United States v. Hongyan Li

Case: 14-51091 Document: 00513130589 Page: 1 Date Filed: 07/27/2015
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 14-51091 United States Court of Appeals
Fifth Circuit
FILED
UNITED STATES OF AMERICA, July 27, 2015
Lyle W. Cayce
Plaintiff - Appellee Clerk
v.
HONGYAN LI,
Defendant - Appellant
Appeal from the United States District Court
for the Western District of Texas
USDC No. 1:13-CV-59
Before JOLLY, HIGGINBOTHAM and DAVIS, Circuit Judges.
PER CURIAM:*
Defendant Hongyan Li, a naturalized United States citizen, pled guilty
to acts related to her illegal prostitution business and to laundering the
proceeds of that illegal business. Thereafter, the government initiated
proceedings to revoke Li’s naturalization, alleging that her prostitution
operation and money laundering activities—before her naturalization—
precluded her possession of the “good moral character” required for one to
* Pursuant to 5th Cir. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5th Cir.
R. 47.5.4.
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become a naturalized U.S. citizen. The government and Li cross-moved for
summary judgment. The district court granted summary judgment in favor of
the government and revoked Li’s U.S. citizenship. We affirm. 1
I.
Li first argues that the government’s civil action to revoke her
naturalized U.S. citizenship violated the plea agreement underlying her
convictions for enticing prostitution and money laundering. 2 To interpret the
terms of that plea agreement, we apply general contract law principles,
considering “whether the government’s conduct is consistent with the
defendant’s reasonable understanding of the agreement.” United States v.
Cantu, 185 F.3d 298, 304 (5th Cir. 1999) (quoting United States v. Valencia,
985 F.2d 758, 761 (5th Cir. 1993)).
As is relevant here, the plea agreement provides:
The United States agrees not to use any truthful
statements, testimony, or information provided by [Li]
under the terms of this agreement against [Li] at
sentencing or as the basis for any subsequent
prosecution. . . . [Li] fully understands that, by this
plea agreement, no promises, representations, or
agreements have been made or entered into with any
other United States Attorney or with any state
prosecutor concerning other possible offenses or
charges. It is further understood by the parties that
this agreement does not prevent any government
1 Because the appeal is from a grant of summary judgment, we review the district
court’s conclusions de novo and construe all of the facts in the non-movant’s favor. Day v.
Wells Fargo Bank Nat’l Ass’n, 768 F.3d 435, 435 (5th Cir. 2014); Price v. Fed. Express Corp.,
283 F.3d 715, 719 (5th Cir. 2002). The district court granted summary judgment in the
government’s favor; therefore, we construe the facts in Li’s favor.
2 “We review a claim of breach of a plea agreement de novo . . . , accepting the district
court’s factual findings unless clearly erroneous.” United States v. Davis, 393 F.3d 540, 546
(5th Cir. 2004).
2
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agency from pursuing civil and/or administrative
actions against [Li] or any property.
Emphases added. Li contends that this language prevents the government
from pursuing its civil denaturalization action because, according to Li, the
government’s civil action is a “prosecution,” which is not permitted under the
plea agreement.
Li’s position is not supported by the unambiguous language of the plea
agreement. First, in the context of the agreement, the term “prosecution”
refers to criminal prosecutions, not civil actions. Thus, the term cannot be read
reasonably to apply to this civil proceeding to revoke Li’s citizenship. Although
the term “prosecution” can capture a wide swath of legal proceedings other
than criminal prosecutions, this Court has held that, in the context of a plea
agreement, the term is read most naturally to refer to criminal prosecutions.
See, e.g., Bickham Lincoln-Mercury Inc. v. United States, 168 F.3d 790, 792-93
(5th Cir. 1999) (reviewing a plea agreement that stated that the defendant
“would not be subject to further prosecution” and noting that “[p]rosecution
typically involves proceeding against a person criminally”); id. at 793(observing that the term “prosecution” is “part of the terminology of the
criminal law, describing the means by which the law is to be enforced, and
associated in popular thought with laws for the prevention and punishment of
crime” and noting that “the word refers to a criminal action or proceeding, and
. . . has been said to be synonymous with ‘criminal action’ ”).
Moreover, to the extent that there may be ambiguity in the plea
agreement’s use of the term “prosecution,” such ambiguity is resolved by the
remainder of the agreement, which states explicitly that the government can
pursue civil and administrative actions against Li: “[The] agreement does not
prevent any government agency from pursuing civil and/or administrative
actions against [Li].” The government’s civil action in this case falls squarely
3
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within the core of this language; and, therefore, the government has not
breached the plea agreement by seeking to revoke Li’s naturalization. 3
II.
Li’s second argument is that the government’s denaturalization action is
time-barred under the general-purpose federal statute of limitations, which
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 . . . .
28 U.S.C. § 2462. 4
“[T]he United States is not bound by any limitations period unless
Congress explicitly directs otherwise.” United States v. City of Palm Beach
Gardens, 635 F.2d 337, 339 (5th Cir. 1981). Where a party seeks to apply a
statute of limitations against the government, the statute at issue “must
receive a strict construction in favor of the Government.” Badaracco v. C.I.R.,
464 U.S. 386, 391 (1984) (quotation mark omitted).
Li points to § 2462 as an explicit direction from Congress that restricts
the filing of the present action to a five-year period. But, strictly construed in
the government’s favor, the limitations period in § 2462 does not apply to civil
denaturalization actions because such actions cannot be classified as punitive
in nature. In fact, the Supreme Court interpreted the predecessor statute to
3 Because the contested portions of the plea agreement are unambiguous, we need not
reach Li’s argument regarding parol evidence.
4 The district court concluded that the statute of limitations did not apply to this
action; this is a legal conclusion that is subject to de novo review. Tharpe v. Thaler, 628 F.3d
719, 722 (5th Cir. 2010).
4
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§ 2462 and held that “[t]he words ‘penalty’ or ‘forfeiture’ in this section refer to
something imposed in a punitive way for an infraction of a public law.” Meeker
v. Lehigh Valley Ry. Co., 236 U.S. 412, 423 (1915) (emphasis added). Remedial
actions do not count. Id. 5 The Supreme Court’s conclusion that the language
in the predecessor statute to § 2462 refers to punitive and not remedial actions
guides our conclusion that § 2462’s limitations period does not apply in the
denaturalization context. 6
Notwithstanding that the revocation of Li’s naturalized citizenship is
certainly severe, it cannot be called punitive. Indeed, if an individual is
statutorily ineligible to be naturalized at the time she becomes a citizen, her
certificate of naturalization must be cancelled and her citizenship must be
revoked and set aside. See 8 U.S.C. § 1451(a) (noting that the revocation is
effective retroactively and given the original date of the naturalization
certificate); see also Fedorenko v. United States, 449 U.S. 490, 506 (1981)
(describing the illegal procurement of naturalized citizenship). Simply put,
denaturalization is the withdrawal of something to which the individual was
5 Courts continue to apply the basic holding from Meeker, namely that a “penalty or
forfeiture” under § 2462 means a punitive measure, not a remedial one. See, e.g., Coughlan
v. Nat’l Transp. Safety Bd., 470 F.3d 1300, 1305 (11th Cir. 2006); United States v. Telluride
Co., 146 F.3d 1241, 1245–46 (10th Cir. 1998) (holding that a sanction is a “penalty” under
§ 2462 if it “seeks compensation unrelated to, or in excess, of the damages caused by the
defendant” and concluding that § 2462 did not apply to the government’s claim for injunctive
relief in an environmental-restoration suit because “the restorative injunction [sought] is not
a penalty because it seeks to restore only the wetlands damaged by [the company’s] acts to
the status quo . . . and does not seek compensation unrelated to or in excess of the damages
caused by [the company’s] acts”); Johnson v. S.E.C., 87 F.3d 484, 488 (D.C. Cir. 1996) (“In
sum, we conclude that a ‘penalty,’ as the term is used in § 2462, is a form of punishment
imposed by the government for unlawful or proscribed conduct, which goes beyond remedying
the damage caused to the harmed parties by the defendant’s action.”).
6 Other courts to consider the issue have also held that § 2462 and its predecessor
statute do not apply to denaturalization actions. See, e.g., United States v. Hauck, 155 F.2d
141, 143 (2d Cir. 1946); United States v. Rebelo, 394 F. App’x 850, 852–53 (3d Cir. 2010); see
also, e.g., Restrepo v. Att’y Gen. of U.S., 617 F.3d 787, 802 (3d Cir. 2010) (concluding “that
§ 2462’s five-year statute of limitations does not apply to removal proceedings”).
5
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never entitled; denaturalization is a restorative or remedial action, not an
action that seeks to punish the commission of a crime. Accord Coughlan v.
Nat’l Transp. Safety Bd., 470 F.3d 1400, 1305-07 (11th Cir. 2006) (concluding
that the limitations period in § 2462 was inapplicable to the revocation of a
piloting certificate because the certificate was not revoked as punishment but
was withdrawn because the pilot was unqualified to hold it). Li’s sentence
punished her for her crimes; denaturalization addresses her qualifications for
becoming a naturalized citizen.
Indeed, the government instituted this specific denaturalization action
because Li never actually met the requirements for naturalization. It was
those acts supporting her criminal convictions that rendered her ineligible for
naturalization and citizenship, and the denial of citizenship is an adverse
consequence of that conduct. But, the government has not instituted these
proceedings to “punish” Li for that conduct; instead, it is attempting to correct
the mistake of granting her citizenship. Because the denaturalization action
is not punitive, the limitations period in § 2462 is inapplicable to Li’s case.
III.
A.
Finally, Li argues that the government has not satisfied its “heavy
burden” of showing that she should be denaturalized. See Fedorenko, 449 U.S.
at 505. An individual seeking naturalized U.S. citizenship must show that she
“has been and still is a person of good moral character.” 8 U.S.C. § 1427(a)(3). 7
The government can prevail in its denaturalization action only if “[t]he
7In Li’s case, she had to demonstrate good moral character for a period of five years
before she filed her naturalization application (in April 2006) until her naturalization
ceremony (in August 2007). That is, Li was required to be a person of good moral character
from April 17, 2001, through August 8, 2007, the date of her citizenship oath.
6
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evidence justifying revocation of citizenship [is] clear, unequivocal, and
convincing and [does] not leave the issue in doubt.” Fedorenko, 449 U.S. at
505. (quotation marks omitted). The government has met its burden.
Li pled guilty to violating 18 U.S.C. §§ 2422 and 1957(a), statutes which
prohibit enticing interstate travel for the purposes of prostitution and money
laundering, respectively. As a factual basis for her plea, Li admitted that she
had multiple residences housing multiple prostitutes over a multi-year period
prior to her naturalization. She also admitted that she laundered the money
from her illegal prostitution business. These acts made Li automatically
ineligible for naturalization because these convictions demonstrated her lack
of “good moral character.” See 8 U.S.C. § 1101(f)(3) (“No person shall be
regarded as . . . a person of good moral character” if she if convicted of violating
or admits to violating § 1182(a)(2)(D)); id. § 1182(a)(2)(D)(ii) (stating that an
alien is inadmissible if she “directly or indirectly procures or attempts to
procure . . . prostitutes or persons for the purpose of prostitution, or receives .
. . in whole or in part, the proceeds of prostitution”); see also 8 C.F.R.
§ 316.10(b)(2)(vii) (“An applicant shall be found to lack good moral character if
during the statutory period the applicant . . . is or was involved in prostitution
or commercialized vice as described in [8 U.S.C. § 1182(a)(2)(D)].”). It is thus
clear that the government satisfied its heavy burden supporting
denaturalization.
B.
Li argues that the district court’s conclusion is procedurally erroneous
because the government’s complaint only sought to denaturalize her under 8
C.F.R. § 316.10(b)(iii), rather than C.F.R. § 316.10(b)(2)(vii). Li’s focus is too
narrow, causing her to overlook that the government cited a relevant statutory
provision, 8 U.S.C. § 1101(f), which provides that Li’s prostitution-related
business precludes a finding that she had good moral character. See 8 U.S.C.
7
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§ 1101(f)(3); see also id. § 1101(f)(8) (referencing subsection (a)(43), which
states that Li automatically lacked the requisite good moral character because
of her convictions under 18 U.S.C. § 1957 and § 2422).
The complaint placed Li’s prostitution-related conduct directly at issue,
alleging that she illegally procured her citizenship because she “committed
unlawful acts, including enticing interstate travel for prostitution and money
laundering, that adversely reflected upon her moral character during the
period in which she was required to show good moral character.” Li’s argument
that the complaint was defective is meritless. 8
IV.
The district court did not err in granting summary judgment for the
government. The cancellation of Li’s certification of naturalization is,
therefore,
AFFIRMED.
8 Li’s argument that the detailed and lengthy factual basis for her prostitution-related
convictions is somehow insufficient to show that she “is or was involved in prostitution” is
meritless. Furthermore, because the government satisfied its burden to show a clear and
unequivocal lack of good moral character, we need not address its alternative bases for
revoking Li’s citizenship.
8