Court Opinion

ID: 2963087
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:06:17.383736+00
Date Added: 2024-06-11T11:42:38.152390
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USCA1 Opinion

	

                            United States Court of Appeals
                            United States Court of Appeals                                For the First Circuit
                                For the First Circuit                                 ____________________        No. 94-1629                                    UNITED STATES,                                      Appellee,                                          v.                          BOHAI TRADING COMPANY, INC., A/K/A                          BRAYCO INTERNATIONAL CORPORATION,                                Defendant, Appellant.                                 ____________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF NEW HAMPSHIRE                    [Hon. Paul J. Barbadoro, U.S. District Judge]
                                             ___________________                                 ____________________                                        Before                                 Selya, Circuit Judge,
                                        _____________                            Bownes, Senior Circuit Judge,
                                    ____________________                              and Stahl, Circuit Judge.
                                         _____________                                 ____________________            Daniel  R.  Deutsch,  with  whom  Steven  J.  Brooks  and  Deutsch
            ___________________               __________________       _______        Williams Brooks DeRensis Holland  & Drachman, P.C., were on  brief for
        __________________________________________________        appellant.            Jean L. Ryan, Assistant United States  Attorney, with whom Paul M.
            ____________                                               _______        Gagnon, United States Attorney, was on brief for appellee.
        ______                                 ____________________                                   January 30, 1995                                 ____________________

                      STAHL, Circuit Judge.  Bohai  Trading Company, Inc.
                      STAHL, Circuit Judge.
                             _____________            ("Bohai"), a New Hampshire-based concern that causes athletic            footwear  to  be  manufactured  overseas  primarily  for  the            account of others, appeals  from the denial of its  motion to            dismiss  two  counts  of   an  indictment  charging  that  it            trafficked  in counterfeit goods in violation  of 18 U.S.C.              2320  and that  it  imported  goods  by  means  of  false  or            fraudulent  practices in violation of  18 U.S.C.    542.  The            principal  issue in  this appeal  is Bohai's argument  that              2320(d) is unconstitutionally vague.  Because we find no such            infirmity, we affirm.                                          I.
                                          I.
                                          __                                     BACKGROUND1  
                                     BACKGROUND
                                     __________                      In 1987 and 1988,  Bohai2 arranged for the overseas            manufacture  of  sneakers  for  the Stride  Rite  Corporation            ("Stride Rite"),  the owner  of the  KEDS trademark.   Stride                                
            ____________________            1.  In reviewing the district court's  denial of a motion  to            dismiss, we take the factual allegations in the indictment as            true.  Boyce Motor Lines v. United States,  342 U.S. 337, 343
                   _________________    _____________            n.16  (1952); United  States v.  Barker Steel  Co., 985  F.2d
                          ______________     _________________            1123,  1125 (1st  Cir. 1993).   In this  case, the  motion to            dismiss  initially   challenged  all   five  counts  of   the            indictment and, therefore, the factual  allegations contained            in the  entire indictment  were properly before  the district            court.  On this appeal, we review the motion  to dismiss only            as to counts one and three (as explained below, pursuant to a            plea agreement, the  district court granted  the government's            motion  to dismiss  the remaining  counts).  Because  of this            procedural  setting,  on this  appeal  we  take as  true  the            factual allegations contained in the entire indictment.              2.  Some  of  the  events  described  here  involved  Bohai's            predecessor, Brayco International Corporation, Inc.                                           -2-
                                          2

            Rite  placed   two  separate   orders  with  Bohai   for  the            manufacture of 100,000 pairs per order of women's canvas vamp            oxford  ("CVO")  sneakers  bearing  the  KEDS  mark.    Bohai            arranged for the shoes to be manufactured at the Qing  Dao #9            Rubber Factory, a government-owned enterprise in the People's            Republic of  China ("PRC").   Stride Rite  terminated Bohai's            authority to apply  the KEDS mark to the  shoes in the spring            of 1989.                      Beginning in August  1989, Bohai's president, James            L. Bryant, devised a plan to produce CVO sneakers bearing the            KEDS mark in the PRC and distribute them in the United States            without the knowledge or authorization of Stride Rite.  Bohai            arranged  for the production of the shoes at the PRC factory.            In September 1989, a  United States-based purchaser agreed to            buy  100,000 pairs of the shoes but asked for assurances that            they  were  not counterfeit.    A Bohai  employee  showed the            purchaser  a   purported  Stride  Rite   purchase  order  for            approximately  100,000  pairs of  CVO  shoes.   However,  the            purchase order pertained to a separate, previous order of CVO            shoes and had nothing to do with the shoes then being sold to            the  purchaser.   The employee  falsely represented  that the            shoes had been ordered and produced for Stride Rite, but that            Stride Rite  had rejected them.   In fact, the  shoes had not            yet been manufactured and Stride Rite had no knowledge of the            plan to produce or import them.                                         -3-
                                          3

                      The Qing Dao factory produced the shoes and applied            the  KEDS mark  to them.   Bryant  and  others took  steps to            conceal  the fact  that trademarks  had been  applied to  the            shoes without the knowledge or permission of Stride Rite.  In            December 1989, Bryant instructed the PRC factory to stamp the            shoes  then being  produced to  falsely reflect  a production            date of 1988.  Documents were also backdated.                        In March 1990,  the counterfeit shoes entered  this            country through  Boston.  The  invoice presented to  the U.S.            Customs Service at the  time of entry falsely  indicated that            the  shoes had been  manufactured pursuant to  a valid Stride            Rite  purchase order  and were  intended to  be delivered  to            Stride  Rite or its consignee.   After entry,  an employee of            Bohai  directed  the  shipper  to  deliver  the  shoes  to  a            warehouse  in  Holbrook, Massachusetts,  rather  than  to the            Stride  Rite warehouse  in New  Bedford, Massachusetts.   The            employee  explained to  the shipping  company that  Bohai and            Stride Rite were manufacturing the shoes together as a "joint            venture" and, therefore, Bohai was an  agent for Stride Rite.            After the purchaser inspected  the shoes, they were delivered            to  New Jersey,  where  they  were  sold  to  the  public  as            authentic KEDS CVO shoes  through a national department store            chain.  On March 27, 1990, Bohai received a wire transfer for            $410,032 from the purchaser for the 100,000 shoes.                                         -4-
                                          4

                      On April  29, 1993,  a federal grand  jury indicted            Bohai,  Bryant and Bohai's  Treasurer, Herbert Chih-Lun Wang,            under one  count charging  violations of  18 U.S.C.    2320,3            one  count charging  violations  of  18  U.S.C.    542,4  two            counts  of conspiracy under 18  U.S.C.   371,5  and one count            charging violations  of 18 U.S.C.    1957.6   The  defendants            moved to dismiss the indictment on various grounds, including            that     2320 did  not  give  them constitutionally  adequate            notice of the illegality  of their acts.  The  district court            held  a  hearing and,  in an  order  dated October  29, 1993,            denied   the  defendants'  motion.    Negotiations  with  the            government ensued.   On  February 17,  1994, Bohai  entered a            conditional plea of guilty under Fed. R. Crim. P. 11(a)(2) to            the first and  third counts of the  indictment, which alleged            violations of     2320 and  542 respectively.   The agreement            expressly reserved Bohai's right to seek review of the denial            of  the motion to dismiss.   The district  court then granted                                
            ____________________            3.  18  U.S.C.    2320 provides  that "whoever  intentionally            traffics  or attempts  to traffic  in goods  or services  and            knowingly uses a counterfeit mark" may be subject to fine and            imprisonment.              4.  18 U.S.C.    542  prohibits the  importation of goods  by            means of false or fraudulent practices.            5.  Counts  two   and  four   of   the  indictment   alleged,            respectively, conspiracy to traffic in  counterfeit goods and            conspiracy to  import goods by  means of false  or fraudulent            practices.            6.  18  U.S.C.      1957  prohibits   engaging  in   monetary            transactions in property derived from unlawful activity.                                         -5-
                                          5

            the government's motion to  dismiss all counts against Bryant            and Wang and  to dismiss the conspiracy and  money laundering            counts against  Bohai.   Following a sentencing  hearing, the            district  court sentenced  Bohai to  probation and  imposed a            fine of $100,000 for violations of counts one and three.  The            district  court  also  ordered   Bohai  to  pay  $100,000  in            restitution to Stride Rite.7  This appeal followed.                                         II.
                                         II.
                                         ___                                      DISCUSSION
                                      DISCUSSION
                                      __________                      Bohai  argues  that  the  district  court  erred in            denying  Bohai's motion  to  dismiss the  indictment for  two            principal   reasons:       (1)   18   U.S.C.        2320   is            unconstitutionally vague; and (2) even if the statute is  not            constitutionally infirm, Bohai nonetheless lacked fair notice            because of    2320's legislative history  and a then-existing            Customs  Service  regulation   issued  pursuant  to   another            statute.  We address Bohai's arguments in order.8                                
            ____________________            7.  Pursuant  to the  plea agreement,  the restitution  is in            escrow pending this  appeal.  The agreement  provides that if            this  court finds count one (charging under 18 U.S.C.   2320)            is legally invalid, the restitution and any interest  will be            returned to Bohai.            8.  Bohai  also challenges  count  three, which  charges that            Bohai knowingly  and intentionally  sought to  import 100,000            pairs of  shoes "bearing counterfeit (as defined  in Title 18            U.S.C. Section 2320(d))  blue rectangular  heel patches  with            the name  `KEDS' on them,  by means  of one or  more material            false statements . . ."  in violation of 18 U.S.C.   542.  As            Bohai notes, the "indictment  expressly ties [count three] to            a   violation  of  section   2320."    Because   we  find  no            constitutional  infirmity  with  regard to     2320,  Bohai's                                         -6-
                                          6

                      The  due  process  clause  of the  Fifth  Amendment
                                  requires  that a criminal  statute be  sufficiently definite.            The "requirement  of definiteness  is violated by  a criminal            statute that fails to give a person of ordinary  intelligence            fair notice that his contemplated conduct is forbidden by the            statute."   United  States  v.  Harriss, 347  U.S.  612,  617
                        ______________      _______            (1954); see also Grayned  v. City of Rockford, 408  U.S. 104,
                    ___ ____ _______     ________________            108  (1972) ("It is a basic principle  of due process that an            enactment is void for  vagueness if its prohibitions are  not            clearly defined.").  "The question is whether, looking at the            statute  in light  of the  facts of  the case  at hand,  [it]            provide[s] a constitutionally adequate warning to those whose            activities  are governed."   United  States v.  Buckalew, 859
                                         ______________     ________            F.2d  1052, 1054  (1st Cir.  1988) (quotations  and citations            omitted);  see also  United States  v. National  Dairy Prods.
                       ___ ____  _____________     ______________________            Corp.,  372   U.S.  29,   33  (1963)  ("In   determining  the
            _____            sufficiency of  the  notice a  statute must  of necessity  be            examined  in light of the  conduct with which  a defendant is            charged.").  Our task, therefore, is  to determine whether 18            U.S.C.   2320 gave Bohai adequate warning that, as alleged in            the indictment, "knowingly  [using] counterfeit marks without            the  authorization of  the holder  of the  right to  use such            marks"  is unlawful.    Our review  is de  novo.   See, e.g.,
                                                   __  ____    ___  ____                                
            ____________________            challenge to count three fails.                                            -7-
                                          7

            United  States  v. Aguilar-Aranceta,  957  F.2d  18, 21  (1st
            ______________     ________________            Cir.), cert. denied, 113 S. Ct. 105 (1992).
                   _____ ______                      Bohai argues  that the phrase  "at the time  of the            manufacture   or  production"   as  used  in   the  so-called            "authorized-use"   exception  to      2320's   definition  of            counterfeit  goods9  renders  the statute  unconstitutionally            vague.  Bohai specifically  focuses on the word "production,"            arguing that it has  "no core meaning" and that   2320 leaves            the  reader  helpless  "to  understand  what  aspect  of  the                                
            ____________________            9.  We  set forth the relevant portion of 18 U.S.C.   2320(d)            with the "authorized-use" language underscored:                  (d)  For purposes of this section --                      (1)  the term "counterfeit mark" means --                            (A)  a spurious mark --                                (i)   that  is  used  in connection  with                                trafficking in goods or services;                                (ii)     that   is  identical   with,  or                                substantially  indistinguishable from,  a                                mark  registered  for   those  goods   or                                services on the principal register in the                                United States Patent and Trademark Office                                and in use, whether  or not the defendant                                knew such mark was so registered; and                                (iii) the use of which is likely to cause                                confusion,  to  cause   mistake,  or   to                                deceive; or                           (B)   a spurious designation that is identical                           with, or substantially indistinguishable from,                           a designation as to  which the remedies of the                           Lanham  Act are  made  available by  reason of                           section 110 of the Olympic Charter Act;                 but such term does not include any mark or designation  
                 ______________________________________________________                 used in connection with goods or services of which the  
                 ______________________________________________________                 manufacturer or producer was, at the time of the        
                 ________________________________________________                 manufacture or production in question authorized to use 
                 _______________________________________________________                 the mark  for  designation  for  the type  of  goods  or
                 ________________________________________________________            services        so manufactured or produced, by the holder of
            ________        _____________________________________________            the right to       use such mark or designation.
            ____________       ____________________________                                         -8-
                                          8

            production  process  --   i.e.,  creating,  bringing   about,            furnishing,  or yielding the goods in question -- is relevant            in dating the  existence of generalized authority  to use the            mark on goods of the same type."                        Bohai's  statutory  analysis  suffers from  extreme            myopia.  As  we have observed in  the past, statutes are  not            enacted on a  piecemeal basis and, accordingly, should not be            read  that way.   See  Little People's  Sch., Inc.  v. United
                              ___  ___________________________     ______            States, 842 F.2d 570, 573 (1st Cir. 1988).  By broadening the
            ______            focus and examining the phrase "at the time of manufacture or            production" in  the  context  of  the  entire  authorized-use            exception, see,  e.g., id.,  we think that  Bohai's vagueness
                       ___   ____  ___            challenge cannot  be sustained.  Based on  the plain language            of the statute, we conclude  that Congress intended, and made            sufficiently plain,  that this exception would  be limited to            those  goods  or  services  for  which authorization  existed            during  the entire period  of production or  manufacture.  We
                        ______            focus on Congress's  statement that authorization  must exist            "at the time of the manufacture or production in question . .
             __ ___ ____ __            .  for the  type  of goods  or  services so  manufactured  or
                                                     __  ____________  __            produced."  Though perhaps  not a model of the  most exacting
            ________            legislative craftsmanship, we think this language nonetheless            makes clear beyond reasonable dispute that  the authorization            to use  the mark must exist  "at the time of,"  that is, from            beginning  of  the  production   or  manufacture  up  to  and                                         -9-
                                          9

            including the time at  which the goods or services  have been            finally "manufactured or produced."                         We believe  that Bohai could  reasonably understand            from  the  statutory language  that  conduct  charged in  the            indictment was not within  the authorized-use exception.  The            government charges that Bohai was not authorized to apply the            marks  to  100,000 pairs  of  CVO shoes,  conduct  that falls            squarely outside the statute's exception.   Bohai asks us  to            consider the language in light of the "undisputed fact" that,            in  1988, it had authority  from Stride Rite  to assemble raw            materials, import  sewing machines  and molds, and  train the            Qing Dao  workers to produce  the KEDS CVO shoes.10   For the            reasons outlined  above, the  language of the  statute cannot            sustain   Bohai's  assertion  that   these  activities  alone            constitute "production" within the meaning of the authorized-            use  exception.  While Bohai's  activities in 1988 might have            been steps  in the  production process, the  statute requires            that authorization  exist until  production is complete.   In            short,  on these facts, we do not  think this language can be            reasonably    described    as     ambiguous,    much     less            unconstitutionally vague.     Bohai makes  the additional and            somewhat novel  argument that,  even  if the  statute is  not                                
            ____________________            10.  On this  point, the  district court  noted in  its order            that,  although  it was  not alleged  in the  indictment, the            government  did concede that the defendants  were at one time
                                                              ___________            authorized to apply the  KEDS trademark to shoes manufactured            at the Qing Dao factory.                                           -10-
                                          10

            vague, Bohai lacked fair  notice in light of  the legislative            history  of   2320 as well as a then-existing Customs Service            regulation.  We  do not  agree.  As  to legislative  history,            Bohai  argues that it "is relevant insofar as it discloses no            intention  to  criminalize the  type  of  conduct at  issue."            Bohai  then presents  a lengthy  examination of  various non-            statutory materials.   As a general proposition, when a court            finds  "clear  meaning in  the  unvarnished  language of  the            statute, [it is] duty bound to honor that  meaning."  Baez v.
                                                                  ____            INS, No.  94-1224, slip op.  at 13 (1st  Cir. Dec. 6,  1994).
            ___            Consequently,  a  court  may  seldom engage  in  a  boundless            exploration of unenacted legislative materials.  See id.; see
                                                             ___ ___  ___            also Laracuente v. Chase Manhattan Bank, 891 F.2d 17, 23 (1st
            ____ __________    ____________________            Cir. 1989)  ("[A]bsent ambiguity  in the  statutory language,            our inquiry is complete  and ends with the plain  language of            the  statute.").    Bohai's  use  of non-statutory  materials            demonstrates the  wisdom  of this  rule.   Bohai relies  upon            legislative history  for  the  dubious  proposition  that  it            discloses no congressional intent to criminalize the activity            at issue.   Under  the Constitution, Congress  speaks through            duly enacted bills and  resolutions; as to legislation, there            is no requirement  that Congress  memorialize anything,  much            less  its intent, through  unenacted non-statutory materials.            Accordingly, Congress's failure to do so can hardly  be cited                                         -11-
                                          11

            as  proof  of  a defendant's  argument  that  it lacked  fair            notice.11                         We also  disagree with Bohai's  analytical premise.            On an  appeal like this one, the  issue is simply whether the            statute, as enacted by  Congress, gave sufficient notice that            the conduct charged was proscribed.  Once we  have determined            that the statute is constitutionally sufficient, our analysis            ends.     Bohai  seeks  to  go  a  step  farther  and  create            uncertainty by  referring to  wholly extraneous matters.   We            are  not  so easily  distracted.    Thus, Bohai's  exhaustive            treatment of the Customs  Service regulation, appearing at 19            C.F.R.   133.21(c)(3), is also unavailing.12                                  
            ____________________            11.  As   Judge  Harold   Leventhal  once   observed,  citing            legislative history  is akin  to "looking  over  a crowd  and            picking  out   your  friends."     Patricia  M.   Wald,  Some
                                                                     ____            Observations On the  Use of Legislative  History in the  1981
            _____________________________________________________________            Supreme Court Term, 68  Iowa L. Rev. 195, 214 (1983).   Bohai
            __________________            seeks to  add a new  twist by  looking over a  crowd and  not            finding an enemy.            12.  Prior to 1988, 19 C.F.R.   133.21(c)(3), issued pursuant            to  Section 526 of the Tariff Act  of 1930, 19 U.S.C.   1526,            provided that  if "the articles of foreign manufacture bear a            recorded  trademark or tradename  applied under authorization            of the United States  owner," then the Customs  Service would            not  prevent importation.   Bohai's  fair notice  argument is            grounded  in  its  assertion  that the  Customs  Service  had            routinely  admitted trademarked goods produced by "authorized            manufacturers"   without  regard   to   the  timing   of  the            manufacture.                      We do  not agree with Bohai that  Grayned, 408 U.S.
                                                        _______            at   110,   supports   the   broad   proposition   that   the            "administrative  practice of  the agency  principally charged            with enforcing  Section  2320 is  significant in  determining            whether  that section  provided  fair notice  to Bohai."   In            Grayned,  a First Amendment  case, the Court  stated that, in
            _______            the absence of an  interpretation of the meaning of  an anti-                                         -12-
                                          12

                                         III.
                                         III.
                                         ____                                      CONCLUSION
                                      CONCLUSION
                                      __________                      Because we conclude that  the language of 18 U.S.C.              2320 is sufficiently definite so as to give fair  notice to            Bohai  that  the  conduct   alleged  in  the  indictment  was            proscribed, the judgment of the district court is                      Affirmed.
                      Affirmed.
                      ________                                
            ____________________            noise ordinance  from the court below,  it would "extrapolate            its allowable meaning . . .  [by looking to] the words of the            ordinance itself, to the  interpretations the court below has            given to  analogous statutes and, perhaps to  some degree, to            the interpretation of the statute given by those charged with            enforcing  it."    Id.  (internal  quotations  and  footnotes
                               ___            omitted).   Thus, agency  interpretations might  provide some            assistance in our  own effort to  arrive at the meaning  of a            statute,  but they  must at  least relate  to the  statute at            issue.                                         -13-
                                          13