United States v. Richardson ( 2023 )

Case: 22-10697 Document: 00516740049 Page: 1 Date Filed: 05/05/2023
United States Court of Appeals
for the Fifth Circuit United States Court of Appeals
Fifth Circuit
____________
FILED
May 5, 2023
No. 22-10697
____________ Lyle W. Cayce
Clerk
United States of America,
Plaintiff—Appellee,
versus
Devonsha Richardson,
Defendant—Appellant.
______________________________
Appeal from the United States District Court
for the Northern District of Texas
USDC No. 4:22-CR-38-4
______________________________
Before Clement, Graves, and Higginson, Circuit Judges.
Stephen A. Higginson, Circuit Judge:
In 2022, Defendant-Appellant Devonsha Richardson pleaded guilty
to one count of Hobbs Act robbery. As part of Richardson’s sentence, and
over his objection, the district court ordered Richardson to pay $5,000 in
restitution to Parks Food Mart, the store he robbed. Richardson appeals this
order of restitution on two grounds: first, that the district court erred in
imposing restitution to a business entity and second, that the district court
erred by ordering restitution in the amount of $5,000. For the reasons given
below, we AFFIRM AS MODIFIED.
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I.
First, Richardson contends that the district court erred in ordering
restitution to be paid to Parks Food Mart, a business entity, because a
“victim” eligible for restitution under the MVRA must be a natural person.
We review the legality of an MVRA award de novo. United States v. Williams,
993 F.3d 976, 980 (5th Cir. 2021). The MVRA defines “victim” as “a person
directly and proximately harmed as a result of the commission of an offense
for which restitution may be ordered . . . .” 18 U.S.C. § 3663A(a)(2).
Richardson focuses on the use of the word “person,” suggesting that the
natural definition of the term excludes corporate entities and other
organizations.
This reading, however, ignores that the broadly applicable statutory
definition of “person” “include[s] corporations, companies, associations,
firms, partnerships, societies, and joint stock companies.” 1 U.S.C. § 1; see
also Vt. Agency of Nat. Res. v. U.S. ex rel Stevens, 529 U.S. 765, 782 (2000)
(noting that corporations are “presumptively covered by the [statutory
definition of the] term ‘person’”). Accordingly, we have routinely found that
restitution may be ordered to non-natural persons. See, e.g., United States v.
Mathew, 916 F.3d 510, 518 (5th Cir. 2019) (holding that although the district
court erred in awarding restitution to Medicare for losses that preceded the
temporal scope of the offense of conviction, restitution as to the loss amount
caused by the conduct underlying the offense of conviction was lawful);
United States v. Sharma, 703 F.3d 318, 324 (5th Cir. 2012) (noting that
insurers can be victims under the MVRA and explaining how to calculate the
actual loss in such cases); United States v. Taylor, 582 F.3d 558, 562, 568 (5th
Cir. 2009) (affirming a restitution award to FEMA). As Richardson himself
concedes, this approach is in accord with all other circuits to have considered
the issue. See, e.g., United States v. Donaby, 349 F.3d 1046, 1052 (7th Cir.
2003) (concluding that because a police department was “directly and
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proximately harmed” by the offense conduct, it qualified as a “victim” under
the MVRA and affirming an order of restitution for property damage caused
by a robbery); United States v. Washington, 434 F.3d 1265, 1266 (11th Cir.
2006) (same).
Nonetheless, Richardson argues that this precedent has been
undermined, if not outright overturned, by the Supreme Court’s decision in
Lagos v. United States, 138 S. Ct. 1684 (2018). In Lagos, the Supreme Court
addressed the scope of the words “investigation” and “proceedings” under
Section 3663A(b)(4)—specifically, whether to adopt a narrow interpretation
in which the terms are limited to government investigations and criminal
proceedings or to adopt a broader reading which additionally encompassed
private investigations and civil proceedings. Id. at 1687. In holding that the
narrower interpretation applied, the Supreme Court primarily looked to the
statute’s wording, although it also recognized, as a practical matter, that a
broad reading of the statute could result in more conflict as to the MVRA’s
coverage and correspondingly increase administrative burdens. Id. at 1689.
Richardson reads Lagos to stand for the proposition that the MVRA
must be read narrowly, including as to the definition of “victim.” But nothing
in Lagos suggests that its holding extends so far—indeed, Lagos itself cabined
its discussion of the benefits of a “narrow” rather than “broad” reading to
the specific provision at issue. See id. at 1689 (discussing how a broad reading
of the term “other expenses” could invite disputes over whether particular
expenses qualified under the statute). If anything, Lagos directly
acknowledged that a victim under the MVRA could be a corporation. See id.
at 1688 (noting that certain kinds of expenses are “the kind of expenses that
victim would be likely to incur when he or she (or, for a corporate victim . . . ,
its employees) misses work . . . .”) (emphasis added). In fact, Lagos involved
consideration of a restitution order to a corporation—General Electric. Id. at
1687.
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Even after Lagos, we have explicitly recognized that corporate victims
may receive restitution under the MVRA. United States v. Koutsostamatis,
956 F.3d 301, 308 (5th Cir. 2020) (“That’s not to say a corporate victim
cannot receive restitution under the MVRA—far from it.”). We do the same
today, and find that the district court did not err in ordering restitution to
Parks Food Mart.
II.
Next, Richardson argues that even if Parks Food Mart was a proper
victim under the MVRA, the district court erred as to the amount ordered.
We review the amount of restitution awarded for abuse of discretion.
Williams, 993 F.3d at 980. Under the MVRA, restitution is limited to “the
actual loss directly and proximately caused” by the offense of conviction.
Sharma, 703 F.3d at 323. In other words, “[t]he MVRA does not permit
restitution awards to exceed a victim’s loss. . . . The court may not award the
victim a windfall.” United States v. Beydoun, 469 F.3d 102, 107 (5th Cir.
2006).
The MVRA states both that “[t]he burden of demonstrating the
amount of the loss sustained by a victim as a result of the offense shall be on
the attorney for the Government,” and that “[t]he burden of demonstrating
such other matters as the court deems appropriate shall be upon the party
designated by the court as justice requires.” 18 U.S.C. § 3664(e). We have
read these two sentences to establish a burden-shifting framework for loss-
amount calculations in which “[t]he Government first must carry its burden
of demonstrating the actual loss to [the victim] by a preponderance of the
evidence,” after which “the defendant can rebut the Government’s
evidence.” Williams, 993 F.3d at 980-81.
The district court ordered restitution in the amount of $5,000, the
amount recommended by probation in the presentence report (“PSR”). The
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probation officer calculated the total loss incurred by Parks Food Mart to be
$5,000—$1,000 for money and merchandise stolen during the robbery and
$4,000 for the lost income from the store closure caused by the robbery and
subsequent investigation. In calculating the total amount of loss, a district
court “may adopt the facts contained in a presentence report without further
inquiry if those facts have an adequate evidentiary basis with sufficient indicia
of reliability and the defendant does not present rebuttal evidence or
otherwise demonstrate that the information in the PSR is unreliable.” United
States v. Smith, 528 F.3d 423, 425 (5th Cir. 2008).
Richardson did not present any rebuttal evidence at sentencing,
although he did file written objections to the PSR’s calculation of restitution.
Specifically, Richardson attacks both the $1,000 loss calculated for stolen
money, which he claims lacks an adequate evidentiary basis, and the $4,000
loss calculated for lost income, which he claims was improperly calculated.
We address each in turn.
A.
To begin, we evaluate the $1,000 loss calculated as to the stolen
property. Where an offense results in the loss of property (and that property
is not returned), the MVRA orders restitution in an amount equal to the
greater of either the value of the property on the date of loss or the value of
the property on the date of sentencing. § 3663A(b)(1)(B).
During the robbery, Richardson stole approximately $600 in cash
from the register, a stack of approximately seventy-five lottery tickets, and a
Beretta .45-caliber semiautomatic handgun. To establish the amount of cash
stolen, the probation officer interviewed the store’s manager, who was also a
victim of the offense. As for the value of the tickets, the probation officer
recorded that the lottery tickets were worth $5 and Parks Food Mart would
have earned a 5% commission on any tickets sold, as well as a potential bonus
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if any of the tickets were high-value winners. Assuming the value of each
lottery ticket to be at least $5, the total loss for the seventy-five tickets is $375.
Adding that value to the $600 in stolen cash, we reach a total loss of $975
without accounting for the stolen gun. From there, all that is needed to reach
the PSR’s $1,000 calculation is an assumed value of at least $25 for the stolen
gun. We find this calculation reasonable.
Nonetheless, Richardson disputes this value. First, he suggests that
the Government was required to conduct some sort of forensic accounting to
prove the loss of cash. Richardson provides no case law to support this
contention, and we have held that a PSR is sufficiently reliable where the
probation officer reviewed investigative materials and interviewed a victim.
United States v. Ollison, 555 F.3d 162, 164 (5th Cir. 2009). Accordingly, the
district court was entitled to rely on the PSR’s calculation as to the amount
of cash stolen.
Additionally, citing United States v. Kim, 988 F.3d 803, 813 (5th Cir.
2021), Richardson argues that using the retail value of the stolen lottery
tickets, rather than net profit, results in a “windfall” to Parks Food Mart.
Kim, however, is inapposite—there, we considered how to calculate the
actual loss to a victim caused by the introduction of counterfeit or infringing
goods into the stream of commerce, displacing legitimate sales from the
victim. Id. In such cases, basing restitution on the retail value would fail to
account for the cost of manufacturing and selling the legitimate goods. Id.This case, however, involves a straightforward robbery, where the loss is
simply the value of the stolen goods. See, e.g., United States v. Hilliard, 578 F.
App’x 439, 442 (5th Cir. 2014) (per curiam) (affirming a restitution order in
the amount of the value of the cash stolen plus the price of an iPad in
connection with a conviction for a conspiracy to steal Government property).
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Finally, Richardson points out that the PSR contained no information
as to the replacement value of the stolen gun. Yet, given that the stolen cash
and lottery tickets together accounted for, at minimum, $975, we do not find
any abuse of discretion in adopting the PSR’s recommendation of a $1,000
loss for stolen merchandise.
B.
Next, we turn to the $4,000 calculated for lost income. The MVRA
directs the district court to “reimburse the victim for lost income . . . and
other expenses incurred during participation in the investigation or
prosecution of the offense.” § 3664A(b)(4). Here, Parks Food Mart was
closed for approximately 6 hours on a Monday, from 6:15 p.m. to midnight,
as law enforcement investigated the robbery. In the original PSR, the
probation officer reported only that the business had suffered “$4,000 from
missed earnings while being closed for investigation.” After Richardson
objected to this calculation, the probation officer conducted a follow-up
interview with the manager of Parks Food Mart. During this interview, the
manager estimated that the store averaged $3,500 in sales on an average
Monday, with peak hours between 4:00 p.m. and 9:00 p.m. Based on this
estimate, probation determined that $4,000 was a reasonable estimate for
lost earnings caused by a closure during some of the most profitable hours of
the day.
Richardson does not dispute that Parks Food Marts was entitled to
restitution for the income it lost during the time the store was closed for
investigation into the robbery. Rather, Richardson takes issue with the
amount ordered. Specifically, Richardson argues that the Government failed
to properly support the $4,000 figure.
First, Richardson contends that the district court improperly awarded
$4,000 in lost earnings, rather than lost income. It is true that the MVRA
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provides only for restitution for income, not earnings. But it is also true that
“income” and “earnings” can, in some instances, be used interchangeably.1
Compare Income, Black’s Law Dictionary (11th ed. 2019) (“The money or
other form of payment that one receives, usu. periodically, from
employment, business, investments, royalties, gifts, and the like. See
Earnings. Cf. Profit.”), with Earnings, Black’s Law Dictionary (11th ed. 2019)
(“Revenue gained from labor or services, from the investment of capital, or
from assets. See Income.”). We do not find, and Richardson provides no case
law to support, that the mere fact that the PSR did not contain the exact
terminology used by the MVRA when describing the victim’s loss and
instead used a term with a very similar meaning invalidates the district
court’s determination of restitution.
Assuming that lost earnings is the appropriate metric, Richardson
alternatively maintains that the PSR (and, by extension, the Government)
failed to provide an adequate evidentiary basis for the $4,000 figure. We
assume that the first version of the PSR, which contained only the victim’s
claimed loss amount and nothing more, may not have contained adequate
evidentiary support. See United States v. Young, 272 F.3d 1052, 1056 (8th Cir.
_____________________
1
In his reply brief, Richardson also claims that the $4,000 was improper because it
represented a loss of gross sales and did not account for the costs related to generating those
sales. In other words, Richardson argues that profit is the proper measure of loss. See Profit,
Black’s Law Dictionary (11th ed. 2019) (“The excess of revenues over expenditures in a
business transaction; Gain. Cf. Earnings; Income.”). Again, however, Richardson cites no
case law to support this position. In certain counterfeiting cases, we have stated that the
relevant metric is net profit, not gross income. See, e.g., Beydoun, 469 F.3d at 108; Kim, 988
F.3d at 812-13. These cases, however, involved the calculation of the actual loss caused by
the conduct underlying the offense, not the reimbursement of lost income caused by the
victim’s participation in the investigation. See Beydoun, 469 F.3d at 107-08 (calculating the
loss caused by the defendants’ creation of counterfeit booklets); Kim, 988 F.3d at 813
(noting that using the retail value, rather than the net profit, to measure actual loss caused
by the introduction of counterfeit goods into the market could result in a windfall to the
victim).
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2001) (finding that a PSR did not contain sufficient factual allegations
substantiating the victim’s proposed loss amount where the PSR “simply
recounted the victim’s estimate of lost retail sales,” had no further
verification of that estimate, and the PSR itself acknowledged that the
amount of restitution was uncertain).
But here, the district court did not just have access to the first version
of the PSR: it also had access to the addendum produced by the probation
officer who, in response to Richardson’s objection, conducted a follow-up
interview to confirm the claimed loss amount. At this point, he was informed
by the store manager that Parks Food Mart averaged around $3,500 in sales
on Mondays.2 Of course, the nature of an average is such that some Mondays
may experience higher sales while others lower. In other words, we
understand that sales are variable and there may have been reason for Parks
Food Mart, in stating that the store closure resulted in $4,000 in lost
earnings, to expect sales on the higher end the day of the robbery. At the same
time, however, we recognize that the store closure only impacted part of the
day, albeit during peak hours. Given these competing tensions, and the lack
of any other documentation as to the store’s losses, we find the $3,500 figure
to be a better-supported estimate of lost sales. Accordingly, we modify the
judgment to reduce the restitution ordered to be paid to Parks Food Mart to
_____________________
2
Both on appeal and in district court, Richardson argued that some sort of
documentation was required to verify this estimate. That is not so—the probation officer
was entitled to rely on an interview with an employee of the store to calculate the loss. See
Smith, 528 F.3d at 425 (rejecting the defendant’s argument that the Government was
required to produce a sworn affidavit or present live testimony as to the amount of loss and
holding that the district court could rely on the amount contained in the PSR, where that
amount was based on an interview of the employee of the victim and the defendant did not
present any rebuttal evidence at sentencing).
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$3,500. See 28 U.S.C. § 2106; United States v. Emasealu, 779 F. App’x. 283,
284 (5th Cir. 2019) (per curiam).
*********
For the foregoing reasons, we AFFIRM AS MODIFIED the district
court’s restitution order.
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James E. Graves, Jr., Circuit Judge, dissenting in part:
I disagree with the majority’s “find[ing]” that $3,500 is the proper
amount of restitution for lost sales. Further, nothing in the record supports
the majority’s statement that “there may have been reason for Parks Food
Mart, in stating that the store closure resulted in $4,000 in lost earnings, to
expect sales on the higher end the day of the robbery.” If there had been, the
government could have easily established that. It did not.
Instead, the addendum to the PSR explicitly states multiple times that
the manager “estimated the store typically averaged $3,500 in sales on an
average Monday.” Based on that, the probation officer then made the
unsupported conclusion that, “[t]hus, the estimate of $4,000 may be
reasonable for lost earnings.” This court has previously said that
unsupported conclusions lack sufficient indicia of reliability. See United
States v. Shacklett, 921 F.2d 580, 584 (5th Cir. 1991).
Moreover, the caselaw requires the restitution amount is supported
by the evidence in the record. See United States v. Sharma, 703 F.3d 318, 323
(5th Cir. 2012) (“[E]very dollar must be supported by record evidence.”);
see also United States v. Trujillo, 502 F.3d 353, 357 (5th Cir. 2007) (The
district court may adopt facts in the PSR so long as the facts have an adequate
evidentiary basis with sufficient indicia of reliability.); United States v.
Beydoun, 469 F.3d 102, 107 (5th Cir. 2006) (“The MVRA does not permit
restitution awards to exceed a victim’s loss.”).
The PSR indicates that Parks Food Mart was usually open from 8 a.m.
until midnight, a 16-hour period. The closure was from 6:15 p.m. until
midnight. The peak hours were purported to be from 4 p.m. to 9 p.m. The
closure only partially occurred during the peak hours. The store was open
for 2 hours and 15 minutes of the peak hours, from 4 p.m. to 6:15 p.m. If we
were to evenly prorate the total average sales for an entire Monday, it would
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come out to $218.75 per hour for each of the 16 hours, for a total of $1,312.50
for the almost 6-hour closure. The PSR does not establish the average sales
during the peak hours as compared to non-peak hours. But, even if it did, the
store was open for more than 2 hours of peak time, and half of the closure was
during non-peak hours, from 9 p.m. to midnight. Therefore, the record
supports restitution for lost sales in the amount of $1,312.50.
For these reasons, I respectfully dissent in part.
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