United States v. Johnson
790 F. Supp. 2d 945
E.D. Wis.2011Background
- Defendant Johnson was convicted of Trafficking in Counterfeit Goods/Services under 18 U.S.C. § 2320(a) and 2, sentenced to 3 years of supervised release with 60 days home confinement.
- At sentencing, the court reserved restitution determinations for a later date.
- Government and RIAA seek MVRA restitution of $33,015.29 based on wholesale value of seized infringing CDs (4,081 CDs at $8.09 each).
- The CDs were seized and never circulated in commerce; no actual loss proof was shown.
- Defense argues MVRA requires actual loss proven by the government; cites circuits requiring actual loss.
- Court finds that MVRA requires actual loss and denial of restitution is proper because no actual loss traceable to defendant was proven.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether MVRA restitution requires actual loss here | Johnson caused losses; RIAA entitlement to restitution. | MVRA requires actual loss; no loss proven since CDs never in commerce. | Restitution denied; actual loss not proven. |
| Whether Milstein controls the measure of damages in this IP case | Milstein supports lost sales as measure for restitution. | Milstein is distinguishable; MVRA differs from VWPA context. | Milstein not controlling; MVRA requires actual loss. |
| Are Chalupnik, Hudson, and Beydoun persuasive on MVRA actual loss | These cases support actual loss as measure. | Those circuits require actual loss; Seventh Circuit would likely follow. | They are persuasive; actual loss required. |
| Is the government entitled to restitution for seized items never in commerce | Lost sales framework applies regardless of commerce status. | No actual loss since no sales or stream of commerce. | No restitution for seized CDs not in commerce. |
| Does the VWPA analysis apply to MVRA restitution in this case | MVRA parallels other restitution statutes with broader reach. | MVRA is a distinct statute with actual loss requirement. | MVRA's actual loss requirement applies. |
Key Cases Cited
- United States v. Milstein, 481 F.3d 132 (2d Cir. 2007) (lost sales as restitution measure; distinguishable context)
- United States v. Chalupnik, 514 F.3d 748 (8th Cir. 2008) (MVRA restitution requires actual loss)
- United States v. Hudson, 483 F.3d 707 (10th Cir. 2007) (restitution based on actual loss; government bears burden)
- United States v. Beydoun, 469 F.3d 102 (5th Cir. 2006) (actual loss required for MVRA restitution)
- United States v. Adams, 19 F. App'x 33 (4th Cir. 2001) (unpublished; supports loss-based restitution analysis)