Court Opinion

ID: 4019313
Source: CourtListenerOpinion
Date Created: 2016-07-27 17:01:10.163085+00
Date Added: 2024-06-11T13:31:22.375564
License: Public Domain

FOR PUBLICATION

      UNITED STATES COURT OF APPEALS
           FOR THE NINTH CIRCUIT

 LIFENG WANG, AKA Alice Wang,                    No. 14-15779
            Petitioner-Appellant,
                                                   D.C. No.
                    v.                         3:12-cv-06367-LB

 LEON RODRIGUEZ, Director of U.S.
 Citizenship and Immigration                      OPINION
 Services; ROBIN BARRETT,
 Director of the San Francisco Field
 Office, U.S. Citizenship and
 Immigration Services,
             Respondents-Appellees.

        Appeal from the United States District Court
           for the Northern District of California
        Laurel D. Beeler, Magistrate Judge, Presiding

          Argued and Submitted February 12, 2016
                 San Francisco, California

                         Filed July 27, 2016

  Before: A. Wallace Tashima and William A. Fletcher,
 Circuit Judges and Stanley Allen Bastian,* District Judge.

                Opinion by Judge W. Fletcher

  *
    The Honorable Stanley Allen Bastian, District Judge for the U.S.
District Court for the Eastern District of Washington, sitting by
designation.
2                      WANG V. RODRIGUEZ

                           SUMMARY**

                            Immigration

    The panel reversed and remanded the district court’s
summary judgment for the government in Lifeng Wang’s
petition seeking de novo review of the United States
Citizenship and Immigration Service’s denial of
naturalization based on Wang’s conviction for trafficking in
counterfeit goods in violation of 18 U.S.C. § 2320(a).

    The panel held that a conviction under 18 U.S.C. § 2320
does not necessarily involve fraud or deceit because a
defendant can be convicted of trafficking in counterfeit goods
for conduct that is merely likely to cause “mistake” or
“confusion.” The panel held that therefore Wang’s
conviction could not form the basis for a finding that she
was convicted of an aggravated felony under 8 U.S.C.
§ 1101(a)(43)(M)(i).

                             COUNSEL

Frank M. Tse (argued), Law Office of Frank M. Tse, San
Francisco, California, for Petitioner-Appellant.

Sarah L. Vuong (argued), Trial Attorney; Colin A. Kisor,
Deputy Director; Civil Division, Office of Immigration
Litigation, United States Department of Justice, Washington,
D.C., for Respondents-Appellees.

  **
     This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
                    WANG V. RODRIGUEZ                         3

                          OPINION

W. FLETCHER, Circuit Judge:

    Lifeng Wang, a lawful permanent resident, was convicted
of one count of trafficking in counterfeit goods in violation of
18 U.S.C. § 2320(a). Based on that conviction, U.S.
Citizenship and Immigration Services (“USCIS”) denied her
application for naturalization, concluding that Wang had been
convicted of an offense “involv[ing] fraud or deceit” with a
loss to the victim of over $10,000, an aggravated felony under
8 U.S.C. § 1101(a)(43)(M)(i). On de novo review, the district
court agreed and concluded that Wang was therefore
ineligible to become a naturalized citizen.

    We hold that a conviction under 18 U.S.C. § 2320 does
not necessarily involve fraud or deceit because a defendant
can be convicted of trafficking in counterfeit goods for
conduct that is merely likely to cause “mistake” or
“confusion.” Wang’s conviction was therefore not an
aggravated felony under 8 U.S.C. § 1101(a)(43)(M)(i). We
reverse and remand to the district court for further
proceedings.

           I. Background and Procedural History

    Lifeng Wang has been a lawful permanent resident of the
United States since February 28, 2001. On September 26,
2005, she pled guilty in federal court to trafficking in
counterfeit goods in violation of 18 U.S.C. § 2320(a). The
charges arose from Wang’s operation between 1999 and 2002
of two software distribution companies that purchased and
sold software programs with counterfeit marks of Microsoft
Corporation (“Microsoft”) and other companies. Pursuant to
4                   WANG V. RODRIGUEZ

a plea agreement, Wang was convicted and sentenced to two
months imprisonment followed by three years supervised
release, and was subject to eight special conditions of release.
She and her co-defendants were ordered to pay restitution of
$93,611 to Microsoft. On July 9, 2007, the court found Wang
to be in violation of four conditions of her supervised release.
She was sentenced to four months incarceration, followed by
a further period of supervised release, which concluded on
February 27, 2009.

    In October 2010, Wang filed an application for
naturalization with USCIS. USCIS denied her application on
the ground that her conviction under 18 U.S.C. § 2320 was an
aggravated felony—specifically, a crime involving fraud in
which loss to the victim exceeded $10,000. 8 U.S.C.
§ 1101(a)(43)(M)(i). USCIS found that Wang therefore
could not establish good moral character and was
permanently ineligible for naturalization. USCIS also noted
that Wang’s conviction and probation violation showed a
disregard for the laws of the United States. Wang requested
reconsideration and USCIS issued a decision reaffirming its
denial.

    Wang filed a timely petition in federal district court
requesting de novo review of the USCIS decision. See
8 U.S.C. § 1421(c). Both Wang and the government moved
for summary judgment on the question whether her 2005
conviction was for an aggravated felony and whether that
conviction would therefore permanently bar naturalization.
The district court granted USCIS’s motion and denied
Wang’s. The court held that a conviction under 18 U.S.C.
§ 2320(a) necessarily involves fraud or deceit. The district
court also found that the plea agreement established that loss
to the victim exceeded $10,000, and concluded that Wang
                   WANG V. RODRIGUEZ                        5

had been convicted of an aggravated felony as defined by
8 U.S.C. § 1101(a)(43)(M)(i). Wang timely appealed.

                   II. Standard of Review

    We review de novo the district court’s grant of summary
judgment. Univ. Health Servs., Inc. v. Thompson, 363 F.3d
1013, 1019 (9th Cir. 2004). We “review de novo the district
court’s conclusions of law,” United States v. Hovsepian,
359 F.3d 1144, 1165 (9th Cir. 2004), including whether a
particular offense constitutes an aggravated felony. See
Estrada-Rodriguez v. Mukasey, 512 F.3d 517, 519 (9th Cir.
2007).

                       III. Discussion

                  A. Statutory Framework

    The Immigration and Nationality Act (“INA”) sets forth
several eligibility requirements for naturalization. An
individual wishing to become a naturalized citizen bears the
burden of showing, among other things, that during the
relevant statutorily-defined period she “has been and still is
a person of good moral character.” 8 U.S.C. § 1427(a).
Although the INA does not define “good moral character,” it
does list individuals who shall not be regarded as having good
moral character. See 8 U.S.C. § 1101(f). As amended by the
Immigration Act of 1990, that list includes “one who at any
time has been convicted of an aggravated felony (as defined
in [8 U.S.C. § 1101(a)(43)]).” Id. § 1101(f)(8). Accordingly,
an individual convicted of an aggravated felony after
November 29, 1990 is ineligible for naturalization. See
Alcozy v. USCIS, 704 F.3d 795, 797 (9th Cir. 2012).
6                   WANG V. RODRIGUEZ

    The definition of “aggravated felony” includes an offense
that “involves fraud or deceit in which the loss to the victim
or victims exceeds $10,000.” 8 U.S.C. § 1101(a)(43)(M)(i)
(“subsection (M)(i)”). To determine whether a particular
offense necessarily involves fraud or deceit, we “employ a
categorical approach by looking to the statute defining the
crime of conviction, rather than to the specific facts
underlying the crime.” Kawashima v. Holder, 132 S. Ct.
1166, 1172 (2012). Under the categorical approach, we
“presume that the conviction rested upon nothing more than
the least of the acts criminalized, and then determine whether
even those acts are encompassed by the generic federal
offense.” Moncrieffe v. Holder, 133 S. Ct. 1678, 1684
(2013). In other words, an individual has been convicted of
an aggravated felony under subsection (M)(i) only if the
elements of the offense for which she was convicted
“necessarily entail fraudulent or deceitful conduct.”
Kawashima, 132 S. Ct. at 1172. We use a “circumstance-
specific” approach to assess whether the loss to the victim
exceeded $10,000. Nijhawan v. Holder, 557 U.S. 29, 38–39
(2009).

    Wang was convicted of one count of trafficking in
counterfeit goods under 18 U.S.C. § 2320(a). At the time of
her offense, § 2320(a) provided that a person could be guilty
of that offense by “intentionally traffic[king] or attempt[ing]
to traffic in goods or services and knowingly us[ing] a
counterfeit mark on or in connection with such goods or
services.” 18 U.S.C. § 2320(a) (2000). (The statute has since
been amended several times, but the elements and relevant
language remain the same.) The term “counterfeit mark” was
defined, in relevant part, as:
                   WANG V. RODRIGUEZ                        7

       (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[.]

18 U.S.C. § 2320(e) (2000). The elements of the offense are
that the defendant: (1) trafficked in goods or services;
(2) intentionally; (3) used a “counterfeit mark” on or in
connection with these goods or services; and (4) knew the
mark was counterfeit. See United States v. Giles, 213 F.3d
1247, 1249 (10th Cir. 2000) (citing United States v. Sultan,
115 F.3d 321, 325 (5th Cir. 1997)); accord United States v.
Hamamoto, 232 F.3d 897 (9th Cir. 2000) (unpublished
disposition).

                 B. Mistake and Confusion

    The plain language of § 2320 makes clear that a crime
under the statute is not limited to conduct involving fraud or
deceit. Rather, to qualify as a “counterfeit mark,” a
defendant’s use of the mark must be “likely to cause
confusion, to cause mistake, or to deceive.” 18 U.S.C.
8                   WANG V. RODRIGUEZ

§ 2320(e) (emphasis added). Used together in a disjunctive
list, the terms “confusion,” “mistake,” and “deceive” each
must be read to have a distinct meaning. See Gustafson v.
Alloyd Co., Inc., 513 U.S. 561, 574 (1995) (“[T]he Court will
avoid a reading [of a statute] which renders some words
altogether redundant.”). Some defendants will be guilty
under § 2320(a) because they used counterfeit marks to
“deceive,” for example, by cheating buyers who believed they
were purchasing the item for which the mark was registered.
See Kawashima, 132 S. Ct. at 1172 (defining “deceit” in
subsection (M)(i) as “the act or process of deceiving (as by
falsification, concealment, or cheating)”). But the inclusion
of the terms “mistake” and “confusion” indicates that at least
some defendants may be guilty for conduct that would not
constitute “deceit.”

     The legislative history of the statute supports this
conclusion. Section 2320 was enacted as part of the
Trademark Counterfeiting Act of 1984 (“TCA”), and added
criminal penalties for acts of trademark counterfeiting that
had previously only been subject to civil liability. See Pub.
L. No. 98-473, § 1502, 98 Stat. 1837, 2178. As the Eleventh
Circuit has explained, early versions of the TCA made a
defendant criminally liable only if she used the counterfeit
mark with the intent to defraud or deceive. See United States
v. Torkington, 812 F.2d 1347, 1353 n.7 (11th Cir. 1987)
(citing S. 875, 98th Cong., 1st Sess. (Mar. 22, 1983) and H.R.
2447, 98th Cong., 1st Sess. (Apr. 7, 1983)). However,
Congress specifically omitted this language from the final
enacted bill. Id.; see also United States v. Yamin, 868 F.2d
130, 132 (5th Cir. 1989) (finding no clear error in jury
instruction that the prosecution “is not required to prove that
the defendant ever had an intent to deceive or defraud
anyone”).      By eliminating the heightened mens rea
                    WANG V. RODRIGUEZ                        9

requirement, Congress made clear that neither fraud nor
deceit is a necessary element of § 2320. Rather, a defendant
need only have had knowledge that the use of a particular
mark was likely to cause mistake or confusion.

    Further, the mistake or confusion need not be on the part
of the buyer of the counterfeit goods. Courts have long held
that the confusion requirement in § 2320 is satisfied by “post-
sale confusion.” Under this doctrine, a seller of imitation
items has violated trademark law if disinterested members of
the general public would be confused were they to encounter
the goods after sale. A seller can be convicted even though
the direct buyer knows the goods are knock-offs. For
example, in Torkington, the defendant sold replica Rolex
watches at a flea market for $27. Although the low price
made it clear to buyers that the watches were not actually
made by Rolex, the Eleventh Circuit upheld the indictment,
concluding that non-purchasers would likely be confused
“should they encounter the allegedly counterfeit goods in a
post-sale context.” Torkington, 812 F.2d at 1352; see also
United States v. Hon, 904 F.2d 803, 805 (2d Cir. 1990) (“[A]
casual observer viewing a counterfeit watch, on the wrist of
a friend, for instance, could easily be confused.”). Other
courts have approved convictions under § 2320 even when
the seller explicitly informed the buyer that the item was a
knock-off. See United States v. Foote, 413 F.3d 1240, 1243
(10th Cir. 2005) (upholding conviction of seller who
advertised goods as “reproductions of brand-name products”);
United States v. Gantos, 817 F.2d 41, 43 (8th Cir. 1987)
(upholding a conviction where the defendant “told the
undercover agent that the watches were copies”). The same
rationale applies to post-sale mistake.
10                  WANG V. RODRIGUEZ

    In many post-sale confusion and mistake cases, the
defendant will not have deceived or defrauded anyone at all.
For example, imagine a vendor selling imitation Gucci
handbags on a street corner. The vendor attaches a tag to
each handbag stating “not a real Gucci.” The vendor may be
convicted under § 2320 on the ground that a hypothetical
third party, even one who never intends to purchase the real
item, could be confused or mistaken when seeing the handbag
on a buyer’s arm weeks after the sale. See Yamin, 868 F.2d
at 132. As this example demonstrates, the seller need not
conceal the truth, and the third-party observer need not act on
any mistaken belief, in order for there to be a valid conviction
under § 2320. Cf. Black’s Law Dictionary 685 (8th ed. 2004)
(defining “fraud” as “[a] knowing misrepresentation of the
truth or concealment of a material fact to induce another to
act to his or her detriment”). Indeed, the third party need not
even actually be confused or mistaken. See Yamin, 868 F.2d
at 133 (rejecting defendant’s argument that there must be
“actual confusion” and finding the evidence sufficient for a
jury to determine that imitation goods, once sold, “had the
potential to deceive or to cause confusion or mistake”
(emphasis added)). In short, because a defendant may violate
§ 2320 without engaging in fraudulent or deceitful conduct,
a conviction under the statute cannot categorically qualify as
an aggravated felony under subsection (M)(i).                See
Kawashima, 132 S. Ct. at 1172.

                     C. Tall v. Mukasey

    Our conclusion is not foreclosed by our prior opinion in
Tall v. Mukasey, 517 F.3d 1115 (9th Cir. 2008). In Tall, the
panel considered whether California’s criminal trademark
counterfeiting statute, Cal. Penal Code § 350, was a crime
involving moral turpitude (“CIMT”). Id. at 1117. The
                    WANG V. RODRIGUEZ                        11

California statute prohibited “willfully manufactur[ing],
intentionally sell[ing], or knowingly possess[ing] for sale any
counterfeit of a mark,” and defined counterfeit mark as “a
spurious mark that is identical with, or confusingly similar to,
a registered mark and is used on or in connection with the
same type of goods or services for which the genuine mark is
registered.” Id. at 1119 (quoting Cal. Penal Code § 350(a),
(e)(2)). The panel held that the California statute was a
CIMT because it was an “inherently fraudulent crime,” which
we had previously defined as a crime “involv[ing] knowingly
false representations made in order to gain something of
value.” Id. at 1119–20 (citing Navarro-Lopez v. Gonzales,
503 F.3d 1063, 1076 (9th Cir. 2007) (en banc) (Reinhardt, J.,
concurring for a majority)). We wrote that a violator of Cal.
Penal Code § 350 “necessarily defrauds the owner of the
mark, or an innocent purchaser of the counterfeit items, or
both.” Id. at 1020.

    The government concedes that Tall does not control this
case. The wording of the state statute at issue in Tall is
different from the wording of 18 U.S.C. § 2320. Further, the
question in Tall was whether a conviction under the state
statute was a CIMT, not whether it was an aggravated felony.
The government nonetheless argues that Tall’s reasoning is
“instructive.” But the differences just noted make the
reasoning in Tall inapposite. Tall stated that a person
convicted under the California trademark counterfeiting
statute has necessarily “defraud[ed]” the owner of the mark.
Tall, 517 F.3d at 1119. But “fraud,” as used in subsection
(M)(i), is an act in which a victim has “voluntarily
surrendered his property because of an intentional perversion
of truth, or otherwise acted upon a false representation to his
injury.” Soliman v. Gonzales, 419 F.3d 276, 282 (4th Cir.
2005) (internal quotation marks omitted) (citing Black’s Law
12                  WANG V. RODRIGUEZ

Dictionary 788 (4th ed. 1951)); see also id. (“[F]raud occurs
with consent that has been unlawfully obtained.”). Under this
definition, a trademark owner has not necessarily been
“defrauded” by a seller of counterfeit goods, because the
owner has not consented to the seller’s use of the registered
mark or taken any action in reliance on the seller’s
representations.

    Even were we to apply the broader definition of
“inherently fraudulent crime” that we have previously applied
in CIMT cases, the federal trademark counterfeiting statute
would not satisfy that definition. As cases applying § 2320
make clear, the federal crime encompasses situations where
the defendant did not make “knowingly false
representations.” That is, a seller can be convicted of the
offense even though she honestly and forthrightly disclosed
that the goods for sale were unauthorized by the trademark
owner. See Foote, 413 F.3d at 1243; Gantos, 817 F.2d at 43.
At the time Tall was decided, no reported California case had
applied the state trademark counterfeiting statute in a similar
situation. The panel in Tall was therefore not directly
confronted with the question that faces us here. A recent
unpublished California Court of Appeal decision upheld a
conviction under Cal. Penal Code § 350 in such a case. See
People v. Navarrete, 2015 WL 5445926, at *1 (Cal. Ct. App.
Sept. 16, 2015) (noting that defendant told the buyer that the
handbags with counterfeit marks were “pretty good
replicas”). We express no opinion as to whether Tall’s
conclusion that the California trademark counterfeiting
statute requires “knowingly false representations” remains
sound in light of this subsequent case law.
                    WANG V. RODRIGUEZ                         13

                          Conclusion

    We hold that 18 U.S.C. § 2320 does not “necessarily
entail fraudulent or deceitful conduct.” Wang’s conviction
under this statute, pursuant to a categorical analysis, therefore
cannot form the basis for a finding that she has been
convicted of an aggravated felony under 8 U.S.C.
§ 1101(a)(43)(M)(i). Kawashima, 132 S. Ct. at 1172. We
need not address whether the loss to the victim from Wang’s
convicted conduct exceeded $10,000.

    The district court granted summary judgment to the
government on the sole ground that Wang had been convicted
of an aggravated felony and therefore could not establish
good moral character. We reverse and remand to the district
court for further proceedings consistent with this opinion.

    REVERSED and REMANDED.