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Restitution — Special Damages — Definitions — Audit, etc.

State v. Nils V. Holmgren, 229 Wis.2d 358, 599 N.W.2d 876 (Ct. App. 1999)
For Holmgren: William E. Appel

Holding: Holmgren’s theft, related to unauthorized use of company’s credit card, gives rise to various restitution issues, all turning on the distinction between special and general damages. (Special damages — those which do not necessarily arise from the wrongful act “and represent the victim’s actual pecuniary losses” — are permissible; general damages – necessarily occurring and exemplified by pain and suffering – aren’t.) Restitution for the following damages are held to be special, and therefore not within the sentencing court’s restitution authority: Unearned vacation time and benefits isn’t supported, largely because Holmgren was salaried and had not set hours; use of a company vehicle during personal trips, because his employment agreement gave him unrestricted personal use of the car; costs associated with hiring his replacement, because these costs were incurred as a result of his resigning, not because of his theft. Restitution is upheld, as special damages, for: costs of an audit to determine the extent of Holmgren’s wrongdoing; the costs of the auditor’s testimony, given that the auditor appeared at Holmgren’s own behest; and another item that no objection was made to.

Authority for restitution for audit expenses under federal statute, see genrally, U.S. v. Scott, 7th Cir No. 04-1053, 4/25/05 – unremarkable, except that, given Judge Posner’s authorship, it contains a concise tutorial on the limits to restitution set by the line between “direct” and “consequential” damages. And, it sounds this note of caution:

In addition, to blur the line would create a potential issue under the Seventh Amendment because the amount of criminal restitution is determined by the judge, whereas a suit for damages is a suit at law within the amendment’s meaning. E.g., Kelly v. Robinson, 479 U.S. 36, 53 n. 14 (1986); Lyndonville Savings Bank & Trust Co. v. Lussier, 211 F.3d 697, 702 (2d Cir. 2000). And it would complicate criminal sentencing unduly—and unnecessarily; the rare crime victim who has a real shot at collecting common law damages (rare because few convicted criminal defendants are affluent) can bring a tort suit. S. Rep. No. 104-179, 104th Cong., 1st Sess. 18 (1995), 1996 U.S.C.C.A.N. 924, 931.

Those limits are not recognized, to be sure, in Wisconsin caselaw (which instead draws the line at “general” damages – not at all the same thing). Indeed, by allowing restitution for damages under a “causal nexus” theory, Wisconsin law essentially supports consequential damages. Nor does the 7th amendment apply, so as to fix a boundary. But perhaps there is a similar, state constitution argument to be made – see, e.g., Dane County v. Kenneth R. McGrew, 2005 WI 130, for a discussion of the state right to jury trials.

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