Salus Populi Suprema Lex Esto

About MoreLaw
Contact MoreLaw

Please E-mail suggested additions, comments and/or corrections to Kent@MoreLaw.Com.

Help support the publication of case reports on MoreLaw

Date: 01-05-2018

Case Style:

State of Minnesota vs. Emile Rey


Case Number: A16-0198

Judge: Paul H. Anderson


Plaintiff's Attorney: Lori Swanson
Attorney General

James C. Backstrom
Dakota County Attorney

Kathryn M. Keena
Assistant County Attorney

Michael Everson
Assistant Attorney General
for amicus curiae Minnesota Attorney General.

Defendant's Attorney: Cathryn Middlebrook
Chief Appellate Public Defender

Sharon E. Jacks
Assistant Public Defender

Description: In March 2015, the Eagan Police Department began investigating the reported use
of a cloned credit card3 by an unknown male at a Target store in Eagan. An investigator
learned from Target’s loss-prevention personnel that the same unknown male had been to
the store on five other occasions to purchase gift cards with what appeared to be cloned
credit cards. On one of the occasions, the unknown male was observed arriving at the
Target store in a 2002 or 2003 Kia Spectra sedan.
In late March, Target loss-prevention personnel at a Bloomington store captured the
license plate number of the Kia Spectra and forwarded it to the investigator. The
investigator then spoke with the registered owner of the vehicle, who reported having sold
it to another person, eventually identified as Rey’s female accomplice, S.R. After obtaining
a court order, an electronic tracking device was installed on S.R.’s vehicle.
Over the course of approximately one month, the investigator tracked the vehicle to
Target stores on 39 occasions and to Walmart stores on nine other occasions. The
investigator obtained a list of transactions from those stores during those visits. From that
list, the investigator identified 25 different credit card numbers used to purchase gift cards.
All of the credit card numbers were associated with credit cards issued by Wells Fargo that
had been compromised by a recent breach of Home Depot’s information systems.
The investigator learned from Target that some of the gift cards were redeemed in
the greater Chicago area. The electronic tracking data from S.R.’s vehicle showed that on

3 Cloned credit cards are copies of legitimate credit cards created by encoding the magnetic strip of a blank card with information from a legitimate credit card. See United States v. Keita, 742 F.3d 184, 187 (4th Cir. 2014).


one day in May, the vehicle traveled to the Minneapolis-Saint Paul Airport, stayed for
approximately one minute, and returned to S.R.’s residence. On that day, airport police,
having received a photo of Rey (who was yet unidentified), reviewed surveillance video
and observed him boarding a flight to Chicago. The airline provided the investigator with
possible names. The investigator then identified Rey from his Facebook profile.
Several weeks later, Eagan police arrested Rey and S.R. after they attempted to use
cloned credit cards at a Target store in Eagan. A search of S.R.’s residence that same day
turned up 66 cloned credit cards and numerous gift cards. The investigator contacted at
least 13 people whose credit cards had been cloned and confirmed that none of them had
given permission to Rey or S.R. to use their credit card information.
The State charged Rey with one count of identity theft, involving more than eight
direct victims. See Minn. Stat. § 609.527, subds. 2, 3(5). Rey pleaded guilty, admitting to
the possession and use of 66 cloned credit cards belonging to 66 different victims. Police
sent forms for restitution requests and victim-impact statements to all 66 victims. By the
time of sentencing, six victims had returned victim-impact statements and only one victim
had returned a restitution-request form, which did not make a claim for restitution.
Rey moved the district court to declare the mandatory-minimum restitution
provision in the identity-theft statute, Minn. Stat. § 609.527, subd. 4(b), unconstitutional
on the grounds that it violated his procedural and substantive due process rights. Rey also
argued that ordering the mandatory-minimum restitution in his case would amount to an
unconstitutional fine. The district court denied the motion and ordered Rey to pay the
mandatory-minimum restitution of $1,000 to each of his 66 victims, totaling $66,000. Rey


appealed, and the court of appeals affirmed. State v. Rey, 890 N.W.2d 135, 143 (Minn.
App. 2017). We granted Rey’s petition for review.
The identity-theft statute requires a district court to order a person convicted of
identity theft to pay restitution in an amount not less than $1,000 to each direct victim of
the crime. Minn. Stat. § 609.527, subd. 4(b). Direct victims are those whose identities
were transferred, used, or possessed, and who suffered loss or harm. See Minn. Stat.
§§ 609.527, subd. 1(b) (2016), 611A.01(b) (2016) (defining a “victim” generally as a
natural person, corporation, or government entity “who incurs loss or harm as a result of a
crime”). Unlike other proceedings for restitution under Minn. Stat. § 611A.045 (2016), the
identity-theft statute does not expressly require a district court to consider the amount of
economic loss suffered by the victim or the defendant’s ability to pay when ordering
Rey argues that the mandatory-minimum restitution requirement in the identity
theft statute is unconstitutional because it: (1) violates procedural due process; (2) violates
substantive due process; and (3) amounts to an unconstitutional fine. We review
constitutional challenges to statutes de novo. See State v. Cox, 798 N.W.2d 517, 519
(Minn. 2011). We presume statutes are constitutional and will exercise our “power to
declare a statute unconstitutional with extreme caution and only when absolutely
necessary.” State v. Craig, 826 N.W.2d 789, 791 (Minn. 2013) (citation omitted) (internal
quotation marks omitted).


The United States and Minnesota Constitutions provide that the government shall
not deprive a person of “life, liberty, or property without due process of law.” U.S. Const.
amends. V, XIV; Minn. Const. art. I, § 7. “The due process protection provided under the
Minnesota Constitution is identical to the due proces[s] guaranteed under the Constitution
of the United States.” State v. Krause, 817 N.W.2d 136, 144 (Minn. 2012) (alteration in
the original) (citation omitted) (internal quotation marks omitted). Rey asks us to hold that
the imposition of the mandatory-minimum restitution in the identity-theft statute violated
procedural and substantive due process. We address each issue in turn.
“Whether the government has violated a person’s procedural due process rights is a
question of law that we review de novo.” Sawh v. City of Lino Lakes, 823 N.W.2d 627,
632 (Minn. 2012). Fundamentally, procedural due process requires “notice and an
opportunity to be heard at a meaningful time and in a meaningful manner.” Id. (citation
omitted) (internal quotation marks omitted). Rey argues that the procedures afforded to
him were not constitutionally sufficient under the three-factor test from Mathews v.
Eldridge, 424 U.S. 319, 335 (1976). The three-factor balancing test in Mathews requires
us to consider:
First, the private interest that will be affected by the official action; second, the risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards; and finally, the Government’s interest, including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail.


Id. But we are not persuaded that the Mathews test applies to a restitution order at a
sentencing proceeding. See Medina v. California, 505 U.S. 437, 443 (1992) (“[T]he
Mathews balancing test does not provide the appropriate framework for assessing the
validity of state procedural rules [that] . . . are part of the criminal process.”). The
restitution order here arises out of the criminal process, and Rey received the full range of
procedural protections afforded to all criminal defendants.
Even if we applied the Mathews framework, however, Rey’s claim would fail. Rey
does not weigh the first and third factors of the test—i.e., the private interest at stake and
the government’s interest. Mathews, 424 U.S. at 335. Rey argues under the second factor
that the risk of erroneous deprivation, id., is so high that we should conclude that the
mandatory-minimum-restitution requirement is unconstitutional. The risk of erroneous
deprivation, however, is nil. Rey’s guilty plea included an express admission of the only
material facts necessary for the restitution order: that 66 persons were direct victims of his
criminal conduct. Rey’s argument—that the procedures afforded will result in erroneous
deprivations because some victims may receive more in restitution payments than their
actual loss or harm—takes aim at the substance of the law, not the adequacy of the
procedures. Rey’s argument is really that the mandatory-minimum restitution will result
in erroneous compensation, not that more or different procedures would have changed the
amount of restitution awarded, which the Legislature has fixed at a minimum of $1,000 per
direct victim.
Moreover, there is no dispute that Rey received notice that he would be required to
potentially pay $66,000 in mandatory restitution, in the pre-plea investigation report and


elsewhere, if he were found guilty of the crime. Further, at sentencing, Rey was afforded
an opportunity to be heard on any challenges to the restitution order. He could have
requested a restitution hearing to challenge the number of victims or their status as direct
victims under the identity-theft statute, but he declined to do so. See Minn. Stat.
§ 611A.045, subd. 3.
Because Rey received notice of the restitution and was afforded a meaningful
opportunity to be heard on the matter, we hold that there was no procedural due process
violation in this case. See Hughes v. State, 815 N.W.2d 602, 606 (Minn. 2012).
We turn next to Rey’s argument that the mandatory-minimum restitution provision
in the identity-theft statute violates substantive due process.4 Whether a law or government
action violates substantive due process is a constitutional question, which we review de
novo. State v. Hill, 871 N.W.2d 900, 905 (Minn. 2015). The Due Process Clauses of the
United States and Minnesota Constitutions prohibit the government from “ ‘certain
arbitrary, wrongful government actions, regardless of the fairness of the procedures used
to implement them.’ ” Boutin v. LaFleur, 591 N.W.2d 711, 716 (Minn. 1999) (quoting
Zinermon v. Burch, 494 U.S. 113, 125 (1990)); see U.S. Const. amends. V, XIV; Minn.
Const. art. I, § 7.

4 We assume without deciding that Rey’s challenge is best analyzed and decided as a substantive due process claim. “[W]here a particular amendment provides an explicit textual source of constitutional protection against a particular sort of government behavior, that Amendment, not the more generalized notion of substantive due process, [is] the guide for analyzing the[] claim[].” Cnty. of Sacramento v. Lewis, 523 U.S. 833, 842 (1998) (citation omitted) (internal quotation marks omitted).


Courts subject challenged government actions or laws to different levels of scrutiny
depending upon whether a fundamental right is implicated. “If a statute does not implicate
a fundamental right, we assess its constitutionality using rational basis review.” State v.
Bernard, 859 N.W.2d 762, 773 (Minn. 2015) (citing State v. Behl, 564 N.W.2d 560, 567
(Minn. 1997)). Under rational-basis review, we will uphold a statute when it provides a
“reasonable means to a permissive objective” and is not “arbitrary or capricious.” Id.
Rey acknowledges that the State has a legitimate interest in ensuring that identity
theft victims are compensated in some way for any actual economic losses they suffer due
to the unlawful use of their personal information. Rey nevertheless argues that the
mandatory-minimum-restitution requirement in the identity-theft statute is arbitrary
because some direct victims might receive restitution payments in excess of their actual
losses. That possibility, however, does not make the requirement arbitrary. The United
States and Minnesota Constitutions do not require the Legislature to devise precise
solutions to every problem. Cf. Weinberger v. Salfi, 422 U.S. 749, 780 (1975) (“Congress
could rationally have concluded that any imprecision from which [the law] might suffer
was justified by its ease and certainty of operation.”); Guilliams v. Comm’r of Revenue,
299 N.W.2d 138, 143 (Minn. 1980) (“If the classification has some reasonable basis, it
does not offend the constitution simply because it is not made with mathematical nicety or
because in practice it results in some inequality.” (citation omitted) (internal quotation
marks omitted)).
The loss or harm sustained by identity-theft victims is in many important ways
distinct from the loss or harm caused by other offenses. For example, an assault victim’s


economic losses are usually concrete, measurable, and easily documented by the various
receipts and invoices for ambulance services, emergency medical care, or prescription
medication. See, e.g., State v. Miller, 842 N.W.2d 474, 476, 478 (Minn. App. 2014)
(affirming the district court’s decision to order joint and several restitution for medical
expenses), rev. denied (Minn. Apr. 15, 2014); cf. State v. Palubicki, 727 N.W.2d 662, 664–
66 (Minn. 2007) (noting the award of funeral expenses and crime scene cleanup costs and
upholding an award of lost wages and expenses to the next of kin). Similarly, a victim of
car theft can measure and substantiate the loss by providing the book value of the car or an
insurance payout. See, e.g., State v. Olson, 379 N.W.2d 524, 527 (Minn. 1986); see also
State v. Johnson, 851 N.W.2d 60, 65 (Minn. 2014) (explaining that restitution ordered for
damage to vehicle must be supported by the record).
Identity-theft victims may never be able to fully account for their losses or harm
because the damage is hard to discover and measure. For example, identity-theft victims
may not know the full extent of the damage until they attempt to finance a new purchase
or refinance a home mortgage. See, e.g., State v. Maxwell, 802 N.W.2d 849, 852–53 (Minn.
App. 2011) (upholding restitution award of more than $200,000 where the victim was
unable to refinance a home mortgage because of identity theft), rev. denied (Minn. Oct. 26,
2011). Because the difficulty extends not only to quantifying the loss or harm but also to
discovering it, affording identity-theft victims some minimum amount of restitution is
rational. The mandatory-minimum-restitution requirement in the identity-theft statute
accounts for the “known unknown”: harm exists, but its nature and extent are often latent.


Because Rey has failed to demonstrate that the mandatory-minimum-restitution
requirement in the identity-theft statute is arbitrary, there has been no substantive due
process violation in this case.
Having concluded that no due process violation occurred, we turn next to Rey’s
argument that the mandatory-minimum-restitution requirement in the identity-theft statute
amounts to an unconstitutional fine, not restitution. In United States v. Bajakajian, the
Supreme Court held that forfeiture of money for violating currency-reporting requirements
was a form of criminal punishment subject to the Excessive Fines Clause of the Eighth
Amendment to the United States Constitution. 524 U.S. 321, 327–28 (1998). The Court
reasoned that a fine has always been “understood to mean a payment to a sovereign as
punishment for some offense.” Id. at 327 (citation omitted) (internal quotation marks
omitted). Rey argues that the mandatory-minimum restitution in the identity-theft statute
operates similarly to the forfeiture in Bajakajian and that we should consider it a fine. We
We have long noted that restitution is intended to compensate crime victims for their
losses. Palubicki, 727 N.W.2d at 666; State v. Terpstra, 546 N.W.2d 280, 283 (Minn.
1996); State v. Maidi, 537 N.W.2d 280, 286 (Minn. 1995); State v. Fader, 358 N.W.2d 42,
48 (Minn. 1984). The Legislature called the provision here “restitution,” and it operates as
restitution. See Minn. Stat. § 609.527, subd. 4. Any money collected from wages that Rey
earns while in prison or on supervised release will be paid to the victims, not to the State.


We recognize that, like the forfeiture in Bajakajian, the restitution order here was part of
Rey’s sentence, yet so are nearly all restitution orders. See Minn. Stat. § 609.10 (2016).
Given the modest amount of mandatory restitution imposed by the Legislature for
each victim, it is sufficient here to hold that the mandatory-minimum-restitution
requirement in the identity-theft statute is what it purports to be: restitution, not a fine.
Because we hold that the mandatory-minimum-restitution requirement is not a fine,
we need not consider Rey’s arguments with respect to Blakely v. Washington, 542 U.S. 296
(2004), and Alleyne v. United States, 570 U.S. 99 (2013).

Outcome: For the foregoing reasons, we affirm the decision of the court of appeals.


Plaintiff's Experts:

Defendant's Experts:


Home | Add Attorney | Add Expert | Add Court Reporter | Sign In
Find-A-Lawyer By City | Find-A-Lawyer By State and City | Articles | Recent Lawyer Listings
Verdict Corrections | Link Errors | Advertising | Editor | Privacy Statement
© 1996-2018 MoreLaw, Inc. - All rights reserved.