Scanlon v. Greenberg Traurig, LLP ( 2011 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
____________________________________
)
MICHAEL P. S. SCANLON, )
)
Petitioner, )
)
v. ) Misc. No. 11-138 (RCL)
)
GREENBERG TRAURIG, LLP, )
)
Respondent. )
____________________________________)
MEMORANDUM & ORDER
Before the Court is defendant Michael Scanlon’s Motion [1] to Determine Availability of
Objection. Upon consideration of the motion [1], Greenberg Traurig’s opposition thereto [3], the
reply [4], the government’s memorandum regarding the motion [7], and the applicable law, the
Court will deny the motion for the reasons set forth below.
I. BACKGROUND
In November 2004, defendant pled guilty to a fraud scheme in which he and Jack
Abramoff defrauded their Indian tribe clients of over $20 million. On February 11, 2011, Judge
Huvelle sentenced defendant to twenty months in prison and ordered him to pay restitution to his
victim clients. At the time of sentencing, all victims but the Choctaw and Sandia tribes reported
that they had been fully compensated by Greenberg Traurig, LLP (GT), the law and lobbying
firm at which Abramoff was employed and with which defendant had a business relationship
during the conspiracy. All of the victims that GT compensated had sued or threatened civil
litigation against GT for the same conduct in which defendant had engaged. In total, GT paid the
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victims $17,699,000 in compensation and civil settlement for losses caused by the scheme
entered into by defendant and Abramoff.
The Mandatory Victims Restitution Act (MVRA) makes restitution mandatory for certain
federal offenses, “seek[ing] primarily to assure that victims of a crime receive full restitution.”
Dolan v. United States, 130 S. Ct. 2533, 2549 (2010). Section 3664(j) of the MVRA establishes
two tiers of restitution claimants—first, victims are fully compensated for all losses, and then
insurers and others from whom victims receive compensation are entitled to restitution. The
statute provides that:
If a victim has received compensation from insurance or any other source with
respect to a loss, the court shall order that restitution be paid to the person who
provided or is obligated to provide the compensation, but the restitution order
shall provide that all restitution of victims required by the order be paid to the
victims before any restitution is paid to such a provider of compensation.
§ 3664(j)(1) (emphasis added). Consistent with § 3664(j), Judge Huvelle’s restitution order
required defendant to pay restitution in the amount of $20,191,537.31, with payment of
$2,000,000 to the Choctaw and $492,537.31 to the Sandia. No. 05-cr-411, Feb. 11, 2011 [65].
The order further directed that, pursuant to § 3664(j), defendant should pay restitution to GT in
the amount of $17,699,000—the total compensation it had paid to the victims.
In his pre-sentencing memorandum, however, defendant had requested an evidentiary
hearing allowing him to contest GT’s entitlement to restitution under § 3664(j). Defendant
argued that GT was involved in the scheme for which he was convicted, and thus challenged his
legal responsibility to pay restitution to GT. Accordingly, Judge Huvelle’s restitution order
provided for a procedure through which this Court 1 would resolve (1) whether defendant is
1
Judge Huvelle has recused herself from ruling on this question because GT is represented by
her former law firm, Williams & Connolly.
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permitted as a matter of law to pursue a legal objection that GT is not entitled to compensation
under § 3664(j) because of his claim that GT had a role in the same conduct for which he pled
guilty, and (2) if so, whether defendant can establish under an appropriate legal standard that GT
is not entitled to compensation under § 3664(j). The Court will address the first of these
questions here.
II. ANALYSIS
At the outset, the Court notes that the government has already represented the victims’
interests in obtaining restitution, consistent with its responsibilities under § 3664(e). Outside of
the victim context, this section provides 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.” § 3664(e). This matter involves a compensation provider’s entitlement to restitution
under § 3664(j). The Court appreciates the government’s recommendation that GT is in the best
position to represent its interests in this matter, and will order that GT be designated to do so.
A. Timeliness of Defendant’s Motion
GT argues that defendant’s motion should be denied because it is untimely. The Court’s
restitution order required defendant to file his motion “on or before March 13, 2011,” which fell
on a Sunday. Defendant filed his motion on Monday, March 14, 2011. Under Federal Rule of
Civil Procedure 6(a), a filing deadline expressed in a period of days is calculated so as not to end
on a Saturday, Sunday, or legal holiday. Fed. R. Civ. P. 6(a)(1)(C). GT correctly notes that this
rule, by its language, applies when computing time periods and not when a filing date has been
specified. Nevertheless,
Rule 6(a) also can be used for the computation of time in the context of a specified
date. Therefore, if the district court orders certain requests and motions to be filed
by a specified date and the date is actually a Saturday, Sunday, or legal holiday,
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the court can extend the deadline to the next day that is not a weekend day or a
legal holiday. This is consistent with the recognition that district courts should
possess broad discretion in managing their calendars.
4B Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1162 (2010
Supp.) (emphasis added). Here, because the specified date of filing fell on a Sunday, the Court
will exercise its discretion and consider defendant’s motion timely.
B. Legal Basis for Defendant’s Motion
The question at issue here—and the threshold question that must be answered before any
further proceedings—is whether a defendant ordered to pay restitution can challenge his
obligation under § 3664(j) to pay any party that has compensated victims for their losses. There
is no dispute that the MVRA, which focuses on ensuring that victims are fully compensated,
offers little guidance on this question. As noted above, § 3664(j)(1) provides that “the court shall
order that restitution be paid” to insurers or “any other source” from which victims have received
compensation. Section 3664(e) provides for challenges “as to the proper amount or type of
restitution,” but defendant is not disputing the amount of restitution to be paid here; he is
challenging GT’s entitlement to restitution. Quite simply, the statute does not provide for
exceptions to the obligation to pay restitution under § 3664(j)—and indeed, defendant does not
suggest that it does so.
Well aware of the statute’s silence regarding his potential objection, defendant argues
that the limited exception recognized by some courts to mandatory restitution under § 3663A
should apply to mandatory restitution under § 3664(j). Section § 3663A of the MVRA provides
that “the court shall order . . . that the defendant make restitution to the victim of the offense.” §
3663A(a)(1). Defendant cites three cases in which courts have precluded mandatory restitution to
parties cast as victims—not compensation providers—based on findings that the claimant-victims
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were criminally liable along with the defendant. Defendant asks this Court to apply the same
reasoning to his claim that compensation provider GT was involved in the scheme for which he
was convicted.
The cases cited by defendant do not support his right to the relief he requests—that is, a
hearing to adjudicate GT’s potential liability, convened as part of his sentencing. In two of these
cases, the courts found that persons or entities were not “victims” entitled to restitution based on
previously adjudicated facts. See United States v. Reifler, 446 F.3d 65 (2d Cir. 2006) (holding
that the defendant’s co-conspirators, who had been tried and convicted alongside the defendant
for the same offense, were not entitled to restitution under the MVRA); United States v.
Martinez, 978 F. Supp. 1442 (D.N.M. 1997) (refusing to order restitution to a robbery victim, an
Indian casino, where the casino’s operation had been deemed illegal through extensive litigation
independent of the Martinez case). In the third case cited by defendant, the Second Circuit relied
on Reifler to reject the defendant’s claim that the victims of his fraud scheme were involved in
the scheme and thus not entitled to restitution. United States v. Ojeikere, 545 F.3d 220, 222–23
(2d Cir. 2008). The issue was taken up at sentencing after trial, and there is no indication that the
court held any additional proceeding to consider evidence of the victims’ conduct. Defendant
cites no other authority for his right to pursue an objection to GT’s entitlement to restitution.
Here, the government did not seek criminal charges against GT, nor did it designate GT
as an unindicted co-conspirator in defendant’s case. Government’s Memorandum 13, March 31,
2011 [7]. As such, there are no previously adjudicated facts regarding GT’s involvement in
defendant’s scheme. The cases discussed above simply do not support a defendant’s right to a
hearing, either as part of or after sentencing, at which to challenge the conduct of an uncharged
third party for the purpose of precluding that party’s entitlement to restitution under § 3664(j).
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The Court therefore need not determine whether these cases’ limited exception to victims’
restitution applies also in the context of compensation providers like GT. Given the lack of
authority for the novel proceeding defendant seeks, defendant is not permitted to pursue his
objection.
III. CONCLUSION
The Court finds that defendant is not permitted as a matter of law to pursue a legal
objection that Greenberg Traurig is not entitled to compensation under § 3664(j). It is hereby
ORDERED that Greenberg Traurig is designated to represent its interests in this matter;
and it is furthermore
ORDERED that defendant Michael Scanlon’s Motion [1] to Determine Availability of
Objection is DENIED.
SO ORDERED.
Signed by Royce C. Lamberth, Chief Judge, on April 20, 2011.
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