Walsh v. Brady, 89-5429

• Citation: 927 F.2d 1229
• Decision Date: 15 March 1991
• Docket Number: No. 89-5429,89-5429
• Parties: Daniel J. WALSH d/b/a Liberation Graphics, Appellant, v. Nicholas F. BRADY, Secretary of Treasury, et al.
• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)

Page 1229

927 F.2d 1229

288 U.S.App.D.C. 374

Daniel J. WALSH d/b/a Liberation Graphics, Appellant, v. Nicholas F. BRADY, Secretary of Treasury, et al.

No. 89-5429.

United States Court of Appeals, District of Columbia Circuit.

Argued Oct. 26, 1990.

Decided March 15, 1991.

Appeal from the United States District Court for the District of Columbia (Civil Action No. 89-01112).

Kate Martin, Washington, D.C., for appellant.

Michael J. Singer, Atty., Dept. of Justice, with whom Stuart M. Gerson, Asst. Atty Gen., Jay B. Stephens, U.S.Atty., and Mark B. Stern, Atty., Dept. of Justice, Washington, D.C., were on the brief, for appellees.

Before BUCKLEY, WILLIAMS and THOMAS, Circuit Judges.

Opinion for the Court filed by Circuit Judge STEPHEN F. WILLIAMS.

Concurring opinions filed by Circuit Judges BUCKLEY and STEPHEN F. WILLIAMS.

STEPHEN F. WILLIAMS, Circuit Judge:

Doing business as Liberation Graphics, Daniel J. Walsh imports political posters from around the world. In 1988 he wished to make a business trip to Cuba to arrange to import Cuban posters. Americans' transactions with Cuba and its nationals are regulated, however, by the Cuban Assets Control Regulations. 31 CFR Part 515 (1990). ¹ These originated with the complete embargo on trade with Cuba proclaimed by President Kennedy nearly 30 years ago, see Proclamation No. 3447, 27 Fed.Reg. 1085 (1962), and are based on the Trading With the Enemy Act, itself enacted at our entry into World War I, see 40 Stat. 411 (1917). The regulations limit such transactions for many purposes, including both trade and travel, although subject to many exceptions. Walsh applied for a license to make payments for his travel. Despite a 1988 amendment barring the Act's use to prohibit or regulate the importation of informational materials such as posters, see 50 U.S.C.App. Sec. 5(b)(4) (1988), the Secretary of the Treasury denied the application. Walsh challenged the travel payment restrictions in district court as violative of the 1988 statute and the Constitution. The court upheld the regulations as applied to Walsh, 729 F.Supp. 118 (D.D.C.1989), and we affirm.

I

The primary purpose of the disputed regulations is to stop the flow of hard currency from the United States to Cuba. See 47 Fed.Reg. 17,030 (1982) (tightening the regulations "to reduce Cuba's hard currency earnings from travel by U.S. persons to and within Cuba"). Although Congress in 1977 limited most uses of the Act to wartime situations, it grandfathered the authority for the Cuban trade embargo. International Emergency Economic Powers Act, Pub.L. No. 95-223, Sec. 101(b), 91 Stat. 1625 (1977). Under the grandfather clause, the President may continue the exercise of these powers with respect to Cuba only if he annually certifies that doing so is in the national interest; successive presidents have so certified since 1978. See, e.g., 54 Fed.Reg. 37,089 (Sept. 7, 1989).

Until 1988 the regulations nominally allowed the importation of informational materials from Cuba but in reality banned it by requiring that the importers make payment into blocked U.S. accounts. See 31 CFR Sec. 515.545 (1987). The 1988 amendment, however, sought to remove this ban:

The authority granted to the President in this subsection [Sec. 5(b) of the Act] does not include the authority to regulate or prohibit, directly or indirectly, the importation from any country, or the exportation to any country, whether commercial or otherwise, of publications, films, posters, phonograph records, photographs, microfilms, microfiche, tapes, or other informational materials....

Pub.L. No. 100-418, Sec. 2502(a), 102 Stat. 1107, 1371 (1988) (codified at 50 U.S.C.App. Sec. 5(b)(4) (1988)) (emphasis added).

In response, the Secretary amended the regulations to permit "[a]ll financial and other transactions directly incident to the physical importation ... of informational materials." 54 Fed.Reg. 5234 (1989); see 31 CFR Sec. 515.206 (1990). The Secretary agrees that the 1988 amendment allows an importer such as Walsh to pay for "the direct costs of importing posters into the United States, e.g., expenditures for the posters' purchase, packing, insurance, and shipping." Letter from R. Richard Newcomb Director, Office of Foreign Assets Control, Department of the Treasury to Kate Martin (Dec. 1, 1988).

The Secretary decided, however, that the 1988 Amendment did not require any changes to the regulations concerning payments for travel expenses. See 31 CFR Sec. 515.206(e) (1990) ("This section does not authorize transactions related to travel to Cuba when such travel is not otherwise authorized under Sec. 515.560 or by specific license."); see also id. Sec. 515.560(a)(3) (denying authorization for transactions related to general business and tourist travel). According to the Director of the Treasury Department's Office of Foreign Assets Control, "Such travel was considered too tangential to the actual physical importation and exportation of informational materials to fall within the language of the [1988 amendment]." Newcomb Declaration p 6.

Walsh states that he wishes to travel to Cuba "for the sole purpose of arranging for the importation of Cuban posters to the United States," and that "it is indispensable that I travel to Cuba in order to make the necessary agreements and technical, financial and transportation arrangements." He claims that before he can enter into a sensible major business contract, it is necessary for him to view not only the posters but also the production capabilities of Cuban poster makers and the quality of their paper, ink, colors, and printing techniques. He also wants to meet personally and to negotiate face-to-face with Cuban poster artists, publishers and exporters. He has made trips for similar purposes throughout Europe and to the Soviet Union, Lebanon, Nicaragua and Egypt. The district court found, for purposes of summary judgment, that "Walsh has established that travel to a foreign country is a normal and perhaps a necessary incident on occasion, as in the case of Cuba, to arrange for imports of political posters into the United States." 729 F.Supp. at 120.

Walsh argues that the regulations exceed the scope of the authority provided by the Act and burden his right of free speech in violation of the First Amendment. Because the regulations contain exceptions for activities such as newsgathering, he also claims a violation of the equal protection component of the Fifth Amendment's due process clause. See Bolling v. Sharpe, 347 U.S. 497, 74 S.Ct. 693, 98 L.Ed. 884 (1954).

II

First we must address Walsh's argument that the Secretary's interpretation of the 1988 amendment is not entitled to any deference under Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). His theory is that deference is not due "when instead of delegating authority to an agency, a statute prohibits it from acting," Reply Brief for Appellant at 8, and he cites various cases in the ongoing debate over whether Chevron applies to "jurisdictional" provisions. Compare Mississippi Power & Light Co. v. Mississippi ex rel. Moore, 487 U.S. 354, 380, 108 S.Ct. 2428, 2443, 101 L.Ed.2d 322 (1988) (Scalia, J., concurring) (attacking the distinction between limits on authority and limits on application of authority) and Dole v. United Steelworkers of America, 494 U.S. 26, 110 S.Ct. 929, 944, 108 L.Ed.2d 23 (1990) (White, J., dissenting) (adopting Justice Scalia's analysis) with Mississippi Power & Light, 487 U.S. at 386-87, 108 S.Ct. at 2446-47 (Brennan, J., dissenting) (arguing against deference); see also Business Roundtable v. SEC, 905 F.2d 406, 408 (D.C.Cir.1990) (noting that the "Supreme Court cannot be said to have resolved the issue definitively"); New York Shipping Ass'n v. Federal Maritime Comm'n, 854 F.2d 1338, 1363 (D.C.Cir.1988) (alternative holding giving no deference).

Assuming that one can identify an intelligible class of cases that could be excluded from Chevron as "jurisdictional", we do not believe that the mere use of a negative brings a clause within that class. The appearance of a statutory negative is typically no more than an accident of draftsmanship or language. Compare Continental Can Co. v. Chicago Truck Drivers, Helpers & Warehouse Workers Union (Independent) Pension Fund, 916 F.2d 1154, 1159 (7th Cir.1990). If "automobiles" in ordinary parlance consist of passenger cars, light trucks, and vans, and Congress wants an agency to be able to reach the first two but not the third, it can either speak affirmatively of cars and light trucks, or it can use the generic term and exclude vans. The choice should make no difference in determining the scope of the agency's authority to draw a line between light trucks and vans.

The Supreme Court is clearly not bemused by congressional use of a negative. In Chemical Manufacturers Ass'n v. NRDC, 470 U.S. 116, 105 S.Ct. 1102, 84 L.Ed.2d 90 (1985), it construed Sec. 301(l ) of the Clean Water Act, an explicit restriction on the Environmental Protection Agency's power: "The [EPA] Administrator may not modify any requirement of this section as it applies to any specific pollutant which is on the toxic pollutant list under section 307(a)(1) of this Act." 91 Stat. 1566, 1590 (1977) (codified at 33 U.S.C. Sec. 1311(l ) (1988)) (emphasis added). In a conflict over the effect of the clause on the EPA's power to grant a specific type of variance from effluent limitations promulgated under Sec. 301, the Court invoked Chevron, found that "modify" had no plain meaning in the context, and accepted the EPA's interpretation as permissible. See also Mississippi Power & Light, 487 U.S. at 380-81, 108 S.Ct. at 2443-44 (Scalia, J., concurring) (citing Chemical Manufacturers for the proposition that Chevron deference applies "to an agency's interpretation of a statute designed to confine its authority"); Michigan Citizens for an Independent Press v. Thornburgh, 868 F.2d 1285, 1292-93 (D...