United States v. Maynard and Ludwig

12-5106 (L)
United States v. Maynard and Ludwig
UNITED STATES COURT OF APPEALS 1
2
FOR THE SECOND CIRCUIT 3
4
August Term, 2013 5
6
7
(Argued: November 21, 2013 Decided: February 24, 2014) 8
9
Docket Nos. 12-5106 (Lead), 12-5124 (Con) 10
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UNITED STATES OF AMERICA, 14
15
Appellee, 16
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- v.- 18
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JOHN W. MAYNARD and JILL M. LUDWIG, 20
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Defendants-Appellants. 22
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Before: KEARSE, JACOBS, and PARKER, Circuit 26
Judges. 27
28
John Maynard and Jill Ludwig appeal from judgments of 29
the United States District Court for the District of Vermont 30
(Reiss, C.J.) requiring them to pay restitution after a 31
series of bank robberies. Maynard and Ludwig contest paying 32
a bank’s expenses other than the money taken in the robbery. 33
We vacate the restitution component of the judgments and 34
remand to redetermine restitution. 35
36

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STEVEN L. BARTH, on behalf of 1
Michael L. Desautels, Federal 2
Public Defender for the District 3
of Vermont, Burlington, Vermont, 4
for Appellant John W. Maynard. 5
6
NANCY J. WAPLES, Hoff Curtis, 7
Burlington, Vermont, for 8
Appellant Jill M. Ludwig. 9
10
WILLIAM B. DARROW (Paul J. Van 11
de Graaf, on the brief), on 12
behalf of Tristram J. Coffin, 13
United States Attorney for the 14
District of Vermont, Burlington, 15
Vermont, for Appellee. 16
17
DENNIS JACOBS, Circuit Judge: 18
19
John Maynard and Jill Ludwig appeal the restitution 20
component of judgments entered following their guilty pleas 21
on a series of bank robberies. Pursuant to the Mandatory 22
Victims Restitution Act of 1996 (“MVRA”), Pub. L. No. 104- 23
132, 110 Stat. 1214 (codified at 18 U.S.C. §§ 3663-64), the 24
United States District Court for the District of Vermont 25
(Reiss, C.J.) imposed restitution in an amount consisting of 26
the money taken in the robberies and additional expenses 27
incurred by one of the victim banks. Maynard and Ludwig 28
object only to restitution for these additional expenses as 29
falling outside the provisions of the MVRA. For the 30
following reasons, we vacate the restitution component of 31
the judgments and remand to the district court. 32
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BACKGROUND 1
Maynard and Ludwig robbed five banks between September 2
and November 2011. 1 Each time, one of the two entered the 3
bank alone, passed a note to the teller claiming possession 4
of a gun, and demanded money. Each robbery lasted only a 5
few minutes. Nobody was harmed. 6
The couple was arrested hours after the last robbery on 7
November 2, 2011. They were indicted on three bank-robbery 8
counts and one count of conspiracy. Ludwig pled guilty on 9
August 16, 2012 to one charge of bank robbery in violation 10
of 18 U.S.C. § 2113(a). The next month, Maynard pled guilty 11
to conspiracy in violation of 18 U.S.C. § 371. The two were 12
sentenced in December 2012. 13
In the sentencing phase, the Government sought 14
restitution under the MVRA, pursuant to 18 U.S.C. § 3663A. 15
More than half of the proposed restitution ($12,966) was to 16
repay the money taken during the robberies, and is 17
uncontested on appeal. The rest included certain expenses 18
paid by Merchants Bank, of which the following are the 19
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.
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subject of this appeal: 1) paid time-off for the bank’s 1
regular staff, and the pay of replacement staff ($7,991.68); 2
2) mileage expenses for the replacement staff ($213.34); 3) 3
the cost of wanted posters ($106.66); and 4) the cost of a 4
temporary security guard at the bank after the robbery 5
($574.52). 6
At separate sentencing hearings, the Merchants Bank 7
teller testified about the anxiety and emotional harm she 8
suffered as a result of being held up. At Maynard’s hearing 9
only, the bank’s security officer, Robert O’Neill, testified 10
that the regular staff was sent home the day of the robbery 11
because the bank was a crime scene, and that the bank did 12
not reopen until it was released by law enforcement at the 13
end of the day. On the two days following, the bank 14
operated with temporary replacements while the regular staff 15
was given paid leave to handle any trauma associated with 16
the robbery. He explained that this was the bank’s usual 17
practice, and that taking care of employees in that way 18
served a business purpose. 19
Maynard and Ludwig contested the inclusion of the 20
bank’s expenses in the restitution order. The court found, 21
however, that the expenses claimed could be compensated 22
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because they were directly and proximately caused by the 1
robbery. The couple was sentenced, inter alia, to pay 2
restitution in the amount of $21,852.20 jointly and 3
severally. This amount included the expenses incurred by 4
Merchants Bank listed above. 5
6
DISCUSSION 7
While the MVRA serves the broad policy purpose of 8
assisting the victims of crime, it also enumerates the 9
specific losses compensable in a mandatory restitution 10
order. Maynard and Ludwig argue that Merchants Bank’s 11
expenses are not subject to restitution because they are not 12
among these enumerated harms. 13
14
I 15
Prior to 1982, federal courts were not permitted to 16
order restitution outside the probation context. See United 17
States v. Amato, 540 F.3d 153, 159 (2d Cir. 2008). The 18
Victim and Witness Protection Act of 1982 (“VWPA”), Pub. L. 19
No. 97-291, 96 Stat. 1248 (currently codified, as amended by 20
the MVRA, at 18 U.S.C. § 3663), afforded courts discretion 21
to impose restitution for specified kinds of harm. See 22
Amato, 540 F.3d at 159. 23
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The victims’ rights movement later inspired a review of 1
the judiciary’s use of restitution. In 1996, Congress 2
passed the MVRA to help victims and to hold offenders 3
accountable for the losses they inflict. 2 See S. Rep. No. 4
104-179, at 17-18 (1995). 5
The MVRA made restitution mandatory for a broad swath 6
of offenses.3 See 18 U.S.C. §§ 3663A(a)(1), (c). The 7
purpose of the MVRA “is to make victims of crime whole, to 8
fully compensate these victims for their losses and to 9
restore these victims to their original state of well- 10
being.” United States v. Boccagna, 450 F.3d 107, 115 (2d 11
Cir. 2006) (quoting United States v. Simmonds, 235 F.3d 826, 12
831 (3d Cir. 2000)) (internal quotation marks omitted). 13
When the MVRA controls, a court “shall require” the 14
defendant to pay restitution for the harms listed in the 15
statute. 18 U.S.C. § 3663A(b). 4 No other expense 16
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–-
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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
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reimbursement is made mandatory. There is no provision in § 1
3663A giving the district court discretion to order any 2
other restitution. 3
The broad scope of the MVRA is subject to some 4
limitations. Only a ‘victim’ (or the victim’s estate) is 5
entitled to restitution. See 18 U.S.C. § 3663A(a)(1). The 6
term ‘victim’ is defined as “a person directly and 7
proximately harmed as a result of the commission of an 8
offense for which restitution may be ordered.” 18 U.S.C. § 9
3663A(a)(2). This causation principle also governs the 10
calculation of reimbursable loss. See United States v. 11
Gushlak, 728 F.3d 184, 194-95 (2d Cir. 2013). And only a 12
victim’s “actual loss” is compensable, not losses that are 13
hypothetical or speculative. Id. at 195. 14
“The procedures by which the sentencing court imposes a 15
restitution order are set forth in 18 U.S.C. § 3664.” 16
United States v. Marino, 654 F.3d 310, 317 (2d Cir. 2011); 17
see also 18 U.S.C. § 3663A(d). Among other things, this 18
section prevents restitution from being conditioned or 19
(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.
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limited by a defendant’s ability to pay: “In each order of 1
restitution, the court shall order restitution to each 2
victim in the full amount of each victim’s losses as 3
determined by the court and without consideration of the 4
economic circumstances of the defendant.” 18 U.S.C. § 5
3664(f)(1)(A) (emphasis added). 6
7
II 8
The decisive issue on this appeal is whether expenses 9
other than those enumerated in § 3663A(b) are compensable 10
under the MVRA. We conclude they are not. 11
“We begin our interpretation of a federal statute with 12
the statutory text.” City of New York v. Permanent Mission 13
of India to the United Nations, 618 F.3d 172, 182 (2d Cir. 14
2010). It is apparent from the text of § 3663A that 15
unlisted harms are not compensable in restitution. Because 16
courts have no inherent authority to order restitution, 17
Congress must provide the authority. See United States v. 18
Casamento, 887 F.2d 1141, 1177 (2d Cir. 1989). Congress did 19
so through the MVRA, but chose to include only the four 20
categories of harms listed in § 3663A(b). If Congress 21
intended to include all harms directly and proximately 22
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caused by a defendant’s offense, it could have done so with 1
wording more simple and categorical. “Applying the rule of 2
statutory construction ‘inclusio unius est exclusio 3
alterius’--that to express or include one thing implies the 4
exclusion of the other”--it follows that Congress intended 5
to limit the restitutable harms covered by the MVRA. United 6
States v. Tappin, 205 F.3d 536, 540 (2d Cir. 2000). 7
The Government’s reliance on the statutory mandate to 8
impose restitution “in the full amount of each victim’s 9
losses,” 18 U.S.C. § 3664(f)(1)(A), is misplaced. The MVRA 10
provides that § 3664 is procedural rather than substantive. 11
See 18 U.S.C. § 3663A(d); see also United States v. Cliatt, 12
338 F.3d 1089, 1093 (9th Cir. 2003) (stating § 3664 cannot 13
trump substantive restitution provisions because it is only 14
a procedural mechanism). Furthermore, the context of this 15
clause is that the “full amount” of loss be determined 16
“without consideration of the economic circumstances of the 17
defendant.” 18 U.S.C. § 3664(f)(1)(A). The provision 18
emphasizes only that courts may not decrease restitution to 19
account for the defendant’s ability to pay. Taken thus in 20
context, this clause cannot serve as the Government’s 21
springboard for restitution more broad than the text 22
specifies. 23
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The Government seems to suggest that any and all losses 1
are compensable to the extent that they were ‘directly and 2
proximately’ caused by a defendant’s offense. However, the 3
requirements of direct and proximate causation, see, e.g., 4
Marino, 654 F.3d at 317, are necessary conditions for 5
restitution under the MVRA–-not sufficient ones. As the 6
statute makes clear, the harm must also come within one of 7
the categories enumerated in § 3663A(b). 8
The Government’s cases do not support a broader 9
application of the MVRA. Many are mere applications of § 10
3663A(b)(1), which allows reimbursement for property loss. 11
See, e.g., United States v. Qurashi, 634 F.3d 699, 702-05 12
(2d Cir. 2011) (allowing prejudgment interest for funds paid 13
out of life insurance funds to ensure the victim received 14
the “full amount” of their losses); United States v. Donaby, 15
349 F.3d 1046, 1051-55 (7th Cir. 2003) (damage to police car 16
in chase after bank robbery). 17
18
III 19
We now consider whether the specific costs incurred by 20
Merchants Bank fall within the enumerated harms of § 21
3663A(b). 22
23
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A 1
In the wake of the robbery, the bank was closed as a 2
crime scene for the afternoon, and the bank’s regular staff 3
stayed home the following two days to get over any stress 4
caused by the incident. The district court ordered Maynard 5
and Ludwig to pay restitution for the full amount of the 6
wages paid to the regular staff over this period of time. 7
However, given the goal of restoring victims “to their 8
original state of well-being,” Boccagna, 450 F.3d at 115 9
(internal quotation marks omitted), we need to take into 10
account that the bank would have paid the regular staff in 11
any event. Thus, the bank would enjoy a windfall if it 12
recovered compensation for the full amount of the regular 13
staff and replacement staff wages. 14
A portion of the regular staff wages is nevertheless 15
compensable because the bank derived no benefit from the 16
wages paid during the bank’s closure on the day of the 17
robbery. When a victim’s facility is required to close 18
temporarily for crime scene investigation, the associated 19
costs may well fall under the MVRA. See, e.g., United 20
States v. Wilfong, 551 F.3d 1182, 1183-87 (10th Cir. 2008) 21
(lost work time due to evacuation after bomb threat); United 22
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States v. Quillen, 335 F.3d 219, 222-23 (3d Cir. 2003) 1
(closing mailroom due to contamination from anthrax); United 2
States v. De La Fuente, 353 F.3d 766, 768, 771-73 (9th Cir. 3
2003) (lost work hours for postal service employees during 4
decontamination resulting from receipt of a threatening 5
letter said to contain anthrax). To the extent the bank 6
paid its regular staff for the remainder of that day, 7
restitution is proper. 8
9
B 10
The wages for the temporary staff do not fall within 11
the enumerated harms of § 3663A(b). The temporary staff 12
wages did not compensate for losses such as destruction of 13
property or funeral expenses, and were not necessary to the 14
prosecution or investigation of the offense. See 18 U.S.C. 15
§ 3663A(b)(1), (3)-(4). The expense is arguably 16
attributable to the psychological recovery of the regular 17
staff present during the robbery; however, the MVRA 18
unambiguously limits recovery for psychological harm to 19
instances of “bodily injury.” 18 U.S.C. § 3663A(b)(2); see 20
also United States v. Reichow, 416 F.3d 802, 805-06 (8th 21
Cir. 2005). The Government characterizes the wages as a 22
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business expense absorbed by the bank, but the MVRA does not 1
include a business expense category. Because the temporary 2
staff wages fall outside the enumerated harms of § 3663A(b), 3
they may not be included in a restitution order. 5
4
The Government adduces cases in which loss of income 5
has been compensated after a robbery. The summary order 6
issued in United States v. Blagojevic, 331 F. Appx. 791, 794 7
(2d Cir. 2009), allowed restitution for lost income when the 8
owner of a jewelry store closed the store during peak season 9
due to trauma suffered from a robbery. But Blagojevic was 10
decided on the plain error standard of review; the only 11
appellate issue was proximate causation, id. at 793-94; and 12
the order did not consider the types of harms compensable 13
under § 3663A. (On the whole, the case is a good example of 14
why summary orders lack precedential force.) The Government 15
also cites United States v. Tran, in which a teller who was 16
unable to work after a bank robbery was awarded restitution 17
for lost income. 234 F.3d 798, 804 (2d Cir. 2000), 18
overruled on other grounds by United States v. Thomas, 274 19
F.3d 655 (2d Cir. 2001) (in banc). However, the defendant 20
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.
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challenged only the payment plan and not “the imposition of 1
restitution.” Id. at 812-13. 2
3
C 4
The only category of allowable expense in which the 5
wanted posters and the temporary security guard might be 6
located is § 3663A(b)(4), which requires defendants to 7
“reimburse the victim for . . . necessary . . . expenses 8
incurred during participation in the investigation or 9
prosecution of the offense or attendance at proceedings 10
related to the offense.” 18 U.S.C. § 3663A(b)(4) (emphasis 11
added). 12
We have not adopted a test for necessity in this 13
context. Our reading of a statutory text “‘necessarily 14
begins with the plain meaning of a law’s text and, absent 15
ambiguity, will generally end there.’” Dobrova v. Holder, 16
607 F.3d 297, 301 (2d Cir. 2010) (quoting Bustamante v. 17
Napolitano, 582 F.3d 403, 406 (2d Cir. 2009)) (internal 18
quotation mark omitted). “In conducting such an analysis, 19
we ‘review the statutory text, considering the ordinary or 20
natural meaning of the words chosen by Congress, as well as 21
the placement and purpose of those words in the statutory 22
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scheme.’” Id. (quoting United States v. Aguilar, 585 F.3d 1
652, 657 (2d Cir. 2009)). The dictionary definition of 2
“necessary” tends to be circular: essential or 3
indispensable. See 10 The Oxford English Dictionary 275-76 4
(2d ed. 1989) (defining “necessary” as “indispensable, 5
requisite, essential, needful; that cannot be done 6
without”). But the plain meaning is not obscure. The 7
victim expenses that are recoverable as restitution under 18 8
U.S.C. § 3663A(b)(4) are expenses the victim was required to 9
incur to advance the investigation or prosecution of the 10
offense. 11
Generally, this Circuit takes a broad view of what 12
expenses are “necessary.” See United States v. Papagno, 639 13
F.3d 1093, 1101 (D.C. Cir. 2011) (citing Amato, 540 F.3d 14
153) (“In reaching our conclusion, we recognize that several 15
other courts of appeals have taken a broader view of the 16
restitution provision at issue here.”). But respect for the 17
limits of the statute is not a narrowing of it. 18
Two of our cases reflect the standard of necessity. 19
Amato imposed restitution for attorney’s fees and accounting 20
costs incurred by an internal investigation that uncovered 21
fraud--notwithstanding that not all of the effort and 22
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expense was requested by the government. See 540 F.3d at 1
159-60, 162 (noting that the victim had “assisted in 2
gathering and producing evidence necessary to the 3
government’s prosecution”). Likewise, in United States v. 4
Bahel, we affirmed restitution for legal fees incurred when 5
the United Nations hired outside counsel to conduct an 6
internal investigation rather than use on-staff lawyers. 7
See 662 F.3d 610, 647-48 (2d Cir. 2011). 8
In both cases, the internal investigations paid for by 9
the victims unmasked fraud and led to investigations 10
conducted by the authorities. The expense of the internal 11
investigations was necessary because the entity had 12
interests to protect (the integrity of its ongoing 13
operations and reputation, at the least) as well as a duty 14
to protect those interests when faced with evidence, 15
indicia, or a grounded suspicion of internal misconduct, and 16
the investigation was a means calculated to achieve the 17
protection of those interests. 18
A bank’s production of wanted posters after a robbery 19
has occurred is by comparison, and in absolute terms, 20
gratuitous. The crime had been committed; there was no 21
especial likelihood that this bank would again be the victim 22
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of the same robbers; the police had an ongoing investigation 1
and did not seek the bank’s cooperation in postering the 2
neighborhood; and the bank had no interest to protect by an 3
independent investigatory effort--and certainly had no duty 4
to undertake it. 5
For many of the same reasons, the security guard served 6
no investigatory purpose. The guard provided additional 7
security for the bank after the robbery happened. If 8
additional security had been laid on permanently, it would 9
be necessitated by permanent security interests rather than 10
by the conduct of these defendants. As it happens, the 11
guard was hired on a short-term basis; but there is no 12
plausible showing that a second robbery of this branch by 13
these defendants was such an imminent peril or a risk that 14
the bank had a duty to take measures by posting a temporary 15
guard. 16
Because these expenses were not necessary to the 17
investigation or prosecution of the offense, and do not fall 18
within one of the other categories of harm enumerated in § 19
3663A(b), restitution for these expenses was improper. 20
21
22
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CONCLUSION 1
The restitution order properly included the amount of 2
money stolen during the bank robberies. For the foregoing 3
reasons, however, we conclude that the only portion of 4
Merchants’ expenses subject to restitution is the amount 5
paid to the bank’s regular staff while the bank was closed 6
as a crime scene. To that end, we vacate the restitution 7
component of the judgments and remand to determine the 8
amount of restitution consistent with this opinion. 9
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