Case o' The Week: A Batson Challenge (with No Jury) - Restitution

The Ninth crafted several new circuit rules in a case this week, in a Batson challenge where no jury ever entered the courtroom. United States v. Batson,__ F.3d __, 2010 WL 2473234 (9th Cir. June 21, 2010), decision available here.

Players: Battle lost, war won by CD Cal AFPD Kathryn A. Young. Decision by Judge Canby.

Facts: Batson’s tax return business falsified tax returns to earn her clients (undeserved) returns. Id. at *1. Charged with nine counts of miscellaneous federal crimes, she ultimately pled guilty “to one count of aiding and assisting in the preparation of a single fraudulent tax return, the loss caused by the conduct apparently being somewhere between $4,571 and $8,028.” Id. In her plea agreement Batson stipulated that all of the tax forms she generated almost a million dollars in fraudulent returns. Id. Batson was sentenced to a year of custody and a year of supervised release. Id.

The district court imposed a restitution order of $176,854: the money the feds couldn’t get back from the taxpayers. Id. Batson objected to the restitution order and appealed. Id.

Issue(s): “This appeal presents a question of first impression in this circuit, namely, whether federal courts may order restitution as a condition of supervised release for offenses set forth in Title 26 of the United States Code (the Internal Revenue Code.”) Id. at *1.

Held: “[T]he Supervised Release Statute, together with the Probation Statute, unambiguously authorizes federal courts to order restitution as a condition of supervised release for any criminal offense, including one under Title 26, [the tax code], for which supervised release is properly imposed. Id. at *3. (emphasis in original). “Accordingly, we hold that 18 U.S.C. § 3563(b)(2), which grants federal courts broad discretion to order restitution as a condition of probation, and 18 U.S.C. § 3583(d), which extends that grant to supervised release, authorizes federal courts to order restitution as a condition of supervised release for any criminal offense, including those set forth in Title 26, for which supervised release is properly imposed.” Id. at *4.

Of Note: AFPD Young lost her creative challenge to the expansive power of the district court to order restitution, but also brought this novel issue: For substantive offenses (not conspiracies, etc.), is the district court statutorily authorized to impose restitution beyond the offense of conviction?

Nope.

As Judge Canby explained, “We now join our sister circuits in holding that an award of restitution ordered as a condition of supervised release can compensate ‘only for the loss caused by the specific conduct that is the basis of the offense of conviction,’ Hughey, 495 U.S. at 413, so long as that offense does not involve an element of scheme, conspiracy or pattern of criminal activity.” Id. at *5.

Mull this new holding over a bit: Batson likely saved over $160k in restitution by pleading to a single substantive count. A nice win for this particular defendant, but a likely new complication for negotiating future fraud plea agreements.

How to Use: If restitution is a real issue, plead to a sole count, low-loss, substantive charge (while you can).

For Further Reading: Political affiliation can be a poor predicator of judicial outcomes. Case in point is this week’s habeas decision Murdoch v. Castro, 2010 WL 2473235 (9th Cir. June 21, 2010) (en banc). Clinton-appointee J. Tashima writes for the en banc court, denying habeas relief when a co-defendant wrote to his attorney and explained that he had been coerced into falsely implicating a murder defendant at trial – and that fact never made it before the jury. Id. at *1.

Reagan-appointee C.J. Kozinski writes a blistering dissent, beginning with “If it wasn’t for bad luck, Murdoch wouldn’t have no luck at all. He’s wakin’ up this mornin’ in jail when there’s strong proof he ain’t done nothing wrong. I would certainly defer to a jury’s contrary verdict if it had seen this evidence and convicted Murdoch after a fair trial, presided over by a fair judge, followed by an appeal where the justices considered all of his constitutional claims. But Murdoch had none of these.” Id. at *11 (Kozinski, C.J., dissenting).

The Chief attacks the unfairness of AEDPA-whitewashing, and concludes that the majority’s decision is a “truly spectacular miscarriage of justice.” Id. at *24. Start Kozinski’s dissent to enjoy his colorful language - you’ll finish it because it is a compelling attack on the injustices of California appellate “review” and the toothless tiger of post-AEDPA federal habeas.



Image of IRS Form 1040 from http://www.boston.com/lifestyle/food/dishing/1040.jpg

Steven Kalar, Senior Litigator N.D. Cal. FPD. Website at www.ndcalfpd.org


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