United States v. Holland

09-1403-cr
U nited States v. H olland

1 UNITED STATES COURT OF APPEALS
2 FOR THE SECOND CIRCUIT
3
4 SUMMARY ORDER
5
6 RULINGS BY SUMM ARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
7 SUM M ARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERM ITTED AND IS GOVERNED BY
8 FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1. WHEN
9 CITING A SUM M ARY ORDER IN A DOCUM ENT FILED W ITH THIS COURT, A PARTY MUST CITE
10 EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (W ITH THE NOTATION
11 “SUM M ARY ORDER”). A PARTY CITING A SUM M ARY ORDER M UST SERVE A COPY OF IT ON ANY
12 PARTY NOT REPRESENTED BY COUNSEL.
13
14 At a stated term of the United States Court of Appeals for the Second Circuit, held at
15 the Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, in the City of New
16 York, on the 29 th day of September, two thousand ten.
17
18 PRESENT: PIERRE N. LEVAL,
19 GERARD E. LYNCH,
20 Circuit Judges,
21 EDWARD R. KORMAN,
22 District Judge.*
23
24 ------------------------------------------------------------------
25
26 UNITED STATES OF AMERICA,
27 Appellee,
28
29 v. No. 09-1403-cr
30
31 JAMES A. HOLLAND,
32 Defendant-Appellant.
33
34 --------------------------------------------------------------------
35
36 FOR APPELLANT: GASPAR M. CASTILLO, JR., Parker & Castillo, Albany,
37 New York.
38

*
The Honorable Edward R. Korman of the United States District Court for the Eastern
District of New York, sitting by designation.

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 1 FOR APPELLEE: GWENDOLYN CARROLL, Assistant United States Attorney
2 (Grant C. Jaquith and Elizabeth S. Riker, on the brief), for
3 Richard S. Hartunian, United States Attorney for the Northern
4 District of New York, Syracuse, New York..
5
6 Appeal from the United States District Court for the Northern District of New

7 York (Frederick J. Scullin, Senior Judge).

8 UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED,

9 AND DECREED that the sentence, entered on March 27, 2009, is AFFIRMED.

10 James A. Holland pled guilty to failing to maintain medical records in violation of

11 21 U.S.C. §§ 331(e), 333(a)(1). At sentencing, the district court ordered, inter alia,

12 restitution in the amount of $502,925.05. Holland now appeals that restitution order,

13 asking us to vacate and remand for further proceedings on the proper amount of

14 restitution owed. We assume the parties’ familiarity with the facts and the record of prior

15 proceedings, which we reference only as necessary to explain our decision.

16 Because Holland failed to properly contest the amount of restitution in the district

17 court, despite several opportunities to do so, we review the order of restitution only for

18 plain error. United States v. Olano, 507 U.S. 725, 732 (1993); United States v. Coriaty,

19 300 F.3d 244, 252 (2d Cir. 2002). Holland contends that he preserved the issue for appeal

20 by filing both a written objection to the probation officer’s recommendation regarding

21 restitution and a letter to the court raising restitution claims in advance of the sentencing

22 hearing. However, when the court subsequently omitted restitution from the list of issues

23 to be resolved at the sentencing hearing, Holland did not object to the proposed scope of

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 1 that hearing. At the hearing itself, he neither raised the issue of restitution nor sought to

2 introduce relevant evidence. Finally, Holland did not object to the order of restitution at

3 the time it was entered. By repeatedly failing to properly contest restitution below,

4 Holland forfeited his right to appeal from the district court’s order of restitution, at least

5 absent plain error. United States v. Caba, 955 F.2d 182, 187 (2d Cir. 1992)

6 (“[A]ppellants may not seek a remand from this court on a factual issue that could have

7 been presented to the sentencing judge for consideration.”).

8 At any rate, we find no error, let alone plain error, in the district court’s ruling.

9 First, Holland argues that restitution was improper because “the companies in question

10 did not suffer a loss,” since they have successfully marketed the drugs involved in

11 Holland’s studies. This argument misses the mark, however, because the companies did,

12 in fact, suffer a loss of $502,925.05 on drug surveys that Holland’s violation rendered

13 unusable.

14 Second, Holland argues that it was “unfair” to require him to pay restitution

15 because he was never personally compensated for the drug studies in question.

16 Restitution, however, is measured not by the perpetrator’s profits, but by the victims’

17 loss, which in cases of damaged or lost property is determined by the “value of the

18 property” lost or damaged. 18 U.S.C. § 3663(b)(1); United States v. Milstein, 481 F.3d

19 132, 137 (2d Cir. 2007) (“restitution may be awarded in an amount equal to the value of

20 the property” (internal quotation marks omitted)); see also 18 U.S.C. § 3663(a)(1)(B)(i)(I)

21 (“The court, in determining whether to order restitution under this section, shall consider

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 1 the amount of the loss sustained by each victim as a result of the offense . . . .”); cf. Id. at

2 § 3663(b)(2) (providing that in personal injury cases restitution is measured by “the cost

3 of necessary medical and related professional services and devices”); United States v.

4 Klein, 476 F.3d 111, 114 (2d Cir. 2007) (“co-defendants may be proportionally or jointly

5 and severally liable for restitution when they are all culpable”). The fact that Holland was

6 never personally compensated by the drug companies is therefore of little relevance.

7 Third, Holland argues that because at least one of the drug companies, Aventis

8 Pharmaceuticals, Inc., “had an opportunity to prevent any claimed losses and failed to do

9 so,” that provided a “basis for mitigation of the amount of restitution to be paid.” Other

10 circuits have held that when considering restitution, a district court is not required “to

11 offset losses by amounts that could have been avoided through proper mitigation.”

12 United States v. Williams, 292 F.3d 681, 688 n.3 (10th Cir. 2002) (internal quotation

13 marks omitted); see also United States v. Soderling, 970 F.2d 529, 534 n.10 (9th Cir.

14 1992) (same). This case does not require us to decide whether we agree with this broad

15 statement. Holland does not argue that Aventis should have mitigated losses in the sense

16 of taking steps to reduce damages for a known breach of duty. Instead, Holland

17 essentially argues that Aventis was negligent in not detecting his criminal conduct sooner

18 than it did. But an innocent crime victim has no duty to detect a crime being perpetrated

19 against it. See United States v. Thomas, 377 F.3d 232, 243 (2d Cir. 2004) (collecting and

20 endorsing cases holding that victim’s negligence in failing to discover crime perpetrated

21 against it is no defense to criminal conduct); see also United States v. Berman, 21 F.3d

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 1 753, 757 (7th Cir. 1994) (Posner, J.) (“[E]ven if the [victim] was negligent, it would be

2 entitled to restitution from a deliberate wrongdoer; contributory negligence is not a

3 defense to fraud.”). Thus, any opportunity Aventis might have had to “mitigate” losses

4 by detecting Holland’s violation sooner is irrelevant to the order of restitution.

5 Finally, the plea agreement and the presentence report (“PSR”) stated that the

6 district court was required to order restitution under the Mandatory Victims Restitution

7 Act of 1996 (“MVRA”), 18 U.S.C. § 3663A. That was erroneous; the MVRA does not

8 cover Holland’s 21 U.S.C. § 331 offense. Id. at § 3663A(c)(1)(A). Holland did not

9 object to this error at sentencing, nor did he raise the issue in his brief to this Court.

10 However, the government noted the mistake in its brief. At oral argument, for the first

11 time, Holland argued that the error in the plea agreement and PSR require us to vacate

12 and remand the restitution order. We review this argument too for plain error, Olano, 507

13 U.S. at 732; Coriaty, 300 F.3d at 252, and identify none.

14 First, although the MVRA did not provide authority for the district court to order

15 restitution, 18 U.S.C. § 3563 did. See 18 U.S.C. § 3563(b)(2); United States v. Bok, 156

16 F.3d 157, 166-67 (2d Cir. 1998). Second, there is no indication that the district court was

17 misled by the plea agreement or the PSR. The district court never stated that it relied on

18 the MVRA to impose restitution, nor did it otherwise indicate a belief that restitution was

19 mandatory. Third, even assuming the district court believed restitution was mandatory,

20 nothing in the record suggests that the district court was disinclined to order restitution or

21 would have declined to order full restitution as a matter of discretion. Fourth, the only

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 1 arguments that Holland made to the district court against a restitution award are the

2 meritless arguments that we have addressed and rejected above, and Holland does not

3 suggest to this Court any additional argument that he would have made to the district

4 court had the plea agreement or PSR correctly stated that restitution was discretionary.

5 Accordingly, we find no plain error in the restitution award. The sentence is

6 therefore AFFIRMED.

7 FOR THE COURT:
8 Catherine O’Hagan Wolfe, Clerk of Court
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