United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS
June 18, 2007
FOR THE FIFTH CIRCUIT
_____________________ Charles R. Fulbruge III
No. 06-10724 Clerk
_____________________
DARREL RUNDUS; GREAT NEWS NETWORK, INC.,
Plaintiffs-Appellants
v.
MICHAEL CHERTOFF, SECRETARY, DEPARTMENT OF
HOMELAND SECURITY; MARK L. LOWERY, Individually
and in his official capacity as Special
Agent-in-Charge for the United States Secret
Service, Department of Homeland Security, United
States of America; ROY WHATLEY, JR., Individually
and in his official capacity as Special Agent for
the United States Secret Service, Department of
Homeland Security, United States of America,
Defendants-Appellees
----------------------
Appeal from the United States District Court
for the Northern District of Texas
(3:06-CV-1032)
----------------------
Before HIGGINBOTHAM, WIENER, and PRADO, Circuit Judges.
WIENER, Circuit Judge*:
Three United States Secret Service agents confiscated 8,300
religious hand-outs from Plaintiffs-Appellants Great News
Network, Inc. (“GNN”) and Darrel Rundus (collectively, “the
Plaintiffs”). These hand-outs resembled Federal Reserve notes
(dollar bills), but were each in the denomination of $1 million,
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
a denomination never issued by the United States Department of
the Treasury. The Plaintiffs filed a civil rights lawsuit
against Defendants-Appellees Michael Chertoff, Mark L. Lowery,
and Roy Whatley, Jr. (collectively, “the government”), claiming
that their actions violated the Plaintiffs’ constitutional
rights.
On the same day that they filed their complaint, the
Plaintiffs sought a preliminary injunction from the district
court that would permit the continued use of the hand-outs. The
district court denied the Plaintiffs’ preliminary injunction,
concluding that they had failed to establish a substantial
likelihood of success on the merits. The Plaintiffs now appeal
that denial to us. Satisfied that the district court did not
abuse its discretion, we affirm.
I. FACTS AND PROCEEDINGS
GNN is an evangelical training ministry with approximately
1,000 members in ten countries. Its headquarters are in Denton,
Texas, and Rundus is its president.
As part of its ministry, GNN distributes the subject hand-
outs, which are designed to look like Federal Reserve notes with
a face value of $1 million. The Plaintiffs admit to having
distributed over one million of the hand-outs in the three years
preceding this lawsuit.
2
The Plaintiffs do not produce or create these hand-outs.
Rather, the Plaintiffs obtain them from Living Waters
Publications, Inc. (“Living Waters”), which operates out of
Bellflower, California.1 In his affidavit of June 15, 2006, the
president of Living Waters averred that, in the previous four
years, Living Waters had distributed over 5.3 million of the
hand-outs world-wide, 95 percent of which were distributed in the
United States.
The hand-outs are in the general style of the Treasury
Department’s Series 2004 notes. Each bears a portrait of former
President Grover Cleveland on its face and a vignette of the
United States Supreme Court building on its reverse side.2 In
addition, the hand-outs are of the same dimensions as the Series
2004 note designs, and have nearly identical color schemes and
layouts.
1
Such hand-outs are still being offered for sale by Living
Waters.
2
The Series 2004 currency designs are the same size as and
have the same portraits, vignettes, and images as previous currency
designs, but also have additional security and design features that
their predecessors lacked, such as (1) color-shifting ink, (2)
watermarks, (3) security threads, (4) symbols of freedom, (5)
additional subtle coloration, (5) updated portraits and vignettes,
(6) microprint text, (7) low vision features, (8) Federal Reserve
indicators, and (9) different serial numbering. The $20
denomination was first issued on October 9, 2003; the $50
denomination was issued on September 28, 2004; the $10 denomination
was issued on March 2, 2006.
3
There are, however, myriad intentional differences that
distinguish the hand-outs from actual legal tender. First, the
paper on which the hand-outs are printed is palpably different
from that used for Federal Reserve notes: The paper on which the
hand-outs are printed is substantially thicker and more rigid
than that of real currency, the hand-out’s stock having a
consistency similar to that of smooth construction paper.
Second, there are numerous verbal indicators on the hand-
outs that distinguish them from real currency. These include (1)
on the left side of each hand-out’s face, the faux Federal
Reserve indicator reads “Reserved Federal System,” contrast to
that of the official indicator, “Federal Reserve System;” (2) the
lower left corner of each face contains the statement “This note
is not legal tender for all debts, public and private;” (3) also
in the lower left corner, each is purportedly signed by a
representative of the “Department of Eternal Affairs;” (4) on the
lower right side of the face of each is a notation of the website
“www.WayOfTheMasterRadio.com;” (5) on the top border of the face
of each is written “Reserved Note,” instead of “Federal Reserve
Note;” (6) the ostensible seal of the United States Department of
Treasury on the right side of the face of each states “Thou Shall
Not Steal —— Isaiah Fifty Five One;” and (7) the border of the
reverse side of each reads:
4
The million-dollar question: Will you go to Heaven?
Here’s a quick test. Have you ever told a lie, stolen
anything, or used God’s name in vain? Jesus said,
“Whoever looks at a woman to lust for her has already
committed adultery with her in his heart.” Have you
looked with lust? Will you be guilty on Judgment Day?
If you have done those things, God sees you as a lying,
thieving, blasphemous, adulterer-at-heart. The Bible
warns that if you are guilty you will end up in Hell.
That’s not God’s will. He sent His Son to suffer and
die on the cross for you. Jesus took your punishment
upon Himself. “God so loved the world that he gave his
only begotten Son, that whoever believes in Him should
not perish but have everlasting life.” Then He rose
from the dead and defeated death. Please, repent (turn
from sin) today and trust in Jesus, and God will grant
you everlasting life. Then read your Bible daily and
obey it. www.livingwaters.com
Early in June 2006, after an individual in North Carolina
attempted to deposit one of the hand-outs into his personal bank
account, three United States Secret Service agents traced that
hand-out back to the Plaintiffs, went to GNN’s headquarters, and
seized eighty-three packs of hand-outs, each of which contained
100 individual hand-outs. In addition, the agents informed the
Plaintiffs that the government intended to issue a cease-and-
desist order requiring them to discontinue their use of the hand-
outs.
Ten days after the seizure, the Plaintiffs filed a civil
lawsuit in the district court, alleging that the seizure and
threatened cease-and-desist order violated their First and Fourth
Amendment rights and seeking a declaratory judgment that
5
distribution of the hand-outs was protected First Amendment
expressive activity. In addition, the Plaintiffs sought a
permanent injunction (1) prohibiting the government from seizing
additional hand-outs and (2) requiring the government to return
those that it had seized. As an alternative measure of relief,
the Plaintiffs sought monetary damages in the event that the
government had already destroyed the hand-outs or otherwise made
their return impossible.
On the same day that they filed their complaint, the
Plaintiffs filed a motion for a preliminary injunction to
restrain the government from issuing a cease-and-desist order
that would prohibit the Plaintiffs from thereafter acquiring,
distributing, or using such hand-outs. The Plaintiffs argued
that the government lacked statutory authority either to seize
the hand-outs or to prohibit their future use.
The district court denied the Plaintiffs’ motion,
determining that they had failed to establish a substantial
likelihood of success on the merits. The Plaintiffs timely filed
a notice of appeal.
II. LAW AND ANALYSIS
A. Standard of Review
Our jurisdiction to review a district court’s order denying
injunctive relief is premised on 28 U.S.C. § 1292(a)(1). We
6
ultimately review denials of preliminary injunctions for abuse of
discretion, but we review de novo decisions based on erroneous
principles of law.3
To prevail on a motion for preliminary injunction, a
plaintiff must show (1) a substantial likelihood of success on
the merits, (2) a substantial threat that he will suffer
irreparable injury if the preliminary injunction is denied, (3)
his threatened injury if the injunction is denied outweighs any
harm that will result if the injunction is granted, and (4)
granting the preliminary injunction will not disserve the public
interest.4
B. Merits
Overarching this case is its context: This is not a criminal
counterfeit case, but a civil case involving the exercise of
administrative discretion. On appeal, the Plaintiffs contend
that the government’s asserted statutory authority for its
seizure and cease-and-desist order —— 18 U.S.C. §§ 474, 475 ——
does not apply to fake Federal Reserve notes of fictitious or
non-existent denominations, such as $1 million, and thus the
government’s actions were improper. As an alternative, the
3
Lake Charles Diesel, Inc. v. Gen. Motors Corp., 328 F.3d
192, 195 (5th Cir. 2003).
4
Speaks v. Kruse, 445 F.3d 396, 399-400 (5th Cir. 2006).
7
Plaintiffs assert that, to the extent that §§ 474 and 475 do
apply to non-existent denominations, the government still
exceeded its authority, because the hand-outs are not a
sufficient “similitude” or “likeness” of a Federal Reserve note
to fall within the ambit of §§ 474 and 475.
1. Fictitious Obligations
Here, the relevant portions of § 474 —— paragraphs six and
seven —— make it a felony (1) to possess with the intent to sell
“any obligation or other security made or executed, in whole or
in part, after the similitude of any obligation or other security
issued under the authority of the United States,” or (2) to
“print[], photograph[], or in any other manner make[] or
execute[] any engraving, photograph, print, or impression in the
likeness of any such obligation or other security.” Section 475
prohibits the making, distribution, or use5 of any business or
professional card, advertisement, or other similar documents6 “in
the likeness or similitude of any obligation or security of the
United States.”
In support of their position, the Plaintiffs advance two
separate but related arguments. They first contend that, as 18
5
Section 475 also criminalizes designing, engraving,
printing, execution, uttering, issuing, and circulation.
6
These other similar documents include notices, placards,
circulars, and handbills.
8
U.S.C. § 8 defines “obligation or other security” as “Federal
Reserve notes . . . of whatever denomination, issued under any
Act of Congress,” the hand-outs are not covered by §§ 474 or 475,
because Congress has never authorized the printing, circulation,
or issuance of a $1 million Federal Reserve note.7 We disagree.
Sections 474 and 475 require that the hand-outs be in the
likeness or similitude of any Federal Reserve note issued by Act
of Congress. There is nothing in the statutory language,
legislative history, or caselaw addressing these statutes that
supports the conclusion that the use of a fictitious denomination
alone is sufficient to render an instrument a per se non-likeness
or non-similitude. Rather, we are convinced that this is at
most one factor to be considered in making the requisite
determination.
Second, the Plaintiffs assert that the plain language and
legislative history of 18 U.S.C. § 514 demonstrate that neither
§§ 474 nor 475 cover Federal Reserve notes of fictitious
denomination. Section 514 prohibits the printing, passing,
possessing, or movement in interstate commerce of “any false or
fictitious instrument, document, or other item appearing,
representing, purporting, or contriving through scheme or
7
Emphasis added.
9
artifice, to be an actual security or other financial instrument
issued under the authority of the United States,” with the intent
to defraud.
The Plaintiffs contend that, as § 514 covers “false or
fictitious” representations of Federal Reserve notes, §§ 474 and
475 cannot also cover fictitious denominations without creating
an overlap in criminal liability. The Plaintiffs would draw a
distinction between “counterfeit” instruments, which are
punishable under §§ 474 and 475, and “fictitious” instruments,
which are punishable only under § 514.
In aid of their proposed interpretation, the Plaintiffs
proffer then-Senator Alfonse M. D’Amato’s introductory remarks to
the Financial Instruments Anti-Fraud Act of 1995, which
eventually led to the enactment of § 514.8 Senator D’Amato
expressed his belief that a loophole existed under federal
criminal counterfeiting law that prevented counterfeiting
prosecutions involving fictitious instruments that were not
counterfeits of any existing negotiable instrument. Section 514,
according to Senator D’Amato, would close this loophole.
Having considered this argument, we do not find the
Plaintiffs’ contention persuasive. The fact that two criminal
8
141 Cong. Rec. S9533-34, quoted in United States v. Howick,
263 F.3d 1056, 1066-67 (9th Cir. 2001).
10
statutes may penalize similar conduct does not require a
mandatory application of one to the exclusion of the other.9
Moreover, there is nothing in Senator D’Amato’s remarks that
leads us to believe that Congress intended § 514 to preempt §§
474’s and 475’s application to false Federal Reserve notes of
fictitious denomination.
2. Similitude or Likeness Test
As their second argument on appeal, the Plaintiffs assert
that the hand-outs do not so closely resemble actual Federal
Reserve notes that they may be deemed to be a “similitude” or
“likeness” within the intendment of these statutes. This is a
question of fact reserved to the fact-finder.10 Given the
similarities (and despite the differences) between the hand-outs
and actual Federal Reserve notes, we cannot say that the district
court either clearly erred in finding similitude or abused its
discretion in ruling that the Plaintiffs failed to satisfy their
burden of establishing a substantial likelihood of success on the
merits.
III. CONCLUSION
9
Pasquantino v. United States, 544 U.S. 349, 358 n.4 (2005)
(“The Federal Criminal Code is replete with provisions that
criminalize overlapping conduct. The mere fact that two federal
criminal statutes criminalize similar conduct says little about the
scope of either.” (citations omitted)).
10
Webb v. United States, 216 F.2d 151, 152-53 (6th Cir. 1954).
11
In closing, we re-emphasize the vast difference between the
government’s acts complained of here in merely confiscating the
hand-outs because of their similarities to legal tender, on the
one hand, and a criminal prosecution for counterfeiting (which
this is not), on the other hand. Within this non-criminal
framework and based on the applicable law and our extensive
review of the parties’ briefs and the record on appeal, we hold
that the district court did not abuse its discretion in denying
the injunction sought by the Plaintiffs, ruling that the
Plaintiffs failed to establish a substantial likelihood of
success on the merits and thus failed to prove their entitlement
to a preliminary injunction.
AFFIRMED.
12