McKinney v. United States Dept. of Treasury

Decision Date23 July 1985
Docket NumberCourt No. 84-9-01320.
Citation614 F. Supp. 1226
PartiesRepresentative Stewart B. McKINNEY, et al., Plaintiffs, v. UNITED STATES DEPARTMENT OF the TREASURY, et al., Defendants.
CourtU.S. Court of International Trade


Washington Legal Foundation (Daniel J. Popeo and Paul D. Kamenar, Washington, D.C.), for plaintiffs.

Richard K. Willard, Acting Asst. Atty. Gen., David M. Cohen, Director, Dept. of Justice, Commercial Litigation Branch, Washington, D.C. (Velta A. Melnbrencis, New York City), for defendants.

Memorandum Opinion and Order

DiCARLO, Judge.

Members of Congress, a shareholder, a labor union, and five organizations seek to exclude from entry into the United States various products mined, produced, or manufactured in the Union of Soviet Socialist Republics (Soviet Union) allegedly by convict, forced, or indentured labor (forced labor).1

Defendants move to dismiss the action alleging plaintiffs lack standing and the action is moot. The motion is granted.


In February 1983, the United States Department of State sent to the Congress its Report on Forced Labor in the U.S.S.R. accompanied by a letter by the Under Secretary of State for Political Affairs stating that forced labor is used "to produce large amounts of primary and manufactured goods for both domestic and Western export markets."2

In September 1983, the Commissioner of Customs (Commissioner), citing the State Department report and congressional and public concern, sought approval from the Secretary of the Treasury (Secretary) to publish in the Federal Register a finding that certain products from the Soviet Union may be produced by forced labor making them ineligible for entry into the United States pending a final determination pursuant to section 307 of the Tariff Act of 1930, 19 U.S.C. § 1307 (1982), and section 12.42, Customs Regulations, 19 C.F.R. § 12.42 (1982).

In substance, section 307 prohibits importation of products produced in whole or in part by forced labor unless domestic production is insufficient to meet United States consumption demands for these products.3

In May 1984, the Secretary responded to the Commissioner in a letter which stated in part:

I have decided that no determination of any kind is warranted at this time. As you are aware, the Senate Finance Committee has directed the International Trade Commission to review this matter in depth. I think it necessary, given the current paucity of reliable information, to withhold any determination until we have the benefit of the International Trade Commission's study.4

On May 23, 1984, eighty-four members of Congress, including some of the congressional plaintiffs in this action, with plaintiffs Washington Legal Foundation, Union Mutual Foundation, and Constitutional Institute of America, petitioned the United States Customs Service (Customs) to bar importation of goods produced in the Soviet Union wholly or in part by forced labor.

The petitioners requested the Commissioner to:

exercise your duty under 19 C.F.R. § 12.42(e)5 that does not require the approval of the Secretary, namely, to "promptly advise all district directors" that the information provided here and that is otherwise in your possession "reasonably but not conclusively indicates that merchandise within the purview of section 307 is being, or is likely to be, imported...." The district directors shall then have the nondiscretionary duty to detain such goods and "withhold release of any such merchandise pending instructions" from you as to the further disposition of such goods. In other words, if you have already made an affirmative finding under § 12.42(f) that is awaiting Secretary Regan's approval, you have necessarily made the "reasonable" finding under § 12.42(e) and your duty is to so inform the district directors. emphasis in original6

In June, 1984, the Assistant Secretary for Enforcement and Operations of the Treasury (Assistant Secretary), wrote the petitioners, stating in part:

As you are no doubt aware, Commissioner von Raab already has made a proposed preliminary finding in this matter. However, because of the substantial foreign policy implications of implementing immediately a preliminary finding, Commissioner von Raab forwarded his preliminary determination to the Treasury Department for approval. The affect of this was to telescope a two-step process into a single step in which the Secretary would determine whether there is sufficient evidence to warrant a prohibition on the entry of certain goods as required by Section 1307.7

The Assistant Secretary enclosed a copy of a letter to the Secretary from the Director of the Central Intelligence Agency (CIA) stating that there was insufficient evidence to identify goods produced with forced labor in the Soviet Union or whether any such goods were being imported into the United States. The Assistant Secretary referred to an ongoing inquiry by the International Trade Commission (ITC), and expressed "hope that it will better enable the Secretary to establish a rational basis for making a final determination ... in this matter." The letter concluded "until such time as additional evidence comes to light ... I must respectfully decline to act on your petition...."8

On January 28, 1985 the Secretary determined that (1) the available evidence, including the ITC report issued December 19849 and further information from the CIA,10 provides no reasonable basis to establish a nexus between Soviet forced labor practices and specific imports from the Soviet Union, (2) there presently is no basis upon which to prohibit importation into the United States any goods produced within the Soviet Union, and (3) the Commissioner's recommendation of September 1983, was not adopted.11

Plaintiffs filed this action September 26, 1984, alleging that the denial of their May 1984 petition constituted final agency action under 5 U.S.C. § 704 (1982)12 which is arbitrary, capricious, contrary to law, an abuse of discretion, and without observance of procedure required by law under 5 U.S.C. § 706(2)(A), (D) (1982).13

Plaintiffs also allege that defendants' failure to deny entry to articles from the Soviet Union which the Commissioner determined in September 1983 may have been made by forced labor was agency action "unlawfully withheld or unreasonably delayed" under 5 U.S.C. § 706(1).

Plaintiffs seek declaratory and injunctive relief.

In December 1984, defendants moved to dismiss the action alleging that plaintiffs lack standing and that the action was not ripe since the Secretary had not made a final determination with respect to the Commissioner's recommendation.

Plaintiffs responded that the action was ripe, saying that "defendants have misperceived the nature of the agency action of which plaintiffs seek review."14 Plaintiffs said they challenge the denial of their petition seeking enforcement of the Commissioner's finding and Customs' failure to withhold release of merchandise named in the Commissioner's finding. With respect to this second allegation, plaintiffs say "this case has been ripe since September 1983."15

Plaintiffs do not challenge the Secretary's January 1985 determination. Their amended complaint, filed February 19, 1985, does not refer to that determination.16 The Secretary is not named as a defendant in either the original or amended complaint.17

Defendants say that the Secretary's January 1985 determination renders the suit moot.

The Court has jurisdiction pursuant to 28 U.S.C. § 1581(i)(3), (4) (1982).18

The remaining parts of this opinion discuss the history and purpose of section 307 and the parties' allegations with respect to standing and mootness.


Section 30719 was preceded by section 51 of the Tariff Act of 1890, ch. 1244, 26 Stat. 567, 624 (1890), which was intended to protect domestic labor from manufactured goods produced by foreign convict labor.20 Amendment was sought to expand the prohibition to include products which were mined as well as manufactured.21 A Senate amendment was offered to extend the provisions to include goods produced by "forced labor or/and indentured labor." Since some members of Congress expressed fear that the humanitarian aims of the amendment22 might harm the American consumer and fail to protect American labor,23 the conference committee on the 1930 Tariff Act added a caveat that the statute would not apply to goods produced by "forced labor or/and indentured labor" which were not produced "in such quantities in the United States as to meet the consumptive demands of the United States."24

Congress intended to protect domestic workers and producers from unfair competition. But this concern as well as any desire to improve foreign labor conditions were clearly subordinate in section 307, as enacted, to concern for the American consumer's access to merchandise not produced domestically in quantities sufficient to satisfy consumer demand.

It is apparent from the statute that importation of a product produced with "forced labor or/and indentured labor" is permissible when United States production is insufficient to satisfy all domestic demand.25 Even if the product is produced in the United States in quantities sufficient to meet most of the domestic consumptive demand for that product, such goods may be imported in any quantity and may not be prevented from entering the United States even if the product is available from a country where it is produced by non-forced labor.


Plaintiffs allege standing under 28 U.S.C. § 2631(i)26 and 5 U.S.C. § 702 (1982).27

The constitutional restriction which limits federal jurisdiction to cases and controversies requires that "the plaintiff must show that he personally has suffered some actual or threatened injury as a result of the putatively illegal conduct of the defendant." Gladstone, Realtors v. Village of Bellwood, 441 U.S. 91, 99, 99 S.Ct. 1601, 1608, 60 L.Ed.2d 66 (1979). "The necessity that the plaintiff who...

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