Monday, October 22, 2012

Appeals Court Sides with Federal Attorneys in ACCG Baltimore Coin Case

The Fourth Circuit Court of Appeals today sided with the United States in the Ancient Coin Collectors Guild (ACCG) Baltimore test case.   We "have reviewed the Guild's various claims and find them to be without merit," the judges wrote in their October 22 decision.

The court's unanimous decision in the case 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, rejected the invitation to "engage in a searching review of the government's implementation of CPIA import restrictions on Chinese and Cypriot cultural property."  The judges exercised restraint, cautioning that "[a]ccepting such an invitation ... would draw the judicial system too heavily and intimately into negotiations between the Department of State and foreign countries, injecting the courts into an area of law covered by statutorily conferred executive discretion and congressional oversight."  The court added that "[s]uch judicial interference would be especially problematic because Congress has already prescribed civil forfeiture as a vehicle through which importers can challenge the seizure and detention of articles allegedly covered by CPIA restrictions."

The ACCG initiated the court action in order to challenge the federal government's application of the Cultural Property Implementation Act (CPIA). The CPIA is the law that implements the 1970 UNESCO Convention on the Means of Prohibiting and Preventing the Illicit Import, Export, and Transfer of Ownership of Cultural Property.  The ACCG imported ancient coins from a London dealer in 2009, transporting them to Baltimore, Maryland on a British Airways flight.  The coins were minted in China and Cyprus, but they had no provenance and no description of their find spots. U.S. Customs and Border Protection (CBP) detained the coins, sanctioned by the import restrictions placed on Chinese and Cypriot ancient coins.  The import restrictions were enacted pursuant to bilateral agreements negotiated between those countries and the United States under the authority of the CPIA.

The ACCG filed a civil action in federal district court attacking the import controls over ancient coins and lost.  It appealed the decision, and both the government and ACCG filed briefs before making oral arguments on September 19, 2012.  The court of appeals issued its written decision today.

While agreeing with the idea that "[c]oins are portable objects," the appeals court remarked "that is not the whole story." "The often worn and mysterious beauty of ancient coins renders them invaluable cultural artifacts, helpful not only in dating archaeological finds but in revealing how distant civilizations once conducted their civic and commercial life. Whether coins (or sculptures or pottery) should be exempted from coverage as cultural property presents a lively policy debate, but the tension is resolved for us through the medium of law."

In its decision, the appeals court provided a primer on the law supporting the CPIA regime and highlighted that the judiciary should only reluctantly insert itself in diplomatic negotiations or congressional action:
Congress set out an elaborate statutory scheme for promulgating import restrictions on culturally sensitive items and gave the Executive Branch broad discretion in negotiating Article 9 [bilateral] agreements with foreign states. Congress itself retained oversight of the CPIA process ... and placed significant responsibility in the hands of CPAC [the Cultural Property Advisory Committee], a body composed of experts in the fields of archaeology and ethnology. Congress also provided forfeiture procedures through which importers could challenge any seizures made pursuant to the CPIA. The conclusions to be drawn from the entirety of this statutory scheme are clear. The federal judiciary has not been generally empowered to second-guess the Executive Branch in its negotiations with other nations over matters of great importance to their cultural heritage, to overrule CPAC in its conclusion that import restrictions on coins were necessary to protect the cultural patrimonies of Cyprus and China, or to challenge Congress in its decision to channel CPIA disputes through forfeiture proceedings.
The ACCG argued that the import restrictions placed on Chinese and Cypriot  ancient coins as well as their execution by the government were ultra vires (extralegal).  The coin collectors group also asserted that the government violated the Administrative Procedures Act (APA) and that it transgressed the First and Fifth Amendments of the U.S. Constitution.  The appellate court rejected each of these assertions.

The court of appeals, like the federal district court below, found that the conduct of the government had not been been ultra vires or extralegal as the ACCG had alleged.  Citing established case law, the court explained that the government only acts outside in an extra legal fashion when it "'is not doing the business which the sovereign has empowered him to do or he is doing it in a way which the sovereign has forbidden.'" (Citation omitted).  The court emphasized that it would not probe the foreign relations functions of the executive and congressional branches of government, writing:
The [CPIA] statute . . . involves a sensitive area of foreign affairs where Congress itself has delegated the Executive Branch significant discretion.  Given that approach, a searching substantive review of the State Department's diplomatic negotiations or CPAC's application of its archaeological expertise would be singularly inappropriate in this forum.
The federal appeals court pointed to specific examples of how authorities followed the CPIA appropriately with regard to Chinese import restrictions, and the fourth circuit sided with the lower federal district court by repeating  that the State Department "complied with the statutory requirements in placing import restrictions on Cypriot coins."

Despite compliance with the CPIA, the fourth circuit judges considered the ACCG's allegation that China did not make a request for bilateral protection of ancient coins--an assertion disputed by the government. The court looked beyond this charge, writing "In making this argument ... the Guild seeks to add a provision to the statute that is simply not there, namely a requirement that a request ... 'include a detailed accounting of every item eventually covered by an ... agreement.'"  (Citation omitted). The court made clear that a request by a foreign government for U.S. protection of cultural property under the CPIA "need not include a comprehensive list" of every archaoelogical and ethnological object included in a final bilateral agreement. To say otherwise, the court wrote, is a burden that "Congress nowhere mentioned ...."

By the same rationale, the appeals court rejected any contention that the State Department was required to publish in advance a detailed list of every cultural object that might have been considered for import protections under the CPIA. "To scrutinize the adequacy of the State Department's publication and require a verbatim publication of a foreign request would involve the judiciary in the very early stages of the CPIA process and place upon the State Department a burden that Congress did not intend," the court wrote.  The appeals court judges observed that the "detail required by the statute at the conclusion of the process is altogether different from the level of detail required before negotiations between our country and another nation have even so much as begun," making note that "Congress sought to strike a balance here between the need for notice and transparency on the one hand, and the need for confidentiality in sensitive matters of diplomacy on the other."

The court addressed the ACCG's further complaint "that State and CBP acted ultra vires by placing import restrictions on all coins of certain types without demonstrating that all coins of those types were 'first discovered within' China or Cyprus."  The court disagreed by explaining that "State and CBP are under no obligation to list restricted items with more specificity than the statute commands, and they are certainly not required to impose restrictions on a coin-by-coin basis. Such a requirement would make the statutory scheme utterly unworkable in practice."

The circuit court acknowledged that there will be cultural objects imported into the U.S. without provenance or export permits, but that there is a process that allows importers to show that the objects are legal:
In those cases, the statute expressly provides that CBP may seize the articles at the border: "If the [importer] of any designated archaeological or ethnological material is unable to present to the customs officer” the required documentation, the “officer concerned shall refuse to release the material from customs custody ... until such documentation or evidence is filed with such officer.” 19 U.S.C. § 2606(b). In short, CBP need not demonstrate that the articles are restricted; rather, the statute “expressly places the burden on importers to prove that they are importable. (Citation omitted).
The court implied that the burden of proof imposed on importers by the CPIA is not as high as might be suggested because "[t]he importer need not document every movement of its articles since ancient times. It need demonstrate only that the articles left the country that has requested import restrictions before those restrictions went into effect or more than ten years before the date of import."

The court commented specifically that "the Guild need not have documented every movement of its coins since ancient times. To comply with § 2606 [of the CPIA], the Guild need demonstrate only that the Cypriot coins left Cyprus prior to 2007 and that the Chinese coins left China prior to 2009. It never so much as attempted to do so."

Attending to the ACCG's argument that the Administrative Procedures Act was violated, the court rejected this claim.
We have emphasized throughout the restricted scope of judicial review when it comes to the statutory discretion Congress has conferred upon the Executive Branch in carrying out the international obligations of the United Sates under the Convention. These cautions are nowhere more pertinent than where this nation's protection and recognition of another's cultural patrimony is involved. Congress recognized that the CPIA 'is important to our foreign relations, including our international cultural relations,' and it enacted the statute to ensure that the United States did not become an illegal market for foreign cultural property, a development that would have 'severely strain[ed] our relations with the countries of origin, which often include close allies.' S. Rep. 97-564, at 23 (1982).
The court added, "Even were we to assume that State was fully subject to the APA, none of its actions were remotely arbitrary or capricious."  The court concluded that CBP acted appropriately as well.

The appeals court also took up the constitutional issues raised by the ACCG. It relied on the district court's conclusion, in part, that "'the government's interest in combating the pillage of archaeological materials is unrelated to the suppression of free expression.'" Moreover, due process claims would be addressed by forfeiture proceedings where the government would be required to outline its arguments supporting the seizure of the imported cultural objects, and where the "Guild must then demonstrate that its coins are not subject to forfeiture in order to prevail."

UPDATE 11/14/12: The ACCG filed a petition on November 13, 2012 for rehearing en banc in the matter.  A rehearing before the full court of appeals (en banc) is usually rejected unless the case is of great significance.

This post is researched, written, and published on the blog Cultural Heritage Lawyer Rick St. Hilaire at Text copyrighted 2012 by Ricardo A. St. Hilaire, Attorney & Counselor at Law, PLLC. Any unauthorized reproduction or retransmission of this post is prohibited. CONTACT: