CONCLUSION

For the reasons set forth herein, we deny Stern and Henley’s renewed motion to dismiss

ENTERED: kev Se

Judge Ruben Castillo
United States District Court

Count Five of the indictment. (R. 94-1.)

Dated: July 22, 2003

activity would be violative of the spirit of the Act.” See Sage Int’l, Ltd. v. Cadillac Gage Co.,
534 F, Supp. 896, 910 (E.D, Mich. 1981). Thus, even if we were to hold that the bribery is
relevant to establishing a violation of Indonesian law for purposes of the Lacey Act, Count V
would survive under this exception to the act of state doctrine.

13


The Government charged Defendants with violating various provisions of the Lacey Act,
16 U.S.C. § 3371 et seg., and other import laws, 18 U.S.C. § 545; 50 C.F.R. § 14.105(b)(2) in a
twelve-count indictment. Defendants Stem and Henley were charged in Count V with illegal
trafficking of species protected under Indonesian law. See 16 U.S.C, § 3372(a)(2)(A).
Following their indictment Stern and Henlcy moved to dismiss Count V under the void-for-
vagueness doctrine, the act of state doctrine and for failure to allege a predicate act or factual
basis for the charge. Additionally, the defendants moved for a bill of particulars, seeking
information to clarify the Government’s theory of the case as well as facts relating to Henley and
Stem. We denied the motion to dismiss Count V, (R. 79-1), but granted the motion for the bill of
particulars (R, 82-1), Based on the Government’s responses to the defendants’ bill of particulars,
Stern and Henlcy renewed their motion to dismiss Count V in April 2003, which is presently
pending before this Court.

LEGAL STANDARDS

To withstand a motion to dismiss pursuant to Federal Rule of Criminal Procedure 12, an
indictment must include the essential elements of the crimes alleged therein. United States v.
Torres, 191 F.3d 799, 804 (7th Cir. 1999). An indictment, or a portion thereof, may be dismissed
if it is otherwise defective or subject to a defense that may be decided solely on issues of law.

See, e.g., United States v. Tallant, 407 F. Supp. 878, 885 (N.D. Ga, 1975).



Defendants offer several reasons why the act of state doctrine should apply in this case.
First, Defendants posit that the Government must prove as a part of its case that the issuance of
the permits was corrupted by bribery and that the outcome of the case lurns upon the effect of the
alleged bribery on the issuance of the permits and the export of the monkeys. The Government
responds that Count V does not implicate the act of state doctrine because it does not require this
Court to inquire into the validity or legality of any public act by the Indonesian government.
Rather, according to the Government, the relevance of the bribery allegations goes only to
whether the defendants knew that the shipments contained wild-caught monkeys even though the
permits for the shipments specified captive-bred monkeys, The Government further contends
that its responses to the bill of particulars does not alter this fact because it could prove its case
without any reference to the alleged bribery. Accordingly, the Government concludes that
nothing in this case with respect to the Indonesian official’s actions in issuing the permits
requires this Court to “declare invalid, and thus ineffective . . . the official act of a foreign
sovereign.” Jd, at 405,

We agree. As noted above, this case docs not turn on whether the permits were issucd as
aresult of bribery; Indonesian law was broken when the wild-caught monkeys left the country.
Tn this way, the present case is analogous to the Supreme Court’s decision in W.S. Kirkpatrick.
In that case a competitor of a company that had obtained a military contract with the Nigerian
government through bribery sued the contracting company under racketeering and antitrust
statutes, The defendant asserted that the act of state doctrine necessitated dismissal of the suit
because in order to prevail the plaintiff would have to show that the defendants intended to

wrongfully influence the Nigerian government through a bribe, that the Nigerian government


The first prong is satisfied because the indictment properly alleges that Defendants
violated the Lacey Act when they imported wild-caught, crab-eating macaques, a species
protected under Indonesian law and thus covered by the Lacey Act. The defendants have not
challenged the third and fourth prongs and the Government properly alleges the requisite acts and
knowledge by the defendants. Thus, at issue in the present motion is whether the Government
sufficiently alleges that the wildlife was taken, possessed, transported or sold in violation of a
wildlife-related foreign law or regulation. In this case, the indictment alleges that the shipments
at issue violated the Decrec of the Indonesian Minister of Forestry No. 26/Kpts-1 1/94, which
bans the export of wild-caught crab-eating macaques but not captive-bred macaques.’

Defendants argue, however, that the indictment is defective in light of the admissions
contained within the bill of particulars either because: (1) it is now clear that the Indonesian
government did intend to approve the export of the entire colony (albeit through bribery) and
thus there was no violation of Indonesian law; or (2) in order to establish a violation of
Indonesian law, as the Government is required to do under the Lacey Act, it will necessarily have

to show that the Indonesian government’s approval of the exports was improper or corrupted,

3 The Decrec of the Indonesian Minister of Forestry, 26/kpts-II/94 states: “Considering (a)
that long-tail macaque . . . are wild animal species which are nol protected by the law and used
by human (people), however, in natural proccss, these species has been decreased . . . (c) thal to
keep that the use of long-tail macaques . . . can be implemented sustainably and will not extinct,
especially for export purposes, they must be from breeding efforts; (d) that in conjunction with
the above matters it is necessary to decide . . . To Stipulate Firstly: The usc of long-tail macaque .
_. species for export purposes must come from breeding efforts; Secondly: Exporters for those
species . . . must meet obligation of the breeding efforts by themselves, in line of the existing and
valid regulations; Thirdly: (1) the number of animal/species which can be exported by licensed
exporters is based on export quota decided by the Department of Forestry; (2) the decision of the
export quota of animal/specics as mentioned in the First point, after investigated/evaluated by the
‘Accreditation Team, be based on the result of breeding efforts. 1/20/94”

6



ANALYSIS

Count V of the indictment charges Stern and Henley with misdemeanor violations of
§§ 3372(a)(2)(A) and 3373(d) of the Lacey Act.” As noted above, those sections make it
unlawful “to import, export, transport, sell, receive, acquire, or purchase in interstate or foreign
commerce — any fish or wildlife taken, possessed, transported, or sold in violation of any law or
regulation of any State or in violation of any foreign law.” 16 U.S.C. § 3372(a)(2)(A). “[Alny
person who knowingly engages in conduct prohibited by any provision of this chapter... . and in
the exercise of due care should know that the fish or wildlife or plants were taken, possessed,
transported, or sold in violation of, or in a manner unlawful under, any underlying law, treaty or
regulation shall be fined . . . or imprisoned , . ., or both.” 16 U.S.C. § 3373. The combined
statutory scheme under the Lacey Act for trafficking misderneanors requires the Government to
prove the following four elements: (1) the wildlife at issue is covered by the Lacey Act; (2) the
wildlife was taken, possessed, transported, or sold in violation of a wildlife-related state, federal,
or foreign law or regulation; (3) the defendants imported, exported, transported, received,
acquired, or purchased the illegal wildlife or attempted to do so; and (4) the defendants knew or
should have known of the wildlife’s illegality. 16 U.S.C. §§ 3372, 3373; see also Robert S.
Anderson, The Lacey Act: America’s Premier Weapon in the Fight Against Unlawful Wildlife

Trafficking, 16 Pub. Land L, Rev. 27, 58 (1995).

? Count V states in pertinent part: “Defendants did knowingly import wildlife in interstate
and foreign commerce . . . and in the cxercise of due care should have known that the wildlife
was transported and sold in violation of a foreign law, namely, Decree No. 26/kpts - 11/94,
which imposed a ban on the transportation from Indonesia, that is, the export of wild-caught
Macaca fascicularis; In violation of Title 16, United States Code, Sections 3372(a)(2)(A) and
3373(€)(2).”


Illinois Secretary of State’s office in order to obtain a license without passing the requisite tests,
{Illinois law nevertheless is violated despite the fact that the truck driver walks away that day with
a license to drive, The violation is not erased by the bribed official's earlier imprimatur.
Similarly, the Indonesian decree was violated when wild-caught, crab-eating macaques were
removed from the country, regardless of the actions and motivations of the Indonesian officials
issuing the permits.

A similar analysis also colors our disposition of Defendants’ act of state doctrine
arguments. The act of state doctrine prohibits United States courts from sitting in judgment of
official acts taken by another country within its own borders that might frustrate the conduct of
foreign relations by the political branches of the government. W.S. Kirkpatrick & Co., Inc. v.
Envtl, Tectonics Corp. Int’l, 493 U.S. 400, 408 (1990). The policies underlying the doctrine
include “international comity, respect for the sovereignty of foreign nations on their own
territory, and the avoidance of embarrassment to the Executive Branch in its conduct of foreign
relations.” Id,; United States v, 2,507 Live Canary Winged Parakeets, 689 F. Supp. 1106, 1120
(S.D. Fla, 1988). Thus, the doctrine requires that courts “not adjudicate a politically sensitive
dispute which would require the court to judge the legality of the sovereign act of a foreign
state,” MOL, Inc. y. The Peoples Rep. of Bangl., 572 F. Supp. 79, 83 (D, Or. 1983) (internal
citations and quotations omitted). That is, act of state issues arise only when “‘a court must
decide—that is, when the outcome of the case turns upon —the effect of official action by a
foreign sovereign. When that question is not in the case, neither is the act of state doctrine.”

WS. Kirkpatrick, 493 U.S. at 406.


Minute Order Farm (08/97)

United States District Court, Northern District of Illinois

Name of Assigned Judge Ruben Castillo Sitting Judge if Orher
or Magistrate Judge than Assigned Judge
CASE NUMBER 02 CR 312 DATE /22/2003
CASE USA vs. Labs of Virginia, Inc., et al.
TITLE
[In the following box (a) indicate the party filing the motion, e.g. plaintitf, defendant, 3¢d party plaintil®, and (1) state briefly the nature
MOTION: of the motion being presented.]

DOCKET ENTRY:

(ap) Oo Filed motion of [ use listing in “Motion” box above.|

(2) a Brief in support of motion due

G6) im] Answer brief to motion due _ Reply to answer brief due__

(A) Oo Ruling/Hearing on setfor at

(3) Oo Status hearing[held/continued to] [set for/re-set for] on set for at

(6) a Pretrial conference[held/continucd to} [set for/re-set for] on _ setfor_ at

7) o ‘Trial[set for/re-set for]on at

(8) o [Bench/Jury trial} [Hearing] held/continued to at .

(9) Oo This case is dismissed [with/without] prejudice and without costs|by/agreement/pursuant to]
Oerrcpam) OlLoeal Rute 41.1 ClERCP4 (a1) OO FRCP4I(a)2).

| |Other docket entry] Defendants Stem and Ienley’s renewed motion to dismiss Count Five of the

Indictment is denied.

(1) [For further detail see order attached to the original minute order.]
No notices required, udvised in open court il vy Document
Ni ft
No notices required. 4 ‘mht ne cre
Notices mailed by judge’s staff 2 3 2003
Notified counsel by telephone, JUL “ye dcatnen
¢ | Docketing to mail notices. \ —
Mail AO 450 form, :
Copy to judge/magistrate judge. ees \
. - dite Med noise
courtroom, aa
RO deputy’s
initials ;
Date/time. ived in
central Clerk's Office nailing Aepry initia



First, as the Government notes, each of those cases involved situations where a forcign
government denied an application for a license to remove resources from or to carry on business
within that country. Even more importantly, the foreign governments’ decisions in those cases
were taken in the absence of a controlling treaty to guide or govern their actions. In the present
case Indonesia, by becoming a party to CITES, subjected itself to the treaty’s principles and
provisions, which included a commitment to “take appropriate measures to enforce the
provisions of the [treaty] and to prohibit trade in specimens in violation thereof” and specifically
to not “allow trade in specimens of species [listed in three attached appendices] except in
accordance with the provisions of [the treaty].” Signatory states to a treaty such as CITES
effectively relinquish some measure of sovereignty in domestic affaits for perceived advantages
abroad or simply for the common good; treaty provisions are binding on its parties and must be
performed in good faith. Gregory H. Fox, The Right to Political Participation in International
Law, 17 Yale J. Int’L L. 539, 543 (1992); Restatement (Third) of the Foreign Relations Law of
the United States § 321 (1987). Thus the situation in the present case differs from thosc cited by
Defendants where the government made unilateral, quasi-commercial and wholly sovereign
decisions to issue or deny export licenses.* In this case the CITES treaty established a framework
that influenced, if not dictated, Indonesia’s export decisions generally and with respect to these
particular monkeys. See 2,507 Live Canary Winged Parakeets, 689 F. Supp. at 1120 (rejecting

act of state doctrine defense and noting “[t]he purpose of CITES is to further international

*In MOL, Inc., the court held that the act of state doctrine barred the court’s inquiry into
the Bangladeshi government’s decision to cancel Plaintiff's license to export rhesus monkeys.
Notably, however, that decision was made prior to the date Bangladesh became a signatory to the
CITES treaty.

Mi



knew of the bribe, accepted it and that but for the bribery the plaintiff would have been awarded
the contract instead. Jd. at 402. The Supreme Court rejected this argument, holding that
“[rJegardless of what the court’s factual findings may suggest as to the legality of the Nigerian
contract, its legality is simply not a question to be decided in the present suit, and there is thus no
occasion to apply the rule of decision that the act of state doctrine requires.” Jd. at 406.
Similarly, the outcome of this case does not tur upon whether the CITES permits were procured
through bribery; Indonesian law was violated when the wild-caught monkeys left the country,
regardless of the permit issuer’s intent.

Next Defendants claim that the act of state doctrine should apply because Count V
impinges on intetnational comity and the need to avoid embarrassment to the Executive Branch
in its conduct of forcign relations. But this case is an enforcement action brought by the
Executive Branch that implicates a treaty signed by both countries. Both the United States and
Indonesia have committed to uphold the CITES treaty and its underlying principles and both
countries have enacted legislation or decrces to that end. As discussed below, the existence of a
controlling treaty alters the parties’ otherwise-unfettered interaction. Accordingly, when both
states are parties to a binding treaty, concerns of intemational comity and conduct of foreign
relations are minimized because the United States and the foreign government have already
agreed, at least to some extent, on the principles governing their conduct.

Finally, Defendants point out that cxport decisions traditionally are considered sovercign
acts covered by the act of state doctrine. But the cases Defendants cile are inapposite. See World
Wide Minerals, Ltd. v. Rep. of Kaz,, 296 F.3d 1154, 1165 (D.C, Cir. 2002); MOL, Inc., 572 F.

Supp. at 85-86; Bokkelen v. Grumman Aerospace Corp., 432 F. Supp. 329, 333 (E.D.N.Y. 1977).

10



which is an inquiry barred under the act of state doctrine. Specifically, Defendants argue that
their first motion to dismiss was denied based on the Government’s representation at the time
that the required violation of Indonesian law could be established without second-guessing
Indonesia’s decision making because Indonesia intended to authorize export of only captive-bred
monkeys, in keeping with Indonesian law. Defendants contend that the Government has
changed course and now admits that the Indonesian government did intend to approve the export
of the entire colony, including wild-caught monkeys, because they did so as a result of a bribery
scheme. Thus, Defendants reason, Count V must now be dismissed under the act of state
doctrine, Alternatively, the defendants also hint in their reply brief that no violation of
Indonesian law occurred because the Indonesian government approved, by issuing CITES
permits, the export of the wild-caught monkeys. According to Defendants the “dispositive fact”
is that “the Indonesian government in fact approved the export of the wild-caught monkeys
alleged to have been exported in violation of Indonesian law,” (R. 100, Defs.’ Reply at 4), and
“[a)ccordingly, the prosecution’s contention that it is ‘seeking to uphold the Indonesian Decree’
... is nothing less than a direct challenge to Indonesia’s own determination that the exports
comported with the Decree,” (id. at 7).

First, any argument that Indonesian law was not violated because an Indonesian official
issued a permit for the shipments is wholly without merit. The CITES permits issued in
Indonesia approved the export only of captive-bred monkeys. Thus, whether or not an Indonesian
official was paid to ignore the fact that wild-caught monkeys were also included in the shipments
is irrelevant to the question of whether the law was broken (i.¢., were wild-caught monkeys

exported?). To usc an analogy a little closer to home, if a truck driver bribes an employee of the


Defendants ate involved in breeding and selling primates for medical research. In about
May 1996 Defendant Labs of Virginia (“Labs”) learned that Inquatex, an Indonesian company in
the business of capturing, breeding and exporting primates, was selling a breeding colony of
long-tail, crab-eating macaque monkeys. Labs, through Defendants Taub, Stern and Henley,
began negotiations to purchase the Inquatex breeding colony. One of Labs’s employees traveled
to Indonesia to inspect the Inquatex colony in June 1996. According to the indictment, the
employec learned, and reported back to Taub, Henley and Curtis, that the colony contained
almost 1,400 crab-eating macaques, of which 668 were wild-caught and 762 were captive-bred.
The indictment also alleges that the employee informed the defendants that importing wild-
caught macaque monkeys was against Indonesian law and that Inquatex had bribed government
officials to obtain permits for their release.

In Jate July 1996 Labs prepared a purchase agreement for the Inquatex colony and
arranged for the first shipment of crab-eating macaques. In January 1997 the parties signed the
purchase agreement for approximately 1,312 crab-eating macaques. The agreement stipulated
that each party was to provide the other with all necessary applications and documents filed as a
part of the permit process. Subsequently, the Inquatex colony was shipped to the United States in
scven separate shipments; four shipments entered the United States at O’Hare International
Airport in Chicago. A Labs employee was present at Inquatex prior to each shipment to monitor
the selection and preparation of the monkeys for shipment to the United States. The indictment
alloges that the four O’Hare shipments contained a mix of wild-caught and captive-bred

monkeys; the permits and health certificates for each shipment, however, falsely specified that

the shipments contained only captive-bred monkeys.



in specimens in violation thereof.” Jd., Art. VII, § 1. Under the terms of the treaty, “{t]he
Parties shall not allow trade in specimens of species [listed in three attached appendices] except
in accordance with the provisions of [the treaty].” /d., Art. IL Appendix II to CITES includes
wildlife specics that may become endangered if trade in those species is not strictly limited.
Accordingly, species listed in Appendix TI may not be exported or imported unless accompanied
by a valid foreign export permit from the country of origin. An export permit shall be granted
only when the following conditions have been met: “‘(a) the Scientific Authority of the State of
export has adviscd that such export will not be detrimental to the survival of that species; (b) a
Management Authority of the State of export is satisfied that the specimen was not obtained in
contravention of the laws of that State for the protection of fauna and flora; and (c) a
Management Authority of the State of export is satisfied that any living specimen will be so
prepared and shipped as to minimize the risk of injury, damage to health or cruel treatment.” /d.,
Art. IV. Long-tailed, crab-eating macaque monkeys are listed on Appendix IL.

The United States Fish and Wildlife Service (“USFWS”) issues regulations to enforce
CITES within the United States. All wildlife imported into the United States must first be
inspected by the USFWS and United States Customs Service personnel, The Lacey Act, 16
U.S.C. § 3371 ef seq., is one of the statutes governing the importation of species covered by
CITES into the United States. The Lacey Act prohibits the import, export, transportation, sale,
receipt, acquisition or purchase in interstate or foreign commerce of any fish or wildlife taken,
possessed, transported or sold in violation of any law or regulation of any State or in violation of

any forcign law. 16 U.S.C. § 3372(a)(2)(A).



UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

UNITED STATES OF AMERICA )

)

v. ) No. 02 CR 0312 ”

) 4
LABS OF VIRGINIA, INC., ) Judge Ruben Castillo "dy
DAVID M. TAUB, ) ie
CHARLES J. STERN, and )
WILLIAM CURTIS HENLEY ITI y

MEMORANDUM OPINION AND ORDER

Presently before the Court is Defendants Charles J. Stern and William Curtis Henley IIl’s
renewed motion to dismiss Count V of the indictment on the grounds that certain Government
Tesponses to the bill of particulars now demonstrate that a part of the Government’s proof would
require this Court to invalidate an official act of the Indonesian govemment, which is barred
under the act of state doctrine. For the following reasons, the motion is denied. (R. 94-1 )

RELEVANT FACTS!

The United States of America and Indonesia became parties to the Convention on
International Trade in Endangered Species of Wild Fauna and Flora (“CITES”) in 1974 and
1979, respectively. CITES was cnacted as a result of a growing recognition “that intemational
cooperation is essential for the protection of certain species of wild fauna and flora against over-
exploitation through intemational trade.” See CITES, Mar. 3, 1973, 27 U.S.T. 1087, T.LA.S. No.
8249, Preamble. Indeed, in the spirit of international cooperation, CITES requires contracting

states to “take appropriate measures to enforce the provisions of the [treaty] and to prohibit trade

' The following facts are taken from the indictment. United States v. Andrews, 749 F,
Supp. 1520, 1521 (N.D. Ill. 1990) (for purposes of a motion to dismiss court assumes the facts
alleged in the indictment are true).


cooperation in assisting other countries in the enforcement of their wildlife protection laws").
Thus the fact that this case involves export decisions does not automatically warrant application
of the act of state doctrine.

We also note for the sake of completeness that even if we were to hold that the act of
slate doctrine was properly invoked in this case, we are convinced that several exceptions to the
doctrine would vitiate its application. In Banco Nacional de Cuba v. Sabatino, 376 U.S. 398
(1964), the Supreme Court carved out a potential cxception to the act of state doctrine when it
held that the judicial branch “will not cxamine the validity of a taking of property within its own
territory by a foreign sovereign government . . , in the absence of a treaty or other unambiguous
agreement regarding controlling legal principles... .” Id. at 428 (emphasis added); see also
Jimenez v. Aristeguieta, 311 F.2d 547, 558 (5th Cir, 1962) (act of state doctrine does not bar
inquiry into validity of sovereign act where there is a treaty defining controlling intemational law
as in the present case where parties acted pursuant to a treaty of extradition that expressly
contemplated judicial review of official’s action). As noted above, both the United States and
Indonesia are parties to CITES, a treaty whose controlling principles influence not only what
species may be exported but also the permit process and cnforcement of the treaty’s provisions.
Because the CITES treaty’s unambiguous legal principles govern this process, the treaty

exception to the act of state doctrine applies in this case.”

5 The corruption exception to the act of state doctrine also secms applicable in this casc.
Under this exception, “even an unrepudiated act of state may be scrutinized by the courts if it
resulted from the corruption of government officials.” Dominicus Americana Bohio v. Gulf & W.
Indus., Inc., 473 F. Supp. 680, 690 (S.D.N.Y, 1979) (citing Hunt vy. Mobil Oil Corp., 550 F.2d 68
(2d Cir. 1977). This exception rests on the concept that allegations of wrongdoing on the part of
foreign sovereigns’ agents are “beyond the umbrella of the Act of State Doctrine” because “such
activity would be violative of the Foreign Corrupt Practice Act of 1977... and. . . to shield such

12