United States v. Wahi

• Decision Date: 02 March 2017
• Docket Number: No. 15-2094,15-2094
• Citation: 850 F.3d 296
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Rakesh WAHI, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

850 F.3d 296

UNITED STATES of America, Plaintiff-Appellee,

v.Rakesh WAHI, Defendant-Appellant.

No. 15-2094

United States Court of Appeals, Seventh Circuit.

Argued February 10, 2016

Decided March 2, 2017

Greggory R. Walters, Attorney, Office of the United States Attorney, Peoria, IL, for Plaintiff–Appellee.

Eamon P. Joyce, Attorney, Sidley Austin LLP, New York, NY, Mark D. Taticchi, Attorney, 3G, Brooklyn, NY, for Defendant–Appellant.

Before Bauer, Flaum, and Sykes, Circuit Judges.

Sykes, Circuit Judge.

Circuit precedent holds that a district court has inherent authority to reopen a closed criminal case to consider a request to expunge the judicial record based on an equitable balancing test that weighs the public and private interests at stake. See United States v. Flowers , 389 F.3d 737, 739 (7th Cir. 2004) ; United States v. Janik , 10 F.3d 470, 472 (7th Cir. 1993). We're asked to decide whether this precedent is sound in light of Kokkonen v. Guardian Life Insurance Co. of America , 511 U.S. 375, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994). Kokkonen clarified that ancillary jurisdiction exists for two limited purposes: (1) to permit claims that are factually interdependent to be resolved in a single proceeding; and (2) to enable the court to "manage its proceedings, vindicate its authority, and effectuate its decrees." Id. at 380, 114 S.Ct. 1673.

Ancillary jurisdiction is the formal name for the inherent power recognized in Flowers and Janik . But a petition for equitable expungement satisfies neither of Kokkonen 's criteria for the assertion of ancillary jurisdiction. Because Flowers and Janik cannot be reconciled with Kokkonen , they are overruled.¹ This holding brings our circuit into conformity with a growing appellate consensus: Every circuit that has specifically addressed this question in light of Kokkonen has held that the district court lacks ancillary jurisdiction to hear requests for equitable expungement. Doe v. United States , 833 F.3d 192, 199 (2d Cir. 2016) ; United States v. Field , 756 F.3d 911, 916 (6th Cir. 2014) ; United States v. Coloian , 480 F.3d 47, 52 (1st Cir. 2007) ; United States v. Meyer , 439 F.3d 855, 859–60 (8th Cir. 2006) ; United States v. Dunegan , 251 F.3d 477, 479 (3d Cir. 2001) ; United States v. Sumner , 226 F.3d 1005, 1014 (9th Cir. 2000). These decisions recognize that expungement authority is not inherent but instead must be grounded in a jurisdictional source found in the Constitution or statutes.

Here, however, the district judge was bound by existing circuit precedent. She acknowledged the force of Kokkonen but nonetheless took jurisdiction over Rakesh Wahi's expungement petition, weighed the equities under the balancing test approved in Flowers and Janik , and concluded that his circumstances did not warrant expungement. We vacate that decision and remand with instructions to dismiss the petition for lack of jurisdiction.

I. Background

Drs. Gautam Gupta and Rakesh Wahi operated nutrition clinics throughout Illinois. In 2011 they were indicted on charges of mail fraud, healthcare fraud, and conspiracy to defraud Medicaid, private insurers, and their patients. Gupta fled the country, but Wahi faced the charges. After more than a year of pretrial proceedings, the government learned that during the execution of a search warrant for electronic records, an FBI Special Agent had inadvertently accessed emails that might have contained communications covered by the attorney-client privilege. A prosecutor advised the court that although the breach was "likely minimal and unintentional," it was "impossible at this stage" to determine whether the agent's access to privileged communications had "spread in any manner to others on the prosecution team."

Because the prejudice to Wahi's case was unknown, the government moved to dismiss the indictment. The judge granted the motion, dismissed the indictment, and ordered the government to file all discovery materials with the clerk under seal. The judge retained jurisdiction for the limited purpose of monitoring the government's compliance with the turnover order. The government promptly complied and the case was closed.

More than two years later, Wahi filed a pro se petition for expungement of the judicial and FBI records related to his case.² He alleged that the public information about the case was inhibiting his ability to obtain employment in the medical profession commensurate with his education and experience. Relying on Kokkonen , the government resisted the petition on jurisdictional grounds. In light of circuit precedent, however, the government also addressed the petition on the merits, arguing that Wahi's circumstances didn't warrant the exceptional remedy of expungement.

The judge approached Wahi's petition in two steps. First, she acknowledged that our caselaw—namely, Flowers and Janik —supports jurisdiction over requests to expunge judicial records but not records maintained by the executive branch. Flowers , 389 F.3d at 738–39 ; Janik , 10 F.3d at 472. She also acknowledged that Flowers and Janik may be on shaky ground under Kokkonen . Bound by circuit precedent, however, the judge proceeded to the merits, but only to the extent that Wahi sought expungement of the judicial records in his case; she did not take jurisdiction over his request to expunge FBI records.³ In the second step, the judge held a hearing, applied the balancing test described in Flowers and Janik , and concluded that Wahi's circumstances did not justify the extraordinary remedy of expungement.

Wahi appealed, initially representing himself, as he had in the district court. After briefing was completed, however, counsel appeared on his behalf and sought leave to file a supplemental brief. We granted the motion and also allowed the government an opportunity to respond. So we have the benefit of counseled adversarial briefing on both the jurisdictional and merits questions. As we'll explain, our cases regarding the district court's inherent power to expunge judicial records are inconsistent with Kokkonen and thus require reconsideration.

II. Analysis

"Federal courts are courts of limited jurisdiction. They possess only that power authorized by Constitution and statute, which is not to be expanded by judicial decree." Kokkonen , 511 U.S. at 377, 114 S.Ct. 1673 (citations omitted). We begin our analysis by noting what is probably obvious: The district court's statutory original criminal jurisdiction cannot support Wahi's petition for expungement. See 18 U.S.C. § 3231 ("The district courts of the United States shall have original jurisdiction ... of all offenses against the laws of the United States."). The charges against Wahi had long since been dismissed when he filed his petition; the entry of final judgment in the case ended the court's § 3231 jurisdiction.

A handful of statutes give the court expungement authority, but only for certain types of records and in special classes of cases not relevant here. See, e.g. , 10 U.S.C. § 1565(e) (requiring expungement of DNA records if a military conviction is overturned); 42 U.S.C. § 14132(d) (allowing expungement of FBI DNA records if a conviction is overturned); 18 U.S.C. § 3607(c) (permitting expungement motions in certain drug-possession cases). No statute vests the court with the general power to expunge the judicial record of a criminal case on purely equitable grounds.

That leaves ancillary jurisdiction as the only possible source of jurisdiction for Wahi's expungement petition. The term "ancillary jurisdiction" refers to the court's power to hear claims that are closely linked to other claims over which the court's jurisdiction is otherwise secure. As the Supreme Court explained in Kokkonen , the doctrine holds that the federal courts have a limited inherent authority to assert jurisdiction "over some matters (otherwise beyond their competence) that are incidental to other matters properly before them." 511 U.S. at 378, 114 S.Ct. 1673.

The precise question in Kokkonen was whether the doctrine of ancillary jurisdiction authorized a district court to hear a postjudgment motion to enforce a settlement agreement when the court's dismissal order neither incorporated the agreement's terms nor reserved jurisdiction to enforce it. Id. at 376–77, 114 S.Ct. 1673. The original lawsuit in Kokkonen was filed in state court, alleged only state-law claims, and was removed to federal court on the basis of diversity jurisdiction. Id. at 376, 114 S.Ct. 1673. The parties eventually settled the case, and the district judge entered an order of dismissal that made no mention of the settlement agreement. Id. at 377, 114 S.Ct. 1673. When a dispute arose over one party's compliance with its obligations under the agreement, the counterparty returned to court and asked the judge to enforce the agreement. Relying on "inherent power," the district judge issued an order of enforcement, and the Ninth Circuit affirmed. Id.

The Supreme Court reversed, id. at 382, 114 S.Ct. 1673, observing that a motion to enforce a settlement agreement "requires its own basis for jurisdiction," id. at 378, 114 S.Ct. 1673. The district court's invocation of "inherent power" could only have been understood as a reference to ancillary jurisdiction. The Court explained that this form of jurisdiction exists for "two separate, though sometimes related, purposes: (1) to permit disposition by a single court of claims that are, in varying respects and degrees, factually interdependent, and (2) to enable a court to function successfully, that is, to manage its proceedings, vindicate its authority, and effectuate its decrees." Id. at 379–80, 114 S.Ct. 1673 (citations omitted).

"Neither of these heads," the Court said, "supports the present assertion of jurisdiction." Id. at 380, 114 S.Ct. 1673. First, the facts of the original suit and the facts of a claim for breach of the settlement agreement "have nothing to do with each other; it would neither be necessary nor even particularly...