United States v. Parsons

United States Court of Appeals Fifth Circuit F I L E D April 16, 2004 In the Charles R. Fulbruge III Clerk United States Court of Appeals for the Fifth Circuit _______________ m 01-50464 _______________ UNITED STATES OF AMERICA, Plaintiff-Appellee, VERSUS ANDREW CLYDE PARSONS, ESTATE OF, AS REPRESENTED BY ITS INDEPENDENT EXECUTOR, PATRICK D. MILLAR, Appellant. _________________________ Appeal from the United States District Court for the Western District of Texas m W-99-CR-63-1 _________________________ Before KING, Chief Judge, JOLLY, Parsons to seventy-eight months’ imprison- HIGGINBOTHAM, DAVIS, JONES, SMITH, ment, a fine of $75,000, a special assessment WIENER, BARKSDALE, EMILIO M. GARZA, of $1,000, restitution of $1,317,834.57 to the DEMOSS, BENAVIDES, STEWART, defrauded insurance companies, and three DENNIS, CLEMENT, and PRADO, years’ supervised release.2 Circuit Judges.* Parsons then informed the government that JERRY E. SMITH, Circuit Judge: he wished to sell the three tracts. The govern- ment approved the sale of those tracts for This case requires us to apply the doctrine $1,900,000 under a contract that would pro- of abatement ab initio to restitution and forfei- vide cash at closing of $1,000,000. That sale ture orders where a criminal defendant dies was completed, and a check for $970,826.90 while his appeal is pending. Concluding that, was given to the United States in return for a under the specific facts of this case, all conse- release of liens. quences of the untested criminal conviction should abate, we DISMISS the appeal and The sale in question was completed pursu- REMAND with direction to VACATE the ant to an agreement between Parsons and the judgment of conviction and sentence, including United States. The government filed a motion the order of restitution, and to dismiss the describing the agreement. The motion states, indictment. We do not, however, direct the in relevant part: government to return monies paid as part of this particular Preliminary Judgment of Forfei- [B]ecause Defendant Parsons had no other ture. apparent financial means with which to fully pay the Money Judgment in the amount of I. $970,826.90, the United States of America After a second trial following a vacated did not object to the . . . sale of [the three conviction, a jury found Andrew Parsons guil- tracts], provided that a [government agent] ty of two counts of arson, four counts of mail be present at the real estate closing to fraud, and four counts of money laundering. receive a cashiers check . . . . Parsons allegedly set fire to his property and wrongfully received insurance proceeds to ... compensate for the loss. In addition to a ver- dict of guilty, the jury returned a special forfei- ture verdict.1 The district court sentenced 1 (...continued) dictment, to construct a certain building and that he had unlawfully derived $970,826.90 from the * Judge Pickering was appointed to the court offenses in counts 1-10. after this case was submitted, and he elected not to 2 participate in the decision. Although both parties state that the court is- sued forfeiture orders originating from the jury’s 1 Specifically, the jury found that Parsons had special forfeiture verdict, the order of judgment used $346,260 of the unlawfully-derived insurance only lists the imprisonment, fine, and restitution or- proceeds, as set forth in counts 1-5 of the in- ders. Presumably, the restitution order incorpor- (continued...) ated the amounts listed in note 1, supra. 2 Further, inasmuch as this case remains on orders were not automatically abated by Par- appeal at this time, the United States of sons’s death, the conviction should be reversed America agrees that in the event Defendant on grounds of violation of the Speedy Trial Parsons prevails in the final determination Act and inadequate nexus to interstate com- of this appeal, and no final judgment of for- merce. feiture is entered in this case, that the [gov- ernment] should return to Defendant Par- A panel of this court upheld the restitution sons the entire amount of $970,826.90, order and Preliminary Judgment of Forfeiture plus interest . . . . and rejected Parsons’s other merits issues raised on appeal. United States v. Estate of After the sale, the district court entered a Parsons, 314 F.3d 745, 750 (5th Cir. 2002), Preliminary Judgment of Forfeiture of $970,- vacated for reh’g en banc, 333 F.3d 549 (5th 826.90, pursuant to FED. R. CRIM. P. 32.2(b).3 Cir. 2003). Recognizing that it was bound by The order states, in relevant part: United States v. Asset, 990 F.2d 208 (5th Cir. 1993), and United States v. Mmahat, 106 F.3d ORDERED that inasmuch as this case re- 89 (5th Cir. 1997), the panel concluded that mains on appeal at this time, in the event “because the restitution order here is unques- Defendant Parsons prevails in the final de- tionably compensatory in nature, it survives termination of this appeal, and no Final Parsons’s death.” Parsons, 314 F.3d at 750.4 Judgment of Forfeiture is entered in this case, the [government] shall return to De- II. fendant Parsons . . . the entire amount of Asset, Mmahat, and Parsons describe the $970,826.90, plus interest . . . . current state of our abatement jurisprudence. “It is well established in this circuit that the While this appeal was pending, Parsons death of a criminal defendant pending an ap- died. This court allowed his estate to substi- peal of his or her case abates, ab initio, the en- tute itself for him as appellant, and the estate tire criminal proceeding.” Asset, 990 F.2d at submitted a new appellate brief, arguing that 210.5 That is, the appeal does not just disap Parsons’s death abated the conviction, restitu- tion order, and forfeiture orders. The estate 4 also protected its interests by arguing, in the The panel nonetheless questioned the cor- alternative, that if the restitution and forfeiture rectness of those decisions. Parsons, 314 F.3d at 750. The panel further questioned the logic of our caselaw in referring to “the strange situation of our reviewing a criminal conviction in what has 3 At the sentencing hearing, the court indicated become a hypothetical case.” Id. at 748. that the $1.317 million restitution order represented 5 the full amount Parsons owed to his victims and See also Mmahat, 106 F.3d at 93 (“Normally, that any sums recovered via forfeiture would apply the death of a criminal defendant during the pen- against that total amount. Because Parsons did not dency of his appeal abates the entire proceeding ab tender any other monies to the government, and initio.”); United States v. Schuster, 778 F.2d 1132, because the district court did not enter any other 1133 (5th Cir. 1985) (“Under the firmly estab- temporary orders, no other portion of the restitution lished rule in this circuit, the death of a defendant order is encompassed by the Temporary Judgment pending conclusion of the direct criminal appeal of Forfeiture. (continued...) 3 pear, and the case is not merely dismissed. In- few courts have plainly articulated the ration- stead, everything associated with the case is ale behind the doctrine. Two primary ap- extinguished, leaving the defendant “as if he proaches support abatement ab initio. The fi- had never been indicted or convicted.” Par- nality principle reasons that the state should sons, 314 F.3d at 749 (quoting United States not label one as guilty until he has exhausted v. Schumann, 861 F.2d 1234, 1237 (11th Cir. his opportunity to appeal. The punishment 1988)). principle asserts that the state should not pun- ish a dead person or his estate. Although the With respect to restitution, we have looked finality principle best explains why criminal to the purpose of the order to determine proceedings abate at death, finality does not whether it abates with the conviction. “When justify the distinction between compensatory restitution is ordered simply to punish the de- and penal restitution orders. fendant, it is penal and abates with the rest of his conviction. When it is designed to make Under the finality rationale, we have de- his victims whole, however, it is compensatory scribed the entitlement to one appeal as fol- and survives his death.” Mmahat, 106 F.3d at lows: 93. Additionally, abatement does not entitle a defendant to monies paid before death as part [W]hen an appeal has been taken from a of a fine or restitution order.6 criminal conviction to the court of appeals and death has deprived the accused of his III. right to our decision, the interests of justice Despite the common acknowledgment that ordinarily require that he not stand con- abatement ab initio is a well-established and victed without resolution of the merits of oft-followed principle in the federal courts,7 his appeal, which is an “integral part of [our] system for finally adjudicating [his] guilt or innocence.” 5 (...continued) abates, ab initio, not only the appeal, but the entire United States v. Pauline, 625 F.2d 684, 685 criminal proceeding.”). 6 7 See, e.g., United States v. Zizzo, 120 F.3d (...continued) 1338, 1347 (7th Cir. 1997) (regarding fines and Cir. 1998) (quoting Durham, 401 U.S. at 481); forfeitures); Asset, 990 F.2d at 214 (regarding United States v. Logal, 106 F.3d 1547, 1551 (11th restitution); Schumann, 861 F.2d at 1236. Cir. 1997) (“This circuit has adopted the general rule that the death of a defendant during the pen- 7 In applying Durham v. United States, 401 dency of his direct appeal renders his conviction U.S. 481, 483 (1971) (per curiam) (stating that and sentence void ab initio; i.e., it is as if the de- “death pending direct review of a criminal con- fendant had never been indicted and convicted.”); viction abates not only the appeal but also all pro- United States v. Davis, 953 F.2d 1482, 1486 (10th ceedings had in the prosecution from its incep- Cir. 1992) (quoting Durham, 401 U.S. at 483); tion”), overruled on other grounds, Dove v. Unit- United States v. Wilcox, 783 F.2d 44 (6th Cir. ed States, 423 U.S. 325 (1976), other circuits fol- 1986); United States v. Oberlin, 718 F.2d 894 (9th low the doctrine of abatement ab initio. See, e.g., Cir. 1983); United States v. Pauline, 625 F.2d 684 United States v. Wright, 160 F.3d 905, 908 (2d (5th Cir. 1980); United States v. Moehlenkamp, (continued...) 557 F.2d 126 (7th Cir. 1977). 4 (5th Cir. 1980) (emphasis added, brackets in cation.11 original) (quoting Griffin v. Illinois, 351 U.S. 12, 18 (1956)).8 The defendant’s attack on his Given that the doctrine of abatement ab conviction tests previously unforeseen weak- initio is largely court-created and a creature of nesses in the state’s case or outright errors at the common law, the applications of abatement trial.9 Under this rationale, neither the state are more amenable to policy and equitable nor affected parties should enjoy the fruits of arguments. Neither of the previously-articu- an untested conviction. lated rationales fully explains our current approach to abatement, restitution orders, and The second rationale focuses on the precept fines paid before death. As we will explain, that the criminal justice system exists primarily we adopt the finality rationale and adjust our to punish and cannot effectively punish one restitution jurisprudence accordingly. who has died. “[T]he purposes of criminal proceedings are primarily penalSSthe indict- The punishment rationale supports our cur- ment, conviction and sentence are charges rent distinction between penal and compensa- against and punishment of the defen- tory restitution orders12 and justifies the line, dantSSsuch that the death of the defendant with respect to fines, drawn at the time of eliminates that purpose.”10 The government death.13 Punishment does not, however, ade- and other circuits have mentioned this justifi- quately explain the other aspect of our abate- ment jurisprudenceSSthe elimination of the criminal proceedings against that person. Pre- sumably, under the punishment rationale, courts could retain the record of conviction 8 and block proceedings that would punish the Accord United States v. Moehlenkamp, 557 estate.14 F.2d 126, 128 (7th Cir. 1977); see also Rosanna Cavallaro, Better Off Dead: Abatement, Inno- cence, and the Evolving Right of Appeal, 73 U. COLO. L. REV. 943, 954 (2002) (“The abatement 11 See, e.g., United States v. Dudley, 739 F.2d remedy relies significantly on a larger premise: a 175, 176 n.2 (4th Cir. 1984) (“A decedent can conviction that cannot be tested by appellate review hardly serve a prison sentence.”). In its brief, the is both unreliable and illegitimate; the con- government makes a similar point: “Put another stitutionally guaranteed trial right must include way, the doctrine of abatement is applied because some form of appellate review.”). it serves no purpose to punish a person who is dead.” 9 In Douglas v. California, 372 U.S. 353 (1963), and Evitts v. Lucey, 369 U.S. 387, 392 12 Mmahat, 106 F.3d at 93 (“When restitution (1985), the Court “require[d] the appointment of is ordered simply to punish the defendant, it is effective counsel for a criminal appellant pursuing penal and abates with the rest of his conviction.”). a first appeal of right.” Clark v. Johnson, 227 13 F.3d 273, 283 (5th Cir. 2000). Following death, the state retains already- paid fines but does not require payment of out- 10 Asset, 990 F.2d at 211; see also Mmahat, standing unpaid fines. 106 F.3d at 93 (stating that “the abatement prin- 14 ciple is premised on the fact that criminal pro- The courts could use the punishment rationale ceedings are penal”). (continued...) 5 The finality principle provides a better ex- IV. planation why all prior proceedings disappear. Although the government may argue that A defendant’s death during appeal forces a this approach harms the interests of those al- court to decide between disregarding a finding legedly injured, such an argument cannot out- of guilt and entering an unreviewed judgment. weigh the finality rationale. “[T]he goal of the Presumptions of innocence and a desire to en- [compensatory restitution] payment is . . . to sure guilt naturally point to extinguishing all restore the victim’s losses.” Asset, 990 F.2d at criminal proceedings. 214. If the restitution order abates with the death of the defendant, those “victims” will not The primary justification for the abatement be made whole, or at least not by way of direct doctrine arguably is that it prevents a wrongly- restitution from the defendant or his estate.16 accused defendant from standing convicted. The Supreme Court and other circuits have recognized this justification for abatement. 15 (...continued) We now adopt it as the primary reason behind mentSSthe finality rationaleSSdoes not support a abatement and, by so doing, we reject Asset’s distinction between compensatory and punitive and Mmahat’s descriptions of the punishment awards. Instead, it mandates that all vestiges of the justification. criminal proceeding should disappear. Accordingly, regardless of its purpose, the In contrast, the dissent skips the primary ques- order of restitution cannot stand in the wake of tion of how abatement and restitution interact and Parsons’s death. Because he now is deemed assumes the continued existence of the compen- never to have been convicted or even charged, satory-penal dichotomy. The dissent’s citations to United States v. Bach, 172 F.3d 520 (7th Cir. the order of restitution abates ab initio.15 1999), and Newman v. United States, 144 F.3d 531 (7th Cir. 1998), suffer from the same problem. Both cases assume that restitution orders should be 14 (...continued) described as either compensatory or penal. Neither to prevent use of the conviction in civil court and to considers the overall purpose behind abatement ab retain the decedent’s good name. The former initio and how such a purpose would affect all application could be accomplished without elim- restitution orders. The traditional dichotomy inating the conviction altogether, and the latter use cannot remain, however, if we are to craft a does not seem significant enough to warrant consistent regime that incorporates statutory ele- extinguishing all prior proceedings. mentsSSsuch as the Victim and Witness Protection ActSS and two forms of equitable doctrine. 15 The dissent argues that restitution orders are 16 “expressly compensatory, non-punitive, and equiv- The government argues, at length, that the in- alent to a civil judgment against a criminal stant restitution order was intended to make whole defendant” and criticizes our approach as “treating the victims of Parsons’s fraud: “Unlike a fine, the restitution order as abatable and therefore im- restitution does not deprive the estate of money the pliedly punitive.” This response overlooks the ap- defendant may have rightfully acquired; instead it proach we have taken in deciding this case. Our removes tainted money that defendant unlawfully aim is to craft a coherent and consistent means of obtained . . . .” Examples of such uncompensated applying abatement ab initio to restitution orders. victims undoubtedly exist. In United States v. As we have shown, the best explanation for abate- Logal, 106 F.3d 1547 (11th Cir. 1997), the court (continued...) (continued...) 6 The government’s position may have val- defendant.17 idity under the punishment rationale, but it has little force if the concern is finality and the V. right of the defendant to contest his appeal at The aforementioned justifications for alter- least once. Any references to the wrongful na- ing our abatement doctrine rely on equitable ture of the defendant and his actions are con- rationales. Perhaps more importantly, as the ditioned on an appellate court’s upholding the estate argues, our current willingness to let conviction, assuming the defendant pursues an compensatory restitution orders survive the appeal. The defendant’s death during the pen- death of the defendant runs contrary to the dency of appeal pushes a court to nullify all text of the Victim and Witness Protection Act prior proceedings. Despite what may have (“VWPA”), 18 U.S.C. § 3663(a)(1)(A). been proven at trial, the trial is deemed not to have taken place. Thus, at least in the eyes of The VWPA allows a court to enter a resti- the criminal court, the defendant is no longer tution order when “sentencing a defendant a wrongdoer and has not defrauded or dam- convicted of an offense.” 18 U.S.C. § 3663- aged anyone. (a)(1)(A) (emphasis added). If death termi- nates the criminal case ab initio, the defendant These unfortunate situations also create the no longer stands convicted. One might re- danger of misusing the term “victim” in differ- spond to this natural reading by arguing that ent contextsSScivil and criminalSSwith the “convicted of an offense” has force only on the same force. One is not necessarily a victim of day on which the restitution order is entered. a crime because he suffers a loss at the hands of another. The loss may arise from poor de- cisions on the part of the alleged victim, poor 17 Merely because the criminal proceeding drafting on the part of the attorneys, or even abates, however, does not necessarily mean that an questionable conduct on the part of the defen- individual who suffered a loss cannot obtain re- dant. None of these situations, however, nec- imbursement in civil court. If he can meet the civil essarily warrants a criminal conviction. The court’s lower burden of proof, he may receive a abatement doctrine provides that one should judgment from that court. The criminal court that not be permanently labeled as finally “con- entered the prior reimbursement order, however, victed” while his first appeal is pending. That should not retain any power over that prior is to say, in abatement the criminal court es- defendant. sentially abdicates its power over the former One may argue that allowing the estate to sub- stitute for the dead defendant ensures the fair rep- resentation of the decent’s interests, but such a substitution does not align logically with the abate- ment of all prior criminal proceedings. Essentially, 16 (...continued) the substitution doctrine forces the estate to argue abated a seemingly compensatory restitution order about a conviction that no longer exists and entered against a defendant convicted of numerous requires a court to adjudicate the merits of a pro- illegal financial dealings. Despite the time invested ceeding that no longer took place. Although it is in the trial and the guilty verdict, those whom the not without a cost, requiring victims to argue their decedent allegedly defrauded could not collect case in civil court protects the interests of through the federal criminal courts. defendants whose direct appeals are not yet final. 7 Because the defendant stands convicted on the trial conviction, after abatement, should not day the court enters the order, ret aining the estop an estate from mounting a defense in order after the defendant’s death would not civil court, one whose conviction is abated no conflict with the VWPA. longer stands “convicted” for purposes of the VWPA.20 Additional text of the VWPA, however, suggests that “convicted” should not have VI. force merely at the time of the restitution or- The estate argues that the finality principle der. Section 3663(d) references 18 U.S.C. also requires the government to return the § 3664 as the enforcement mechanism for re- money paid pursuant to the Preliminary Judg- imbursement orders. Section 3664(l) de- ment of Forfeiture. The government stridently scribes the effect of a conviction on future civil disagrees. actions: “A conviction of a defendant for an offense involving the act giving rise to an or- The panel noted that “the doctrine of abate- der of restitution shall estop the defendant ment does not apply to fines, forfeitures, and from denying the essential allegations of that restitution paid prior to a defendant’s death.” offense in any subsequent Federal civil pro- Parsons, 314 F.3d at 748 (emphasis added, ci- ceeding or State civil proceeding.” tations omitted). Fines that have not yet been paid, however, abate in the same manner as do A standard canon of construction “provides the prior criminal proceedings. Id. Asset and that a word used in different parts of the stat- similar cases have distinguished between fines ute should be construed to have the identical paid before and after a defendant’s death, meaning throughout the entire statute.”18 If based on the punishment rationale.21 the narrower construction of “convicted” is applied to § 3664(l), an estate would be es- topped from denying important factual matters 19 (...continued) in a subsequent civil suit, even if the underly- conviction exists. ing conviction had been abated.19 Just as a 20 The dissent discusses, at length, the Manda- tory Victim Restitution Act (“MVRA”). The par- 18 Miss. Poultry Ass’n v. Madigan, 992 F.2d ties, however, did not argue the MVRA in the con- 1359, 1363 (5th Cir.), modified, 9 F.3d 1113 (5th text of this case. Instead, they generally focused on Cir.), vacated on other grounds for reh’g en banc, the equitable doctrines, how they interacted with 9 F.3d 1116 (5th Cir. 1993), opinion on reh’g, 31 one another, and how the VWPA affected that F.3d 293 (5th Cir. 1994) (en banc) analysis. Even if we consider the MVRA, however, it references the same enforcement 19 Admittedly, one could argue that “convicted” provisionSS18 U.S.C. § 3664SSas does the and “conviction” have different meanings. A de- VWPA. Consequently, using the MVRA as a fendant may be convicted on a given day and will means of keeping the compensatory-penal dichot- always be convicted on that day. The conviction, omy fails, for the reasons we have discussed. in contrast, may abate or dissolve. This distinc- 21 tion, however, ignores the effect of abatement on Asset, 990 F.2d at 214 (“The rule of abate- either situation. After abatement, the defendant no ment has never been applied to require the return of longer stands convicted on that date, and no money paid by a defendant prior to his death and (continued...) (continued...) 8 The question is whether the tender to the and governs the transaction.” Tex. Nat’l Bank government of the check for $970,826.90, at v. Sandia Mortgage Corp., 872 F.2d 692, 698 the real estate closing, was a voluntary, irrevo- (5th Cir. 1989) (internal citation and quotation cable payment, as the government contends, or marks omitted) (applying Texas law).23 When was, instead, only a means of preserving assets the government and Parsons entered into this pending the outcome of the appeal. The agreement, abatement did not require the re- government argues that by giving the check, turn of penalties paid before a defendant’s “Parsons paid and the government collected death.24 Nothing in the agreement or the spe- the Money Judgment of criminal forfeiture cific facts of this case suggests that the parties . . . . The United States collected Parsons’ intended to avoid that pre-existing rule. payment in full satisfaction of the Money Judg- ment.” Although the estate might receive the funds if Parsons “prevails” on appeal, he has not The agreement and the order provide for achieved a victory, taken any action, or made full return of the money, with interest, if Par- any substantive points worthy of overturning sons “prevails in the final determination of this his conviction. Rather, at the time of his appeal.”22 Although, as explained, we con- death, this court had made no decision on the clude that restitution orders against Parsons merits of the appeal. Although, based on the should abate with his death, neither the agree- abatement rationale, the restitution orders ment nor the Preliminary Judgment of Forfei- must abate, Parsons has not “prevailed” in any ture requires the government to return the meaningful sense. already-paid funds. Presumably in an effort to protect his inter- “[T]he law . . . existing at the time a con- ests, Parsons voluntarily entered into the tract is made becomes a part of the contract agreement memorialized in the Preliminary Judgment of Forfeiture. That agreement, however, did not adequately provide for his 21 (...continued) death and did not indicate that the parties has, in fact, been held inapplicable to wished to act outside the legal framework at finesSSobviously penalSSpaid by a defendant be- the time they entered into the contract.25 Con fore his death.”); see also United States v. Zizzo, 120 F.3d 1338, 1343 (7th Cir. 1997) (stating that fines paid prior to death “are analogous to time 23 We have no occasion here to comment on, served and are not refundable.”). and we express no opinion on, a situation in which there is no agreement or order, such as those pres- 22 The agreement has two requirements: “[I]n ent in this case, conditioning return of the forfeited the event Defendant Parsons prevails in the final sums on the outcome of the appeal. determination of this appeal, and no Final Judg- ment of Forfeiture is entered in this case, the [gov- 24 See, e.g., Asset, 990 F.2d at 214 (“The rule ernment] shall return to Defendant Parsons . . . the of abatement has never been applied to require the entire amount of $970,826.90, plus interest.” The return of money paid by a defendant prior to his estate has satisfied the second requirement, as no death . . . .”). final judgment has been entered. Thus, we address 25 only whether Parsons “prevail[ed] in the final This analysis pertains only to Parsons and determination of this appeal.” (continued...) 9 sequently, although Parsons died, we have not validated any of his grounds for appeal, and he has not “prevailed.” He is not entitled to the return of the monies paid under the Prelimi- nary Judgment of Forfeiture. VII. Thus, as part of ensuring that every defen- dant has an opportunity to challenge his con- viction by one direct appeal, we expunge the criminal proceedings and the pending punish- ments attached to those proceedings if the de- fendant takes an appeal and dies during its pendency. In the instant case, this includes an unpaid restitution order. Based on the particu- lar language of the Preliminary Judgment of Forfeiture, Parsons did not meet the judg- ment’s requirements, so we DENY his request to require the return of sums paid under that order. This appeal is DISMISSED, and this matter is REMANDED with direction to VACATE the judgment of conviction and sentence, in- cluding the order of restitution, and to dismiss the indictment. To the extent that they are in- consistent herewith, Asset and Mmahat are overruled. 25 (...continued) this particular agreement. Other agreements may contemplate the possibility of the defendant’s death during the pendency of an appeal. 10 DENNIS, Circuit Judge, joined by HIGGINBOTHAM, DAVIS, WIENER, BENAVIDES, and STEWART, Circuit Judges, dissenting in part and specially concurring in part: I respectfully disagree with the majority’s decision to (1) overrule our long-standing circuit precedents of United States v. Mmahat, 106 F.3d 89 (5th Cir. 1997) and United States v. Asset, 990 F.2d 208 (5th Cir. 1993),26 which held 26 The majority’s unique “finality rationale,” even if valid, does not justify overruling Mmahat and Asset. The majority’s raison D’etre for creating the “finality rationale” is that “all consequences of the untested criminal conviction should abate,” maj. slip op. p.2 (emphasis added), so that “neither the state nor affected parties should enjoy the fruits of an untested conviction.” Id. p.5 (emphasis added). In Mmahat itself, however, this court has already created a procedure for testing the conviction of a defendant who dies during pendency of the appeal so that compensatory restitution consequences or fruits would not flow from an untested conviction. The Mmahat court held that the compensatory restitution order against the deceased defendant did not abate; instead, his heirs’ motion to substitute for him and continue the appeal in his place was granted, and his arguments which potentially could result in a reversal of the restitution order were fully considered. Mmahat, 106 F.3d at 93. Thus the majority has not shown a sufficient legal reason for overruling Mmahat and Asset because the perceived evil of an unreviewed and untested compensatory restitution order has been adequately remedied by Mmahat itself. Mmahat and Asset also have already attained the “finality rationale’s” goal of eliminating the punitive effects of an unreviewed criminal conviction by assuring “that the state should not label one as guilty until he has exhausted his opportunity to appeal” maj. slip op. p.4; preventing the “entering [of] an unreviewed judgment” Id. p.5; and “preventing a wrongly-accused defendant from standing convicted.” Id. p.6. Under Mmahat and Asset, the penal aspects of the judgment of conviction, which label or give the accused status as a “convicted criminal,” abate immediately upon the death of the defendant, and, as already noted, the heirs or estate of the deceased can pursue the appeal and take full advantage of the chance to have any judgment of compensatory restitution reviewed and reversed. Thus, the concrete objects and effects sought by the “finality rationale” are already accessible under Asset and Mmahat. There is no reason to create a new legalistic doctrine, and even if created it does not require overruling those Circuit precedents. (continued...) 11 that a restitution order, because it is compensatory rather than punitive, does not abate with the defendant’s criminal conviction and punishment when he dies while his appeal is pending; and (2) judicially create a rule, contrary to federal statutes and common law, that a judgment requiring a criminal defendant to make 26 (...continued) Contrary to the inference that might be drawn from a casual reading of the majority’s citations, the “finality rationale” is a completely novel judicial creation which has not been embraced or even suggested by the other courts. The majority cites United States v. Pauline, 625 F.2d 684, 685 (5th Cir. 1980) and United States v. Moehlenkamp, 557 F.2d 126, 128 (7th Cir. 1977), See maj. slip op. p.4, but they do not support or even mention that rationale. Pauline and Moehlenkamp merely hold that the Supreme Court’s decision in Dove v. United States, 423 U.S. 325 (1976) to dismiss pending petitions for certiorari upon the petitioner’s death, overruling its previous practice of abatement followed in Durham v. United States, 401 U.S. 481 (1971), was not meant to alter the longstanding rule of lower federal courts of abatement of the entire criminal proceedings upon death of an appellant during the pendency of his appeal. Pauline and Moehlenkamp dealt only with the abatement of the punitive aspects of criminal convictions; the question of whether compensatory restitution survives the appellant’s death was not presented. The majority was apparently inspired to create the “finality rationale” by a single law review article. maj. slip op. p.4 (citing and quoting Rosanna Cavallaro, Better Off Dead: Abatement, Innocence, and the Evolving Right of Appeal, 73 U. Colo. L. Rev. 943, 954 (2002)). In her article, Ms. Cavallaro argues that the right to appeal from a criminal conviction should be and is evolving into a constitutional right. She sees the adoption of the remedy of abatement ab initio by a large majority of courts as an important “strand” which, together with others, “are forceful arguments for formal, legal recognition of an evolution in criminal procedure [toward constitutionalization of the right to appeal].” Id. 986. In furthering her argument for the constitutional right to appeal, she says that “[t]he abatement remedy relies significantly on a larger premise: a conviction that cannot be tested by appellate review is both unreliable and illegitimate[.]” Id. 954 It does not follow from this statement or the article as a whole that courts should create a “finality rationale” as espoused by the majority; nor does it follow that the dual mechanism provided by Asset and Mmahat, i.e., abatement ab initio of all punitive consequences of the criminal proceedings together with the right to continue the appeal with respect to the compensatory restitution decree, does not adequately satisfy the needs for reliability and legitimacy in criminal proceedings. 12 restitution to his victims also abates upon his death. The well reasoned decisions in Mmahat and Asset established the sound and just majority rule that, when a person adjudged guilty of a crime dies while his appeal is pending, (1) the trial court’s restitution order requiring him to compensate his victims for the harm done them by his crimes does not abate or disappear, because it is compensatory rather than penal; (2) the restitution order continues to have effect as a civil judgment enforceable against his estate; but (3) his estate may move to be substituted in his place and pursue the appeal, which, if successful, will require that the restitution judgment be cancelled. See Mmahat, 106 F.3d at 93. The majority now holds that, when a criminal defendant dies during his appeal, the restitution judgment immediately abates and is voided, leaving his estate the windfall of any fruit of his crime, and requires that his victims go uncompensated for their harm, and leaves in doubt whether they must turn over to the criminal defendant’s estate any restitution previously received. See Slip Op. at 2, 10. 1. The majority’s decision conflicts with the policy and provisions of the Mandatory Victims Restitution Act of 1996 (MVRA) and the 13 Victim and Witness Protection Act of 1982 (VWPA)27 and undermines the Congressional objective of requiring Federal criminal defen- dants to pay compensatory restitution to the identifiable victims of their crimes. Congress enacted the VWPA in 1982, 18 U.S.C. § 3663 (1982), to authorize, but not require, district courts, within their discre- tion, to order restitution to victims of criminal conduct. Id. § 3663(a)(1)(A).28 In determining whether to order restitution, and 27 The MVRA supersedes the VWPA, in part, and mandates restitution with respect to, inter alia, mail fraud crimes (such as those committed by Parsons), of which the defendant is convicted on or after the date of the MVRA’s enactment. See S. Rep. 104-179, 104th Cong., 2nd Sess. 13, reprinted in 1996 U.S. Code Cong. & Admin. News 926 (indicating that the MVRA is designed to further the purposes of the VWPA); Pub. L. No. 104- 132 § 211, 110 Stat. 1241 (1996) (stating that the MVRA shall apply to convictions on or after the date of the MVRA’s enactment); 18 U.S.C. § 3663A(c)(1)(A) (listing the types of crimes to which the MVRA applies); United States v. Caldwell, 302 F.3d 399, 419 (5th Cir. 2002) (holding that mail fraud is a crime to which the MVRA applies). For the reasons discussed below, I believe the MVRA is not an ex post facto law, but a compensatory, non-punitive remedy which applies retroactively to all such convictions regardless of the date of the commission of the crime. In any event, the policy and provisions of the MVRA should be carefully and fully considered in this major policymaking decision having broad future ramifications under the MVRA and VWPA. 28 The majority argues that the restitution order under this statute should abate because, after the criminal case is abated ab initio, the defendant no longer stands “convicted.” See maj. slip op. p.7. But the language in question on its face uses the term “convicted” in the context of “when [the district court is] sentencing” the defendant. Because Parsons stood convicted during sentencing, the restitution order was issued during sentencing, and the restitution order has the effect of a civil judgment rendered at that time, see infra notes 5-11 and accompanying text, the restitution order is valid. The majority then tries to analogize to section 3664(l), which refers to the effect of a conviction in subsequent proceedings, arguing that the term “convicted” must have the same meaning in both of these sections. But the word “convicted” has no temporal element; the temporal thrust of each section is provided by the context in which the (continued...) 14 how much, the court was required to consider, along with the loss sustained by each victim, the financial resources and family needs of the defendant. Id. § 3663(a)(1)(B). Prior to today’s decision herein, a majority of circuits, including this Fifth Circuit, had held that restitution orders under the VWPA were compensatory and therefore non-abatable. See United States v. Asset, supra; United States v. Mmahat, supra; see also United States v. Christopher, 273 F.3d 294, 299 (3rd Cir. 2001); United States v. Johnson, 1991 U.S. App. LEXIS 17204 (6th Cir. 1991) (unpublished); United States v. Dudley, 739 F.2d 175 (4th Cir. 1984). But see United States v. Logal, 106 F.3d 1547, 1552 (11th Cir. 1997) (holding that restitu- tion orders are punitive and should abate with the death of a criminal defendant during his appeal). In 1996, Congress enacted the MVRA, 18 U.S.C. § 3663A (1996), which mandates restitution for certain crimes and clearly indicates that such restitution is compensatory and non-abatable. The MVRA superseded in part the VWPA, with respect to the designated crimes, Id. § 3663A(c), and, as its name indicates, mandatorily requires that, in sentencing a defendant convicted of, inter alia, “an offense against property, including any offense committed by fraud or deceit,” the court “shall order...that the defendant make restitution to the victim of the offense or, if the victim is 28 (...continued) word “convicted” or “conviction” is used. Thus, the majority’s analogy is inherently flawed. 15 deceased, to the victim’s estate.” Id. §§ 3663A(c), 3663A(a). Further, the MVRA amended the VWPA to provide that restitution orders under the VWPA shall be issued and enforced in accordance with § 3664, which sets forth the enforcement provisions of the MVRA. See § 3663(d). (“An order of restitution made pursuant to this section shall be issued and enforced in accordance with Section 3664.”). In each restitution order under the MVRA and the VWPA, as amended, the court “shall order restitution to each victim in the full amount of each victim’s losses as determined by the court and without consideration of the economic circumstances of the defendant.” Id. § 3664(f)(1)(A).29 Under the MVRA and the VWPA, as amended, the court’s restitution order expressly creates a property right for the victim or his estate which has the effect of a civil judgment against the criminal defendant or his estate. A restitution order is a heritable,30 assignable,31 civil judgment “in favor of such victim”,32 and, when 29 The defendant’s financial circumstances are relevant only to fixing a payment schedule for the mandatory restitution. 18 U.S.C. § 3664(f)(2)-(4). 30 The MVRA expressly provides that if the victim is deceased the court shall order restitution to the victim’s estate. Id. § 3663(a)(1)(A); this provision implies that the right created by the restitution order is heritable property. 31 Id. §3664(g)(2). 32 Id. § 3664(m)(ii)(B), which provides: At the request of a victim named in a restitution order, the (continued...) 16 properly recorded, “shall be a lien on the property of the defen- dant...in the same manner . . . as a judgment of a court of general jurisdiction. . . .”33 The judgment of restitution carries poten- tial civil effects of joint and several liability, res judicata or collateral estoppel, and subrogation: When plural defendants contribute to the loss of the victim the court may make each defendant liable for payment of the full amount of restitution.34 A defendant ordered to make restitution is estopped from denying the essential allegations of the offense in subsequent civil proceedings.35 An insurer or other person who compensates the victim for loss covered by a restitution order may to the extent of the payment be subrogated to the victim’s right against the restitution debtor.36 While the foregoing provisions demonstrate that Congress carefully 32 (...continued) clerk of the court shall issue an abstract of judgment certifying that a judgment has been entered in favor of such victim in the amount specified in the restitution order. Upon registering, recording, docketing, or indexing such abstract in accordance with the rules and requirements relating to judgments of the court of the State where the district court is located, the abstract of judgment shall be a lien on the property of the defendant located in such State in the same manner and to the same extent and under the same conditions as a judgment of a court of general jurisdiction in that State. 33 Id. 34 Id. § 3664(h). 35 Id. § 3664(l). 36 Id. § 3664(j)(1). 17 designed the restitution ordered under the MVRA and the VWPA, as amended, to be a compensatory remedy for crime victims, other provisions of § 3664 protect the defendant from possible punitive effects. In case of property loss, the order may require only a return of the property or payment equal to the value of the property.37 In case of bodily injury, the order may compensate the victim only for specified losses, e.g., medical and therapeutic expenses, lost income, funeral expenses, child care expenses, transportation expenses, and expenses related to the prosecution.38 Thus, the court cannot order restitution for compensatory damages related to pain, suffering, mental or emotional distress or for punitive damages. Additionally, any amount paid to a victim under a restitution order shall be reduced by the victim’s recovery of compensatory damages for the same loss in civil proceedings.39 In sum, an order of restitution under the MVRA or the VWPA, as amended, is expressly compensatory, non-punitive, and equivalent to a civil judgment against a criminal defendant requiring that he compensate his victims for the specified elements of the harm done to them by his offenses. Consequently, the majority’s decision conflicts with the statutory scheme by treating the restitution order as abatable and therefore impliedly punitive. The decision 37 Id. § 3664(b)(1). 38 Id. § 3664(b)(2). 39 Id. § 3664(j)(2). 18 thereby divests the victims of vested rights established by the restitution order as a civil judgment. On the other hand, Mmahat and Asset, which the majority overrules, are fully consistent with the MVRA, the VWPA, as amended, and their objectives. The major- ity’s decision plainly clashes with and undermines the Congressional policy implemented by the VWPA and the MVRA. 2. The majority opinion disregards or refuses to follow the well reasoned opinions of other Circuits that carefully analyze the VWPA and the MVRA and conclude that restitution orders under them are compensatory and do not constitute criminal punishment for ex post facto or abatement purposes.40 40 The majority asserts that its “finality rationale. . . . mandates that all vestiges of the criminal proceeding should disappear.” maj.op.n.13. Because the compensatory/penal analysis would not result in total abatement, the majority rejects it summarily. Id. Until the majority’s decision rejecting the compensatory/penal analysis, it had been adopted and used unanimously. See Mmahat, 106 F.3d 89, 93 (using the penal-compensatory dichotomy); Asset 990 F.2d at 213-14 (same); see also United States v. Christopher, 273 F.3d 294, 298- 99 (3rd Cir. 2001)(same); United States v. Logal, 106 F.3d 1547, 1552 (11th Cir. 1997) (same); United States v. Dudley, 739 F.2d 175, 177-78 (4th Cir. 1984) (same); United States v. Johnson, 1991 U.S. App. LEXIS 17204 (6th Cir. 1991) (unpublished) (citing Dudley). By rejecting the analysis and the unanimous weight of authority, the majority opinion places this Circuit in a sui generis position of isolation. The compensatory/punitive test is part of the well settled doctrine that death abates a criminal penalty because, once the defendant is dead, there is no longer a justification for the punishment of him or his estate; but the defendant’s death does not affect the justification for restitution intended only to compensate the victim; accordingly, such restitution survives and its payment will not undermine the purposes of abatement since the goal of the payment is not to punish the defendant, or his estate, but to restore the victim’s losses. See, e.g., (continued...) 19 Chief Judge Posner, in United States v. Bach, 172 F.3d 520 (7th Cir. 1999), succinctly and persuasively stated the reasons that MVRA restitution orders are compensatory, rather than criminal punish- ment, and therefore cannot run afoul of the ex post facto prohibi- tion.41 He explained that the MVRA is not penal but is functionally 40 (...continued) Asset, 990 F.2d at 214 (citing United States v. Morton, 635 F.2d 723, 725, 727 (8th Cir, 1980); United States v. Bowler, 537 F.Supp.933, 935 (N.D. Ill. 1982)). Restitution also serves the non-penal purpose of removing benefits derived by wrongdoing from the defendant’s estate, which would otherwise be unjustly enriched, and using them to repair the victim’s losses. Christopher, 273 F.3d at 299 , cert. denied, 536 U.S. 964 (2002)(“To absolve the estate [of the defendant] from refunding the fruits of the wrongdoing would grant an undeserved windfall.”) Most important, as the text of this dissenting opinion explains, Congress in the MVRA and the VPWA has confirmed the merit of the compensatory/punitive test by providing that judgments of compensatory restitution for crime victims shall have the force and effect of civil judgments, which under the federal and common law do not abate but survive the death of the defendant judgment-debtor. The majority erroneously claims that it has crafted a “consistent regime that incorporates statutory elements–such as the Victim and Witness Protection Act . . . .” Maj. slip op. at 6 n.13. Instead, the majority has simply expanded the judicially created rule of ab initio abatement far beyond its original purpose to, in effect, judicially overrule the national policy and legislated law of restitution of crime victims enacted by Congress in the MVRA and VWPA. 41 Some courts, without functional analysis or reasoning, treat restitution under the VWPA and MVRA as a criminal penalty. See United States v. Edwards, 162 F.2d 87, 89-90 (3rd Cir. 1998) (collecting cases). They rely on formalistic classification of the restitution order as criminal because it issues during the sentencing proceeding; they fail to recognize the modern practice of using civil proceedings as ancillary to criminal actions. See Susan R. Klein, Redrawing the Criminal-Civil Boundary, 2 Buff. Crim. L.R. 679, 686-89 (1999) (noting the MVRA as an example). Though courts are authorized to issue restitution orders in criminal proceedings, restitution under the MVRA and VWPA is functionally a tort remedy–a streamlining of procedures that allows a victim to recover a compensatory remedy though “a summary proceeding ancillary to a criminal prosecution.” See Bach, 172 F.3d at 523 (citing, inter alia, Carol S. Steiker, Punishment and Procedure: (continued...) 20 a compensatory torts statute: The Act requires the court to identify the defendant's victims and to order restitution to them in the amount of their loss. In other words, definite persons are to be compensated for definite losses just as if the persons were successful tort plaintiffs. Crimes and torts frequently overlap. In particular, most crimes that cause definite losses to ascertainable victims are also torts: the crime of theft is the tort of conversion; the crime of assault is the tort of battery--and the crime of fraud is the tort of fraud. Functionally, the Mandatory Victims Restitution Act is a tort statute, though one that casts back to a much earlier era of Anglo-American law, when criminal and tort proceedings were not clearly distinguished. The Act enables the tort victim to recover his damages in a summary proceeding ancillary to a criminal prosecution. We do not see why this procedural innovation, a welcome streamlining of the cumbersome processes of our law, should trigger rights under the ex post facto clause. It is a detail from a defrauder's standpoint whether he is ordered to make good his victims' losses in a tort suit or in the sentencing phase of a criminal prosecution. It would be different if the order of restitution required the defendant to pay the victims' losses not to the victims but to the government for its own use and benefit; then it would be a fine, which is, of course, traditionally a criminal remedy. 41 (...continued) Punishment Theory and the Criminal-Civil Procedural Divide, 85 Geo. L.J. 775, 782-83 (1997)). Indeed, the acts within which the MVRA and VWPA are contained were not passed as solely criminal acts. The MVRA was simply one part of the Antiterrorism and Effective Death Penalty Act of 1996 (“AEDPA”), which contains both criminal and civil legislation. See Pub. L. 104-132, 110 Stat. 1214 (1996). For example, AEDPA contains, among other provisions, sections involving habeas corpus reform and provisions relating to civil lawsuits brought against terrorist states. Id. In addition, the VWPA is primarily a civil act providing for compensatory restitution. In other words, both the MVRA and the VWPA were passed as part of legislative enactments that created both civil and criminal reforms. 21 Bach, 172 F.3d at 522-23 (internal citations omitted)(emphasis added). The Seventh Circuit’s decision in Newman v. United States, 144 F.3d 531 (7th Cir. 1998), provides further analysis demonstrating that restitution under the MVRA does not qualify as criminal punishment. (1) “Restitution has traditionally been viewed as an equitable device for restoring victims to the position they had occupied prior to a wrongdoer’s actions.” 144 F.3d at 538 (citing Restatement of Restitution (introductory note) (1937)). “It is separate and distinct from any punishment visited upon the wrongdoer and operates to ensure that a wrongdoer does not procure any benefit through his conduct at others’ expense.” Id. (Citing 1 George E. Palmer, The Law of Restitution § 1.1, at 5 (1978)); (2) The non- punitive character of restitution had been recognized by the Seventh Circuit and other courts in previous cases. Id. 538-39 (Citing United States v. Black, 125 F.3d 454, 467 (7th Cir. 1997) (restitu- tion under the Child Support Recovery Act of 1992 was not punish- ment); United States v. Hampshire, 95 F.3d 999, 1006 (10th Cir. 1996) (same); United States v. Arutunoff, 1 F.3d 1112, 1121 (10th Cir.) (The VWPA’s purpose is not to punish defendants but to make victims whole to the extent possible); United States v. Rochester, 898 F.2d 971, 983 (5th Cir. 1990) (same)); (3) The nature of the restitution order authorized by the VWPA or the MVRA is not a punitive sanction when analyzed under the factors set forth by 22 Kennedy v. Mendoza-Martinez, 371 U.S. 144, 168-69 (1963) for deciding whether a statutory scheme was so punitive in purpose or effect as to transform what was intended as a civil remedy into a criminal penalty. See Newman, 144 F.3d at 540 (citing Kansas v. Hendricks, 521 U.S. 346 (1997); Hudson v. United States, 522 U.S. 93 (1997)). Accord: United States v. Nichols, 169 F.3d 1255 (10th Cir. 1999); United States v. Arutunoff, 1F.3d 1112, 1121 (10th Cir. 1993)(“The VWPA’s purpose is not to punish defendants or to provide a windfall for crime victims but rather to ensure that victims, to the greatest extent possible, are made whole for their losses.”)(citing United States v. Rochester, 898 F.2d 971, 983 (5th Cir. 1990)). For similar reasons, the majority of circuits that have addressed whether MVRA or VWPA restitution orders are abatable, decided that, because such orders are compensatory rather than punitive, the death of the defendant during appeal does not cause them to abate. See United States v. Christopher, 273 F.3d 294, 298 (3rd Cir. 2001) (“To absolve the estate from refunding the fruits of the wrongdoing would grant an undeserved windfall...abatement should not apply to the order of restitution in this case....”);United States v. Mmahat, supra; United States v. Asset, supra; United States v. Johnson, 1991 U.S. App. LEXIS 17204 (6th Cir.) (unpublished) (same); United States 23 v. Dudley, 739 F.2d 175, 178 (4th Cir. 1984) (same).42 3. The majority’s decision is contrary to the general principles of federal and common law pertaining to abatement, survival, and revival of actions and judgments. With respect to a cause of action created by act of Congress, it is well settled that the question of whether it survives the death of a party by or against whom it has been brought is not one of procedure but one which depends on federal substantive law. Schreiber v. Sharpless, 110 U.S. 76, 80 (1884); See 7C Wright, Miller & Kane §§ 1952 & 1954 (2d ed 1986). If no specific provision for survival is made by federal law, as in the present case, the cause survives or not according to the principles of common law. Patton v. Brady, 184 US 608 (1902); Ex parte Schreiber, supra. Generally, an action is not abated by the death of a party after the cause has reached a verdict or final judgment and while the judgment stands, 1 Am Jur 2d, Abatement, Survival and Revival § 61, n.26 (citing Connors v. Gallick, 339 F.2d 381 (1964); Smith v. Henger, 148 Tex 456, 226 S.W. 2d 425, 20 ALR2d 853 (1950), et al.), even if the judgment is based on a cause of action that would not have survived had the party died before judgment. Id. §61, n.27.(citing Mayor, etc., of Anniston v. Hurt, 42 One Circuit court concluded, with little analysis or reasoning, that restitution orders are punitive and therefore should abate when a defendant dies during his appeal. See United States v. Logal, 106 F.3d 1547 (11th Cir. 1997). 24 140 Ala 394, 37 So 220 (1903), et al.). “So long as the judgment remains in force, the rule on survival has no further application,[] even where the proceedings are stayed by appeal and supersedeas.” Id., nn. 28 and 29 (citing authorities). A restitution order issued under the MVRA has the effect of a judgment “entered in favor of such victim in the amount specified in the restitution order.”43 It is undisputed that the defendant Parsons’s death occurred after the special verdict and restitution order were entered. Consequently, under the substantive principles of federal and common law pertaining to abatement, survival and revival, the judgment of restitution survived and was not abated by the defendant’s death. Id. 4. I respectfully concur in the result reached by the majority opinion in not ordering the government to return sums already paid. Because I would not overrule this Circuit’s precedents in Mmahat and Asset but would adhere to them, I cannot join the majority in reasons related to this point. As I read those Circuit precedents, the rule of abatement does not apply to require the return of money paid by a defendant prior to his death as forfeiture, fine or restitution. I do not join in the expungement order because I am uncertain as to whether this relief was requested or whether the estate would be entitled to it if it had been prayed for. 43 § 3664(m)(ii)(B). See note 7, supra. 25 For the foregoing reasons, I respectfully dissent in part and specially concur in part in the majority opinion. 26