Argument analysis: Justices skeptical of Colorado’s approach to returning payments by defendants whose convictions are reversed on appeal

If there was a single moment at Monday’s oral argument in Nelson v. Colorado during which the likely outcome of the case became clear, it may have been Chief Justice John Roberts’ statement, just under halfway through Colorado Solicitor General Frederick Yarger’s argument, that “you keep talking about compensation. The issue is restitution.” Although the Chief Justice’s statement was hardly one of the funnier moments in an often chuckle-filled 56-minute argument session, it cut to the heart of the dispute between the petitioners, Shannon Nelson and Louis Alonzo Madden, and the respondent, the state of Colorado.

As we explained in our argument preview, Nelson and Madden both paid substantial fees and penalties to the state in conjunction with criminal convictions that were subsequently vacated on appeal or post-conviction review, and both argued that they were entitled to have the remitted funds conditioned upon their convictions promptly returned. The Colorado Supreme Court disagreed, holding that the only remedy available to individuals in Nelson’s and Madden’s position was that provided by Colorado’s Exoneration Act – a statute that requires wrongly convicted defendants to show in a standalone civil action, by clear and convincing evidence, that they were actually innocent, in order to obtain “compensation” from the state.

The problem, as UCLA law professor Stuart Banner explained on behalf of the Nelson and Madden, is that Colorado thereby treats the monies paid by defendants like Nelson and Madden as property of the state – a point Yarger confirmed during his portion of the argument. So understood, Yarger suggested, the state has no obligation – under either state law or the federal Constitution – to compensate previously convicted defendants until and unless they can prove their actual innocence, and perhaps not even then. As Justice Stephen Breyer skeptically observed, on that theory, a state could impose a significant fine as the punishment for a criminal conviction, and then keep the money even if the conviction is vacated on appeal – rendering the appeal pointless.

Although Banner ran into difficulties of his own in articulating the source and historical pedigree of Nelson’s and Madden’s right to the automatic return of the monies paid to the state upon the vacaturs of their convictions, no justice seemed to disagree with Banner’s argument that those funds were their property once their convictions were vacated, and that they therefore were seeking restitution, not compensation. And although restitution, as an equitable remedy, might be subject to equitable considerations militating against an immediate and full refund in other cases, Banner seemed to have little trouble convincing the justices that there were no equitable considerations supporting anything other than a full return of the monies paid by Nelson and Madden here.

As Justice Elena Kagan suggested early in Yarger’s argument on behalf of Colorado, “it’s money that’s conditioned on a valid conviction. And when that valid conviction goes away, it seems the most natural, obvious thing in the world to say that the State’s right to that money evaporates at exactly the same moment.” Yarger labored mightily and eloquently to convince the justices that the funds in fact remained the state’s property even after the convictions were wiped off the books – so that the state had a right to require a standalone civil action (through the Exoneration Act) to compel any repayment. But the justices’ rather comprehensive lack of interest in even discussing the adequacy of that remedy, coupled with the fact that the hour-long session concluded several minutes early, seem fairly powerful evidence that Kagan was not just speaking for herself – and that a reversal is in the offing.

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