Opinion ID: 623664
Heading Depth: 1
Heading Rank: 2

Heading: Actual Loss to a Victim

Text: At sentencing, the government requested $1,401.44 in restitution payable to the State Lab. It based this request on a paper-thin evidentiary record, namely, the description of Haileselassie's offense conduct in his Presentence Investigation Report (PSR), to which there was no objection, plus Government Exhibit No. 1, a cost estimate from the State Lab reporting that its testing of the specimen received from the Bettendorf Police Department required eighteen hours of staff time valued at $1,325.44, and the use of $76 in consumables. Haileselassie opposed the award, arguing both that § 876(c) is not a crime of violence for restitution purposes, and that the expenses in question were merely the cost of government investigation, similar to lab expenses routinely incurred in prosecuting drug offenses. Without addressing this second contention, the district court ordered the full amount of restitution the government requested because Haileselassie's offense conduct was the direct cause of [the State Lab's] $1,401.44 expenditure for testing. Although for many years the issue was in doubt, it is now firmly established that a unit of government directly and proximately harmed by a qualifying offense can be awarded restitution under the MVRA. See, e.g., United States v. Senty-Haugen, 449 F.3d 862, 865 (8th Cir. 2006). Congress intended that restitution be a compensatory remedy from the victim's perspective. Therefore, government agencies, like private MVRA victims, should be limited to compensation for their actual losses. United States v. Petruk, 484 F.3d 1035, 1038 (8th Cir.2007). The government bears the burden of proof on these restitution issues. United States v. Chalupnik, 514 F.3d 748, 752 (8th Cir. 2008). At least two of our sister circuits have approved the award of restitution for costs the government incurred when a defendant created a legitimate fear that anthrax had been mailed or delivered to a government facility. United States v. De La Fuente, 353 F.3d 766 (9th Cir.2003); United States v. Quillen, 335 F.3d 219 (3d Cir.2003). We agree with those decisions. The cost of determining if an imminent threat to the safety of government workers or operations exists is a true involuntary victim cost directly and proximately caused by this type of offense. As the district court reasoned, the mailing of the purported anthrax with a threatening letterwas the direct cause of [the State Lab's] expenditure. The agency's response... was also the necessary and foreseeable result of that conduct. However, it is well-settled that [t]he costs of investigating and prosecuting an offense are not direct losses for which restitution may be ordered. United States v. Salcedo-Lopez, 907 F.2d 97, 98 (9th Cir.1990); see United States v. Menza, 137 F.3d 533, 539 (7th Cir.1998), and cases cited. The government and the district court erred by failing to consider this principle in awarding restitution in this case. The PSR recited, the letter [sent by Haileselassie to the Bettendorf Police Department] was tested for anthrax, but no units of anthrax were located in the powder. Further analysis of the powder determined it could have come from a mixture of carpet and baby powder, similar to the powder seized from Haileselassie's room. (Emphasis added.) This passage makes clear what common sense suggeststhat it did not take the State Lab's staff eighteen hours to determine there was no anthrax threat. Rather, after making that determination, the State Lab, no doubt at law enforcement's sensible request, went on to analyze the powder mailed with the threat for purposes of gathering evidence in the criminal investigation. If that sequence of events occurred, the latter costs were not an involuntary victim loss. They were a voluntary cost of criminal investigation for which restitution may not be ordered. Some government investigative costs are actual losses properly included in a restitution award, such as the site investigation needed to design an appropriate environmental cleanup plan in United States v. Phillips, 367 F.3d 846, 862-64 (9th Cir.2004). Because distinguishing between this type of costs and costs routinely incurred prosecuting criminal cases is fact-intensive, the Ninth Circuit vacated the restitution order in Phillips. Id. at 864. Here, the government offered no evidence permitting the district court (or this court) to separate the restitution wheat from the chaff in Government Exhibit No. 1. In addition, the government offered no evidence clarifying whether the estimates of staff costs in Exhibit No. 1 reflected the State Lab's internal labor costs, which would be a legitimate measure of actual loss, or the external billing rates for these staff professionals, which might well be consequential damages that must be excluded from any award. As the Seventh Circuit said in rejecting similar proof in Menza, 137 F.3d at 539, general invoices... ostensibly identifying the amount of loss without further explanation are insufficient. Accordingly, the order of restitution must be reversed. The judgment of the district court is reversed, and the case is remanded with directions to enter an amended Judgment in a Criminal Case that eliminates the obligation to pay restitution.