Oral Argument Preview: Ordering Restitution as Part of a Plea Bargain. State v. Daniel Lalain.

Update: On July 17, 2013 the Supreme Court issued a merit decision in this case.  Read the analysis here.

Read the analysis of the oral argument here.

On March 13, 2013, the Supreme Court of Ohio will hear oral argument in the case of State v. Daniel Lalain, 12-0302/12-0408. The case is before the Court on both conflict certification and as a discretionary appeal. The cases were consolidated. The issue at hand regards the amount of restitution a defendant must pay in the absence of a specific plea agreement or evidentiary hearing.

Case Background

After leaving his job as an engineer with Aero Instruments, Daniel Lalain took with him numerous documents and other materials related to the work he had done during his employment. His former employer filed a civil lawsuit over the material, and Lalain also found himself subject to a criminal theft prosecution for first-degree felony theft of national security clearance materials.

Before the criminal trial, the prosecution offered Lalain a plea agreement that reduced the charges from first-degree felony theft to fifth-degree felony theft (theft of property valued between $500 – $5,000). The prosecution did not seek any particular amount of restitution. Lalain accepted the offer, acknowledging at the plea colloquy that he could be ordered to pay restitution in connection with his plea to the theft of an amount less than $5,000. At sentencing, however, the State sought restitution in the amount of $63,121, as this was for expenses that the employer maintained had been expended in connection with the case. Without holding a hearing, the trial court accepted this amount of restitution.

Court of Appeals Decision

In a split decision, the Eighth District Court of Appeals affirmed the restitution award. The court found that because Lalain did not object at the sentencing hearing to the order of restitution or the amount ordered, no separate hearing was required on restitution, and Lalain waived all but plain error. Lalain received the benefit of his bargain in the case—he received a reduced charge in exchange for pleading guilty and agreeing to pay restitution.  Because of the unique nature of the intellectual property at hand, an accounting was done to determine the value; the amount of restitution was less than what it would have been if Lalain had been convicted of the original offense (a first degree theft offense involving property or services valued at $1 million or more.) Therefore, the Court of Appeals majority found no plain error.

One judge dissented because of the lack of clarity and specificity about the restitution amount at the time of the plea bargain. While Lelain did agree to pay restitution at the time of the plea bargain, no specific amount was made part of that agreement.  The dissent believes a trial court cannot order an amount of restitution  greater than the maximum associated with the degree of offense to which the defendant has pled–—in this case $4999. He would reduce the restitution order to that amount.

Appeal to the Ohio Supreme Court

The Supreme Court approved the certification of a conflict in the case, but  originally declined to accept a discretionary appeal of Propositions of Law I-III. However, the Court reconsidered, and the three propositions of law were also accepted.

Certified Question

The certified question is, “Whether, despite the defendant’s failure to object, it is error for the trial court to order defendant to pay an amount of restitution in the absence of a specific plea agreement and without a hearing or evidence substantiating the economic loss claimed by the plaintiff?”

Conflict Case

State v. Ratliff, 2011-Ohio-2313 (2nd Dist.)

The Second District held that the trial court abused its discretion in ordering restitution without holding a hearing; in the absence of a specific plea agreement to the contrary, the amount of any order of restitution may not exceed the maximum amount that is an element of the offense for which the defendant was convicted. (this is essentially the position of the dissenting judge in Lalain.)

Lalain’s Argument

Lalain argues that the maximum amount of restitution that the trial court could order in the case was under $5,000, which corresponds to the fifth-degree felony theft value. The only exception to this is when a defendant agrees to make restitution in a greater amount than could otherwise be awarded as part of the plea bargain, which was not the case here.

While a trial court is authorized to impose a restitution order to reimburse a victim of a crime, such restitution is limited to the “economic loss” suffered by the victim as a direct and proximate result of the commission of the offense. In the instant case, Lalain argues that the expenditures accounted for were not the direct result of the theft, but rather the monies his employer spent in developing a civil case against him, and therefore do not constitute “economic loss” caused by the offense.

In addition, Lalain contends that the defense did object to the amount of restitution, and that the record supports this. Accordingly, the trial court erred when it failed to conduct an evidentiary hearing. However, even in the absence of a specific objection, a hearing was required in light of the unsubstantiated and excessive nature of the amount of restitution requested. Lalain urges the Court to reverse and remand for a hearing on the amount of restitution, not to exceed $4,999.99.

State’s Argument

The prosecution contends that the amount of restitution ordered in this case was proper. In Ohio the purpose of restitution is to compel defendants to compensate victims of crimes for the economic loss they suffered as a result. Irrespective of a specific plea agreement, a trial court may order restitution in the amount that represents this economic loss suffered as a direct and proximate result of the crime. An employer’s costs in investigating theft by a former employee meet the definition of “economic loss” for restitution. The state contends that in determining the appropriate amount of restitution, a victim’s statement as to the amount of loss suffered is sufficient to support such restitution. Additionally, when no objection to the amount of restitution is made by the defendant, a trial court may order restitution without holding a separate hearing to receive evidence. The state contends that Lalain’s counsel conceded this failure to object at appellate argument.

The state’s answer to the certified question is: a trial court may award restitution in an amount that is consistent with the victim’s economic loss even if that amount exceeds the defendant’s amended theft charge. The amount of restitution is guided by the victim’s loss, not the degree of the defendant’s crime.

The prosecution also requests that the Court find that plain error does not exist when a defendant fails to object to restitution that is ordered in the amount of the victim’s economic loss as caused by the defendant’s theft.

Lalain’s Proposed Propositions of Law

 I.  In the absence of a specific plea agreement to the contrary, an order of restitution for a felony theft offense may not exceed the maximum statutory property value for that degree of the offense.

II. When a defendant disputes the amount of restitution, a trial court abuses its discretion in ordering restitution without a hearing.

III. Restitution is limited to those economic losses suffered by the victim as the direct and proximate result of a crime and does not include costs that the victim incurred to support the prosecution of the defendant or in connection with a civil suit filed by the victim against the defendant.

Student Contributor: Elizabeth Chesnut

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