Restitution standard shatters circuits

A federal statute makes it mandatory for victims of child pornography to get restitution for the losses they suffer. But federal court rulings deciding how those losses should be categorized and what proof is required to establish liability are so divergent that the term “circuit split” doesn’t quite cut it. It’s more like a “circuit shatter.”

The Fifth Circuit stands alone as the only federal appellate court to hold that the law does not require proof that a defendant’s possession or distribution of pornographic images of child victims proximately caused the victim’s losses. But that is just half the story.

The circuits that have found a proximate cause requirement have established such varying standards that different conclusions are being reached on nearly identical facts, leaving a tumultuous landscape for lawyers and their clients.

“You have three different probable cause standards” among the circuits, said Stanley G. Schneider of the Houston firm Schneider & McKinney, who represents a defendant in the Fifth Circuit case.

The myriad approaches by the circuits are a result of “a lot of judicial sloppiness and laziness,” said James R. Marsh of the Marsh Law Firm in New York, who represents child pornography victims across the country. “They are relying on cases where [proximate causation] was mentioned only in a footnote or in dicta. They never really analyzed what was required by the statute.”

And because the language of the Mandatory Restitution for Sexual Exploitation of Children Act is so similar to that of other restitution statutes, the impact of the split is being felt beyond child pornography cases, including in domestic violence cases. Now lawyers on both sides of the issue are hoping for clarity from Washington.

“I think it’s rare to find the circuits so dramatically split as they are on this issue,” said Paul G. Cassell, a professor at S.J. Quinney College of Law at the University of Utah and a former federal judge who is part of the appellate litigation team representing victims seeking restitution.

One statute, many possible meanings

The restitution statute at issue, 18 U.S.C. §2259(b)(1), defines “full amount of the victim’s losses” as “any costs incurred by the victim for:

(A) medical services relating to physical, psychiatric, or psychological care;

(B) physical and occupational therapy or rehabilitation;

(C) necessary transportation, temporary housing, and child care expenses;

(D) lost income;

(E) attorneys’ fees, as well as other costs incurred; and

(F) any other losses suffered by the victim as a proximate result of the offense.” (Emphasis added).

It’s that last subsection, §2259(b)(1)(F), that is the source of the fractured circuit rulings.

In a nutshell, all agree that there is some causation standard in the law, but the parties and courts have split over whether the phrase “proximate result” applies to all restitution claims or only to the losses specifically described in subsection (F).

Attorneys for child victims argue that it only pertains to subsection (F), which they call a catch-all section designed to preserve victims’ right to claim damages not otherwise specified in the statute. Because the statute was created to establish mandatory restitution from those who possess and traffic images of child exploitation, and because the impact on the victim is compounded each time those images are distributed, victims’ lawyers say, a proximate causation requirement would be counterproductive.

“In a perfect world, you can prove proximate causation and you get restitution for everything under the statute,” said Marsh. “It doesn’t mean if you don’t prove proximate causation you get nothing.”

That approach was adopted by the en banc Fifth Circuit in the case In re Amy Unknown, no. 09–41238 (Oct. 1).

But attorneys for defendants say that such an interpretation is unworkable, leaving open the possibility for endless and duplicative recovery from defendants who may view or possess the images long after a particular victim’s losses have been litigated and calculated.

“It’s a weird deal,” said Schneider. “How can [a defendant] have harmed somebody when the harm had occurred and been calculated before the conduct of that particular defendant?”

Possibly in an effort to address that issue, other circuits struggling to nail down a causation standard have come to different conclusions, leaving some federal judges scratching their heads.

“On rather similar facts the circuits have reached different outcomes in applying the proximate cause test, and those outcomes cannot be entirely explained by differences in the facts of record,” observed Chief Justice Sandra L. Lynch in the First Circuit opinion in U.S. v. Kearney, 672 F.3d 81 (1st Cir. 2012).

Hope for Supreme intervention

The impact of the disparate rulings is being felt by parties far beyond child pornography litigation.

For example, the language in a federal statute establishing restitution for domestic violence victims is nearly identical. In interpreting that statute, the Second Circuit rejected a general proximate causation standard, ruling instead that the “proximate result” language referred to costs not otherwise specified in the proceeding subsections of the law, such as attorney fees and costs.

If courts adopt the reasoning of the circuits that have found broader proximate causation standards, “not only will victims of child pornography be harmed, but victims of domestic violence will be harmed as well,” Cassell said.

The parties on both sides are now hoping for U.S. Supreme Court review. Several of the decisions creating the circuit fracture have come down since the last time the Supreme Court declined to take up the issue. Marsh and Cassell filed a petition for certiorari in a Ninth Circuit case in November, and believe the issue is now ripe.

“The court, I think, recognizes that Congress tried to create a uniform system,” Cassell said. “It’s a classic issue for the Supreme Court to take up, since people are being treated differently in different jurisdictions.”

The issue:

Does a federal statute granting restitution for victims of child pornography require plaintiffs to prove that the victim’s losses were the proximate result of an individual defendant’s child pornography crime?

The break:

• Fifth Circuit: The statute, 18 U.S.C. §2259, does not require proof that a defendant’s actions proximately caused the victim’s injuries except for damages specified under subsection §2259(b)(3)(F).

Other circuits have ruled in varying ways on the proximate cause issue, citing different reasons:

• First Circuit: The proximate cause requirement was satisfied where a defendant’s actions resulted in identifiable losses as outlined by experts in victim impact statements, but that may not apply in all instances.

• Second and D.C. Circuits: Proof of proximate cause is required for restitution awards based on the traditional principles of tort and criminal law.

• Third and Ninth Circuits: Any award of restitution requires proof of a causal connection between the defendant’s offense conduct and the victim’s specific losses, according to statutory interpretation.

The solution:

Last year the U.S. Supreme Court denied a petition for certiorari on the issue, but circuit rulings have since created a more varied split. A certiorari petition from the Ninth Circuit case was filed in November and is pending.