Guest Blogger Marshall Mintz: District Court Authority To Amend Restitution Orders

Guest Blogger Marshall Mintz provides his take below of United States v. Kyles, No. 06-4196 (2d Cir. April 2, 2010) (found here), in which the Second Circuit held (in an appeal that Mr. Mintz handled) that a district court has implied authority to amend a restitution order, entered under the Victim and Witness Protection Act of 1982, 18 U.S.C. § 3663 et seq. (the "VWPA"), during the period that the defendant was incarcerated.  As he notes, though, because the district court's order in Kyles improperly designated the setting of a payment schedule to the Bureau of Prisons, the Second Circuit remanded for further proceedings.

The Facts

Kyles was convicted in 1993 of armed bank robbery, in violation of 18 U.S.C. § 2113(a) and (d), and sentenced to 262 months' imprisonment to be followed by five years' supervised release.  As a special condition of his supervised release, Kyles was directed to pay $4,133 in restitution on a schedule to be determined by the United States Probation Office.  However, the Probation Office never set any schedule for those payments.  In October 1998, the district court, for reasons unknown, issued an Order Amending Judgment which directed Kyles to “pay restitution of $2 per month, while incarcerated,” and reserved authority to alter that amount in the future.

In June 2006, in response to a letter from the Bureau of Prisons (the context of which is not clear), the district court further amended the judgment in Kyles's case, "to reflect an increase in the defendant's restitution payment obligation from $2 each month to $25 each month, while incarcerated," while again reserving the right to make further alterations in the future.

Kyles sought reconsideration of that order, arguing that the district court lacked authority to issue either the October 1998 order or the June 2006 order, as neither had been entered within seven days of sentencing as required by Rule 35 of the Federal Rules of Criminal Procedure.  Further, Kyles argued that even if the court had the authority, he lacked the means to pay $25 per month.  In September 2006, the district court vacated its earlier order and directed that "restitution payments shall be increased in accordance with the guidelines of the Inmate Financial Responsibility Program" of the Bureau of Prisons.

The Appeal

On appeal, Kyles contended that the district court lacked statutory authority under the VWPA to modify his restitution schedule while he remained incarcerated.  Further, even if the district court did have the authority to enter the Order Amending Judgment, the provision that restitution payments should be set “in accordance with the guidelines of the Inmate Financial Responsibility Program” was an improper delegation of judicial authority to the Bureau of Prisons. 

While the appeal was pending, the government filed a motion seeking to have the initial 1993 restitution schedule vacated so that the district court could clarify its initial intent with respect to the payment of restitution while Kyles was incarcerated.  That motion was denied without prejudice to the government seeking the same relief in its brief.  In its brief, the government argued that the 2006 order should be vacated because the district court lacked authority to enter it under Rule 35 but that the 1998 order should stand because no timely appeal was taken. 

In June 2009, the Second Circuit ordered the parties to submit further briefing on whether the VWPA gave the district court inherent authority to amend the payment schedule.

The District Court's Authority to Modify the Schedule

In holding that the district court had the authority to amend the judgment in the first place, the Second Circuit held that “[t]o the extent it allowed Kyles to pay the sentenced amount in installments, that departure from the statutory presumption in favor of immediate restitution is not reasonably understood as a ‘sentence,’ but rather as an application of equity to performance of the pronounced sentence, providing a means for Kyles fully to compensate his victim consistent with his limited means.”  Thus, a modification of the restitution schedule only changes the application of equity and not the amount of restitution.  As such, the Second Circuit found there was “no change in sentence.”

In rejecting Kyles’s argument that the VWPA precluded a district court from amending the restitution schedule while a defendant was incarcerated, the Second Circuit held that the statute gave district courts an inherent authority “to adjust [restitution] orders when the circumstances informing them change.”  As it reasoned, “[u]nless the equitable authority conferred by § 3663(f)(1) is construed to permit a court to modify a payment schedule as warranted by changed circumstances, a defendant who encounters unanticipated financial setbacks may be burdened with an unreasonable schedule.” 

With respect to the fact that a later statute, the Mandatory Victims Restitution Act, 18 U.S.C. § 3663 (1996), includes an explicit authorization for a district court to amend a payment schedule if a defendant experiences a material change in his economic circumstance (thus making clear that Congress knew how to give a district court the authority if it chose to), the Second Circuit held that the provision merely “clarifies and strengthens what is implicit in the VWPA.” 

The Delegation to the Bureau of Prisons

The Second Circuit did find that the district court exceeded its authority when it ordered that the payments should “be increased in accordance with the guidelines of the Inmate Financial Responsibility Program,” citing to United States v. Mortimer, 94 F.3d 89 (2d Cir. 1996). 

In Mortimer, the district court had similarly ordered that the defendant “pay restitution while in prison according to a schedule to be determined pursuant to the Bureau of Prisons Inmate Financial Responsibility Program.”  The Second Circuit rejected that provision, reasoning that since the payment schedules under the IFRP are not fixed but instead left to the discretion of the BOP personnel, such a delegation of judicial authority to BOP staff is improper.

The Second Circuit further found that there was "little to distinguish the challenged order . . . from that held invalid in Mortimer," and remanded for further proceedings.