United States v. Ven-Fuel, Inc.

BREYER, Circuit Before BOWNES and SELYA,* Judges, and Judge. District existing tariffs and the institution of a SELYA, Judge. District system of fees applicable imports Ven-Fuel, government sued Inc. oil, oils, crude unfinished prod- finished (Ven-Fuel) in the District Court for the ucts----” See generally Federal Energy District of Massachusetts under 19 U.S.C. Administration Algonquin SNG, Inc., imposition for the of a 15ET2 civil 548, 552-53, 96 S.Ct. 2298- impor- referable to Ven-Fuel’s illicit 99, 49 L.Ed.2d 1(a) 49 Section of tation residual fuel oil into the of proclamation prohibited the entry of specifically, and more into Massa- oil, oils, crude unfinished chusetts, prod- finished in 1974. The district court en- ucts into judgment against the United except tered Ven-Fuel and as- States “by or $783,- sessed a civil in the sum of for the person account of a to whom a appeals. 500. Ven-Fuel license has been issued Secretary of pursuant

the Interior to an allocation made person to such by the Secretary.” 38 Fed. I. OIL IMPORT LICENSE PROGRAM. Reg. 2(a) at 9646. Section established the import The federal oil program license as maximum imports levels of which could be ago existed a decade lies at the core of made without the prior payment of fees. controversy. put In order to the rath- Id. at 3(a) 9647-48. Section established “a er daedalian nature of the underlying system of fees for licenses issued under proceedings proper events and per- into allocations imports oil, of of crude unfin- spective, it is advisable first to focus on the oils, ished and products finished over the scope and extent applicable regula- imports.” levels of Id. at [maximum] tory scheme. 9648-49. oil, For residual 3(a) fuel section imposed a thirty fee of per cents barrel as the event that being “article is 1,May 1974, of forty-two and per cents imported into the United barrel as of November 1974. Id. Sec- quantities or under such circumstances as 3(b) provided tion that: impair to threaten to the national security,” Except for has allocations authorized the and licenses President to to “take such action ... as he which the deems neces- license fee is applicable, not sary adjust imports to of applications such article for imports allocations of and its imports derivatives so that such will oil, oils, crude unfinished or finished not impair threaten to the national securi- products shall accompanied be by the ty....” 1862(b) (1982). 19 U.S.C. applicant’s certified check ap- ... in the predecessor statutes contained amount____ similar au- propriate thorizations. President Eisenhower exer- Id. at 9649. authority impose cised this system to 4(a) Section authorized Secretary quotas importation on the petroleum regulations issue purpose for the imple- petroleum products in 1959. Presidential menting proclamation. Id. On Febru- (1959- Proclamation No. 3 C.F.R. 11 11, 1974, ary the Secretary proposed issued Comp.). later, 63 More than a decade regulations, Fed.Reg. (1974), 39 5193 April 1973, President Nixon issued amending Import Regulation (Revi- Oil Presidential Proclamation No. 5) (1974), sion to conform to Presidential (1974), C.F.R. Fed.Reg. Proclamation 4210. On- (1973), March provided gradual “for a tran- Secretary regulations issued final gov- existing quota sition from the method of erning period adjusting imports petroleum May allocation from petrole- products through long-term April um program 1975. See Fed. adjustment (1974) imports petroleum Reg. (codified at 32A C.F.R. petroleum products through suspension (1974)). XCh.

* Island, sitting by desig- Of the District of Rhode nation. import fuel con- limned the allocation to residual regulations final 12 of the

Section appli- I imports eligible of residual into which each oil District trolled allocations fees, X, into oil, to license 32A Ch. subject fuel cant would receive. C.F.R. (District I, I encom- And, 12(e) 12(d), Fed.Reg. so-called. District at Maine from passed eastern seaboard that: declared §X, 12, 39 Fed. Florida.) C.F.R. Ch. 32A pursuant this sec- No allocation made 12(b) Reg. provided 10246. Section at sold, assigned or may tion otherwise part that: material transferred. import eligible an allocation not To §X, 12(e), Fed.Reg. 32A C.F.R. Ch. fuel oil fee of residual subject license a person must: pursuant to this section exempt ineligible for an One allocation I District Be business apply fees for an alloca- from license could fuel oil ... and have selling residual to such fees. 32A C.F.R. Ch. subject tion operational management his under 32(i)(l) X, (1974). the imposed 32 Section deepwater located in a terminal control fee mandated Presidential schedule I into which there has been deliv- District X, 4210. 32A C.F.R. Ch. Proclamation he owned residual fuel oil ... which ered 32(i)(l) applicant the had Once delivery, or at time of allocation, a would is- obtained an license I Be in the business District specifying the of oil which sue amount have selling residual fuel oil ... and a X, imported. 32A Ch. could be C.F.R. agreement deepwater throughout with a 7(b) 7(a), Fed.Reg. at 10243. 39 Section agree- operator terminal under which that: declared person to the ment the has delivered oil which he to pursuant terminal residual fuel ... No issued this section license sold, when it so delivered. may assigned, owned was otherwise transferred. § 12(b), Fed.Reg. X, 32A Ch. at C.F.R. 39 10246. §X, 7(b), Fed.Reg. 39 at 32A C.F.R. Ch. 12(c) oil required required that: 18 that a valid Section further Section import presented to the license must be import person seeking A an allocation petro- before federal Customs Service fee file subject to license ... must an product subject regulations leum to the the Of- application with the Director [of 32A consumption. could entered for on form as he fice of Oil Gas] §X, 18. application may prescribe. The shall dis- C.F.R. Ch. close such information the Director II. FACTS. may necessary deem in such detail as he require. may “clearly as the erroneous” Inasmuch standard, 52(a), our 12(c), Fed.Reg. applies Fed.R.Civ.P. X, 32A C.F.R. Ch. at below,1 of the regulations required assessment determinations 10246. The final that 31, 1974, present the facts and the reasonable applications by March in we be filed § 5(a). 12(d) in the most with Id. Section inferences therefrom manner accordance judgment. granted summary Though initially cate earlier R.A. court a district partial summary liability signifi judgment parties in favor alluded to no 509-10. The have Ven-Fuel, facts, government, United States v. disagreements underlying cant about 80-335-Z, (D.Mass. Inc., slip op. C.A. No. at 8 pointed factual nor has either further 6, 1982), damages. a bench trial ensued on Oct. present. Under evidence which wished clearly appear, more For reasons which will see circumstances, should these set aside necessarily presenta post, the text trial involved they only if court’s factual inferences district culpabili proof tion of all of ty. as Ven-Fuel’s Emplea clearly are Federacion de erroneous. (March in an ore tenus decision Torres, de v. 747 F.2d dos Tribunal Justicia del trial, 1984) following bench the district Frosch, Cir.1984); (1st F.2d Vetter liability finding upon reaffirmed con court its Williams, Cir.1979); Starsky v. 507-10, evidence, of all R.A. at sideration 532-38, of the (9th Cir.1975). F.2d 547-48, having moved va Ven-Fuel §1, (Revision 5), Fed.Reg. appellee, to the extent hospitable to the (March 1, 1972). support. record Ven-Fuel had neither. consistent with Arellano, with full awareness of the under- enterprise owned joint is a Ven-Fuel facts, lying nevertheless submitted the subsidiary of increments a fifty percent completed application in March of 1974. corporation business publicly-held certified, erroneously, He that Ven-Fuel spanning globe interests eligible applica- was for the license. The ego of the corporate alter Venezuelan tion was rife with misstatements.3 The Iglesias chief government. Julio was its Thereafter, during license issued. the cur- found, The district court executive officer. license, rency improperly-obtained out, Iglesias that was and the record bears 927,142 brought Ven-Fuel barrels of residu- sophisticated experienced an business- States, al fuel oil into the United much of it Cusler, lawyer/engineer, man. Jack ports. parties stipu- at Massachusetts president until served as Ven-Fuel’s vice that the cargo, lated “entered value” of the Thereafter, (who mid-1973. Gusler was at is, purchase price paid point payroll transferred dollars, $9,366,- importer, converted to corporate grand- appellant’s publicly-traded value, is, 506 and that its domestic responsibility parent) continued to have price importer eventually for which the legal providing advice to Ven-Fuel. Jose sold the oil in the United inwas Arellano, also well versed elaborate $11,950,892. excess of If Ven-Fuel had dealings, intricacies of international oil imported goods pursuant the same to a early joined Ven-Fuel as Gusler’s fee-free) (rather license, fee-paid than a it subordinate, day- succeeded to Gusler’s $296,- permit would have incurred costs of to-day operational responsibilities upon the 956.80. departure.2 latter’s import had received an license Ven-Fuel III. PROCEEDINGS BELOW. Department

from the federal of the Interi- (Interior) 1, period April government ap- for the did not discover the or 31, pellant’s It artifice well after the through March 1974. desired to ob- until fact. period fee-free license for the The Customs Service issued a notice of tain a further 30, 1, through May April penalty To be to Ven-Fuel December of 1978. 1975. 1980, Thereafter, eligible import February fee-free license to re- suit was for a during span, brought. alleged in fuel oil this time an The United States sub- sidual imported deepwater appellant have a terminal stance that the had the applicant had to control, thereof, statements and false under its or lieu a oil means of false practices appliances in vio- throughput agreement deepwater with a or fraudulent § (1970).4 operator. Import Regulation lation of 19 U.S.C. 1592 Subse- terminal Oil 3, a was amended on October 2. Arellano was named as codefendant in this Section 1592 4. 1978, action, part Re- as a of the Customs Procedural but the district court found that the (CPRSA). Simplification limitations, 1621, form and Act of 1978 § statute of 19 U.S.C. barred 1592(e), Except U.S.C. which took ef- § for 19 Although government ap- against suit him. the passage, contemporaneous fect the amend- favor, pealed judgment from the in Arellano's only proceedings applicable ments are com- appeal presently is not before us. Ven- that eighty-nine days menced more than after enact- Fuel, having applicable executed waiver of the 95-410, I, 110(f), Title Stat. ment. Pub.L. 1979, August period in has not limitations (1978) (note 1592). following 19 U.S.C.A. § a similar defense. asserted determining purposes of to which cases the For applicable, are an action is com- amendments purpose detail- No useful would be served 3. prepenalty when a notice is menced ing Arellano’s care- the manner and extent of 778, S.Rep. Cong., No. 2nd Sess. issued. 20, 95th it was not in lessness. Ven-Fuel concedes that Cong. reprinted & Ad. in 1978 U.S.Code license, eligible the and the district’s fact News, 2211, 2231; H.Conf.Rep. 95th No. finding appellant negligent was court’s that Cong., reprinted U.S.Code 2nd Sess. in 1978 preparation and the submission of in both the promulga- Cong. & 2255. The Ad.News application is so well documented that no penalty notice the Customs Ser- tion of the finding challenge (some to that will lie. seventy-one serious vice on December straightaway present appeal 1984. The partial moved for government quently, the ensued. Fed.R.Civ.P. under summary judgment ante, see note On October PRESENTED. IV. ISSUES as to lia- motion granted the district court judgment assigns error Ven-Fuel that, the uncontroverted holding on

bility, ways. Generally myriad of in a below facts, made false statements had Ven-Fuel divided into appeal can be speaking, its license. fee-free in order to obtain First, inverse it raises an segments. four amended, see note 4 1592(e), view of Wong Sun argument, Wong Sun cf. ante, which conditions the amount 487-88, States, degree penalty to be assessed (1963), 417-18, L.Ed.2d 441 S.Ct. matter of dam- culpability,5 the importer’s (the fee- tree poisoned the effect plenary trial. for a ages was reserved granted by Interior on the ba- license free in March of 1984. ensued A trial bench representations) appellant’s false sis ruled 1 ante. The district court See note the fruit of which and taint did not bear negli- merely conduct was that Ven-Fuel’s (the entry of complains government now grossly (as to fraudulent gent opposed Customs). Sec- through fuel oil residual to vacate denied its motion negligent), ond, the district court asseverates summary judgment partial simple negligence wrong ruling allowance of was predicate amount of the to invoke the liability, and fixed the a sufficient as to liability 19 U.S.C. $783,500. Judgment in that under imposition penalty at Third, fly gaggle lets Ven-Fuel on March against Ven-Fuel amount entered spe- CPRSA) independently plying even before the more days following suf- the enactment intent, damage provisions culpability, and slip litigation the window of cific within ficed to Therefore, only 1592(c) came into force: prior law. of § substantive 1592(e) pur- prior statute modifies cases which as § For 592 [recodified 1592] pertinent portions of the poses of this case. The date of enact- the courts after the are before provision follow: text of that prior of revised to the effectiveness ment but (e) proceedings. that, District court 592, managers for the intend section —Notwith- law, standing any provision of other judicial provi- applying review purpose of court proceeding a States district in United sions, to court will have full discretion the pursuant by to the United commenced its of the case and make look at the merits recovery of title for the section 1604 of this appro- independent on the determination own monetary penalty this sec- claimed under penalty priate the and would not amount of tion— penalty which the old maximum be bound issues, (1) including the amount all would in the old 592. The court was set out novo; penalty, de shall be tried not, course, penal- be authorized to assess of (2) monetary penalty is based on if the penalty ty allowable un- the maximum above fraud, shall have the burden the United States section 592. der old alleged violation proof to establish the of Cong. & S.Rep. at 1978 U.S.Code No. 778 evidence; convincing clear not, 1592(e) did how- at 2254. Section Ad.News ever, (3) monetary penalty based on the if Congress negligence liability. clear- create gross negligence shall have the United States existed, liability already see ly believed that such proof all the ele- of to establish the burden Cong. & S.Rep. at 1978 U.S.Code No. 778 violation; alleged ments of the solely to aim was and its Ad.News neg- monetary penalty on is based if the perceived remedy make more flexible and to the bur- ligence, States shall have the United applicable We can- sanctions. imbalance proof the act or omission den of constituting to establish 1592(e) of alone § the enactment not infer from violation, alleged and the vio- the any previ- Congress to interdict intended that proof of that the shall have the burden lator existing requirements for civil ac- ously intent result of did not occur as a act or omission negligence specifically stan- to enact a tions or negligence. 1592(c)). contrary, (as To the did in § dard is, 1592(e)(4), legisla- that the premise of 1592(e) § the history legislative of conclusive- § 5. existing embodied the assumption law that tive ly to alter the that intended shows negli- simple penalties on concept bottomed of system administrative which allowed two-tiered mitigation strong support conclu- gence, for our furnishes only penalties permitted the but VI, sion, pre-1978 post that the at Part see text actions. forfeiture in civil draconian sanction of effect, precisely a result. legislation accomplished such 1592(e) ap- given was immediate § Thus § questions which mixed long of claims relate to 19 U.S.C. 1592 has a and venera- asserts, history. Its can example, of fact and law: it ble roots be traced to the eighteenth viz., century, 1799, 1 the Act of that the misstatements contained the 677. That Stat. enactment ordained in application opinion constituted matters part: fact; than rather statements of the merchandise, if any goods, That wares or

government representations induced the which have been made, shall made in thereby giving were rise to collector, the office of a shall not be safe harbor defenses of and/or es- waiver according invoiced to the actual cost event, that, toppel; and in any Ven-Fuel’s thereof, place exportation, at the taradiddles were not “material” contem- design to the duties thereupon, evade plation Lastly, appellant the thereof, any part goods, all wares challenges the im- penalty the amount of thereof, the value merchandise, posed by being grossly the district as court person making be recovered of the entry, excessive. forfeited____ shall be haveWe considered these contentions to §at Id. record, warranted the extent (8 In Caldwell v. each and find Ven-Fuel’s reliance all How.) 366, (1850), 12 L.Ed. 1115 the Court misplaced. of them be question considered the of whether a bona purchaser holding goods fide which in fact V. BAD TREE—ROTTEN FRUIT. had been entered in violation of 66 could subject to a forfeiture order. The Court clever, Ven-Fuel offers the but not answering exhibited scant hesitation argument unique, because license question in the affirmative: presented regular to Customs its first, is, face, transgression there can be no statu- forfeiture tory right is, goods approach 1592. This at the U.S.C. transfer of noted, time the is committed. If this application an inverted have offence so, transgressor, was not against Stripping argu Sun doctrine. Wong whom, directed, course, essentials, to its appellant ment bare punishment, escape would often and tri- long have us so would hold that as the umph in the cleverness his contrivance papers importation were themselves unex which he has violated law. ceptionable, apply; does goods title of the United States to the this, despite the li fact that fee-free forfeited is not consummated until after cense, precedent which was a condition condemnation; judicial right but the completion papers, of those would ad them relates backwards to the time the mittedly never have but for issued Ven committed____ offence was misrepresentations Fuel’s to Interior. Put way, argues (8 How.) another Ven-Fuel that if the (emphasis origi- Id. U.S. at nal). paper declarations related Customs’ and form, in proper work were the “mere” fact early Caldwell took an stitch in what has they premised that were on a license to omnipresent an thread in the become fabric importer legally

which was not entitled § 1592 of and kindred laws. The decision consequence. argument no was of This represents plain recognition a of the need in casuistry. an exercise construe laws customs with some breadth, ingenious so as to avoid end-runs The caselaw is its consistent insistence on collection of revenues and the con- persons should not from the benefit imports. trol reasonably perni- foreseeable results importation conduct cious vis-a-vis the case Another landmark of the same vin- (16 goods. postulate clearly tage, such a has 41 U.S. Wood v. United Pet.) (1842), the statute as well as is illustrative judice informed sub L.Ed. 987 overriding policy and kith and kin. the same considera- its ancestors its close In the customs laws. Cli- passed arboretum Wood, were goods In tions. that, But, under the 1863 held quot’s, incident. the Court without through Customs statute, (March and de- fact, seized 12 Stat. 737 they were of the after the version having be- (the government 1863), was insuffi- agent’s clared forfeit innocence an in the ac- latedly recognized deficiencies principal’s of the erase the blemish cient to invoices). The Court Wood companying (3 Wall.) at 144. The stat- guilt. 70 U.S. confiscation: post hoc upheld the apply appeared not to ute, on its face a permitted that never be For it can persons who en- than the to those other upon the a fraud perpetrates party who goods, to enter the was attempted tered or custom-house, thereby enters his and strike down expansively construed to again false valu- goods upon false invoices using “innocent” an practice the invidious delivery there- ations, regular gets guilty principal. for a run cover agent duties payment of such upon the mere Caldwell, collective- Cliquot’s Wood valua- and false invoices as such false punish more customs laws ly teach that the himself of require, can avail tions contrivance which poorly-executed than purposes of defeat very fraud to bud; those nipped point-of-entry sixty- language justice____ impugn artifice so slick that similarly laws at an supposes ... section sixth goods sliding initially succeeds upon false invoices the custom-house eyes of the past the watchful undetected payment intent to evade custom-house. duties, the forfeiture attaches proper entry upon upon such an immediately principles arose The same The suc- (C.C.S.D.N.Y. such intent. such invoices with 24 Fed. 692 Boyd, vigilance evading fraud in cess of the 1885), grounds, other rev’d on officers, it is not public so that (1886), L.Ed. a case 6 S.Ct. goods after the have until discovered respects strikingly simi- in certain which is custody, does not from their passed Boyd, the de- at bar.6 lar to the case forfeiture; although it away the purge re- material misstatements fendant made the offence may render the detection of application garding eligibility an uncertain. more difficult and more permit. Department import for an Treasury (16 Pet.) then used at 362. issued and was permit Id. U.S. was at goods,through the custom-house pass goods, The naked fact The defendant called New York. imprima- entry, time of were accorded entry, cause” of the faulty letter a “remote held officials neither tur of the Customs and, Ven-Fuel, like relied Fed. at entry as purified the them harmless nor permit was a true an assertion that entry”. or as a “true “regular on its face” at the custom-house. clear, document when used locutions, did made Such Court summarily rejected: was to Id. The defense away the taint which attached not wash tree. the fruit of bad [Sjuch application there must be an steps belonging to an one of the deemed Cliquot’s Champagne, The case of goods, attempt enter the and conse- Wall.) 114, (3 L.Ed. 116 presented, and paper quently reject- litany of cases which broadened the present- designed by the defendant to tree in the the rotten fruit of a bad ed affidavit, letter, paper, by means of Boyd decided under the 1874 revision verbal, statement, by ... to Amend the Customs written or the statute. The Act false Laws, (18 Repeal Stat. and to Moieties shall be de- Revenue whereof the United States means 1874) part pertinent duties, provided in any portion June prived lawful or of the 12): merchandise, (§ thereof, accruing upon the or owner, consignee, agent, any importer, any "That or referred to portion thereof embraced shall, person invoice, affidavit, letter, with to who intent paper, or other or in such revenue, make, attempt to or defraud statement, forfeiture]. be liable to [shall make, by entry any imported merchandise of Id. at 188. invoices, any of fraudulent or false means 749 ed, treasury of the secretary E.g., to the Customs. United States v. Twenty- Eight purpose obtaining Packages Pins, the order 28 of F.Cas. 252 of (C.C.D.Pa.1832)(No. 16,561). case, But entry, the free cannot be considered as a no read, fairly only, proposition extends the remote or indirect cause but as the further imposing (i) requirement than a procuring entry. direct of the free some cause Customs, presented document must be to subsequent The of the collector in acts (ii) entry to goods, order effect an of conformity supe- with the direction of his (iii) in irregular. is some material manner free, entering goods rior in as were requirement wholly That was satisfied in merely compliance a formal with what this instance. A practice false occurs if the already upon had been determined misrepresentation at any stage is made of application Washington. defendant’s beginning the transaction “from the to the effect, attempt to enter these end, anywhere.” Baker, United States v. goods Washington, as free at was made (C.C.S.D.N.Y.1871) 24 F.Cas. 956-57 application depart- to the head of the (No. 14,500). Mescall, See United States v. ment, not, cases, ordinary inas (C.C.E.D.N.Y.1908). 164 Fed. 583 application at the custom-house here. Cf. Bag United States v. One Crushed of nothing There is in section 12 of the Wheat, 166 (C.C.S.D.N.Y.1908). Fed. 562 application, act its of 1874 that limits regards goods, attempts pro- reading to enter to Ven-Fuel’s restrictive of the stat- ceedings only. only by ute is contradicted caselaw, the custom-house not act, very language but purpose prevent real U.S.C. (which broadly frauds, prohibits both punish general as its false as well lan- statements, verbal, whether or written guage, require applied it to be [sic] practices false committed connection attempts goods to enter wherever make importation goods). Section [sic]. in way presenta- 1592 no limits itself 24 Fed. at 695-96. any specific entry tion of type document Boyd Ven-Fuel’s notion that is distin Instead, prohibits to Customs. the im- guishable grounds on the that Treasury portation by any of merchandise false “in- merely “superior” customs voice, declaration, affidavit, letter, paper, misplaced; officials Interior stands as statement, any or means of false writ- “superior” such a just vis-a-vis Customs verbal, or ten or false means regulatory applicable under the scheme practice appliance fraudulent whatsoev- this case. See text at Part I. ante And a er____” generality Id. The of this lan- number of cases other construe federal guage plainly indicates that false state- See, similarly. e.g., statutes United States practice, just particular ment (5th Cir.1977) Beasley, 550 F.2d 261 document, genre is within the stat- (false and made fraudulent claims to state utory sweep. application government held to violate False Claims not, therefore, depend does on the form or Act, 287); 18 U.S.C. United States v. Del content of the or statement. document See Toro, Cir.), (2d denied, 513 F.2d 656 cert. Twenty-five Packages States v. United 423 U.S. S.Ct. L.Ed.2d Hats, 358, 360-61, Panama (false made city statements held 63, 64-65, (1913)(invoice S.Ct. L.Ed. States); to constitute a fraud on United goods); forms contained false valuation Catena, States v. 500 F.2d Felsen, 648 F.2d 684- United States v. (3rd Cir.1974) presented (physician false (10th Cir.1981) (applying similarly through claims United States insurance § 542, provision, criminal 18 U.S.C. worded companies). foreign automo- statements that true, out, It appellant points as the were covered certificates of con- biles majority reported formity cases Environ- under from the United States akin Agency); statutes to 19 1592 deal with mental Protection United States U.S.C. apocryphal presented directly Wagner, 434 F.2d 627-28 Cir. documents to v. whatsoever, any or false state- makes 1970) to (applying 19 U.S.C. provi- origin any of declaration under country on ment regarding statements (relating labeling mer- this title of the sions of section of the invoices and in the chandise). entry) to without reason- declaration of to the truth such able cause believe Caldwell, Wood, Cliquot’s, rule of The statement, procures aids the mak- or or renders statutori- Boyd, progeny and their any as to ing any such false statement of fruit of Ven- ly indigestible putrescent material thereto without reason- matter more To read Fuel’s diseased tree. of the truth such able cause to believe to open an invitation narrowly would be statement, not the United whether or reve- legitimate of aims of subversion may of deprived or States shall be acquisition by to the nue collection and thereof, duties, any portion or ac- lawful them, privity importers, and those merchandise, any por- cruing upon the or decline extend ill-gotten benefits. We to of thereof, to in or referred tion embraced any invitation. or to honor such affidavit, letter, invoice, declaration, such importer intended that an be reward- never statement; guilty any of paper, or or is by being al- administrative deceit ed for by act or means whereof willful omission product very to use the of that lowed may deprived States or be the United duty-free pas- of faith insure the to breach any portion of duties there- the lawful or hold, expense. sage goods public of We accruing upon any of or the merchandise therefore, in this assertions Ven-Fuel’s thereof, portion embraced or referred to regard are baseless. invoice, declaration, affidavit, in such let- statement, A LI- ter, by NEGLIGENCE AS BASIS FOR or or affected paper, VI. omission, merchandise, ABILITY. or such act thereof, or the value to be recovered appellant argues force The with some person person, shall from such or was, simple negligence as matter of forfeiture, subject to which forfeiture law, trigger the applicable insufficient to only apply to shall the whole mer- penalty provisions. since the district in the chandise or the value thereof case exculpated of any Ven-Fuel more court particular package containing or arti- premises, egregious conduct cle to or articles merchandise must confront this contention head on.7 paper or false or statement such fraud language look We first relates. The arrival within territorial itself, large- an enactment which is statute any limits of the United mer- ly silent on the of intent. version issue consigned sale and remain- chandise applicable ques- the law which is shipper or ing property con- here, ante, liability note tion see signor, of a false acceptance and the or precise form 1930. Recodi- born by invoice fraudulent thereof con- 1970, it provides entirety in its as fied signee agent consignor, or the or follows: any the existence other facts constitu- owner, seller, any consignor, importer, If fraud, attempted shall ting an consignee, agent, person per- or other or deemed, section, purposes for the of this introduces, or attempts sons enters or attempt such merchan- be an enter introduce, enter or into the commerce of notwithstanding no actual has dise imported any the United States merchan- made or been offered. fraudulent or false dise means added). (1970) (emphasis U.S.C. invoice, declaration, affidavit, letter, pa- must, outset, reject analy- statement, at the any false We per, or means of verbal, relied the court or sis of the statute written means of opined that the practice appliance The district court false or fraudulent below. negligence only government guilty appeal Ven-Fuel was has filed no cross that opposed gross negligence challenging fraud. the district court’s determination

751 phrase adjective in phrase “reasonable cause to believe” blan- “such” “without thereby entirety keted the statute in its reasonable cause to believe the truth of § allowed the cause absence “reasonable portion such statement.” In the believe,” i.e., negligence, as a to to serve preceding phrase, the noun “state- liability basis for under the act. Such an twice, appears initially ment” before the blush, interpretation plausible at first (“... disjunctive first clause or means light the fact especially when seen statement, any false written or verbal Congress in 1978 that 19 believed ”) latterly ... within the second “or” liability imposed negli- U.S.C. clause, where it is immediately followed gence: penalty applies negligent as “The (and qualified) by phrase “in any decla- violations____” S.Rep. as intentional well provisions ration under the of section 1485 Cong., No. reprint- 95th 2nd Sess. (relating of this title to declaration on en- Cong. ed in 1978 & Ad.News at U.S.Code try).” The definition of “such” in Black’s Yet, 2228-29. we think that the matter is Dictionary 1979), Law ed. states: simplistic. not so represents object “Such” already particularized in terms which are not is, The rule of the last antecedent mentioned, descriptive and is a and rela- course, statutory a fundamental tool of word, tive referring to the last ante- generally construction. That rule holds (emphasis added). cedent. qualifying phrases applied are to be phrase immediately preceed the words or Again, apply the rule of the last ante- ing and are not to be construed as extend statement,” clause, cedent. “Such in this ing to others more remote. First Charter referring only must be construed as to the Corp. Financial v. United 669 F.2d prior last use of the word “statement.” 1342,1350 (9th Cir.1982); Morton, Azure v. Thus, “such perforce statement” refers Quindlen (9th Cir.1975); 514 F.2d only to a statement made a formal cus- Co., v. Prudential Insurance 482 F.2d declaration, toms only type and it is (5th Cir.1973); v. Pritch phrase statement to which the “without ett, (D.C.Cir.1972); 470 F.2d Man applies. reasonable cause to believe” Commission, del Bros. v. Federal Trade other construction would ren (7th Cir.1958), 254 F.2d rev’d on nugatory phrase: der the entire “or makes grounds, other S.Ct. any false statement the declaration un L.Ed.2d 893 While the rule is not provisions der the of section 1485 of this one, Pritchett, an inflexible 470 F.2d at general title.” This is so because the word applied it should be unless there is a appears “declaration” in the earlier clause: plain contrary indication to the in the stat “by means of fraudulent or false in harbinger ute. there is no such here. voice, declaration, affidavit, letter, pa slips neatly 19 U.S.C. 1592 within per____” The unrestricted word “declara integument qualifying of the rule. The would, course, types tion” include all phrase “without reasonable cause to be declarations, including declarations on en modify only lieve” must be construed to Thus, try made under 19 U.S.C. 1485. if viz., previous phrase, the last antecedent phrase, had intended the “with “any statement declaration out reasonable cause to believe the truth of provisions under the of section 1485 of this apply such statement” to to statements (relating entry).” title to declaration on (and generally made declarations modifying phrase rationally cannot be invoices, affidavits, statements made in let distributively construed refer papers), ters or it would have been sense phrases, more remote antecedent words or any particularized less to make reference disjunctive which occur before clause entry. All 1485 declarations on words set off commas. provisions intended to of statutes are effect, interpretation meaning given validity of such an is have and are to be adopted presence no construction should be further confirmed thereupon, or the duties design to evade statutory words or render would thereof, super goods, wares any part or all such redundant meaningless, phrases thereof, merchandise, F.2d to 752 the value Cunningham, v. fluous. Breest Cir.1985); making entry, v. North 8, (1st person Zimmerman recovered of 9 be 347, Co., F.2d 353 704 Signal forfeited; every case in American and in shall be Society v. Mor Cir.1983); suspect Wilderness collector shall the said which (D.C.Cir.), 842, cert. de ton, 856 F.2d 479 goods, wares or merchan- that such 1550, 917, 36 S.Ct. nied, 93 equal at a sum to are not invoiced dise Rhode (1973); Blue Cross L.Ed.2d 309 they usually of have been for which that Cannon, F.Supp. Island v. country from whence place in the sold Black, Con (D.R.I.1984). generally See duty imported, it shall they were Laws, Interpretation and struction goods, to take the said of such collector 1911). § There is but one (2d at 165 ed. posses- into his or merchandise wares why Con one reason reason—and alone— sion, due and and retain the same with § singled out 1485 decla gress would have care, expense at the risk and reasonable ref particularized entry by rations on owners, consignee or the owner or to only such declarations it erence: thereof, at until their value consignees cause to reasonable the “without which importation shall be place the time directly relates. lanuage believe” ascertained, arising, until the duties was, Although the district court valuation, first according shall be to reasons, formulating the in error in these required paid, as paid, or secured to be that upon which it determined rationale importation. cases of by this act in other enough trigger negligence was to simple Stat. of that error liability, ascertainment statute, limited narrowly drawn and This is set- inquiry. our The law does not end situations, heed invoicing paid particular court reached tled that if the below But, did place exportation. it conclusion, faulty premise, right albeit on phrase that dealt with intent: include a appeal. on should be affirmed its decision progenitor As the design to evade.” “with See, Exchange Com- e.g., Securities on the laws addressed to fraud of a race of Chenery Corp., 318 U.S. mission v. custom-house, the 1799 statute became (1943); 454, 459, Doe 87 L.Ed. 626 63 S.Ct. ar- interpretation in two crucial object of (1st Cir.1984); 728 F.2d Anrig, hoary ordi- decided under that eas.8 Cases DeCardona, Inc. v. Pueblo International give glimpse us a of what kind nance So, Cir.1984). (1st in F.2d Congress had in mind requirement intent meaning and intendment order to divine the § 66. when it enacted statute, applicability to the and its court, it is by the district facts as found in set Wood, decided Court trace the full necessary judgment in our many of the later cases. the tone for § 1592. genealogy of 19 U.S.C. any notion that the revenue rejected Court strictly proceed- were to be con- trek with the collection laws We commence our ap- strued, expansive instead for an ings Congress, opting the fifth from which in this provided statutory interpretation emerged proach an enactment (16 Pet.) Wood, 41 U.S. at 362-63. part as follows: area. read- Court’s liberal merchandise, while Wood any goods, That if wares or statutory scheme ing application of the have been made of which shall silentio, the Court implemented . sub collector, not be office of a shall some in its observations was more direct the actual cost according to invoiced later: thereof, years three place exportation, with 28, 1830, stat- relation to 66. These May discussed in Stat. often 8. Two acts —one however, utes, impact 14, 1832, have no substantial July 4 Stat. 593— other of and the the case at hand. laws are modified the customs revenue which Upon point laws, policies the revenue on remedial they promote, founded, which the information was were deeply rooted in jurisprudence. Thus, our not, judge as the sug- the court below in Cliquot’s Court Champagne applied gested, penal to be deemed laws analytic approach same to the 1863 phrase sense which is sometimes ancestor of holding that: used, may proper say very few penal Revenue laws are not laws in the point words. He treated the as not of requires sense that them to be construed great importance case, think great strictness in favor of the de- not, it was since it tendency had no They fendant. are regarded rather to be change interpretation provi- of the character, as remedial in their and in- sions of the revenue laws then under his prevent fraud, tended to suppress public sense, consideration. In one every law wrong, promote public and good. imposing a penalty may or forfeiture be They should be so construed as to carry law; penal sense, deemed a in another out the intention of legislature deemed, are often truly laws and passing them and most effectually ac- called, deserve to be remedial. The complish objects. these judge accurate, strictly therefore (3 Wall.) 70 U.S. at 145. See also United when he stated that “It must not be Willetts, States v. 28 F. Cases every imposes understood that law which (C.C.S.D.N.Y.1871) (No. 16,699) (Blatch- is, therefore, penalty a legally speaking, ford, J.). early are authorities virtual- law, is, penal a law which is to be ly consentient on point.9 And, great construed with strictness favour soundness of reasoning their cannot seri- of the defendant. Laws enacted for the doubted, ously given be govern- the salient fraud, prevention of suppression for the mental concerns which underlie the integri- public wrong, of a public or to effect a ty of the custom-house. good, not, sense, are in the penal strict acts, although they may that, inflict a These cases tell us notwithstanding violating added, penal them.” And he “It aspects, their the revenue laws are to light laws, is in I this view the revenue expansively be read in give order to effect and I But, would construe them so as most Congress. to the will of the they are effectually accomplish the intention of particularly illuminating as to how that legislature passing them.” The degree will manifests itself vis-a-vis the same recognised distinction will be found culpability necessary catalyze the statu- writers, as, elementary in the tory for exam- scheme. It is on this issue that cases ple, Commentaries, (1 in Blackstone’s such as United States v. Five Casks of 88;) Files, Abridg- Blaek.Comm. and Bacon’s (C.C.S.D.N.Y.1840) F.Cas. ment, (statute 7, 8;) (No. Comyns’ 15,112) I. Di- States, and Caldwell v. United (Parliament gest, 20;) R. R. R. supra, point way. it abundantly supported by is also matter, In government the former authorities. brought against an information merchan- (3 How.)

Taylor v. United allegedly imported by dise means of a false 197, 210-11, (1845) (dicta). 11 L.Ed. 559 invoice intent evade or defraud Taylor by collection, no contrary

Wood means stand revenue 28, 1830, alone. The idea that May revenue laws are a Act of 4 Stat. 410. The breed, special generis, demanding sui importers argued argues Ven-Fuel —as more interpretation light liberal here—that a mere mistake was insufficient Only Eighty-Four quired United States v. Boxes for forfeiture. This is evident from the (7 453, 462-63, Sugar, Pet.) (7 argument 8 L.Ed. 745 of counsel in the case. Id. 32 U.S. (1833), appears stating Pet.) interpretation, contra. laws at 458. Consistent with the imposing penal Sugar forfeiture were should makes the standard distinction between construed, however, strictly apparent- the Court cases of fraud and situations of mere accident ly only (7 Pet.) meant to hold that some intent is re- or mistake. Id. 32 U.S. at 463. ap- requirement intent The nature of the oth- Judge Betts ruled liability. to sustain clearly in pears more erwise: Diamonds, 139 Fed. 961 Ninety-Nine that, W., if H. & contends claimant [T]he There, sought Cir.1905). government they purchas- were supposed Moss § 9 of the Act of gems under to confiscate inserted and, supposition, ers, under 10, 1890, 135-36. ch. 26 Stat. June value, cost, of actual instead the actual ancestor of 19 a direct lineal That law is law, merely mistaken they were part follows: It read as 1592.10 U.S.C. defraud or of an intent to guilty and not owner, importer, consignee, any That if however, court, revenue. evade person shall make or agent, other the law this mistake of opinion that is of any entry imported make attempt to exculpation. in their looked to cannot be any fraudulent by means merchandise if, law, and to know the They are bound affidavit, letter, invoice, paper, or false fact, they make an mistake without statement, any false writ- byor means of law, contrary to entry in their invoice verbal, means of ten or intentional; and, regarded must appliance what- practice or or fraudulent reve- or defraud the tending if to evade soever, guilty of willful or shall be to the nue, must ascribed that intent the by means whereof act or omission not, in this jury The are false invoice. deprived of the States shall be to the actual inquire particular, thereof, duties, ac- any portion lawful or revenue, the private intent to defraud merchandise, any por- upon the or cruing in such a importers the were whether but thereof, to in embraced or referred tion them manufacturers as bound relation of affidavit, letter, invoice, paper, or such cost, goods, the not at actual but to enter statement, by act or or affected at actual value. omission, or the value such merchandise Files, 25 v. Five Casks United States thereof, person recovered from the to be at 1096. F.Cas. forfeited, entry, shall making the only apply to the forfeiture shall which in- something specific less than the That the merchandise or the value whole of usually associated with tent or scienter containing package in or thereof the case criminality suffice in a customs acts of will or articles of mer- particular article apparent from case is also Caldwell. such fraud or false chandise to which There, court, reviewing in the district relates; paper or statement ... judge’s jury instructions in a suit under 1799, charge Circuit, thorough intimat- Eighth Act of faulted the The in a recognized duality ing proof opinion, of “meditated fraud” was an that exhaustive meaning ascribed to the government’s case. which could be essential element of context, statutory (8 “false” in the Caldwell, How.) word at 383. Cald- negligently the line so as to include drew well, in the on the trial level and both representations the reach of false within Court, equated in the Supreme “fraud” (139 Fed. The court held the revenue law. “improper sense of the Act of 1799 with 966): at means;” plainly case indicates that the has two distinct and liability “false” necessary impose word “fraud” is, well-recognized meanings. signifies It has violation of the customs laws negli- start, (1) intentionally knowingly or or apart. from the been breed 858, 982, IV, 592, 643, 356, 10. Stat. provisions Title §§ Administra- Customs 9, 10, 1890, 407, 6, superseded and re- §§ tive Act of June ch. The 1922 Act was 989-90. 131, 134, 17, 1930, 497, were amended and reen- pealed by Stat. 135-36 ch. Title the Act of June 5, Aug. 762, by Payne-Aldrich 590, 750-51, IV, acted Tariff Act of 651(a)(1), 46 Stat. §§ 11, 95, Payne- 5, 1935, ch. 6 36 Stat. 97. The Aug. Act of which was later amended Act turn was amended the Under- Aldrich in III, 304(b), Stat. Title ch. H, 3, 1913, III, wood Tariff Act of Oct. ch. changes the 1890 Act these altered None of 114, 183-84, supersed- which was itself 38 Stat. any way material to this case. Sept. repealed ch. ed and Act of true____ untrue, mistake, that it untrue was not gently reason- [T]he accident, honestly or after exercise able inference is that intended A that care. statement is knowledge falsity, reasonable that culpable of its or undoubtedly false the former sense negligence ascertaining the answer by section 9. denounced question, whether it was true or false, indispensable should be an 968-69): ele- (id. further at And using ment the false case, general The reason of the rule offense statement, rule, under the familiar “Nos- penal strictly statutes should be con- citur a sociis.” strued, judiciary that the should not in- terpret into them the creation offenses (emphasis supplied). Id. 969-70 body did enacting clearly which While more modern caselaw on the sub- denounce, general and the current of de- ject scanty, an application it favors upon subject, cisions to some of principles same of construction to 19 U.S.C. made, reference which has been indicate § Circuit, 1592. The Ninth for example, this: true rule is The words upheld a predicat- forfeiture under “false” and “falsely,” statutes and finding ed below claim- “[t]he impose contracts which forfeitures or ant made false statements the entry or penalties falsely for false acts acts papers ... without reasonable cause to be- done, culpable generally imply negli- lieve the truth of such statements.” Unit- gence wrong. They signify more than Wagner, ed States v. F.2d incorrectly, incorrect or and mean know- Cir.1970). Wagner dealt the exact ingly or intentionally negligently statutory verbiage before the falsely, in express pro- the absence of district court in the case at bar. The court visions statutes or contracts them- appeals flatly rejected notion that selves, implications or reasonable from “knowing prerequisite intent” was a them, subjects, their and the circum- application of the statute. Id. at 628-29.11 contrary. (Citations stances to the omit- To the same effect United States v. ted). (N.D.Ill. Organics, F.Supp. R.I.T.A. Eighth The Circuit concluded: 1980). case, one, That the like instant in Section 9 of the 1890 is penal act of a proceeding volved a under 19 U.S.C. grave prescribes statute. It forfeitures § 1592, as enacted in wherein the penalties, fairly and and it falls within government alleged that the defendant announced, the rule which has been made false statements connection with which is sustained above the authori- importation of certain merchandise. ties. A rational construction the stat- squarely The district court held and a ute consideration of the relation of imposes liability regard statute “without the offense of the use a false state- importer’s culpability whether the is based ment denounced in it to the other of- fraud, negligence, gross negli strengthen fenses created this con- Thus, gence.” at Id. 76. 1592 “makes It is probable, clusion. neither nor rea- negligent, fraudulent, actionable as well as sonable, suppose intend- importa misstatements at the time of the to inflict ed the forfeiture of the mer- Id. at tion merchandise.” involved, chandise possible a fine of $5,000, In possible imprisonment addition to the “awkward locution” of years Chen, two for the an Dao ante at use of innocent or Jen discussed note trilogy mistaken was of musty statement that made with Yen-Fuel relies on a cases which, view, knowledge myopic reasonable care and without its somewhat re- appellant’s case, knowledging 11. The an “of the reliance on earlier Ninth Chen’s use term ‘intent’ as context," being Circuit Jen Dao United Wag- Chen v. somewhat in this awkward (9th Cir.1967), contrary ner, F.2d 939 misplaced. a rule carefully 434 F.2d at reconciled Chen Wagner specifically The court con- Wagner with the rule. and, precedent, although sidered the Chen ac- But, place on appellant attempts defraud. showing of intent to quire see, the case. the smoke that Ven-Fuel of these three deci- none shall as we dispelled dicta is further weight appellant’s sees Tobacco’s sions bears express Ninety- reliance on by Tobacco’s assertion. Tobacco, Diamonds, supra. Nine 1,150½ Pounds Cel States United at 130. Fed. (6th Cir.1897) involved luloid, Fed. 627 points to Lastly, appellant Ad United States 9 of the Customs under forfeiture (3d Rug, 158 Fed. 974 Cir. ch. v. One Silk Act of June ministrative But, 1908). the case is less an Aubusson There no evidence of was 26 Stat. imperfect remnant. To the extent part on the than an negligence or fraud either Rug holds to the view that owner, court ordered that One Silk and the district provisions of the customs the seized the forfeiture from the sale of proceeds judged by must the same standard paid to the claimant. laws over celluloid of a making applies prosecution to the criminal appealed, essen as reject person charged effecting a fraudulent liability argument. tially a strict error, simply wrong-headed. assignment entry, id. at it is government’s ing the Circuit, quoted respectable authority sup- with There is no id. Sixth following passage perspective, from the and the port such an extreme approval the Fifty-One to none. Be that opinion Rug Hundred court cites Six One Silk States, 22 F.Cas. much may, Tea v. United as it the issue the case is Chests of (C.C.S.D.N.Y.1826) (No. 12,916), 253, 256 would have us be- narrower than Ven-Fuel (12 Wheat.) 6 L.Ed. 702 aff'd, 25 U.S. lieve. The Third Circuit described issue there at bar as follows: single instance I am not aware of a position judge The learned trial took the where, any positive provision of the part foreign of the that the fraud on the laws, incurred, a forfeiture is revenue support would not a forfeiture of broker fraud, grow of some that it does not out goods fraud subse- unless this mistake, party on negligence person making quently adopted by the (Em- has been visited. whom goods, if phasis supplied). person there was no were innocent position ground read, Closely only for Celluloid stands for forfeiture. is, government contrary, on the proposition that an innocent accepted filed, exceptions the indicated in the to more, bevue, the without will not incur that, 9 of the cus- effect under section custom-house. wrath of the Cellu- act, the toms administrative strongly loid ’s reliance Chests Tea goods by means of a fraudulent invoice suggests precedential that its value favors ship- seller and put into existence the appellee’s position the in the case at bar. merchandise, finan- per of the and who is Ven-Fuel next brandishes the Second Cir- defeating cially interested in the cus- Seventy- cuit’s decision in United States v. toms, goods forfeit the is sufficient to Tobacco, (2d Five Bales 147 Fed. 127 invoice____ entry is made on this when Cir.1906). Tobacco, Judge did lit- Coxe brief) (em- (quoting government’s Id. at 976 tle more than to restate the “honest mis- supplied). phasis rule; a directed take” Tobacco affirmed Thus, despite the use of intent-oriented in the owner’s in circumstanc- verdict favor language, of the “awkward lo- district had exonerated reminiscent es where the court Chen, ante, note 11 negligence, specifically stat- cution” of Jen Dao see the owner of is, bottom, one fur- sought “require Rug but ing government that the to One Silk blameworthy conduct making up proof in ther that some degree accuracy a of care and owner/importer to the fairly attributable the invoice which seems unreasonable.” in to invoke language goods the must attach order negligence That is Id. at 129. —it gloss penalty liability. emphatically artificial erases punish surrounding adoption The debates Congress intended to That beyond that section demonstrate cavil legislative from ac- negligence is evident Congress give statutory intended to au- surrounding adoption history tions and thority long-standing to administrative time, Congress Act. At that of the 1930 noted, practice. As Senator Howell “[W]e practice administrative sur- memorialized given Secretary have of the Trea- revenue laws en- rounding the customs sury power to exercise his discretion § 618, pertinent part: acting which read may and to relieve to such extent as he any person interested in Whenever proper deem the fine which has been levied vehicle, merchandise, vessel, baggage or and to collect it. That has ever been an Act, provisions of this seized under executive function under the Constitution incurred, alleged has or is to have or who continuing of the United and we are thereunder, incurred, any penalty fine or init an executive function here as it has Secretary Treasury of the files with past.” See been for some time in the laws, if under the customs and with (1929) (remarks Cong.Rec. S4714 Sen. if Secretary of Commerce under navi- see also Shortridge); Howell and Sen. laws, the sale of gation before such ves- (1929) (remarks Cong.Rec. S3848-52 on var- merchandise, sel, vehicle, baggage or cases). express ious administrative au- mitigation petition for remission or punish negligence thorization to forfeiture, fine, penalty, the Sec- § evidences, think, congressional retary Treasury, Secretary or the intent to utilize a similar standard for Commerce, fine, if he finds that such statutes, all, 1592. The after must be penalty, was incurred with- or forfeiture pari passu. Secretary read in was not negligence or without in- out willful required only permitted mitigate or — —to part petitioner tention on the negli- remit a forfeiture in cases of law, defraud the revenue or violate gence; it would be anomalous to allow the mitigating of such or finds the existence Secretary predicated upon to assess a fine justify circumstances as remission negligence but be unable to enforce that fine, mitigation penalty, of such action; equally fine a civil it would be forfeiture, may mitigate remit or the’ prohibit, negli- anomalous to a case of upon such terms and conditions as same gence, directly, a civil action for forfeiture just, or order he deems reasonable and Secretary impose such yet allow the any prosecution relat- discontinuance of remedy administratively. It is obvious that ing thereto. act, enacting the 1930 version of the §of from which the 1970 version was plainly Secretary Section 618 allowed assumed —and transplanted, mitigate penal- Treasury fines and therefore, negligence intended —that imposed on a they ties if had been lower plat- requisite to constitute the sufficient culpability negli- level of than “wilfull adequately to form of intent bottom liabili- gence.” proviso That alone leaves no room ty.12 Congress intended and envi- to doubt that simple negligence could itself Though sioned that the district we have faulted support imposition penalties; the of such the “with- judge for her literal reliance on elsewise, authority the clause the ceded to Secre- out reasonable cause to believe” § 1592, see text ante at contained in tary mitigate or reduce be an would 750- 752, good. her Despite instincts were empty exercise. the remarks, (1929) (remarks by which there was no 12. See 72 Cong.Rec. The senator’s dissent, from S4333 falsity Blaine). unique antique display sense of debating the Sen. schedules, furniture and no- passing revenue context. The made these fraud in the customs Senator Blaine blameworthy encompasses anything going apply penalty, more a tion remarks: "If we are ought Consistent applied party or innocent mistake. acted than accident not to be where caselaw, "negligently knowledge preexisting un- innocently and without and without pur- practices the encincture. grounds true” fall within to believe that his reasonable Cf. Diamonds, at 966. Ninety-Nine 139 Fed. spurious chased and fraudulent.” article (which quite prob- particularly precise so when the intent of solecism, language analysis) enacting Congress does is obscure.” in the final Sea superfluous, ably Oil, Shipbuilding v. 444 U.S. Again, a train Shell statute as whole. inform the 572, 800, 814, 596, 100 S.Ct. 63 L.Ed.2d veil. must lift the historical (citations omitted). Andrus v. See § Payne-Aldrich ago, 6 of Decades Oil, 657, 8, 666 n. 100 S.Ct. Shell 1909, 95, 5, August 36 Stat. Tariff Act of 8, (1980); 1932, 1938 n. 64 L.Ed.2d 593 cf. with false statements specifically dealt Broadcasting Red Lion v. Federal Com A a customs declaration. made under Commission, 367, munications statute, of the same general provision more 8, 1794, 380-81 & n. 1801-02 & n. S.Ct. § 9, practices fraudulent covered false and 23 L.Ed.2d 371 As we have re appliances, etc. 36 Stat. 97. Unlike cently observed: § seen, which, as we have blame- 9—in Although subsequent legislative history historically requirement had worthiness contemporane- is less authoritative than statutory implicit been explanation, subsequent Congres- ous express intent language 6 contained an §— sional intent declaration an act’s requirement. great weight statutory entitled to con- Congress amended these sections struction. 3, 1913, Act of 38 Stat. 183- October Campobello Roosevelt International Park doing, Congress effectively In so con- Commission v. United States Environ- § § solidated 6 and 9 of the 1909 Act under Agency, mental Protection 711 F.2d rubric, “knowing- single a deleted word (1st Cir.1983). 436-37 § 6, ly” from the former and inserted the Congress up When the faced to the need cause to believe” ver- “without reasonable § 1592, to revise it left no doubt as to its biage legislative in its stead. While the understanding of its former enactment: history philological merger of this is unen- lightening purposes, only penalty for our rea- under Section 592 U.S.C. [19 applies regard illation which we can is that sonable draw without 1592] Congress sought degree culpability. penalty match the re- intent §§ quirements of may applied the former 6 and 9. forfeiture value be to a vio- softening occurring simple to do so demanded the lation as result phraseology negligence. to the “without reasonable level, cause to akin to the mini- believe” S.Rep. Cong., No. 95th 2nd Sess. showing negligence mum which had his- reprinted Cong. in 1978 & Ad- U.S.Code torically energize culpabili- sufficed to min.News also id. at See ty. Seen albedo of these evolution- Cong. U.S.Code & Admin.News ary changes, presence of the “without (penalties negligent 2224-29 apply “to language reasonable cause to believe” violations”). aswell intentional (1970),though blanketing U.S.C. 1592 confirmatory That view was of wide statute, easily-read signpost the entire is an spread preexisting practice administrative points unerringly to our conclusion conduct, imposing penalties negligent negligence can and should be an ade- id., practice which all of the commenta quate finding foundation for a tors had believed to consistent with the liability. E.g., statute in its incarnation. 1930-1978 Herzstein, If doubt remains as to the reach The Need to Section Reform § 1592, of 19 U.S.C. it can set to rest Act 10 Int’l Law. Tariff (1976); Note, reviewing proceedings Laid to Anachronism Accomplishes when the statute was redrafted. Rest: Customs Act Reform subsequent Long views of Con Overdue Section “[W]hile of of Reform gresses Pol’y 10 Law & Int’l of 1930, cannot override the unmistakable Act Tariff (1978). textu enacting intent of the one such views Bus. 1305 Our search of the ... significant expression no of weight are entitled to ... and al authorities reveals 759 view, opposite appellant and the has cited absence of malevolent intent need not bar § application us to none. of a penalty when adequately has evinced a con- application does the Nor of such a trary intention. importance The of secur- penalty negligence strike a dissonant ing compliance court, with the order of a jurisprudence gener chord in terms of our McComb, e.g., supra, or of an arm of the ally. long has stressed Court the re Branch, Executive e.g., Enterprise Found- purposes medial of the customs laws and ry, supra, nicely parallels importance necessity expansive, commonsense securing due observance of the Customs construction effectively promote so as to protecting public laws and against fisc public E.g., Cliquot’s weal. Cham losses sustained reason noncompli- (3 Wall.) 145; pagne, 70 Taylor, U.S. ance. (3 How.) (dicta). at 210-11 It is horn- legislation book law remedial is to be up, To sum from 1799 forward the fairly reasonably construed so as to revenue laws have sounded a consistent apparent legislative purpose. effectuate Congress, theme: the expressed will as Stowell, E.g., United States v. 133 U.S. long statutes, line of successive has 244, 245, (1890). 10 S.Ct. 33 L.Ed. 555 been to excuse honest mistakes and acci custom-house, dental incursions argued Neither can it be that the levying condemn, but to another, in one form or of a civil for carelessness alone is blameworthy more violations. Historically, way. somehow alien to the American For simple negligence has been deemed suffi cogent analogy, we need look no further ciently culpable to fall within the latter another, than more familiar revenue collec- category. caselaw, spotty, while has measure, tion the Internal Revenue Code. tended to honor this distinction. The com Congress there explicit has made what was mentators, though sometimes critical of the implicit pre-1978 version of 19 U.S.C. rule, harshness of the uniformly have rec monetary 1952: that sanctions will lie for ognized And, vitality. its good there are simple negligence. E.g., I.R.C. policy sufficient (1954 considerations which And, Supp.1984). & West the courts approach. favor such an We therefore fol consistently upheld have impost. such an Eighth low the See, reading Circuit’s of this e.g., Lysek v. Commissioner Inter- Revenue, join statute’s ancestor and Ninth Cir nal 583 F.2d Cir. (albeit 1978); cuit reasons) for somewhat Abrams v. different 449 F.2d (2d holding Cir.1971); finding that the district court’s Druker v. Com- cf. Revenue, negligence enough trigger missioner Internal F.2d (2d Cir.1982). appellant’s liability 52-56 instances, under 19 both U.S.C. 1592 (1970). compelling public assuring interest compliance strict legislation designed VII. MISCELLANEOUS LIABILITY equitably engines to fuel the of a democrat- QUESTIONS. government (which runs, ic like busi- ness, energy part gross derived in from A. Opinion. Fact versus receipts) constitutes, itself, good and of represented Ven-Fuel asserts that it no reason to citizenry compara- hold the to a facts, false at most but included in its tively rigorous compliance. standard of permit application opinions. incorrect good

Just as law, faith is no by analogy defense to a appellant to tort ar- charge of civil contempt, gues expression McComb Jack- that the mere opinion, Paper, 187, 191, ill-founded, sonville though S.Ct. cannot constitute a 497, 499, (1949); misrepresentation. L.Ed. 599 Donovan v. 37 Am. See Enterprise (1st Jur.2d, Foundry, Deceit, 751 F.2d Fraud and Cir.1984); Fortin v. palpably Commissioner Mas- Ven-Fuel characterizes the untrue Department sachusetts Welfare, portions application being Public of its no more (1st Cir.1982), 692 F.2d opinions so the than the sum of Arellano’s

760 is, ineli- of the situation. Ven-Fuel was line of defense ments interpretations. This however, fee-exempt li- doubly gible flawed. for an allocation and import cense to residual fuel oil into the record be have scrutinized We States; the district court so found appellant low, sign no that and find appellant concedes as much. When and the point in manner before raised this Arellano, Ven-Fuel, acting for certified that prac “our consistent district court. Under corporation eligible was for the fee-free at game be started a new tice ... [cannot] was, license, opin- in our that certification President and Fel this date.” Cohen v. ion, utterly false as a matter of fact.13 59, F.2d 60- College, 729 lows Harvard — -, Cir.), denied, (1st cert. Estoppel. B. 233, Ex 83 L.Ed.2d 161 105 S.Ct. appellant govern- claims extraordinary circum cept under the most against ought it to fore- ment’s action here), (not regu have present stances problems closed inasmuch as “Ven-Fuel’s initial consideration at larly eschewed misleading, ambigu- were a direct result of “alien to the appellate level of theories conflicting ous and information disseminat- record,” Kobrosky, 711 v. United States government.” Appellant’s ed Brief Cir.1983), (1st F.2d and we hew asseveration in this re- at 30. Ven-Fuel’s The failure of that line in this instance. gard inartfully- centers around a series of ignite this blaze appellant below Energy phrased letters from the federal purposes of extinguishes the ustulation for Office, agency on bulletins issued Cohen, proceeding. supra; Kobrosky, 15, 1974, February February 1974 and supra; Eagle-Picher Liberty Industries v. publication February and the 1974 of Insurance, 682 F.2d n. 8 Mutual Cir.1982), denied, 1028, proposed regulations, Proposed Rules (1st cert. (Revi- (1983); Import Regulation 1 Amending 75 L.Ed.2d 500 Oil 103 S.Ct. Inns, (1974), Holiday 5), Fed.Reg. 595 F.2d Johnston sion (1st Cir.1979). ultimately abandoned. were event, whatever remain of embers need not this evidence in We discuss appellant’s argument quickly are First, though properly estoppel detail. was applica- an doused examination appellant pleaded as an affirmative Assuming arguendo itself. that ex- tion defense, entirely proffer any it failed pressions opinion are held to a more point argument on the when the district lenient standard than statements of fact liability. adjudicated court It is settled law (a purposes proposi- of 19 U.S.C. that, when confronted with a Rule 56 mo necessary tion which it is not for us disposition, party invoking tion for brevis bar, decide in the case at and as to which estoppel the doctrine of must advance the view), starkly apparent it we offer no appropriate issue in fashion. Burke v. application expressions that the called for Inc., Gateway Clipper, F.2d 948- obligated of fact and that Ven-Fuel was (3rd Cir.1971); Moore, Moore’s Fed J. respond in a factual had manner. Ven-Fuel (2d 1982). ed. eral Practice deepwater op- 56.17[21] neither a terminal under its summary judgment a motion for “When throughput agree- erational control nor a party supported made and ... an adverse deepwater operator; ment with terminal may allegations mere was, therefore, not rest ineligible largesse for the pleading____” fully denials of his Fed.R.Civ.P. of a fee-free license. Arellano was 56(e). apprised of all of the relevant factual ele- is, during deepwater its terminals It cannot be doubted that Ven-Fuel in this fuel oil into regard, feebly grasping January ending period at the frailest of straws. December 1973 and Arellano, only application, certify 2,740 Not did average per day were barrels b/d "eligible falsely corporation fact, have a 60° F.” In Ven-Fuel did not even allocation,” such an but he likewise certified deepwater terminal in 1973. qualified inputs that "its terminal of residual

761 sure, attempted Marsh, 1378, (9th Ven-Fuel v. 644 F.2d To be when 1384 Cir. 1981), the penalty phase trial vacate are tantamount to after affirmative misbe- liability, argue it did summary judgment on havior. The evidence in this record in no theory. suggest— way presented It did not estoppel compelling so a case as to proof suggest misconduct, all of the on the then or now—that affirmative or as to question was not before the district court. intimate that begin Ven-Fuel could even Judge carefully heavy Zobel examined the rele- meet the burden which it bore evidence, 536-37, Heckler, e.g., 2224-26; vant R.A. and reaf- wise. See 104 S.Ct. at finding liability. firmed her on R.A. 548. Immigration and Naturalization Service rejection appellant’s estop- Miranda, 19, her v. 459 U.S. at 103 S.Ct. at pel by 283; claim means clear error. Hansen, 785, no Schweiker v. 450 U.S. 788-90, 1468, 1470-72, 101 S.Ct. 67 L.Ed.2d repeatedly As have held in a (1981); 685 Gill, Lemer v. 751 F.2d contexts, variety of the “traditional doc 450, (1st Cir.1985). 458-459 equitable estoppel apply trine of does not Likewise, the overwhelming evidence is fully against government.” in cases that, (if all) to the extent that Ven-Fuel Immigration v. Akbarin Naturaliza at. relied on sloppy the somewhat Service, 839, (1st actions of tion 669 F.2d 842 Cir. government, totally such reliance was 1982). minimum, party raising At a unreasonable. Arellano admitted that he reasonably defense must have relied on never took the appli- trouble review the some “affirmative misconduct” attributable regulations. And, cable he submitted the sovereign. to the Id.14 The rationale for application 1974, in early despite March of are, all, the rule is clear: we after a nation having by advised Energy been the Federal possibility ruled laws not men. regulations Office that pro- will be private party deny “[f]inal of harm to a inherent in mulgated date”; filing before the March 15 ing equitable estoppel its wonted reach is applications that “no ... should be filed (if always) grossly outweighed by often until the proposed comments on the rule- pressing public interest in the enforce making published in Register, the Federal congressionally public ment of mandated 11, February 1974 have been received and Stetson, policy. Best v. 691 F.2d 44-45 Regulations published”; final have been (1st Cir.1982); States, Portmann v. United that, necessary, if an extension of the (7th Cir.1982). 674 F.2d Such filing granted. March 15 date would be peculiarly appropriate are considerations appellant Had the these abided instruc- here, given strong national interest in tions, ambiguity of which it now com- integrity custom-house and plains would have vanished. thwarting honeycombing circumvention Brokers, of the customs laws. Air-Sea C. Materiality. Cf. Inc. 596 F.2d v. United Relying “by on the means of” (C.C.P.A.1979) (estoppel not available § 1592, clause embodied 19 U.S.C. duties). involving import cases collection of appellant argues liability cannot attach charitably ap showing Viewed most under the statute of ma absent pellant, in this teriality. engraft the record case demon A number of have cases vagueness requirement strates a certain and lack of ed such a the statute’s viz., artistry part counterpart, of Interior’s bureaucra criminal 18 U.S.C. 542. But, carelessness, See, Teraoka, cy. neither e.g., Simon v. United States v. (9th Cir.1979), (9th Cir.1982); Califano, 593 F.2d F.2d United States assistance, Ven-Fuel, Inc., (5th nor a reluctance to be of Lavin v. 602 F.2d (1984); present Immigration 14. Even if of these elements are both L.Ed.2d 42 Naturaliza- case, (and, not), 14, 19, they Miranda, in this are is uncertain v. tion Service government estopped. 281, 283, that the should be Heck- (per 74 L.Ed.2d 12 cu- S.Ct. Community ler v. Health Akbarin, riam); Services F.2d at 842. of Crawford — U.S.-, County, 104 S.Ct. Rose, generically im Cir.1979); ularly 570 F.2d been sustained where States v. Cir.1978). portable goods had been entered trick or No case has (false supra imposes similarly E.g., Murray, artifice. state to us been cited country origin materiality requirement ments as value stringent —or all, Brown, glue); that mat 456 F.2d materiality requirement at United States § (2d Cir.), denied, 1592; and our research has cert. ter—under (1972) (fraudu The district court S.Ct. 32 L.Ed.2d 684 none such. revealed telephones).15 in authority of this lent undervaluation questioned the Teraoka our decision in circuit based on United accepted only logical Once it is that the (1st Cir.), Murray, 621 F.2d 1163 States v. § reading 1592 extends reach of the denied, 837,101 S.Ct. cert. U.S. practices statute to false statements and event, (1980), held, in L.Ed.2d 44 merchandise, lawfully importable anent rule, applied the facts that the Teraoka e.g., Twenty-Five United States v. Pack- bar, not insulate Ven-Fuel from lia did Hats, ages Panama Judge bility. Zobel noted: (1913)(civil S.Ct. 58 L.Ed. 267 forfeiture by the de- importation Here the of oil provision applies attempted entry of mis- by achieved means of a fendants was headgear); Wag- valued United States v. falsity, But for the de- false statement. ner, (§ supra apocryphal 1592 covers fendants never would have received a regarding origin statements of artificial It is irrelevant that the fee-free license. limbs); Santini, v. 266 Fed. imported by oil could have been someone (2d Cir.1920) (action forfei- recover § language speaks else. The quilts accompanied by bogus ture value of relationship importer between an and invoices); United States v. F.A.G. Bear- his or her merchandise. Even under Ter- 83-9-01314, slip No. ings Corp., op. 84-109 applied aoka the but for test must be (Ct. 4, 1984) at 12-13 Int’l. Trade Oct. relationship. the context of this (§ misdescription 1592 extends to of ball Ven-Fuel, Inc., bearings components), C.A. No. and other United States the cor- 80-335-Z, (D.Mass. slip op. at 7 Oct. rectness of the district court’s conclusion is 1982) (footnote omitted). inescapable. that, agree We with the court below even Circuit, The Fifth in United States v. applies, if Teraoka Ven-Fuel is neverthe- Ven-Fuel, Inc., (a supra case which § So, less snared 1592 net. we need factually distinguishable find from Ven- any perceived

not resolve at this time con- present plight), Fuel’s observed mate- Murray. flict between Teraoka and riality “applied objective is to be as an test significance of a fact to the transac- appellant argues “by that the means consideration,” requires tion under “a language of” 1592 serves to limit the showing potential reasonable effects grasp of the statute to those situations in of the statement.” 602 F.2d at 753. The importation goods question which government’s judi- instance case sub would not have been for the allowed but facilely rigorous ce meets even this stan- practice false or statement. Insofar as this oil could not have dard. Given suggests only contention 1592 would imported permit, without a the means apply prohibited been where merchandise was employed to its ill- imported, e.g., (entry which Ven-Fuel obtain 19 U.S.C. gotten license the means imports manufactured slave became labor barred), “an entirely imported it is a re it the merchandise. Under baseless. Such test,” reading largely objective signifi- strictive Arellano’s lies would eviscerate were statute, inexorably rendering meaningless they directly cant in that led license, majority and there- vast of cases. even under 18 to the issuance of the § 542, reg preferential U.S.C. criminal convictions have after to the fee-free Rose, involving importation non-prohibited 15. Indeed supra, appel- relied on of a lant, item. 570 F.2d at 1364. affirmed conviction under 18 U.S.C. dutiable potential appellant’s negligently-made the oil. The effect of the mis- was, ease, sufficiently one and the statement was statement material to its importation illicit of residual fuel same actual effect. In the absence oil into as its the United States to sustain the duty-exempt district chicanery, of such transac- imposition court’s of fault. tion could not have occurred.16 string yet Ven-Fuel has another to its VIII. DAMAGES. that, materiality suggests due bow. It repulsed We have considered and ap- shortage plagued of fuel oil which pellant’s main assaults the district importers nation in other had a sur- liability court’s finding. adverse Its re- feit of fee-free allocations and that Ven- maining forays on this front are uniformly Fuel “could have used tickets of some reject meritless and we them without fur- charge importer, other either free of or at a ther discussion. We turn now to Ven- per Appellant’s modest cost barrel.” Brief challenge: Fuel’s final that the verdict be- Thus, runs, at 37. thesis Ven-Fuelian grossly low was excessive and should be appellant finagled if the had not the fee- set aside. license, free it would have induced a lawful case, In this the entered value of the permit entry holder of such a to front the illegally imported $9,366,506; oil was its But, argument of the merchandise. this is $2,500,000 domestic value was some more. too cute half. It overlooks the ban If complied Ven-Fuel had applica- with the against sale, assignment, or transfer of laws, ble paid govern- would have an allocation license which existed in $296,956.80 ment in duties in 1974. The See, X, 12(e) 1974. 32A e.g., C.F.R. Ch. penal $783,500, award was the sum of (1974). say misrepresentation To a is judgment was entered below in that immaterial culprit because the could have 16, amount on March accomplished by breaking the same result yet proposition another law is a more suit- apply standard which we able to Lewis Carroll than to the lexicon of reviewing fixing penalty by of a civil statutory interpretation.17 federal “clearly the district court is the erroneous” apart rejoinder, even from such an obvious 52(a). See, standard of Rule e.g., v. Woods judged by a defendant must be what it has States, 1444, (9th 724 F.2d United done, might what it have done. Cir.1984); 87,100 Perper, v. 569 F.2d Safer argument shoplifter, Ven-Fuel’s is akin to a (D.C.Cir.1977); Saga Shipping, Neal v. act, apprehended laying claim 481, to a Cir.), denied, F.2d 487-88 cert. right by producing of exoneration suffi- 395 U.S. 89 S.Ct. 23 L.Ed.2d 775 that, cient funds to show had he chosen not pen We must examine whether the steal, paid he could have full alty value for assessed so harsh that there is an the merchant’s disproportion wares. “inherent between the of- " view, ‘Well, it,’ holding by eating piece In our this is consistent with ma of cake. I’ll eat Teraoka, recog- Alice, inasmuch as the Ninth Circuit grow larger, said ‘and if it makes me I can making nized that of false statements to smaller, key; grow reach the and if it makes me opposed avoid a conditional —as to an abso- door; creep way I can under the so either I’ll would, entry purposes lute —ban on even for get garden, into the and I don’t care which 542, satisfy “by U.S.C. § means of" re- Carroll, happens!’” L. Alice’s Adventures In Teraoka, (§ quirement. See 669 F.2d at 579 542 Wonderland, (Delacorte 1966). 8-9 Press ed. Af- transgression provisions attaches to which enjoying repast, quite surprised ter "she was operate deny goods either "to entrance of or to to find that she remained the same size: to be sure, impose upon granted”). terms which generally happens this is what when one pre- Presidential Proclamation 4210 established cake; got eats but Alice had so much into the cisely prohibition this sort of conditional as to way expecting nothing out-of-the-way but residual fuel oil. things happen, quite that it seemed dull and go who, stupid way.” for life to on in the common 17. One is reminded of Alice tum- bling finding Id. at 9. into the rabbit hole and the door locked, garden to solve her dilem- decided $1,873,- punishment.” transgression Grover v. United to Ven-Fuel’s fense and was States, (quoting against 200 Ct.Cl. backdrop, Judge 301.20. Set v. 186 Ct.Cl. levy negligence penalty Zobel’s of a Heffron (1969)). F.2d 1312-13 slightly forty percent more than resolved in favor of the Doubts are to be statutory maximum does not seem so dis- court, heard the evidence and trial proportionate to the offense as to shock— opportunity had to extract the true the best or even to vellicate—our collective con- controversy; flavor of the as with the as- science. damages by jury, sessment of we will particularly This is true one con- when stay long as the falls our hand so siders certain additional factors. The oil possible the universe of awards “within import program put place was not as supported that are the evidence.” law, just express another tariff but (1st 710 F.2d Cir. Taylor, Clark presidential power affirmative exercise of 1983) And, verdict, jury . like a the dollar to “take such action ... as [the President] judgment amount of the below should necessary imports deems ... so that such “grossly stand unsullied unless it is exces- impair will not threaten to the national sive,” “inordinate,” “shocking to the con- § 1862(b). security.” 19 U.S.C. See Presi- court,” [reviewing] science of the or “so dential Proclamation supra. No. As high justice that it would be a denial of such, honest, good the national interest in permit it stand.” McDonald v. Federal compliance faith regulations with the Laboratories, (1st 724 F.2d Cir. And, heightened. public the benefit to be 1984), quoting Long v. Grunenthal Island keeping derived from R.R., bay the sharks at 159 & n. 89 S.Ct. great. inexorably It follows n. & L.Ed.2d 309 integrity program breach of the of the de- approach inquiry We this conscious of sternly served to be treated more than a judgment the deference which is due to the garden-variety peccadil- sort of commercial court, mindful, withal, of the district lo. though negligent, Ven-Fuel has been gross negli- exonerated of both fraud and Lastly, in the industry oil as elsewhere in gence. commerce, the world of equates time with money. played If Ven-Fuel by had the Inasmuch judge as the district rules, paid government it would have the failed to articulate the method which slightly $300,000 under duties 1974. computed penalty,18 the she we must view If principal interest were to accrue the on perspectives. the award in its various The amount of the duties as of the start of 1975 provides statute penalty may that the civil prime (national average), at the rate com- twenty percent not exceed of the dutiable pounded annually, of the resultant total value the merchandise. 19 U.S.C. would, 1592(c)(3)(B)(1978). government out, pointed has Since “dutiable val $800,000 equivalent upwards March, ue” is the functional of “entered of as of value,” (when penalty applicable below).20 the maximum the-judgment was entered case, Though appellate price not fatal in this re- is listed documents as the is, circumstances, clearly view in such facilitat- entered value of the merchandise. ed a concise statement of the court below as ingredients concocting following which it used in 20. The table limns the calculation. penalty-setting ragout. strongly eight years, prime We com- For the first the table uses the Census, practice published mend such a to the district courts in rate as in Bureau of the Commerce, Department future cases. of Ab- Statistical stract the United States ed. 1983). quarter Customs Service determines val- dutiable For 1983 and the first through appraisal prime reported ue its own of the value of the the table uses the rate price Department merchandise. U.S.C. § 1503. The Research of the Federal Reserve exporta- judicial the merchandise when it was sold for Bank of Boston. We take notice of tion to the United States is the critical element. these rates as matters of fact. Fed.R. historical importer’s purchase See 19 U.S.C. 1401a. The Evid. 201. interpret cases fashioning years. of the several Thus, court’s to two the district specifically indi one corresponds ing to at least the words section penalty roughly intent. a criminal monetary gain they require secured cated that measure To Seventy-Five Bales consequence of its evasion appellant (2d Cir.1906) bacco, the tariff. 147 Fed. uphold a for (“Proof is sufficient which inherent imbalance between We find no justify a is also sufficient feiture ... punishment in this the offense and the conviction, imprisonment--- fine and penalty, though case. amount intended to was not Manifestly, [the Act] substantial, inordinately high nor is neither judgment errors to mistakes or apply It traumatizing judicial conscience. plainly indicate a to acts ... but of, within, the upper end but falls at to defraud culpable intent willful There was of sustainable awards. universe Fraud, its lawful revenues. government of the trial court’s discretion. no abuse of civil, criminal or action be whether proved; elementary.”); must be ... this is IX. CONCLUSION. Rug, United States v. One Silk 158 Fed. appellant’s find each and all of We (3d Cir.1908) (“[The] forfeiture judg- meritless. The protestations to be requires guilty clause scienter and ... court, as to Yen- ment of the district both intent____ properly criminal con [I]f amount liability and as to the dollar Fuel’s must, by strue the criminal clause we refer legal on solid penalty, the civil rests ence, provision read into the forfeiture judgment footing. Accordingly, the intent, coupled guilty must appel- Costs Affirmed. favor exclude such intent when we enforce that lee. forfeit.”); clause to United States v. BREYER, Judge Circuit (dissenting). 1,150 Celluloid, ½ Pounds 82 Fed. majority (6th Cir.1897) (forfeiture Once the proves provisions that the stat 633-34 ute’s “reasonable lightly interpreted cause to believe” lan should not to dis guage apply defendant, does not requirement pense with “mens rea” (in view) over, my case intent”); for the other “criminal v. United States One in words the statute punish Wheat, do not negli Bag 166 Fed. Crushed gent activity. (S.D.N.Y.1908) (“The Those other Ap goods words must not be {see A) pendix directly descend from an away act taken from unless he has [the owner] passed by Congress in 1890 Appendix guilty been of an intent to defraud the {see B), as the majority acknowledges, ante, States.”); see revenues of the United see also at n.' 10. Diamonds, Section 9 of the 1890 statute Ninety-Nine United States made the Cir.1905) substantive grounds (“It offense 139 Fed. reasonable, both forfeiture and imprisonment up probable, sup- neither nor (%) ($) here, completely YEAR PRIME RATE AMOUNT should not be considered miss- 296,956.80 juncture es the mark. We are not at this con- 320,297.60 7.86 rather, struing practice; a statute or a rule of 342,205.96 6.84 are judg- called to make a commonsense 365,578.63 6.83 ment as to the reasonableness of a in 398,700.05 9.06 wrong. relation to a We are not so divorced 449,215.35 12.67 reality ignore (i) from that we can the facts that 517,810.53 15.27 sophisticated corporations routinely invest sur- 615,521.38 18.87 plus (and equal funds at rates often in excess 706,987.86 14.86 of) prime, compounding with the benefit of 783,271.85 10.79 (let (ii) that, daily annually), alone and on the (1st 804,968.48 qtr.) 11.07 coin, flip borrowing side of the the cost of an amount in with no amortization for a argument compounding Ven-Fuel’s is not decade, probably would demand an interest rate in, permitted say, prejudg- the calculation of prime regular in excess of variable and with a case, e.g., ment interest in a tort Fox v. Kane- compounding liability of the for accrued inter- Corp., F.Supp. (D.Md.1975), Miller est. aff’d, (4th Cir.1976), 542 F.2d 915 and thus points to a statement one of the relevant Congress intended to inflict the pose that cases, statute’ v. Nine- ‘1890 United States involved, the merchandise forfeiture of Diamonds, ty-Nine that those other words $5,000, possible impris possible fine “knowingly intentionally negli- mean or years for the an onment for two use of false,” gently Fed. at 968. But the innocent or mistaken statement that was “negligently” pure here is at best word made with reasonable care and without dictum, busily engaged for the court was true.”), cert. de knowledge that it was not showing impose the statute did not nied, 50 L.Ed. S.Ct. invoking rules strict liability strict (1906). fact, preced- to do so. In construction ing Ninety-Nine these cases is as Diamonds underlying sentence principle was, following page make it clear that namely that today it ever valid says “negligently” when the court it means interpret a criminal stat courts should negligence” term in “culpable context fault, liability nor impose without ute to —a referring gross negli- recklessness or liability upon they criminal should rest gence aggravated or some form of behav- reasonably negligence, without mere said, ior. The court Congress so intended. indication that clear Statutory Con Compare 3 Sutherland The use of a false statement invokes the §§ (C. ed. Sands 4th 59.01-59.04 punishment struction and is same enumerated 1,150 1974) ½ States v. with United the same section with the use of a Celluloid, (citing Fed. at 634 invoice, affidavit, Pounds “fraudulent or false Sutherland, Statutory Construction letter, paper,” guilt and the of a “willful Hart, §§ (1st ed.)). generally 346-407 See act or omission.” As the act or willful Law, 23 Law & the Criminal The Aims and the omission offense fradulent Contemp. Probs. invoice, affidavit, letter, paper could knowledge not be committed without or a of 1890 single statutory provision disregard reckless the means of into two later modified bifurcated knowledge, the reasonable inference is imposing criminal separate sections—one knowledge intended that civil liability, and the other forfeiture —but falsity, culpable negligence of its trig- penalties continued to be and criminal ascertaining question, the answer to the predicate offenses gered by identical {see false, whether it was true or should be A), C, and the Appendix compare Appendix indispensable an element of the offense history reveals no intent legislative statement____ using the false language scope specific broaden 9 of the 1890 from section taken verbatim 139 Fed. at 969-70. H.R.Rep. Cong., No. 63d 1st Sess. Act. The other three ‘1890statute’ cases cited contrast, pas- that same (By XLIV-XLV. by majority language use that states H.R.Rep. announced that sage of No. 5 clearly still more requirement the statute’s scope intend to broaden did of a criminal state of mind. See United Act, namely, the 1890 of sections of other supra; States Rug, v. One Silk United the “reasonable those activities which 1,150 Celluloid, States v. ½ Pounds applies. directly clause to believe” cause supra; Seventy-Five United States v. Ba concedes, majority that clause As the Id. Tobacco, supra. les ante, See also United at n. inapplicable here. See also is Wheat, 10.) Thus, only Bag the “reason- States v. before 1978 One Crushed su a pra. to believe” clause embodied able cause the case of United States v. standard; statutory the 1978 negligence (9th Cir.1970), Wagner, upon 434 F.2d 627 de- apply too late to to this change came relies, majority which the also dealt with an fendant. application of the “reasonable cause to be clause, inapplicable lieve” which here. importing a majority’s The reasons for congressional majority also relies on negligence other standard into the statute’s statements, made in 1930 and which majority words do not convince me. imposes that the statute introduces, reflect a belief or sons enters or attempts to Many of these liability negligence. for introduce, enter or into the commerce of simply be understood as statements should any imported United States merchan- cause to be- referring to the “reasonable by dise means of any fraudulent or false (which impose liability does

lieve” clause invoice, declaration, affidavit, letter, paper, applies). Some- negligence for where by any statement, or means of false writ- below, do congressmen, times like the court verbal, any ten or or means of false or suggest “reasonable cause be- that the practice appliance fraudulent or whatsoev- applies literally to the en- language lieve” er, any or makes in any statement But, today statutory tire the court section. under provisions declaration of section Thus, nothing in rejects that there is view. title (relating 1485 of this to declaration on help congressional debates to it. entry) without reasonable cause believe statement, truth such or aids or Finally, the refers to considerable court procures the making any such false pre-1870 history language suggesting as to any statement matter material there- a broad of customs statutes. construction to without reasonable cause believe the 1870, however, Before the statute did statement, truth of such whether or not the liability; initial impose criminal and it is the shall may deprived United States or be in a appearance language of the relevant duties, any portion thereof, lawful or triggers criminal statute that the relevant upon merchandise, accruing any or por- makes principles strict of construction and thereof, tion embraced or referred to in customs statute inter irrelevant ‘broad’ invoice, declaration, affidavit, such letter, pretive Regardless canon. of the case law statement; paper, guilty or or statutes, contempora under courts earlier willful act or omission means whereof neously interpreting the were 1890 Act States may deprived United shall or penal, that it saying unanimous duties, any portion thereof, lawful strictly should therefore be construed. merchandise, accruing upon the any por- 1,150 United v. ½ Pounds Cellu States thereof, tion embraced or referred to in (“The loid, 82 Fed. at 634 statute under invoice, declaration, affidavit, letter, such highly penal, such consideration is and as statement, paper, or or affected such requires falls rule general within the omission, act or person persons construction.”); a strict shall conviction be fined each of- Diamonds, 139 Ninety-Nine Fed. at $5,000, not exceeding fense a sum or be (“But penal statute which creates and imprisoned exceeding a time not two strictly denounces a offense should be new both, years, or in the discretion of the construed.”); Seventy- United States v. Provided, nothing court: That in this sec- Tobacco, Five 147 Fed. at 130 Bales of tion imported shall construed to relieve (“Such strictly a statute must be con merchandise from forfeiture reason of strued.”). such false statement or for cause else- amended, has Since statute been (June 17, 1930, provided by where law. ch. has precedential the case therefore little IV, 750; Aug. title 46 Stat. value, more, say I shall no but leave III, 304(a), ch. title 49 Stat. reader with an historical bent the task 527.) history examining legislative cases reading I have cited to determine which Same; goods. § penalty against 1592. disagree- simply my correct. Here I note departs the ment insofar as the court from owner, consignor, seller, importer, If any construction, my principle con- of strict agent, per- or consignee, person or other sequent disagreement with the result. introduces, attempts or sons enters or APPENDIX A introduce, commerce of enter into the or Fraud; any imported merchan- penalties. the United personal seller, owner, importer, by any dise means of or false any consignor, fraudulent If invoice, declaration, affidavit, letter, per- paper, person or other or consignee, agent, statement, by any thereof, or false writ- means of to be recovered from such value verbal, by any of ten or or means false or subject to for- persons, or shall be person practice appliance fraudulent or whatsoev- feiture, only apply to which forfeiture shall er, any any or makes false statement of the merchandise or the value the whole provisions declaration under the of section containing package case or thereof (relating 1485 of title to declaration on this of mer- particular article or articles entry) cause without reasonable to believe paper such fraud or false to which chandise statement, the truth of such or aids or relates. The arrival within or statement procures making any of such false of limits of the United States the territorial any statement as to matter material there- consigned any for sale merchandise to without reasonable cause to believe the shipper or remaining property of the statement, truth of such whether or not the acceptance of a false or consignor, and may deprived United States shall or be of by consignee thereof fraudulent invoice duties, any portion thereof, or lawful consignor, or the exist- merchandise, agent of the accruing upon any or or the por- thereof, tion embraced or referred to in constituting an any other facts ence invoice, declaration, affidavit, letter, such deemed, fraud, attempted shall be for the statement; paper, guilty or any or is section, attempt to be an purposes of by willful act or omission means whereof notwithstanding merchandise to enter such may deprived United States is or be entry has made or offered. no actual been any portion lawful duties or thereof IV, (June 17, title ch. accuring upon any por- the merchandise or 5, 1935, III, 750; title Aug. eh. Stat. thereof, tion embraced or referred to in 527.) 304(b), 49 Stat. invoice, declaration, affidavit, letter, such §§ 1591-92 Taken from 19 U.S.C. paper, statement, or by or affected such merchandise, (now superseded). omission, such or the act or

APPENDIX B Penalty making, owner, person any importer, consignee, agent, shall make That if or other Sec. 9. entry, ialse etc> imported by any attempt any entry or merchandise means fraudulent or to make statement, affidavit, letter, invoice, paper, by any written or or means of false false whatsoever, verbal, any practice appliance by or fraudulent or or or means of false guilty any by States shall willful act or omission means whereof United shall be duties, thereof, any portion accruing upon deprived the merchan or of the lawful invoice, affidavit, letter, dise, thereof, any portion or referred to in such or embraced omission, merchandise, statement, by paper, such act or or the or or affected forfeited, thereof, entry, person making the shall be to be recovered from the value only apply or the value thereof shall to the whole of the merchandise which forfeiture containing particular package merchandise to article or articles of in the case or shall, relates; person paper and such which such fraud or false or statement dollars, conviction, exceeding a sum five thousand or be be fined for each offense both, years, imprisoned exceeding or in the discretion of the court. for a time not two Taken from 407, 9, Customs Act of Administrative June ch. 135-36. Stat. APPENDIX C seller, owner, agent, any consignor, importer, consignee, at- or other Punishment “G. That if tempts by to enter false introduce, introduce, attempt

person persons, into the enter or or to enter or or shall invoice, etc. any any imported means of fraudulent commerceof the United States merchandise Vol. p. 97, amended. invoice, declaration, affidavit, letter, any paper, or false or means statement, verbal, practice any or or means of false or fraudulent written whatsoever, provided any appliance or shall make false statement in the declarations p. statement, Ante, paragraph cause to the truth of such for in F without reasonable believe procure making any such as to matter material shall aid or false statement statement, or shall be thereto without reasonable cause to believe the truth of such may guilty shall or omission means whereof the United States willful act or duties, thereof, any portion accruing upon deprived the merchan- of the lawful or embraced or referred to in such dise, thereof, invoice, any portion declaration, or or affected such act or affidavit, letter, statement, such paper, by omission, person exceeding conviction be fined for each or shall offense a sum not upon $5,000, persons Proviso. exceeding or for a time not two or in the both, discretion of the years, imprisoned Forfeiture not affected. Provided, nothing That in this section shall court: be construed to relieve imported merchandise from forfeiture reason of such false statement or for cause by any law. elsewhere by provided consignor, consignee, agent, “H. That if seller, owner, or other any importer, Forfeiture goods making false invoices, shall enter or or introduce, or to enter or into the attempt introduce, person persons etc- statements> commerce of the United merchandise means of fraudulent any imported by any or or affidavit, false means of false invoice, declaration, letter, by paper, any written or or means of false or fraudulent statement, verbal, or any practice or shall make false statement whatsoever, declarations any appliance provided paragraph F without reasonable cause to believe the truth of such statement, or 182. p. Ante, making shall aid or such statement as to matter material any procure any thereto without reasonable cause to believe the truth of such or shall be statement, guilty of willful act or omission means whereof the United States shall or any may accruing of the lawful duties or the merchandise deprived any thereof, portion or embraced or referred to such thereof, invoice, declaration, affidavit, any portion or or affected such act or letter, statement, omission, paper, merchandise, Extent of forfeiture. thereof, value be recovered from such shall be forfeited, person persons, which forfeiture shall to the whole of the merchandise or the value thereof only apply package containing in the case or article or articles of merchandise to particular which such fraud or false or statement relates. That the arrival within the paper consigned territorial limits of the United States merchandise for sale and Attempt to make false remaining consignor, and the of a false or property shipper acceptance entry construed. consignee agent consignor, fraudulent invoice thereof or the or the constituting existence of other facts an fraud, shall be for the deemed, attempted paragraph, of this to be an to enter such merchandise notwithstand purposes attempt ing no actual has been made or offered. 3,1913, III, G, H, Taken from the Underwood Tariff Act of Oct. ch. 38 Stat. 183-84. BISZKO, Jr., al., Michael et

Plaintiffs, Appellants, CORPORATION,

RIHT FINANCIAL et

al., Defendants, Appellees.

No. 84-1579.

United States Appeals, Court of

First Circuit.

Argued Nov. 1984.

Decided March

As April 2, Amended

Case Details

Case Name: United States v. Ven-Fuel, Inc.

Court Name: Court of Appeals for the First Circuit

Date Published: Mar 21, 1985

Citation: 758 F.2d 741

Docket Number: 84-1268

Court Abbreviation: 1st Cir.