Petition for Writ of Certiorari — Patrick Shin, Petitioner v. United States

Supreme Court briefJan 2, 2020

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No. 19In the

Supreme Court of the United States

PATRICK SHIN,

Petitioner,

UNITED STATES OF AMERICA,

Respondent.

On Petition for a Writ of Certiorari to the United

States Court of A ppeals for the Ninth Circuit

PETITION FOR A WRIT OF CERTIORARI

James E. Friedhofer

Counsel of Record

Friedhofer PC

11410 Bracken Fern Cove

San Diego, CA 92131

(858) 693-4400

jfriedhofer@friedhofer.com

Counsel for Petitioner

292855

(800) 274-3321 • (800) 359-6859

QUESTIONS PRESENTED

The federal False Statements statute expressly

applies only to a materially false, fictitious, or fraudulent

statement or entry. The Circuits disagree over the

standard for proof of materiality in federal fraud

prosecutions and disagree as to whether the “demanding”

materiality requirement that necessitated clarification

in Universal Health Servs., Inc. v. United States ex rel.

Escobar, 136 S.Ct. 1989, 1995 (2016) altered how rigorously

that standard must be imposed.

The questions presented are:

Do Escobar’s clarifications apply to the materiality

requirement for False Statements prosecution under

18 U.S.C. § 1001(a)(3)?

Do such clarifications demonstrate “an error of the

most fundamental character” for coram nobis relief

where, prior to a guilty plea, the Government did

not allege that defendant’s false statements had any

ability to influence the actual decisionmaker-recipient

and where post-Escobar case evidence showed those

statements would have had no effect on the actual

decisionmaker?

PARTIES TO THE PROCEEDINGS

Petitioner in this Court, who was Appellant in the

Ninth Circuit, is Patrick Shin. Respondent is the United

States of America, which was Appellee in the court of

appeals.

iii

RELATED CASE STATEMENT

The original criminal case is United States of America

v. Patrick Shin, United States District Court for the

District of Hawaii No. 1:04-cr-00150-SOM, judgment

entered March 9, 2006.

The coram nobis proceeding is Patrick Shin v. United

States of America, United States District Court for the

District of Hawaii No. 1:15-cv-00377-SOM-RLP, judgment

entered on June 29, 2017.

An initial appeal in the coram nobis proceeding,

dismissed as premature, is Patrick Shin v. United States

of America, United States Court of Appeals for the Ninth

Circuit No. 16-17014, dismissal order entered on April 21,

2017.

The operative appeal in the coram nobis proceeding is

Patrick Shin v. United States of America, United States

Court of Appeals for the Ninth Circuit No. 17-16460,

memorandum issued on July 26, 2019, and order of denial

of rehearing of the United States Court of Appeals for the

Ninth Circuit issued on October 3, 2019 (mandate issued

on October 11, 2019).

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED . . . . . . . . . . . . . . . . . . . . . . . i

PARTIES TO THE PROCEEDINGS . . . . . . . . . . . . . . ii

RELATED CASE STATEMENT . . . . . . . . . . . . . . . . iii

TABLE OF CONTENTS . . . . . . . . . . . . . . . . . . . . . . . . . iv

TABLE OF APPENDICES . . . . . . . . . . . . . . . . . . . . . . . vi

TABLE OF CITED AUTHORITIES . . . . . . . . . . . . . . vii

OPINIONS BELOW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

JURISDICTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

STATUTORY PROVISION INVOLVED . . . . . . . . . . . 1

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

A. Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

B. Original District Court Proceedings . . . . . . . . . 11

C. Shin’s Coram Nobis Petition and Proceedings . 13

D. Ninth Circuit Proceedings . . . . . . . . . . . . . . . . . 18

Table of Contents

Page

REASONS FOR GRANTING THE PETITION . . . . 19

The Decision Below Allows This Court

to Resolve Circuit Disagreement as to

W hether Escobar ’s Clarifications on

Materiality Apply to Criminal Cases . . . . . . . . 20

II. The Decision Below Allows This Court

to Resolve the Question of W hether

Escobar Endorsed a “Reasonable Person”

Materiality Standard . . . . . . . . . . . . . . . . . . . . . 23

III. The Decision Below Allows This Court to

Resolve Circuit Disagreement as to Whether

a Materiality Allegation is Sufficient If

It Does Not Show that a Decision Would

Have Been Affected by the Violation . . . . . . . . . 30

IV. Facts of This Case Provide a Sufficient

Background for Resolving the Important

Question of Who the “Decisionmaker” is in

Cases Involving the Government . . . . . . . . . . . . 32

CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

TABLE OF APPENDICES

Page

APPENDIX A — MEMORANDUM OF THE

UNITED STATES COURT OF APPEALS

FOR T HE NIN T H CIRCU I T, FILED

JULY 26, 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1a

A PPENDIX B — A MENDED ORDER OF

THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF HAWAII, FILED

JUNE 28, 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5a

APPENDIX C — DENIAL OF REHEARING

OF T H E U N I T ED S TAT E S C OU RT

OF A PPEA LS FOR T H E NIN T H

CIRCUIT, FILED OCTOBER 3, 2019 . . . . . . . . . . 64a

vii

TABLE OF CITED AUTHORITIES

Page

Cases

D’Agostino v. ev3, Inc.,

845 F.3d 1 (1st Cir. 2016) . . . . . . . . . . . . . . . . . . . . . . 30

Kungys v. United States,

485 U.S. 759 (1988) . . . . . . . . . . . . . . . . . . . . . . . . 21, 25

U.S v. Betts-Gaston,

860 F.3d 525 (7th Cir. 2017) . . . . . . . . . . . . . . . . . . . . 26

U.S v. Williams,

865 F.3d 1302 (10th Cir. 2017) . . . . . . . . . . . . . . . . . . 27

United States ex rel. Campie v. Gilead Scis., Inc.,

862 F.3d 890 (9th Cir. 2017) . . . . . . . . . . . . . . . . . . . . 31

United States ex rel. Nargol v.

DuPuy Orthopaedics, Inc.,

865 F.3d 29 (1st Cir. 2017) . . . . . . . . . . . . . . . . . . . . . 30

United States ex rel. Petratos v. Genentech Inc.,

855 F.3d 481 (3d Cir. 2017) . . . . . . . . . . . . . . . . . . . . . 30

United States ex rel. Prather v.

Brookdale Senior Living Communities, Inc.,

892 F.3d 822 (6th Cir. 2018) . . . . . . . . . . . . . . . . . . . . 31

United States ex rel. Rose v. Stephens Institute,

901 F.3d 1124 (9th Cir. 2018) . . . . . . . . . . . . . . . . . . . 28

viii

Cited Authorities

Page

United States v. Allen,

364 F. Supp. 3d 1234 (D. Kansas 2019) . . . . . . . . . . . 29

United States v. Facchini,

832 F.2d 1159 (9th Cir. 1987) . . . . . . . . . . . . . . . . 17, 18

United States v. Green,

698 Fed. Appx. 879 (9th Cir. 2017) . . . . . . . . . . . . . . 27

United States v. Henderson,

893 F.3d 1338 (11th Cir. 2018) . . . . . . . . . . . . . . . . . . 31

United States v. Holmes,

406 F.3d 337 (5th Cir. 2005) . . . . . . . . . . . . . . . . . . . . 24

United States v. Lindsey,

850 F.3d 1009 (9th Cir. 2017) . . . . . . . . . . . . . . . passim

United States v. McBane,

433 F.3d 344 (3d. Cir. 2005) . . . . . . . . . . . . . . . . . . . . 24

United States v. Menendez,

291 F. Supp. 3d 606 (D.N.J. 2018) . . . . . . . . . . . . . . . 29

United States v. Neder,

527 U.S 1 (1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

United States v. Palin,

874 F.3d 418 (4th Cir. 2017) . . . . . . . . . . . . . . 21, 22, 23

Cited Authorities

Page

United States v. Peterson,

533 F.3d 1064 (9th Cir. 2008) . . . . . . . . . . . . . . . . . 24

United States v. Peterson,

533 F.3d 1064 (9th Cir. 2008) . . . . . . . . . . . . . . . . . . . 24

United States v. Phillip Morris USA Inc.,

566 F.3d 1095 (D.C. Cir. 2009) . . . . . . . . . . . . . . . . . . 24

United States v. Raza,

876 F.3d 604 (4th Cir. 2017) . . . . . . . . . . . . . . 22, 23, 27

United States v. Rigas,

490 F.3d 208 (2d. Cir. 2007) . . . . . . . . . . . . . . . . . . . . 24

United States v. Rodriguez-Rodriguez,

840 F.2d 697 (9th Cir. 1988) . . . . . . . . . . . . . . . . . . . . 17

United States v. Tantillo,

686 Fed. Appx. 257 (5th Cir. 2017) . . . . . . . . . . . . . . 23

United States v. Triple Canopy, Inc.,

857 F.3d 174 (4th Cir. 2017) . . . . . . . . . . . . . . . . . . . . 31

United States v. Walgren,

885 F.2d 1417 (9th Cir. 1989) . . . . . . . . . . . . . . . . . . . 19

United States v. Wright,

665 F.3d 60 (3d Cir. 2012) . . . . . . . . . . . . . . . . . . . . . . 24

Cited Authorities

Page

Universal Health Servs., Inc. v.

United States ex rel. Escobar,

136 S. Ct. 1989 (2016) . . . . . . . . . . . . . . . . . . . . . passim

Statutes and Other Authorities

18 U.S.C. § 1001 . . . . . . . . . . . . . . . . . . . . . . . . 1, 20, 29, 31

18 U.S.C. § 1001(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

18 U.S.C. § 1001(a)(3) . . . . . . . . . . . . . . . . . . . . 3, 15, 17, 24

18 U.S.C. § 1343 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

18 U.S.C. § 1347 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

18 U.S.C. § 1349 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

28 U.S.C. § 1254(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

48 CFR § 15.404-4(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

OPINIONS BELOW

The memorandum decision of the United States

Court of Appeals for the Ninth Circuit (July 26, 2019) is

unreported. It is reprinted as Petitioner App. A. App.

1a. The amended order denying Petitioner’s petition for

writ of error coram nobis and order denying alternative

petition for writ of audita querela by the United States

District Court for the District of Hawaii, Crim. No. 0400150 SOM, Civ. No. 15-00377 SOM-RLP (June 28, 2017)

is unreported. It is reprinted as Petitioner App. B. App.

5a. The order of denial of rehearing of the United States

Court of Appeals for the Ninth Circuit (October 3, 2019) is

unreported. It is reprinted as Petitioner App. C. App. 64a.

JURISDICTION

The Ninth Circuit issued its memorandum decision on

July 26, 2019. App. 1a. The court denied panel rehearing

and rehearing en banc on October 3, 2019. App. 64a. This

Court has jurisdiction under 28 U.S.C. § 1254(1).

STATUTORY PROVISION INVOLVED

The federal False Statements statute, 18 U.S.C.

§ 1001, provides in pertinent part:

(a) Except as otherwise provided in this section,

whoever, in any matter within the jurisdiction

of the executive, legislative, or judicial branch

of the Government of the United States,

knowingly and willfully—

...

(3) makes or uses any false writing or document

knowing the same to contain any materially

false, fictitious, or fraudulent statement or

entry; shall be fined under this title, imprisoned

not more than 5 years or, if the offense involves

international or domestic terrorism (as defined

in section 2331), imprisoned not more than

8 years, or both. If the matter relates to an

offense under chapter 109A, 109B, 110, or 117,

or section 1591, then the term of imprisonment

imposed under this section shall be not more

than 8 years.

INTRODUCTION

The United States Navy was in a bind. It needed

substantial repairs on a massive pump for a drydock at

the Pearl Harbor Naval Shipyard. Congress had allocated

money for this, but that funding was about to lapse at the

end of the fiscal year.

The Navy turned to defense contractor JHL, which

had been awarded a contract for the same work on a sister

drydock pump the year before. But, pressed by the time

crunch, the Navy asked JHL to submit its new proposal

under a different type of contracting vehicle – one that

the Navy acknowledges was wrong for the circumstances

but that could be executed swiftly. JHL complied and

submitted a proposal at roughly the same cost as the first

job.

During the Navy’s standard contract review process,

an assigned mechanical engineer questioned JHL’s

costs and asked to see the subcontractor’s quotes. Such

questioning exposed the Navy’s problem in using the

wrong contracting vehicle. JHL brought in its SBA Mentor

Patrick Shin to try to protect the project for the Navy and

JHL. Shin had a “go to” reputation among senior Navy

contracting officials and his company frequently was asked

to handle problem jobs.

During negotiations, JHL dropped the amount of its

bid – twice. When the engineer persisted in asking for

the subcontractor quotes, Shin concluded that the way to

save the project was to obtain and submit altered numbers

for these quotes to account both for the money to the

subcontractors and also for JHL’s profit and overhead.

Undeniably, that was the wrong thing to do. Based on a

tip from HSI, the FBI investigated Shin and Shin readily

admitted what he had done.

Viewed with hindsight, the Navy’s decisionmaker

on this contract testified that Shin was put in a difficult

situation by the way the Government chose to negotiate

this contract. Another senior Navy contracting official

testified that Shin in this regard “was subjected to a

process which put him in a position to fail.”

Regardless, the Government charged Shin with

making a false statement under 18 U.S.C. § 1001(a)

(3). Seeing that Shin had acknowledged making the

alterations, he accepted an agreement to plead guilty to

that charge. But the materiality of the false statements –

an indispensable element of the crime – remained a serious

question. The engineer who asked for the subcontractors’

quotes did not have the authority to accept or reject JHL’s

proposal. And, as the district court later found during

sentencing, the Government never presented proof that

Shin had intended to cause a financial loss to the Navy as

a result of his misstatements. His actions were motivated

solely by the need for JHL to recover reasonable profit

and overhead for a project the Navy desperately wanted.

Shin’s acceptance of the materiality of his statements was

so questionable that the prosecutor and the magistrate

judge wondered at the time whether his guilty plea could

be accepted. In the end, applying Ninth Circuit law as it

then existed, the magistrate judge for the district court

found an adequate record on that point because of Shin’s

mere admission that he made the misstatements to justify

the proposal that JHL submitted to the Navy.

Years after Shin completed his twelve days of

confinement and probation, he learned new information

from the Navy’s engineer that made him believe the

Government had wrongfully withheld exculpatory

evidence. On that basis he filed a petition for writ of error

coram nobis to allow him to withdraw his guilty plea and

take his chances at any prosecution the Government still

wished to pursue. (That theory is not part of this petition.)

But while Shin’s coram nobis petition was pending,

this Court issued its opinion in Universal Health Servs.,

Inc. v. United States ex rel. Escobar, 136 S.Ct. 1989,

1995 (2016). Escobar was a False Claim Act case that,

in part, substantially clarified the applicable materiality

requirement and how it was to be enforced. It discussed

what type of evidence would be relevant to that standard.

Shin and his counsel noted that Escobar found support for

its clarifications of how materiality was defined in federal

criminal law and at common law.

Shin concluded that Escobar’s clarifications applied

to the False Statement statute as well, and that under

these clarifications his prior misstatements had not been

material. Escobar quoted common law for the proposition

that materiality looks to the effect on the likely or actual

behavior of the recipient of the alleged misrepresentation.

It emphasized that the materiality requirement is

“demanding,” and that materiality cannot be found where

noncompliance is minor or insubstantial. Most critical to

Shin’s case, the Escobar materiality standard included

focus on case-specific facts of the effect on the Government

of the type of misrepresentation in question.

Shin fully briefed and argued to the district court and

the Ninth Circuit that Escobar’s clarifications constituted a

newly emerged basis for coram nobis relief – a substantive

change of law that affected his conviction. There had been

no evidence that Shin’s misstatements were part of any

attempt to cheat the Government. Armed with the Escobar

clarifications, Shin obtained new declarations from the

actual decisionmaker for the Government on JHL’s

proposal – Director of Procurement Operations Division

at Pearl Harbor, Robert Hokama. Hokama testified

that he would have considered Shin’s alteration of the

subcontractor quotes as his effort to put JHL’s proposal

in a form appropriate for consideration and approval by

the Government. Hokama concluded that for this reason

the altered subcontractor bids, which contained amounts

covering overhead and profit because of the task order’s

out-of-scope nature, would not be material to his decision

to award the contract to JHL.

Shin’s arguments in this regard were not successful.

In fact, both the district court and the Ninth Circuit held

that all of Hokama’s testimony was irrelevant to Escobar’s

materiality standard.

This petition alleges that such lack of success was

due to the Ninth Circuit’s misinterpretation of Escobar.

Further, the Circuits generally disagree on many key legal

points related to Escobar’s clarifications. They disagree

on whether Escobar’s materiality requirement applies

to prosecution of federal criminal fraud statutes. They

disagree about whether Escobar analyzes materiality

under a “reasonable person” standard or rather based on

case-specific facts of the likely or actual behavior of the

recipient of the alleged misrepresentation. They disagree

about whether materiality allegations must go farther

than simply contending that the statements could have

influenced recipient behavior.

This petition presents an opportunity for this Court to

resolve those critical disagreements, as well as to answer

the important question of who in the Government may

testify as to the effect of a misstatement that becomes

relevant under Escobar’s materiality standard. Shin

contends that should this Court accept review, such

ultimately would result in holdings that would establish

the only missing element of his coram nobis petition – an

error of the most fundamental character concerning the

district court’s acceptance of Shin’s guilty plea.

STATEMENT

A. Background

Facts relevant to Petitioner Patrick Shin’s criminal

prosecution arose from business dealings concerning

JHL Construction, Inc., a private government contractor.

2 ER 198. At that time, JHL was a Small Business

Administration Section 8(a) Business Development

Program participant. Id. Shin was JHL’s SBA Mentor

and was authorized to act as an agent on behalf of JHL.

3 ER 85; App. 8a.

In 2002, the Navy needed to overhaul massive pumps

at a drydock location at the Pearl Harbor Naval Shipyard.

2 ER 197-198. At that time, JHL had a Multi-Trades

Contract with the Naval Facilities Engineering Command

of the United States Navy. 2 ER 198, 207. Under the MultiTrades Contract, JHL calculated its actual labor costs,

and then added 6% more (a “6% coefficient”). JHL also

calculated its actual materials costs, and then added 15%

more (a “15% coefficient”). These two coefficients allowed

JHL to recoup its lawful overhead expenses, and also

make a reasonable profit. 2 ER 207.

In August 2002, JHL entered into a $2,355,745 solesource delivery order with the Navy for the overhaul

of Pump #1, Drydock #4. 2 ER 198. This Pump #1

delivery order was issued as an SBA Section 8(a) set-aside

procurement. Id.

In 2003, JHL was awarded a job order contract

(“JOC”) by the Navy. App. 9a. JOCs are based on prepriced construction tasks. Id. The prices typically come

from a unit price book. Id. The Navy’s unit price books

list average costs that might be higher or lower than the

actual costs in a particular local economy. Id. Using the

unit prices relied on by a customer such as the Navy, a

contractor proposes an appropriate coefficient to apply

to the unit prices to cover overhead and profit, thereby

arriving at the contract cost. Id. JHL anticipated that

the unit prices would exceed JHL’s actual costs. Id.

Because JHL would make a profit without adding any

coefficient, JHL proposed a zero percent coefficient and

was awarded a zero coefficient contract. Id. Once awarded

to a contractor, a JOC allows an agency to approach and

negotiate with the contractor directly, as construction

needs come up. Id.

In August 2003, the Navy asked JHL to provide a

proposal under the JOC for the overhaul of Pump #2,

Drydock #4, at Pearl Harbor Naval Shipyard. App. 9a.

The Navy was under pressure to award a number of

work orders by the end of the Government’s fiscal year

(September 30, 2003), including 70-80 last-minute jobs to

be negotiated in about 60 days. Id.; 3 ER 192. Assigning

the Pump #2 project to JHL’s JOC was seen as a quick

way to use current year funding. App. 9a. But the Navy

did not, and could not, provide the required justification

for using a JOC – an incorrect contract vehicle for a

proposed order that consisted of 100% non-prepriced

items. 2 ER 206. The NAVFAC Job Order Contracting

Manual states that JOC contracts “should not include a

large percentage of non-prepriced items.” 2 ER 201. “The

percentage value of the non-prepriced component for an

individual delivery order should be limited to no more than

20%.” Id. “Delivery orders that exceed 20% non-prepriced

line items should be thoroughly documented and justified

in a memo to file.” Id. The Navy never authored such a

written justification for its selection of JHL’s JOC for this

substantial work order. 2 ER 206.

Despite being asked by the Navy to submit a price

under an incorrect contract vehicle, JHL provided a

proposal for $2,360,153, which was forwarded to the

Navy’s Engineering Department for a technical review of

the costs. App. 10a. Wesley Choy, a mechanical engineer

with the Navy’s Engineering Department, questioned

the costs, which he viewed as high. Id. The costs were

not broken down, and he could not tell how the final

number had been reached. Id. Choy asked the contract

administrator, Annette Ching, to get subcontractor quotes

from JHL to substantiate JHL’s cost proposal. Id. On

August 26, 2003, JHL submitted a second proposal for

the reduced amount of $2,205,138. Id. The second proposal

did not include either a line item breakdown of costs or

the requested subcontractor quotes. Id. Choy asked Ching

to get the subcontractor quotes from the two proposed

subcontractors, HSI Electric, Inc., and Alfred Conhagen

Inc. Id.

Even though JHL’s bid on the Pump #2 delivery

order was fair and reasonable, Choy was not approving

line items that were associated with overhead or profit.

2 ER 31, 115, 210; 3 ER 194, 204. Choy expected those

items to be included in JHL’s coefficient – not knowing

at the time that JHL’s JOC had a “zero coefficient.” Id.

That created a problem – the effect of Choy’s approach

was that JHL would have to forego separate recoupment

of any of its legitimate overhead expense, much less make

any reasonable profit on this $2 million-plus job. 2 ER 211.

As JHL’s agent, Shin intervened to resolve the problem

caused by the Navy’s choice of contracting vehicle. 2 ER

211. Shin had a reputation among senior Navy contracting

officials of being capable of handling the Navy’s difficult,

risky, or emergency-type jobs. 3 ER 191-192.

On September 4, 2003, Shin called HSI and asked it

to increase its quote by $100,000, but to invoice JHL the

original amount without the $100,000 markup. App. 10a.

HSI contacted the FBI to inform it of Shin’s request.

Id. Because HSI did not cooperate with Shin’s request,

Shin submitted HSI’s quote from July 10, 2003, which

concerned work on Pump #1. App 10a-11a. Shin altered

the $114,733 price on the July 2003 quote to read $314,733.

2 ER 213.

On September 4, 2003, Shin asked Conhagen to

increase its quote by $180,000, bringing Conhagen’s

subcontract amount from $377,260 to $557,260. App. 11a.

Conhagen provided Shin with the requested quote for

$557,260. Id.

On September 8, 2003, Shin met with Choy and Ching

to discuss JHL’s proposal and give them the altered HSI

quote. App. 11a. Shin ultimately submitted JHL’s best

and final offer of $2,150,000. Id. Yet, also at this meeting,

Choy recalls that Shin explained to him the problem of

using the zero coefficient JOC as the contract vehicle, and

that Choy understood the need to roll overhead and profit

into the contract line items. 2 ER 221-222.

Senior Navy contracting officials later would describe

Shin’s alterations as simply being a way to “shortcut” or

“expedite” the negotiation process. 3 ER 192, 198. The

decisionmaker on the contract recognized that Shin’ s

motivation for the alterations essentially was to avoid

a lengthy higher-level review that might have rendered

negotiations impossible by the end of the fiscal year. 3

ER 192-193.

On September 23, 2003, federal agents executed a

search warrant at Shin’s business office. App. 11a. Shin

confessed at that time to having submitted altered and

inflated figures for the Pump #2 job, explaining that

the real subcontractor quotes would not have supported

JHL’s cost proposal and would have caused the Navy to

question the legitimacy of the proposal. Id. He said that,

while Conhagen had provided an inflated quote as he had

requested, HSI’s failure to do so right away had caused

him to doctor HSI’s quote from a previous job. Id.

The Pump #2 project did not involve any prepriced tasks

listed in the Navy’s unit book. App 11a. For that reason,

performing work on Pump #2 under JHL’s zero coefficient

JOC would not have allowed JHL to recover any overhead

or profit. Id. Applicable Government regulations expressly

state that it is not in the Government’s interests to negotiate

contracts that include no profit motivation for contractors.

See FAR 15.404-4(a)(2) (48 CFR § 15.404-4(a)(2)); 2 ER 204208. Shin said the inflated subcontractor quotes were his way

of recovering overhead and profit. App. 11a-12a.

B. Original District Court Proceedings

The Government charged Shin with having made a

false statement to the Government. App 12a. On April

21, 2004, pursuant to a plea agreement, Shin pled guilty

to that charge. Id. As to the issue of “materiality,” the

Memorandum of Plea Agreement only referenced that

Shin: (1) provided the false statement to Navy contracting

officials in response to the Navy’s request for JHL’s

subcontractor pricing; (2) provided the false statement to

the Navy to justify the proposal submitted by JHL; and

(3) provided the false statement to the Navy with intent

to benefit JHL. 4 ER 43-44.

At the plea hearing, on the issue of “materiality,” Shin

admitted that he made the false statement to benefit JHL

but added that he also made it to benefit the Government

– “it protects the project.” 4 ER 29. In response to that,

the Government stated that it did not think the Court

should accept his plea. Id. The magistrate judge observed

that Shin’s reason for his false statement impacts whether

or not it was material to the Government. 4 ER 30. The

Government also observed that motivation may not be

material to the plea, but when Shin said he thought what

he did benefitted the Government, “it sounds like he’s

not thinking it was material.” 4 ER 31. The Government

and the magistrate judge ultimately resolved their

“materiality” concerns with just one question to Shin:

MR. SEABRIGHT: Judge, you mind if I ask a

question of him?

THE COURT: Sure.

MR. SEABRIGHT: And it was done to justify

the proposal that JHL submitted to the Navy?

MR. SHIN: Yes, it is. Yes, it is.

THE COURT: I think with that that record is

adequate.

MR. SEABRIGHT: I agree.

THE COURT: Mr. Seabright.

MR. SEABRIGHT: I agree.

4 ER 31-32.

During sentencing proceedings, Shin argued that

the Pump #2 job was not prepriced and therefore had

been improperly assigned under JHL’s zero coefficient

JOC, depriving JHL of a chance to recover overhead

and profit. App. 11a. Shin contended that he had altered

the subcontractor quotes only to recover a reasonable

profit on the job. Id. He denied any malicious intent but

acknowledged that the way he had handled the situation

was wrong. Id. The district court determined that “there

was clearly an intent to deceive,” and called the offense

“one of these dishonesty kinds of crimes,” but imposed a

sentence that reflected the court’s determination that the

Government had failed to prove that Shin had intended

to cause a loss (a conclusion advanced in the Probation

Officer’s Presentence Report). Id.

On March 8, 2006, Shin was sentenced to three years

of probation, which included twelve days of intermittent

confinement, and a fine of $100,000. Id. Shin paid his fine,

completed his confinement, and completed his term of

probation. 2 ER 220.

C. Shin’s Coram Nobis Petition and Proceedings

After he was sentenced, Shin reached out to Choy

several times to talk about Choy’s role in the prosecution

and to ask him for a written statement. App. 12a.

Ultimately Choy did so, detailing new information about

what Choy initially had told the prosecutor and the

prosecutor’s investigators and about how the prosecutor

went about obtaining his key declaration for the sentencing

phase. See App. 12a-14a.

Specifically, in April 2014, Choy provided Shin with

a typed, unsigned “clarification” statement regarding

his role in the contracting process. App. 13a. Choy’s

“clarification” statement includes the following points: (1)

he recalled having stated at a meeting with Shin in 2003

that he understood that Shin needed to “roll” overhead

and profit into the line items, given the zero coefficient

contract, but that that was a contractual rather than

technical issue; (2) imposing a zero coefficient contract on

JHL was not fair or reasonable; (3) Choy was surprised to

hear that the project had a zero coefficient; and (4) Choy

had turned the issue over to the contracting officer as the

person authorized to resolve the matter. Id.

In May 2015, Shin again spoke with Choy regarding

Choy’s communications with “the Prosecutor and the

Prosecutor’s investigators.” App. 13a. Without telling

Choy, Shin taped the conversation. Id. When Shin asked

Choy whether he had communicated to the Government

personnel any of the points made in his April 2014

“clarification” statement, Choy allegedly stated that he

had told the prosecutor and the prosecutor’s investigators

that he did not have the authority to decide whether JHL

needed to be awarded extra money in the zero coefficient

contract to cover its legitimate and reasonable overhead

and profit. Id. Choy also told Shin: (1) the prosecuting

authorities “put the gun” on him regarding his authority

to decide the zero coefficient issue; (2) the prosecuting

authorities “hid” the fact that Choy was not authorized

to deal with the zero coefficient issue; (3) the prosecuting

authorities only “heard what they wanted to hear to make

their case”; and (4) a declaration that the prosecuting

authorities had Choy sign was “sneaky” and “twisted”

the facts he had given them. Id.

On September 22, 2015, based on the new information

from Choy, Shin petitioned for a writ of coram nobis or,

in the alternative, audita querela. The petition sought (1)

the vacating of Shin’s federal criminal conviction on one

count of False Statement pursuant to 18 U.S.C. § 1001(a)

(3); and (2) leave to withdraw his prior guilty plea in this

case. 1 App. 14a.

Yet while Shin’s petition was pending, this Court

issued its opinion in Universal Health Servs., Inc. v.

United States ex rel. Escobar, 136 S.Ct. 1989, 1995 (2016).

Shin argued that decision constituted a change in law and

provided a separate basis for coram nobis relief. See App.

15a-19a.

In furtherance of this argument, Shin submitted to the

district court two new declarations from Robert Hokama.

App. 16a-18a. Hokama testified that from 1997 to 2004 he

was the Director of Procurement Operations Division at

Pearl Harbor responsible for contracting activity relating

to the procurement for construction and maintenance of

naval facilities. App. 16a. He supervised Annette Ching

and was responsible for negotiating and recommending

the contract awarded to JHL in 2003. Id. He suggested

that Ching did not follow certain procedures necessary to

awarding contracts and stated that he was “the ultimate

decision-maker regarding whether to award the Contract

or not” to JHL and Shin. Id. He further stated:

I would have considered Shin’s alteration of the

subcontractor quotes as his effort to put JHL’s

1. The Government filed an Opposition to Shin’s petition

and supported it with a declaration from Choy stating that he

did not say many of the things Shin alleged about the May 2015

conversation. 2. ER 171-172; 183-184. Shin responded by producing

the audiotape and transcript of that conversation (2 ER 117-142),

which supported Shin’s allegations.

proposal in a form appropriate for consideration

and approval by the Government considering

the Government’s choice of a JOC for the

Contract, so his alteration of the subcontractor

quotes would not have been material to me.

This a fair price to both the Government and

JHL, and the funding for the Contract would

not have been lost.

...

[Choy’s] Government Estimate was prepared

with a contract coefficient, and JHL’s best and

final offer, including the altered subcontractor

quotes, was very close to the amount of the

Government Estimate. This is also a reason why

the altered subcontractor bids, which contained

amounts covering overhead and profit because

of the task order’s out-of-scope nature, would

not be material to my decision to award the

Contract to JHL as its best and final offer.

App. 16a-17a.

Subsequent to submission of that declaration, the

Ninth Circuit issued its opinion in United States v.

Lindsey, 850 F.3d 1009 (9th Cir. 2017) (“Lindsey II”).

After that decision issued, Shin submitted a supplemental

declaration from Hokama noting that Hokama’s certificate

of appointment “stated no limitation on the scope of [his]

authority, other than limitations contained in applicable law

or regulation.” App. 18a. “As the “designated contracting

officer with highest authority for NAVFAC,” Hokama

said that he “enjoyed a wide latitude to exercise business

judgment.” Id. “The U.S. Government is not one monolithic

entity which decides contracting issues uniformly across

every aspect of the procurement process.” Id. He “would

have approved of the JHL Pump 2 contract even with

knowledge that Mr. SHIN provided altered subcontract

bids and would not have considered the alterations by Mr.

Shin ‘material’.” Id.

The district court terminated Shin’s case with an

amended order denying Petitioner’s petition for writ of

error coram nobis and order denying alternative petition

for writ of audita querela. App. 5a-63a. The court held that

Shin had satisfied the first three of the four requirements

for the issuance of coram nobis relief (App. 20a-22a) but

had failed to satisfy the fourth factor of a fundamental

error rendering his conviction invalid (App. 22a-48a).

Pertinent to the questions presented in this petition for

certiorari, the district court concluded:

Under 18 U.S.C. § 1001(a)(3), the element of

materiality is evaluated under “an objective

test, which looks at ‘the intrinsic capabilities

of the false statement itself, rather than the

possibility of the actual attainment of its end.’”

Peterson, 538 F.3d at 1072 (quoting United

States v. Facchini, 832 F.2d 1159, 1162 (9th

Cir. 1987)).

“To be material a statement need only have

the propensity or capacity to inf luence or

affect an agency’s decision.” United States v.

Rodriguez-Rodriguez, 840 F.2d 697, 700 (9th

Cir. 1988). “The agency need not rely on the

information in fact for it to be material.” Id.

“Materiality, therefore, is not measured by

effect or magnitude.” Facchini, 832 F.2d at

1162.

App. 25a-26a.

The district court rejected Shin’s argument that

cases such as Escobar and Lindsey II had changed the

law of materiality since the time he had pled guilty. App.

26a-35a., 60a-61a. It also rejected Shin’s contention that

Hokama could provide testimony as to the effect of Shin’s

false statements on him as the applicable decision-maker

for the Government. App 40a-42a, 52a-54a, 61a.

D. Ninth Circuit Proceedings

The Ninth Circuit affirmed the district court’s rulings

in a memorandum decision. App. 1a-4a. It agreed with the

district court that Shin had established the first three

factors for coram nobis relief, but not the fourth. App. 2a.

The memorandum dispensed with Shin’s “materiality”

argument in a single paragraph:

Shin also misreads Escobar. Contrary to Shin’s

contention, both Escobar and United States v.

Lindsey, 850 F.3d 1009 (9th Cir. 2017) reiterated

the “familiar” premise that a statement is

material if a “reasonable [person] would attach

importance to it in determining his choice of

action in the transaction.” Escobar, 136 S.Ct.

at 2002-04 & n.6 (citation and alteration in

original omitted); see also Lindsey, 850 F.3d at

1014. Consequently, Shin’s misstatements could

be material irrespective of their subjective

effect on a particular government official. See

Lindsey, 850 F.3d at 1013-14.

App. 3a-4a.

The Ninth Circuit denied panel rehearing and

rehearing en banc. App. 64a-65a.

REASONS FOR GRANTING THE PETITION

Shin’s “materiality” argument for the fourth prong

of the coram nobis test rested on his ability to show that

Escobar and its progeny substantially changed the federal

materiality standard in a manner that would have affected

his case. See, e.g., United States v. Walgren, 885 F.2d 1417,

1422 (9th Cir. 1989) [fundamental error in coram nobis

case shown where McNally decision placed defendant’s

conduct outside of the ambit of the mail fraud statute].

The Ninth Circuit’s simple and straight-forward

rejection of Escobar’s application under Shin’s facts –

perhaps counter-intuitively – make this case an attractive

candidate for resolving accelerating Circuit disagreements

over Escobar’s meaning and application.

As a gateway issue, any questions of Escobar’s

holdings would be relevant to this case only if this Court

intended application to extend beyond False Claim Act

cases to cases of criminal fraud. Thus, Shin’s case provides

an ideal avenue for resolving that far-reaching issue.

This case also raises the issue of dueling materiality

standards focused respectively on a “reasonable person”

versus an “actual decisionmaker.” It involves the question

of what type of materiality allegations must be pled in

a case. And it requires a determination of what type of

witness is qualified to give testimony relevant to the effects

of a statement either through the perspective of industry

practice or of the individual recipient of the statement.

These questions affect prosecutions of countless

present and future criminal defendants. Recent highprofile cases illustrate the breadth of prosecutions under

18 U.S.C. § 1001. Questions of materiality go to the heart

of many such prosecutions, where (as in Shin’s case) the

making of the statement and the statement’s contents

largely are undisputed. Certiorari should be granted in

this case to resolve those weighty and timely issues.

The Decision Below Allows This Court to Resolve

Circuit Disagreement as to Whether Escobar’s

Clarifications on Materiality Apply to Criminal Cases

The overwhelming majority of cases applying and

interpreting Escobar arise out of False Claim Act (“FCA”)

cases. Indeed, relatively few non-FCA published opinions

discuss the case. Yet published opinions from two Circuits

that have done so disagree on the fundamental question

of whether Escobar’s clarifications on the materiality

standard extend to criminal cases.

The Ninth Circuit applied the materiality standard

of Escobar in a Wire Fraud case under 18 U.S.C. § 1343,

noting:

The Supreme Cou r t has used cases on

materiality in one context as precedent for

materiality in another. See, e.g., Gaudin, 515

U.S. at 509, 115 S.Ct. 2310 (materiality for crime

of making false statements) (citing Kungys,

485 U.S. at 770, 108 S.Ct. 1537 (materiality for

revocation of citizenship)).

Lindsey II, supra, 850 F.3d at 1016, fn. 4. Indeed, Escobar

itself compared the FCA definition of materiality to

language used in other federal fraud statutes. It even

found relevance of the materiality definition at common

law. Escobar, supra, 136 S.Ct. at 2002-2003.

Yet, one Fourth Circuit case, in dicta, rejected such

an application:

As an initial matter, Palin and Webb stretch

Universal Health too far. We do not believe

the Supreme Court intended to broadly

“overrule” materiality standards that had

previously applied in the context of criminal

fraud. And we doubt the Court’s examination

of how materiality applies under “implied false

certification” FCA cases transfers to all cases

charging fraud, or even all cases charging

health care fraud.

United States v. Palin, 874 F.3d 418, 423 (4th Cir. 2017).

Because the Fourth Circuit ultimately concluded that

the misrepresentations in question were material even

under the Escobar standard, it left final resolution of that

question for another day. Id.

A subsequent Fourth Circuit opinion embraced and

expanded on the Palin dicta:

First, to the extent Universal Health altered

the concept of materiality in fraud proceedings,

it is not likely that its impact extends beyond the

context of qui tam actions. And a qui tam action

is a civil proceeding that protects the federal

government. The Court implicitly acknowledged

that proposition in Universal Health, explaining

that “[t]he [FCA’s] materiality standard is

demanding. The [FCA] is not an all-purpose

antifraud statute.” See 136 S.Ct. at 2003

(internal quotation marks omitted). We reached

a similar conclusion recently in United States v.

Palin. In the Palin fraud prosecution, several

defendants had been convicted of health care

fraud and conspiracy to commit health care

fraud, in violation of 18 U.S.C. §§ 1347 and

1349. See 874 F.3d 418, 420 (4th Cir. 2017).

They appealed, arguing that “Universal Health

established a new materiality standard that

applies to all criminal fraud statutes, including

§ 1347.” Id. at 422. Judge Motz’s opinion

expressed skepticism with that assertion,

recognizing that the defendants sought to

“stretch Universal Health too far.” Id. at 423.

Although Palin only had to decide whether

Universal Health impacted the materiality

element in the context of health care fraud, it

specified that “[w]e do not believe the Supreme

Court intended to broadly ‘overrule’ materiality

standards that had previously applied in the

context of criminal fraud.” Id. We readily agree.

United States v. Raza, 876 F.3d 604, 620 (4th Cir. 2017).

Additionally, in a footnote of an unpublished per

curium decision, the Fifth Circuit summarily concluded

that the “rigorous” materiality requirement of Escobar

has no application to materiality for the purposes of 18

U.S.C. § 1001(a)(2). United States v. Tantillo, 686 Fed.

Appx. 257, 262, fn. 6 (5th Cir. 2017).

Like in Palin, the brief Ninth Circuit disposition

in Shin’s case begins with the conclusion that Shin

“misreads Escobar.” A nd while the Memorandum

appears to apply the materiality standards of Escobar,

its summary rejection of the relevance of decisionmaker

Hokama’s testimony suggests application of the concept

of materiality envisioned by Palin, Raza, and Tantillo

rather than Escobar and Lindsey II.

Regardless, because application of Escobar ’s

clarifications in a False Statements case is a threshold

determination for the other questions presented for

certiorari here, this case presents an opportunity to

confront the Fourth Circuit’s approach of not applying

Escobar in the context of criminal fraud. Materiality

is a critical element of federal criminal fraud statutes.

Uncertainty as to application of Escobar’s clarifications

is contrary to the interests of both the Government and

present and future criminal fraud defendants.

II. The Decision Below Allows This Court to Resolve

the Question of Whether Escobar Endorsed a

“Reasonable Person” Materiality Standard

The Ninth Circuit’s rejection of Shin’s Escobar

arguments was brief and blunt. It applied a “reasonable

person” materiality standard; “. . . a statement is material

if a [‘]reasonable [person] would attach importance to it in

determining his choice of action in the transaction.[‘]” App.

3a. This choice of standard jettisoned both the relevance

of Hokama’s new evidence and Shin’s contention that a

substantive change of law since his guilty plea made that

evidence relevant. Id.

Predating Escobar, tension existed among several

Circuits concerning materiality standards in criminal

fraud cases. One group of Circuits appears to apply an

actual-decisionmaker standard in determining whether a

defendant’s misstatements were material. 2 Another group

appears to apply a reasonable person standard to make

that materiality determination. 3

2. United States v. Rigas, 490 F.3d 208, 235 (2d. Cir. 2007) [for

defendant’s “misstatements to be material,” “they had to be capable

of influencing a decision that the bank was able to make,” and holding

that the statements at issue were “immaterial, i.e., incapable of

influencing the intended victim”]; United States v. Wright, 665 F.3d

60, 575 (3d Cir. 2012) [misstatements at issue were material because

they “might have changed the [building owner’s] mind about the

building’s value”]; United States v. Holmes, 406 F.3d 337, 355, fn. 27

(5th Cir. 2005) [observing that while “one formulation” of materiality

may involve a “reasonable man,” “in [the] bank fraud context, a

statement is material if it has a natural tendency to influence, or

was capable of influencing the decision of the lending institution”].

3. United States v. Phillip Morris USA Inc., 566 F.3d 1095,

1122 (D.C. Cir. 2009) [observing that a statement is material

under wire or mail fraud statutes “if the matter at issue is of

importance to a reasonable person in making a decision about a

particular matter or transaction”]; United States v. Peterson, 533

F.3d 1064, 1073 (9th Cir. 2008) [under 18 U.S.C. § 1001(a)(3), the

element of materiality is evaluated under “an objective test, which

looks at ‘the intrinsic capabilities of the false statement itself,

rather than the possibility of the actual attainment of its end.’”];

United States v. McBane, 433 F.3d 344, 351 (3d Cir. 2005) [while

a false statement affecting a specific agency decision makes for an

easier materiality determination, the standard requires that the

statement be capable of influencing a reasonable decisionmaker].

Escobar begins its clarifications with reference to a

common definition of materiality in federal fraud statutes:

“[T]he term ‘material’ means having a natural tendency

to influence, or be capable of influencing, the payment

or receipt of money or property.” Escobar, supra, citing

United States v. Neder, 527 U.S 1, 16 (1999), and Kungys

v. United States, 485 U.S. 759, 770 (1988). It also adds:

“Under any understanding of the concept, materiality

“look[s] to the effect on the likely or actual behavior of

the recipient of the alleged misrepresentation.” Id., 136

S.Ct. at 2002 (citation omitted). But this Court’s opinion

also makes reference to materiality under common law

contract and tort principles mentioning the concept of the

“reasonable person.” In a footnote, it quotes Williston on

Contracts as stating:

(“most popular” understanding is “that a

misrepresentation is material if it concerns

a matter to which a reasonable person would

attach importance in determining his or

her choice of action w ith respect to the

transaction involved: which will induce action

by a complaining par ty[,] knowledge of

which would have induced the recipient to act

differently” . . . )

Yet, the paragraphs clarifying this Court’s own

“demanding” materiality standard are not based purely

on mere reference to a “reasonable person”:

In sum, when evaluating materiality under the

False Claims Act, the Government’s decision

to expressly identify a provision as a condition

of payment is relevant, but not automatically

dispositive. Likewise, proof of materiality

can include, but is not necessarily limited to,

evidence that the defendant knows that the

Government consistently refuses to pay claims

in the mine run of cases based on noncompliance

with the particular statutory, regulatory, or

contractual requirement. Conversely, if the

Government pays a particular claim in full

despite its actual knowledge that certain

requirements were violated, that is very strong

evidence that those requirements are not

material. Or, if the Government regularly pays

a particular type of claim in full despite actual

knowledge that certain requirements were

violated, and has signaled no change in position,

that is strong evidence that the requirements

are not material.

Id., 136 S.Ct. at 2003-2004 (footnote omitted).

Cour ts apply ing Escobar have g rappled w ith

reconciliation of the “reasonable person” citation and

the clarifications that proof of materiality – or a defense

against the same – may focus on the effect of the violation

on the actual decisionmaker.

Most courts presently look to the effect on the

hypothetical “reasonable person.” The Seventh Circuit

ruled in a bank fraud case that where the victim is a

private person, “whether a statement is material depends

on its effect on ‘a reasonable person’ – or, in this case,

a reasonable lender.” U.S v. Betts-Gaston, 860 F.3d

525, 532 (7th Cir. 2017). The Tenth Circuit ruled that a

misrepresentation is material if it “had the ‘capability’

or ‘natural tendency’ to influence a reasonable bank’s

decision of whether to provide a loan.” U.S v. Williams, 865

F.3d 1302, 1312 (10th Cir. 2017). The Fourth Circuit held

that the actual decisionmaker standard “does not apply

to a fraud scheme that targets a private lender such as

SunTrust,” and that materiality instead must be judged

from the perspective of a “reasonable lender in SunTrust’s

position – not necessarily SunTrust itself.” Raza, supra,

876 F.3d at 621.

The Ninth Circuit employs a different interpretation,

though its contours appear imprecise. Lindsey II held

that “materiality is an objective element, and an absence

of reliance does not affect its presence . . . a victim’s

intentional disregard of relevant information is not a

defense to wire fraud and thus evidence of such disregard

is not admissible as a defense to mortgage fraud.” Lindsey

II, supra, 850 F.3d at 1015-16. Yet it also held that Escobar

has altered that standard somewhat:

The Supreme Court’s language suggests that

evidence of the Government’s past treatment

of a particular requirement is admissible

to show that a defendant’s violation of that

requirement is not material. Translating to the

mortgage fraud context, Escobar suggests that

defendants be allowed to probe lender behavior

to some extent. The question is how much.

Id., 850 F.3d at 1017. The court settled on a rule that a

defendant may “attack materiality through industry

practice,” but not through “the practice of particular

lenders.” Id., 850 F.3d at 1016. See also, United States v.

Green, 698 Fed.Appx. 879, 880 (9th Cir. 2017).

But Lindsey II was followed soon after by United

States ex rel. Rose v. Stephens Institute, 901 F.3d 1124 (9th

Cir. 2018). Illustrating fluidity in the “materiality” analysis,

the Ninth Circuit entertained that interlocutory appeal to

“settle questions of law posed in the wake of [Escobar].”

(Id., 901 F.3d at 1127.) Escobar’s materiality standard

split the panel. The full panel agreed on key principles.

First, Escobar added to the materiality standard at least

somewhat. The majority viewed Escobar as creating a

“gloss” on materiality analysis and noted that while a

condition of payment regarding the False Claims Act is

relevant it is not dispositive – seemingly extending past

precedent. (Id., 901 F.3d at 1130-1131.) Second, Escobar’s

materiality standard focuses on case-specific facts of “the

likely or actual behavior of the recipient of the alleged

misrepresentation.” (Id., 901 F.3d at 1131.) One reviewed

factor was the “magnitude of violation.” (Id. 901 F.3d at

1134.) That holding by all three panel judges seeming is

at odds with Lindsey II. The dissent found Escobar fully

overruled prior Ninth Circuit precedent, and that the

majority failed to fully articulate the Escobar materiality

standard – declaring that Escobar had “imposed a new

materiality analysis that we must follow and apply.” (Id.,

901 F.3d at 1135.) The dissent concluded, evidence of the

government’s response to a misrepresentation “must

be specific or directly analogous to the current alleged

misrepresentation.” (Id., 901 F.3d at 1137.)

Shin’s appellate result did not reference the statements

in Lindsey II about how Hokama’s statement might be or

not be evidence of industry practice. It did not mention

Rose’s focus on “case-specific facts” of “the likely or actual

behavior of the recipient of the alleged misrepresentation.”

Instead, it appears to have adopted the pre-Escobar

position of the “reasonable person” standard Circuits.

Contributing to the confusion, some federal courts

after Escobar continue to grapple with this question but

without any reference to Escobar. United States v. Allen,

364 F.Supp.3d 1234 (D. Kansas 2019), involved as one

count a violation of 18 U.S.C. § 1001. Without reference to

the materiality standard of Escobar, the court found that

materiality was “an objective inquiry that is divorced from

whether the false statement had any actual influence on

the FBI’s investigation.” Id., 364 F.Supp.3d at 1253. In the

high-profile prosecution of United States Senator Robert

Menendez, the district court held that materiality under

the false statement statute was “an objective inquiry” and

that conviction could be supported by a jury conclusion

that the statement was “of a type capable of influencing a

reasonable decisionmaker.” United States v. Menendez,

291 F.Supp.3d 606, 636 (D. N.J. 2018).

Shin’s case, as well as the other post-Escobar cases

referenced above, paint a picture of a federal judiciary

and public in need of further guidance as to how to

implement Escobar’s clarifications. Shin’s case serves as

a viable vehicle for that re-visitation. Both sides briefed

extensively in the district court and in Ninth Circuit the

relevance of Hokama’s declarations. Resolution of that

issue determined the outcome of Shin’s appeal. This Court

should use this case to tackle head on the type of evidence

that may be introduced on materiality, consistent with

Escobar. The answer to that issue further would resolve

the question concerning the continued viability of a pure

objective “reasonable person” materiality standard.

III. The Decision Below Allows This Court to Resolve

Circuit Disagreement as to Whether a Materiality

Allegation is Sufficient If It Does Not Show that

a Decision Would Have Been Affected by the

Violation

The majority of Circuit Courts in False Claim Act

cases read Escobar as requiring that the materiality

analysis include pleading allegations showing the

Government’s payment decision would be affected by the

violation in question.

In D’Agostino v. ev3, Inc., 845 F.3d 1 (1st Cir.

2016), the First Circuit held that materiality allegation

was insufficient where it alleged merely that the false

statements in question “could have” inf luenced the

government’s decision to pay a claim. (See also, United

States ex rel. Nargol v. DuPuy Orthopaedics, Inc. 865

F.3d 29 (1st Cir. 2017).)

In United States ex rel. Petratos v. Genentech Inc.,

855 F.3d 481 (3d Cir. 2017), the Third Circuit dismissed

a qui tam action against a drug manufacturer because

there had been no allegation that the Government would

not have paid claims had it known that the defendant

concealed information on the severe side effects from one of

its cancer drugs. The court held that “where a relator does

not plead that knowledge of the violation could influence the

Government’s decision to pay, the misrepresentation likely

does not ‘have a natural tendency to influence payment’ as

required by the statute. (Id., 855 F.3d at p. 490.)

In a case with facts more similar to Shin’s, the Fourth

Circuit addressed the materiality of misrepresentations

by a contractor engaged to provide security at an

airbase in Iraq. The contractor had brought in guards

from Uganda who were unable to meet marksmanship

requirements, and falsified scorecards indicating that

they did. (United States v. Triple Canopy, Inc., 857 F.3d

174 (4th Cir. 2017).) The court found the Government had

properly pled materiality, in part, because it had alleged

that when the misrepresentations were discovered the

agency did not renew the contractor’s contract.

If the same view of relevance from these cases had

been applied in Shin’s case, evidence that the Government

would have awarded the contract with actual knowledge

of Shin’s misrepresentations would have been a factor

considered regarding materiality. Yet, the Memorandum

treats such as irrelevant.

Yet these decisions conf lict at a minimum with

decisions of the Sixth, Ninth, and Eleventh Circuits.

United States ex rel. Campie v. Gilead Scis., Inc., 862

F.3d 890 (9th Cir. 2017), and United States ex rel. Prather

v. Brookdale Senior Living Communities, Inc., 892 F.3d

822 (6th Cir. 2018), each held that it is not essential to

Escobar’s materiality analysis that a relator allege that the

misrepresentations affected the Government’s decision to

pay a claim – the abstract possibility that the Government

could refuse payment based on the same was sufficient.

In United States v. Henderson, 893 F.3d 1338 (11th Cir.

2018), the Eleventh Circuit held that the Government

proved materiality of a false statement under 18 U.S.C.

§ 1001 by presenting evidence that the statement could

have misled a medical professional. Id, 893 F.3d at 13461347. Essentially, this view of the materiality requirement

matches what the district court in Shin’s case held when

in 2004 it did not require the Government to show actual

reliance on Shin’s misrepresentations.

Cases involving these issues have spawned several

certiorari petitions and published opinions pulling in

diverse directions. The time is ripe for this Court to

address the effect of Escobar in this respect, and this

petition presents that opportunity.

IV. Facts of This Case Provide a Sufficient Background

for Resolving the Important Question of Who

the “Decisionmaker” is in Cases Involving the

Government

If this Court were to conclude that Escobar does

establish a basis for testimony of the effect of a false

statement on that statement’s recipient, an important

question arises as to who may give such testimony when

the recipient is the Government. Shin’s case facts starkly

present that question.

As stated above, the Ninth Circuit holds in criminal

fraud cases that a defendant may put on “materiality”

evidence in the form of expert testimony as to the effect

of a false statement on industry practice. Yet these

cases involve private parties as recipients of the false

statements. When the Government is the recipient of the

statements, any distinction between industry practice

and the individual recipient seemingly fades away. The

Government is both individual recipient and its own

unique “industry.” Is the appropriate testifying witness

the Government agent who first takes in the statement?

Or is the appropriate witness the actual decisionmaker

designated by the Government to act on the matter in

which the statement was made? Or a government official

based in Washington D.C.? Or an outside expert on

governmental handling of statements in similar matters?

Hokama’s declarations demonstrate that he alone

was designated by the Government to make the decision

on JHL’s contract proposal for Pump #2. That clear

factual record would be an ideal basis on which this Court

may articulate a controlling rule, based upon Escobar’s

principles.

CONCLUSION

For the reasons set forth above, a writ of certiorari

should be granted.

Respectfully submitted,

James E. Friedhofer

Counsel of Record

Friedhofer PC

11410 Bracken Fern Cove

San Diego, CA 92131

(858) 693-4400

jfriedhofer@friedhofer.com

Counsel for Petitioner

APPENDIX

APPENDIX A —Appendix

MEMORANDUM

OF THE

UNITED STATES COURT OF APPEALS FOR THE

NINTH CIRCUIT, FILED JULY 26, 2019

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

No. 17-16460

D.C. No. 1:15-cv-00377-SOM-RLP

PATRICK SHIN,

Petitioner-Appellant,

UNITED STATES OF AMERICA,

Respondent-Appellee.

MEMORANDUM*

Appeal from the United States District Court

for the District of Hawaii

Susan O. Mollway, District Judge, Presiding

Argued and Submitted October 12, 2018

Honolulu, Hawaii

Before: WARDLAW, BERZON, and RAWLINSON,

Circuit Judges.

*. This disposition is not appropriate for publication and

is not precedent except as provided by Ninth Circuit Rule 36-3.

Appendix A

Patrick Shin (Shin) appeals the district court’s denial

of his petition for a writ of error coram nobis or, in the

alternative, a writ of audita querela.

We review de novo the district court’s ruling on a

petition for a writ of error coram nobis or a writ of audita

querela. See United States v. Riedl, 496 F.3d 1003, 1005

(9th Cir. 2007); see also United States v. Hovsepian, 359

F.3d 1144, 1153 (9th Cir. 2004) (en banc). We review for

an abuse of discretion a district court’s determination

whether an evidentiary hearing is warranted. See

Runningeagle v. Ryan, 825 F.3d 970, 990 (9th Cir. 2016).

We affirm.

1. To establish entitlement to a writ of error coram

nobis, the petitioner must show that: “(1) a more usual

remedy is not available; (2) valid reasons exist for not

attacking the conviction earlier; (3) adverse consequences

exist from the conviction . . . ; and (4) the error is of the

most fundamental character.” Riedl, 496 F.3d at 1006

(citation omitted). Shin has established the first three

factors, but not the fourth.

As Shin has completed his sentence and is not

in custody, no “more usual” remedy is available. Id.

(citation omitted). Because Shin only became aware of the

asserted exculpatory evidence in May, 2015, he had valid

reasons for not attacking his conviction earlier. Finally,

Shin has suffered at least reputational and professional

consequences as a result of his conviction. See Hirabayashi

v. United States, 828 F.2d 591, 606 (9th Cir. 1987)

(recognizing a “presumption that collateral consequences

flow from any criminal conviction”) (citation omitted).

Appendix A

Shin pled guilty to making a false statement in violation

of 18 U.S.C. § 1001(a)(3), admitting the materiality of his

statement. See United States v. Peterson, 538 F.3d 1064,

1073 (9th Cir. 2008) (listing elements). However, Shin

argues that an “error of the most fundamental character”

occurred because the government violated Brady v.

Maryland, 373 U.S. 83 (1963), when it failed to disclose

exculpatory evidence that Wesley Choy (Choy) was not the

proper party to testify as to materiality, and because his

actions are no longer a crime after the Supreme Court’s

decision in Universal Health Services, Inc. v. United

States ex rel. Escobar, 136 S. Ct. 1989 (2016).

Without deciding whether a Brady violation qualifies

as an error of “the most fundamental character,” we

conclude that no Brady violation occurred because Shin

did not prove the existence of exculpatory evidence.

Although Choy acknowledged that he could not testify as

to the materiality of Shin’s false statement, Shin failed to

provide any evidence that the government could not prove

materiality through another witness, such as Annette

Ching.

Shin also misreads Escobar. Contrary to Shin’s

contention, both Escobar and United States v. Lindsey,

850 F.3d 1009 (9th Cir. 2017) reiterated the “familiar”

premise that a statement is material if a “reasonable

[person] would attach importance to it in determining his

choice of action in the transaction.” Escobar, 136 S.Ct. at

2002-04 & n.6 (citation and alteration in original omitted);

see also Lindsey, 850 F.3d at 1014. Consequently, Shin’s

misstatements could be material irrespective of their

Appendix A

subjective effect on a particular government official. See

Lindsey, 850 F.3d at 1013-14.

2. “If the record refutes the applicant’s factual

allegations or otherwise precludes habeas relief, a district

court is not required to hold an evidentiary hearing.”

Sivak v. Hardison, 658 F.3d 898, 927 (9th Cir. 2011)

(citation and alteration omitted). Shin failed to establish

that an evidentiary hearing would reveal support for a

Brady violation or for an absence of materiality. Thus,

the district court did not abuse its discretion in denying

Shin’s request for an evidentiary hearing. See id.

3. “A person seeking a writ of audita querela must

show . . . a legal defect in the underlying sentence or

conviction. . . .” Hovsepian, 359 F.3d at 1154 (citations and

internal quotation marks omitted). As discussed, Shin did

not establish any such defect. Thus, audita querela relief

is not available. See id.

AFFIRMED.

Appendix B ORDER OF THE

APPENDIX B — AMENDED

UNITED STATES DISTRICT COURT FOR THE

DISTRICT OF HAWAII, FILED JUNE 28, 2017

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF HAWAII

PATRICK SHIN,

Petitioner,

vs.

UNITED STATES OF AMERICA,

Respondent.

June 28, 2017, Decided,

June 28, 2017, Filed

CRIM. NO. 04-00150 SOM,

CIV. NO. 15-00377 SOM-RLP

AMENDED ORDER DENYING DEFENDANT’S

PETITION FOR WRIT OF ERROR CORAM NOBIS;

ORDER DENYING ALTERNATIVE PETITION

FOR WRIT OF AUDITA QUERELA

INTRODUCTION.

Defendant Patrick Shin pled guilty with a plea

agreement to having made a false statement to the

Government in violation of 18 U.S.C. § 1001. He was

Appendix B

sentenced in 2006 to three years of probation, which

included twelve days of intermittent confinement, and to

a $100,000 fine. Shin now seeks to vacate his conviction

more than ten years after judgment was entered. Having

long since paid his fine and completed his term of probation

and intermittent confinement, he seeks a common law writ

of coram nobis or audita querela.

In his Verified Petition for Writ of Error Coram

Nobis, or Alternatively, for Writ of Audita Querela, filed

on September 22, 2015, Shin argues that he has recently

discovered exculpatory evidence that the Government

should have disclosed to him before he entered his guilty

plea. Specifically, Shin contends that the Government

wrongfully withheld evidence that a Navy engineer

involved in the contracting process could not have testified

as to the materiality of Shin’s false statements. Shin says

that, because materiality is an essential element of the

false statement charge, his conviction should be vacated.

Although Shin’s original materiality argument was

couched in terms of an alleged violation by the Government

of its disclosure obligation under Brady v. Maryland,

373 U.S. 83, 83 S. Ct. 1194, 10 L. Ed. 2d 215 (1963), Shin

has, over time, refocused his materiality analysis. In

2016, months after Shin had filed his Verified Petition,

the Supreme Court discussed the materiality standard

applicable to a False Claims Act charge in Universal

Health Services, Inc. v. United States ex rel. Escobar,

136 S. Ct. 1989, 195 L. Ed. 2d 348 (2016). Less than a

month later, the Ninth Circuit examined the materiality

standard without mentioning Escobar. Rehearing was

Appendix B

sought, and, on rehearing, the Ninth Circuit expressly

considered Escobar’s materiality analysis. See United

States v. Lindsey (Lindsey I), 827 F.3d 865 (9th Cir. 2016),

rehearing granted and opinion withdrawn by 854 F.3d

1047 (9th Cir. 2017); see also United States v. Lindsey

(Lindsey II), 850 F.3d 1009 (9th Cir. 2017). This court gave

the parties in the present case an opportunity to discuss

the recent materiality case law.

In his optional supplemental memoranda, Shin argues

that Escobar articulates a new standard of materiality that

should be retroactively applied to his circumstances, and

that Lindsey II confirms this. Particularly with respect

to his request for a writ of audita querela, Shin says that,

under Escobar, he could have raised a defense to the false

claim charge that he could not have availed himself of at

the time he pled guilty. Shin reads Escobar as saying that,

in the context of a false claim charge, the relevant evidence

concerns whether the particular government decisionmaker was affected by (or would have been affected by)

the false statement, not whether the statement had the

propensity to influence a decision. That is, Shin contends

that, under Escobar, a false statement is material only if

the particular government official in issue subjectively

relied on it (or would have relied on it), and that materiality

is not viewed objectively. Shin adds that, under the new

subjective standard he says Escobar established, a jury

would have likely acquitted him of the false statement

charge in light of evidence that the Navy official with

“ultimate approving authority” for government contracts

would have approved the contract in issue even knowing

that Shin had made false statements.

Appendix B

Although Shin says that these arguments also apply

to his petition for a writ of coram nobis, he does not

specifically analyze Escobar or Lindsey II in the coram

nobis context, despite this court’s invitation that he do so.

Instead, Shin asks this court to allow him to amend his

Verified Petition to include a request for coram nobis relief

based on Escobar. He signals to this court that, if denied

relief in the present order and if also denied a chance to

amend his petition, he will reserve these arguments for

a motion for reconsideration and an appeal.

This court denies Shin’s petition for a writ of coram

nobis and a writ of audita querela. The court also denies

Shin’s motion to amend his Verified Petition to raise

Escobar in the coram nobis context. Having allowed Shin

to argue any impact Escobar or Lindsey II may have on

his coram nobis argument, this court concludes that it may

proceed to determine that impact on the present record.

This court further concludes that Shin is not entitled to

further discovery or a hearing on his petition.

The present order replaces and supersedes this court’s

earlier order denying coram nobis relief and reserving

any decision as to audita querela relief. That earlier order,

filed on September 1, 2016, preceded the issuance of the

Lindsey II opinion and the filing of additional briefs.

II. BACKGROUND.

At all times material to the conviction, Shin was

authorized to act as an agent on behalf of JHL Construction,

Inc., a general contracting company owned by Shin’s

Appendix B

nephew, James Lee. See ECF No. 91 in Crim. No. 04-00150

SOM, PageID # 249. (All ECF and PageID references

are to Crim No. 04-00150, rather than to the companion

civil case.)

In 2003, JHL was awarded a job order contract

(“JOC”) by the Navy. JOCs are based on pre-priced

construction tasks. The prices typically come from a unit

price book. See id. The Navy’s unit price books list average

costs that might be higher or lower than the actual costs

in a particular local economy. See id., PageID # 250-51.

Using the unit prices relied on by a customer such as the

Navy, a contractor proposes an appropriate coefficient

to apply to the unit prices to cover overhead and profit,

thereby arriving at the contract cost. See id.

JHL anticipated that the unit prices would exceed

JHL’s actual costs. See id., PageID #s 253-54. Because

JHL would make a profit without adding any coefficient,

JHL proposed a zero percent coefficient and was awarded

a zero coefficient contract. See id.

Once awarded to a contractor, a JOC allows an agency

to approach and negotiate with the contractor directly, as

construction needs come up. See id., PageID # 249-54. In

August 2003, the Navy asked JHL to provide a proposal

under the JOC for the overhaul of Pump # 2, Drydock #

4, at Pearl Harbor Naval Shipyard. See id., PageID #s

254-55. The Navy was under pressure to award a number

of work orders by the end of the Government’s fiscal year

(September 30, 2003), and assigning the Pump # 2 project

to JHL’s JOC was seen as a quick way to use current year

funding. See id.

10a

Appendix B

JHL provided a proposal for $2,360,153, which was

forwarded to the Navy’s Engineering Department for

a technical review of the costs. See id., PageID # 272.

Wesley Choy, a mechanical engineer with the Navy’s

Engineering Department, questioned the costs, which

he viewed as high. See id., PageID #s 259-60; ECF No.

100, PageID # 395. The costs were not broken down, and

he could not tell how the final number had been reached.

See ECF No. 100, PageID # 395. Choy asked the contract

administrator, Annette Ching, to get subcontractor quotes

from JHL to substantiate JHL’s cost proposal. See id.

On August 26, 2003, JHL submitted a second proposal

for the reduced amount of $2,205,138. See id., PageID #s

395-96. The second proposal did not include either a line

item breakdown of costs or the requested subcontractor

quotes. See id., PageID # 396. Choy asked Ching to

get the subcontractor quotes from the two proposed

subcontractors, HSI Electric, Inc., and Alfred Conhagen,

Inc. See id.

On September 4, 2003, Shin called HSI and asked it

to increase its quote by $100,000, but to invoice JHL the

original amount without the $100,000 markup. See ECF

No. 64, ¶ 15. HSI contacted the FBI to inform it of Shin’s

request. See id.; see also ECF No. 91, PageID # 264.

As directed by the FBI, HSI then gave Shin the

requested quote with the inflated price. See ECF No.

64, ¶ 17; ECF No. 91, PageID # 265. However, instead of

submitting this quote to the Navy, Shin submitted HSI’s

quote from July 10, 2003, which concerned work on Pump

11a

Appendix B

# 1. See ECF No. 64, ¶ 17; ECF No. 91, PageID # 264-65.

Shin used white-out to alter the $114,733 price on the July

2003 quote to $314,733. See ECF No. 64, ¶ 17.

On September 4, 2003, Shin asked Conhagen to

increase its quote by $180,000, bringing Conhagen’s

subcontract amount from $377,260 to $557,260. See id.,

¶ 18. Conhagen provided Shin with the requested quote

for $557,260. See id.

On September 8, 2003, Shin met with Choy and Ching

to give them the altered HSI and Conhagen quotes. See

id., ¶ 19; ECF No. 91, PageID # 264. Shin ultimately

submitted JHL’s best and final offer of $2,150,000. See

ECF No. 64, ¶ 19; ECF No. 91, PageID # 269-70.

On September 23, 2003, federal agents executed a

search warrant at Shin’s business office. See ECF No.

91, PageID # 266. Shin confessed at that time to having

submitted altered and inflated figures for the Pump # 2

job, explaining that the real subcontractor quotes would

not have supported JHL’s cost proposal and would have

caused the Navy to question the legitimacy of the proposal.

See ECF No. 64, ¶ 20. He said that, while Conhagen had

provided an inflated quote as he had requested, HSI’s

failure to do so right away had caused him to doctor HSI’s

quote from a previous job. See id.

The Pump # 2 project did not involve pre-priced tasks

listed in the Navy’s unit book. For that reason, performing

work on Pump # 2 under JHL’s zero coefficient JOC did

not allow JHL to recover any overhead or profit. Shin

12a

Appendix B

said the inflated subcontractor quotes were his way of

recovering overhead and profit. See id.

The Government charged Shin with having made a

false statement to the Government. See ECF No. 1. On

April 21, 2004, pursuant to a plea agreement, Shin pled

guilty to that charge. See ECF No. 8. On March 8, 2006,

Shin was sentenced to three years of probation, which

included twelve days of intermittent confinement, and a

fine of $100,000. See ECF No. 62, PageID #s 140-43.

During sentencing proceedings, Shin argued that the

Pump # 2 job was not pre-priced and therefore had been

improperly assigned under JHL’s zero coefficient JOC,

depriving JHL of a chance to recover overhead and profit.

See ECF No. 99, PageID #s 337-40. Shin contended that

he had altered the subcontractor quotes only to recover

a reasonable profit on the job. See id., PageID #s 340-41.

He denied any malicious intent, but acknowledged that

the way he had handled the situation was wrong. See

id., PageID #s 342-43, 372. This court determined that

“there was clearly an intent to deceive,” see id., PageID

# 352, and called the offense “one of these dishonesty

kinds of crimes,” see id., PageID # 368, but imposed a

sentence that reflected the court’s determination that the

Government had failed to prove that Shin had intended

to cause a loss. See id.

After he was sentenced, Shin reached out to Choy

several times to talk about Choy’s role in the prosecution

and to ask him for a written statement. See ECF No. 91,

PageID # 271. Choy originally said that Government

13a

Appendix B

lawyers had told him not to provide any such written

statement without approval from the U.S. Attorney’s

Office. See id., PageID #s 271-72. Eventually, in

approximately April 2014, Choy provided Shin with a

typed, unsigned “clarification” statement regarding his

role in the contracting process. See id., PageID # 272.

Choy’s “clarification” statement includes the following

points: 1) he recalled having stated at a meeting with

Shin in 2003 that he understood that Shin needed to

“roll” overhead and profit into the line items, given the

zero coefficient contract, but that that was a contractual

rather than technical issue; 2) imposing a zero coefficient

contract on JHL was not fair or reasonable; 3) Choy was

surprised to hear that the project had a zero coefficient;

and 4) Choy had turned the issue over to the contracting

officer as the person authorized to resolve the matter. See

ECF No. 91-2, PageID # 307.

In May 2015, Shin spoke with Choy regarding Choy’s

communications with “the Prosecutor and the Prosecutor’s

investigators.” See ECF No. 91, PageID # 276. Without

telling Choy, Shin taped the conversation. See ECF No.

102-3, PageID #s 470-91. When Shin asked Choy whether

he had communicated to the Government personnel any of

the points made in his April 2014 “clarification” statement,

Choy allegedly stated that he had told the prosecutor and

the prosecutor’s investigators that he did not have the

authority to decide whether JHL needed to be awarded

extra money in the zero coefficient contract to cover

its legitimate and reasonable overhead and profit. See

ECF No. 91, PageID #s 277-78. Choy also allegedly told

14a

Appendix B

Shin: 1) the prosecuting authorities “put the gun” on him

regarding his authority to decide the zero coefficient issue;

2) the prosecuting authorities “hid” the fact that Choy was

not authorized to deal with the zero coefficient issue; 3)

the prosecuting authorities only “heard what they wanted

to hear to make their case”; and 4) a declaration that the

prosecuting authorities had had Choy sign was “sneaky”

and “twisted” the facts he had given them. See id.

On September 22, 2015, Shin moved for a writ of

coram nobis or, in the alternative, audita querela. The

motion sought (1) the vacating of Shin’s federal criminal

conviction on one count of False Statement pursuant to

18 U.S.C. § 1001(a)(3); and (2) leave to withdraw his prior

guilty plea in this case. See id., PageID # 243.

Shin filed a motion for leave to depose Choy and Ching.

See ECF No. 105. This court denied Shin’s discovery

request to the extent it supported his petition for a writ of

coram nobis, but noted that it was premature for Shin to

seek discovery in aid of a writ of audita querela because

a writ of audita querela is a remedy of last resort, and his

request for a writ of coram nobis was still pending. See

ECF No. 117, PageID #s 600-01. This court thus deferred

any ruling on Shin’s discovery request insofar as it was

brought in aid of obtaining a writ of audita querela. See

id., PageID # 601.

On September 1, 2016, this court denied Shin’s

petition for a writ of coram nobis and invited Shin to

submit an optional supplemental memorandum regarding

his alternative request for a writ of audita querela. See

15a

Appendix B

Order Denying Defendant’s Petition for Writ of Error

Coram Nobis, and Inviting Supplementation of Alternative

Petition for Writ of Audita Querela, ECF No. 126, PageID

# 651. This court again deferred any ruling on Shin’s

discovery request to the extent it related to his request

for a writ of audita querela. See id.

Shin’s optional supplemental memorandum argues

that, in Universal Health Services, Inc. v. United States ex

rel. Escobar, 136 S. Ct. 1989, 195 L. Ed. 2d 348 (2016), the

Supreme Court set forth a new definition of materiality that

is retroactive and that provides Shin with a defense that

was not available to him at the time judgment was entered.

See Shin’s Supplemental Memorandum Regarding His

Motion for Writ of Audita Querela and Motion to Amend

Petition, ECF No. 135, PageID #s 746-50. Shin asserts

that, given this new definition, his conviction should be

vacated as defective. See id. Specifically, he contends that

Escobar creates a new subjective materiality standard

for false statement claims, replacing the former objective

materiality standard. See id., PageID #s 746-49. Shin says

that, under this new standard, his lies were immaterial

if the Government would have awarded the contract to

him even knowing that his subcontractor quotations were

inflated. See id., PageID #s 746-47, 751-53.

The Government counters that Escobar did not change

the law relating to materiality and thus did not create

a legal defect in Shin’s conviction. See Government’s

Opposition to Shin’s Motion for Writ of Audita Querela,

ECF No. 136, PageID # 757. The Government contends

that Escobar “simply applied the accepted definition [of

materiality] to a particular context.” See id., PageID # 760.

16a

Appendix B

In responding to the Government’s opposition, Shin

submitted a declaration by Robert Hokama, who allegedly

had the “ultimate” authority to approve the contract.

Hokama “would have approved the contract even if aware

of SHIN’s alteration of the subcontractor bids.” See

Responding Memorandum Regarding Shin’s Motion for

Writ of Audita Querela, ECF No. 139, PageID #s 77677. Shin points to Hokama’s statement as “very strong

evidence” under Escobar that Shin’s false statements were

not material. See id., PageID # 777.

From 1997 to 2004, Hokama was the Director of

Procurement Operations Division at Pearl Harbor

responsible for contracting activity relating to the

procurement for construction and maintenance of naval

facilities. See Declaration of Robert T. Hokama, ECF

No. 139-1, PageID # 780. He supervised Annette Ching

and was responsible for negotiating and recommending

the contract awarded to JHL in 2003. See id., PageID #

781. Hokama suggests that Ching did not follow certain

procedures necessary to awarding contracts and states

that he was “the ultimate decision-maker regarding

whether to award the Contract or not” to JHL and Shin.

See id., PageID #s 781-82. Hokama further states,

I would have considered Shin’s alteration of the

subcontractor quotes as his effort to put JHL’s

proposal in a form appropriate for consideration

and approval by the Government considering

the Government’s choice of a JOC for the

Contract, so his alteration of the subcontractor

quotes would not have been material to me. This

17a

Appendix B

way, the Contract would have been awarded at

a fair price to both the Government and JHL,

and the funding for the Contract would not have

been lost.

...

[Choy’s] Government Estimate was prepared

with a contract coefficient, and JHL’s best and

final offer, including the altered subcontractor

quotes, was very close to the amount of the

Government Estimate. This is also a reason why

the altered subcontractor bids, which contained

amounts covering overhead and profit because

of the task order’s out-of-scope nature, would

not be material to my decision to award the

Contract to JHL as its best and final offer.

See id., PageID #s 782-83.

On November 9, 2016, this court stayed its ruling on

the audita querela issue pending the disposition of the

rehearing motion before the Ninth Circuit in United States

v. Lindsey. See ECF No. 146. Following the issuance of

the Lindsey II opinion, this court invited the parties to

file memoranda “addressing the new Lindsey decision

and its impact, if any on Mr. Shin’s petition (whether in

the coram nobis or the audita querela context, or both).”

See ECF No. 150.

Just as they had dueling positions as to Escobar, the

parties disagree on how to read Lindsey II. According

18a

Appendix B

to Shin, a “subjective standard should now apply to

‘materiality’” pursuant to Lindsey II. ECF No. 157,

PageID # 865. Shin says that Escobar stands for the

proposition that “if the Government pays a particular

claim in full despite its actual knowledge that certain

requirements were violated, that is very strong evidence

that those requirements are not material.” Id., PageID

# 866. Because Hokama would have approved JHL’s

proposal even had he known of the inflated subcontractor

quotes, Shin says his conviction should be vacated. Id.,

PageID #s 865, 870-72.

Shin submits yet another declaration from Hokama,

this one noting that Hokama’s certificate of appointment

“stated no limitation on the scope of [his] authority, other

than limitations contained in applicable law or regulation.”

See Supplemental Declaration of Robert T. Hokama, ECF

No. 157-1, PageID # 873. As the “designated contracting

officer with highest authority for NAVFAC,” he says that

he “enjoyed a wide latitude to exercise business judgment.”

Id., PageID # 874. Hokama further states, “The U.S.

Government is not one monolithic entity which decides

contracting issues uniformly across every aspect of the

procurement process.” Id. He “would have approved of

the JHL Pump 2 contract even with knowledge that Mr.

SHIN provided altered subcontract bids and would not

have considered the alterations by Mr. Shin ‘material’.”

Id., PageID # 875.

The Government points out that Shin offers no

evidence of a systemic practice of ignoring the use of

altered documents or a contractor’s stated costs in

19a

Appendix B

determining whether bid prices are fair and reasonable.

ECF No. 156, PageID # 861.

III.

ANALYSIS.

Writ of Coram Nobis.

The 1946 amendments to Federal Rule of Civil

Procedure 60(b) expressly abolished several common law

writs, including the writ of coram nobis. In United States

v. Morgan, 346 U.S. 502, 511, 74 S. Ct. 247, 98 L. Ed. 248

(1954), the Supreme Court held that district courts still

retain limited authority to issue common law writs such

as writs of coram nobis and audita querela in collateral

criminal proceedings.

These common law writs survive “only to the extent

that they fill ‘gaps’ in the current systems of postconviction

relief.” United States v. Valdez-Pacheco, 237 F.3d 1077,

1079 (9th Cir. 2001). Such writs are not available when

the claims raised would be cognizable in petitions under

28 U.S.C. § 2255.

A writ of coram nobis is “a highly unusual remedy,

available only to correct grave injustices in a narrow range

of cases where no more conventional remedy is applicable.”

United States v. Riedl, 496 F.3d 1003, 1005 (9th Cir. 2007).

It is distinguishable from a habeas petition, which is

available only when convicted defendants are in “custody.”

See Hensley v. Municipal Court, 411 U.S. 345, 349, 93 S.

Ct. 1571, 36 L. Ed. 2d 294 (1973); Jones v. Cunningham,

371 U.S. 236, 243, 83 S. Ct. 373, 9 L. Ed. 2d 285 (1963).

20a

Appendix B

A writ of coram nobis allows a petitioner to attack a

conviction when the petitioner has already finished his

sentence and is no longer in custody. See McKinney v.

United States, 71 F.3d 779, 781 (9th Cir. 1995).

To qualify for coram nobis relief, a petitioner must

establish all of the following: (1) a more usual remedy

is not available; (2) valid reasons exist for not having

attacked the conviction earlier; (3) there are adverse

consequences from the conviction sufficient to satisfy the

case or controversy requirement of Article III; and (4) the

error is of the most fundamental character. Hirabayashi v.

United States, 828 F.2d 591, 604 (9th Cir. 1987). “Because

these requirements are conjunctive, failure to meet any

one of them is fatal.” Matus-Leva v. United States, 287

F.3d 758, 760 (9th Cir. 2002).

Shin Satisfies the First Three of the Four

Requirements for the Issuance of a Writ

of Coram Nobis.

Shin satisfies three of the four requirements for the

issuance of a writ of coram nobis.1

1. Shin’s plea agreement included a waiver of his right to

collaterally attack his sentence except when the attack is based on

a claim of ineffective assistance of counsel or any upward departure

by the court. See ECF No. 8. Although Shin’s petition for a writ of

coram nobis is a type of collateral attack, it does not challenge the

sentence. Instead, Shin attacks the underlying conviction, which

the Government concedes was not covered by the appeal waiver. See

ECF No. 100, PageID # 402.

21a

Appendix B

First, a more usual remedy is not available here.

Hirabayashi, 828 F.2d at 604. Shin has completed his

sentence and cannot seek relief under § 2255. See 28

U.S.C. § 2255 (providing that a “prisoner in custody . . .

may move the court which imposed the sentence to vacate,

set aside or correct the sentence”).

Second, Shin has suffered reputational, professional,

and social consequences as a result of his criminal

conviction. See ECF No. 91, PageID # 285. He states in

his Verified Petition that he has lost business opportunities

because of his conviction and that newspaper articles

published as recently as August 2015 continue to refer to

his felony conviction. See id., PageID # 297. The Ninth

Circuit has “repeatedly affirmed the presumption that

collateral consequences flow from any criminal conviction.”

Hirabayashi, 828 F.2d at 606.

Third, Shin has valid reasons for not having attacked

his conviction earlier. Although a petition for a writ of

coram nobis is not subject to a statute of limitations, the

petitioner must show that there were valid reasons that

the conviction was not attacked earlier. See id. at 60405. This requirement upholds a court’s gate-keeping in

barring claims that are unjustifiably late. Shin’s petition

is based on allegedly exculpatory statements that Choy

made to the Government, but that Shin only learned of

during a conversation with Choy in May 2015. See ECF

No. 91, PageID #s 294-95. Shin filed his petition in

September 2015. See id., PageID # 305. To the extent Shin

relies on Escobar and Lindsey II, those decisions issued

after Shin had filed the petition before this court. These

22a

Appendix B

circumstances provide valid reasons for Shin’s failure to

file his petition earlier.

Shin Does Not Satisfy the Fourth Factor

(a Fundamental Error Rendering His

Conviction Invalid) Required for the

Issuance of a Writ of Coram Nobis.

The fourth factor requires an error of “the most

fundamental character.” Matus-Leva, 287 F.3d at 760. A

fundamental error is an error that renders the underlying

proceeding itself irregular and invalid. See Morgan, 346

U.S. at 502; Hirabayashi, 828 F.2d at 604; see also United

States v. George, 676 F.3d 249, 258 (1st Cir. 2012) (“[A]

n error of the most fundamental character must denote

something more than an error simpliciter” (citation and

internal quotations omitted)).

The Supreme Court and the Ninth Circuit have

identified a limited number of fundamental errors,

including ineffective assistance of counsel, see United

States v. Ifenatuora, 586 F. App’x 303, 304 (9th Cir. 2014),

cert. denied, 135 S. Ct. 1750, 191 L. Ed. 2d 713 (2015); a

federal criminal trial without defense counsel and without

a competent and intelligent waiver of counsel, see Morgan,

346 U.S. at 512; a guilty plea induced by a bargain that

was not kept, see Holloway v. United States, 393 F.2d 731,

732 (9th Cir. 1968); an erroneous jury instruction relieving

the prosecution of the burden of proving an essential

element of the offense, see United States v. McClelland,

941 F.2d 999, 1003 (9th Cir. 1991); and the nondisclosure

of exculpatory evidence in violation of Brady, see Ikbal v.

United States, 304 F. App’x 604, 606-07 (9th Cir. 2008).

23a

Appendix B

The only error Shin initially identified that falls

within the errors described above is what he alleges was

the Government’s Brady violation. According to Shin,

the Government failed to disclose key evidence that was

exculpatory and material to the defense for impeachment

purposes. See ECF No. 91, PageID # 243-45.

Generally, there are three components to a Brady

violation: “The evidence at issue must be favorable to the

accused, either because it is exculpatory, or because it is

impeaching; that evidence must have been suppressed by

the State, either willfully or inadvertently; and prejudice

must have ensued.” Strickler v. Greene, 527 U.S. 263,

281-82, 119 S. Ct. 1936, 144 L. Ed. 2d 286 (1999); see also

Turner v. United States, No. 15-1503, 137 S. Ct. 1885, 198

L. Ed. 2d 443, 2017 U.S. LEXIS 4041, 2017 WL 2674152, at

*8-9 (U.S. June 22, 2017) (focusing on whether petitioners

established prejudice and materiality of withheld evidence,

including whether there was a “reasonable probability

that, had the evidence been disclosed, the result of the

proceeding would have been different”); Hamilton v.

Ayers, 583 F.3d 1100, 1110 (9th Cir. 2009) (analyzing

alleged Brady violation and concluding defendant was

not prejudiced).

In United States v. Ruiz, 536 U.S. 622, 122 S. Ct. 2450,

153 L. Ed. 2d 586 (2002), the Supreme Court held that “the

Constitution does not require the Government to disclose

material impeachment evidence prior to entering a plea

agreement with a criminal defendant.” Id. at 633. See also

United States v. Eltringham, 550 F. App’x 398, 399 (9th

Cir. 2013). The Supreme Court explained:

24a

Appendix B

[I]mpeachment information is special in

relation to the fairness of a trial, not in respect

to whether a plea is voluntary (“knowing,”

“intelligent,” and “sufficient[ly] aware”). Of

course, the more information the defendant has,

the more aware he is of the likely consequences

of a plea, waiver, or decision, and the wiser that

decision will likely be. But the Constitution does

not require the prosecutor to share all useful

information with the defendant. Weatherford

v. Bursey, 429 U.S. 545, 559, 97 S. Ct. 837,

51 L. Ed. 2d 30 (1977) (“There is no general

constitutional right to discovery in a criminal

case”). And the law ordinarily considers a

waiver knowing, intelligent, and sufficiently

aware if the defendant fully understands the

nature of the right and how it would likely apply

in general in the circumstances--even though

the defendant may not know the specific detailed

consequences of invoking it. A defendant, for

example, may waive his right to remain silent,

his right to a jury trial, or his right to counsel

even if the defendant does not know the specific

questions the authorities intend to ask, who will

likely serve on the jury, or the particular lawyer

the State might otherwise provide.

Ruiz, 536 U.S. at 629-30 (second alteration in original)

Therefore, under Ruiz, the withholding of evidence

that was only impeaching would not rise to the level of a

Brady violation, let alone a Brady violation sufficient to

25a

Appendix B

justify the issuance of an extraordinary writ. Because Shin

elected to plead guilty pursuant to a plea agreement, he

can only establish a Brady violation by a showing that the

Government withheld exculpatory (not just impeaching)

evidence from him prior to his guilty plea.

Shin was convicted under 18 U.S.C. § 1001(a)(3) for

having made a false statement to the Government. Section

1001(a)(3) imposes criminal liability for “whoever, in any

matter within the jurisdiction of the executive, legislative,

or judicial branch of the Government of the United States,

knowingly and willfully . . . makes or uses any false writing

or document knowing the same to contain any materially

false, fictitious, or fraudulent statement or entry.” “A

conviction under § 1001 requires the government to prove

(1) a statement, (2) falsity, (3) materiality, (4) knowledge,

and (5) jurisdiction.” United States v. Peterson, 538 F.3d

1064, 1073 (9th Cir. 2008) (quoting United States v. Atalig,

502 F.3d 1063, 1066 (9th Cir. 2007)).

Shin does not dispute that he made a false statement

to the Government in submitting a project bid with

subcontractor quotes that were inflated by a total of

$380,000. See ECF No. 91, PageID #s 266-67. But Shin

says the Government committed a Brady violation by

failing to disclose that it could not have shown that the

inflated quotes were material, as required for a conviction

at trial. See id., PageID #s 279-81.

Under 18 U.S.C. § 1001(a)(3), the element of materiality

is evaluated under “an objective test, which looks at ‘the

intrinsic capabilities of the false statement itself, rather

26a

Appendix B

than the possibility of the actual attainment of its end.’”

Peterson, 538 F.3d at 1072 (quoting United States v.

Facchini, 832 F.2d 1159, 1162 (9th Cir. 1987)).

“To be material a statement need only have the

propensity or capacity to influence or affect an agency’s

decision.” United States v. Rodriguez-Rodriguez, 840 F.2d

697, 700 (9th Cir. 1988). “The agency need not rely on the

information in fact for it to be material.” Id. “Materiality,

therefore, is not measured by effect or magnitude.”

Facchini, 832 F.2d at 1162.

Materiality is a question for the trier-of-fact. See

United States v. Gaudin, 515 U.S. 506, 511-15, 115 S. Ct.

2310, 132 L. Ed. 2d 444 (1995).

As noted above, Shin’s focus on materiality has

undergone a change during the pendency of the petition

now before this court. Shin views cases like Peterson and

Rodriguez-Rodriguez as undercut by the recent Escobar

and Lindsey II decisions. Those decisions, issued in the

course of this case, have, according to Shin, changed the

law of materiality. This court is not persuaded by Shin’s

argument.

This court initially cited Lindsey I in considering

the Government’s appeal from a Magistrate Judge’s

ruling permitting Shin to depose Choy. See ECF No.

117, PageID # 608. The court’s citation, however, was

to a discussion in Lindsey I that relied on longstanding

Ninth Circuit law on materiality, not to any new discussion

unique to Lindsey I. That longstanding Ninth Circuit

27a

Appendix B

law was not, like Lindsey I, withdrawn and replaced by

Lindsey II. When the Ninth Circuit withdrew Lindsey

I and subsequently issued Lindsey II, which expressly

addressed the Supreme Court’s materiality analysis in

Escobar, this court allowed the parties to submit briefs

addressing Lindsey II.

Shin reads Escobar as having changed the wellestablished objective materiality standard to a subjective

materiality standard. Shin also reads Lindsey II as

acknowledging the applicability of a subjective materiality

standard in false statement cases. According to Shin,

Escobar creates a new legal defense that was not

previously available to him and thus creates a legal defect

in his conviction. Notably, this “legal defect” argument

goes more to the standard for a writ of audita querela,

discussed later in this order, than to the standard for a

writ of coram nobis.

Despite this court’s invitation to address how Lindsey

II affects either his coram nobis argument or his audita

querela argument, see ECF No. 150, Shin provides no

specifics as to how either Escobar or Lindsey II entitles

him to coram nobis relief. Instead, Shin says:

The question now becomes whether the

Escobar decision regarding the definition of

“materiality” is more appropriately raised in

a coram nobis or audita querela petition. If

Escobar is viewed as “clarifying” the definition

of “materiality,” then a writ of coram nobis is

more appropriate to raise the Escobar issue. If

28a

Appendix B

Escobar is viewed as “creating a new definition”

of “materiality,” then audita querela applies. In

a sense, it does not matter which way this Court

views the situation because SHIN has pled both

coram nobis and audita querela petitions.

ECF No. 157, PageID # 869. Shin had also previously

stated:

Although we believe that an argument can be

made that the [Escobar] case is applicable to

SHIN’s coram nobis petition, this Court has

already dismissed the coram nobis petition

(apparently considering [Escobar] based on

some of this Court[‘s] recent rulings), so we

will reserve this argument for a motion for

reconsideration if this Court dismisses SHIN’s

entire Petition and for possible appeal. If

[Escobar] does not apply to SHIN’s coram nobis

petition, we believe, as argued above, it applies

to his audita querela petition.

ECF No. 135, PageID # 753.

In his most recent supplemental memorandum, Shin

notes that he has previously asked this court to allow

him to amend his Verified Petition to “include allegations

relating to Escobar,” and complains that “so far, this Court

has ruled based on Lindsey I without consideration of the

applicability of Escobar to the Petition.” ECF No. 157,

PageID # 869. This court gave Shin an expanded word

limit and additional time to file his most recent optional

memorandum to supplement prior filings and to address

29a

Appendix B

the impact of recent court decisions on his coram nobis

petition. See ECF No. 155. It is unclear to this court why

Shin could not have raised specific arguments as to why

and how Escobar and Lindsey II entitle him to a writ of

coram nobis.

This court nevertheless considers here whether either

Escobar or Lindsey II affects Shin’s petition for a writ of

coram nobis.

In Escobar, the Supreme Court discussed materiality

and what types of evidence might be relevant to proving

materiality depending on the specific facts of a case. See

Escobar, 136 S. Ct. at 2003-04. Escobar concerned claims

arising under the False Claims Act. A patient had died

while being treated at a mental health clinic by various

unlicensed and unsupervised staff in alleged violation of

state Medicaid regulations. Id. at 1995-97. The Supreme

Court examined when liability could be imposed under the

FCA. Id. at 1996. Specifically, the Supreme Court stated,

What matters is not the label the Government

attaches to a requirement, but whether the

defendant knowingly violated a requirement

that the defendant knows is material to

the G over n ment ’s pay ment decision. A

misrepresentation about compliance with a

statutory, regulatory, or contractual requirement

must be material to the Government’s payment

decision in order to be actionable under the

False Claims Act.

Id.

30a

Appendix B

The Cou r t noted that the FCA def inition of

“materiality” used language that had been employed to

define that term in other federal fraud statutes. Id. at

2002. For example, the Court noted that Neder v. United

States, 527 U.S. 1, 119 S. Ct. 1827, 144 L. Ed. 2d 35 (1999),

and Kungys v. United States, 485 U.S. 759, 108 S. Ct. 1537,

99 L. Ed. 2d 839 (1988), had used the following definition to

interpret the relevant federal fraud statutes: “[T]he term

‘material’ means having a natural tendency to influence, or

be capable of influencing, the payment or receipt of money

or property.” Escobar, 136 S. Ct. at 2002. With respect

to the standard that should be applied to determining

materiality in Escobar, the Supreme Court stated, “Under

any understanding of the concept, materiality ‘look[s] to

the effect on the likely or actual behavior of the recipient

of the alleged misrepresentation.’” Id. (quoting 26 R.

Lord, Williston on Contracts § 69:12, p. 549 (4th ed. 2003)

(Williston)). This standard is consistent with the objective

evaluation of materiality in Neder and Kungys.

The Supreme Court then concluded that, in the

FCA context, the Government’s provision of proof as to

materiality varied depending on the specific facts of the

case:

In sum, when evaluating materiality under

the False Claims Act, the Government’s

decision to expressly identify a provision as

a condition of payment is relevant, but not

automatically dispositive. Likewise, proof of

materiality can include, but is not necessarily

limited to, evidence that the defendant knows

31a

Appendix B

that the Government consistently refuses to

pay claims in the mine run of cases based on

noncompliance with the particular statutory,

reg ulator y, or contractual requirement.

Conversely, if the Government pays a particular

claim in full despite its actual knowledge that

certain requirements were violated, that is

very strong evidence that those requirements

are not material. Or, if the Government pays a

particular type of claim in full despite actual

knowledge that certain requirements were

violated, and has signaled no change in position,

that is strong evidence that the requirements

are not material.

Id. at 2003-04. The Court thus expressly disagreed with

the view that “any statutory, regulatory, or contractual

violation is material so long as the defendant knows that

the government would be entitled to refuse payment were

it aware of the violation.” Id. at 2004.

Shortly after Escobar was published, the Ninth Circuit

decided United States v. Lindsey (Lindsey I), 827 F.3d

865 (9th Cir. 2016). Lindsey I involved wire fraud counts

arising in the mortgage loan context. The defendant had

challenged the materiality of false responses to lender

requests. The Ninth Circuit adopted a “bright-line test,”

holding “that when a lender requests specific information

in its loan applications, false responses to those specific

requests are objectively material for purposes of proving

fraud.” Id. at 871. The Ninth Circuit ultimately withdrew

Lindsey I. See United States v. Lindsey (Lindsey

32a

Appendix B

I), 854 F.3d 1047 (9th Cir. 2017) (granting rehearing

and withdrawing published opinion and companion

memorandum disposition in Lindsey I). In United States

v. Lindsey (Lindsey II), 850 F.3d 1009 (9th Cir. 2017), the

Ninth Circuit deleted the prior reference to a “bright-line”

test under which the fact of an inquiry rendered a false

response material. But this deletion did not signal the

adoption of a subjective standard.

In Lindsey II, the Ninth Circuit addressed the district

court’s exclusion of evidence offered by the defendant to

prove that false statements in loan applications were not

material to a lender’s decision-making. See id. at 1013-18.

The defendant had offered evidence at trial that specific

individual lenders would have approved particular loans

even knowing about false statements on loan applications.

See id. at 1014. The district court excluded that evidence,

and the Ninth Circuit concluded that evidence about

particular lending decisions, as opposed to evidence of

how the lending industry typically treated statements

and requirements on loan applications, were properly

excluded. Id. at 1015-18.

Escobar does not say that a subjective standard now

applies to any evaluation of the materiality of a false

statement. Escobar actually relies on objective definitions

of “materiality” that the Supreme Court observed have

roots in “common-law antecedents” in the fraud context.

See Escobar, 136 S. Ct. at 2002 (quoting Neder and

Kungys).

While Escobar noted that, “if the Government

regularly pays a particular type of claim in full despite

33a

Appendix B

actual knowledge that certain requirements were violated,

and has signaled no change in position, that is strong

evidence that the requirements are not material,” id. at

2003-04, that statement provided an example of the kind

of evidence relevant to proving the materiality of a false

statement in the context of the False Claims Act. See id.

Shin is stretching that statement when he contends that

Escobar altered the decades-old objective standard for

evaluating the materiality of a false statement. Shin’s

error is made clear by the Ninth Circuit in Lindsey II.

In Lindsey II, the Ninth Circuit emphasized that the

“element of materiality is evaluated under an objective

test, in which we must examine ‘the intrinsic capabilities

of the false statement itself, rather than the possibility

of the actual attainment of its end.” 850 F.3d at 1014.

The Ninth Circuit affirmed Lindsey’s conviction, noting

that “[a] false statement is material if it objectively had

a tendency to influence, or was capable of influencing, a

lender to approve a loan.” Id. at 1015 (emphasis in original)

(citations omitted). Looking to some of the “common-law

antecedents” relied on by the Supreme Court in Escobar,

the Ninth Circuit stated, “In general a false statement is

material if it has ‘a natural tendency to influence, or [is]

capable of influencing, the decision of the decisionmaking

body to which it was addressed.’” Id. at 1013-14 (alteration

in original) (quoting Neder, 527 U.S. at 16).

Lindsey II carefully distinguished the “subjective

effect” on a victim from the “intrinsic capabilities of a

statement to influence” a decision-maker. Id. at 101516. The Ninth Circuit observed that evidence of a

34a

Appendix B

particular lender’s negligence or the intentional conduct

of a particular lender in disregarding false statements

had “little relevance to whether those statements are

intrinsically able to influence a decision.” Id. at 1015.

“[M]ateriality is an objective element, and an absence of

reliance does not affect its presence.” Id. at 1015-16. That

is, “a victim’s intentional disregard of relevant information

is not a defense to wire fraud and thus evidence of such

disregard is not admissible as a defense to mortgage

fraud.” Id. at 1016.

Lindsey II indicates that it is evidence of a widespread

practice, not of the individual behavior of a specific

decision-maker, that may establish materiality under

an objective standard. Id. When the Government is the

victim of a falsehood, the Government may be seen as

“represent[ing] the entire market for issuing federal

government contracts.” Id. at 1017. “The weight the

Government gives to a particular statutory, regulatory,

or contractual requirement is analogous not to the weight

an individual lender gives to a statement on its loan

application, but rather the weight the entire mortgage

industry gives to that type of statement.” Id. This

distinction underscores the objective materiality standard

under which “materiality measures natural capacity to

influence, not whether the statement actually influenced

any decision.” Id.

The reasoning of Escobar and Lindsey II makes it

clear that materiality continues to be measured under

an objective standard. Shin conflates this objective

standard with the types of evidence that may be relevant

35a

Appendix B

and admissible in certain contexts. To address what

Shin argues, this court turns now to how the objective

materiality standard applies to the facts of the present

case.

In focusing on materiality, Shin relies heavily on

Choy’s “clarification” statement and his statements

in a later conversation that Shin recorded. Shin says

these statements show that the Government withheld

exculpatory evidence that Choy “was not a competent or

qualified witness to testify about the issue of ‘materiality.’”

See ECF No. 91, PageID # 244. Shin argues that Choy’s

post-sentencing statements show that Choy, far from

helping the Government prove its case, would have

“negated the ‘materiality’ element of the False Statement

charge.” See id. Shin adds that this evidence also reveals

that “Choy was an exculpatory witness regarding the issue

of ‘materiality’” because Choy’s comments show that the

false statement was not material to him. See id.

Choy’s “clarification” statement reads:

(1) Clarification as to my role in this contract. I

am not a contracting official nor do I have the

authority to revise a contractual requirement.

My task was to review the contractor’s proposal

to ensure that the contractor scope of work is in

accordance with the Governments scope of work

and provide an opinion on a fair and reasonable

price for the Government.

(2) On 14 August 2003 despite the fact that

36a

Appendix B

the contractor’s proposal was with range 6%

($148,903) of the Government estimate (GE

$2,211,250 vice contractor proposal $2,360,153),

I was requested by the contracting administer

to review the contractor’s proposal for technical

compliance (i.e. Contractor’s scope of work) and

provide an opinion on a fair and reasonable

price. Since the contractor proposal consisted

of aggregated pricing it was difficulty to

determine if the contractor proposal was in

practicable in line eh Government scope of work,

I requested to the contracting administer if the

contractor can provide additional breakdown of

their proposal.

(3) On September 8, 2003, I attended a meeting

along with the contracting administer in which

Mr. Patrick Shin explained to the Government

that based on this contractor he had a zero

coefficient for this project. I recall stating that I

understand that Mr. Shinn needed to “roll” this

overhead and profit into the line items since he

had a zero coefficient but that is a contractual

issues and not a technical issue.

(4) My Government estimate was prepared

w ith a contractor coefficient. It was my

understanding during this time that the

contractor’s coefficient included their overhead

and profit so to not include a coefficient would

not be fair and would be unreasonable. I was

surprised by the fact that this project had a

37a

Appendix B

zero coefficient and turned this issue to the

contracting officer, the authorized person, to

resolve.

ECF No. 91-2, PageID # 307 (grammar and spelling as

in original).

Shin characterizes Choy’s “clarification” statement

as exculpatory, treating it as an admission by Choy

that he could not have been a materiality witness for

the Government. But this argument assumes that the

Government had no other way of proving materiality. As

it turns out, Choy was not the only source of materiality

evidence.

Even assuming the materiality analysis focuses on

an individual’s mindset, as Shin contends it should, the

Government could have used testimony by Annette Ching,

the contracting officer for the project bid, on the issue of

whether Shin’s statement was material to the decision to

award the job to JHL. Ching’s declaration indicates the

type of testimony she may have given on the Government’s

behalf had Shin’s case gone to trial. See ECF No. 100-3.

Ching states that she “was assigned responsibility for

negotiating and recommending the award of a task order

contract for the overhaul of Pump #2, Dry Dock #4 at

the Pearl Harbor Naval Shipyard.” See id., PageID #s

429-30. She adds:

I later learned from criminal investigators that

the HSI Electric and Conhagen quotations given

to me by Shin had been inflated by $380,000, by

38a

Appendix B

altering the original quotations. Had I known

that the quotations were altered and inflated,

I would have recommended against the award

of the contract to JHL. I would have been

concerned both about the actual costs incurred

by JHL, and about the integrity of the company.

See id., PageID # 431.

Ching also states:

Regardless of the coefficient on the job,

I wanted to know the actual costs of the

contractor for purposes of deciding whether

to award the contract and at what price. Choy

would be responsible for determining whether

the proposal was technically acceptable. I

would be responsible for determining whether

the price was fair and reasonable. The true

subcontractor costs charged to JHL would have

been a factor Choy and I could have considered

in making our decisions.

See id. Assuming that, as Shin argues, an individual’s

reaction is relevant to establishing materiality, testimony

by Ching at trial that JHL’s actual costs would have

influenced her decision as to whether the proposed price

was fair, and that she would not have recommended a

contract with JHL had she known that the costs were

inflated, could have established that the inflated quotes

had the propensity or capacity to influence or affect the

Navy’s award of the job. See Rodriguez-Rodriguez, 840

F.2d at 700.

39a

Appendix B

Even if, for some reason, the Government could not

have called Ching as a fact witness, it could conceivably

have called her as an expert witness regarding what the

Navy considers in its decision to award such projects,

and whether statements such as Shin’s would normally

be material to the Navy’s decision-making process. Shin

himself acknowledges that materiality may be proven

through an expert witness. See ECF No. 91, PageID # 268

(“Materiality is best shown by the testimony of a witness,

generally those who make the decisions on the application

or statements in the particular case, concerning the

influence that defendant’s allegedly false statement might

have had on the ultimate result of the transaction. Such

a witness may be an expert witness or a fact witness, or

both.” (quoting Dep’t of Just. Manual Resource Manual

Title 9 Number 911)).

In its earlier discovery order, this court noted that,

alternatively or additionally, the Government could have

relied on other witnesses like Robert Hokama to testify

regarding materiality. See ECF No. 117, PageID # 613.

While not involved in the negotiations in which Shin made

his false statement, Hokama was the Director of the

Procurement Operations Division for Pearl Harbor and

Ching’s supervisor at the time Shin was negotiating the

contract on behalf of JHL. See ECF No. 48-1.

A fter this court issued its order referring to

possible testimony by Hokama concerning materiality,

Shin filed several memoranda indicating that Hokama

had recently told Shin’s counsel that he would have

approved JHL’s proposal even had he known it included

40a

Appendix B

falsified subcontractor amounts. Shin followed up with

declarations by Hokama. This court recognizes that the

Government would not, after all, have called Hokama as

a materiality witness at trial if Government attorneys

had known that he would testify in accordance with his

recent declarations. Shin’s counsel conceded, however,

that he had no information suggesting that Hokama ever

communicated the content of his declarations to anyone

before Shin pled guilty. In the absence of any statement

by Hokama about his hypothetical approval of a contract

in the face of knowledge that it included falsities, the

Government could have contemplated calling him as a

materiality witness. More importantly, Hokama’s earlier

silence on the subject means that the Government’s

failure to disclose his view could not serve as the basis

of a Brady violation. The Government has no duty to

disclose exculpatory “evidence” that is simply an unspoken

hypothetical locked in an individual’s mind.

In any event, there is no evidence that Hokama speaks

for the Government as a whole when he says he would not

have been affected by Shin’s statements even knowing

they were false. As a contracting officer, Hokama had

decision-making authority that is more easily analogized

to the decision-making authority that an individual loan

officer or particular lender may have had in Lindsey II,

not to the lending industry as a whole. As noted earlier,

Lindsey II counsels that it is the practice of the industry

as a whole that is relevant to materiality. 850 F.3d at

1017. Even if Hokama as an individual decision-maker

would have condoned Shin’s false statements, Hokama’s

attitude would not make the false statements material. As

41a

Appendix B

the Ninth Circuit said in Lindsey II, “Two wrongs do not

make a right, and lenders’ negligence, or even intentional

disregard, cannot excuse another’s criminal fraud.” Id.

at 1014.

This is consistent with Maslenjak v. United States,

No. 16-309, 137 S. Ct. 1918, 198 L. Ed. 2d 460, 2017 U.S.

LEXIS 4042, 2017 WL 2674154, at *8 (U.S. June 22, 2017),

in which the Supreme Court discussed the materiality

of false statements made to individual government

decision-makers in the context of immigration law. Id. at

*8. Divna Maslenjak, who had immigrated to the United

States from Bosnia in the 1990s as a refugee and who was

later naturalized, was charged with having “procure[d],

contrary to law, naturalization” in violation of 18 U.S.C.

§ 1425(a). Id. at *4. Maslenjak was accused of having

violated § 1425(a) by allegedly knowingly making a false

statement under oath in a naturalization proceeding in

violation of 18 U.S.C. § 1015(a). Id.

With respect to false statements made to government

officials, the Supreme Court said that “objective legal

criteria” determine “whether a false statement sufficiently

altered [] processes [so] as to have influenced an award

of citizenship.” Id. at *8. The Supreme Court observed

that government officials must apply immigration laws

“faithfully-- granting naturalization when the applicable

criteria are satisfied, and denying it when they are not.” Id.

(citing Kungys, 485 U.S. at 774 n.9). “The entire system,

in other words, is set up to provide little or no room for

subjective preferences or personal whims. Because that is

so, the question of what any individual decisionmaker might

42a

Appendix B

have done with accurate information is beside the point.”

Id. The Supreme Court further stated that a defendant

in this situation “should neither benefit nor suffer from a

wayward official’s deviations from legal requirements.”

Id. That is, the actions of a particular individual official

should not affect the analysis of whether a false statement

is material. Instead, the inquiry is “framed in objective

terms: To decide whether a defendant acquired citizenship

by means of a lie, a jury must evaluate how knowledge of

the real facts would have affected a reasonable government

official properly applying naturalization law.” Id.

In Escobar, the Supreme Court looked to the

Government as a whole. Hokama’s position was akin to

that of an immigration official determining whether an

applicant should or should not be granted naturalization

status. Because our system of Government leaves “little

or no room for subjective preferences or personal whims,”

what Hokama might have done if he had known of Shin’s

lies is “beside the point” for materiality purposes. See id.

Under the analysis in Maslenjak, Shin should “neither

benefit nor suffer” from Hokama’s subjective preferences.

The inquiry into the materiality of a false statement

continues to be measured under an objective standard.

This court has read Shin’s contention that he did not

know prior to his guilty plea that the Government had

any materiality witness besides Choy. Shin appears to be

claiming that this somehow means that the Government

may not rely on other materiality evidence. See ECF No.

115-1, PageID # 578. It is far-fetched that Shin, who, in

his own words, “was experienced in federal government

contracting matters,” see ECF No. 91, PageID # 249; see

43a

Appendix B

also id., PageID #s 245-46, did not know that Ching might

have had something to say about Shin’s false statements.

But even if Shin thought Choy was the sole possible

witness on materiality, the Government was not bound

by Shin’s assumptions. The Government was and is free

to present all the evidence in its possession to establish

that Shin’s false statements were material.

It is not the case that, before Shin pled guilty, the

Government was required to outline for Shin which

person or persons might provide evidence at trial going

specifically to materiality or to any other element of a

false statement charge. Nor does Shin point to anything

suggesting that the Government misled him into believing

that its only source of materiality evidence was Choy. Cf.

Ruiz, 536 U.S. at 632 (“Consequently, the Ninth Circuit’s

requirement could force the Government to abandon

its ‘general practice’ of not ‘disclos[ing] to a defendant

pleading guilty information that would reveal the identities

of cooperating informants, undercover investigators, or

other prospective witnesses.’”). Indeed, Shin’s counsel

admitted during a telephone conference with the court

on August 23, 2016, that the Government never expressly

identified Choy as its materiality witness. See ECF No.

125. According to Shin’s counsel, Choy’s role in the Navy’s

review of the JHL bid supported Shin’s assumption that

Choy was the Government’s materiality witness. But any

assumption by Shin that Choy was the Government’s only

possible materiality witness was unjustified.

It also bears noting that, even assuming Choy’s

individual mindset were as critical as Shin contends, Shin

overstates what Choy told Shin after Shin was sentenced.

44a

Appendix B

Choy never admitted that he could not have testified

regarding the materiality of Shin’s statement. Although

Choy believed that, because he was not the contracting

authority, he could not testify about contractual issues

such as whether or not JHL should have been awarded

the contract in spite of Shin’s false statement, Choy might

still have testified about a number of issues relevant to

materiality. For example, Choy could have testified as

to why he asked JHL to provide subcontractor quotes;

whether including the Pump # 2 work in JHL’s JOC was

typical or a mistake; what type of information Ching

had requested in regards to the JHL bid; what type of

technical assistance Choy had given Ching regarding

the JHL bid; and a host of other things not requiring

testimony as to how Choy might have decided whether to

award the project to JHL. Choy’s insistence that he could

not testify as to decision-making issues versus “technical”

issues relates only to the scope of his testimony. That

insistence does not go to whether he had anything at all

to say about materiality, assuming, as Shin contends, that

Choy’s individual mindset is relevant to materiality.

Choy was a potential Government witness, not a

Government lawyer. Any so-called “admission” by him

about what he was legally able to say could not have

precluded a Government lawyer from calling him to testify

about materiality.

Shin also argues that statements in Choy’s declaration

and recorded conversation indicate that Choy believed

Shin’s misrepresentations were immaterial. Even if Choy’s

belief were relevant here, there is no such indication.

During the recorded conversation, Shin pressed Choy

45a

Appendix B

to admit that he had told Government prosecutors that

the inflated quotes did not matter. But Choy appears

to have instead repeatedly explained that he lacked the

authority to decide such contracting issues. Shin asked,

“Did you ever explain to [the Government prosecutor]

about coefficient and the--he thought that--you know, roll in

profit and overhead[?]” See ECF No. 102-3, PageID # 481.

Choy answered, “I know that was the issue. The issue--and

that wasn’t for me--that’s why it’s a contracting issue. That

wasn’t for me to decide whether, you know, he bid--Nan,

Inc. [Shin’s company] bid--but realized that he needed to

make profit and overhead.” See id., PageID # 482.

Shin again pressed Choy:

Shin: So when you talked to, like, [the

Government prosecutor] and these government

people, you explained there’s no coefficient and

we had to roll it in profit and overhead and--but

do they still understand when you were talking

to them?

Choy: So I told them that, but I told them I

think--because it’s an ACQ issue, acquisition

issue, that’s not for me to decide whether they

going let Nan, Inc. roll into the--into the-Shin: Roll in the coefficient?

Choy: Yeah, yeah. That’s not my call. I don’t

have the authority to make that kind of call.

Shin: Uh-huh.

46a

Appendix B

Choy: So I remember telling them about

the zero percent coefficient. I remember

telling them, “Does it have that?” So I kept

--I remember telling them that it’s not my job

responsibility to--do that, it’s acquisition’s.

See id., PageID #s 482-83. See also id., PageID # 481

(discussing contract question about whether Government

could give zero coefficient contract to Nan, Inc., and

noting, “I’m not the one that--I’m not supposed to decide”

and “I don’t know” about contracting issues); id., PageID

# 482 (“[T]hat’s not for me to decide. That’s ACQ guys. I

just over here to review the technical aspect and say that,

oh, does this make sense kind of deal, right.”).

Choy’s belief that this issue fell outside his duties is

not an indication as to materiality at all.

Shin contends that the following statement by

Choy also indicates that Choy would testify that Shin’s

statement was not material to him:

It was my understanding during this time

that the contractor’s coefficient included their

overhead and profit so to not include a coefficient

would not be fair and would be unreasonable.

I was surprised by the fact that this project

had a zero coefficient and turned this issue to

the contracting officer, the authorized person,

to resolve.

See ECF No. 91, PageID # 273 (numbers omitted); see

also ECF No. 91-2, PageID # 307. Choy also recalled

47a

Appendix B

telling prosecutors “[a]bout that zero percent coefficient,

yeah, who the contract was awarded and that--the zero

percent coefficient and it needed to go to overhead and

profit. I mean how else he going make money, right?” See

ECF No. 102-3, PageID # 487.

Here, too, Shin treats Choy’s statements as asserting

more than they do. Choy was expressing his understanding

that it would be unreasonable for the Navy to require a

private contractor like JHL to perform a job for free. Choy

appears to have been telling Shin that he understood to

some extent Shin’s motive for inflating the subcontractor

bids. But this is a far cry from suggesting that falsified

subcontractor prices were immaterial to him, much less

to the Navy, or that Choy communicated such a thought to

anyone. Regardless of whether Choy thought a contractor

should make some profit, an inability to make a profit

absent a false statement to the Government is not a

defense to a charge under 18 U.S.C. § 1001. Thus, whatever

Choy may have said to Government prosecutors on this

subject, there is no reason that, before Shin pled guilty,

the prosecutors had to relay to Shin Choy’s belief that a

contractor was entitled to make a profit.

Even assuming that Choy had earlier told the

Government what he later told Shin in his clarification

statement and the recorded conversation, these statements

did not constitute exculpator y evidence that the

Government improperly withheld from Shin prior to his

guilty plea. Nor does Shin present any reason for this

court to assume that, applying an objective materiality

standard, Shin’s false statements were not material.

48a

Appendix B

Having failed to establish there was an actual fundamental

error in his conviction, Shin is not entitled to a writ of

coram nobis.

Shin Is Not Entitled to an Evidentiary

Hearing in Support of a Writ of Coram

Nobis.

Shin argues that he is entitled to an evidentiary

hearing if this court does not grant his petition for writ

of coram nobis outright. See ECF No. 91, PageID # 301.

“Whether a hearing is required on a coram nobis

motion should be resolved in the same manner as habeas

corpus petitions.” United States v. Taylor, 648 F.2d 565,

573 n.25 (9th Cir. 1981). See also Korematsu v. United

States, 584 F. Supp. 1406, 1412 (N.D. Cal. 1984) (“§ 2255

considerations apply [in a coram nobis proceeding] in

determining whether an evidentiary hearing is required”).

A petitioner “is entitled to an evidentiary hearing on his

claim ‘[u]nless the motion and the files and records of

the case conclusively show that the prisoner is entitled

to no relief.’” Frazer v. United States, 18 F.3d 778, 781

(9th Cir. 1994) (quoting 28 U.S.C. § 2255). “In deciding

whether to grant an evidentiary hearing, a federal court

must consider whether such a hearing could enable an

applicant to prove the petition’s factual allegations, which,

if true, would entitle the applicant to federal habeas relief.”

Schriro v. Landrigan, 550 U.S. 465, 474, 127 S. Ct. 1933,

167 L. Ed. 2d 836 (2007).

Shin’s request for an evidentiary hearing is deficient

in failing to show how such a hearing would establish the

49a

Appendix B

Government’s inability to prove materiality or a Brady

violation in the form of the Government’s failure to disclose

such an alleged inability.

This court addressed a similar inquiry in determining

whether Shin had good cause to depose Choy and Ching.

See ECF No. 117. Under the good cause standard applicable

to the discovery ruling, the court was required to examine

whether the “‘specific allegations before the court show

reason to believe that the petitioner may, if the facts are

fully developed, be able to demonstrate that he is . . .

entitled to relief.’” Id., PageID # 605 (quoting Pham v.

Terhune, 400 F.3d 740, 743 (9th Cir. 2005)). Consistent with

the above analysis regarding whether the Government

withheld exculpatory evidence regarding Choy, this court

ruled that Shin’s allegations, together with the evidence

Shin pointed to in support of his allegations, gave this

court no reason to believe that deposing Choy would lead

to evidence demonstrating that the Government had

withheld exculpatory evidence from Shin before he pled

guilty. See id., PageID #s 607-22. With regard to Ching,

Shin never alleged that she provided any exculpatory

evidence to the Government. Thus, this court determined

that Shin had failed to show good cause to depose Ching

as well. See id., PageID #s 623-25.

Once it denied Shin a chance to depose Choy or Ching,

this court could not discern from the record what further

evidence Shin might offer in support of his request for a

writ of coram nobis. The only fundamental error alleged

by Shin involved the Government’s purported withholding

of exculpatory statements by Choy allegedly relating to

50a

Appendix B

materiality. Nevertheless, in an abundance of caution, this

court gave Shin a further opportunity to explain whether

he continued to want an evidentiary hearing. See id.,

PageID #s 625-26. Shin filed a request for an evidentiary

hearing that included an offer of proof regarding what

would be presented at an evidentiary hearing:

Patrick Shin will testify as set forth in his

Petition that, to him, the key witness in the

entire case as to “materiality” was Wes Choy

because Choy was the Government employee

who prepared the Government Estimate (GE)

and asked for the subcontractor quotes. Shin

will testify that, had he known that once Choy

found out about the zero coefficient problem,

Choy “washed his hands” of the contract

and turned all issues over to the contracting

officers, he would not have pled guilty.

Rober t Hoka ma w i l l t est i f y ( ba sed on

Petitioner’s counsel’s discussion with him

yesterday) that if the Pump #2 contract had

reached his desk with the information that

Petitioner had changed the subcontractor

bids because of the zero coefficient problem,

he still would have approved the contract, i.e.,

the subcontractor quotes would not have been

“material” to him because the JHL proposal

was close to the GE. He will also testify he

was the contracting officer with final authority

to approve the contract over Annette Ching

and Brian Sekiguchi. (This Court speculated

51a

Appendix B

at 22-23 of its Order that Mr. Hokama might

be a witness for the Government on the issue

of “materiality.” This is clearly not the case.)

Br ian Sek ig uchi w i ll t esti f y ( based on

Petitioner’s counsel’s discussion with him

yesterday) about the inappropriate assignment

of the Pump #2 contract to the JHL JOC, as

he set out in his Declaration for sentencing. He

will testify that if the contract had reached his

desk with the information that Petitioner had

changed the subcontractor bids, he would have

passed the contract on to Robert Hokama for

final decision.

Wes Choy will testify as set forth in Petitioner’s

Petition. To the extent that he tries to deny

the statements he made to Petitioner, his

tape recorded statement will be introduced

into evidence. Choy will also admit that his

Government Estimate (GE) for the contract

cost was reasonable with consideration of a

reasonable coefficient.

Annette Ching will testify that she was not

the ultimate deciding authority regarding

the approval of the contract. She may testify

that she would recommend not approving the

contract because of Petitioner’s falsifications,

but she will have to admit that the final

authorities were Brian Sekiguchi and Robert

Hokama.

52a

Appendix B

ECF No. 119, PageID #s 632-34.

Even taking Shin’s offer of proof as an accurate

summary of the testimony that Shin would present, this

court sees no reason to conduct an evidentiary hearing.

The offer of proof shows that the evidence sought by Shin

either duplicates evidence already in the record, or would

not entitle him to the relief he seeks. The offer of proof

states that Shin would “testify as set forth in his Petition,”

and that “Wes Choy will testify as set forth in Petitioner’s

Petition.” Id. Far from demonstrating any inadequacy

in the record with respect to Choy and Shin, Shin’s

offer of proof only proposes to corroborate statements

Choy made in his clarification statement and the taped

conversation. See Korematsu, 584 F. Supp. at 1412 (noting

that evidentiary hearing may be afforded “when a palpable

claim is raised by the petitioner and there is an inadequate

record or disputed factual issues”). As discussed above,

however, even if the court accepted these statements

as true, they would not be sufficient to show that the

Government withheld exculpatory information from Shin.

Furthermore, the offers of proof for Hokama,

Sekiguchi, and Ching are irrelevant for the purpose of

a coram nobis petition. During the telephone conference

in which Shin’s request for an evidentiary hearing was

discussed, Shin’s counsel admitted that he had no reason

to believe that any of these witnesses had told anyone

before Shin pled guilty that they would have approved the

contract even had they known that Shin had falsified the

subcontractor quotes. Shin’s counsel conceded that Shin’s

petition was focused solely on the Government’s failure

53a

Appendix B

to disclose what Shin says were exculpatory statements

by Choy.

As this court has already noted, Shin’s offer of proof

concerning Hokama indicates that Shin wants to present

newly discovered evidence from Hokama that Shin’s

misrepresentations were immaterial to him. This new

evidence is not probative of any fundamental error. See

Moody v. United States, 874 F.2d 1575, 1577 (11th Cir.

1989) (“A claim of newly discovered evidence relevant only

to the guilt or innocence of the petitioner is not cognizable

in a coram nobis proceeding.”). With respect to Ching, it

appears from Shin’s offer of proof that he wants to elicit

testimony that she was not the ultimate decision-maker

and therefore could not testify as to materiality. This

court has discussed the materiality issue at length earlier

in this order. In short, because materiality continues to

be evaluated under “an objective test, which looks at ‘the

intrinsic capabilities of the false statement itself, rather

than the possibility of the actual attainment of its end,’”

Peterson, 538 F.3d at 1072 (quoting Facchini, 832 F.2d at

1162), materiality evidence can be provided by individuals

other than an ultimate decision-maker.

In many cases, an ultimate decision-maker relies on

individuals like Ching and Choy to evaluate a proposal

or statement and to make recommendations that guide

the final decision. See, e.g., U.S. ex rel. Longhi v. Lithium

Power Techs., Inc., 513 F. Supp. 2d 866, 888 (S.D. Tex.

2007) (rejecting argument that Government could not

rely on witness to establish materiality because he was

not ultimate decisionmaker regarding award of contract).

54a

Appendix B

Individuals may provide evidence as to materiality to the

extent that their knowledge and experience allow them

to testify regarding whether a particular statement

has “the propensity or capacity to influence or affect an

agency’s decision.” Rodriguez-Rodriguez, 840 F.2d at

700. As discussed above, Ching could even have testified

as an expert witness regarding materiality. Shin does not

show that testimony by Ching would somehow support the

issuance of a writ of coram nobis. Nor does Shin suggest

how the evidentiary hearing he requests would show that

the Government as a whole disregards false statements in

circumstances analogous to those presented by this case.

In summary, Shin fails to show that an evidentiary

hearing would support either a Brady violation or an

absence of materiality. Even assuming that the witnesses

Shin identifies would testify in accordance with his offer

of proof, none of the witnesses would provide evidence

relevant to the narrow issue of whether exculpatory

material was withheld, creating a fundamental error in

the underlying proceeding. See Ybarra v. United States,

461 F.2d 1195, 1200 (9th Cir. 1972) (affirming denial of

evidentiary hearing when nothing could be gained by

granting hearing). And under the objective materiality

standard that applies even after Escobar and Lindsey

II, none of the matters Shin says he might present would

show that Shin’s false statements were immaterial. See

id. The petition, file, and records of this case conclusively

show that Shin is not entitled to coram nobis relief. Shin

fails to show that an evidentiary hearing could change

that outcome.

55a

Appendix B

B. Writ of Audita Querela

Shin alternatively seeks a writ of audita querela that

vacates his conviction. See ECF No. 91, PageID #s 30405; ECF No. 135, Page ID #s 744-46.

“The writ of audita querela, meaning literally ‘the

complaint having been heard,’ is a common law writ used

to attack a judgment that was correct when rendered, but

which later became incorrect because of circumstances

that arose after the fact.” United States v. Fischer, No.

3:01-CR-00263-HA, 2014 U.S. Dist. LEXIS 153372,

2014 WL 5473586, at *3 (D. Or. Oct. 28, 2014) (quoting

Carrington v. United States, 503 F.3d 888, 890 n.2 (9th

Cir. 2007)).

The Supreme Court has limited the availability of this

writ to “extraordinary” cases presenting circumstances

compelling its use “to achieve justice.” Morgan, 346 U.S.

at 511. “The writ is similar, but not identical, to the writ of

error coram nobis; audita quer[e]la is directed against the

enforcement, or further enforcement, of a judgment which,

when rendered, was just and unimpeachable, whereas

coram nobis attacks the judgment itself.” Fischer, 2014

U.S. Dist. LEXIS 153372, 2014 WL 5473586, at *3.

In Doe v. INS, 120 F.3d 200 (9th Cir. 1997), the Ninth

Circuit ruled that the writ is unavailable for parties who

seek it purely for equitable relief. With audita querela

unavailable on purely equitable grounds, the Ninth

Circuit questioned without deciding whether any situation

existed in which the writ of audita querela would be the

56a

Appendix B

appropriate remedy. See id. at 204 n.5 (“[W]ith section

2255 and coram nobis available to challenge the lawfulness

of conviction, several courts have questioned, without

deciding, whether audita querela survives at all.”). See

also United States v. Johnson, 962 F.2d 579, 583 (7th

Cir. 1992) (questioning “the extent of the viability of

audita querela given the availability of coram nobis and

§ 2255”); United States v. Reyes, 945 F.2d 862, 866 (5th

Cir. 1991) (noting that “audita querela seems to add little,

if anything, to the current scheme of postconviction relief

afforded by section 2255 and the writ of coram nobis”).

Not every court considers the writ of audita querela to

have been eliminated. In Erickson v. United States, 757 F.

Supp. 2d 1060, 1061 (D. Or. 2010), the defendant brought a

petition for writ of audita querela to set aside or invalidate

a felony conviction for refusing to submit to induction

into the military on the grounds that the defendant was

a nonreligious conscientious objector. Erickson was no

longer in custody and was therefore not eligible for relief

under § 2255. Decades after his conviction, the Supreme

Court had expanded the definition of and the requirements

for conscientious objector status, creating a defense to

the crime defendant had been charged with. Id. at 1064.

With this newfound defense creating a legal defect in the

underlying conviction, the court held that the defendant

was entitled to a writ of audita querela and vacated his

conviction. Id. Shin, however, has not made an equivalent

showing justifying the issuance of the writ on the present

record.

“Even assuming the continued vitality of audita

querela, courts have ruled that it is only available where

57a

Appendix B

there is a legal objection to a judgment which has arisen

subsequent to that judgment.” Fischer, 2014 U.S. Dist.

LEXIS 153372, 2014 WL 5473586, at *4. See Doe, 120 F.3d

at 204 (holding that “a writ of audita querela, if it survives

at all, is available only if a defendant has a legal defense

or discharge to the underlying judgment”).

Shin Does Not Establish That He Is

Entitled to Relief Under a Writ of Audita

Querela.

In his Verified Petition, Shin does not allege a

postconviction legal defect, instead arguing that the writ

provides relief when an evidentiary matter arising after

the conviction has rendered the conviction unfair. Shin

is making an equitable, rather than a legal, claim. He is

arguing that even if the prosecuting authorities did not

withhold exculpatory evidence, later statements by Choy,

Hokama, and Sekiguchi are “facts discovered after the

judgment was rendered” that render his conviction unfair.

Shin provides no authority indicating that the scope of the

writ of audita querela extends to such a circumstance.

This court is cognizant that the writ of audita querela

is a writ of last resort only available, if at all, when all

other post-conviction remedies have been exhausted.

See United States v. Valdez-Pacheco, 237 F.3d 1077, 1080

(9th Cir. 2001); see also United States v. Baptista, No. CR

10-00050 PJH, 2013 U.S. Dist. LEXIS 109890, 2013 WL

4014965, at *3 (N.D. Cal. Aug. 5, 2013). In this regard, a

petitioner may not challenge his conviction through the

writ on grounds that are cognizable under another form

of post-conviction relief.

58a

Appendix B

Shin’s verified petition for writ of audita querela

substantively presents a claim that new evidence has

arisen that would support his defense at trial. See ECF

No. 91, PageID # 304. This court recognizes that the

new evidence Shin identifies was not available to him

until long after he completed serving his sentence. While

Shin’s assertion of new evidence is akin to what might be

asserted under Rule 33 of the Federal Rules of Criminal

Procedure in a motion for a new trial based upon newly

discovered evidence, Shin had no remedy under Rule 33

because Rule 33 is inapplicable when a defendant has pled

guilty and, in any event, requires such a motion to be filed

within three years of final judgment. See United States

v. Collins, 898 F.2d 103, 104 (9th Cir. 1990) (per curiam)

(“When the defendant has pled guilty, as here, no trial has

occurred and the Rule 33 remedy is unavailable.”); see also

United States v. Graciani, 61 F.3d 70, 78 (1st Cir. 1995)

(“A defendant who enters a guilty plea cannot thereafter

use Rule 33 as a wedge to undo his acknowledgement that

he committed the offense.”).

But the unavailability of other relief does not

necessarily give rise to a right to a writ of audita querela.

In Valdez-Pacheco, the petitioner attempted to use the

writ of audita querela because a § 2255 habeas motion

was precluded by the Antiterrorism and Effective Death

Penalty Act of 1996. 237 F.3d at 1078-79. The Ninth Circuit

affirmed the dismissal of Valdez’s petition, explaining:

[W]e reject Valdez’s contention that audita

querela is available in his case due to the fact

that he is precluded from raising his claims

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Appendix B

in a § 2255 motion by those provisions of the

Antiterrorism and Effective Death Penalty Act

of 1996, Pub. L. 104-132, tit. I, § 105, 110 Stat.

1214, 1220 (AEDPA) (codified in relevant part

at 28 U.S.C. §§ 2255 and 2244), that limit the

rights of a prisoner to file a second or successive

motion. A prisoner may not circumvent valid

congressional limitations on collateral attacks

by asserting that those very limitations create a

gap in the postconviction remedies that must be

filled by the common law writs. See Kimberlin,

675 F.2d at 869; see also In re Davenport, 147

F.3d 605, 608 (7th Cir. 1998) (concluding that,

even if the limitations of AEDPA foreclosed the

use of 28 U.S.C. §§ 2241 and 2255 by federal

prisoners, “it would be senseless to suppose that

Congress permitted them to pass through the

closed door [by way of the All Writs Act] simply

by changing the number 2241 to 1651 on their

motions”); cf. Moore v. Reno, 185 F.3d 1054,

1055 (9th Cir. 1999) (per curiam) (concluding

that § 2255 is not inadequate or ineffective

merely because a particular prisoner’s § 2255

motion is procedurally barred), cert. denied,

528 U.S. 1178, 120 S. Ct. 1214, 145 L. Ed. 2d

1115 (2000).

Valdez-Pacheco, 237 F.3d at 1080 (footnotes omitted). In

short, a writ of audita querela is not necessarily available

whenever new evidence is discovered and other remedies

are unavailable. The unavailability of other remedies is a

necessary condition in the audita querela context, but it

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Appendix B

is not, on its own, sufficient to support the issuance of the

extraordinary writ.

Here, Shin tries to bolster his plea for relief with the

contention that the law has recently changed. Shin does

not dispute that, at least at the time he pled guilty, the

materiality standard was based on an objective standard.

See ECF No. 135, PageID # 747. Instead, Shin clarifies

that he now has a legal objection to the judgment, which

he claims has recently arisen through Escobar. See id.

Specifically, Shin claims and makes an offer of proof that

the inflated quotes were immaterial, given how Choy or

Hokama would have allegedly proceeded with the contract

in the face of knowledge that subcontractor quotes were

false. See id., PageID #s 746-49.

As explained above, Shin misreads Escobar and

Lindsey II. Escobar does not alter the applicable objective

materiality standard. Rather, Escobar clarifies what

types of evidence may be relevant in proving materiality

depending on the facts of a particular case. Lindsey

II clearly emphasizes that materiality continues to be

evaluated under an objective standard and applies that

standard in the wire fraud context.

Nor does United States ex rel. Kelly v. Serco, Inc., 846

F.3d 325 (9th Cir. 2017), which Shin also cites, help him.

Kelly involved a qui tam action under the False Claims

Act. Shin argues that Kelly applied Escobar’s purported

subjective materiality standard, which Shin contends also

applies to Shin’s case. Kelly discusses Escobar and notes

that under Escobar what the Government “regularly”

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Appendix B

does is relevant to materiality. See id. at 334. While Kelly

looks at what types of evidence would support a finding of

materiality in the context of the False Claims Act, Kelly

nowhere indicates that a subjective standard applies. See

id. Similarly, Shin’s expectation, see ECF No. 135, PageID

# 747; ECF No. 152, PageID #s 847-50, that United States

v. Green, No. 15-10554, 698 Fed. Appx. 879, 2017 U.S. App.

LEXIS 11125 (9th Cir.) (oral argument held on June 14,

2017), will somehow help him is misplaced. The threejudge panel that decides Green will be bound not only by

Escobar, but also by Lindsey II. Only an en banc Ninth

Circuit or the Supreme Court can overrule Lindsey II.

Shin’s focus on Hokama’s statements reflects Shin’s

mistaken belief that a subjective standard applies to the

materiality analysis. In fact, Shin himself concedes that

he “was almost certain to be convicted at a jury trial”

under the objective materiality standard, which is why,

he claims, he “had no choice but to plead guilty” at the

time. See ECF No. 135, PageID # 751. In seeking a writ

of audita querela, Shin misreads Escobar and Lindsey II.

Shin is not entitled to a writ of audita querela on the basis

of that misreading.

Shin Is Not Entitled to Further Discovery

in Support of His Request for a Writ of

Audita Querela.

Notwithstanding the concerns about Shin’s right

to a writ of audita querela and his inability to establish

that he is entitled to relief under that writ, this court

recognizes that it left pending Shin’s request to depose

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Appendix B

Choy and Ching in support of a writ of audita querela.

This court previously invited Shin to provide further

argument and legal support regarding the appropriate

discovery standard for the writ of audita querela, as well

as an explanation as to how the discovery he seeks would

entitle him to relief under this writ, if Shin still believed

he was entitled to discovery in relation to his request for

a writ of audita querela. See ECF No. 126, PageID # 687.

Shin’s supplemental memoranda provide no authority

relating to the appropriate discovery standard and do

not specifically address how any discovery matter might

entitle him to a writ of audita querela.

While Shin argues that Ching’s credibility is highly

questionable, see ECF No. 135, PageID # 752, this court

is not able to discern how Ching’s credibility is relevant

to Shin’s audita querela petition. An objective materiality

standard applies. Even if, as Shin argues, a subjective

materiality standard applied, it would not help with

respect to Ching. The record reflects that Ching did not

know Shin had lied prior to being informed of that by the

FBI. See ECF No. 100-3, PageID # 431. It is thus difficult

to see how Ching’s attitude toward Shin’s lies might help

Shin.

Shin’s request to depose Choy and Ching is denied.

Shin has not demonstrated that he is entitled to discovery

or any further hearing in relation to his request for a writ

of audita querela.

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Appendix B

IV. CONCLUSION.

This court denies Shin’s petition for a writ of coram

nobis or alternatively for a writ of audita querela. Shin’s

motion to amend his petition is also denied.

Shin’s request for an evidentiary hearing and further

discovery is denied. This court directs the Clerk of Court

to enter judgment against Shin and to close Civil No. 1500377.

IT IS SO ORDERED.

DATED: Honolulu, Hawaii, June 28, 2017.

/s/ Susan Oki Mollway

Susan Oki Mollway

United States District Judge

64a

AppendixOF

C REHEARING OF

APPENDIX C — DENIAL

THE UNITED STATES COURT OF APPEALS FOR

THE NINTH CIRCUIT, FILED OCTOBER 3, 2019

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

No. 17-16460

PATRICK SHIN,

Petitioner-Appellant,

UNITED STATES OF AMERICA,

Respondent-Appellee.

D.C. No. 1:15-cv-00377-SOM-RLP

District of Hawaii, Honolulu

ORDER

Before: WARDLAW, BERZON, and RAWLINSON,

Circuit Judges.

The panel has voted to deny the Petition for Rehearing.

The full court has been advised of the Petition

for Rehearing En Banc, and no judge of the court has

requested a vote.

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Appendix C

Appellant’s Petition for Panel Rehearing and

Rehearing En Banc, filed September 6, 2019, is DENIED.

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