United States v. Grant, No. 12-4037

Decided:  May 9, 2013

The Fourth Circuit vacated the decision of the United States District Court for the Eastern District of Virginia, finding that the court abused its discretion by ordering Nicole Grant to adhere to a special condition on her probationary restitution payments without first determining the effects of the condition on Grant’s financial circumstances.

In 2009, Grant pled guilty to a count of theft of government property in excess of $1,000 in the Northern District of Florida.  Grant had received Supplementary Security Income (“SSI”) from the Social Security Administration (“SSA”) after her eligibility for SSI had ended.  On October 28, 2009, the district court sentenced Grant to a probationary sentence.  The court required that, inter alia, Grant pay $42,152 in restitution to the SSA in monthly installments and provide the probation office with requested financial data.  In January 2010, the district court transferred jurisdiction of the case to the Eastern District of Virginia.  In 2010 and 2011, Grant received tax refunds totaling around $2,900 and $3,300, respectively.  In November 2011, Grant’s new probation officer asked the district court to apply a special condition to Grant’s probation, under which Grant would have to “apply monies received from income tax refunds . . . to the outstanding court ordered financial obligations.”  In a subsequent hearing before the Eastern District of Virginia, Grant argued that the special condition would be improper, as her financial conditions had not improved materially.  The government characterized the tax refunds as windfall benefits that created a material change in Grant’s financial circumstances.  The government also noted that, if the court later determined that Grant could not afford her restitution obligations, it could adjust her payment amounts.  Without deciding whether a material change in Grant’s financial circumstances had occurred, the district court ruled in favor of the government, and Grant appealed.

The Fourth Circuit discussed the history of criminal restitution and relevant probationary conditions, noting that under the Mandatory Victims Restitution Act of 1996 (MVRA), criminal defendants convicted of certain offenses—including offenses against property—must be ordered to pay restitution under 18 U.S.C. § 3664.  Under § 3664(f)(2), the court must take the defendant’s financial circumstances into account when determining the manner and schedule of restitutionary payments.  Furthermore, under § 2664(k), the restitution order must require the defendant to “notify the court and the Attorney General of any material change in the defendant’s economic circumstance that might affect the defendant’s ability to pay restitution.”  The Court may then proceed to adjust the payment schedule under certain circumstances.  In this case, the Fourth Circuit noted that the district court ordered Grant to adhere to a special condition without determining the effect it would have on her financial circumstances.  The Fourth Circuit rejected the government’s characterization of tax refunds as windfall benefits, noting that “[m]illions of Americans living paycheck to paycheck rely on tax refunds every year to catch up on their bills and pay for or save for other one-time expenses.”  The Fourth Circuit also dismissed the government’s argument that the court could simply change the amount of restitutionary payments in the future if it found them inappropriate, noting that this “has no bearing on whether the challenged order was authorized in the first place.”

Full Opinion

– Stephen Sutherland

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