Opinion ID: 195396
Heading Depth: 1
Heading Rank: 3

Heading: the government as victim

Text: 18 In his most portentous assignment of error, appellant posits that, on the facts of this case, the USDA is not a victim within the meaning of the restitutionary provisions of the Victim and Witness Protection Act, 18 U.S.C. Secs. 3663-3664. This proposition presents a pure question of statutory interpretation and, as such, invites de novo review. See, e.g., Gifford, 17 F.3d at 472; Liberty Mut. Ins. Co. v. Commercial Union Ins. Co., 978 F.2d 750, 757 (1st Cir.1992). 19
20 This case falls into a grey area that separates two established legal principles. On one hand, although once problematic, see infra p. 35, it is by now settled that a government entity (local, state, or federal) may be a victim for purposes of the VWPA (and may be awarded restitution) when it has passively suffered harm resulting directly from the defendant's criminal conduct, as from fraud or embezzlement. See, e.g., Ratliff v. United States, 999 F.2d 1023, 1027 (6th Cir.1993) (collecting cases); United States v. Hand, 863 F.2d 1100, 1103 (3d Cir.1988) (collecting cases). This principle has been applied, and properly so, to cases involving food stamp fraud. See, e.g., United States v. Dudley, 739 F.2d 175, 178 (4th Cir.1984). 21 On the other hand, the federal courts are consentient to the effect that the government is not a victim for purposes of VWPA (and may not be awarded restitution) to the extent that it incurs costs in the clandestine provocation of a crime that, if carried to fruition under ordinary circumstances, would not directly harm the government. 4 See, e.g., Gall v. United States, 21 F.3d 107, 111 (6th Cir.1994) (holding that drug buy money advanced by the government is not recoverable under the VWPA); United States v. Daddato, 996 F.2d 903, 905 (7th Cir.1993) (similar) (dictum); United States v. Salcedo-Lopez, 907 F.2d 97, 98 (9th Cir.1990) (holding that money used by undercover government agent to purchase false identification documents is not recoverable under the VWPA); United States v. Finley, 783 F.Supp. 1123, 1127 (N.D.Ill.1991) (refusing to order restitution of funds extorted by defendant from undercover agent). All four of these cases rely at some level on the generality that investigatory costs do not constitute a loss within the purview of the Act because such costs are best conceived as voluntary outlays for the procurement of evidence. 5 See Gall, 21 F.3d at 112; Daddato, 996 F.2d at 905; Salcedo-Lopez, 907 F.2d at 98; Finley, 783 F.Supp. at 1128. 22 What makes this case difficult is that it falls somewhere between the two ends of the spectrum. While we deal with a crime provoked by an undercover investigation, the crime was designed to inflict harm on the government. If consummated under circumstances not involving official participation, the crime would have resulted in direct loss to the government in exactly the manner that the government here experienced loss. Nonetheless, the government instigated the particular incidents for which it now claims the right to restitution--indeed, had there been no official participation, the claimed losses would not have eventuated. This means that here, unlike in either of the more familiar prototypes, the difference between the face value of the food stamps and the amount appellant paid for them was both a calculated consequence of the defendant's crime and a calculated cost of the government's investigation. As a result of the hybrid nature of the loss, each side argues that this difficult situation more closely resembles the prototype that favors its position--and neither argument can easily be debunked. 23
24 We envision the task of resolving this conundrum as an exercise in statutory construction. Our role, of course, is as interpreters of the words chosen by Congress, not as policymakers or enlargers of congressional intent. This role requires that we start with the statutory text. 25 1. Text. The VWPA states that restitution may be awarded only to a victim of the offense. 18 U.S.C. Sec. 3663(b)(1). A victim of an offense is defined as any person directly harmed by the defendant's criminal conduct in the course of the scheme, conspiracy, or pattern. Id. Sec. 3663(a)(2). In the idiom of the Act, the question we decide today is whether the government is a victim in the sense that it is harmed by the defendant's criminal conduct when it experiences loss that is the direct, foreseeable consequence both of the criminal's conduct and of the government's own machinations. Conceived in this way, the question is one of first impression. 6 26 We believe that the key phrase, harmed by, as it appears in the VWPA, is ambiguous. Under one reading of the phrase, the statute is satisfied when, as now, an entity experiences a loss directly and foreseeably caused in whole or in part by the criminal's conduct. But this reading represents one choice out of several. For example, it is also entirely possible that the word harm denotes aggregate harm--a construction which, if adopted, would require the phrase to be read with a view toward some type of cost-benefit analysis. In that event, the very fact that the government knowingly incurred the loss could be taken as signifying that, in its estimation, the game was worth the candle. Put another way, the fact could evidence the government's belief that the overall gain--incapacitating the targets of the investigation and deterring others from embarking on similar schemes--outweighed the out-of-pocket loss. 27 A second, more intriguing possibility is that harmed by connotes passivity. In ordinary usage, harm is suffered at the hands of another, while loss may be merely experienced or sustained. It defies common usage to envision an entity that planned and provoked a crime as a victim in the same sense that a passive sufferer of harm is a victim, notwithstanding that the entity may have experienced loss. Courts cannot ignore legislative decisions to use one particular word instead of another. See, e.g., United States ex rel. Springfield Term. Ry. Co. v. Quinn, 14 F.3d 645, 653-54 (D.C.Cir.1994) (attributing significance to Congress's choice of words). Since Congress could have employed a more neutral construct in framing the Act, its choice of a phrase connoting passivity may well be meaningful. 28 A statute is ambiguous if it reasonably can be read in more than one way. See United States v. O'Neil, 11 F.3d 292, 297 (1st Cir.1993). Here, the alternative interpretations are sufficiently plausible to render the statutory language ambiguous. Consequently, we must search for guidance in the legislative history and beyond. See id. at 297-98 (describing standard protocol for statutory interpretation). 29 2. Legislative History. The VWPA was first enacted in 1982 in an effort to afford greater protection to victims and witnesses, and to enhance their stature in the criminal justice system. See S.Rep. No. 532, 97th Cong., 2d Sess. 30, reprinted in 1982 U.S.C.C.A.N. 2515-16. The object of the restitution provisions in particular was to help restore the victim to his or her prior state of well-being. Id. at 2536. Although the word victim was not precisely defined in either the original Act or its accompanying commentary, it is pellucid that, in the eyes of the enacting Congress, the prototypical victim was a private individual. The preamble to the Senate Report laments that the victim is all too often the  'forgotten person'  in the legal process. Id. at 2516. With regard to the restitution provisions, the only specific example of a victim describes an elderly lady who, after being mugged, had to forgo surgery because the prosecutors did not seek restitution in a sufficient amount. See id. at 2536-37. 30 Absent a clearly marked trail leading in some other direction, courts should presume that words used in a statute are to be given their ordinary meaning. See United States v. Dawlett, 787 F.2d 771, 774 (1st Cir.1986). Here, the signposts embedded in the legislative history indicate quite vividly that, in enacting the VWPA, Congress used the word victim in such a way. A victim is commonly considered to be a passive sufferer of harm, that is, someone who is tricked, duped, or subjected to hardship.... Webster's Third New International Dictionary 2550 (1981). Read against this lexicographical backdrop, calling the organization that sets up a sting and carries it out a victim is like calling the rabbit who lurks in Houdini's hat a magician. 31 To be sure, Congress amended the VWPA in 1990, adding a statutory definition of victim as one directly harmed by the defendant's criminal conduct. 18 U.S.C. Sec. 3663(a)(2). However, we resist the conclusion that, by specially defining victim on this occasion, Congress meant to stray far enough from the common meaning of the word to eliminate the element of passivity. Rather, the legislative history attests that highly idiosyncratic concerns motivated Congress's action. 32 The amendment first surfaced in the House and Senate versions of the proposed Banking Law Enforcement Act under the caption, Enhancement of Ability to Order Restitution in Certain Fraud Cases. See 136 Cong.Rec. H 5996 (daily ed., July 31, 1990); 136 Cong.Rec. S 18322 (daily ed., Nov. 2, 1990). It was then incorporated into, and passed as part of, the sprawling Crime Control Act of 1990, P.L. 101-647, 104 Stat. 4789. In that incarnation, the definition comprised one of nine disparate provisions grouped in a single title under the appellation Banking Law Enforcement. In floor remarks, the sponsor of that title explained that its purpose was to enhance the enforcement powers of the Department of Justice and the federal financial institution regulatory agencies with respect to unlawful activities affecting federally insured financial institutions. 136 Cong.Rec. E 3684 (daily ed., Nov. 2, 1990) (remarks of Rep. Schumer). 33 We think that this history, coupled with the division of opinion that originally existed in the courts on whether a government entity could ever be a victim under the Act, makes it highly probable that the newly emergent definition was intended to accomplish two things. Broadly, the amendment was meant to clarify that, in appropriate cases, a government entity, say, FSLIC or FDIC, could be regarded as a victim under the Act. More narrowly, the amendment was designed to clarify the government's entitlement to restitution for losses suffered qua insurer as a consequence of savings-and-loan fraud, that is to say, as a passive sufferer of the harm caused by such fraud. Although special definitions sometimes are taken wholly to supplant common usage, see 2A Sutherland Statutory Construction Sec. 47.28 (5th ed. 1992), this special definition is not of that ilk; it strengthens, rather than dissipates, the force of our point anent common usage. In other words, notwithstanding the 1990 amendment, the presumption in favor of ordinary meaning continues to apply in this case. And the ordinary meaning of the word victim poses an obvious problem for the government's view of the VWPA universe. 34 To sum up, nothing in the legislative history of either the organic Act or its amendments indicates that losses incurred in government sting operations should be subject to recoupment under the VWPA. Conversely, there is some basis in the legislative history of the VWPA for believing that the enacting and amending Congresses both viewed the word victim in a more restrictive manner than the government urges here. We do not mean to suggest that the benefits of the VWPA should be confined to widows and orphans; but we are constrained to note that, as the status of victimhood is expanded beyond passive sufferers of harm, we move further and further away from the concerns that drove Congress to pass the statute. 35
36 We recognize that the Act's language and legislative history, though suggestive, do not speak unequivocally to the question at hand. In light of this uncertainty, we have examined more recondite sources. We confess, however, that our quest has proven unrewarding; by and large, the government's claim resists analogy. We have considered analogies from the doctrines and case law of civil restitution, criminal restitution through probationary conditions, tort law, and a variety of other sources. 7 None offer compelling guidance. 37 When all else fails to bring sufficient lucidity to the meaning of a penal statute, the rule of lenity casts the decisive vote. That rule, which mandates the resolution of ambiguities in a criminal statute favorably to the defendant, see, e.g., United States v. Bass, 404 U.S. 336, 347-49, 92 S.Ct. 515, 522-23, 30 L.Ed.2d 488 (1971), is a background principle that properly comes into play when, at the end of a thorough inquiry, the meaning of a criminal statute remains obscure, O'Neil, 11 F.3d at 301 n. 10; see also Chapman v. United States, 500 U.S. 453, 111 S.Ct. 1919, 1926, 114 L.Ed.2d 524 (1991). 38 This is not only the proper time to invoke the rule of lenity, but also the proper place; after all, the rule of lenity played the decisive role on the one occasion that the Court ventured to interpret the VWPA. See Hughey v. United States, 495 U.S. 411, 110 S.Ct. 1979, 109 L.Ed.2d 408 (1990). 8 When the statutory language regarding the scope of a court's authority to order restitution [is] ambiguous, the Court explained in that case, longstanding principles of lenity ... preclude our resolution of the ambiguity against petitioner.... Id. at 422, 110 S.Ct. at 1985 (citations omitted). 39 We retrace the Court's steps here. On the principle of lenity, we resolve lingering doubts as to the statute's meaning in favor of the defendant. We hold as follows: a government agency that has lost money as a consequence of a crime that it actively provoked in the course of carrying out an investigation may not recoup that money through a restitution order imposed under the VWPA. 40 We add an eschatocol of sorts. As courts reaching similar conclusions have observed, see, e.g., Salcedo-Lopez, 907 F.2d at 99; Finley, 783 F.Supp. at 1129, other methods of recovery remain open to the government, notably fines or voluntary agreements for restitution incident to plea bargains. 9 Therefore, the main practical consequence of our holding, in the long term, is that the awards to the government in sting cases will be influenced not only by the amount of loss, but also by other factors, see 18 U.S.C. Sec. 3572(a). Though in a given situation the resulting penalty may be smaller or larger than the foregone restitutionary award, the principle of interpretive integrity will in all events be honored.