Supreme Court Narrows Federal Criminal Restitution

According to the Mandatory Victims Restitution Act (MVRA), defendants convicted of crimes in federal court are required to pay their victims criminal restitution for the losses that they suffered. The case of Lagos v. United States involved an issue of interpretation over the act's language regarding what types of losses would be eligible for restitution. Ultimately, the Supreme Court settled on a narrow interpretation of the MVRA and significantly narrowed the types of losses for which a defendant would be required to pay restitution.

What is Criminal Restitution?

Criminal restitution involves a court order for a defendant convicted of a crime to pay the victim for the losses that he or she endured as a result of the defendant's criminal conduct. Even if a victim or prosecutor does not specifically request that a convicted defendant be ordered to pay the victim restitution, the court is required to consider it as part of any criminal sentence. It is viewed as both a deterrent to dissuade potential criminals from committing crimes and as a compensation mechanism to help victims recover from the crimes they endured. A restitution order is a common part of a sentence in theft and fraud cases because they typically involve financial crimes that result in at least one victim losing money.

Although a court-imposed fine is another way that a defendant may be required to pay for his crime, that is different from restitution. A fine is a specific penalty to be paid to the court instead of the victim. Its sole purpose is to punish the defendant for his unlawful behavior and does not necessarily benefit the victim in any way. Different states have different laws related to what criminal restitution can be used to cover in terms of the victims' losses.

The Supreme Court's Unanimous Decision in Lagos v. United States

In Lagos v. United States, the Supreme Court addressed the MVRA's requirement that a convicted defendant's criminal restitution must cover the expenses that a victim must pay as a result of a crime. The relevant portion of the MVRA requires that a convicted defendant must "reimburse the victim for lost income and necessary child care, transportation, and other expenses incurred during participation in the investigation or prosecution of the offense or attendance at proceedings related to the offense."

The defendant successfully argued that the only types of "investigations" and "proceedings" that would be eligible for restitution are those that the government initiates. In other words, a defendant should not have to compensate a victim for all aspects of the private or personal investigation into criminal activity that a victim could perform separately from the government's official investigation. The Supreme Court agreed with the defendant's argument while reasoning that it would be incredibly difficult to determine which parts of an individual's own investigation into a crime would be considered "necessary" in an investigation that was outside of the government's control.

Another practical point raised in the unanimous Supreme Court opinion was that many criminal defendants do not have the means to pay back victims after they are convicted of a crime. Thus, requiring defendants to pay restitution in those cases could do nothing more than increase the administrative burden on the lower courts without actually helping any victim. In this regard, the Supreme Court seemed hesitant to invite a broad reading of the MVRA because it could lead to requirements on convicted defendants that would be nearly impossible to fulfill.

What Lagos v. United States Could Mean for the Future of Criminal Restitution

The Supreme Court's ruling in Lagos v. United States signaled to many that the highest court in the land is not in favor of seeing restitution orders increase the amount that those convicted of crimes are forced to pay over time. The Supreme Court indicated that there is at least some nebulous ceiling on the payment amounts that courts are able to force convicted defendants to pay.

In addition, the ruling left open the possibility for victims of crime to pursue damages against the convicted defendants in civil court. This seems to be the preferred method, at least according to the Supreme Court, for addressing cases in which a large corporation is convicted of injuring victims and causing great financial losses. One issue that the ruling did not address at all was the repayment of attorneys' fees incurred by victims as part of their participation in both private and government investigations.