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United States v. Wahi

United States Court of Appeals, Seventh Circuit

March 2, 2017

United States of America, Plaintiff-Appellee,
Rakesh Wahi, Defendant-Appellant.

          Argued February 10, 2016

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

          Before Bauer, Flaum, and Sykes, Circuit Judges.


         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 (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.

         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. ...

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