Opinion ID: 197346
Heading Depth: 2
Heading Rank: 3

Heading: Choosing a Standard.

Text: 43 Upon close perscrutation, the extreme positions advocated by the parties do not hold out much promise in our quest for a serviceable standard of causation. 44 On the one hand, the sort of direct causation standard that the appellants propose is simply too rigid. Under their theory of intervening forces, a court could not impose restitution even if the defendant's conduct were a substantial cause of a loss, unless it were the last cause. Such a standard would flout the basic purpose of the VWPA. 6 In our judgment, Congress did not contemplate such adamantine formalism when it moved to expand the availability of restitutionary remedies by enacting the VWPA. See S.Rep. No. 532, supra, 1982 U.S.C.C.A.N. at 2537. 45 On the other hand, concerns of fairness require us to reject the unbridled but for causation standard that the government propounds. Under it, a court could impose restitution based on the most tenuous of connections. 7 While it is true that for want of a nail the kingdom reputedly was lost, cf. Benjamin Franklin, Poor Richard's Almanac (1758), it could hardly have been Congress' intent to place the entire burden on the blacksmith if the nail was an insignificant factor in the calculus of concurrent causes. Such a result would countervail principles of fundamental fairness and, in the bargain, would be at odds with the majority of reported cases. See, e.g., United States v. Holley, 23 F.3d 902, 914-15 (5th Cir.1994); United States v. Tyler, 767 F.2d 1350, 1351-53 (9th Cir.1985). 46 Having rejected the parties' proposals, it falls to us to fashion the appropriate legal standard. Despite the gaps in the statute and in its legislative history, and notwithstanding the contradictions that permeate the cases, we think it is possible to distill certain bedrock principles from the sources that we have consulted. 47 First: Restitution should not be ordered in respect to a loss which would have occurred regardless of the defendant's conduct. A good illustration of this principle in operation is found in United States v. Blackburn, 9 F.3d 353 (5th Cir.1993). There, the sentencing court included foreclosure expenses in calculating the amount of restitution due. The Fifth Circuit reversed, citing proof that the foreclosure would have happened even if the defendant had not committed the crime. See id. at 359; see also United States v. Walker, 896 F.2d 295, 305-06 (8th Cir.1990) (holding that when defendants, who owned a company, defrauded the United States, restitution to laid-off company employees was improper because the record failed to show that the fraud caused the company to cease operations). 48 Second: Even if but for causation is acceptable in theory, limitless but for causation is not. Restitution should not lie if the conduct underlying the offense of conviction is too far removed, either factually or temporally, from the loss. We offer two examples of remoteness in fact. The first arises in a case that bears some similarity to the instant case. 49 In Diamond, 969 F.2d at 963-64, the defendant pled guilty to filing false financial reports with a lender. The loan had already been made before Diamond authored the reports, but the reports apparently helped in obtaining an extension. The loan proved uncollectible. The sentencing court ordered the defendant to make restitution, reasoning that the loss stemmed from the false reports. The court of appeals refused to equate the extension of an existing loan with the granting of the loan in the first place, and negated the restitutionary order because there was no proof that the extension worsened the lender's position. See id. at 966. 50 A somewhat different example of factual remoteness is found in United States v. Sablan, 92 F.3d 865 (9th Cir.1996). There, the defendant had been convicted of computer fraud. The district court ordered restitution for expenses incurred by the victim in meeting with investigators to discuss the case. The Ninth Circuit struck these amounts from the award, ruling that the expenses were not connected closely enough to the fraudulent conduct. See id. at 870; see also United States v. Kenney, 789 F.2d 783, 784 (9th Cir.1986) (invalidating that portion of a restitution order which was designed to reimburse the corporate victim for the cost of having its employees testify at the defendant's trial, but upholding that part of the order encompassing the cost of removing film chronicling the robbery from the bank's surveillance cameras). 51 Typical of the situations in which but for causation existed but restitution was denied because the claimed losses were temporally remote is Holley, in which the court deemed restitution improper when the victim, who received foreclosure property from the defendant in the course of the criminal activity, unnecessarily held onto the property for a lengthy interval after the crime was discovered, and the property declined in value during that period. 23 F.3d at 914-15. Similarly, in Tyler, the defendant cut down a tree in a national forest and was apprehended as he tried to take it to a nearby lumber mill. 767 F.2d at 1351. The government retained the lumber, needlessly, for a long period of time, then sold it in a fallen market for considerably less than it would have fetched if sold promptly. See id. The district court ordered restitution, pegging the loss by reference to the reduced price. The appellate court disagreed, pointing out that, although abstract but for causation existed, it was too attenuated to support the award. See id. at 1351-53. 52 Consistent with these two principles and with our dictum in Neal, 36 F.3d at 1201 & n. 10, we hold that a modified but for standard of causation is appropriate for restitution under the VWPA. This means, in effect, that the government must show not only that a particular loss would not have occurred but for the conduct underlying the offense of conviction, but also that the causal nexus between the conduct and the loss is not too attenuated (either factually or temporally). The watchword is reasonableness. A sentencing court should undertake an individualized inquiry; what constitutes sufficient causation can only be determined case by case, in a fact-specific probe. 53