Opinion ID: 2978318
Heading Depth: 3
Heading Rank: 2

Heading: Attorney Fees as Recoverable Losses

Text: Where an offense involves damage to or loss of property, the MVRA restricts restitution to the replacement value of the property. 18 U.S.C. § 3663A(b)(1); see United States v. Akbani, 151 F.3d 774, 779-80 (8th Cir. 1998) (construing identical language in the VWPA). In cases involving such offenses, several circuits have held that a district court lacks authority under the VWPA to order restitution for attorney fees and similar “consequential damages involved in determining the amount of the loss or in recovering those funds.” United States v. Schinnell, 80 F.3d 1064, 1071 (5th Cir. 1996). In Schinnell, the Fifth Circuit found that the district court erred in including a victim’s “accounting fees and cost[s] to reconstruct the bank statements for the time period that the defendant perpetuated []his scheme.” Id. at 1070. Similarly, the Third Circuit has stated that, “[i]n defining the substantive boundaries of compensation in cases where restitution is ordered for offenses resulting in the loss of property,” restitution is restricted to an amount “‘pegged to the actual losses suffered by the victims’” and does not include consequential damages such as attorney fees. Gov’t of Virgin Islands v. Davis, 43 F.3d 41, 44-45 (3d Cir. 1994) (quoting United States v. Barany, 884 F.2d 1255, 1260 (9th Cir. 1989)). Where, as in Elson’s case, the offense does not involve damage to or loss or destruction of property, however, the MVRA “requires only that the restitution ordered by the district court be based on losses ‘caused by the specific conduct that is the basis for the offense of conviction.’” Akbani, 151 F.3d at 780 (quoting United States v. Marsh, 932 F.2d 710, 712 (8th Cir. 1991)). Accordingly, “there is no blanket prohibition . . . against inclusion of attorneys’ fees in the calculation of a restitution amount for offenses that do not result in damage to or loss or destruction of property.” Id. No. 07-3778 United States v. Elson Page 15 In addition, attorney fees also may be recoverable pursuant to § 3663A(b)(4), which requires a district court, “in any case,” to order restitution to “reimburse the victim for . . . other expenses incurred during participation in the investigation or prosecution of the offense.” 18 U.S.C. § 3663A(b)(4). While this Circuit has yet to interpret the meaning of “other expenses” in the context of § 3663A(b)(4), several other circuits have addressed the issue. In United States v. Waknine, 543 F.3d 546 (9th Cir. 2008), the defendant argued that the attorney fees incurred by the victims were “too indirectly related to the offense conduct to be reimbursed” under § 3663A. Id. at 558. Although the court remanded the case to the district court for more detailed evidence as to the type of attorney fees incurred, the court directed the district court to “award restitution of . . . attorneys’ fees [only] if the government provides sufficiently detailed evidence to demonstrate by a preponderance of the evidence that these costs were incurred by [the victims] in aid of Waknine’s investigation or prosecution, and that such expenses and costs were reasonably necessary.” Id. at 559. In United States v. Amato, 540 F.3d 153 (2d Cir. 2008), the defendants also challenged the inclusion of attorney fees in the restitution amount. In rejecting the defendants’ argument, the court held “that ‘other expenses’ incurred during the victim’s participation in the investigation or prosecution of the offense or attendance at proceedings related to the offense may include attorney fees and accounting costs.” Id. at 159.