                           NOT FOR PUBLICATION                           FILED
                    UNITED STATES COURT OF APPEALS                        FEB 22 2017
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                             FOR THE NINTH CIRCUIT

 In re: DAVID A. ARMSTRONG,                      No.    15-56475

                    Debtor,                      D.C. No. 2:14-cv-09349-JAK
 ------------------------------
 DAVID A. ARMSTRONG,
                                                 MEMORANDUM *
                 Appellant,

   v.

 KRISTI KAPLON,

                 Appellee.

                   Appeal from the United States District Court
                      for the Central District of California
                   John A. Kronstadt, District Judge, Presiding

                           Submitted February 16, 2017**
                               Pasadena, California


Before: M. SMITH and OWENS, Circuit Judges, and HELLERSTEIN,*** District
Judge.

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
        **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
        ***
            The Honorable Alvin K. Hellerstein, United States District Judge for
the Southern District of New York, sitting by designation.
      Appellant David Armstrong appeals from the district court’s order affirming

a final order of the bankruptcy court, which held that a criminal restitution order

imposed against Armstrong was nondischargeable pursuant to 11 U.S.C.

§ 523(a)(7). We have jurisdiction pursuant to 28 U.S.C. § 158(a) and 28 U.S.C. §

1291, and we affirm.

      Section 523(a)(7) of the Bankruptcy Code states that a debtor may not

discharge any debt “to the extent such debt is for a fine, penalty, or forfeiture

payable to and for the benefit of a governmental unit, and is not compensation for

actual pecuniary loss[.]” In Kelly v. Robinson, 479 U.S. 36 (1986), the Supreme

Court held that “§ 523(a)(7) preserves from discharge any condition a state

criminal court imposes as part of a criminal sentence.” Id. at 50 (emphasis added).

This includes criminal restitution orders such as the one imposed on Armstrong.

As the Supreme Court held:

      Because criminal proceedings focus on the State’s interests in
      rehabilitation and punishment, rather than the victim’s desire for
      compensation, we conclude that restitution orders imposed in such
      proceedings operate “for the benefit of” the State. Similarly, they are
      not assessed “for ... compensation” of the victim. The sentence
      following a criminal conviction necessarily considers the penal and
      rehabilitative interests of the State. Those interests are sufficient to
      place restitution orders within the meaning of § 523(a)(7).




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Id. at 53. The Supreme Court based this broad holding upon a “deep conviction

that federal bankruptcy courts should not invalidate the results of state criminal

proceedings.” Id. at 47.

      We have followed Kelly. See In re Silverman, 616 F.3d 1001, 1008 (9th Cir.

2010) (“As Kelly made clear, criminal restitution payments are non-

dischargeable.”); In re Taggart, 249 F.3d 987, 994 n.9 (9th Cir. 2001) (“The

Supreme Court has held that ‘§ 523(a)(7) preserves from discharge any condition a

state criminal court imposes as part of a criminal sentence.’”) (quoting Kelly, 479

U.S. at 50); In re Levy, 951 F.2d 196, 198–99 (9th Cir. 1991) (Kelly “held that

restitution obligations imposed in state criminal proceedings are not

dischargeable.”).

      Nevertheless, Armstrong contends that his criminal restitution is

dischargeable because, unlike the state statute at issue in Kelly, the California penal

code provides for both “restitution” and a “restitution fine.” Compare Cal. Penal

Code § 1202.4(f) (“[I]n every case in which a victim has suffered economic loss as

a result of the defendant’s conduct, the court shall require that the defendant make

restitution to the victim or victims in an amount established by court order, based

on the amount of loss claimed by the victim or victims or any other showing to the

court.”) with Cal. Penal Code § 1202.4(b) (“In every case where a person is

convicted of a crime, the court shall impose a separate and additional restitution


                                          3
fine, unless it finds compelling and extraordinary reasons for not doing so and

states those reasons on the record.”). Armstrong argues that the holding of Kelly

extends only to the “restitution fine,” and not to a restitution order issued pursuant

to California Penal Code § 1202.4(f).

      This argument is squarely precluded by Kelly, which categorically held that

criminal restitution orders are nondischargeable. 479 U.S. at 49–50. The Court’s

holding did not hinge upon the specific language or structure of the state law at

issue. Rather, it was based upon the desire not to interfere with state courts’

“unfettered administration of their criminal justice systems.” Id. at 44. Here,

Armstrong’s restitution order served California’s penological interests and was

imposed as a function of the administration of that state’s criminal justice system.

It therefore falls within the scope of Kelly, even though the California penal statute

also provides for the imposition of a separate “restitution fine.” To hold otherwise

“would hamper the flexibility of state criminal judges in choosing the combination

of imprisonment, fines, and restitution most likely to further the rehabilitative and

deterrent goals of state criminal justice systems.” Id. at 49.

      Armstrong’s remaining arguments are unavailing. First, we have no

occasion to revisit or challenge Kelly. Second, the principle of federalism

supports, not subverts, the Supreme Court’s interpretation of Section 523(a)(7), for

“[t]o allow a debtor to discharge this [restitution] obligation would be abhorrent to


                                           4
the standards of federalism expressed in Kelly that bankruptcy statutes should not

be interpreted so as to remit state criminal judgments.” In re Warfel, 268 B.R. 205,

212 (B.A.P. 9th Cir. 2001). Third, the fact that the California statute provides that

restitution is to be based on the amount of loss “claimed by the victim or victims”

is irrelevant, for “such [is] the nature of restitution.” In re Steiger, 159 B.R. 907,

912 (B.A.P. 9th Cir. 1993). The fact that restitution “may be determined by

reference to the amount of harm caused by the offender . . . does not alter its penal

character.” Warfel, 268 B.R. at 210 (citing Kelly, 479 U.S. at 51–52).

      AFFIRMED.




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