991 F2d 609 United States v. Mills

991 F.2d 609

UNITED STATES of America, Plaintiff-Appellee,
Richard Lee MILLS, Defendant-Appellant.

No. 92-10245.

United States Court of Appeals,
Ninth Circuit.

Argued and Submitted Jan. 13, 1993.
Decided April 20, 1993.

Suzanne A. Luban, Sacramento, CA, for defendant-appellant.

Lisa C. Ridge, Asst. U.S. Atty., Sacramento, CA, for plaintiff-appellee.

Appeal from the United States District Court for the Eastern District of California.

Before CHOY, SCHROEDER, and BRUNETTI, Circuit Judges.

CHOY, Circuit Judge:

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Appellant Richard Lee Mills pled guilty to bank robbery in January of 1992. The district court ordered him to make restitution to the victim banks, and also ordered that $2,400 seized from Mills at the time of arrest be applied to the restitution obligation. The district court denied Mills' motion brought pursuant to Fed.R.Crim.P. 41(e) seeking the return of the $2,400.1


Mills appeals from the denial of his Rule 41(e) motion, arguing (1) that the district court's restitution order was invalid because the court did not consider the financial needs of Mills' child as required by 18 U.S.C. § 3664(a), and (2) that notwithstanding the restitution order, Mills was entitled to lawful possession of the seized money. We have jurisdiction under 28 U.S.C. § 1291, and we affirm.



In July 1991, police in Sacramento arrested Mills on charges of bank robbery and seized a bag containing $2,400 in cash. Mills pled guilty to five counts of bank robbery in January 1992. The district court sentenced Mills to fifty-seven months imprisonment and ordered him to make restitution to the victims in the amount of $8,044. The judgment specified that the $2,400 seized from Mills was to be forfeited to the United States government and applied to the restitution obligation.


Mills brought a motion pursuant to Fed.R.Crim.P. 41(e) seeking the return of the $2,400. The district court found that the money belonged to Mills at the time it was seized, in part because there was insufficient evidence to show that the $2,400 was precisely the same currency stolen from the banks. However, instead of returning the money to Mills, the court denied the Rule 41(e) motion and ordered that the money be applied toward Mills' restitution obligation.2 Mills appeals from the denial of his Rule 41(e) motion.


A. Validity of the Restitution Order


Restitution orders are specifically authorized by the Victim and Witness Protection Act of 1982 ("VWPA"), Pub.L. No. 97-291, 96 Stat. 1248-1258 (codified in part at 18 U.S.C. §§ 3663-3664 (1988 & Supp.1991)). The VWPA was enacted "to ensure that the Federal Government does all that is possible within limits of available resources to assist victims and witnesses of crime without infringing on the constitutional rights of the defendant." Pub.L. No. 97-291, 96 Stat. 1249. Toward that end, the VWPA authorizes a sentencing court to order a defendant to make restitution to his victim and sets up the procedure for such an order.


Under 18 U.S.C. § 3663, the district court has the authority to issue a restitution order, but is not required to do so. 18 U.S.C. § 3663(a)(1) (Supp.1991). Section 3664(a) provides that in determining whether to order restitution and the amount of restitution, the court "shall consider the amount of the loss sustained by any victim as a result of the offense, the financial resources of the defendant, the financial needs and earning ability of the defendant and the defendant's dependents, and such other factors as the court deems appropriate." 18 U.S.C. § 3664(a) (Supp.1991).


Mills contends that the restitution order is invalid because the district court failed to consider the needs of his dependent child. We review a sentence that falls within the statutory limits of the VWPA for abuse of discretion. United States v. Smith, 944 F.2d 618, 623 (9th Cir.1991), cert. denied, --- U.S. ----, 112 S.Ct. 1515, 117 L.Ed.2d 651 (1992).

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Although the district court must consider the factors listed in § 3664(a), the court is not required to make findings of fact, United States v. Cannizzaro, 871 F.2d 809, 811 (9th Cir.), cert. denied, 493 U.S. 895, 110 S.Ct. 245, 107 L.Ed.2d 195 (1989), or even to discuss the factors on the record, United States v. Grewal, 825 F.2d 220, 223 (9th Cir.1987). Instead, in reviewing restitution orders, we have required that the record reflect "that the district judge had at his disposal information bearing on the considerations enumerated in section 3664." Cannizzaro, 871 F.2d at 811. There must also be some indication that the judge gave thought to the relevant information. See Smith, 944 F.2d at 623; Cannizzaro, 871 F.2d at 812; United States v. Ruffen, 780 F.2d 1493, 1495 (9th Cir.), cert. denied, 479 U.S. 963, 107 S.Ct. 462, 93 L.Ed.2d 407 (1986).


In Cannizzaro, we upheld a restitution order because the presentence report contained information on the defendant's financial condition and the district court specifically referred to the report's findings. Cannizzaro, 871 F.2d at 812. Likewise, in Ruffen, we concluded that a restitution order was proper because the judge had access to a presentence report containing information on the defendant's finances, and also because the defendant's counsel "made an impassioned plea" and "fully argued" the issue of the defendant's inability to pay restitution. Ruffen, 780 F.2d at 1495.


As in Cannizzaro and Ruffen, Mills' presentence report contained information bearing on the § 3664(a) factors, including details on Mills' financial resources, employment history, and his dependent child. As in Ruffen, Mills' attorney argued prior to the sentencing hearing that the $2,400 was needed for the care of the child. The judge commented on this argument, and asked for additional briefs and evidence. At a subsequent hearing, the judge stated that he had read the additional briefs submitted as well as the presentence report. It is clear that the judge was aware of Mills' financial circumstances and of his dependent child. We conclude that the district judge satisfied the requirements of § 3664(a) and did not abuse his discretion in issuing the restitution order.

B. Denial of the Rule 41(e) Motion


Mills argues that the district court nevertheless should have granted his Fed.R.Crim.P. 41(e) motion because Mills was entitled to lawful possession of the money. We review the district court's interpretation of Rule 41(e) de novo. In re Grand Jury Subpoenas Dated Dec. 10, 1987, 926 F.2d 847, 855 (9th Cir.1991).

Rule 41(e) provides in part:


A person aggrieved by an unlawful search and seizure or by the deprivation of property may move the district court for the district in which the property was seized for the return of the property on the ground that such person is entitled to lawful possession of the property. The court shall receive evidence on any issue of fact necessary to the decision of the motion. If the motion is granted, the property shall be returned to the movant....


Generally, a Rule 41(e) motion is properly denied "if the defendant is not entitled to lawful possession of the seized property, the property is contraband or subject to forfeiture or the government's need for the property as evidence continues." United States v. Van Cauwenberghe, 934 F.2d 1048, 1061 (9th Cir.1991). A criminal defendant is presumed to have the right to the return of his property once it is no longer needed as evidence, and the burden of proof is on the government to show "that it has a legitimate reason to retain the property." Id. (quoting United States v. Martinson, 809 F.2d 1364, 1369 (9th Cir.1987)). The government may meet this burden by demonstrating "a cognizable claim of ownership or right to possession adverse to that of [the defendant]." United States v. Palmer, 565 F.2d 1063, 1065 (9th Cir.1977).


We hold that a valid restitution order under the VWPA gives the government a sufficient cognizable claim of ownership to defeat a defendant's Rule 41(e) motion for return of property, if that property is needed to satisfy the terms of the restitution order.


Under the enforcement provisions of the VWPA, the government acquires a lien against seized property when a district court issues a valid restitution order. Title 18 U.S.C. § 3663 provides that an order of restitution can be enforced by the United States in the manner described in subchapter B of chapter 229 of title 18.3 18 U.S.C. § 3663(h)(1)(A) (1988). One of the provisions in subchapter B states that a fine is a lien "upon all property belonging to the person fined" which "arises at the time of the entry of the judgment and continues until the liability is satisfied." 18 U.S.C. § 3613(a) (1988). Thus, a restitution order is enforceable as a lien upon all of the defendant's property at the time judgment is entered. It follows that the district court had a legitimate reason to order that the defendant's property already in the government's possession be applied to his restitution obligation. Cf. United States v. Duncan, 918 F.2d 647, 654 (6th Cir.1990), cert. denied, --- U.S. ----, 111 S.Ct. 2055, 114 L.Ed.2d 461 (1991) (affirming district court's order that seized property be used to pay off monetary penalties imposed as part of the sentence).


Mills' reliance on Palmer, 565 F.2d at 1064-65, is unpersuasive. In Palmer, the district court denied a defendant's Rule 41(e) motion for the return of money seized at the time of the defendant's arrest for bank robbery. In reversing, this court emphasized that the district court had made no determination of the rightful owner of the money. There was no evidence that the money rightfully belonged to the victim of the robbery, and the government had not claimed the money for itself through a forfeiture proceeding. Id. at 1064. The court concluded that "in absence of any cognizable claim of ownership or right to possession adverse to that of [the defendant]," the district court should have returned the money to the defendant. Id. at 1065.


Palmer is distinguishable from the facts of this case because it was decided before the passage of the VWPA and did not involve an order of restitution. The Palmer court was concerned about the government's attempts to compensate victims while avoiding any judicial resolution of the defendant's liability to the victims. See id. at 1064-65. In this case, there was a judicial resolution of Mills' liability, undertaken pursuant to federal statute. Thus, the holding in Palmer does not affect our conclusion that the government acquires a right to possession of seized property once a district court issues a valid restitution order. Since we have determined that the restitution order in this case was valid, the government had a legitimate reason to retain the money. The Rule 41(e) motion was properly denied.




Fed.R.Crim.P. 41(e) permits a criminal defendant to move for the return of property seized by the government on the ground that the movant is entitled to lawful possession of the property


Since the district court ordered that the $2,400 be used for restitution and not for reimbursement of government legal costs, we do not address Mills' arguments based on 18 U.S.C. § 3006A


Subchapter B sets up procedures for collection of unpaid criminal fines. 18 U.S.C. § 3611-3615 (1988 & Supp.1991)