United States v. Arnold I. Mandel Rona K. Mandel

FARRIS, Before PREGERSON and RYMER, Judges. Circuit RYMER, Judge: Circuit appeal This raises the issue of whether a charged criminal defendant exporting items on the Control List in Export violation of the Administration Act discovery of 1979 is entitled to Depart ment Commerce records relied on Secretary in promulgating commodity con categories trol within exported which the items are listed. The district court held published opinion, United States v. Man del, (E.D.Cal.1988), appropriate because defen dants in a criminal case are entitled to challenge list, specific limited, and that “basis fact” review of the implicate decision does not considerations giving political question. rise to a We dis agree decision can be review, subjected or that basis for his decision is material violation, defense of an EAA and reverse. I Arnold and Roña Mandel were indicted July charged with one conspiracy count of and ten counts of il- legally exporting controlled commodities without a license Export in violation of the Administration Act U.S.C. 2410(a).1 50 U.S.C.App. Arnold § § 2410(a) provides: exports than five times the value of the in- $50,000, greater, Except provided (b) volved or whichever is in subsection of this section, imprisoned knowingly years, whoever not more than violates or con- or both. spires attempts any provision to or The EAA violate has since been amended. All refer- order, any regulation, of this Act or or license ences to the Administration Act are to issued thereunder shall be fined not more the Act as it existed in 1982 and 1983. Refer- counts, power criteria set forth the Act. with four charged Mandel was also counts, falsify- require export licenses for such commodi- Mandel of two and Rona of Com- in viola- ties is vested export declarations ing shipper’s 2403(a). It is the merce. of 18 U.S.C. 1001. tion responsibility Secretary the to establish of Kong Hong alleges that a The indictment commodities, of the and maintain a list Compa- Enterprise company called Fortune (“CCL”), List for which Control comput- sophisticated ny placed orders for export licenses are U.S.C. required. equip- ers, test oscilloscopes, and electronic 2403(b), 2404(c). App. The CCL de- § beginning the defendants ment with categories scribes the of controlled com- responded of 1982. The defendants June modities, export the countries for which American ordering equipment from the li- type are the of required, licenses and making arrangements and manufacturers 399.1, Supp. 1 cense needed. 15 C.F.R. § Hong Kong. equipment to ship to the equipment was listed Cate- Some of this 1565A, The Act contains an set of cri- 1529A, 1584A of the elaborate gories governs Secretary’s imposi- 399.1, The the Supp. 1. teria 15 C.F.R. CCL. § export U.S.C.App. controls. equipment tion of export this defendants could not Secretary the export 2403. Section directs Kong a validated Hong to without finding regarding foreign the of Department Commerce. license from he restrict 2410(a). availability of items before Id.; applica- An U.S.C.App. exportation. Secretary The must con- their sent the defen- tion for such license con- July whether the commodities Department on sider to the dants Commerce restriction returned, Department trolled are available without 9,1983 after the number, sources outside the United as inade- assigned application it an export of commodities is those not resubmit whether quate.2 The defendants did agree- to a multilateral Instead, pursuant restricted July application. between party, is a to which the United States they shipped ment August 1982 and possess capabili- $933,000.00 whether other nations equipment of to the than more commodities com- respect to such export li- ties with Kong company, without Hong of the United States. parable to those charges also censes. The indictment 2403(c),2404(d)-(f). documents, U.S.C.App. export falsified §§ the Mandéis detection, by stating on them to avoid order charged the defendants The items licenses, export us- they had obtained for national exporting were controlled with assigned by the application number 399.1, 15 C.F.R. security reasons.3 See for Department as a substitute Commerce 1563A, 1529A, 1584A. Categories Supp. number. a license securi- may impose national Secretary The “only to the commodity on a provides EAA the executive branch The (A) to restrict necessary for extent ... impose export controls power technology which goods and foreign policy, export of security, reasons of national significant contribution would make short supply. or domestic country any other military potential 2402(2), (10) These con- and 2404-06. §§ which would countries licensing re- combination of through implemented trols are prove detrimental which meet quirements for commodities writing a final deter- respond in before implementing nity regulations the Act enees to 2409(f)(2). U.S.C.App. § Federal made. 50 the Code of is are to the 1982 mination version Helmy, Regulations. United (E.D.Cal.1989). provides review EAA internal 2. The elaborate procedures regarding appeal the denial of cooperation items were controlled These 3. v. Moller- license. See United States Coordinating member countries with the (D.Mass. Butcher, 554 n. 7 Export Controls for Multilateral Committee 1983). application denial of a license (“COCOM”). nations are COCOM member agencies. subject review several Once Iceland, countries, plus Japan. excluding made, opportu- NATO applicant has the a denial is Following government’s motion for States.” reconsideration, 2402(2)(A),2404(a)(1); changed see also 50 U.S.C. require the 2403(d). scope of its order to App. § of: production provides periodic for Section 2404 Department records of the of Com- all the commodities to national se- upon by relied merce they continue curity controls to insure in promulgating Commerce imposition satisfy the conditions 1565A, categories 1584A, control must issue controls. they during years existed 1529A review, including regulations providing for determination, availability foreign it government notified the court that The security controls items to national respectfully comply decline to years in case of every three at least order, unjustified. it believed which cooperatively with oth- controls maintained an order “ex- The court then entered annually in the case of all er countries and any cluding] the trial of this case 2404(c)(3). other controls. 50 showing that the commodities all evidence foreign The must review allegedly exported by the defendants were availability require a vali- of items which List.” in fact on the Control continuing export license on a basis. dated 2404(f)(1).4 See the dis- government The contends that request have been denied covery should returned, After the indictment was defense, it was not material to because moved to discover all documents Mandéis challenge the cannot a criminal defendant investiga- possession in the of a number Secretary’s place a agencies relating to intelligence tive CCL, and the decision forth in sections the factors set require export controls is an unreviewable purpose determining for the question. argue The Mandéis political leg- government “whether the followed its discre- the district court did not abuse placing mandate ... the items islative they showed that a tion because in the indictment” on the The listed CCL. process right to chal- defendant has due denying the court entered an order district lenge administrative deci- produc- as it called for the motion insofar sion, not an unre- and that that decision is possession any information in the tion of political question. viewable except Department government agency required of Commerce. However II government produce the administra- jurisdiction had under pertaining The district court tive record 3231 and U.S.C. on the CCL those items U.S.C. 2410(a). upon App. jurisdiction rests charged with ex- Our that the defendants were Mandel, permits 18 U.S.C. which porting. at 518. to COCOM multilateral controls is submitted 4. The of Commerce has established ongoing process by through delegate. control list COCOM the United States are added to and removed from the CCL. items List review for national extensive review and delibera- then undertakes security controlled items, controls on tion of require- meet the items is undertaken both to considering foreign availability again and mili- negotia- prepare for ments of the EAA and tary potential. delibera- COCOM’sconfidential United States. tions in COCOMwith allies of the During political, tions involve discussions of sensitive undergo process, CCL this security, foreign policy matters not national separate which the for- number of reviews in only also of the other of the United but military potential eign availability and allies reach a consen- members. If the COCOM Following review Tech- items are examined. item, the United States then sus to control an ("TACs”), Advisory Technical nical Working Groups Committees imposes the au- national ("TWGs”), and Technical Task thority Department of Commerce under (“TTGs"),composed experts Groups from the COCOMmember countries im- the EAA. Other high government technol- and from the nation’s pose security controls under their na- industries, ogy proposal expanded for con- time. tional laws at the same controls, trols, of exist- reduced or maintenance 1445; Little, 753 F.2d at or defense. See Ca appeal from decision Government det, 727 F.2d at 1466-68. “suppressing order a district proceed- in a criminal excluding evidence” fac made no threshold Mandéis ing. materiality.5 The showing district tual unpersuaded by govern court was III argument pre that an insufficient ment’s rulings made, un liminary showing court’s had because been district for an necessary 16 are reviewed der information Fed.R.Crim.P. “the legal discretion, all, the court’s showing, but if it is in the abuse of can be made at 16 is reviewed de of Rule of the Government.” possession construction Iglesias, unnecessary 511 n. novo. 15. It is — Cir.1989), denied, cert. ever us to decide there can U.S. -, where the fact that infor any circumstance court’s construction The district is available mation showing materiality Act is reviewed Administration because excuses a Arrellano, showing case, Mandéis made no United States de novo. See Cir.1987), (9th 1209, plac mod 1211 the actions 812 F.2d either that Cir.1987). (9th on the CCL were ing exported F.2d 235 the items ified, 835 law, they the or that

not in with accordance showing. make such a unable IV were to Rules of Criminal Pro- the Federal 16(a)(1)(C) provides While Fed.R.Crim.P. per- set the outer limits of do not to dis cedure is entitled that a defendant Cadet, 727 F.2d discovery, see the missible covery materials “which within of Richter, 1466; 488 F.2d v. United States custody, or control possession, (9th Cir.1973),ordering production 170, 173 to the which are material government, and any preliminary government without by the defense.” of the defendant’s preparation materiality is inconsistent with showing of “relevant discovery that is permits Rule 16 Richter, 174 n. F.2d at & 488 Rule 16. See possible defense.” development of a to the 16(b),predeces- (construing Rule 16, 18 (9th former 14 740 F.2d Clegg, v. United States 16(a)(1)(C)).Particular- current Rule Rule sor to Cir.1984). discovery under To obtain where, here, government has the ly as prima facie 16, a must defendant request the complying with shown that materiality. United States showing of burdensome,6 it is incum- Cir.1984); unduly (9th would be Little, F.2d 1445 consider the court to the district Cadet, on 727 F.2d bent States v. United light of asserted government de interests (9th Cir.1984). general Neither Cadet, 727 shown. See materiality sought nor con- scription of the information showing a factual suffice; 1468. Without a F.2d at materiality allegations of clusory upon which is no basis would there present facts which must defendant discretion, ignore it to and for its is in exercise the Government tend show its discretion.7 is to abuse requirement helpful to the possession information of suggesting facts 7. In absence necessary to make for a defendant 5. It is not law, contrary difficult materiality uphold it is showing strong a acted granting requested would to could be as it trial court’s see how information Cadet, discovery. a denial of overturn defense. the Mandéis’ preparation of material to nor 2410(a) 1468. However neither the Mandéis requires F.2d at Conviction under point authority that dis the district (1) exported an item on proof defendant government may with covery ordered knowingly. proprie CCL, (2) acted materiality. showing any To the con out trary, an CCL is not listing item an "[m]ateriality necessary prerequisite guilt to the irrelevant therefore and is element discovery.” United States v. United United States a defendant. innocence of (9th Cir.1983). Court, Dist. Inc., Research, F.2d Optical Spawr — U.S. -, denied, Cir.1988), (9th cert. findings on the made no district court 6. The (1989); see also 107 L.Ed.2d 110 S.Ct. comply- degree of burden (8th Gregg, United States v. discovery order. require They license. did not V that, challenge proposition in a criminal requiring preliminary factu Instead of trial, particu- decision that materiality, showing al the district court should be items included on the CCL lar “may tender as determined that defendants reviewable, challenged rather was but a defense the issue of whether the Secre deferring de- the court’s initially tary had no basis in fact in either specific exported by termination that items placing maintaining exported and/or were included on Spawrs CCL. CCL,” discovery must items on the so that II, held: 864 F.2d at 1472-73. We as to that issue. be allowed context, In this construe the F.Supp. at 517-18. It relied on two Su we cannot cases, United preme regulations Court Act or its to accommo- 66 S.Ct. 90 L.Ed. judicial factfinding date intricate li- v. Mendoza-Lo (1946) United States censing questions. desig- Congress has pez, coordinating nated the as the (1987), concluding that de L.Ed.2d 772 in the area of administra- official judicial review of fendants are entitled to severely It tion. undermine the any in fact for there was basis Secretary’s authority judges juries if placement exported proceedings in individual criminal were rendered, its we CCL. After licensing permitted to reverse determina- Spawr Optical States v. held in tions. And it would convert the Cir.1988), Research, Inc., 864 F.2d 1467 forum, system policy-making into a one — denied, U.S. -, rt. ce judiciary possess significant- II”), (“Spawr (1989) ly expertise resources than the less that a court must defer to the Secretary. Congress did not intend this specific item was in determination that a potentially dangerous result. chaotic and Spawr II controls this cluded on the CCL. argue that case.8 However the Mandéis Secretary has determined ... [T]he decided, Spawr II was wrongly directly and Spawrs’ the mirrors could not be that Estep Mendoza-Lopez. conflicts with exported an license. without II Spawr collaterally In chal defendants wrong, ac- Right or the trial court must lenged exporting their laser convictions for cept this determination as matter of a lic mirrors Soviet Union without licensing law.... Because the issue was ense,9 Spawr Optical see United offenses, charged an element of Cir.1982), Research, Inc., (9th 685 F.2d 1076 Spawrs process due are not denied denied, 905, rt. 461 U.S. 103 S.Ct. ce right jury to a trial deference to (“Spawr 1875, (1983) I”), L.Ed.2d 76 807 Secretary’s determination. ground that on the failed Id. at 1473.10 exculpatory to disclose material evidence in effect concede that which that the mir The Mandéis established Spawr II is urge dispositive and did not but us to fol- rors were not on the CCL Cir.1987), 108 S.Ct. 9. 1022, denied, Spawrs rt. U.S. were indicted under the 1969 486 ce 1994, II, (1988) Spawr (policy n. 2. factors of EAA. See 864 F.2d at 1469 50 2401 and 2402 for imposing export in consider restrictions are not 10. legislative history support text EAA); elements of criminal offense under Mol 2412(a) explicitly U.S.C.App. § conclusion. 50 ler-Butcher, (whether 560 at 552-53 precludes judicial deci- review of the significant item would make contribution to Procedure Act sion under the Administrative military potential country of another not ele ("APA”). clearly, Report the Senate Even more EAA). ment of offense under Act of 1979 stated on the Administration legislation exemption "continues the of panel unanimously agreed that under the Act from 8. The the Secre all functions exercised tary’s judicial Procedure Act and Administrative 17, judi S.Rep. reprinted is not at Control List review." No. 96-169 in II, (Brunet- Cong. 864 F.2d at & at cial review. ti, J.), 1473 1979 U.S.Code Admin.News J., added). (Pregerson, dissenting). (emphasis Mendoza-Lopez. However, the administrative Estep meaningful low Mendoza-Lopez, 481 U.S. at prece proceeding.” an earlier may reconsider Circuit we 837-38, 107 origi in intervening Supreme (emphasis S.Ct. at only “an dent when Estep, existing nal). sought an to de undermines In a defendant Court closely on charge willfully failing cases precedent against and both are ... fend Commissioner, Landreth ground point.” military induction on submit Unit Cir.1988) (9th (quoting improperly as F.2d classified he had been that Lancellotti, 761 F.2d ed States local military service his available for Mendoza-Lo Cir.1985)). (9th 116-17, Neither at at 66 S.Ct. board. draft pez intervening decision. Mendoza-Lopez, the issue nor was 424-25. In II Spawn precedent Thus, binding which illegal en prosecuted an alien whether rehear on en banc only overruled can be of 8 deportation, in violation try after Bureau Economic Long v. See ing. 1326, may assert as a defense U.S.C. § Cir.), Analysis, 646 F.2d invalidity of the proceeding criminal grounds, 454 U.S. vacated on other at 481 U.S. underlying deportation order. (1981); 70 L.Ed.2d 102 S.Ct. applies at Neither 107 S.Ct. 2150-51. States, v. United Charleston here, where, prior administrative dismissed, 404 U.S. (9th Cir.), cert. involve defendant’s proceeding does not (1971). L.Ed.2d 191 is not an element rights individual II, pending case.11 offense in the Spawn to revisit if were free Even we Mendoza-Lopez, Mendoza-Lopez Estep not incon- validity (question is whether at 2152 S.Ct. They in this case. compelling sistent or may be deportation order underlying made “where a determination require that prior prosecution challenged play proceeding is in an administrative crime), & is element deportation imposition of subsequent role critical open in left (noting question had been some sanction, there must a criminal 1300, 1312-13, 738, 757-58, L.Ed.2d legislative thought histo- The district maintenance Because the Congress more ry "desired revealed impact significant EAAhas a under the prohibition review under than a II, see, security, e.g., Spawn on national APA, prohibition extends to though 1473, sug- the available evidence discussed,” and because at simply and that is not criminal cases preclude, not Congressional gests intent a necessarily to be Congressional "is not silence review, authorize, general presump- judicial power federal of the as a denial of the construed apply. judicial not does tion of grant in the relief exercise courts Congress has con- general jurisdiction which Optical by in put Judge Greene As 511, upon at ferred them." 1366, Research, Baldridge, 649 v. Inc. (citing Estep, 66 S.Ct. at 327 U.S. (D.D.C.1986): 426-27). analysis was made without analogous court’s The district argument here Defendants’ Navy Egan, Department v. drug possession reference to case by in a a defendant one L.Ed.2d S.Ct. no 484 U.S. stand because cannot that his conviction drug that evidence it is the rule absent showing While specific been made has convincing Congressional intent drawing clear list of society. up of a and a In is a threat to strong presumption in contrary, substances, a Congress there is or local controlled review, e.g., Abbott Labora judicial see already governments favor of have determined will Gardner, cocaine, poses 87 S.Ct. say 387 U.S. a drug question, tories (1967), 1507, 1511-12, "gen general welfare. safety 18 L.Ed.2d public or threat to runs law ... a de- proposition Congress may of administrative included such eral have even policy of nation introduc- concerns aground it encounters when termination in a statement 801(2) appro ing drug committed law See 21 U.S.C. ... laws. al manufacture, Egan, ("The distri- illegal importation, priate agency of the Executive Branch.” bution, improper use possession at Courts and 108 S.Ct. U.S. at 823-24. and authority upon substantial intrude substances controlled therefore should general military on the health and securi effect detrimental of the executive However, people.”). affairs, Congress specifically ex has welfare of American unless Id., drug possessed showing that contrary 484 U.S. at intention. pressed a effect also, ahas 'detrimental e.g., Chappell v. individual defendant at 825. thereby be- general does not Wallace, L.Ed.2d welfare' S.Ct. Councilman, offense. come an element (1983); Schlesinger argued case where dissent had textually that it was demonstrable constitutional impermissible to use administrative deter- commitment of the issue to a coordinate political (2) mination as department; judicially conclusive evidence of a lack of fact subsequent prosecution). manageable Even discoverable and standards for point, they resolving it; (3) were otherwise on impossibility of decid- additional, Mendoza apart are set for an ing policy without an initial determination distinguishing reason: administrative deci- clearly discretion; of a kind nonjudicial implicate sions EAA (4) under the national se- impossibility of a court’s undertak- curity foreign policy concerns and consider- ing independent express- resolution without part ations that are not of the decision- respect lack of the due coordinate making process deportation in a or classifi- (5) government; branches of an unusual hearing. cation Whereas a court is well unquestioning po- need for adherence to a prior depor- suited to determine made; (6) already litical decision hearing fairly tation or classification potentiality of embarrassment from multi- conducted, properly it is ill suited to pronouncements by depart- farious various particular oscilloscope determine whether a Id. question. ments on one impact peace. has an on war and Implicating any at 710. one of these question “political” factors renders a We therefore hold that Armstrong v. United nonjusticiable. thus decision to include States, (9th Cir.1985). 759 F.2d subject Control List is not challenge charge as a defense to a of vio- The district court declined to decide if the lating Act, Administration such political question applies. doctrine of the basis for his decision argue correctly Mandéis that it determined may be ordered for that reason alone. judicial review limited to whether any there was in fact for the basis Secre- tary’s political question decision raises no VI concerns.12 contends that any event the Although inquiry to re the basis in fact is the quire export Sanger review,13 controls is an unreviewable judicial narrowest form of Seamans, political question. questions” “Political Cir. 1974), controversies policy which revolve around it is nevertheless a review of the choices and value determinations constitu merits of the decision. A “ba tionally Congress committed to the proof’ or the sis in fact consists of ‘some —some Branch, Executive and are not thing less than substantial Japan Whaling review. Ass’n v. evidence.” Petrie v. United Soc’y, American Cetacean Cir.1969). (9th 478 U.S. F.2d Even that 2860, 2865-66, possibili L.Ed.2d carries it level of review with Carr, Baker v. In might 369 U.S. that the court reverse the Secre (1962), tary’s particular the Su determination a case. preme ex independent Court identified six rel. Checkman v. See United (1) Laird, political question: factors indicative of a (2d Cir.1972). 778-83 They suggest adopted reviewing weigh that the limited review 12. "The not does the evi- 13. by the district court is similar to that allowed in dence for itself or ask whether there is substan- States, (9th Haire v. United 869 F.2d 531 Cir. support evidence to [the tial Rather, decision].... 1989), States, and Dart v. United 848 F.2d 217 the record for ’search[es] (D.C.Cir.1988). However, the review in each support some affirmative evidence' to the au- proceedings case was of administrative in which implicit finding_ thorities’ overt or Put an- assessed, penalties civil were not of the Secre way, reviewing other court should look for tary’s place commodity decision to on the proof incompatible appli- ‘some that is with the important, CCL. More neither case involved ” Force, Secretary cant’s claims' Koh v. the Air decision, Secretary’s review of the merits of the (9th Cir.1983), quoting Taylor 719 F.2d 1384 v. Haire, 533; Dart, F.2d at see also 848 F.2d at (9th Cir.1979) Claytor, (citations 601 F.2d 1102 judicial agency but rather limited review of omitted). action that on its face violates the EAA. Spawr II that the We held con- requires the to EAA The commodity place to on Com imposition decision things as whether sider such judi subject to modity List is not be detrimental Control would export Opti Spawr United States inter- foreign policy or cial review. Inc., Research, States, F.2d cal whether restric- at ests of the United granted by judge fulfill the district given discovery on a The tions therefore, obligations appropriate. this case, was not in this declared international given process that the due contend country, and whether The Mandéis significant contri- States Mendoza-Lo make principles of United commodity would potential 2148-50, military of other 107 S.Ct. at pez, bution to at 2403(c), U.S.C.App. at countries. (d)-(f). quintessential- These are 2404(a)(1), 423-24, our follow preclude S.Ct. Con- policy entrusted ly argument matters is unavail ing Spawr II. That President, Congress and the states, we opinion stitution ing. majority As the meaningful no stan- there are only an precedent when our reconsider II, Spawr review.14 dards under intervening Supreme Court decision Johnson, at 1473. F.2d mines it. See Montana v. Spawr II Cir.1984). and reverse to review If a court were Mendoza-Lopez and Es- after was decided determination, into it would call tep, and can overruled an en be well agencies as input other question opinion thus un majority panel. The banc the Secre- EAA directs as Commerce. of Mendo necessarily discusses the effect develop a list of militari- Defense to tary of za-Lopez Estep on this case. technologies for inclusion on ly critical 2404(d), provides CCL, U.S.C.App. § holds, Spawr II Further, as a because Secretary of in the concurrence for his interpretation, statutory matter U.S.C.App. Commerce’s decision. to in- Secretary of Commerce’s decision must Secretary of 2404(c)(2). State Commodity items clude also consulted. judicial re- subject not List is Control requires the 2404(k). Finally, EAA view, govern- need to reach is no there allies of negotiate argument. question political ment’s mutually ac- at a arrive United States to judge his the district based It is true list of articles ceptable discovery the Mandels allow the 2404(i). controls. analysis of Mendo- on an requested part reasons the For these Estep. But the district za-Lopez item on the of our hold- the benefit did judge not sub political question not List is a Control ruling. his Spawr II when he made he had to determine whether ject to by Spawr II. are bound doWe error to Accordingly it was in fact. a basis II issue. alone. on allow I would reverse based majority join in I do not Accordingly, fur- REMANDED for REVERSED and Mendoza-Lopez, Es- opinion’s discussion inconsistent with proceedings ther question issue. tep, and the political opinion. PREGERSON, Judge, Circuit

concurring: by result reached

I concur I be- separately because

majority. I write path opinion cuts majority

lieve the case. necessary to decide this

broader than (E.D.Cal. Helmy, 712 held in have so well-rea Two district courts 1989). opinions. United States Moller-Butch soned (D.Mass.1983) er,

Case Details

Case Name: United States v. Arnold I. Mandel Rona K. Mandel

Court Name: Court of Appeals for the Ninth Circuit

Date Published: Sep 14, 1990

Citation: 914 F.2d 1215

Docket Number: 88-1418

Court Abbreviation: 9th Cir.