v.
Duane Nishiie
FOR PUBLICATION
UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, No. 19-10405 Plaintiff-Appellant, D.C. No. v. 1:17-cr-00550- SOM-1 DUANE NISHIIE, AKA Suh Jae Hon, Defendant-Appellee. OPINION
Appeal from the United States District Court for the District of Hawaii Susan O. Mollway, District Judge, Presiding
Argued and Submitted January 15, 2021 San Francisco, California
Filed May 12, 2021
Before: Mary M. Schroeder, Jay S. Bybee, and Ryan D. Nelson, Circuit Judges.
Opinion by Judge R. Nelson; Concurrence by Judge Schroeder
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SUMMARY *
Criminal Law
The panel reversed the district court’s order dismissing as time barred seven non-conspiracy criminal counts, and remanded for further proceedings, in a case in which the indictment alleges that Duane Nishiie engaged in a scheme seeking payments in exchange for steering the award of Department of Defense contracts for infrastructure, engineering, and construction projects in Korea.
The seven non-conspiracy counts, which were based on alleged activity that occurred prior to September 21, 2012, would be time barred absent a suspension—pursuant to Wartime Suspension of Limitations Act (WSLA), 18 U.S.C. § 3287—of the running of the five-year statute of limitations set forth in 18 U.S.C. § 3282(a).
The appeal raised a question of first impression: which of the three categories of offenses under the WSLA—fraud, property, or contract—is modified by a clause requiring a nexus between the charged criminal conduct and a specific, ongoing war or congressional authorization of military force.
After considering the WSLA’s plain language and structure, well-established canons of statutory construction, and the WSLA’s amendment history and context, the panel concluded that the WSLA's restrictive-relative clause does not modify the first offense category “involving fraud or attempted fraud” or the second offense category involving
* This summary constitutes no part of the opinion of the court. It has been prepared by court staff for the convenience of the reader.
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“any real or personal property of the United States.” The panel held that the running of any statute of limitations applicable to the WSLA’s fraud and property offense categories—offense categories under which Nishiie was charged—is therefore suspended, whether or not a nexus exists between these offenses and either war or “authorized use of the Armed Forces.”
Concurring, Judge Schroeder agreed that the district court’s judgment must be reversed, but disagreed with the majority that any canon of statutory construction aids this court’s decision. What persuaded Judge Schroeder that the suspension restriction applies only to crimes related to contracts (and not to fraud and property crimes) is that the contract category and the restrictive clause were enacted together in July 1944 and have stayed together despite subsequent amendments reordering the list of crimes within the WSLA.
COUNSEL
Francesco Valentini (argued), Trial Attorney, Appellate Section; Robert A. Zink, Acting Deputy Assistant Attorney General; Brian C. Rabbit, Acting Assistant Attorney General; Richard B. Evans, Peter M. Nothstein, and Erica O’Brien Waymack, Trial Attorneys, Public Integrity Section; Criminal Division, United States Department of Justice, Washington, D.C.; for Plaintiff-Appellant.
De Anna S. Dotson (argued), Dana Point, California, for Defendant-Appellee.
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OPINION
R. NELSON, Circuit Judge:
This appeal raises a question of first impression: which of the three categories of offenses under the Wartime Suspension of Limitations Act (“WSLA”), 18 U.S.C. § 3287—fraud, property, or contract—is modified by a clause requiring a nexus between the charged criminal conduct and a specific, ongoing war or congressional authorization of military force. If the WSLA’s war nexus clause—“which is connected with or related to the prosecution of the war or directly connected with or related to the authorized use of the Armed Forces”—applies, then the criminal charges against Duane Nishiie are time barred. The district court held the WSLA’s war nexus clause modifies both the fraud and property offense categories, meaning the seven criminal counts against Nishiie were time barred. Based upon the WSLA’s text, history, and context, however, we hold that the war nexus clause modifies only the third offense category—not at issue here. Accordingly, we reverse the district court’s dismissal of Nishiie’s seven criminal counts and remand for further proceedings.
I
Beginning around 2005, the governments of the United States and the Republic of Korea (“Korea”) commenced a joint program to relocate and consolidate military bases and installations located in Korea. Between approximately 2006 and 2012, Duane Nishiie is alleged to have worked as a contracting officer in Korea for the United States Department of Defense (“DOD”).
On September 21, 2017, a federal grand jury charged Nishiie in a nine-count indictment based on alleged conduct
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originating in Korea. According to the indictment, between 2008 and 2015, Nishiie engaged in a scheme seeking payments in exchange for steering the award of multi- million-dollar contracts for infrastructure, engineering, and construction projects in Korea. The indictment further alleged that around 2012 Company A employed Nishiie, after his resignation from the DOD, to lobby DOD to favor Company A for projects in Korea. To facilitate this, Nishiie allegedly accepted bribes, received kickbacks, laundered money, made false reporting disclosures, concealed evidence, and worked with a co-conspirator, among other conduct.
Nishiie was charged with conspiracy to commit bribery and honest-services fraud (18 U.S.C. § 371); bribery (18 U.S.C. §§ 2; 201(b)(2)); three counts of honest-service wire fraud (18 U.S.C. §§ 1343; 1346); conspiracy to commit money laundering (18 U.S.C. § 1956(h)); and three counts of making a false statement (18 U.S.C. § 1001). 1 The seven non-conspiracy criminal counts at issue in this appeal were based on alleged activity that occurred prior to September 21, 2012, and therefore would have been time barred absent a suspension of the running of the applicable five-year statute of limitations pursuant to the WSLA. The United States also sought forfeiture of property under 18 U.S.C. §§ 981(a), 982(a), and 2461(c).
Nishiie moved to dismiss the indictment on the ground that the charges were barred by the applicable statute of 1 Some of the charges were also brought against co-defendant Seung-Ju Lee, a purported officer in the Korean Ministry of Defense’s procurement arm. The two conspiracy counts, not at issue in this appeal, are based on Nishiie’s alleged actions in concert with Lee and other individuals.
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limitations. See 18 U.S.C. § 3282(a). According to Nishiie, “[t]he completion dates, that initiated the running of the statute of limitations” of the following counts in the indictment are: “Count Two – May 2012, Count Three – September 18, 2008, Count Four – March 20, 2009, Count Five – April 6, 2010, Count Seven – February 9, 2010, Count Eight – January 18, 2011, Count Nine – January 13, 2012.” Under the WSLA, certain charges suspend the running of any statute of limitations applicable to any offense: “involving fraud or attempted fraud against the United States . . . whether by conspiracy or not” (fraud offense); or “committed in connection with the acquisition, care, handling, custody, control or disposition of any real or personal property of the United States” (property offense); or “committed in connection with the negotiation, procurement, award . . . of any contract, subcontract, or purchase order which is connected with or related to the prosecution of the war or directly connected with or related to the authorized use of the Armed Forces” (contract offense). 18 U.S.C. § 3287.
This restrictive relative clause (also called the limiting “which” clause)—“which is connected with or related to the prosecution of the war or directly connected with or related to the authorized use of the Armed Forces”—follows a series of three enumerated offense categories. The “which” clause undisputedly modifies the third category for contract offenses. Whether the “which” clause also modifies the remote fraud and property offense categories ultimately is dispositive of the question here. In short, if the limiting “which” clause modifies the fraud and property offense categories, the seven non-conspiracy counts against Nishiie are time barred. If the “which” clause does not modify the fraud and property offense categories, the running of any applicable statute of limitations has been suspended and the
UNITED STATES V. NISHIIE 7 charges are not time barred. The relevant first sentence of the WSLA provides:
When the United States is at war or Congress has enacted a specific authorization for the use of the Armed Forces, as described in section 5(b) of the War Powers Resolution (50 U.S.C. 1544(b)), the running of any statute of limitations applicable to any offense (1) involving fraud or attempted fraud against the United States or any agency thereof in any manner, whether by conspiracy or not, or (2) committed in connection with the acquisition, care, handling, custody, control or disposition of any real or personal property of the United States, or (3) committed in connection with the negotiation, procurement, award, performance, payment for, interim financing, cancelation, or other termination or settlement, of any contract, subcontract, or purchase order which is connected with or related to the prosecution of the war or directly connected with or related to the authorized use of the Armed Forces, or with any disposition of termination inventory by any war contractor or Government agency, shall be suspended until 5 years after the termination of hostilities as proclaimed by a Presidential proclamation, with notice to Congress, or by a concurrent resolution of Congress.
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Nishiie argues the suspension of the running of any statute of limitations applicable to either the fraud or property offense categories is not triggered because the “United States was not at war nor had a specific authorization for the use of armed forces been declared for South Korea during the time applicable to the facts of this case.” According to Nishiie, a nexus to war is required to trigger the suspension of the running of any applicable statute of limitations under the WSLA’s fraud and property offense categories, similar to the contract offense category. Consequently, Nishiie argues absent “war or authorized use of Armed Forces in any conflict in South Korea during the time Nishiie was working in South Korea,” the statute of limitations for “Counts Two, Three, Four, Five, Seven, Eight, and Nine, all expired prior to the filing of the Indictment on September 21, 2017.”
The United States argues the indictment is timely because the “WSLA has never contained a requirement that offenses falling under its first two categories be substantively related to the hostilities.” It reads the WSLA’s limiting “which” clause to only modify the contract offense category, and not the fraud and property offense categories. Under this interpretation, to trigger suspension of the running of any applicable statute of limitations, no substantive nexus is required between either fraud or property offense categories and the prosecution of war or authorization of military force.
The district court summarized the issue: if the limiting “which” clause “applies to all three categories” of offenses—fraud, property, and contract—then “at least some of the charges against Defendant Duane Nishiie may be time-barred. If, on the other hand, the modifier applies only to the closest category, the limitations periods applicable to
UNITED STATES V. NISHIIE 9 the charges in this case are tolled, and all of the charges against Nishiie are timely.”
The district court held that the “which” clause is a “modifier [that] applies to all three categories” based on the language of the statute, its legislative history, and the rule of lenity. Therefore, the district court held that the statute of limitations was not tolled as to the seven non-conspiracy criminal counts alleged in the indictment, as there was not a nexus between the war and the alleged crimes. On this basis, the district court dismissed Counts Two, Three, Four, Five, Seven, Eight, and Nine as untimely. [2] The district court noted the United States’s “conten[tion] that Nishiie’s alleged fraud with respect to steering military base contracts in Korea falls under the first offense category, which involves fraud-based crimes, rather than the more specific contract-based crimes in the third category.” Consequently, according to the district court, the United States “will likely never characterize any offense it charges as falling under” the third offense category to “avoid the impact of the ‘which’ clause.”
The United States appealed the district court’s order dismissing the seven non-conspiracy criminal counts, arguing the exclusive application of the limiting “which” clause to the WSLA’s third offense category or “offenses that involve wartime contracts” is the correct reading. We The last antecedent canon applies in the interpretation of “statutes that include a list of terms or phrases followed by a limiting clause.” Lockhart v. United States, 577 U.S. 347, 351 (2016); see A. Scalia & B. Garner, Reading Law: The Interpretation of Legal Texts 144 (2012) (“Scalia & Garner”). “The rule reflects the basic intuition that when a modifier appears at the end of a list, it is easier to apply that
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modifier only to the item directly before it.” Lockhart, 577 U.S. at 351; see Barnhart v. Thomas, 540 U.S. 20, 26 (2003). Consistent with the last antecedent canon, the limiting “which” clause would only modify the third category— contract offenses—that immediately precedes it.
Accordingly, as a corollary, neither the fraud nor property offense categories—under which Nishiie was charged—are similarly constrained. See Lockhart, 577 U.S. at 351. While it is grammatically possible to read the limiting “which” clause to modify the fraud and property offense categories, the restrictive relative clause is thus best read consistent with the last antecedent canon to only modify the immediately preceding contract offense category. See Hall v. U.S. Dep’t of Agric., 984 F.3d 825, 838 (9th Cir. 2020). This is “particularly true where it takes more than a little mental energy to process the individual entries in the list, making it a heavy lift to carry the modifier across them all.” Lockhart, 577 U.S. at 351. The varied syntax and distinct elements within each category of offense “makes it hard for the reader to carry” the limiting clause across the two remote offense categories. See id.
Punctuation also supports the last antecedent canon as the most relevant canon for the WSLA. “The doctrine of the last antecedent, including its observation about the placement of commas, is consistent with general grammatical rules, found outside the legal context, governing restrictive and nonrestrictive (also called ‘essential’ and ‘nonessential’) clauses.” State v. Webb, 927 P.2d 79, 83 (Or. 1996) (Graber, J.) (en banc). As noted by the Webb Court, the Chicago Manual of Style contains a reflection of this rule. See id. According to The Chicago Manual of Style § 6.27 (17th ed. 2017) (ebook):
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A clause is said to be restrictive (or defining) if it provides information that is essential to understanding the intended meaning of the rest of the sentence. Restrictive relative clauses are usually introduced by that (or by who/whom/whose) and are never set off by commas from the rest of the sentence. . . . A clause is said to be nonrestrictive (or nondefining or parenthetical) if it could be omitted without obscuring the identity of the noun to which it refers or otherwise changing the intended meaning of the rest of the sentence. Nonrestrictive relative clauses are usually introduced by which (or who/whom/whose) and are set off from the rest of the sentence by commas.
No comma separates the limiting “which” clause from the third offense category in the current version of the WSLA: “committed in connection with the negotiation . . . of any contract, subcontract, or purchase order which is connected with or related to the prosecution of the war or directly connected with or related to the authorized use of the Armed Forces.” 18 U.S.C. § 3287. Given the restrictive relative clause is not set off from the immediately preceding category by a comma, common grammatical rules suggest that Congress intentionally tied it to the last antecedent.
[*1014]On the other hand, application of the series-qualifier canon is inappropriate given the WSLA’s first paragraph contains just a single 187-word sentence. The series- qualifier canon intuitively comports with casual, spoken English, but not with complex criminal legislation. Under
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this syntactic canon, “[w]hen there is a straightforward, parallel construction that involves all nouns or verbs in a series,” then a postpositive modifier “normally applies to the entire series.” Scalia & Garner at 147. This canon is inadvisable here for several reasons. The text within each category of offense does not present a parallel construction. One need look no further than the district court’s masterclass sentence diagramming, see United States v. Nishiie, 421 F. Supp. 3d 958, 966–67 (D. Haw. 2019), to recognize the complexity of the WSLA’s language. The density and intricacy of the WSLA’s text also counsel against application of the series-qualifier canon here.
Some examples underscore the general primacy of the last antecedent canon for a multi-pronged disjunctive statute, like the WSLA, over the series-qualifier canon. Spoken or written statements presenting an uncomplicated and short series of nouns or phrases are more readily interpreted using the series-qualifier canon. Consider the following examples. In the “phrase ‘no person shall be deprived of life, liberty, or the pursuit of happiness, without due process of law,’ the phrase ‘without due process of law’ modifies all three terms.” Enron Creditors Recovery Corp. v. Alfa, S.A.B. de C.V., 651 F.3d 329, 335 (2d Cir. 2011). As another example: “Imagine a friend told you that she hoped to meet ‘an actor, director, or producer involved with the new Star Wars movie.’ You would know immediately that she wanted to meet an actor from the Star Wars cast—not an actor in, for example, the latest Zoolander.” Lockhart, 577 U.S. at 362 (Kagan, J., dissenting). Likewise, “[s]uppose a real estate agent promised to find a client ‘a house, condo, or apartment in New York.’ Wouldn’t the potential buyer be annoyed if the agent sent him information about condos in Maryland or California?” Id. These straightforward and conversational statements require no mental gymnastics. In such plain and
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parallel sentences, the series-qualifier canon makes sense. But application of the series qualifier canon does not apply given the complexity of the WSLA’s language.
[*1015]The disjunctive “or” as used in the WSLA is also instructive. “Canons of construction ordinarily suggest that terms connected by a disjunctive be given separate meanings, unless the context dictates otherwise; here it does not.” Reiter v. Sonotone Corp., 442 U.S. 330, 339 (1979). “As a general rule, the use of a disjunctive in a statute indicates alternatives and requires that they be treated separately.” Azure v. Morton, 514 F.2d 897, 900 (9th Cir. 1975). Use of the disjunctive form here—“or” after the first and second offense categories—“tends to cut off” the “which” clause so that its “backward reach is limited.” See Scalia & Garner at 149. While “statutory context can overcome the ordinary, disjunctive meaning of ‘or,’” the WSLA’s context—using the “or” twice—“favors the ordinary disjunctive meaning of ‘or.’” See Encino Motorcars, LLC v. Navarro, 138 S. Ct. 1134, 1141 (2018). 6 The relevant text—a single 187-word sentence—simply does not favor carryover modification given the repetitive use of a determiner—“or”—before the third offense category. See Scalia & Garner at 148. 7