Court Opinion

ID: 4149896
Source: CourtListenerOpinion
Date Created: 2017-03-02 22:00:56.346768+00
Date Added: 2024-06-11T07:46:29.776854
License: Public Domain

In the

    United States Court of Appeals
                 For the Seventh Circuit
                    ____________________
No. 15-2094
UNITED STATES OF AMERICA,
                                                 Plaintiff-Appellee,

                                v.

RAKESH WAHI,
                                             Defendant-Appellant.
                    ____________________

            Appeal from the United States District Court
                 for the Central District of Illinois.
           No. 11-CR-30043 — Sue E. Myerscough, Judge.
                    ____________________

    ARGUED FEBRUARY 10, 2016 — DECIDED MARCH 2, 2017
                    ____________________

   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
2                                                         No. 15-2094

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 proceeding; and (2) to enable the court to “manage its
proceedings, vindicate its authority, and effectuate its de-
crees.” Id. at 380.
    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

1 Because this opinion overrules circuit precedent, we have circulated it
to all judges in active service in accordance with Circuit Rule 40(e). No
judge voted to hear the case en banc.
No. 15-2094                                                3

but nonetheless took jurisdiction over Rakesh Wahi’s ex-
pungement petition, weighed the equities under the balanc-
ing 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 ad-
vised 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 commu-
nications had “spread in any manner to others on the prose-
cution 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.
4                                                           No. 15-2094

   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, howev-
er, 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 ex-
punge 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.

2 To be clear, Wahi sought expungement of the publicly available FBI
records in his case (i.e., records regarding his arrest and indictment). He
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 this aspect of his
expungement petition.
No. 15-2094                                                     5

    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 jurisdic-
tional 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 (citations omitted). We begin our
analysis by noting what is probably obvious: The district
court’s statutory original criminal jurisdiction cannot sup-
port 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 au-
thority, 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 convic-
tion is overturned); 42 U.S.C. § 14132(d) (allowing expunge-
ment 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
6                                                   No. 15-2094

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.
    The precise question in Kokkonen was whether the doc-
trine of ancillary jurisdiction authorized a district court to
hear a postjudgment motion to enforce a settlement agree-
ment when the court’s dismissal order neither incorporated
the agreement’s terms nor reserved jurisdiction to enforce it.
Id. at 376–77. 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. 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. 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 pow-
er,” the district judge issued an order of enforcement, and
the Ninth Circuit affirmed. Id.
   The Supreme Court reversed, id. at 382, observing that a
motion to enforce a settlement agreement “requires its own
basis for jurisdiction,” id. at 378. The district court’s invoca-
No. 15-2094                                                      7

tion 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 (citations omitted).
    “Neither of these heads,” the Court said, “supports the
present assertion of jurisdiction.” Id. at 380. 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 efficient
that they be adjudicated together.” Id. Second, the power to
adjudicate an alleged breach of a settlement 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, the postjudgment dis-
pute was a garden-variety contract claim. The 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, and automatic jurisdiction over such contracts
is in no way essential to the conduct of federal-court busi-
ness.” Id. at 381.
    The case would be “quite different,” the Court observed,
if the dismissal order had retained jurisdiction to enforce the
settlement agreement or incorporated its terms. Id. “In that
event, a breach of the agreement would be a violation of the
8                                                 No. 15-2094

order, and ancillary jurisdiction to enforce the agreement
would therefore exist.” Id. But the dismissal order in
Kokkonen—written by the parties themselves—did neither 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 of ancil-
lary jurisdiction requires us to revisit Flowers and Janik, our
equitable-expungement cases. Like the lower courts’ asser-
tion of jurisdiction in Kokkonen, our treatment of jurisdiction
in these opinions rests on unexamined assumptions about
the district court’s inherent authority.
    Flowers is our most recent opinion on the subject; it post-
dates Kokkonen but does not mention the case. Indeed,
Flowers skims over the jurisdictional question 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 juris-
diction to expunge records maintained by the judicial
branch.” 389 F.3d at 738–39. Beyond that, Flowers is silent on
the jurisdictional issue; the rest of the opinion is devoted to
the balancing test for equitable expungement. Id. at 739–40.
Relying again on Janik, Flowers explains that “[t]he test for
the expungement of judicial records is a balancing test: ‘if
the dangers of unwarranted 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 because the public has a strong
interest in maintaining “accurate and undoctored records,”
the balance “very rarely tips in favor of expungement.” Id.
No. 15-2094                                                  9

   Janik, for its part, draws on two earlier cases—Scruggs v.
United States, 929 F.2d 305 (7th Cir. 1991), and Diamond v.
United States, 649 F.2d 496 (7th Cir. 1981)—neither of which
directly addresses the court’s authority to expunge judicial
records. Scruggs involved a request to expunge an arrest
record; we explained that no statute authorized the district
court to expunge arrest records, and “even if” the court had
the authority to do so, the district judge had not abused his
discretion in declining the request. 929 F.2d at 307.
    Along the way to this holding, Scruggs clarified that
while “some cases” (including our own circuit’s decision in
Diamond) contain loose language about the district court’s
“inherent powers to obliterate arrest records,” the court’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 authorized district judges to expunge arrest records
using a case-specific balancing test without ever addressing
the source of the court’s authority over records held by the
executive branch. 649 F.2d at 499. Although Scruggs noted
this flaw in Diamond, 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 any-
thing to say about the source of the court’s authority to
expunge judicial records.
    It should be clear from this brief survey that Flowers and
Janik are built on a weak foundation, resting as they do on a
series of unexplained assertions—what we’ve described
10                                                     No. 15-2094

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 “drive-by jurisdiction-
al rulings” lacking in any precedential effect whatsoever.
Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 91 (1998); see
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 addresses 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 De 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 applying 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 expunge-
ment is not factually dependent on the underlying criminal
case in any sense that matters. Instead, it will always turn on
facts collateral to or arising after the case is over—in short,
matters external to the criminal case itself. For example, here
Wahi alleges that he has been unable to secure professional
employment because of the reputational taint associated
with the public record of his indictment and arrest. In anoth-
er case a defendant might claim that his postjudgment good
behavior justifies expungement. Other scenarios can be
imagined. The material point is that expungement based on
No. 15-2094                                                  11

an equitable balancing test that weighs the public and
private interests in maintaining the judicial record is a
wholly collateral inquiry based on new facts and, frankly, a
policy choice. 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 equita-
ble grounds is not incidental to the court’s ability to function
successfully as a court. Equitable expungement is not needed
to enable the court to “manage its proceedings” for the
simple reason that the criminal proceedings are over. Id. at
380. Nor is expungement authority needed to enable the
court to “vindicate its authority” or “effectuate its decrees.”
Id. Expungement is not a remedial tool to enforce a ruling in
the underlying criminal case. In short, equitable expunge-
ment “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 rec-
ords 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. To the 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. 15-2094

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 judge 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. We VACATE that decision and
REMAND with instructions to dismiss for lack of jurisdiction.