Judge Callahan Urges Fresh Reading of High Court Case

Monday, July 6, 2026

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Judge Callahan Urges Fresh Reading of High Court Case

Jurist Argues That Ninth Circuit Decisions on Inapplicability of Supreme Court Decision to Restitution Are Wrong

By a MetNews Staff Writer

The Ninth U.S. Circuit Court of Appeals has affirmed the conviction of a man for attempting to defraud the federal government through his check-cashing service that facilitated under-the-table payments to construction workers, with Circuit Judge Consuelo M. Callahan protesting that an order that he pay $44,877,254 in restitution to the IRS violates the Sixth Amendment and a 2000 decision by the U.S. Supreme Court.

She urged a rethinking of Ninth Circuit precedent.

In a memorandum opinion, Circuit Judge Bridget S. Bade and Senior Circuit Judge Andrew D. Hurwitz rejected arguments on appeal by David A. Katz of Oregon who operated Check Cash Pacific, Inc. which, at its three locations, cashed payroll checks issued by sham construction companies that withheld no sums for federal taxes. More than $177 million in checks were cashed, with the IRS being deprived of in excess of $44 million.

Katz received a 2% kickback from the transactions. He was sentenced on Feb. 4, 2025, to four years in prison.

Sixth Amendment

Christen said she agrees with the affirmance but writes separately “to argue that restitution issued pursuant to the Mandatory Victims Restitution Act…violates the Sixth Amendment [right to a jury] and Apprendi v. New Jersey….”

She continued:

“Our caselaw holds otherwise…, and the memorandum disposition correctly follows that binding precedent….But in my view, that precedent is mistaken.”

Holding in Apprendi

In Apprendi, Justice John Paul Stevens (now deceased), writing for the majority, said:

“Other than the fact of a prior conviction, any fact that increases the penalty for a crime be yond the prescribed statutory maximum must be submitted to a jury, and proved beyond a reasonable doubt.”

The opinion invalidated a New Jersey statute that allowed a judge to boost a sentence without jury findings, and by a preponderance of the evidence, based on the aggravating factor of underlying racial animus on the part of the defendant.

The Ninth Circuit, in its 2013 opinion in United States v. Green, declared that Apprendi does not apply to restitution orders. Bade and Hurwitz said in Wednesday’s memorandum opinion:

“Katz’s argument that restitution ordered under the Mandatory Victims Restitution Act….is criminal punishment and therefore subject to the Apprendi rule is foreclosed by our precedent.”

Christen argued in her concurring opinion:

“Fixing a restitution amount requires fact-gathering…and fact-finding….In the absence of this judicial fact-finding, the maximum amount of restitution that can be imposed—’solely on the basis of facts reflected in the jury verdict’…—is typically zero dollars. Any increase in that amount requires finding additional facts. Because those facts increase the penalty for a crime. Apprendi demands that they be found by a jury.”

She added:

“I am not alone in expressing this view—several dissents have made the same argument in greater detail….But I am outnumbered—indeed, the circuits appear to be unanimous in concluding that Apprendi does not apply to restitution. I think that conclusion is wrong, and therefore urge the court to reconsider its precedent in an appropriate case.”

The case is U.S. v. Katz, 25-981.