Costello v. United States
1961 U.S. LEXIS 1945, 365 U.S. 265, 81 S. Ct. 534 (1961)
Rule of Law:
Naturalized citizenship may be revoked if procured by willful misrepresentation of a material fact, even decades later, as the doctrine of laches generally does not apply against the government, and a prior dismissal for failure to meet a procedural prerequisite does not bar a subsequent denaturalization proceeding under Rule 41(b).
Facts:
- Frank Costello became a naturalized citizen of the United States on September 10, 1925.
- In 1925, during his naturalization process, Costello swore in various forms and before a Naturalization Examiner that his occupation was "real estate."
- At the time of his naturalization, Costello was engaged in large-scale bootlegging operations, which was his primary source of income and consistent activity.
- Costello engaged in limited real estate transactions through Koslo Realty Corporation, which he was president of, and admitted to financing these ventures with earnings from "liquor or gambling."
- Decisions prior to and after the repeal of the Eighteenth Amendment generally held that individuals engaged in liquor trafficking during Prohibition, especially within five years of their application, did not meet the good moral character requirement for naturalization.
- From 1938 to 1947, Costello made several admissions in federal and New York State inquiries, including grand jury testimonies, acknowledging his involvement in the illicit liquor business from 1923/1924 until shortly before 1933, and that most of his reported income during that period came from bootlegging.
Procedural Posture:
- The Government initiated an earlier denaturalization complaint against Costello under the predecessor statute to § 340(a).
- The District Court for the Southern District of New York dismissed the first complaint, citing potential wiretapping issues with the Government's affidavit and evidence.
- The Court of Appeals for the Second Circuit reversed, instructing the Government to prove its evidence was untainted.
- The Supreme Court granted certiorari and reversed the Court of Appeals, finding that the affidavit of good cause, a prerequisite for denaturalization, was not filed with the complaint.
- On remand, the District Court declined to specify whether the dismissal was with or without prejudice.
- The Government did not appeal this order but subsequently filed a new denaturalization proceeding against Costello under § 340(a) on May 1, 1958, including an affidavit of good cause and complaint.
- The District Court for the Southern District of New York revoked Costello's citizenship on March 9, 1959, finding "willful misrepresentation and fraud" based on his true occupation being bootlegging.
- The Court of Appeals for the Second Circuit affirmed the District Court's revocation of citizenship.
- The Supreme Court granted certiorari to review the Court of Appeals' decision.
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Issue:
Does the government's denaturalization proceeding against a naturalized citizen, alleging willful misrepresentation of his occupation, violate due process or is it barred by laches or a prior dismissal, when the misrepresentation occurred decades earlier and was supported by admissions potentially influenced by wiretaps?
Opinions:
Majority - Mr. Justice Brennan
No, the denaturalization of Costello was proper because he willfully misrepresented his occupation, his admissions were not tainted by wiretaps, the proceeding was not barred by laches, and a prior dismissal for a procedural defect did not bar the new action. The Court affirmed that the government met its heavy burden of proof with "clear, unequivocal, and convincing evidence" that Costello's true occupation was large-scale bootlegging and his claim of "real estate" was willfully false. At the time, bootlegging activities would have precluded a finding of good moral character, making the misrepresentation material. The Court found that Costello's admissions regarding his bootlegging were not a "fruit of the poisonous tree" because the information was already known to authorities from independent sources predating the 1943 wiretaps. The Court also reiterated the principle that laches is not a defense against the sovereign (the government), and even if it were, Costello suffered no prejudice from the delay. Finally, the Court held that the dismissal of the earlier denaturalization complaint for failure to file an affidavit of good cause was a dismissal "for lack of jurisdiction" under Rule 41(b) of the Federal Rules of Civil Procedure. This interpretation means the dismissal was not an adjudication on the merits and therefore did not bar the government from instituting a new proceeding after correcting the procedural defect, aligning with common-law principles that dismissals not going to the merits do not preclude subsequent actions.
Dissenting - Mr. Justice Douglas
Yes, Costello's denaturalization should not stand because he answered truthfully when he listed "real estate" as his "occupation" on the naturalization form. Justice Douglas argued that the naturalization forms did not explicitly ask for a disclosure of all business activities or all sources of income. Since Costello was indeed the president of Koslo Realty Corporation and it engaged in real estate transactions, albeit secondarily to his bootlegging, listing "real estate" as his occupation was a truthful response to the question as phrased. He contended that resolving such an ambiguity in favor of the government, especially given the high standard of "clear, unequivocal, and convincing" evidence required to revoke citizenship, was inappropriate. To hold otherwise would be an act of hypocrisy, as bootlegging was prevalent due to public demand, and the forms did not require complete disclosure of all endeavors.
Analysis:
This case significantly clarifies the standards for denaturalization proceedings, reinforcing the high burden of proof for the government while confirming that deliberate misrepresentation of a material fact, such as one's true occupation, can be grounds for revocation even decades later. It also provides an important interpretation of Rule 41(b) of the Federal Rules of Civil Procedure, broadly defining the 'lack of jurisdiction' exception to include failures to meet procedural prerequisites, thereby limiting the preclusive effect of dismissals based on such technicalities. This ruling ensures that the government is not unduly barred from pursuing cases where initial procedural errors occur but the underlying merits were not adjudicated.
