United States v. Fernandez-Pertierra

• Decision Date: 30 September 1981
• Docket Number: No. 81-233-Cr-JWK.,81-233-Cr-JWK.
• Citation: 523 F. Supp. 1135
• Parties: UNITED STATES of America, Plaintiff, v. Midgalia FERNANDEZ-PERTIERRA, Defendant.
• Court: U.S. District Court — Southern District of Florida

523 F. Supp. 1135

UNITED STATES of America, Plaintiff, v. Midgalia FERNANDEZ-PERTIERRA, Defendant.

No. 81-233-Cr-JWK.

United States District Court, S. D. Florida.

September 30, 1981.

David S. Hammer, Asst. U. S. Atty., Miami, Fla., for plaintiff.

Stephen Kogan, Miami, Fla., for defendant.

MEMORANDUM ORDER ON MOTION TO DISMISS

KEHOE, District Judge.

The Court must determine the validity of the Indictment filed against the defendant, Midgalia Fernandez-Pertierra, in this criminal prosecution which arose under the somewhat unusual factual circumstances involved in this case. The defendant is charged in a two count Indictment with violations of the Trading With the Enemy Act, 50 U.S.C.A.App. § 1 et seq., and its implementing regulation, 31 C.F.R. § 515.415 (1980).¹ Specifically, Count I of the Indictment charges the defendant with having conspired to engage in transactions in connection with the transportation of Cuban nationals from Cuba to the United States without obtaining a license from the Office of Foreign Asset Control. Count II of the Indictment charges that the defendant engaged in a specific transaction involving the transportation of Cuban nationals from Cuba to the United States, also without first obtaining a license from the Office of Foreign Asset Control.

The defendant has filed a motion to dismiss, challenging this Indictment, contending that the regulation sought to be enforced is unconstitutional on its face, and as applied to the facts of this case, and, furthermore, that the Indictment fails to properly charge an offense under the laws of the United States. The Government has fully responded to the motion and the arguments raised. Because of the importance of the issues involved in this matter, the Court accorded the parties full oral argument and an opportunity to submit supplementary memoranda.

The Court has reviewed the various authorities cited in the memoranda submitted, as well as those authorities obtained through independent research. The Court now concludes that the regulation codified at 31 C.F.R. § 515.415 (1980) is constitutional on its face and as applied to the facts alleged, and that the Indictment correctly charges an offense against the United States.

I.

The defendant was indicted for activities that resulted from the so-called "Freedom Flotilla" or "Mariel Boatlift" which occurred last year and in which hundreds of privately owned vessels transported approximately 125,000 Cuban refugees to Key West, Florida. For a factual background into the events surrounding the Mariel Boatlift, and out of which this case arose, see United States v. Anaya, 509 F.Supp. 289 (S.D.Fla.1980) (en banc); Pollgreen v. Morris, 496 F.Supp. 1042 (S.D.Fla.1980). Suffice it to say for purposes of this case that the defendant is charged with engaging in activities involved in the boatlift and causing the transportation of refugees to the United States in willful violation of the Trading With the Enemy Act (hereinafter also the "TWEA") and its implementing regulations, the Cuban Assets Control Regulations.² The relevant portions of the Indictment charge the following overt acts:

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1. Beginning on or about August 17, 1980 and continuing until on or about September 20, 1980, at 10710 S.W. 55th Terrace, Miami, Florida, the defendant MIGDALIA FERNANDEZ, accepted approximately $130,735.00 from individuals who wished to have specific Cuban nationals brought to the United States.

2. Beginning on or about August 17, 1980, and continuing until on or about September 20, 1980, at 10710 S.W. 55th Terrace, Miami, Florida, the defendant MIGDALIA FERNANDEZ, helped compile "reclamante lists," that is lists of specific Cuban nationals who were to be brought from Cuba to the United States.

3. Beginning at a date unknown, but at least on or about August 17, 1980, and continuing through September, 1980, the defendants, MIGDALIA FERNANDEZ and RAFAEL SALVILIMA, made arrangements to have motor vessels travel from the United States to Cuba in order to bring specific Cuban nationals to the United States. These motor vessels included the Jim Dandy, the Hawk-e (sic) Tropica and the Big Trojan.

4. In late August or early September, 1980, the defendant, RAFAEL SALVI-LIMA, took the motor vessel Jim Dandy to the Port of Mariel in Cuba, in order to bring specific Cuban nationals to the United States.

5. During September, 1980, the defendant, RAFAEL SALVI-LIMA, spent approximately $1,800 on expenses and supplies in Cuba, while the motor vessel Jim Dandy lay in the Port of Muriel.³

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In her motion, the defendant contends that the Indictment should be dismissed since the Cuban Assets Control Regulation under which she was charged, 31 C.F.R. § 515.415, is unconstitutional on its face and as applied since: (a) it is an unconstitutional exercise of executive power; (b) it denies the defendant equal protection in the absence of any rational basis for its promulgation; (c) it is arbitrary and capricious; and (d) it is vague and overbroad. The defendant also contends that the Indictment fails to state a crime or charge an offense since the transportation of refugees that allegedly took place did not violate any law of the United States. The Court has carefully examined all of these contentions and considers them to be without merit for the reasons which follow.

II.

The Trading With the Enemy Act was originally enacted as a war measure on October 6, 1917, and provided, inter alia:

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During the time of war or during any other period of national emergency declared by the President, the President may, through any agency that he may designate, or otherwise, and under such rules and regulations as he may prescribe, by means of instructions, licenses, or otherwise —

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(B) investigate, regulate, direct and compel, nullify, void, prevent or prohibit, any acquisition, holding, withholding, use, transfer, withdrawal, transportation, importation or exportation of, or dealing in, or exercising any right, power, or privilege with respect to, or transactions involving, any property in which any foreign country or a national thereof has any interest, by any person, or with respect to any property, subject to the jurisdiction of the United States. (emphasis supplied)

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50 U.S.C.A. App. § 5(b)(1), ch. 106, § 5(b), 40 Stat. 415, as amended by Act of March 9, 1933, ch. 1, § 2, 48 Stat. 1; Act of December 18, 1941, ch. 593, Title III, § 301, 55 Stat. 839.

Until 1977, the plain language of the act clearly stated that it was to be applicable not only during time of war, but also during any declared period of national emergency. The substance of Section 5(b) allows the President, or his designee,⁴ to prohibit transactions with specified nations, or to license such transactions.

On December 16, 1950, President Truman declared the existence of a national emergency.⁵ The continued existence of this national emergency has been formally recognized by subsequent Presidents over the last 30 years.⁶ For purposes of enforcement under the Cuban Assets Control Regulations, a state of emergency presently exists.⁷

On December 28, 1977, Section 5(b) of the TWEA was again amended. This amendment, Pub.L. 95-223, Title I, §§ 101(a), 102, 103(b), 91 Stat. 1625, made significant changes in the act. Primarily however, it removed the authority from the President to restrict transactions with foreign nations by declaring a national emergency under the TWEA. Following the adoption of this amendment, all national emergencies must be declared pursuant to the provisions of the National Emergencies Act of 1977.⁸

The amendment was in response to, among other things, the "extensive use by Presidents of emergency authority under Section 5(b) of the Trading With the Enemy Act of 1917 to regulate both domestic and international economic transactions unrelated to a declared state of emergency." S.Rep.No. 95-466, 95th Cong., 1st Sess., reprinted in 1977 U.S.Code Cong. & Ad. News 4540, 4541. The amendment did, however, allow the President to continue exercising those authorities conferred upon him by Section 5(b) "which were being exercised with respect to a country on July 1, 1977, as a result of a national emergency declared by the President before such date." Section 101(b) of Pub.L. 95-223, 91 Stat. 1625. By this "grandfather" provision, the President, or his designee, continues to possess the authority to issue regulations pertaining to Cuba. Accordingly, the Cuban Assets Control Regulations, originally promulgated in 1963, and supplemented from time to time since then, continue to have the force and effect of law, notwithstanding the 1977 amendment to the TWEA deleting the authority to issue new regulations as a result of a national emergency declared after July 1, 1977.

The TWEA itself was designed to prohibit trade with an enemy⁹ without obtaining a license by the Office of Foreign Asset Control, and to provide authority for the control, regulation and seizure of enemy property located in the United States.¹⁰ The constitutional basis for confiscating and regulating enemy assets without compensation appears to rest on the war powers of the Congress.¹¹ It is settled that the Government is authorized to obtain criminal convictions for violations of the act. 50 U.S.C.A.App. § 16 (West Supp.1981); United States v. Quong, 303 F.2d 499 (6th Cir.), cert. denied, 371 U.S. 863, 83 S.Ct. 119, 9 L.Ed.2d 100 (1962); United States v. China Daily News, 224 F.2d 670 (2d Cir.), cert. denied, 350 U.S. 885, 76 S.Ct. 138, 100 L.Ed. 780 (1955); United States v. Broverman, 180 F.Supp. 631 (S.D.N.Y.1959). Civil actions arising from the TWEA have also been entertained by the courts since the promulgation of the Cuban Assets Control Regulations in 1963. See e. g. Tagle v. Regan, 643 F.2d 1058 (5th Cir. 1981); Real v. Simon, 510 F.2d 557 (5th Cir. 1975); Nielsen v. Secretary of the Treasury, 424 F.2d 833 (D.C.Cir.1970); Teague v. Regional...