Friday, September 16, 2005

3rd Cir to consider en banc whether Booker applies to restitution and forfeiture

The 3rd Cir has sua sponte voted to rehear en banc three appeals previously argued before two different panels in which the issue is whether the rule of Blakely and Booker applies to orders of restitution and forfeiture. See US v. Kennard Gregg, No 04-2912 (9/16/05); US v. James Fallon No. 03-4184 (both addressing restitution); and US v. Paul Leahy, No. 03-4490 (addressing forfeiture.) In the Gregg and Fallon, the Court has stated that the following issue is to be addressed:

Whether orders of restitution are a criminal penalty and whether the
decision of the Supreme Court of the United States in Booker applies to such
orders under the MVRA (the mandatory restitution Act).


The issue in Leahy is whether Booker applies to forfeiture, and also "whether orders of restitution are a criminal penalty and whether Booker applies to such orders under the VWPA" (the discretionary restitution Act in effect prior to the MVRA).
The en banc argument is scheduled for Nov. 1, 2005. The granting of en banc review in these cases indicates that the 3d Circuit judges are split or undecided on the question of whether a jury finding or admission by defendant regarding loss amount is required under the reasoning of Blakely and Booker in order for a judge to be able to impose restitution or forfeiture.

The granting of en banc consideration makes all the more clear the importance of objecting on Blakely/Booker grounds to any sentence that includes an order of restitution (or forfeiture) where the amount of loss (or ill-gotten gain) is not admitted or proven to the jury beyond a reasonable doubt. The 3rd Cir rejected this argument pre-Blakely in US v. Syme, 276 F.3d 131 (2002) in the context of the old version of the restitution act -- the VWPA -- which made the amount of restitution discretionary with the judge. The Court in Syme ruled, following a long line of precedent within the Circuit (and in most other circuits), that restitution is a "criminal penalty" and thus that it must be analyzed as such under the rule of Apprendi. (The issue statement in Gregg and Fallon indicates the Court will be reconsidering this part of Syme too.) But the Court, without the benefit of Blakely, ruled that since the VWPA did not specify a maximum amount of restitution, the rule of Apprendi regarding increases in the statutory maximum did not apply.

At least two things have changed since Syme, requiring the Circuit to reconsider that holding. First, under the new restitution act -- the MVRA -- restitution in the full amount of the loss is no longer discretionary, but mandatory. Second, Blakely and Booker have clarified what the Supreme Court meant by "statutory maximum." The statutory maximum for Sixth Amendment and Apprendi purposes is not just a number specified in a statute, but rather, the "maximum sentence a judge may imposed solely on the basis of facts reflected in the jury verdict or admitted by the defendant." Blakely, 124 S. Ct. at 2537. Thus, for Apprendi purposes, the maximum restitution a judge may impose is the amount of loss "reflected in the jury verdict or admitted by the defendant." If the jury does not find a loss amount beyond a reasonable doubt, and the defendant does not admit to an amount, then the statutory maximum restitution is zero. Restitution based only on judge-found facts would violate Apprendi, Blakely and Booker.

(To the extent that forfeiture can be viewed now, in light of Blakely and Booker, as a criminal penalty also subject to the Sixth Amendment right to jury trial, this same argument applies there. The only difficulty is that the in Libretti, 516 US 29 (1995), the Supreme Court held that there is no Sixth Amendment right to jury trial on forfeiture. But the reasoning of Libretti, which depends on the distinction between conviction and sentence, has been substantially undercut by Blakelyy and Booker, which "have made clear that distinguishing between a conviction and a sentence obscures what matters for constitutional purposes -- namely, facts that increase a defendant's punishment." US v. Lloyd, 407 F.3d 608, 615 (3rd Cir. 2005).)

An interesting question that may arise is whether, assuming Blakely and Booker do apply to restitution under the MVRA, could the Court impose a Booker style cure -- making the restitution discretionary as it was under the VWPA, and then permit restitution based on judge-found facts? The answer is clearly no. It simply makes no difference to the Apprendi analysis whether the amount of restitution is mandatory as under the MVRA, or whether judge has the discretion to impose less than the total amount of loss as under the VWPA. The Booker remedy of advisory guidelines cures the Sixth Amendment error inherent in mandatory guidelines only because the guidelines operate against the backdrop of statutes which set maximum sentences for each offense. Thus, if, as under Booker, the guidelines are made advisory, or even if the guidelines were entirely eliminated, the courts would retain statutory authority to impose up to the maximum allowed by the statute for the offense of conviction.

The same is not true for restitution. The court's only authority for imposing restitution is the restitution statute, and whether that statute is the MVRA or the VWPA, the maximum amount of restitution that can be imposed is determined by the amount of loss. That is true regardless of whether the court, as under the VWPA, has discretion to impose less than the maximum. Under Blakely and Booker, any fact which controls the maximum sentence that can be imposed must be admitted or proven to the jury. Thus, whether under the MVRA or under the VWPA, the amount of loss, since it controls the maximum restitution that can be imposed, must be subject to this Sixth Amendment jury requirement.

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