Empresa Cubana Exportadora De Alimentos Y Productos Varios v. United States Dep't of The Treasury

CourtUnited States Courts of Appeals. United States Court of Appeals (District of Columbia)
Citation638 F.3d 794
Docket NumberNo. 09–5196.,09–5196.
PartiesEMPRESA CUBANA EXPORTADORA DE ALIMENTOS Y PRODUCTOS VARIOS, Doing Business as Cubaexport, Appellantv.UNITED STATES DEPARTMENT OF the TREASURY, Office of Foreign Assets Control, et al., Appellees.
Decision Date29 March 2011

OPINION TEXT STARTS HERE

Appeals from the United States District Court for the District of Columbia (No. 1:06–cv–01692).David H. Bernstein argued the cause for appellant. With him on the briefs were Carl Micarelli and Peter M. Brody.Jonathan H. Levy, Attorney, U.S. Department of Justice, argued the cause for appellees. With him on the brief were Tony West, Assistant Attorney General, U.S. Department of Justice, Ronald C. Machen, Jr., U.S. Attorney, and Douglas N. Letter, Attorney, U.S. Department of Justice.Before: KAVANAUGH, Circuit Judge, and EDWARDS and SILBERMAN, Senior Circuit Judges.Opinion for the Court filed by Circuit Judge KAVANAUGH, with whom Senior Circuit Judge EDWARDS joins.Dissenting opinion filed by Senior Circuit Judge SILBERMAN.KAVANAUGH, Circuit Judge:

First enacted in 1917, the Trading with the Enemy Act authorizes the President, under specified conditions, to impose embargoes on trade with foreign nations. In 1963, acting pursuant to that statute, President Kennedy directed the Department of the Treasury to issue the Cuban Assets Control Regulations. Those regulations prohibit most transactions between American and Cuban persons. The regulations authorize the Secretary of the Treasury to make certain exceptions to the embargo, but the regulations state that any such exceptions “may be amended, modified, or revoked at any time.”

As issued in 1963, the Treasury regulations contained an exception allowing Cuban-affiliated entities to register and renew U.S. trademarks. In 1976, acting under that exception, a Cuban corporation known as Cubaexport registered the trademark HAVANA CLUB with the U.S. Patent and Trademark Office. In 1996, one of Cubaexport's subsidiaries renewed the trademark. But in 1998, Congress modified the exception to the Cuban Assets Control Regulations that had allowed Cubaexport to register and renew its HAVANA CLUB trademark. The 1998 law barred renewals of certain trademarks, including Cubaexport's. As a result, the Department of the Treasury's Office of Foreign Assets Control prohibited Cubaexport from renewing its trademark when the trademark again came due for renewal in 2006.

In this Court, Cubaexport invokes the presumption against retroactivity and argues that the 1998 law should be interpreted to bar only new trademark registrations, not renewals of previously registered trademarks. Cubaexport also contends that, if the 1998 law does bar renewal of previously registered trademarks, then it violates the substantive due process doctrine. We disagree with both arguments. Because the Cuban Assets Control Regulations stated that exceptions were revocable at any time, Cubaexport had no vested right to perpetual renewal of the trademark. Therefore, the presumption against retroactivity does not apply, and we must interpret the 1998 law according to its terms—namely, to bar both new registrations and renewals of previously registered trademarks. Moreover, the 1998 legislation readily satisfies the deferential substantive due process test. Cubaexport raises several other contentions, but they likewise are without merit. We therefore affirm the District Court's judgment against Cubaexport.

I

The Trading with the Enemy Act of 1917 authorizes the President to impose comprehensive economic sanctions on foreign nations in certain circumstances. See 50 U.S.C. app. § 5(b).1 In 1963, pursuant to that Act and President Kennedy's order, the Department of the Treasury issued the Cuban Assets Control Regulations, 31 C.F.R. Part 515. Those regulations prohibit, among other things, transactions by “any person subject to the jurisdiction of the United States” involving property in which Cuba or any Cuban national has “any interest of any nature whatsoever, direct or indirect.” 31 C.F.R. § 515.201.

Under the regulations, exceptions may be “specifically authorized by the Secretary of the Treasury (or any person, agency, or instrumentality designated by him).” Id. Such exceptions may take two forms: A so-called “general license” is a general exception written into the Treasury regulations themselves. A “specific license” is an exception made by the Department of the Treasury for a specific applicant. Id. §§ 501.801, 515.316–.318.

Under the regulations, exceptions are not forever. Since 1963, the regulations have cautioned that any exception to the trade embargo “may be amended, modified, or revoked at any time.” See 28 Fed.Reg. 6974, 6985 (July 9, 1963); see also 31 C.F.R. § 501.803.

This case involves trademarks. As issued in 1963, the Cuban Assets Control Regulations contained an exception allowing Cuban-affiliated entities to register and renew U.S. trademarks. See 28 Fed.Reg. 6974, 6982 (July 9, 1963).

In 1974, Cubaexport—a company owned by the Cuban government—applied to the U.S. Patent and Trademark Office to register the trademark HAVANA CLUB for the sale of rum. In 1976, as a result of the regulatory exception allowing Cuban companies to register U.S. trademarks, the U.S. Patent and Trademark Office approved Cubaexport's application. In 1996, one of Cubaexport's subsidiaries renewed the trademark pursuant to that same exception to the Cuban Assets Control Regulations.

In 1998, however, Congress passed and President Clinton signed a law eliminating the ability of Cuban companies to register or renew certain trademarks. See Omnibus Consolidated and Emergency Supplemental Appropriations Act, 1999, Pub.L. No. 105–277, § 211(a)(1), 112 Stat. 2681. That Act provides:

Notwithstanding any other provision of law, no transaction or payment shall be authorized or approved pursuant to section 515.527 of title 31, Code of Federal Regulations, as in effect on September 9, 1998, with respect to a mark, trade name, or commercial name that is the same as or substantially similar to a mark, trade name, or commercial name that was used in connection with a business or assets that were confiscated unless the original owner of the mark, trade name, or commercial name, or the bona fide successor-in-interest has expressly consented.

As of September 9, 1998, 31 C.F.R. § 515.527 stated:

Transactions related to the registration and renewal in the United States Patent and Trademark Office or the United States Copyright Office of patents, trademarks, and copyrights in which the Government of Cuba or a Cuban national has an interest are authorized.

§ 515.527(a) (emphasis added). Thus, because of the 1998 Act and its reference to 31 C.F.R. § 515.527, Cubaexport's trademark no longer fit within the regulatory exception for trademarks that had existed since 1963. 2 The new law therefore posed a problem for Cubaexport when the HAVANA CLUB trademark came due for renewal in 2006 and Cubaexport tried to renew the mark. The Department of the Treasury's Office of Foreign Assets Control, known as OFAC, informed Cubaexport's counsel that the company was legally barred from paying the fee required to renew the trademark.

Cubaexport then filed suit. Cubaexport contended that the 1998 Act violated the substantive due process doctrine. Cubaexport further asserted that OFAC's decision contravened the procedural requirements of the Due Process Clause and the Administrative Procedure Act, and that OFAC's decisions were arbitrary and capricious under the Administrative Procedure Act. The District Court rejected each claim and granted summary judgment to the Government. We review the District Court's decision of those questions of law de novo.

II

To begin, we think it clear that the 1998 Act bars not just registration of new trademarks but also renewals of previously registered trademarks. The Act specifically applies to “transactions” and “payments.” A renewal is both. A trademark renewal is a transaction. See The American Heritage Dictionary of the English Language (3d ed.1996) (transaction is [s]omething transacted, especially a business agreement or exchange” and to transact is to “do, carry on, or conduct: transact business over the phone; transacting trade agreements”). And a trademark renewal requires a payment. See 15 U.S.C. § 1059 (requiring payment of fee to renew trademark).

Even more to the point, the 1998 Act specifically cross-references section 515.527 of title 31, Code of Federal Regulations, as in effect on September 9, 1998.” The regulation at 31 C.F.R. § 515.527 expressly listed both registrations and renewals as “transactions.”

Therefore, by its terms, the 1998 Act plainly bars both new trademark registrations and renewals of previously registered trademarks. As a result of the 1998 Act, Cubaexport was prohibited from renewing its HAVANA CLUB trademark when it tried to do so in 2006. Invoking the presumption against retroactivity, Cubaexport argues that the 1998 Act bars only the new registration of trademarks, not the renewal of previously registered marks such as Cubaexport's. Alternatively, Cubaexport contends that the 1998 Act contravenes the substantive due process doctrine. We disagree with both arguments.

A

Under the branch of the presumption against retroactivity doctrine that is relevant here, a statute is interpreted not to have retroactive effect if (i) the statute does not clearly specify its temporal scope 3 and (ii) applying the statute retroactively would affect a party's vested rights. See Fernandez–Vargas v. Gonzales, 548 U.S. 30, 37, 126 S.Ct. 2422, 165 L.Ed.2d 323 (2006).4 Cubaexport contends that it acquired a vested right to renewal of the HAVANA CLUB trademark when it first registered the mark in 1976. It argues that the 1998 Act therefore should be construed (notwithstanding its text) to bar only new registrations, not...

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