United States Court of Appeals
For the First Circuit
Nos. 03-2274 & 03-2275
UNITED STATES OF AMERICA,
Appellant/Cross-Appellee,
v.
WALTER L. LACHMAN, MAURICE H. SUBILIA, JR.,
FIBER MATERIALS, INC., MATERIALS INTERNATIONAL, INC.,
Defendants-Appellees/Cross-Appellants.
APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Douglas P. Woodlock, U.S. District Judge]
Before
Selya, Dyk*, and Howard, Circuit Judges.
James D. Herbert, Assistant United States Attorney, with whom
Michael J. Sullivan, United States Attorney, Despena F. Billings,
Assistant United States Attorney, and Stephan E. Oestreicher were
on brief for appellant/cross-appellee.
Michael R. Schneider with whom Andrew Good, Matthew Zisow, and
Alan M. Dershowitz were on briefs for defendant-appellees/cross-
appellants.
October 25, 2004
*
Of the Federal Circuit, sitting by designation.
DYK, Circuit Judge. The issue on the government’s appeal is
whether the term “specially designed” as used in 15 C.F.R. § 399.1,
Supp. 1 (1988) (now 15 C.F.R. § 774, Supp. 1 (2004)), is
unconstitutionally vague.
Defendants Walter L. Lachman, Maurice H. Subilia, Jr., Fiber
Materials, Inc. (“FMI”), and Materials International, Inc., were
convicted in the United States District Court for the District of
Massachusetts on charges of violating and conspiring to violate the
Export Administration Act of 1979, Pub. L. 96-72, 93 Stat. 503
(codified at 50 U.S.C. app. § § 2401-2420 (2000)) (“EAA”), and its
implementing regulations.1 The alleged violation consisted of
exporting a control panel for a hot isostatic press (“HIP”) without
the necessary export license required by the EAA and its
regulations. The question under the regulation was whether the
control panel was “specially designed” for use with an embargoed
HIP. See 15 C.F.R. § 399.1, Supp. 1 (1988).
After trial, the district court granted a motion for acquittal
notwithstanding the verdict, pursuant to Federal Rule of Criminal
1
The EAA expired in 1994, was briefly renewed by Congress in
2000, and expired again in 2001. See 50 U.S.C. app. § 2419. Its
provisions have been carried forward by executive order under the
authority of the International Emergency Economic Powers Act, 50
U.S.C. § 1701 et seq. See 59 Fed. Reg. 43437 (Aug. 23, 1994); 66
Fed. Reg. 44025 (Aug. 22, 2001); 67 Fed. Reg. 53721 (Aug. 16,
2002); 68 Fed. Reg. 47833 (Aug. 11, 2003); 69 Fed. Reg. 48763 (Aug.
6, 2004). The defendants do not make any argument that the EAA and
its regulations are inapplicable due to the expiration of the
original statute.
-2-
Procedure 29(c), on the ground that the EAA regulation and, in
particular, the term “specially designed” as used in the
regulation, was unconstitutionally vague. United States v.
Lachman, 278 F. Supp. 2d 68 (D. Mass. 2003). We hold that the
applicable EAA regulation was not unconstitutionally vague and,
accordingly, vacate the judgment of acquittal. With respect to the
defendants’ cross-appeal, we remand to the district court to rule
on the defendants’ conditional motion for a new trial in light of
our construction of the statute and our decision on the vagueness
issue.
I.
A.
The EAA is designed “to restrict the export of goods and
technology which would make a significant contribution to the
military potential of any other country . . . which would prove
detrimental to the national security of the United States.” 50
U.S.C. app. § 2402(2)(A). The EAA requires exporters to obtain a
“validated license” before exporting commodities listed in the
regulations promulgated by the Secretary of the Department of
Commerce (“Commerce”). Id. § 2403(a). Commerce’s regulations
themselves include similar license requirements. See generally 15
C.F.R. § 372.1 (1988). It is a criminal offense to knowingly
violate or conspire to violate the EAA or its regulations. 50
-3-
U.S.C. app. § 2410(a). Willful violations incur an even greater
penalty. Id. § 2410(b).
Commerce has promulgated a “Control List” of all commodities
subject to export controls under the EAA and requiring a valid
license for export. Id. §§ 2403(b), 2404(c)(1).2 Our concern is
with the Control List as it existed in 1988. In the 1988 Control
List3 each regulated commodity was assigned an Export Control
Classification Number (“ECCN”), indicating the commodity’s
characteristics, its functions, the reasons for its control, and
its export licensing requirements. Commodities not listed were not
regulated by the EAA. Although each exporter was responsible for
classifying its own goods, an exporter could request an advisory
opinion from Commerce’s Bureau of Industry and Security regarding
whether a particular item was subject to regulation and, if so, its
appropriate ECCN classification. 15 C.F.R. § 748.3(a) (2004).
B.
The defendants in this case were charged with “knowingly and
willfully” violating and conspiring to violate the EAA and its
2
This control list does not include commodities exclusively
controlled for export by agencies other than the Department of
Commerce. 15 C.F.R. § 738.1 (2004).
3
The Commerce Control List was formerly known, between 1988-
1991, as the Commodity Control List. See 56 Fed. Reg. 42824 (Aug.
29, 1991). The current version of the Control List is at 15 C.F.R.
§ 774, Supp. 1 (2004), while the version relevant at the time of
the events at issue here may be found at 15 C.F.R. § 399.1, Supp.
1 (1988). We refer in this opinion to the 1988 list.
-4-
regulations by exporting a HIP control panel to India “without
having first obtained the required validated export license” from
Commerce. (J.A. at 88-89.) The defendants admittedly did not
request or secure an individual license. The question is whether
they were required to secure one.4
A HIP is a piece of “equipment capable of pressurizing a
closed cavity . . . to create equal pressure in all directions
within the cavity upon workpiece or material.” 15 C.F.R. § 399.1,
Supp. 1 (1988). Material exposed to this process densifies, and,
in particular, carbon/carbon material “becomes suitable for use in
rocket components, including ballistic missiles with nuclear
capability.” Lachman, 278 F. Supp. 2d at 73. In 1988, HIPs
“possessing a chamber cavity with an inside diameter of 127 mm (5
inches) or more” (a “larger HIP”) were covered by the Control List
and assigned an ECCN 1312A classification. 15 C.F.R. § 399.1,
Supp. 1 (1988). A license was required for the export of larger
HIPs and all “specially designed . . . components, accessories and
controls therefor.” Id. The reasons for control of such
commodities were “[n]ational security [and] nuclear non-
proliferation.” Id.
4
If the export of a good does not require an individually
validated license, then a general license usually attaches
automatically. See generally, Lachman, 278 F. Supp. 2d at 72. For
simplicity in the text we use the shorthand “license” to refer to
the requirement for an individual license.
-5-
C.
The EAA and its implementing regulations were adopted against
the background of an international regime for the control of
strategic materials administered by the Coordinating Committee on
Multilateral Export Controls (“COCOM”). See 50 U.S.C. app.
§ 2404(i). COCOM was a “multilateral organization that cooperated
in restricting strategic exports to controlled countries.”5 15
C.F.R. § 772.1 (2004). In particular, COCOM created “a list of
strategic commodities which were to be embargoed for shipment to
Communist Bloc countries” (“COCOM List”). Peter Swan, A Road Map
to Understanding Export Controls: National Security in Changing
Global Environment, 30 Am. Bus. L.J. 607, 619 (1992). “Recognizing
the ineffectiveness of unilateral controls and the importance of
uniform enforcement measures to the effectiveness of multilateral
controls,” the EAA mandated United States involvement in COCOM.
See 50 U.S.C. app. § 2404(i). The EAA export control system was
coordinated with the COCOM regime. For example, when the letter
“A” appeared at the end of the ECCN for an item on the Control
List, it indicated that the classification was “multilaterally
controlled.” 15 C.F.R. § 399.1(f)(2) (1988). The particular
regulation involved here bore a letter designation “A,” indicating
that its source was the COCOM List.
5
COCOM was officially disbanded on March 31, 1994. 15 C.F.R.
§ 772.1 (2004).
-6-
D.
In 1985 the defendants first contracted with the government of
India to supply a HIP of 18 inch cavity diameter and a control
panel.6 This contract was amended in January 1987 such that
defendants would instead supply the Indian government with a HIP of
4.9 inch cavity diameter, which was unregulated. On the same day
as the amendment, however, defendant Subilia, President of FMI,
signed a letter stating that the subsystems delivered with the 4.9
inch HIP, including the control panel, would have “added capacity
. . . to provide for future expansion . . . to larger vessel size.”
In April of 1988, the defendants shipped a HIP with a 4.9 inch
diameter cavity and an accompanying control panel. Although the
control panel could be used with a 4.9 inch HIP, it was designed so
that it would also control a HIP with a diameter larger than 5
inches, i.e., one that was covered by the Control List. In April
of 1991, the defendants’ engineers connected the control panel to
a HIP with a diameter larger than 5 inches. This larger HIP had
been procured by the defendants from a third-party manufacturer in
Switzerland. There is no contention that a license was required
for this larger HIP because it originated from Switzerland.
6
The evidence set forth below was contested on a number of
points. On review from a judgment of acquittal, we evaluate the
evidence in the light most favorable to the prosecution. United
States v. Pimental, 380 F.3d 575, 584 (1st Cir. 2004). The facts
as stated are based on assumptions favoring the United States.
-7-
In 1993 the government charged the defendants with “knowingly
and willfully conspir[ing] and agree[ing] with each other . . . to
export and cause to be exported from the United States” the control
panel, without the required license. The government argued that
the control panel required a validated license because it qualified
as “specially designed . . . accessories and controls” for an
embargoed larger HIP.
At the trial, on the “specially designed” question, the
government presented evidence that defendant Subilia had instructed
FMI’s engineers to base the control panel’s design on that of a
panel used to operate 20 inch HIPs. The government also presented
evidence that the control panel which was exported had five heating
zone controllers and that the 4.9 inch HIP defendants exported only
had two heating zones. The government showed as well that the
defendants had ordered a switch for the control panel, which
permitted the disabling of three of the five heating zone
controllers or alternatively the use of the panel with a unit with
more than two heating zones.
There was also significant dispute regarding the legal meaning
of the phrase “specially designed” in ECCN 1312A. This phrase
appeared throughout the 1988 Control List, being used to describe
the controlled items in more than 100 instances. The government
contended that the term “specially designed” included all controls
that were designed so that they could be used with regulated HIPs,
-8-
whether or not such controls could also be used with non-regulated
HIPs. See Lachman, 278 F. Supp. 2d at 74-75. The defendants, on
the other hand, argued that the term encompassed only those
controls designed exclusively for use with an embargoed HIP.
“In reliance upon the . . . pre-trial affidavits regarding the
Commerce Department’s understanding of the meaning of ‘specially
designed’ as used in ECCN 1312A (which . . . was consistent with a
plain meaning definition of the term), and in the absence of any
then compelling contrary evidence on this point,” the district
court rejected the defendants’ request for an exclusive use jury
charge. Id. at 77. Instead, the district court judge instructed
the jury as follows:
You should consider that an item or commodity is
specially designed within the meaning of the regulation
if it is designed for a special purpose. . . [which] does
not mean designed for an exclusive purpose. That is to
say, you could have a . . . control that can run a 4.9
inch HIP and can also run a HIP over five inches. It
doesn’t have to be exclusively for that. . . . [Y]ou can
find that a control panel such as the one at issue here
was specially designed for a [regulated HIP] even if you
find that the panel could have been used for other
purposes . . . so long as among the purposes for which it
was designed was the intent to control a [regulated HIP]
and it had the effective capacity to do so when it was
shipped.7
7
Regarding the EAA’s scienter requirement, the judge
instructed the jury that in order to convict they had to find
that each defendant here intentionally violated or conspired to
violate a known legal duty or, in other words, that each knew that
the control panel that we’re talking about here that was being
exported in April of 1988 required an individual validated license
and, yet, knowing that, nevertheless, they undertook to export it
-9-
The defendants were convicted on all counts, and they timely
filed a motion for acquittal notwithstanding the verdict or, in the
alternative, for a new trial, pursuant to Rules 29(c) and 33 of the
Federal Rules of Criminal Procedure. The defendants’ motion argued
(1) that the jury instructions erroneously defined “specially
designed”; (2) that ECCN 1312A was void for vagueness; (3) that the
defendants were deprived of a fair trial because expert testimony
regarding the definition of “specially designed” was not admitted,
and (4) that there was insufficient evidence to find (a) that the
defendants violated a known legal duty or conspired to violate the
export laws, (b) that the control panel “was a ‘control’ within the
meaning of ECCN 1312A,” (c) that the control panel “could
effectively control a large HIP within the meaning of the court’s
definition of ‘specially designed’,” and (d) that the district of
Massachusetts was an appropriate venue for the litigation. (J.A.
at 474-99.)
without one. . . . [G]ood faith is a defense to this charge. If
any one of the defendants under your consideration believed in good
faith that he was acting properly, even if he was mistaken or he
was negligent, or he acted through inadvertence, that defendant may
not be found guilty.
Because neither side challenges this instruction on appeal, we
have no occasion to consider whether the trial judge correctly
stated the scienter requirements of the EAA. We reserved this same
issue in our earlier decision in this case. United States v.
Lachman, 48 F.3d 586, 594 (1st Cir. 1995). See generally United
States v. Shetterly, 971 F.2d 67, 73 (7th Cir. 1992).
-10-
In the course of post-trial proceedings, with few exceptions
(noted below), both the defendants and the government relied
exclusively on non-public sources to support their differing
interpretations of “specially designed” and the vagueness issue.
The defendants’ post-trial submissions included new internal COCOM
documents as well as new affidavits of former and current Commerce
officials, supporting the contention that “specially designed” was
understood to mean exclusively designed.
The most central of the defendants’ post-trial submissions
were the official minutes of a 1975 COCOM meeting, which the
defendants had obtained in connection with another trial in
Germany. These meeting minutes addressed “machines specially
designed for making gas turbine blades” and “machines specially
designed for the manufacture of jet engines.” Lachman, 278 F.
Supp. 2d at 81 (internal alterations omitted). To a large extent,
the minutes reflected the United States delegation’s statements
that “it was standard practice in the context of [the COCOM List]
to make use of the term ‘specially designed’ and that [COCOM] had
resorted to it in a number of cases when it had been difficult to
define exactly the equipments it was desired to embargo” and that
the term was used to mean “an equipment used solely for a
particular purpose.” Id.
In light of the post-trial submissions, the district court
granted the defendants’ motion for acquittal notwithstanding the
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verdict. The district court concluded that the definition of
“specially designed” that it used in charging the jury was
“fundamentally wrong.” Id. at 89. It held that the term was
ambiguous and that Commerce had employed “a number of competing
interpretations for the term ‘specially designed’ in ECCN 1312A.”
Id. at 90. Emphasizing that Commerce bore the responsibility to
settle on one interpretation of the term, the court explained that
Commerce “has yet to meet that obligation with respect to ECCN
1312A sufficiently for purposes of criminal prosecution.” Id.
The court then considered whether ECCN 1312A was void for
vagueness in all its applications. On this question, the court
held that the regulation failed to give constitutionally sufficient
notice and to meet the obligation of fair enforcement. The court
concluded that although it had “no doubt . . . that the defendants
here sought — for their own private economic advantage and heedless
of the national security interest of this country — to exploit
imprecision in the regulatory regime for controlling exports,” it
could not sustain the conviction “in the face of the defendants’
adequately developed void-for-vagueness challenge.” Id. at 97.
The district court failed to rule on the defendants’ motion for a
new trial.8
8
The trial judge denied a separate motion for a new trial
brought by one defendant on the ground that the trial court failed
to make an inquiry about a potential conflict of interest.
Lachman, 278 F. Supp. 2d at 70 n.1.
-12-
The government timely appealed the post-trial judgment of
acquittal, and the defendants cross-appealed the district court’s
failure to issue a conditional ruling on their new trial motion as
required by Rule 29(d)(1).9
II.
The defendants raise a challenge to the jurisdiction of this
court that we must consider before addressing the merits of the
government’s appeal. The first paragraph of the Criminal Appeals
Act, dealing with the dismissal of indictments, allows government
“appeals whenever the Constitution would permit.” United States v.
Wilson, 420 U.S. 332, 337 (1975); see 18 U.S.C. § 3731 (2000). The
defendants argue that the government’s appeal should be dismissed
because the Double Jeopardy Clause prohibits the government from
appealing the district court’s judgment of acquittal. We disagree.
The defendants argue that had the COCOM minutes been admitted
before the jury verdict, the trial judge would have granted them a
pre-verdict judgment of acquittal that would have been unappealable
under Burks v. United States, 437 U.S. 1 (1978). The defendants
contend that the government should not be able to transform an
unappealable pre-verdict acquittal into an appealable post-verdict
acquittal simply by unlawfully withholding exonerative evidence.
9
As noted above, the case has previously appeared in this
court on an interlocutory appeal by the government. This court
held that the trial judge did not abuse his discretion in excluding
13 government exhibits. Lachman, 48 F.3d at 594.
-13-
The defendants misunderstand the holding of Burks and the
trial judge’s acquittal in this case. In Burks, the Court of
Appeals for the Sixth Circuit had vacated a conviction because the
evidence had been insufficient to convict. The court of appeals
then remanded to the district court with instructions to consider
whether to enter a judgment of acquittal or order a new trial. The
Supreme Court held that these remand instructions were improper.
The district court was required to enter a judgment of acquittal
because the “appellate reversal mean[t] that the government's case
was so lacking that it should not have even been submitted to the
jury. Since we necessarily afford absolute finality to a jury's
verdict of acquittal--no matter how erroneous its decision--it is
difficult to conceive how society has any greater interest in
retrying a defendant when, on review, it is decided as a matter of
law that the jury could not properly have returned a verdict of
guilty.” Id. at 16 (emphasis in original).
However, Burks explicitly stated that “reversal for trial
error, as distinguished from evidentiary insufficiency, does not
constitute a decision to the effect that the government has failed
to prove its case. . . . Rather, it is a determination that a
defendant has been convicted through a judicial process which is
defective in some fundamental respect, e.g., . . . incorrect
instructions.” Id. at 15; see also United States v. Scott, 437
U.S. 82, 96 (1978) (“Where the court, before the jury returns a
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verdict, enters a judgment of acquittal pursuant to Fed. Rule Crim.
Proc. 29, appeal will be barred only when ‘it is plain that the
District Court . . . evaluated the Government's evidence and
determined that it was legally insufficient to sustain a
conviction.’” (quoting United States v. Martin Linen Supply Co.,
430 U.S. 564, 572 (1977)). Thus the Court stated in Lockhart v.
Nelson, 488 U.S. 33 (1988), that Burks bars retrial only when an
acquittal is based “on the sole ground that the evidence was
insufficient to sustain the jury's verdict.” Id. at 39.
The defendants appear to argue that even if the issue of
constitutional vagueness is an issue of law, it depends on
underlying findings of historical fact. We do not view Burks and
its progeny as holding that the Double Jeopardy Clause is
implicated by such fact-finding. The bar of Double Jeopardy
attaches only where the acquittal involves “a resolution, correct
or not, of some or all of the factual elements of the offense
charged.” Martin Linen, 430 U.S. at 571 (emphasis added).
The trial judge here found that the regulation was
unconstitutionally vague. This is a legal determination that is
independent of the sufficiency of evidence. Declaring that the
regulation is unconstitutionally vague is not a “decision to the
effect that the government has failed to prove its case.” Burks,
437 U.S. at 15. The district court’s historical fact findings
here, even if pertinent to the constitutional issue, are irrelevant
-15-
to the “elements of the offense charged.” Martin Linen, 430 U.S.
at 571. Because the judgment of acquittal was based on the legal
conclusion of a constitutional defect in the regulation, we have
jurisdiction to review the judgment of acquittal.
III.
On the merits, we consider whether the district court properly
granted the defendants’ motion for a judgment of acquittal based on
a legal determination that ECCN 1312A is void for vagueness. The
determination that a regulation is unconstitutionally vague is
reviewed without deference. United States v. Hussein, 351 F.3d 9,
14 (1st Cir. 2003). This review requires us to decide two
questions: first, we must construe the meaning of the term
“specially designed” in ECCN 1312A.10 Second, we must determine
10
Contrary to the government’s contention, United States v.
Cabrera, 208 F.3d 309 (1st Cir. 2000), does not decide the
interpretation of the term “specially designed” in a dual use
situation, even under the statute in Cabrera. In Cabrera the
defendant was convicted of possessing a document-making “implement
or impression specially designed or primarily used for making . .
. a false identification document,” in violation of 18 U.S.C.
§ 1028(a)(5). Id. at 311. The defendant in Cabrera argued that
his computer, printer and scanner were not uniquely suited to
making false identification documents. In rejecting this argument,
the court merely noted that “the system also included digitized
templates of various official identification documents,” and that
a “jury viewing this paraphernalia as a whole could reasonably have
deemed the system specially designed for making a false
identification document.” Id. at 313-14 (internal quotations and
alterations omitted). Nothing in Cabrera indicates one way or the
other whether “specially designed” encompasses an exclusive use or
a multiple use definition. Nor do we find the Supreme Court’s
decision in Village of Hoffman Estates v. Flipside, Hoffman
Estates, Inc., 455 U.S. 489, 501 (1982), finding the phrase
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whether the regulation is void for vagueness under the construction
we have adopted.
A.
1.
We begin our analysis with the language of ECCN 1312A. See
Williams v. Taylor, 529 U.S. 420, 431 (2000). “The Supreme Court
has repeatedly emphasized the importance of the plain meaning rule,
stating that if the language of a statute or regulation has a plain
and ordinary meaning, courts need look no further and should apply
the regulation as it is written.” Textron Inc. v. Comm’r, 336 F.3d
26, 31 (1st Cir. 2003) (citing Comm'r v. Soliman, 506 U.S. 168, 174
(1993); United States v. Ron Pair Enters., 489 U.S. 235, 241-42
(1989); Gitlitz v. Comm'r, 531 U.S. 206, 220 (2001)).
Dictionaries of the English language are a fundamental tool in
ascertaining the plain meaning of terms used in statutes and
regulations.11 See, e.g., Carey v. Saffold, 536 U.S. 214, 219-20
(2002); see also Textron, 336 F.3d at 32. The first definition of
“special” provided by Webster’s Third New International Dictionary
is “distinguished by some unusual quality.” Webster’s Third New
International Dictionary of the English Language 2186 (3d ed. 1961)
“designed . . . for use” not to be unconstitutionally vague,
instructive in construing the term “specially designed.”
11
For this purpose we look to dictionaries in use prior to or
contemporaneous with the enactment of the statute or regulation.
See Lamar v. United States, 241 U.S. 103, 113 (1916).
-17-
(1986 prtg.) (“Webster’s Dictionary”). The Oxford English
Dictionary includes a definition of “special” as “[m]arked off from
others of the kind by some distinguishing qualities or features.”
9 A New English Dictionary 542 (Oxford 1919 & Supp. 1986) (“Oxford
English Dictionary”). These definitions support the government’s
position because the control panel at issue had distinguishing
features that rendered it suitable for the larger HIP. On the
other hand, there are alternative definitions of “special” that
tend to support the defendants’ narrower construction of “specially
designed.” For example, Webster’s Dictionary provides definitions
such as “3a: relating to a single thing or class of things,”
Webster’s Dictionary at 2186, and the Oxford English Dictionary
includes definitions such as “affecting or concerning a single . .
. thing” and “[h]aving close, intimate or exclusive connexion or
relationship with one . . . thing (or set of these),” Oxford
English Dictionary at 542. The definitions of “design” are more
uniform. Webster’s Dictionary provides such definitions as “to
create, fashion, execute, or construct according to plan” and “to
plan or produce with special intentional adaptation to a specific
end.” Webster’s Dictionary at 611.
The dictionaries thus support two different definitions of
“specially designed”: (1) a broader definition encompassing items
designed with properties that enable them to be used for a
particular purpose, but capable of use for other purpose as well,
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and (2) a narrower definition encompassing only items designed
exclusively for a certain purpose. In interpreting statutes we
must adopt the definition most consistent with the statute’s
purpose. See, e.g., Holloway v. United States, 526 U.S. 1, 9
(1999) (noting that “statutory language should be interpreted
consonant with ‘the provisions of the whole law, and . . . its
object and policy’” (quoting John Hancock Mut. Life Ins. Co. v.
Harris Trust and Sav. Bank, 510 U.S. 86, 94-95 (1993))); Chapman v.
Houston Welfare Rights Org., 441 U.S. 600, 608 (1979) ("As in all
cases of statutory construction, our task is to interpret the words
of these statutes in light of the purposes Congress sought to
serve."); Kokoszka v. Belford, 417 U.S. 642, 650 (1974); see also
Gen. Dynamics Land Sys., Inc. v. Cline, 124 S. Ct. 1236, 1245
(2004) (interpreting the Age Discrimination in Employment Act of
1967 “in light of the statute's manifest purpose”); Johnson v.
United States, 529 U.S. 694, 710 n.10 (2000) ("Our obligation is to
give effect to congressional purpose so long as the congressional
language does not itself bar that result."). We also construe a
regulation in light of the congressional objectives of its
underlying statute. See McCuin v. Sec’y of Health & Human
Services, 817 F.2d 161, 174 (1st Cir. 1987). We must therefore
look to the purpose of the EAA to determine which definition of
“specially designed” is most consistent with the intent of
Congress.
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2.
The goals of Congress in enacting the EAA are not difficult to
ascertain. The EAA itself begins with an expansive description of
“Congressional findings” and continues with an even longer section
devoted to “Congressional declaration of policy.” These provisions
make clear that the EAA was designed to ensure that exports do not
detrimentally affect the national security of the United States,
while not unduly restricting legitimate trade and, in particular,
United States exports. 50 U.S.C. app. § 2401. The act repeatedly
emphasizes that “[e]xport of goods or technology without regard to
whether they make a significant contribution to the military
potential of individual countries or combinations of countries may
adversely affect the national security of the United States,” id.
§ 2401(5); see also id. §§ 2401(8), 2402(9). ECCN 1312A
specifically states “[n]ational security” as the reason for control
of HIPs. See 15 C.F.R. § 399.1, Supp. 1 (1988). The EAA also
explains that the “ability of the United States citizens to engage
in international commerce is a fundamental concern.” 50 U.S.C.
app. § 2401(1).
The EAA’s concern for national security is of acute relevance
in this case. The term “specially designed” appeared more than 100
times on the Control List in 1988 and represents a fundamental
concept used in export control. Given the depth of concern for
national security in the EAA, it would hardly serve this statutory
-20-
purpose to adopt a definition of “specially designed” that excludes
any item designed for use with embargoed commodities but capable of
use with commodities that were not embargoed. An item “specially
designed” to activate or complete an embargoed commodity can “make
a significant contribution to the military potential” of another
country and threaten “the national security of the United States,”
irrespective of whether it is also capable of interacting with non-
embargoed items. An exclusive use definition would permit easy
evasion of the regulation through the deliberate design of items
that implicate national security concerns so that they have both
permitted and prohibited uses. This is clear from the very facts
of this case, where the exported control panel with dual
capabilities was attached by the defendants to an embargoed HIP in
India. Thus, statutory and regulatory concerns with national
security cannot be achieved if the regulation is construed to allow
the exportation of controls designed to be used with embargoed
commodities so long as they had other potential uses. See
Holloway, 526 U.S. at 9 (rejecting the defendant’s construction
because it “would exclude from the coverage of the statute most of
the conduct that Congress obviously intended to prohibit”).
We conclude that this central purpose of the EAA requires us
to construe “specially designed” in the regulation to include
controls designed to be used with regulated HIPs even though they
are capable of use with non-regulated HIPs. A device is “specially
-21-
designed” for use with an embargoed commodity if it is
intentionally created for use, and in fact capable of being used,
with the embargoed commodity. At the same time, this definition
does not extend the embargo to devices simply because they could in
theory be used with embargoed commodities, thus ensuring that
legitimate exports are not prohibited.12
3.
The defendants raise a number of arguments against adopting
the forgoing construction of the term “specially designed.” In a
letter submitted under Rule 28(j) of the Federal Rules of Appellate
Procedure, they argue “that ‘specially designed’ in ECCN 1312A must
be construed as a ‘technical term of art’ derived from Department
of Commerce and COCOM custom and usage, and not from a plain
dictionary meaning.” The defendants maintain that an exclusive use
definition of “specially designed” is evidenced by affidavits of
former regulators and industry participants regarding the export
12
Because we find the statute and regulation clear in light of
their declared purpose, the rule of lenity does not apply. See
Reno v. Koray, 515 U.S. 50, 64-65 (1995) (“The rule of lenity
applies only if, after seizing everything from which aid can be
derived, we can make no more than a guess as to what Congress
intended.” (internal quotations and citations omitted)).
-22-
industry’s understanding of the term.13 We do not find these
sources persuasive.
To be sure, there are instances where a statutory or
regulatory term is a technical term of art, defined more
appropriately by reference to a particular industry usage than by
the usual tools of statutory construction. See, e.g., McDermott
Int’l, Inc. v. Wilander, 498 U.S. 337, 342 (1991); La. Pub. Serv.
Comm'n v. FCC, 476 U.S. 355, 371-372 (1986); Corning Glass Works v.
Brennan, 417 U.S. 188, 201-02 (1974). Thus it is well-settled, for
example, that “in the interpretation of the revenue laws, words are
to be taken . . . according to their commercial designation, if
that differs from the ordinary understanding of the word.” Lutz v.
Magone, 153 U.S. 105, 107 (1894). However, this canon of
construction requires the disputed term to actually be a technical
term of art. Thus, the Court in Greenleaf v. Goodrich, 101 U.S.
278, 284-85 (1879), held that although “the commercial designation
of an article among traders and importers . . . fixes its character
for the purpose of the tariff laws[,] . . . [t]he phrase ‘of
similar description’ is not a commercial term.” There has been no
showing that the term “specially designed” has a technical meaning
13
See, e.g., J.A. at 613 (affidavit of former Commerce
official stating that “specially designed” meant parts, components,
accessories or controls “were peculiar to and solely used” with the
embargoed item); J.A. at 517 (affidavit of former consultant to
exporters stating that “specially designed” covered “components
which could be used with an ‘export controlled’ item and no
other.”).
-23-
in a relevant industry. Rather, the defendants have submitted as
evidence statements as to the common legal interpretation of the
term in 1988. This is not the same as identifying a technical term
of art.14
Second, while the defendants appear to recognize that the
regulation should not be construed based on an agency’s informal
non-public understanding, the district court, in reaching the
interpretation reflected in the jury instructions relied on
evidence concerning the agency’s internal understanding of the
regulation. The defendants now call our attention to post-trial
affidavits that suggest Commerce officials within the agency
internally gave the term a contrary interpretation and affidavits
as to statements made by Commerce officials at industry seminars
also suggesting a contrary interpretation. These views of Commerce
officials are simply irrelevant to our interpretive task. Agencies
do have an important role to play in the interpretation of statutes
and regulations under Chevron and related doctrines. See Chevron
U.S.A. Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837
(1984); United States v. Cleveland Indians Baseball Co., 532 U.S.
14
There is another canon of construction that if Congress uses
a legal term of art in a statute, “it presumably knows and adopts
the cluster of ideas that were attached to each borrowed word in
the body of learning from which it was taken and the meaning its
use will convey to the judicial mind unless otherwise instructed.”
Morissette v. United States, 342 U.S. 246, 263 (1952). However,
this canon is not implicated here because there has been no showing
that the regulation adopted a well-accepted and pre-existing legal
understanding of the term “specially designed.”
-24-
200, 220 (2001); Auer v. Robbins, 519 U.S. 452, 461 (1997). But we
look to agency interpretations only when the statute or regulation
remains ambiguous after we have employed the traditional tools of
construction. See Chevron, 467 U.S. at 843 n.9 (“If a court,
employing traditional tools of statutory construction, ascertains
that Congress had an intention on the precise question at issue,
that intention is the law and must be given effect.”); see also
Gen. Dynamics, 124 S. Ct. at 1248 (“Even for an agency able to
claim all the authority possible under Chevron, deference to its
statutory interpretation is called for only when the devices of
judicial construction have been tried and found to yield no clear
sense of congressional intent.”). Here, we have concluded that the
regulation is not ambiguous when construed in light of the
statutory purpose.
In any event, agency interpretations are only relevant if they
are reflected in public documents. The Administrative Procedure
Act, 5 U.S.C. § 551 et seq, provides that “agenc[ies] shall make
available to the public . . . substantive rules of general
applicability adopted as authorized by law, and statements of
general policy or interpretations of general applicability
formulated and adopted by the agency.” Id. § 552(a)(1)(D) (2000).
So too, under Chevron, the Supreme Court has made clear that
informal agency interpretations of statutes, even if public, are
not entitled to deference. See generally United States v. Mead
-25-
Corp., 533 U.S. 218 (2001). While this is not a situation
involving the interpretation of a statute, the same requirements of
public accessibility and formality are applicable in the context of
agency interpretations of regulations. For example, in Rumsfeld v.
United Technologies Corp., 315 F.3d 1361, 1369 (Fed. Cir. 2003),
the court held that testimony of former members of the Cost
Accounting Standards ("CAS") board as to the understanding of the
CAS regulations was irrelevant to the construction of those
regulations. See Chrysler Corp. v. Brown, 441 U.S. 281, 302 (1979)
(“Interpretive rules are issued by an agency to advise the public
of the agency's construction of the statutes and rules which it
administers.” (emphasis added) (internal quotations and citations
omitted)).
The non-public or informal understandings of agency officials
concerning the meaning of a regulation are thus not relevant. The
affidavits here of former and present agency officials as to the
agency’s non-public understanding of the regulation do not remotely
satisfy the requirements of formality and public accessibility.
The statements made by government officials at industry seminars
(upon which the defendants also rely), although public, are also
not the kind of formal agency statements that are entitled to
deference.
Third, the defendants appear to argue that the term “specially
designed” should be construed to be given the same meaning as is
-26-
used in the COCOM regime. We recognize that statutory and
regulatory language should be construed in consonance with
international obligations when possible. See, e.g., Weinberger v.
Rossi, 456 U.S. 25, 32 (1982); Murray v. The Charming Betsy, 6 U.S.
(2 Cranch) 64, 118 (1804). We also recognize that the EAA itself
envisions overlap with COCOM, see 50 U.S.C. app. § § 2404(i),
2402(3), and ECCN 1312A was transposed from the COCOM Annex, see 15
C.F.R. § 799.1(b)(4) (1992). However, the COCOM List does not
define the term “specially designed.” Rather, the defendants point
to Commerce officials’ statements regarding the commonly understood
definition at COCOM and to statements by the United States
delegation during COCOM meetings. These sources suffer from the
same shortcoming as the defendants’ evidence addressing the common
understanding at Commerce. They do not reflect publicly
communicated or publicly accessible definitions. In fact, before
the trial court the government insisted that the 1975 COCOM meeting
minutes remain classified, and provided a redacted version to the
court. Lachman, 278 F. Supp. 2d at 80 n.18.
Finally, the defendants point to the definition of “specially
designed” used in another source of United States export control,
the Missile Technology Control Regime (“MTCR”) Annex. This
definition, adopted in 1991, ostensibly supports the defendants’
proposed definition of "specially designed" as it states in its
“TERMINOLOGY” section that: “‘Specially designed’ describes
-27-
equipment, parts, components or ‘software’ which . . . have unique
properties that distinguish them for certain predetermined purposes
. . . [and] are not capable of producing other types of
components.” See http://www.mtcr.info/english/annex.html. While
this does not suffer from the same defects identified above, being
both formal and public, we conclude that it is not relevant.
The MTCR was formed in 1987 as a “policy statement between the
United States, the United Kingdom, the Federal Republic of Germany,
France, Italy, Canada, and Japan . . . to restrict sensitive
missile-relevant transfers based on the MTCR Annex.” 22 C.F.R. §
120.29 (2004). The MTCR Annex lists missile-related commodities,
which MTCR members agree to control. Control of MTCR Annex items
is implemented through listing on the United States Munitions List
pursuant to the Arms Export Control Act, 22 U.S.C. § 2797(a)
(2000), and listing on the Control List pursuant to the EAA, 50
U.S.C. app. § 2405(l). In 1991 when the “specially designed”
definition was added to the MTCR Annex, Commerce included among its
definitions applicable to its regulations for the “Commodity
Control List and Related Matters,” 15 C.F.R. § 799 (1992), the MTCR
definition of “specially designed,” id. § 799.1, Supp. 3. This
entry was listed as “Specially designed (MTCR context).” Id. The
defendants argue that “specially designed” in the regulation here
should be construed the same way.
-28-
We recognize that, generally, “[t]he normal rule of statutory
construction assumes that ‘identical words used in different parts
of the same act are intended to have the same meaning.’” Sorenson
v. Sec’y of the Treasury, 475 U.S. 851, 860 (1986) (quoting
Helvering v. Stockholms Enskilda Bank, 293 U.S. 84, 87 (1934)); see
also Gustafson v. Alloyd Co., 513 U.S. 561, 570 (1995). This rule
applies equally to regulations. See Weaver v. United States Info.
Agency, 87 F.3d 1429, 1436-37 (D.C. Cir. 1996). Nonetheless, this
rule of construction is not applicable here. The MTCR Annex is not
“a different part of” the EAA regulations. The MTCR Annex is not
even published in the Code of Federal Regulations.
Most importantly, Commerce explicitly limited the
applicability of this definition by listing the definition in the
EAA regulations with the specific notation of “(MTCR context).” If
anything, the explicit limitation of this definition to the “MTCR
context” suggests that the exclusive use definition was a departure
from Commerce’s customary usage of the term, perhaps in order to
achieve consistent usage among the various countries involved in
the MTCR. This purpose, of course, would only have application to
items on the control list marked “MT,” which is not the case with
ECCN 1312A.15 See Gen. Dynamics, 124 S. Ct. at 1246 (rejecting the
15
We also note that the MTCR definition did not exist during
the time period of the export in question, specifically 1988,
because it was added in 1991. See United States v. Price, 361 U.S.
304, 313 (1960) (“[T]he views of a subsequent Congress form a
hazardous basis for inferring the intent of an earlier one.”).
-29-
presumption of uniform usage because it conflicted with “the
cardinal rule that statutory language must be read in context”
(internal quotation and alterations omitted)).
In sum, we find no reason to reject the construction of the
term “specially designed” that we glean from the text and purpose
of the regulation. The regulation “by its terms” prohibits
exporting items specially designed to function with a larger HIP,
whether or not designed exclusively for that purpose.
IV.
We next consider whether ECCN 1312A, as construed, is void for
vagueness. Although the district court held the regulation invalid
in all applications, the defendants argue that the regulation is
invalid as it applies to them and disclaim a facial challenge.
The Due Process Clause “mandates that, before any person is
held responsible for violation of the criminal laws of this
country, the conduct for which he is held accountable be prohibited
with sufficient specificity to forewarn of the proscription of said
conduct.” United States v. Anzalone, 766 F.2d 676, 678 (1st Cir.
1985). “As generally stated, the void-for-vagueness doctrine
requires that a penal statute define the criminal offense with
sufficient definiteness that ordinary people can understand what
conduct is prohibited and in a manner that does not encourage
arbitrary and discriminatory enforcement.” Kolender v. Lawson, 461
-30-
U.S. 352, 357 (1983). See also Grayned v. City of Rockford, 408
U.S. 104, 108 (1972); Bouie v. City of Columbia, 378 U.S. 347, 350-
51 (1964).
The mere fact that a statute or regulation requires
interpretation does not render it unconstitutionally vague. “Many
statutes will have some inherent vagueness . . . . Even trained
lawyers may find it necessary to consult legal dictionaries,
treatises, and judicial opinions before they may say with any
certainty what some statutes may compel or forbid.” Rose v. Locke,
423 U.S. 48, 49-50 (1975). This is particularly the case where, as
here, the statute deals with economic regulation and is addressed
to sophisticated businessmen and corporations which, because of the
complexity of the regulatory regime, necessarily consult counsel in
planning their activities, and where an administrative process
exists to secure advisory interpretations of the statute. Hoffman
Estates, 455 U.S. at 498; see also McConnell v. FEC, 124 S. Ct.
619, 675 n.64 (2003). The regulation here was reasonably
susceptible to the construction that we have adopted. There is no
basis for invalidating ECCN 1312A as failing to provide fair
notice.
Defendants cite a line of cases from the District of Columbia
Circuit for the proposition that when a regulation lacks
“ascertainable certainty,” the regulated party’s reasonable
interpretation of the regulation will be accepted if otherwise a
-31-
drastic penalty would result. See Trinity Broad. of Fla., Inc. v.
FCC, 211 F.3d 618 (D.C. Cir. 2000); United States v. Chrysler
Corp., 158 F.3d 1350 (D.C. Cir. 1998); Gen. Elec. Co. v. EPA, 53
F.3d 1324 (D.C. Cir. 1995); Rollins Envtl. Servs. (NJ) Inc. v. EPA,
937 F.2d 649 (D.C. Cir. 1991); Gates & Fox Co. v. Occupational
Safety & Health Rev. Comm’n, 790 F.2d 154 (D.C. Cir. 1986). This
court recognized a similar rule in Anzalone, 766 F.2d at 681-82.
These cases, however, do not stand for the proposition that
any ambiguity in a regulation bars punishment. Rather, they are
addressed only to situations in which: (1) the agency had given
conflicting public interpretations of the regulation, or, (2) the
regulation is so vague that the ambiguity can only be resolved by
deferring to the agency’s own interpretation of the regulation
(i.e. a situation in which the ambiguity is resolved by something
comparable to a step-two analysis under Chevron), and the agency
has failed to provide a sufficient, publicly accessible statement
of that interpretation before the conduct in question.
When the agency itself issues contradictory or misleading
public interpretations of a regulation, there may be sufficient
confusion for a regulated party to justifiably claim a deprivation
of fair notice. For example, in Anzalone, the statute required
that a financial institution “and any other participant” to report
a transaction of more than $10,000. However, the Treasury
regulation only specified that financial institutions needed to
-32-
file such reports. 766 F.2d at 681. We concluded that because the
“ambiguity regarding coverage of the [statute] and its regulations
ha[d] been created by the government itself,” the defendant could
not be punished because he was not a “financial institution.” Id.
In General Electric, the court highlighted that a regional office
of the agency had issued an opinion letter subscribing to a
contrary definition of the regulation, describing it as “unlikely
that regulations provide adequate notice when different divisions
of the enforcing agency disagree about their meaning.” 53 F.3d at
1332. Similarly in Trinity Broadcasting, the agency had previously
provided a conflicting interpretation of a “nearly identical
regulation.” 211 F.3d at 629-30. See also Rollins, 937 F.2d at 653
& n.3 (penalty should be mitigated where publicly available summary
of agency report stated that “various EPA offices [had] been giving
conflicting guidance”).
Even if the agency does not issue contradictory public
statements, it may fail to give sufficient fair notice to justify
a penalty if the regulation is so ambiguous that a regulated party
cannot be expected to arrive at the correct interpretation using
standard tools of legal interpretation, must therefore look to the
agency for guidance, and the agency failed to articulate its
interpretation before imposing a penalty. See PMD Produce
Brokerage Corp. v. USDA, 234 F.3d 48, 53 (D.C. Cir. 2000) (“The
Secretary’s Rules of Practice are silent . . . . Nor would the .
-33-
. . underlying rationale for the procedures in [the regulation]
compel an interpretation of the regulations.”).
The General Electric/Trinity Broadcasting line of cases do not
apply here. The phrase “specially designed” is not so ambiguous
that standard tools of legal construction fail and a regulated
party must necessarily look to the agency for an interpretation.
As we have found, the meaning of the “specially designed” may be
ascertained by reference to the underlying policies of the EAA.
While the defendants contend that Commerce officials arrived
at conflicting interpretations of ECCN 1312A, the vast majority of
those interpretations were not public. Nothing in the General
Electric/Trinity Broadcasting line of cases suggests that such non-
public statements may create the kind of confusion that supports a
finding of a due process violation.16
In an effort to identify public agency statements to support
their vagueness challenge, defendants rely on Commerce’s earlier
published definition of “specially fabricated,” which specified
that a part “is not a specially fabricated part for [a] machine
unless it is so constructed that its use for all practical purposes
is limited to that machine.” (J.A. at 754.) They assert that
16
See General Electric, 53 F.3d at 1329 (holding that
regulated parties must be able to ascertain the meaning of the
statute by “reviewing the regulations and other public statements
issued by the agency” (emphasis added)); see also Trinity
Broadcasting, 211 F.3d at 628.
-34-
“specially designed” replaced “specially fabricated” and appear to
argue that they were entitled to rely on Commerce’s definition of
“specially fabricated.” However, any similarity between these
terms does not rise to the level of being “nearly identical.”
Trinity Broadcasting, 211 F.3d at 629-30. We therefore find that
the defendants were not entitled to rely on the definition of
“specially fabricated” as creating confusion as to the meaning of
the term “specially designed.”
The defendants rely most heavily on affidavits concerning the
participation of Commerce officials in industry seminars concerning
EAA compliance at which public statements were made regarding
Commerce’s interpretation of the term “specially designed.” Some
of these affidavits state that Commerce officials who presented at
these seminars, though not authorized to offer opinions on
commodity classifications, were directed by Commerce to be “as open
and candid as possible in answering the questions of seminar
attendees.” (J.A. at 697.) These same affiants stated that at the
seminars the officials provided an exclusive use definition of
“specially designed.” The defendants also rely on affidavits from
industry representatives that confirm that such statements were
made. See, e.g., (J.A. at 568.)17
17
The relevant evidence on this matter include: an affidavit
from Richard J. Sheil, a former Commerce official, who stated that
he gave an exclusive use definition of “specially designed” when
presenting at these seminars (J.A. at 515); an affidavit from an
industry representative, Pat Paulson, who attested to hearing Sheil
-35-
Where the advice given by agencies has been considered in the
General Electric/Trinity Broadcasting line of cases, they have
involved formal contemporaneous agency interpretations reflected in
related regulations, formal letters to regulated parties, and
publicly distributed summaries of internal agency reports. See,
e.g., Trinity Broadcasting, 211 F.3d at 629-30 (related
regulation); General Electric, 53 F.3d at 1332 (letters to
regulated parties); Rollins, 937 F.2d at 653 n.3 (public summary of
agency report). In contrast, we do not think that informal
statements made at industry seminars are the types of
interpretations on which the defendants may properly rely,
particularly because, as noted earlier, there was a formal process
by which the defendants could have sought an advisory opinion from
Commerce’s Bureau of Industry and Security regarding whether their
control panel was subject to regulation and, if so, its appropriate
ECCN classification.
To allow informal statements by agency officials at industry
seminars to provide a defense to criminal proceedings would be to
invite a debilitating uncertainty in the enforcement of the
criminal law. Each criminal case would threaten to degenerate, as
provide an exclusive use definition at one such seminar (J.A. at
568); and an affidavit from John R. Black, another former Commerce
official, who stated that he spoke at these seminars and that he
understood “specially designed” to require exclusive use, but he
did not state that he had communicated this understanding at the
seminars at which he taught (J.A. at 701).
-36-
the facts of this case illustrate, into a contest between the
prosecution and defense as to the nature and content of the
officials’ oral statements. Those intent on violating the law
could attend such seminars with a view to planting questions that,
in the future, could provide the basis for a defense to a criminal
charge. We do not think that the General Electric/Trinity
Broadcasting line of cases reaches this far.18
We also do not think that ECCN 1312A as written lends itself
to “arbitrary and discriminatory enforcement.” Courts are
concerned with the possibility of arbitrary enforcement where a
statute or regulation leaves broad discretion in the executive to
determine what constitutes a criminal violation such that it may
permit “a standardless sweep [that] allows policemen, prosecutors,
and juries to pursue their personal predilections.” Kolender, 461
U.S. at 358 (quoting Smith v. Goguen, 415 U.S. 566, 575 (1974)).
Just as there is no deficiency of fair notice, there is no concern
for arbitrary or discriminatory enforcement under the circumstances
in this case. Here, the regulation does not allow for a limitless
range of interpretations of what constitutes criminal conduct. As
18
The mere fact that, after the events in question, various
public government statements also noted that the term "specially
designed" was “confusing” and “ambiguous” also creates no issue of
Due Process. After the defendants' convictions, the Bureau of
Export Administration published a request for comments regarding
the development of a definition for “specially designed” as it
pertains to items on the Control List. 62 Fed. Reg. 56138 (Oct.
29, 1997). No definition has yet been published.
-37-
explained above, ECCN 1312A, as we have interpreted it, prohibits
exporting without a validated license items designed to function
with an embargoed HIP, whether the item is designed exclusively for
this purpose or whether it is capable of serving other functions as
well. This is not an amorphous category of items that allows for
a broad range of possible interpretations.
V.
The defendants argue that we should remand the case to the
district court “to rule conditionally on the defendants' motion for
an new trial,” which it was required to do under Federal Rule of
Criminal Procedure 29(d)(1).19 We agree that the district court
should have ruled on the defendants’ motion for a new trial. We
remand to the district court to rule on the defendants’ motion for
a new trial in light of the rulings reflected in this opinion. We
intimate no view as to the proper disposition of that motion.
In this connection, we note that the defendants contend on
appeal that a new trial should be granted because informal agency
advice and the private views of agency officials are necessarily
relevant to their defense of lack of willfulness. The Supreme
Court in Cheek v. United States, 498 U.S. 192 (1991), held that a
bona fide misunderstanding of the tax laws is a defense to willful
19
Rule 29(d)(1) reads: “If the court enters a judgement of
acquittal after a guilty verdict, the court must also conditionally
determine whether a motion for a new trial should be granted if the
judgment of acquittal is later vacated or reversed.”
-38-
tax evasion. The defendants argue that the jury instructions
required the jury to find willfulness; that under Cheek evidence of
the objective reasonableness of their claimed belief that a license
was not required is relevant to the issue of willfulness; that
evidence as to the interpretation given to the term “specially
designed” by Commerce and COCOM officials (even if undisclosed and
informal) was admissible to show that their claimed belief was
objectively reasonable; and that the United States was obliged to
supply them with this evidence before the trial commenced or,
alternatively, that this evidence is newly discovered evidence
under Rule 33(a) of the Federal Rules of Criminal Procedure. The
district court did not reach these issues. Although the defendants
invite us to reach them on appeal, we think these issues are most
appropriately addressed to the district court in the first instance
in connection with the conditional motion for a new trial. We
express no opinion as to the defendants’ argument in these respects
or whether these arguments were properly preserved in the new trial
motion itself.
VI.
For the foregoing reasons we vacate the district court’s
acquittal, reinstate the defendants’ convictions, and remand for a
ruling on the defendants’ motion for a new trial.
It is so ordered.
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United States v. Lachman
Court: Court of Appeals for the First Circuit
Date filed: 2004-10-25
Citations: 387 F.3d 42
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