Below are excerpts from Reed's recent testimony before a legislative hearing of the House Natural Resources Committee's Subcommittee on Fisheries, Wildlife, Oceans and Insular Affairs regarding Lacey Act reform.
The hearing may be viewed HERE.
Reed's complete written testimony may be reviewed HERE.
The U.S. Chamber’s Institute for Legal Reform (“ILR”) strongly supports the Lacey Act’s important fish, wildlife and plant conservation goals.1 However, the statute is deeply flawed. To begin with, the Act is an exemplar for the vice of over-criminalization. It lacks a meaningful mens rea (wrongful intent) requirement, instead imposing vicarious criminal and civil liability on American citizens for violations of a vast, uncharted universe of foreign laws, regulations, decrees and ordinances.2 As enforced, American musical instrument makers, fishermen, and florists are deemed to “know” all potentially applicable foreign requirements and then required to guess, at the risk of their liberty and property, how these requirements will be interpreted by both foreign and U.S. regulators. This offends basic principles of due process, equity and prudence.3
Congress enacted 16 U.S.C. § 3374(d) to protect innocent owners’ rights under the Civil Asset Forfeiture Reform Act (“CAFRA”)4 to recover property seized by the government under Lacey. Congress did this to account for the practical compliance difficulties created by its 2008 expansion of Lacey liability to plants and plant products, and to cure a 2005 Ninth Circuit ruling striking CAFRA’s innocent owner affirmative defense because it deemed all property seized by the government under Lacey to be “contraband.”5 However, the government continues to apply the punitive Ninth Circuit rule. Punishing objectively blameless persons who act with due care has not been proven to materially enhance the Act’s protection of endangered fish, wildlife or plant populations, and is inconsistent with basic U.S. legal norms.
ILR believes that Congress should reform the Lacey Act to cure these serious flaws. Therefore, it applauds Rep. Cooper, for introducing H.R. 3210 (the “RELIEF Act”), and Rep. Broun, for introducing H.R. 4171 (the “FOCUS Act”). These bills demonstrate that there is bipartisan support both for a Congressional “hard look” at the statute and for implementation of the common-sense reforms needed to remedy the Act’s unintended consequences.
As a general matter, ILR believes the “hard look” at Lacey should include whether the Act: (1) includes an adequate mens rea requirement; (2) appropriately defines both the actus reus (guilty act) and the mens rea of the offense in specific and unambiguous terms; (3) provides a clear statement of whether the mens rea requirement applies to all the elements of the offense or, if not, which mens rea terms apply to which elements of the offense; and (4) sets proper limits on the delegated criminal lawmaking authority of regulators.6 At a minimum, ILR believes that Congress should cabin the foreign laws that are Lacey jeopardy “triggers” to provide Americans with fair notice of prohibited conduct and to prevent arbitrary and discriminatory enforcement and prosecution. Also, Congress should solve the contraband issue by explicitly providing that innocent owners, as defined by CAFRA,7 may recover property seized by the government under Lacey.
KEY LACEY ACT CONCERNS
A. The “Over-criminalization” Problem
The Lacey Act is an exemplar for the vice of over-criminalization. “Over-criminalization” is seen in Congressional enactments that expand criminal liability to individuals who hardly seem blameworthy, including strict liability offenses that dispense with culpable mental states; vicarious liability for the acts of others without some evidence of personal advertence; grossly disproportionate penalties that bear no relation to the wrongfulness of the underlying crime, the harmfulness of its commission, or the blameworthiness of the criminal; and the broad delegation of criminal enforcement authority to bureaucratic regulators.8 Such enactments corrode individual civil liberties.
The Lacey Act does all of these things. It holds Americans vicariously liable for the violation of even the most technical foreign law, rule or local ordinance without evidence of personal advertence or intent. It penalizes without relation to the harm done by the “violator” to fish, wildlife or plant populations. It criminalizes obscure foreign requirements, including civil customs, transportation, and packaging rules and even local tax or royalty ordinances, and then delegates unlimited prosecutorial power to federal regulators. Perversely, the Lacey Act unleashes the coercive power of the federal government not against the corrupt and lawless foreign individuals, companies and governments that allow, encourage or conduct poaching, clear-cutting and environmental degradation, but rather against Americans who are innocent of wrong-doing, by any common measure.
The U.S. Supreme Court has repeatedly held that a criminal law is unconstitutionally vague and invalid if it fails to provide the kind of notice that will enable ordinary people to understand what conduct it prohibits, or if it authorizes or encourages arbitrary and discriminatory enforcement.9 The Court has not considered whether Lacey’s “foreign laws” references pass constitutional muster. However, at best it is very difficult to justify the legal fiction that the owner of a small business in Topeka, Kansas who imports wooden-handled brooms from China has fair notice of and understands the conduct prohibited by all applicable national, provincial and local Chinese civil and criminal laws, regulations, ordinances and requirements.10 Also, the Gibson Guitar case starkly illustrates the statute’s inherently subjective, arbitrary and discriminatory enforcement regime.11 Although the Indian government certified that the wood there in question was properly and legally exported, the U.S. Fish and Wildlife Service substituted its own opinion and dispatched armed agents to raid the company.12 The fact that U.S. regulators can do such a thing certainly suggests that the Act may be tainted by a due process infirmity.
B. The “Contraband” Problem
In 2008, Congress amended Lacey by adding 16 U.S.C. § 3374(d). This section states that Lacey Act forfeitures of fish, wildlife or plants are subject to the Civil Asset Forfeiture Reform Act (“CAFRA”).13 Among other things, CAFRA states that an innocent owner’s interest in property shall not be forfeited under any civil forfeiture statute.14 Congress enacted § 3374(d) to account for the practical compliance difficulties caused by Lacey liability expansion to plant products,15 and to cure a Ninth Circuit ruling in the case of United States v. 144,774 Pounds of Blue King Crab that essentially holds that all fish, wildlife or plants seized under the Lacey Act are “contraband,” nullifying the innocent owner defense in all such cases.16
Notwithstanding § 3374(d)’s enactment, the government apparently still denies innocent owners the benefit of CAFRA’s protection. This is puzzling, because to do this the government must hold, contrary both to controlling authorities and to the legislative history, that § 3374(d) is superfluous.17 Furthermore, punishing objectively blameless persons who act with due care does not materially advance the statute’s goal of fish, wildlife and plant conservation, and offends basic U.S. legal norms. In circumstances where an importer reasonably cannot have knowledge of illegality, the government’s approach seems to directly counter what Congress intended to do via § 3374(d) and CAFRA itself.18
POTENTIAL SOLUTIONS: THE FOCUS AND RELIEF ACTS
The Lacey Act’s fish, wildlife and plant conservation goals are worthy and deserve strong Congressional support. Nevertheless, the Act’s minimal mens rea threshold and its overly broad reliance on “foreign law” to create domestic jeopardy require a Congressional remedy. At a minimum, Congress should cabin the foreign laws that serve as jeopardy “triggers” to provide Americans with fair notice of prohibited conduct. U.S. courts, agencies and citizens all would benefit from clear “rules of the road” to prevent arbitrary and discriminatory enforcement and prosecution, and companies like Gibson ought to be able to rely on the Indian government’s interpretation of Indian law as a defense to Lacey liability.19 Additionally, the “contraband” issue must be addressed to better align the Act with both the practical realities of the marketplace and with basic Anglo-American legal norms.
Both the FOCUS Act and the RELIEF Act should play an important role in the Lacey Act reform process. The FOCUS Act (H.R. 4171) addresses the Act’s over-criminalization and due process problems by striking both the Act’s foreign law references and its criminal sanctions.20 It retains the “due care” standard for civil liability and potential forfeiture, which seems adequate, appropriate and beneficial in this limited context.21 It also limits the reach of the Act’s forfeiture provision to the prohibited fish, wildlife and plants only. The RELIEF Act (H.R. 3210), in turn, provides useful language for finally resolving the “contraband” issue so that innocent owners are entitled to CAFRA’s protection.22 This is what Congress intended to do when it enacted 16 U.S.C. § 3374(d) in 2008. It is time now to finish the job.
(1) 18 U.S.C. §§42 – 43; 16 U.S.C. §3371 et seq.
(2) That these foreign “laws” lack a direct nexus to fish, wildlife or plant conservation, or provide only for civil fines, or even are ruled invalid and retroactively repealed by the government that enacted them in the first instance, is of no moment. See generally United States v. McNab, 324 F.3d 1266, 1268 (11th Cir.) cert. denied 540 U.S. 1177 (2004); United States v. Lee, 937 F.2d 1388, 1393 (9th Cir.) cert. denied 502 U.S. 1076 (1992).
(3) See generally City of Chicago v. Morales, 527 U.S. 41 (1999); Grayned v. City of Rockford, 408 U.S. 104, 108 (1972).
(4) 18 U.S.C. §§ 981, 983(d)(1).
(5) See Testimony of Craig Foster, Legal Timber Protection Act: Hearing on H.R. 1497 Before the Subcomm. on Fisheries, Wildlife and Oceans of the H. Comm. on Natural Resources, 110th Cong. at 55 (2007)(discussing compliance barriers and explaining that “it is necessary to understand that long supply chain and the fact that there are many people along that supply chain…I cannot audit the entire supply chain…Criminal behavior is criminal behavior. All I can do is work with the best of my knowledge”); United States v. 144,774 Pounds of Blue King Crab, 410 F.3d 1131 (9th Cir. 2005).
(6) See generally Walsh & Joslyn, WITHOUT INTENT: HOW CONGRESS IS ERODING THE INTENT REQUIREMENT IN FEDERAL LAW 26 – 31 (2010) available at http://www.nacdl.org/withoutintent/ (accessed May 3, 2012).
(7) 18 U.S.C. §§ 983(d)(2) - (3).
(8) See Luna, The Overcriminalization Phenomenon, 54 American Univ. L. Rev. 703, 715 (2005).
(9) Morales, 527 U.S. at 56 (citation omitted). As the Court held long ago:
That the terms of a penal statute…must be sufficiently explicit to inform those who are subject to it what conduct on their part will render them liable to its penalties, is a well-recognized requirement, consonant alike with ordinary notions of fair play and the settled rules of law. And a statute which either forbids or requires the doing of an act in terms so vague that men of common intelligence must necessarily guess at its meaning and differ as to its application, violates the first essential of due process of law.
Connally v. General Constr. Co., 269 U.S. 385, 391 (1925).
(10) The Ninth Circuit has held that the term “foreign law” enables an ordinary person to understand the prohibited conduct in a given case. Lee, 937 F.2d at 1395. Yet, the court did not explain how, exactly, American fishermen were supposed to identify or understand applicable Taiwanese regulations.
(11) “A vague law impermissibly delegates basic policy matters to policemen, judges, and juries for resolution on an ad hoc and subjective basis, with the attendant dangers of arbitrary and discriminatory application.” Grayned, 408 U.S. at 108 (citations omitted). The Gibson case, in which U.S. regulators rejected the Indian government’s interpretation of Indian law, and the McNab decision, in which a U.S. court rejected the Honduran government’s interpretation of Honduran law, demonstrate that Lacey Act enforcement is “ad hoc and subjective” because U.S. regulators apparently are free to interpret and apply foreign law as they see fit. See generally Morales, 527 U.S. at 41 (striking down an ordinance providing absolute discretion to police officers to determine prohibited “loitering”).
(12) Juszkiewicz, supra at note 19.
(13) 18 U.S.C. § 981 et seq. In 2000, Congress enacted CAFRA and created the “innocent owner” affirmative defense to cure the government’s “abuses of fundamental fairness” and to ensure that property owners obtain adequate due process in civil forfeiture cases. See generally Moores, Reforming The Civil Asset Forfeiture Reform Act, 51 ARIZ. L. REV. 777, 782 – 83 (2009)(citations omitted).
(14) 18 U.S.C. § 983(d)(1). Sections 983(d)(2) and (3) set the criteria for proof of innocence.
(15) As the House Report on H.R. 1497 (subsequently enacted as § 8204 of the Food, Conservation and Energy Act of 2008, Pub. L. 110-246) states:
Under Lacey, the entire supply chain handling imported plant material is held responsible for illegal acts of which they would have no reasonable expectation to know the violation much less know the underlying laws that exist in all foreign countries. Amending the Lacey Act to include reaffirmation of CAFRA provides important forfeiture liability protection for “innocent owners”….Recent case law had effectively exempted Lacey Act forfeitures from the ‘‘innocent owner’’ defense… [so] the specificity of language in H.R. 1497 and specific reference to CAFRA subsequent to the [Blue King Crab] case are intended to clearly show that it is Congress’ intent to provide ‘‘innocent owner’’ [sic] in forfeiture proceedings under the Lacey Act.
HOUSE REP. 110-882, at 20-21; see also 42 RUTGERS L. REV. at 576 – 78 (discussing the “missing” innocent owner exception under Lacey)(citations omitted).
(16) 18 U.S.C. § 983(d)(4) states “Notwithstanding any provision of this subsection, no person may assert an ownership interest under this subsection in contraband or other property that it is illegal to possess.” The Ninth Circuit ruled that all property seized under Lacey was by definition “illegal to possess” and therefore ruled that the innocent owner affirmative defense to forfeiture should be stricken. Blue King Crab, 410 F.3d at 1135 - 36.
(17) The government’s position contradicts the basic canon of statutory interpretation that Congress does not enact superfluous provisions. See, e.g., Bailey v. United States, 516 U.S. 137, 146 (1995)(citations omitted).
(18) 42 RUTGERS L. REV. at 578 (citations omitted); 51 ARIZ. L. REV. 782 – 83 (citations omitted).
(19) See Juszkiewicz, supra at note 19. Congress also should consider re-examining whether, and to what extent, the Act’s broad criminal and civil sanctions and its minimal mens rea requirements actually advance its conservation goals. As Gibson CEO Juszkiewicz points out, limited government enforcement dollars may be better devoted to fighting illegal logging and poaching by bad actors, and not to fights with American companies that try hard to comply with the law. Thus, he quite reasonably suggests creation of a compliance system that would allow businesses to know before they buy wood and other plant products whether or not they are in compliance with the Act. Id.
(20) H.R. 4171, §§ 2(a), (b).
(21) Id. § 2(c). The goal, of course, is for Congress to improve the Act and make its scope and application more clear without imposing limited, artificially rigid and commercially inadequate enforcement or interpretative checklists on the regulated community.
(22) H.R. 3210 § 3(a).