Court Opinion

ID: 9392623
Source: CourtListenerOpinion
Date Created: 2023-05-05 18:00:40.301868+00
Date Added: 2024-06-11T17:18:47.138150
License: Public Domain

Case: 22-10697     Document: 00516740049         Page: 1    Date Filed: 05/05/2023

           United States Court of Appeals
                for the Fifth Circuit                                     United States Court of Appeals
                                                                                   Fifth Circuit
                                ____________
                                                                                 FILED
                                                                              May 5, 2023
                                  No. 22-10697
                                ____________                                Lyle W. Cayce
                                                                                 Clerk
   United States of America,

                                                            Plaintiff—Appellee,

                                      versus

   Devonsha Richardson,

                                           Defendant—Appellant.
                  ______________________________

                  Appeal from the United States District Court
                      for the Northern District of Texas
                           USDC No. 4:22-CR-38-4
                  ______________________________

   Before Clement, Graves, and Higginson, Circuit Judges.
   Stephen A. Higginson, Circuit Judge:
         In 2022, Defendant-Appellant Devonsha Richardson pleaded guilty
   to one count of Hobbs Act robbery. As part of Richardson’s sentence, and
   over his objection, the district court ordered Richardson to pay $5,000 in
   restitution to Parks Food Mart, the store he robbed. Richardson appeals this
   order of restitution on two grounds: first, that the district court erred in
   imposing restitution to a business entity and second, that the district court
   erred by ordering restitution in the amount of $5,000. For the reasons given
   below, we AFFIRM AS MODIFIED.
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                                    No. 22-10697

                                          I.
          First, Richardson contends that the district court erred in ordering
   restitution to be paid to Parks Food Mart, a business entity, because a
   “victim” eligible for restitution under the MVRA must be a natural person.
   We review the legality of an MVRA award de novo. United States v. Williams,
   993 F.3d 976, 980 (5th Cir. 2021). The MVRA defines “victim” as “a person
   directly and proximately harmed as a result of the commission of an offense
   for which restitution may be ordered . . . .” 18 U.S.C. § 3663A(a)(2).
   Richardson focuses on the use of the word “person,” suggesting that the
   natural definition of the term excludes corporate entities and other
   organizations.
          This reading, however, ignores that the broadly applicable statutory
   definition of “person” “include[s] corporations, companies, associations,
   firms, partnerships, societies, and joint stock companies.” 1 U.S.C. § 1; see
   also Vt. Agency of Nat. Res. v. U.S. ex rel Stevens, 529 U.S. 765, 782 (2000)
   (noting that corporations are “presumptively covered by the [statutory
   definition of the] term ‘person’”). Accordingly, we have routinely found that
   restitution may be ordered to non-natural persons. See, e.g., United States v.
   Mathew, 916 F.3d 510, 518 (5th Cir. 2019) (holding that although the district
   court erred in awarding restitution to Medicare for losses that preceded the
   temporal scope of the offense of conviction, restitution as to the loss amount
   caused by the conduct underlying the offense of conviction was lawful);
   United States v. Sharma, 703 F.3d 318, 324 (5th Cir. 2012) (noting that
   insurers can be victims under the MVRA and explaining how to calculate the
   actual loss in such cases); United States v. Taylor, 582 F.3d 558, 562, 568 (5th
   Cir. 2009) (affirming a restitution award to FEMA). As Richardson himself
   concedes, this approach is in accord with all other circuits to have considered
   the issue. See, e.g., United States v. Donaby, 349 F.3d 1046, 1052 (7th Cir.
   2003) (concluding that because a police department was “directly and

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                                     No. 22-10697

   proximately harmed” by the offense conduct, it qualified as a “victim” under
   the MVRA and affirming an order of restitution for property damage caused
   by a robbery); United States v. Washington, 434 F.3d 1265, 1266 (11th Cir.
   2006) (same).
           Nonetheless, Richardson argues that this precedent has been
   undermined, if not outright overturned, by the Supreme Court’s decision in
   Lagos v. United States, 138 S. Ct. 1684 (2018). In Lagos, the Supreme Court
   addressed the scope of the words “investigation” and “proceedings” under
   Section 3663A(b)(4)—specifically, whether to adopt a narrow interpretation
   in which the terms are limited to government investigations and criminal
   proceedings or to adopt a broader reading which additionally encompassed
   private investigations and civil proceedings. Id. at 1687. In holding that the
   narrower interpretation applied, the Supreme Court primarily looked to the
   statute’s wording, although it also recognized, as a practical matter, that a
   broad reading of the statute could result in more conflict as to the MVRA’s
   coverage and correspondingly increase administrative burdens. Id. at 1689.
           Richardson reads Lagos to stand for the proposition that the MVRA
   must be read narrowly, including as to the definition of “victim.” But nothing
   in Lagos suggests that its holding extends so far—indeed, Lagos itself cabined
   its discussion of the benefits of a “narrow” rather than “broad” reading to
   the specific provision at issue. See id. at 1689 (discussing how a broad reading
   of the term “other expenses” could invite disputes over whether particular
   expenses qualified under the statute). If anything, Lagos directly
   acknowledged that a victim under the MVRA could be a corporation. See id.
   at 1688 (noting that certain kinds of expenses are “the kind of expenses that
   victim would be likely to incur when he or she (or, for a corporate victim . . . ,
   its employees) misses work . . . .”) (emphasis added). In fact, Lagos involved
   consideration of a restitution order to a corporation—General Electric. Id. at
   1687.

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            Even after Lagos, we have explicitly recognized that corporate victims
   may receive restitution under the MVRA. United States v. Koutsostamatis,
   956 F.3d 301, 308 (5th Cir. 2020) (“That’s not to say a corporate victim
   cannot receive restitution under the MVRA—far from it.”). We do the same
   today, and find that the district court did not err in ordering restitution to
   Parks Food Mart.
                                          II.
            Next, Richardson argues that even if Parks Food Mart was a proper
   victim under the MVRA, the district court erred as to the amount ordered.
   We review the amount of restitution awarded for abuse of discretion.
   Williams, 993 F.3d at 980. Under the MVRA, restitution is limited to “the
   actual loss directly and proximately caused” by the offense of conviction.
   Sharma, 703 F.3d at 323. In other words, “[t]he MVRA does not permit
   restitution awards to exceed a victim’s loss. . . . The court may not award the
   victim a windfall.” United States v. Beydoun, 469 F.3d 102, 107 (5th Cir.
   2006).
            The MVRA states both that “[t]he burden of demonstrating the
   amount of the loss sustained by a victim as a result of the offense shall be on
   the attorney for the Government,” and that “[t]he burden of demonstrating
   such other matters as the court deems appropriate shall be upon the party
   designated by the court as justice requires.” 18 U.S.C. § 3664(e). We have
   read these two sentences to establish a burden-shifting framework for loss-
   amount calculations in which “[t]he Government first must carry its burden
   of demonstrating the actual loss to [the victim] by a preponderance of the
   evidence,” after which “the defendant can rebut the Government’s
   evidence.” Williams, 993 F.3d at 980-81.
            The district court ordered restitution in the amount of $5,000, the
   amount recommended by probation in the presentence report (“PSR”). The

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   probation officer calculated the total loss incurred by Parks Food Mart to be
   $5,000—$1,000 for money and merchandise stolen during the robbery and
   $4,000 for the lost income from the store closure caused by the robbery and
   subsequent investigation. In calculating the total amount of loss, a district
   court “may adopt the facts contained in a presentence report without further
   inquiry if those facts have an adequate evidentiary basis with sufficient indicia
   of reliability and the defendant does not present rebuttal evidence or
   otherwise demonstrate that the information in the PSR is unreliable.” United
   States v. Smith, 528 F.3d 423, 425 (5th Cir. 2008).
          Richardson did not present any rebuttal evidence at sentencing,
   although he did file written objections to the PSR’s calculation of restitution.
   Specifically, Richardson attacks both the $1,000 loss calculated for stolen
   money, which he claims lacks an adequate evidentiary basis, and the $4,000
   loss calculated for lost income, which he claims was improperly calculated.
   We address each in turn.
                                          A.
          To begin, we evaluate the $1,000 loss calculated as to the stolen
   property. Where an offense results in the loss of property (and that property
   is not returned), the MVRA orders restitution in an amount equal to the
   greater of either the value of the property on the date of loss or the value of
   the property on the date of sentencing. § 3663A(b)(1)(B).
          During the robbery, Richardson stole approximately $600 in cash
   from the register, a stack of approximately seventy-five lottery tickets, and a
   Beretta .45-caliber semiautomatic handgun. To establish the amount of cash
   stolen, the probation officer interviewed the store’s manager, who was also a
   victim of the offense. As for the value of the tickets, the probation officer
   recorded that the lottery tickets were worth $5 and Parks Food Mart would
   have earned a 5% commission on any tickets sold, as well as a potential bonus

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   if any of the tickets were high-value winners. Assuming the value of each
   lottery ticket to be at least $5, the total loss for the seventy-five tickets is $375.
   Adding that value to the $600 in stolen cash, we reach a total loss of $975
   without accounting for the stolen gun. From there, all that is needed to reach
   the PSR’s $1,000 calculation is an assumed value of at least $25 for the stolen
   gun. We find this calculation reasonable.
          Nonetheless, Richardson disputes this value. First, he suggests that
   the Government was required to conduct some sort of forensic accounting to
   prove the loss of cash. Richardson provides no case law to support this
   contention, and we have held that a PSR is sufficiently reliable where the
   probation officer reviewed investigative materials and interviewed a victim.
   United States v. Ollison, 555 F.3d 162, 164 (5th Cir. 2009). Accordingly, the
   district court was entitled to rely on the PSR’s calculation as to the amount
   of cash stolen.
          Additionally, citing United States v. Kim, 988 F.3d 803, 813 (5th Cir.
   2021), Richardson argues that using the retail value of the stolen lottery
   tickets, rather than net profit, results in a “windfall” to Parks Food Mart.
   Kim, however, is inapposite—there, we considered how to calculate the
   actual loss to a victim caused by the introduction of counterfeit or infringing
   goods into the stream of commerce, displacing legitimate sales from the
   victim. Id. In such cases, basing restitution on the retail value would fail to
   account for the cost of manufacturing and selling the legitimate goods. Id.
   This case, however, involves a straightforward robbery, where the loss is
   simply the value of the stolen goods. See, e.g., United States v. Hilliard, 578 F.
   App’x 439, 442 (5th Cir. 2014) (per curiam) (affirming a restitution order in
   the amount of the value of the cash stolen plus the price of an iPad in
   connection with a conviction for a conspiracy to steal Government property).

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          Finally, Richardson points out that the PSR contained no information
   as to the replacement value of the stolen gun. Yet, given that the stolen cash
   and lottery tickets together accounted for, at minimum, $975, we do not find
   any abuse of discretion in adopting the PSR’s recommendation of a $1,000
   loss for stolen merchandise.
                                        B.
          Next, we turn to the $4,000 calculated for lost income. The MVRA
   directs the district court to “reimburse the victim for lost income . . . and
   other expenses incurred during participation in the investigation or
   prosecution of the offense.” § 3664A(b)(4). Here, Parks Food Mart was
   closed for approximately 6 hours on a Monday, from 6:15 p.m. to midnight,
   as law enforcement investigated the robbery. In the original PSR, the
   probation officer reported only that the business had suffered “$4,000 from
   missed earnings while being closed for investigation.” After Richardson
   objected to this calculation, the probation officer conducted a follow-up
   interview with the manager of Parks Food Mart. During this interview, the
   manager estimated that the store averaged $3,500 in sales on an average
   Monday, with peak hours between 4:00 p.m. and 9:00 p.m. Based on this
   estimate, probation determined that $4,000 was a reasonable estimate for
   lost earnings caused by a closure during some of the most profitable hours of
   the day.
          Richardson does not dispute that Parks Food Marts was entitled to
   restitution for the income it lost during the time the store was closed for
   investigation into the robbery. Rather, Richardson takes issue with the
   amount ordered. Specifically, Richardson argues that the Government failed
   to properly support the $4,000 figure.
          First, Richardson contends that the district court improperly awarded
   $4,000 in lost earnings, rather than lost income. It is true that the MVRA

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   provides only for restitution for income, not earnings. But it is also true that
   “income” and “earnings” can, in some instances, be used interchangeably.1
   Compare Income, Black’s Law Dictionary (11th ed. 2019) (“The money or
   other form of payment that one receives, usu. periodically, from
   employment, business, investments, royalties, gifts, and the like. See
   Earnings. Cf. Profit.”), with Earnings, Black’s Law Dictionary (11th ed. 2019)
   (“Revenue gained from labor or services, from the investment of capital, or
   from assets. See Income.”). We do not find, and Richardson provides no case
   law to support, that the mere fact that the PSR did not contain the exact
   terminology used by the MVRA when describing the victim’s loss and
   instead used a term with a very similar meaning invalidates the district
   court’s determination of restitution.
           Assuming that lost earnings is the appropriate metric, Richardson
   alternatively maintains that the PSR (and, by extension, the Government)
   failed to provide an adequate evidentiary basis for the $4,000 figure. We
   assume that the first version of the PSR, which contained only the victim’s
   claimed loss amount and nothing more, may not have contained adequate
   evidentiary support. See United States v. Young, 272 F.3d 1052, 1056 (8th Cir.
           _____________________
           1
              In his reply brief, Richardson also claims that the $4,000 was improper because it
   represented a loss of gross sales and did not account for the costs related to generating those
   sales. In other words, Richardson argues that profit is the proper measure of loss. See Profit,
   Black’s Law Dictionary (11th ed. 2019) (“The excess of revenues over expenditures in a
   business transaction; Gain. Cf. Earnings; Income.”). Again, however, Richardson cites no
   case law to support this position. In certain counterfeiting cases, we have stated that the
   relevant metric is net profit, not gross income. See, e.g., Beydoun, 469 F.3d at 108; Kim, 988
   F.3d at 812-13. These cases, however, involved the calculation of the actual loss caused by
   the conduct underlying the offense, not the reimbursement of lost income caused by the
   victim’s participation in the investigation. See Beydoun, 469 F.3d at 107-08 (calculating the
   loss caused by the defendants’ creation of counterfeit booklets); Kim, 988 F.3d at 813
   (noting that using the retail value, rather than the net profit, to measure actual loss caused
   by the introduction of counterfeit goods into the market could result in a windfall to the
   victim).

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   2001) (finding that a PSR did not contain sufficient factual allegations
   substantiating the victim’s proposed loss amount where the PSR “simply
   recounted the victim’s estimate of lost retail sales,” had no further
   verification of that estimate, and the PSR itself acknowledged that the
   amount of restitution was uncertain).
           But here, the district court did not just have access to the first version
   of the PSR: it also had access to the addendum produced by the probation
   officer who, in response to Richardson’s objection, conducted a follow-up
   interview to confirm the claimed loss amount. At this point, he was informed
   by the store manager that Parks Food Mart averaged around $3,500 in sales
   on Mondays.2 Of course, the nature of an average is such that some Mondays
   may experience higher sales while others lower. In other words, we
   understand that sales are variable and there may have been reason for Parks
   Food Mart, in stating that the store closure resulted in $4,000 in lost
   earnings, to expect sales on the higher end the day of the robbery. At the same
   time, however, we recognize that the store closure only impacted part of the
   day, albeit during peak hours. Given these competing tensions, and the lack
   of any other documentation as to the store’s losses, we find the $3,500 figure
   to be a better-supported estimate of lost sales. Accordingly, we modify the
   judgment to reduce the restitution ordered to be paid to Parks Food Mart to

           _____________________
           2
             Both on appeal and in district court, Richardson argued that some sort of
   documentation was required to verify this estimate. That is not so—the probation officer
   was entitled to rely on an interview with an employee of the store to calculate the loss. See
   Smith, 528 F.3d at 425 (rejecting the defendant’s argument that the Government was
   required to produce a sworn affidavit or present live testimony as to the amount of loss and
   holding that the district court could rely on the amount contained in the PSR, where that
   amount was based on an interview of the employee of the victim and the defendant did not
   present any rebuttal evidence at sentencing).

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   $3,500. See 28 U.S.C. § 2106; United States v. Emasealu, 779 F. App’x. 283,
   284 (5th Cir. 2019) (per curiam).
                                   *********
          For the foregoing reasons, we AFFIRM AS MODIFIED the district
   court’s restitution order.

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                                     No. 22-10697

   James E. Graves, Jr., Circuit Judge, dissenting in part:
          I disagree with the majority’s “find[ing]” that $3,500 is the proper
   amount of restitution for lost sales. Further, nothing in the record supports
   the majority’s statement that “there may have been reason for Parks Food
   Mart, in stating that the store closure resulted in $4,000 in lost earnings, to
   expect sales on the higher end the day of the robbery.” If there had been, the
   government could have easily established that. It did not.
          Instead, the addendum to the PSR explicitly states multiple times that
   the manager “estimated the store typically averaged $3,500 in sales on an
   average Monday.” Based on that, the probation officer then made the
   unsupported conclusion that, “[t]hus, the estimate of $4,000 may be
   reasonable for lost earnings.”       This court has previously said that
   unsupported conclusions lack sufficient indicia of reliability. See United
   States v. Shacklett, 921 F.2d 580, 584 (5th Cir. 1991).
          Moreover, the caselaw requires the restitution amount is supported
   by the evidence in the record. See United States v. Sharma, 703 F.3d 318, 323
   (5th Cir. 2012) (“[E]very dollar must be supported by record evidence.”);
   see also United States v. Trujillo, 502 F.3d 353, 357 (5th Cir. 2007) (The
   district court may adopt facts in the PSR so long as the facts have an adequate
   evidentiary basis with sufficient indicia of reliability.); United States v.
   Beydoun, 469 F.3d 102, 107 (5th Cir. 2006) (“The MVRA does not permit
   restitution awards to exceed a victim’s loss.”).
          The PSR indicates that Parks Food Mart was usually open from 8 a.m.
   until midnight, a 16-hour period. The closure was from 6:15 p.m. until
   midnight. The peak hours were purported to be from 4 p.m. to 9 p.m. The
   closure only partially occurred during the peak hours. The store was open
   for 2 hours and 15 minutes of the peak hours, from 4 p.m. to 6:15 p.m. If we
   were to evenly prorate the total average sales for an entire Monday, it would

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   come out to $218.75 per hour for each of the 16 hours, for a total of $1,312.50
   for the almost 6-hour closure. The PSR does not establish the average sales
   during the peak hours as compared to non-peak hours. But, even if it did, the
   store was open for more than 2 hours of peak time, and half of the closure was
   during non-peak hours, from 9 p.m. to midnight. Therefore, the record
   supports restitution for lost sales in the amount of $1,312.50.
          For these reasons, I respectfully dissent in part.

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