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November 3, 2010

Ninth Circuit adopts invented exception to victims' right to restitution

A helpful reader altered me to an interesting little unanimous panel opinion from the Ninth Circuit today in US v. Lazarenko, No. 08-10185 (9th Cir. Nov. 3, 2010) (available here).  Here is how the opinion starts:

Defendant Pavel Ivanovich Lazarenko, former Prime Minister of Ukraine, was convicted of money laundering and conspiracy to commit money laundering.  See United States v. Lazarenko, 564 F.3d 1026 (9th Cir.), cert. denied, 130 S. Ct. 491 (2009).  In this appeal, Lazarenko challenges the district court’s order of restitution of more than $19 million to his co-conspirator, Peter Kiritchenko.  We hold that, in the absence of exceptional circumstances, a co-conspirator cannot recover restitution.  Because no exceptional circumstances exist here, we reverse and vacate the order of restitution.

This Lazarenko ruling acknowledges that it is making up law here when the plain text clearly does not exclude certain types of victims from the right to obtain restitution:

[Applicable victim restitution statutes set forth a] definition [that] looks only to whether the person was harmed; it does not consider whether the person also was a co-conspirator. Under the plain text of the MVRA and VWPA, therefore, co-conspirators have just as much right to restitution as do innocent victims.

But courts have recognized that Congress could not have intended that result.  Otherwise, the federal courts would be involved in redistributing funds among wholly guilty co-conspirators, where one or more co-conspirators may have cheated their comrades. Indeed, the Second Circuit has held that an order of restitution from one co-conspirator to another was “an error so fundamental and so adversely reflecting on the public reputation of the judicial proceedings that we may, and do, deal with it sua sponte.” United States v. Reifler, 446 F.3d 65, 127 (2d Cir. 2006); see also United States v. Weir, 861 F.2d 542, 546 (9th Cir. 1988) (suggesting that it would be improper to consider a participant to a crime as a victim of the crime for purposes of restitution).  In other words, because a literal application of the plain text leads to absurd results, the plain text does not control.

We agree with the Second Circuit that, as a general rule, an order of restitution to a co-conspirator is a “fundamental” error that “adversely reflect[s] on the public reputation of the judicial proceedings.” Reifler, 446 F.3d at 127. Indeed, we suggested the same in Weir, 861 F.2d at 546. Only in exceptional circumstances would Congress have intended that a coconspirator to a crime be entitled to restitution.

I wonder if all committed textualists (including some on the Supreme Court), as well as all those committed to broad interpretations of victim rights, fully concur with the Ninth Circuit's decision in Lazarenko to invent an exception (with its own exception circumstances exception) to the plain term of the federal statutes providing for victim restitution. 

To me, it is not obviously absurd that a federal offender's punishment should include a requirement of restitution to all victims financially harmed even if those victims are co-consiprators.  Indeed, the rule adoped here would seem to give major fraudsters a tangible incentive to seek to co-opt their biggest victims into their frauds if/when they start fearing apprehension so as to reduce the risk of owing those victims restitution if/when convicted.

November 3, 2010 at 07:12 PM | Permalink


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The biggest crime is not that of the defendant. It is insurrection against Article I Section 1 of the Constitution by these judges. Despite being a devout atheist, I pray. I beseech the Lord to send us a strong executive who will dispatch federal marshals to hunt these insurrectionists. Try them fairly for one hour, as they wear tall dunce caps, find them guilty, with their own appellate utterances as the sole evidence. Carry out the death sentence that is the wage of all traitors, on the spot, in the basement of the courthouse. The judges tried at Nuremberg lost their self-dealt immunities. If the Supreme Court objects, arrest them, try them, too. The idea of judge immunity can only be justified by their speaking with the voice of God. This is a psychotic delusion, that introduces an endorsement of religion. They do not speak with the voice of God. They speak with the voice of the idiocy of their criminal cult indoctrination. Deter them.

Posted by: Supremacy Claus | Nov 4, 2010 3:42:35 AM

More sound and fury over a mostly mythical benefit for crime victims.

All but a relative handful of restitution orders yield a pittance or nothing for designated victims. That's because by the time most defendants attain convict status they're dead broke...and their lifetime prospects for being otherwise are next to nil.

Mandatory restitution laws amount to yet another sham by grandstanding, ass-clown, tough-on-crime legislators...no better in any meaningful respect than when judges were allowed in ordering restitution to consider ability to pay.

Typically all they accomplish is to further marginalize, degrade and torment people trying to rebuild their lives after doing their time. (of course I realize this is exactly the aspect that appeals to the major-league scolds and disciplinarians who post here.

Posted by: John K | Nov 4, 2010 10:26:43 AM


"But courts have recognized that Congress could not have intended that result."

Then MAYBE congress should get off it's ass and rewrite the law. The courts are REQUIRED to based their rulings on what the laws say! not to pull interpitations out of their ass that directly contridect the law.

Posted by: rodsmith | Nov 4, 2010 6:57:35 PM

"I wonder if all committed textualists (including some on the Supreme Court), as well as all those committed to broad interpretations of victim rights, fully concur with the Ninth Circuit's decision in Lazarenko to invent an exception (with its own exception circumstances exception) to the plain term of the federal statutes providing for victim restitution."

Doug, you obviously have a simplistic view of textualism if you think that agreeing with the Ninth Circuit's decision here is at all problematic for a "committed textualist." First of all, the result is absurd when considered against the backdrop of law Congress is presumed to know. If Congress intended to debase the judiciary by forcing it to redistribute proceeds among criminals, it almost certainly would have said so in much clearer terms. Second of all, the requirement of "proximate caus[ation]", though not cited by the court, almost certainly allows some judgment calls here as well.

Posted by: federalist | Nov 4, 2010 10:16:16 PM

I see with some regularity probation orders that require each defendant in a multiple-offender situation to make restitution of 100% of the value of the property stolen, damaged, or destroyed. The purpose is to see that a total of 100% is paid. If these orders are entered at the same time, and each defendant pays his or her porpoertionate share, it might be that each just pays 25% of the total, and the restitution stops. But if the orders are separated by a significant time interval, it can be that the later defendants are paying money back to the first defendant so that each defendant bears his or her proportionate share of teh restitution. It's the tort concept of contribution among joint tort-feasors. I don't have a problem with that in any circumstance. There's no reason why one offender among many should have to bear the whole burden.

Posted by: Greg Jones | Nov 5, 2010 12:01:12 PM

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