Yesterday the Second Circuit issued a short opinion concerning the burdens of proof for modifying restitution orders under the Mandatory Victims Restitution Act (MVRA), 18 U.S.C. §§ 3663A & 3664. Specifically, the panel held that the district court acted within its discretion in requiring the defendant to prove that a victim recovered money in civil litigation “for the same loss” caused by the defendant. Id. § 3664(j)(2) (requiring that a restitution order be reduced by the amount of such recoveries). The opinion in United States v. Smathers, No. 16-2394 (Kearse, Cabranes, Wesley) (per curiam) (appeal from Hellerstein, J., SDNY), is available here.
Mr. Smathers, a former AOL employee, was ordered to pay $84,000 in restitution to AOL in connection with his conviction for selling the company’s customer list to be used for spam. Through his attorney, Mr. Smathers requested that the district court determine whether this restitution order should be modified in light of reports that AOL had recovered $95,000 (and a Hummer!) in civil litigation related the sale of the customer list. The district court gave Mr. Smathers permission to file a motion—which was never filed—for “appropriate relief based on affidavits and competent proof.” Slip op. at 4 (quotation marks omitted). Years later, Mr. Smathers moved pro se, and without supporting evidence, for the district court eliminate his restitution obligation in light of AOL’s recoveries as described in his earlier request. The district court denied the motion, concluding that Mr. Smathers failed to show a connection between AOL’s recoveries in the civil judgment and the loss caused by Smathers.
The MVRA allocates the burdens of proof for challenging a restitution order in three different ways. First, it requires the government to demonstrate “the amount of loss sustained by a victim.” 18 U.S.C. §§ 3664(e). Second, it requires the defendant to demonstrate his “financial resources . . . and the financial needs of the defendant’s dependents.” Id. Finally, it entrusts the district court to allocate “as justice requires” the burden of “demonstrating such other matters as the court deems appropriate.” Id.
Here, the district court allocated the burden of proof to the defendant for demonstrating that AOL had recovered money in civil litigation for the loss that he caused. The panel concluded that this allocation was not an abuse of discretion (the standard of review for decisions concerning MVRA restitution orders). As a general matter, burdens of proof are properly placed on the party that “has an affirmative goal and presumptive access to proof.” Slip op. at 12. Here, Mr. Smathers had “the strongest incentive to establish that he is entitled to a reduction of his remaining restitution obligation.” Id. at 13. The government “was not a party to the civil litigation” and thus “has no greater access than Smathers to the records in that litigation.” Id. at 13. Accordingly, the district court properly placed on Mr. Smathers the burden of obtaining those records.
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