Opinion ID: 425183
Heading Depth: 1
Heading Rank: 3

Heading: Customs' Threshold Claims.

Text: 25 On appeal, Customs has not pressed its procedural claims; it has simply remarked in a footnote in its brief that the district court's conclusion[s] as to both mandamus jurisdiction and standing appear to be erroneous   . Similarly, neither Rolex nor Grand Jewels briefed or argued these issues. Nevertheless, because our jurisdiction to decide the case is implicated, Village of Arlington Heights v. Metropolitan Housing Development Corp., 429 U.S. 252, 260, 97 S.Ct. 555, 561, 50 L.Ed.2d 450 (1977), we are compelled to briefly address these novel questions. 26
27 Customs argued below that its resolution of the counterfeit issue--even if erroneous--did not injure Rolex in a manner sufficient to confer standing under Article III of the Constitution. The crux of its argument was that the Grand Jewels bracelets had already been declared infringements and that the offending marks would therefore have to be obliterated before the merchandise was released. Under these circumstances, Customs contended, Rolex was not exposed to any actual or threatened harm, much less the type of injury in fact required by Article III. 28 We think that Customs takes too narrow a view of the consequences to Rolex of an adverse determination here. Commercial counterfeiting has reached epidemic proportions. See generally Rakoff & Wolff, Commercial Counterfeiting and the Proposed Trademark Counterfeiting Act, 20 Am.Crim.L.Rev. 145 (1982). As we previously witnessed in Matter of Vuitton et Fils S.A., 606 F.2d 1 (2d Cir.1979), the owners of trademarks on prestige items are particularly likely to be plagued by recurring counterfeit problems. Indeed, in this case Customs official DeNardo testified that the Grand Jewels bracelets were not the first batch of fake Rolex merchandise that Customs had intercepted. And Rolex's expert confirmed that Rolex encounters three or four counterfeits a week. 29 Given this predicament, there is more at stake for Rolex in this action than the fate of this particular shipment of Grand Jewels bracelets. A ruling that the designs on these bracelets were not counterfeits of Rolex's trademark, despite the fact that only an expert could distinguish between the two, would remove a major disincentive that might otherwise prevent counterfeiters from pirating Rolex's mark. Counterfeiters would be free to copy the Rolex crown with relative impunity, safe in the knowledge that if their merchandise was intercepted at Customs and deemed an infringement, they could still salvage most of their investment by selling the merchandise after the offending marks were removed. 30 Contrary to Customs' position below, this potential harm to Rolex is not so abstract or speculative as to deny Article III standing. As this court, sitting en banc, recognized in City of Hartford v. Towns of Glastonbury, 561 F.2d 1032, 1050 (2d Cir.1977), cert. denied, 434 U.S. 1034, 98 S.Ct. 766, 54 L.Ed.2d 781 (1978) (quoting Village of Arlington Heights v. Metropolitan Housing Development Corp., 429 U.S. 252 at 260-61, 97 S.Ct. 555 at 561 (citations omitted)): 31 The essence of the standing question, in its constitutional dimension, is whether the plaintiff has 'alleged such a personal stake in the outcome of the controversy' as to warrant his invocation of federal court jurisdiction and to justify exercise of the court's remedial powers on his behalf. ... The plaintiff must show that he himself was injured by the challenged action of the defendant. The injury may be indirect ... but the complaint must indicate that the injury is indeed fairly traceable to the defendant's acts or omissions. 32 In the present case, the challenged action of defendants places a uniquely personal interest of Rolex in jeopardy. And Rolex has established at least a substantial probability that it will in fact be harmed. In our view, this is sufficient to confer standing. See Douglas Oil Co. v. Petrol Stops Northwest, 441 U.S. 211, 218 n. 8, 99 S.Ct. 1667, 1672 n. 8, 60 L.Ed.2d 156 (1979); Ludlow Corp. v. SEC, 604 F.2d 704, 706 (D.C.Cir.1979); cf. Warth v. Seldin, 422 U.S. 490, 504, 95 S.Ct. 2197, 2208, 45 L.Ed.2d 343 (1975). 33 Furthermore, where a dispute is otherwise justiciable, the question whether the litigant is a 'proper party to request an adjudication of a particular issue,'    is one within the power of Congress to determine. Sierra Club v. Morton, 405 U.S. 727, 732 n. 3, 92 S.Ct. 1361, 1365 n. 3, 31 L.Ed.2d 636 (1972) (citation omitted). Here, Congress has passed a statute that expressly requires notification of the trademark owner after counterfeit merchandise is seized. Together with the applicable regulations, see 19 C.F.R. Sec. 133.23a, the statute contemplates that the trademark owner will play an active role in the ensuing administrative process. It is not unreasonable to assume that Congress also intended for the trademark owner to have some input into the initial administrative determination as to whether the detained merchandise was counterfeit. Indeed, that is apparently the way Customs interpreted the statute at the administrative level in this case, for it permitted Rolex actively to participate in the Customs proceedings. It would be anomalous to rule now that Rolex had no standing to pursue this appeal. 34 Finally, we cannot overlook that the result of accepting Customs' standing argument would be to render its decision unreviewable. In the absence of any explicit indication, we will not assume that Congress intended to entrust Customs with final disposition of substantial competing commercial interests through the exclusive administration of Sec. 1526(e). 35
36 Turning briefly to Customs' second threshold argument, we need not determine whether the district court had jurisdiction to adjudicate this dispute under the Mandamus Act, 28 U.S.C. Sec. 1361. While the district judge did find that mandamus jurisdiction was appropriate, he also found that the court had general federal question jurisdiction under 28 U.S.C. Sec. 1331, and this latter ruling is unassailable. Kast's administrative affirmance of DeNardo's initial decision unquestionably qualified as reviewable final agency action under 5 U.S.C. Sec. 704 (1982), since Rolex had exhausted its administrative remedies. And the district court clearly had jurisdiction to review Rolex's challenge to Kast's final determination under Sec. 1331 as an action arising under Sec. 1526(e). 37 Further, to the extent that Rolex sought mandatory relief, it was well within the district court's traditional equitable powers to award it in an action based on Sec. 1331. Any doubts as to whether these powers may be exercised in this context are laid to rest by 5 U.S.C. Sec. 703 (1982), which provides that a court reviewing agency action may issue writs of prohibitory or mandatory injunction    . 38 Thus, mandamus jurisdiction, if available, would be superfluous. See 4 K. Davis, Administrative Law Treatise Secs. 23:8-23:14 (2d ed. 1983). We therefore do not reach the academic question of whether, in the circumstances present here, Sec. 1361 might be an appropriate vehicle for challenging Customs' decision. 39