UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT
August 28, 2012
UNITED STATES OF AMERICA
NORMAN STOERR SEVENSON ENVIRONMENTAL SERVICES,
On Appeal from the United States District Court for the District of New Jersey (D.C. Civil Action No. 2-08-cr-0521-001) District Judge: Susan D. Wigenton
The opinion of the court was delivered by: Vanaskie, Circuit Judge.
pursuant to FRAP 12(a)
Submitted Under Third Circuit LAR 34.1 June 21, 2012
Before: AMBRO, VANASKIE and ALDISERT, Circuit Judges
Norman Stoerr was convicted of participating in an illegal bid rigging and kickback scheme in connection with his employment at Sevenson Environmental Services, Inc. ("Sevenson"). Sevenson, a non-party to the underlying criminal proceeding, voluntarily compensated one of Stoerr‟s victims, Tierra Solutions, Inc. ("Tierra"). At Stoerr‟s sentencing, Sevenson sought restitution under the Mandatory Victims Restitution Act ("MVRA"), 18 U.S.C. § 3663A et seq., for reimbursement of the amount that it paid as compensation to Tierra. The District Court denied Sevenson‟s request for restitution, instead ordering that Stoerr pay restitution to Tierra. Sevenson now attempts to appeal Stoerr‟s sentence, contending that the District Court erred in declining to grant its request for restitution. We will dismiss Sevenson‟s appeal because, as a non-party, it lacks standing to appeal.
On July 23, 2008, Stoerr pled guilty to bid rigging, in violation of 15 U.S.C. § 1; conspiracy to provide kickbacks and to defraud the United States, in violation of 18 U.S.C. § 371; and assisting in the preparation of false tax returns, in violation of 26 U.S.C. § 7206(2). The convictions stemmed from kickback payments that Stoerr solicited and accepted from sub-contractors in connection with projects managed by Sevenson, his employer from 1980 to October 2003.
Sevenson obtained contracts in 2000 and 2004 with the United States Army Corps of Engineers to perform remediation services as the prime contractor at the Federal Creosote Superfund Site ("Federal Creosote") in Manville, New Jersey. From 1999 to 2007, Sevenson also had a contract with Tierra, a private company, to perform remediation services as the general contractor at the Diamond Alkali Superfund Site ("Diamond Alkali") in Newark, New Jersey. The Environmental Protection Agency was responsible for paying Sevenson for its services at Federal Creosote, and Tierra was responsible for paying Sevenson for its services at Diamond Alkali. At both project sites, Sevenson hired sub-contractors, and then sought reimbursement from the payer for the sub-contractor charges, plus a fee equal to a fixed percentage of the sub-contractor charges.
From 2000 to 2002, Stoerr was the superintendent at Diamond Alkali, and from 2002 to 2003, he was the assistant project manager/contracts administrator at Federal Creosote. At Diamond Alkali, Stoerr was responsible for soliciting vendors, and at Federal Creosote, he was responsible for soliciting bids for sub-contracts. In both positions, he reported to Gordon McDonald, the project manager.
From 2000 to 2004, Stoerr, at McDonald‟s direction, solicited and accepted kickbacks valued at $77,132 from sub- contracting companies National Industrial, Inc. ("National Industrial"), JMJ Environmental Services, Inc. ("JMJ"), Bennett Environmental Inc., and Haas Sand & Gravel LLC.*fn1 In return for the kickbacks, Stoerr and McDonald treated the sub-contracting companies favorably in awarding sub- contracts for the Federal Creosote and Diamond Alkali projects.
Stoerr and McDonald passed the cost of the kickbacks on to Tierra and to the EPA by including the amount of the kickbacks in the sub-contractors‟ invoices that they submitted for reimbursement. In total, the District Court determined that Stoerr‟s and McDonald‟s scheme resulted in losses of $134,098.96 to the EPA and $257,129.22 to Tierra. Of the $257,129.22 in losses to Tierra, the District Court found that $25,000 related to kickback payments from National Industrial and its partial owner, Victor Boski, and $232,129.22 related to kickback payments from JMJ and its owner, John Drimak Jr.
After Sevenson learned of the kickbacks scheme, it paid Tierra $202,759.04 to compensate it for its losses relating to the JMJ and Drimak scheme, and $38,158.11 to compensate it for its losses relating to the National Industrial and Boski scheme. It then commenced a civil action against Stoerr in state court to recover its losses, and sought restitution in connection with Stoerr‟s sentencing.
Regarding Stoerr‟s sentencing, Sevenson filed letters with the United States Probation Office and with the District Court, seeking restitution from Stoerr under the MVRA. The MVRA "compels a sentencing court to order a defendant convicted of certain crimes, including crimes against property, to make restitution to his victim." United States v. Aguirre-Gonzalez, 597 F.3d 46, 51 (1st Cir. 2010) (emphasis omitted) (quoting United States v. Innarelli, 524 F.3d 286, 292-93 (1st Cir. 2008)) (internal quotation marks omitted). In particular, the MVRA provides that "[i]n each order of restitution, the court shall order restitution to each victim in the full amount of each victim‟s losses as determined by the court and without consideration of the economic circumstances of the defendant." 18 U.S.C. § 3664(f)(1)(A).
The MVRA also provides that "[i]f a victim has received compensation from insurance or any other source with respect to a loss, the court shall order that restitution be paid to the person who provided or is obligated to provide the compensation." § 3664(j)(1). Sevenson claimed that it was entitled to restitution because it reimbursed Tierra for its losses.*fn2
On May 23, 2011, the District Court conducted Stoerr‟s sentencing, during which it denied Sevenson‟s request for restitution. In declining to grant restitution to Sevenson, the District Court determined that Tierra, rather than Sevenson, was Stoerr‟s victim. Moreover, the District Court noted that "Sevenson has the opportunity to pursue a civil remedy here." (A. 201.)
The District Court sentenced Stoerr to a five-year period of probation and ordered restitution in the amount of $391,228.18, with $134,098.96 apportioned to the EPA and $257,129.22 apportioned to Tierra. The District Court‟s order provided that Stoerr was jointly and severally liable for $232,192.22 of the Tierra payment with his co-conspirator, Drimak, whom the District Court had previously ordered to pay $232,192.22 in restitution to Tierra. Because Stoerr lacked the financial ability to make the restitution payments in full, the District Court ordered him to pay $250 per month.
On June 22, 2011, the District Court ordered that Stoerr‟s obligation to pay Tierra $25,000 for the losses relating to the National Industrial and Boski scheme was satisfied because "Tierra . . . received full compensation" for its losses stemming from that scheme. (A. 173.) The District Court also ordered that Sevenson‟s $202,759.04 payment to Tierra counted towards Stoerr‟s $232,129.22 restitution obligation relating to Tierra‟s losses from the JMJ and Drimak scheme, and reduced Stoerr‟s remaining restitution obligation to Tierra to $29,370.18.
Sevenson moved for reconsideration of the District Court‟s restitution order, which the District Court denied. Sevenson then filed a notice of appeal. The Government moved to dismiss Sevenson‟s appeal, arguing that Sevenson, as a non-party, is unable to appeal Stoerr‟s sentence. We referred the Government‟s motion to our merits panel and now consider the Government‟s motion together with the parties‟ merits briefs.
Sevenson contends that the District Court erred in failing to award it restitution in compensation for its payments to Tierra, because the MVRA requires district courts to order restitution to any entity that has compensated the crime victim. See 18 U.S.C. § 3664(j)(1) ("If a victim has received compensation from insurance or any other source with respect to a loss, the court shall order that restitution be paid to the person who provided . . . the compensation . . . .").
Although Sevenson acknowledges that it is not a party to Stoerr‟s criminal proceedings, it asserts that it nonetheless has a right to appeal the District Court‟s restitution order as a non-party payer of compensation to a victim under the MVRA.
The Government responds that Sevenson cannot appeal, because non-parties are unable to appeal a criminal defendant‟s final judgment and sentence. The Government also contends that the District Court did not abuse its discretion in ordering restitution payments to Tierra rather than to Sevenson, because district courts must fully compensate victims for their losses under § 3664(f)(1)(A), and because Stoerr is jointly and severally liable for the $232,192.22 restitution payment with Drimak. We will dismiss Sevenson‟s appeal, because Sevenson, as a non-party, lacks standing to appeal Stoerr‟s sentence.
To have standing to appeal, the appellant "must be aggrieved by the order of the district court from which it seeks to appeal."*fn3 IPSCO Steel (Ala.), Inc. v. Blaine Constr. Corp., 371 F.3d 150, 154 (3d Cir. 2004) (quoting McLaughlin v. Pernsley, 876 F.2d 308, 313 (3d Cir. 1989)) (internal quotation marks omitted). Ordinarily, only parties to a proceeding adversely affected by the judgment entered in that proceeding are aggrieved by the judgment. See Kaplan v. Rand, 192 F.3d 60, 66-67 (2d Cir. 1999) ("[I]f not a party, the putative appellant is not concluded by a judgment, and is not therefore aggrieved by it.") (alteration and internal quotation marks omitted) (quoting West v. Radio-Keith-Orpheum Corp., 70 F.2d 621, 624 (2d Cir. 1934)); Sec. & Exch. Comm'n v. An-Car Oil Co., 604 F.2d 114, 119 (1st Cir. 1979)
("Ordinarily, only a person who was a party to the proceeding below and who is aggrieved by the judgment or order is entitled to appeal.") (citations omitted); Burleson v. Coastal Recreation, Inc., 572 F.2d 509, 511 (5th Cir. 1978) (same). Accordingly, the Supreme Court and our Court have long recognized, as a general matter, that "only parties to a lawsuit, or those that properly become parties, may appeal an adverse judgment." Marino v. Ortiz, 484 U.S. 301, 304 (1988) (citations omitted); see also Karcher v. May, 484 U.S. 72, 77 (1987) ("[W]e have consistently applied the general rule that one who is not a party or has not been treated as a party to a judgment has no right to appeal therefrom.") (citations omitted); In re Leaf Tobacco Bd. of Trade, 222 U.S. 578, 581 (1911) ("One who is not a party to a record and judgment is not entitled to appeal therefrom.") (citations omitted); IPSCO Steel (Ala.), Inc., 371 F.3d at 153 ("Ordinarily, only parties of record before the district court have standing to appeal.") (citing Caplan v. Fellheimer Eichen Braverman & Kaskey, 68 F.3d 828, 836 (3d Cir. 1995)).
Sevenson does not contest the fact that it is not a party to Stoerr‟s criminal proceeding. Indeed, courts have recognized that "[n]otwithstanding the rights reflected in the restitution statutes, crime victims are not parties to a criminal sentencing proceeding." Aguirre-Gonzalez, 597 F.3d at 53 (citations omitted); see also United States v. Grundhoefer, 916 F.2d 788, 793 (2d Cir. 1990) (explaining that "[t]he victim[,] as a non-party[,]" has only limited rights under the Victim and Witness Protection Act ("VWPA"), 18 U.S.C. § 3663 et seq.). Sevenson claims entitlement to restitution, not as a victim, but as one who has reimbursed losses incurred by a victim of its former employee. If victims are non-parties to criminal proceedings, then Sevenson, who is a degree removed from victim status, is likewise a non-party. The presumptive rule, therefore, is that Sevenson cannot appeal. See Aguirre-Gonzalez, 597 F.3d at 53 ("[T]he baseline rule is that crime victims, as non-parties, may not appeal a defendant‟s criminal sentence.") (citations omitted).
We find no reason to disturb the presumptive rule in the context of a non-party payer‟s appeal of a restitution order. A restitution order is part of a defendant‟s sentence. See United States v. Syme, 276 F.3d 131, 159 (3d Cir. 2002) ("Restitution orders have long been treated as part of the sentence for the offense of conviction .") (citations omitted). Thus, as the Tenth Circuit recognized, permitting a non-party to appeal a restitution order "would produce the extraordinary result of reopening [a criminal defendant‟s] sentence" for the benefit of a private party.*fn4 United States v. Hunter, 548 F.3d 1308, 1314 (10th Cir. 2008).
Neither our Court nor any other Court of Appeals has ever permitted this result. To the contrary, all Courts of Appeals to have addressed this issue have concluded that non- parties cannot directly appeal a restitution order entered against a criminal defendant. See, e.g., Aguirre-Gonzalez, 597 F.3d at 54 ("[C]rime victims have no right to directly appeal a defendant‟s criminal sentence, under the CVRA or otherwise."); Grundhoefer, 916 F.2d at 793 (holding that a victim lacks standing to appeal a restitution order); United States v. United Sec. Sav. Bank, 394 F.3d 564, 567 (8th Cir. 2004) (holding that a crime victim lacks Article III standing to appeal under the MVRA); United States v. Mindel, 80 F.3d 394, 398 (9th Cir. 1996) ("[A crime victim] does not have standing under the VWPA to challenge the district court‟s order rescinding restitution payments."); Hunter, 548 F.3d at 1316 ("[N]either our case law nor the CVRA provide[s] for non-parties . . . to bring a post-judgment direct appeal in a criminal case."); United States v. Johnson, 983 F.2d 216, 217 (11th Cir. 1993) (holding that the VWPA "does not afford a victim . . . standing to appeal the rescission of a restitution order"); United States v. Monzel, 641 F.3d 528, 544 (D.C. Cir. 2011) ("[W]e hold that [a non-party appellant] may not directly appeal her restitution award . . . .").
We agree that a non-party lacks standing to appeal a restitution order, because a non-party lacks "a judicially cognizable interest‟" in a criminal defendant‟s sentence, and is thus not aggrieved by the defendant‟s sentence. McLaughlin, 876 F.2d at 313 (quoting Diamond v. Charles, 476 U.S. 54, 71 (1986)). Although a restitution order may resemble a civil judgment in the sense that it compensates a private party, it remains "criminal rather than civil in nature." United States v. Leahy, 438 F.3d 328, 335 (3d Cir. 2006) (en banc). Criminal punishment "is not operated primarily for the benefit of victims, but for the benefit of society as a whole." Kelly v. Robinson, 479 U.S. 36, 52 (1986). Therefore, regardless of the benefit that a restitution order may bestow on a private entity, restitution is largely "for the benefit of the State" rather than for the benefit of a private party.*fn5 Id. at 53 (quotation marks omitted). Moreover, criminal prosecutions "place an individual citizen against the United States government." Hunter, 548 F.3d at 1312. Accordingly, even if a defendant‟s sentence affects other individuals, "[i]t is the defendant and he alone that suffers the direct consequences of a criminal conviction and sentence." Grundhoefer, 916 F.2d at 791.
Sevenson attempts to distinguish its appeal from the long line of precedent holding that a non-party lacks a judicially cognizable interest in a defendant‟s prosecution by arguing that the MVRA implies a right of appeal by non-party payers. Sevenson also asserts that we have recognized exceptions permitting interested non-parties to appeal, and that such an exception should be made here. We reject Sevenson‟s arguments in turn below.
We first disagree that the MVRA‟s statutory scheme contains an implicit right of appeal by non-parties. Citing United States v. Diaz, 245 F.3d 294, 312 (3d Cir. 2001), Sevenson contends that allowing standing here will further the purpose of the MVRA. In Diaz, we recognized that "[t]he purpose of restitution under the MVRA is to compensate the victim for its losses and, to the extent possible, to make the victim whole." Id. (citing United States v. Kress, 944 F.2d 155, 159-60 (3d Cir. 1991)). The MVRA‟s statutory scheme, in Sevenson‟s view, encourages third-parties to compensate victims voluntarily by mandating reimbursement to the payer. See § 3664(j)(1) ("If a victim has received compensation from insurance or any other source with respect to a loss, the court shall order that restitution be paid to the person who provided or is obligated to provide the compensation . . . ."). Because "preclud[ing] a pay[e]r from vindicating her right [to reimbursement] through the appellate process will discourage or even deter would-be pay[e]rs from making victims whole," Sevenson urges us to hold that the MVRA‟s statutory scheme contains an implied right of appeal by non- party payers. (Appellant‟s Resp. in Opp‟n to Mot. to Dismiss at 10.)
Although we appreciate that conferring non-party payers with appellate rights may encourage third-parties to compensate victims voluntarily, we cannot conclude that the MVRA implies a right of appeal by non-parties. First, the MVRA gives no indication that it disturbs the default rule that only the Government and the defendant can appeal a defendant‟s sentence. Instead, as the Government explains, § 3664(o)(1)(B) notes that a restitution order can be "appealed and modified" pursuant to 18 U.S.C. § 3742. Section 3742 permits appeals by the defendant and by the Government, but does not purport to allow appeals by non-parties. Because "[i]t is not the province of a federal court to confer rights where statutory language is silent," Am. Trucking Ass'ns v. Del. River Joint Toll Bridge Comm'n, 458 F.3d 291, 303 (3d Cir. 2006) (citing California v. Sierra Club, 451 U.S. 287, 297 (1981)), the MVRA‟s omission of any language recognizing non-party appellate rights counsels against permitting non-party appeals.
Moreover, we are especially hesitant to find an implied right of appeal by non-party payers under the MVRA, because Congress explicitly granted victims the right to petition the court of appeals for a writ of mandamus under the CVRA, but did not grant non-party payers an analogous means to obtain court of appeals review under the MVRA. See § 3771(d)(3) (permitting victims to petition for a writ of mandamus under the CVRA).*fn6 Congress‟s decision to permit victims to seek mandamus review under the CVRA, but to refrain from including a similar provision for non-party payers under either the MVRA or the CVRA, suggests that Congress did not intend to permit appeals by non-party payers.
Finally, the MVRA‟s statutory scheme indicates that Congress intended for the Government, rather than for payers and victims, to be primarily responsible for ensuring proper restitution payments. For example, the MVRA provides that "[t]he burden of demonstrating the amount of the loss sustained by a victim as a result of the offense shall be on the attorney for the Government," § 3664(e) (emphasis added), and that "[a]n order of restitution may be enforced by the United States in the manner provided for in . . . [18 U.S.C. §§ 3571 et seq. and 3611 et seq.]; or . . . by all other available and reasonable means." § 3664(m)(1)(A)(i)-(ii) (emphasis added). A victim‟s role, by contrast, is limited to conferring with the Government "to the extent practicable" regarding the amounts of restitution, § 3664(d)(1); submitting information to the probation officer regarding his or her losses; § 3664(d)(2)(A)(iii), (vi); petitioning the district court for an amended restitution award if he or she discovers further losses, § 3664(d)(5); moving for an adjustment of the defendant‟s payment schedule if the defendant‟s economic circumstances change, § 3664(k); and obtaining "an abstract of judgment certifying that a judgment has been entered in" his or her favor. § 3664(m)(1)(B). Because the MVRA‟s statutory scheme assigns to the Government the primary responsibility for ensuring proper restitution orders, we cannot infer from the MVRA that Congress intended to permit non-party payers to appeal purportedly improper restitution orders. See Transamerica Mortg. Advisors, Inc. v. Lewis, 444 U.S. 11, 19 (1979) ("[W]here a statute expressly provides a particular remedy or remedies, a court must be chary of reading others into it.").
We acknowledge, as Sevenson emphasizes, that the Sixth Circuit held in United States v. Perry, 360 F.3d 519, 524 (6th Cir. 2004), that a victim has standing under the MVRA to appeal a district court‟s order vacating a lien that the victim obtained under § 3664(m)(1)(B) against a criminal defendant‟s property to collect court-ordered restitution. We disagree, however, that Perry demonstrates that a non-party payer can appeal a criminal defendant‟s sentence. In Perry, the Sixth Circuit reasoned that the MVRA permits a victim to obtain a lien to ensure that the defendant satisfies his or her restitution obligation. Id. A lien under the MVRA is "a lien on the property of the defendant located in such State in the same manner and to the same extent and under the same conditions as a judgment of a court of general jurisdiction in that State." Id. at 525 (quoting § 3664(m)(1)(B)). In the state where defendant Perry‟s property was located, a lien gave rise to a property interest for the victim. Id. Because the lien created a property interest, the victim was entitled to due process before the district court vacated the lien. Id. at 525- 26. Out of concern that declining to hear the appeal would result in a deprivation of the victim‟s property without due process, the Sixth Circuit determined that the victim had standing under the MVRA. Id. at 526.
Sevenson, by contrast, cannot present the due process issue that the Sixth Circuit confronted in Perry, because it does not have a cognizable property interest created by state law. We therefore do not face the constitutional concern that encouraged the Sixth Circuit to find that a victim has standing to appeal a district court‟s order vacating a lien entered pursuant to § 3664(m)(1)(B). Moreover, as the Government emphasizes, the victim in Perry did not request that Perry‟s final sentence be reopened. We, by contrast, cannot review the District Court‟s restitution order without reopening Stoerr‟s sentence. Perry thus does not persuade us that the MVRA affords standing to appeal to non-parties.*fn7
Next, Sevenson contends that the Supreme Court and our Court have recognized exceptions to the rule against non- party appeals where the non-party has a pecuniary interest in the dispute. See, e.g., Devlin v. Scardelletti, 536 U.S. 1, 14 (2002) ("We hold that nonnamed class members . . . who have objected in a timely manner to approval of the settlement . . . have the power to bring an appeal without first intervening."); Caplan, 68 F.3d at 836 (holding in the civil context that a non-party with "a stake in the outcome of the district court proceedings" may sometimes appeal) (citing Binker v. Pennsylvania, 977 F.2d 738, 745 (3d Cir. 1992)). Because, in Sevenson‟s view, it has an interest in restitution under § 3664(j)(1), it asserts that it can appeal the District Court‟s restitution order as an interested non-party.
As an initial matter, as Sevenson acknowledges, courts have allowed interested non-parties to appeal in primarily civil, rather than criminal, matters. See, e.g., Devlin, 536 U.S. at 14 (permitting unnamed class members to appeal); Caplan, 68 F.3d at 836 (holding in the civil context that certain non- parties have a right to appeal); Northview Motors, Inc. v. Chrysler Motors Corp., 186 F.3d 346, 349 (3d Cir. 1999) (holding in the civil context that a non-party with "a stake in the outcome of the proceedings that is discernible from the record" can sometimes appeal) (citing Caplan, 68 F.3d at 836). Sevenson cites to no precedent in which the Supreme See Bruesewitz v. Wyeth LLC, 131 S. Ct. 1068, 1081 (2011) ("Post-enactment legislative history . . . is not a legitimate tool of statutory interpretation.") (citations omitted).
Court or our Court has allowed an exception to the rule against non-party appeals in the context of a final criminal judgment.*fn8
Assuming that the exceptions permitting certain interested non-parties to appeal apply in the criminal context, none of our recognized exceptions permits Sevenson‟s appeal. Our primary exception, known as the Binker exception, permits non-party appeals when "(1) the nonparty has a stake in the outcome of the proceedings that is discernible from the record; (2) the nonparty has participated in the proceedings before the district court; and (3) the equities favor the appeal." Northview Motors, Inc., 186 F.3d at 349 (citing Caplan, 68 F.3d at 836). As we explained in Section II(A) supra, a non-party does not have a judicially cognizable stake in a criminal defendant‟s sentence. Sevenson therefore cannot satisfy the first prong of the Binker exception, and thus cannot establish entitlement to appeal as an interested non-party.
Because Sevenson does not have standing to appeal Stoerr‟s sentence, we will grant the Government‟s motion to dismiss.*fn9