UNITED STATES OF AMERICA v. DOMINIC DEMARCUS STEELE
US Court of Appeals for the Fourth Circuit, Gregory, July 27, 2018,
Restitution – Restitution for theft of commonly traded items should be based on the fair market value of the items stolen, not the replacement cost
Facts:
In 2015, Dominic Steele was a mail handler for the U.S. Postal Service.
After GameFly contacted the US Postal Service to report a significant loss of video games, Steele was observed by agents taking numerous games from the processing center and placing them in his personal vehicle.
Steele was indicted with postal theft and pled guilty.
GameFly reported that it lost 1,390 video game discs and estimated a cost of $40 each along with a $1 cost to mail replacement games to its customers. 100 games were recovered from Steele’s vehicle and home.
At sentencing, Steele was ordered to pay $52,990 in restitution ($40×1290 for replacement cost and $1390 in mailing costs).
Steele appealed, arguing that the video games were used and not worth $40 each.
Held: The Court held that, in cases involving theft of commonly marketed goods, restitution should be valued according to fair-market value, not replacement cost.
Restitution – The Mandatory Victim’s Restitution Act (MVRA) requires that courts order restitution to the victim for certain crimes, including theft
Restitution – Restitution is the value of the property reduced by any property that was recovered or returned
Restitution – Fair Market Value – Using Fair Market Value to determine restitution is particularly appropriate where “the lost property is fungible.” Fungible goods “are interchangeable with one another,” and “by nature or trade usage, are the equivalent of any other like unit, such as coffee or grain.”
Restitution – Replacement Value – “Replacement cost may be an appropriate measure of value when the fair market value is difficult to determine or would inadequately capture the value of the victim’s actual losses.”
From the Case: “The video games that GameFly lost are fungible—they are interchangeable with other games of the same title. Nothing in the record indicates that the stolen games had any unique or personal value to GameFly that fair market value could not adequately capture.”