Court Opinion

ID: 3171761
Source: CourtListenerOpinion
Date Created: 2016-01-25 17:04:53.819217+00
Date Added: 2024-06-11T11:55:58.753381
License: Public Domain

STATE OF MINNESOTA
                               IN COURT OF APPEALS
                                     A15-0984
                                     A15-0998

                                  State of Minnesota,
                                Respondent (A15-0984),
                                 Appellant (A15-0998)

                                          vs.

                                     Chao Moua,
                                 Appellant (A15-0984),
                                Respondent (A15-0998).

                                 Filed January 25, 2016
                    Affirmed in part, reversed in part, and remanded
                                    Bjorkman, Judge

                              Ramsey County District Court
                                File No. 62-CR-14-996

Lori Swanson, Attorney General, St. Paul, Minnesota; and

John J. Choi, Ramsey County Attorney, Peter R. Marker, Assistant County Attorney,
St. Paul, Minnesota (for State of Minnesota)

Cathryn Middlebrook, Chief Appellate Public Defender, Benjamin J. Butler, Assistant
Public Defender, St. Paul, Minnesota (for Chao Moua)

      Considered and decided by Bjorkman, Presiding Judge; Smith, Judge; and

Klaphake, Judge.


 Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to
Minn. Const. art. VI, § 10.
                                       SYLLABUS

       1.      The minimum restitution provision of the identity-theft statute, Minn. Stat.

§ 609.527 (2012), does not violate a defendant’s right to procedural due process.

       2.      An individual experiences “loss or harm” as a result of identity theft when

the individual either suffers economic loss or the theft involves the individual’s name and

private identifying information.

                                        OPINION

BJORKMAN, Judge

       Chao Moua was convicted of one count of identity theft in violation of Minn. Stat.

§ 609.527, subds. 2, 3(5), and ordered to pay restitution to 15 individuals who sustained

economic loss or took remedial action as a result of the theft. Moua appeals, arguing that

the identity-theft statute’s $1,000 minimum restitution provision for direct victims violates

his right to procedural due process. In a separate appeal, the State of Minnesota argues that

the district court erred by requiring individuals to present evidence of resulting loss or harm

to qualify as direct victims entitled to minimum restitution. We affirm the district court’s

conclusion that the identity-theft statute does not violate a defendant’s right to procedural

due process. But because we conclude that an individual does not have to sustain actual

economic loss or provide evidence of specific remedial action to show loss or harm and

thus qualify as a direct victim entitled to minimum restitution, we reverse and remand for

the district court to award restitution to all direct victims.

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                                           FACTS

       In February 2014, St. Paul police stopped Moua’s vehicle and discovered hundreds

of pieces of stolen mail inside. The mail included identifying information of various kinds

relating to 422 individuals. Moua was charged with one count of identity theft involving

eight or more direct victims in violation of Minn. Stat. § 609.527, subds. 2, 3(5).

       Moua pleaded guilty, admitting that he stole mail with the intent to fraudulently

exploit any personal-identification information the mail contained. The state sought

restitution on behalf of all direct victims. The district court directed the state to provide a

list of potential direct victims, categorizing them by the nature of their loss or harm, which

could be used to determine restitution payment priority. At sentencing, the prosecutor did

so, placing the individuals into four categories:

               Category 1 - 14 individuals who sustained out-of-pocket
                economic losses.

               Category 2 - 287 individuals who were likely to suffer
                some form of inconvenience or hassle due to the identity
                theft, but did not experience economic loss.

               Category 3 - 2 individuals who responded to calls from
                county victim’s advocates, but reported no economic losses
                or inconvenience.

               Category 4 - 119 individuals who lost items such as “junk
                mail,” which did not contain private identifying
                information.

The district court ordered Moua to pay restitution of $1,000 to each of the 422 individuals

pursuant to the minimum restitution provision of the identity-theft statute, Minn. Stat.

§ 609.527, subd. 4(b).

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       In August 2014, Moua filed a timely challenge to the restitution order, asserting that

most of the individuals for whom the state sought restitution were not direct victims as

defined by the identity-theft statute, and that the minimum restitution provision of the

statute violates his due-process rights. At the restitution hearing, the state conceded that

the 119 individuals whose stolen mail did not include private identifying information are

not direct victims. The primary dispute was whether the 287 individuals whose names and

private identifying information were stolen, but who had not sustained economic loss, are

direct victims entitled to restitution.1

       Detective Jennifer Engh of the Roseville Police Department testified regarding the

nature of the loss or harm individuals in each of the first three categories was likely to

experience. She explained that the 287 members of category 2 had, in addition to their

names, some form of private identifying information stolen, such as an account number,

date of birth, driver’s license number, or passport. Detective Engh noted that once such

private identifying information is stolen, “it is always out there, and you don’t know who

will have [it] next.” She also explained that these individuals will likely need to take a

variety of remedial actions, including “closing accounts, reestablishing new credit cards,

reestablishing new checking accounts, . . . [and] contacting the Social Security

Administration.” Detective Engh testified that one of these individuals spent over 100

hours clearing his or her name.

1
  On appeal, the state concedes that the two category 3 individuals who responded to calls
from county victim’s advocates are not entitled to restitution.

                                             4
       Following the restitution hearing, the district court amended its original order,

awarding restitution only to the 14 individuals in category 1—those who had incurred

economic loss—and the one person in category 2 who spent over 100 hours attempting to

clear his or her name. The district court determined that the steps the category 2 individuals

would likely have to take in response to the stolen information would constitute loss or

harm entitling them to minimum restitution only if and when they took such steps. The

district court suggested that, if these individuals experienced loss or harm in the future,

they would be able to pursue recovery under the general criminal restitution statute, Minn.

Stat. § 611A.04, subd. (1)(b) (2014). The district court also rejected Moua’s argument that

the minimum restitution provision violates his rights to substantive and procedural due

process. Both Moua and the state appeal. This court consolidated the appeals.

                                          ISSUES

I.     Does the minimum restitution provision of Minnesota’s identity-theft statute violate
       a defendant’s right to procedural due process?

II.    Must individuals whose names and private identifying information were stolen
       sustain economic loss or provide evidence of remedial action to show loss or harm
       for purposes of obtaining minimum restitution?

                                        ANALYSIS

I.     The minimum restitution provision of Minnesota’s identity-theft statute does
       not violate a defendant’s right to procedural due process.

       The Due Process Clauses in the United States and Minnesota Constitutions state that

a person shall not be deprived of life, liberty, or property “without due process of law.”

U.S. Const. amends. V, XIV; Minn. Const. art. I, § 7. Procedural due process requires the

government to “provide an individual with notice and an opportunity to be heard at a

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meaningful time and in a meaningful manner.” Sawh v. City of Lino Lakes, 823 N.W.2d

627, 632 (Minn. 2012) (quotation omitted).

       We conduct a “two-step analysis to determine whether the government has violated

an individual’s procedural due process rights.” Id. First, we “must identify whether the

government has deprived the individual of a protected life, liberty, or property interest.”

Id. If the government has deprived a person of a protected interest, we then “determine

whether the procedures followed by the [government] were constitutionally sufficient.” Id.

(alteration in original) (quotation omitted). Whether an individual’s due-process rights

have been violated is a question of law, which we review de novo. Id.

       Minnesota’s identity-theft statute provides that “[t]he court shall order a person

convicted of [identity theft] to pay restitution of not less than $1,000 to each direct victim

of the offense.” Minn. Stat. § 609.527, subd. 4(b). Moua challenged this provision on both

substantive and procedural due-process grounds in the district court. On appeal, Moua

argues only that the provision violates his procedural due-process rights. Specifically, he

contends that the $1,000 minimum restitution obligation denies him procedural due process

because he is unable to contest the amount of restitution awarded to each direct victim. We

are not persuaded.

       First, it is undisputed that Moua received notice and had multiple opportunities to

challenge the restitution award. At the plea hearing, Moua acknowledged that the state

intended to seek as much as $612,000 in restitution, and while he would have the

opportunity to challenge restitution, the court had the authority to order him to pay $1,000

per direct victim. Moua’s counsel argued at sentencing that the state was obligated to show

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that every claimed victim experienced loss or harm. And the district court conducted a

restitution hearing in which Moua presented legal arguments and challenged the state’s

evidence as to who qualified as a direct victim. Indeed, counsel persuaded the district court

to limit the number of restitution recipients to 15 individuals. In short, Moua’s numerous

opportunities to be heard on the issue of restitution demonstrate that application of the

minimum restitution provision did not impermissibly deprive him of his procedural due-

process rights.

       Second, it appears to us that Moua’s constitutional argument, at its core, implicates

the substance of the statute—that the statute is unfair because it, in effect, levies an arbitrary

fine that is untethered to a victim’s actual loss. To the extent the minimum restitution

provision raises due-process concerns, then, it does so with respect to substantive due

process. See State v. Wiseman, 816 N.W.2d 689, 692 (Minn. App. 2012) (stating that the

right to substantive due process “protects individuals from certain arbitrary, wrongful

government actions regardless of the fairness of the procedures used to implement them”

(quotations omitted)), review denied (Minn. Sept. 25, 2012), cert. denied 133 S. Ct. 1585

(2013), abrogated in part by Missouri v. McNeely, 133 S. Ct. 1552 (2013). But Moua has

not raised or briefed this issue on appeal.

       In sum, we conclude that the minimum restitution provision does not violate Moua’s

procedural due-process rights. And we decline to consider the merits of a possible

substantive due-process challenge because Moua did not raise the issue on appeal.

                                                7
II.    The 287 individuals whose names and private identifying information were
       stolen incurred loss or harm as a result of identity theft and are entitled to
       minimum restitution.

       A district court has broad discretion to award restitution. State v. Tenerelli, 598

N.W.2d 668, 671 (Minn. 1999). But whether a statute authorizes restitution is a matter of

statutory construction, which we review de novo. In re Welfare of J.A.D., 603 N.W.2d

844, 846 (Minn. App. 1999). The object of all statutory interpretation “is to ascertain and

effectuate the intention of the legislature.” Minn. Stat. § 645.16 (2014). When interpreting

a statute, we first determine whether its language is clear or ambiguous. Am. Family Ins.

Grp. v. Schroedl, 616 N.W.2d 273, 277 (Minn. 2000). Statutory language is ambiguous if

it is subject to more than one reasonable interpretation. Amaral v. St. Cloud Hosp., 598

N.W.2d 379, 384 (Minn. 1999). If statutory language is clear, we apply its plain meaning.

Hans Hagen Homes, Inc. v. City of Minnetrista, 728 N.W.2d 536, 539 (Minn. 2007). We

consider a statute as a whole and analyze statutory language in the context of surrounding

provisions to determine its plain meaning. Schroedl, 616 N.W.2d at 277-78. A statute

should be interpreted to give effect to all of its provisions, with no word or phrase deemed

superfluous,    and    to    avoid    absurd       or   unjust   results.      Minn.     Stat.

§ 645.17 (2014); Schroedl, 616 N.W.2d at 277-78.

       Minnesota’s identity-theft statute makes it a crime to “transfer[], possess[], or use[]

an identity that is not the person’s own, with the intent to commit, aid, or abet any unlawful

activity.” Minn. Stat. § 609.527, subd. 2. The statute broadly defines “identity” as “any

name, number, or data transmission that may be used, alone or in conjunction with any

other information, to identify a specific individual or entity,” and includes the following:

                                               8
                      (1) a name, Social Security number, date of birth,
              official government-issued driver’s license or identification
              number, government passport number, or employer or taxpayer
              identification number;
                      (2) unique electronic identification number, address,
              account number, or routing code; or
                      (3) telecommunication identification information or
              access device.

Id., subd. 1(d). The statute entitles each “direct victim” of identity theft to minimum

restitution “of not less than $1,000.” Id., subd. 4(b). A “direct victim” is “any person or

entity described in section 611A.01, paragraph (b), whose identity has been transferred,

used, or possessed in violation of this section.” Id., subd. 1(b). In its relevant part, Minn.

Stat. § 611A.01, paragraph (b) (2012), defines “victim” as “a natural person who incurs

loss or harm as a result of a crime.” (Emphasis added.) Accordingly, our analysis turns

on whether the claimed victims who had their names and private identifying information

stolen but did not sustain economic loss, incurred “loss or harm.”

       The state argues that an individual incurs loss or harm when an offender possesses,

transfers or uses the individual’s identifying information with the intent to commit criminal

activity and that individual has either: (1) suffered economic loss or (2) had the type of

private identifying information stolen—i.e., birthdate, Social Security number, passport,

account numbers, and the like—that will or has required some kind of remedial action.

Examples of such remedial actions include cancelling accounts, obtaining new forms of

identification and changing passwords or privacy settings. Moua asserts that general

restitution principles apply, so actual economic loss must be demonstrated to prove loss or

harm. See Minn. Stat. § 611A.04, subd. 1 (2014). Alternatively, he contends that even if

                                              9
non-economic loss or harm is sufficient, individuals must present evidence of specific

remedial action to obtain minimum restitution.       We find the state’s argument more

persuasive for three reasons.

       First, we do not read the identity-theft statute to require a showing of economic loss

to establish loss or harm. The statute defines “loss” as “value obtained . . . and expenses

incurred by a direct or indirect victim.” Minn. Stat. § 609.527, subd. 1(f). But the statute

does not define “harm.” Accordingly, we consider the plain meaning of the term. Harm

generally means “physical or psychological damage” or “immoral or unjust effects.” The

American Heritage Dictionary 802 (5th ed. 2011). Black’s Law Dictionary further defines

harm as a “material or tangible detriment.” Black’s Law Dictionary (10th ed. 2014). Thus,

the plain meaning of harm includes any detrimental effects of another’s wrongful actions,

and is not limited to measurable economic loss.

       This broad definition of harm is consistent with other portions of the identity-theft

statute. By generally defining a direct victim as someone who incurs either “loss or harm,”

and specifically defining “loss” in economic terms, the legislature implied that “harm”

encompasses an alternative array of non-economic damages and harmful effects. If this

were not so, the inclusion of harm in the definition of direct victim would be superfluous;

its scope would simply duplicate the term loss. See Amaral, 598 N.W.2d at 384 (stating

that “[w]henever it is possible, no word, phrase, or sentence should be deemed superfluous,

void, or insignificant.”).   Moreover, the legislature’s decision to tie the severity of

sentencing to either the number of direct victims or the total, combined economic loss

sustained supports our broad interpretation of harm. See Minn. Stat. § 609.527, subd. 3.

                                             10
These alternative bases for sentencing recognize that culpability flows from both the

amount of economic loss and the number of direct victims involved, regardless of the extent

of their loss or harm. This implies that real harm occurs even in the absence of economic

loss, and it follows that the legislature intended direct victims to include those who incur

such non-economic harm.

       Second, we are not persuaded that an individual whose name and private identifying

information has been stolen must have already taken remedial steps to demonstrate harm.

Detective Engh testified that individuals whose names, account numbers, birth dates, and

license and passport numbers have been compromised by an identity thief will “absolutely”

have to take remedial actions at some point to protect themselves. As Detective Engh

explained, such an individual’s private identifying information “is always out there,” and

thus these individuals face a lingering threat even if they take remedial action. In other

words, individuals incur harm when their security is compromised by the initial theft of

their name and private identifying information, and the harm may continue indefinitely,

despite restorative measures. The subsequent time and effort individuals may expend on

actions such as closing accounts, changing passport, Social Security, and other identifying

numbers, and alerting creditors do not represent the first realization of harm. Rather, it is

additional detriment to the harm occasioned by the initial theft.

       Third, our interpretation of harm is consistent with the broad, remedial purpose of

the identity-theft statute. The minimum restitution provision reflects the legislature’s

recognition that while it is difficult to quantify loss or harm occasioned by identity theft,

victims nonetheless experience material detriment. In Anderson v. State, this court rejected

                                             11
the contention that an identity-theft victim must submit a loss affidavit to recover under the

minimum restitution provision. 794 N.W.2d 137, 140-41 (Minn. App. 2011), review

denied (Minn. Apr. 27, 2011). We reasoned that the specific provisions of the identity-

theft statute control over the general restitution procedures embodied in Minn. Stat.

§ 611A.04, subd. 1, and that the more specific identity-theft provisions do not require proof

of loss. Id. at 140. In so doing, we implicitly recognized the legislature’s intention to

forego the procedural requirements contained in the general restitution statutes to make

restitution broadly available to those affected by identity theft.

       Likewise, requiring individuals whose names and private identifying information

have been stolen to show what remedial action they have taken before receiving restitution

would be inconsistent with the legislature’s intent. By interpreting harm to be incurred

when private identifying information is stolen, identity-theft victims may efficiently

resolve restitution claims that could otherwise linger as they attempt to uncover the extent

of their exposure, which as Detective Engh suggested, may be indeterminable. And our

construction of the statute ensures that individuals who are only dispossessed of publicly

available information like their name and address on a piece of junk mail, are not entitled

to minimum restitution because such information on its own would be of little use to an

identity thief.

       In sum, we hold that when a defendant possesses an individual’s name and private

identifying information with the intent to commit a crime, the individual has incurred loss

or harm and is thus entitled to $1,000 minimum restitution under the identity-theft statute.

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                                      DECISION

       The identity-theft statute’s minimum restitution provision does not violate a

defendant’s right to procedural due process. We also conclude that where a defendant

criminally possesses, uses, or transfers an individual’s name and private identifying

information, that individual has sustained loss or harm and is thus a direct victim who is

entitled to the mandatory minimum restitution payment. Accordingly, we reverse and

remand for the district court to award restitution to all direct victims, consistent with this

opinion.

       Affirmed in part, reversed in part, and remanded.

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