TESTING THE LIMITS ON RESTRICTIONS ON CULTURAL GOODS; BRAVE, FOOLHARDY OR A BIT OF BOTH?

This is what I said, more or less, to the audience of 100 or so people at the New York City Bar last week.   The sponsors of the event commemorating the 30th Anniversary of the Convention on Cultural Property Act asked me to speak about the ACCG's test case.  So I did.

I’ve had the honor and pleasure of representing a small non-profit advocacy group, the Ancient Coin Collectors Guild, in an effort to test import restrictions which as a practical matter make it impossible to import ancient “coins of Cypriot type” and “coins from China.”  

Although the courts in the 4th Circuit have not been kind to us to date, let me explain why such an effort is not as crazy as it might seem to some.  And while you yourself might not be as interested in ancient coins as I am, they make for an excellent type of artifact to use for a test case, because restrictions on them should raise serious questions of how far the State Department, US Customs and the archaeological community are taking the concept of “cultural property.”

Ancient coins are by far the most common ancient artifact.  There are millions extent if you are talking about ones produced by classical civilizations in the West and billions extent if you include coins made in China and the rest of Asia.  They are hardly rare as a class or “culturally significant,” if you like.  They are not only widely and legally collected in the US, but also in Europe (including Cyprus), China and pretty much anywhere for that matter.  Moreover, it’s hard to link them to a specific modern nation state.  Like the $100 bills of today, ancient coins circulated far and wide well outside the borders of the ancient city states and empires that made them.  And yet, despite this commonality, despite this widespread circulation, and despite this widespread popularity for collectors of many countries—including countries like Cyprus, China, Greece and Italy for which restrictions have been given, our State Department and Customs have seen it fit to restrict Americans from access to what the rest of the world enjoys.  Talk about being “holier than the pope!”  Or the Cultural Property Advisory Committee (CPAC) for that matter—because 2 CPAC members have stated publicly that State and Customs have acted against CPAC’s recommendations on coins.   

Next, let’s discuss the governing statute, the Convention on Cultural Property Implementation Act or CPIA.   You’ve already heard something about how the CPIA is the product of legislative compromise—and so it was.  But how was this compromise worked into the law?  In short, it was done—quite deliberately-- by drastically limiting executive authority.

Indeed, the CPIA contains significant procedural and substantive constraints on the executive authority to impose import restrictions on cultural goods.  Restrictions may only be applied to archaeological artifacts of “cultural significance” “first discovered within” and “subject to the export control” of a specific UNESCO State Party.  They must be part of a “concerted international response” of other market nations, and can only be applied after less onerous “self-help” measures are tried.  Moreover, the CPIA contemplates that CPAC is to provide the executive with useful advice about this process, including what types of cultural goods should be subject to restriction.

The CPIA also limits the government’s authority to promulgate regulations imposing such import restrictions. In particular, once the State Department decision-maker imposes import restrictions, U.S. Customs and Border Protection (“CBP”) must then designate the material restricted by type or classification, making certain that the list of restricted material is sufficiently specific and precise to ensure that the restrictions are only applied to the material covered by any agreement to impose import restrictions and that “fair notice” is given to importers.  

 Why is this important for purposes of testing the regulations?  Well, these limitations on executive discretion embedded in the statute give litigants an opening to argue that the decision making should be subject to judicial review.  How should this work?  And why didn’t courts in the 4^th Circuit buy that argument?

Well, first the Administrative Procedure Act (APA) provides for judicial review of final agency actions.  There is certainly a good argument that the “final agency action” here was US Customs’ promulgation of import restrictions, but the district court instead sided with the Government and its claim that the “final agency action” was the decision of the President’s designee approving a MOU with Cyprus and China.    This allowed the Government to escape judicial review under the APA based on an old case, Franklin v. Massachusetts,  that held that held that the actions of the president are not subject to judicial review because he is not an “agency” for purposes of the APA.   

Frankly, I think that the district court got it wrong.   Supreme Court case law says the final agency action is only the one where any liability attaches—and here any liability only flows from the regulations themselves, not the initial decision from State.  Moreover, there is a presumption of judicial review embedded in the APA—so why did that presumption not control here?     And let’s not forget, the decision maker was not the president himself, instead it was an assistant secretary in the State Department, who acted as his designee.   It’s not at  all clear in those circumstances whether Franklin should really apply.

Second, there is the rarely used but judicially recognized “non-statutory” or “ultra vires” review of whether the executive exceeded its statutory authority that applies where the APA does not.  Interestingly, while the district court agreed with the Guild that the CPIA’s limitations on executive discretion made judicial ultra  vires review appropriate, the district court then only undertook what purported to be ultra vires review of compliance with the CPIA with respect to two discrete issues, to the exclusion of all others, most notably the “concerted international response” requirement, before dismissing the case without allowing for any discovery.  Presumably, a more sympathetic judge might undertake such a review of whether the executive complied with all the limitations on their authority.

Finally, there is the question of whether the courts should stay out of these issues altogether because import restrictions on cultural goods are “foreign policy matters.”   The district court never reached this issue, mentioning it only in a footnote, but the Court of Appeals based its decision affirming the district court on this basis.  The court of appeals completely ignored the Supreme Court’s “political question” test in doing so even though the Supreme Court has also held that it applies to such “foreign policy” claims.

That test calls for “a discriminating analysis of the particular question posed, in terms of the history of its management by the political branches, of its susceptibility to judicial handling in light of its nature and posture in a specific case, and the possible consequences of judicial action.” Baker v. Carr, 369 U.S. at 211-12.  One wonders if a court that honestly applied this test could really conclude that import restrictions on coins constituted such a “foreign policy matter.”   I submit not.   But we will not know unless, of course, another test case is filed in another circuit, perhaps one less known for its pro-government leanings.  

Okay, you might with ask with perfect 20-20 hindsight why then did the Guild file in the 4^th Circuit?  Well, the Guild is a small non-profit and it was done because filing elsewhere would have added unnecessary expense since my law firm is based in Washington, D.C.  As a D.C. firm, we certainly would have liked to file in D.C. Circuit, which is well known for its expertise in administrative law.  However, to get standing we needed to actually import some coins on the designated lists—and the most convenient ports for an import from Europe were in Baltimore and Dulles Airport in Virginia, both in the 4^th Circuit.  It was only after the coins were imported and seized by U.S. Customs in Baltimore that the case could go forward.

And what of those coins?  Well, the government finally filed a forfeiture action against the coins the Guild imported.  So we will soon see what, if any, of the same issues will be litigated in the context of that action.    If you invite me back again in a few years, perhaps I will have more to say on that.    For now though, let me thank you for inviting me to discuss this issue that is so important to the small businesses of the numismatic trade and collectors tonight.