United States v. Hamed

• Decision Date: 05 October 2020
• Docket Number: No. 19-1184,19-1184
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Mubarak Ahmed HAMED, Defendant-Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

976 F.3d 825

UNITED STATES of America, Plaintiff-Appellee,

v.Mubarak Ahmed HAMED, Defendant-Appellant.

No. 19-1184

United States Court of Appeals, Eighth Circuit.

Submitted: February 13, 2020

Filed: October 5, 2020

James O. Hacking, III, Hacking Law Practice LLC, St. Louis, MO, argued (Amany Ragab Hacking, on the brief), for defendant-appellant.

Christopher W. Hollis, U.S. Dept. of Justice, Office of Immigration Litigation, Dist. Ct. Section, Washington, DC, argued (Joseph H. Hunt, Asst. Atty., Gen., Civil Div., William C. Peachy, Director, Office of Immigration Litigation, Dist. Ct. Section, Kathleen A. Connolly, Deputy Chief, National Security & Affirmative Litigation Unit, on the brief), for plaintiff-appellee.

Before SMITH, Chief Judge, COLLOTON and STRAS, Circuit Judges.

STRAS, Circuit Judge.

This case requires us to determine what effect, if any, a guilty plea has on later denaturalization proceedings. In this case, the district court¹ ruled that Hamed was collaterally estopped from taking a position that was inconsistent with what he said when he pleaded guilty. Although we conclude that a different species of estoppel applies, we affirm.

I.

Hamed, a native of Sudan, originally arrived in the United States in 1990 under a student visa. He eventually became the chief executive officer of the Islamic American Relief Agency, which purportedly had humanitarian goals, including aiding the poor, feeding the hungry, and sheltering the orphaned. The organization's actual activities, however, were not quite so noble. It would send funds to Khalid Al-Sudanee, an individual with ties to terrorism, who would then transport the money into Iraq in violation of economic sanctions in place at the time.

While this illegal activity was ongoing, Hamed applied for naturalization. In one form, he marked "no" in response to the question, "[h]ave you ever[ ] ... knowingly committed any crime for which you have not been arrested?" When later asked the same question during an in-person interview, he did not change his answer.

Although Hamed's naturalization application was approved in 2000, the truth soon came to light. By 2001, the Department of the Treasury uncovered the illegal transfers into Iraq. And then, in 2004, it announced that both Al-Sudanee and Hamed's agency were "Specifically Designated Global Terrorist[s]." Six years later, Hamed finally pleaded guilty to violating and conspiring to violate the Iraq Sanctions from "March 1991, ... until in or around May 2005," see 18 U.S.C. § 371 ; 50 U.S.C. §§ 1701 – 1706, and to misusing the organization's "tax-exempt status" and omitting "relevant, material information" from tax forms "as early as ... 1997," see 26 U.S.C. § 7212(a).

Hamed's troubles were not over. In 2018, eight years after pleading guilty and eighteen years after first becoming a citizen, the government commenced proceedings to denaturalize him. The district court agreed with the government, in response to a motion for judgment on the pleadings, that Hamed's failure to disclose his criminal activities called for denaturalization because it amounted to "concealment of a material fact or ... willful misrepresentation." 8 U.S.C. § 1451(a).

II.

We review the district court's decision de novo. Clemons v. Crawford , 585 F.3d 1119, 1124 (8th Cir. 2009). Judgment on the pleadings was appropriate if, "view[ing] all facts pleaded by the nonmoving party as true and grant[ing] all reasonable inferences in favor of that party[,] ... no material issue of fact remains to be resolved and the movant is entitled to judgment as a matter of law." Id. (first and second alterations in original) (internal quotation marks and citation omitted).

A.

The government's reason for seeking denaturalization was simple enough. Once it discovered that Hamed "procured" naturalization "by conceal[ing]" or "willful[ly] misrepresent[ing]" his criminal activity, it had a statutory "duty" to seek revocation. 8 U.S.C. § 1451(a). The complaint, as relevant here, alleged that (1) Hamed "misrepresented and concealed" his criminal activity "throughout [the] naturalization proceedings"; (2) the misrepresentation and concealment was "willful"; (3) his criminal history was "material"; and (4) Hamed "procured his naturalization" through the "misrepresentation and concealment." See United States v. Hirani , 824 F.3d 741, 748 (8th Cir. 2016).

Hamed's defense was also simple. In his view, he did "not deliberate[ly] or voluntar[ily]" misrepresent or conceal anything because he was unaware at the time that his actions were illegal. See id. at 747 (assuming without deciding that the omissions or misrepresentations had to be "deliberate and voluntary").

The district court sided with the government. Relying on the plea agreement and Hamed's admissions, the court concluded that the defense was unavailable under the doctrine of collateral estoppel. See Total Petroleum, Inc. v. Davis , 822 F.2d 734, 737 n.6 (8th Cir. 1987) (discussing different types of estoppel).

By relying so heavily on Hamed's earlier admissions, however, the district court may technically have been applying judicial estoppel, not collateral estoppel. See, e.g. , id. ; see also Thore v. Howe , 466 F.3d 173, 185–87 (1st Cir. 2006) (applying judicial estoppel to the facts admitted during a guilty plea); Lowery v. Stovall , 92 F.3d 219, 224–25 (4th Cir. 1996) (same); Mirando v. U.S. Dep't of Treasury , 766 F.3d 540, 544–48 (6th Cir. 2014) (same). But even if the court mislabeled its analysis, our task is to examine the substance of its reasoning. See Henry L. Firm v. Cuker Interactive, LLC , 950 F.3d 528, 534 (8th Cir. 2020) ("Although the district court used the term judicial estoppel, it is plain that its reasoning and the record supports equitable estoppel."); Bracewell v. U.S. Bank Nat'l Ass'n , 748 F.3d 793, 796 (8th Cir. 2014) ("looking beyond the label" of equitable estoppel and analyzing promissory estoppel because the complaint alleged that theory "in substance"). And here, given the "close relationship to the directly contested issue of collateral estoppel[,] we may properly rely upon [judicial estoppel] as an alternative basis for affirmance." Allen v. Zurich Ins. Co. , 667 F.2d 1162, 1168 n.5 (4th Cir. 1982) (considering judicial estoppel, even if it was never raised).

B.

"[J]udicial estoppel protects the integrity of the judicial process" by preventing a party from taking a position in a legal proceeding that is inconsistent with one it took earlier, "simply because [its] interests have changed."

Stallings v. Hussmann Corp. , 447 F.3d 1041, 1047 (8th Cir. 2006) (quotation marks omitted). For example, a person may not "state[ ] facts under oath during ... a trial" and then deny "those facts in a second suit," even if the parties are different. Monterey Dev. Corp. v. Law.’s Title Ins. Corp. , 4 F.3d 605, 609 (8th Cir. 1993). The doctrine, which courts may "invoke[ ]" at their "discretion," New Hampshire v. Maine , 532 U.S. 742, 750, 121 S.Ct. 1808, 149 L.Ed.2d 968 (2001) (quotation marks omitted), applies when:

First, a party's later position [is] clearly inconsistent with its earlier position. Second, ... [a] party has succeeded in persuading a court to accept that party's earlier position, so that judicial acceptance of an inconsistent position in a later proceeding would create the perception that either the first or the second court was misled.^{[2 ]} ... [And third,] the party seeking to assert an inconsistent position would derive an unfair advantage or impose an unfair detriment on the opposing party if not estopped.

Stallings , 447 F.3d at 1047 (quoting New Hampshire , 532 U.S. at 750–51, 121 S.Ct. 1808 ).

"Here, the district court failed to apply the three factors," so "we will apply each [one] to determine if the district court abused its discretion." Id. at 1049 ; see also Triple H Debris Removal, Inc. v. Companion Prop. & Cas. Ins. Co. , 647 F.3d 780, 785 (8th Cir. 2011) (applying an abuse-of-discretion standard of review to the judicial-estoppel factors, even though the district court proceeded under a judicial-notice theory). The first is comparative: is Hamed's current position "clearly inconsistent" with the one from his criminal proceeding? Jones v. Bob Evans Farms, Inc. , 811 F.3d 1030, 1033 (8th Cir. 2016) (quoting New Hampshire , 532 U.S. at 750, 121 S.Ct. 1808 ). It does not take much digging to conclude that the answer is "yes." When pleading guilty, Hamed repeatedly admitted that he "knowingly and willfully" committed the tax and sanctions-related crimes, which is inconsistent with his current position that at the time he had no clue that his actions were criminal. See Lowery , 92 F.3d at 224 (analyzing specific statements during the plea to determine whether judicial estoppel applied).

Digging a bit deeper into the record removes any doubt. During the plea colloquy, for example, Hamed admitted that,

beginning on or about March 1991 , and continuing until in or around May 2005, ... [he] knowingly and willfully conspired, confederated and agreed to violate Executive Orders 12722 and 12724 and the Iraq Sanctions Regulations by transferring, attempting to transfer, and causing to be transferred, funds from the United States to Iraq ... in violation of [various federal laws].

(Emphasis added). This admission is clearly inconsistent with his position now that the earliest he could have learned about the criminality of his actions was 2001, nearly a year after he became a naturalized citizen.

His argument that he had no idea what was in his tax forms fares no better. As part of the factual basis for his plea, he admitted to "knowingly fail[ing] to disclose the fact that he and [his organization] had provided funds for projects and persons in Iraq." (Emphasis added). He also acknowledged "fil[ing] or caus[ing] to be filed" tax returns for "each year 1997 through 2003." If he knew that he failed to disclose material facts in his tax forms, then he cannot have been ignorant about what was...