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Eighth Circuit Pulls BOP’s Hand Out of Prisoner’s Pocket Accumulated Prison Wages Not “Substantial Resources” Under Mandatory Victim Restitution Act

by Casey J. Bastian

In a decision published on January 10, 2022, the U.S. Court of Appeals for the Eighth Circuit ruled that accumulated prison wages constitute neither “substantial resources” nor a “material change” to a prisoner’s resources that would allow the federal Bureau of Prisons (BOP) to confiscate them under the Mandatory Victim Restitution Act (MVRA).

A prisoner, Corey Kidd, was serving a 15-year term at a federal lockup in Arkansas after pleading guilty to armed robbery. Kidd was also ordered to pay $61,952.61 under MVRA to the pharmacy he robbed and its insurer. The amount was either due immediately, or Kidd could make payments to satisfy the obligation.

When Kidd began his incarceration, he agreed to participate in BOP’s Inmate Financial Responsibility Program (IFRP), paying $25 per quarter from his trust fund account towards the restitution. For seven years Kidd made all quarterly payments, reducing the restitution amount by $1,096.45 and leaving a remaining balance of $60,856.16.

In 2020, the government learned that Kidd had accumulated $5,989.37 in his trust fund account. The U.S. Attorney asked the federal court for the Western District of Arkansas for an order to seize a total of $5,500 from Kidd’s account, pursuant to provisions of 18 U.S.C. § 3664, to apply to the outstanding restitution balance.

The two relevant provisions the government relied upon were § 3664(k) and § 3664(n). The former authorizes the sentencing court to adjust the payment schedule or require a full repayment based upon “any material change in the defendant’s economic circumstances that might affect the defendant’s ability to pay restitution,” while the latter provision requires a defendant who receives “substantial resources from any apply the value of such resources to any restitution still owed.”

Kidd opposed the government’s motion and requested a hearing. But the district court granted the motion without a hearing, so it didn’t determine how the funds were acquired. Kidd appealed, arguing that he had fully complied with the IFRP contract and that his prison wages should not be considered “substantial resources” or a “material change” in his financial situation.

In his petition to the Eighth Circuit, Kidd asked the Court to agree with the interpretation of the statutes made by the Fifth and Ninth Circuits, both of which had previously found that prison wages do not constitute “substantial resources” under § 3664, holding instead that the language pertains to windfalls or sudden financial injections. For its part, the government did not dispute the facts of the case, arguing instead that the funds qualify for seizure under § 3664.

In its decision, the Court said that prison wages could in some circumstances be seized, disagreeing with its sister Circuits. The Court noted the syntactical structure of the relevant statute, where “[f]ollowing the general term [‘from any source’] with specifics [‘including inheritance, settlement, or other judgment’] can serve the function of making doubly sure that the broad (and intended-to-be-broad) general term is taken to include the specifics” but not exclude any others.

“We conclude,” the Court continued, “that is the more logical interpretation of § 3664(n). Thus, we cannot agree with the Fifth and Ninth Circuits that § 3664(n) refers only to ‘windfalls or sudden financial injections.’”

But the Court was also loath to create a threat to the institutional safety and security by allowing prosecutors simply to reach into a prisoner’s trust account and take wages earned while imprisoned. That would hurt “inmate moral, discouraging inmates from gaining the benefits of prison work, and interfering with [the IFRP],” the Court said.

Thus the district court’s decision was vacated and the case remanded for further proceedings to determine whether any portion of the funds in Kidd’s account were not from prison wages. If so, that portion might be subject to MVRA provisions, allowing application towards the prisoner’s restitution obligations. Kidd was represented in his appeal by Little Rock attorney Garry J. Corrothers. See: United States v. Kidd, 23 F.4th 781 (8th Cir. 2022). 

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Related legal case

United States v. Kidd