NO. 1639-98

ROBERT CABLA, JR., Appellant






Meyers, J., delivered a concurring opinion in which Johnson and Keasler, J.J., joined.


I agree with the Court's conclusion that the trial court did not abuse its discretion by ordering appellant to pay restitution as a condition of community supervision. In reaching the same result, however, I differ from the Court's opinion in one respect. The Court indicates that the "inherent differences between the creditors and debtors of bankruptcy proceedings and the victims and defendants of criminal proceedings" are always sufficient to place a state criminal restitution order outside the scope of the power usurped by Congress under the Bankruptcy Code. Ante, at __, slip op. at 5. Based on this conclusion, the Court rejects appellant's contention that this particular prosecution was improperly motivated by a desire to aid the complainants in collecting debts discharged in bankruptcy. See id. at __, slip op. at 12-14. The majority holds that "the restitution orders were valid because evidence at trial established appellant committed a crime against the alleged victims and that he was ordered to pay restitution in the amount proven to have been unlawfully appropriated from those victims." Id., at __, slip op. at 14. This conclusion implies that regardless of whether the actual purpose underlying a specific prosecution was to frustrate federal law, an order of criminal restitution will be upheld so long as the evidence is sufficient to support a conviction.

While bankruptcy proceedings serve different interests than criminal prosecutions and Congress did not intend to interfere with a state's restitutionary sentencing scheme by enacting Chapter 7, an inquiry into the sufficiency of the evidence does not necessarily solve the Supremacy Clause problem where there is an allegation that a specific state prosecution is motivated by a desire to circumvent the prohibitions of the federal Bankruptcy Code. In other words, where the actual purpose underlying a prosecution is to collect a discharged debt, a restitution order is not valid under the Supremacy Clause purely by virtue of the fact that the "evidence presented at trial established appellant committed a crime." Id. Where such an allegation is made, some inquiry into the purposes underlying the prosecution is necessary. To successfully prove that a condition of restitution interferes with the full effectiveness of the Bankruptcy Code, an appellant must show that the state criminal proceedings were commenced with the intent to frustrate federal law -- that is, that the principal motivation behind the prosecution was to collect a discharged debt in circumvention of the Bankruptcy Code. Appellant fails to meet this burden. The judgment of the Court of Appeals should therefore be affirmed.

Although this is an issue of first impression before this Court, the conclusion that criminal restitution may generally be imposed despite a previous discharge of the underlying debts in bankruptcy is consistent with the great weight of authority from other jurisdictions. See United States v. Pepper, 51 F.3d 469, 473-74 (5th Cir. 1995); United States v. Carson, 669 F.2d 216 (5th Cir. Unit B 1982); United States v. Alexander, 743 F.2d 472, 479-80 (7th Cir. 1984); United States v. Roberts, 783 F.2d 767, 770-71 (9th Cir. 1985); United States v. Kunzman, 125 F.3d 1363, 1365-66 (10th Cir. 1997); Barnette v. Evans, 673 F.2d 1250 (11th Cir. 1982); People v. Milne, 690 P.2d 829, 837 (Colo. 1984); State v. Angle, 353 N.W.2d 421, 424 (Iowa 1984); State v. West, 845 P.2d 1097, 1103-04 (Ariz. Ct. App. 1992); Baker v. State, 616 So.2d 571 (Fla. Dist. Ct. App. 1993); State v. Hamilton, 935 P.2d 201, 205-06 (Idaho Ct. App. 1997); State v. Muzio, 732 P.2d 879, 880-82 (N.M. Ct. App. 1987); State v. Eyre, 692 P.2d 853 (Wash. Ct. App. 1984); State v. Foley, 417 N.W.2d 920, 923-26 (Wis. Ct. App. 1987); People v. Stavrinoudis, 586 N.Y.S.2d 865, 866-67 (N.Y. Dist. Ct. 1992). Although each of these decisions construes the Bankruptcy Code as it relates to their own unique restitution statutes, they all have in common a fundamental concern for principles of federalism and judicial comity. These concerns militate in favor of an interpretation of the Bankruptcy Code that does not interfere with criminal sentencing schemes. See Kelly v. Robinson, 479 U.S. 36, 47, 107 S. Ct. 353, 360, 93 L. Ed. 2d 216 (1986) ("Our interpretation of the [Bankruptcy] Code also must reflect the basis for [the] judicial exception [that criminal financial penalties are not dischargable], a deep conviction that federal bankruptcy courts should not invalidate the results of state criminal proceedings. The right to formulate and enforce penal sanctions is an important aspect of the sovereignty retained by the States").

The great majority of courts that have addressed this issue agree that criminal prosecutions and federal bankruptcy proceedings serve vastly different interests. See, e.g., Barnette, 673 F.2d at 1251 ("The purpose of bankruptcy is to protect those in financial, not moral, difficulty. The bankruptcy courts were not created as a haven for criminals." (citing H.R. Rep. No. 595, 95th Cong., 2d Sess., 342, reprinted in 1978 U.S.C.C.A.N. 5787, 5963, 6299)). The purpose underlying the federal bankruptcy law is to "'relieve the honest debtor from the weight of oppressive indebtedness and permit him to start afresh free from the obligations and responsibilities consequent upon business misfortunes.'" Local Loan Co. v. Hunt, 292 U.S. 234, 244, 54 S. Ct. 695, 699, 78 L. Ed. 1230 (1934) (citing Williams v. United States Fidelity & Guar. Co., 236 U.S. 549, 554-55, 35 S. Ct. 289, 290, 59 L. Ed. 1230 (1915)). A state law that either "frustrates" or "conflict[s] with" this purpose will be invalidated under the Supremacy Clause of the federal constitution. See Perez v. Campbell, 402 U.S. 637, 649, 91 S. Ct. 1704, 1711, 29 L. Ed. 2d 233 (1971).(1)

Texas law explicitly provides that restitution is a condition "personally related to the rehabilitation of the defendant." Tex. Crim. Proc. Code Ann. art. 42.12, 11(b) (Vernon Supp. 1999). Such a desire to implement the State's penal goals of rehabilitation and punishment is not inconsistent with the civil relief that a bankruptcy proceeding provides a debtor.(2) See, e.g., Foley, 417 N.W.2d at 924 ("In a criminal justice system which focuses upon the offender and not the victim, ordering the offender to make restitution to his victim has a rehabilitative effect which is not incompatible with a 'fresh-start' approach"). Thus, a sentence that includes restitution does not generally intrude on the sphere of responsibility carved out by Congress under the Bankruptcy Code.(3)

Appellant next asserts that this particular prosecution was improperly motivated by a desire to collect on a discharged debt in violation of the Supremacy Clause. In other words, appellant alleges that his theft prosecution was a subterfuge for collecting the civil debts owed to the victims. The Bankruptcy Code prohibits the commencement of a criminal action to "collect, recover or offset" a discharged debt. 11 U.S.C.A. 524(a)(2) (1993 & Supp. 1999). Courts have taken different approaches in determining whether a specific prosecution was initiated with the intent to frustrate the Bankruptcy Code. For example, the Tenth Circuit has held that in order to be successful in challenging a restitutionary order, an appellant must show that the "principal motivation behind her prosecution was to collect on a discharged debt." Kunzman, 125 F.3d at 1366 (citing In re Brinkman, 123 B.R. 318, 322 (Bankr. D. Minn. 1991)). This approach focuses on the prosecutor's subjective motivations for bringing an individual prosecution. On the other hand, in State v. Muzio, 732 P.2d at 881, the New Mexico Court of Appeals declined the appellant's invitation to examine the prosecutor's subjective motives in commencing criminal proceedings and instead focused on whether there was sufficient evidence to support the conviction. Id. The New Mexico court reasoned that the Bankruptcy Code was not so intrusive as to prevent criminal punishment where the state was able to prove that the appellant had engaged in the underlying criminal conduct with the requisite mental state. Id. Under this approach, the actual motivations of the prosecutor are irrelevant where the State can otherwise prove the elements of the crime. This is so, reasoned the Muzio court, because a criminal statute itself serves a punitive or rehabilitative purpose quite different from that embodied in the Bankruptcy Code. Id.

The majority's opinion adopts the approach articulated in Muzio. See ante, at __, slip op. at 13-14. I disagree, however, that a conclusion that the evidence is sufficient to support the conviction necessarily resolves the Supremacy Clause problem.(4) Under 524(a)(2), a discharge in bankruptcy will prevent any action designed to "collect a debt" which has been discharged. That section does not contain any language which would except criminal proceedings from that prohibition. Therefore, if the criminal prosecution is an action to collect a discharged debt, the restitution order will be prohibited. The obvious question, then, is whether the specific criminal prosecution is designed to vindicate the public good or to collect the debt for one of the defendant's creditors. The "principal motivation" test announced by the Tenth Circuit most closely implements the intent of the federal statute and avoids the problems posed by the Supremacy Clause.

Under the "principal motivation" test, appellant has the burden of proving by a preponderance of the evidence that the State's principal motivation in pursuing the criminal theft charges was to collect the debt discharged in bankruptcy. He failed to meet his burden. Appellant argues that statements made by the trial judge make it "clear on the record that its primary goal was to obtain restitution for the complainants."(5) Appellant's Brief at 12. Specifically, appellant cites the following statements made by the trial judge:

I'm going to order him to pay restitution for the amount of money that I determine to be stolen. I don't care whether or not it's been a previously adjudicated debt in bankruptcy, been dissolved by bankruptcy, what not, I don't care about any of that, I'm just trying to determine what money I feel has been misappropriated as a result of the theft. That's what he will be ordered to repay. Whether or not it's been discharged by bankruptcy in a civil proceeding, I don't care.

Appellant's argument fails for two reasons. First, the trial judge's statements at sentencing may be interpreted as an expression of a desire to punish appellant for his wrongdoing. By emphasizing that the debt was discharged "by bankruptcy in a civil proceeding," the trial judge seemed to recognize the different rehabilitative and punitive purposes underlying criminal restitution. Second, and more importantly, the trial judge's statements do not go to the impetus behind the prosecution of appellant, but rather only address the trial judge's motivations during sentencing. A trial judge has no input into a decision to initiate criminal proceedings against an accused. That decision lies exclusively with the State. Thus the evidence in the record establishes that the prosecution of appellant for theft was designed to enforce the State's criminal statutes.

The Court of Appeals should be affirmed. I concur in the Court's judgment.


Delivered: December 8, 1999


1. Appellant argues that the reasoning of the Supreme Court in Perez is applicable in the instant case. Nevertheless, I agree with the majority's implicit holding that a probationary sentence conditioned on the payment of restitution generally does not interfere with the goals of the Bankruptcy Code as did the statute in Perez. Perez involved a Arizona law that sought to suspend the driver's license of an individual who failed to satisfy a tort judgment that had been previously discharged in a federal bankruptcy proceeding. Id., 402 U.S. at 639, 91 S. Ct. at 1706. The Court concluded that the state legislation frustrated the full effectiveness of the federal law and was invalid under the Supremacy Clause. Id., 402 U.S. at 652 & 656, 91 S. Ct. at 1712 & 1715. Unlike Perez, criminal restitution generally does not involve an action to collect a tort debt, but rather seeks to punish and rehabilitate the person convicted of a crime. See Eyre, 692 P.2d at 854.

2. Appellant urges us to hold that restitution revives a "debt" in conflict with the "fresh start" policies of the Code. But appellant's reliance on Pennsylvania Dept. of Pub. Welfare v. Davenport, 495 U.S. 552, 110 S. Ct. 2126, 109 L. Ed. 2d 588 (1990), to establish this proposition is mislaid. Although Davenport held that criminal restitution was a "debt" within the meaning of Chapter 13, that case is inapplicable on these facts for two reasons. First, as appellant himself acknowledges, in 1990 Congress overruled the result in Davenport by adding 11 U.S.C. 1328(a)(3). That provision expressly withdraws the Bankruptcy Court's power to discharge restitution orders under 1328(a). Second, Davenport dealt with discharge of debts under Chapter 13, not Chapter 7, as is the case here.

3. Although the Supreme Court resolved Kelly v. Robinson by way of statutory interpretation, and thus did not address a constitutional argument based on the Supremacy Clause, the Court's reasoning supports this conclusion. The Court emphasized that, "'[u]nlike an obligation which arises out of a contractual, statutory or common law duty, here the obligation is rooted in the traditional responsibility of a state to protect its citizens by enforcing its criminal statutes and to rehabilitate an offender by imposing a criminal sanction intended for that purpose.'" Kelly, 479 U.S. at 52, 107 S. Ct. at 362 (quoting In re Pellegrino, 42 B.R. 129, 133 (Bankr. D. Conn. 1984)). Thus Kelly illustrates the very different legislative priorities addressed by criminal punishment and by the Bankruptcy Code. While the debt relief afforded under the Bankruptcy Code and criminal restitution might seem at first to conflict inasmuch as the former seeks to protect a debtor from financial claims and the latter ultimately compensates that same individual as a victim of a crime, "[t]he pursuit of one proceeding will seldom resolve the other." Pepper, 51 F.3d at 473 (citing United States v. Tatum, 943 F.2d 370, 381-82 (4th Cir. 1991)). Inasmuch as the majority points out these obvious differences between criminal restitution and bankruptcy relief, I agree that, as a general matter, no Supremacy Clause problem is presented. However, where an appellant is able to show that a state criminal prosecution is motivated primarily by a desire to circumvent the federal Bankruptcy Code, I do not agree with the majority's rule that these differences are by themselves sufficient to lift that proceeding out of the prohibition included under 11 U.S.C. 524(a)(2). See discussion infra p. __, slip op. at 6- 9.

4. The Fifth Circuit's decisions in Carson and Pepper, relied on by the majority, are not dispositive of the Supremacy Clause issue. In each of those cases, the Fifth Circuit dealt with restitution orders in the context of federal criminal prosecutions. As such, the Supremacy Clause was not a factor in the court's decisions. However, in the case at bar, and in all state criminal prosecutions where restitution is ordered after the underlying debt had been discharged in a federal bankruptcy proceeding, serious federalism questions are presented.

5. Appellant also argues that the complainants in this case pressed criminal charges for the sole purpose of collecting the civil debts that were discharged in the previous bankruptcy proceeding. The obvious implication of appellant's allegation is that the prosecution itself was motivated by a desire to subvert the Bankruptcy Code. But there is no evidence that the prosecutor was motivated by such an illicit purpose. As the Supreme Court pointed out in Kelly, "[t]he victim has no control over the amount of restitution awarded or the decision to award restitution. Moreover, the decision to impose restitution generally does not turn on the victim's injury, but on the penal goals of the State and the situation of the defendant." Kelly, 479 U.S. at 52, 107 S. Ct. at 362. By the same token, a complainant does not have the final say in whether criminal charges are even pursued. That decision is left in the sole discretion of the prosecutor. Therefore, given the lack of control that a complainant has over a criminal prosecution, the motives of the complainants may not be attributed to the prosecution itself.