UNSETTLED: VICTIM DISCRETION IN THE ADMINISTRATION AND ENFORCEMENT OF CRIMINAL RESTITUTION ORDERS.

• Author: Peters, David

INTRODUCTION 1294 I. RESTITUTION AND THE MVRA 1296 A. History of Restitution 1296 B. Critique of the MVRA 1299 C. The Criminal/Civil Split 1300 II. VICTIM SETTLEMENT 1301 A. A Framework for Settlement 1301 B. Applying the Framework 1302 1. Pre-Issuance Mechanisms 1303 2. Post-Issuance Mechanisms 1303 a. Section 3664(f) 1304 b. Section 3664(g) 1305 i. No Sua Sponte Transfer 1306 ii. Sua Sponte Transfer 1307 c. Section 3664 (m)(1)(B) 1308 III. VICTIM CONTROL 1310 A. Ensuring Victim Participation 1310 B. Forgoing Restitution Payments 1311 1. Harmful Restitution 1311 2. Illusory Restitution 1312 IV. IMPLICATIONS OF VICTIM CONTROL 1314 A. Harassment and Coercion 1314 B. Race to the Courthouse 1316 C. Collusion 1317 V. POLICY RECOMMENDATIONS 1318 A. Information and Procedural Barriers 1318 B. Lowering Barriers to Settlement 1320 C. Recommendations 1321 1. Congress 1321 2. Judiciary 1322 CONCLUSION 1322 INTRODUCTION

In 2008, a prominent Philadelphia businessman, Donald Dougherty, Jr., was charged with nearly one hundred counts of fraud, theft, bribery, and tax evasion.1 Dougherty was accused of engaging in illegal accounting practices as the owner, president, and sole shareholder of Dougherty Electric, Inc., an electrical contracting business. (2) As a result of the accounting scheme, Dougherty defrauded the United States government of well over $1 million in taxes. (3) In addition, Dougherty defrauded IBEW Local 98, the union with which his business contracted, of more than $670,000 in contributions owed to the IBEW benefit and pension plan. (4) Dougherty pled guilty to all charges. (5)

After Dougherty entered his plea, the court sentenced him to twenty-four months in prison. (6) In addition, pursuant to the federal Mandatory Victims Restitution Act (MVRA), (7) the court ordered Dougherty to repay the victims of the crime for the losses suffered, $2.3 million owed in total to the United States government and the IBEW. (8) The colorful facts of the case aside, nothing about the proceeding was particularly unusual. (9)

That is until March 2016, when Dougherty petitioned the District Court for the Eastern District of Pennsylvania to have his restitution payment "marked as satisfied." (10) Dougherty had made a lump-sum payment of $2.5 million to the federal government in December 2015, which fully satisfied his outstanding restitution and back taxes. (11) Additionally, Dougherty had entered into a settlement agreement with the IBEW in 2011. (12) By the terms of the settlement, Dougherty paid a lump sum of $200,000 to the union in exchange for "satisfaction of all obligations owed to IBEW and the IBEW Benefit Funds arising from the conduct underlying the restitution order."13 In his petition, Dougherty contended that he had fulfilled his restitution obligation and the court should recognize as much.

The court has yet to rule on Dougherty's petition. (14) But the question it raises is a difficult one--whether a victim and defendant may settle a restitution payment under the MVRA is one that courts have not fully resolved.

The MVRA is the federal statute that regulates restitution for the most serious federal crimes. (15) Congress enacted the MVRA to bring the federal restitution scheme more in line with the objectives of the victims' rights movement by forcing sentencing judges to enter orders of restitution for the full amount of a victim's loss. In passing the MVRA, Congress severely restricted judicial discretion in ordering restitution at the time of sentencing. (16) In the same legislative act, Congress also bolstered the MVRA's enforcement clause to ensure victims could control their participation in the restitution process.17 These two provisions are in tension when courts seek to apply the MVRA: although both provisions are intended to promote victims' rights, they come into conflict when determining the scope of a victim's ability to settle outstanding restitution orders.

This Comment argues that the enforcement provisions of the MVRA provide mechanisms by which a willing victim may settle an outstanding restitution order with a criminal defendant. The MVRA's limitation on judicial discretion is not a limitation on a victim's ability to dispose of restitution in a way she sees fit. Courts and judges err when they conflate a lack of judicial discretion in ordering restitution with a lack of victim discretion in settling such an order.

Not only is this a permissible reading of the statutory scheme, it is also a preferable one. The benefits of such an approach are twofold. First, it would safeguard the right of victims to participate in the criminal justice process, a central tenet of the victims' rights movement. Second, for at least a certain segment of the victim community, it would increase victim satisfaction with restitution.

Part I of this Comment explores the text, history, and enacting intent of the MVRA as well as the case law it has spawned. Part II provides a framework for analyzing whether the MVRA's enforcement provisions provide a victim with discretion that can be exercised to settle an outstanding restitution order. It then applies that framework to three specific provisions of the MVRA. Part III explains why victims may choose to settle an outstanding restitution order. Part IV explores potential negative implications of recognizing such victim discretion. Part V evaluates the procedural and information hurdles to settlement and explores policy recommendations for Congress and federal sentencing judges to lower those barriers.

1. RESTITUTION AND THE MVRA

   1. History of Restitution

      Restitution has a long legal history. It existed as a legal rule as far back as Hammurabi's Code. (18) From the Bible to the Common Law of England, restitution played an important role in the administration of justice in a variety of legal systems, (19)

      Criminal restitution has a similarly long history in America. Borrowing from English common law, the early American Republic enacted restitution statutes. In 1802, Congress passed a law that provided monetary restitution to victims of robbery, larceny, or trespass committed by a U.S. citizen on Indian Territory. (20) But as criminal law became more formalized during the later nineteenth and early twentieth centuries, the role of restitution diminished,21 so much so that for a significant part of the twentieth century, restitution played only a bit part in the American criminal justice system.22

      The victims' rights movement in the 1970s and 1980s revitalized restitution as a prominent element of the American criminal justice system. Emerging out of a societal fear of crime in America, the movement criticized the criminal justice system as being too focused on protecting the rights of offenders at the expense of victims.23 Calling for a criminal justice system that focused on the needs of victims, the movement advocated for federal legislation that, inter alia, guaranteed restitution to victims.24

      This advocacy culminated in the 1982 President's Task Force on Victims of Crimes, which conducted a national survey on the challenges faced by victims of crime and put forth policy recommendations to address those challenges.25 A key component of those policy recommendations was legislation guaranteeing victims the right to restitution.26 As the Task Force's Final Report concluded: "The concept of personal accountability for the consequences of one's conduct, and the allied notion that the person who causes the damage should bear the cost, are at the heart of civil law. It should be no less true in criminal law." (27)

      The same year the Task Force was created, Congress enacted the Victim and Witness Protection Act (VWPA) of 1982. (28) The VWPA created the framework for federal restitution, but, critically, it did not mandate restitution be ordered in all cases. The VWPA instructed sentencing judges to consider "the financial resources of the defendant," as well as "the financial needs and earning ability of the defendant and the defendant's dependents." (29) In effect, the statute gave sentencing judges broad discretion to ensure that a restitution order did not exceed a defendant's ability to pay.

      The 1996 Mandatory Victims Restitution Act (MVRA) was enacted in part to address this grant of judicial discretion. (30) The legislation was first introduced because the victims' rights movement and their congressional allies were dissatisfied with the leniency shown by judges in determining whether to order restitution.31 As the Senate Report that accompanied the MVRA observed: "This legislation is needed to ensure that the loss to crime victims is recognized, and that they receive the restitution that they are due." (32)

      The MVRA mandated that judges enter an award of restitution for the full amount of loss suffered by victims. Specifically, the MVRA provides that "[n]otwithstanding any other provision of law... the court shall order... the defendant [to] make restitution to the victim of the offense." (33) Moreover, Congress required that "the court shall order restitution to each victim in the full amount of each victim's losses as determined by the court." (34) The statutory scheme curtailed judicial discretion in an attempt to bolster victim satisfaction with restitution.

      An additional and related goal of the MVRA was to create a uniform procedure for awarding and enforcing restitution payments. The Senate Report stated that "this legislation is needed to replace an existing patchwork of different rules governing orders of restitution under various Federal criminal statutes with one consistent procedure." (35) Prior to enactment of the MVRA, the VWPA provided that restitution orders "shall be issued and enforced in accordance with section 3664." (36) As initially drafted, however, 18 U.S.C [section] 3664 did not provide a clear means of enforcing restitution orders. (37) Although not explicit in the statutory scheme, victims awarded restitution under the VWPA enforced...