Liu v. United States
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| Liu v. United States | |
|---|---|
| Case name | Liu v. United States |
| Citation | 140 S. Ct. 1933 (2020) |
| Decided | July 9, 2020 |
| Docket | 18-1513 |
| Holding | Clarified restitution limits under 18 U.S.C. §3663A and §3664 |
| Majority | Kagan |
| Joinmajority | Roberts, Thomas, Ginsburg, Breyer, Alito, Sotomayor, Kavanaugh |
| Dissent | Gorsuch |
Liu v. United States
Liu v. United States resolved whether criminal restitution under statutes codified at 18 U.S.C. §3663A and §3664 may include disgorgement-style remedies measured by the defendant's gain rather than victims' actual losses. The Supreme Court's decision, issued by Justice Kagan and joined by a majority, interpreted federal restitution norms and engaged precedents from cases such as Kastigar v. United States, United States v. Booker, Caperton v. A.T. Massey Coal Co..
Background
The case arose against a backdrop of federal restitution jurisprudence that involved statutes like the Mandatory Victims Restitution Act of 1996 and doctrines from decisions including Paroline v. United States and Robinette v. United States. Petitioners and respondents invoked authorities such as 18 U.S.C. §3663A, 18 U.S.C. §3664, and arguments tied to remedies considered in Gonzalez v. Crosby and restitution principles discussed in Hudson v. United States. The litigation engaged circuits including the United States Court of Appeals for the Ninth Circuit and practice influenced by opinions from judges associated with the D.C. Circuit, Second Circuit, and Eleventh Circuit.
Facts of the Case
Petitioner, convicted in the United States District Court for the District of Oregon, was found to have made material misrepresentations in connection with investments tied to ventures associated with entities and individuals who appear in filings involving Securities and Exchange Commission investigations and enforcement actions. The government sought restitution calculated as the defendant's net gains from the fraudulent scheme, citing precedents from United States v. Wells and regulatory contexts involving the Securities Act of 1933 and the Investment Advisers Act of 1940. Victims, identified in affidavits and civil filings, claimed actual losses potentially traceable through transactions recorded in filings submitted to the Internal Revenue Service and state regulators in Oregon.
Legal Questions Presented
The Supreme Court defined the principal questions as whether district courts may order restitution that represents a defendant's unjust enrichment measured by gain rather than victims' loss under statutes such as 18 U.S.C. §3663A and 18 U.S.C. §3664. Subsidiary questions implicated statutory interpretation methods drawn from decisions like Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. and Skidmore v. Swift & Co., as well as constitutional considerations informed by Ex parte Milligan and remedial frameworks referenced in Marrero v. United States.
Decision and Opinion
In a majority opinion authored by Justice Elena Kagan, the Court held that the statutory text and structure of restitution provisions do not permit a disgorgement remedy measured solely by a defendant's net gain when the statute limits restitution to "the victim's loss." The opinion distinguished precedents such as Salinger v. Random House, Inc. and relied on statutory construction principles reflected in Muscarello v. United States. Justice Neil Gorsuch dissented, arguing for a broader remedial reading consistent with equitable restitution doctrines articulated in cases like Mertens v. Hewitt Associates.
Reasoning and Precedent
The majority reasoned from statutory language and legislative history, comparing the restitution scheme to equitable remedies in decisions from the Court including S.E.C. v. Jarkesy and civil-forfeiture pronouncements such as One 1958 Plymouth Sedan v. Pennsylvania. The opinion canvassed circuit splits involving the Ninth Circuit, Second Circuit, and Seventh Circuit, addressing their reliance on precedents like Paroline v. United States and distinguishing remedial regimes in Brown v. Legal Foundation of Washington. The Court explained that Congress's text in 18 U.S.C. §3663A ties restitution to victims' losses, not a disgorgement metric, and invoked interpretive tools from King v. Burwell to resolve ambiguities.
Impact and Subsequent Developments
The decision constrained district courts' authority to order restitution measured by defendant gain, prompting effects in criminal sentencing practice across districts such as District of Massachusetts, Southern District of New York, and Northern District of California. Post-decision litigation has produced guidance in circuit opinions from the Ninth Circuit and Fourth Circuit applying the ruling to restitution calculations in cases involving fraud prosecuted by the Department of Justice and enforcement actions by the Securities and Exchange Commission. Law reform discussions in bodies like the American Bar Association and scholarship in journals including the Yale Law Journal and Harvard Law Review debated implications for victims' remedies and legislative responses in Congress, including proposed amendments to restitution statutes considered by committees such as the House Judiciary Committee.