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IMPACT OF CRIME VICTIMS RESTITUTION ACTS
Fifth Circuit’s Decision on Restitution in Possession of Child Pornography Cases Creates Sentencing Nightmare
By: Houston Criminal Lawyer John Floyd and Paralegal Billy Sinclair
In theory the criminal justice system has a fundamental obligation to provide restitution to crime victims. In practice this obligation has created a contentious and ongoing legal debate in federal appellate courts as to how this obligation must be met. Two recent decisions emanating out of the Fifth and Second federal circuits underscore the difficulties faced in deciding when and how restitution is appropriate, the level of harm caused to victims, and the statutory standards by which restitution can be awarded. Last year we dealt with the issue of restitution in child pornography cases which, we believe, has run constitutionally amuck. We feel it’s time to examine both the legislative history, and the statutory application, of crime victims’ restitution acts, both of which were discussed at some length by the Second Circuit on August 18, 2011 in United States v. Marino.
Matthew Marino was convicted of misprision of a felony, a violation of 18 U.S.C. § 4, in connection with a Ponzi scheme; and following a guilty plea, New York’s Southern District U.S. District Court Judge Stephen C. Robinson ordered Marino to pay $60 million to those defrauded in the scheme. The restitution order was imposed pursuant to the Mandatory Victims Restitution Act (“MVRA”), 18 U.S.C. § 3663A, which was enacted in 1996 as part of the Anti-Terrorism and Effective Death Penalty (“AEDPA”). In upholding extraordinary restitution order, the Second Circuit informed us that the first crime victims restitution law was passed by Congress in 1982 under the title of Victim Witness Protection Act (“VWPA”), 18 U.S.C. § 3663(a)(2), which was a general, discretionary restitution statute revised in 1986 and which was later “partially superseded” by MVRA. The VWPA was overhauled in 1990 as part of the Crime Control Act of 1990, including authorizing federal courts, when sentencing in certain crimes, to order “that the defendant make restitution to any victims of such offense,’ which was pointed out by the U.S. Supreme Court in Hughey v. United Statesshortly before the 1990 VWPA amendment.
In 2009 the Second Circuit, in United States v. Battista, said “the goal of restitution in the criminal context, is ‘to restore a victim, to the extent money can do so, to the position he occupied before sustaining injury.’” MVRA defines a “victim” as broadly as any of the restitution statutes: It is a “person directly and proximately harmed as a result of the commission of an offense for which restitution may be ordered, including in the case of an offense that involves as an element a scheme, conspiracy, or pattern of criminal activity, any person directly harmed by the defendant’s criminal conduct in the course of the scheme, conspiracy, or pattern.” VWPA had essentially adopted the same “victim” definition in 1990.
Significantly, the Second Circuit in Marino pointed out that the current version of MVRA and the original version of VWPA included an important provision that limited a federal court’s authority to order restitution where such an order “would unduly complicate or prolong the sentencing process.” The appeals court pointed to a Senate Report that explained “the Committee added this provision to prevent sentencing hearings from becoming prolonged and complicated trials on the question of damages owed the victim.”
The Second Circuit observed that “since 1982 when it authorized federal courts to impose restitution, Congress has: (i) broadened this authority by … allowing restitution for victims who directly suffered harm from crimes involving conspiracy or a criminal scheme, and allowing restitution for crimes pled in a plea agreement; (ii) made restitution mandatory for certain crimes; (iii) imposed a ‘direct and proximate causation’ to both discretionary and mandatory restitution; and (iv) remained insistent that restitution determinations not unduly prolong sentencing proceedings.”
It is the “direct and proximate causation” issue that has clouded restitution in child pornography cases in the Fifth Circuit. A number of opportunistic attorneys across the country have used a 1994 federal restitution statute, 18 U.S.C. § 2259, to file hundreds of requests for adults, who were victimized as children by child pornography, in cases in which a defendant has been charged with possessing their child porn images. This statute imposes a duty upon a federal sentencing court to order any defendant convicted of a child abuse-related offense to pay restitution to the victim of that offense. The statute is especially demanding because the sentencing judge cannot refuse to order restitution based on the defendant’s deprived economic circumstances or because the victim has received compensation for his/her injuries from some other source, such as a civil judgment. The following reasons are provided for restitution under this statute:
- “Medical services relating to physical, psychiatric, or psychological care” for the victim;
- “Physical and occupational therapy or rehabilitation” for the victim;
- “Attorney fees, as well as other costs incurred” by the victim; and
- “Any other losses suffered by the victim as a proximate result of the offense.”
All these crime victims restitution statutes were reinforced and augmented by the Crime Victims’ Rights Act of 2004 (“CVRA”). It is mandatory under CVRA that crime victims be given timely notice of any court proceeding involving the perpetrator of the crime and that they have the right to be heard at that proceeding.
Attorneys seeking mass restitution from any and every defendant formally charged with possession of images of those individuals victimized by the producers, distributors, and possessors of the child pornography have used CVRA, Sec. 2259, and the Violence Against Women Act of 1996 (“VAWA”) in support of their restitution requests. A United States District Court in the Eastern District of Texas in 2009 in the case of United States v. Paroline was forced to confront one of these restitution requests. Paroline was convicted via a guilty plea in January 2009 of one count of possessing pornographic material. An attorney representing one of the children (named “Amy”) in Paroline’s pornographic material filed a restitution request under Sec. 2259 seeking a $3,367, 854.00 damage award.
As we pointed out in our 2010 post, U.S. District Court Judge Leonard Davis, sitting in Tyler, had to confront whether there is a “proximate cause” requirement under § 2259, i.e., whether Amy’s losses—the more than $3 million she requested in restitution—were “proximately caused by Paroline’s possession of Amy’s two pornographic images.” While her attorney strenuously argued that § 2259 did not require a proximate cause showing, both the Government and Paroline’s attorney agreed that such a showing was required, and that the Government bore the burden of having to prove by a preponderance of the evidence that Paroline’s conduct inflicted a $3 million loss on Amy. Judge Davis agreed with the Government and Paroline’s attorney, pointing out that at least one subsection of § 2259 contained a “proximate result” requirement.
For guidance, Judge Davis turned to the Supreme Court decision in Hughey which specifically held that restitution in criminal cases must be tied to the losses caused by the offense for which the defendant is convicted. Judge Davis also invoked the Fifth Circuit decision in United States v. Maturin which held that a “district court can award restitution to victims of the offense, but the restitution award can encompass only those losses that resulted directly from the offense for which the defendant was convicted.”
These cases set the stage for Judge Davis’ most critical inquiry: did the Government establish that Paroline’s conduct, the possession of the two Amy images, inflict a $3 million loss on her? Judge Davis began his analysis with the following preliminary observation:
“ … the Court is not aware of any circuit court that has considered a restitution award under section 2259 where the defendant was an end-user or possessor of child pornography. Restitution in possession cases is an issue of first impression in district courts around the nation as the Government has only recently begun seeking restitution from possessors of child pornography on behalf of victims … After considering all of the arguments, authority before it, and principles of statutory construction, the Court finds that section 2259 requires that a victim’s losses be proximately caused by the defendant’s conduct to be recoverable in restitution. General restitution and causation principles applied by the Supreme Court and the Fifth Circuit support this interpretation of the statute. Moreover, this interpretation is consistent with the various circuit courts that have interpreted section 2259 to require that the victim’s losses be proximately caused by the defendant’s conduct. Thus, an award of restitution under section 2259 is appropriate only for the amount of the victim’s losses proximately caused by the defendant’s conduct.”
Judge Davis then faced the underlying, albeit essential, issue in the Paroline case: whether the government carried the burden of proving Amy’s loss was the proximate result of Paroline’s conduct. The Government launched its argument with a slight of hand maneuver, telling the Court that it had satisfied the “proximate cause requirement” of § 2259 by showing Amy had been “harmed” by Paroline’s conduct. Judge Davis was not impressed as he casually deflected the Government’s maneuver by conceding that Amy had been “harmed” by Paroline’s possession of the two images but added that “ … this does little to show how much her harm, or what amount of her losses, was proximately caused by Paroline’s offense.” Judge Davis added the significant observation that simply because a victim is harmed and even sustained some lesser loss as a result of a defendant’s specific offense, the victim is not “necessarily entitled to restitution for all her losses.”
Judge Davis then instructed the Government that it had the burden of proving that “but for” Paroline’s possession of the two images Amy would not have suffered a specific loss. This is consistent with what the Second Circuit concluded in In re Rendon Galvis that when a “proximate cause” showing must be made, the Government must show that “but for” a defendant’s conduct a victim would not have suffered a specific loss.
Judge Davis conducted two hearings on the Amy restitution issue during which her attorney and the Government attempted to establish her $3 million loss demand with the following evidence:
- A Victim Impact Statement (which was authored by Dr. Silberg);
- A psychological evaluation by Dr. Silberg (dated November 21, 2008);
- An economic report by Dr. Stan V. Smith (dated September 15, 2008) who had no real expertise as an economist; and
- Numerous excerpts from articles about the harm associated with child pornography.
After listening to this evidence, Judge Davis concluded:
“ … The losses described in Amy’s reports are generalized and caused by her initial abuse as well as the general existence and dissemination of her pornographic images. No effort has been made to show the portion of these losses specifically caused by Paroline’s possession of Amy’s two images. After reviewing the data underlying Amy’s experts’ reports, Paroline submitted a supplemental brief that identifies certain discrepancies between Amy’s Victim Impact Statement and Dr. Silberg’s notes. Paroline’s supplemental briefing also includes a report by Dr. Timothy J. Proctor enumerating his concerns as to the reliability of Dr. Silberg’s report and an economic report prepared by Dr. Kent Gilbreath that sets forth estimates of Amy’s future potential earning capacity to illustrate the discrepancy between his sums and those of Dr. Smith.
“It is clear from the evidence before the Court that a large portion of Amy’s total losses were caused by her original abuse by her uncle. It is equally clear that significant losses are attributed to the widespread dissemination and availability of her images and the possession of those images by many individuals such as Paroline. There is no doubt that everyone involved with child pornography—from the abusers and producers to the end-users and possessors—contribute to Amy’s ongoing harm. The Court is sympathetic to Amy and the harm that she had undoubtedly experienced and will continue to experience for the rest of her life. The Court also realizes that it is incredibly difficult to establish the amount of a victim’s losses proximately caused by any one defendant convicted of possession. However, the Court’s sympathy does not dispense with the requirement that the Government satisfy its burden of proving the amount of Amy’s losses proximately caused by Paroline’s possession of her two images. Although this may seem like an impossible burden for the Government, the Court is nevertheless bound by the requirements of the statute.
“Having reviewed all of the evidence, the Court finds that the Government has failed to meet its burden of proving any specific losses proximately caused by Paroline’s conduct. Thus, an award of restitution is not appropriate in this case.”
This past March the Fifth Circuit in In re Amy Unknown reversed Judge Davis’ ruling. The appeals court held, as it had twelve years ago in United States v. Norris, that the mere possession of child pornography establishes harm. This decision is not yet final as the appeals court has agreed to an en banc hearing on the Paroline issues. The finding that mere possession constitutes victim harm notwithstanding, the three-judge panel decision opened a Pandora’s box that flies in the face of the Hughey decision and the underlying provision of victim restitution statutes; namely, that restitution requests not prolong or complicate the sentencing process.
The following paragraph highlights how the In re Amy Unknown decision will complicate and prolong the sentencing process:
“A second reason to doubt that Paroline will pay an unconstitutional price for his crime is the possibility that he can seek contribution from other persons who possess Amy’s images. Although [Sec. 2259] holds a criminal suspect responsible for ‘the full amount of the victim’s losses,’ … it instructs the court to enforce the restitution award ‘in accordance with section 3664’ … Section 3664 states that the court may enforce a restitution order ‘by all other available and reasonable means.’ … Among these is joint and several liability. Holding wrongdoers jointly and severally liable is no innovation … It will, however, enable Paroline to distribute ‘the full amount of the victim’s loss across other possessors of Amy’s images. Among its virtues, joint and several liability shifts the chore of seeking contribution to the person who perpetrated the harm rather than its innocent recipient … This court offers no opinion on the amount of restitution due in Amy’s particular circumstances. The district court has conducted two evidentiary hearings already. It is best qualified to determine Amy’s total harm and the fraction due to Paroline’s crime.”
There are hundreds, if not thousands, of criminal defendants across the nation who have been convicted of possessing child pornography that included images of Amy. Some of the defendants are in the nation’s prison system, others under supervised release, and still others registered as life time sex offenders. This does not include the score of other defendants sitting in federal and state jails charged with possessing child pornography that includes Amy’s images. All of these offenders are, according to the Fifth Circuit, jointly and severally liable of any restitution damages awarded to Amy in any given case.
Defense counsel in Paroline’s case, or in any case in which the attorney for Amy files a Sec. 2259 restitution request, can file a sentencing discovery request asking that the Government provide a list of all the criminal defendants either convicted or charged with possessing Amy’s image. Attorneys can then ask the court to spread out any Amy restitution award to all of these defendants.
A significant underlying issue in the Fifth Circuit’s holding In re Amy Unknown is that the appeals court implied Amy had made herself a “party” in Paroline’s case, and as such, she and her experts (as well as her attorney) would be subject to depositions. Attorneys representing Paroline or any other defendant charged with possessing Amy’s image would naturally want to know from these individuals the number of cases in which she has filed a Sec. 2559 restitution request and if she listed all of her itemized “harms” identically in each case.
These sentencing discovery requests would certainly prolong and complicate the sentencing process. Once the Government joins in a Sec. 2259 restitution request made by Amy or anyone else, the likelihood that the court will order significant restitution dramatically increases. Still, regardless of whether the restitution award is for one dollar or a million dollars, under joint and several liability theories, the defendant against whom the award is levied has a right under Sec. 2259 to spread the award among all defendants who possessed Amy’s image. The Government will spend months, if not years, compiling all the information in Amy-related possession cases, as well as in other cases where individuals like Amy have filed Sec. 2259 restitution requests.
And before any defendants in an Amy-related case, or any other similar case, can be forced to pay one penny of the restitution damages levied against them, they should have a right to petition every federal and state court in the nation that handled any Amy-like possession case to hold those defendants jointly and severally liable on an equal basis for the restitution damages levied against them.
Put simply, the In re Amy Unknown case has created much more than a prolonged and complicated sentencing process; it has created a sentencing nightmare.
By: Houston Criminal Attorney John Floyd and Paralegal Billy Sinclair
John Floyd in Board Certified in Criminal Law by the Texas Board of Legal Specialization
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Had the pleasure speaking with John Floyd on a personal matter, he was very responsive, nothing but exceptional, and he really cares about you with sincerity and most importantly knows … More what is he talking about! No games or bs, his approach to my situation even though I knew it was probably way smaller then what he normally takes on, he was extremely helpful and didn't care about the size of the matter like other attorneys do. He really looked out for my best interests. You can tell he has decades of experience doing what he does just by chatting with him. I would highly recommend him.
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Words can’t describe how grateful I am for working with John, he went above and beyond my expectation. I was wrongly accused and hired many lawyers before hiring John Floyd but they … More all disappointed me, I had lost hope until a friend of mine referred me to John. From the start he had my best interest in mind and gave helpful advice, he explained the process and guided me. He put more work and time than all my previous lawyers that cost me thousands of dollars. He was constantly communicating with court and defended me more than all lawyer i had hired before him. Don’t waste your time and money like I did, believe me when I say I hired countless lawyers before him and no one came close to John. I’m forever thankful for him for fighting for my innocence and getting my case dismissed. Thank you so much🙏🏼🙏🏼
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I called Mr Floyd and left a message, with in the hour I received a call back with much more information then I could have ever expected. Mr Floyd was very informative on every question … More I had for him. He seemed like he cared, instead of like most attorneys that you talk to that are just out for a quick buck. If you want someone that is going to shoot strait with you, and has your best interest in hand, this is you guy. This was the best experience that I have ever had with an lawyer.
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I can state with confidence that Mr. Floyd and his team are the most competent and professional lawyers one can hope for. My case was quite complex and I admit that as a law student … More I was not the most patient client. Mr. Floyd did a phenomenal job of managing the bench, prosecution and myself! The result was above expectation, and I will never hesitate to recommend this firm regardless of the caliber of the case at issue.
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It was a pleasure working with Mr. Floyd. I contacted him regarding a legal matter and he was extremely knowledgeable about the law, and responded in a timely manner. I appreciated … More the fact I did not feel rushed, and he made sure he thoroughly answered all questions I had. I would highly recommend him!Positive
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Spoke with John Floyd about a 45 year old criminal case I was involved in. I had very little information about the case and John helped me search what records were available and gave … More me guidance to find more information. He was very professional and took his time helping me. I may need to hire a lawyer on this case and Mr. Floyd will be the man.Thanks John.
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Very professional and straight forward. He's not going to waste your time or money. Very knowledgeable in a large range of possible matters one could face living in these days … More and times. If ever you need legal assistance, this is who I would suggest. Awesome!Positive
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I called about some legal questions I needed to get clarified and John was able to give me clarification and sound advice. I will definitely contact John for all future legal questions … More and issues.Thank you John!Positive
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Knows his stuff and well respected with DA and judges. I have referred him a couple times and every client has been satisfied
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John is beyond knowledgeable! If I decide to pursue my case any further I would only have him represent me.
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What a great attorney, this guy really took time out of his day to answer my questions and explain my case to me. Very grateful, thank you so muchPositive
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Absolutely a very professional lawyer. Very well read in the current law and more than willing to help if needed.
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Mr. John he’s a professional he knows what he’s doing and he’s patient they recommend Him stronglyPositive
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Great service, very knowledgable and happy to help with any questions I had
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Quick to action and helpful and knowledgeable with entertainment industry based issues!
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Responded on a holiday week. Very knowledgeable and reassuring.
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Very professional
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I want to thank John T. Floyd and all of his team. He is the best lawyer who cares aboutHis clients and fights really hard to get the best outcome. He is a fighter and he is awesome!!!I … More recommend if any one needs criminal defense , he is the BEST. We had a really serious caseAnd we are very thankful for the outcome. Thank you John!!!!! God bless you!!!!!!
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The attorneys at John T. Floyd Law Firm work diligently to achieve the best possible results for their clients. They are caring and knowledgeable professionals. Their expertise in the … More law and their experience as trial attorneys makes them the right choice as a defense attorney. I recommend this law firm highly.
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From beginning to end this firm handled my case like the top tier professionals they are. I would not trust ANYONE else with my legal needs after having less than stellar experiences … More with other teams. Thank you Floyd!!!
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I really felt like the team cared about my case and am super satisfied with the outcome. Would not recommend anyone else!
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These guys do amazing work and have phenomenal service! Hands down best in the Houston area!!
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John and Chris are true professionals! Love those guys like family!
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Mr. Floyd and his team are very knowledgeable, informative, and helpful.
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A team you can depend on to stand up and fight for you to prove the truth the whole truth!
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Mr. John T. Floyd represented me.I couldn't be happier with the outcome he managed to achieve on an VERY Important case that was dismissed the day of Trial. He is patient & … More very knowledgeable of the legal system. I HIGHLY recommend him to anyone in need of a lawyer!John, I am forever grateful & satisfied with the effort you put forth & all you did for me. Thank you isn't enough!God bless you & your family!
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The John T. Floyd Law Firm assisted me, and I can tell you that the attorney took the time to answer my questions, and I didn't feel rushed or dismissed as I have experienced in … More the past with attorneys. The attorney was very nice and extremely knowledgeable. Initial impressions and continued excellent customer service are big factors for me and as such I would highly recommend this firm.
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I thank you for your efforts to help Felons regain their Civil rights, and for the information on possession , I am A convicted Felon, no violent history. I am an expert shot, I am … More 76 yoa, and very concerned about the present lake of Security in our State and Country. God Bless and Prosper you in your efforts, Your friend, Sonny Bivens
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I really appreciated both Chris and John helping with my legal questions and concerns. Both are good guys and I would not hesitate to recommend them.
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Extremely helpful!!! Helping me understand the law.
John T. Floyd is Board Certified in Criminal Law By the Texas Board of Legal Specialization
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