Massachusetts Judges Must Now Consider “Ability to Pay” When Imposing Restitution

The Massachusetts Supreme Judicial Court’s recent decision in Commonwealth v. Henry imposed clearer defendant-friendly safeguards on judges when imposing restitution in a criminal matter.  Additionally, the SJC also held that, in cases of theft from retail stores, the amount of actual restitution is the “replacement value” of the stolen goods; unless the government proves by a preponderance of the evidence that the stolen goods would have been sold, in which case the “retail sales value” should be the amount of restitution.

It had been the longstanding practice to impose restitution in cases regardless of whether or not the defendant was employed or had any ability to pay it.  Oftentimes, the defendant, by that time placed on probation, would be brought back before a judge on a probation violation hearing because he wasn’t able to pay per the court order.  Way too often, the defendant had either his probation extended so he could somehow find satisfy the restitution amount; or he was ultimately sent to jail.

Moving forward, a judge must take into account a defendant’s ability to pay the restitution amount; and may not impose a longer period of probation or extend the probation because of the person’s inability or limited ability to pay that restitution.The defendant in this case was a cashier at a Walmart store in Salem, Massachusetts. The store’s surveillance video caught the defendant “free-bagging” items – in other words, for some customers, the cashier wouldn’t scan the items and would simply place them in the bag, permitting the customer to leave the store without paying for them. The defendant was ultimately charged with Larceny Over $250 in Salem District Court, and she ultimately admitted sufficient facts for a finding of guilty (CWOF).  She was placed on probation for 18 months and ultimately stipulated to pay restitution to Walmart in the amount of $5,256.10.

Thereafter, the defendant filed a motion to revise and revoke the order of restitution, and a new restitution hearing was held. At that hearing, the judge heard evidence from Walmart’s loss protection manager, who testified he calculated the retail sales price of the items stolen at $5,256.10. He further testified that that figure included a markup of those items that were sold in the store, which he estimated between 7%-15%, and some rare cases, as much as 50%.

At that same hearing, the defendant testified that she had since lost her job at Walmart, where she had been employed for 12 years. Following her termination, she received unemployment benefits for 3 months, but was then determined to be ineligible for further benefits.  She had also been evicted from her apartment and was staying with a friend.

The prosecutor argued that the restitution amount should be based on the retail value of the items stolen because the theft occurred at the point of sale. Walmart, they argued, were thus deprived of the value of the goods that the customer would have paid. The prosecutor further argued that, despite the defendant’s circumstances and inability to pay, she should still be held liable for the full restitution amount because the defendant, by her actions, created her inability to pay in that she was fired for stealing.

Conversely, the defendant argued that the actual loss to Walmart is the replacement value of the stolen goods, not their retail price, because Walmart shouldn’t be entitled to recover restitution for lost profits. She further argued she shouldn’t be ordered to pay restitution because, financially, she was unable to pay; and would inevitably be found in violation of her probation because of that.

Ultimately, the judge declared that the loss of restitution would be based on the retail loss and ordered the defendant to pay $5,256 during the probationary period. The defendant appealed this ruling and the matter made its way to the SJC.

The Massachusetts Supreme Judicial Court noted that, when deciding whether to order restitution and what amount, judges should consider whether the person is financially able to pay and how such payment is to be made. In practice, the SJC explained this means that the judge must (1) determine the amount of the victim’s actual economic loss causally connected to the defendant’s crime; and (2) determine the amount the defendant is able to pay.  If a defendant claims he is unable to pay the full amount of restitution, it is the defendant’s burden to prove his inability to pay.

The SJC explained that it must require judges to consider the defendant’s ability to pay restitution because judges may order restitution in a criminal case only as a condition of probation; and the collection of restitution is enforced by the threat or imposition of a criminal sanction for violation of a probation condition. It would be unjust to permit a judge to impose a restitution amount upon a person who has not financially ability to satisfy it, as it essentially dooms the person into noncompliance and inevitable further criminal sanctions. Doing so would be a waste of the court’s time and impose additionally unnecessary expenses upon the court’s and administrative process.

More importantly, burdening a defendant with the risk of criminal sanctions for the sole reason of his inability to pay violates the principle that a criminal defendant should not face additional punishment solely because of his or her poverty.  Even an extension of the probationary term is hopelessly unfair because it extends the restrictions on a defendant’s liberty when placed on probation; may result in additional criminal penalty or incarceration if the person, while on probation, commits a new crime during the extended period.

Massachusetts’ highest court ultimately provided a fair and equitable balance between the satisfaction of retail loss to victims of theft while also considering unjust inequities against defendants who simply have no financial means.

Boston Criminal Lawyer Lefteris K. Travayiakis.

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