USCA1 Opinion
United States Court of Appeals
United States Court of Appeals
For the First Circuit
For the First Circuit
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No. 94-1629
UNITED STATES,
Appellee,
v.
BOHAI TRADING COMPANY, INC., A/K/A
BRAYCO INTERNATIONAL CORPORATION,
Defendant, Appellant.
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APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE
[Hon. Paul J. Barbadoro, U.S. District Judge]
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Before
Selya, Circuit Judge,
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Bownes, Senior Circuit Judge,
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and Stahl, Circuit Judge.
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Daniel R. Deutsch, with whom Steven J. Brooks and Deutsch
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Williams Brooks DeRensis Holland & Drachman, P.C., were on brief for
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appellant.
Jean L. Ryan, Assistant United States Attorney, with whom Paul M.
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Gagnon, United States Attorney, was on brief for appellee.
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January 30, 1995
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STAHL, Circuit Judge. Bohai Trading Company, Inc.
STAHL, Circuit Judge.
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("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.
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BACKGROUND1
BACKGROUND
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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
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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
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n.16 (1952); United States v. Barker Steel Co., 985 F.2d
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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.
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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.
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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.
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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
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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.
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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.
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DISCUSSION
DISCUSSION
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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
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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
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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
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(1954); see also Grayned v. City of Rockford, 408 U.S. 104,
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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
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F.2d 1052, 1054 (1st Cir. 1988) (quotations and citations
omitted); see also United States v. National Dairy Prods.
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Corp., 372 U.S. 29, 33 (1963) ("In determining the
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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.,
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challenge to count three fails.
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United States v. Aguilar-Aranceta, 957 F.2d 18, 21 (1st
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Cir.), cert. denied, 113 S. Ct. 105 (1992).
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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
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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
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used in connection with goods or services of which the
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manufacturer or producer was, at the time of the
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manufacture or production in question authorized to use
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the mark for designation for the type of goods or
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services so manufactured or produced, by the holder of
________ _____________________________________________
the right to use such mark or designation.
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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
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States, 842 F.2d 570, 573 (1st Cir. 1988). By broadening the
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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
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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
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focus on Congress's statement that authorization must exist
"at the time of the manufacture or production in question . .
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. for the type of goods or services so manufactured or
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produced." Though perhaps not a model of the most exacting
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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
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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
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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
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authorized to apply the KEDS trademark to shoes manufactured
at the Qing Dao factory.
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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.
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INS, No. 94-1224, slip op. at 13 (1st Cir. Dec. 6, 1994).
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Consequently, a court may seldom engage in a boundless
exploration of unenacted legislative materials. See id.; see
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also Laracuente v. Chase Manhattan Bank, 891 F.2d 17, 23 (1st
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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
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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
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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
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Observations On the Use of Legislative History in the 1981
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Supreme Court Term, 68 Iowa L. Rev. 195, 214 (1983). Bohai
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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.
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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
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the absence of an interpretation of the meaning of an anti-
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III.
III.
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CONCLUSION
CONCLUSION
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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.
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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
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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.
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