United States 11th Circuit Court of Appeals Reports
U.S. v. BARNETTE, 10 F.3d 1553 (11th Cir. 1994) UNITED
STATES OF AMERICA, PLAINTIFF-APPELLANT, v. LARRY D.
BARNETTE, DEFENDANT-APPELLEE. No. 91-3206. United States
Court of Appeals, Eleventh Circuit. January 7, 1994.
Douglas Letter, Appellate Staff, Civ. Div., Dept. of
Justice, Washington, DC, for plaintiff-appellant.
Christine A. Clark, Charles W. Arnold, Jr., Jacksonville,
FL, for defendant-appellee. Page 1554
Appeal from the United States District Court for the
Middle District of Florida.
Before TJOFLAT, Chief Judge, CARNES, Circuit Judge, and
CLARK, Senior Circuit Judge.
CARNES, Circuit Judge:
[1] In this civil action the Government seeks damages from
Appellee Larry D. Barnette, who has previously been
convicted and sentenced for defrauding the Government. The
district court granted summary judgment for Barnette based
on its holding that the Government is barred from
recovering damages in excess of the amount of restitution
Barnette was ordered to pay in the criminal proceeding. We
now reverse the district court’s decision and remand for
further proceedings, including a determination of the total
loss that Barnette’s crimes caused the Government, so that
the doctrine of United States v. Halper, 490 U.S. 435, 109
S.Ct. 1892, 104 L.Ed.2d 487 (1989), may be applied properly.
[2] I. BACKGROUND
[3] Between 1977 and 1981, Barnette and his associates
defrauded the United States of millions of dollars through
a complex conspiracy involving, among other things, a
government contract for laundry services for the United
States Army in Germany. The details of Barnette’s many
crimes are recounted in United States v. Barnette, 800 F.2d
1558, 1560-66 (11th Cir. 1986) (“Barnette I”), cert.
denied, 480 U.S. 935, 107 S.Ct. 1578, 94 L.Ed.2d 769
(1987). In 1984, a jury convicted Barnette on 17 counts,
including racketeering, mail fraud, bribery, false
statements, income tax evasion, and misapplication of
government funds. The jury convicted several
co-conspirators as well. Id. at 1560.
[4] At sentencing, the United States sought an order
requiring Barnette to pay restitution of $15 million, the
Government’s estimate of Barnette’s excess profit. Barnette
disputed the Government’s estimate, contending that his
illegal profit was at most $6.8 million. Without resolving
the parties’ dispute, the district court ordered Barnette
to pay $7 million in restitution. The district court also
sentenced Barnette to five years in prison and another five
years on probation.
[5] On direct appeal, we affirmed Barnette’s convictions
and, with one minor exception, the sentencing judge’s
restitution order. Barnette I, 800 F.2d at 1572. In doing
so, we stated that “the evidence introduced at trial
established that the conspiracy netted approximately
fifteen million dollars in excess profits from the German
laundry contract alone.” Id. at 1571-72.
[6] After Barnette’s criminal conviction, the Government
filed this civil action against Barnette and his
co-conspirators, asserting claims under the Racketeer
Influenced and Corrupt Organizations Act (RICO), 18
U.S.C.A. § 1964 (1984 & Supp. 1993), the False
Claims Act, 31 U.S.C.A. § 3729 (1983 & Supp. 1993),
and various common law theories. The Government’s present
claims arise from the same conduct for which Barnette was
convicted. The Government alleges that Barnette’s illegal
actions caused the United States to suffer at least
$15,750,153 in direct loss. At oral argument, the
Government also asserted that it has incurred substantial
investigation and prosecution costs as a result of
Barnette’s fraud. The Government now seeks between $18.1
million and $50.5 million from Barnette, depending upon the
theory of recovery. (The Government’s theories of recovery
and prayers for relief are set out in the Appendix to this
opinion.) At oral argument, the Government conceded that
Barnette may offset the $7 million in restitution that he
already paid as part of his criminal sentence against any
new civil judgment.
[7] The district court granted Barnette’s motion for
summary judgment against the Government. The court, through
a judge different from the one who had sentenced Barnette,
decided that the sentencing judge’s restitution order
constituted a finding of fact that the Government had lost
only $7 million. The court reasoned that this sentencing
finding estopped the Government from relitigating the
amount of its damages. Citing United States v. Halper, 490
U.S. 435, 109 S.Ct. 1892, 104 L.Ed.2d 487 (1989), the
district court concluded that, because Barnette had already
been tried and sentenced, awarding Page 1555 the
Government treble damages in this case would subject him to
a second punishment in violation of the Double Jeopardy
Clause.
[8] Although numerous counts remain against other
defendants, the district court certified its summary
judgment order for immediate interlocutory review pursuant
to 28 U.S.C.A. § 1292(b) (1993), and we permitted
the appeal. Because we conclude that the sentencing judge
never determined the extent of the Government’s loss, we
now reverse the order granting summary judgment and remand
for findings on the amount of the Government’s loss and for
reconsideration of Barnette’s summary judgment motion in
light of those findings and this opinion.
[9] II. DISCUSSION
[10] The Government contends on appeal that the district
court erred in holding that the Double Jeopardy Clause[fn1]
and the doctrine of collateral estoppel bar recovery under
this civil suit. We exercise plenary review over the
district court’s legal conclusions and review that court’s
findings of fact for clear error. E.g., Richardson v.
Alabama State Bd. of Educ., 935 F.2d 1240, 1244 (11th Cir.
1991); Balbirer v. Austin, 790 F.2d 1524, 1526 (11th Cir.
1986).
[11] A. DOUBLE JEOPARDY
[12] The district court held that recovery in this civil
suit would violate Barnette’s double jeopardy rights. The
court reasoned that, because the Government has already
received full compensation from Barnette’s restitution
sentence, the present case was “nothing more than a further
attempt to `prosecute’ the defendant civilly.” We now
consider whether the Government’s effort to obtain further
compensation in this case is such an attempt.
[13] 1. Sentencing Judge’s Restitution Order
[14] The district court concluded that the sentencing
judge’s $7 million restitution order constituted a “prior
judicial determination” of the amount of the Government’s
loss. This conclusion underpins the remainder of the
district court’s summary judgment order, so we address it
as a threshold issue.
[15] The parties dispute whether we should treat the
district court’s interpretation of the sentencing judge’s
order as a finding of fact or a mixed finding of law and
fact. We need not resolve this dispute. After reviewing
this case, “we are left with a definite and firm conviction
that a mistake has been committed.” United States v. Roy,
869 F.2d 1427, 1429 (11th Cir.), cert. denied, 493 U.S.
818, 110 S.Ct. 72, 107 L.Ed.2d 38 (1989). Because the
district court’s conclusions are clearly erroneous, we must
reverse even if the more deferential standard of review is
applicable.
[16] The sentencing judge carefully avoided making factual
findings as to the total amount of the Government’s loss.
As initially drafted, Barnette’s presentence report stated
that the defendants’ criminal activities earned them
“`approximately $15,000,000 in excess profits to which they
were not entitled.'” Barnette objected to the original
report’s assessment of the evidence and asked the judge to
leave the amount of the Government’s loss undecided
“[r]ather than conduct[ing] an extensive hearing on this
point.” The judge agreed. During the sentencing hearing,
she ordered the probation department to revise the
presentence report to set forth both the Government’s and
Barnette’s position on this issue, and to state
specifically that neither she nor the probation department
would resolve the dispute. As revised according to the
sentencing judge’s express instructions, the final
presentence report reads, in pertinent part:
The Government maintains that the evidence shows that
defendants made false and fraudulent statements relating
to costs that allowed $15,000,000 in excess profits.
Defendants maintain that the evidence shows that the
German laundry contract was a fixed price contract and
that defendants were not limited to a specific profit
amount of 10%. The defendants maintain that a profit of
$6,851,134.00 over and Page 1556 above the 10% profit
figure was made in fiscal years 1979, 1980 and 1981. The
Court and Probation Office make no specific finding as to
an amount of `excess profits’ that may or may not have
been made under the German laundry contract. [emphasis
added]
[17] In the face of these events, Barnette argues that the
sentencing judge determined the magnitude of the
Government’s loss later in the sentencing hearing.
According to Barnette, when the sentencing judge decided
“that the proper amount of restitution was $7 million, she
implicitly rejected the government’s calculation of loss.”
Barnette argues that his view of the judge’s restitution
order can be inferred from that order and is also supported
by a statutory presumption.
[18] We first reject Barnette’s inference argument.
Although Barnette offers one possible explanation of the
sentencing judge’s ruling, it is neither the only nor the
most persuasive interpretation. An order of restitution is
not a judicial determination of damages. Damages measure
the amount of compensable loss a victim has suffered.
Restitution, by contrast, is an equitable remedy, “subject
to the general equitable principle that [it] is granted to
the extent and only to the extent that justice between the
parties requires . . . .” Restatement of Restitution ch. 8,
topic 2, introductory note, at 596 (1936); accord Williams
v. Washington Metro. Area Transit Comm’n, 415 F.2d 922, 944
(D.C. Cir. 1968) (“[R]estitution is not a matter of right,
but is `ex gratia, resting in the exercise of a sound
discretion’ . . . .”) (quoting Atlantic Coast Line R.R. v.
Florida, 295 U.S. 301, 310, 55 S.Ct. 713, 717, 79 L.Ed.
1451 (1935)), cert. denied, 393 U.S. 1081, 89 S.Ct. 860,
21 L.Ed.2d 773 (1969); cf. Frederick County Fruit Growers
Assoc. v. Martin, 968 F.2d 1265, 1274 (D.C. Cir. 1992)
(holding that “less than full restitution is appropriate in
certain circumstances”); Thompson v. Washington, 551 F.2d
1316, 1319 (D.C. Cir. 1977) (“[T]he general principles
governing the shaping and review of equitable decrees are
fully applicable to awards of restitution.”). For example,
the Victim and Witness Protection Act of 1982, Pub.L. No.
97-291, 96 Stat. 1253, 1255 (now codified at 18 U.S.C.A.
§§ 3663-3664 (1985 & Supp. 1993)) (“VWPA”),
specifically directs a sentencing judge to consider not only
the victim’s injury, but also “the financial resources of
the defendant, the financial needs and earning ability of
the defendant and the defendant’s dependents, and such
other factors as the court deems appropriate.” 18 U.S.C.A.
§ 3664(a) (1985 & Supp. 1993).
[19] Barnette’s attempt to equate the sentencing judge’s
restitution order with a determination of damages is
therefore unpersuasive. More likely, the sentencing judge
decided that the Government had lost at least $7 million
and that Barnette could pay that amount, but left final
resolution of the Government’s damages claim to the ensuing
civil case. This interpretation of the judge’s decision
comports with her disavowal that same morning of a
determination of the Government’s total loss. Barnette’s
approach, by contrast, would require us to read the
sentencing judge’s silence at one moment as an intention to
do implicitly that which she had expressly disavowed any
intention of doing just a few minutes earlier.
[20] If the parties and the sentencing court had been under
the impression that the Government’s only chance of
recovering its losses from Barnette was through the
restitution order, there might be some reason to infer that
the court had set restitution at the total amount of the
loss. The facts, however, are just the opposite. The
transcript of the sentencing hearing indicates that the
sentencing judge knew that the Government had brought civil
claims against Barnette. In fact, in his sentencing
memorandum, Barnette argued against restitution on the
ground that the Government was seeking to recover damages
in civil actions.
[21] Our reading of the sentencing court’s actions is also
more compatible than Barnette’s with this Court’s statement
in the criminal appeal that “the evidence introduced at
trial established that the conspiracy netted approximately
fifteen million dollars in excess profits.” Barnette I,
800 F.2d at 1571-72. Because an appellate court does not
find facts, see, e.g., Icicle Seafoods, Inc. v.
Worthington, 475 U.S. 709, 714, 106 S.Ct. 1527, 1530, 89
L.Ed.2d 739 (1986), this Court’s Page 1557 previous
statement must be read as upholding the $7 million
restitution order on the ground that the evidence would
have supported at least $15 million in restitution. Nowhere
in that opinion did we intimate that the sentencing judge
had found the loss to be only $7 million, and the opinion’s
assessment of the evidence is inconsistent with such a
proposition.
[22] Barnette also proffers a statutory argument for his
contention that the sentencing judge determined the
Government’s total loss to be only $7 million. As Barnette
notes, the VWPA requires a judge who orders partial
restitution under the Act to explain on the record her
reasons for not providing full restitution. 18 U.S.C.A.
§ 3663(a)(2) (1985), repealed by Pub.L. 99-646,
§ 8(b) (1986), recodified at 18 U.S.C.A. §
3553(c) (Supp. 1993); see also United States v. Hairston,
888 F.2d 1349, 1352 (11th Cir. 1989) (“The VWPA does not
explicitly require the court to assign reasons for its
determination unless the court does not order restitution
or orders only partial restitution.”). Barnette asserts
that the sentencing judge in his case did not offer such an
explanation and therefore must have intended to award full
restitution. Any other reading, he suggests, would require
us to find that the sentencing judge violated her statutory
duties.
[23] Barnette’s VWPA argument in unpersuasive. First, the
VWPA does not clearly control this case. The sentencing
judge imposed five concurrent $7 million restitution
orders, of which we upheld four on direct appeal. See
Barnette I, 800 F.2d at 1570-71. Three of those four
restitution orders were for crimes that occurred before the
effective date of the VWPA, and were therefore not governed
by its provisions. As we have already implicitly held, see
id. at 1570, those three restitution orders were each made
pursuant to 18 U.S.C.A. § 3651 (1985 & Supp. 1993),
repealed by Pub.L. 98-473, Title II, § 235(a)(1), 98
Stat. 2031 (Oct. 12 1984) (effective Nov. 1, 1987). Section
3651 did not require a judge to explain a less-than-full
restitution order. Therefore, Barnette’s statutory argument
is inapposite with respect to three of the four concurrent
restitution orders.
[24] Although the remaining restitution order was subject to
the VWPA, that might not have been apparent prior to our
holding on appeal. See Barnette, 800 F.2d at 1571. At
sentencing, the Government mistakenly stated that
Barnette’s crimes had been completed before the VWPA took
effect. More specifically, counsel for the Government told
the sentencing judge: “Congress recently passed a new law
dealing with restitution . . . . That, of course, deals
with the crimes that have occurred after the one that we
have here. But I think it’s instructive to note that
Congress thinks that is an important part of the sentencing
process in principle anyway.” Neither the court nor
Barnette contested the Government’s assertion that the VWPA
did not apply to the case. Indeed, it appears that Barnette
based his direct appeal in part on his contention that the
VWPA did not apply to the case. See 800 F.2d at 1571
(rejecting part of Barnette’s appeal on the ground that the
VWPA did apply). In light of this uncertainty at the time
of sentencing, the sentencing judge may well have been
unaware, just as the Government and Barnette were unaware,
that the VWPA was applicable to any part of the case. If
so, she would have felt no obligation under the VWPA to
explain an award of less-than-full restitution.
[25] The sentencing judge’s own statements provide
particularly strong evidence that she was unaware of any
VWPA obligation. Shortly before ordering restitution, the
judge expressly refused to determine the total amount of
the Government’s loss. We know that, had she been aware
that the VWPA applied to any of the restitution counts, and
of the resulting duty to explain less-than-full
restitution, she would not have disavowed any intent to
calculate the figure required for full restitution.
[26] In any event, we are not at a loss to explain how the
sentencing judge arrived at the $7 million figure at which
she set restitution. The judge stated at sentencing: “The
jury’s verdict would support a finding that the proceeds
from the crime were placed in the Old Dominion Corporation.
Even the Defendant states that Old Dominion’s worth is
approximately six million five hundred Page 1558 thousand
dollars.” Because Barnette owned a majority stake in Old
Dominion, the judge’s words suggest that she was estimating
Barnette’s financial resources. Indeed, when the judge’s
estimate of Old Dominion’s value is factored into the
presentence report’s assessment of Barnette’s known assets
and liabilities, we discover that Barnette had a known net
worth of between $7 and $8 million § approximately
the amount of the restitution order. It is therefore
reasonable to interpret the sentencing judge’s comments as
explaining that she was ordering $7 million in restitution
because that was an amount that Barnette could pay.[fn2]
[27] The district court clearly erred in determining that
the sentencing judge had made a factual finding that the
Government’s loss from Barnette’s crimes was only $7
million. The sentencing judge expressly disavowed such a
finding, and neither the district court nor Barnette have
offered any reason for us to doubt the sincerity of her
disavowed. The record is wholly consistent with the
expressed intention of the sentencing judge not to resolve
the damages dispute.
[28] 2. Barnette’s Double Jeopardy Claim
[29] Barnette claims, and the district court held, that any
civil penalties that the Government might win from Barnette
in excess of the criminal restitution order would violate
the Double Jeopardy Clause of the Fifth Amendment. We
disagree.
[30] Although civil actions for damages are by no means an
unusual follow-up to criminal proceedings — and are
expressly contemplated by the VWPA, see 18 U.S.C.A.
§ 3663(e)(2) (1985) (providing for offsets in civil
actions of the amounts of restitution paid in criminal
proceedings) — the Supreme Court has declared that
there is a point beyond which civil penalties may become so
punitive in nature as to violate the constitutional ban on
subsequent punishments. The controlling law on this issue
is found in United States v. Halper, 490 U.S. 435, 448-50,
109 S.Ct. 1892, 1902, 104 L.Ed.2d 487 (1989). Under Halper,
the question we must decide is whether the civil penalty
sought by the Government from Barnette is so grossly
disproportionate to the amount of loss suffered as to
constitute deterrence or retribution instead of
compensation. Id.
[31] We are not now in a position to decide that question.
As discussed in Part II.A.1, above, Barnette’s sentencing
judge never determined the total amount of the Government’s
loss, although she must have believed it to be at least $7
million. On direct appeal, we observed that the evidence
presented at trial — which did not include evidence
regarding the Government’s investigation and prosecution
costs — would have supported a finding that the loss
was as high as $15 million. However, we did not then, and
do not now, specifically determine the Government’s direct
loss or its total loss, which would include investigation
and prosecution costs. It is not an appellate court’s role
to find facts. E.g., Icicle Seafoods, Inc. v. Worthington,
475 U.S. 709, 714, 106 S.Ct. 1527, 1530, 89 L.Ed.2d 739
(1986). That is a function of the district courts.
Therefore, to the extent that the Government’s complaint is
not foreclosed on its face, we must remand for further fact
finding. Of course, if Halper forecloses the Government
from recovering the civil penalties it now seeks even if it
did lose as much as it claims, then there is no point in
remanding for what would be an irrelevant factual
determination. The Government seeks between $18,570,153 and
$50,525,279 (in direct loss damages, treble damages, and
statutory penalties), plus costs. See Appendix. While we do
not know the amount of the Government’s investigation and
prosecution costs, we can determine whether a total
recovery of $50.5 million would violate the Double Jeopardy
Clause, assuming the Government suffered at least
$15,750,153 in direct damages, as it claims. Page 1559
[32] In United States v. Halper, a unanimous Supreme Court
held that the Double Jeopardy Clause protects a defendant
who has already been punished in a criminal prosecution
from an additional civil sanction that is deterrent or
retributive rather than remedial. 490 U.S. at 448-49, 109
S.Ct. at 1902. The defendant in Halper had submitted $585
in false Medicare claims, for which he already had been
sentenced. 490 U.S. at 437, 109 S.Ct. at 1896. The
Government then filed a civil case seeking an additional
civil fine of $130,000 under the False Claims Act. 490 U.S.
at 438, 109 S.Ct. at 1896. According to the trial court,
the Government’s total injury — including detection
and investigation costs — totaled about $16,000. 490
U.S. at 439, 109 S.Ct. at 1897. The ratio between the total
recovery sought and the Government’s direct loss through
the defendant’s fraud was thus about 222 to 1. The ratio
between the total recovery sought and the Government’s
total loss, including detection and investigation costs,
was just over 8 to 1.
[33] Faced with a “stark situation” in which the civil fine
would have been “exponentially greater than the amount of
the fraud” and “many times the amount of the Government’s
total loss,” the Supreme Court balked. 490 U.S. at 445, 109
S.Ct. at 1900. On these facts, the Court held, the
“supposedly remedial sanction . . . [did] not remotely
approximate the Government’s damages and actual costs,” and
“rough justice [had become] clear injustice.” 490 U.S. at
446, 109 S.Ct. at 1901. Since Halper had already been tried
and sentenced for the same activities, the Court ruled that
a $130,000 fine would violate the constitutional prohibition
on subsequent punishments. 490 U.S. at 448-49, 109 S.Ct. at
1902. More generally, the Supreme Court held that “if a
civil penalty sought in [a] subsequent proceeding bears no
rational relation to the goal of compensating the
Government for its loss,” but is instead punitive, “then
the defendant is entitled to an accounting of the
Government’s damages and costs to determine . . . the size
of the civil sanction the Government may receive without
crossing the line between remedy and punishment.” 490 U.S.
at 449-50, 109 S.Ct. at 1902; see also United States v.
Mayers, 897 F.2d 1126, 1127 (11th Cir.), cert. denied, 498
U.S. 865, 111 S.Ct. 178, 112 L.Ed.2d 142 (1990) (holding
that the Double Jeopardy Clause may be triggered when a
“civil penalty . . . rose to the level of criminal
punishment because of the lack of rational relation to the
Government’s loss”).
[34] Nevertheless, the Halper Court carefully limited its
holding, which it called “a rule for the rare case.” 490
U.S. at 449, 109 S.Ct. at 1902. The Court emphatically
denied any intention to limit the Government to the
recovery of direct damages, exclusive of ancillary costs.
On the contrary, the Court explicitly “recognized that in
the ordinary case fixed-penalty-plus-double-damages
provisions can be said to do no more than make the
Government whole.” Id. It considered such formulas a
necessary aspect of “rough justice.” Id. Echoing this point
in concurrence, Justice Kennedy noted that “[o]ur rule
permits the imposition in the ordinary case of at least a
fixed penalty roughly proportionate to the damage caused or
a reasonably liquidated amount, plus double damages.” 490
U.S. at 452-53, 109 S.Ct. at 1904 (emphasis added).
[35] Despite the undeniably large sums at stake, the present
case is “ordinary” as that term was used in Halper. Here,
unlike in Halper, the civil penalty is not exponentially
exaggerated by a fixed penalty disproportionate to the
defendant’s actual fraud. Assuming that the Government can
prove that it has lost as much as it claims, even an award
of $50.5 million in restitution against Barnette would not
constitute a second punishment violative of the Double
Jeopardy Clause. If the Government is correct that
Barnette’s fraud caused the Government $15.75 million in
direct loss, then the ratio between the amount that the
Government is seeking and its direct loss is only 3.2 to 1
— strikingly less than the 222 to 1 figure that so
shocked the Halper Court. Because the Government has not
averred the amount of its investigation and prosecution
costs, we cannot determine the ratio between the total
recovery sought here and the Government’s total loss,
including those costs. It is clear, however, that this
ratio would not exceed 3.2 to 1 even if there were no
ancillary costs. In other words, the ratio in this case
between Page 1560 the total recovery sought and the
Government’s total loss will never approach Halper’s 8 to 1
ratio. And a 3.2 to 1 ratio simply does not lack a
“rational relation to the Government’s loss.” Mayers, 897
F.2d at 1127. Instead, such a ratio is very close to “a
fixed penalty roughly proportionate to the damage caused .
. . plus double damages.” Halper, 490 U.S. at 452-53, 109
S.Ct. at 1904 (Kennedy, J., concurring). The rule of Halper
permits “at least” that much. 490 U.S. at 453, 109 S.Ct. at
1904.
[36] Seeking refuge from the result of a proportionality
analysis, Barnette also contends that in a case of this
magnitude we should consider the absolute amount by which
the total recovery sought exceeds the Government’s total
loss, rather than a ratio of these figures. We do not
dispute that the amounts claimed by the Government are
large, but they are not disproportionate, and
proportionality is the key. In a case in which the
plaintiff sought penalties of $13 billion, Justice Stevens
observed:
[T]he exceptional magnitude of those consequences is the
product of the vast size of Texaco itself . . . and the
immensity of the transaction that gave rise to this
unusual litigation. The character of harm that may flow
from this litigation is not different from that suffered
by other defeated litigants, their families, their
employees, and their customers. The price of evenhanded
administration of justice is especially high in some
cases, but our duty to deal equally with the rich and the
poor does not admit of a special exemption for
multi-billion-dollar corporations or transactions.
[37] Pennzoil Co. v. Texaco, Inc., 481 U.S. 1, 34, 107 S.Ct.
1519, 1538, 95 L.Ed.2d 1 (1987) (Stevens, J., concurring).
We agree. The Constitution does not have two sets of
provisions, one that operates at retail and another at
wholesale. It offers no quantity discounts. The protections
of the Bill of Rights apply the same regardless of the size
of the crime or the identity of the criminal.
[38] The present case is about remedies, and whether the
Constitution permits the remedy the Government seeks. The
Government claims to have suffered at Barnette’s hands
losses significantly in excess of the amount he paid in
restitution. By granting Barnette’s motion for summary
judgment, the district court precluded the Government from
proving its claim. When faced with an analogous situation,
the Halper Court remanded to allow the Government to
present an accounting of its total loss. Halper, 490 U.S.
at 452, 109 S.Ct. at 1903. Similarly, we now remand this
case to the district court to allow the Government to
demonstrate its total loss. Cf. Mayers, 897 F.2d at 1127
(remanding under Halper for a factual determination of the
Government’s loss). The Government is entitled to introduce
evidence regarding “not merely the amount of the fraud
itself, but also ancillary costs, such as the costs of
detection and investigation, that routinely attend the
Government’s efforts to root out deceptive practices
directed at the public purse.” Halper, 490 U.S. at 445, 109
S.Ct. at 1900.[fn3] If the district court finds that the
Government’s total loss was $15.75 million, which is the
amount it claims in direct loss alone, then a recovery of
$50.5 million in damages (offset by the $7 million Barnette
already paid in restitution) is not barred by the Double
Jeopardy Clause. If the Government proves a lesser amount
of total loss, than the district court should apply to its
fact findings the same Halper analysis that we have applied
in this opinion.
[39] B. COLLATERAL ESTOPPEL
[40] Barnette asserts that the doctrine of collateral
estoppel bars the Government’s civil damages action against
him. That doctrine only precludes “relitigation of an issue
of fact Page 1561 or law that has been litigated and
decided in a prior suit.” I.A. Durbin, Inc. v. Jefferson
Nat’l Bank, 793 F.2d 1541, 1549 (11th Cir. 1986). Here,
because the sentencing judge never determined the amount of
the Government’s loss, the doctrine of collateral estoppel
is completely inapposite. We therefore need not determine
if this case presents one of those rare exceptions to the
general rule that collateral estoppel does not apply to the
United States. See, e.g., United States v. Killough, 848
F.2d 1523, 1526 (11th Cir. 1988).
[41] C. RES JUDICATA
[42] Barnette asserts that the present action is barred
under principles of res judicata. “[A] federal court must
apply federal law to determine the preclusive effect of a
prior federal court decision.” Citibank, N.A. v. Data Lease
Fin. Corp., 904 F.2d 1498, 1501 (11th Cir. 1990). The
doctrine of res judicata in federal law prohibits “the
filing of claims which were raised or could have been
raised in an earlier proceeding.” Id. Barnette asserts that
because the Government could have brought its civil claims
as part of the criminal trial, res judicata bars this suit.
[43] We have some doubts about the Government’s ability to
bring civil claims as part of a criminal proceeding.
Barnette contends that Halper allows such a mixed action,
but he points to no statutory authorization for a hybrid
proceeding of that sort. Halper says only that the ruling
in that case does not prevent imposition of a civil penalty
in a criminal trial. 490 U.S. at 450, 109 S.Ct. at 1903. We
hardly think that this passing dicta renders moot other
obstacles to such hybrid proceedings. These obstacles are
one reason that the doctrine of res judicata often has been
held not to bar a civil case brought subsequent to a
criminal trial. Cf.; e.g., Standefer v. United States, 447
U.S. 10, 23 & n. 18, 100 S.Ct. 1999, 2007 & n. 18, 64
L.Ed.2d 689 (1980) (holding that a “not guilty” verdict
does not estop the Government in a subsequent civil case
because, inter alia, “the prosecution’s discovery rights in
criminal cases are limited”); Helvering v. Mitchell, 303
U.S. 391, 397, 58 S.Ct. 630, 632, 82 L.Ed. 917 (1938) (“The
difference in degree of the burden of proof in criminal and
civil cases precludes application of the doctrine of res
judicata.”). Furthermore, Barnette’s res judicata theory
ignores the result of Halper itself. There, the Supreme
Court remanded a civil case for further fact finding in
order to determine whether a civil remedy would be
permitted, despite the fact that the defendant had already
been prosecuted for the same conduct. See Halper, 490 U.S.
at 452, 109 S.Ct. 1904. Under Barnette’s reading of the
Halper case, the Halper action itself would have been
barred by res judicata. Yet the Supreme Court never
mentioned that possibility. We will not interpret and apply
dicta in a Supreme Court decision in a way that is
inconsistent with the disposition reached in that very
decision.
[44] Moreover, the VWPA expressly contemplates civil
restitution claims brought subsequent to a criminal
conviction. See 18 U.S.C.A. § 3579(e)(2) (1985).
Barnette’s approach would require us to render this
provision of the VWPA irrelevant. The courts should not jam
judicially created doctrines such as res judicata into the
gears of Congress’ carefully crafted statutory machinery.
[45] There is one last reason to reject Barnette’s res
judicata defense. At sentencing, Barnette asserted that the
Government was also seeking to recover its loss through a
civil action, and he argued that a restitution order would
unfairly make him pay twice. After Barnette made that
argument, the sentencing judge did not award as much
restitution as the Government had requested. We will not
now permit Barnette to defeat the Government’s unsatisfied
damages claims on the ground that the Government has
already had one bite at the apple. To do so, in view of the
arguments Barnette used during sentencing to reduce the
amount of restitution, would allow him to have the
Government’s apple and eat it too.
[46] In a related vein, Barnette points out that the
district court seems to have based its summary judgment
order in part on the Government’s Page 1562 failure to
appeal the prior restitution award. The district court did
not indicate why it attached any legal significance to this
fact. Whatever the court’s reasoning, it assumed without
discussion that the Government could have appealed. That is
not at all clear to us, because three of the four
restitution counts we upheld against Barnette’s challenge
on direct appeal were based on pre-VWPA law. Moreover, as
we have already discussed, the doctrine of res judicata is
not applicable in this case for other reasons. For those
same reasons, it would not have been applicable even if the
Government had attempted to appeal the restitution order.
There is no basis in law or logic for saying that res
judicata would not apply if the Government had attempted to
appeal the restitution order, but that it does apply
because the Government did not appeal. That is, however,
essentially what Barnette contends when he argues that res
judicata is applicable because the Government did not
attempt to appeal the restitution order. Finally, we note
that Barnette has not cited any case from any jurisdiction
that even hints that a prior criminal restitution order is
res judicata against a subsequent damages action,
regardless of whether the Government attempted to appeal
the restitution order. We decline to be the first court to
misapply the doctrine of res judicata in such a fashion.
[47] D. THE GOVERNMENT’S PRAYER FOR INJUNCTIVE RELIEF
[48] Seven of the eight counts in the Government’s second
amended complaint sought monetary relief. See Appendix.
Count Two, however, sought an injunction. The district
court did not explain its rationale for granting summary
judgment on this count. To the extent that the district
court rested its order as to Count Two on the same
rationale that it applied to the Government’s other claims,
we reverse and remand for reasons already discussed. To the
extent that summary judgment on Count Two was based on some
unarticulated — and thus unreviewable —
rationale, we must still remand for a specification of
grounds. On remand, the district court will be free to
reconsider Barnette’s summary judgment motion as to this
count. However, if the district court reenters summary
judgment on Count Two, it should specify its grounds.
[49] III. CONCLUSION
[50] We REVERSE the district court’s order granting Barnette
summary judgment and REMAND this case for further
proceedings consistent with this opinion.