Opinion ID: 195622
Heading Depth: 1
Heading Rank: 2

Heading: the import charges

Text: 6 Taking matters in reverse chronological order, we turn first to an examination of the import charges. These counts arise under a criminal statute that provides in pertinent part: 7 Whoever enters or introduces, or attempts to enter or introduce, into the commerce of the United States any imported merchandise by means of any fraudulent or false invoice, declaration, affidavit, letter, paper, or by means of any false statement, written or verbal, or by means of any false or fraudulent practice or appliance, or makes any false statement in any declaration without reasonable cause to believe the truth of such statement, or procures the making of any such false statement as to any matter material thereto without reasonable cause to believe the truth of such statement, whether or not the United States shall or may be deprived of any lawful duties ... [s]hall be [punished as provided]. 18 U.S.C. Sec. 542 (emphasis supplied). 2 8 Appellant does not deny that he knowingly made false statements to Customs officials, thereby undervaluing his imports. Nonetheless, he contends that such statements do not fall within the scope of the statute of conviction because the phrase by means of indicates that no violation occurs unless the merchandise, absent the false invoice, statement, or practice, would have been excludable. And he says this was not the case regarding the Chinese munitions, as their importation was lawful. The government, by contrast, puts no stock in a causation requirement, dismissing appellant's argument as involving too cramped a reading of the statutory language. Because the parties' dispute boils down to a pure question of statutory interpretation, our review is plenary. See United States v. Gifford, 17 F.3d 462, 471-72 (1st Cir.1994); Liberty Mut. Ins. Co. v. Commercial Union Ins. Co., 978 F.2d 750, 757 (1st Cir.1992). 9 Whatever shadows cloud this record, one thing is very clear: even though no materiality requirement appears on the statute's face, section 542's first provision must be read to contain such a requirement; to justify a conviction, the prosecution must demonstrate that the false invoice, statement, or practice is related to the importation in some material respect. This is the construction recognized by virtually every court that has directly addressed the issue. See, e.g., United States v. Corcuera-Valor, 910 F.2d 198, 199 (5th Cir.1990); United States v. Bagnall, 907 F.2d 432, 435 (3d Cir.1990); United States v. Teraoka, 669 F.2d 577, 579 (9th Cir.1982). It also comports with our construction of the parallel civil statute, 19 U.S.C. Sec. 1592, explicated in United States v. Ven-Fuel, Inc., 758 F.2d 741, 761-62 (1st Cir.1985). We hasten to add that the inclusion of a materiality component is warranted by more than habit; such a requirement is pragmatically desirable because it permits courts to advance the statute's apparent purposes and, if necessary, to exclude trivial lapses from the statute's ambit. Cf., e.g., United States v. Corsino, 812 F.2d 26, 30 (1st Cir.1987) (explaining materiality requirement under 18 U.S.C. Sec. 1001, which prohibits, among other things, the submission of false statements in matters within the jurisdiction of any federal agency). 10 Yet, our recognition of a materiality requirement does not solve the interpretive riddle that this appeal presents; it is the nature of the materiality requirement--not its mere existence--over which the parties grapple. Appellant invites us to hold that materiality in this context is contingent on a crabbed construction of the term by means of. Specifically, he argues that by means of is synonymous with because of, and that a false statement is material under the first part of section 542 only if the importation of any particular item would have been forbidden in its absence. We decline the invitation. 11 In discerning the meaning of this portion of section 542, [w]e start--as all statutory construction must start--by looking at the language of the law, United States v. Charles George Trucking Co., 823 F.2d 685, 688 (1st Cir.1987), and by examining the ordinary, contemporary, common meaning of the words, Perrin v. United States, 444 U.S. 37, 42, 100 S.Ct. 311, 314, 62 L.Ed.2d 199 (1979). Bearing this in mind, we are constrained to conclude that the phrase by means of is not synonymous with because of; while the former includes the latter, that hardly renders them coterminous. Rather, understood in an unforced way, saying that someone has effected an importation by means of a false statement is simply to suggest that the person has introduced a false statement at some significant stage in the process. The phrase does not mean that the person could not have used a true statement in tandem with the false statement, or that the importation could not otherwise have been achieved. See, e.g., Webster's New Universal Unabridged Dictionary 1115 (2d ed. 1983) (defining by means of as by using; with the aid of; through); Richard A. Spears, American Idioms Dictionary 43 (1987) (defining by means of something as using something or with the use of something). 12 There is no basis for rejecting plain meaning here. Indeed, contrary to appellant's importuning, the principal problem with the by means of language is not ambiguity--its meaning is obvious--but, rather, the language's potential breadth. It is because of this problem that courts have read a materiality requirement into this portion of section 542. This requirement is intended to flesh out, not to eviscerate, the by means of language as that phrase resonates in the context of section 542. So viewed, it brings to the textual surface the commonsense notion that, to ground a conviction, there must be a significant nexus between the false statement and the importation. 13 We hold, therefore, in basic agreement with the Third Circuit, that a false statement is material under section 542 if it has the potential significantly to affect the integrity or operation of the importation process as a whole, and that neither actual causation nor actual harm to the government need be demonstrated. See Bagnall, 907 F.2d at 436 (The language of Sec. 542 suggests to us that its purpose is no less than to preserve the integrity of the process by which foreign goods are imported into the United States. As a result, we are inclined to believe that a false statement is material not only if it is calculated to effect the impermissible introduction of ineligible or restricted goods, but also if it affects or facilitates the importation process in any other way.); see also Corsino, 812 F.2d at 30-31 (drawing similar conclusion in relation to the judicially devised materiality requirement of 18 U.S.C. Sec. 1001); United States v. Greenberg, 735 F.2d 29, 31 (2d Cir.1984) (suggesting, in construing an analogous statute, that when a false statement is made to a public body or its representative, materiality refers to the impact that the statement may reasonably have on the ability of that agency to perform the functions assigned to it by law). 14 It is thus apparent that the focus of an inquiry into materiality is not what effect a false statement actually may have, but whether it carries a serious potential risk for obstructing the agency or substantially inhibiting the agency's performance of its duties under the law. Transplanted to the Customs milieu, a statement is material if it has the potential significantly to affect the integrity or operation of the importation process--the manner in which Customs handles the assessment of duties and passage of goods into the United States. 15 Having distilled the plain meaning of the disputed phrase, we could end our inquiry at this point. See, e.g., Charles George Trucking, 823 F.2d at 688 (explaining that, when the language of a statute points unerringly in a single direction, and produces an entirely plausible result, it is unnecessary--and improper--to look for other signposts). But, here, to reinforce our conclusion that material means something more than causal, we think it is appropriate to note that this conclusion is supported not only by the plain language of section 542, but also in three other ways: by the better reasoned case law, by the adverse textual consequences that would result from adopting appellant's proposed definition, and by the policy underlying the statutory provision. See, e.g., United States v. O'Neil, 11 F.3d 292, 295-301 (1st Cir.1993) (beginning interpretive analysis with plain language of statute and verifying construction by reference to statutory structure, logic, and public policy). 16 An examination of precedent reveals that we already have rejected a narrow, causally oriented reading of the materiality requirement found in the civil analog to section 542. See Ven-Fuel, 758 F.2d at 762 (branding such a construction of 19 U.S.C. Sec. 1592 entirely baseless and predicting that [s]uch a restrictive reading would largely eviscerate the statute, rendering it meaningless in the vast majority of cases). 3 Our view of section 542's materiality requirement is also consonant with the reasoning and/or resolution of several cases from other jurisdictions. See, e.g., Bagnall, 907 F.2d at 436; United States v. Brown, 456 F.2d 293, 295 (2d Cir.), cert. denied, 407 U.S. 910, 92 S.Ct. 2436, 32 L.Ed.2d 684 (1972); United States v. Szwaczka, 769 F.Supp. 293, 296 (E.D.Wis.1991); see also United States v. Yip, 930 F.2d 142, 147-49 (2d Cir.) (construing the second provision of section 542 in an equally broad manner), cert. denied, --- U.S. ----, 112 S.Ct. 197, 116 L.Ed.2d 157 (1991). 4 17 A broad construction of section 542 is also supported by accepted canons of statutory construction. If the first provision in section 542 is construed as applying only to ineligible imports, then the final sentence of the section, discussing the legal irrelevance of depriving the government of any lawful duties, would be meaningless (for nonimportable items are not dutiable, and hence, the government could never be deprived). Accordingly, such a construction would transgress the oft-stated interpretive rule that [a]ll words and provisions of statutes are intended to have meaning and are to be given effect, and no construction should be adopted which would render statutory words or phrases meaningless, redundant or superfluous. Ven-Fuel, 758 F.2d at 751-52; accord O'Neil, 11 F.3d at 297. 18 Finally, a statute must be read as a whole, with due regard for its object, purposes, and underlying policy. See Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 51, 107 S.Ct. 1549, 1554-55, 95 L.Ed.2d 39 (1987). Here, a broad reading of the disputed language serves to advance the fundamental purpose of the first part of section 542. That purpose, as evidenced by Congress's choice of phrase--particularly the caveat that the government need not be deprived of any lawful duties--is to ensure full disclosure in importation and thereby maintain the integrity of the importation process as a whole. See Bagnall, 907 F.2d at 436. Adopting an isthmian standard would thwart this goal by making it more attractive for importers to assume the persona of Holmes's bad man and to practice strategic forms of deception under the guise of immateriality. See Oliver Wendell Holmes, Jr., The Path of the Law, 10 Harv.L.Rev. 457, 459 (1897) (If you want to know the law and nothing else, you must look at it as a bad man, who cares only for the material consequences which such knowledge enables him to predict....). 19 To recapitulate, we hold that materiality is, in fact, an element of the offense of conviction. This element serves to explain, not to emasculate, the by means of language contained in the first part of the statute. Particularly when viewed against this backdrop, appellant's proposed equation of by means of with because of betrays both common meaning and common sense. By limiting the scope of section 542's first provision to ineligible items, such an interpretation would effectively convert the provision into an inoperative piece of parchment. Accordingly, we reject appellant's narrow construction, and rule that, in this context, material means having the potential significantly to affect the integrity or operation of the importation process as a whole, without regard to whether the conduct at issue caused the importation and without regard to whether the federal government suffered actual harm. 20 Appellant's false statements had this deleterious potential. Undervaluations are by their nature materially related to the importation process, both because they may interfere with the government's efforts to monitor and regulate the flow of goods into the United States and because they undermine the integrity of the entire importation process. Consequently, appellant's convictions under section 542 must be upheld. 5