Petition for Writ of Certiorari — Da-Chuan Zheng v. United States

Bo 864) |

IN THE = _nienenali

Supreme Court of the United ‘States

OCTOBER TERM, 1985

DA-CHUAN ZHENG, and

KUANG-SHIN LIN

Petitioners,

-VS-

UNITED STATES OF AMERICA,

Respondent.

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

SEYMOUR MARGULIES

Counsel of Record

Margulies, Margulies & Wind

A Professional Corporation

921 Bergen Avenue

Jersey City, New Jersey 07306

Of Counsel (201) 963-0700

Maurice C. Brigadier Attorneys for Kuang-Shin Lin

JOHN B. LIVELLI

Counsel of Record

Robinson, Wayne, Levin

Riccio & La Sala

On the Petition Gateway One

Seymour Margulies Newark, New Jersey 07102

John B. Livelli (201) 621-7900

Robert E. Margulies Attorneys for Da-Chuan Zheng

QUESTIONS PRESENTED FOR REVIEW

1. Does the use of the terms

"countermeasures" and "“counter-

countermeasures" on the U.S. Muni-

tions List (22 C.F.R., section 121.01

Category XI(a)) satisfy the statutory

requirement of the Arms Export Control

Act (22 U.S.C., section 2778) that the

President designate "items" for

Criminal Liability purposes?

2. Does the U.S. Munitions List

designation "countermeasures" and

"“counter-countermeasures" constitute an

unconstitutional exercise by the

President of a delegated power or an

invalid sub-delegation to the executive

administration so as to violate the

defendants’ due process’ rights in the

indictment at bar?

3. Would men of common intelligence

understand the meaning of an indictment

charging a conspiracy to arrange for

the purchase of defense articles where

the designation is identified as

“active and passive countermeasures and

counter-countermeasures," thus being

impermissively overbroad and vague?

TABLE OF CONTENTS

PAGE #

QUESTIONS PRESENTED FOR REVIEW........i.

TABLE OF CITATIONS.......eeeeeeeiV,V,Vi

TABLE OF APPENDIX CONTENTS..........vii

POPRUUN, «cs das sce siaeieeieeeeeeeee

STATEMENT OF GROUNDS ON WHICH JURIS-

DICTION Is 4 4 rae ee ee ee

PERTINENT STATUTES, REGULATIONS AND

CONSTITUTIONAL PROVISIONS.....cce022224

STATEMENT OF THE CASE

A. FREPORRSELOR. cc cicnccascerevesusene

B. Concise Statement of Facts.......7

REASONS WHY THE WRIT SHOULD BE

Gs 0066 00k eee 66060 886 eee eee

i Pr re en rr ree:

POINT LTecccccccccccccccssccscccccssesekd

THE "COUNTERMEASURES" DESIGNATION OF

THE U.S. MUNITIONS LIST DOES NOT

FORM THE BASIS FOR CRIMINAL LIABIL-

alia

ITY BECAUSE “COUNTERMEASURES” IS NOT

AN “ITEM AND THE PRESIDENT IS RE

QUIRED TO LIST ITEMS CONSISTENT WITH

AECA, 22 U.S.C., SECTION 2778

DOTNET Ele ccccccccccccccscccccccccccsedl

THE REGULATION DESIGNATION VIOLATES

THE DELEGATION AND SUBDELEGATION

DOCTRINES AND VIOLATES DUE PROCESS.

POINT IILecccccsccccccesescssccseeee cK

A MAN OF COMMON INTELLIGENCE WOULD

NOT UNDERSTAND THE DESIGNATION

"COUNTERMEASURES" AS ENCOMPASSING

TWTAs, THEREFORE THE INDICTMENT

SHOULD BE DISMISSED.

BO, gcc cc cecececensesecese wees 4S

-iii-

TABLE OF CITATIONS

CASES CITED

Aaron v. SEC

446 U.S. 680 (1980)

PAGE #

32

Adamo Wrecking Co. v. United 19,34,35

States

434 U.S. 275 (1978)

Caminetti v. United States 17

242 U.S. 470 (1917)

Commissioner v. Glenshaw Glass Co. 31

348 U.S. 426 (1955)

The Conqueror “

166 U.S. 110 (1896)

Continental Products Safety 17

Commission v. GTE Sylvania, Inc.

447 U.S. 102 (1980)

Escondido Mut. Water Co. v. 36

LaJolla Indians

a

80 L.Ed. 2d 753 (1984)

Houghton v. Payne 36

194 U.S. 88 (1904)

Knickerbocher Ice Co. v. Stewart 31

253 U.S. 149 (1920)

Lanzetta v. New Jersey 15,18,46

306 U.S. 451 (1939)

Nixon v. Fitzgerald 4

457 U.S. 731 (1982)

-iv-

Power Reactor Co. v. International 32

Union of Electrical Radio &

Workers

367 U.S. 396 (1961)

Reiter v. Sonotone Corporation 16

442 U.S. 330 (1979)

SEC v. Sloan 31

436 U.S. 103 (1978)

Skidmore v. Swift & Co. 35

323 U.S. 134 (1944)

Smith v. Goguen 46,47

4i5 u.S. 566 (1974)

United States v. General Motors 4

Corp.

323 U.S. 373

United States v. Laub 36

385 u.sS. 475 (1967)

U.S. v. Swarovski 45

592 F.2d. 131 (2d Cir. 1979)

STATUTES

3 usc 301 39

22 usc 1934 30

22 USC Section 2776 21,44

22 uSC Section 2778 3,4,7,10,15,22

23,25,27,28,29

33,37,41,42

22 uSC Section 2794(7) 4,23

-V=-

28 USC Section 1254(1) 4

40 USC App Section 2416(b) 50

590 USC App Section 2401 24

50 USC App Section 2404(d) 5,25

90 USC App Section 2405(k) 5,25

90 USC App Section 2416 (b) 5,24

22 CFR Section 121.01 7

15 CFR Section 4516B 26

22 CFR Section 121.01 4,7,38

22 CFR Section 127 5

OTHER AUTHORITIES

l Davis, Administrative Law

Treatise

2nd Ed.

Section 3:1] 41

Section 3.15 41

Section 3.16 43

Dictionary of Military and

Associated Terms 18

1982 U.S. Code Cong. & Admin. News 22

Vol. 3, p 2496

1976 U.S. Code Cong. & Admin.

News 21,23

p. 1378, 1415

-Vi-

“TABLE OF APPENDIX CONTENTS

APPENDIX I - Opinion - U.S.

v. Zheng, 768 F. 2d 518

(CA 3 1985) la

Third Circuit Judgment

deted July 19, 1985 15a

Third Circuit Order denying

rehearing, dated |

August 27, 1985 17a

APPENDIX II - Opinion -- U.S.

v. Zheng, 590 F.Supp 274 (DNJ,

J. Sarokin, July 26, 1984) 19a

APPENDIX III - Opinion - DNJ

-- J. Sarokin, May 23, 1984 59a

APPENDIX IV - Opinion - DNJ

-- J. Sarokin, October 4, 1984 113a

APPENDIX V - Criminal

Complaint 137a

APPENDIX VI - Indictment -

February 25, 1984 144a

APPENDIX VII - Government's

affidavit of Nelson J. Wilson

filed August 9, 1984 150a

APPENDIX VIII - 22 USC,

Section 2778 153a

22 USC, Section 2794 157a

50 USC App, Section 2416 160a

-vii-

CONTENTS CONT'D

50 USC App, Section 2404 1628

50 USC App, Section 2405 167a

Fifth Amendment to the

Constitution 169a

22 C.F.R. Sec. 121.0! 1708

22 C.F.R. Sec. 127.0] 210a

-Vili-

INTENTIONALLY PRINTED AS

A BLANK PAGE

IN THE

SUPREME COURT OF THE UNITED STATES

October Term, 1985

DA-CHUNG ZHENG and KUANG-SHIN LIN

Petitioners

UNITED STATES OF AMERICA

Respondent

PETITION FOR A WRIT OF CERTI-:

ORARI TO THE UNITED STATES

COURT OF APPEALS FOR THE

THIRD CIRCUIT.

Petitioners Da-Chuan zheng and

Kuang-Shin Lin* pray that a writ of

certiorari issue to review the judgment

of the United States Court of Appeals

*Pursuant to Supreme Court Rule 21.1(b)

the other co-defendants below were David

for the Third Circuit which reversed

the District Court's dismissal of the

indictment.

STATEMENT OF GROUNDS ON WHICH

JURISDICTION Is I _INVOKED.

The petitioners Da-Chuan Zheng and

Kuang-Shin Lin seek a writ of

certiorari to review the Circuit

Court's judgment (A 15a _)* rendered

in accordance with an opinion of the

Third Circuit (A _la_) on July 19,

1985; the petition for rehearing was

denied on August 27, 1985. The

judgment reversed the District Court's

dismissal of an indictment charging

conspiracy by the defendants to violate

che Arms Export Control Act (AECA), 22

U.$.Ce, Section 2778 (1982) by

arranging for the unlawful purchase and

export of "defense articles" included

« } =

*A refers to the Appendix to this

Petition annexed,

on the U.S. Munitions List, 22 C.F.R.,

Section 121.01 Category XI(a) (1984).

The Supreme Court has juris-

diction to review the Sheet below by

writ of certiorari pursuant to 28

U.S.C., Section 1254(1). See, The

Conqueror, 166 U.S. 110, 113-114

(1896); U.S. v. General Motors Corp.,

323 U.S. 373,377 (1944); Nixon v.

Fitzgerald, 457 U.S. 731,743 (1982).

PERTINENT STATUTES, __REGULA-

TIONS AND CONSTITUTIONAL

PROVISIONS

The following statutes and regu-

lations set forth in the appendix are

pertinent:

22 UcBeCc oe Section 2778; 22

U.S.C., Section areetews: 6 «68G.hCUG. B.C.

a 4 -

App. Section 2416(b); 50 U.S.C. App.

Section 2404 (d); 50 U.S.C. App.

Section 2405(k); 22 C.F.R. Section

121.01, category XI; 22 C.F.R. Section

127.

The following constitutional

provisions set forth in the appendix

are pertinent:

The Fifth Amendment to the United

States Constitution.

STATEMENT OF THE CASE

A. Introduction

Petitioners seek review of a

Circuit Court's reversal of a district

court dismissal of the indictment

below. The AECA authorized the

President to designate the "“items"

which will constitute the Munitions

—

List. The District Court held that a

designation "countermeasures and

counter countermeasures" is not a

designation of an item but of a

"category" and therefore impermissible.

The Third Circuit reversal sanctions

the exercise of executive power in

creating item designations on the U.S.

Munitions Control List, which has the

effect of insulating the List from

congressionai control and review. The

initiation of criminal prosecutions, as

at bar, based on the designation which

is a most arbitrary and all

encompassing trade proscription, is

antithetical to constitutional

safeguards in Criminal proceedings.

The potential for abuse is accomplished

by generic indictments involving vague

categories of goods on the Executive's

list, inconsistent with the

a 6 «

congressional mandate of the ABKVA (22

U.S.C. Section 2778) that the List

(C.F.R. Section 121.01 et seq.) be

comprised of items as opposed to

categories.

B. Concise Statement of Facts

Defendants were indicted on

February 23, 1984, in a single-count

conspiracy to violate Section 38 of

AECA, 22 U.S.C., Section 2778, for

allegediy arranging for the unlicensed

export of “defense articles"

purportedly on the U.S. Munitions

List. 22 C.F.R., Section 121.01 et

seg. (Al70a, 175a-178a). The indictment did

not directly allege what “defense

articles” were involved, but ther? was

a reference in a non-charging portion

of the indictment to certain

"travelling wave tube amplifiers" and

» 9 «

“travelling wave tube amplifier chains"

(collectively "“TWTAs") (A (147a para.

5).

TWTAsS do not appear on the List.

The government contends that TWTAS are

encompassed by a List reference to

"active and passive countermeasures and

counter countermeasures" (hereinafter

"countermeasures"). However, there is

no reference to countermeasures in the

indictment (A 144a )e nor in the

underlying complaint (A 137a)- The

complaint rather suggests that the

TWTAS were "“radar-jamming" equipment,

although there is no reference to

“radar-jamming equipment" either on the

List or in the indictment. The only

item proffered by the government to

support its contention that the TWTAs

involved were radar-jamming equipment

is an affidavit of a government

munitions expert (A 150a), which does

not state that the TWTAs involved here

are used for radar-jamming, and goes on

to state that most TWTAS have

commercial purposes and “are not

designed to Function, and cannot

effectively be utilized, as military

countermeasures." Defendants did not

concede that the TWTAs' here could be

used for radar-jamming purposes.

Defendants moved below for the

dismissal of the indictment, raising

claims of insufficiency of the

indictment, vagueness’ of the List

"countermeasures" reference, and

improper delegation and subdelegation

of legislative authority to the

Executive, along with other grounds

(See Opinion I, Aif2a)- The trial

— ——

court reserved on the vagueness

challenge pending trial (‘a7vjiair+ and

denied defendants' other motions

(A100aq) « Defendants then filed a

separate motion to dismiss on the'

grounds that the List “countermeasures”

designation was invalid under the

enabling statute, 22 U.S.C., Section

2778, which requires that the List be

composed of "items." The trial court

Jranted this motion, and dismissed the

indictment (Al9%a), holding that the

Gesignation “countermeasures” was too

broad to constitute an “item" within

the meaning and Congressional intent of

Section 2778.

The Government appealed the Dis-

trict Court's determination that the

"countermeasures" designation identi-

fied by the Government to be the

« 30 «

applicable "item" on the List

encompassed MTWTAs. In reviewing the

dismissal of the indictment the Court

neld that the term “items" and

“articles” were used interchangeably

and that cCongress' “" ... minor word

substitution did not signal a

substantial but unarticulated shift in

Congressional policy ..." so as to

require a more specific designation of

items on the List.

The Circuit Court further held

Meee that ‘items' (does not) demand

more precision than that discerned by

the President" (Al2a). By permitting

countermeasures to be "items", it

intended to extend “the full meaning"

(Ailja) of the statute even in the

Criminal context. The Court found “we

are not satisfied that

» Al «

in the military electronics field

‘countermeasures’ does not mean

radar-jamming devices and hence is as

much an item as a nuclear propulsion

plant" (A Ilda). It further relied

upon the A.E.C.A. savings clause as a

basis for the predecessor Munitions

List being intended by Congress to

continue in effect despite the new act.

REASONS WHY THE WRIT SHOULD

BE GRANTED.

(1) Where a national policy

Statute such as’ the AECA is construed

so as to permit an unbridled scope of

administrative control in the Executive

branch of government in the designation

of export items, there is a reai

potential for abuse, both in the

Criminal enforcement and in the

administrative functioning of the

oe 229 «

Legislative policy.

(2) The AECA specifically requires

that the President designate items on

the U.S. Munitions List. In the

indictment at bar, defendants were

charged with conspiracy to violate a

Section which has been designated

“active and passive countermeasures and

counter countermeasures." The

indictment refers to TWTAs which are

not onthe List. Since the President

has not designated an "item"

encompassed by the List. The

indictment must be dismissed.

(3) Congress in enacting the AECA

in 1976 intended to require

particularization of the List of

controlled military exports. It

changed the word “article” to the word

« 13 «

i

"item" and, by adding periodic review

of "items", as well as requiring

congressional reports of the military

exports, intended to more closely

monitor military items. The Third

Circuit Court's opinion dilutes the

legislative control and correspondingly

enhances the executive power beyond the

legislative intent. There can be no

indictable crime for the conspiracy

charged.

(4) The Executive, in delegating

or subdelegating the composition of the

List without standards to guide the

exercise of discretionary power,

resulted in this particular case in a

failure of itemization which requires

this Court's intervention to prevent

Sanctioning of arbitrary exercise of a

delegated power.

s 16 «

(5) Due process requires that men

of common intelligence be able to

understand a charge against them

(Lanzetta v. New Jersey, 306 U.S.

451,453 (1939)). The assertion of

Criminal Liability based upon a charge

of conspiring to export an “item"

designated as "“countermeasures"™ does

not comport with that requirement.

—— i

THE “COUNTERMEASURES” DESIG-

NATION OF THE U.S. MUNITIONS

LIST DOES NOT FORM THE BASIS

FOR __CRIMINAL LIABILITY

BECAUSE “COUNTERMEASURES” IS

NOT AN “ITEM“ AND THE

—_——_—_—_—_- oe

ITEMS CONSISTENT WITH AECA,

22 U.S.C., SECTION 2778

A. The Court of Appeals Decision Is

Contrary To The Plain Meaning of the

AECA and to Its Context And Underlying

Purposes.

e 18 «

_

1. Plain Meaning

The Court of Appeals was quite

direct in its rejection of the piain

meaning of the word "items",

disregarding the "common sense"

approach advocated by the District

Court (A26a-28a)+- The court dismissed

the statutory language as a “minor word

substitution” intended as a mere

Sylistic convenience, and at the same

time applied a “relativistic” analysis

which rendered the word essentially

meaningless.

The Circuit Court did not comply

with this Court's mandate that

congressional language must be the

starting point, Reiter v. _Sonotone

Corporation, 442 U.S. 330,337 (1979)

and apply the plain meaning expressed

in the legislation, Continental

|

Products Safety Commission v. GTE

Sylvania, _Inc., 447 U.S. 102,108

(1980).

The District Court properly

concl uded that the President was

authorized to designate "items" on the

List and, using “common sense” (A 2Xa )

and with reference to dictionary

definitions, held that "“' (c)ounter-

measures’ is Simply too broad a

| description tec be considered an ‘item'"

| (A 28a ). See, Caminetti_v. United

| States, 242 U.S. 470, 485-486 (1917)

(presumption that "statutory words are

eee to be used in their ordinary and

usual sense, and with the meaning

common] y attributed to them.")

| Lexicographic sources such =s

dictionaries are a permissible, if not

preferred, source. See e.g., Lanzetta

» 29 «

v. New Jersey, 306 U.S. 451, 454-456

(1933), where the Court reversed a

guilty verdict under a New Jersey law

making association with a "gang" a

Criminal offense. Even if the word

"countermeasures" is considered a “term

of art", (Alda) it is far too broad a

category to be an item. Thus,

countermeasures is defined in Dept. of

Defense Dictionary of Military and

Associated Terms (with the NATO, CENTO

and TADB Glossaries, Inc) (The Joint

Chiefs of Staff, Washington, D.C.

(June l, 1979)) as “That form of

military science which by the

employment of devices and/or techniques

has as its objective the impairment of

the operational effectiveness of enemy

activity. See also electronic

warfare". The same resource in

defining electronic warfare has a

a th «

sub-division "electronic counter-

measures" which is further subdivided

into areas of “electronic jamming" and

"electronic deception". The Circuit

Court, by permitting the

"countermeasures" designation as the

oasis of a criminal prosecution

vitiated the meaning of the statutory

declaration of AECA.

The admonition im Adamo Wrecking

Co. v. United States, 434 U.S.

—_——_— =

275,283 (1978) is particularly

pertinent. In Adamo, the Court upheld

the dismissal of an indictment grounded

on a purported violation of a

regulation designating as an “emission

Standard" that which really was not

such a standard at all. The Court

stated in a sentence in which the word

"item" could easily be substituted here

> 8 «

foc “emission standard":

ese Congress intended,

within broad limits that

‘emission standards' be

regulations of a certain

type, and eee did not

empower the administrator,

after the manner of Humpty

Dumpty in Through the Looking

Glass, to make a regulation

an ‘emission standard' by his

mere designation.”

The Court of Appeals concluded

that there was not “even a clue from

Congress on how much precision was to

be used in preparing the Munitions List

coca” ‘GR Be Fe There is no doubt but

that the central purpose behind the

enactment of AECA in 1976 was to

"restructure U.S. arms sales policies

to provide for increased Congressional

Supervision and review of all aspects

of the foreign military sales program."

House Report (International Relations

» 26 =

Committee) No. 94-1144, May 14, 1976

(94th Congress, 2d Session), quoted in

1976 U.S. Code Cong. and Admin. News

1378, 1385. The Act reflects Congress’

"strong desire to provide for increased

congressional participation in the

formulation of U.S. military

assistance and sales policies and

prograns.” Id. at 1387.

One way Congress sought to insure

its role was to require the President

to report in detail on the scope of his

export controls 22 U.S.C., Section

2776. Specific List itemization does

not merely "facilitate" this reporting

as the Court of Appeals obser ed: the

reporting requirements of the AECA

depend on accurate and specific

itemization. Section 2776(a) (4), for

example, requires information for all

oa 22 «

export licenses with respect to each

"item" of comnercially sold military

equipment. Therefore, it is evident

that the reporting requirements

presuppose a particularized List, thus

effectuating congressional oversight.

In 1982, Congress amended AECA, 22

U.S.C., Section 2778(£) to further

insure a tightly controlied List. That

section requires that the President

"periodically review the items" on the

List to see “what items, if any" should

be removed, and report such review to

Congress. The legislative history to

this section indicates that the

congressional conferees "expect (ed)

that the List should be reviewed at

least annually." 1982 U.S. Code Cong.

& Admin. News (Vol. 3), p. 2496.

The meaning of the itemization

» 2 =

terminology used inthe 1976 AECA is

Clarified by reference to 22 U.S.C.

section 2794(7) which defines "defense

articles and defense services," with

respect to commercial exports, as

"those items designated by the

President" pursuant to 22 U.S.C.

section 2778(a)(1). The House Report

explains that

"For purposes of commercial

export control under this

act, it is the nature of the

item which determines whether

it is included in the term

‘defense articles and defense

services' and not its

intended use as is the case

for purposes of government to

government sales."

House Report (International Relations

Committee) No. 94-1144 May 14, 1976

(94th Congress 2d Session) quoted in,

1976 U.S. Code Cong. and.Admin. News

1378, 1415. This comment clearly shows

Congress’ concern for specificity when

»~ 23 @

it comes to commercial export controls.

"Countermeasures" as a target of

commercial export controls, plainly

does not coincide with this legislative

mandate. See also, the Export

Administration Act ("EEA"), 50 U.S.C.

App Section 2401 et seg..

Tne EAA as a corollary export

control statute should be relied upon

for construction purposes. First, both

statutes restrict the unlicensed

movement of goods from this country

abroad. Second, the EAA explicitly

provides far coordination between the

EAA and AECA (50 U.S.C. App Section

2416(b)). Third, the AECA was amended

so that the President's enforcement

powers under that act are specifically

derived from his power under the EAA,

and are “subject to the same terms and

- 24 -

conditions as are applicable to his

EAA powers." (In fact, the AECA

post-dates the EAA of 1969, and Section

2778 (e) was added to insure that

exercise of powers under the AECA would

De in conformity with the EAA). The

EAA contains a corresponding provision,

50 U.S.C. App Section 2416(b).

The EAA encompasses the list of

"Military Critical Technologies",

(MCTL) which is a part of the Commodity

Control List (CCL), Section 2404(d) (5).

Thus, Section 2404(d) (3) requires that

this MCTL "be sufficiently specific to

guide the determination of any official

exercising export licensing

responsidilities ...". Similarly, 50

U.S.C. App Section 2405(k) requires

that “goods or technology” subject to

Foreign policy controls be “clearly

o 6

identified" when placed on the CCL.

Indeed, both the CCL proper and

its constituent MCTL contain

Significantly more specific Listings,

including the type of materials

apparently involved in the case. See,

CCL, 15 C.F.R. Section 4516B:

(Communications, counter-

measures equipment eee

including but not limited to

special purpose broadband

monitoring receivers with

detection capabilities;

optical and video detectors;

microphone detectors; non-

Linear junction detectors;

telephone analyzers; and

parts and accessories, n.e.s.

See, Part A, Section 9.5 of the MCTL

DoD Ad-Al46 998, October 1984, opp.

9-10 to 9-ll:

Communications Counter-

measures Technology as

follows: lcontains twelve

separate descriptive titles

including e.g., compressive

receivers using dispersive

filters and convolvers with

» 26

Sidelobes better than 20d

transmitter exciters

employing synthesizers and

modulation techniques, and

automatic antennae tuners

cabable of tuning rates

exceeding 30MHz/sec}

Also, if an “item” is removed from the

List, considerations must be given to

whether controls should be imposed

under the EAA. 22, U.S.C. Section

2778(£). The District Court recognized

this "Language coordination,” (A.

35a), and was justified in looking to

the legislative history of the EAA to

give meaning to the "items" requirement

in terms of federal export policy under

the Arms Act.

What emerges from this Legislative

context is the Clear notion that

Congress wanted to focus the export

control mechanism, thereby providing

enhanced notice to exporters of

= 27 «

ee

precisely what items require licensing.

In the words of the District Court, the

elmination of uncertainty regarding

U.S. export policy was additionally

intended to "remove unnecessary

barriers to exporting goods which might

arise from the chilling effect that

necessarily attends less clear

regulation.” (A. 13la ) In fact,

Section 2778 of the AECA itself, ina

new clause introduced in 1976

Simultaneously with enactment of the

express itemization reguirement,

exhorts the President, in designating

items on the List,

"to provide foreign policy

guidance to persons of the

United States involved in the

export and import of

aGefense articles and

services."

The itemization requirement is

» 26 «

Clearly one of the tools Congress used

to improve notice to potential arms

exporters and thereby facilitate trade.

Itemization further promotes a more

focused federal export control polcy by

forcing regulators who compile the list

to examine just exactly where controls

are necessary. Indeed, the

coordination of federal export policy

is reflected in 22 JU.S.C. Section

2778(£) of the AECA which also

minimizes uncertainties by requiring

the President to periodically review

the Munitions List and remove "items"

no longer warranting export controls.

B. The "Countermeasures" Desig-

nation Does Not Have Implicit

Congressional Approval and Does Not

Constitute An Agency Interpretation

Entitled To Any Deference.

SE

he government has relied heavily

» 29 «

neni

on the fact that the List and its

"Countermeasures" entry preexisted the

1976 passage of the AECA with its

"items" requirement, and that the

repeal of the prior law accompanying

such passage included a "savings

clause" (AECA Section 212(b), see

annotation to 22 U.S.C.A. Section

1934). The Circuit Court said that

"Congress was well acquainted with the

format of the List and the terminology

it employed" (A.1i0a ), but at another

that Congress "has never even addressed

the contents of the List" (A.ji1a).-

—_———

Congress never explicitly or im-

plicitly ‘approved of generic category

listings such as "countermeasures", nor

even examined the List closely at all.

The significance and effect of the

Savings clause waS not to permit a

~ 5

ESCs

lapse in the law before the Executive

could act. Congress did not reenact

the List as it was contructed. See,

e.g., Knickerbocker, Ice Co. V.

Stewart, 253 U.S. 149,162(1920). If€

Congress had meant to approve or adopt

the existing Munitions List when it

passed AECA, it could have expressly

done so. It did not.

This Court has often held that

extreme caution must be exercised

before a court would imply, as did the

court below, congressional approval of

an administrative practice or statutory

interpretation based on even a

reenactment of the underlying statutes,

Commissioner v. Glenshaw Glass Co.,

348 U.S. 426,431 (1955). Thus, the

Court in SEC _v. Sloan, 436 U.S. 103

(1978), in Striking down an

=.) a

earn

unauthorized SEC summary suspension

procedure based on a Statutory

interpretation, rejected the agency's

argument that Congress was aware of the

SEC interpretation when it reenacted

the pertinent statute. Even though it

was clear that the SEC interpretation

and practice had been brought to the

attention of, and has been "accept (ed)"

by a Congressional committee at the

time of reenactment (at 120), the Court

held that this was "scarcely the sort

of congressional approval" required for

inferring congressional validation of

an otherwise Statutorily proscribed

administrative practice. Accord, Aaron

v. SEC, 446 U.S. 680,694 n.11 (1980).

——

See also, Power Reactor Developmentr

Co. v.- _ International Union __of

Electrical, Radio and Machine Workers,

367 U.S. 396,409 (1961) (it is "shaky

a 39 «=

business to attribute significance to

the inaction of Congress.")

It is by no means clear that the

"countermeasures" category constituted

a valid administrative designation of

particular "arms, ammunition and

implements of war", even under the

predecessor Mutual Security Act, which

did not require that the Executive

prepare a discrete list of munitions.

The reported decisions interpreting

that Act do not address the

"countermeasures" listing.

Section 2778(a) (1) of the AECA

does affirmatively envision and require

that the President designate "items"

which "so designated shall constitute"

the List. This language is

prospective, anticipating future

executive action.

2. Absence of Reasoned Agency

Interpretation

The Court of Appeals' premise that

"countermeasures" constitutes a de

facto “interpretation" of the enabling

Statute's itemization requirement is

improper in the context of a criminal

proceeding. It is to such “differing

agency interpretatio, , says the court,

that the “general understanding" of

what the word "item" means "must yield"

(A.lla_). In fact, there is no “agency

interpretation" here. The reference to

"full meaning" as encompassing " ...

expansive and sometimes even bizarre

meanings ..." may not constitutionally

be applied to enforcement of a criminal

Statute, Adamo Wrecking Co. v. U.S.,

434 U.S. supra at 285.

It is undisputed that the

e $4

"countermeasures" designation antedates

passage of the AECA by many years.

Nothing has been suggested indicating

that the administrator even addressed

the question whether "countermeasures",

Or indeed any other List designation,

is Or is not an "item". Absent are the

established factors weighing in favor

oF judicial deference, Skidmore v.

Swift & Co., 323 U.S. 134,140 (1944).

As the Court noted in Adamo Wrecking

Co. Vv. United States, supra, 43 U.S.

at 287 n.5, “the mere promulgation of a

regulation, without a concommitant

exegesis of the statutory authority for

doing so, obviously lacks ‘power to

persuade' as to the existence of such

authority."

"Countermeasures" does not con-

stitute a contemporaneous’ interpre-

— 2

tation of the AECA. A custom of the

administrative department, however

long construed by successive officers,

must yield to the positive language of

the statute." Houghton v. Payne, 194

U.S. 88, 99-100 (1904). See also,

Escondido Mut. Water Co. v. LaJolla

Indians, os - » 80 L.Bad. 24

753, 765 n.22 (1984). As the District

Court below ultimately observed: "Nor

does any degree of deference allow the

court to reach the conclusions that the

term '‘contermeasures' constitutes an

"item'". (A 5*%a). Any doubt, assuming

there is any, has to. be resolved in

favor of defendants, not the

government. See also, United States v.

Laub, 385 U.S. 475,480, 486-487 (1967)

(this Court affirmed the dismissal of

an indictment for violation of an

unauthorized regulation holding that

» $6 =

the enabling act had to be “narrowly

construed" in the criminal context, and

that "(c)rimes are not to be created by

inference"). The District Court

properly resolved any doubt in

interpreting the itemization require-

ment in favor of defendant.

THE REGULATION DESIGNATION

VIOLATES THE DELEGATION AND

SUBDELEGATION DOCTRINES AND

VIOLATES DUE PROCESS.

(a) INTRODUCTORY STATEMENT

AECA, 22 U.S.C. section 2778

(1982) requires the President to

designate "items" to be included in a

list of defense articles whose sale and

exportation are restricted. Section

2778 (£) requires the President to

periodically review the "items" on the

list to determine “what items, if any,"

» 37 «=

no longer warrant controls. He is to

repo. such review to appropriate

bodies of both houses, such report to

be submitted at least thirty days

"before any item is removed" from the

list, and shall describe the nature of

the controls to be imposed "on that

item" under the EAA Act of 1979.

When the list was promulgated, 22

C.F.R. section 121.01 (1984), Category

XI, Subsection (a) read in part:

Electronic Equipment .-. including but

not limited to tne rollowing items:

"(1) ... active and passive counter-

measures and counter-countermeasures

nee” 6 The word "“item" is not defined

in the Statute nor in the regulations.

The issue is whether the President

by calling "active and passive

countermeasures and counter-

« 26 «

countermeasures" an “item" makes them

such in the context of the Statute and,

if so, whether such a delegation and

Ssubdelegation (the President didn't

create the list himself, nor need he, 3

U.S.C. 301) contravenes due process in

the framework of the instant criminal

indictment. Though raised below, this

issue was not the basis of the trial

court's dismissal of the indictment;

nor was it considered by the Third

Circuit in reversing the trial Court.

(6b) THE CONSTITUTIONAL DOCTRINES OF

DELEGATION AND SUBDELEGATION.

Professor Davis summarized decades

of federal due process delegation law

in one brief paragraph by saying:

"Congress may and does law-

fully delegate legislative

power to administrative

agencies. The Supreme Court

nas said many times -- more

= 99 «

than a hundred -- that

Standards are required, but

it has often held that

Standards are not required.

The Supreme Court throughout

the twentieth century has

upheld congressional

delegations without

Standards, and except for two

1935 decisions, it has never

held unconst)j tutional any

delegation to an

administrative agency. Since

1935 the nondelegation

doctrine has had no reality

in the holdings, although

remnant of the doctrine

persist in judicial verbiage.

The law allowing delegation

of rulemaking power to

administrative agencies is

clear law, sound law, and

necessary law. It is sure to

continue, for the kind of

government we have developed

could not operate without it.

But the law allowing

delegation of power to

exercise unguided discretion

in individual cases is in

need of reexamination. The

nondelegation doctrine, as

proposed in section 3:15, can

and should be given new life

by altering it to require

either statutory or admin-

istrative standards to euide

the exercise ot

= 40 «

discretionary power in

individual cases. The

purpose of a reconstituted

nondelegation doctrine should

be to protect private parties

against injustice that grows

out of unnecessary and

uncontrolled discretionary

power. See, Section 3:15

below.

l Davis, Administrative Law

ae ae Ke eer

Treatise, 2nd Ed., section

3:1, p.149.

His concluding reference to

section 3:15 at p. 206, et seq.

transforms the non-delegation doctrine

into a meaningful proscription of

arbitrary discretionary conduct by

administrative personnel. Due process

protection shifts from "“standards" to

administrative safeguards.

As applied at bar, the broad

Standards of section 2778, that is the

“furtherance of world peace" and the

Furtherance of the "security and

=» @h «

foreign policy of the United States”

becomes meaningful and controllable,

notwithstanding the broad delegation to

the President of the power to create

the list -- so long as the list is one

of “designated” “items" (The items so

designated shall constitute the U.S.

Munitions List, section 2778(a) (1))

rather than broad categories which can

be interpreted, construed and enforced

by the agency in its own arbitrary or

abusive way. There is neither

Statutory nor administrative safeguards

in designations of “categories". There

is no protection against bias or

favoritism or unfairness in the

administration of the export list if

one must look, item by item, to the

administrators to see if the item is

one in the category of “active and

passive countermeasures and

s 42 «

counter-countermeasures".

In short, those authorities cited

in Davis" treatise support the need for

certiorari in the case at bar. This is

uniquely so because Criminal (as

distinguished from the more usual

administrative) consequences flow from

the acceptance of the Third Circuit's

conclusion that the term "item"

suffices to control the subject

enumeration in the list. This

case combines the delegation concept

with the unique subdelegation instance

and there is a direct crossing of the

separation of powers. Though the

crossover, per se, is now well

accepted, Davis, supra, section 3:16,

the very broad scope of the AECA, where

there is a crossover to the President,

warrants assurance that it is

» 63 «

OC

accompanied by adequate controls on the

subsequent administrative behavior.

This need for control (item means item,

not category) is found in section (f)

and parallels the requirements in

section 2776(a) (4) (A),(B) and (C).

er Oc. 8 III

A MAN OF COMMON INTELLIGENCE

WOULD NOT UNDERSTAND THE

DESIGNATION "COUNTERMEASURES"

AS ENCOMPASSING TWTAS,

THEREFORE THE INDICTMENT

SHOULD BE DISMISSED.

The indictment at bar charges a

conspiracy to violate AECA by arranging

for the exportation of defense articles

which are particularized in a

non-charging part of the indictment as

TWTAS. TWTAS do not appear on the

list.

The Circuit Court and _ the Trial

» £6 «

Court indicated in dicta with respect

to vagueness "sae it could not

determine before trial ‘whether or not

wave tube amplifiers are reasonably

encompassed within the term

‘countermeasure’ in the eyes of the

average arms exporter.' The district

court's ruling is consistent with U.S.

v. Swarovski, 592 F. 2d 131 (2d Cir.

1979). In ruling on a Similar

challenge to the Munitions List, the

court said: 'We are dealing here with a

regulation of limited scope aimed at a

small and relatively sophisticated

group of persons.'" (A Sa )

The designation "countermeasures"

identified by the Government as’ the

"items" for which the defendants are

deing subjected to criminal Liability

is in the same class as the "gang"

- £6 =

found impermissible as a classification

for criminal liability in Lanzetta v.

New Jersey, supra or the contemptuous

treatment of the United States flag in

Smith v. Goguen, 415 U.S. 566 (1974).

This court in Goguen stated:

"Tne statutory language under

which Goguen was charged,

however, fails to draw

reasonably clear lines

between the Kinds of

non-ceremonial treaetment that

are criminal and those that

are not. Due process

requires that all ‘be

informed as to what the State

commands or forbids.'

Lanzetta v. New Jersey, 306

U.S. 451,453, 83 L.Ed 888,

59 S.Ct. 618 (1939) and that

‘men of common intellgience'

not be forced to guess at the

meaning of the criminal law.

Connally Ve _ General

Construction Co., 269 U.S.

385,391, 70 L.Ed 322, 46

S.Ct. Ase (2926)". SiS 0.8.

at 574.

The Court goes on to criticize the

"standardless sweep" of the statutory

~ £6 =

language noting "legislators may not so

abdicate their responsibilities for

setting the standards of criminal law"

(415 U.S. at 575).

It is suggested at bar in the

language of Goguen, supra, that:

"Where inherently vague stat-

utory Language permits such

selective law enforcement,

there is a denial of due

process", 415 U.S. at 576.

It should not matter for

enforcement purposes whether the

legislature intended the prohibition of

conduct against a select group or not;

the law must be applied un ‘ormly.

CONCLUSION

For the foregoing reasons it is

respectfully submitted that the writ of

certiori should be granted.

Respectfully submitted

MARGULIES, MARGULIES & WIND

A Professional Corporation

=

;

\ ( /

/ F. > ie. ‘ /

ae ARS ie

ROBINSON, WAYNE, LEVIN,

RICCIO & LA SALA

By

Maurice C. a ee

Of Counsel

SEYMOUR MARGULIES

JOHN B. LIVELLI

ROBERT E. MARGULIES

On The Petition

October 25, 1985

« &48 «

APPENDIX

la

APPENDIX I

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 84-5693

UNITED STATES OF AMERICA,

Appellant

Vv.

DA-CHUAN ZHENG, KUANG-SHIN LIN, JING-LI

ZHANG, DAVID TSAI, ALLEN YEUNG,

Appellees

APPEAL FROM THE UNITED STATES

DISTRICT COURT FOR THE

DISTRICT OF NEW JERSEY

(D.C. Criminal Nos. 84-00064-01/2/3/4/5)

Argued May 1, 1985

Before: SEITZ, WEIS, and ROSENN,

Circuit Judges

(Filed July 19, 1985)

Robert J. Fettweis, Esquire (ARGUED)

Assistant U.S. Attorney

W. Hunt Dumont, Esquire

United States Attorney

Federal Building

970 Broad Street

Newark, New Jersey 07102

Attorneys for Appellant

2a

2

Robert E. Margulies, Esquire (ARGUED)

MARGULIES, MARGULIES & WIND

921 Bergen Avenue

Jersey City, New Jersey 07306

Attorney for Appellee Kuang-Shin Lin

John B. Livelli, Esquire (ARGUED)

ROBINSON, WAYNE, LEVIN, RICCIO & LA SALA

Gateway One

Newark, New Jersey 07102

Attorney for Appellee Da-Chuan Zheng

Susan V. Tipograph, Esquire (ARGUED)

120 Duane Street, Suite 400

New York, New York 10007

Attorney fo. Appellee Jing-Li Zhang

OPINION OF THE COURT

WEIS, Circuit Judge.

The government contends that in dismissing an

indictment the district court adopted an unduly

restrictive definition of the word “items.” The term

appears in a statute that requires the President to

designate “items” to be included on a list of defense

articles whose sale and exportation are restricted. We

conclude that the list.as prepared by the Executive

complied with the congressional direction. We will

therefore vacate the district court's order.

In a one count indictment, defendants were

charged with having conspired to violate the Arms

Export Control Act, 22 U.S.C. 8 2778 (1982), by

arranging for the unlawful purchase and export of

“defense articles” included on the United States

Munitions List, 22 C.F.R. § 121.01 (1984). Finding

3a

3

that the listing cited by the government did not have

the specificity required by the Act, the district court

dismissed the indictment.'

According to the criminal complaint underlying

the indictment, defendants met with an undercover

customs agent on several occasions and discussed the

purchase of certain high technology equipment,

including “English Electric Valve Co. Travelling Wave

Tube Amplifier Chains and Watkins-Johnson, Inc.

Travelling Wave Tube Amplifiers.” After acquisition,

these devices were to be shipped to the Peoples

Republic of China.

The customs agent informed defendants that the

devices “could not be solid without an export license

and further that he could not obtain the necessary

licensing.” Defendants persisted, explaining that they

would pay the agent for the risks incurred. After the

details of the plan were agreed on, defendants were

arrested and charged with conspiracy.

Shortly after arraignment, defendants filed a

motion to dismiss, contending that the statute and

regulations were impermissibly vague. The

government responded that the wave tube amplifiers

were “active and passive countermeasures” included

on the Munitions List and that defendants were aware

that it was unlawful to export the equipment without a

license. Concluding that the vagueness issue could not

be resolved until certain facts were established. the

district court deferred ruling on this motion.

Defendants then filed a second motion to dismiss,

this time contending that the Munitions List

designation “countermeasures” was a generic term

which did not comply with the Arms Export Control

Act's requirement that the President designate

1. The district court opinion is published at 590 F. Supp. 274

(D.N.J. 1984).

4a

4

“items.” Observing that this argument was

conceptually distinct from the vagueness challenge

made in the first dismissal motion, the district court

examined the merits of the defendants’ position.

The court noted that Congress had authorized the

President to “designate those items which shall be

considered as defense articles, and that once so

designated, the items became controlled exports. At

the outset of its analysis, the court stated “that the

term ‘countermeasure’ does not constitute an ‘item.

In support of this conclusion, the court set out the

dictionary definition of “item” and reasoned that even

in the context of the Munitions List,

“countermeasures” comprised a “‘group of related

particulars and items’ and not the ‘individual

particular or detail’ itself.” In the court's view,

countermeasures “clearly is not an ‘item’ but a category

or classification which includes a variety of items.”

The court determined that Congress had used the

word “item” to obtain greater particularity in the

Munitions List so as to facilitate congressional

oversight and “increase the quality of notice available

to potential exporters.” Holding that the congressional

use of “items” required more specificity than the court

attributed to “countermeasure and counter-

countermeasures,” it concluded that the terms were a

“nullity,” which could not serve as a basis for a crime.

Therefore the indictment was dismissed.

On this appeal, the government contends that the

district court erred in finding a congressional intent to

require a more particularized list, in failing to give

appropriate deference to the administrative

interpretation, and in misconstruing the plain

meaning of the word “items.”

At the outset, it is important to put aside the

vagueness issue. In their initial motion to dismiss.

defendants argued that the statute was

5a

5

unconstitutionally vague because it failed to put them

on notice that the wave tube amplifiers were covered by

the Arms Export Control Act. The district court

carefully analyzed the defendants’ contention, which

was limited to wave tube amplifiers and not to other

articles included on the Munitions List. Thus,

defendants did not argue that the statute was vague on

its face, but rather that “countermeasures” was too

broad a term. The government responded that to

anyone dealing in these devices, the designation is

unambiguous.

The court declined to rule “absent the resolution of

certain disputed facts,” commenting that it could not

determine before trial “whether or not wave tube

amplifiers are reasonably encompassed within the

term countermeasure in the eyes of the average arms

exporter.” The district court's ruling is consistent with

United States v. Swarovski, 592 F.2d 131 (2d Cir.

1979). In ruling on a similar challenge to the

Munitions List the court said: “We are dealing here

with a regulation of limited scope aimed at a small and

relatively sophisticated group of persons.” 592 F.2d at

133.

In passing on the defendants’ second motion, the

court did not revise its earlier vagueness decision, and

consequently, that issue is not before us. We must

assume in the present posture of the case that the

statute is not unconstitutionally vague in the sense

that it failed to give defendants notice that their

conduct was illegal. For purposes of this appeal, we

also assume without deciding that “Travelling Wave

Tube Amplifiers” are “countermeasures. ™

The district court, however, did change its

position on the defendants’ assertion that

“countermeasures” as designated in the Munitions

List did not constitute an “item.” In its earlier opinion,

the court had said, “This may be true. However, unless

6a

6

such generic categories are under the statute vague.

such violation does not comprise a ground for

dismissal of the indictment.”

At the time of the first motion, the court did not

distinguish between the generic category contention

and the vagueness defense. In its opinion on the

second motion, the court did separate the two issues. It

is to the question of statutory compliance that we now

turn.

A brief history of the Munitions List ts important

in resolving the question presented here. Following

World War II and continuing to the present time.

Congress enacted a series of statutes providing

economic and military aid to foreign countries, as well

as regulating exports and imports of military and nava)

equipment. Some provisions pertain to country-

to-country sales, others only to commercial

transactions. Most of the legislation has no direct

bearing on the issues presented in this case but only

serves to establish the framework in which the few

relevant provisions must be placed.

The Mutual Security Act of 1954, 65 Stat. 832.

marked the beginnings of the United States Munitions

List. Section 414 of that Act entitled “Munitions

Control” authorized the President to control the

commercial import and export of “arms, ammunition.

and articles of war.” To implement the legislation, the

President was empowered to “designate those articles

which shall be considered as arms, ammunition, and

implements of war, including technical data relating

thereto, for purposes of this section.” 68 Stat. 848.

In 1968, Congress enacted the Foreign Military

Sales Act, 82 Stat. 1320, requiring. inter alia, that the

Secretary of State report all exports “of significant

defense articles on the United States munitions list.”

82 Stat. 1326. Although the reporting requirement

was new. Congress expressly disclaimed any intention

7a

7

to affect § 414 of the 1954 Act. 82 Stat. 1326. Also, it

should be noted that throughout the 1968 Act,

Congress used the term “defense articles and defense

services” instead of “arms, ammunition, and

implements of war.” See 82 Stat. 1322-25.

The Foreign Military Sales Act in turn was revised

by the Arms Export Control Act of 1976, 90 Stat. 729,

the legislation underlying the indictment in the case at

hand. Section 414 of the Mutual Security Act of 1954

was repealed, 90 Stat. 745, but the President's

authority to control commercial imports and exports

through the use of the Munitions List was re-enacted

as § 38. 90 Stat. 744, with some changes in the

statutory language. The President was authorized to

“designate those items which shall be considered as

defense articles and defense services ... and to

promulgate regulations for the import and export of

such articles and services. The items so designated

shall constitute the United States Munitions List.” 90

Stat. 744, currently codified at 22 U.S.C. § 2778(a)

(1982).

The Act does not define “items” but does define

“defense articles and defense services.” For purposes of

“commercial exports subject to the provisions of § 38 of

this Act,” 22 U.S.C. § 2778. the term “defense articles

and defense services” means “those items designated

by the President pursuant to subsection (a)(1) of

{8 38)." 90 Stat. 747. codified 22 U.S.C. § 2794(7)

(1982).

The revision of the statutory language from “arms,

ammunition and implements of war” to “defense

articles and defense services” resulted from the

terminology used throughout the 1968 Act. A Senate

Report commented, “This change is merely intended to

conform section 38 to the style of the other sections of

the Act. It is not intended to alter the scope of items

subject to export control, or the extent of such control,

8a

8

under the regulations authorized by this Bill.” S. Rep.

No. 876, 94th Cong., 2d Sess. 42. 1976 reprinted in

Senate Misc. Reports on Public Bills V.

Another feature of the Arms Export Controi Act is

its express provision for the preservation of existing

regulations. “All determinations, authorizations,

regulations, ..., and other actions issued ... under

section 414 of the Mutual Security Act of 1954 shal!

continue in full force and effect until modified,

revoked, or suspended by appropriate authority.” 90

Stat. 745.7 Thus, the existing Munitions List was to

continue in effect.

At the time of the events described in the

indictment, the List began by stating. “the following

articles are hereby designated as arms, ammunition,

and implements of war.’ The List is organized into 22

“categories,” which are designated by roman

numerals. Important to the case at hand is “Category

XI--Military and Space Electronics.” Subsection (a)

reads in part, “Electronic equipment. . . including but

not limited to the following items: (emphasis added)

(1) Underwater sound equipment including

long towed arrays ... search, acquisition.

tracking, moving target indication and imaging

radar system; active and passive counter-

2. The authority to designate the materials for inclusion on the

Munitions List was delegated to the Secretary of State in 1954.

see Exec. Order No. 10575. 3 C.F.R.. 1954-1958 Comp.. p. 213.

214, and this practice has continued. Exec. Order No. 11958.

42 Fed.Reg. 4311 (January !8, 1977). The List. codified at 22

C.F.R. 8 121.01 (1984), has been revised recently. See 49

Fed.Reg. 47682 (December 6. 1984).

3. The recent revision has changed this language to conform to

the statutory wording of “defense articles and defense

services.” 49 Fed.Reg. at 46687. See also 50 Fed.Reg. 12787

(April 1, 1985) (technical amendments).

9a

9

measures, counter-countermeasures; electronic

fuses, identification systems; command, control

and communication systems, and regardless of

designation, any experimental or developmental

electronic equipment specifically designed or

modified for military application, or for use with

a military system. . . .” (Emphasis added).

The word “items” is not defined by the regulations

but appears in several places. A footnote to Category V1

discussing the licensing for export of a nuclear

propulsion plant refers to it as an “!tem.” Categories

XI(d). XII(c), & XVI(b) refer to components, parts, etc.

“except such items as are in normal commercial use.”

Similar references are made in the other categories,

except that at times the word “article” is used instead

of “item.” See Categories IV, IX, X, & XIV.

Section 121.15 defines “end-items” as assembled

systems or equipment requiring only fuel or

ammunition for operation and which consist of

components. “Components are items which are useful

only in conjunction with an end-item.”

Section 121.16 states that “items in a partially

completed state such as forgings, castings. . . of any of

the articles enumerated on the Munitions List ...

where they are identifiable as . . . implements of war

are considered to be such acticles. . ..”

Some observations should be made at this

juncture. First, the word “items” appears not only in

the enabling statute but in the regulations through

which the power conferred has been exercised. Also

“articles” and “items” are used almost interchangeably

in the Munitions List. Finally, the use of “items” in the

regulations was the same before and after 1976 when

the Arms Export Control Act substituted “items” for

the term “articles” that had appeared in the 1954 Act.

Rather than reading the minor word substitution

as signalling a substantial but unarticulated shift in

10a

10

congressional fF olicy as did the district court, we think

a more modest explanation is the correct one. Congress

did not choose the language in a vacuum, but made the

change in the course of amending portions of the

Mutual Security Act -- a 22-year-old statute which had

developed its own appendage of regulations. The

Munitions List had been in existence for many years,

and Congress referred to it specifically in the Arms

Export Control Act in 1976. Consequently, there is no

doubt that Congress was well acquainted with the

format of the List and the terminology it employed.

As noted earlier, the List used the words “articles”

and “items” almost interchangeably. It is not

surprising then, nor do we consider it significant, that

the word “items” was selected to replace “articles”

when Congress changed the designation of “arms,

ammunition, and implements of war” to “defense

articles and defense services.” Adoption of terms used

in the regulations or avoidance of repetition in the

same sentence are far more likely reasons for

substitution of the words than is the announcement of

the major policy change, which the district court

perceived.

The legislative history of the 1976 a-t does not

demonstrate any congressional dissatisfaction with

the use of the word “item” in the List nor any

disagreement with the degree of specificity.‘ The

histories of the earlier statutes, the Mutual Security

4. Although subsequent legislative developments are not

considered especially probative. we note that in the

international Security Act of 1980. 94 Stat. 3137. Congress’

use of “items” ts consistent with the breadth attributed to the

term by,ghe President in the Munitions List. Section 108 of the

1980 legislation is captioned “Export Controls on Certain

Items on the Munitions List.” It then refers in several instances

to “defense articles and defense services on the United States

Munitions List.” 94 Stat. 3137.

lla

11

Act and the Foreign Military Sales Act, similarly are

silent.

As the district court found, legislative

developments since 1976 express an increased

congressional interest in moniioring export controls.

The President has been directed to exercise his

authority under 8 38 to achieve coordination with

export controls authorized under the Export

Administration Act of 1979. 50 U.S.C. App. § 2416(b);

22 U.S.C. § 2778(e). But we must observe that

although greater precision in the Munitions List would

facilitate reporting as well as legislative oversight,

Congress has not directed the President to be more

particular in designating “defense articles” nor has it

even addressed the contents of the List. Accordingly.

we do not agree with the district court's assumption

that these later legislative developments have great

significance in demonstrating the degree of specificity

the word “items” connotes.

In most situations, the plain language rule is the

preferred method of statutory interpretation. Perrin v.

United States, 444 U.S. 37, 42 (1979). However, when

the subject matter is a technical one and is entrusted

to the executive, the general understanding must yield

if a differing agency interpretation is reasonable and

does not contradict the expressed intent of Congress.

Chevron, USA, Inc. v. Natural Resources Defense

Council, Inc., 52 U.S.L.W. 4845, 4847 (1984); Adamo

Wrecking Co. v. United States, 434 U.S. 275 (1978).

In the case at hand, the dictionary definition relied

on by the district court is of little value because “items”

is a relative term whose contours are constructed by

context. Only when measured by the remaining

particulars in a given classification can one discern

whether a designation is an item. Thus, we are left. as

was the President, with determining the meaning of

“items” as used in the statute without an

12a

Wy

accompanying list of associated particulars. That

being so, reasonable persons could differ on the degree

of specificity inherent in the term.*

Absent even a clue from Congress on how much

precision was to be used in preparing the Munitions

List, the President should be given wide latitude in

interpreting the delegation of authority and

formulating regulations. Implicit in the descriptions

used to designate the “defense articles and defense

services” is an Executive conclusion that specific

nomenclature was not required and that more generic

identification was acceptable.

Because we can find no contrary suggestion in the

legislation or its history, the question is whether the

“agency's answer is based on a permissible

construction.” Chevron, 52 U.S.L.W. at 4847. Given

the limited nature of the inquiry, we cannot say that

“items” demands more precision than that discerned

by the President. Indeed, as we have already observed,

it appears that the more plausible explanation for the

Congressional choice of “items” was consistency with

the use of that term in the Munitions List.

According some deference to the Executive in this

circumstance does not interfere with the principle that

criminal] statutes are to be narrowly construed. Strict

construction does not mean that every federal criminal

statute must be given the narrowest possible meaning.

See Barrett v. United States, 423 U.S. 212 (1976):

United States v. Campos-Serrano, 404 U.S. 293

(1971).

Nor does Adamo Wrecking Co. v. United States.

434 U.S. 275. 283 (1978), suggest a contrary

5. It is interesting that the dictionary does contain a much

simpler explanation of the word that corresponds to our more

detailed exposition. “Item applies chiefly to each thing in a list

of things or in a group of things that lend themselves to

listing.” Websters Third International Dictionary (1968).

13a

13

conclusion. That case, while it supports the

proposition that the President's mere designation of

“countermeasures” and “counter-countermeasures”™ as

“items” is insufficient “to foreclose further inquiry.”

also reaffirms the principle that deference to the

executive “is entirely appropriate under ordinary

circumstances.” Id. at 288. Furthermore, we are not

dealing with a possible absence of executive power.

There is no dispute in this case about whether the

wave tube amplifiers could be placed on the List. Thus,

unlike cases applying strict construction to avoid |

extending the reach of a criminal statute, here the

principle “is not violated by permitting the words of the

statute to have their full meaning, or the more

extended of two meanings.” United States v. Hartwell,

73 U.S. (6 Wall) 385, 396 (1867). See also Marshall v.

Stoudt's Ferry Preparation Co., 602 F.2d 589, 592 &

n.4 (3d Cir. 1979) (A “word means what the statute

says it means.” and “That the law should attribute

expansive and sometimes even bizarre meanings to a

word is not a novel phenomenon.”)

Even if we were dubious about the reasonableness

of the President's more expansive interpretation of

“items” and were inclined to give that term a narrower

meaning, the present record does not demonstrate that

“countermeasures and counter-countermeasures” do

not constitute items.

Category XI lists highly specialized electronic

equipment used for particular military purposes. In

that context “countermeasures” obviously has some

meaning peculiar to that category and is shaped by its

technical environment.

In the 1975 virsion of the Munitions List, Category

XlI(a) read, “Electronic equipment assigned a military

designation including but not limited to, the following

items: radar, active and passive countermeasures,

counter-countermeasures. .. .” In 1977, the category

l4a

14

was amended as quoted earlier to list various sonar

devices and more specific types of radar, again followed

by “countermeasures.” Thus, the listing suggests that

countermeasures is a term of art having reference to

radar.

We have little doubt that had “radar jamming

devices” been used instead of “countermeasures,” the

district court would have accepted that designation.

On the present record. we are not satisfied that in the

military electronics field “countermeasures” does not

mean radar jamming devices and hence is as much an

“item” as a nuclear propulsion plant. In that event the

statutory direction has been complied with, and the

basis for the defendants’ motion falls.

We conclude that “countermeasures” and

“counter-countermeasures" are appropriate

designations of “items” for inclusion on the Munitions

List, and therefore the indictment must be reinstated.

Accordingly. the order of the district court will be

vacated and the case remanded for further

proceedings.

A True Copy:

Teste:

Clerk of the United States Court of Appeals

Jor the Third Circuit

15a

UNITED STATE COURT OF APPEALS

FOR THE THIRD CIRCUIT

UNITED STATES OF AMERICA,

Appellant

Vs.

DA-CHUAN ZHENG, KUANG-SHIN LIN,

JING-LI ZHANG, DAVID TSAI,

ALLEN YEUNG,

Appellees

(D. C. Crim. Nos. 84-00064-01/2/3/4/5)

ON APPEAL FROM THE UNITED STATES

DISTRICT COURT FOR THE ---------

DISTRICT OF NEW JERSEY

Present: SEITZ, WEIS, and ROSEN,

Circuit Judges

JUDGMENT

This cause came on to be heard on

the record from the United States

District Court for the ------ District

of New Jersey and was argued by counsel

May l, 1985.

l6a

On consideration whereof, it is

now here ordered and adjudged by this

Court that the judgment of the said

District Court, entered July 3l, 1984

and made final by the order entered Oc

tober 10, 1984, be, and the same is

hereby vacated and the cause remanded

to the said District Court for further

proceedings consistent with the opinion

of this Court.

ATTEST:

/S/ M. Elizabeth Ferguson

Chief Deputy Clerk

July 19, 1985

Certified as a true copy and

issued in lieu of a formal

mandate on Septembr 4, 1985.

Test: /S/ M. Elizabeth Ferguson

Chief Deputy Clerk, United States

Court of Appeals for

the Third Circuit.

17a

UNITED STATE COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 84-5693

UNITED STATES OF AMERICA,

Appellant

vs.

DA-CHUAN ZHENG, KUANG-SHIN LIN,

JING-LI ZHANG, DAVID TSAI,

ALLEN YEUNG,

Appellees

(D. C. Crim. Nos. 84-00064-01/5)

SUR PETITION FOR REHEARING

Present: ALDISERT, Chief Judge, SEITZ,

ADAMS, HUNTER, WEIS, GARTH,

HIGGINBOTHAM, SLOVITER,

BECKER, STAPLETON, MANSMANN,

and ROSENN, Circuit Judges,

The petition for rehearing filed

by appellees in the above entitled case

having been submitted to the judges who

participated in the decision of this

court and to all the other available

circuit judges of the circuit in

18a

regular active service, and no judge

who concurred in the decision having

asked for rehearing, and a majority of

the circuit judges of the circuit in

regular active service not having voted

for rehearing by the court in banc, the

petition for rehearing is denied.

Judge Gibbons did not participate

in the consideration of this matter.

BY THE COURT,

/S/ Weis

~—_—— SS

DATED: Aug. 27, 1985

i9a

APPENDIX Ii

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW JERSEY

UNITED STATES OF Criminal No.

AMERICA 84-64

Plaintiff OPINION

vs.

ORIGINAL FILED

DA-CHUAN ZHENG, JULY 26, 1984

KUANG-SHIN LIN,

DAVID TSAI, KWON

ALLEN YEUNG, and

JING-LI ZHANG,

“7 ef «8 «8 #0 © 88 88 8 OF 89 “7 ef

Defendants.

SAROKIN, District Judge

The court here confronts a

difficult and highly technical problem

involving the propriety of regulations

implementing a criminal statute.

Underlying this specific issue, how-

ever, are more fundamental principles

regarding the creation of criminal

liability, the extent to which a

defendant's subjective belief in the

20a

Criminality of his or her acts affect

such liability, and the compliance by

the Executive branch with congressional

directives regarding what may be made a

Crime and what may not.

On February 23, 1984, defendants

Da-Chuan Zheng, Kuang-Shin Lin, David

Tsai, Kuang Allen Yeung and Jing-Li

Zhang were charged in a one-count

indictment with conspiracy to violate

the Arms Export Control Act, 22 U.S.C.,

Section 2778 ("the Act"), and regu-

lations promulgated pursuant thereto,

all in violation of 18 U.S.C., Section

371. In particular, the indictment

alleges that defendants conspired to

arrange for the export of certain radar

jamming devices, known as wave tube

amplifiers, to the People's Republic of

China. The arrest of defendants

Zila

culminated an approximately two-week

long undercover investigation conducted

by the United States Customs Service.

By opinion filed May 23, 1984, the

court addressed defendants’ various

pretrial motions. One sich motion

sought dismissal of the indictment in

this matter on the grounds of the

vagueness of the Act and the

regulations promulgated pursuant

thereto. 22 C.F.R. Section 121.01 et

seq. ("the Munitions List").

Defendants argued that the section of

the regulations within which the

government claims wave tube amplifiers

fall, 22 «=C.F.R. Section 121.01,

Category XI(a)(1) (a) (naming “active

and passive countermeasures and

counter-countermeasures” or “compon-

ents" thereof), was unconstitutionally

e j«

22a

vague, since, as defendants then argued

"(t)o think that a person of ordinary

intelligence would understand that wave

tube amplifiers are prohibited items

under Category XI of the Munitions

List, defies logic.: Pretrial Brief of

Defendant Zheng at 4. The court,

however, reserved decision or this

issue, because of its inability to

determine “whether or not wave tube

amplifiers are reasonably encompassed

within the term countermeasure in the

eyes of the average arms- exporter."

United States v. Zheng, Crim. No.

84-64, unpub. op. at 5 (D.N.J. May

23, 1984) ("Opinion"), as well as the

court's duty to evaluate vagueness

challenges “in light of the particular

facts at hand," id. at 6, especially

where specific intent is a necessary

element of the offense charged. Id. at

—

23a

Upon reconsideration, defendants

do not, for the most part, dispute this

holding. Rather, they now argue that,

because Congress required that specific

"items" be made apart of the Munitions

List, see 22 U.S.C., Section

2778(a) (1), (Fn 1) and because this

statutory mandate was ignored in

' designating a generic category,

"countermeasures," rather than more

specific items such as wave tube

amplifiers, such generic category must

be deemed a nullity, and the indictment

based upon it dismissed.

This argument is, of course,

conceptually distinct from that

regarding vagueness; at issue here is

the Executive's obedience or disobe-

dience of a congressional mandate, and

o Gs

24a

not the objective Clarity of the

statute Or regulations thus

promulgated. (Fn 2) As the court noted

in its opinion, such argument is

irrelevant to a vagueness challenge.

The court did, however, state that such

argument “may” have factual merit,

though it questioned defendants'

Standing to raise it. Opinion at 5

n.3. Upon motion for reconsideration,

and supplemental briefs ordered by the

court, the issue is clearly presented

and thoroughly briefed for the first

time. The court here addresses it, and

for the reasons set forth below,

dismisses the instant indictment.

First, there is no question but

that the term "countermeasure" does not

constitute an "<ton.™ "Item" is

defined, for these purposes, as “an

25a

individual particular or detail singled

out from a group of related particulars

Or items." Webster's Third New

International Dictionary of the English

Language Unabridged (" Webster's") at

1203 (1976). "Countermeasures" Or

"counter-countermeasures" and their

"(c)omponents, parts, accessories,

attachments and associated equipment

et es 22 CcP eRe Section 121.01,

| Category XI(a)(1),(d), even limited to

those associated with “Military and

Space Electronics," and even read in

the context of the paragraph in which

it appears, (Fn 3) comprise a “group of

related particulars and items," and not

the “individual particular or detail"

itself. It is true, as the govern,ment

argues, that in order to be an "item",

an object need not be the "“'‘'most

particularized' possible thing."

=» 2 «

26a

Government's Supplemental Brief at 5.

Indeed, the government is correct that

an “jitem" need not be as specific as a

"particular." As Webster's states, in

discussing "item" and its synonyms:

ITEM, DETAIL AND PARTICULAR can

Signify one of the things, either

separate and distinct jor so

considered, that constitute a whole.

ITEM applies chiefly to each thing in a

list of things or in a group of things

that lend themselves to listing.

DETAIL, in this connection applies to

egch separate thing which enters into

the building, form, or construction of

something as a house, a painting,

narrative, Or operation. PARTICULAR in

this connection implies a relationship

with any whole and stresses that

relationship more than ITEM or DETAIL,

27a

emphasizing the smallness, singleness,

and concreteness of each item or detail

in the whole ... Webster's at 1203

(capitals in Original) (examples

omitted). Nor, however, is an "item"

as broad as a “category” or “group”

from which items are derived. Hence,

what is an “item" and what is a

"particular" oul ta one hand, or in a

"group" on the other, is always

relative. The government is correct

that an "item" may always be further

itemized, making it appear to be a

"group" ora “category,” or it may be

viewed in the larger context of the

group of which it is a part. Thus, to

use the government's example, “horses"

can be identified "as jusmpers,

workhorses, racehorses and pleasure

horses, OF ee. further “itemized” by

more detailed breeds such as quarter

» © =

28a

horses, thoroughbreds, palominos,

appaloosas, Clydesdales, et¢,°

Government's Supplemental Brief at 5.

Of course, "horses" could also be

thought of as "items" within the

"group" of "“quadripeds," “mammals” or

even “living things." Which is’ the

group and which is the item is

therefore a matter of judgment and

ought normally to be determined with

regard to the legislative context in

which the words appear.

That legislative context lends

powerful support to defendants'

arguments, as discussed, infra.

However, the court need only rest its

conclusion upon common sense.

"Countermeasures" is simply too broad a

description to be considered an "item";

to require greater specificity is not

= 16 «

29a

to mandate undue particularization, but

to reguire the Executive merely to

promulgate a list of "items" in

conformity with the Act. This

conclusion derives additional authority

from the fact that wave tube

amplifiers, in the words of Webster's

supra, “lend themselves to listing”.

As defendants point out, wave tube

amplifiers th- selves are specifically

listed elsewhere in the Code of Federal

Regulations, see 14 C.F.R., Section

171.323, and have been the subject of

inquiry by the United States Air Force

Scientific Advisory Board Ad Hoc

Committee on Traveling Wave Tube

Amplifiers, see 46 #£xFed.Reg. 7427

(January 9, 1981); 46 Fed.Reg. 14374

(February 18, 1981) (investigating wave

tube amplifier reliability), and by the

Department of Commerce, International

- ll =

30a

Trade Administration, see 46 Fed.Reg.

63364 (December 31, 1981) (investigating

alleged dumping of wave tube amplifiers

by Japanese manufacturers). Moreover,

even the government admits that “wave

tube amplifiers are common components

of several other equipment types"

described in 22 C.F.R. SECTION 121.01,

CATEGORY XI (a) (1). Government's Brief

in Opposition to pretrial Motion by

Defendants at 13.

Furthermore, although the govern-

ment continues to argue that requiring

the List to include such. specific

"items" as wave tube amplifiers "would

be cumbersome and difficult” and “would

be to require a list much more statis

at any one point in time than would be

wise in the world of fast-changing

technology," Government's Supplemental

= 29 «

31la

Brief at 6, such argument is undercut

by the many extremely detailed sections

of the list that already exist. Hency,

for example, the “chemical agents"

listed in Category XIV(a) are specified

in excruciating detail in 22 C.F.R.,

Section 121.09, and even such terms as

"vessels of war" and “aircraft" are

defined with extraordinary specificity

in 22 C.F.R., Sections 121.13, 121.14.

Moreover, the face of the list, while

not perfect, is replete with

designations fare more specific than

"countermeasures." Within Category XI

itself, terms like "simple fathometers"

or "electro-mechanical beam former

sonars and elemenary sonobuoys"

certainly describe "items", without

apparently sacrificing the practi-

cability or flexibility of the List.

22 C.F.R. Section 121.01, Category

oa £3 «

XI(b). 32a

Even “aerial cameras, space

cameras, special purpose military

cameras, and specialized processing

equipment therefor ecog” 22 C.F.R.

Section 121.01, Category XIII(a), is a

listing far more specific than

"countermeasures," and obviously

adequate under the Act. See United

States v. Swarovski, 595 F.2d 121 (2d

Cir.1979). In sum, the court is

convinced that the Munitions List could

describe "items" within the category

that is “countermeasures without unduly

burdening the Executive responsible for

constituting the list or preventing

modification thereof on a reasonably

frequent basis.

The Act requires that the United

States Munitions List be composed of

e 14 «

33a

items. By its terms:

The President is authorized to

designate those items which shall

be considered as defense articles

and defense services for the

purposes of this section and to

promulgate regulations for the

import and export of such

articles and services. The items

so designated shall constitute

the United States Munitions List.

22 U.S.C., Section 2778 (a) (1)

(emphasis added). Similarly, the most

recent amendment to the Act provides:

The President shall periodically

review the items on the United

States Munitions List to deter-

mine what items, if any, no

longer warrant export controls

under this section. The results

of such reviews shall be reported

to the Speaker of the House of

Representatives and to the

Committee on Foreign Relations

and the Committee on Banking,

Housing and Urban Affairs of the

Senate. Such a report shall be

submitted at least 30 days before

any item is removed from the

Munitions List and shall describe

the nature of any controls to be

imposed under the Export

Administration Act of 1979 (50

U.S.C.App 2401 et seg.) (emphasis

e if <

—————— eer cr our

34a

added).

It is thus clear that the United

States Munitions List is to be composed

of "items", which items are themselves

to be subject to periodic review and,

if appropriate, deletion from the list.

Additionally, the Executive must make

quarterly reports of all export

licenses issued for “major defense

equipment, by category, sold for

$1,000,000 or more," which reports are

to list

(A) the items to be exported under

the license,

(B) the Quantity and contract

price of each such item to be

furnished, and

(C) the name and address of the

ultimate user of each such item.

22 U.S.C. Section 2776 (a) (4)

(emphasis added).

The congressional mandate thet the

«s 16 @

35a

Munitions List be composed of "items"

is not coincidental. For example, the

commodity control List, which is to be

promulgated by the Secretary of Defense

according to the terms of the Export

Administration Act of 1979, does not

reguire a listing of “items," but

rather "a list of all goods and

technology ... clearly identified as

being subject to controls under this

section." 50 U.S.C.App. Section

2404(c) (1). That the Export Admin-

istration Act speaks. inthe broader

terms of "goods and technology”

throughout is further consistent with

that Act's less stringent reporting

reguirements: rather than the quarterly

requirements imposed by the Arms Export

Control Act 22 U.S.C. Section

2776(a) (4), tue Secretary of Defense

need only report on “general Licensing

» 239 «

36a

activities,” and other aspects of the

administration of the Export

Administration Act annually. 50

U.S.C.App Section 2413. Similarly,

while no reporting requirements are

imposed upon the Secretary of Defense

who wishes to delete goods or

technology from the commodity control

list, prior to such deleter, see 50

U.S.C.App. Section 2404(c) (3),(g), the

President must alert Congress thirty

days before an item is removed from the

Munitions List. 22 U.S.C. Section

2778 (£) Hence, it is clear that

Congress demanded particularly rigorous

oversight of the Munitions List: one of

the ways it did this was by requiring

that the list be made up of discrete

items, as to which the strict review

mandated was far more practicable (Fn

4).

s 46%

37a

More important, perhaps, are the

goals that these two acts share. The

Export Administration Act of 1979, 50

U.S.C.App. Section 2401, et seq. had

the effect of amending various portions

of the Arms Control Export Act; 22

U.S.C. Section 2778(e). That Act also

stated that

The authority granted to the

President in this Act’ shall be

exercised in such a manner as to

achieve effective coordination

with the authority exercised

under section 38 of the Arms

Control Export Act (22 U.S.C.

2778). 50 U.S.C.App. Section

2416(b). See also 22 U.S.C.

Section 2778 (e)

The legislative history of the

Export Administration Act demonstrates

that one of its primary purposes was to

keep the number of goods and

technologies upon which export

limitations were to be imposed toa

minimum to "provide authority to

= 4&6 =

38a

control exports where necessary, but

also (to) ensure that such authority is

exercised with maximum efficiency and

controls are confined to those

necessary to achieve the purposes of

the act". S.Rep. No. 96-169, 96th

Cong., lst Sess. at 2 (1979), quoted

in U.S.Code Cong. & Adm. News

1147,1148-49 (1979). The legislation

was said by the Senate to be

necessary to improve the

efficiency of export licensing

and to provide for periodic and

Systemic review and revision of

export control policy to insure

that controls are achieving their

intended purposes, are not

excessive, and are focused on

items for which export control is

most in the national interest.

Ss. Rep. No. 96-169 supra, at 2.

U.S.Code Cong. & Admin.News 1979 p.

1148. The necessity for this

legislation stemmed, at least in part,

from the fact that

» 26 =

39a

Uncertainty over U.S. policy

toward the use of export controls

for foreign policy purposes has

discouraged potential exports and

tarnished the reputation of U.S.

exporters as reliable suppliers

to foreign countries. Controls

applied for foreign policy

reasons often restrict the export

of goods and technology freely

availabe from foreign suppliers,

often from our allies. Yet there

is no evidence that the effects

of such controls are receiving

due consideration, nor that

efforts are being made to obtain

agreement by our allies to adopt

Similar restrictions On their

exports.

S.Rep. No. 96-169, supra, at 3,

U.S.Code Cong. & Admin.News 1979, p.

1149. Hence, the Export Administration

Act was clearly designed to assure that

export controls be, in the words of

former Under Secretary of State George

Ball, “used very sparingly.” Id. at 6.

See also House Conference Report No.

96-482, 96th Cong., Il1st Sess., quoted

in, U.S.Code Cong. & Adm. News, supra

at 1180. Both this Act and the Arms

— =

40a

Control Export Act were to be

administered accordingly. With respect

to the Export Administration ACt, such

administration reugired the Executive

Branch to utilize certain criteria when

"jimposing, expanding, Or extending

export controls under this section", 50

U.S.C.App. Section 2405(b) (Fn 5), and

to consider other factors in deciding

whether to grant “hardship relief from

such controls. 50 U.S.C.App. Section

24ll(e). With respect to the Arms

ControL Export Act, both a limitation

upon the scope cf the statute and the

notice to be given by it were to be

enhanced by the requirement that

"items" be listed, rather than either

the "goods or technclogy” of the Export

Administration Act or the “articles

which shall be considered as arms,

ammunition and implements of war" of

= 92 «

4la

the predecessor to the Arms’ Export

Control Act. 22 U.S.C. Section 1934

(Fn. 6).

In sum, the court concludes that

congressional use of the term "item"

engendered a purposeful choice of

words. It meant to enhance the detail

of the Munitions List, making possible

greater congressional oversight of the

Executive in this area. It also meant

to increase the quality of the notice

available to potential exporters, and

thereby remove unnecessary barriers to

exporting goods which might arise from

the chilling effect that necessarily

attends less clear regulation (Fn 7).

Thus, important social policies were to

be served by the use of the term “item"

in the Act. The question that remains

is the effect of the Executive's

o 23 <

42a

failure to name as an "item" the

defense article which defendants

allegedly conspired to export without a

License.

(1) Where the Executive fails to

adhere to the statutory mandate

applicable to his or her actions, the

actions thus taken or regulatiors thus

promulgated are rendered “a nullity”.

United States v. Larionoff, 431 U.S.

864,873 and n. 12, 97 §.Ct. 2150,

2156 and n. 12, 53 L.Ed.2d 48 (1977),

Citing Manhattan General Equipment Co.

Vv. Commissioner, 297 U.S. 129, 134,

56 S.Ct. 397, 400 80 L.Ed. 528

(1936). See also Campbell v. Galeno

Chenmical Co., 281 U.S. 599,610, 50

S.Ct. 412,415, 74 L.Ed. 1063 (1930);

Atchison, Topeka & Santa Fe Railway

ee eae ee er ele

Co., 607 F.2d 1199, 1203 (7th Cir.

- 24 -

43a

1979); City of Santa Clara ~. Andrus,

572 F.2d 660, 677 (9th Cir. 1978);

United States v. Silva, 272 F.Supp,

they may not support a prosecution.

See, €.9., Adamo Wrecking Co. Vv.

United States, 434 U.S. 275, 98 S.Ct.

566, 54 L.Ed.2d 538 (1978) (regulation

exceeding congressional mandate) ;

McKart Vv. United States, 395 U.S.

185, 189-92, 89 S.Ct. 1657, 1660-62,

23 L.Ed.2d 194 (1969) (administrative

action exceeding congressional

mandate). cf. United States v.

Gurrola-Garcia, 547 F.2d 1075, 1077

(9th Cir.1976) (22 C.F.R. Section

127.01 would not serve as a basis for

conviction if it extended or modified

the predecessor to the Act, which it

did not do in this case). This is true

whether the regulation or action at

» $3 «

44a

issue is substantive, see, e.g., Adamo

Wrecking Co., supra, 434 U.S. at 285,

98 §.Ct. at 573 (question of what

comprises an “admission standard" under

the Clean Air Act); United States v.

W.T. Rawleigh Co., 267 F.2d 180, 184

(7th Cir.1959) (interpretation of

Internal Revenue Code, anda

regulations), or procedural. See, e.g.

United States v. Finley Coal Co., 493

F.2d 285, 291 (6th Cir.), cert. denied,

419 U.S. 1089, 95 S.Ct. 679, 42

L.Ed.2d 681 (1974) ("(a)dministrative

rule-making in disregard of procedural

requirements is ultra vires"), citing

Texaco, Inc. v. - Federal Power

Commission, 412 F.2d 740, 746 (3d

Cir.1969); Hotch v. United States, 212

F.2d 280, 283-84 (9th Cir.1954).

Here, as defendants argue, it is

» $6 «

45a

both. In failing properly to

"itemize", the Executive did not make

the unlicensed export of wave tube

amplifiers, or other items within the

category “countermeasures." a crime

under 22 U.S.C. Section 2778(c); this

is a substantive failing akin to that

requiring dismissal of the indictment

in Adamo Wrecking, supra. Arguably,

the Executive also failed to promulgate

the pertinent regulations in their

proper form; this was a procedural

shortcoming, similar to that resulting

in nullification in Finley Coal (Fn 8).

These failings, which the government

characterizes as based upon a

"*hypertechnical and artifical eee

reading of the word "item",

Government's Supplemental Memorandum at

8-9, are fatal in the cirminal context,

where the rule is that “where there is

- 27 =-

46a

ambiguity ..., doubts are resolved in

favor of the defendant." Adamo Wrecking

Co., supra, 434 U.S. at 285, 98 S.Ct.

at 573, citing United States v. Bass,

404 U.S. 336, 348, 92 S.Ct. 515, 523,

30 L.Ed.2d 488 (1971). See also United

States v. Laub, 385 U.S. 475, 480,

486-87, 87 }§.Ct. 574, 580-81, 17

L.Ed.2d 526 (1967) (statute did not

authorize area restrictions which could

not, therefore, support an indictment);

United States v. Eaton, 144 U.S. 677,

687-88, 12 S.Ct. 764, 767, 36 L.Ed.

591 (1892). Nor, in situations such as

these, are administrative regulations

entitled to their normal presumption of

regularity, as argued by the

government. See, e.g. SEC v. Sloan,

436 U.S. 103, 117, 98 S.Ct. 1702,

1711, 56 L.Ed. 2d 148 (1978);

Weyerhaeuser Co. v. Costle, 590 F.2d

———— i. i, ta

e 28 «

47a

10ll, 1027 (D.C.Cir. 1978); United

states v. Finley Coal Co., supra, 493

F.2d at 290-91. Cf£&. McKart v. United

States, supra, 395 U.S. at 197-99, 89

S.Ct. at 1664-65 (exhaustion of

administrative remedies not required

where statutory interpretation is at

issue) (Fn 9).

(2) This analysis leads the court

to but one conclusion the terms

"countermeasures,

counter-countermeasures" in 22 C.F.R.

Section 121.01, Category XI(a) (1) are a

nullity. As they are the basis for the

instant indictment, such indictment

must in turn be dismissed. This is

true irrespective of defendants’

knowledge, belief or actual subjective

understanding of the wrongfulness of

their acts, for what is not a crime

e 29 «

48a

cannot be made one simply by virtue of

one's impressions, however, accurate or

misguided they may be. See Hotch v.

United States, supra 212 F.2d at

284-84. Unlike the vagueness inguiry

which, the court has noted, depends

upon “the particular facts of the case

at hand, including the conduct of the

defendants," Opinion at 6 (citing

cases), the issue here before the court

in no way involves defendants’

understanding. Rather, the question is

simply one of whether the Executive has

failed to comply with his or her

legislative mandate. The matter is

thus one of statutory construction, and

not of due process, which is the basis

of a vagueness challenge. See, e.g.,

Hoffman Estates v. Flipside, 455 U.S.

489, 497, 102 S.Ct. 1186, 1193, 71

L.Ed.2d 362 (1982). To require an

e 30 «

49a

inguiry into defendants’ respective

states of mind would thus be to engage

in non-seguitur and to inject into the

issue of Executive authority the myriad

beliefs of all those affected by a

particular statute. No court has yet

held such beliefs relevant to an

analysis such as this one; this court

thus concludes that the issue of

defendant's standing to raise this

Claim is unproblematic in this context.

CONCLUSION

Although what is at issue here may

appear to be a highly technical reading

of a regulation implementing a criminal

statute, it actually involves the

fundamental principle that no person

may be charged with a crime where no

such crime exists. Congress authorized

the President to make it a crime to

» 31 «

50a

export Or import certain "items"

without a license, punishable by two

years in prison, a_ $100,000 fine, or

both. Until such items have been

properly Gesiqgnated, no crime exists.

There can be endless esoteric

discussion as to what is or is not an

item and what is or is not a

Classification or category of items.

However, “countermeasures” clearly is

not an item, but a category or

Classification which includes a variety

of items. Therefore, the unlicensed

export of "countermeasures" does not

fall within the proscriptions of the

Act. Since the defendants in this

matter are thus charged with an act

that does not constitute a crime, the

court has no alternative but to dismiss

the indictment. Such result is

particularly mandated where Congress

o 2%

has conferred upon the Executive branch

the power to decree what shall

constitute a crime, and has sought to

assure that the notice thereby afforded

would be adequate. If the Executive

does not exercise that authority

precisely as Congress has authorized,

the conduct of persons who wish to be

law-abiding may therefore be placed in

jeopardy.

There is a far greater danger to a

free society in construing a criminal

Statute too broa'tly rather than too

narrowly. One should not be indicted,

tried, and possibly convicted and

punished for a crime which does not

Clearly exist or whose enactment has

not been accomplished in a manner

authorized by Congress.

The dismissal of the indictment is

= $3 «

S2a

thus compelled mot only by the fact

that one cannot be charged with a

Criminal violation where his or her

acts doe not constituite a crime, but

by the principle of separation of

powers that underlies our

constitutional system as well.

Congress has conferred upon the

Executive the power to decree what

shall consitute a crime under the Act,

but has decreed that such authority be

exercised in a particular manner.

Here, the Executive has failed to

exercise his authority in the manner

set forth by the statute. As the

Executive's authoirity is limited to

that conferred by statute, or the

Constitution, such actions’ beyond his

delegated powers must be nullified. To

hold otherwise would be to. sanction

disobediance of the legislature,

- 34 -

disobedience which is all the more

impermissible where the result thereof

is to render certain conduct criminal

without the notice specifically

authorized by Congress.

Defendants' motion to dismiss the

indictment is hereby granted. An

appropriate order will issue.

FOOTNOTES

Fn. 1 - Title 22 U.S.C. Section

2778(a) (1) states: The President is

authorized to designate those items

which shall be considered as defense

articles and defense services for the

purposes of this section and to

promulgate regulations for the import

and export of such articles and

services. The items so designated

shall constitute the United States

Munitions List. This section, and

related provisions, are discussed in

further detail, infra.

Fn. 2 - Defendants raised this issue

for the first time in reply, see Reply

Brief of Defendant Zheng at 3-4; Letter

Brief of Defendant Zheng (5/1/84), and

the matter was discussed at oral

arguiment. All prior discussion took

place within the context of a challenge

= 93 «

S4a

to the Act on grounds of vagueness.

Fn. 3 - That paragraph reads, in full:

(1) Underwater sound equipment

including long towed arrays, electronic

beam forced sonar, target

Classification equipment, and

spectrographic displays; search,

acquisition, tracking, moving target

indication and imaging radar systems,

active and passive countermeasures,

counter-countermeasures; electronic

fuses; identification systems; command,

control and communications systems, and

regardless of destination, any

experimental or developmental

electronic equipment specifically

designed Or modified for military

application, or for use with a military

System ... 22 C.F.R. Section 121.01,

Category XI (a) (1). Al though the

government fails so to contend, the

content of this paragraph could be

argued to narrow the term

“countermeasures somewhat: read fairly,

the term could not, for example be said

to encompass anti-aircraft devices,

which might also be considered

“countermeasures”. Nonetheless, the

term “countermeasure” is not an "item".

Rather it is a category, the components

of which would themselves be items,

perhaps including wave tube amplifiers,

which served to “counter, check or

offset," Webster's at 520, some

military Or space electronic

technology.

Fn. 4 - Indeed, it is clear that

congressional oversight was a

motiviating factor behind the 1951

= 36 «

55a

amendment to the Act which added

Section 2778(f). See 1981 U.S.Code

Cong. & Adm.News 2404, 2407, 2412-15

(discussing P.L. 97-113, of which

Seciton 2778(£) was Section 107).

Fn. 5 = These factors were very similar

to those that Congress had in mind when

passing the Arms Control Export Act.

See H.R. No. 94-1144, 94th Cong., 2d

Sess. (1976) at 12-13 (remarks of

Secretary of State Kissinger) quoted in

1976 U.S.Code Cong. & Adm.News

1378,1389.

Fn. 6 =- Title 22 U.S.C. Section 1934

Stated, in full: The President is

authorized to control, in furtherance

of world peace andthe security and

foreign policy of the United States,

the export and import of arms,

ammunition and implements of war,

including technical data relating

thereto, other than by a United States

Governmental agency. The President is

authorized to designate those articles

which shall be considered as arms,

ammunition and implements of war,

including technical data relating

thereto, for the purposes of this

section.

When Congress enacted the current Arms

Control Export Act, it changed, inter

alia, the language “articles which

shall be considered as arms, ammunition

and implements of war" to "items"

whiich shall be considered as defense

articles and defense services." Though

the parties have pointed to no

legislative history behind such change

» 39 «

S6a

and al though "item" is nearly

synonymous with "article", see

Webster's at 124, the structure of 22

U.S.C. Section 2778 makes it apparent

that “items"™ are a subset of “defense

articles and defense services," and

thus more specific than either. In

other words, because the list was to

contain "items" which are “defense

articles", it would make little sense

to use the former term unless it were

more specific than the latter. This is

also consistent with Webster's, since

the dictionary definition of "item"

connotes a specificity which “article”

does not. \ In any event, the change in

the statute reveals an _ intentional

movement to the word "item" in 1976.

Fn. 7 - The importance of breaking down

such barriers to trade with the

People's Republic of China, to which

defendants sought to export wave tube

amplifiers, has been reinforced by the

events of the past decade, as reflected

in regulatory changes. See, e.g. 48

Fed.Reg. 53064 (NOV. 23, 1983)

(implementing “a more liberal export

control policy toward the People's

Republic of China"); 46 Fed.Reg. 60820

(Dec. 14, 1981) (deleting the People's

Republic of China “from the list of

countries which are denied licenses and

other approvals by the U.S. Department

of State for U.S. Munitions List

exports").

Fn. 8 - Cases like Finley Coal describe

Situations in which regulations are

invalidated for failure to adhere to

the required procedures for rulemaking.

» 38 «

S7a

Such cases are applicable by powerful

analogy. Here, the Executive did not

adhere to the procedure for making a

defense article or service part of the

list: the article must be identified as

one which belongs on the list, and then

sufficiently specified so as to become

an "item". The function of such

procedure, like those in Finley Coal,

is to provide the requisite notice to

those potentially affected. See supra

at 277-78.

Fn. 9 - The cases cited by the

government all involve situations in

which particular regulations were

upheld by the courts as not

inconsistent with the substance and

purposes of the statute at issue. See,

e.g., Mourning v. Family Publications

Service, Inc., 411 U.S. 356, 369, 93

S.Ct. 1652, 1660, 36 L.Ed.2d 318

(1973) (regulations under Truth in

Lending Act), citing Thorpe v. Housing

Authority of the City of Durham, 393

U.S. 268, 280- ’ 89 $.Cct. 518,

525-26, 21 L.Ed.2d 474 (1969). That is

not the issue here before the court:

indeed, the court might well concede

that wave tube amplifiers belong on the

Munitions List, and that to hold

otherwise would be unduly to restrict

the power of the Executive. However,

in order to support an indictment and

possible conviction, wave tube

amplifiers must be placed on the list

in the manner prescribed by the

Statute, as “items". Such itemization

is itself consistent with the language

and purposes of the Statute, as

discussed, supra, matters as to which

- 39 -

58a

even the cases cited by the government

hold the court need not defer to the

administrator. See Udall v. Tallman,

380 U.S. le 16, 85 S.Ct. 792, 801, 13

L.Ed.2ad 616 (1965) (deference is more

in order when the construction of a

regulation rather than the statute is

at issue). Nor does any degree of

deference allow the court to reach the

conclusion that the term “counter-

measures” constitutes an "item."

= 60 «

59a

APPENDIX III

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW JERSEY

UNITED STATES OF

AMERICA,

Criminal No.

84-64

Plaintiff,

vs. OPINION

DA-CHUAN ZHENG,

KUANG-SHIN LIN,

DAVID TSAI, KWON

ALLEN YEUNG, and

JING-LI ZHANG,

ORIGINAL FILED

MAY 23, 1985

ALLYN Z. LITE

CLERK

Defendants.

SAROKIN, District Judge

On February 23, 1984, defendants

Da-Chuan Zheng, Kaung-Shin Lin, David

Tsai, Kuang Allen Yeung and Jing-Li

Zhang were charged in a one-count

indictment with conspiracy to violate

the Arms Export Control Act, 22 U.S.C.

section 2778 (the Act) and regulations

Promulgated pursuant thereto, all in

violation of 18 U.S.C. section 371.

60a

In particular, the indictment alleges

that defendants conspired to arrange

for the export of certain traveling

wave tube amplifier chains and wave

tube amplifiers to the People's

Republic of China. The arrest of

defendants culminated an approximately

two-week long undercover investigation

conducted by the United States Customs

Service.

Defendants have made a number of

pretrial motions which are now before

the court. These motions challenge the

constitutionality of the Act, the

sufficiency of the indictment and the

conduct of the government.

Additionally, defendant Zheng moves for

the redaction of a particular

statement. These sets of motions will

be discussed below, seriatim.

6la

I. CHALLENGES TO THE STATUTE

Defendants move to dismiss the

indictment on three qrounds comprising

constitutional challenges to the

Statute here at issue. First, they

argue that the Act is

unconstitutionally vague as applied to

this case, in that it failed to put

defendants on notice that the wave tube

amplifiers which they sought to export

were covered by it. Second, they argue

that the Act works an unconstitutional

delegation of power from Congress to

the President. Third, they state that,

in turn, the President has unlawfully

subdelegated his powers from the Act to

the Director of the United States Arms

Control and Disarmament Agency (ACDA).

A. Vagueness (Fn.1)

a

62a

A statute such as the one at issue

may, of course, be held void for

vagueness where it fails to “define the

criminal offense with sufficient

definiteness that ordinary people can

understand what conduct is prohibited

and in a manner that does not encourage

arbitrary and discriminatory

enforcement."

Kolender v. Lawson, 103 S. Ct. 1855,

1858 (1983) (citing cases).

Nu one may be required at

peril of life, liberty or

property to speculate as to

the meaning of penal

statutes. All are entitled

to be informed as to what the

State commands or forbids.

Lanzetta v. New Jersey, 306 U.S. 451,

453 (1939).

Defendants do not argue that the

Act is vague on its face; indeed, such

63a

an argument might well be difficult to

make where, as here, they concede that

certain applications of the statute do

not comprise du. process violations.

Reply Brief of Defendant Zheng at 5,

citing United States v. Swarovski, 592

F. 2d 131 (2d Cir. 1979). See

generally Hoffman Estates v. Flipside

Hoffman Estates, 455 U.S. 489, 497

(1982). But see Kolender v. Lawson,

Supra, 103 S. Ct. at 1859 n. 8.

Rather, they contend that the statute

is vague with respect to whether it

covers the wave tube amplifiers which

defendants allegedly sought to export

and, for that reason, the indictment

must be dismissed. In response, the

government contents first, that the

regulations clearly cover these pieces

of equipment; second, that because

detendants knew that the equipment was

«e 8 «

a ee

64a

govered by the regulations, they lack

Standing to assert the _ regulation's

vagueness, if any; and third, that in

any event, the issue of vagueness

merges with that of intent: if

defendants did not know that their

conduct was proscribed, then they must

be found innocent at trial.

Argument as to the ciarity of the

regulations at issue revolves around

Category XI of the Munitions List,

codified at 22 CFR, section 121.01.

This category covers Military and Space

Electronics, and the government argues

that the wave tube amplifiers which

defendants sought to export --which, it

is undisputed, are "pieces of

electronic equipment used to jam radar

signals," Government's Brief at

12--fall within such category. In

65a

particular, the government argues that

the wave tube amplifiers are “active

and passive countermeasures" within the

meaning of paragraph (a) (1) of

Category XI, or “components, parts,

accessories, attachments, and

associated equipment" thereof as

described in Paragraph (d) of the

Category. The government contents that

To anyone dealing in these

items, their classification

within these sections of the

Munitions List is an

unambiguous as the fact that

a carburetor would be

encompassed by a list

including “components” of

"automobile engines."

Government's Brief at 13. Defendants

reply that "countermeasure" is too

broad a term, that it is a term

susceptible of greater definition, that

wave tube amplifiers are a known

technology which could be specifically

66a

named and that a generic term such as

"countermeasure" does not comply with

the statutory mandate that the Prsident

denominate particular items of

technology. Reply Brief of Defendant

Zheng at 2-5. They also attach a

newspaper article indicating that even

the State Department is unsure of

whether the wave tube amplifiers are on

the Munitions List. (Fn. 2)

The court is unable to rule on

these issues absent the resolution of

certain disputed facts. In particular,

absent fact-finding, the court cannot

determine whether or not wave tube

amplifiers are reasonably encompassed

within the term countermeasure in the

eyes of the average arms exporter.

Relevant to this sesve would be any

doubts that the State Department had or

67a

has as to whether the amplifiers are

included on the Munitions List. That

"countermeasure" could be more

specifically defined tto include wave

tube amplifiers is irrelevant,

especially given the flexible

definitions of items some of which

defendants concede are adequately

named. See 22 CFR section

121.02-121.16 (definitions beginning

with "includes", “includes inter alia"

or “includes but is not limited to");

Defendant Zheng's Reply Brief at 2.

(Fn 3).

Normally, therefore, the court

would have to decide these issues after

a pretrial hearing addressed to these

questions. Where, however, the statute

is challenged as applied, and where

constitutionally protected rights are

68a

not implicated, see, e.g., Kolender v.

Lawson, supra, 103 S. Ct. at 1859 n.

8, resolution of the issue more

appropriately awaits decision after a

trial on the merits. This is so

because the vagueness doctrine, as

developed by the Supreme Court,

requires that the court evaluate a

challenge such as this one in light of

the particular facts of the case at

hand, including the conduct of the

defendants. See Hoffman Estates,

Supra, 455 U. BS. at 495; United

States v. Powell, 423 U.S. 87, 92

(1975); United States v. Mazurie, 419

U.S. 544, 550 (1975); Parker v. Levy,

417 U.S. 733, 756 (1974); United

States v. National Dairy Products

Corp., 372 U.S. 29 (1963). See also

United States v. Moller-Butcher, 560

F. Supp. 550, 555 (D. Mass. 1983).

=» 20 «

69a

Indeed, courts considering vagueness

challenges to the Act, or related or

predecessor provisions, have

consistently looked to the peculiar

circumstances of the cases before them.

See, e.g., United States v. Swarovski,

supra, 592 F. 2d at 132 (vagueness

challenge rejected where it came from

"one who was fully cognizant of the

wrongfulness of his acts"), citing

Screws v. United States, 325 U.S. 91],

102 (1945); United States v. Brumage,

377. P Supp. 144, 149 (E.D.N.Y.

1974) (vagueness challenge rejected

where defendants within the class

reasonably familiar with export

licensing requirements). It is all the

more appropriate that they do so in

light of the fact that specific intent

must be proved in order for defendants

to be convicted cor violating the Act,

= il «

70a

see 22 U.S.C. section 2778(c); United

States v. Eeck, 615 F. 2d 441, 450-51

‘7en Cait. 1980); United States v.

Wieschenberg, 604 F. 2d 326, 331 (Sth

Cis 1979); United States v. Davis,

583 F. eq 6490 (Sth Cie. i878). or

conspiring to do so. See United States

v. Feola, 420 U. S. 671, 686 (1975)

(same intent requirement for conspiracy

as for underlying substantive offense).

Thus, if the Act is sufficiently vague

so that it is unreasonable for persons

in defendents' positions to realize

that their actions were illegal, then

defendants ought to be acquitted. See

Screws, supra, 325 U.S. at 101-03;

Moeller-Butcher supra, 560 F. Supp.

at 555; Brumage, supra, 377 F. Supp.

at 149, If, despite proof of such

unreasonableness, they are not

acquitted, the court will, upon renewal

o $2 «

Jia

of this motion, consider disissal of

the case. Since, resolution of the

vagueness question will therefore

require extensive findings of fact, all

of which would be repeated upon the

trial of this matter, efficiency

dictates that such resolution await the

results of such trial. The court

therefore reserves upon the motion to

dismiss. See Fed. R. Crim. P.

l2(e).

B. Delegation (Fn 4).

1. The delegation to the President

Defendants Zheng and Lin argue

that the Act unlawfully delegates power

which should have been exercised by

Congress to the President. The

delegation doctrine, dating from the

earliest days of our Republic, see

= 13 «

72a

Industrial Union Department Vv.

American Petroleum Institute, 448 U.S.

607, 673 (1980) (Rehnquist, Jer

concurring) (citing authorities), was

best explicated almost fifty years ago.

The Supreme Court, in striking down

section 9(c) of the National Industrial

Recovery Act aS an unconstitutiona2

delegation to the President, said:

The Constitution provides

that "All legislative powers

herein granted shall be

vested ina Congress of the

United States, which shall

consist of a Senate and House

of Representatives.” Art I,

section l. And the Congress

is empowered "To make all

laws which shall be necessary

and proper’ for carrying into

execution® its general

powers. Art I, section 8,

par. 18. The Congress

manifestly is not permitted

to abdicate, or to transfer

to others, the essential

legislative functions with

which it is thus vested.

Undoubtedly legislation must

often be adopted to complex

conditions involving a host

» 14 «

73a

of details with which the

national legislature cannot

deal directly. The

Constitution has never been

regarded as denying to

Congress the necessary

resources of flexibility and

practicality, which will

enable it to perform its

function in laying down

policies and establishing

Standards, while leaving to

selected instrumentalities

the making of subordinate

rules within prescribed

limits and the determination

of facts to which the policy

as declared by the

legislature is to apply.

Without capacity to give

authorizations of that sort

we should have the anomaly of

a legislative power which in

many circumstances calling

for its exertion would be but

a futility. But the constant

recognition of the necessity

and validity of such

provisions, and the wide

range of administrative

authority which has been

developed by means of them,

cannot be allowed to obscure

the limitations of the

authority to delegate, if our

constitutional system is to

be maintained.

Panama Refining Co. v. Ryan, 293 U.S.

388, 421 (1935). See also A.L.A.

» 13 «

74a

Schecter Poultry Corp. Vv. United

States, 295 U.S. 495, 529-30 (1953)

(section 3 of the Nationai Industrial

Recovery Act works an unconstitutional

delegation of power): Hampton & Co. ov.

United States, 276 U.S. 394 (1928)

(delegation to set tariffs upheld).

Although certain members of the Supreme

Court have of late expressed an

interest in reviving this doctrine,

American Textile Manufacturers

Institute v. Donovan, 452 U.S. 490,

543-48 (Rehnquist, J., dissenting,

joined by Burger, C.J.); Industrial

Union Department, supra and a majority

of the Court has demonstrated a reborn

solicitude for the separation of powers

in general, see, e.g., Immigration and

Naturalization Service v. Chadha, 103

remains that the delegation doctrine

e 16 «

75a

has lain essentially dormant since the

period immediately following the New

Deal. But see National Cable

Television Association Vv. United

States, 415 U.S. 336, 342 (1974)

(construing Independent Offices

Appropriation Act narrowly so as_ to

avoid constitutional delegation

problem). Among those statutes upheld

as against delegation challenges during

this period were the predecessor to the

Act (Fn 5) here at issue. See, United

States v. Gurrola Garcia, 547 F. 24d

1075, 1078-79 (9th Cir. 1976); United

States v. _ Stone, 452 F. 2d 42, 46-47

(8th Cir. 1971); Samora v. United

States, 406 F. 2d 1095, 1098 (Sth Cir.

1969). In disposing of constitutional

challenges such as these, the courts

have relied on the President's

traditional dominance in and

» 19 @

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76a

responsibility for the conduct of

foreign affairs. As a result of the

"exclusive power of the President as

the sole organ of the federal

government in the field of

international relations," the Supreme

Court has warned that one “should not

be in haste to apply a general rule

which will have the effect of

condemning legislation like that under

review as an unlawful delegation of

legislative power." United States v.

Curtiss-Wright Corp., 299 U.S. 304,

315-22 (1936). (Fn 4).

(B)ecause of the changeable

and explosive nature of

contemporary international

relations, and the fact that

the Executive is immediately

privy to information which

cannot be swiftly presented

to, evaluated by,> and acted

upon by the legislature,

Congress - in giving the

Executive authority over

matters of foreign

» 26 «

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affairs-must of necessity

paint with a brush broader

than that it customarily

wield in domestic areas.

Zemel v. Rusk, 381 U.S. 1, 17 (1965).

See also Panama Refining Co., Supra,

293 U.S. at 422. Hence what is left

of the delegation doctrine ought not be

Strictly enforced in cases involving

foreign relations.

Nor has it been in cases construing the

predecesor to this Act, see cases

cited, supra, or related statutes.

United Stats v. Rosenberg, 150 F. 2d

788, 789-90 (2d Cir.), cert. denied,

326 U.S. 752 (1945); United States v.

Moller-Butcher, supra, 560 F. Supp.

at 553 (construing Export

Administration Act, 50 U.S.C. App.

section 2401 et seg.); United States v.

Brumage, supra, 377 F. Supp. at

149-50 (same).

@ 19 «

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ithough the court is hesitant in

expounding broad principles of

delegation to an executive who may well

abuse his or her foreign policy

prerogatives, it finds the delegation

here at issue to be unproblematic.

Titie 22 vU.8.C. section 2778(a) (1)

provides

In furtherance of world peace

and the security and foreign

policy of the United States,

the President is authorized

to control the import and the

export of defense articles

and defense services and to

provide foreign policy

4 guidance to persons of the

United States involved in the

export and import of such

articles and services. The

President is authorized to

designate those items which

shall be considered as

defense articles and defense

services for the purposes of

this section and to

promulgate regulations for

the import and export of such

articles and services. The

items so designated shall

constitute the United Stats

Munitions List.

«= 26 «

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Defendants argue that this’ provision

leaves the President without standards

to apply in formulating the Munitions

List. This argument is without merit.

First, the denomination "defense

article” and ‘dbdenne service” is not

significantly broader that the category

"arms, ammunition and implements of

war, including technical data relating

thereto" which concededly rendered the

predecessor to the Act a lawful

delegation of authority. See Brief of

Defendant Zheng at 15. Defendants'

argument that "any item, including

wearing apparel or food, could be

regarded as a ‘defense article'," Brief

of Defendant Zheng at 15, applies as

well to the term “implements of war."

Furthermore, both the Act and its

predecessor serve the same ends: “world

peace and the security and foreign

» 2 «

iii

80a

policy of the United States." See also

Curtiss-Wright, Supra, 299 U.S. at

312. The earlier provision having been

upheld, there is no logic in striking

Gown the current one.

Second, the terms "defense

articles" and “defense services" are,

in and of themselves, not standardless,

As the Supreme Court stated in Gorin v.

United States, 312 U.S. 19 (1941) in

holding that the term “information

respecting the national defense” was

definite enough to withstand a

challenge to the Espionage Act of 1917

on due process grounds, national

defense is "a generic concept of broad

connotations, referring to the military

and naval establishments and the

related activities of national

preparedness.” The court continued,

=. 32 «

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"the language employed appears

sufficiently definite to apprise the

public of prohibited activities and is

consonant with due process.” 312 U.S.

at 28. If "national defense"

sufficiently apprised the public of

what comprised spying during World War

II, then the term “defense articles" is

certainly not Standardless when

directed to the President of the United

States in the 1980s.

Third, the President's power under

the Act is significantly reined in by

other provisions of the Act. Thus, as

defendants themselves point out, the

President must “periodically review the

items" on the Munitions List and submit

the results of such review to Congress

before any item is removed from the

list. 22 U«8.C. section 2778(f£).

- 23 «

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Moreover, the issuance 2f export

licenss is contingent upon a

determination that

the export of an article will

(mot) contribute to the arms

race, increase the

possibility of outbreak or

escalation of conflict, or

prejudice the development of

bilateral or mirltilateral

arms control ar. agements.

22 U.S.C. section 2778(a) (2). These

qualifications of the President's

power, absent from such cases as Panama

Refining or Schecter Poultry, render

the Act far from the standardless

provision described by defendants.

Finally, the components of a

munitions list, like tariff rates,

Hampton & Co., supra, or listings of

disabilities, see Heckler v. Campbell,

103 S. Ct. 1952, 1957 (1983), are

precisely the type of complex,

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technical, oft-changed determinations

best left for an expert administrator.

It would be extremely unwieldy for

Congress itself to arrive at and update

this type of list. Delegation of such

responsibilities to the executive is

therefore appropriate.

2. Subdelegation

The creation of the Munitions List

has been entrusted to the Director of

the ACDA, a presidential appointee

subject to the approval of the Senate.

22 U.S.C. section 2562. Defendants

argue that this subdelegation is

unlawful and, by the terms of the

statute quoted, supra, only the

President himself may develop. such

list. This argument is meritless.

First, the defendants ignore the

= 28 «-

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obvious intent of the statute. It

delegates power to the Executive

Branch, and fully contemplates that

such power will be exercised by others

than the President. Thus, the

licensing process is to eccur in

coordination with the Director of the

United States Arms Control and

Disarmament Agency." 20 U.S.C. section

2778(a) (2). The statute recognizes the

expertise that will be possessed by the

Director who is to “have primary

responsibility within the Government

for arms control and disarmament

matters," 22 U.S.C. section 2562,

defined to include "the identification,

verification, inspection, limitation,

control, reduction, or elimination of

armed forces and armaments of all kinds

under international agreement including

the necessary steps taken under such an

o 96 @

8Sa

agreement to establish an effective

system of international control, or to

create and Strengthen international

organizations for the maintenance of

peace." 22 U.S.C. section 2552. Part

of any such system of international

control must’ be the monitoring of arms

exports. To that end, the Director of

the ACDA is best suited and indeed,

Statutorily required, to decide what

ought and ought not be the subject of

such exports.

Moreover, subdelegation is a

necessary and accepted practice. See l

Davis, Administrative Law Treatise, (3d

ed. 1972) at 216. It is hard to

imagine that the President himself is

required to put pen to paper to draft

the Munitions List: for him, as well as

Congress, more important

oe 4

86a

decision-making awaits. Congress has

recognized this and adopted 3 U.S.C.

section 301 allowing just such

subdelegation of Presidential power to

"the head of any department or agency

in the executive branch, or any

official thereof who is required to be

appointed by and with the advice and

consent of the Senate ... without

approval, notification, or other action

by the President eee” Where’ such

delegation is both within the scope of

congressional intent and governed by

Standards such as those discussed

supra, it is wholly proper.

Defendants’ motions to dismiss on

grounds of unconsitutional delegation

are, therefore, denied.

II. CHALLENGES TO THE INDICTMENT

Defendants challenge the suf-

= 28 «

87a

ficiency of the indictment and move

both to dismiss it and for a bill of

particulars. (Fn 7)

A. Motion to dismiss

Defendants move to dismiss’ the

indictment for failure sufficiently to

apprise them of the offense with which

they are charged. Essentially, they

argue that the indictment does not

properiy allege a violation of 22

U.S.C. section 2778(c) in that it

fails to state which "defense articles"

are here involved. Further, defendants

content that the indictment must be

Gismissed for failure to allege an

actual sale cr arrangement to sell

and/or that any such sale was for

export.

It is, of course, constitutionally

= 239 «

88a

required that an indictment be

sufficiently specific to inform a

defendat of the charges against which

he or she must defend, and enable him

or her to plead an acquittal or

conviction in bar of future

prosecutions’ for the same offense.

See, e.g., Hamling v. United States,

418 U.S. 87, 117 (1974); Russell v.

(1962). Federal Rule of Criminal

Procedure 7(c) (1) codifies this

standard, requiring that an indictment

be "a plain, concise and definite

written statement of the essential

facts constituting the offense

charged." It is, however, axiomatic

that, where as here, the offense

charged is a conspiracy, the indictment

need not allege *with technical

precision all of the elements essential

= 30 -

89a

to the commission of the offense which

is the object of the conspiracy." Wong

Tai v. United States, 273 U.S. 77, 81

(1927). Rather, a conspiracy count

need only charge: (1) an agreement; (2)

an unlawful purpose or object; and (3)

at least one overt act in furtherance

thereof. See, e.g., United States v.

Falcone, 311 U.S. 207, 210 (1940);

United States v. Wieschenberg, supra,

604 F. 2d at 331 (conspiracy to

violate predecessor of the Act).

Hence, courts have consistently held

that a conspiracy count need not be as

precise as a count alleging a violation

of a substantive offense. See, e.g.,

United States v. Ramos, 666 F. 2d

469, 475 (Sth Cir. 1982); United

States v. Clark, 649 F. 2d 534, 539

(7en Cif. 1981; United States v.

Pheaster, 544 F. 2d 353, 360 (9th Cir.

= 3) «

90a

1976), cert. Genied, 429 U.S. 1099

(1977), quoting Wong Tai, supra, 273

U.S. at 81. See also United States v.

Jannotti, 673 F. 2d 575, 591 (3d Cir.

1982) (affirming district court

decision dismissing substantive counts

for failure to plead one element of

Hobbs Act offense, while allowing

conspiracy count to stand).

In light of these principies, the

indictment must stand. First, 4a

failure to allege that defendant

consummated an export transaction is

irrelevant where it is only the

agreement to do sc, here alleged, that

needs be charged. See generally United

States v. Feola, supra, 420 U.S. at

693 (conspiracy law serves ends

different from those served by

substantive offenses). Second,

= 32 «

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defendants’ argument that the

government must identify the precise

defense articles here at issue flies in

the face of the above principle: a

conspiracy to export unlicensed

items--including an agreement to do an

unlawful act, and several overt acts in

furtherance thereof -- is clearly set

forth. Moreover, the items at issue

are named in paragraph 5S of the

indictment, giving some notice to

defendants of the allegations against

them. Should the government proceed to

prosecute defendants for the agreement

illegally to export items not named in

the indictment, then defendants will

have cause to complain. Absent such

prejudice, however, the indictment must

survive. See Russell Vv. United

States, Supra, 369 U.S. at 763.

Finally, it should be noted that this

e 93 «

il

92a .

indictment is far more detailed than

others charging a violation of the Act

or its predecessors which have been

allowed to stand. See e.g., Etheridge

v. United States, 380 F. 2d 804, 805,

809 (Sth Cir. 1977) (count one in

indictment under 22 U.S.C. section

1934, alleging conspiracy to export

"arms, ammunition and implements of

war" held sufficient). The cases cited

by defendants are inapposite. The

motion to dismiss is therefore denied.

B. Bill of particulars

Defendants Tsai and Yeung have

moved pursuant to Federal Rule of

Criminal Procedure 7(f) for a Bill of

Particulars. Specifically, they

request an itemization of the defense

articles alleged to be involved, the

procedural history of their being made

a Sh @

’

93a

part of the Munitions List, the other

locations, co-conspirators, dates and

overt acts involved in the conspiracy,

and, for Tsai, the date upon which he

entered the conspiracy and the overt

acts with which he is’ charged. The

government argues that these requests

are either improper or unreasonable in

light of the clarity of the indictment

and the discovery already provided.

With one exception, the court agrees.

The purpose of the bill of

particulars is to inform the

defendant of the nature of

the charges brought against

him to adequately prepare his

defense, to avoid surprise

during trial and to protect

him against a second

prosecution for an

inadequately described

offense. A bill of

particulars should fulfill

this function "when the

indictment itself is too

vague and indefinite for such

purposes."

United States v. Addonizio, 451 F. 2d

o %% «

5

94a

49, 63-64 (3d Cir. 1971), cert.

denied, 405 U. S. 936 (1972)

(citations omitted). The grant or

denial of such a motion is committed to

the sound discretion of the district

court. Id. at 64; Wong Tai, Supra, 273

U.S. at 82. As discussed, supra, the

indictment is not here vague or

indefinite; hence, a bill of

particulars iS not necessary. Nor are

most of defendants' requests proper:

the information requested by defendant

Tsai regarding the President's

decisions with respect to the Munitions

List are part of the public record and

thus available to defendants, as well

as to the government, through their own

research. Further details requested

concerning the dates and places of the

conspiracy would allow defendants

wholesale discovery of the government's

— 2

95a

evidence, contrary to the purpose of

Rule 7 (8). See United States v.

Armocida, 515 F. 2d 49, 54 (3d Cir.,

cert. denied, 423 U.. 858 (1975);

Addonizio, supra, 451 F. 2d at 64.

Other overt acts need not be disclosed.

United States v. Perez, 489 F. 2d 5l,

—_—— ee eer Ke

70 (Sth Cir. 1973), cert. denied, 417

W.S. 945 (1974) citing cases). Nor is

defendant Tsai entitled to know the

particulars of the allegations

regarding his personal involvement.

See, e.g. United States v. Ostrer, 481

F. Supe. 407, 417 (S.D.N.Y. 1979).

Furthermore, the government here

represents that it is currently unaware

of the identity of any unindicted

co-conspirators’ and that "(i)n the

event that other coconspirators become

know, their identity will promptly be

supplied to the defendants."

= 33 =

96a

Government's Brief at 32 n. 10.

However, although the discovery

already provided, in the form of

transcripts of tapes or videotaped

conversettons, seems to provide notice

as to what defense articles are here at

issue, the court here orders that a

bill of particulars be provided by the

government specifying precisely which

articles will provide the basis’ for

this prosecution. While the absence of

such exact information does not render

the indictment so vague as to require

dismissal, the court finds that greater

certaintly will enhance the quality of

the notice given defendants and avoid

the type of surprise at trial which

would be unacceptable to the court and

to defendants. With this exception,

however, defendants' motions for bills

«» 236 =

97a

of particulars are denied. The court

notes that the government has fully and

fairly complied with its discovery

obligations to this point; it expects

that defendants will do the same.

III. CHALLENGES TO THE GOVERNMENT'S

—_—_——~—

A. Due process (Fn 8)

Defendants move’ to dismiss’ the

indictment on the ground that the

behavior of the government was so

outrageous as to violate defendant's

right to due process. Separate and

apart from any entrapment defense, see

United States v. Russell, 411 U.S.

423, 431-32 (1973), this due process

argument is one that has been accepted

in the Third Circuit, see United States

v. Twigg, 588 F.2d 373, 377-80 (3d

o @«

: on

98a

Ci¢c. 1978), notwithstanding its

limited application by the Supreme

Court. Hampton v. United States, 425

U.S. 484 (1976). The government

argues, correctly, that recent Third

Circuit jurisprudence has emphasized

that dismissal on the ground of a

violation of the due process clause is

a power to be exercised but sparingly.

See United States v. Beverly, 723 F.2d

ll, 12-13 (34 Cits 1983); United

States v. Jannotti, supra, 673 F.2d at

re)

06-10; United States v. Bocra, 623

F.2d 2861, 389-90 (3d Cir. 1980).

Nonetheless, the doctrine retains some

vitality. The due process clause is

available to "curb the most intolerable

government conduct,” Beverly, Supra,

723 F.2d at 12, where it reaches "that

"demonstrable level of outrageousness'

necessary to compel acquittal so as to

- 40 -

—

99a

protect the Constitution." Id. at 13,

quoting Hampton, supra, 425 U.S. at

495 n.7 (Powell, J., concurring).

The parties, of course, differ as

to whether that standard has here been

met. Defendants paint a picture of the

government, through Customs Service

Agent Moyes, initiating the contacts

with defendnts, promising to supply the

defense articles at issue, pressuring

the defendants continuously to engage

in unlawful behavior to which they were

not inclined and attempting to expedite

the deal and bring it to a rapid

conclusion. The government responds

that the idea of illegally exporting

defense articles, by shipping the

merchandise through a third country,

here Hong Kong, was the defendants’

alone. Admitting that Agent Moyes

= £2 «

100a

played a part, the government

nonetheless asserts that it was

defendants who ultimately opted for an

illegal modus operandi.

The parties concede that a full

hearing on this issue is” required.

Defendant Zheng's Brief at 28;

Government's Brief at 39. The court

agrees: the allegations of government

misconduct are serious ones, not

susceptible of decision based upon

transcripts alone. Other evidence must

be received and credibility

determinations made. The only question

that remains is of the timing of such

hearing. The court has discretion

either to hold such a hearing prior to

the time of trial or, if good cause

exists, defer the matter "for

determination at the trial of the

» 62 «

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general issue or until after verdict."

Fed. R. Crim. P.1l2(e). Wisdom

counsels the latter course here, as it

has in other, similar situations. See.

e.g., United States _v. Williams, 644

F.2d 950, 952-53 (2d Cir. 1981);

United States v. Marcello, 508 F,

Supp. 586, 593 (E.D. La. 1981)

(citing cases). The evidence that will

be presented with respect to the due

process issue will, for the most part,

be admissible at trial on the issue of

intent. Additional evidence, for

example, of intragovernmental

communications that might bear on the

government's conduct but not the

defendants' state of mind, can be

adduced after trial, if necessary.

This disposition will render it

unnecessary to re-try many of the same

facts--indeed, most of the case--in the

» @3 «

102a

event that the due process claim is

presented and the motion denied under

the rigorous standards which now

prevail. See United States v.

Barletta, 500 F. Supp. 739 (D. Mass.

1980). Judicial time and litigants’

money will thus be saved.

The court recognizes that if there

has been a violation of defendants’ due

process rights, there is a basic

unfairness in requiring the defendants

to subject themselves to a full scale

trial prior to a determination of their

Claim. They quite properly argue that

if the government has’ been guilty of

outrageous conduct, they should not be

put through the trauma, anxiety and

expense of a trial. However, because

of the near identity of the scope of

the hearing and the trial itself, the

» 64 «

103a

court concludes that the interests of

justice require a single combined trial

and that such procedure adequately

protects the rights of the defendants.

For these reasons, the court

reserves on defendants’ motion to

dismiss on due process grounds until

after trial and denies their motion for

a pretrial hearing.

B. Motions to suppress

Three defendants have moved to

suppress evidence. Defendant Tsai

moves to suppress evidence seized from

his home on February 1l, 1983. Though

without a warrant, the search was by

written consent. Tsai now argues that

such consent, given while in custody,

was not voluntary. A hearing is

ordered to address the limited issue of

eo @8 «

en

104a

voluntariness, which hearing is

consented to by the government and

shall occur at 10:00 AM on May 30,

1984.

Defendant Tsai also moves to quash

a trial subpoena issued to the Chase

Manhattan Bank, where Mr. Tsai was

employed, requesting documents

concerning Mr. Tsai. The case law is

clear: Mr. Tsai lacks standing to

challenge a subpoena duces tecum for

any bank records regarding him. United

States v. Miller, 425 U.S. 435,

440-45 (1976). See also United States

Vv. Payner, 447 U.S. 727, 732 and n.

4 (1980). However, certain of his

personal documents in the possession of

the bank were also requested by the

subpoena, and it is these which

defendant claims are here at issue.

« 46 «

10Sa

With respect to these items, defendant

has standing to challenge this

subpoena, as he would a search of his

place of employment. Mancusi vv.

DeForte, 392 U.S. 364, 367-69 (1968),

cited in Rakas_ v. Illinois, 439 U.S.

128, 143 (1978). However, it appears

that Chase Manhattan has aiready

complied with the subpoena. Hence

defendant Tsai has failed to make his

motion to quash sufficiently promptly

(Fn 9) to prevail on his complaint that

the scope of the subpoena exceeds the

bounds of pretrial production

authorized by Federal Rule of Criminal

Procedure 17(c). See generally United

States Vv. Nixon, 418 U.S. 683,

699-700 (1974). Nor is it clear that

the government sought pretrial

discovery. Rather, acting in a fashion

considered less intrusive than a

106a

third-party search would have been, see

Zurcher v. Stanford Daily, 436 U.S.

547, 560-63 (1978), the prosecutor made

such subpoena returnable on the

scheduled trial date. Early compliance

was not the government's fault, nor the

result of any apparent impropriety, and

defendant does not object to the

subpvena as a trial subpoena. Finally,

defendant does not move to suppress the

materials as resulting from an illegal

search and seizure: were he to do so,

however, he would have to show why such

search was not a private search beyond

the strictures of the fourth amendment,

Burdeau v. McDowell, 265 U.S. 465

(1921); United States v. Valen, 479 F.

24 667 (3@ Cir. i973), cert. Genied,

439 U.8s 901 (1974), and that bank

officials could not have consented to a

search of Mr. Tsai's belongings

a So

107a

located on their premises. See

generally United States v. Matlock,

415 u.S. 164, 171 (1974). Defendant

Tsai's motion to suppress is denied.

Defendant Yeung has moved to

suppress items seized from his

suitcase, which was being stored at the

home of defendant Tsai. The government

has, however, agreed not to use such

evidence at trial, rendering this

motion moot.

Finally, defendant Zheng has moved

to suppress a post arrest statement and

the search and seizure of certain

briefcases, bags and other luggage. No

supporting papers were submitted. The

government has consented not to use

such post arrest statement in its

case-in-chief, rendering the former

motion moot. (Fn 10). As to the

=» 49 -

108a

latter, despite the failure of

defendant Zheng to provide any argument

in support of his motion, the court

hereby orders a hearing on such motion,

also to take place at 10:00 AM on May

30, 1984.

IV. REDACTION

Defendant Zheng has moved to

redact any reference to him in the

post-arrest statements of his

co-defendants. The government has

agreed to do so and offers a redacted

version of the only such statement it

plans to use at trial, that of

defendant Yeung. Now, ‘iowever, Yeung

objects to such redaction, claiming

that it unfairly prejudices him, in

violation of his right to have the

document presented in his’ entirety.

See Letter of April 11, 1984, citing

« S86 6

109a

Bruton v. United States, 391 U.S.

123, 143 (1968) (White, Jer

dissenting). He argues that he must be

allowed to present an unredacted

version of his statement or have his

trial severed from that of Mr. Zheng.

At oral argument, however, the

government agreed to attempt to arrive

at a more limited form of redaction

which will prove satisfactory to Mr.

Yeung and yet protect the sixth

amendment rights of defendant Zheng.

Pending the submission of such proposed

redaction and an opportunity for the

pertinent parties to be heard on it,

the court reserves on this motion,

110a

The government is directed to

submit an order in conformity with this

opinion.

H. Lee Sarokin, U.S.D.J.

Date: May 23, 1984

Original to Clerk, U.S. District Court

Copy to: Harvey Weissbard, Esq.

Robert E. Margulies, Esq.

John D. Arseneault, Esq.

Robert Fettweis, Esq.

Gerald D. Miller, Esq.

Susan V. Tipograph, Esq.

a 69 «

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FOOTNOTES

(Fn 1) This motion was made and

briefed by defendant Zheng and joined

in by the other defendants.

(Fn 2) The court notes that such

article, of course, has limited

credibility, especially because it

begins by stating that the State

Department has delayed the instant

case, which is simply not true.

(Fn 3) Defendants argue that the

fact that the list denominates generic

categories, rather than particular

items, violates the statute, which

requires the President "“to designate

those items which’ shall be considered

as defense articles ..." 22 U.S.C.

section 2778(a). This may be true.

However, unless such generic categories

render the statute vague, such

violation does not comprise a ground

for dismissal of the indictment. Nor

would defendants have standing to raise

such violation as a basis for dismissal

independent of their vagueness

challenge.

(Fn 4) This motion was’ made and

briefed by defendants Zheng and Lin,

and joined in by the remaining

defendants.

(Fa 3) 22 U.S.C. section 1934

(repealed).

l12a

(Fn 6) Curtiss-Wright has been

seen as an effort to “get around Panama

and Schecter" in order to conclude that

"Congress could in the foreign affairs

field make a delegation to the

executive which in the domestic field

would be unconstitutional." United

States v. Butenko, 494 F. 2d 593, 630

(3d Cit. 1974) (Gibbons, J.

dissenting in part). Judge Gibbons

joins other commentators in criticizing

this holding, see Lofgren, United

States v. Curtiss-Wright Corporation:

An Historical Reassessment, 83 Yale

LJ. l1 (1973), and this court might

not apply this doctrine were it pushed

to its outer limits. This case does

not, however, do so.

(Fn 7) The motion to dismiss was

made and briefed by defendant Lin and

joined in by the other defendants.

Bills of particulars were requested by

defendants Yeung and Tsai.

(Fn 8) Defendant Zheng made and

briefed the motion regarding violation

of the due process clause. All other

defendants have, however, joined in

such motion.

(Fn 9) There is no indication that

defendant did not receive timely notice

of such subpoena.

(Fn 10) Regardless of the outcome

of the hearing requested by defendant

Zheng, suct: statement would be

admissible ter impeachment purposes.

Harris v. New York, 401 U.S. 222

(1971).

» $4 «

, ea

ll3a

APPENDIX IV

ORIGINAL FILED

OCTOBER 4, 1984

ALLYN Z. LITE

CLERK

UNITED STATES DISTRICT COURT

DISTRICT OF NEW JERSEY

UNITED STATES OF : Criminal Action No.

AMERICA . : 84-64

Plaintiff, OPINION

Ve Criminal No. 84-64

DA-CHUAN ZHENG,

KUANG-SHIN

DAVID TSAI,

ALLEN YEUNG, and

JING-LI ZHANG,

Defendants.

LIN,

KWONG

SAROKIN, District Judge

This matter is before the court on

the government's motion for reconsider-

ation of

Opinion

dismissing

defendants

to violate

the court's July 26, 1984

and Order ("Opinion")

an indictment charging

with one count of conspiracy

the Arms Export Control Act,

llda

22 U.S.C., Section 2778 ("the Act") (Fn

1), by arranging for the unlicensed

export of radar jamming devices, known

as wave tube amplifiers, to the

People's Republic of China. The

court's ruling was based upon the Act's

requirement that those "defense

articles and defense services" subject

to import and export controls. be

designated as “items" on the United

States Munitions List, 22 C.F.R.

Section 121.01 et seg. The court held

that the section of the Munitions List

which the government Claimed

encompassed wave tube amplifiers failed

to designate "items" and, instead,

named the "category" "active and

passive countermeasures and counter-

countermeasures." 22 C.F.R. Section

121.01, Category XI(a) (1). The court

thus found such category to be beyond

the scope of the Act and as such, a

115a

nullity not capable of supporting an

indictment.

The court's analysis proceeded in

three stages. First, the court held

that "there is no question but that the

term ‘countermeasure’ does not

constitute an ‘item.'" Opinion at 4.

Even read in context, Opinion at 4-5

and n.3 (Fn 2), “countermeasures” did

not fall within the dictionary

definition of the term “item.” Thus,

the court found that common” sense

dictated that

"Countermeasures" is simply

too broad a description to be

considered an “item;"* to

require greater specificity

is not to mandate undue

particularization, but to

require the Executive merely

to promulgate a list of

"items" in conformity with

the Act.

Opinion at 6. That the government

specifically listed wave tube

li6a

amplifiers elsewhere in the Code of

Federal Regulations, see, e.g., 14

C.F.R. Section 171.323, and created a

Munitions List sufficiently specific in

many other respects demonstrated to the

court that wave tube amplifiers could

have been properly listed without

undermining the necessary flexibility

of the Munitions List. Opinion at 7-8.

Second, the court held that the

language of the Act mandated the

listing of "items" and thet this

language, as well as the legislative

history underlying it, made clear that

such mandate was consistent with the

purposes of the Act. Thus, in contrast

to the Export Administration Act, the

Arms Export Control Act required the

specification of "items" in order to

effectuate the more rigorous oversight

of the Executive mandated by Congress.

117a

Opinion at 9-10. Together, these two

Acts were meant to impose import and

export control on only those articles

appropriately regulated, and to make

clear to exporters and importers

precisely what those articles were.

The use of the term “items" in the Arms

Export Control Act accomplishes this

purpose and was a choice made by

Congress in passing such Act, and

repealing its predecessor. Opinion at

ll-13.

Finally, the court held that,

because the Executive had failed to

adhere to the statutory mandate of the

Act by denominating “categories” rather

than "items" on the Munitions List,

such action was deemed a nullity and

could not support a prosecution. For

this reason, the indictment was to be

dismissed,

ee

118a

In its motion for reconsideration,

the government does not address the

first or third prongs of the court's

analysis (Fn 3). Rather, for the first

time, it confronts the legislative

history of the Act, arguing that the

court's analysis is erroneous in three

respects. Primarily, the government

directs itself to a single footnote in

the court's Opinion, arguing tht he

court erred in concluding thet Coiigress

meant to require greater specificity

when it passed the Act, and thus

changed the statutory basis for the

Munition's List. See Government's

Brief at 3-6, citing Opinion at 13 n.6.

Second, the government contends that it

was inappropriate for the court “to

engraft onto the Arms Export Control

Act the legislative history for the

Export Administration Act," in part

because the two Acts “were not even

119a

enacted by the same Congress."

Government's Brief at 6-7. And third,

the government argues that Congress

achieved sufficient oversight of the

Munitions List by requiring that the

Executive comply with “srious reporting

requirements set fo-th in the Act;

hence, “a more particularized Munitions

List would add nothing to the

legislative capacity to oversee the

arms exportation process. Fer purposes

of congressional oversight, then, the

terminology of the Munitions List is

irrelevant." Government's Brief at 8.

The court finds these contentions

to be without merit and therefore

denies the government's motion for

reconsideration. The government has

not persuaded the court that it erred

in holding that Congress meant “items”

when it repeatedly said "items" in the

FE

aetna at tala aa laa ae

120a

Act. See 22 Pate Ge Sections

2776(a) (4), 2778(a) (1), 2778(£). Of

course, *the Starting point for

interpreting a statute is the language

of the statute itself. Absent a

clearly expressed legislative intention

) to the contrary, that language must

ordinarily be regarded as conclusive."

Consumer Products Safety Commission v.

GTE Syivania, Inc., 447 U.S. 102, 108

(1980). Nonetheless, the government

argues that when Congress stated, for

example, that "“(t)he President is

authorized to designate those items"

which would constitute the United

States Munitions List, it implicitly

allowed the President to designate

categories as well. This argument

disregards the lanauage of the Act,

language which, the court must assume,

was meant to be given full effect, see,

e.g-, Reiter v. Sonotone Corp., 442

121la

U.S. 330, 339 (1979), citing United

States v. Menasche, 348 U.S. 528,

538-39 (1955), and should be strictly

construed, particularly where criminal

Sanctions are at issue. See, e.g.,

Adamo Wrecking Co. v. United States,

434 U.S. 275, 285 (1978), citing

United States v. Bass, 404 U.S. 336,

348 (1971).

Moreover, the court beieves’ that

the legislative history relied upon

Supports its position. The government

does not dispute that, in enacting the

Act in 1976, Congress added the word

"items" to the Statute, thereby

distinguishing such statute from its

predecessor. 22 U.S.C. Section 1934.

See Opinion at 13 n.6. ("In any event,

the change in the statute reveals an

intentional movement to the word ‘item’

in 1976.") However, it attacks’ the

122a

court's conclusion that such change was

meaningful, arguing that the language

and history of the Act make clear that

Congress did not intend, by its

passage, to require particularization

of the Munitions List. Thus, the

government argues that Congress

explicitly continued the existing

Munitions List in full force and

effect. Indeed, Section 212(b) (2) of

All determinations, authori-

zations, regulations, orders,

contracts, agreements and

other actions issued,

undertaken, or entered into

under (22 U.8.0. Section

1934, the predecessor of the

Act) shall continue in full

force and effect until

modified, revoked, or

superseded by appropriate

authority.

It is true, as the government argues,

that this language alone does not state

that the new Munitions List was

necessarily to be more particularized

123a

than that which preceded it. However,

Section 212(b)(2) clearly anticipates

that the Munitions List, and/or other

regulations issued pursuant to the

Mutual Security Act of 1954, 22 U.S.C.

Section 1934, would change as a result

of the passage of the Arms’ Export

Control Act. Such changes might occur

by virtue of changes in the language of

the latter Act, as the Executive

attempted properly to bring such

regulations into compliance with such

Act. Congress acted so as to insure

continuity in the interim. It could

not, however, have intended that

existing regulations not conforming to

its new enactment be insulated from

review as a result of this clause.

Indeed, such review is explicitly

authorized, and in the exercise of its

"appropriate authority," the court has

performed such review here. The

Oe Te

124a

government's argument that the

Munitions List, with its many

imperfections, see Government's Brief

at 4-5, was to be continued permanently

"in full force and effect,"

notwithstanding express Statutory

language requiring it to change thus

misconceives the purpose and substance

of the savings clause which it quotes.

Congress did not approve of the

existing Munitions List; it simply did

not requre that it be scuttled pending

appropriate legislative, administrative

or judicial action.

The government is also correct

that the legislative history which it

cites does not require a more

particuarized list. Nor, however, does

it stand for the opposite proposition

that, as the government contends,

"Congress intended no substantive

125a

change in the manner in which the

Muntions List up to that time had been

compiled." Government's Brief at 6.

Referring to the Act's substitution of

the term “defense articles and defense

services" for the term "arms,

ammunitions, and implements of war" in

22 U.S.C. Section 1934, the Report of

the Senate Committee on Foreign

Relations stated,

This change is merely

intended to conform (22

U.S.C. Section 2778) to the

style of the other sections

of the Act. It is not

intended to alter the scope

of items subject to export

control, or the extent of

such control, under the

regulations authorized by

this bill.

S. Rep. No. 94-876, 94th Cong., 2d

Sess. (1976) at 42, cited in

Government's Brief at 5-6. This

Snippet of legislative history does

not assist the court in defining the

126a

term “item,” or in assessing its

importance. Rather, it makes clear

that in changing the language of the

Act, no change in the types of items

which were to comprise the Munitions

List was intended. Indeed, this

quotation does not mention the

conspicuous addition of the word

"items" to the Act, except to utilize

such word precisely as does the Act

(Pn 3).

The court remains convinced that

such addition was not coincidental;

its decision strove, therefore, to

give the meaning to the term "item"

that was intended by Congress. In

gleaning this meaning, the court

relied primarily upon the ordinary

definition of the term. However, the

court recognized that this “need not

end the inquiry,” and went beyond such

127a

"plain meaning” to ascertain the

purposes behind Congess' actions.

See, e.g., Watt v. Alaska, 451 U.S.

259, 265-66 (1981). In so doing, it

compared the Arms Export Control Act

with the Export Administration Act, a

comparison which the government labels

inappropriate. ee Government's Brief

at 6 (Fn 6).

Such cy. »arison was not one that

was fabricated by the court. In fact,

the Export Administration Act amended

the Arms Export Control Act to bring

the two into line. As the court

noted, the Export Administration Act

explicitly stated

The authority granted to the

President in this Act shall

be exercised in such a

manner as to achieve

effective coordination with

the authority exercised

under section 38 of the Arms

Export Control Act (22

U.8.6. 2778).

128a

50 J.$8.C. App. Section 2416(b),

cited in Opinion at 11. The Arms

Export Control Act was amended

accordingly. 22 U.S.C. Section

2778(e). And, when the Act was again

amended in 1981, further coordination

with the Export Administration Act was

explicitly effected. See 22 U.S.C.

Section 2778(f£) (reports to Congress

regarding items no longer warranting

controls “shall describe the nature of

any controls to be imposed on that

item under the Export Administration

Act of 1979..."). In light of this

express language of coordination, it

matters little that, as the government

argues, *(t)he two statues, after ail,

were not even enacted by the same

Congress." Government's Brief at 6-7.

See, e.g., Oscar Meyer & Co. Ve

Evans, 441 U.S. 750, 756 (1979)

(interpreting Title VII of the Civil

129a

Rights Act of 1964 and the Age

Discrimination in Employment Act of

1967 #4xin pari materia), citing

Northcross Vv. Memphis Board of

Education, 412 U.S. 427, 428 (1973).

See generally 2A Sands, supra, Section

51.02 at 290 ("...it is assumed that

whenever the legislature enacts a

provision it has in mind previous

Statutes relating to the same subject

matter, wherefore it is held that in

the absence of any express repeal or

amendment therein, the new provision

was enacted in accord with the

legislative policy embodied in those

prior statutes, and they should all be

construed together.") See also

Commonwealth of Pennsylvania Vv.

Department of Health and Human

Services, 723 F.2d 1114, 1119 (3d Cir.

1983) ("statutory provisions enacted

at different times should be read as

130a

harmoniously as possible, so that each

is given effect and the provisions do

not conflict") (citing cases).

The court utilized a comparison

between the Export Administration Act

and the Arms Export Control Act to

Clarify the purposes of the latter.

Thus, the court noted that the Acts

were dissimilar in that the Arms

Export Control Act involved more

rigorous oversight of executive

actions thereunder by Congress. It

found that the inclusion of the term

"items" in the Arms Export Control Act

but not in the Export Administration

Act was consistent with this

Gistinction and concluded that, by

including the term “items," Congress

intended to enhance the effectiveness

of such oversight. Viewed this way,

failure to name *items" is a material

l3la

breach of the Act. See Opinion at 10

(Fn 7).

Such comparison also made clear

that the term “items" was meant to

increase the quality of the notice

provided by the Act, and thereby to

"remove unnecessary barriers to

exporting goods which might arise from

the chilling effect that necessarily

attends less clear regulation.”

Opinion at 13-14. Such a reading was

consistent with the purposes of the

Export Administration Act, which

purposes were incorporated into the

Arms Export Control Act by the

amendment thereto, or which, to the

extent they conflicted with the

latter, were most recent and thus,

prevailed. See Watt Vv. Alaska,

Supra, 451 U.S. at 266-67, citing 2A

Sands, supra, Section 51.02. The

l32a

court thus continues to believe that

Congress intended, and continues to

intend, to maximize the notice given

to potential arms dealers, and that

the term “items" was one means of

accomplishing this goal.

The government's motion for

reconsideration must therefore be

denied, for it fails to persuade the

court that the court erred in holding

that Congress meant what it said and

said what it meant. The language of

the Act cannot be disputed. Extrinsic

“aiés to its interpretation make clear

that Congress did not act

inadvertently in adding the term

"items," but meant to change the law

with particular purposes in mind. In

ignoring the language of the Act, the

Executive has undermined these

purposes and exceeded his authority.

133a

His actions do not, therefore, acquire

the ferce of law; much less may they

give rise to criminal liability.

The government's motion for

reconsideration is denied. An

appropriate order will issue.

H. LEE SAROKIN,

U.S.D.J.

Date: October 4, 1984

Original to Clerk, U.S. District Court

Copy to: Harvey Weissbard, Esq.

Robert E. Margulies, Esq.

John D. Arseneault, Esq.

Robert Fettweis, Esq.

Gerald D. Miller, Esq.

Susan V. Tipograph, Esq.

134a

FOOTNOTES

Fn 1. In its Opinion, the court often

referred to the Act as the Arms Control

Export Act. The proper designation is

the Arms Export Control Act.

Fn 2. The government appears to argue

that the Court did not consider the

term "active and passive counter-

measures and counter-countermeasures"

in context. See Government's Brief at

2, mn.l. In fact, the court's Opinion

specifically states that such term

comprises a category even where

"limited to... ‘Military and Space

Electronics’ and even read in the

context of the paragraph in which it

appears." Opinion at 4. That part of

the paragraph not quoted by the court

adds little to the context, so

described.

Fn 3. The government has previously

argued that countermeasures are

sufficiently “items” within the meaning

of the Act and that defendants lack

Standing to raise the instant issue

because of their alleged knowledge of

the illegality of their actions.

Defendant Zheng argues, with some force

and justification, that the govern-

ment's failure to raise the issues

breught before the court on this

application renders this application

procedurally inappropriate. The Court

will nonetheless address the

government's concerns, in the interests

of finally disposing of this matter on

its legal merits.

135a

Fn 4. This provision apparently has

not been made ae part of the United

States Code. It can be found in the

annotations to 22 U.S.C. Section 1934.

Fn 5. Defendant Zheng argues that the

"itemization" of the Munitions List was

contemplated even by the predecessor of

the Act. See Brief of Defendant Zheng

at 8-9. Indeed, the legislative

history indicates that one purpose of

the Mutual Security Act of 1954 was "to

relieve commercial enterprises of the

burden of unnecessary detail and

redtape required under existing

legislation." See S. Rep. No. 1799,

83d Cong., 2d Sess., quoted in 1954

U.S. Code Cong. & Adm. News 3175,

3268. This goal is consistent with

greater particularization of the

Munitions List. See Opinion at 11-13.

The court believes that in adding the

word "items," Congress sought to

achieve this goal. See United S

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