U.S. v. Bozarov

• Citation: 974 F.2d 1037
• Decision Date: 10 August 1992
• Docket Number: No. 91-50646,91-50646
• Parties: UNITED STATES of America, Plaintiff-Appellant, v. Ognian BOZAROV, Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

Page 1037

974 F.2d 1037

61 USLW 2123

UNITED STATES of America, Plaintiff-Appellant, v. Ognian BOZAROV, Defendant-Appellee.

No. 91-50646.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted July 6, 1992.

Decided Aug. 10, 1992.

Andrew G. McBride, U.S. Dept. of Justice, Washington, D.C., for plaintiff-appellant.

Weyman I. Lundquist, Heller, Ehrman, White & McAuliffe, San Francisco, Cal., for defendant-appellee.

Appeal from the United States District Court For the Central District of California.

Before: SNEED and D.W. NELSON, Circuit Judges, and WANGER, District Judge. ^*

D.W. NELSON, Circuit Judge:

OVERVIEW

The United States appeals the dismissal of its indictment charging Ognian Bozarov with conspiracy to violate the Export Administration Act of 1979 (EAA or Act), 50 U.S.C.App. § 2401 et seq., for his role in a scheme to transport computer disc manufacturing equipment to Bulgaria. The district court dismissed the indictment based on its determination that the EAA was unconstitutional under the nondelegation doctrine because it delegated to the Secretary of Commerce legislative authority to control exports and prohibited judicial review of the Secretary's decisions. We reverse the decision of the district court because we believe that the Act's preclusion of judicial review does not violate the nondelegation doctrine. Because we interpret the Act to permit courts to review colorable constitutional challenges to the Act and claims that the Secretary has acted completely outside the scope of his delegated powers, we conclude that the EAA satisfies constitutional requirements.

FACTUAL AND PROCEDURAL BACKGROUND

The Export Administration Act

The EAA authorizes the executive branch to impose export controls for reasons of national security, foreign policy, or domestic short supply. 50 U.S.C.App. §§ 2402(2), (10) and 2404-06. Congress delegated substantial authority under the Act to the Secretary of Commerce. In particular, the EAA requires the Secretary to establish and maintain a Commodity Control List (CCL) and to issue validated licenses for the export of listed goods and technologies.

The Act contains an elaborate set of criteria and internal procedures which governs the Secretary's imposition of export controls. 50 U.S.C.App. § 2403. For example, the Secretary must make a determination as to the foreign availability of the goods and consider whether the goods are being restricted pursuant to a multilateral agreement. 50 U.S.C.App. §§ 2403(c), 2404(e). Additionally, controls imposed for reasons of national security must be compiled in coordination with other Departments and agencies and be coordinated with allies through international negotiations with the Coordinating Committee for Multilateral Export Controls (COCOM). 50 U.S.C.App. § 2404(c)(3). The Secretary The EAA also contains detailed procedures for the processing of applications for validated export licenses for goods listed on the CCL. 50 U.S.C.App. § 2409. For example, the EAA prescribes time limits for decision, provides procedures for a right of appeal of a denial to the Secretary, and permits an applicant to respond to a denial in writing before a final determination is made. If the Secretary fails to act on an application in a timely fashion, an applicant may seek equitable relief in federal district court. The Secretary's denial of a validated license "shall be final and is not subject to judicial review." 50 U.S.C.App. § 2412(e). Indeed, all functions exercised under the Act are explicitly excluded from judicial review and from the protections of the Administrative Procedure Act (APA). 50 U.S.C.App. § 2412(a). A willful violation of the Act or any regulation, order or license issued thereunder is a felony punishable by fine and/or imprisonment for not more than ten years. 50 U.S.C.App. § 2410(b).

                must periodically review the CCL to reassess the foreign availability of goods and the continuing need for national security controls.   The Secretary must also furnish detailed reports with respect to each item monitored and submit annual reports to Congress concerning the administration of the EAA.   50 U.S.C.App. §§ 2406(b), 2413
                

Bozarov's Alleged Violation of the EAA

Ognian Bozarov is an international trade official who resides in Sofia, Bulgaria. In 1981, while serving as the deputy general manager of a trade organization devoted to developing industry in Bulgaria, Bozarov entered into negotiations with a Dutch company for the purchase of computer disc manufacturing equipment. The Dutch company then contracted with an American company to supply the equipment. Although the American company appears to have submitted an application for an export license, Bozarov alleges that he was eventually told by his American and Dutch partners that the equipment did not require a license. The relevant commodities, however, were indeed listed on the CCL for national security reasons. After the goods were shipped in late 1982 and early 1983, a ten count indictment was issued against Bozarov and four others on November 3, 1983.

Despite the issuance of a warrant for the arrest of all the defendants, Bozarov was apparently never notified of the charges against him by the United States Attorney. He learned of the indictment only when the International Trade Association issued a temporary order denying all export privileges to Bozarov and his co-defendants. Bozarov protested the order on the grounds that he had not been a party to any conspiracy and had acted in good faith. In 1986, Bozarov's export privileges were restored by an administrative law judge in the Commerce Department. Apparently under the impression that the charges against him had been resolved in his favor by this decision, Bozarov applied for and was granted a visa to travel to the United States to accept an international trade award. This 1990 trip to Puerto Rico was completed without incident. In December 1990, Bozarov was selected to host a trade delegation in San Francisco and again obtained a travel visa from the United States embassy in Bulgaria. Bozarov was arrested when he arrived in San Francisco.

On January 4, 1991, Bozarov entered a plea of not guilty. On May 20, Bozarov filed a motion to dismiss the indictment, arguing that the EAA's preclusion of judicial review violated the constitutionally mandated separation of powers and the due process clause of the Fifth Amendment. After briefing and hearings, the district court rendered its decision in a telephone conference call on June 11. The district court concluded that because the EAA precluded judicial review, the Act was an unconstitutional delegation of legislative power to the Executive. The judge based his decision in part on the Supreme Court's recent decision in Touby v. United States, --- U.S. ----, 111 S.Ct. 1752, 114 L.Ed.2d 219 (1991), finding implicit in the majority's reasoning the principle that "judicial review perfects a delegated law-making scheme by assuring that the exercise of such power remains within statutory bounds." The district court also rejected

                the government's argument that preclusion of judicial review under the EAA was constitutional, even if review was otherwise required under the nondelegation doctrine, because the Secretary's decisions under the Act constituted nonjusticiable political questions.   The court reasoned that application of the political question doctrine presupposes the constitutionality of the underlying statute.   Because he found the Act unconstitutional under the nondelegation doctrine, the district judge did not consider Bozarov's due process argument.   The district court then dismissed the indictment.   This appeal followed
                

STANDARD OF REVIEW

All the questions presented on this appeal are pure questions of law subject to de novo review. United States v. McConney, 728 F.2d 1195, 1201 (9th Cir.) (en banc), cert. denied, 469 U.S. 824, 105 S.Ct. 101, 83 L.Ed.2d 46 (1984).

DISCUSSION

I. Bozarov's standing to challenge the constitutionality of the EAA

As a preliminary matter, the government argues that Bozarov's failure to pursue administrative avenues for relief means that he cannot now challenge the statute's preclusion of judicial review. We disagree. First, Bozarov did not realize that he was an "exporter" who needed to seek a license, and because he did not seek a license he had no adverse decision to appeal through the EAA's review procedures. Second, raising a constitutional challenge before the agency would have been a futile exercise because an agency has no authority to declare its governing statute unconstitutional. The Supreme Court has recognized that "[c]onstitutional questions obviously are unsuited to resolution in administrative hearing procedures and, therefore, access to the courts is essential to the decision of such questions." Califano v. Sanders, 430 U.S. 99, 109, 97 S.Ct. 980, 986, 51 L.Ed.2d 192 (1977). We have thus ruled on constitutional challenges to statutes even when the challenge was not raised in an earlier administrative proceeding. See, e.g., Reid v. Engen, 765 F.2d 1457, 1461 (9th Cir.1985). ¹

The government also contends that Bozarov is not entitled to bring a facial challenge to the EAA because doing so requires him to raise the claims of third parties. We reject this argument. A defendant in a criminal proceeding is entitled to "insist that his conduct be judged in accordance with a rule that is constitutionally valid." Monaghan, Overbreadth, 1981 Sup.Ct. Rev. 1, 8; accord P. Bator, D. Meltzer, P. Mishkin, & D. Shapiro, Hart & Wechsler's The Federal Courts and the Federal System 166 (3rd ed. 1988). Thus, in INS v. Chadha, 462 U.S. 919, 935-36, 103 S.Ct. 2764, 2775-76, 77 L.Ed.2d 317 (1983), the Court permitted Chadha to raise separation-of-powers claims even though they reflected the interests of the executive branch, rather than Chadha's own private interests. The Court required only that Chadha demonstrate "injury in...