant admitted to facts sufficient to 
warrant a finding of guilty, and the judge continued her case 
without a finding for eighteen months, with restitution to be 
determined at a later date.2  The defendant was placed on 
administrative probation for eighteen months, with a special 
condition that she have no contact with Walmart.  
 
At a restitution hearing in September, 2014, the defendant 
stipulated that the loss to Walmart was $5,256.10, and a judge 
(who was not the plea judge) ordered that restitution in that 
amount be paid.  However, in October, 2014, the defendant filed 
a motion to revise and revoke the order of restitution, which 
                                                          
 
 
2 The defendant recommended that her case be continued 
without a finding for eighteen months.  The prosecutor 
recommended that a guilty finding be entered, that she be placed 
on probation for a period of two years, and that she be ordered 
as a condition of probation to pay Walmart $5,256.10 in 
restitution.  The defendant accepted the judge's disposition 
even though it exceeded her recommendation.  See G. L. c. 278, 
§ 18. 
4 
 
 
was allowed, and a new restitution hearing was held in November, 
2014, before yet another judge.  At this evidentiary hearing, 
the Commonwealth offered testimony from Ronald Capistran, the 
loss protection manager at the Salem Walmart, who calculated 
that the retail sales price of the items stolen totaled 
$5,256.10.  He estimated that the "markup" on most of the items 
sold in the store was "somewhere between [seven per cent] and 
probably [fifteen per cent]" but, in a rare case, "it could be 
[fifty]" per cent.  The defendant testified that she was 
"discharged" from Walmart in September, 2013, after working 
there as a cashier for nearly twelve years.  She received 
unemployment benefits for approximately three months following 
her termination, but was found ineligible for such benefits 
after a department of unemployment assistance hearing and was 
ordered to reimburse the Commonwealth for the benefits she had 
received.  At the time of the restitution hearing, she had been 
unable to find employment and had no income or government 
assistance of any kind.  She had been evicted from her apartment 
and was staying with someone, but not paying rent.  She 
testified that she "free-bagged" the items only for friends, and 
received only fifty dollars once for having done so.   
 
The prosecutor argued that restitution should be based on 
the retail sales value of the items stolen because the theft was 
at the point of sale, and Walmart was deprived of the value of 
5 
 
 
the goods that should have been paid by the customer.  The 
prosecutor also argued that the amount of restitution should not 
be reduced based on the defendant's inability to pay because the 
defendant "by her actions created her inability to pay in that 
she was fired from a job by stealing."  The defendant argued 
that the actual loss to Walmart is the replacement cost of the 
stolen goods, not their retail price, because Walmart is not 
entitled to recover in restitution for its lost profits.  The 
defendant also argued that she should not be ordered to pay 
restitution because she was financially unable to pay, noting 
that, if ordered to pay "any figure remotely near" the amount of 
restitution sought, she will be in violation of her probation 
because of her inability to pay.  The judge declared that the 
loss is measured by the retail loss and ordered that restitution 
in the amount of $5,256 be paid during the period of probation 
at a rate to be determined by the probation department.3  The 
defendant timely appealed from this order, and we allowed the 
defendant's application for direct appellate review. 
 
Discussion.  A judge may order a defendant to pay 
restitution to the victim as a condition of probation provided 
that the "[r]estitution is limited to economic losses caused by 
the defendant's conduct and documented by the victim."  
                                                          
 
 
3 The judge waived the probation supervision fee and the 
indigent counsel fee. 
 
6 
 
 
Commonwealth v. McIntyre, 436 Mass. 829, 833-834 (2002).  See 
Commonwealth v. Nawn, 394 Mass. 1, 6 (1985) ("There is no 
question that restitution is an appropriate consideration in a 
criminal sentencing").  "The procedure used to determine the 
amount of restitution or reparation must be reasonable and 
fair."  Id. at 6-7.  The prosecution should disclose prior to 
the hearing the amount of restitution it seeks.  Id. at 7, 
citing People v. Gallagher, 55 Mich. App. 613, 620 (1974).  
Where the defendant does not stipulate to the amount, the judge 
should conduct an evidentiary hearing at which "the Commonwealth 
bears the burden of proving by a preponderance of the evidence 
the amount of the victim's losses."  Nawn, 394 Mass. at 7-8.  At 
such a hearing, the victim may testify regarding the amount of 
the loss, and the defendant may cross-examine the victim, with 
such cross-examination limited to the issue of restitution.  Id. 
at 8.  The defendant may rebut the victim's estimate of the 
amount of loss with expert testimony or other evidence.  Id. at 
7.   
 
1.  Ability to pay.  In deciding whether to order 
restitution and, if so ordered, the amount, the judge should 
"consider whether the defendant is financially able to pay the 
amount ordered."  Nawn, 394 Mass. at 7, citing Model Sentencing 
and Corrections Act § 3-601(d), 10 U.L.A. 322 (Supp. 1984), and 
ABA Standards Relating to Probation § 3.2(d) (1970).  "The 
7 
 
 
amount of restitution is not merely the measure of the value of 
the goods and money stolen from the victim by the defendant; . . 
. the judge must also decide the amount that the defendant is 
able to pay and how such payment is to be made."  Nawn, supra at 
8-9.   
 
In practice, this means that, at the close of the 
evidentiary hearing, the judge must make two findings in 
deciding whether to order restitution as a condition of 
probation and, where ordered, the amount of restitution to be 
paid during the period of probation.  First, the judge must 
determine the amount of the victim's actual economic loss 
causally connected to the defendant's crime.  See McIntyre, 436 
Mass. at 834.  The Commonwealth bears the burden of proof as to 
this finding.  See Nawn, 394 Mass. at 7-8.  The order of 
restitution may not exceed this amount.  See Commonwealth v. 
Rotonda, 434 Mass. 211, 221 (2001).  Second, the judge must 
determine the amount the defendant is able to pay.  See Nawn, 
supra at 8-9.  Where a defendant claims that he or she is unable 
to pay the full amount of the victim's economic loss, the 
defendant bears the burden of proving an inability to pay.  See 
Commonwealth v. Porter, 462 Mass. 724, 732-733 (2012) (defendant 
bears burden of persuasion regarding indigency, in part because 
"[a] criminal defendant is the party in possession of all 
material facts regarding her own wealth and is asserting a 
8 
 
 
negative").  Cf. United States v. Fuentes, 107 F.3d 1515, 1532 
(11th Cir. 1997) (regarding restitution, "the defendant must 
establish her financial resources and needs by a preponderance 
of the evidence").      
 
We require a judge to consider the defendant's ability to 
pay when setting the restitution amount because a judge may 
order restitution in a criminal case only as a condition of 
probation, and therefore the collection of restitution is 
enforced by the threat or imposition of a criminal sanction for 
violation of a probation condition.  See Commonwealth v. Denehy, 
466 Mass. 723, 737 (2014); Commonwealth v. Goodwin, 458 Mass. 
11, 15 (2010).  Cf. G. L. c. 258B, § 3 (u) (victim shall be 
informed of "right to pursue a civil action for damages relating 
to the crime, regardless of whether the court has ordered the 
defendant to make restitution to the victim").  A defendant can 
be found in violation of a probationary condition only where the 
violation was wilful, and the failure to make a restitution 
payment that the probationer is unable to pay is not a wilful 
violation of probation.  See Commonwealth v. Canadyan, 458 Mass. 
574, 579 (2010) ("where there was no evidence of wilful 
noncompliance, a finding of violation of the condition of 
wearing an operable [global positioning system (GPS)] monitoring 
device was unwarranted, and is akin to punishing the defendant 
for being homeless"); Commonwealth v. Gomes, 407 Mass. 206, 212-
9 
 
 
213 (1990) (imposition of default costs permitted only when 
default is wilful).  Cf. Bearden v. Georgia, 461 U.S. 660, 669 
n.10 (1983) ("Numerous decisions by state and federal courts 
have recognized that basic fairness forbids the revocation of 
probation when the probationer is without fault in his failure 
to pay the fine" [footnote omitted]).   
 
To allow a judge to impose a restitution amount that the 
defendant cannot afford to pay simply dooms the defendant to 
noncompliance.  Such noncompliance may trigger a notice of 
probation violation even though a probationer cannot be found in 
violation for failing to pay a restitution amount that the 
probationer cannot reasonably afford to pay.  See Canadyan, 
supra; Gomes, supra.  Not only would a notice of violation under 
such circumstances waste the time of the court, but it imposes 
upon the blameless probationer the risk of an arrest on a 
probation warrant, of payment of a warrant fee, of being held in 
custody pending a hearing, and of probation revocation if the 
judge were to fail to recognize that inability to pay is a 
defense to the alleged violation.  See G. L. c. 276, § 87A; Fay 
v. Commonwealth, 379 Mass. 498, 504 (1980); Rule 3 of the 
District/Municipal Courts Rules for Probation Violation 
Proceedings, Mass. Ann. Laws Court Rules (LexisNexis 2015-2016).   
 
Burdening a defendant with these risks by imposing 
restitution that the defendant will be unable to pay violates 
10 
 
 
the fundamental principle that a criminal defendant should not 
face additional punishment solely because of his or her poverty.  
See Canadyan, supra; Gomes, supra at 212-213.  Cf. Bearden, 461 
U.S. at 668-669 ("if the probationer has made all reasonable 
efforts to pay the fine or restitution, and yet cannot do so 
through no fault of his own, it is fundamentally unfair to 
revoke probation automatically without considering whether 
adequate alternative methods of punishing the defendant are 
available" [footnote omitted]).  To avoid this unlawful result, 
we require the judge to consider the defendant's ability to pay 
when initially setting the restitution amount.4  See State v. 
Blank, 570 N.W.2d 924, 927 (Iowa 1997) ("A court's assessment of 
a defendant's reasonable ability to pay is a constitutional 
prerequisite for a criminal restitution order").  Cf. Fuentes, 
107 F.3d at 1529 ("Although a sentencing court may order 
restitution even if the defendant is indigent at the time of 
sentencing, . . . it may not order restitution in an amount that 
the defendant cannot repay").  
                                                          
 
 
4 Where, because of the defendant's limited ability to pay, 
the restitution amount is less than the victim's total economic 
loss, nothing bars the victim from filing a civil action and 
obtaining a judgment against the defendant for the full amount 
of the loss.  The victim may seek to collect on this judgment 
through a civil execution.  See Commonwealth v. Klein, 400 Mass. 
309, 311 (1987); Commonwealth v. Malick, 86 Mass. App. Ct. 174, 
178 (2014); Fidelity Mgt. & Research Co. v. Ostrander, 40 Mass. 
App. Ct. 195, 199 (1996).  See also G. L. c. 258B, § 3 (u). 
 
11 
 
 
 
A judge may not ignore a defendant's ability to pay in 
determining restitution under the rationale that, if the 
defendant were to violate the probation condition of payment of 
restitution because of an inability to pay, the judge would not 
revoke probation but would instead extend the period of 
probation to allow the defendant more time to pay.  Probation 
"serves as a disposition of and punishment for a crime; it is 
not a civil program or sanction" (emphasis in original).  
Commonwealth v. Cory, 454 Mass. 559, 566 (2009).  It punishes a 
defendant by ordering the defendant to comply with conditions 
deemed appropriate by the sentencing judge and, "[i]f a 
defendant violates one or more conditions of probation, a judge 
may revoke his probation and sentence him to a term of 
imprisonment for his underlying conviction, or return the 
defendant to probation, with new or revised conditions."  
Commonwealth v. Goodwin, 458 Mass. 11, 15 (2010). 
 
An extension of the period of probation punishes a 
defendant in two ways.  First, it extends the restrictions on a 
defendant's liberty arising from probation.  Under the general 
conditions of probation, a probationer may be required to report 
periodically to his or her probation officer, may not leave the 
State without permission, and must pay a monthly probation fee 
or, in lieu of payment, provide community service, unless 
payment is waived by the judge because of the order of 
12 
 
 
restitution.  See G. L. c. 276, § 87A; Commentary to Rules 2 and 
4 of the District/Municipal Courts Rules for Probation Violation 
Proceedings, Mass. Ann. Laws Court Rules, at 77-78, 86 
(LexisNexis 2015-2016).  A probation officer may search the home 
of a probationer by obtaining a warrant supported only by 
reasonable suspicion rather than probable cause.  See 
Commonwealth v. LaFrance, 402 Mass. 789, 792-793 (1988).  
Special conditions, where ordered, may impose further 
restrictions and obligations, such as drug and alcohol testing 
and evaluation, participation in treatment programs, GPS 
monitoring, and home confinement curfews.  See G. L. c. 276, 
§ 87A.   
 
Second, where a probationary period is extended, and a 
defendant commits a new crime during the extended period, the 
defendant, in addition to being convicted and sentenced for the 
new crime, can have his or her probation revoked and be 
sentenced anew on the conviction for which he or she was placed 
on probation.  See Goodwin, 458 Mass. at 17.  And probation may 
be revoked for the commission of a new crime based on proof by a 
preponderance of the evidence, so a defendant may be found not 
guilty at trial of committing the new crime where the evidence 
fell short of proof beyond a reasonable doubt but still have his 
or her probation revoked because a judge found it more likely 
than not that he or she committed the new crime.  See 
13 
 
 
Commonwealth v. Hartfield, 474 Mass. 474, 481-483 (2016).  Thus, 
extending the length of a probationary period because of a 
probationer's inability to pay subjects the probationer to 
additional punishment solely because of his or her poverty.  See 
Canadyan, 458 Mass. at 579; Gomes, 407 Mass. at 212-213.  We 
need not reach the question whether an extension of the length 
of probation in such circumstances violates the Massachusetts 
Declaration of Rights, because we invoke our superintendence 
power to declare that a judge may not extend the length of 
probation where a probationer violated an order of restitution 
due solely to an inability to pay. 5,6   
 
For the same reasons, equal justice means that the length 
of probation supervision imposed at the time of sentence should 
not be affected by the financial means of the defendant or the 
ability of the defendant to pay restitution.  See Superior Court 
                                                          
 
 
5 A judge remains free to revoke probation or extend the 
term of probation where a probationer violates a condition of 
probation by willfully failing to pay a restitution amount he or 
she had the ability to pay.  See Bearden v. Georgia, 461 U.S. 
660, 668 (1983) ("If the probationer has willfully refused to 
pay the fine or restitution when he has the means to pay, the 
State is perfectly justified in using imprisonment as a sanction 
to enforce collection"); .Commonwealth v. Avram A., 83 Mass. 
App. Ct. 208, 212-213 (2013). 
 
 
6 We acknowledge that extending the length of probation in 
such circumstances has not been recognized to be in violation of 
Federal constitutional law.  See Bearden, 461 U.S. at 674 (where 
defendant on probation is unable to pay fine, court may extend 
time for payment). 
 
14 
 
 
Working Group on Sentencing Best Practices, Criminal Sentencing 
in the Superior Court:  Best Practices for Individualized 
Evidence-Based Sentencing, at 15 (Mar. 2016) (Superior Court 
Best Practices for Sentencing) ("An extended period of 
supervision for the purpose of collecting money can be 
particularly troublesome since it necessarily means that greater 
burdens are imposed on poor offenders compared to those with 
economic resources").  To ensure that a defendant does not face 
a longer probationary period because of his or her limited 
means, the ability to pay determination should be made only 
after the judge has determined the appropriate length of the 
probationary period based on the amount of time necessary to 
serve the twin goals of rehabilitating the defendant and 
protecting the public.  See Cory, 454 Mass. at 567; Commonwealth 
v. Lapointe, 435 Mass. 455, 459 (2011).  See also State v. 
Farrell, 207 Mont. 483, 498-499 (1984) (to impose longer 
suspended sentence because of defendant's indigency in order to 
extend time to pay restitution would violate due process and 
fundamental fairness).  Cf. Superior Court Best Practices for 
Sentencing, supra ("probationary terms should generally be 
limited in duration, extending only long enough to facilitate a 
period of structured reintegration into the community").  Once 
the judge has determined the appropriate length of the 
probationary period, restitution may be a condition of probation 
15 
 
 
for the length of that period at the maximum monthly amount that 
the defendant is able to pay, provided the total amount does not 
exceed the actual loss.  The amount of restitution ordered 
should not exceed this monthly amount multiplied by the months 
of probation, even if that amount is less than the amount of 
financial loss sustained by the victim.  The monthly amount must 
be determined by the judge; it cannot be delegated to the 
probation department.  But the judge may be aided in that 
determination by the guidance of the probation department.7   
                                                          
 
 
7 For example, where a defendant has been found guilty of 
shoplifting and the judge determines that the economic loss to 
the victim is $5,000, the judge might decide that the 
defendant's risk of future criminal conduct is most effectively 
diminished by two years of treatment for the defendant's drug 
and mental health problems, and that the defendant should 
therefore be placed on supervised probation for two years, with 
special conditions of drug and mental health treatment.  Once 
the judge has decided on this two-year probationary period, the 
judge must then consider the defendant's ability to pay and 
determine the amount of restitution that the defendant is able 
to pay.  The judge might determine that, for example, the 
defendant has the ability to pay fifty dollars per month for 
each of the twenty-four months.  If the defendant successfully 
completes the probation period and meets the required monthly 
payments, the defendant's probation must be terminated, even 
though the defendant paid only $1,200 in restitution; probation 
may not be extended so that the victim may be paid the balance 
of $3,800.  The victim may initiate a civil action to recover 
the unpaid balance of economic loss.   
 
 
Where a judge determines that there is no reason to impose 
probation other than to collect restitution, a judge may impose 
a brief period of probation (e.g., thirty or sixty days) and 
determine how much of the economic loss the defendant is able to 
pay during that time period, and make that amount of restitution 
a condition of the brief period of probation. 
16 
 
 
 
The defendant may be required to report to his or her 
probation officer any change in the defendant's ability to pay, 
and the probation officer may petition the judge to modify the 
condition of probation by increasing or decreasing the amount of 
restitution due based on any material change in the 
probationer's financial circumstances.  See Goodwin, 458 Mass. 
at 18, quoting Buckley v. Quincy Div. of the Dist. Court Dep't, 
395 Mass. 815, 820 (1985) ("A judge may add or modify a 
probation condition that will increase the scope of the original 
probation conditions only where there has been a 'material 
change in the probationer's circumstances since the time that 
the terms of probation were initially imposed,' and where the 
added or modified conditions are not so punitive as to 
significantly increase the severity of the original probation"). 
Cf. United States Sentencing Commission Guidelines Manual 
§ 5B1.3(a)(7) (updated Nov. 2015) ("the defendant shall notify 
the court of any material change in the defendant's economic 
circumstances that might affect the defendant's ability to pay 
restitution"). 
 
Because we have not previously had the opportunity to 
articulate the legal standard for determining the defendant's 
ability to pay restitution, we do so here for the first time.  
In determining the defendant's ability to pay, the judge must 
consider the financial resources of the defendant, including 
17 
 
 
income and net assets, and the defendant's financial 
obligations, including the amount necessary to meet minimum 
basic human needs such as food, shelter, and clothing for the 
defendant and his or her dependents.  Cf. G. L. c. 261, § 27A 
(a) (defining "[i]ndigent" with respect to civil litigants who 
seek waiver of court fees as person who is "unable to pay the 
fees and costs of the proceeding in which he is involved or is 
unable to do so without depriving himself or his dependents of 
the necessities of life, including food, shelter, and 
clothing"); United States v. McGiffen, 267 F.3d 581, 589 (7th 
Cir. 2001), citing United States v. Embry, 128 F.3d 584, 586 
(7th Cir. 1997) (in determining whether defendant is financially 
able to contribute to cost of appointed counsel, judge must find 
"whether requiring the contribution would impose an extreme 
hardship on the defendant, whether it would interfere with his 
obligations to his family, and whether there were third parties 
with valid claims to the funds"); Museitef v. United States, 131 
F.3d 714, 716 (8th Cir. 1997) (test of inability to pay costs of 
appointed counsel "is whether repayment would cause such 
financial hardship as to make it impractical or unjust . . . . 
The ability to pay must be evaluated in light of the liquidity 
of the individual's finances, his personal and familial needs, 
or changes in his financial circumstances"); Model Penal Code:  
Sentencing § 6.04(2) (Proposed Official Draft 2012) ("The total 
18 
 
 
severity of economic sanctions imposed on an offender may never 
exceed the offender's ability to pay while retaining sufficient 
means for reasonable living expenses and existing family 
obligations").   
 
The payment of restitution, like any court-imposed fee, 
should not cause a defendant substantial financial hardship.  
See People v. Jackson, 483 Mich. 271, 275 (2009) (in determining 
defendant's ability to pay, judge must consider "whether the 
defendant remains indigent and whether repayment would cause 
manifest hardship").  Cf. S.J.C. Rule 3:10, § 10 (a), 475 
Mass.        (2016) ("The indigent counsel fee shall be waived 
where a judge, after the indigency verification process, 
determines that the party is unable without substantial 
financial hardship to pay the indigent counsel fee within 180 
days").  Restitution payments that would deprive the defendant 
or his or her dependents of minimum basic human needs would 
cause substantial financial hardship.  Where a defendant has 
been found indigent by the court for purposes of the appointment 
of counsel, a judge should consider carefully whether 
restitution can be ordered without causing substantial financial 
hardship.   
 
A judge may also consider a defendant's ability to earn 
based on "the defendant's employment history and financial 
prospects," Nawn, 394 Mass. at 9, but a judge may attribute 
19 
 
 
potential income to the defendant only after specifically 
finding that the defendant is earning less than he or she could 
through reasonable effort.  Cf. Child Support Guidelines (Aug. 
1, 2013) (allowing attribution of potential income "[i]f the 
Court makes a determination that either party is earning less 
than he or she could through reasonable effort"). 
 
2.  Order of restitution.  We now turn to the order of 
restitution in this case.  The judge here ordered restitution in 
the amount of the "retail loss" -- $5,256 -- even though the 
judge appeared to recognize that the defendant could not afford 
to pay that amount during the remaining period of her probation.8  
The judge did not set a monthly amount for the defendant to pay, 
but instead directed that the probation department set a payment 
schedule.  It was error for the judge to order restitution based 
only on the amount of loss, without considering whether the 
defendant was financially able to pay that amount during the 
remaining period of her probation.  It was also error for the 
                                                          
 
 
8 When the restitution hearing was conducted, the defendant 
had only approximately eleven months remaining on her eighteen-
month probation term.  The judge acknowledged that "you can't 
get blood out of a stone" and declared it "a sad case."  He said 
that he did not know whether "she can get a job somewhere at 
Dunkin' Donuts and pay it off that way."  He added, "I'm not 
sitting here feeling great about this, believe me.  I feel 
terrible. . . .  [B]ut a lot of that's on her. . . .  [I}t's 
tough.  I feel bad for her."   
 
20 
 
 
judge to delegate to the probation department the responsibility 
of establishing a payment schedule.   
 
The consequence of these errors demonstrates why it is so 
important that the ability to pay be considered in setting the 
amount of restitution.  Although the record does not reveal what 
payment schedule was established by the probation department, a 
notice of violation issued on May 11, 2015, for the defendant's 
failure to pay the required amount,9 and a warrant issued for her 
arrest when she failed to appear at the probation violation 
hearing on May 22.  The warrant was recalled on June 4, and she 
stipulated to a violation of her probation at a hearing on July 
15, where the judge restored her to the same terms and 
conditions of probation, but ordered her to make restitution 
payments of thirty dollars per month.  Although the defendant 
made the required monthly payments, on October 28, 2015, the day 
her probation was set to expire, the probation department issued 
a second notice of violation for her failure to pay the balance 
of her restitution, which the probation department calculated as 
$5,176.10  The probation hearing on that notice of violation has 
                                                          
 
 
9 The record on appeal reflects that the defendant made only 
two payments of five dollars for restitution.   
 
 
10 The Commonwealth correctly noted that this amount is in 
error, and that the amount of restitution due on that date was 
actually $5,126. 
 
21 
 
 
been continued in light of this pending appeal.11  If the 
defendant had not been poor, she could have afforded to pay the 
restitution in full before October 28, 2015, and would no longer 
have been subject after that date to the conditions of probation 
or the risk that a new crime might result in her being 
resentenced on her larceny from Walmart.  It was only because of 
her poverty that she was subject to the prolonged punishment of 
probation.     
 
3.  Calculation of amount of economic loss.  The defendant 
claims that the judge erred, not only in failing to consider her 
ability to pay, but also in calculating the amount of 
restitution as the retail price of the items stolen.  We earlier 
noted that the payment of restitution "is limited to economic 
losses caused by the defendant's conduct and documented by the 
victim."  McIntyre, 436 Mass. at 834.  Because the purpose of 
restitution is to reimburse the victim "for any economic loss 
caused by the defendant's actions," Rotonda, 434 Mass. at 221, 
the amount of restitution may not exceed the victim's actual 
loss.  See McIntyre, supra.  See also United States v. Ferdman, 
779 F.3d 1129, 1132 (10th Cir. 2015), quoting United States v. 
James, 564 F.3d 1237, 1243 (10th Cir. 2009) ("a district court 
may not order restitution in an amount that exceeds the actual 
                                                          
 
 
11 The record reflects that the defendant continued to make 
monthly restitution payments of thirty dollars at least through 
December, 2015. 
22 
 
 
loss caused by the defendant's conduct, which would amount to an 
illegal sentence constituting plain error"); United States v. 
Boccagna, 450 F.3d 107, 119 (2d Cir. 2006) ("Criminal 
restitution . . . is not concerned with a victim's disappointed 
expectations but only with [its] actual loss").  
 
Where items are stolen from a retail store, the actual loss 
to the victim is the replacement value of the items, that is, 
their wholesale price, unless the Commonwealth proves by a 
preponderance of the evidence that the items would have been 
sold were they not stolen, in which event the actual loss would 
be the retail price of the items.  See Ferdman, 779 F.3d at 1140 
(considering restitution in the context of retail theft and 
holding that, "unless the Government can show the defendant's 
crime depleted the stock of a particular fungible or readily 
replaceable good . . . at a time when the victim might otherwise 
have been able to sell that good to a willing buyer, something 
akin to replacement or wholesale cost clearly appears the more 
accurate measure of actual loss"); People v. Chappelone, 183 
Cal. App. 4th 1159, 1178-1179 (2010) (because prosecutor 
presented no evidence that store lost any sales of "mass-
produced consumer goods" that it "sold in abundance," judge 
erred in awarding restitution in amount of retail value rather 
than replacement cost); State v. Islam, 359 Ore. 796, 807 (2016) 
("[W]hen goods for sale are stolen from a retail seller and not 
23 
 
 
recovered, . . . the measure of 'economic damages' for the 
seller in a restitution proceeding is the same measure of 
damages that would be available to the seller in a tort action 
for conversion[:] . . . the reasonable market value of the goods 
converted at the time and place of conversion, and the market 
that determines that reasonable value is the market to which the 
seller would resort to replace the stolen goods, generally the 
wholesale market").  But see State v. Smith, 144 Idaho 687, 693 
(Ct. App. 2007) ("the district court did not err in calculating 
the amount of restitution owed for the property stolen . . . by 
using the ascertained retail value of that property").12   
 
Here, the record reflects that the theft occurred when the 
defendant's friends brought merchandise to her cashier counter, 
and that the defendant scanned some items and "free-bagged" 
others.  Although the record is silent as to how the defendant 
chose which items to "free-bag" and whether her friends knew in 
advance that she would "free-bag" particular items (or "free-
bag" any), the judge reasonably could have inferred from the 
circumstances of the theft that, had the defendant scanned these 
                                                          
 
 
12 The concurrence contends that we should declare the 
retail price to be the best measure of actual loss in order to 
avoid placing an "extra burden" on victim retailers who seek 
restitution.  Post at     .   A retailer should be able to 
ascertain the wholesale price of stolen items as easily as the 
retail price, and we do not think it unfair to require the 
victim retailer to show that it is more likely than not that the 
stolen items would have been sold to obtain the higher retail 
price as the measure of restitution. 
24 
 
 
items at her counter, the friends would have paid for them.  
Therefore, because these items were stolen, not from inventory, 
but after they were brought to the cashier's counter, the judge 
reasonably could have found by a preponderance of the evidence 
that these items would have been sold had they not been stolen, 
and that the retail price of the items was the appropriate 
measure of the victim's actual loss.  Although it is not plain 
that the judge applied this analysis in calculating the amount 
of restitution as the "retail loss," we conclude that the judge 
did not err in determining that the appropriate amount of the 
victim's actual loss in these circumstances was the aggregate 
retail price of the items stolen.   
 
Conclusion.  Because the judge erred in failing to consider 
the defendant's ability to pay in determining whether to order 
restitution and in determining the amount of restitution, we 
vacate the judge's restitution order and remand the case to the 
District Court for further proceedings consistent with this 
opinion. 
 
 
 
 
 
 
 
So ordered. 
 
 
 
CORDY, J. (concurring in part).  I agree that in setting an 
amount of restitution especially as a condition of a probation, 
a judge can and should take into account the likely ability of 
the defendant to pay that amount during the term of the 
probation imposed.  I disagree with the extra burden the court 
seems prepared to place on victims in establishing their 
economic loss in the context of thefts from a retail enterprise. 
 
It seems to me that the economic loss incurred in that 
context should be presumed to be the retail price of the goods 
stolen, an amount that can be readily ascertained and presented 
to the court at a restitution hearing.  See State v. Smith, 144 
Idaho 687, 693 (2007) (where retailer's items stolen, correct 
value for restitution will generally be retail market value of 
items).  
 
The court suggests, however, that store owner victims are 
only entitled to restitution based on the retail prices of the 
items stolen if they can affirmatively prove by a preponderance 
of the evidence that the specific items would have been sold at 
the retail price if they had not been stolen.  This is an 
unnecessary burden in the ordinary case, and the cases cited by 
the court in support of its proposition are far from ordinary.  
 
For example, in People v. Chappelone, 183 Cal. App. 4th 
1159 (2010), the victim was the Target department store, and the 
principal defendant was an employee responsible for seeing that 
2 
 
 
damaged items and merchandise withdrawn by manufacturers were 
taken off the sales floor and returned to the appropriate entity 
for credit (or sold for deeply discounted prices to charitable 
organizations).  Id. at 1163, 1165-1166.  The theft at issue 
involved large quantities of such items awaiting disposal from 
storage.  Id. at 1165. 
 
The court set restitution at $278,678, based on the full 
retail price of the goods.1  Id. at 1170.  On appeal, the Court 
of Appeal noted that the vast majority of stolen goods had in 
fact been recovered and returned to Target, and that the items, 
even before the theft, were identified by Target as damaged or 
otherwise not saleable at retail in any event.2  Id. at 1173-
1174.  In these circumstances, the Court of Appeal reasonably 
held that valuing the merchandise at its full retail price 
highly inflated its actual value, and the recovery of that 
amount would result in a windfall to Target.  Id. at 1178-1179.  
While the retail price was a "reasonable starting point the 
value should have been discounted to reflect the true nature of 
the goods."  Id. at 1175.  Consequently, the restitution order 
was vacated and the matter remanded for a further hearing. 
                                                          
 
 
1 This amount also included $44,000 in expenses incurred by 
the Target department store during the investigation.  People v. 
Chappelone, 183 Cal. App. 4th 1159, 1170 (2010). 
 
 
2 The merchandise was ultimately donated by Target to 
charities.  See id. at 1171. 
 
3 
 
 
 
The facts in United States v. Ferdman, 779 F.3d 1129 
(2015), are also exceptional.  The items at issue in that case 
were eighty-six cellular telephones that the defendant purchased 
at Sprint stores (fraudulently using various corporate accounts) 
for a "subsidized price" contingent on Sprint service 
agreements.  Id. at 1131, 1136.  The defendant then resold the 
telephones.  Id. 
 
The trial judge ordered restitution in an amount based on 
the full retail price that could have been charged to a customer 
purchasing the telephones without a service agreement.3  Id. at 
1131.  While the Appeals Court concluded that the trial court 
judge could ordinarily include lost retail sales and lost 
profits in a restitution order, the specific language of the 
Federal Mandatory Victims Restitution Act of 1996, as applied in 
this case, required more than just an unverified letter from 
Sprint stating that its losses were the full unsubsidized retail 
prices of the telephones, without any evidence from which the 
trial judge could infer that the defendant's theft caused the 
victim to lose actual retail sales at those prices.  Id. at 
1136-1137, 1139-1140. 
 
In sum, it is unnecessary in the present case to conclude 
anything other than that the retail price of goods stolen from a 
                                                          
 
 
3 This amount included apparently $3,300 in investigative 
costs incurred by Sprint.  See United States v. Ferdman, 779 
F.3d 1129, 1134 (2015). 
4 
 
 
retail store in the straightforward circumstances of this case 
was proper.