Lead Opinion
The opinion of September 11, 2015, is withdrawn and the following is substituted. Vencent Scales pled guilty to theft of government funds. The issue on appeal is whether the district court erred in the manner in which it ordered restitution be paid. Because there was no objection to the order in district court, our review is for plain error. We find none and AFFIRM.
FACTS AND PROCEDURAL HISTORY
In district court, Scales admitted that in late 2012 or early 2013, as a “representative payee” for another person, he took Social Security benefits of over $1,000 and converted them to his own use. The offense took place in the Northern District of Texas.
Scales pled guilty to theft of government funds in violation of 18 U.S.C. § 641. The
No objection to the amount of restitution or the manner in which it was to be paid was made in district court. On appeal, Scales’s counsel initially filed a brief under Anders v. California,
Counsel does not address or analyze whether the district court complied with its obligation to consider “financial resources and other assets of the defendant” in determining the schedule under which a restitution order is to be paid____ Specifically, counsel does not address or analyze the condition of supervised release that Scales make restitution payments over the course of his term of supervised release and that any unpaid balance shall be paid in full 60 days prior to the termination of the term of supervised release, and whether, in light of the PSR’s recitation of Scales’s financial position, this condition creates an “unrealistic payment schedule.” See United States v. Calbat,266 F.3d 358 , 366 (5th Cir.2001).
In their briefing in response to this order, both Scales and the Government analyze whether the defendant’s lack of financial resources meant that it was error for the district court’s order to provide restitution was “payable immediately.” We find that question to be sufficiently inherent in the court’s briefing order, and also important in the caselaw we discuss, to identify it as a separate issue in our opinion.
We earlier held there was reversible plain error. United States v. Scales,
DISCUSSION
The parties disagree about the applicable standard of review. Scales relies on caselaw that provides we should remand to correct an unpreserved error when the ordering of restitution is “in violation of law.” See United States v. Arnold,
Because Scales failed to raise this issue in the district court, we review for plain
I. Requirement that restitution be payable immediately
The Mandatory Victims Restitution Act (“MVRA”) instructs courts to order the full amount of restitution without regard to a defendant’s ability to pay. See 18 U.S.C. § 3664(f)(1)(A). In setting a payment schedule, however, the court must consider the defendant’s resources, earnings, and obligations. See id. § 3664(f)(2). As the Government stated in the PSR in this case, Scales suffers from mental health problems, has no assets, and has not been employed since 2009. He received Supplemental Security Income benefits of $699 per month, but that amount is subject to garnishment for outstanding child support payments. As a result, the PSR states that Scales “does not have the financial resources to pay a fine and make restitution payments.”
We have held a district court plainly erred by ordering a defendant to pay all of restitution immediately when the defendant lacked the resources to do so; the restitution order contained no payment schedule. See United States v. Myers,
In another precedent we found no plain error in making restitution payable immediately when a payment schedule was also set that considered a defendant’s financial situation. See United States v. Miller,
Applying that reasoning here, we again note that the district court ordered restitution in a specific amount payable immediately. After announcing that. obligation, though, the court stated that failure to pay immediately would not violate Scales’s conditions of supervised release if his payments were made “as provided in defendant’s conditions of supervised release.” The payment schedule required a $100 monthly payment that would begin upon his release from prison, with any unpaid balance of the $29,427.37 to be paid no later than 60 days prior to the end of supervised release.
Because there was no payment schedule in Myers to qualify the requirement of immediate payment of all restitution, we, as did the panel in Miller, find Myers distinguishable and inapplicable. In contrast, in Miller — though the order also said restitution was payable immediately—
There is another part of the payment schedule, of course, which is the obligation to pay the balance of restitution by the end of the period of supervised release. We will analyze that feature next. At this point we consider only whether plain error exists when a district court orders all of restitution to be “payable immediately” and then provides a payment schedule demonstrating no actual obligation exists to pay the full balance immediately. We follow Miller, as we must, to hold that no clear or obvious error exists in that circumstance, relying solely on the first two factors of plain error review.
Whatever the phrase “payable immediately” means,
II. Validity of a payment schedule with a balloon obligation
Scales’s payment schedule requires $100 monthly payments once supervised release begins. There is no argument that the monthly amount was inappropriate due to Scales’s financial situation. The only claim as to the schedule is that it was error to require the remaining balance be paid no later than 60 days prior to the end of supervised release. No similar final obligation was mentioned in our Miller opinion. In fact, though, a review of the record reveals that Miller’s payment schedule also required that the “unpaid balance of the restitution ordered by this judgment shall be paid in full 60 days prior to the termination of the term of supervised release.” The same district judge entered both orders, explaining the similarity.
Miller controls to the extent of its holding, which is that a district court does not plainly err by ordering restitution be payable immediately if it then also provides a realistic payment schedule. Id. at 328. The opinion did not address whether a restitution order that required the balance be paid in one final balloon obligation before the end of supervised release affected whether the schedule was “realistic.” Indeed, that part of the restitution order was not described in our opinion. “Where an opinion fails to address a question squarely, we will not treat it as binding precedent.” Thomas v. Tex. Dep’t of Criminal Justice,
We look elsewhere for the validity of that final obligation. In one case, we vacated a sentence because the district court imposed an “unrealistic payment schedule” in light of the defendant’s poverty. See United States v. Calbat,
The court in Calbat used a somewhat different methodology — perhaps a best-case scenario for upholding the schedule— to assess the defendant’s average annual restitution obligation. The court allocated the obligation equally through all six years of Calbat’s sentence (three in prison, and three on supervised release), which would be about $41,000 annually. See id. Under that analysis, Calbat would pay $2,000 more each year than he had earned prior to his conviction.
We do not apply Calbat’s method of calculation to Scales, namely, to take the entire restitution amount and spread it over his full sentence in order to judge its reasonableness. That is because the district order set a specific amount for monthly payments. The order does not provide for payment while Scales is in prison. Once on supervised release, he is to make $100 monthly payments during the term of supervision. Scales received $699 each month in Supplemental Security Income before his arrest. Thus, before becoming a felon, Scales earned significantly more each month than he will be required to pay. Unlike in Calbat, Scales has no obligation to make unreasonably large periodic payments during his term of supervised release.
Applying this precedent, we first hold there is no plain error in setting Scales’s monthly payment at $100. Indeed, Scales does not argue error there. The only possible defect in the payment schedule is the requirement that any unpaid balance be satisfied before supervision ends.
In deciding how a court in a sentencing order should address a possible unpaid balance in restitution at the end of supervised release, we first identify three options that structure our analysis. One is for the court to ignore the anticipated outstanding balance. Two others are for the court’s order to identify the amount of the anticipated balance, and then either remain silent as to any obligation that the balance be paid during the term of supervised release or, alternatively, require that the balance be paid during the period of supervision. A fourth conceptual option, stating that the anticipated balance is forgiven, may be beyond the authority of the court under the MVRA, but we need not address that point. We examine whether what the distinct court did here, namely, require the balance to be paid at the end of the term of supervision, was plain error.
We start with the purpose of the MVRA, which “is to make victims of crime whole, to fully compensate these victims for their losses and to restore these victims to their original state of well-being.” United States v. Boccagna,
In setting a schedule, the district court must consider the defendant’s financial situation. Id. § 3664(f)(2). Importantly, this initial determination of the defendant’s ability to pay is subject to later revision during the term of supervision, which allows a district court to increase the payment amount:
A restitution order shall provide that the defendant shall notify the court and the Attorney General of any material change in the defendant’s economic circumstances that might affect the defendant’s ability to pay restitution. The court may also accept notification of a material change in the defendant’s economic circumstances from the United States or from the victim. The Attorney General shall certify to the court that the victim or victims owed restitution by the defendant have been notified of the change in circumstances. Upon receipt of the notification, the court may, on its own motion, or the motion of any party, including the victim, adjust the payment schedule, or require immediate payment in full, as the interests of justice require.
Id. § 3664(k) (emphasis added).
In summary, the MVRA requires the district court to: (a) order the full amount of restitution; (b) establish an initial payment schedule that takes into consideration the defendant’s financial situation; and (c) respond to any change in the defendant’s economic condition by adjusting the schedule. All of this has the goal of making “full payment” in the shortest time possible.
Thus, a court at the time of sentencing will establish a payment schedule that takes into account a defendant’s- ability to pay. Likely, if the total restitution is a substantial amount, the schedule will not result in payment of the entire amount. In that circumstance, one proper issue for the court throughout the term' of the sentence is whether the defendant can pay more. Under Section 3664(k), defendants must notify the court of material changes in their financial situation, an obligation that “accounts both for windfalls and for tighter times.” United States v. Cheal,
All this means that the deficiency resulting from a defendant’s satisfaction of a relatively modest payment schedule may in proper circumstances be reduced by increasing the payment amounts during the period of supervision. Here, the district court provided that the deficiency must be satisfied in full by a final lump-sum payment before supervision ends. Even if it is unlikely a defendant will be able to pay a large balance, it is not plain error for a court, in a sentencing order, to leave open the possibility that it might require an additional payment near the end of supervised release if unexpected funds are suddenly available. The MVRA explicitly provides that if an individual becomes entitled to “substantial resources from any source, including inheritance, settlement, or other judgment, during a period of incarceration,” the court may require that those amounts be used to pay restitution. 18 U.S.C. § 3664(n). Making full payment of restitution a condition of supervised release is consistent with the statutory right to draw on unanticipated resources to pay restitution. We consider the balloon payment to be a placeholder, or a way in which a final accounting may be done, a means by which payment of the largest amount of restitution possible can be- made a condition of supervised release.
Another way to have described that final payment in the sentencing order would be
In holding that it is not plain error to require full payment of restitution as a final condition of supervised release, we rely on the point that enforcing the obligation requires proof of an ability to pay. A district court may not revoke supervised release simply because the person does not make the final balloon payment. Instead, the court must first determine whether there was a willful refusal to pay. See United States v. Payan,
We find support for this analysis in Pay-an. The defendant challenged his sentence that required restitution payments as a condition of supervised release, arguing his inability to pay might keep him imprisoned indefinitely. Id. at 1395. We rejected the argument, explaining “even if such future collection efforts by the government should prove fruitless, Payan’s supervised release still would not be revoked automatically.” Id. at 1395-96. We relied on a Supreme Court decision that required a court to “inquire into the reasons for the failure to pay” before revoking probation. Id. at 1396 (citing Bearden v. Georgia,
Finally, we noted the Government has other enforcement mechanisms for failure to pay restitution, aside from revocation proceedings. Payan,
We restate our conclusions. The district court set a payment schedule that allows Scales to meet his periodic restitution obligations. There is one final and large balloon obligation. If Scales shows he cannot pay the balance at the end of his term of supervision, further orders from the district court can be entered, but his supervised release cannot be revoked automatically. Whatever is ultimately ordered by the district court, an appeal can be taken at that time to contest any of those new rulings. As to the restitution order and payment schedule now before us, Scales has no viable claim of plain error.
AFFIRMED.
Notes
Pursuant to 5th Cir. R. 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5th Cm. R. 47.5.4.
. Sentencing orders that require restitution to be paid immediately, or state that it is payable or due immediately, have a long history and have been much litigated. The intent of such language and its operation in practice are explained in Catharine M. Goodwin, Federal Criminal Restitution § 11:30.
. We have held that that when reviewing for plain error, the possibility of modification of a term of supervised release is irrelevant to the first three steps of the analysis but may apply as to the final step regarding the exercise of our discretion to correct an error. United States v. Prieto,
Concurrence Opinion
Circuit Judge, concurring in the judgment only:
I write separately to express my view that United States v. Calbat,
The majority opinion correctly concludes that United States v. Miller,
In Calbat, the district court ordered Cal-bat to pay $250,000 in restitution, to begin sixty days after the date of his confinement, with no more than twenty percent of the funds in his inmate trust fund to be withheld for that purpose.
According to the PSR, at the time of the offense, Calbat was employed as a purchasing manager and earned approximately $39,000 a year. His only assets were a 1995 Pontiac Grand Prix valued at $4800 and his § 401K account, which was valued at $2800. Calbat’s debts amount to approximately $1,200. Under the payment schedule imposed by the district court, the average yearly payment required of him, over $41,000, is greater than his yearly income at the time of the offense. The district court noted at sentencing that “I frankly do not anticipate that he would ever be able to pay the full $250,000.” Absent a large windfall, Calbat will not be able to*242 pay the full amount of restitution within the time ordered by the district court. This unrealistic payment schedule is particularly troubling in light of the fact that payment of restitution is one of the conditions of Calbat’s supervised release. Calbat could thus be sent back to prison for failure to make restitution payments in a timely manner. Under these circumstances, we conclude that the district court abused its discretion in setting the payment schedule for the restitution order.
Id. at 366.
Applying Calbat’s methodology — spreading Scales’s total restitution of $29,427.27 over his sixty months of imprisonment and thirty-six months of supervised release— results in monthly payments of about $306. These payments would be unrealistic. Scales’s presentence report (PSR) notes that he suffers from severe mental and emotional health issues, which, together with his prior incarcerations, have limited his ability to maintain employment. Before his arrest, Scales had no earned income and received only $699 in monthly SSI benefits, which was subject to garnishment for child support payments. Scales has no assets, multiple delinquent loans, and outstanding child support obligations. Based on these facts, the PSR concluded that Scales did not have the financial resources to make any restitution payments. Thus, just as in Calbat, it is unrealistic to expect Scales to be able to pay his restitution in the time allotted.
Of course, as the majority opinion notes, Scales was not ordered to pay off his restitution in equal installments as in Calbat. Instead, Scales is required to pay $100 per month with the remainder as a balloon payment at the end of his term of supervised release. This difference is immaterial, however, because Scales is no more likely to be able to pay $29,000 in restitution at the end of his thirty-six months of supervised release than he is to be able to spread those payments over the thirty-six months. Calbat’s reasoning and holding could just as well have been written about Seales:
Absent a large windfall, [Scales] will not be able to pay the full amount of restitution within the time ordered by the district court. This unrealistic payment schedule is particularly troubling in light of the fact that payment of restitution is one of the conditions of [Scales’s] supervised release. [Scales] could thus be sent back to prison for failure to make restitution payments in a timely manner. Under these circumstances, we conclude that the district court abused its discretion in setting the payment schedule for the restitution order.
Id. Given the direct applicability of Cal-bat’s holding, I would hold that the district court here likewise erred in setting an unrealistic payment schedule for Scales as a condition of supervised release, sueh that non-payment could result in his re-imprisonment, and that the error was plain.
The majority opinion, however, declines to apply Calbat’s method of calculation and instead adopts a novel approach, evaluating the restitution payment schedule as if the district court had only ordered the
The majority opinion’s approach is contrary to our precedent, including the cases on which the majority opinion relies. In those cases, we have consistently evaluated the reasonableness of the payment schedule as a whole, not the reasonableness of each required payment. See Calbat,
In the face of this uniform precedent, the majority opinion does not cite to any case in which we have avoided addressing the reasonableness of the restitution payment schedule as a whole by determining that some of the required payments are realistic and that any unrealistic payments need not yet be addressed. This approach is not only novel; it also violates our longstanding policy against piecemeal appeals by preventing Scales from challenging the requirement that he make a patently unreasonable balloon payment at the time the condition is imposed and instead suggesting that he can separately appeal a future order enforcing this condition. See, e.g., Switzerland Cheese Ass’n, Inc. v. E. Horne’s Mkt, Inc.,
Moreover, as the majority opinion acknowledges, our precedent dictates that the possibility of future modification of a supervised release condition has no bearing at all on prongs one through three of plain error review and is only a factor under prong four. United States v. Prieto,
This is a false distinction. The balloon payment does far more than “leave open the possibility that [the district court] might require an additional payment near the end of supervised release,” as the majority opinion characterizes it. The conditions imposed on Scales presently require him to pay off the balance of his restitution sixty days before the end of his term of supervised release. This requirement is already imposed in a binding court order, and is not a future “possibility.” The majority appears to suggest that Scales may disregard this requirement and trust that the district court will decide not to re-imprison him for the violation after inquiring into the reasons for his failure, as required in United States v. Payan,
In sum, the restitution schedule ordered in this case is patently unrealistic. Indeed, the majority opinion does not suggest that Scales will be able to comply with the required payment schedule. Noncompliance subjects Scales to the threat of re-imprisonment. Under Calbat, therefore, the district court erred by imposing the
Nevertheless, I concur in the judgment because Scales has not briefed the fourth prong of plain error review. See, e.g., United States v. Rivera,
. Although the Calbat panel did not do so, the majority opinion also calculates the annual payments Calbat would have owed if the restitution were spread over only the three years of supervised release, on the assumption that payments during incarceration would be negligible. Applying the same calculation to Scales produces average payments of approximately $817 per month, which, as in Calbat, exceeds Scales’s pre-incarceration income.
. The majority does not reach prong three of plain error review. Under our precedent, Scales has established that the district court’s error affects his substantial rights. See Prieto,
