U.S. v. Holtzman

• Decision Date: 12 March 1985
• Docket Number: No. 84-5531,84-5531
• Citation: 762 F.2d 720
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Yair HOLTZMAN, Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 720

762 F.2d 720

1 Fed.R.Serv.3d 880

UNITED STATES of America, Plaintiff-Appellee, v. Yair HOLTZMAN, Defendant-Appellant.

No. 84-5531.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Sept. 6, 1984.

Decided March 12, 1985.

Maria A. Iizuka, Washington, D.C., for plaintiff-appellee.

J. Eric Isken, Graham & James, Los Angeles, Cal., for defendant-appellant.

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

Before WALLACE, FLETCHER, and REINHARDT, Circuit Judges.

WALLACE, Circuit Judge:

Alonim, formerly Holtzman, appeals from the district court's denial of his motion to vacate a permanent injunction issued in connection with a 1978 judgment that he violated section 203(a)(1) of the Clean Air Act (the Act), 42 U.S.C. Sec. 7522(a)(1) (section 7522(a)(1)). He seeks relief from the injunction to the extent that it prohibits him from importing motor vehicles without prior certification of conformity with the Clean Air Act. The district court exercised jurisdiction under 28 U.S.C. Sec. 1345 and 42 U.S.C. Sec. 7523. We have jurisdiction under 28 U.S.C. Sec. 1291. We reverse and remand.

I

Alonim is in the business of importing for resale foreign-made automobiles not intended for general distribution in the United States. Section 7522(a)(1) prohibits the importation of vehicles into the United States unless they conform to anti-pollution standards set by the Environmental Protection Agency (EPA).

Manufacturers of imported vehicles ordinarily obtain certificates from the EPA acknowledging that their vehicles conform to the standards before they arrive in the United States. These manufacturers do not bother obtaining such certificates, however, for the few specialty imports brought in by businessmen like Alonim. Section 7522(a)(1) allows importation of such vehicles without certificates of conformity if, but only if, they are imported conditionally in accordance with regulations issued by the EPA pursuant to section 203(b)(2) of the Clean Air Act, 42 U.S.C. Sec. 7522(b)(2) (section 7522(b)(2)).

Current regulations allow conditional importation if the importer promises to bring the vehicle into conformity within a specified time. 19 C.F.R. Sec. 12.73(b)(x-xi), (c) (1984); 40 C.F.R. Secs. 85.1504-85.1509 (1983). These regulations also require conditional importers to post a bond to secure compliance. 19 C.F.R. Sec. 12.73(c) (1984). If the importer fails to bring the vehicle into conformity within the prescribed time, the importer must return the vehicle to United States Customs at the port of entry. 19 C.F.R. Sec. 12.73(c) (1984). Failure to do so may result in forfeiture of the bond, id., as well as civil penalties for violation of the Act. 40 C.F.R. Sec. 85.1508 (1983). If the importer brings the vehicle into conformity, the EPA issues final approval to admit the vehicle permanently into the United States. Id. Sec. 85.1504.

In 1978, the district court found that Alonim intentionally violated section 7522(a)(1) by importing eighteen automobiles into the United States that were neither covered by certificates of conformity nor brought into conformity within the specified time. In addition to assessing civil penalties of $22,000 against him, the district court issued a permanent injunction which, among other things, enjoined him as follows:

1. The defendant is permanently enjoined and restrained from importing into the United States any motor vehicle or motor vehicle engine, or selling or offering for sale or introducing or delivering for introduction into commerce any motor vehicle or motor vehicle engine, which is not covered by a certificate of conformity issued by the Administrator of the Environmental Protection Agency of the United States, pursuant to the Clean Air Act as amended, 42 U.S.C. Sec. 1857 et seq. [current version at 42 U.S.C. Sec. 7522 et seq.], unless defendant receives prior notice of the vehicle's or engine's conformity from the Environmental Protection Agency.

2. The defendant is permanently enjoined and restrained from importing any motor vehicles or motor vehicle engines into the United States unless the requirements of 19 C.F.R. [Sec.] 12.73 and 40 C.F.R. [Secs.] 85.1501 through 1509 are strictly adhered to.

In 1979, Alonim consented to entry of a second section 7522(a)(1) judgment, this time for importing thirteen nonconforming vehicles during the period in which the first case was pending. The district court fined him $10,500 and issued an identical permanent injunction. Alonim never appealed these judgments.

Alonim claims he always understood paragraph 1 of the injunction to prevent him from unlawfully importing any nonconforming vehicle, but permitting him, pursuant to paragraph 2, to import nonconforming vehicles conditionally under bond as long as he complied strictly with the regulations governing conditional imports. Thus, he interpreted these two paragraphs as alternative methods of compliance. In October 1982, however, the EPA Administrator, through the United States Attorney, informed Alonim that he viewed paragraph 1 as prohibiting him from importing any nonconforming vehicle. He interpreted paragraph 2 as advising him to comply with regulations governing the importation of conforming vehicles.

Because of this dispute, Alonim filed a motion on December 1, 1982 to correct or clarify the 1978 injunction. It was necessary to reassign the case to a new district judge. The new judge denied the motion without giving reasons. Alonim did not appeal. Instead, on November 4, 1983, Alonim filed a motion to vacate as void the two disputed paragraphs of the injunction because he interpreted the court's denial of his motion to clarify as an implicit acceptance of the government's interpretation. The new district judge denied this motion, again without giving reasons. This appeal followed.

II

Alonim contends that the disputed portions of the injunction should be set aside as void, pursuant to rule 60(b)(4), Fed.R.Civ.P., because the government's apparently favored interpretation would permanently bar him from engaging in lawful activity. Because the question of a judgment's voidness is a legal one, our standard of review is de novo. See United States v. McConney, 728 F.2d 1195, 1201 (9th Cir.) (en banc), cert. denied, --- U.S. ----, 105 S.Ct. 101, 83 L.Ed.2d 46 (1984).

Alonim's argument is without merit. "A judgment is not void merely because it is erroneous." 11 C. Wright & A. Miller, Federal Practice & Procedure Sec. 2862, at 198 (1973). There is no claim that the district court lacked jurisdiction of the subject matter or of the parties. Rather, Alonim asserts that the district court acted "plainly outside the authority conferred upon the court by the Clean Air Act." An argument can be made that a judgment is void if a court plainly misinterprets the scope of a statutory grant of jurisdiction such that there is a blatant usurpation of power. See 7 J. Moore, Moore's Federal Practice p 60.25, at 60-226 to 60-228 (1983). Obviously, this would rarely occur because courts necessarily have room in which to interpret the scope of jurisdictional grants. Id. The district court did not plainly misinterpret the scope of its delegated power when it issued the injunction against Alonim.

Federal courts have jurisdiction to hear cases in which the United States is a plaintiff, 28 U.S.C. Sec. 1345, and the Clean Air Act specifically grants federal courts jurisdiction "to restrain violations of [the Act]." Id. Sec. 7523(a). It is possible to "restrain" violations merely by assessing civil penalties, but most cases interpreting statutes with similar jurisdictional grants have interpreted the power to restrain as including the power to enjoin. See, e.g., United States v. United States Gypsum Co., 340 U.S. 76, 88-89, 71 S.Ct. 160, 169-70, 95 L.Ed. 89 (1950) (interpreting Sherman Act, which authorizes courts to "prevent and restrain" violations, as affording power to enjoin); United States v. Vitasafe Corp., 345 F.2d 864, 870 (3d Cir.) (same with the Food, Drug & Cosmetic Act which affords power to "restrain" violations), cert. denied, 382 U.S. 918, 86 S.Ct. 290, 15 L.Ed.2d 232 (1965). Alonim agrees the Act authorizes federal courts to enjoin violations of the Act, but he argues that it plainly prohibits them from enjoining lawful activity. Therefore, because the district court enjoined him from importing vehicles conditionally, as authorized by section 7522(b)(2) and the underlying regulations, he argues that its judgment is void for lack of subject matter jurisdiction.

A federal court's injunctive power arises from its jurisdiction in equity. See Weinberger v. Romero-Barcelo, 456 U.S. 305, 311-12, 102 S.Ct. 1798, 1802-03, 72 L.Ed.2d 91 (1982). As such, federal courts do not depend upon a specific delegation of power to issue injunctions in cases over which they otherwise have subject matter jurisdiction. See id. at 313, 102 S.Ct. at 1803. In this regard, the Supreme Court has stated, "[u]nless a statute in so many words, or by a necessary and inescapable inference, restricts the court's jurisdiction in equity, the full scope of that jurisdiction is to be recognized and applied." Id. at 313, 102 S.Ct. at 1803 (holding that the issuance of an injunction is permissive rather than mandatory unless Congress expressly specifies otherwise), quoting Porter v. Warner Holding Co., 328 U.S. 395, 398, 66 S.Ct. 1086, 1089, 90 L.Ed. 1332 (1946).

The district court reasonably interpreted its power under section 7523(a) in issuing the injunction, because it possessed jurisdiction over the suit's general subject matter under 28 U.S.C. Sec. 1345. A federal court's equity jurisdiction affords it the power to enjoin otherwise lawful activity when necessary and appropriate in the public interest to correct or dissipate the evil effects of past unlawful conduct. See, e.g., Ford Motor Co. v. United States, 405 U.S. 562, 573 & n. 8, 92 S.Ct. 1142, 1149 & n. 8,...