Court Opinion

ID: 2654176
Source: CourtListenerOpinion
Date Created: 2014-02-24 16:53:41.516358+00
Date Added: 2024-06-11T09:11:33.210182
License: Public Domain

12-5106 (L)
     United States v. Maynard and Ludwig

 1                       UNITED STATES COURT OF APPEALS
 2
 3                           FOR THE SECOND CIRCUIT
 4
 5                              August Term, 2013
 6
 7
 8   (Argued: November 21, 2013                 Decided: February 24, 2014)
 9
10               Docket Nos. 12-5106 (Lead), 12-5124 (Con)
11
12   - - - - - - - - - - - - - - - - - - - -x
13
14   UNITED STATES OF AMERICA,
15
16                     Appellee,
17
18               - v.-
19
20   JOHN W. MAYNARD and JILL M. LUDWIG,
21
22                     Defendants-Appellants.
23
24   - - - - - - - - - - - - - - - - - - - -x
25

26         Before:           KEARSE, JACOBS, and PARKER, Circuit
27                           Judges.
28
29         John Maynard and Jill Ludwig appeal from judgments of

30   the United States District Court for the District of Vermont

31   (Reiss, C.J.) requiring them to pay restitution after a

32   series of bank robberies.             Maynard and Ludwig contest paying

33   a bank’s expenses other than the money taken in the robbery.

34   We vacate the restitution component of the judgments and

35   remand to redetermine restitution.

36
 1                              STEVEN L. BARTH, on behalf of
 2                              Michael L. Desautels, Federal
 3                              Public Defender for the District
 4                              of Vermont, Burlington, Vermont,
 5                              for Appellant John W. Maynard.
 6
 7                              NANCY J. WAPLES, Hoff Curtis,
 8                              Burlington, Vermont, for
 9                              Appellant Jill M. Ludwig.
10
11                              WILLIAM B. DARROW (Paul J. Van
12                              de Graaf, on the brief), on
13                              behalf of Tristram J. Coffin,
14                              United States Attorney for the
15                              District of Vermont, Burlington,
16                              Vermont, for Appellee.
17
18   DENNIS JACOBS, Circuit Judge:
19
20       John Maynard and Jill Ludwig appeal the restitution

21   component of judgments entered following their guilty pleas

22   on a series of bank robberies.      Pursuant to the Mandatory

23   Victims Restitution Act of 1996 (“MVRA”), Pub. L. No. 104-

24   132, 110 Stat. 1214 (codified at 18 U.S.C. §§ 3663-64), the

25   United States District Court for the District of Vermont

26   (Reiss, C.J.) imposed restitution in an amount consisting of

27   the money taken in the robberies and additional expenses

28   incurred by one of the victim banks.     Maynard and Ludwig

29   object only to restitution for these additional expenses as

30   falling outside the provisions of the MVRA.     For the

31   following reasons, we vacate the restitution component of

32   the judgments and remand to the district court.

                                     2
1                                BACKGROUND

2        Maynard and Ludwig robbed five banks between September

3    and November 2011.1    Each time, one of the two entered the

4    bank alone, passed a note to the teller claiming possession

5    of a gun, and demanded money.       Each robbery lasted only a

6    few minutes.   Nobody was harmed.

7        The couple was arrested hours after the last robbery on

8    November 2, 2011.     They were indicted on three bank-robbery

9    counts and one count of conspiracy.      Ludwig pled guilty on

10   August 16, 2012 to one charge of bank robbery in violation

11   of 18 U.S.C. § 2113(a).    The next month, Maynard pled guilty

12   to conspiracy in violation of 18 U.S.C. § 371.      The two were

13   sentenced in December 2012.

14       In the sentencing phase, the Government sought

15   restitution under the MVRA, pursuant to 18 U.S.C. § 3663A.

16   More than half of the proposed restitution ($12,966) was to

17   repay the money taken during the robberies, and is

18   uncontested on appeal.    The rest included certain expenses

19   paid by Merchants Bank, of which the following are the

          1
            The date and place of the robberies are: 1) Merchants
     Bank, Rutland, Vt. on Sept. 7, 2011; 2) Lake Sunapee Bank,
     West Rutland, Vt. on Oct. 7, 2011; 3) TD Bank, Granville,
     N.Y. on Oct. 25, 2011; 4) TD Bank, Granville, N.Y. on Oct.
     29, 2011; and 5) Citizens Bank, Poultney, Vt. on Nov. 2,
     2011.
                                     3
1    subject of this appeal: 1) paid time-off for the bank’s

2    regular staff, and the pay of replacement staff ($7,991.68);

3    2) mileage expenses for the replacement staff ($213.34);     3)

4    the cost of wanted posters ($106.66); and 4) the cost of a

5    temporary security guard at the bank after the robbery

6    ($574.52).

7        At separate sentencing hearings, the Merchants Bank

8    teller testified about the anxiety and emotional harm she

9    suffered as a result of being held up.   At Maynard’s hearing

10   only, the bank’s security officer, Robert O’Neill, testified

11   that the regular staff was sent home the day of the robbery

12   because the bank was a crime scene, and that the bank did

13   not reopen until it was released by law enforcement at the

14   end of the day.   On the two days following, the bank

15   operated with temporary replacements while the regular staff

16   was given paid leave to handle any trauma associated with

17   the robbery.   He explained that this was the bank’s usual

18   practice, and that taking care of employees in that way

19   served a business purpose.

20       Maynard and Ludwig contested the inclusion of the

21   bank’s expenses in the restitution order.   The court found,

22   however, that the expenses claimed could be compensated

                                   4
1    because they were directly and proximately caused by the

2    robbery.   The couple was sentenced, inter alia, to pay

3    restitution in the amount of $21,852.20 jointly and

4    severally.   This amount included the expenses incurred by

5    Merchants Bank listed above.

6

7                              DISCUSSION

8        While the MVRA serves the broad policy purpose of

9    assisting the victims of crime, it also enumerates the

10   specific losses compensable in a mandatory restitution

11   order.   Maynard and Ludwig argue that Merchants Bank’s

12   expenses are not subject to restitution because they are not

13   among these enumerated harms.

14

15                                   I

16       Prior to 1982, federal courts were not permitted to

17   order restitution outside the probation context.   See United

18   States v. Amato, 540 F.3d 153, 159 (2d Cir. 2008).    The

19   Victim and Witness Protection Act of 1982 (“VWPA”), Pub. L.

20   No. 97-291, 96 Stat. 1248 (currently codified, as amended by

21   the MVRA, at 18 U.S.C. § 3663), afforded courts discretion

22   to impose restitution for specified kinds of harm.    See

23   Amato, 540 F.3d at 159.

                                     5
1        The victims’ rights movement later inspired a review of

2    the judiciary’s use of restitution.     In 1996, Congress

3    passed the MVRA to help victims and to hold offenders

4    accountable for the losses they inflict.2     See S. Rep. No.

5    104-179, at 17-18 (1995).

6        The MVRA made restitution mandatory for a broad swath

7    of offenses.3    See 18 U.S.C. §§ 3663A(a)(1), (c).     The

8    purpose of the MVRA “is to make victims of crime whole, to

9    fully compensate these victims for their losses and to

10   restore these victims to their original state of well-

11   being.”    United States v. Boccagna, 450 F.3d 107, 115 (2d

12   Cir. 2006) (quoting United States v. Simmonds, 235 F.3d 826,

13   831 (3d Cir. 2000)) (internal quotation marks omitted).

14       When the MVRA controls, a court “shall require” the

15   defendant to pay restitution for the harms listed in the

16   statute.    18 U.S.C. § 3663A(b).4   No other expense

          2
            While the MVRA started out as a separate bill, it was
     later placed within the Antiterrorism and Effective Death
     Penalty Act of 1996, Pub. L. No. 104-132, 110 Stat. 1214.
          3
            The parties agree that the MVRA applies here because
     a bank robbery is a “crime of violence” under 18 U.S.C. §
     3663A(c).
          4
              The full text of 18 U.S.C. § 3663A(b) states:

     The order of restitution shall require that such defendant–-

                                    6
1

    (1) in the case of an offense resulting in damage to or loss
    or destruction of property of a victim of the offense–-

        (A) return the property to the owner of the property or
        someone designated by the owner; or

        (B) if return of the property under subparagraph (A) is
        impossible, impracticable, or inadequate, pay an amount
        equal to–-

             (i) the greater of–-

                 (I) the value of the property on the date of
                 the damage, loss, or destruction; or

                 (II) the value of the property on the date of
                 sentencing, less

             (ii) the value (as of the date the property is
             returned) of any part of the property that is
             returned;

    (2) in the case of an offense resulting in bodily injury to
    a victim–-

        (A) pay an amount equal to the cost of necessary
        medical and related professional services and devices
        relating to physical, psychiatric, and psychological
        care, including nonmedical care and treatment rendered
        in accordance with a method of healing recognized by
        the law of the place of treatment;

        (B) pay an amount equal to the cost of necessary
        physical and occupational therapy and rehabilitation;
        and

        (C) reimburse the victim for income lost by such victim
        as a result of such offense;

    (3) in the case of an offense resulting in bodily injury
    that results in the death of the victim, pay an amount equal
    to the cost of necessary funeral and related services; and

                                    7
1    reimbursement is made mandatory.    There is no provision in §

2    3663A giving the district court discretion to order any

3    other restitution.

4        The broad scope of the MVRA is subject to some

5    limitations.   Only a ‘victim’ (or the victim’s estate) is

6    entitled to restitution.   See 18 U.S.C. § 3663A(a)(1).       The

7    term ‘victim’ is defined as “a person directly and

8    proximately harmed as a result of the commission of an

9    offense for which restitution may be ordered.”    18 U.S.C. §

10   3663A(a)(2).   This causation principle also governs the

11   calculation of reimbursable loss.    See United States v.

12   Gushlak, 728 F.3d 184, 194-95 (2d Cir. 2013).    And only a

13   victim’s “actual loss” is compensable, not losses that are

14   hypothetical or speculative.   Id. at 195.

15       “The procedures by which the sentencing court imposes a

16   restitution order are set forth in 18 U.S.C. § 3664.”

17   United States v. Marino, 654 F.3d 310, 317 (2d Cir. 2011);

18   see also 18 U.S.C. § 3663A(d).     Among other things, this

19   section prevents restitution from being conditioned or

     (4) in any case, reimburse the victim for lost income and
     necessary child care, transportation, and other expenses
     incurred during participation in the investigation or
     prosecution of the offense or attendance at proceedings
     related to the offense.
                                    8
1    limited by a defendant’s ability to pay: “In each order of

2    restitution, the court shall order restitution to each

3    victim in the full amount of each victim’s losses as

4    determined by the court and without consideration of the

5    economic circumstances of the defendant.”     18 U.S.C. §

6    3664(f)(1)(A) (emphasis added).

7

8                                  II

9        The decisive issue on this appeal is whether expenses

10   other than those enumerated in § 3663A(b) are compensable

11   under the MVRA.   We conclude they are not.

12       “We begin our interpretation of a federal statute with

13   the statutory text.”   City of New York v. Permanent Mission

14   of India to the United Nations, 618 F.3d 172, 182 (2d Cir.

15   2010).   It is apparent from the text of § 3663A that

16   unlisted harms are not compensable in restitution.      Because

17   courts have no inherent authority to order restitution,

18   Congress must provide the authority.   See United States v.

19   Casamento, 887 F.2d 1141, 1177 (2d Cir. 1989).     Congress did

20   so through the MVRA, but chose to include only the four

21   categories of harms listed in § 3663A(b).     If Congress

22   intended to include all harms directly and proximately

                                   9
1    caused by a defendant’s offense, it could have done so with

2    wording more simple and categorical.   “Applying the rule of

3    statutory construction ‘inclusio unius est exclusio

4    alterius’--that to express or include one thing implies the

5    exclusion of the other”--it follows that Congress intended

6    to limit the restitutable harms covered by the MVRA.       United

7    States v. Tappin, 205 F.3d 536, 540 (2d Cir. 2000).

8        The Government’s reliance on the statutory mandate to

9    impose restitution “in the full amount of each victim’s

10   losses,” 18 U.S.C. § 3664(f)(1)(A), is misplaced.     The MVRA

11   provides that § 3664 is procedural rather than substantive.

12   See 18 U.S.C. § 3663A(d); see also United States v. Cliatt,

13   338 F.3d 1089, 1093 (9th Cir. 2003) (stating § 3664 cannot

14   trump substantive restitution provisions because it is only

15   a procedural mechanism).   Furthermore, the context of this

16   clause is that the “full amount” of loss be determined

17   “without consideration of the economic circumstances of the

18   defendant.”   18 U.S.C. § 3664(f)(1)(A).   The provision

19   emphasizes only that courts may not decrease restitution to

20   account for the defendant’s ability to pay.    Taken thus in

21   context, this clause cannot serve as the Government’s

22   springboard for restitution more broad than the text

23   specifies.

                                   10
1        The Government seems to suggest that any and all losses

2    are compensable to the extent that they were ‘directly and

3    proximately’ caused by a defendant’s offense.   However, the

4    requirements of direct and proximate causation, see, e.g.,

5    Marino, 654 F.3d at 317, are necessary conditions for

6    restitution under the MVRA–-not sufficient ones.   As the

7    statute makes clear, the harm must also come within one of

8    the categories enumerated in § 3663A(b).

9        The Government’s cases do not support a broader

10   application of the MVRA.   Many are mere applications of §

11   3663A(b)(1), which allows reimbursement for property loss.

12   See, e.g., United States v. Qurashi, 634 F.3d 699, 702-05

13   (2d Cir. 2011) (allowing prejudgment interest for funds paid

14   out of life insurance funds to ensure the victim received

15   the “full amount” of their losses); United States v. Donaby,

16   349 F.3d 1046, 1051-55 (7th Cir. 2003) (damage to police car

17   in chase after bank robbery).

18

19                                III

20       We now consider whether the specific costs incurred by

21   Merchants Bank fall within the enumerated harms of §

22   3663A(b).

23

                                     11
1                                    A

2        In the wake of the robbery, the bank was closed as a

3    crime scene for the afternoon, and the bank’s regular staff

4    stayed home the following two days to get over any stress

5    caused by the incident.     The district court ordered Maynard

6    and Ludwig to pay restitution for the full amount of the

7    wages paid to the regular staff over this period of time.

8    However, given the goal of restoring victims “to their

9    original state of well-being,” Boccagna, 450 F.3d at 115

10   (internal quotation marks omitted), we need to take into

11   account that the bank would have paid the regular staff in

12   any event.     Thus, the bank would enjoy a windfall if it

13   recovered compensation for the full amount of the regular

14   staff and replacement staff wages.

15       A portion of the regular staff wages is nevertheless

16   compensable because the bank derived no benefit from the

17   wages paid during the bank’s closure on the day of the

18   robbery.     When a victim’s facility is required to close

19   temporarily for crime scene investigation, the associated

20   costs may well fall under the MVRA.     See, e.g., United

21   States v. Wilfong, 551 F.3d 1182, 1183-87 (10th Cir. 2008)

22   (lost work time due to evacuation after bomb threat); United

                                     12
1    States v. Quillen, 335 F.3d 219, 222-23 (3d Cir. 2003)

2    (closing mailroom due to contamination from anthrax); United

3    States v. De La Fuente, 353 F.3d 766, 768, 771-73 (9th Cir.

4    2003) (lost work hours for postal service employees during

5    decontamination resulting from receipt of a threatening

6    letter said to contain anthrax).        To the extent the bank

7    paid its regular staff for the remainder of that day,

8    restitution is proper.

9

10                                   B

11       The wages for the temporary staff do not fall within

12   the enumerated harms of § 3663A(b).        The temporary staff

13   wages did not compensate for losses such as destruction of

14   property or funeral expenses, and were not necessary to the

15   prosecution or investigation of the offense.        See 18 U.S.C.

16   § 3663A(b)(1), (3)-(4).   The expense is arguably

17   attributable to the psychological recovery of the regular

18   staff present during the robbery; however, the MVRA

19   unambiguously limits recovery for psychological harm to

20   instances of “bodily injury.”        18 U.S.C. § 3663A(b)(2); see

21   also United States v. Reichow, 416 F.3d 802, 805-06 (8th

22   Cir. 2005).   The Government characterizes the wages as a

                                     13
1    business expense absorbed by the bank, but the MVRA does not

2    include a business expense category.     Because the temporary

3    staff wages fall outside the enumerated harms of § 3663A(b),

4    they may not be included in a restitution order.5

5        The Government adduces cases in which loss of income

6    has been compensated after a robbery.     The summary order

7    issued in United States v. Blagojevic, 331 F. Appx. 791, 794

8    (2d Cir. 2009), allowed restitution for lost income when the

9    owner of a jewelry store closed the store during peak season

10   due to trauma suffered from a robbery.     But Blagojevic was

11   decided on the plain error standard of review; the only

12   appellate issue was proximate causation, id. at 793-94; and

13   the order did not consider the types of harms compensable

14   under § 3663A.     (On the whole, the case is a good example of

15   why summary orders lack precedential force.)     The Government

16   also cites United States v. Tran, in which a teller who was

17   unable to work after a bank robbery was awarded restitution

18   for lost income.     234 F.3d 798, 804 (2d Cir. 2000),

19   overruled on other grounds by United States v. Thomas, 274

20 F.3d 655 (2d Cir. 2001) (in banc).     However, the defendant

          5
            Because we hold that the award for temporary staff
     wages was improper, it follows that the mileage expense for
     the temporary staff is likewise not allowable.
                                     14
1    challenged only the payment plan and not “the imposition of

2    restitution.”   Id. at 812-13.

3

4                                     C

5        The only category of allowable expense in which the

6    wanted posters and the temporary security guard might be

7    located is § 3663A(b)(4), which requires defendants to

8    “reimburse the victim for . . . necessary . . . expenses

9    incurred during participation in the investigation or

10   prosecution of the offense or attendance at proceedings

11   related to the offense.”   18 U.S.C. § 3663A(b)(4) (emphasis

12   added).

13       We have not adopted a test for necessity in this

14   context.   Our reading of a statutory text “‘necessarily

15   begins with the plain meaning of a law’s text and, absent

16   ambiguity, will generally end there.’”   Dobrova v. Holder,

17   607 F.3d 297, 301 (2d Cir. 2010) (quoting Bustamante v.

18   Napolitano, 582 F.3d 403, 406 (2d Cir. 2009)) (internal

19   quotation mark omitted).   “In conducting such an analysis,

20   we ‘review the statutory text, considering the ordinary or

21   natural meaning of the words chosen by Congress, as well as

22   the placement and purpose of those words in the statutory

                                      15
1    scheme.’”    Id. (quoting United States v. Aguilar, 585 F.3d
2    652, 657 (2d Cir. 2009)).   The dictionary definition of

3    “necessary” tends to be circular:   essential or

4    indispensable.   See 10 The Oxford English Dictionary 275-76

5    (2d ed. 1989) (defining “necessary” as “indispensable,

6    requisite, essential, needful; that cannot be done

7    without”).   But the plain meaning is not obscure.   The

8    victim expenses that are recoverable as restitution under 18

9    U.S.C. § 3663A(b)(4) are expenses the victim was required to

10   incur to advance the investigation or prosecution of the

11   offense.

12       Generally, this Circuit takes a broad view of what

13   expenses are “necessary.”   See United States v. Papagno, 639

14 F.3d 1093, 1101 (D.C. Cir. 2011) (citing Amato, 540 F.3d
15   153) (“In reaching our conclusion, we recognize that several

16   other courts of appeals have taken a broader view of the

17   restitution provision at issue here.”).   But respect for the

18   limits of the statute is not a narrowing of it.

19       Two of our cases reflect the standard of necessity.

20   Amato imposed restitution for attorney’s fees and accounting

21   costs incurred by an internal investigation that uncovered

22   fraud--notwithstanding that not all of the effort and

                                    16
1    expense was requested by the government.        See 540 F.3d at

2    159-60, 162 (noting that the victim had “assisted in

3    gathering and producing evidence necessary to the

4    government’s prosecution”).     Likewise, in United States v.

5    Bahel, we affirmed restitution for legal fees incurred when

6    the United Nations hired outside counsel to conduct an

7    internal investigation rather than use on-staff lawyers.

8    See 662 F.3d 610, 647-48 (2d Cir. 2011).

9        In both cases, the internal investigations paid for by

10   the victims unmasked fraud and led to investigations

11   conducted by the authorities.        The expense of the internal

12   investigations was necessary because the entity had

13   interests to protect (the integrity of its ongoing

14   operations and reputation, at the least) as well as a duty

15   to protect those interests when faced with evidence,

16   indicia, or a grounded suspicion of internal misconduct, and

17   the investigation was a means calculated to achieve the

18   protection of those interests.

19       A bank’s production of wanted posters after a robbery

20   has occurred is by comparison, and in absolute terms,

21   gratuitous.   The crime had been committed; there was no

22   especial likelihood that this bank would again be the victim

                                     17
1    of the same robbers; the police had an ongoing investigation

2    and did not seek the bank’s cooperation in postering the

3    neighborhood; and the bank had no interest to protect by an

4    independent investigatory effort--and certainly had no duty

5    to undertake it.

6        For many of the same reasons, the security guard served

7    no investigatory purpose.   The guard provided additional

8    security for the bank after the robbery happened.   If

9    additional security had been laid on permanently, it would

10   be necessitated by permanent security interests rather than

11   by the conduct of these defendants.   As it happens, the

12   guard was hired on a short-term basis; but there is no

13   plausible showing that a second robbery of this branch by

14   these defendants was such an imminent peril or a risk that

15   the bank had a duty to take measures by posting a temporary

16   guard.

17       Because these expenses were not necessary to the

18   investigation or prosecution of the offense, and do not fall

19   within one of the other categories of harm enumerated in §

20   3663A(b), restitution for these expenses was improper.

21

22

                                   18
1                             CONCLUSION

2       The restitution order properly included the amount of

3   money stolen during the bank robberies.   For the foregoing

4   reasons, however, we conclude that the only portion of

5   Merchants’ expenses subject to restitution is the amount

6   paid to the bank’s regular staff while the bank was closed

7   as a crime scene.   To that end, we vacate the restitution

8   component of the judgments and remand to determine the

9   amount of restitution consistent with this opinion.

                                  19