MHAMMAD ABU-SHAWISH, Petitioner-Appellant, v. UNITED STATES OF AMERICA, Respondent-Appellee.
No. 17-1283
United States Court of Appeals For the Seventh Circuit
ARGUED APRIL 5, 2018 — DECIDED JULY 31, 2018
Appeal from the United States District Court for the Eastern District of Wisconsin. No. 03-CR-211-1-JPS — J.P. Stadtmueller, Judge.
Before KANNE, ROVNER, and HAMILTON, Circuit Judges.
We vacate the dismissal and remand for further proceedings. The district court applied a standard that is too rigorous for the pleading stage of what is, in essence, a new civil case embedded within a closed criminal case. In the end, the question in this proceeding is whether Abu-Shawish can show by a preponderance of the evidence that he was in fact not guilty of a crime, not whether the trial evidence would have allowed a conviction. This is not to say that Abu-Shawish is entitled to relief, but he must be given a fair opportunity to show that he is entitled to damages under the governing statutes.
I. Factual and Procedural Background
A. Underlying Facts
Abu-Shawish was the founder and executive director of a Milwaukee-based non-profit organization. United States v. Abu-Shawish, 507 F.3d 550, 552 (7th Cir. 2007). On behalf of that non-profit, Abu-Shawish sought and received a grant from the City of Milwaukee to create a plan for revitalizing a street in Milwaukee. The problem was that the development plan from Abu-Shawish’s non-profit was “essentially identical” to a plan submitted by someone else and sponsored by a separate group. Id. at 553. The funds for the grant came from the United States Department of Housing and Urban Development, id. at 552, which explains why a local grant proposal ultimately piqued the interest of federal prosecutors.
B. First Trial
On the theory that Abu-Shawish took the government’s money but gave it nothing it had not already paid for, the government charged him with federal program fraud under
C. Second Trial
On remand, the district court dismissed the indictment for federal program fraud. A grand jury indicted Abu-Shawish again—this time as a principal under
D. Certificate of Innocence Filings
In 2014, Abu-Shawish filed a complaint against the United States in the Court of Federal Claims pursuant to
In November 2015, Abu-Shawish went back to the district court in Wisconsin and filed a pro se petition for a certificate of innocence.1 The petition alleges that this court vacated the conviction on the federal program fraud charge, that the jury acquitted Abu-Shawish on the charges of mail fraud and transporting stolen funds in foreign commerce in the second trial, and that this acquittal proves Abu-Shawish “was and still is innocent of the charged offenses and of any fraud.” After more than three months with no docket activity, Abu-Shawish filed a motion to expedite a decision on his petition. The government never responded to the original petition or to the motion to expedite. The district court dismissed the petition in January 2017. Abu-Shawish appealed, and we recruited counsel, who have been of great assistance to the court and their client.
II. Analysis
It is difficult to prove actual innocence, and proceedings like this one are rare. See Pulungan v. United States, 722 F.3d 983 (7th Cir. 2013) (reversing grant of certificate; reversal of conviction was not sufficient to show actual innocence); Engel v. Buchan, 710 F.3d 698, 707 (7th Cir. 2013) (federal unjust conviction statutes do not apply to convictions under state law); Betts v. United States, 10 F.3d 1278 (7th Cir. 1993) (ordering grant of petition). Those cases and decisions by other courts explain that the federal statutes set a high bar for obtaining a certificate of innocence. Because of the scant precedent on this issue, we begin with a review of the statutes and their history.
A. Current Statutes
Read together, two statutes give people who have been unjustly convicted and imprisoned for a federal crime a damages remedy against the United States. The first gives the Court of Federal Claims jurisdiction over “any claim for damages by any person unjustly convicted of an offense against the United States and imprisoned.”
First, the petitioner must establish that the record of the court setting aside or reversing his conviction demonstrates that the court did so on the ground that he is not guilty of the offense for which he was convicted. Second, the petitioner must prove that he did not commit any of the acts charged, or that those acts or related acts constituted no crime against the United States, or any State, Territory or the District of Columbia. Third, the petitioner must demonstrate that he did not by misconduct or neglect cause or bring about his own prosecution.
United States v. Mills, 773 F.3d 563, 566 (4th Cir. 2014), citing United States v. Graham, 608 F.3d 164 (4th Cir. 2010).
The petitioner proves those requirements to the Court of Claims by submitting a certificate of innocence from the court of conviction. See
The story that led to these federal unjust conviction statutes supports this stringent standard. The story begins with front-page news in 1911: a wrongful conviction following a labor riot in one of Andrew Carnegie’s steel mills. The cast of characters includes not just Andrew Carnegie but also Charles Schwab, Dean Wigmore, and then-Professor Felix Frankfurter. Our discussion draws from the comprehensive treatment of the legislative history in United States v. Keegan, 71 F. Supp. 623 (S.D.N.Y. 1947).
Andrew Carnegie made the front page of the New York Times for doing what the Pennsylvania legislature refused to do. Carnegie Pensions Toth. Man Who Served Twenty Years for Crime He Did Not Commit, N.Y. Times, Aug. 2, 1911, at 1. The legislature refused to compensate Andy Toth, a former steelworker in one of Carnegie’s mills who was released from prison after serving twenty years of a life sentence for a murder he did not commit. Editorial, False Imprisonment, 17 Va. L. Reg. 406 (1911); Edwin M. Borchard, Convicting the Innocent 286 (1932). Carnegie arranged to pay Toth $40 a month for the rest of his life. Borchard, supra, at 291.
Toth was one of three defendants convicted of murder for the beating of a furnace boss during a labor riot in one of Carnegie’s mills. Id. at 287–89. Convicted amidst a wave of anti-Hungarian prejudice following the riot, Toth was sentenced to be hanged. Id. at 289, 292. The governor commuted Toth’s death sentence to life imprisonment after Carnegie, Charles Schwab, and others lobbied on his behalf. Id. at 289. In 1911, when another man confessed to the murder on his deathbed, the brother of Toth’s lawyer pushed for a pardon. Id. at 290. Eventually, members of Congress introduced separate bills in the House and Senate in 1912 to compensate wrongly convicted prisoners like Toth, but it took more than 25 years for Congress to enact legislation.4
The pair of statutes now codified as
Like the district court here and every other circuit to consider the question, we read the statute’s distinction between acquittal and innocence as setting a high bar for petitioners. Pulungan, 722 F.3d at 985. The distinction between acquittal and innocence appeared early in the legislative history. The Attorney General made this distinction in his comment on the 1935 bill, and that comment was reprinted in the report on the 1937 bill:
Ideal justice would seem to require that in the rare and unusual instances in which a person who has served the whole or part of a term of imprisonment, is later found to be entirely innocent of the crime of which he was convicted, should receive some redress. On the other hand, reversals in criminal cases are more frequently had on the ground of insufficiency of proof or on the question as to whether the facts charged and proven constituted an offense under some statute. Consequently, it would be necessary to separate from the group of persons whose convictions have been reversed, those few who are in fact innocent of any offense whatever.
Relief for Persons Erroneously Convicted, S. Rep. No. 75-202, at 3 (1937); Relief for Erroneously Convicted Persons, S. Rep. No. 74-2339, at 3 (1936); see also Graham, 608 F.3d at 171 n.2 (quoting Attorney General’s comment and concluding that legislative history “clearly demonstrates a congressional desire to limit the class of persons entitled to relief under the statute“). The House Judiciary Committee noted the same distinction in its report accompanying the bill out of committee. See H.R. Rep. No. 75-2299, at 2 (“In other words, the claimant must be innocent of the particular charge and of any other crime or offense that any of his acts might constitute. The claimant cannot be one whose innocence is based on technical or procedural grounds, such as lack of sufficient evidence, or a faulty indictment—such cases as where the indictment may fail on the original count, but claimant may yet be guilty of another or minor offense.“); see also Keegan, 71 F. Supp. at 635 (reprinting House Report and concluding that “Congress never intended that every imprisoned person whose conviction had been set aside, should be indemnified by the Government“).
The House amendments also introduced the concept of the certificate of innocence and divided the judicial labor. Instead of litigating innocence in the Court of Claims (as in the Senate version of the bill), the petitioner would first establish innocence in the district court of conviction, obtain a
C. Litigating and Adjudicating Actual Innocence Claims
This history informs our understanding of the procedural and substantive requirements for litigating actual innocence petitions. Procedurally, petitions for certificates of innocence are “civil in nature,” regardless of the docket designation. Betts, 10 F.3d at 1283, citing United States v. Brunner, 200 F.2d 276, 279 (6th Cir. 1952), and McMurry v. United States, 15 M.J. 1054, 1055 (N.M.C.M.R. 1983). Although district court clerks may file petitions under the existing criminal docket number (as in Betts) or as a separate, miscellaneous civil case (as in Pulungan), we think the better course is to file the petition under the existing criminal docket number with the conviction because a petition starts what is, in essence, a civil proceeding within the closed criminal case. In that respect, a petition is similar to a motion under
We have said that whether “a petitioner is entitled to a certificate of innocence … is a question committed to the sound discretion of the district court” and that appellate review is for an abuse of that discretion. Betts, 10 F.3d at 1283, citing Rigsbee v. United States, 204 F.2d 70, 72 & n.2 (D.C. Cir. 1953), Burgess v. United States, 20 Cl. Ct. 701, 704 (1990), and Keegan, 71 F. Supp. at 635. That phrasing needs more explanation. Discretion does not mean that a district judge can exercise “discretion” to deny a certificate even if a petitioner meets the statutory burden of proof. That would be a legal error—an abuse of discretion by definition. See Betts, 10 F.3d at 1283, 1286 (noting abuse-of-discretion and clear-error standards and reversing clearly erroneous finding that petitioner “brought about his own prosecution through neglect or misconduct“); see also In re Veluchamy, 879 F.3d 808, 823 (7th Cir. 2018) (district court “abuses its discretion when it commits an error of law or makes a clearly erroneous finding of fact“), quoting Kress v. CCA of Tennessee, LLC, 694 F.3d 890, 892 (7th Cir. 2012). In this line of cases, the references to “discretion” have meant that the district judge may not rely solely on the judgment of acquittal but must exercise judgment in the process of hearing evidence and making a finding on whether or not a defendant has satisfied the burden of proof to obtain the certificate. See Keegan, 71 F. Supp. at 636 (“Unless the law contemplated the exercise of discretion on the
The petitioner must receive a fair opportunity to be heard on the petition. Again, we find a helpful analogue with Rule 41(g), where the district judge has procedural discretion. See United States v. Stevens, 500 F.3d 625, 628 (7th Cir. 2007) (requirement that district court “‘must receive evidence on any factual issue necessary to decide the motion’ … does not mean that a district court must conduct an evidentiary hearing to resolve all factual disputes“) (citation omitted and ellipsis added), quoting
For procedural issues, our review is for abuse of discretion. See Stevens v. United States, 530 F.3d 502, 506 (7th Cir. 2008). It is also clear from the statutes that both the petitioner and the government must have an opportunity to introduce new evidence. Cf. Stevens, 500 F.3d at 628 (Rule 41(g) requires “that the district court receive evidence to resolve factual disputes“), citing United States v. Albinson, 356 F.3d 278, 281–82 (3d Cir. 2004). Ultimately, the district judge must take a fresh look at all the relevant evidence and make a “determination independent of the outcome of the trial or appeal,” Betts, 10 F.3d at 1283; see also Stevens, 500 F.3d at 628 (under Rule 41(g), “any factual determinations supporting the court’s decision must be based on evidence received“). The district judge is free to draw on his or her memory of the trial, but those mem-ories need to be explained in findings. And meaningful appellate review requires a transcript of any trials, hearings, or other proceedings on which those memories are based.
D. Abu-Shawish’s Case
The district court has considerable discretion in managing a case like this toward a fair disposition, but Abu-Shawish received no meaningful opportunity to be heard. His petition was dismissed without any response from the government, without any briefing or hearing, and by imposing a pleading standard not compatible with civil proceedings and without an opportunity to try to cure the pleading defects identified by the district court.
The bar for obtaining a certificate of innocence is high, but the district court applied too stringent a standard to Abu-Shawish’s pro se pleading. As the government acknowledges,
We do not see a defect in Abu-Shawish’s petition. He alleged what was required by
To the extent the district court found, correctly or not, that Abu-Shawish’s petition fell short of what was required, the court should have given him leave to replead. The usual standard in civil cases is to allow defective pleadings to be corrected, especially in early stages, at least where amendment would not be futile. See, e.g., Childress v. Walker, 787 F.3d 433, 441 (7th Cir. 2015) (reversing denial of leave to amend and noting that district courts should grant leave freely under
That is the ordinary practice in an ordinary civil case where the party is represented by counsel. When the party is pro se, the liberal approach to amending pleadings applies with even more force. E.g., Erickson, 551 U.S. at 94, citing Estelle v. Gamble, 429 U.S. 97, 106 (1976); Perez v. Fenoglio, 792 F.3d 768, 776 (7th Cir. 2015) (reversing dismissal); Luevano v. Wal-Mart Stores, Inc., 722 F.3d 1014, 1024 (7th Cir. 2013) (applying Rule 15(a), reversing dismissal, and collecting cases for proposition that “plaintiffs enjoy leave to amend whenever ‘justice so requires’ and, as a matter of course, almost always get an opportunity to amend their complaints at least once“). And as we explained in Runnion, “The liberal standard for amending under Rule 15(a)(2) is especially important where the law is uncertain.” 786 F.3d at 520. Cases like this one are so rare that the pleading standards for a petition for a certificate of innocence surely qualify as debatable. While truly futile amendments need not be allowed, a district judge who believes a pleading has a fatal but possibly curable flaw needs to identify it and give the pleading party a fair opportunity to try to correct it. Id., citing Barry Aviation, 377 F.3d at 687.
On remand, the district court must allow Abu-Shawish to proceed on his
On the merits, Abu-Shawish has the burden to prove by a preponderance of the evidence that he is actually innocent. As the district judge and both sides understand, that is more difficult than proving that Abu-Shawish was found not guilty or that his conviction was reversed. See Grubbs, 773 F.3d at 733 (preponderance standard applies to certificate of innocence proceedings). Abu-Shawish satisfies the first requirement of
The district court wrote that our opinion reversing Abu-Shawish’s conviction “forecloses” Abu-Shawish’s argument that his conduct was not criminal. Abu-Shawish, 228 F. Supp. 3d at 882. That is not correct. Whether the evidence was sufficient to support a finding of guilt is not the test for a certificate of innocence. The court must decide whether the petitioner has shown that he did not—in fact—commit a crime. Statements about the sufficiency of evidence do not offer a shortcut around that question. See Weiss, 95 F. Supp. at 179–80 (declining to defer to dictum in Supreme Court opinion that petitioner was not guilty of offense other than offense of conviction); Keegan, 71 F. Supp. at 639 (same); see also United States v. Racing Services, Inc., 580 F.3d 710, 713–14 (8th Cir. 2009) (affirming district court’s denial of certificate even though appellate opinion reversing conviction doubted, in dictum, that conduct violated state law).
On remand, after giving Abu-Shawish an opportunity to be heard and fully considering his petition, the district court will need to decide whether Abu-Shawish had the requisite intent—either for federal mail or wire fraud or for a similar state crime. The district court also wrote that it was “quite likely that Abu-Shawish could be found to have committed fraud by the preponderance standard applicable to the instant petition.” Abu-Shawish, 228 F. Supp. 3d at 883. That finding is not sufficient, even after a fair opportunity
The district court also wrote that “it cannot be said that Abu-Shawish’s ‘conduct … did not constitute a crime.‘” Id., quoting Betts, 10 F.3d at 1284. That statement addresses the ultimate issue in this case, but it came before Abu-Shawish had a fair opportunity to be heard on his petition. The district court based that statement on our reversal of Abu-Shawish’s conviction, the evidence presented at the first trial, and Abu-Shawish’s second trial, without giving Abu-Shawish an opportunity to present additional evidence. See 228 F. Supp. 3d at 882–83. Also, the district court’s review of the second trial was necessarily limited because the transcript did not exist at the time of the court’s order. We understand the district court’s skepticism, but Abu-Shawish is entitled to a fair opportunity to be heard. When the court decides the case on the merits, it will need to explain its ultimate decision with reviewable findings of fact under
The dismissal of Abu-Shawish’s petition is VACATED, and the case is REMANDED for proceedings consistent with this opinion.