United States v. Lehman , 225 F.3d 426 ( 2000 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
UNITED STATES OF AMERICA,
Plaintiff-Appellant,
v.
PETER OWENS LEHMAN,
Claimant-Appellee,
and
1,966 CARTONS, MORE OR LESS,OF
No. 98-1307
WOMEN'S GARMENTS DESCRIBED IN
PART AS: 1,000 CARTONS, MORE OR
LESS, CONTAINING 5,000 DOZEN
WOMEN'S COTTON DENIM SHIRTS; 966
CARTONS, MORE OR LESS, CONTAINING
5,756 DOZEN WOMEN'S 100% RAYON
WOVEN BLOUSES,
Defendants.
UNITED STATES OF AMERICA,
Plaintiff-Appellant,
v.
PETER OWENS LEHMAN,
Claimant-Appellee,
No. 99-2119
and
1,966 CARTONS, MORE OR LESS,OF
WOMEN'S GARMENTS DESCRIBED IN
PART AS: 1,000 CARTONS, MORE OR
LESS, CONTAINING 5,000 DOZEN
WOMEN'S COTTON DENIM SHIRTS; 966
CARTONS, MORE OR LESS, CONTAINING
5,756 DOZEN WOMEN'S 100% RAYON
WOVEN BLOUSES,
Defendants.
Appeals from the United States District Court
for the District of South Carolina, at Charleston.
Julian Abele Cook, Jr., Senior District Judge, sitting by designation.
(CA-94-2641-2-8)
Argued: December 2, 1999
Decided: August 23, 2000
Before NIEMEYER and MOTZ, Circuit Judges, and
BUTZNER, Senior Circuit Judge.
_________________________________________________________________
Reversed and remanded by published opinion. Senior Judge Butzner
wrote the opinion, in which Judge Niemeyer and Judge Motz joined.
_________________________________________________________________
COUNSEL
ARGUED: Stanley D. Ragsdale, Assistant United States Attorney,
Columbia, South Carolina, for Appellant. Timothy D. Scrantom, TEN
STATE STREET, L.L.P., Charleston, South Carolina, for Appellee.
ON BRIEF: J. Rene Josey, United States Attorney, Marvin J. Caugh-
man, Assistant United States Attorney, Robert F. Daley, Jr., Assistant
United States Attorney, Columbia, South Carolina; Brooks Thomas,
Assistant Chief Counsel, U.S. CUSTOMS SERVICE, Atlanta, Geor-
gia, for Appellant. Lisa C. Heydinger, TEN STATE STREET, L.L.P.,
Charleston, South Carolina, for Appellee.
_________________________________________________________________
2
OPINION
BUTZNER, Senior Circuit Judge:
On January 12 and 25, 1994, United States Customs officials
seized three containers of garments, Defendants 1 and 2. The United
States filed a civil in rem complaint for forfeiture of Defendants 1 and
2 pursuant to 19 U.S.C.A. § 1595a. Prior to a judicial determination
of forfeitability, Customs inadvertently sold the Defendant goods--
approximately 5,000 dozen women's cotton shirts and 5,756 dozen
women's 100% rayon blouses. The United States and the claimant
moved for a substitution of res.
After a bench trial, the district court directed the United States to
release Defendants 1 and 2, or their monetary equivalent ($352,625),
to claimant, Peter Owens Lehman, the assignee of all right, title, and
interest in the goods. The district court denied the government's
motion for reconsideration, and the United States appealed.
In August 1998, the U.S. Customs Service located a certificate of
origin falsely designating Malta as the country of origin for Defendant
1. The government moved for relief from judgment, and the district
court denied the motion. The government appealed, and we consoli-
dated both appeals.
The question presented on appeal is whether intermingled goods
with false or confusing markings of country of origin and fabric con-
tent are subject to seizure and forfeiture pursuant to § 1595a as "mer-
chandise which is introduced or attempted to be introduced into the
United States contrary to law" when the goods are unladed at the
United States port of entry.
I
In October 1993, One Price Clothing, Inc. (One Price), a South
Carolina importer and discount retailer, became the subject of a Cus-
toms Service transshipment investigation. Transshipment is a process
of illegally relabeling goods to reflect a false country of origin in
order to evade import restrictions. In August 1993, One Price had
3
placed an order through buying agent Awards Activewear for
women's cotton and rayon blouses with D&Sc Co. Ltd. (D&Sc), a
Malta-based company that manufactures and distributes apparel. After
the investigation began, Awards Activewear notified D&Sc in mid-
December 1993 that One Price intended to repudiate the orders for
both Defendant goods and refuse payment. D&Sc contacted the
freight company to have both Defendants 1 and 2 returned to Malta.
Despite instructions to the contrary, the freight company unladed
Defendant 1 into a Customs warehouse.
In January 1994, while the Defendant goods were in a warehouse
awaiting return to Malta, Customs inspected and seized the garments.
The district court made several findings of fact:
(1) the Malta garments had been repackaged along with
a manipulation of their labels;
(2) some of the Malta garments did not contain any
country of origin labels;
(3) some of the Malta garments were marked"Made in
China" intermingled with the garments that bore a"Made in
Malta" identification;
(4) some of the "Made in Malta" labels were affixed to
some of the Fiji [sic] garments with staples;
(5) some of the garments contained labels that identified
its fiber content as 100% cotton when, in fact, the product
was made from rayon; [and]
(6) some of the garments did not contain any labels that
identified the content of its fiber . . . .
See J.A. at 653-54. Nevertheless, the district court ordered the govern-
ment to release its claim over the goods, or the proceeds of the sale
of the goods, upon the belief that § 1595a requires the government to
prove that the goods "entered the stream of commerce." We reverse
because the plain language of the statute does not require proof that
the goods entered the stream of commerce.
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II
We review the district court's interpretation of"introduced or
attempted to be introduced into the United States" de novo. See
United States v. 7715 Betsy Bruce Lane, 906 F.2d 110, 112 (4th Cir.
1990). Other courts have construed the verb "introduce" within the
Customs context. See United States v. Twenty-Five Packages of Pan-
ama Hats, 231 U.S. 358, 362 (1913); Keck v. United States, 172 U.S.
434, 447, 459 (1899); United States v. Food, 2,998 Cases, 64 F.3d
984, 988-89 (5th Cir. 1995); United States v. 169 Bales Containing
Wool, 56 F.2d 736, 737 (2d Cir. 1932). But this case appears to be
the first time a court has analyzed "introduce" within § 1595a since
Congress substantially amended the statute in 1986 and 1993. See
Customs Enforcement Act of 1986, Pub. L. No. 99-570,§ 3123, 100
Stat. 3207, 3207-87 (1986); North American Free Trade Agreement
Implementation Act, Pub. L. No. 103-182, § 624, 107 Stat. 2057,
2187-88 (1993)(current version at 19 U.S.C.A. § 1595a (West 1999)).
At trial and again on appeal, Lehman argued that it was essential
for the government to prove that the goods entered the stream of com-
merce, and if this element were not proved, the statute had not been
violated. In agreement, the district court held that:
material is not introduced into the United States commercial
stream simply because it is unladen on our shores. Rather,
the owner or the seller of the goods must make some affir-
mative effort to introduce the product into commerce. Thus,
the harm that the law seeks to avoid was never done--the
goods were never introduced into the United States com-
merce.
J.A. at 659-60 (emphasis added).
We cannot accept this reading of the statute. As amended, it pro-
vides:
Merchandise which is introduced or attempted to be intro-
duced into the United States contrary to law shall be treated
as follows:
5
***
(2) The merchandise may be seized and forfeited
if--
***
(E) it is merchandise which is marked inten-
tionally in violation of section 1304 of this title
....
19 U.S.C.A. § 1595a(c)(2)(E) (West 1999) (amended by Customs
Enforcement Act of 1986, Pub. L. No. 99-570, § 3123, 100 Stat.
3207, 3207-87 (1986); North American Free Trade Agreement Imple-
mentation Act, Pub. L. No. 103-182, § 624, 107 Stat. 2057, 2187-88
(1993)).
A fundamental canon of statutory construction requires that "unless
otherwise defined, words will be interpreted as taking their ordinary,
contemporary, common meaning." Perrin v. United States, 444 U.S.
37, 42 (1979); see also 2A Norman J. Singer, Sutherland Statutory
Construction § 46:01 (6th ed. 2000). Because "introduce" is not
defined within 19 U.S.C.A. § 1595a, the Customs code, or the federal
regulations, we turn to the dictionary definition of introduce for its
common meaning. See Fruit Growers, Inc. v. Brogdex Co., 283 U.S.
1, 11 (1931). Webster's Third New International Dictionary defines
introduce as "to lead, bring, conduct, or usher in esp. for the first time
. . . [or] to put or insert into." 1186 (3d. ed. 1986).
The district court reasoned that two cases interpreting an earlier
version of 19 U.S.C.A. § 1595a, United States v. One 1976 Mercedes
450 SLC, Etc., 667 F.2d 1171, 1173 (5th Cir. 1982), and United States
v. One 1970 Ford Pick-Up Truck, Serial No. F10GCH17034, 537 F.
Supp. 368, 369 (N.D. Ohio 1981), required that the goods be intro-
duced into the stream of commerce in order to violate the statute. In
these cases, both courts rejected claimants' arguments that forfeiture
of their vehicles under 19 U.S.C.A. § 1595(a) was improper because
the merchandise, which had been stolen from Customs custody, had
been introduced prior to the theft. But these cases were decided before
6
Congress amended § 1595a in 1986 and 1993, adding subsection (c)
--the subsection at issue in this case--in 1986 and refining it in 1993.
See Customs Enforcement Act of 1986, Pub. L. No. 99-570, § 3123,
100 Stat. 3207, 3207-87 (1986); North American Free Trade Agree-
ment Implementation Act, Pub. L. No. 103-182, § 624, 107 Stat.
2057, 2187-88 (1993) (current version at 19 U.S.C.A.§ 1595a (West
1999)). Through the amendments, Congress provided for forfeiture of
merchandise that "is introduced or attempted to be introduced into the
United States contrary to law." 19 U.S.C.A. § 1595a(c) (West 1999).
In sum, we hold that these goods were introduced when they were
moved from the ship that transported them to the warehouse on
United States soil. The government did not have to prove that the
merchandise entered the stream of commerce. We reverse this aspect
of the case.
We remand with respect to § 1595a(c)(2)(E) for the district court
to determine whether the violation of law was intentional.
REVERSED AND REMANDED
7