### In the 

# United States Court of Appeals For the Seventh Circuit

____________________ No. 1 5

- 2 094
U NITED S TATES OF A MERICA , Plaintiff

- Appellee ,

v.

R AKESH W AHI , Defendant

- Appellant

.

____________________ Appeal from the Unit ed States District Court for the Central District of Illinois

. No. 1 1

- CR

- 300 4 3

— Sue E

. Myerscough , Judge

.

____________________
A RGUED F EBRUARY 10 , 201 6

— D ECIDED M ARCH 2, 2017

____________________

Before B AUER , F LAUM , and S YKES , Circuit Judges

. S YKES , Circuit Judg e

. C ircuit precedent holds that a dis trict court has inherent authority to reopen a cl osed 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 th is precedent is sound in light of Ko kkonen v. Guard ian Life Insurance Co. of2 No. 15

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America , 511 U.S. 375 (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 pr oceeding ; and (2) to enable the court to “ manage its proceedings, vindicate its authority, and effectuate its d ecrees.” Id

. at 380. Ancillary jurisdiction is the for mal name for the inherent power recognized in Flower s and Janik . B ut a petition for equitable expungement satisf ies n either 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 : E very circuit that ha s specifically addressed th is question in light of Kokkonen ha s held that the district court lacks ancillary jurisdiction to hear reque st s 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 100 5 , 1014 (9th Cir. 2000). Th ese decisions recognize tha t expungement authority is not inherent but instead must be grounded in a jurisdictional sour ce found in the Constitution or statute s

. Here , however, t he district judge was bound by existing circuit precedent . She acknowledged the force of Kokkonen

1 Because this opinion overrules circuit precedent, we have circulated it to all judges in active service in accordance with Circuit R ule 40(e). No judge voted to hear the case en banc.No. 15

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but nonetheless took jurisdiction over Rakesh Wahi’s e xpungement petition , weighed the equities under the balan cing test a pproved in Flowers and Janik , and concluded that his circumstances did not warrant expungement. W e vacate that decision and remand with instructions to dismiss the petition for lack of jurisdiction.
I. Background

Dr s

. 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 f aced the charg es. 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 a dv ised the court that although t he breach was “likely minimal and unintentional, ” it was “ impossible at this stage ” to determine whether the agent’s access to privileged comm unications had “ spread in any manner to o thers on the pros ecution 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 o rdered th e government to file all discovery mate ri al s with the clerk under seal

. The judge retained jurisdiction for the limited purpose of monitoring the government’s compliance with the turnover order. T he government promptly complied and th e case was closed.4 No. 15

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More than two years later , Wahi filed a pro se petition for expunge ment of the judicial and FBI record s relat ed to his

case

. 2 He alleg ed that the public information about the case
was in hibiting his ability to obtain employment in the medical profession commensurate with his education and experi ence

. Relying on Kokkonen , t he government resisted the petition on jurisdiction al grounds

. In light of circuit precedent, however, t he government a lso addressed the petition on the merits, arguing that Wahi’s circumstances didn’t warrant th e exceptional remedy of expungement

. T he judge approached Wahi’s petition in two steps. First, she acknowledged that our case law

— namely, Flowers and Janik

— support s jurisdiction over requests to expunge judicial records but not recor ds maintained by the exec utive 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, howe ver , the judge pro ceeded to the merits , but only to the extent that Wahi sought e xpungement of the judicial record s in his

case ; she did not take jurisdiction over his request to e xpunge FBI records

. 3 I n th e second step, t he judge held a hearing , appl ied the balancing test described in Flowers and Janik , and conclud ed that Wah i’s circumstances did n o t justify the extraordinary reme dy of expunge ment.

2 To be clear, Wahi sought expungement of the publicly available FBI

r ecords in his case (i.e., records regarding his arrest and indictment). H e did not seek expungement of the FBI ’s nonpublic files

.
3 Wahi has abandoned his quest to expunge FBI records; he does not challenge the judge’s refusal to take jurisdiction over thi s aspect of his expungement petition.No. 15

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Wahi appealed , i nitially represent ing himself , as he had in the district court. After briefing was complete d , 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 jurisdi ctional and merits qu estions. As we’ll explain, our case s 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 on ly that power authoriz ed by Constitution and statute, which is not to be expanded by judicial decree.” Kok k onen , 511 U.S. at 377 (citations omitted)

. W e begin our analysis by not ing w hat is probably obvious: T he district court’s statutory original criminal jurisdiction cannot su pport 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.”). T he charges against Wahi had long sin ce 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 expunge ment a utho r ity , but only for certain types of records and in special classes of cases n ot relevant here

. See, e.g. , 10 U.S.C. § 1565(e) (requiring expungement of DNA records if a military convi ction is overturned); 42 U.S.C. § 14132(d) ( allowing expung ement of FBI DNA records if a conviction is overturned); 18 U.S.C. § 3607(c) (permitting expungement motions in certain drug

- possession cases )

. No statut e vests the court6 No. 15

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with the general power to expunge the judicial record of a criminal case on purely equitable grounds.
That leaves a ncillary jurisdiction a s the only possible source of jurisd iction 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
t he court’s jurisdiction is otherwise secure. As the Supreme Court explained in Kokkonen , t he doctrine holds that the federal courts have a limited inherent authority to assert j urisdiction “ over some matters ( otherwise beyond their competence) that are incidental to other matters properly before them.” 511 U.S. at 378.
The precise question in Kokkonen was whether the do ctrine of ancillary jurisdiction authorize d a district court to hear a postjudgment motion to enforce a settlement agre ement when the court’s dismissal order neithe r incorporated the agreement ’s terms nor rese rved jurisdiction to enforce it. Id

. at 376

– 77. The original lawsuit in Kokkon en 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. The parties eventually settled th e case , and the district judge entered an order of dismissal that made no mention of the settlement agreement. Id

. at 377. When a dispute arose
over one party ’s compliance with its obligations un der the agreement, the counter party returned to court and ask ed the judge t o enforce the agreement. R e l ying on “inherent po wer , ” the district judge issued an order of enforcement , and the Ninth Circuit affirmed. Id

. The Supreme Court reversed , i d

. at 38 2 , observing that a motion to enforce a settlement agreement “requires its own basis for jurisdiction , ” i d

. at 378. The district court ’s invoc a-No. 15

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tion o f “inherent power” could only have been understood

as a reference to ancillary jurisdiction

. T he Court explained that this form of jurisdiction ex ists 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 it s proceedings, vindicate its authority, a nd effectuate its decrees.” Id. at 379

– 80 (citations omitted)

.

“ N either of these heads ,” the Court said, “supports the present assertion of jurisdiction

. ” Id

. at 380. First, t he 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 efficient that they be adjudicated together. ” Id

. Second, the power to adjudicate an alleged breach of a settle ment agreement “is quite remote from what courts require in order to perform their functions.” Id. The judgment in the underlying case consisted of a simple dismissal order, “a disposition that is in no way flouted or imperiled by the alleged breach of the settlement agreement.” Id

. Instead , t he postjudgment di spute was a garden

- variety contract claim

. T he facts to be determined in a claim for breach of a settlement agreement

“ are quite separate from the facts to be determined in the principal suit , a nd automatic jurisdiction over such contracts i s in no way essential to the conduct of federal

- court bus iness.” Id

. at 381.

T he case would be “quite different , ” the Court observed, if the dismissal order had retained jurisdiction to enforce the settlement agr eement or inco rporat e d its terms

. Id

. “ I n that event, a breach of the agreement would be a violation of the8 No. 15

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order, and ancillary jurisdiction to enforce the agreement would therefore exist

. ” Id

. B ut the dismissal order in Kokko nen

— written by the parties th emselves

— did n either of these things , and “ [a] bsent such action,

... enforcement of the settlement agreement is for state courts, unless there is some independent basis for federal jurisdiction.” Id

. at 382.
Kokkonen ’s clarification of the permissible scope o f anci llary jurisdiction require s us to revisit Flowers and Janik , our equitable

- expungement cases. Li ke the lower courts’ asse rtion of jurisdiction in Kokkonen , our treatment of jurisdiction in these opinions rests on unexamined assumptions about the dis trict court’s inherent authority.
Flowers is our most recent opinion on the subject; it pos tdates Kokkonen but does not mention the case. Indeed, Flowers skims over the jurisdictional questio n without much discussion at all , simply citing Janik for the proposition that although district courts lack jurisdiction to expunge executive

- branch records , the “ district courts do have juri sdiction to expunge records maintained by the judicial branch.” 389 F.3d at 738

– 39. Beyond that, Flowers is silent on the juri sdictional issue ; the re st of the opinion is devoted to the balancing test for equitable expungement

. Id

. at 739

– 40. Relying again on Janik , Flower s explain s that “[t]he test for the expungement of judicial records is a balancing test: ‘if the dangers of u nwarranted adverse consequences to the individual outweigh the public interest in maintenance of the records, then expunction is appropriate.’” Id

. at 739 (quoting Janik , 10 F.3d at 472)

. But Flowers added a thumb on the scale : The court held that b ecause the public has a strong interest in maintaining “ accurate and undoctored records , ” th e balance “very rarely tips in favor of expungement.” Id

.No. 15

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Janik , for its part , draws on two earlier cases

— Scruggs v. United States , 929 F.2d 305 ( 7th Cir. 1991) , and Diam ond v. United States , 649 F.2d 496 ( 7th Cir. 1981)

— n either of which directly addresse s the court’s authority to expunge judicial records

. Scruggs involved a request to expunge an arrest record ; we explain ed that no statute authorize d the district court to expunge arrest records, and “ even if ” the court had th e authori ty to do so , the district judge had not abuse d his discretion in de clining the request . 929 F.2d at 30 7

. Along the way to t his holding , Scruggs clarified that while “some cases ” ( inclu ding our own circuit’s decision in Diamond ) contain loose language about the district court’s

“ inherent power s to obliterate arrest records,” th e co urt’s inherent authority actually doesn ’ t reach that far. Id

. at 306. Whatever else might be said about the scope of inherent power , it is plainly limited to “ the management of judicial business” and does not include “ supervisory powers over the behavior of the Executive Branch of the government.” Id

. This part of Scruggs is in significant tension with Diamond , which a uthorized district judges to expunge arrest records

u sing a case

- specific balancing test without ever address ing the source of the court’s authority over records held by the executive branch

. 649 F.2d at 49 9

. Although Scruggs noted th is flaw in Diam ond , the case remains on the books , and the balancing test it approved is carried forward to Janik and Flowers

. And again, neither Scruggs nor Diamond has an ything to say about the source of the court’s authority to expunge judicial records.
It should be clear from this brief survey th at Flowers and Janik are built on a weak foundation , resting as they do on a series of unexplained ass ertions

— what we’ve described10 No. 15

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elsewhere as “ the judicial equivalent of a rumor chain.” Thomas v. Clements , 797 F.3d 445, 448 (7th Cir. 2015). Perhaps it goes too far to characterize them as “ d rive

- by jurisdictio nal rulings ” lacking in any precedential effect whatsoever

. Steel Co. v. Citizens for a Better Env’t , 523 U.S. 83, 91 (1998); s ee also Magruder v. Fid. Brokerage Servs

. LLC , 818 F.3d 285 , 289 ( 7th Cir. 2016) (“[A]n unreasoned assertion of jurisdiction lacks precedential value.”). Still, there is good reason to revisit the jurisdictional issue that both decisions treated so perfunctorily . Neither opinion addresse s the effect of the Supreme Court’s decision in Kokkonen

. ( Janik predates it; Flowers overlooks it

. ) When an intervening Supreme Court decision unsettles our precedent, it is the ruling of the Court that sits on 1 First Street that must carry the day. See D e Leon Castellanos v. Holder , 652 F.3d 762, 765 (7th Cir. 2011); Reiser v. Residential Funding Corp. , 380 F.3d 1027, 1029 (7th Cir. 2004 ). Starting afresh and a pplying Kokkonen , we now conclude that the district court’s ancillary jurisdiction does not stretch so far as to permit the assertion of jurisdiction over a petition to expunge the judicial record in a criminal case on purely equitable grounds

. First, a request for equitable expung ement is not factually dependent on th e underlying crimin al

case in any sense that matters. I nstead, i t will always turn on fact s collateral to or arising after the case is over

— in short,
matters external to the cr iminal c ase itself

. For example, h ere Wahi a lleg es that he has been unable to secure professional

e mployment because of the reputational taint associated with the public record of his indictment and arrest

. In anot her case a defendant might claim that his post judgment good behavior justifies expungement

. O ther scenarios can be imagined. The material point is that expungement based onNo. 15

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a n equitable balancing test that weighs the p ublic and private interest s in maintaining the judicial record is a wholly collateral inquiry based on new facts and , frankly, a policy c hoice . As such, it is not incidental to anything properly before the court and “requires its own basis for jurisdiction.” Kokkonen , 511 U.S. at 378. Second, the power to expunge judicial records on equit able grounds is not incidental to the court’s ability t o function successfully as a court

. Equitable expungement i s not ne eded
to enable the court to “manage its proceedings” for the simple reason that the criminal proceedings are over

. Id

. at 380. N or is expungement authority ne eded to enable the court to “vindicate its authority” or “effectuate its decrees

. ” I d

. Expungement is not a remedial tool to enforce a ruling in the underlying criminal case. In short, e quitable expung ement “is in no way essential to the conduct of federal

- court business.” Id

. at 381. Properly understood, then, ancillary jurisdiction does not include a general equitable power to expunge judicial re cords in a criminal case . Expungement authority must instead have a source in the Constitution or statutes. In light of Kokkonen , Flowers and Janik are overruled

. T o th e extent that any language in Scruggs or Diamond suggests that the district court has inherent power to order expungement of judicial records , that language is withdrawn.
With this holding we join five of our sister circuits , each of which has read Kokkonen to preclude the assertion of ancillary jurisdiction over a request to expunge judicial records on purely equitable grounds. See Doe , 833 F.3d at 199; Field , 756 F.3d at 916 ; Coloian , 480 F.3d at 52 ; Meyer , 439 F.3d at 859

– 60 ; Dunegan , 251 F.3d at 479 ; Sumner ,12 No. 15

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226 F.3d at 1014

. No circuit has rejected this understanding of Kokkonen

. Our status as an outlier is another compelling reason to overrule. See Glaser v. Wound Care Consultants, Inc. , 570 F.3d 907, 915 (7th Cir. 2009) (explaining that circuit precedent may justifiably be overruled “when our position remains a minority one among other circuits [or] when the Supreme Court issues a decision on an analogous issue that compels us to reconsider our position”) (citation omitted). Here, the district j udge faithfully followed existing circuit precedent , as she was required to do, and denied Wahi’s expungement petition on the merits using the balancing test approved in Flowers and Janik . W e V ACATE that decision and R E MAND with instructions to dismiss for lack of jurisdiction

.