Court Opinion

ID: 9474928
Source: CourtListenerOpinion
Date Created: 2023-08-05 05:12:39.656367+00
Date Added: 2024-06-11T17:44:24.670767
License: Public Domain

WINTER, Circuit Judge,
dissenting:
I respectfully disagree with the conclusion reached by my colleagues as to the validity of the customs regulation in question.
With regard to Congress’s intent in enacting Section 526, I agree generally with Judge Silberman’s discussion in Coalition to Preserve the Integrity of Trademarks v. United States, 790 F.2d 903 (D.C.Cir.1986), although I believe the legislative history to be somewhat more ambiguous than his opinion indicates.
Moreover, as Judge Silberman’s opinion describes in detail, id. at 910-918, the history of the regulation itself reflects the Customs Service’s own confusion over the purpose and validity of the regulation. The Service waited some thirteen years before enacting one version of it and then relied for the statutory basis on the Lanham Act’s predecessor rather than on Section 526. Since then, the reasons given by the Service in support of the regulation have varied, and even now considerable doubt exists as to precisely what relevant policy it is intended to implement. Congress’s supposed long-standing acquiescence, therefore, is of little weight in view of the lack of continuity in the Service’s rationale. Id. at 916-918.
My colleagues rely upon the administrative difficulties faced by the Service in excluding grey market goods as a policy justifying the regulation. I believe that such reliance is misplaced. First, the purported administrative difficulties appear to be recently created justification to defend litigation in the 1980’s. The Service never alluded to administrative difficulties when the regulation was originally promulgated a half century ago on the basis of the Lanham Act’s predecessor, or later when it found the regulation’s basis in a now defunct antitrust policy, or when it based the regulation upon the purported commands of Section 526.
Second, viewing this regulation as an attempt to lighten the Service’s administrative burdens is a bootstrap argument. Enforcement of Section 526 as written is simplicity itself. Goods of foreign manufacture bearing a trademark owned by a U.S. citizen or firm must be excluded from the country absent written consent from the owner. Difficulties stemming from variations in grey market relationships or from a supposed need to find a mark’s existing domestic goodwill arise only after determining that Section 526 does not exclude all grey market goods. In short, the administrative difficulties are encountered only after the major legal question as to the meaning of Section 526 has been resolved. Once that is resolved against excluding grey market goods, however, the validity of the regulation is beyond challenge.
The fact is that the Customs Service has over the years justified this regulation with arguments of opportunity tailored to whatever audience it happened to be addressing at the time. This is hardly unusual administrative behavior, although the degree of vacillation in this case is somewhat exceptional. The fact that courts may indulge in fiction in the area of administrative law more often than in any other field does not mean, however, that we cannot insist upon coherent fiction. Cf. United States v. Diapulse Corp. of America, 748 F.2d 56, 61-62 (2d Cir.1984).
I respectfully dissent.