In 1996, Congress enacted the Mandatory Victim Restitution Act (MVRA). The Act is codified as amended in 18 U.S.C. § 3563A. This statute requires restitution for any Title 18 crime in which the victim has suffered “pecuniary loss.”
As part of the Sentencing Reform Act of 1984, the U.S. Sentencing Guidelines became effective in 1987. Guideline 5E1.1 established mandatory restitution in certain criminal cases as a condition of the sentence of incarceration, probation, or supervised release.
In 2005, the U.S. Supreme Court in Booker ruled that the Guidelines are advisory, not mandatory. The Fifth Circuit, and a number of other circuits, has ruled that Booker does not apply to Guidelines relating to restitution, so in many cases restitution is still mandatory.
Since the early 1980s, congress has continually expanded the courts ability to issue. District courts may now impose restitution orders in virtually all federal criminal cases. This is a far cry from the federal sentencing scheme in place before 1982 when restitution could only be ordered as a condition of probation pursuant to the Federal Probation Act of 1925.
Victim Witness Protection Act
In 1982, Congress enacted the Victim Witness Protection Act(VWPA), codified in 18 U.S.C. §§ 3663-3364, which established restitution as an independent component of a federal criminal sentence and authorized the district court to issue restitution orders at its discretion.
Restitution thus became a source of perpetual litigation concerning both the limits of the district court’s authority to impose restitution and the government’s authority to enforce those orders.
SCOTUS Limits Restitution
In 1990, the Supreme Court in Hughley v. United States moved to clarify the extent of the district court’s authority to impose restitution in federal criminal cases. The Court determined that the language of the VWPA permits the district court to compensate victims “harmed as the result of the offense” and limits restitution to the “loss caused by the specific conduct that is the basis of the offense of conviction.”
Congress was not impressed by what has become known as the “Hughley limitation,” and has steadily expanded the reach of the VWPA with amendments, which, in turn, has embolden the district courts to impose greater orders of restitution and prompted the government to assume power not authorized by law to enforce those restitution orders.
Child Support Recovery Act
Ten years after the VWPA, Congress enacted the nation’s first mandatory restitution law, the Child Support Recovery Act (CSRA).
Once Congress gets involved in “feel good,” politically advantageous legislating, there’s no stopping it.
Violence Against Women Act
In 1994, Congress enacted the Violence Against Women Act (VAWA) that added four specific Title 18 offenses subject to mandatory restitution; and two years later amended the VWPA with the Mandatory Victims Restitution Act (MVRA).
Mandatory Victims Restitution Act
The MVRA, now codified in § 3663A, increased the number of offenses subject to mandatory restitution, such as crimes of violence and Title 18 property offenses.
And that brings us the case of T. Martinez.
Martinez was convicted mail fraud and conspiracy. The district court was forced issue an order of restitution because § 3663A(c) requires restitution for any crime in which a victim “has suffered … pecuniary loss.”
The district court set the amount of restitution at $2.7 million to be paid on monthly installments based on a percentage of Martinez’s disposable income.
Under §§ 3613(a)(c)(f) and 3664(m)(1)(A)(i), the government enjoys the power to enforce orders of restitution like the one issued in the Martinez case.
Invariably when the government enjoys the power to enforce anything, there will be instances where the government oversteps its enforcement authority. That’s what happened in the Martinez case.
On December 16, 2015, the Tenth Circuit Court of Appeals issued a significant ruling in the Martinez case that seriously limits the government’s enforcement power in restitution cases.
The appeals court pointed out that Martinez has difficulty securing employment following his release from prison. Because his disposable income was quite limited, he was able to pay only relatively small amounts of restitution.
Garnishment of Retirement Accounts
The government was not satisfied with those amounts. It filed writs of garnishments for two of Martinez’s retirement accounts worth approximately $170,000—accounts that had not reached distribution status.
Martinez and his wife moved to quash the writs of garnishment. The district court denied their motion. They appealed to the Tenth Circuit.
Can Government Garnish Assets Beyond Amount Currently Due?
The issue squarely before the appeals court was whether the government could garnish assets beyond the “amount currently due under Mr. Martinez’s court-ordered payment schedule.”
The government argued it had the enforcement authority to garnish the entire amount of restitution.
The Tenth Circuit was not persuaded, finding that “this argument incorrectly assumes that Mr. Martinez currently owes the entire restitution amount.”
Government Can Enforce Only What Court has Order to Pay
The appeals court informed the government that it was the district court, not the government, that “determines how a defendant is to pay restitution … Thus, the government can enforce only what the district court has ordered the defendant to pay.”
The district court restitution order required Martinez to pay monthly installments of 25% of his net disposable income. Thus, the Tenth Circuit ruled, he did not “owe” the entire $2.7 million restitution order, rather he owed only 25% his current disposable income.
It is gratifying to know that the government can garnish only what is currently owed under a district court’s restitution order, not what the government thinks is owed.