Court Opinion

ID: 4461633
Source: CourtListenerOpinion
Date Created: 2019-12-05 18:00:32.006546+00
Date Added: 2024-06-11T14:53:36.587232
License: Public Domain

FOR PUBLICATION

    UNITED STATES COURT OF APPEALS
         FOR THE NINTH CIRCUIT

 UNITED STATES OF AMERICA,                      No. 18-35998
           Plaintiff-Appellee,
                                                D.C. No.
                  v.                       3:17-cv-00247-JWS-
                                                  MMS
 PHODAY BABA PHATTEY,
 a.k.a. Foday Fatty,
          Defendant-Appellant.                    OPINION

         Appeal from the United States District Court
                  for the District of Alaska
         John W. Sedwick, District Judge, Presiding

                   Submitted August 5, 2019*
                      Anchorage, Alaska

                       Filed December 5, 2019

      Before: Richard C. Tallman, Sandra S. Ikuta, and
              N. Randy Smith, Circuit Judges.

                       Opinion by Judge Ikuta

    *
      The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
2                  UNITED STATES V. PHATTEY

                            SUMMARY**

                            Immigration

    Affirming the district court’s grant of summary judgment
in favor of the government, the panel held that the five-year
statute of limitations set out by 28 U.S.C. § 2462, which
generally applies to actions to enforce civil penalties, does
not apply to denaturalization proceedings.

    In 2010, Phoday Phattey was issued a certificate of
naturalization. In 2017, the government learned that Phattey
had obtained his citizenship by fraud and filed a complaint to
revoke naturalization under 8 U.S.C. § 1451(a). Although
§ 1451(a) does not contain a statute of limitations, Phattey
argued that the five-year statute of limitations set out by
28 U.S.C. § 2462 applies to revocation proceedings and
that, therefore, the statute of limitations to bring the
denaturalization action had expired.

    Observing that the Supreme Court has long held that
revocation of citizenship is not a penalty, the panel held that
§ 2462 does not provide Phattey a statute-of-limitations
defense because denaturalization is not a penalty for purposes
of § 2462. The panel rejected Phattey’s argument that the
relevant precedent had been superseded by Kokesh v. SEC,
137 S. Ct. 1635 (2017), in which the Supreme Court
concluded that § 2462 applies to disgorgement actions
brought by the Securities Exchange Commission. The panel
observed that the Supreme Court set out two principles in

    **
       This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
                UNITED STATES V. PHATTEY                     3

Kokesh: 1) whether a sanction represents a penalty turns in
part on whether the wrong sought to be addressed is a wrong
to the public or a wrong to an individual; and 2) a pecuniary
sanction operates as a penalty only if it is sought for the
purpose of punishment, and to deter others from offending.

    The panel explained that, although the wrong sought to be
redressed by denaturalization is a wrong to the public,
revocation of citizenship is not sought for the purpose of
punishment or to deter future violations. Rather, the purpose
of denaturalization is to remedy a past fraud by taking back
a benefit to which the alien is not entitled and thus restoring
the status quo ante.

                         COUNSEL

Nicolas A. Olano and Lara E. Nations, Nations Law Group,
Anchorage, Alaska, for Defendant-Appellant.

Joseph F. Carilli, Jr., Trial Attorney; Joseph H. Hunt,
Assistant Attorney General, William C. Peachey, Director,
District Court Section; Timothy M. Belsan, Chief, National
Security & Affirmative Litigation Unit; Office of
Immigration Litigation, Civil Division, United States
Department of Justice, Washington, D.C.; for
Plaintiff-Appellee.
4               UNITED STATES V. PHATTEY

                          OPINION

IKUTA, Circuit Judge:

     This appeal raises the question whether the revocation of
citizenship on the ground that the grant of citizenship was
“illegally procured or . . . procured by concealment of a
material fact or by willful misrepresentation,” 8 U.S.C.
§ 1451(a), constitutes a “penalty” for purposes of the five-
year statute of limitations generally applicable to civil fines,
penalties, and forfeitures, see 28 U.S.C. § 2462. Because the
purpose of denaturalization is to remedy a past fraud by
taking back a benefit to which an alien is not entitled, see
Johannessen v. United States, 225 U.S. 227, 242–43 (1912),
we conclude it is not a penalty, and the statute of limitations
does not apply.

                               I

    Phoday Phattey arrived in New York in 1995 with a non-
immigrant U.S. visa and a Gambian passport issued to Foday
Fatty. He submitted an application for asylum and
withholding of removal under the name Foday Fatty. An
immigration judge denied his application and ordered him
removed, but the government was unable to locate him to
execute the removal order.

    Shortly after he was ordered to be removed, Phattey
applied again for asylum and withholding, this time using the
name Phoday Phattey. In his application, Phattey claimed he
was a citizen of Mauritania who had recently arrived in
Miami, Florida. He also denied having a passport or using
any other names. As required by the application, he swore
that the contents of the application were all “true and
                    UNITED STATES V. PHATTEY                            5

correct.” The second application for asylum was granted in
September 1997. Phattey successfully registered as a legal
permanent resident in 2004.

    In April 2010, Phattey applied for citizenship under the
name Phoday Phattey. He left blank the space provided to
identify other names used, which indicated that he had never
used another name. Phattey also falsely stated in the
application that he had never lied to a government official to
gain entry or admission into the United States, given false or
misleading information to a government official while
applying for an immigration benefit or to prevent deportation
or removal, or been ordered to be removed or deported.
Phattey signed this application under penalty of perjury,
certifying that his answers were all “true and correct.” In his
interview with an immigration officer, Phattey again swore
that the contents of his application were true and correct.
Phattey’s application for citizenship was successful. He took
the Oath of Allegiance on August 20, 2010, see 8 C.F.R.
§ 337.1, and was issued a certificate of naturalization.

    In November 2017, as part of a Department of Homeland
Security investigation, the government learned of Phattey’s
immigration fraud and filed a complaint to revoke
naturalization. See 8 U.S.C. § 1451(a).1 The government

   1
       8 U.S.C. § 1451(a) states, in material part:

          It shall be the duty of the United States attorneys for the
          respective districts, upon affidavit showing good cause
          therefor, to institute proceedings in any district court of
          the United States in the judicial district in which the
          naturalized citizen may reside at the time of bringing
          suit, for the purpose of revoking and setting aside the
          order admitting such person to citizenship and
6                   UNITED STATES V. PHATTEY

later presented matching fingerprints from the asylum
applications of Foday Fatty and Phoday Phattey to establish
that the two are the same person.

    In his answer to the government’s complaint, Phattey
invoked his Fifth Amendment right against self-incrimination
and declined to respond to the charges against him.
Nevertheless, he raised the defense that the statute of
limitations to bring a denaturalization action under § 1451(a)
had expired. Although § 1451(a) does not contain a statute
of limitations, Phattey argued that 28 U.S.C. § 2462—a
catch-all provision imposing a five-year limitations period on
any action to enforce a penalty—applies to revocation
proceedings.2

          canceling the certificate of naturalization on the ground
          that such order and certificate of naturalization were
          illegally procured or were procured by concealment of
          a material fact or by willful misrepresentation . . . :
          Provided, That refusal on the part of a naturalized
          citizen within a period of ten years following his
          naturalization to testify as a witness in any proceeding
          before a congressional committee concerning his
          subversive activities . . . shall be held to constitute a
          ground for revocation of such person’s naturalization
          under this subsection . . . .
    2
        28 U.S.C. § 2462 provides:

          Except as otherwise provided by Act of Congress, an
          action, suit or proceeding for the enforcement of any
          civil fine, penalty, or forfeiture, pecuniary or otherwise,
          shall not be entertained unless commenced within five
          years from the date when the claim first accrued if,
          within the same period, the offender or the property is
          found within the United States in order that proper
          service may be made thereon.
                UNITED STATES V. PHATTEY                     7

    The parties both moved for summary judgment. Based on
the matching fingerprints from Phattey’s two asylum
applications and a negative inference from Phattey’s
invocation of the Fifth Amendment, the district court granted
the government’s motion for summary judgment, concluding
that Phattey and Fatty were the same person and that the
government, through “clear, unequivocal, and convincing”
evidence, had carried the “heavy burden,” Fedorenko v.
United States, 449 U.S. 490, 505 (1981) (citations omitted),
of proving that Phattey’s citizenship was “illegally procured,”
8 U.S.C. § 1451(a). The district court rejected Phattey’s
statute of limitations defense. This appeal followed.

                              II

    On appeal, Phattey primarily claims that the revocation of
citizenship, sometimes referred to as “denaturalization,”
constitutes a penalty. Because 28 U.S.C. § 2462 imposes a
five-year statute of limitation on actions for the enforcement
of a penalty, Phattey contends that the government cannot
now revoke his citizenship because more than five years have
passed since he was naturalized. Therefore, he concludes, the
district court erred in rejecting his statute of limitations
defense.

    We have jurisdiction under 28 U.S.C. § 1291. “A grant
of summary judgment is reviewed de novo.” Suzuki Motor
Corp. v. Consumers Union of U.S., Inc., 330 F.3d 1110, 1131
(9th Cir. 2003). In reviewing a grant of summary judgment,
we must “[v]iew[] the evidence in the light most favorable to
the nonmoving party” and “determine whether there are any
genuine issues of material fact and whether the district court
correctly applied the relevant substantive law.” Devereaux v.
Abbey, 263 F.3d 1070, 1074 (9th Cir. 2001) (en banc).
8               UNITED STATES V. PHATTEY

                             III

     Congress’s authority over naturalization stems from its
power to “establish an uniform Rule of Naturalization.” U.S.
Const. art. I, § 8, cl. 4. The Supreme Court has recognized
that this constitutional authority gives Congress the power to
impose “prerequisites to the acquisition of citizenship.”
Fedorenko, 449 U.S. at 506. The “[f]ailure to comply with
any of these conditions renders the certificate of citizenship
‘illegally procured,’” and the Court recognized that
“naturalization that is unlawfully procured can be set aside.”
Id. (citations omitted).

    Congress set out procedures for revoking naturalization,
when procured by fraud or other unlawful acts, by enacting
Section 15 of the Naturalization Act of 1906 (the 1906 Act),
34 Stat. 596, 601. See Bindczyck v. Finucane, 342 U.S. 76,
83 (1951). When Congress replaced the 1906 Act with the
Immigration and Nationality Act of 1952 (the INA), it
retained substantially all of the language of Section 15 and
included it in 8 U.S.C. § 1451(a). The relevant statutory
provision remains substantially the same today and permits
denaturalization where naturalization was “illegally procured
or . . . procured by concealment of a material fact or by
willful misrepresentation.” 8 U.S.C. § 1451(a). Nothing in
the statute provides for the imposition of a fine, penalty, or
sentence of imprisonment—only the revocation of
citizenship. See id.

    The Supreme Court has long held that the revocation of
citizenship under these denaturalization provisions is not a
penalty. See Johannessen, 225 U.S. at 242–45; Trop v.
Dulles, 356 U.S. 86, 98–99 (1958). In the seminal case of
Johannessen, decided shortly after the enactment of the 1906
                UNITED STATES V. PHATTEY                      9

Act, the Supreme Court considered the claims of a naturalized
citizen facing cancellation of his naturalization certificate on
the ground that it had been “fraudulently and illegally
procured.” 225 U.S. at 232. The alien argued that the
denaturalization provision in Section 15, if applied
retroactively, would be void as an ex post facto law in
violation of the Constitution. Id. at 242. The Court rejected
this argument based on the well-settled rule that the
constitutional prohibition of ex post facto laws “is confined
to laws respecting criminal punishments.” Id. at 242 (citing
U.S. Const. art 1, § 9). The Court acknowledged the
prohibition does not apply to the denaturalization provision,
which merely deprives the alien “of a privilege that was never
rightfully his” and “imposes no punishment upon an alien
who has previously procured a certificate of citizenship by
fraud or other illegal conduct.” Id. (emphasis added).

    After the INA was enacted, a plurality of the Court
reiterated that “[d]enaturalization is not imposed to penalize
the alien for having falsified his application for citizenship.”
Trop, 356 U.S. at 98–99 (“Rather, [denaturalization] is
imposed in the exercise of the power to make rules for the
naturalization of aliens.”). The Seventh Circuit has followed
this guidance, holding that “denaturalization proceedings are
not criminal in nature and do not inflict punishment,” but
rather “work[] to deprive the naturalized citizen of a privilege
that should never have been bestowed.” United States v.
Kairys, 782 F.2d 1374, 1383 (7th Cir. 1986).

    Phattey argues that these decisions have been superseded
by the Supreme Court’s subsequent decision in Kokesh v.
SEC, 137 S. Ct. 1635 (2017). Kokesh considered whether
§ 2462 applied to disgorgement actions brought by the
Securities Exchange Commission (SEC) to enforce violations
10               UNITED STATES V. PHATTEY

of federal securities laws. Id. at 1639. The Court explained
that the statute of limitations imposed by § 2462 would apply
in this context only “if SEC disgorgement qualifies as either
a fine, penalty, or forfeiture.” Id. at 1642. In considering
whether disgorgement qualified as a penalty, the Court first
defined “penalty” to mean “a punishment, whether corporal
or pecuniary, imposed and enforced by the State, for a crime
or offense against its laws.” Id. (internal quotation marks and
alterations omitted) (quoting Huntington v. Attrill, 146 U.S.
657, 667 (1892)). According to the Court, “[t]his definition
gives rise to two principles.” Id. First, “whether a sanction
represents a penalty turns in part on whether the wrong
sought to be redressed is a wrong to the public, or a wrong to
the individual.” Id. (internal quotation marks and citation
omitted). Private causes of action are not penalties, because
“[p]enal laws, strictly and properly, are those imposing
punishment for an offense committed against the State.” Id.
(citation omitted). Second, “a pecuniary sanction operates as
a penalty only if it is sought for the purpose of punishment,
and to deter others from offending in like manner—as
opposed to compensating a victim for his loss.” Id. (citation
omitted).

    Applying these principles, the Supreme Court concluded
that the SEC’s use of disgorgement constituted a penalty
under § 2462. Id. at 1643. Looking at its first principle, the
Court reasoned that disgorgement seeks to “remedy harm to
the public at large” rather than vindicate harm to a particular
victim. Id. at 1643 (citation omitted). Turning to the second
principle, the Court held that deterrence was not merely an
“incidental effect” of disgorgement. Id. Rather, “[t]he
primary purpose of disgorgement orders is to deter violations
of the securities laws by depriving violators of their ill-gotten
gains.” Id. (emphasis added) (quoting SEC v. Fischbach
                UNITED STATES V. PHATTEY                     11

Corp., 133 F.3d 170, 175 (2d Cir. 1997)). The Court
acknowledged that a disgorgement may also serve
compensatory goals, but because “disgorgement orders go
beyond compensation, are intended to punish, and label
defendants wrongdoers as a consequence of violating public
laws, they represent a penalty and thus fall within the 5–year
statute of limitations of § 2462.” 137 S. Ct. at 1645 (internal
quotation marks and citation omitted).

    The Court rejected the government’s argument that “SEC
disgorgement is not punitive but ‘remedial’ in that it lessens
the effects of a violation by restoring the status quo.” Id. at
1644 (internal quotation marks omitted). The Court stated
that “it is not clear that disgorgement, as courts have applied
it in the SEC enforcement context, simply returns the
defendant to the place he would have occupied had he not
broken the law,” because “SEC disgorgement sometimes
exceeds the profits gained as a result of the violation.” Id. at
1644. In such instances, “disgorgement does not simply
restore the status quo; it leaves the defendant worse off.” Id.
at 1645. Because SEC disgorgement addressed a public
wrong, and has the primary purpose of deterrence and
punishment, it constitutes a penalty for purposes of the
§ 2462 statute of limitations. Id.

    Under the principles set out in Kokesh, revocation of
citizenship does not qualify as a “penalty.” Although the
wrong sought to be redressed by § 1451(a) is a wrong to the
public, revocation of citizenship is not sought for the purpose
of punishment or to deter future violations. See Trop,
356 U.S. at 98–99. Rather, as the Supreme Court has already
concluded, the purpose of denaturalization is to remedy a past
fraud by taking back a benefit to which the alien is not
entitled and thus restoring the status quo ante. See
12              UNITED STATES V. PHATTEY

Johannessen, 225 U.S. at 242; United States v. Koziy,
728 F.2d 1314, 1320 (11th Cir. 1984) (holding that
denaturalization “deprived [the alien] of a privilege that was
never rightfully his”). Instead of imposing a punishment,
denaturalization “simply returns the [alien] to the place he
would have occupied had he not broken the law.” Kokesh,
137 S. Ct. at 1644. Congress clearly knows how to impose
criminal penalties for immigration fraud, see, e.g., 18 U.S.C.
§ 1015 (mandating imprisonment for false statements under
oath relating to naturalization); 18 U.S.C. § 1546 (mandating
imprisonment or a fine for counterfeit immigration
documents); 8 U.S.C. § 1325(c) (mandating imprisonment or
a fine for marriage fraud), but chose not to do so in enacting
§ 1451(a).

    Although § 1451(a) on its face merely restores the status
quo ante, Phattey nevertheless argues that the threat of
denaturalization has the effect of deterring aliens from
making fraudulent representations in naturalization
proceedings, and therefore constitutes a penalty. But Phattey
here improperly equates the purposes of sanctions with their
effects, whether intended or not. The Supreme Court has
determined that a sanction is a penalty only if it is sought for
the purpose of punishment or deterrence. Kokesh, 137 S. Ct.
at 1642. The incidental effect of a sanction is irrelevant. See
id. at 1643 (holding that disgorgement is a penalty where
“deterrence is not simply an incidental effect of
disgorgement” but rather its “primary purpose”). While
Phattey may be correct that denaturalization will have a
deterrent effect as a practical matter, the purpose of
revocation proceedings is to revoke a wrongfully obtained
benefit, rather than deterrence. See Johannessen, 225 U.S. at
242. Phattey further argues that denaturalization qualifies as
a penalty due to its negative collateral effects on the alien’s
                UNITED STATES V. PHATTEY                    13

family members whose citizenship was obtained “through the
naturalization of a parent or spouse.” See 8 U.S.C. § 1451(d).
But § 1451’s incidental effect on third parties, whose
citizenship was necessarily also obtained as a result of fraud,
similarly serves to restore the status quo ante, rather than to
act as a deterrent.

   Because denaturalization proceedings do not constitute a
penalty for purposes of 28 U.S.C. § 2462, that statute does
not provide Phattey a statute-of-limitations defense.
Accordingly, the district court did not err in entering
summary judgment in favor of the government.

   AFFIRMED.