Sunday, August 05, 2018

Case o' The Week: Like it or lump it? Don't lump it - we like it! - Holden and Lump Sum Restitution Orders

 The government takes its lumps, in a welcome restitution decision.
United States v. Holden, 2018 WL 3580122 (9th Cir. July 26, 2018), decision available here.

Players: Decision by Judge Graber, joined by Judges M. Smith and DJ Korman.
  Admirable wins for Fed. Defender Lisa Hay, District of Oregon.  

Facts: Holden and a co-defendant had an investment scheme for foreign biofuel production. Id. at *1. The biofuel plants never materialized; they were charged with fraud and other financial crimes, and Holden was convicted after a trial. Id.
   At sentencing, Holden was ordered to pay more than $1.4 million in restitution. Id. The written order specified that the entire amount was “due immediately” in a “lump sum payment.” Id. at *5.
  The district court also, however, set out a small-sum payment schedule, and conceded that Holden lacked the ability to make full restitution immediately. Id.

Issue(s): “Defendant argues that the district court erred by ordering immediate restitution in full in light of its finding that he lacked the funds to make such restitution.” Id. at *6.

Held: “When a district court orders a defendant to pay restitution under 18 U.S.C. § 3664, it must specify in the restitution order the manner in which, and the schedule according to which, the restitution is to be paid, in consideration of . . . the financial resources and other assets of the defendant.” . . . . In order to meet its obligation under § 3664, a court must ‘consider’ a defendant’s financial resources. . . . If the court determines that the defendant is unable to make immediate restitution, the court must set a repayment schedule in the judgment of conviction. . . . . Id. at *6 (internal quotations and citations omitted).
  “[W]e read the district court’s order as both requiring immediate restitution in full and setting a mandatory, unconditional schedule of payments during the period of incarceration.” Id. “So construed, the restitution order is internally inconsistent. But that inconsistency does not require us to seek clarification from the district court. Again, the district court orally announced that Defendant lacked the ability to make immediate restitution in full. The written restitution order, insofar as it purports to order immediate restitution, is inconsistent with that finding. In this situation, we construe the written order to conform to the court’s oral ruling . . . . We therefore vacate the restitution order and remand so that the district court can strike the lump-sum payment requirement from the judgment.” Id. at *7 (internal citation omitted).

Of Note: The rejection of the Financial Litigation Unit’s (FLU’s) and Probation’s lump sum gambit is a great outcome in this opinion. Another welcome win is the Ninth’s rejection of a two-level “organizer” enhancement for Holden, who was a “co-equal” of his co-defendant in the biofuel scheme. Id. at *4-*5.
  When your PSR paints your client as an “organizer,” take a look at the narrow definition in Holden to fight the offense-level bump.

How to Use: For years, FLUs and Probation have conspired to seek lump-sum restitution payment orders against our clients who can’t afford to buy soap at the prison commissary. The government is afraid that our dirt-poor clients may, say, hit the lottery.
  Judge Graber is unmoved by the government’s fear. She explains that the Ninth “is confident that the Government will be able to recover any future assets that Defendant may acquire.” Id. at *7 & n12.
  After Holden, it is legal error for a district court to find that a defendant can’t immediately pay restitution, yet simultaneously order a lump-sum payment. Object to and appeal restitution orders that (inconsistently) demand lump sum repayments from our indigent clients.  
For Further Reading: Do you love opera? So does the government. Since 2015, DOJ FLUs have had access to the Judiciary’s Offender Payment Enhanced Report Access (OPERA), to go after restitution debts. See article here
  DOJ / USAO FLU personnel hit the Court’s OPERA data system about 500 times a day, we’re told. As Darrell Curtis, Management Analyst for the Executive Office for United States Attorneys (EOUSA), reports “It’s been a great asset. It’s really enhanced our ability to enforce debts.” Id.

Image of “lump sum” graphic from

Image of "Oregon Lottery" from 

Steven Kalar, Federal Public Defender, N.D. Cal. Website at


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Tuesday, August 14, 2018 6:44:00 AM  

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