Opinion ID: 581353
Heading Depth: 4
Heading Rank: 1

Heading: Count V--Tariff Act

Text: 18 It is Judge Lew's treatment of Count V that is most relevant to the question of issue preclusion in this case. Yamaha-America alleged in Count V that ABC's importation of genuine Yamaha products violated its rights under the Tariff Act and the Lanham Act. The relevant portion of section 526 of the Tariff Act provides that 19 it shall be unlawful to import in the United States any merchandise of foreign manufacture if such merchandise ... bears a trademark owned by a citizen of, or by a corporation or association created or organized within, the United States ... unless written consent of the owner of such trademark is produced at the time of making entry. 20 19 U.S.C. § 1526(a) (1988). Judge Lew recognized that the protection provided by section 526 has been consistently interpreted by U.S. Customs for more than fifty years not to be available to American subsidiaries of foreign corporations. ABC, 703 F.Supp. at 1403. 4 After quoting directly from 19 C.F.R. § 133.21(c)(2) (the Regulation), Judge Lew added that the Supreme Court had recently upheld the Regulation in K Mart Corp. v. Cartier, Inc., 486 U.S. 281, 108 S.Ct. 1811, 100 L.Ed.2d 313 (1988), as a permissible interpretation of section 526. ABC, 703 F.Supp. at 1403. 21 Yamaha-America had argued to the ABC court that it had rights under section 526 to seek damages and an injunction against a private gray-market importer even if Customs would not have issued a genuine-goods exclusion order under the Regulation. In other words, Yamaha-America had argued that the Regulation does not define the full scope of the protection provided by section 526; even if the Regulation is valid, ABC's actions violated Yamaha-America's rights under section 526. See Transcript of Oral Argument (D.C.Cir. filed Mar. 11, 1992) (Transcript) at 31 (discussing argument made to ABC court and on appeal to Ninth Circuit). Judge Lew rejected Yamaha-America's argument, however, declining to interpret § 526 any differently than does the Customs Service. ABC, 703 F.Supp. at 1403. He added that 22 even if this Court were to review the statute de novo, it would conclude that Yamaha is not entitled to relief under § 526. To allow Yamaha-America and firms like it such protection would allow any foreign manufacturer to use a wholly owned American subsidiary as a means to secure the help of American tariff law in enforcing worldwide price discrimination. This can not be seen to have been the intent of Congress in passing § 526. 23 Id. Judge Lew's grant of summary judgment to ABC on Yamaha-America's Tariff Act claim was clearly based on two reasons: First, the Regulation--which the Supreme Court recognized to be a reasonable interpretation of section 526--withholds the protections of section 526 from a U.S. trademark holder that is a subsidiary of the foreign trademark holder; and second, section 526 itself excludes from its general protected class those U.S. trademark holders that are wholly owned American subsidiaries of the foreign trademark holders. 24