source: Caselaw Access Project

author: Justice Thomas

license: Public Domain

text:
    REGALADO CUELLAR v. UNITED STATES
    CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT
    No. 06-1456.
    Argued February 25, 2008
    Decided June 2, 2008

      Jerry V. Beard argued the cause for petitioner. With him on the briefs were Richard Alan Anderson, Kevin Joel Page, Jonathan D. Hacker, Walter Dellinger, and Mark S. Davies.

      Lisa H. Schertler argued the cause for the United States. With her on the brief were Solicitor General Clement, Assistant Attorney General Fisher, Deputy Solicitor General Dreeben, and Joel M. Gershowitz.

        Craig D. Singer and Jeffrey T. Green filed a brief for the National Association of Criminal Defense Lawyers as amicus curiae urging reversal.

   Justice Thomas

delivered the opinion of the Court.

This case involves the provision of the federal money laundering statute that prohibits international transportation of the proceeds of unlawful activity. Petitioner argues that his conviction cannot stand because, while the evidence demonstrates that he took steps to hide illicit funds en route to Mexico, it does not show that the cross-border transport of those funds was designed to create the appearance of legitimate wealth. Although we agree with the Government that the statute does not require proof that the defendant attempted to “legitimize” tainted funds, we agree with petitioner that the Government must demonstrate that the defendant did more than merely hide the money during its transport. We therefore reverse the judgment of the Fifth Circuit.

I

On July 14, 2004, petitioner Humberto Fidel Regalado Cuellar was stopped in southern Texas for driving erratically. Driving south toward the Mexican border, about 114 miles away, petitioner had just passed the town of Eldorado. In response to the officer’s questions, petitioner, who spoke no English, handed the officer a stack of papers. Included were bus tickets showing travel from a Texas border town to San Antonio on July 13 and, in the other direction, from San Antonio to Big Spring, Texas, on July 14. A Spanish-speaking officer, Trooper Danny Núñez, was called to the scene and began questioning petitioner. Trooper Núñez soon became suspicious because petitioner was avoiding eye contact and seemed very nervous. Petitioner claimed to be on a 3-day business trip, but he had no luggage or extra clothing with him, and he gave conflicting accounts of his itinerary. When Trooper Núñez asked petitioner about a bulge in his shirt pocket, petitioner produced a wad of cash that smelled of marijuana.

Petitioner consented to a search of the Volkswagen Beetle that he was driving. While the officers were searching the vehicle, Trooper Núñez observed petitioner standing on the side of the road making the sign of the cross, which he interpreted to mean that petitioner knew he was in trouble. A drug detection dog alerted on the cash from petitioner’s shirt pocket and on the rear area of the car. Further scrutiny-uncovered a secret compartment under the rear floorboard, and inside the compartment the officers found approximately $81,000 in cash. The money was bundled in plastic bags and duct tape, and animal hair was spread in the rear of the vehicle. Petitioner claimed that he had previously transported goats in the vehicle, but Trooper Núñez doubted that goats could fit in such a small space and suspected that the hair had been spread in an attempt to mask the smell of marijuana.

There were signs that the compartment had been recently created and that someone had attempted to cover up the bodywork: The Beetle’s carpeting appeared newer than the rest of the interior, and the exterior of the vehicle appeared to have been purposely splashed with mud to cover up tool-marks, fresh paint, or other work. In the backseat, officers found a fast-food restaurant receipt dated the same day from a city farther north than petitioner claimed to have traveled. After a check of petitioner’s last border crossing also proved inconsistent with his story, petitioner was arrested and interrogated. He continued to tell conflicting stories about his travels. At one point, before he knew that the officers had found the cash, he remarked to Trooper Núñez that he had to have the car in Mexico by midnight or else his family would be “floating down the river.” App. 50.

Petitioner was charged with attempting to transport the proceeds of unlawful activity across the border, knowing that the transportation was designed “to conceal or disguise the nature, the location, the source, the ownership, or the control” of the money. 18 U. S. C. § 1956(a)(2)(B)(i). After a 2-day trial, the jury found petitioner guilty. The District Court denied petitioner’s motion for judgment of acquittal based on insufficient evidence and sentenced petitioner to 78 months in prison, followed by three years of supervised release.

On appeal, a divided panel of the Fifth Circuit reversed and rendered a judgment of acquittal. 441 F. 3d 329 (2006). Judge Smith’s majority opinion held that, although the evidence showed that petitioner concealed the money for the purpose of transporting it, the statute requires that the purpose of the transportation itself must be to conceal or disguise the unlawful proceeds. Id., at 333-334. Analogizing from cases interpreting another provision of the money laundering statute, the court held that the transportation must be undertaken in an attempt to create the appearance of legitimate wealth. See id., at 334. Although the evidence showed intent to avoid detection while driving the funds to Mexico, it did not show that petitioner intended to create the appearance of legitimate wealth, and accordingly no rational trier of fact could have found petitioner guilty. Ibid. Judge Davis dissented, arguing that concealment during transportation is sufficient to violate § 1956(a)(2)(B)(i). Id., at 334-336.

The Fifth Circuit granted rehearing en banc and affirmed petitioner’s conviction. 478 F. 3d 282 (2007). The court rejected as inconsistent with the statutory text petitioner’s argument that the Government must prove that he attempted to create the appearance of legitimate wealth. Id., at 290. But it held that petitioner’s extensive efforts to prevent detection of the funds during transportation showed that petitioner sought to conceal or disguise the nature, location, and source, ownership, or control of the funds. Id., at 289-290. Judge Smith dissented for largely the same reasons set forth in his opinion for the original panel majority. He emphasized the distinction between “concealing something to transport it, and transporting something to conceal it,” and explained that whether petitioner was doing the latter depended on whether his ultimate plan upon reaching his destination was to conceal the nature, location, source, ownership, or control of the money. Id., at 296-297.

We granted certiorari, 552 U. S. 973 (2007).

II

The federal money laundering statute, 18 U. S. C. § 1956, prohibits specified transfers of money derived from unlawful activities. Subsection (a)(1) makes it unlawful to engage in certain financial transactions, while subsection (a)(2) criminalizes certain kinds of transportation. Petitioner was charged under the transportation provision: The indictment alleged that he attempted to transport illicit proceeds across the Mexican border “knowing that such , transportation was designed in whole or in part to conceal and disguise the nature, location, source, ownership, and control” of the funds. App. 10-11 (citing § 1956(a)(2)(B)(i)).

A

We first consider the “designed ... to conceal” element. Petitioner argues that to satisfy this element, the Government must prove that the defendant attempted to create the appearance of legitimate wealth. Petitioner would replace “designed ... to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds” with “designed to create the appearance of legitimate wealth.” § 1956(a)(2)(B)(i). This is consistent with the plain meaning of “money laundering,” petitioner argues, because that term is commonly understood to mean disguising illegally obtained money in order to make it appear legitimate. In petitioner’s view, this common understanding of “money laundering” is implicit in both the transaction and transportation provisions of the statute because concealing or disguising any of the listed attributes would necessarily have the effect of making the funds appear legitimate, and, conversely, revealing any such attribute would necessarily reveal the funds as illicit. The Government disagrees, contending that making funds appear legitimate is merely one way to accomplish money laundering, and that revealing a listed attribute would not necessarily reveal the funds’ illicit nature. In any event, the Government argues, the statute should not be cabined to target only classic money laundering because Congress intended to reach any conduct that impairs the ability of law enforcement to find and recover the unlawful proceeds.

We agree with petitioner that taking steps to make funds appear legitimate is the common meaning of the term “money laundering.” See American Heritage Dictionary 992 (4th ed. 2000) (hereinafter Am. Hert.) (defining “launder” as “[t]o disguise the source or nature of (illegal funds, for example) by channeling through an intermediate agent”); Black’s Law Dictionary 1027 (8th ed. 2004) (hereinafter Black’s) (defining “money-laundering” to mean “[t]he act of transferring illegally obtained money through legitimate people or accounts so that its original source cannot be traced”). But to the extent they are inconsistent, we must be guided by the words of the operative statutory provision, and not by the common meaning of the statute’s title. See Pennsylvania Dept. of Corrections v. Yeskey, 524 U. S. 206, 212 (1998) (declining to use a statute’s title to limit the meaning of the text). Here, Congress used broad language that captures more than classic money laundering: In addition to concealing or disguising the nature or source of illegal funds, Congress also sought to reach transportation designed to conceal or disguise the location, ownership, or control of the funds. For example, a defendant who smuggles cash into Mexico with the intent of hiding it from authorities by burying it in the desert may have engaged in transportation designed to conceal the location of those funds, but his conduct would not necessarily have the effect of making the funds appear legitimate.

Nor do we find persuasive petitioner’s attempt to infuse a “classic money laundering” requirement into the listed attributes. Contrary to petitioner’s argument, revealing those attributes — nature, location, source, ownership, or control — would not necessarily expose the illegitimacy of the funds. Digging up the cash buried in the Mexican desert, for example, would not necessarily reveal that it was derived from unlawful activity. Indeed, of all the listed attributes, only “nature” is coextensive with the funds’ illegitimate character: Exposing the nature of illicit funds would, by definition, reveal them as unlawful proceeds. But nature is only one attribute in the statute; that it may be coextensive with the creation of the appearance of legitimate wealth does not mean that Congress intended that requirement to swallow the other listed attributes.

We likewise are skeptical of petitioner’s argument that violating the elements of the statute would necessarily have the effect of making the funds appear more legitimate than they did before. It is true that concealing or disguising any one of the listed attributes may have the effect of making the funds appear more legitimate — largely because concealing or disguising those attributes might impede law enforcement’s ability to identify illegitimate funds — but we are not convinced that this is necessarily so. It might be possible for a defendant to conceal or disguise a listed attribute without also creating the appearance of legitimate wealth. Cf. United States v. Abbell, 271 F. 3d 1286, 1298 (CA11 2001) (noting that the transaction provision, although designed to punish those who “attemp[t] to legitimize their proceeds,” may be satisfied without proof that a particular defendant did so). Petitioner’s “appearance of legitimate wealth” requirement simply has no basis in the operative provision’s text.

Petitioner argues that the money laundering transportation provision must be aimed at something other than merely secretive transportation of illicit funds because that conduct is already punished by the bulk cash smuggling statute, 31 U. S. C. § 5332 (2000 ed., Supp. V). We disagree. A comparison of the statutory language reveals that, even if no “appearance of legitimate wealth” requirement exists in 18 U. S. C. § 1956(a)(2)(B)(i), the two statutes nonetheless target distinct conduct. The bulk cash smuggling provision encompasses, in relevant part, a defendant who,

“with the intent to evade a currency reporting requirement under section 5316, knowingly conceals more than $10,000 in currency or other monetary instruments . . . and transports or transfers or attempts to transport or transfer such currency or monetary instruments from a place within the United States to a place outside of the United States.” 31 U. S. C. § 5332(a)(1).

To be sure, certain conduct may fall within both statutes. For example, both provisions may be violated by a defendant who intends to evade a relevant reporting requirement. See ibid, (transportation of funds “with the intent to evade a currency reporting requirement”); 18 U. S. C. § 1956(a)(2) (B)(ii) (transportation of funds knowing that it is designed “to avoid a transaction reporting requirement”). But only the money laundering statute may be violated in the absence of such intent. See § 1956(a)(2)(B)(i) (prohibiting transportation of illicit funds knowing that the transportation is designed to conceal or disguise a listed attribute). Similarly, although both statutes encompass transportation of illicit funds, only the bulk cash smuggling statute also punishes the mere transportation of lawfully derived proceeds. Compare 31 U. S. C. § 5332(a) (omitting any requirement that the funds be unlawfully derived) with 18 U. S. C. § 1956(a)(2)(B) (requiring that the defendant “kno[w] that the monetary instrument or funds involved in the transportation ... represent the proceeds of some form of unlawful activity”).

B

Having concluded that the statute contains no “appearance of legitimate wealth” requirement, we next consider whether the evidence that petitioner concealed the money during transportation is sufficient to sustain his conviction. As noted, petitioner was convicted under § 1956(a)(2)(B)(i), which, in relevant part, makes it a crime to attempt to transport “funds from a place in the United States to ... a place outside the United States . . . knowing that the . . . funds involved in the transportation ... represent the proceeds of some form of unlawful activity and knowing that such transportation ... is designed in whole or in part... to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of specified unlawful activity.” Accordingly, the Government was required in this case to prove that petitioner (1) attempted to transport funds from the United States to Mexico, (2) knew that these funds “represent[ed] the proceeds of some form of unlawful activity,” e. g., drug trafficking, and (3) knew that “such transportation” was designed to “conceal or disguise the nature, the location, the source, the ownership, or the control” of the funds.

It is the last of these that is at issue before us, viz., whether petitioner knew that “such transportation” was designed to conceal or disguise the specified attributes of the illegally obtained funds. In this connection, it is important to keep in mind that the critical transportation was not the transportation of the funds within this country on the way to the border. Instead, the term “such transportation” means transportation “from a place in the United States to ... a place outside the United States” — here, from the United States to Mexico. Therefore, what the Government had to prove was that petitioner knew that taking the funds to Mexico was “designed,” at least in part, to conceal or disguise their “nature,” “location,” “source,” “ownership,” or “control.”

Petitioner argues that the evidence is not sufficient to sustain his conviction because concealing or disguising a listed attribute of the funds during transportation cannot satisfy the “designed ... to conceal” element. Citing cases that interpret the identical phrase in the transaction provision to exclude “mere spending,” petitioner argues that the transportation provision must exclude “mere hiding.” Otherwise, petitioner contends, all cross-border transport of illicit funds would fall under the statute because people regularly make minimal efforts to conceal money, such as placing it inside a wallet or other receptacle, in order to secure it during travel. The Government responds that concealment during transportation is sufficient to satisfy this element because it is circumstantial evidence that the ultimate purpose of the transportation — i e., its “design” — is to conceal or disguise a listed attribute of the funds. This standard would not criminalize all cross-border transport of illicit funds, the Government argues, because, just as in the transaction cases, the statute encompasses only substantial efforts at concealment. As a result, the Government agrees with the Court of Appeals that a violation of the transportation provision cannot be established solely by evidence that the defendant carried money in a wallet or concealed it in some other conventional or incidental way. See 478 F. 3d, at 291 (characterizing the defendant’s transportation of money in a box in United States v. Dimeck, 24 F. 3d 1239, 1246 (CA10 1994), as a “minimal attempt at concealment” that is distinguishable from petitioner’s “effort to hide or conceal” the funds).

We agree with petitioner that merely hiding funds during transportation is not sufficient to violate the statute, even if substantial efforts have been expended to conceal the money. Our conclusion turns on the text of § 1956(a)(2)(B)(i), and particularly on the term “design.” In this context, “design” means purpose or plan; i. e., the intended aim of the transportation. See Am. Hert. 491 (“[t]o formulate a plan for; devise”; “[t]o create or contrive for a particular purpose or effect”); Black’s 478 (“[a] plan or scheme”; “[p]urpose or intention combined with a plan”); see also Brief for United States 14 (“ ‘to conceive and plan out in the mind’ ” (quoting Webster’s Third New International Dictionary 611 (1993))). Congress wrote “knowing that such transportation is designed ... to conceal or disguise” a listed attribute of the funds, § 1956(a)(2)(B)(i), and when an act is “designed to” do something, the most natural reading is that it has that something as its purpose. The Fifth Circuit employed this meaning of design when it referred to the “transportation design or plan to get the funds out of this country.” See 478 F. 3d, at 289.

But the Fifth Circuit went on to discuss the “design” of the transportation in a different sense. It described the packaging of the money, its placement in the hidden compartment, and the use of animal hair to mask its scent as “aspects of the transportation” that “were designed to conceal or disguise” the nature and location of the cash. Ibid, (emphasis added). Because the Fifth Circuit used “design” to refer not to the purpose of the transportation but to the manner in which it was carried out, its use of the term in this context was consistent with the alternate meaning of “design” as structure or arrangement. See Am. Hert. 491, 492 (“[t]o plan out in systematic, usually graphic form”; “[t]he purposeful or inventive arrangement of parts or details”); Black’s 478 (“[t]he pattern or configuration of elements in something, such as a work of art”). The Government at times also appears to adopt this meaning of “design.” See Brief for United States 21 (“Congress focused on how the transportation itself was 'designed’ ”); id., at 43 (arguing that petitioner’s design to move funds without detection is proof of a design to conceal or disguise the location and nature of the funds). If the statutory term had this meaning, it would apply whenever a person transported illicit funds in a secretive manner. Judge Smith supplied an example of this construction: A petty thief who hides money in his shoe and then walks across the border to spend the money in local bars, see 478 F. 3d, at 301 (dissenting opinion), has engaged in transportation designed to conceal the location of the money because he has hidden it in an unlikely place.

We think it implausible, however, that Congress intended this meaning of “design.” If it had, it could have expressed its intention simply by writing “knowing that such transportation conceals or disguises,” rather than the more complex formulation “knowing that such transportation ... is designed ... to conceal or disguise.” § 1956(a)(2)(B)(i). It seems far more likely that Congress intended courts to apply the familiar criminal law concepts of purpose and intent than to focus exclusively on how a defendant “structured” the transportation. In addition, the structural meaning of “design” is both overinclusive and underinclusive: It would capture individuals who structured transportation in a secretive way but lacked any criminal intent (such as a person who hid illicit funds en route to turn them over to law enforcement); yet it would exclude individuals who fully intended to move the funds in order to impede detection by law enforcement but failed to hide them during the transportation.

To be sure, purpose and structure are often related. One may employ structure to achieve a purpose: For example, the petty thief may hide money in his shoe to prevent it from being detected as he crosses the border with the intent to hide the money in Mexico. See 478 F. 3d, at 301 (Smith, J., dissenting). Although transporting money in a conventional manner may suggest no particular purpose other than simply to move it from one place to another, secretively transporting it suggests, at least, that the defendant did not want the money to be detected during transport. In this case, evidence of the methods petitioner used to transport the nearly $81,000 in cash — bundled in plastic bags and hidden in a secret compartment covered with animal hair — was plainly probative of an underlying goal to prevent the funds from being detected while he drove them from the United States to Mexico. The same secretive aspects of the transportation also may be circumstantial evidence that the transportation itself was intended to avoid detection of the funds, because, for example, they may suggest that the transportation is only one step in a larger plan to facilitate the cross-border transport of the funds. Cf. id., at 289 (noting that “concealment of the funds during the U. S. leg of the trip [was] a vital part of the transportation design or plan to get the funds out of this country”). But its probative force, in that context, is weak. “There is a difference between concealing something to transport it, and transporting something to conceal it,” id., at 296-297 (Smith, J., dissenting); that is, how one moves the money is distinct from why one moves the money. Evidence of the former, standing alone, is not sufficient to prove the latter.

This case illustrates why: Even with abundant evidence that petitioner had concealed the money in order to transport it, the Government’s own expert witness — ICE Agent Richard Nuckles — testified that the purpose of the transportation was to compensate the leaders of the operation. Tr. 179 (Oct. 12,2004), App. 64-65 (“[T]he bulk of [the money] generally goes back to Mexico, because the smuggler is the one who originated this entire process. He’s going to get a large cut of the profit, and that money has to be moved back to him in Mexico”). The evidence suggested that the secretive aspects of the transportation were employed to facilitate the transportation, see 478 F. 3d, at 289 (noting that “concealment of the funds during the U. S. leg of the trip [was] a vital part of the transportation design or plan”), but not necessarily that secrecy was the purpose of the transportation. Agent Nuckles testified that the secretive manner of transportation was consistent with drug smuggling, see Tr. 179-180, App. 65-66, but the Government failed to introduce any evidence that the reason drug smugglers move money to Mexico is to conceal or disguise a listed attribute of the funds.

Agent Nuckles also testified that Acuna, the Mexican border town to which petitioner was headed, has a cash economy and that U. S. currency is widely accepted there. See Tr. 188-189, App. 69. The Fifth Circuit apparently viewed this as evidence that petitioner transported the money in order to conceal or disguise it: “[G]iven Mexico’s largely cash economy, if [petitioner] had successfully transported the funds to Mexico without detection, the jury was entitled to find that the funds would have been better concealed or concealable after the transportation than before.” 478 F. 3d, at 292. The statutory text makes clear, however, that a conviction under this provision requires proof that the purpose— not merely effect — of the transportation was to conceal or disguise a listed attribute. Although the evidence suggested that petitioner’s transportation would have had the effect of concealing the funds, the evidence did not demonstrate that such concealment was the purpose of the transportation because, for instance, there was no evidence that petitioner knew about or intended the effect.

In sum, we conclude that the evidence introduced by the Government was not sufficient to permit a reasonable jury to conclude beyond a reasonable doubt that petitioner’s transportation was “designed in whole or in part... to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds.” § 1956(a)(2)(B)(i).

Ill

The provision of the money laundering statute under which petitioner was convicted requires proof that the transportation was “designed in whole or in part... to conceal or disguise the nature, the location, the source, the ownership, or the control” of the funds. § 1956(a)(2)(B)(i). Although this element does not require proof that the defendant attempted to create the appearance of legitimate wealth, neither can it be satisfied solely by evidence that a defendant concealed the funds during their transport. In this case, the only evidence introduced to prove this element showed that petitioner engaged in extensive efforts to conceal the funds en route to Mexico, and thus his conviction cannot stand. We reverse the judgment of the Fifth Circuit.

It is so ordered.

Justice Alito, with whom The Chief Justice and Justice Kennedy join, concurring.

I join the opinion of the Court but write briefly to summarize my understanding of the deficiency in the Government’s proof.

As the Court notes, ante, at 561-562, the Government was required in this case to prove that petitioner knew that the plan to transport the funds across the Mexican border was designed at least in part to “conceal or disguise the nature, the location, the source, the ownership, or the control” of the funds. 18 U. S. C. § 1956(a)(2)(B)(i).

Transporting the funds across the border would have had the effect of achieving this objective if, once the funds made it into Mexico, it would have been harder for law enforcement authorities in this country (1) to ascertain that the funds were drug proceeds (“nature”), (2) to find the funds (“location”), (3) to determine where they came from (“source”), (4) to ascertain who owned them (“ownership”), or (5) to find out who controlled them (“control”). But as the Court notes, ante, at 566, the prosecution had to prove, not simply that the transportation of the funds from the United States to Mexico would have had one of these effects, ibid., but that petitioner knew that achieving one of these effects was a design (i. e., purpose) of the transportation.

As the Court also notes, ante, at 567-568, n. 8, a criminal defendant’s intent is often inferred. Here, proof of petitioner’s knowledge and of the intent of the person or persons who “designed” the transportation would have been sufficient if the prosecution had introduced evidence showing, not only that taking “dirty” money across the border has one or more of the effects noted above, but that it is commonly known in the relevant circles (that is, among those who design and carry out “such transportation,” § 1956(a)(2)(B)) that taking “dirty” money to Mexico has one of the effects noted above. Such evidence would permit a trier of fact to infer (1) that the person or persons who “designed” the plan to have the funds taken to Mexico intended to achieve the effect in question and (2) that a person like petitioner (that is, a person who is recruited to transport the funds) knew that this was the design.

Of course, if the prosecution had introduced such evidence, the defense could have countered with any available proof showing (1) that in fact the achievement of these effects was not a design of the transportation or (2) that petitioner in fact did not know that achieving one of these effects was a purpose of the plan. It would have then been up to the trier of fact to decide whether the statutory elements had been adequately proved.

At petitioner’s trial, as the Court notes, ante, at 567, the Government introduced some evidence regarding the effect of transporting illegally obtained money to Mexico, but the Government has not pointed to any evidence in the record from which it could be inferred beyond a reasonable doubt that a person like petitioner knew that taking the funds to Mexico would have had one of the relevant effects. For this reason, I agree with the Court that petitioner’s conviction cannot be sustained.

       Several Courts of Appeals have considered this requirement as relevant, or even necessary, in the context of 18 U. S. C. § 1956(a)(l)(B)(i), which prohibits, inter alia, engaging in financial transactions “involv[ing] the proceeds of specified unlawful activity... knowing that the transaction is designed in whole or in part... to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of some specified unlawful activity” See United States v. Morales-Rodriguez, 467 F. 3d 1,13 (CA1 2006); United States v. Esterman, 324 F. 3d 565, 572-573 (CA7 2003); United States v. Abbell, 271 F. 3d 1286, 1298 (CA11 2001); United States v. McGahee, 257 F. 3d 520, 527-528 (CA6 2001); United States v. Dobbs, 63 F. 3d 391, 397 (CA5 1995); United States v. Dimeck, 24 F. 3d 1239,1247 (CA10 1994).
      In construing the provision under which petitioner was convicted, four Courts of Appeals, including the Fifth Circuit, have implicitly or explicitly rejected the requirement. See United States v. Garcia-Jaimes, 484 F. 3d 1311, 1322 (CA11 2007) (upholding convictions for conspiracy to commit transportation money laundering without addressing the requirement); United States v. Ness, 466 F. 3d 79, 81-82 (CA2 2006) (rejecting the requirement and upholding a conviction for conspiracy to violate the transportation provision where defendant’s conduct was elaborate and highly secretive); United States v. Carr, 25 F. 3d 1194, 1206-1207 (CA3 1994) (upholding a conviction under the transportation provision without discussing the requirement).

       Subsection (a)(2) reads, in its entirety:
      “Whoever transports, transmits, or transfers, or attempts to transport, transmit, or transfer a monetary instrument or funds from a place in the United States to or through a place outside the United States or to a place in the United States from or through a place outside the United States—
      “(A) with the intent to promote the carrying on of specified unlawful activity; or
      “(B) knowing that the monetary instrument or funds involved in the transportation, transmission, or transfer represent the proceeds of some form of unlawful activity and knowing that such transportation, transmission, or transfer is designed in whole or in part—
      “(i) to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of specified unlawful activity; or
      “(ii) to avoid a transaction reporting requirement under State or Federal law,
      “shall be sentenced to a fine of not more than $500,000 or twice the value of the monetary instrument or funds involved in the transportation, transmission, or transfer whichever is greater, or imprisonment for not more than twenty years, or both. For the purpose of the offense described in subparagraph (B), the defendant’s knowledge may be established by proof that a law enforcement officer represented the matter specified in subparagraph (B) as true, and the defendant’s subsequent statements or actions indicate that the defendant believed such representations to be true.”

       Section 1956(a)(2)(A) also punishes the mere transportation of lawfully derived proceeds, but it imposes the additional requirement, not found in 31 U. S. C. § 5332 (2000 ed., Supp. V), that the defendant must have “in-ten[ded] to promote the carrying on of specified unlawful activity.”

       See, e. g., Esterman, 324 F. 3d, at 570-572; United States v. Corchado-Peralta, 318 F. 3d 255, 259 (CA1 2003); McGahee, 257 F. 3d, at 527; United States v. Herron, 97 F. 3d 234, 237 (CA8 1996); United States v. Majors, 196 F. 3d 1206, 1213 (CA11 1999); United States v. Stephenson, 183 F. 3d 110,120-121 (CA2 1999); Dobbs, 63 F. 3d, at 398; United States v. Garcia-Emanuel, 14 F. 3d 1469,1474 (CA10 1994).

       See, e. g., Ness, 466 F. 3d, at 81 (concluding that extensive attempts at secrecy were sufficient to support a conviction under 18 U. S. C. § 1956(a)(1), but “expressing] no view” as to whether transactions involving “less elaborate stratagems or a lesser measure of secrecy” would be sufficient); United States v. Johnson, 440 F. 3d 1286, 1291 (CA11 2006) (“Evidence of concealment must be substantial”); Dimeck, 24 F. 3d, at 1247 (“The transportation of the money from Detroit to California in a box, suitcase, or other container does not convert the mere transportation of money into money laundering”).

       This understanding of “design” is also implicit in some of the Government’s statements that secretive transportation is sufficient to prove a violation of the statute. See Brief for United States 46 (arguing that the statute covers any “surreptitiou[s]” movement of funds “to a location where United States law enforcement authorities are impaired from detecting and intercepting them,” apparently regardless of whether such impairment was the purpose of the plan); id., at 11 (“When a defendant surreptitiously transports or attempts to transport illegal proceeds across the border knowing of their illegal character, money laundering is the appropriate charge”); id., at 13 (“The statute explicitly covers, and was intended to cover, a wide range of conduct that impairs the ability of law enforcement to find and recover the proceeds of crime”); Tr. of Oral Arg. 46. Agent Kichard Nuckles, Immigration and Customs Enforcement (ICE), appears to have adopted this standard at trial as well. See Tr. 196 (Oct. 12,2004) (testifying that attempting to move funds across the border without detection would be illegal, apparently regardless of the reason for doing so).

       Concealing or disguising a listed attribute need be only one of the purposes of the transportation. See § 1956(a)(2)(B)(i) (providing that a transportation plan need be designed “in whole or in part” to conceal or disguise). But here, compensating the leaders of the operation was the only purpose to which Agent Nuckles testified.

       In many cases, a criminal defendant’s knowledge or purpose is not established by direct evidence but instead is shown circumstantially based on inferences drawn from evidence of effect. See, e. g., 1W. LaFave, Substantive Criminal Law § 5.2(a), p. 341 (2d ed. 2003). Specifically, where the consequences of an action are commonly known, a trier of fact will often infer that the person taking the action knew what the consequences would be and acted with the purpose of bringing them about. Although, as noted above, the Government introduced some evidence regarding the effect of transporting illegally obtained money to Mexico, the Government has not pointed to any evidence in the record from which it could be inferred beyond a reasonable doubt that petitioner knew that taking the funds to Mexico would have had one of the relevant effects.


author: Justice Alito

text:
    RICHLIN SECURITY SERVICE CO. v. CHERTOFF, SECRETARY OF HOMELAND SECURITY
    CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT
    No. 06-1717.
    Argued March 19, 2008
    Decided June 2, 2008

      Brian Wolfman argued the cause for petitioner. With him on the briefs was Scott L. Nelson.

      Anthony A. Yang argued the cause for respondent. With him on the brief were Solicitor General Clement, Acting Assistant Attorney General Bucholtz, Deputy Solicitor General Garre, Michael Jay Singer, and Michael E. Robinson.

        Amy Howe, Kevin K Russell, Thomas C. Goldstein, Pamela S. Karlan, and Jeffrey L. Fisher filed a brief for the National Association of Legal Assistants et al. as amici curiae urging reversal.

   Justice Alito

delivered the opinion of the Court.

The question presented in this case is whether the Equal Access to Justice Act (EAJA), 5 U. S. C. § 504(a)(1) (2006 ed.) and 28 U. S. C. § 2412(d)(1)(A) (2000 ed.), allows a prevailing party in a case brought by or against the Government to recover fees for paralegal services at the market rate for such services or only at their cost to the party’s attorney. The United States Court of Appeals for the Federal Circuit limited recovery to the attorney’s cost. 472 F. 3d 1370 (2006). We reverse.

I

Petitioner Richlin Security Service Co. (Richlin) is a small California proprietorship. In the early 1990’s, it was engaged by the former Immigration and Naturalization Service to provide guard services for detainees at Los Angeles International Airport. Through mutual mistake, the parties’ two contracts misclassified Richlin’s employees under the Service Contract Act of 1965, 41 U. S. C. § 351 et seq. The Department of Labor discovered the misclassification and ordered Richlin to pay its employees back wages. Richlin responded by filing a claim against the Government with the Department of Transportation’s Board of Contract Appeals (Board). The claim sought reformation of the two contracts in order to force the Government to make additional payments necessary to cover Richlin’s liability under the Service Contract Act. Richlin prevailed after extensive litigation, and the Board entered an award in its favor.

Richlin then filed an application with the Board for reimbursement of its attorney’s fees, expenses, and costs pursuant to EAJA. Under EAJA, “[a]n agency that conducts an adversary adjudication shall award, to a prevailing party other than the United States, fees and other expenses incurred by that party in connection with that proceeding, unless the adjudicative officer of the agency finds that the position of the agency was substantially justified or that special circumstances make an award unjust.” 5 U. S. C. § 504(a)(1). In addition to its other fees and expenses, Richlin sought $45,141.10 for 523.8 hours of paralegal work on its contract claim and $6,760 for 68.2 hours of paralegal work on the EAJA application itself.

Thé Board granted Richlin’s application in part. Richlin Security Service Co. v. Department of Justice, Docket Nos. 3034E, 3035E, Contract Nos. WRO-06-90, WRO-03-91, 2005 WL 1635099 (June 30, 2005), App. to Pet. for Cert. 25a. It found that Richlin met § 504(b)(l)(B)’s eligibility requirements, see id., at 30a, and that the Government’s position had not been “substantially justified” within the meaning of § 504(a)(1), id., at 32a. It concluded, however, that Richlin was not entitled to recover its paralegal fees at the rates (ranging from $50 per hour to $95 per hour) at which Richlin was billed by its law firm. See id., at 39a. The Board held that EAJA limited recovery of paralegal fees to “the cost to the firm rather than ... the billed rate.” Ibid. Richlin had not submitted any evidence regarding the cost of the paralegal services to its law firm, see ibid., but the Board found that “$35 per hour is a reasonable cost to the firm[,] having taken judicial notice of paralegal salaries in the Washington D. C. area as reflected on the internet,” id., at 42a-43a.

A divided panel of the Federal Circuit affirmed. 472 F. 3d 1370. The court construed the term “fees,” for which ÉAJA authorizes recovery at “prevailing market rates,” § 504(b)(1)(A), as embracing only the fees of attorneys, experts, and agents. See id., at 1374. The court declined to follow the contrary decision of the Eleventh Circuit in Jean v. Nelson, 863 F. 2d 759 (1988), aff’d sub nom. Commissioner v. Jean, 496 U. S. 154 (1990). It also distinguished this Court’s decisions in Missouri v. Jenkins, 491 U. S. 274 (1989), and West Virginia Univ. Hospitals, Inc. v. Casey, 499 U. S. 83 (1991), reasoning that those cases involved a different fee-shifting statute with different “‘goals and objectives.’” 472 F. 3d, at 1375-1377, 1379 (discussing the Civil Rights Attorney’s Fees Awards Act of 1976,42 U. S. C. § 1988). The court instead found support for its interpretation in EAJA’s legislative history, see 472 F. 3d, at 1381 (citing S. Rep. No. 98-586 (1984) (hereinafter S. Rep.)), and in considerations of public policy, see 472 F. 3d, at 1380-1381.

Judge Plager dissented. He believed that the authorities distinguished by the majority (particularly this Court’s decisions in Jenkins and Casey) were indistinguishable. He also identified “sound policy reasons for... adopting the Supreme Court’s take of the case, even if we thought we had a choice.” 472 F. 3d, at 1383.

Richlin petitioned for rehearing, pointing out that the approach taken by the Eleventh Circuit in Jean had been followed by several other Circuits. See 482 F. 3d 1358, 1359 (CA Fed. 2007) (citing Role Models Am., Inc. v. Brownlee, 353 F. 3d 962, 974 (CADC 2004); Hyatt v. Barnhart, 315 F. 3d 239, 255 (CA4 2002); and Miller v. Alamo, 983 F. 2d 856, 862 (CA8 1993)). The panel denied rehearing over Judge Plager’s dissent, and the full court denied rehearing en banc. See App. to Pet. for Cert. 57a.

We granted certiorari. 552 U. S. 1021 (2007).

II

A

EAJA permits an eligible prevailing party to recover “fees and other expenses incurred by that party in connection with” a proceeding before an administrative agency. 5 U. S. C. § 504(a)(1). EAJA defines “fees and other expenses” as follows:

“ ‘[F]ees and other expenses’ includes the reasonable expenses of expert witnesses, the reasonable cost of any study, analysis, engineering report, test, or project which is found by the agency to be necessary for the preparation of the party’s case, and reasonable attorney or agent fees (The amount of fees awarded under this section shall be based upon prevailing market rates for the kind and quality of the services furnished, except that (i) no expert witness shall be compensated at a rate in excess of the highest rate of compensation for expert witnesses paid by the agency involved, and (ii) attorney or agent fees shall not be awarded in excess of $125 per hour unless the agency determines by regulation that an increase in the cost of living or a special factor, such as the limited availability of qualified attorneys or agents for the proceedings involved, justifies a higher fee.)” § 504(b)(1)(A).

In this case, Richlin “incurred” “fees” for paralegal services in connection with its contract action before the Board. Since § 504(b)(1)(A) awards fees at “prevailing market rates,” a straightforward reading of the statute leads to the conclusion that Richlin was entitled to recover fees for the paralegal services it purchased at the market rate for such services.

The Government resists this reading by distinguishing “fees” from “other expenses.” The Government concedes that “fees” are reimbursable at “prevailing market rates,” but it insists that “other expenses” (including expenses for “any study, analysis, engineering report, test, or project”) are reimbursable only at their “reasonable cost.” And in the Government’s view, outlays for paralegal services are better characterized as “other expenses” than as “fees.” The Government observes that the second sentence of § 504(b)(1)(A), which explains how to calculate awards for “fees,” refers to attorneys, agents, and expert witnesses, without mentioning paralegals. From this omission, the Government infers that Congress intended to treat expenditures for paralegal services not as “fees” but as “other expenses,” recoverable at “reasonable cost.”

We find the Government’s fractured interpretation of the statute unpersuasive. Contrary to the Government’s contention, § 504(b)(1)(A) does not clearly distinguish between the rates at which “fees” and “other expenses” are reimbursed. Although the statute does refer to the “reasonable cost” of “any study, analysis, engineering report, test, or project,” Congress may reasonably have believed that market rates would not exist for work product of that kind. At one point, Congress even appears to use the terms “expenses” and “fees” interchangeably: The first clause of § 504(b)(1)(A) refers to the “reasonable expenses of expert witnesses,” while the parenthetical characterizes expert compensation as “fees.” There is no indication that Congress, in using the term “expenses” in one place and “fees” in the other, was referring to two different components of expert remuneration.

Even if the dichotomy that the Government draws between “fees” and “other expenses” were supported by the statutory text, it would hardly follow that amounts billed for paralegal services should be classified as “expenses” rather than as “fees.” The Government concludes that the omission of paralegal fees from § 504(b)(l)(A)’s parenthetical (which generally authorizes reimbursement at “prevailing market rates”) implies that the recovery of paralegal fees is limited to cost. But one could just as easily conclude that the omission of paralegal fees from the litany of “any study, analysis, engineering report, test, or project” (all of which are recoverable at “reasonable cost”) implies that paralegal fees are recoverable at market rates. Surely paralegals are more analogous to attorneys, experts, and agents than to studies, analyses, reports, tests, and projects. Even the Government’s brief, which incants the term “paralegal expenses,” e. g., Brief for Respondent 4, 5, 6, 7, 8, 9, 10, 11, 12, slips up once and refers to them as “fees,” see id., at 35 (“As the court of appeals explained, treating paralegal fees as attorney fees could ‘distort the normal allocation of work and result in a less efficient performance of legal services’ under the EAJA . .. ”).

But even if we agreed that E A JA limited a prevailing party’s recovery for paralegal fees to “reasonable cost,” it certainly would not follow that the cost should be measured from the perspective of the party’s attorney. To the contrary, it would be anomalous to measure cost from the perspective of the attorney rather than the client. We do not understand the Government to contend, for example, that the “reasonable cost” of an “engineering report” or “analysis” should be calculated from the perspective of the firm that employs the engineer or analyst. Such an interpretation would be tough to square with the statutory language, which provides that an agency shall award to a prevailing party “fees and other expenses incurred by that party.” 5 U. S. C. § 504(a)(1) (emphasis added); see also § 504(b)(1)(A). That language leaves no doubt that Congress intended the “reasonable cost” of the specified items in § 504(b)(1)(A) to be calculated from the perspective of the litigant. That being the case, we find it hard to believe that Congress, without even mentioning paralegals, intended to make an exception of them by calculating their cost from the perspective of their employer rather than the litigant. It seems more plausible that Congress intended all “fees and other expenses” to be recoverable at the litigant’s “reasonable cost,” subject to the proviso that “reasonable cost” would be deemed to be “prevailing market rates” when such rates could be determined.

B

To the extent that some ambiguity subsists in the statutory text, we need not look far to resolve it, for we have already addressed a similar question with respect to another fee-shifting statute. In Missouri v. Jenkins, 491 U. S. 274 (1989), we considered whether litigants could recover paralegal fees under the Civil Rights Attorney’s Fees Awards Act of 1976, 42 U. S. C. § 1988. Section 1988 provides that “the court, in its discretion, may allow the prevailing party, other than the United States, a reasonable attorney’s fee as part of the costs.” We concluded that the term “attorney’s fee” in § 1988 “cannot have been meant to compensate only work performed personally by members of the bar.” 491 U. S., at 285. Although separate billing for paralegals had become “increasingly widespread,” id., at 286 (internal quotation marks omitted), attorney’s fees had traditionally subsumed both the attorney’s personal labor and the labor of paralegals and other individuals who contributed to the attorney’s work product, see id., at 285. We were so confident that Congress had given the term “attorney’s fees” this traditional gloss that we declared it “self-evident” that the term embraced the fees of paralegals as well as attorneys. Ibid.

We think Jenkins substantially answers the question before us. EAJA, like §1988, entitles certain parties to recover “reasonable attorney . . . fees.” 5 U. S. C. § 504(b)(1)(A). EAJA, like § 1988, makes no mention of the paralegals, “secretaries, messengers, librarians, janitors, and others whose labor contributes to the work product for which an attorney bills her client.” Jenkins, supra, at 285. And we think EAJA, like § 1988, must be interpreted as using the term “attorney .. . fees” to reach fees for paralegal services as well as compensation for the attorney’s personal labor. The Government does not contend that the meaning of the term “attorney’s fees” changed so much between § 1988’s enactment in 1976 and EAJA’s enactment in 1980 that the term’s meaning in one statute must be different from its meaning in the other. Under the reasoning of Jenkins, we take it as “self-evident” that when Congress instructed agencies to award “attorney... fees” to certain parties prevailing against the Government, that term was intended to embrace paralegal fees as well. Since §504 generally provides for recovery of attorney’s fees at “prevailing market rates,” it follows that fees for paralegal services must be recoverable at prevailing market rates as well.

The Government contends that our decision in Jenkins was driven by considerations arising from the different context in which the term “attorney’s fee” was used in § 1988. At the time Jenkins was decided, §1988 provided for the recovery of attorney’s fees without reference to any other recoverable “expenses.” The Government insists that Jenkins found paralegal fees recoverable under the guise of “attorney’s fee[s]” because otherwise paralegal fees would not be recoverable at all. Since EAJA expressly permits recovery (albeit at “cost”) for items other than attorney, agent, and expert witness fees, the Government sees no reason to give EAJA the broad construction that Jenkins gave § 1988.

The Government’s rationale for distinguishing Jenkins finds no support either in our opinion there or in our subsequent decisions. Our opinion in Jenkins expressed no apprehension at the possibility that a contrary decision would leave the claimant emptyhanded. This omission is unsurprising, since our decision in Jenkins did not rest on the conviction that recovery at market rates was better than nothing. Our decision rested instead on the proposition— a proposition we took as “self-evident” — that the term “attorney’s fee” had historically included fees for paralegal services.

Indeed, the Government’s interpretation of Jenkins was rejected by this Court just two years after Jenkins was handed down. In West Virginia Univ. Hospitals, Inc. v. Casey, 499 U. S. 83, the petitioner sought to recover expert witness fees from the Commonwealth of Pennsylvania pursuant to § 1988. The petitioner looked to Jenkins for the proposition that the “broad remedial purposes” of § 1988 allowed the recovery of fees not expressly authorized by statute. The Court rejected that interpretation of Jenkins:

“The issue [in Jenkins] was not, as [petitioner] contends, whether we would permit our perception of the ‘policy’ of the statute to overcome its ‘plain language.’ It was not remotely plain in Jenkins that the phrase ‘attorney’s fee’ did not include charges for law clerk and paralegal services. Such services, like the services of ‘secretaries, messengers, librarians, janitors, and others whose labor contributes to the work product,’ had traditionally been included in calculation of the lawyers’ hourly rates. Only recently had there arisen ‘the increasingly widespread custom of separately billing for [such] services.’ By contrast, there has never been, to our knowledge, a practice of including the cost of expert services within attorneys’ hourly rates. There was also no record in Jenkins — as there is a lengthy record here — of statutory usage that recognizes a distinction between the charges at issue and attorney’s fees.” Casey, supra, at 99 (quoting 491 U. S., at 285-286; some internal quotation marks and citations omitted).

Our analysis of Jenkins in Casey refutes the Government’s claim that Jenkins had to stretch the law to fit hard facts. As Casey shows, our decision in Jenkins turned not on extra-textual policy goals but on the traditional meaning of the term “attorney’s fees.”

Ill

The Government parries this textual and doctrinal analysis with legislative history and public policy. We are not persuaded by either. The legislative history cited by the Government does not address the question presented, and policy considerations actually counsel in favor of Richlin’s interpretation.

A

The Government contends first that a 1984 Senate Report accompanying the bill that reenacted EAJA unequivocally expressed congressional intent that paralegal fees should be recovered only “‘at cost.’” Brief for Respondent 29 (quoting S. Rep., at 15; emphasis in original). It next contends that the Report tacitly endorsed the same result by approving model rules of the Administrative Conference of the United States and a pre-EAJA Sixth Circuit decision, both of which had adopted schemes of reimbursement at attorney cost. See Brief for Respondent 29. We are not persuaded. In our view, the legislative history does not even address the question presented, much less answer it in the Government’s favor.

The Senate Report accompanying the 1984 bill remarked that “[e]xamples of the type of expenses that should ordinarily be compensable [under EAJA] include paralegal time (billed at cost).” S. Rep., at 15. The Government concludes from this stray remark that Congress intended to limit recovery of paralegal fees to attorney cost. But as we observed earlier, the word “cost” could just as easily (and more sensibly) refer to the client’s cost rather than the attorney’s cost. Under the former interpretation, the Senate Report simply indicates that a prevailing party who satisfies E A JA’s other requirements should generally be able to “bil[l] ” the Government for any reasonable amount the party paid for paralegal services. Since the litigant’s out-of-pocket cost for paralegal services would normally be equal to' the “prevailing market rat[e]” for such services, 5 U. S. C. § 504(b)(1)(A), the Senate Report could easily support Richlin’s interpretation.

Moreover, even if the Government’s interpretation of the word “cost” is correct, that interpretation would not be inconsistent with our decision today. “Nothing in [EAJA] requires that the work of paralegals invariably be billed separately. If it is the practice in the relevant market not to do so, or to bill the work of paralegals only at cost, that is all that [EAJA] requires.” Jenkins, 491U. S., at 288 (construing 42 U. S. C. § 1988). We thus recognize the possibility, as we did in Jenkins, that the attorney’s cost for paralegal services will supply the relevant metric for calculating the client’s recovery. Whether that metric is appropriate depends on market practice. The Senate Report, even under the Government’s contestable interpretation, is not inconsistent with that conclusion. On the contrary, the Report implies that courts should look to market practice in setting EAJA awards. See S. Rep., at 15 (“The Act should not be read ... to permit reimbursement for items ordinarily included in office overhead, nor for any other expenses not reasonable in amount, necessary for the conduct of the litigation, and customarily chargeable to clients” (emphasis added)). Beyond that vague guidance, the Report does not address the critical question in this case: whether EAJA limits recovery of paralegal fees to attorney cost regardless of market practice. As such, the Report does not persuade us of the soundness of the Government’s interpretation of the statute.

The Government’s reliance on the Sixth Circuit’s decision in Northcross v. Board of Ed. of Memphis City Schools, 611 F. 2d 624 (1979), founders for the same reason. The Government contends that Northcross approved of reimbursement at attorney cost under 42 U. S. C. § 1988 and that the 1984 Senate Report, by endorsing Northcross, tacitly approved of the same result for EAJA. See Brief for Respondent 30 (citing Northcross, supra, at 639). The problem again is that Northcross did not decide whether a litigant’s recovery for paralegal services would be limited to his attorney’s cost even in a market where litigants were customarily billed at “prevailing market rates.” Although the Sixth Circuit seems to have been aware that paralegal services could be billed to clients at market rates, some language in its opinion suggests that the court assumed that attorneys billed their clients only for the out-of-pocket cost of paralegal services. Since Northcross does not clearly address the question presented, its endorsement in the Senate Report means little.

Finally, the model rules cited in the Senate Report may actually support Richlin’s position. The implementing release for the rules describes the Administrative Conference’s approach to paralegal costs as follows:

“Commenters also took varying positions on whether paralegal costs should be chargeable as expenses. We do not believe the rules should discourage the use of paralegals, which can be an important cost-saving measure. On the other hand, lawyers’ practices with respect to charging for paralegal time, as with respect to other expenses such as duplicating, telephone charges and the like, vary according to locality, field of practice, and individual custom. We have decided not to designate specific items as compensable expenses. Instead, we will adopt a suggestion of the Treasury Department and revise the model rule to provide that expenses may be charged as a separate item if they are ordinarily so charged to the attorney’s clients.” Administrative Conference of the U. S., Equal Access to Justice Act: Agency Implementation, 46 Fed. Reg. 32905 (1981).

To the extent that this passage addresses the question presented at all, it seems to take the same approach that the Court took in Jenkins and that we adopt today: It allows the recovery of paralegal fees according to “the practice in the relevant market.” 491 U. S., at 288. But we think the fairest interpretation of the implementing release is that it does not address how awards for paralegal fees should be calculated. Instead, it addresses the anterior question whether courts may award paralegal fees under EAJA at all. See, e. g., 46 Fed. Reg. 32905 (responding to comments urging that the model rules “identify particular expenses of attorneys and witnesses that are compensable”). Like the other legislative authorities cited by the Government, the model rules fail to persuade us of the soundness of the Government’s interpretation because they fail to clearly address the question presented.

B

We find the Government’s policy rationale for recovery at attorney cost likewise unpersuasive. The Government argues that market-based recovery would distort litigant incentives because EAJA would cap paralegal and attorney’s fees at the same rate. See 5 U. S. C. § 504(b)(1)(A) (“[Attorney or agent fees shall not be awarded in excess of $125 per hour unless the agency determines by regulation that an increase in the cost of living or a special factor, such as the limited availability of qualified attorneys or agents for the proceedings involved, justifies a higher fee”). The Government observes that paralegal rates are lower than rates for attorneys operating in the same market. If EAJA reimbursed both attorney time and paralegal time at market rates, then the cap would clip more off the top of the attorney’s rates than the paralegal’s rates. According to the Government, a market-based scheme would encourage litigants to shift an inefficient amount of attorney work to paralegals, since paralegal fees could be recovered at a greater percentage of their full market value.

The problem with this argument, as Richlin points out, is that it proves too much. The same reasoning would imply that agent fees should not be recoverable at market rates. If market-based recovery of paralegal time resulted in excessive reliance on paralegals, then market-based recovery of agent time should result in excessive reliance on agents. The same reasoning would also imply that fees for junior attorneys (who generally bill at lower rates than senior attorneys) should not be recoverable at market rates. Cf. Jenkins, supra, at 287 (“If the fees are consistent with market rates and practices, the ‘windfall’ argument has no more force with regard to paralegals than it does for associates”). Yet despite the possibility that market-based recovery of attorney and agent fees would distort litigant incentives, § 504 unambiguously authorizes awards of “reasonable attorney or agent fees . . . [at] prevailing market rates.” 5 U. S. C. § 504(b)(1)(A). The Government offers no persuasive reason why Congress would have treated paralegal fees any differently. The Government’s policy rationale thus founders on the text of the statute, which shows that Congress was untroubled by the very distortion the Government seeks to prevent.

We also question the practical feasibility of the Government’s interpretation of the statute. The Board in this case relied on the Internet for data on paralegal salaries in the District of Columbia, but the Government fails to explain why a law firm’s cost should be limited to salary. The benefits and perks with which a firm compensates its staff come out of the bottom line no less than salary. The Government has offered no solution to this accounting problem, and we do not believe that solutions are readily to be found. Market practice provides by far the more transparent basis for calculating a prevailing party’s recovery under EAJA. It strains credulity that Congress would have abandoned this predictable, workable framework for the uncertain and complex accounting requirements that a cost-based rule would inflict on litigants, their attorneys, administrative agencies, and the courts.

IV

Confronted with the flaws in its interpretation of the statute, the Government seeks shelter in a canon of construction. According to the Government, any right to recover paralegal fees under E A JA must be read narrowly in light of the statutory canon requiring strict construction of waivers of sovereign immunity. We disagree.

The sovereign immunity canon is just that — a canon of construction. It is a tool for interpreting the law, and we have never held that it displaces the other traditional tools of statutory construction. Indeed, the cases on which the Government relies all used other tools of construction in tandem with the sovereign immunity canon. See Ardestani v. INS, 502 U. S. 129, 137 (1991) (relying on the canon as “reinforce[ment]” for the independent “conclusion that any ambiguities in the legislative history are insufficient to undercut the ordinary understanding of the statutory language”); Ruckelshaus v. Sierra Club, 463 U. S. 680, 682, 685-686 (1983) (relying on the canon in tandem with “historic principles of fee-shifting in this and other countries” to define the scope of a fee-shifting statute); Department of Energy v. Ohio, 503 U. S. 607, 626-627 (1992) (resorting to the canon only after a close reading of the statutory provision had left the Court “with an unanswered question and an unresolved tension between closely related statutory provisions”); see also Smith v. United States, 507 U. S. 197, 201-203 (1993) (invoking the sovereign immunity canon only after observing that the claimant’s argument was “undermine[d]” by the “commonsense meaning” of the statutory language). In this case, traditional tools of statutory construction and considerations of stare decisis compel the conclusion that paralegal fees are recoverable as attorney’s fees at their “prevailing market rates.” 5 U. S. C. § 504(b)(1)(A). There is no need for us to resort to the sovereign immunity canon because there is no ambiguity left for us to construe.

V

For these reasons, we hold that a prevailing party that satisfies EAJA’s other requirements may recover its paralegal fees from the Government at prevailing market rates. The Board’s contrary decision was error, and the Federal Circuit erred in affirming that decision. The judgment of the Federal Circuit is reversed, and this case is remanded for further proceedings consistent with this opinion.

It is so ordered.

      Justice Scalia joins this opinion except as to Part III-A, and Justice Thomas joins this opinion except as to Parts II-B and III.

       Richlin was actually billed for paralegal services at rates as high as $135 per hour, but it amended its application to cap the fees at $95 per hour. See App. to Pet. for Cert. 39a; Brief for Petitioner 9; Brief for Respondent 4, n. 2.

       Some agencies allow nonattorney representatives, known as “agents,” to assist parties with the presentation of their cases. See n. 10, infra. Richlin has never claimed that a paralegal may qualify as an “agent” within the meaning of § 504(b)(1)(A).

       Virtually identical fee-shifting provisions apply to actions by or against the Government in federal court. See 28 U. S. C. §§ 2412(a)(1), (d)(2)(A). The question presented addresses both §§504 and 2412, but the Federal Circuit’s decision resolved only petitioner’s § 504 application, and the Government avers (without challenge from Richlin) that § 2412 “is not at issue in this case.” Brief for Respondent 2, n. 1. We assume without deciding that the reasoning of our opinion would extend equally to §§ 504 and 2412. We confine our discussion to § 504.

       The Government contends that the question presented does not fairly include the question whether the cost of paralegal services should be calculated from the perspective of the litigant rather than the litigant’s attorney. We disagree. The question presented in Riehlin’s petition for certiorari was whether “a prevailing party [may] be awarded attorney fees for paralegal services at the market rate for such services,... [or at] cost only.” Pet. for Cert. i. A decision limiting reimbursement to “cost only” would simply beg the question of how that cost should be measured. Since the question presented cannot genuinely be answered without addressing the subsidiary question, we have no difficulty concluding that the latter question is “fairly included” within the former. See this Court’s Rule 14.1(a).

       It is worth recalling that the Board calculated Riehlin’s award based on an Internet survey of paralegal salaries in the District of Columbia. Presumably the salaries the Board identified represented the market rate for paralegal compensation. The limited award that the Government wants affirmed was thus based, ironically enough, on the “prevailing market rates” for paralegal services. The fact that paralegal salaries respond to market forces no less than the fees that clients pay suggests to us that this case has more to do with determining whose expenditures get reimbursed (the attorney’s or the client’s) than with determining how expenditures are calculated (at cost or at market). Since EAJA authorizes the recovery of fees and other expenses “incurred by [the] party,” § 504(a)(1), rather than the party’s attorney, the answer to the former question is plain.

       Following our decision in Casey, Congress amended §1988 to allow parties to recover “expert fees as part of the attorney’s fees.” Civil Rights Act of 1991, § 113(a), 105 Stat. 1079 (codified at 42 U. S. C. § 1988(c)).

       The version of EAJA first enacted in 1980 had a sunset provision effective October 1,1984. See §§ 203(c), 204(e), 94 Stat. 2327, 2329. Congress revived EAJA without the sunset provision (but with certain other amendments) in 1985. See Act of Aug. 5,1985, §§ 1-2, 6,99 Stat. 183-186; see also n. 8, infra; see generally Scarborough v. Principi, 541 U. S. 401, 406-407 (2004) (summarizing EAJA’s legislative history).

       Richlin makes a threshold challenge to the legitimacy of the 1984 Senate Report as legislative history, observing that the bill it accompanied was vetoed by the President before being enacted by a subsequent Congress. See Brief for Petitioner 27 (“To the extent that legislative history serves as legitimate evidence of congressional intent, it does so only because it is presumed to have been ratified by Congress and the President when the relevant legislation was enacted” (citing Siegel, The Use of Legislative History in a System of Separated Powers, 53 Vand. L. Rev. 1457, 1522 (2000); and Sullivan v. Finkelstein, 496 U. S. 617, 631-632 (1990) (Scalia, J., concurring in part))). But see Melkonyan v. Sullivan, 501 U. S. 89, 96 (1991) (relying on the same Report to interpret EAJA’s 1985 amendments). Because the legislative history is a wash in this case, we need not decide precisely how much weight it deserves in our analysis.

       Compare Northcross, 611 F. 2d, at 638 (“[A] scale of fees as is used by most law firms is appropriate to use in making fee awards pursuant to Section 1988. The use of broad categories, differentiating between paralegal services, in-office services by experienced attorneys and trial service, would result in a fair and equitable fee”), with id., at 639 (“The authority granted in section 1988 to award a reasonable attorney’s fee included the authority to award those reasonable out-of-pocket expenses incurred by the attorney which are normally charged to a fee-paying client, in the course of providing legal services. Reasonable photocopying, paralegal expenses, and travel and telephone costs are thus recoverable pursuant to the statutory authority of § 1988” (internal quotation marks omitted)).

       “ ‘An “agent fee” may be awarded for the services of a non-attorney where an agency permits such agents to represent parties who come before it.’” Brief for Respondent 11, n. 4 (quoting H. R. Rep. No. 96-1418, p. 14 (1980)); see also n. 2, swpra. Since federal courts generally do not permit nonattorneys to practice before them, the portion of EAJA governing awards for parties to federal litigation makes no provision for agent fees. Compare 28 U. S. C. § 2412(d)(2)(A) with 5 U. S. C. § 504(b)(1)(A).