Petition for Writ of Certiorari — Yi-Chi Shih, aka Yugi Shi, aka Yichi Shih, Petitioner v. United States
Supreme Court briefDec 22, 2023
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No. 23In the
Supreme Court of the United States
YI-CHI SHIH, AKA YUGI SHI, AKA YICHI SHIH,
Petitioner,
v.
UNITED STATES OF AMERICA,
Respondent.
On Petition for a Writ of Certiorari to the
United States Court of A ppeals for the Ninth Circuit
PETITION FOR A WRIT OF CERTIORARI
James W. Spertus
Counsel of Record
M. A nthony Brown
Kevin J. Minnick
Kirsi E. Luther
Spertus, Landes
& Josephs, LLP
1990 South Bundy Drive,
Suite 705
Los Angeles, CA 90025
(310) 826-4700
jim@spertuslaw.com
Attorneys for Petitioner
December 2023
324985
A
(800) 274-3321 • (800) 359-6859
i
QUESTION PRESENTED
Petitioner, an electrical engineer and adjunct
professor at UCLA, was prosecuted for failing to obtain
a license before exporting models of experimental
microwave monolithic integrated circuits (MMICs), a type
of semiconductor, to fellow researchers in China. MMICs
that are “rated for operation” at performance parameters
specified in the export controls may require a license.
But at trial a Licensing Officer from the Department of
Commerce’s Bureau of Industry and Security (BIS)—the
agency that administers the export controls—testified
that a MMIC is not “rated for operation” unless postmanufacture testing confirms it will operate reliably at
those specified parameters. On Dr. Shih’s Rule 29 motion,
the district court gave deference to the Licensing Officer’s
interpretation under Skidmore v. Swift & Co., 323 U.S.
134 (1944); and, because it was undisputed the MMICs had
not undergone reliability testing before being exported,
vacated Dr. Shih’s export control convictions.
Without analyzing the district court’s application of
Skidmore, a two-judge panel of the Ninth Circuit held that
the district court “improperly relied on witness testimony”
when interpreting the charged export controls—an opinion
creating a blanket prohibition against giving Skidmore
deference to trial testimony from agency witnesses about
the meaning of regulations they administer.
The question presented is whether district courts
may, under Skidmore, give deference to an agency’s
interpretation of its own technical regulations when
offered by one of its representatives at trial in a criminal
case.
ii
RELATED PROCEEDINGS
• United States v. Shih, No. 2:18-cr-00050-JAK, U. S.
District Court for the Central District of California.
Judgment entered July 28, 2021.
• United States v. Shih, No. 20-50144, U. S. Court of
Appeals for the Ninth Circuit. Judgment entered July
18, 2023.
• United States v. Shih, No. 20-50175, U. S. Court of
Appeals for the Ninth Circuit. Judgment entered July
18, 2023.
• United States v. Shih, No. 20-50196, U. S. Court of
Appeals for the Ninth Circuit. Dismissed on Mar. 8,
2022.
• United States v. Shih, No. 20-50197, U. S. Court of
Appeals for the Ninth Circuit. Dismissed on Sept. 29,
2021.
• United States v. Shih, No. 23-3718, U. S. Court of
Appeals for the Ninth Circuit.
iii
TABLE OF CONTENTS
Page
QUESTION PRESENTED . . . . . . . . . . . . . . . . . . . . . . . . i
RELATED PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . ii
TABLE OF CONTENTS . . . . . . . . . . . . . . . . . . . . . . . . iii
TABLE OF APPENDICES . . . . . . . . . . . . . . . . . . . . . . . v
TABLE OF CITED AUTHORITIES . . . . . . . . . . . . . . . vi
PETITION FOR A WRIT OF CERTIORARI . . . . . . . 1
OPINIONS BELOW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
JURISDICTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RELEVANT REGULATORY PROVISIONS . . . . . . . . 1
STATEMENT OF THE CASE . . . . . . . . . . . . . . . . . . . . 2
A. The Regulatory Provision in Context . . . . . 2
B. Dr. Shih’s Trial . . . . . . . . . . . . . . . . . . . . . . . . 4
C. The District Court’s Judgment of
Acquittal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
D. The Court of Appeals’ Reversal . . . . . . . . . 11
REASONS FOR GRANTING THE PETITION . . . . 13
iv
Table of Contents
Page
A. The Court of Appeals Erred in Answering
an Important Question of Federal Law
by Faulting the District Court for
Relying on an Administrative Agency’s
Interpretation of Its Own Regulations . . . 13
B. T h is Is a n Oppor tune Case for
Reaffirming Skidmore and Addressing
Its Proper Application. . . . . . . . . . . . . . . . . 24
CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
v
TABLE OF APPENDICES
Page
APPENDIX A — OPINION OF THE UNITED
STATES COURT OF APPEALS FOR THE
NINTH CIRCUIT, FILED JULY 18, 2023 . . . . . . 1a
APPENDIX B — ORDER OF THE UNITED
STATES DISTRICT COURT FOR THE
CENTRAL DISTRICT OF CALIFORNIA,
FILED APRIL 22, 2020 . . . . . . . . . . . . . . . . . . . . . . 35a
APPENDIX C — ORDER DENYING PETITION
FOR REHEA RING OF THE UNITED
STATES COURT OF APPEALS FOR THE
NINTH CIRCUIT, FILED SEPTEMBER 25,
2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163a
vi
TABLE OF CITED AUTHORITIES
Page
Cases
Auer v. Robbins,
519 U.S. 452 (1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Chevron v. National Resources Defense Council,
467 U.S. 837 (1984) . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Kisor v. Wilkie,
588 U.S. ___, 139 S. Ct. 2400 (2019) . . . . 15, 24, 25, 26
Loper Bright Enterprises v. Raimondo,
143 S. Ct. 2429 (2023) . . . . . . . . . . . . . . . . . . . . . . . . . 26
Skidmore v. Swift & Co.,
323 U.S. 134 (1944) . . . . . . . . . . . . . . . 13, 15, 16, 17, 18
Teva Pharms. USA, Inc. v. Sandoz, Inc.,
574 U.S. 318 (2015) . . . . . . . . . . . . . . . . . . . . . . . . 12, 19
United States v. Mead Corp.,
533 U.S. 218 (2001) . . . . . . . . . . . . . . . . . . . . . 13, 16, 17
United States v. Sineneng-Smith,
140 S. Ct. 1575 (2020) . . . . . . . . . . . . . . . . . . . . . . 21, 22
United States v. Yi-Chi Shih,
73 F.4th 1077 (9th Cir. 2023) . . . . . . . . . . . . . . . . . . . . 1
vii
Cited Authorities
Page
Statutes and Other Authorities
28 U.S.C. § 1254(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
50 U.S.C. § 1705(a), (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
15 C.F.R. § 730.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
15 C.F.R. § 734.3(b)(3)(ii) . . . . . . . . . . . . . . . . . . . . . . . . . . 5
15 C.F.R. § 734.13(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
15 C.F.R. § 736.2(b)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
15 C.F.R. § 738, Supp. 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
15 C.F.R. § 772.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
15 C.F.R. ch. VII, subch. C . . . . . . . . . . . . . . . . . . . . . . . . 1
15 C.F.R. Part 774, Supp. 1 . . . . . . . . . . . . . . . . . . . . . . . . 3
15 C.F.R. Pt. 774, Supp. 1, Cat. 3 . . . . . . . . . . . . 2, 3, 4, 23
88 F.R. 12108 (Feb. 24, 2023) . . . . . . . . . . . . . . . . . . . . . 14
Federal Rule of Criminal Procedure 29 . . . . . . . . . . 8, 11
Bureau of Industry and Security, Multilateral
Expor t Control Reg imes, https://w w w.
bis. doc.gov i ndex .php/pol icy-g u ida nce /
multilateral-export-control-regimes . . . . . . . . . . . . 14
1
PETITION FOR A WRIT OF CERTIORARI
Petitioner Dr. Yi-Chi Shih respectfully petitions for
a writ of certiorari to review the judgment of the United
States Court of Appeals for the Ninth Circuit.
OPINIONS BELOW
The opinion of the court of appeals (App., infra, 1a-35a)
is reported as United States v. Yi-Chi Shih, 73 F.4th 1077
(9th Cir. 2023). The district court’s order granting in part
Dr. Shih’s motion for judgment of acquittal (App., infra,
36-162) is unreported.
JURISDICTION
The judgment of the court of appeals was entered on
July 18, 2023. App., infra, 2a. A petition for rehearing was
denied on September 25, 2023. Id. at 164a. This petition,
filed within 90 days of the denial of rehearing, is timely.
Sup. Ct. R. 13.3. This Court has jurisdiction under 28
U.S.C. § 1254(1).
RELEVANT REGULATORY PROVISIONS
The relevant regulatory provisions, located within the
Export Administration Regulations, 15 C.F.R. ch. VII,
subch. C, are the Export Control Classification Numbers
3A001.b.2.b and 3A001.b.2.c, which apply to microwave
monolithic integrated circuits (MMICs)1 that are either:
1. MMICs are integrated circuits that operate at microwave
frequencies. App., infra, 4a.
2
b.2.b. Rated for operation at frequencies
exceeding 6.8 GHz up to and including 16 GHz
and with an average output power greater than
1W (30 dBm) with a “fractional bandwidth”
greater than 10%; [or]
b.2.c. Rated for operation at frequencies
exceeding 16 GHz up to and including 31.8 GHz
and with an average output power greater than
0.8W (29 dBm) with a “fractional bandwidth”
greater than 10%.
15 C.F.R. Pt. 774, Supp. 1, Cat. 3 (eff. Oct. 15, 2013, to June
4, 2014) (emphasis added). 2
STATEMENT OF THE CASE
A.
The Regulatory Provision in Context
The Export Administration Regulations (EAR), issued
and administered by the Department of Commerce’s
Bureau of Industry and Security (BIS), prohibit exporting
certain items to certain countries without first obtaining
a license from BIS. See 15 C.F.R. §§ 730.1, 736.2(b)(1).
A violation of the EAR constitutes a violation of the
International Emergency Economic Powers Act (IEEPA),
which may be enforced civilly or criminally. 50 U.S.C.
§ 1705(a), (c).
2. Unless otherwise indicated, all citations to provisions of
the EAR, including ECCNs, are to versions in effect in January
2014, at the time of the alleged criminal conduct.
3
To determine whether exporting an item requires
a license from BIS, one must first determine whether
the item has an Export Control Classification Number
(ECCN), e.g., 3A001.b.2.b, that describes the item and
indicates the reasons it is controlled. All ECCNs are in
the BIS’s Commerce Control List. 15 C.F.R. Part 774,
Supp. 1. If the item is covered by an ECCN, one must then
consult BIS’s Commerce Country Chart, which contains
licensing requirements based on destination and reasons
for control. See 15 C.F.R. § 738, Supp. No. 1. If the reason
for control given in an ECCN is also checked for a country
in the Commerce Country Chart, then a license is required
to export any item covered by the ECCN to that country.
The ECCNs relevant to this case are 3A001.b.2.b and
3A001.b.2.c, which apply to MMICs that are either:
b.2.b. Rated for operation at frequencies
exceeding 6.8 GHz up to and including 16 GHz
and with an average output power greater than
1W (30 dBm) with a “fractional bandwidth”
greater than 10%; [or]
b.2.c. Rated for operation at frequencies
exceeding 16 GHz up to and including 31.8 GHz
and with an average output power greater than
0.8W (29 dBm) with a “fractional bandwidth”
greater than 10%.
15 C.F.R. Pt. 774, Supp. 1, Cat. 3 (eff. Oct. 15, 2013 to June
4, 2014) (emphasis added). MMICs that are so “rated for
operation” may not be exported to China without a license.
Id. § 742.4(a) (eff. Oct. 15, 2013 to June 26, 2014); see also
id. Pt. 738, Supp. 1 (eff. July 23, 2012 to March 25, 2014).
4
ECCNs covering other types of integrated circuits use
noticeably different language to describe the conditions
of coverage. For example, ECCNs 3A0001.a.1a and
3A0001.a.1.b apply to “[i]ntegrated circuits designed
or rated as radiation hardened to withstand” certain
specified radiation dosages. 15 C.F.R. Pt. 774, Supp. 1,
Cat. 3 (emphasis added). Similarly, electronic vacuum
tubes “designed or rated for operation in any frequency
band” and with certain other specified characteristics
are specifically excluded from coverage under ECCNs
in category 3A001.b.1. Id. (Note 1 to ECCN 3A001.b.1)
(emphasis added).
On Dr. Shih’s post-trial motion for a judgment of
acquittal on the IEEPA counts, the district court was called
upon to construe the term of art “rated for operation.” In
doing so, the district court gave Skidmore deference to
the trial testimony of the government’s expert witness,
a BIS Licensing Officer, on the application of the EAR.
B. Dr. Shih’s Trial
1. Dr. Shih was charged with violating IEEPA by
exporting MMICs covered by ECCNs 3A001.b.2.b and
3A001.b.2.c to China without first obtaining a license.
There was no dispute at trial that the charged MMICs
had been designed to operate at the performance levels
described in those ECCNs. The key questions at trial were
instead: (1) as a threshold matter, whether the MMICs
fell within the fundamental research exclusion from the
export regulations; and (2) if not, whether they were
“rated for operation” under the charged ECCNs.
5
2. Dr. Shih is an electrical engineer who has published
numerous research papers and obtained many patents
related to semiconductors. App., infra, 40a. At the time
of the alleged offenses, he was an adjunct professor of
electrical engineering at UCLA. Id.
Dr. Shih paid a foundry, Cree, to manufacture
physical models of nine unique MMICs and some smaller
power amplifiers, each designed by Dr. Shih and Chinese
research colleagues. App., infra, 39a, 48a. Cree made the
devices on four “wafers” (four-inch discs), each containing
80 “reticles” (groups) of the nine MMICs and amplifiers.
App., infra, 38a. Thus, the wafers contained 320 total
physical models of each unique MMIC design.
3. Dr. Shih was charged with conspiring to violate
(Count One) and violating (Count Two) IEEPA by failing
to obtain a license before exporting the Cree MMICs to
China. App., infra, 77a. The government alleged that
the MMICs were subject to ECCNs 3A001.b.2.b. and
3A001.b.2.c. 3
4. Dr. Shih presented two related defenses at
trial. First, he argued that the alleged exports were
not subject to the EAR because he was engaged in
fundamental research, an exemption from the EAR. 15
C.F.R. § 734.3(b)(3)(ii). Second, he argued that the Cree
MMICs were experimental prototypes which, though
designed to operate at the parameters specified in ECCNs
3. Dr. Shih was also charged with mail and wire fraud, a
violation of the Computer Fraud and Abuse Act (CFAA), money
laundering, false statements, income tax fraud, and FBAR
violations. App., infra, 77a-78a.
6
3A001.b.2.b. and 3A001.b.2.c, had not yet been “rated for
operation” at those parameters because no testing had
been conducted on the MMICs to determine whether they
performed reliably at the specified parameters.
5. Substantial evidence supported these defenses.
Carlos Monroy, a BIS Licensing Agent called by the
government as an expert on the EAR, testified that
determining a MMIC design’s actual operating frequency,
power output, and fractional bandwidth requires testing
on a manufactured model of the design. App., infra, 90a.
More specifically, Monroy testified that “a finished device
… has been through a process of research, development,
and production,” and that “in each one of those stages,
design, research, development, and production, it has to
go through certain testing in order for the company or
the person to determine that it specifically meets certain
frequencies and output powers that would contribute to
that device to operate [sic] reliably in the market.” Trial
Tr. Day 3, vol. 2 (May 17, 2019), 82 (ECF No. 660). While
Monroy noted that semiconductor manufacturers often
produce data sheets specifying their products’ operating
parameters, he confirmed that “the only way to create a
data sheet is by testing a manufactured MMIC” and that,
“the first time that an item [i.e., a MMIC] is made before
any testing, the item is unrated” under the ECCNs. See
App., infra, 90a. The district court found that Monroy’s
testimony supported “the conclusion that an item can only
be ‘rated’ as used in ‘rated for operation’ by conducting
tests on the manufactured item.” Id. at 90a–91a.
The testimony of two other witnesses called by the
government supported Monroy’s interpretation. Dr.
Christopher Nordquist, a Ph.D. in electrical engineering
7
and member of the technical staff in microwave research
and development at Sandia National Laboratories
testifying as an expert, said that “‘rated’ means the
quality of an item has been determined because it has
been the subject of several testing processes” and that
a “rated” item is one whose performance conforms with
its specified ratings. App., infra, 89a n15, 91a. Nordquist
also testified that, other than their design specifications,
the Cree MMICs “ha[d] not been rated in any meaningful
way.” Id. at 91a. The district court found that Nordquist’s
testimony “support[ed] the inference that the design
documentation of the Cree MMICs was not sufficient for
them to be ‘rated’ as used in ‘rated for operation’ under
the applicable regulations.” Id. Similarly, Dr. Jeffrey
Barner, the head of Cree’s foundry, “agreed that the
actual outputs of a MMIC that is developed for the first
time cannot be determined until it is tested.” Id. at 89a
n.14, 92a. The district court found that Barner’s testimony
was “in accord with the view that testing is needed to
determine the actual outputs of a MMIC” and “supports
the conclusion that ‘rated’ as used in ‘rated for operation,’
involves the testing of a manufactured item.” Id. at 92a.
“[N]o evidence was presented at trial that any testing
was performed on the manufactured Cree MMICs prior
to any exportation of them.” App., infra, 81a. Testing
conducted by Nordquist after the alleged export found
that only three of the nine MMIC designs performed
within the parameters specified in the ECCNs. Id. at 50a.
The government’s export violation case was based on those
three MMICs. Id. at 51a.
6. In closing, the government claimed that “rated for
operation” meant “specified to operate at” the parameters
8
stated in the ECCNs and that the Cree MMICs satisfied
this standard because Dr. Shih had designed them to
operate within those parameters. Id. at 80a. The argument
assumed the word “rated” meant “designed.”
Dr. Shih argued that the MMICs could not be “rated
for operation” because, in the context of electrical
engineering, the term means that testing has verified that
a chip functions reliably at specified parameters, and the
government presented no evidence that such testing had
been done on the charged MMICs. Id. at 79a. In support
of this interpretation, Dr. Shih pointed to other ECCNs
covering items that are “designed” or “designed or rated”
for operation in certain ways, indicating that the term
“rated” must mean something different from “designed.”
Id. at 86a. He also relied on Licensing Officer Monroy’s
testimony to argue that “rated” has the same meaning
as it does when, for example, one refers to glass as “fire
rated”—i.e., testing has confirmed the item will function
reliably for the specified purpose. Id. at 90a–91a.
6. Following lengthy deliberations, the jury returned
guilty verdicts on Counts 1 and 2.
C.
The District Court’s Judgment of Acquittal
After trial, Dr. Shih moved under Federal Rule of
Criminal Procedure 29 for a judgment of acquittal on
Counts 1 and 2. Dr. Shih argued that MMICs cannot be
“rated for operation” at the performance levels specified
in the ECCNs until post-manufacture testing confirms
that they will operate reliably at those performance levels.
Id. at 79a. Because the government did not offer evidence
that such testing had been conducted before the MMICs
9
were exported to China, insufficient evidence supported
the convictions on Counts 1 and 2. Id. at 79a–80a.
The district court ag reed. The district court
recognized that Dr. Shih’s convictions on Counts 1 and
2 “turn[ed] on the correct interpretation of ‘rated’ as
used in ‘rated for operation.’” Id. Because the EAR does
not define the term “rated,” the district court sought to
determine the term’s ordinary meaning by reference to
dictionary definitions and witness testimony, including
expert testimony from a BIS agency witness whose
interpretation of the term warranted Skidmore deference.
The district court first found that dictionary
definitions offered by the parties were inconclusive on
the ordinary meaning. Id. at 86a. The district court
observed that definitions from lay dictionaries provided
by the government suggested that the term “rated” meant
“designed.” Id. However, the district court rejected this
interpretation, first, because the parties agreed that the
two terms were not synonymous and, second, because
it would render the word “designed” in other ECCNs
covering items that are “designed or rated” superfluous.
Id. The district court reasoned that a definition of the
word “rating” in the Oxford Dictionary of Electronics
and Electrical Engineering offered by Dr. Shih provided
some support for his interpretation of the term “rated”
but was not conclusive. Id. at 87a-88a.
The district court then found that the trial testimony
of witnesses with backgrounds in electrical engineering
“makes clear that the ordinary meaning of ‘rated’ as
used in ‘rated for operation’ in the electrical engineering
context means that a manufactured item has been tested
10
to confirm its operating conditions and performance
limitations.” Id. at 88a-89a. In reaching this conclusion,
the district court applied Skidmore deference to expert
testimony offered by the government’s BIS witness.
That witness was Carlos Monroy, a Licensing Officer
from BIS’s Electronics and Materials Division with
thirteen years’ experience processing export licenses
and issuing opinions about whether items are export
controlled. As the district court noted, his testimony
was corroborated by at least two other witnesses
from electrical engineering backgrounds: Dr. Jeffrey
Barner, the head of Cree’s foundry, and Dr. Christopher
Nordquist, Ph.D., a government electrical engineering
expert from the Sandia National Laboratories. Id. at
89a. Monroy testified that the first time an item is made,
before any performance testing has confirmed whether
it will operate reliably, it is “unrated.” Id. at 90a. Dr.
Nordquist testified that “rated” means “the quality of
an item has been determined because it has been the
subject of several testing processes”; that “a rated item
is one whose performance conforms with that rating”;
and that the Cree MMICs Dr. Shih allegedly exported
“ha[d] not been rated in any meaningful way.” Id. at 91a.
Dr. Barner testified that “the actual outputs of a MMIC
that is developed for the first time cannot be determined
until it is tested.” Id. at 92a. Based on this testimony, the
district court concluded that “in the electrical engineering
context, ‘rated’ as used in ‘rated for operation’ ordinarily
means that a manufactured item has been tested, with the
results confirming that it operates within the specified
parameters.” Id.
11
Given the term’s ordinary meaning, the Cree MMICs
could not have been “rated for operation” at the specified
parameters in the charged ECCNs unless they “ha[d] been
tested and thereby confirmed to operate reliably within
the specified parameters.” Id. at 100a. However, “[t]here
was no evidence that such testing was performed prior
to the export at issue in this action.” Id. Accordingly, the
district court granted Dr. Shih’s Rule 29 motion on the
export violation counts. Id.
On the government’s motion for reconsideration, the
district court reversed its ruling on Count 1, concluding
that sufficient evidence supported another object of the
multi-object conspiracy alleged there. App., infra, 8a.4
D.
The Court of Appeals’ Reversal
On the government’s appeal from the judgment of
acquittal on Count 2, a two-judge panel of the Ninth
Circuit held that the district court erred in at least two
ways when interpreting the term “rated” in the charged
ECCNs. App., infra, 10a.
First, the court of appeals held that the district court
unreasonably adhered to the canon against surplusage
in concluding that, within the EAR, the term “rated”
meant something different from the term “designed.”
App., infra, 11a. The court determined that lay dictionary
definitions taught that “rated” means “designed.” App.,
infra, 10a. Although the use of the phrase “designed or
4. Dr. Shih challenged this ruling as well as his convictions
on the mail and wire fraud, CFAA, money laundering, false
statements, and income tax fraud counts in his cross-appeal.
12
rated” in other ECCNs indicated that, at least in the
EAR, the terms have different meanings, the court of
appeals concluded that some degree of redundancy in the
regulations must be tolerated to avoid creating a “gaping
loophole” in the EAR: “If ‘rated for operation’ requires
postmanufacture, pre-export testing, one seeking to evade
the EARs could simply design an export-controlled item,
run reliable pre-manufacture simulations, freely export
the item, and then test it only after export to confirm that
its performance is consistent with the simulations.” App.,
infra, 12a.
Second, and most relevant to this petition, the court
of appeals held that the district court “improperly relied
on witness testimony” when interpreting the term. Id.
at 13a (citing Teva Pharms. USA, Inc. v. Sandoz, Inc.,
574 U.S. 318, 332 (2015)). The court of appeals did not
identify which witness’s testimony the district court
had relied on improperly. In any event, the holding
diverged from well-settled waiver principles in ways that
prejudiced Dr. Shih. Indeed, the government had waived
the argument by not raising it below, which the court of
appeals acknowledged. Id. at 13a n.3. Even so, the court
of appeals exercised its discretion to raise the argument
sua sponte, asserting the matter had been fully developed
in the parties’ briefing. Id. The briefing does not bear this
out. Because the government had never raised the issue
or otherwise challenged the district court’s Skidmore
deference to Monroy’s interpretation of the ECCNs, there
was no reason for Dr. Shih to fully address the point in
his briefing.
Because of this error, the court of appeals reversed
the judgment of acquittal. Id. at 34a.
13
After Dr. Shih raised this issue in a petition for
rehearing, the court of appeals denied the petition for
panel rehearing and rehearing en banc without comment.
App., infra, 164a.
REASONS FOR GRANTING THE PETITION
This Court should reverse the opinion of a two-judge
panel of the court of appeals that, in direct conflict with
this Court’s precedent, prohibits district courts from
giving Skidmore deference to agency testimony about
the meaning of their own regulations and, as a result,
interprets the export controls in a way that may subject
U.S.-based academics collaborating with foreign students
and colleagues on semiconductor research and design to
potential criminal liability.
A.
The Court of Appeals Erred in Answering
an Important Question of Federal Law by
Faulting the District Court for Relying on an
Administrative Agency’s Interpretation of Its
Own Regulations.
1. The court of appeals has decided an important
question of federal law in a way that “conflicts with relevant
decisions of this Court.” Sup. Ct. R. 10(c). The court
of appeals’ holding that the district court “improperly
relied on witness testimony” when interpreting the
term “rated for operation” conflicts with this Court’s
precedent allowing district courts to defer to an agency’s
interpretation of a regulation that it promulgated and
administers. See Skidmore, 323 U.S. at 139–140; United
States v. Mead Corp., 533 U.S. 218, 227–28 (2001).
14
a. The primary testimony upon which the district
court relied when interpreting the ECCNs came from
Carlos Monroy, a Licensing Officer with BIS. See App.,
infra, 89a–92a. As the district court found, “BIS is the
regulatory agency responsible for promulgating and
enforcing export control regulations, including the EAR.”
Id. at 89a. Monroy’s duties at BIS included “processing
export licenses, handling requests to determine whether
an item is export controlled or requires an export license,
and serving on the technical team that meets with
international partners to determine what items should
be export controlled.” Id.5
b. Monroy confirmed on cross-examination that,
under the EAR, testing must confirm that a circuit
will perform reliably within the parameters specified
in an ECCN before the circuit is considered “rated for
operation” within those parameters. Monroy first testified
that an item is “rated for operation” at the performance
levels indicated in an ECCN if it is “specified to operate
at” those performance levels. Id. at 90a. Monroy then
clarified, however, that specifications may be based
on the results of testing or data sheets published by
the circuit’s manufacturer. Id. When asked how the
5. The ECCNs in the Commerce Control List include
items agreed upon by the Wassenaar Arrangement, a group
of 42 states committed to developing a list of arms and dualuse items the export of which members have agreed to control
under their respective laws. See 88 F.R. 12108 (Feb. 24, 2023);
BIS, Multilateral Export Control Regimes, https://www.bis.
doc.govindex.php/policy-guidance/multilateral-export-controlregimes. Monroy’s testimony made clear that his experience
meeting with international partners was at the Wassenaar
Arrangement.
15
manufacturer obtained the information for the data
sheets, Monroy “implied that the only way to create a data
sheet is by testing a manufactured MMIC.” Id. “Monroy
also confirmed that the first time that an item is made
before any testing, the item is unrated.” Id. Based on
these statements, the district court found that Monroy’s
testimony supported the conclusion “that an item can only
be ‘rated’ as used in ‘rated for operation’ by conducting
tests on the manufactured item.” Id. at 90a–91a.
c. This Court has established three types of deference
federal courts may give to administrative agencies’
interpretations of statutes and regulations.
Under Chevron v. National Resources Defense
Council, 467 U.S. 837 (1984), courts owe deference to
an agency’s interpretations of a statute the agency
administers when the statute is ambiguous and Congress
has given “an express delegation of authority to the
agency to elucidate a specific provision of the statute by
regulation.” Id. at 843-44.
Under Auer v. Robbins, 519 U.S. 452 (1997), courts
may give deference to an agency’s interpretation of
its own regulation if it is genuinely ambiguous and the
interpretation reflects the agency’s “official position” and
“implicate[s] its substantial expertise.” Kisor v. Wilkie,
139 S. Ct. 2400, 2415–2417 (2019).
In Skidmore v. Swift & Co., 323 U.S. 134 (1944),
this Court held that, while “rulings, interpretations and
opinions” of an agency were not controlling upon the
courts, they did constitute “a body of experience and
informed judgment to which courts and litigants may
16
properly resort for guidance.” Id. at 140. The degree to
which a court may lean on an agency’s interpretation of a
regulation is not fixed but fluid and should be determined
according to (1) the thoroughness of the agency’s
consideration, (2) the validity of its reasoning, (3) the
consistency of its interpretation over time, and (4) “all
those factors which give it the power to persuade.” Id.;
see also Mead Corp., 533 U.S. at 227–228.
d. The district court gave Skidmore deference to
Monroy’s interpretation of the regulation. This is clear
from several aspects of the district court’s order. First,
the district court discussed this Court’s precedent
regarding deference to administrative agencies, including
Kisor, at length throughout the order. See App., infra,
85a, 98a–99a. In these discussions, the district court
demonstrated an awareness and understanding of
Skidmore’s prerequisites. Second, in describing Monroy’s
interpretation of “rated,” the district court specifically
noted that BIS promulgated and was charged with
enforcing the EAR and that Monroy’s job duties and
experience at BIS included processing export licenses,
see id. at 89a—factors relevant to the applying Skidmore,
323 U.S. at 140. Third, the district court was persuaded to
adopt Dr. Shih’s interpretation of the ECCNs primarily
because Monroy’s testimony supported the conclusion
that “rated for operation” means that “a manufactured
item has been tested, with the results confirming that
it operates within the specified parameters.” Id. at 92.a.
Finally, in response to the government’s argument that
another one of Monroy’s statements about the regulations’
meaning was entitled to deference, the district court
thoroughly examined the testimony under Skidmore’s
rubric before rejecting it, primarily because it conflicted
17
with Monroy’s more reasonable and persuasive testimony
that “rated” requires post-manufacture reliability testing.
Id. at 98a–100a. This record makes clear that the district
court relied on Monroy’s interpretation of the regulation
because of Monroy’s position and experience at BIS as
well as the reasonableness of his explanations. That is the
essence of Skidmore deference.
e. The court of appeals’ holding that the district court
“improperly relied on witness testimony,” App., infra, 13a,
when interpreting the charged ECCNs clearly conflicts
with Skidmore’s holding “that an agency’s interpretation
may merit some deference whatever its form, given the
‘specialized experience and broader investigations and
information’ available to the agency.” Mead Corp., 533
U.S. at 234 (quoting Skidmore, 323 U.S. at 139).
Importantly, the court of appeals did not hold that the
district court’s particular reasons for giving deference
to Monroy’s interpretation were invalid. Indeed, it never
analyzed the district court’s reasoning. Instead, the court
of appeals broadly ruled that it is erroneous to rely on any
witness’s interpretation of a regulation for any reason.
The court of appeals’ reversal was a categorical ruling
that deference to an agency witness’s testimony about the
meaning of a regulation is always error.
That bright-line bar is clearly in conf lict with
Skidmore. There was undoubtedly room for Skidmore
deference here, “where the regulatory scheme is highly
detailed, and [BIS] can bring the benefit of specialized
experience to bear on the subtle questions in this case.”
Mead Corp., 533 U.S. at 235.
18
f. In fact, the district court’s approach to determining
the correct meaning of “rated for operation” in the charged
export controls was perfectly in line with Skidmore.
The distr ict cour t conducted an independent
examination of the regulation and, in light of the
testimony of Monroy and the government’s other
electrical engineering experts, concluded that Monroy’s
interpretation of the term “rated for operation” was sound
and entitled to respect. Monroy’s testimony was “made
in pursuance of official duty, based upon more specialized
experience and broader investigations and information
than is likely to come to a judge in a particular case.”
Skidmore, 323 U.S. at 139. Indeed, the government itself
had called Monroy as an expert on the proper application
of the ECCNs in this case. App., infra, 89a. As an expert
witness at trial, he was essentially providing an advisory
opinion about whether the Cree MMICs were covered by
the charged ECCNs. And, as the district court specifically
noted, Monroy had the qualifications to offer such an
opinion. He had a B.S. in electrical engineering and
thirteen years of experience at BIS processing export
licenses, issuing advisory opinion requests, and serving
on the technical team at the Wassenaar Arrangement. Id.
Furthermore, the district court did not treat Monroy’s
interpretation as controlling, only with “respect,” a weight
commensurate with Monroy’s position within BIS, his
experience, the depth of his background knowledge, the
thoroughness of his consideration, the fact that he was
endorsed as an expert by the government, and the validity
of his reasoning, as supported by the corroborating
testimony of two other experts in the field. See Skidmore,
323 U.S. at 140.
19
T he d i st r ic t cou r t ’s defer ence t o Mon r oy ’s
interpretation of the regulation was not erroneous.
g. Nor did the district court run afoul of Teva
Pharmaceuticals USA, Inc. v. Sandoz, Inc., 574 U.S.
318 (2015), the only case cited by the court of appeals in
support of its erroneous holding. App., infra, 13a.
Teva Pharmaceuticals held that a district court’s
resolution of extrinsic factual issues when determining
the proper interpretation of a written patent claim is
reviewed for clear error, 574 U.S. at 331–33, which has
nothing to do with deference to an agency’s interpretation
of a regulation.
Even assuming Teva Pharmaceuticals applied
here, the court of appeals erred in its application. Far
from precluding consideration of witness testimony
when construing a patent’s technical language, Teva
Pharmaceuticals recognizes that, in some cases, district
courts will need “to consult extrinsic evidence,” including
the testimony of expert witnesses, “in order to understand
… the background science or the meaning of a term in
the relevant art during the relevant time period.” 574
U.S. at 331. Here, the district court did exactly what Teva
Pharmaceuticals condones. It considered the testimony of
electrical engineering experts, including an expert from
the relevant agency, to determine the meaning of the word
“rated,” a term of art in the electrical engineering context.
The district court then relied on the interpretation
of the BIS’s Licensing Officer, in part because it was
corroborated by the reliable testimony of Nordquist and
Barner, to determine the meaning of the term “rated for
operation” in the ECCNs.
20
h. To be clear, in arguing that the district court’s
reliance on Monroy’s interpretation of “rated for
operation” was adequately supported by Skidmore, Dr.
Shih is not implying that the court of appeals held that the
district court’s application of Skidmore was erroneous.
It did not. The court of appeals’ reversal was, instead,
tantamount to a holding that district courts can never
give Skidmore deference to witness testimony at trial.
That holding plainly conflicts with relevant decisions of
this Court and should be reversed.
Of course, the opinion’s blanket prohibition against
relying on witness testimony to interpret a regulation
obviated the need to mention that a BIS Licensing Officer’s
expert testimony at trial corroborated the defense’s
interpretation of “rated for operation” or that the district
court relied on the Licensing Officer’s testimony when
determining that the charged export controls did not apply
to the Cree MMICs. But due to the opinion’s truncation
of the record on the agency deference issue, this petition
presents more than just a case where the court of appeals
simply got a question of regulatory interpretation wrong. It
also presents a case where the court of appeals’ erroneous
rejection of Skidmore’s application to trial testimony in
a criminal case resulted in key facts falling out of the
opinion’s analysis—facts that, if properly considered,
would have yielded the same outcome the district court
reached under Skidmore.
2. The court of appeals also “so far departed from the
accepted and usual course of judicial proceedings ... as to
call for an exercise of this Court’s supervisory power.” Sup.
Ct. R. 10(a). In ruling that the district court erroneously
relied on witness testimony when interpreting the ECCNs,
21
the court of appeals violated the party presentation rule
by deciding this appeal on an argument never raised by
the parties. See United States v. Sineneng-Smith, 140 S.
Ct. 1575, 1579 (2020).
The government did not argue either in its appeal
or below that the district court was prohibited from
considering Monroy’s testimony when construing the
term “rated for operation.” See App., infra, 13a n.3. To
the contrary, before the district court, the government
affirmatively argued that some of Monroy’s testimony
about the meaning of the term was entitled to Skidmore
deference. See, e.g., App., infra, 80a. The district court
ruled, however, that the testimony embraced by the
government was not entitled to deference because
it conflicted with Monroy’s testimony during crossexamination which, the district court found, was more
consistent with the regulation’s language and the
testimony of the government’s other electrical engineering
experts and, thus, more persuasive. See id. at 98a. The
government declined to challenge that ruling on appeal.
See Gov’t Op. Br. 36 n. 12 (ECF No. 31). Moreover,
arguing that the district court should not have deferred
to Monroy’s testimony at all would have been inconsistent
with its position below. This is why the government never
raised the argument in its appeal; why, contrary to the
court of appeals’ assessment, App., infra, 13a, the record
on this issue was not fully developed in the parties’
briefing; and, finally, why the court was wrong to have
resolved this case sua sponte on grounds not advanced
by the appealing party.
In our adversarial judicial system, courts must rely on
the parties to frame the issues for decision. See Sineneng-
22
Smith, 140 S. Ct. at 1579. While departures from the
party presentation principle may be necessary in criminal
cases to protect pro se litigants’ rights, id. at 866, no such
justification existed here. The court of appeals’ reason for
exercising its discretion to raise the argument—that the
record on an issue of regulatory construction was fully
developed, App., infra, 13a n.3—further indicates that,
for the Ninth Circuit, facts that might otherwise support
Skidmore deference are irrelevant when the agency
interpretation is offered as trial testimony. The court of
appeals’ violation of the party presentation principle thus
goes hand-in-hand with its erroneous bright-line view of
Skidmore’s inapplicability to trial testimony.
3. The meaning of a single term in an obscure
provision of the EAR may at first glance seem to be far
from the types of important questions of federal law
warranting this Court’s attention. However, the ECCNs at
issue in this case cover items of crucial importance to our
country’s economy and national security: semiconductors.
By erroneously holding that, under the EAR, an item is
“rated for operation” in a certain way merely because
it was designed to operate that way threatens to chill
domestic semiconductor research and development by
subjecting researchers who share their experimental
circuit designs with foreign students and colleagues to
potential criminal liability.
The interaction of three other provisions of the EAR
reveal this prospect. First, engineering designs are
considered “technology” under the EAR. See 15 C.F.R.
§ 772.1 (definition of “technology”). Second, under ECCN
3E001, “technology” for “commodities” controlled by
any ECCN beginning 3A001 may not be exported to
23
any country (other than Canada) without a license. See
15 C.F.R. § Pt. 774, Supp. 1, Cat. 3 (eff. Nov. 17, 2023).
Thus, engineering designs for electronic devices that, if
“rated for operation” at performance levels specified in an
ECCN beginning 3A001, would require a license before
they could be exported also would require a license before
they could be exported.6 Third, such designs could be
“exported” without ever leaving the United States. That
is because disclosing such designs to non-citizens—even
if the disclosure occurs within the United States—is
deemed under the EAR to be an export to the country
of citizenship of the person to whom the disclosure was
made. See 15 C.F.R. § 734.13(a)(2).
Taken together with the court of appeals’ interpretation
of the term “rated,” these regulations potentially
criminalize the common practice among research
engineers of sharing their experimental semiconductor
designs with students and research partners whenever
one of those students or colleagues happens to be from a
country other than Canada.
In sum, this case presents a question of federal law with
broad application to semiconductor research in the United
States. The court of appeals has interpreted the EAR in
a way that criminalizes everyday academic conduct in
electrical engineering departments at universities across
the country. Its decision will prevent U.S.-based academics
and researchers from collaborating with foreign students
6. The ECCNs that beg in w ith 3A001 cover a w ide
array of electronic devices, including MMICs, microprocessor
microcircuits, discrete microwave transistors, and microwave solid
state amplifiers. See 15 C.F.R. Pt. 774, Supp. 1, Cat. 3.
24
and research colleagues in the design of any electronic
device that might be covered under an ECCN beginning
3A001, regardless of whether their design ideas ultimately
work. Reading the term “rated for operation” as the BIS
and the district court urged would avoid this outcome.
The Court should grant a writ of certiorari to prevent
the potentially dire consequences of the Ninth Circuit’s
errant ruling.
B. This Is an Opportune Case for Reaffirming
S kidm o r e a nd A d d r e s si n g It s P r o p e r
Application.
1. In recent years, the Court has selected for review
several cases involving questions about the proper
scope of administrative agency powers, in particular
cases considering the degree to which Article III courts
should defer to administrative agencies’ interpretations
of statutes and regulations. While the Court has already
decided or is about to decide the viability and requisite
conditions for applying Auer and Chevron deference, it
has not yet been presented with an adequate vehicle for
addressing the viability and scope of Skidmore deference.
Dr. Shih’s case gives the Court the perfect vehicle to do so.
2. While the Court is divided over the validity of Auer
deference, indicating a potential divide over Chevron’s
continued viability, its recent opinions foreshadow that
Skidmore remains not only sound law, but the very
foundation for proper agency deference going forward.
Four years ago, in Kisor v. Wilkie, 588 U.S. ___, 139
S. Ct. 2400 (2019), this Court reaffirmed the continued
viability of Auer deference while “reinforc[ing] its limits.”
25
Id. at 2408, 2410. Justice Kagan, writing for a 5-4 majority,
explained that Auer deference rests on the presumption
that, “when granting rulemaking power to agencies,
Congress usually intends to give them, too, considerable
latitude to interpret the ambiguous rules they issue,”
id. at 2412; and that “[a]gencies (unlike courts) have
unique expertise, often of a scientific or technical nature,
relevant to applying a regulation to complex or changing
circumstances,” id. at 2413. The Court clarified, however,
that “when the reasons for [these] presumption[s] do not
apply, or countervailing reasons outweigh them, courts
should not give deference to an agency’s reading, except
to the extent it has the ‘power to persuade.’” Id. at 2414.
Justice Gorsuch, joined by Justices Thomas, Alito, and
Kavanaugh, dissented, calling for the Court to overturn
Auer. However, that dissent endorsed “the well-worn
path of acknowledging that an agency’s interpretation of
a regulation can supply evidence of its meaning,” holding
up Skidmore as the epitome of that practice. See id. 2427
(Gorsuch, J., dissenting).
This term, the Court will decide the future of Chevron
deference in Loper Bright Enterprises et al. v. Raimondo
et al., No. 22-451. The case involves a National Marine
Fisheries Service (NMFS) rule requiring commercial
fishing vessels in the Atlantic Ocean to pay for onboard
federal observers authorized by the Magnusen-Stevens
Fishery Conservation and Management Act to ensure
compliance with various fishing regulations. See Pet. for
Writ of Cert. at 7–10, Loper Bright Enterprises et al. v.
Raimondo et al., No. 22-451. The Act expressly requires
industry-funded observers in three limited contexts but
does not expressly require them for the Atlantic herring
fishery, where the plaintiffs fish. Id. The question on
26
which certiorari was granted is whether the Court
should overrule Chevron or, at least, rule that the Act’s
authorization to require fishing vessels to fund federal
observers in certain limited circumstances does not
create statutory ambiguity—a prerequisite for application
of Chevron deference—about whether the Act broadly
authorizes the requirement in other cases. See id. at i-ii;
see also Loper Bright Enterprises v. Raimondo, 143 S.
Ct. 2429 (2023) (granting petition for writ of certiorari
on Question 2).
Since Skidmore was decided in 1944, however, the
Court has not accepted a case directly questioning its
validity.
3. Dr. Shih’s case provides a suitable and convenient
opportunity for the Court to round out its serial review
and clarification of its prior agency deference decisions in
Kisor and Loper Bright by addressing the appropriate role
for the remaining third tier of deference federal courts
give to agency interpretations—Skidmore deference.
The Court’s recent cases point to the importance
of an authoritative word about Skidmore. The Kisor
majority held that “the cases in which Auer deference
is warranted largely overlap with the cases in which it
would be unreasonable for a court not to be persuaded
by an agency’s interpretation of its own regulation.”
Kisor, 139 S. Ct. at 2424-25 (Roberts, C.J., concurring).
At the same time, the dissenting justices in Kisor, who
would overrule Auer, nevertheless endorse Skidmore and,
indeed, consider it “an entirely reliable statement of the
law.” Kisor, 139 S. Ct. at 2428 (Gorsuch, J., dissenting)
(brackets and internal quotation marks omitted). Given
27
the views expressed in Kisor, even if—especially if—
Chevron is repudiated in Loper Bright, the principles for
evaluating deference to agency interpretations of statutes
and regulations as articulated in Skidmore seem poised
to come to the fore.
The Court should therefore grant certiorari in
this case to address and affirm Skidmore’s continuing
validity, emphasize that Skidmore articulates the baseline
principles that guide district courts when deciding
whether they owe any “respect” to agency interpretations
of their own regulations, and reverse the court of appeals’
decision faulting the district court’s proper application of
Skidmore when interpreting the ECCNs charged in this
case.
28
CONCLUSION
The petition for a writ of certiorari should be granted.
Respectfully submitted,
James W. Spertus
Counsel of Record
M. A nthony Brown
Kevin J. Minnick
Kirsi E. Luther
Spertus, Landes
& Josephs, LLP
1990 South Bundy Drive,
Suite 705
Los Angeles, CA 90025
(310) 826-4700
jim@spertuslaw.com
Attorneys for Petitioner
December 2023
APPENDIX
i
TABLE OF APPENDICES
Page
APPENDIX A — OPINION OF THE UNITED
STATES COURT OF APPEALS FOR THE
NINTH CIRCUIT, FILED JULY 18, 2023 . . . . . . 1a
APPENDIX B — ORDER OF THE UNITED
STATES DISTRICT COURT FOR THE
CENTRAL DISTRICT OF CALIFORNIA,
FILED APRIL 22, 2020 . . . . . . . . . . . . . . . . . . . . . . 35a
APPENDIX C — ORDER DENYING PETITION
FOR REHEA RING OF THE UNITED
STATES COURT OF APPEALS FOR THE
NINTH CIRCUIT, FILED SEPTEMBER 25,
2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163a
1a
APPENDIX A — Appendix
OPINIONAOF THE UNITED
STATES COURT OF APPEALS FOR THE NINTH
CIRCUIT, FILED JULY 18, 2023
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
No. 20-50144
D.C. Nos. 2:18-cr-00050-JAK-1
2:18-cr-00050-JAK
UNITED STATES OF AMERICA,
Plaintiff-Appellant,
v.
YI-CHI SHIH, AKA YUGI SHI, AKA YICHI SHIH,
Defendant-Appellee.
No. 21-50175
D.C. No. 2:18-cr-00050-JAK-1
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
YI-CHI SHIH, AKA YUGI SHI, AKA YICHI SHIH,
Defendant-Appellant.
2a
Appendix A
Appeal from the United States District Court
for the Central District of California.
John A. Kronstadt, District Judge, Presiding.
May 10, 2023, Argued and Submitted
Pasadena, California
July 18, 2023, Filed
Before: Andrew D. Hurwitz and Ryan D. Nelson,
Circuit Judges*.
Opinion by Andrew D. Hurwitz
OPINION
HURWITZ, Circuit Judge:
After Yi-Chi Shih was indicted for various offenses
arising out of the export of semiconductors to the People’s
Republic of China, a jury returned guilty verdicts on
all counts. The district court subsequently entered a
judgment of acquittal on one count. The government
appeals that acquittal, and Shih appeals his convictions
on the other counts. We reverse the judgment of acquittal,
affirm Shih’s other convictions, and remand.
* This case was decided by quorum of the panel. See 28 U.S.C.
§ 46(d); Ninth Circuit General Order 3.2(h).
3a
Appendix A
BACKGROUND
I. The Regulatory Scheme
The Export Administration Regulations (“EARs”),
administered by the Department of Commerce’s Bureau of
Industry and Security (“BIS”), impose controls on certain
exports to “serve the national security, foreign policy,
nonproliferation of weapons of mass destruction, and
other interests of the United States.” 15 C.F.R. §§ 730.1,
730.6.1 After the expiration of the Export Administration
Act of 1979, see 50 U.S.C. § 2419 (2001), the EARs were
continued pursuant to Executive Order 13,222, which
declared a national emergency under the International
Emergency Economic Powers Act (“IEEPA”), 50 U.S.C.
§ 1702, and provided that
[a]ll rules and regulations issued or continued
in effect by the Secretary of Commerce under
the authority of the Export Administration Act
of 1979 . . . and all orders, regulations, licenses,
and other forms of administrative action issued,
taken, or continued in effect pursuant thereto,
shall . . . remain in full force and effect as if
issued or taken pursuant to this order.
Exec. Order No. 13,222, 66 Fed. Reg. 44025 (Aug. 17,
2001). A violation of the EARs is a violation of IEEPA. 50
U.S.C. § 1705(a), (c).
1. All citations are to the 2014 version of the Code of Federal
Regulations.
4a
Appendix A
Most items subject to the EARs are identified on a
BIS Commerce Control List and given an Export Control
Classification Number (“ECCN”). 15 C.F.R. Pt. 774, Supp.
1. An exporter of these items must obtain a license from
the BIS, 15 C.F.R. § 736.2(b)(1), and file an Electronic
Export Information (“EEI”), 15 C.F.R. § 758.1(b)(2).
The ECCNs relevant to this case are 3A001.b.2.b
and 3A001.b.2.c, which apply to a monolithic microwave
integrated circuit (“MMIC”) that is either:
b.2.b. Rated for operation at frequencies
exceeding 6.8 GHz up to and including 16 GHz
and with an average output greater than 1W
(30 dBm) with a “fractional bandwidth” greater
than 10%;
b.2.c. Rated for operation at frequencies
exceeding 16 GHz up to and including 31.8 GHz
and with an average output power greater than
0.8 W (29 dBm) with a “fractional bandwidth”
greater than 10%.
15 C.F.R. Pt. 774, Supp. 1. MMICs are integrated circuits,
or “chips,” that operate at microwave frequencies. The
foundries that manufacture MMICs typically provide
designers with kits that can be rearranged to achieve
performance specifications and with software to run premanufacture simulations. Final designs are collected on
reticles, pieces of glass whose patterns are stamped onto
wafers by the foundry. The wafers are then divided into
individual MMICs.
5a
Appendix A
A catch-all “EAR99” basket applies the EARs to some
items without an ECCN. 15 C.F.R. § 732.3(b)(3). Although
export licenses are not required for EAR99 items not
destined for a recipient on a BIS “Entity List,” see 15
C.F.R. Pt. 774, Supp. 4, an exporter must file an EEI if
the items are valued at more than $ 2,500 and destined for
a country other than Canada, 15 C.F.R. § 758.1(b).
“Publicly available technology” that “arise[s] during,
or result[s] from, fundamental research” is not subject
to the EARs. 15 C.F.R. § 734.3(b)(3)(ii). “Technology” is
defined as “information necessary for the ‘development,’
‘production,’ or ‘use’ of a product”; that information
can take the form of “technical data,” which includes
“blueprints, plans, diagrams, models, formulae, tables,
engineering designs and specifications, [or] manuals and
instructions written or recorded on other media or devices
such as disk, tape, [and] read-only memories.” 15 C.F.R.
§ 772.1. “Fundamental research” is “basic and applied
research in science and engineering, where the resulting
information is ordinarily published and shared broadly
within the scientific community.” 15 C.F.R. § 734.8(a).
II. Export of the MMICs
The charges against Shih arose out of the export
of MMICs to China. In September 2012, Shih and his
colleagues at Chengdu RML, a China-based company,
began conducting research for China Avionics Systems
(“AVIC 607”), a Chinese state-owned enterprise that
develops military weapons. In early 2013, Kiet Mai agreed
to help Shih procure MMIC foundry services from Cree,
6a
Appendix A
Inc. Cree required Mai to submit an export compliance
questionnaire, which Shih completed. The completed
questionnaire indicated that (1) Cree’s customer was
MicroEx Engineering, a Los Angeles-based company
run by Mai; (2) the approximate frequency of the MMICs
would be “up to 18 GHz” and the approximate power “up
to 10W”; and (3) the product was neither subject to export
control regulations nor to be shipped overseas.
After Mai submitted the questionnaire and signed
Cree’s Process Design Kit Agreement, Cree gave him
access to a web portal that included the design kit, data
reports, and other materials. Although Cree creates
unique login credentials for each authorized user, Mai
requested only one set, which he emailed to Shih. Shih
shared Mai’s username and password with his Chengdu
RML colleagues, who used the Cree software to design
the MMICs, respond to feedback from Cree engineers,
and run simulations to ensure that the MMICs would meet
performance goals.
Cree manufactured the RML-designed MMICs on
wafers suited for high-power microwave applications. On
December 26, 2013, Cree shipped four wafers to MicroEx.
In early 2014, Shih allegedly shipped them to China
through several intermediaries. Post-export testing in
China confirmed that the MMICs performed consistently
with pre-manufacture simulations.
7a
Appendix A
III. Proceedings Below
In February 2018, a grand jury returned a ten-count
indictment against Shih, Mai, and a third codefendant.
Counts 1 and 2 charged conspiracy to violate and violation
of export control laws, 50 U.S.C. § 1705(a), (c); 18 U.S.C.
§ 2(b); Counts 3 through 6 charged mail fraud, 18 U.S.C.
§ 1341; Counts 7 and 8 charged wire fraud, 18 U.S.C.
§§ 1343, 2(b); Count 9 charged conspiracy to defraud the
U.S. government and a violation of the Computer Fraud
and Abuse Act, 18 U.S.C. §§ 371, 1030; and Count 10
charged money laundering, 18 U.S.C. §§ 1956(a)(2)(A),
2(a). In October 2018, the grand jury returned a first
superseding indictment charg ing four additional
defendants under Count 1, extending the conspiracy
timeframe, and adding eight new counts against Shih.
A second superseding indictment amended Counts 12
through 14. In June 2019, after a 22-day trial, a jury
returned guilty verdicts against Shih on all counts.
Shih then moved for a judgment of acquittal on
Counts 1 through 10. In April 2020, the district court
granted a judgment of acquittal on Counts 1 and 2.
Although rejecting Shih’s argument that the MMICs
were fundamental research exempt from the EARs,
the court held that they were not “rated for operation”
under ECCNs 3A001.b.2b.b and 3A001.b.2.c., 15 C.F.R.
Pt. 774, Supp. 1, because they had not been “tested and
thereby confirmed to operate reliably within the specified
parameters” before export. It denied Shih’s motion as to
the remaining counts as well as his motion for a new trial.
8a
Appendix A
Upon reconsideration, the district court reinstated
the guilty verdict on Count 1, finding that overwhelming
evidence supported a conviction for conspiring to export
an item without filing a required EEI (Object C of Count
1’s multi-object conspiracy) even if an export license were
not required (Object A). The court denied Shih’s renewed
motion for a new trial on Counts 3 through 8 and again
declined to grant a judgment of acquittal on Counts 9
and 10.
The district court issued a second amended judgment
and commitment order on July 28, 2021. The government
had in the meantime timely appealed the judgment of
acquittal on Count 2. Shih then timely appealed the second
amended judgment, and we consolidated the two appeals.
DISCUSSION
I. Constitutionality of the EARs
Shih argues that the EARs are invalid because
Executive Order 13,222 was an improper invocation of
presidential authority. He also argues that IEEPA violates
the nondelegation doctrine.
We start our analysis of the Executive Order from the
settled premise that courts must be hesitant to review the
executive’s declaration of a national emergency. See Haig
v. Agee, 453 U.S. 280, 292, 101 S. Ct. 2766, 69 L. Ed. 2d
640 (1981). Given that maxim, we have previously rejected
a similar claim challenging continued enforcement of the
EARs through executive orders after previous lapses
9a
Appendix A
in the Export Administration Act. See United States v.
Spawr Optical Rsch, Inc., 685 F.2d 1076, 1081-82 (9th Cir.
1982). Although the prior executive orders were issued
under the Trading with the Enemy Act, we see no reason
to treat one issued pursuant to IEEPA any differently.
Compare 50 U.S.C. § 1701, with 50 U.S.C. § 4305.
Nor does IEEPA run afoul of the nondelegation
doctrine. The statute “meaningfully constrains” the
executive’s “discretion to define criminal conduct.” Touby
v. United States, 500 U.S. 160, 166, 111 S. Ct. 1752, 114 L.
Ed. 2d 219 (1991). It specifies the steps the President must
take before invoking an emergency, including consultation
with Congress, and establishes reporting requirements.
See 50 U.S.C. § 1703. It also limits the President’s
authority to prohibit certain types of transactions, see
50 U.S.C. § 1702(b), and prohibits the punishment of
unwitting violators, see 50 U.S.C. § 1705(c). Because these
statutory restrictions strike “a careful balance between
affording the President a degree of authority to address
the exigencies of national emergencies and restraining his
ability to perpetuate emergency situations indefinitely by
creating more opportunities for congressional input,” we
agree with every Circuit to have considered the issue that
IEEPA is constitutional. United States v. Amirnazmi,
645 F.3d 564, 577 (3d Cir. 2011); see also United States v.
Dhafir, 461 F.3d 211, 215-17 (2d Cir. 2006); United States
v. Arch Trading Co., 987 F.2d 1087, 1092-94 (4th Cir.
1993); United States v. Mirza, 454 F. App’x 249, 255-56
(5th Cir. 2011).
10a
Appendix A
II. Construction of “Rated for Operation”
The judgment of acquittal on Count 2 rested on
the district court’s construction of the term “rated for
operation” in ECCNs 3A001.b.2.b and 3A001.b.2.c. See
15 C.F.R. Pt. 774, Supp. 1. We hold that the district
court erred in concluding that this term requires postmanufacture, pre-export testing.
“Regulations are interpreted according to the
same rules as statutes, applying traditional rules of
construction.” Minnick v. Comm’r, 796 F.3d 1156, 1159
(9th Cir. 2015). The starting point is the “plain language,”
United States v. Bucher, 375 F.3d 929, 932 (9th Cir. 2004),
and we give undefined terms their ordinary meaning, see
FCC v. AT&T Inc., 562 U.S. 397, 403, 131 S. Ct. 1177, 179
L. Ed. 2d 132 (2011). “Ordinarily, a word’s usage accords
with its dictionary definition.” Yates v. United States, 574
U.S. 528, 537, 135 S. Ct. 1074, 191 L. Ed. 2d 64 (2015).
The district court correctly recognized that numerous
dictionary definitions teach that the term “rated” means
“designed.”2 It rejected these definitions, however, because
2. See Rate, Webster’s Third New International Dictionary,
Unabridged (1961) (“to set an estimate on” or “to estimate the normal
capacity or power of (current flowing at the rated capacity)”); Rate,
Oxford English Dictionary Online, https://perma.cc/3T9H-FJK8
(“To estimate or assess the . . . value” or “To assign a standard,
optimal, or limiting rating”); Rate, Vocabulary.com, https://perma.
cc/2RFL-5GXZ (“estimate the value of” or “assign a rank or rating
to”); Rate, Dictionary.com, https://perma.cc/RQ7Y-R9DU (“to
estimate the value or worth of; appraise” or “to esteem, consider, or
account”); Rated Frequency, Electropedia, https://perma.cc/EZ8X-
11a
Appendix A
the EARs elsewhere include the phrase “designed or
rated,” see, e.g., ECCN 3A001.a.1, 15 C.F.R. Pt. 774,
Supp. 1. The court therefore concluded that “rated”
would be surplusage unless it meant something other
than “designed” and—relying on testimony by experts
in electrical engineering—held that “rated for operation”
means “that a manufactured item has been tested, with
the results confirming that it operates within the specified
parameters.” Because there was no evidence that the
MMICs were so tested before export, the court held that
the government failed to establish that they were covered
by ECCNs 3A001.b.2.b and 3A001.b.2.c.
We disagree. “The canon against surplusage is not an
absolute rule.” Marx v. Gen. Revenue Corp., 568 U.S. 371,
385, 133 S. Ct. 1166, 185 L. Ed. 2d 242 (2013). “Sometimes
the better overall reading of the statute contains some
redundancy,” Rimini St., Inc. v. Oracle USA, Inc., 139
S. Ct. 873, 881, 203 L. Ed. 2d 180 (2019), and “[i]t is
appropriate to tolerate a degree of surplusage rather than
adopt a textually dubious construction,” United States v.
Atl. Rsch. Corp., 551 U.S. 128, 137, 127 S. Ct. 2331, 168
L. Ed. 2d 28 (2007).
VV4Z (“the frequency at which the transformer or reactor is designed
to operate”); Rated Voltage, Electrical Engineering Dictionary
(2000) (“the voltage at which a power line or electrical equipment
is designed to operate”); Rating, Oxford Dictionary of Electronics
and Electrical Engineering (5th ed. 2018) (“Stipulating or the
stipulation of operating conditions for a machine, transformer, or
other device or circuit and stating the performance limitations of such
equipment . . . . The designated limits to the operating conditions
within which the device or equipment functions satisfactorily are
the rated conditions . . . .”).
12a
Appendix A
This is the paradigm of such a case. In applying the
canon against surplusage, the district court created a
gaping loophole in the EARs that plainly contravenes
their purpose. The EARs
are intended to serve the national security,
foreign policy, nonproliferation of weapons of
mass destruction, and other interests of the
United States . . . . Some controls are designed
to restrict access to items subject to the EAR
by countries or persons that might apply
such items to uses inimical to U.S. interests.
These include . . . controls designed to limit
the military . . . support capability of certain
countries.
15 C.F.R. § 730.6. If “rated for operation” requires postmanufacture, pre-export testing, one seeking to evade the
EARs could simply design an export-controlled item, run
reliable pre-manufacture simulations, freely export the
item, and then test it only after export to confirm that its
performance is consistent with the simulations. Although
Shih suggests that the district court’s interpretation
ensures that mere prototypes or research models are
not subject to the EARs, its holding sweeps far more
broadly, exempting all items not tested before export
from the EARs. Moreover, this reading is not necessary;
the EARs expressly exempt certain technology arising
from fundamental research. See 15 C.F.R. § 734.3(b)(3)(ii).
By “reading words or elements into a [regulation] that
do not appear on its face,” Bates v. United States, 522 U.S.
13a
Appendix A
23, 29, 118 S. Ct. 285, 139 L. Ed. 2d 215 (1997), the district
court’s construction also contravenes a basic principle of
statutory interpretation. Moreover, the court improperly
relied on witness testimony. See Teva Pharms. USA, Inc.
v. Sandoz, Inc., 574 U.S. 318, 332, 135 S. Ct. 831, 190 L.
Ed. 2d 719 (2015) (noting that expert testimony about
terms of art “cannot be used to prove the proper or legal
construction of any instrument of writing” (cleaned up)). 3
Nor, as Shih claims, does an ordinary meaning
interpretation of “rated for operation” render the EARs
unconstitutionally vague. The regulations “describe in
detail the technologies subject to export control” and thus
“provide law enforcement with clear guidance as to what
technologies they may police.” United States v. Zhi Yong
Guo, 634 F.3d 1119, 1123 (9th Cir. 2011). “Moreover, the
scienter requirement in [IEEPA] further alleviates any
concern over the complexity of the regulatory scheme”
because “the government [is] required to prove beyond a
reasonable doubt that Defendant knew that a license was
required for [ ] export.” Id.
III. Fundamental Research Instructions
Shih argues that the district court erred by failing to
give his proposed jury instructions on the fundamental
research exemption. We reject that argument because
3. Although the government failed to raise this argument below,
because the argument “is a matter of statutory construction, and
the record has been fully developed, we exercise our discretion to
address it.” El Paso v. Am. W. Airlines, Inc. (In re Am. W. Airlines,
Inc.), 217 F.3d 1161, 1165 (9th Cir. 2000).
14a
Appendix A
“other instructions given in their entirety cover the
defense theory.” United States v. Tucker, 641 F.3d 1110,
1122 (9th Cir. 2011).
Shih proposed the following general instruction:
Publicly available technology and software
are excluded from the Export Administration
Regulations, and therefore neither a license
nor an Electronic Export information filing
is required for the export of such materials.
Technolog y and sof t wa re a re “ publicly
available” when they (i) Are already published
or will be published; OR (ii) Arise during or
result from fundamental research; OR (iii) Are
educational; OR (iv) Are included in certain
patent applications. The government bears the
burden of proving beyond a reasonable doubt
that the items at issue in Counts One and Two
were not “publicly available” in any of these
four ways.
Shih also requested instructions defining “fundamental
research” as including “[r]esearch conducted by scientists,
or students at a university, a Federal agency, or a business
entity,” and “technology” as “technical data that may take
the form of models and/or engineering designs.”
Even assuming that Shih’s proposed instructions were
accurate, a defendant “is not entitled to an instruction in
a particular form,” and there is no reversible error if the
defense theory was “fairly and adequately covered” by
15a
Appendix A
other instructions. United States v. Keyser, 704 F.3d 631,
641-42 (9th Cir. 2012). That was the case here. Instruction
21 stated that the EARs “provide for certain exclusions
and exceptions to the requirements to obtain a license
and to file Electronic Export Information.” Instruction
29 then stated:
Certain evidence has been presented that
items involved in this case were classified with
ECCNs in the 3A001 category. In determining
whether the 3A001 category applies, you should
consider the following matters: 1) the 3A001
category applies to “commodities,” but not
to “technology.” “Commodities” are articles,
materials, or supplies other than technology or
software. “Technology” is specific information
necessary for the development, production, or
use of a product. This includes such information
that is publicly available.
The jury thus was told that if it found the MMICs to
be “technology,” neither a license nor an EEI filing was
required. 15 C.F.R. § 734.3(b)(3)(ii). And, the district court
accurately defined both “technology” and “commodity.”
See 15 C.F.R. § 772.1. Although the court did not
enumerate the various forms that technology can take nor
provide examples of when fundamental research results
in a commodity rather than technology, the instructions
addressed the key jury questions and allowed Shih to
argue that the MMICs were not covered by the EARs
because they were publicly available technology arising
from fundamental research.
16a
Appendix A
IV. Right to Present a Defense
The defendant has a constitutional “right to put before
a jury evidence that might influence the determination
of guilt.” United States v. Stever, 603 F.3d 747, 755 (9th
Cir. 2010) (cleaned up). But this is not “an unfettered
right to offer evidence that is incompetent, privileged, or
otherwise inadmissible under standard rules of evidence.”
Montana v. Egelhoff, 518 U.S. 37, 42, 116 S. Ct. 2013, 135 L.
Ed. 2d 361 (1996) (cleaned up). Because the district court’s
evidentiary rulings were “well within its discretion” and
Shih was able to “present the substance” of his defense,
we find no error. United States v. Waters, 627 F.3d 345,
353-54 (9th Cir. 2010).
A. Cross-Examination
A trial judge “has considerable discretion in restricting
cross-examination.” United States v. Bensimon, 172 F.3d
1121, 1128 (9th Cir. 1999). The judge “may limit crossexamination in order to preclude repetitive questioning,
upon determining that a particular subject has been
exhausted, or to avoid extensive and time-wasting
exploration of collateral matters.” United States v. Weiner,
578 F.2d 757, 766 (9th Cir. 1978) (per curiam).
1. FBI Special Agent Miller
Special Agent Maureen Miller super vised the
execution of a search warrant at Shih’s house. On direct
examination, Miller testified that the agents conducting
the search found no Cree MMICs. On cross-examination,
17a
Appendix A
Shih sought to establish that the agents had overlooked
two boxes in an upstairs office containing such MMICs.
The district court sustained the government’s
objections to questions posed to Miller that it found
argumentative, asked and answered, speculative, or about
agent “error” or “mistakes.” Shih’s counsel nonetheless
extensively cross-examined Miller on the search, and
Miller admitted that her team would have seized any boxes
from Cree, addressed to Mai, or containing MMICs.
The district court did not abuse its discretion. In
sustaining objections to questions about agent error,
the district court correctly noted that defense counsel
had “asked the question repeatedly” and it had already
permitted questions about whether the boxes “would . . .
have been material, if identified.” The court also reasonably
found that questions about “what constitutes an error . . .
could open other issues in terms of how to evaluate that
term,” and that defense counsel already had “a sufficient
foundational basis to make arguments . . . as to . . . the
quality or error in the work.” Indeed, defense counsel
drew from this cross-examination to challenge the quality
of the agents’ search in closing argument.
2. Codefendant Mai
Shih contends that the district court abused its
discretion by restricting on relevance grounds testimony
by Mai about Shih’s reputation for truthfulness. Even
assuming that testimony was relevant to Shih’s intent to
defraud, see Fed. R. Evid. 401(a), 404(a)(2)(A), any error
18a
Appendix A
was harmless. During cross-examination, Mai stated that
Shih had never asked him to say anything untruthful to
Cree. Additional testimony about Shih’s general reputation
for truthfulness was unlikely to affect the verdict.
B. Admission of Evidence
Determining the admissibility of evidence “is a matter
first for the district court’s sound judgment under Rules
401 and 403.” Sprint/United Mgmt. Co. v. Mendelsohn,
552 U.S. 379, 384, 128 S. Ct. 1140, 170 L. Ed. 2d 1 (2008)
(cleaned up). We review the district court’s evidentiary
rulings for abuse of discretion. See United States v. Cherer,
513 F.3d 1150, 1157 (9th Cir. 2008). “Harmless errors do
not warrant reversal.” Id.
1. UCLA Personnel File
Shih attempted to introduce portions of his UCLA
personnel file during the cross-examination of FBI Agent
Alexander Storino. However, Storino had never seen the
file and could not provide the foundation necessary for
admission. The district court acknowledged that items in
the file might be relevant to Shih’s fundamental research
defense and, after defense counsel conferred with the
government, admitted a page of the file without objection.
Shih’s counsel renewed the request to publish other
portions of the file near the end of the defense case. After
the district court indicated a reluctance to admit the entire
file, defense counsel agreed to confer with the government
and bring any disputes to the court. But Shih did not
19a
Appendix A
seek to publish any other part of the file before resting,
instead simply moving for their admission into evidence.
The district court admitted the exhibits after the close of
evidence but before closing arguments.
Any error in not admitting the evidence earlier was
harmless. Defense counsel did not seek to publish the
portions of the file later admitted before resting and freely
referred to them during closing argument. Moreover,
neither party disputed the facts established by these
portions of the personnel file—Shih was an acclaimed
researcher, UCLA knew about his affiliation with a
Chinese company, and he was integrated into the UCLA
community. Nor were those facts central questions for
the jury.
2. Cree Boxes
The district court also acted within its discretion by
delaying the admission of two boxes that were purportedly
found in Shih’s home after the government’s search
allegedly containing Cree MMICs. The court declined to
admit the boxes during the cross-examination of Special
Agent Miller because her testimony failed to establish
either authenticity or chain of custody. That foundational
ruling was well within the court’s discretion. See United
States v. Edwards, 235 F.3d 1173, 1178 (9th Cir. 2000)
(requiring “sufficient proof so that a reasonable juror
could find that the evidence is in substantially the same
condition as when it was seized” (cleaned up)).
20a
Appendix A
And although initially denying admission of the
boxes, the court nonetheless allowed defense counsel to
extensively cross-examine Miller about her team’s failure
to find them. The boxes were later conditionally admitted
after the foundational testimony of a defense paralegal
who claimed to have found them and Dr. Jeffrey Barner
(a Cree manager) testified as to the MMICs’ authenticity.
The boxes were fully admitted before closing arguments
and Shih referred to them in his closing, arguing that the
alleged MMICs were never sent to China and that the
government’s failure to seize the boxes casts doubt on its
investigation. Thus, the court’s reluctance to admit the
boxes earlier did not prejudice Shih.
3. Cree Internal Emails
During the cross-examination of Dr. Barner, Shih
sought to admit internal Cree emails to establish that
“Cree’s concern is getting paid for the work it does rather
than any export compliance or other issues.” The district
court denied admission, finding the emails cumulative
and only minimally probative because they concerned the
“assurance of payment for services that are going to be
provided,” something “distant from the issue of compliance
and knowledge of the export regulations.” The emails were
admitted into evidence before closing arguments.
The court did not abuse its broad discretion in these
evidentiary rulings. In any event, there was no prejudice
to Shih; the emails were published to the jury and referred
to by defense counsel during closing.
21a
Appendix A
4. YouTube Videos
Defense counsel sought to introduce seven YouTube
videos during Dr. Barner’s cross-examination to challenge
his testimony that access to the Cree portal was limited
and that its functionality was hidden from the public.
The government objected, noting that the videos did not
contradict Barner’s testimony and only three included
Cree employees. Although defense counsel offered to limit
his request to those with Cree employees, he also indicated
that he might not need the videos. The parties reargued
admissibility near the end of the defense case, but defense
counsel again decided to reserve the issue. At the close of
evidence but before closing arguments, the court admitted
two Cree videos and a third that mentioned Cree. It denied
admission of the other videos as cumulative and because
it was not clear that they related to the Cree web portal.
District courts have “considerable latitude even with
admittedly relevant evidence in rejecting that which is
cumulative.” Hamling v. United States, 418 U.S. 87, 127,
94 S. Ct. 2887, 41 L. Ed. 2d 590 (1974). The court did
not abuse that discretion here. And, any supposed error
was clearly harmless. Barner confirmed the existence of
YouTube videos showing features of the Cree portal and
how it can be used to design MMICs during his crossexamination, and Shih does not explain how the excluded
videos contradict any testimony.4
4. We are not persuaded by Shih’s perfunctory argument on
appeal that the district court abused its discretion by delaying
admission of dozens of patents and scholarly articles authored by Shih
and alleged co-conspirators until the close of evidence. See United
Nurses Ass’ns of Cal. v. NLRB, 871 F.3d 767, 780 (9th Cir. 2017).
22a
Appendix A
V. Expert Testimony
Peter Mattis, a Research Fellow in China Studies at
the Victims of Communism Memorial Foundation, testified
during the government’s case that state-owned AVIC
607 “seems to be focused on electrical components that
might . . . be used in missiles or missile guidance systems.”
Shih contends that this testimony was (1) not properly
disclosed; (2) unreliable; (3) had no probative value or was
unfairly prejudicial; and (4) violated the Confrontation
Clause. Reviewing the first three challenges for abuse of
discretion, see United States v. Danielson, 325 F.3d 1054,
1074 (9th Cir. 2003); United States v. Aubrey, 800 F.3d
1115, 1129 (9th Cir. 2015), and the Confrontation Clause
claim de novo, see United States v. Vera, 770 F.3d 1232,
1237 (9th Cir. 2014), we find no reversible error.
A. Rule 16
The government must disclose information about
intended expert testimony “sufficiently before trial to
provide a fair opportunity for the defendant to meet the
government’s evidence.” Fed. R. Crim. P. 16(a)(1)(G).
The disclosure must contain “a complete statement of
all opinions that the government will elicit from the
witness . . . ; the bases and reasons for them; the witness’s
qualifications . . . ; and a list of all other cases in which,
during the previous 4 years, the witness has testified as
an expert.” Id. The rule “is intended to minimize surprise
that often results from unexpected expert testimony”
and to enable the defendant “to test the merit of the
expert’s testimony through focused cross-examination.”
Id. advisory committee’s note to 1993 amendment.
23a
Appendix A
Although the government likely failed to comply with
Rule 16 by not making complete disclosure about Mattis’s
testimony before trial, Shih has not demonstrated a
“likelihood that the verdict would have been different had
the government complied with the discovery rules.” United
States v. Mendoza-Paz, 286 F.3d 1104, 1111 (9th Cir. 2002)
(cleaned up). The district court held a Daubert hearing
during trial at which Shih cross-examined Mattis. After
that hearing, the court concluded that Mattis qualified
as an expert, used a sufficiently reliable methodology,
and that Shih had sufficient notice of the witness and the
subjects of his testimony. The court ruled that Mattis could
not testify about the Chinese military but could explain
that AVIC 607’s business involved missiles.
Although Shih argues that he did not receive a “fair
opportunity to test the merit of the expert’s testimony
through focused cross-examination” at trial, he does
not explain how he would have cross-examined Mattis
differently than at the Daubert hearing, nor did he
later pose any questions he now claims were improperly
excluded. Shih never sought to recall Mattis during his
case-in-chief, even though the court indicated it might
be willing to allow this. And, he neither disputes that he
had business dealings with AVIC 607 nor the accuracy of
Mattis’s testimony about that entity.
B. Reliability
Expert testimony is admissible if
(a) the expert’s scientific, technical, or other
specialized knowledge will help the trier of fact
24a
Appendix A
to understand the evidence or to determine
a fact in issue; (b) the testimony is based on
sufficient facts or data; (c) the testimony is the
product of reliable principles and methods; and
(d) the expert has reliably applied the principles
and methods to the facts of the case.
Fed R. Evid. 702. An expert can rely on information
reasonably relied upon by experts in their fields, Fed. R.
Evid. 703, but must be “more than a conduit or transmitter
for testimonial hearsay,” Vera, 770 F.3d at 1237 (cleaned
up).
At the Daubert hearing, Mattis explained that his
opinions were based on
open-source research, looking at company
websites, following individuals associated with
that company to look at what kind of events
they showed up at, looking through the files
and books that I’ve collected related to the
issues of China’s tech transfer [ ] or . . . Chinese
military modernization, as well as conversations
or questions to friends who have followed these
same organizations or the same general area of
organization.
Those files included news articles and publicly available
government documents discussing export-control
violations. During cross-examination, Mattis noted that
the entities he would testify about were mentioned in his
forthcoming book and that he primarily relied on Chinese-
25a
Appendix A
and English-language publications and websites to develop
his opinions. On redirect, Mattis confirmed that it is
“normal to rely on publications and written works to help
guide . . . opinions and views,” which were also informed
by his life experience with China.
Although Mattis’s methodology relied in part on his
personal experiences, the district court did not abuse its
discretion in concluding that he properly applied those
experiences to open sources “in a manner that is beyond
what a typical layperson could do.” See United States v.
Damrah, 412 F.3d 618, 625, 124 Fed. Appx. 976 & n.4 (6th
Cir. 2005). For the same reason, the district court did not
err in rejecting Shih’s Confrontation Clause argument.
See Vera, 770 F.3d at 1237-40 (“The key question for
determining whether an expert has complied with [the
Confrontation Clause] is the same as for evaluating expert
opinion generally: whether the expert has developed his
opinion by applying his extensive experience and a reliable
methodology.” (cleaned up)).
C. Relevance and Prejudice
The district court also acted within its discretion in
finding Mattis’s testimony relevant and likely helpful to the
jury. Fed. R. Evid. 401, 702(a). The testimony described
the objectives of companies that Shih was involved with,
information with which a lay juror would be unfamiliar.
Nor was a statement by Mattis regarding AVIC 607’s
“focus[ ] on electronic components that might . . . be
used in missiles or missiles guidance systems” unfairly
prejudicial. Fed. R. Evid. 703. The district court limited
26a
Appendix A
Mattis’s testimony about the Chinese military in general,
and Shih’s own documents identified AVIC 607, his other
customers, and the military applications of MMICs. See
United States v. El-Mezain, 664 F.3d 467, 509 (5th Cir.
2011) (“Evidence which tends to rebut a defendant’s claim
of innocent action is unlikely to be unduly prejudicial.”).
Moreover, other experts testified without objection about
the MMICs’ potential military applications.
VI. Prosecutorial Misconduct
The prosecutor stated in rebuttal argument that “the
customer for the Cree chip was AVIC 607, which you heard
develops missiles and missile guidance systems for China”;
mentioned the military, missiles, or AVIC 607 sixteen
times; called Shih’s position at UCLA the “perfect cover”
for his scheme; and described the evidence as “scary.”
Although Shih did not object during the argument, he
filed a written objection five days later, citing the district
court’s “preference . . . not to have counsel interrupt each
other with objections during argument.”
Even assuming that the objection was timely, Shih
has not established that the statements “so infected the
trial with unfairness as to make the resulting conviction
a denial of due process.” Darden v. Wainwright, 477 U.S.
168, 181, 106 S. Ct. 2464, 91 L. Ed. 2d 144 (1986) (cleaned
up). The statements about AVIC 607 were supported by
the record. Mattis testified that the company was focused
on electronic components that could be used in missiles,
Exhibit 2106A identified AVIC 607 as a probable customer,
and other experts testified about the MMICs’ military
applications.
27a
Appendix A
Nor did the prosecutor inappropriately appeal to the
jurors’ fears. “A prosecutor may respond in rebuttal to
an attack made in the defendant’s closing argument.”
United States v. Hui Hsiung, 778 F.3d 738, 746 (9th Cir.
2015). References to the military were in response to
the defense closing or came from the evidence, including
Shih’s own documents. The government’s two uses of the
word “scary” were a “fair response,” see United States
v. Lopez-Alvarez, 970 F.2d 583, 597 (9th Cir. 1992), to
defense counsel’s closing, which accused the prosecution of
a “distraction with fear” and trying to “scare” the jurors.
VII. Wire and Mail Fraud Instructions
The parties do not dispute that the jurors were
improperly instructed on the wire and mail fraud charges
(Counts 3 through 8) because they were asked to find
whether Shih intended to deceive or cheat Cree, rather
than to deceive and cheat. See United States v. Miller, 953
F.3d 1095, 1098 (9th Cir. 2020). Even assuming arguendo
that Shih preserved his challenge to the instructions, as
in Miller, see id. at 1103, we find any error harmless.
The “harmless error inquiry [ ] focuses on what the
evidence showed regarding [Shih’s] intent to defraud and
whether we can conclude beyond a reasonable doubt that
the jury verdict would have been the same absent the
error.” United States v. Saini, 23 F.4th 1155, 1164 (9th Cir.
2022) (cleaned up). We find the instructions here harmless
for many of the same reasons as we did in Miller. Like the
instructions in Miller, 953 F.3d at 1103, the district court’s
instruction on the “scheme to defraud” element required
28a
Appendix A
the jury to find that Shih “knowingly participated in a
scheme or plan to defraud Cree, or a scheme or plan for
obtaining money or property from Cree by means of false
or fraudulent pretenses, representations, or promises.”
Miller noted that “a scheme . . . to defraud or obtain money
or property” encompasses “the intent not only to make
false statements or utilize other forms of deception, but
also to deprive a victim of money or property by means
of those deceptions.” Id. at 1101. Here, as in Miller,
“[i]f the jury had believed that there was any inconsistency
between this language and the subsequent language about
‘deceive or cheat,’ they undoubtedly would have sought
further instruction, which they did not.” Id. at 1103.
Moreover, there was powerful evidence that Shih
intended to defraud Cree. See Saini, 23 F.4th at 1164. In
completing the export compliance questionnaire, Shih
obscured the identity of both the customer and end user
and stated that the MMICs would not be shipped abroad.
Mai falsely told Cree that MicroEx would design, test,
and use the MMICs. And Shih used Mai to obtain login
credentials without letting Cree know that he would be
using them.
VIII. Sufficiency of the Evidence
“There is sufficient evidence to support a conviction
if, reviewing the evidence in the light most favorable to
the prosecution, any rational trier of fact could have found
the essential elements of the crime beyond a reasonable
doubt.” United States v. Ross, 123 F.3d 1181, 1184 (9th Cir.
1997). Sufficient evidence supports the convictions on the
ten counts that Shih challenges.
29a
Appendix A
A. Violation of the EARs
As to Counts 1 and 2, a rational factfinder could find
that the exported MMICs were not exempt from the
EARs as fundamental research. There was sufficient
evidence to allow a jury to find that the Cree MMICs
were “commodities” rather than “[p]ublicly available
technology” that “ar[o]se during, or result[ed] from,
fundamental research.” 15 C.F.R. § 734.3(b)(3)(ii); see also
15 C.F.R. § 772.1 (defining “commodity,” “technology,”
and “technical data”). Multiple witnesses explained that
the MMICs had various practical applications. Shih’s
business plans suggested that the MMICs would be used
by a specific customer for such applications, and were thus
not “specific information necessary for the ‘development’,
‘production’, or ‘use’ of a product.” 15 C.F.R. § 772.1
(defining “technology”). 5
B. Mail and Wire Fraud
Sufficient evidence also supports the verdicts on
Counts 3 through 8. To establish mail and wire fraud,
the government must prove “1) a scheme to defraud, 2)
a use of the mails or wires in furtherance of the scheme,
and 3) a specific intent to deceive or defraud.” United
States v. Bonallo, 858 F.2d 1427, 1433 (9th Cir. 1988).
Misrepresentations must be material. See United States
v. Brugnara, 856 F.3d 1198, 1207-08 (9th Cir. 2017).
5. Shih also contends that the evidence is insufficient to
support the guilty verdicts on these counts because the MMICs
did not undergo post-manufacture, pre-export testing. We reject
this contention because it relies upon the district court’s erroneous
construction of the relevant EARs. See supra Discussion Part II.
30a
Appendix A
Shih plainly made misrepresentations to Cree. On
Cree’s export compliance questionnaire, Shih falsely listed
MicroEx as the customer. And, the jury could infer that
Mai spoke on Shih’s behalf when falsely telling Cree that
MicroEx would be “doing the design, testing and use of
the MMICs.”
A reasonable fact f i nder cou ld f i nd those
misrepresentations material. Dr. Barner testified that
Cree typically does not provide its foundry materials to
customers in China and would not ship wafers to China
that contain proprietary technology. He also testified that
access to Cree’s design portal was limited to authorized
users covered by the Portal Design Kit Agreement and
that Cree would have cut off Mai’s access had it known that
Mai had shared his login credentials with third parties
who had not signed the agreement.
The evidence also supports a finding that Cree was
deprived of confidential information, a cognizable property
interest under the mail and wire fraud statutes. See
Carpenter v. United States, 484 U.S. 19, 22-26, 108 S. Ct.
316, 98 L. Ed. 2d 275 (1987). Cree limited access to its
portal—which contained confidential information about
Cree’s design process—to authorized users. A rational
factfinder could find that Shih deprived Cree of that
information when Mai shared his login credentials with
Shih and other unauthorized users.
Nor were the wire and mail fraud convictions based
upon a right-to-control-property theory, an invalidated
theory under which a defendant could be found “guilty
31a
Appendix A
of wire fraud if he schemes to deprive the victim of
potentially valuable economic information necessary to
make economic decisions.” Ciminelli v. United States,
143 S. Ct. 1121, 1124, 215 L. Ed. 2d 294 (2023) (cleaned
up). The government’s second superseding indictment and
trial strategy did not rest on that theory. Cf. id. at 1125.
Rather, the government has always argued that Cree was
deprived of its confidential information because it would
not have provided the information but for Shih’s fraud. Nor
was the jury improperly instructed about what constitutes
“property.” Cf. id.
C. Computer Fraud
To establish computer fraud, the government was
required to prove that Shih conspired to (1) intentionally
access Cree’s portal w ithout authorization, (2) in
furtherance of a criminal act. See 18 U.S.C. § 1030(a)(2)(C),
(c)(2)(B)(iii).
A rational factfinder could find that Shih and his
Chengdu RML colleagues were not authorized to access
the Cree web portal. The evidence was also sufficient
to establish that Shih gained unauthorized access to
the portal through Mai by hiding his identity from
Cree, despite his familiarity with the Portal Design Kit
Agreement. Moreover, a rational factfinder could reject
Shih’s argument that he was authorized to access the
portal as a consultant for JYS Technologies. Although
Shih argues that JYS had agreements with MicroEx,
Mai testified that MicroEx never did any work for JYS.
Because sufficient evidence also supports the verdict on
32a
Appendix A
at least one of Counts 1 through 8, a rational factfinder
could find that the unauthorized computer fraud access
was in furtherance of a specified crime.
D. Money Laundering
Shih contends that the Count 10 conviction cannot
stand because the money laundering was alleged to
further the unlawful activity specified in Counts 1 through
9, which he argues that the government did not prove.
Because we reject his attacks on those counts, we affirm
the conviction on Count 10.6
IX. Classified Information Procedures Act
Before trial, the government filed an ex parte, in
camera motion requesting that the court find certain
classified information not discoverable or, in the
alternative, that the information need not be disclosed
under Section 4 of the Classified Information Procedures
Act (“CIPA”), 18 U.S.C. app. 3.
W hen consider ing a motion to w ithhold
classified information from discovery, a district
court must first determine whether . . . the
information at issue is discoverable at all. If
the material at issue is discoverable, the court
6. Shih also argues that the convictions on Counts 1, 9, and 10
should be vacated because they included a legally invalid object or
predicate offense. See Skilling v. United States, 561 U.S. 358, 414,
130 S. Ct. 2896, 177 L. Ed. 2d 619 (2010). Because we find no legal
flaw underlying those counts, we reject the argument.
33a
Appendix A
must next determine whether the government
has made a formal claim of the state secrets
privileges, lodged by the head of the department
which has actual control over the matter, after
actual personal consideration by that officer.
United States v. Sedaghaty, 728 F.3d 885, 904 (9th Cir.
2013) (cleaned up).
The district court followed this procedure and
determined that none of the allegedly classified material
was discoverable. Shih contends that he was denied due
process. However, we have stated that precisely such a
“challenge . . . is a battle already lost in the federal courts,”
noting that “in a case involving classified documents, [ ] ex
parte, in camera hearings in which government counsel
participates to the exclusion of defense counsel are part
of the process that the district court may use in order
to decide the relevancy of the information.” Id. at 908
(cleaned up).7
X. Cumulative Error
“In some cases, although no single trial error
examined in isolation is sufficiently prejudicial to warrant
reversal, the cumulative effect of multiple errors may still
prejudice a defendant.” United States v. Frederick, 78 F.3d
7. Shih also asserts that “the district court incorrectly found
that the submitted classified information was not ‘material to
preparing the defense.’” We decline to consider this argument
because it was first raised in Shih’s reply brief. See Cedano-Viera
v. Ashcroft, 324 F.3d 1062, 1066 n.5 (9th Cir. 2003).
34a
Appendix A
1370, 1381 (9th Cir. 1996). But, “many of [Shih’s] alleged
errors are not errors at all.” United States v. Lindsey, 634
F.3d 541, 555 (9th Cir. 2011). And, Shih has not established
that any errors made his defense “far less persuasive than
it might otherwise have been.” Parle v. Runnels, 505 F.3d
922, 927 (9th Cir. 2007) (cleaned up).
CONCLUSION
We REVERSE the judgment of acquittal on Count
2 and order reinstatement of the guilty verdict on that
count, AFFIRM the convictions on all other counts, and
REMAND for further proceedings consistent with this
opinion. 8
8. Shih’s motion for judicial notice of two government manuals
and two agency specifications, Dkt. 92, is GRANTED.
35a
B
APPENDIXAppendix
B — ORDER
OF THE
UNITED STATES DISTRICT COURT FOR THE
CENTRAL DISTRICT OF CALIFORNIA,
FILED APRIL 22, 2020
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CRIMINAL MINUTES - GENERAL
Case No. LA CR18-00050 JAK (1)
Date April 22, 2020
Present: The Honorable John A. Kronstadt,
United States District Judge
Interpreter N/A
Cheryl Wynn
Deputy Clerk
Not Reported
Court Reporter/Recorder
Not Present:
Melanie Sartoris; Judith A. Heinz;
Khaldoun Shobaki; William Rollins;
James C. Hughes
Assistant U.S. Attorney
U.S.A. v. Defendant(s):
Yi-Chi Shih
Present
Not
Cust.
36a
Appendix B
Bond
X
Attorneys for Defendants:
James W. Spertus;
Christa L. Culver;
Michael A. Brown
Present
Not
App.
Ret.
X
Proceedings: (IN CHAMBERS) ORDER GRANTING
IN PART AND DENYING IN PART DEFENDANT’S
MOTION FOR JUDGMENT OF ACQUITTAL (Dkt.
633) AND DENYING DEFENDANT’S MOTION FOR
NEW TRIAL (Dkt. 634)
I.
Introduction
On June 26, 2019, following a 22-day jury trial,
Defendant Yi Chi-Shih was convicted of all 18 counts
charged in the Second Superseding Indictment (“SSI”).
Dkt. 569. On October 4, 2019, pursuant to an agreed upon
briefing schedule, Defendant filed a Motion for Judgment
of Acquittal Pursuant to Fed. R. Crim. P. 29 (“MJOA”)
(Dkt. 633) and Motion for New Trial Pursuant to Fed. R.
Crim. P. 33 (“Motion for New Trial”) (Dkt. 634) (together,
the “Motions”). On November 1, 2019, the Government
filed Oppositions to Defendant’s Motions. Dkt. 645; Dkt.
37a
Appendix B
647. Defendant then filed reply briefs in support of both
Motions. Dkt. 650; Dkt. 651. The Government responded
with a Sur-Reply. Dkt. 652. Defendant filed a Motion to
Strike or, in the alternative, Response to Government’s
Sur-Reply. Dkt. 654.1
A hearing was held on Defendant’s Motions on
December 19, 2019, at which time the Court noted it
would take the matter under submission upon the parties’
additional briefing or upon notice that no additional
briefing would be filed. Dkt. 681. On December 23, 2019,
1. In a footnote, Defendant moved to strike the Government’s
Sur-Reply because it was filed without leave to do so, required by
Local Rules. Dkt. 654 at 1 n.1. Although arguments raised only in
footnotes may be deemed to have been waived, Defendant’s request to
strike is addressed. See Estate of Saunders v. Comm’r, 745 F.3d 953,
962 n.8 (9th Cir. 2014) (declining to address an argument raised only
in an opening brief footnote and reply brief because “[a]rguments
raised only in footnotes, or only on reply, are generally deemed
waived.”). Local Rule 7-10 provides that “[a]bsent prior written
order of the Court, the opposing party shall not file a response to
the reply.” L.R. 7-10. “The decision as to whether to allow a surreply
is within the court’s discretion, though the discretion should only
be exercised in favor of allowing the surreply when there is a valid
reason for the additional briefing.” Cleveland v. Janssen Pharm., No.
CV 2:16-02308 MCE (ACPS), 2019 WL 6114719, at *1 (E.D. Cal. Nov.
18, 2019), report and recommendation adopted, 2020 WL 1157724
(E.D. Cal. Mar. 10, 2020). Because many substantive issues have been
presented through the briefing and at the hearing, it is appropriate
to consider all arguments on the regulatory interpretation dispute.
Further, Defendant had an opportunity to respond to the Sur-Reply
in writing and at the hearing. Therefore, because there is no showing
of prejudice to Defendant by permitting the Sur-Reply, the Court
exercises its discretion and does so. Therefore, Defendant’s Motion
to Strike is DENIED.
38a
Appendix B
the parties filed a notice that no additional briefing would
be filed. Dkt. 680.
For the reasons stated in this Order, Defendant’s
MJOA is GRANTED IN PART and DENIED IN PART,
and Defendant’s Motion for New Trial is DENIED.
Defendant’s MJOA is granted as to Counts One and Two,
but denied as to all other counts, and Defendant’s Motion
for New Trial is denied in its entirety.
II. Factual Background
A.
Overview
The evidence discussed in this section concerns the
facts most relevant to Defendant’s Motions. The discussion
does not address all the evidence presented by the
Government at trial about the export conspiracy violation
or the other charges.
Defendant was convicted of, inter alia, conspiring
to violate, and violating the International Emergency
Economic Powers Act (“IEEPA”) by exporting Monolithic
Microwave Integrated Circuits (“MMICs”)2 to the People’s
2. A MMIC is an integrated circuit. Dkt. 619 at 12–13. MMICs
are manufactured on wafers; in this matter the wafers were four-inch
discs. See id. at 21–22. The MMICs are collected on a “reticle”, which
is a piece of glass that is used to do the imaging when manufacturing
the circuits. Id. at 19. That reticle is the pattern that is repeated like
a stamp across a wafer. Id. The wafer is then placed on a substance
similar to packing tape and may be sawed or diced into individual
integrated circuits. Id. at 22. Those individual circuits are the MMIC
39a
Appendix B
Republic of China (“China”) in violation of the Export
Administration Regulation (“EAR”). The charges against
Defendant are premised on this export conspiracy and
violation. The export conspiracy was alleged to have been
in place from January 2006 to January 2016, and the actual
export at issue occurred in January 2014.
At trial, evidence was presented that, as part of the
export conspiracy and violation, the MMICs at issue (the
“Cree MMICs”) were designed by individuals in China
with Defendant’s assistance and under his direction. They
were then manufactured by Cree, a United States-based
company that operates a foundry. 3 Defendant and others
then worked together to send the Cree MMICs to China
through a very circuitous process, which the Government
contends was intended to conceal the shipments. The
Government also presented evidence that the Cree
MMICs had practical applications, including in military
devices, and that the intended customer for the Cree
MMICs was AVIC 607, a Chinese entity.
power amplifiers. Id. at 22–23. The MMICs at issue in this case were
MMIC power amplifiers. However, in this Order they are referred
to as MMICs to simplify the discussion and to be consistent with
the use of this term in the briefing by the parties.
3. This type of foundry is used to manufacture integrated
circuits, including MMICs. Dkt. 619 at 14.
40a
Appendix B
B. Defendant
Defendant is an electrical engineer who has published
many research papers and obtained many patents during
his career. See, e.g., Ex. 3204, 3207–24, 3227–31, 3273–87,
3290, 3292–97, 3321, 3324–26, 3301–19, 3330–31, 3341–56,
3358–84, 3386-3399, 3974–76, 3999, 4060–61. Defendant
has worked for several defense contractors in the United
States. During closing argument, defense counsel
conceded that Defendant was familiar with the export
laws of the United States. See Dkt. 671 at 8. Defendant
also worked as an adjunct professor in the electrical
engineering department of UCLA during the same time
period when the conspiracy was operating. Dkt. 665 at
42–45; Dkt. 639-1 at 347–89 (Ex. 4299).
C.
Chengdu Gastone and Chengdu RML
Defendant and others established Chengdu Gastone
Technology Company (“Chengdu Gastone”), which is a
foundry located in China. See Dkt. 622 at 43; Dkt 591 at
69; Ex. 153A. Defendant began serving as president of
Chengdu Gastone in mid-2011. Dkt. 593 at 50. Although
the precise date is unclear, Defendant’s role at Chengdu
Gastone changed sometime in 2014 or 2015. See Dkt. 511
at 518; Dkt. 517 at 52–53; Dkt. 536 at 20; Dkt. 665 at 11–13;
Ex. 700; Ex. 705; Ex. 732.
Defendant also performed work for Chengdu RML
Technology Company (“Chengdu RML”), a Chinese entity
involved in circuit research and design. See Dkt. 581 at
40; Dkt. 590 at 80–81; Dkt. 591 at 16, 74; Dkt. 622 at 43.
In connection with the alleged export conspiracy and
41a
Appendix B
violation, Defendant worked with individuals employed
by Chengdu RML to design the Cree MMICs. See § II.E,
infra. Peter Mattis, an expert witness called by the
Government, testified that Chengdu RML appeared to be
staffed by one or two individuals who are related to the
Chinese government. Dkt. 517 at 15–16. He also testified
that they appeared to act as facilitators who connected
people outside China to companies inside China for the
purpose of developing cooperative agreements between
them. Id.
The Government argued that the establishment of
Chengdu RML and Chengdu Gastone was the result of
a plan formulated in 2006 by Defendant and others to
develop and improve the MMIC design capability and
foundry services in China. See Dkt. 595 at 70–71; Ex.
204A. Chengdu RML became the design entity and
Chengdu Gastone became the foundry entity under this
plan. See Dkt. 595 at 70–71.
In 2014, the U.S. Department of Commerce, which is
the federal agency charged with promulgating the EAR,
placed Chengdu Gastone on the Department’s entity list.
Dkt. 535 at 44.4
4. The EAR contains particular license requirements for the
export of specified items to those parties that are on the entity list.
A party is placed on the entity list based on a determination that the
party has been involved in actions or other conduct that is adverse
to the interests or foreign policy of the United States. Dkt. 535 at
19–20. As a result, even if an item might not otherwise be export
controlled, it may be so controlled if it is to be exported to a party
on the entity list. Id. at 16, 42–43.
42a
Appendix B
D.
Procuring the Cree MMICs
1.
Background
Kiet Anh Mai (“Mai”), an alleged co-conspirator
who had entered a plea of guilty prior to the trial,
cooperated with the Government and testified at trial.
Mai and Defendant previously worked together in other
enterprises. As a result, they had known each other
for approximately 12 years at the time that Defendant
approached Mai bout procuring MMICs from Cree. Dkt.
506 at 36. Defendant told Mai that if Defendant procured
the MMICs from Cree through UCLA, it would result in
a 40% surcharge. Dkt. 522 at 48. Defendant offered to pay
Mai a 20% commission to procure the MMICs from Cree.
Id. Mai accepted Defendant’s offer, and then proceeded
to contact Cree. Id. at 48–49. 5
Dr. Jeffrey Barner, who was in charge of Cree’s
foundry services, testified about them. He stated that
these services included providing customers with access
to the Cree web portal, which contains design software
-- the Process Design Kit (“PDK”) -- that customers can
use to design MMICs. He also testified that Cree provides
assistance to customers during the design process so
that they can submit a design that can be manufactured
successfully. Dkt. 511 at 124–25, 127–29. Once a customer
5. Mai ultimately procured two wafer runs from Cree; each
consisted of four wafers. Although evidence of both Cree wafer runs
was presented at trial, the subject of the export conspiracy and
violation concerned the first Cree wafer run. All references to Cree
MMICs are to that wafer run.
43a
Appendix B
submits a final design, the Cree foundry uses it to
manufacture the physical MMIC.
2.
Concealing Defendant’s Identity from Cree
When Mai communicated with Cree representatives,
he did not disclose that he was working with Defendant
or that the MMICs were being manufactured at the
direction of, and for Defendant. Rather, Mai contracted
with Cree for the manufacture of the MMICs purportedly
on behalf of his own company, MicroEx. Mai created that
company for certain engineering jobs that he performed.
Dkt. 506 at 36. When Mai communicated with Cree, he
was in essence the voice and intermediary of Defendant,
who provided the information that Mai was to present
to Cree. Dkt. 522 at 67. Mai explained that his efforts to
conceal Defendant’s identity from Cree was consistent
with his regular business practice of not revealing the
identities of his customers to vendors. See id. at 59, 65;
Dkt. 507 at 37–39.
3.
The Export Questionnaire
When Mai first contacted Cree, Dr. Barner asked
Mai to complete an export questionnaire and sign what
is called the “PDK Agreement.” Cree provided Mai with
its standard export questionnaire. Mai forwarded it to
Defendant to complete. Dkt. 522 at 51–54. On the export
questionnaire, Defendant stated that the MMICs to be
manufactured were “Prototype circuits to validate design
concepts utilizing high Vbr for wideband, highefficiency
power amplifiers.” Dkt. 635-1 at 15 (Ex. 6). Defendant
44a
Appendix B
also listed the approximate frequency of the MMICs as
up to 18 GHz and the approximate power up to 10W. Id.
Further, Defendant wrote that the MMICs would not be
subject to export control regulations, including the EAR.
He wrote “N/A” on the questionnaire in response to a
question whether the product would be shipped outside
of the United States. Id.
Upon receiving the completed questionnaire, Dr.
Barner followed up with Mai. He asked Mai whether
MicroEx would be designing, testing and using the
MMICs. See Dkt. 511 at 158; Dkt. 635-1 at 22 (Ex. 10).
Mai responded affirmatively (Dkt. 635-1 at 22), although
at trial Mai admitted this was not true. Dkt. 522 at 59.
Mai said that Defendant did not direct Mai to make that
statement; Mai made it on his own. Dkt. 588 at 49. Mai also
testified that Defendant never asked Mai to say anything
to Cree that Mai believed was untruthful. Id. at 51.
Dr. Barner did not believe that the representation
that the MMICs would not be subject to export control
regulations was correct based on the power level and
frequency range of the MMICs. Dkt. 511 at 158–59.
However, he did not ask Mai about this or to correct the
form. Id. Instead, Cree proceeded with the manufacturing
process. Id. Dr. Barner explained that there was no
further action needed regarding these representations on
the export questionnaire because Mai represented that
the products would not be exported. Id. at 167–69.
45a
Appendix B
4.
The PDK Agreement and Cree’s Web
Portal
Cree’s web portal is only accessible to customers
who have signed the PDK Agreement. Dkt. 511 at
106. Therefore, the web portal is not accessible to the
general public. Id. at 128–29. Through Cree’s web portal,
customers can access the PDK, as well as folders that
contain data reports and foundry manuals. Id. at 127– 29.
The foundry manuals describe all of the layers in Cree’s
process on how to design and layout custom circuits.
Id. at 131. Cree controls what a customer can access
through the web portal based on the specific customer.
Id. at 127–29. The web portal is also used to exchange
information between Cree and its customers during the
design process. Id. at 127–28.
The PDK Agreement also provides additional
restrictions regarding the use and confidentiality of
Cree’s products contained in the web portal or otherwise
shared with customers. Id. at 106; Dkt. 635-1 at 16–19
(Ex. 6). The typical Cree customer is a company or
educational institution. Dkt. 511 at 107. Consequently,
the PDK Agreement allows portal access to employees of
customers. Id. When providing access to its web portal,
Cree sets up a unique user name and password for each
employee who will be given access to the web portal. Id.
at 117. The login page of Cree’s web portal also contains a
warning that if the user has not been given authorization
by Cree, the user should leave the page. See Dkt. 593 at
64; Ex. 69.
46a
Appendix B
When Cree was setting up portal access for MicroEx,
Mai requested only one username and password, which
was for himself. Dkt. 511 at 117. Dr. Barner testified
that Mai was not authorized to give that username and
password to someone outside of MicroEx, and that, if
Mai did so, that person would not be authorized to access
the Cree web portal. Id. at 117–18. Dr. Barner explained
that if Mai had disclosed that he was going to use a third
party to do the design, Dr. Barner would have asked to
have that third party sign the PDK Agreement so that
the third party would be subject to its terms and could
properly access Cree’s web portal. Id. at 114.
5.
Defendant’s Access of the Cree Web Portal
Mai shared his Cree web portal login credentials with
Defendant. Dkt. 522 at 63–64, 72; Ex. 284. Mai testified
that he believed that he could share that information
with Defendant. Dkt. 588 at 49. Mai also admitted that,
although he signed the PDK Agreement, he did not read
its terms and conditions. Id. at 84–85. Mai also sent
Defendant a copy of the PDK Agreement. Ex. 274.
In addition to Mai’s admission that he shared the
Cree web portal login credentials with Defendant, the
Government presented evidence that Defendant accessed
Cree’s web portal. This included evidence that Cree
foundry manuals, which were accessible through Cree’s
web portal, were found on Defendant’s personal computer.
See Dkt. 511 at 131–33; Dkt. 591 at 78.
47a
Appendix B
6.
Dr. Barner’s Testimony Concerning Cree’s
Work with Customers in China
Dr. Barner testified about Cree’s willingness to work
with customers in China as well as the harm that might
occur if Cree’s products were shared with persons in China.
As to Cree’s general willingness to work with customers
in China, Dr. Barner testified that when Cree had received
inquiries in the past from prospective customers in China,
he would reply that Cree was disinclined to contract with
Chinese entities given that it was unlikely that such entities
would receive an export license from the Department of
Commerce for manufactured products. Dkt. 511 at 108.
Dr. Barner also explained that, if Mai had disclosed that
he planned to work with designers in China, Dr. Barner
would have had a much more in-depth conversation with
Mai, particularly as to export compliance. Id. at 109. Dr.
Barner further explained that whether or not a company
is located in China, the company would nevertheless need
an agreement in place with Cree to access Cree’s web
portal. Id.
As to the Cree wafers, Dr. Barner testified that
the process used to manufacture wafers is intellectual
property owned by Cree. Dkt. 521 at 25. Dr. Barner
explained that, when a customer was provided with a
finished Cree wafer it would not result in the disclosure
to the customer of everything about Cree’s manufacturing
process. Dkt. 506 at 9–10. However, with the right
analytical tools, a customer could use the finished product
to gain a very significant amount of information about the
Cree manufacturing process. Id. Further, if Cree ships
48a
Appendix B
an undiced wafer, it contains process control monitors
(“PCMs”), which are test structures designed by Cree,
that also contain Cree’s proprietary information. Dkt.
511 at 123. A customer could learn additional information
about Cree’s design process from the PCMs. Id. Cree
would never ship an undiced wafer with PCMs in it to
China. Id. Dr. Barner also explained that if someone
were trying to reverse engineer a Cree wafer, it would be
helpful to that person to have the PCMs. Dkt. 506 at 17–18.
Finally, as to the Cree foundry manuals, to the best of
Dr. Barner’s knowledge, Cree would not release a foundry
manual to a customer in China. Dkt. 511 at 132. Release of
such a manual publicly would harm Cree because it would
allow people to reverse engineer Cree’s processes, giving
those competitors an unfair advantage. Id. Dr. Barner
also confirmed that if someone established a foundry in
China similar to Cree’s by using such information, it would
permit it to compete unfairly with Cree, with resulting
financial harm. Id. at 134–35.
E. Design of the Cree MMICs & Electronic
Simulations
The Cree MMICs were designed by employees of
Chengdu RML in China with the assistance of Defendant
using the PDK supplied through the Cree web portal. See
Dkt. 591 at 19, 23–24. When Mai received questions from
Cree about the design of the MMICs, he would email
Defendant, who on certain occasions would then email
persons at Chengdu RML about the inquiry. Id. at 26.
49a
Appendix B
The Government presented evidence that, as part of
the design process, Chengdu RML designers conducted
electronic simulations on the designs to specify the
outputs of the MMICs. Dr. Christopher Nordquist, an
expert witness called by the Government, explained
how electronic simulations work. He testified that
computer-aided design software can take the electronic
representations of the components of an integrated
circuit and run electronic simulations, which would show
a performance similar to the one on the integrated circuit
that the designer is seeking to build. Dkt. 619 at 15–16.
Dr. Nordquist described electronic simulations as “a way
to predict what you’re actually building and verify your
design.” Id. at 16. Dr. Barner also explained that, by using
Cree’s design kit, an experienced MMIC designer would
be able “pretty accurately” to predict the power output
and performance of a MMIC. Dkt. 506 at 13–14. Dr. Barner
then explained that it was more difficult to predict reliably
the frequency range that a MMIC would generate, or at
which it would operate, because it is very difficult to get
all the potential, relevant factors correct the first time. Id.
Carlos Monroy, who is the Licensing Officer of
the Department of Commerce, Bureau of Industry
and Security (“BIS”),6 also testified. He stated that if
something has been designed, but not yet manufactured,
he could use electronic simulations to specify how the item
would work in the design stage before development and
production. Dkt. 535 at 95.
6. The BIS is the division of the Department of Commerce that
is charged with the administration of the EAR.
50a
Appendix B
Special Agent (“SA”) Alex Storino testified about
several emails between Defendant and Chengdu RML
designers in China that were entered into evidence. They
suggested that electronic simulations had been performed
during the design process of the Cree MMICs. Dkt. 591
at 24–27 (discussing exhibits 2736, 2737, and 2738). SA
Storino discussed an email in which someone asked for a
simulation on a MMIC design, which Storino interpreted
to be a request for a simulation to determine if the circuit
would perform in the desired and planned manner. Id. at
25. SA Storino then discussed another email that referred
to an electrical performance, which Storino interpreted
to be the Defendant asking a Chengdu RML designer to
conduct a simulation to confirm that any changes to the
design made by Cree would not affect the performance
of the MMICs. Id. at 26–27.
The names of the individual Cree MMICs (PA11020-A1, PA2-1020-A1, and PA2-1615-A1), which were
part of the design file given to Cree (Dkt. 668 at 32),
corresponded to their output. Dkt. 619 at 42–43.
F.
Testing the Cree MMICs
A wafer from the first Cree wafer run was given to the
FBI by a UCLA professor. The professor stated he had
received the wafer from a graduate student who received
it from Defendant. Dkt. 534 at 9–10. Dr. Nordquist tested
the MMICs on this wafer and determined that three of
the Cree MMICs (PA1-1020-A1, PA2-1020-A1, and PA21615-A1) had outputs that made them subject to export
control. Dkt. 619 at 47–51. Dr. Nordquist also explained
that the Cree MMICs performed consistently with their
designs. Id. at 50–51.
51a
Appendix B
Dr. Nordquist testified that he would expect that the
MMICs with the same design on each of the wafers would
have the same performance. Id. at 63–64. BIS Licensing
Officer Monroy explained that if one MMIC on a wafer was
export controlled under the EAR, then the entire wafer
would be export controlled. Dkt. 535 at 27–28.
Dr. Nordquist’s testing on the Cree MMICs occurred
in 2018. See Dkt. 619 at 65. The export of the Cree MMICs
occurred in January 2014. See Ex. 148, 149, 312, 1301, 1302,
1303, 2124A, 2743A, 2746A.
G. Practical Applications of the Cree MMICs and
AVIC 607
During the trial, the Government presented evidence
to support the claim that the Cree MMICs had practical
applications, including military ones. It also claimed that
AVIC 607, a Chinese entity, was the customer of the Cree
MMICs. The evidence presented by the Government to
support these positions included the following:
i.
Mattis testified that China Avionics Systems
Co. Limited is “a state-owned enterprise that is
active in all parts of the aerospace industry.” Dkt.
517 at 16–17. He also testified that AVIC 607 is “a
subsidiary of the larger body, and it seems to be
focused on electronic components that might -- or
that could be used in missiles or missile guidance
systems.” Id. at 17.
ii.
In February 2010, Defendant sent an email to
his brother that included a business proposal.
It explained that, because certain high-end
52a
Appendix B
technologies were in “the hands of the United
States, Japan, and a handful of European
countries, and also because of the urgent needs
in defense military applications, we are strictly
locked out by the western countries.” Ex. 245A.
This proposal also stated that the “project
market” in China for wafers included “military
units.” Id.
iii. On October 27, 2010, the minutes from a meeting
held by Chengdu Ganide, a Chinese company for
which Defendant was a director, were emailed to
Defendant. The materials also included business
plans. Dkt. 635-1 at 58–74 (Ex. 253A). One portion
of these plans projected “specialty income” from
“missile tip guidance” for 2011 through 2014. Id.
at 65.
iv. A document was found on Defendant’s computer
titled the “GaN Chip Project (Z5) Implementation
Plan VO 1.” Dkt. 635-1 at 135–41 (Ex. 2106A). The
beginning section of the Z5 Plan stated that “[t]he
development and implementation plan of the GaN
chip project (code named Z5) contains mainly an
introduction to the project and the cost and risk
analysis of the project.” Id. at 138. The following
introduction was provided about the project:
Ever since September 2012, General
M a na ger Lu of Ch i na Av ion ic s
Systems Co. Ltd. has presided over in
person the company’s five subsidiaries
53a
Appendix B
that engage in business involving
avionics micro electronics systems
and conducted exchange sessions
in Chengdu. The RML Company
that is in charge of designing the
radio frequency chip put together a
special project team. And based on
the characteristics of the airborne
needs of the 607, the RML Company
has launched its research on the wide
frequency band and high power GaN
chip (code named Z5). Based on the
contents of the meeting on March 13,
2013 between China Avionics Systems
Co., Ltd. and the RML Company, the
GaN chip project is launched. The
project will be a cooperation between
Chengdu RML and 607 to jointly
conduct research and develop the Z5
chip.
Id.
v.
The Z5 Plan also explained that the human
resources dedicated to the project included a
team led by Defendant. Id. at 141. In addition,
the Z5 Plan stated that a “high performance
.25um GaN processing line from overseas”
would be used as a short-term solution, and “at
the same time” the goal was to “develop high
performance chip through conducting joint and
ongoing research with GaStone processing line in
54a
Appendix B
the areas of processing and transistor modeling.”
Id. The Government argued that Cree was this
processing line from overseas. Dkt. 595 at 90–92.
In support of this position it cited evidence that
when, on behalf of Defendant, Mai first asked
Cree about manufacturing the MMICs, Mai
stated that he “was interested in the Full-Wafer
Service for GaN, 0.25um process.” Dkt. 635-1
at 13 (Ex. 6). SA Storino also testified that Z5
referred to the Cree wafers that were part of the
first Cree wafer run. Dkt. 591 at 37.
vi. The Z5 Plan stated that the project would “[t]ake
advantage of the experience accumulated by the
RML Company in the area of high power Active
Electronically Steered Antenna devices.” Id. Dr.
David Sandison, an expert witness called by the
Government, testified that an “active electronic
scannable array, sometimes called a steerable
array[,]” is “the front end of a missile radar
system that allows the radar to track objects
without having any moving parts.” Dkt. 663 at
122. And, “gallium nitrade and gallium arsenide
are technologies used in those missile systems.”
Id.
vii. A Chengdu Gastone PowerPoint presentation,
dated October 10, 2013, was found on Defendant’s
computer. Dkt. 663 at 116; Ex. 2017A. It described
“AVIC607” as a major customer for GaN highelectron mobility transistors (“HEMT”) “first
batch of specialty products,” and projected sales
from 2014 through 2018. Dkt. 663 at 125; Ex.
55a
Appendix B
2017A. The presentation also contained an image
of an Active Electronically Steered Antenna
missile borne-radar seeker. See Dkt. 663 at
124–25; Ex. 2017A.
viii. A series of emails were exchanged between
June 17, 2013 and June 20, 2013 by Defendant
and others with the subject line “Regarding
the reliability of Z5 chip.” In them, the parties
discussed the demands of the customer for the
Z5 concerning the MMICs’ performance and
specifically reference “607.” Dkt. 580-5 (admitted
as Exhibit 2719A at trial); Dkt. 580-6 (admitted
as Exhibit 2721A at trial).
ix. Defendant received minutes on July 9, 2013 from
a board meeting where the market for the Z5 was
discussed. Dkt. 511 at 31–33; Ex. 2722A.
x.
Dr. Nordquist testified that the Cree MMICs
were optimi zed for X-band and Ku-band
frequencies, which can be used in electronic
warfare applications. Dkt. 619 at 30–33.
H. Closing Arguments
Defendant argues that the Government’s statements
during its rebuttal closing argument that the customer
for the Cree MMICs was AVIC 607, and that AVIC 607
developed missiles, were improper. Dkt. 634 at 44. The
following is the relevant excerpt of the Government’s
argument:
56a
Appendix B
And if the defendant was simply developing
cell phones, he never would have tried to sell
U.S. microchips to a customer in China that
develops missile guidance systems. . . . There
is no innocent explanation for the fact that a file
on defendant’s hard drive here in Los Angeles
showed that the customer for the Cree chip was
AVIC 607, which you heard develops missiles
and missile guidance systems for China. That’s
Exhibit 2106A.
Dkt. 671 at 90–91.
Defendant argues that the prejudicial effect of this
argument increased when the Government used the
words “military” and “missiles,” as well as the term
“code name” in referring to the Z5 project, stated that
Defendant’s research position at UCLA was a “perfect
cover” for his unlawful actions and described this evidence
as “scary.” Dkt. 634 at 45–46. Defendant contends that
these statements implied that Defendant was a spy. The
following are some relevant excerpts of the Government’s
rebuttal closing argument:
Now, if that evidence [referring to AVIC 607
being a customer for the MMICs] is scary,
then ask yourself what was it doing on the
defendant’s hard drive in Los Angeles.
Dkt. 671 at 91.
Exhibit 245A. If the defendant was focused on
gallium arsenide, then why is he e-mailing his
brother a proposal explaining that China is,
57a
Appendix B
quote, strictly locked out of high-end materials
by western countries and that the market for
GaN wafers includes, quote, military units?
Id. at 96.
And remember, the fact that the defendant also
had expertise in gallium arsenide chips and
the fact that he also wanted to make money
with civilian applications for gallium arsenide
chips, gallium arsenide applications, doesn’t
mean that he didn’t want to make even more
money with gallium nitride chips for military
application. That’s exactly what the evidence
in this case proves he did. And it’s also exactly
why the defendant e-mailed his brother meeting
minutes saying that the five-year business plan
for Chengdu Ganide included income for things
like missile-tip guidance. That’s Exhibit 253A.
Id. at 96–97.
If the defendant was just doing research at
UCLA, why use a code name for the Cree
wafer? Why call your academic research work
with your students the Z5 project? Why turn
around and sell the Z5 project to 607? That’s
not research.
Id. at 97.
The defendant had the perfect cover, the perfect
research lab in the United States, and Chinese
government-backed entities were willing to
58a
Appendix B
pay him millions of dollars for that and for that
access.
Id. at 97.
You’ll see the topics of discussion included the
Z5 chip and that there were two markets that
the defendant and his co-conspirator were
interested in -- the upward and high-end market
and the downward or civil-use market. The plan
was to focus the KU band and the X band on the
domestic special market. The phrase domestic
special market is code for military.
Id. at 98.
Scary or not, that’s what the evidence is in
this case. And there is no innocent explanation
for statements like that, all of which show the
defendant’s involvement in the conspiracy and
his consciousness of guilt.
Id. at 106.
The Government responds to Defendant’s position about
the use of the word “scary,” by arguing that it was an
appropriate reply to Defendant’s arguments that the
Government was trying to scare the jury. Dkt. 647 at
45–47. The Government has provided examples of what
it contends are such statements by Defendant’s counsel
in closing argument:
59a
Appendix B
I want to spend some time on distracting with
fear. I’m going to budget myself six minutes
because this they did in closing and they did
throughout the trial with the references to
military and missiles and radar. And it is
wrong. And those dimensions have nothing
to do with the crimes you’re evaluating. It’s
designed to scare you. Wow. Without telling you
why we listed CGTC on the entity list, here’s a
publication that says it’s in the national security
interest; therefore, be afraid. Help us. Let’s
take an American scientist out of the field that
he’s practicing in.
Dkt. 671 at 83.
Now, until the mic disconnects, I’m going to
focus on this distraction with fear because
it permeated the government’s case and
argument, and I guarantee you all of the
rebuttal will be you don’t know if there’s a
MMIC right now in a missile in China circling
over Russia. I mean, you’re going to hear that.
You’re going to hear them saying imagine bad
things. Don’t think of science and research. So
the references to dual use, missiles, radars, it
all comes down to, even in closing, this line: Dr.
Shih did a PowerPoint, and it was done in 2013
when he was at CGTC trying to explain why
people should invest in the foundry.
Id. at 84–85.
60a
Appendix B
So he walked through the PowerPoint explaining
things that the government drew his attention
to. What is that? That’s a missile. Here’s a
big boat. Here’s another big boat on water. I
really want to emphasize that, okay, because
the government is trying to scare you with this
testimony.
Id. at 85.
Dr. Shih is proposing something that’s only
civilian. It has no military application. Dr.
Sandison confirmed this. This is where I was
asking Sandison: Would anybody buy for
military use a GaNon- silicon chip? No. The
failure rate is too high for military standards. I
also asked him about dual use. And remember,
he confirmed, yeah. M&M’s is military Mars.
Everything that a military uses is dual use.
I mean, trying to keep milk chocolate from
melting in the hands of army soldiers is a
dual use technology. Don’t let the government
use that term to scare you into convicting an
American scientist.
Id. at 87.7
7. Several days after closing arguments, but before the jury
reached its verdict, Defendant filed a one-page objection to the
Government’s rebuttal closing argument. Dkt. 551. After the jury
reached its verdict, the Government filed a response to Defendant’s
objection. Dkt. 580. The Court deferred the matter for presentation
in connection with Defendant’s Motions. Dkt. 586.
61a
Appendix B
I.
Underlying Facts Related to Defendant’s
Argument that He Was Deprived of the
Opportunity to Present a Complete Defense
Defendant presented a multi-part defense during
the trial. Among other things, he argued that the Cree
MMICs were never sent to China, that the Cree MMICs
were technology that fell under the fundamental research
exception to the EAR, that Cree was not defrauded
and that general access to the Cree web portal was not
restricted. In the Motion for New Trial, Defendant argues
that he was prevented from presenting a complete defense
due to the exclusion of certain exhibits and areas of crossexamination.
1.
Internal Cree Emails
During Defendant’s cross-examination of Dr. Barner,
Defendant sought to introduce internal Cree emails sent
by Dr. Barner, which Defendant argued established that
Cree’s concern was its profits not export compliance.
Dkt. 511 at 169–71. The Government’s objection to the
introduction of those exhibits was sustained under Fed.
R. Evid. 402 and 403. Id. at 170. The Court provided an
explanation for the rulings outside the presence of the
jury:
These exhibits, as I understand them, concern
assurance of payment for services that are
going to be provided. And I think that’s
sufficiently distant from the issue of compliance
and knowledge of the export regulations, that
62a
Appendix B
it’s not necessary. And I think that the issue
of compliance with the export regulations was
already covered in the prior examination of the
witness in terms of the communications he had
with others, as well as the questions that were
asked concerning the EUS and other matters.
Id. at 176.
The following day, the Court gave further instruction
to Defendant as to how Defendant might be able to
establish a sufficient foundation for these exhibits:
So what you’ll need to do is, to establish a
basis to follow up -- some of it may have been
covered. I’m not looking for something that’s
lengthy. But a basis upon which the witness
who testified about his concerns concerning
export limitations, his discussion then with the
person at Cree who is there -- was at least at
that time very involved in that issue, and the
determination and – I’m not going to state what
the document states. But that they would go
forward, at least initially, with this customer.
And then go back to what other events, if any,
occurred on that issue during the relationship
when the -- the business relationship as the
wafers were being created so as to make these
exhibits, which talk about payment, fit in.
Dkt. 521 at 20–21.
63a
Appendix B
Defendant later sought to admit the exhibits. Id. at
73–74. The Court stated that Defendant would have to
establish a foundational basis for their relevance with
respect to the arguments that defense counsel wished
to make. Id. Defendant’s request to admit most of these
emails was granted. This occurred after Dr. Barner had
completed his testimony. Defendant published the emails
during closing argument. Dkt. 671 at 31, 55–56; Dkt. 6021 at 83–86.
2.
YouTube Videos
Defendant sought to introduce seven YouTube videos
during the cross-examination of Dr. Barner. Counsel
argued that these videos undermined Dr. Barner’s claim
that access to the Cree web portal was limited and its
functionality not disclosed to the public. Dkt. 521 at
9–10. Defendant first sent these YouTube videos to the
Government the night before Defendant sought to use
them. Id. at 8. The Government argued that the videos
did not impeach Dr. Barner’s claim about the Cree web
portal and noted that a Cree employee only appeared
in three of the seven videos. Id. at 11–13. After some
discussion, Defendant offered to limit the request to the
videos with Cree employees. Id. at 15. The Court deferred
ruling on the issue because Defendant indicated that he
might not use the videos. Id. at 15. During Defendant’s
cross-examination of Dr. Barner, Dr. Barner confirmed
that Cree posted YouTube videos showing the features of
the PDK and how it can be used in design. Dkt. 521 at 51.
64a
Appendix B
On June 14, 2019, during Defendant’s case-in-chief,
the YouTube videos were again discussed. Dkt. 594 at
19–29. At the end of a lengthy colloquy with counsel for
both sides, it was determined that Defendant would seek
to lay the foundation for the videos with an upcoming
defense witness and then the parties would reargue their
positions about the admissibility of the videos. Id.
The parties addressed the issue of the videos again
immediately before closing arguments. The Court ruled
that the two videos that were Cree videos, along with
another video that clearly referenced Cree, could be
admitted. Dkt. 595 at 6–14. The Court denied Defendant’s
request to admit the others because they were cumulative,
and it was less certain that those videos showed the Cree
web portal. Id. at 14. Defendant indicated that he would
not be publishing the videos during closing argument.
Id. at 16–17.
3.
Defendant’s UCLA Personnel File
Defendant sought to introduce his UCLA personnel
file. Defendant first provided the Government with copies
of the file after Defendant obtained it by subpoena. Dkt.
594 at 7. This was on June 7, 2019, just before Defendant
sought to introduce the file during the cross-examination of
SA Storino. Dkt. 665 at 4. The Court instructed Defendant
to identify the areas of Defendant’s UCLA personnel
file that Defendant would seek to use or were pertinent
to the cross-examination of SA Storino. Based on those
disclosures, the Court could evaluate the admissibility of
the file, which the Court had also just received. Id. at 7–8.
65a
Appendix B
During cross-examination, SA Storino admitted that the
FBI did not obtain Defendant’s UCLA personnel file. Id.
at 37–39. After SA Storino’s testimony concluded for the
day, the parties and the Court discussed the admissibility
of Defendant’s UCLA personnel file. Id. at 45–59.
The parties also discussed the admissibility of
Defendant’s UCLA personnel file on June 11, 2019 before
SA Storino’s testimony was scheduled to resume. Dkt.
592 at 17–21. During this discussion, the Court stated
its preliminary views that the part of the file concerning
employment history or engagement letter could be
admitted, but the part about the resume or evaluations
were not necessary for cross-examination of SA Storino.
Id. at 18–19. At the end of the discussion, Defendant said
that he would only show SA Storino one page from the
UCLA personnel file, to which the Government did not
object. Id. at 20. That page was admitted and published
during Defendant’s cross-examination of SA Storino. Id.
at 24–25.
The parties and the Court again discussed the
admissibility of Defendant’s UCLA personnel file on June
14, 2019, before the defense rested. At that time, the Court
clarified that it had not excluded the UCLA file entirely,
it only excluded the admission of the file during crossexamination of SA Storino. Dkt. 594 at 6–7. The parties
presented their arguments on the issue again. Id. at 8–9.
The Government suggested that the parties confer on the
issue during a break. Id. at 9. The Court proposed that
the Defendant identify to the Government which pages
he sought to publish, and then the Court could address
66a
Appendix B
any disputes. Id. at 10–11. Defendant indicated that this
was an acceptable plan. Id. at 10–11. Then, after more
discussion, the Court noted its concerns that the file
contained communications about the hiring process and
additional matters that were not relevant to the issue
of Defendant being a researcher or holding a position
at UCLA. Dkt. 594 at 17–18. Defendant argued that the
UCLA file was necessary to show that he was part of a
close-knit engineering community at UCLA. Id. at 18.
Defendant indicated that he was willing to confer with
the Government about its objections. See id.
After the break following Defendant’s final witness,
Defendant informed the Court that he had spoken with the
Government to seek to narrow the issues, and suggested
that the Court address the issues on the next court day,
which was the following Monday. Id. at 93. The Court
explained it was unavailable on that day, and Defendant
suggested Tuesday. Id. at 93–94. A few moments later once
the jury returned to the courtroom, Defendant moved to
admit four exhibits from the UCLA personnel file into
evidence, but they were not admitted or published to the
jury at that time. Id. at 95.
Prior to closing arguments, after additional argument
on the issue, the Court ruled that some of Defendant’s
UCLA personnel file could be admitted. Dkt. 670 at
15–22. The Court sustained the Government’s objections
to portions of Defendant’s UCLA personnel file because
they were duplicative, not understandable on their own, or
both. Id. at 19–22. The Court overruled the Government’s
objections to other portions of Defendant’s file, allowing
67a
Appendix B
Defendant to introduce those specific portions. Id. Among
the portions admitted were materials that showed
Defendant disclosed his position at Chengdu Gastone to
UCLA, and letters and materials that were generated
in connection with Defendant’s appointment to UCLA.
Id. Defendant then incorporated some of the admitted
portions of his UCLA personnel file into his closing
argument, including in the PowerPoint presentation. Dkt.
602-1 at 49.
4.
Defendant’s Cross-Examination of Special
Agent Miller
SA Maureen Miller was the team leader for the
execution of the search warrant at Defendant’s residence.
Dkt. 517 at 42–43. This role included being the seizing
agent, i.e., the one responsible for the overall execution
of the search warrant and for taking possession and
retaining custody of all things seized during the search.
Id.
Defendant argues that because certain objections
made during his cross-examination of SA Miller were
sustained improperly, that examination was prejudiced
and limited. The following portions of the trial transcript
contain the questions, objections and rulings:
MR. SPERTUS: Do you personally, as the
person in charge of seizing items from [Dr.
Shih’s] residence, wish an agent had told you
about the Cree boxes?
68a
Appendix B
MS. SARTORIS: Objection, your Honor.
THE COURT: Sustained.
MR. SPERTUS: You’re the filter between
what’s seized and not seized during the search,
right, you personally?
SA MILLER: I was one of the filters, yes.
MR. SPERTUS: So with that foundation, do you
wish an agent had told you that the box now in
front of you bearing the label ‘Kiet Mai’ was in
the office so that you can seize it?
MS. SARTORIS: Same objection, your Honor.
THE COURT: Sustained. This is – let’s move
on, please.
Dkt. 477 at 58–59.
MR. SPERTUS: Well, during the search, if an
agent had approached you with the Cree boxes
and said, ‘Look what we found,’ would you have
decided to seize them?
SA MILLER: Yes.
MR. SPERTUS: So do you believe that agents
under your supervision made mistakes?
69a
Appendix B
MS. SARTORIS: Objection. Foundation. We
haven’t laid foundation these are the actual
boxes in the location.
THE COURT: Sustained.
Id. at 72.
MR. SPERTUS: If you were told about these
Cree boxes, and since you have already testified
you would have seized them, do you believe that
agents under your supervision made a mistake
by not telling you about them?
MS. SARTORIS: Objection. Speculation.
THE COURT: Sustained. Until the issue
we’ve addressed at the side is resolved, it’s an
improper hypothetical.8 So let’s move on, please.
8. The “issue” that is referenced is whether Defendant could
establish the authenticity and chain of custody for the Cree boxes and
their contents to which these questions refer. Defendant produced
these boxes at trial, without any prior disclosure to the Government.
Counsel represented that they were found at Defendant’s residence
and had, therefore, been overlooked during the search. At the time
of the cross-examination, there had been no testimony about the
authenticity or the chain of custody of the Cree boxes that was
necessary to establish the premise for the cross-examination. That
issue was deferred so that the necessary information could be
provided to, and considered by the Government. See id. at 62–67. It
was later resolved, and the Cree boxes were admitted into evidence.
70a
Appendix B
MR. SPERTUS: Your Honor, can I ask this
witness any hypothetical questions?
THE COURT: You can ask hypothetical
questions, but not ones that turn on that issue
because we can address that later. and you can
make arguments later. Let’s move on, please.
Thank you.
MR. SPERTUS: As you sit here today, knowing
that the Cree boxes depicted in government
Exhibit 793 were not seized, do you believe that
seizing agents under your supervision made
errors?
MS. SARTORIS: Argumentative.
THE COURT: It’s the same question. Let’s
move on, please.
MR. SPERTUS: Your Honor, may I have a
sidebar on this?
THE COURT: No. Let’s move on, please.
MR. SPERTUS: Your Honor, may I have a
sidebar on this?
THE COURT: No. Let’s move on, please. Until
the foundational issue is addressed, let’s move
on, please.
71a
Appendix B
Id. at 73–74.
MR . SPERT US: I f 79 3 , wh ich i s you r
government agent photo, those boxes, if they
bear the label -- address label to Kiet Mai and
come from Cree, you would define that as a
particularly significant item; correct?
MS. SARTORIS: Objection, Your Honor.
Speculation.
THE COURT: You may answer.
[Witness confirms she understands the question
and the question is repeated.]
SA MILLER: So in this photograph, the labels
of these boxes are not depicted. So if these
boxes were at the residence and had the label
of ‘Kiet Mai’ – with the name ‘Kiet Mai’ on it,
yes, they would have been a significant item.
MR. SPERTUS: And then you would consider
it agent error if that agent hadn’t told you about
it; right?
MS. SARTORIS: Objection, your Honor.
THE COURT: Sustained. Let’s move on, please.
Id. at 78–79.
72a
Appendix B
MR. SPERTUS: So as you sit here today, as the
supervisor evaluating the agents who report to
you during the search only, do you believe that
agents under your supervision made errors by
not bringing these Cree boxes to your attention?
MS. SARTORIS: Objection, your Honor.
THE COURT: Sustained.
Id. at 80–81.
Defendant also questioned SA Miller about the
following: whether the agents saw the Cree boxes, which
Defendant argued contained Cree wafers that were never
sent to China; her claim that the Cree boxes did not have
a shipping label; why agents would not have collected the
Cree boxes; whether any agents actually looked inside
the Cree boxes; and her failure to ask whether any agents
looked inside the Cree boxes. See id. at 44–57. During
Defendant’s cross-examination, SA Miller admitted that
“there is some question in my mind as to what happened
with these boxes.” Id. at 52–53. Defendant also asked
SA Miller about the briefing process and protocol of the
search, which demonstrated that agents were advised
that Cree and Mai were relevant names and items with
those names should be brought to SA Miller’s attention.
Id. at 76–77.
Outside the presence of the jury, the following
colloquy occurred concerning the objections that had
been sustained during Defendant’s cross-examination of
SA Miller:
73a
Appendix B
THE COURT: Mr. Spertus, I think you
have asked the question repeatedly. And I’ve
continued to sustain the objections in terms
of what is agent error. I think that could open
the door to an examination of various factors.
I think you’ve already covered in the questions
that the -- what was this -- would this have been
material, if identified? So I don’t think the next
question is necessary. we don’t need to get into
that.
MR. SPERTUS: Can I respond, please?
THE COURT: Briefly.
MR. SPERTUS: In concluding the direct
testimony this morning, the prosecutor, after
walking through all this evidence, then turned
back to the diligence and thoroughness of the
search. She asked questions about the diligence
and thoroughness of the search that I’m now
impeaching with the fact that the Cree boxes
were not seized.
THE COURT: And I permitted you to do that.
MR. SPERTUS: But I don’t feel I have done
that.
THE COURT: I think you have asked that
question repeatedly. I think this is actually
quite cumulative. I don’t think we need to get
into the definitional term of “agent error.”
74a
Appendix B
MR. SPERTUS: Your Honor, can I make
one last pitch to you because I truly don’t
understand this to be argumentative? If this
agent answers, “yes,” that she thinks – she
trained these agents on that day. She gave the
briefing. she instructed them what to do. And
agents – if she concludes that they didn’t comply
with her instructions, she will say they made
a mistake. The fact that the supervising agent
says, “agents I trained and supervised made an
error” is critically-important evidence.
THE COURT: It’s an argument you can make
based on the answers that have been given
to several questions that I’ve permitted. So I
don’t think we need to get into more than that.
Thank you.
Id. at 81–83.
5.
Defendant’s Cross-Examination of Mai
Defendant argues that because the objections in the
following passage were sustained, the cross-examination
of Mai was improperly limited:
MR. SPERTUS: And you had known Dr. Shih
for many, many years, right?
KIET MAI: Yes.
MR. SPERTUS: And you had worked with him
at MMCOMM in – 10 of 12 years ago, right?
75a
Appendix B
KIET MAI: Yes, 1997.
MR. SPERTUS: Since 1997. Okay. And during
your relationship with Dr. Shih through the
work you did together at MMCOMM, did you
grow to trust him?
MS. HEINZ: Objection. Relevance.
THE COURT: Sustained.
MR. SPERTUS: Ultimately did you work with
Dr. Shih from 1997 through 2011?
KIET MAI: With a few breaks in between.
MR. SPERTUS: Okay. And during those
interactions with Dr. Shih over those years,
did he ever exhibit to you, through demeanor
or otherwise, any effort to be untruthful in any
manner?
MS. HEINZ: Objection. Relevance.
THE COURT: Sustained.
Dkt. 507 at 40.
Outside the presence of the jury, defense counsel and
the Court had the following discussion:
MR. SPERTUS: Your Honor, I just do want
to bring to the Court’s attention that [Fed. R.
76a
Appendix B
Evid.] 401 and 402 are the lowest standards.
Is the evidence I’m seeking to obtain relevant
to any fact material in the action? The Court
has, I believe, completely shut down cross of
a cooperating witness about his state-of-mind
issues on numerous occasions. I do not feel that
I’m getting the evidence I need for argument.
THE COURT: I understand. We can agree
to disagree. I don’t agree with even what you
just said. I don’t think so. I think that many
times the same question has been asked more
than once. So, yes, there have been multiple
objections sustained. I think I’ve done the best I
can do in terms of evaluating the questions and
their appropriateness in terms of admissibility,
and I’ve admitted a number of exhibits over the
government’s objections. So I’m not quite clear.
I don’t think we need to revisit all of this. As
I say, it’s routine. It’s not uncommon for me to
disagree with counsel, both sides. That’s that.
Id. at 83–84.
In opposition (Dkt. 647 at 64), the Government argues
any error in sustaining the Government’s objections did
not prejudice Defendant because Defendant was able to
bring out Defendant’s character for truthfulness during
the following exchange with Mai:
MR. SPERTUS: Did Dr. Shih ever ask you to
say anything to Cree that you believed was not
truthful?
77a
Appendix B
KIET MAI: No.
Dkt. 588 at 51.
III. Procedural Background
On February 1, 2018, a grand jury returned a tencount indictment against Defendant, Ishiang Shih and Mai
for their alleged unlawful exportation of the Cree MMICs
to China. Dkt. 50. Counts One and Two of the Indictment
charged the conspiracy to and violation of export laws,
Counts Three through Eight charged mail and wire fraud
violations, Count Nine charged a violation of the Computer
Fraud and Abuse Act (“CFAA”), and Count Ten charged
a money laundering violation.
On October 18, 2018, a first superseding indictment
(“FSI”) was returned. Dkt. 176. The FSI expanded the
scope of the charged conspiracy (Count One), by charging
four additional defendants as to that count (Jieru Deng,
Yaping Chen, Fei Ye, and Ye Yuan) and extending the
timeframe of the conspiracy from January 2006 to
January 2016. See id. The FSI also added the following
eight counts solely against Defendant: making a false
statement to the Federal Bureau of Investigation (Count
Eleven); making fraudulent or false statements on income
tax returns (Counts Twelve through Fourteen); and
concealing particular financial interests in Foreign Bank
and Financial Accounts forms filed with the Treasury
Department (Counts Fifteen through Eighteen).
On November 8, 2018, the SSI was returned. Dkt.
223. The SSI added language to Counts Twelve through
78a
Appendix B
Fourteen that linked the income that Defendant allegedly
failed to report on tax returns with income received
through his participation in the alleged conspiracy and/
or dividends earned on investments held in a foreign
bank account that he allegedly concealed improperly. Id.
at 46–48.
Defendant was tried individually, and the jury
returned guilty verdicts on all 18 counts of the SSI. Dkt.
569.
IV. Motion for Judgment of Acquittal
A.
Legal Standards
“A motion for Judgment of Acquittal is reviewed on
a sufficiency-of-the-evidence standard.” United States v.
Stoddard, 150 F.3d 1140, 1144 (9th Cir. 1998). “Under that
standard, evidence supports a conviction, if, viewed in the
light most favorable to the government, it would allow any
rational trier of fact to find the essential elements of the
crime beyond a reasonable doubt.” Id. “[A]ny conflicts
in the evidence are to be resolved in favor of the jury’s
verdict.” United States v. Alvarez-Valenzuela, 231 F.3d
1198, 1201–02 (9th Cir. 2000).
B. Application
Defendant has moved for judgments of acquittal on
Counts One through Ten on several grounds. They are
discussed in the following sections.
79a
Appendix B
1.
Counts One and Two: Whether the Cree
MMICs Were “Rated” as Used in “Rated
for Operation”
Counts One and Two charge, respectively, the
conspiracy to violate and the violation of the export laws.
Defendant argues that the Government failed to prove that
the Cree MMICs were export controlled. The basis for this
assertion is that the Government did not present evidence
that, prior to any exportation by Defendant or an alleged
co-conspirator, the Cree MMICs had been “rated” as used
in “rated for operation” within the specified parameters
-- certain frequencies with the particular power outputs
and fractional bandwidths -- in the relevant Export
Control Classification Numbers (“ECCNs”). Dkt. 633 at
10–15. On this basis, Defendant argues that, because the
Government did not prove that the Cree MMICs were
export controlled, any unlicensed exportation of them to
China could not violate the EAR. Id. Therefore, Defendant
contends that judgments of acquittal must be entered on
Counts One and Two. Id. Defendant’s argument turns on
the correct interpretation of “rated” as used in “rated for
operation.” The parties disagree on that issue.
Defendant argues that the plain meaning of “rated”
as used in “rated for operation” in the context of electrical
engineering is that a manufactured MMIC has been
tested, thereby confirming that it operates reliably
within the specified parameters. Id. at 10–13; Dkt. 650
at 9–10; Dkt. 654 at 3–4. Defendant contends that the
evidence did not show that any testing was performed on
the manufactured Cree MMICs prior to any exportation;
80a
Appendix B
the Government does not disagree. See Dkt. 633 at 14–15;
Dkt. 645 at 12–19.
The Government argues that “rated for operation”
means “specified to operate at” these stated parameters,
and that this requirement can be satisfied through
electronic simulations conducted prior to manufacturing
the MMICs. Dkt. 645 at 12–16. The Government contends
its interpretation is consistent with the plain meaning of
“rated” as used in “rated for operation” and that adopting
it is appropriate because it is also the interpretation of
the relevant agency, to which deference is warranted. Id.;
Dkt. 652 at 2–7. In support of the deference argument,
the Government cites the testimony of BIS Licen
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