Wednesday, January 18, 2012

Federal Attorneys File Appellate Brief in Baltimore Coin Case

Attorneys for the United States have filed their brief in the matter of Ancient Coin Collectors Guild v. U.S. Customs and Border Protection; U.S. Department of State; Assistant Secretary of State, Educational and Cultural Affairs. The United States’ brief rejects the Ancient Coin Collectors Guild’s (ACCG) interpretation and application of the Cultural Property Act (CPIA), writing that the ACCG “fundamentally misunderstands the CPIA’s statutory scheme.”

Last September the ACCG appealed to the Fourth Circuit Court after a federal district court judge dismissed its test case. The group initially filed the lawsuit hoping to challenge cultural heritage import protections enacted under the Cultural Property Implementation Act (CPIA). According to the government’s brief, “[o]n April 15, 2009, [the ACCG] transported [Chinese and Cypriot] coins from London to Baltimore with the intention of testing the validity of existing import restrictions. The invoice accompanying the coins identified each by type and indicated that each was minted in China or Cyprus, but provided no indication of when the coins first arrived in London (or any other information regarding the history of the coins).” Customs seized the ancient coins. The district court then struck down the ACCG’s challenge to the seizure after concluding that the group failed to make out a sufficient case to show that the government acted outside its legal authority.

The ACCG filed an appellate brief with the federal circuit court on October 31, 2011, arguing that the enactment and application of the import controls by the State Department and/or Customs and Border Protection (CPB) was unlawful and should be reviewed under the standards of the Administrative Procedures Act (APA).  (The APA is the law that instructs federal agencies about how they must establish administrative regulations.  The Act also outlines the procedures by which administrative decisions are reviewed by the courts.The ACCG also argued in its brief that the United States government could not issue cultural property import protections on certain ancient coins since China allegedly did not request the import restrictions.  The group further explained that the CPIA’s import controls require federal officials to prove an ancient coin’s find spot before it can be seized. The United States’appellate brief, filed on January 13, 2012, counters these claims.

Attorneys for the United States contend in their brief that its agencies followed the rules while the ACCG did not follow the process.  The government's lawyers write that the ACCG should have followed the forfeiture process established by Congress.  Instead, the ACCG filed a lawsuit. “The CPIA’s provisions regarding seizure and forfeiture, in concert with the pre-existing statutory scheme addressing forfeiture proceedings, set forth a process by which claimants may contest a threatened forfeiture,” the government argues. Federal lawyers state that the “APA authorizes judicial review of agency action only ‘for which there is no other adequate remedy in a court.’ The circumstances in which extra-statutory review is available are similarly limited.  Here, however, Congress has expressly provided for challenges to the seizure and forfeiture of materials under the CPIA through the established mechanism of administrative or judicial forfeiture proceedings.”

At the time of the attempted import of the coins in Baltimore, lawyers for the United States say that “Customs provided [the ACCG] with the opportunity to present a certification of lawful export or other evidence establishing a right to entry . . . . [but the ACCG] disclaimed any ability to present such evidence.  On July 20, 2009, Customs seized the coins, and explained that – in light of [the ACCG’s] representations – the items would be subject to summary forfeiture absent a request by plaintiff for judicial proceedings.”  Government lawyers say that even though the ACCG requested a judicial forfeiture proceeding in September 2009, “Plaintiff [ACCG] did not await the commencement of judicial forfeiture proceedings by the U.S. Attorney’s Office.  Rather, on February 11, 2010 – five months after requesting such proceedings – plaintiff commenced this suit to challenge the seizure of its ancient Chinese and Cypriot coins.”  The government observes that “Plaintiff [ACCG] has invoked those procedures, but they have not occurred as this litigation has been ongoing. Plaintiff does not explain why its arguments should not be considered in the forum designated by Congress.”

Had the ACCG challenged the seizure of the coins through the congressionally prescribed forfeiture proceeding, it would have confronted a defined standard of proof requiring the ACCG to show that the coins were legal to import. The government’s brief describes the standard of proof that applies in a forfeiture proceeding: “the government must establish that the seized property is material that has been designated as restricted under [the CPIA].  After this initial showing, the burden shifts to the claimant [ACCG] to show that the property is not subject to forfeiture, or to establish an applicable affirmative defense.”

The United States rebukes the ACCG for short-circuiting the judicial forfeiture proceeding, avoiding its burden of proof, and claiming that the government acted beyond its authority (i.e. ultra vires).  The government contends that the “Plaintiff [ACCG] cannot properly circumvent the statutory scheme established by Congress by asking a district court to review this seizure under the APA and under the rubric of ultra vires review and . . . to further confound Congress’s intent by asking the court to disregard the burden of proof established by the CPIA.”

Attorneys for the United States further maintain that the ACCG has confused the meaning and requirements of the CPIA. They point out that “[t]o import the coins into the United States, plaintiff [ACCG] needed only to show that the coins had left Cyprus or China before the effective dates of the relevant Designated Lists.  Plaintiff declined to offer any declaration to that effect, claiming that it could not offer the evidence required by the statute because it did not know whether the coins had been ‘first found in the ground’ of either China or Cyprus. But the CPIA quite plainly does not require plaintiff to know where the coins were ‘first found in the ground’; all that was required was information as to the whereabouts of the Cypriot coins as of July 16, 2007 and of the Chinese coins as of January 16, 2009.”

The government's lawyers pointedly draw attention to the fact that the President exercises his foreign affairs powers when acting pursuant to the CPIA. The attorneys highlight that “[t]he provisions of the CPIA confirm that Congress recognized that these judgments are imbued with foreign policy concerns.” They describe how “[t]he CPIA provides the President with broad power to apply import restrictions pursuant to MOUs he enters into with foreign States in furtherance of the United States’s obligations under the Convention on Cultural Property and with the goal of ‘promoting U.S. leadership[] in the preservation of cultural treasures.’” The attorneys point out that “Congress recognized that allowing illicitly excavated and trafficked artifacts to enter into the United States, thereby permitting a market in such goods, threatened our relationships with other nations, and that this legislation was thus “‘important to our foreign relations.’” They also explain that “the issues raised by the import of cultural goods are ‘distinct from the normal concerns of the reciprocal trade agreements program or U.S. trade law.’”

The review of American foreign policy decisions by the courts essentially would be improper, suggests the brief, particularly where foreign policy considerations have other avenues of oversight.  “Rather than involve the courts in an inquiry into the conduct of foreign affairs, Congress provided for political review by requiring the CPAC [Cultural Property Advisory Committee] to share its reports with Congress, and requiring the President to report actions taken to Congress,” says the government’s brief.

Federal lawyers contend that even if there is court review of the government’s implementation of import restrictions enacted under the CPIA, government agencies acted properly. Their brief asserts that “[i]f the Court concludes that some form of judicial review is nevertheless appropriate in these proceedings, it should affirm the district court’s conclusion that plaintiff has not stated a viable claim.”

In support of this argument, attorneys for the United States point out that the ACCG’s “primary contention is that its 22 ancient Cypriot and Chinese coins were unlawfully seized based on their ‘type.’ Plaintiff urges that, although the coins appear on the Designated Lists of restricted materials published by Customs, the coins must be allowed entry to the United States unless the government can prove, on a coin by coin basis, that each was first unearthed in Cyprus or China. The district court correctly concluded that plaintiff’s proposed scheme lacks any basis in the statute.”  Therefore, the federal lawyers maintain that “[t]he Assistant Secretary [of State] exercised her judgment and discretion under the CPIA in determining that certain types of ancient Cypriot and Chinese coins qualify as the ‘archaeological material of the State Party’ and applying import restrictions to them. As the district court concluded, plaintiff’s approach can not (sic) be reconciled with the plain terms of the Act, is unworkable, and ‘would undermine the core purpose of the CPIA.’”

Attorneys for the United States also address in their brief the ACCG’s request for information.  “[The ACCG’s] amended complaint alleged that ‘China never formally requested import restrictions on coins,’ and urged that the government’s restrictions on Chinese coins should thus be deemed invalid. This is unsurprising, since – as the government has previously noted – China’s request did, in fact, address ancient Chinese coins, as noted in the public summary of the request that is posted on the State Department’s website.”  That said, federal lawyers declare that “the district court correctly rejected plaintiff’s request for discovery with regard to the precise contents of China’s diplomatic note requesting that the United States impose import restrictions under Article 9 of the Convention on Cultural Property. The United States has met all of its statutory obligations, and is not required to make such information public."

Finally, the government addresses the constitutional issues raised by the ACCG: “Plaintiff asserts that the import restrictions at issue 'impinge on collectors’ access to information materials' in a 'grossly overbroad' manner and are thus 'constitutionally suspect under both the First and Fifth Amendments.' Contrary to plaintiff’s characterization, the CPIA does not ban the sale of ancient coins or prevent individuals from accessing the information they offer. Rather, the [CPIA] allows the importation of the designated coins when particular requirements, which are designed to prevent the illicit trafficking of ancient artifacts that are under threat from pillage or looting, are satisfied. It is contrary to no recognized constitutional interest."

[Note: All quotes are from the government's appellate brief.  Citations in the original have been omitted.]