Opinion ID: 1311468
Heading Depth: 2
Heading Rank: 3

Heading: The district court plainly erred in calculating restitution.

Text: Defendants argue that the district court used an improper method of calculating the amount of restitution. As discussed above, because Defendants did not raise this argument before the district court, we review for plain error. Plain error is (1) error, (2) that is plain, and (3) that affects substantial rights. If all three conditions are met, an appellate court may then exercise its discretion to notice a forfeited error, but only if (4) the error seriously affects the fairness, integrity, or public reputation of judicial proceedings. United States v. Cotton, 535 U.S. 625, 631, 122 S.Ct. 1781, 152 L.Ed.2d 860 (2002) (brackets, citation, and internal quotation marks omitted). Defendants stand convicted of violating 18 U.S.C. § 241. Accordingly, the district court was authorized to impose restitution under 18 U.S.C. § 3663. See 18 U.S.C. § 3663(a)(1)(A) (The court, when sentencing a defendant convicted of an offense under this title, ... may order ... that the defendant make restitution to any victim of such offense....); see also id. § 3556 (The court, in imposing a sentence on a defendant who has been found guilty of an offense ... may order restitution in accordance with section 3663.). When imposing restitution under § 3663, the court must consider the amount of the loss sustained by each victim as a result of the offense. Id. § 3663(a)(1)(B)(i)(I). We have emphasized that the amount of restitution under[§ 3663] is limited to the victim's actual losses.  United States v. Bussell, 504 F.3d 956, 964 (9th Cir.2007), cert. denied, ___ U.S. ___, 129 S.Ct. 40, 172 L.Ed.2d 20 (2008). [A]ctual loss for restitution purposes is determined by comparing what actually happened with what would have happened if the defendant had acted lawfully. Id. (brackets and internal quotation marks omitted). The district court rejected the calculation method required by § 3663. It stated that, due to the nature of the illegal business in which the victims were forced to participate, there is no way to calculate restitution here based on a comparison between what actually happened with what would have happened had [Defendants] acted lawfully. Instead, the district court determined the amount of restitution by calculating Defendants' ill-gotten gains via their exploitation of the victims. In particular, the district court adopted the following calculation, which had been proposed by the government: (average price of each commercial sex act) x(average estimated number of commercial sex acts performed) = restitution. The district court found that the average price for each sex act was $170. It then multiplied $170 by the estimated number of sex acts each victim performed and held that the following restitution amounts are warranted: (1) for Y.H., $8,500 ($170 x 50 acts); (2) for J.C., $11,050 ($170 x 65 acts). Pursuant to its order filed April 30, 2008, the district court held further that the $4,226 seized at the time of Defendants' arrests should be distributed equally to J.C. and Y.H. and credited toward the full amount of restitution. The district court derived its calculation method, which the government had proposed, from 18 U.S.C. § 1593  the restitution provision in the Trafficking Victims Protection Act of 2000 (Trafficking Act), Pub.L. No. 106-386, 114 Stat. 1464. Section 1593 directs that the district court's calculation shall include the victim's actual losses and shall in addition include the greater of the gross income or value to the defendant of the victim's services or labor or the value of the victim's labor as guaranteed under the minimum wage and overtime guarantees of the Fair Labor Standards Act. 18 U.S.C. § 1593(b)(3) (emphases added). In other words, the Trafficking Act mandates restitution that includes a defendant's ill-gotten gains. Section 1593 applies, however, only to cases in which a defendant has been convicted of an offense under the Trafficking Act. Id. § 1593(a). But Defendants were not convicted of an offense under the Trafficking Act; they were convicted of a violation of 18 U.S.C. § 241. The restitution provisions of the Trafficking Act simply do not apply. Instead, the restitution provisions of § 3663 apply. And the calculation methods under § 3663 do not include a defendant's ill-gotten gains. For its part, the government does not dispute any of the foregoing analysis. Instead, it argues on appeal that, [a]lthough Section 1593 does not mandate restitution for violations of 18 U.S.C. [§ ]241, it was reasonable in this case, where defendants engaged in the same sort of behavior, to look to Section 1593 for guidance. We disagree. Congress specified criminal penalties for violations of 18 U.S.C. § 241, which include restitution limited to the victim's actual losses.  Bussell, 504 F.3d at 964. Congress specified different criminal penalties for violations of the Trafficking Act, which include restitution for a defendant's ill-gotten gains. [1] 18 U.S.C. § 1593(b)(3). If the government wanted to seek penalties under the Trafficking Act, it was required to prosecute Defendants under the Trafficking Act. Having chosen to prosecute Defendants under 18 U.S.C. § 241, it may seek only the penalties authorized by law for violations of that crime. The government has cited no authority  and we know of none  for the proposition that the district court may exceed its statutory authority simply because of the government's assertion that defendants engaged in the same sort of behavior as a crime of which Defendants were not convicted. Because the district court rejected the correct calculation method (under § 3663) in favor of an incorrect method (under § 1593), the district court erred. Moreover, we hold that the district court's error was plain, because the statutes are clear and because the government openly admitted that its proposed methodology derived from the wrong restitution statute. See United States v. Tuyet Thi-Bach Nguyen, 565 F.3d 668, 677 (9th Cir.2009) (An error is plain when it is `clear' or `obvious' under the law.). Finally, we hold that the error affected Defendants' substantial rights and affected the fairness, integrity, or public reputation of the judicial proceedings. The government did not present evidence  and the district court did not make findings  of the victims' actual losses, as required by § 3663. See Bussell, 504 F.3d at 964 (holding that the amount of restitution is limited to the victim's actual losses ); United States v. Joyner, 201 F.3d 61, 81 (2d Cir.2000) (holding that a district court's failure to make the necessary findings related to a restitution order constitutes plain error); United States v. Smith, 156 F.3d 1046, 1057 (10th Cir.1998) (holding that, where the government has not present[ed] evidence at the hearing concerning the appropriate amount of restitution[,]... [the] imposition of the [restitution] order constitutes plain error). We therefore cannot tell whether the amount of restitution imposed by the district court exceeded the victims' actual losses. [2] See 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 loss caused by the defendant's conduct, which would amount to an illegal sentence constituting plain error.); United States v. Austin, 479 F.3d 363, 373 (5th Cir.2007) (When a defendant is ordered to pay restitution in an amount greater than the loss caused, the error affects substantial rights as well as the fairness and integrity of the judicial proceeding.); United States v. Alburay, 415 F.3d 782, 789 (7th Cir.2005) (holding that restitution in the amount of $1,750,000 constituted plain error because the actual loss was only $1,725,000); see also United States v. Diaz, 245 F.3d 294, 312 (3d Cir. 2001) (holding that a district court cannot order restitution in amounts that will result in the payment to the victim of an amount greater than the victim's loss); United States v. Royal, 100 F.3d 1019, 1033 (1st Cir.1996) (holding that no plain error occurred where any hypothetical minor error in calculating total loss would not have affected the ultimate amount of restitution, because the court imposed only $30,000 of restitution after calculating a total loss of $500,000). We therefore vacate the restitution order and remand the case to the district court on an open record to allow recalculation of restitution under 18 U.S.C. § 3663. See United States v. Matthews, 278 F.3d 880, 885 (9th Cir.2002) (en banc) ([A]s a general matter, if a district court errs in sentencing, we will remand for resentencing on an open record  that is, without limitation on the evidence that the district court may consider.). On remand, the district court would be acting within its discretion to include restitution for the victims' bodily injury under 18 U.S.C. § 3663(b)(2)(C); restitution for the $1,875 that each victim paid to Defendants to be brought to American Samoa, see United States v. English, 92 F.3d 909, 917 (9th Cir.1996) (affirming the district court's order of restitution for an amount representing nine investors' aggregated losses, including the investors' initial payments, in a fraudulent investment scheme); and any other restitution amount, such as lost wages for legitimate employment, authorized by § 3663. But the district court may not order restitution to reflect Defendants' ill-gotten gains. We understand the district court's desire to make Defendants disgorge everything that they gained by cruelly exploiting these victims. But restitution for a violation of § 241 is limited by the provisions of § 3663; other means (such as fines) are available to accomplish disgorgement. The victims also may choose to sue Defendants civilly for damages, including but not limited to damages to help compensate them for their extreme pain and suffering. With regard to restitution, however, the court and the victims are bound to the government's choice to pursue a civil rights prosecution rather than a human-trafficking prosecution.