Walsh v. Brady, Civ. A. No. 89-1112.

• Decision Date: 01 November 1989
• Docket Number: Civ. A. No. 89-1112.
• Citation: 729 F. Supp. 118
• Parties: Daniel J. WALSH d/b/a Liberation Graphics, Plaintiff, v. Nicholas F. BRADY, Secretary of the Treasury, et al., Defendants.
• Court: U.S. District Court — District of Columbia

729 F. Supp. 118

Daniel J. WALSH d/b/a Liberation Graphics, Plaintiff, v. Nicholas F. BRADY, Secretary of the Treasury, et al., Defendants.

Civ. A. No. 89-1112.

United States District Court, District of Columbia.

November 1, 1989.

Kate Martin, Washington, D.C., and Cornelia Pillard, New York City, for plaintiff.

Sandra M. Schraibman and Anne L. Weismann, Civ. Div., Dept. of Justice, Washington, D.C., for defendants.

MEMORANDUM

GESELL, District Judge.

Plaintiff, Daniel J. Walsh ("Walsh"), an established, experienced importer of political posters from various countries around the world, seeks a license to enter Cuba solely for the purpose of arranging for the importation of Cuban posters to the United States. He challenges the decision of the Director of the Treasury's Office of Foreign Assets Control (the "Director") denying the license. Issues of statutory interpretation and First Amendment rights have been extensively briefed and argued in support of dispositive cross-motions for summary judgment. There are no material facts in dispute.

This controversy requires the Court to resolve an apparent clash between Regulation 560 of the Cuban Assets Control Regulations issued by the Secretary of the Treasury, 47 Fed.Reg. 17,030 (April 30, 1982), 31 C.F.R. Part 515, under authority of the Trading With The Enemy Act of 1917, 50 U.S.C.App. § 1 et seq., and a subsequent 1988 amendment of that Act affecting posters and other "informational materials" accomplished by Section 2502 of the Omnibus Trade and Competitiveness Act of 1988, Pub.L. No. 100-418, 102 Stat. 1107.

Regulation 560, which is implemented by the Director, was designed to "reduce Cuba's hard currency earnings from travel by U.S. persons to and within Cuba" pursuant to announced national policy. 47 Fed. Reg. 17,030 (April 30, 1982). In contrast, the subsequent 1988 amendment limited the Secretary's authority in this regard as follows:

(b)(4) The authority granted to the President in this subsection does not include the authority to regulate or prohibit, directly or indirectly, the importation from any country, or the exportation to any country, whether commercial or otherwise, of publications, films, posters, phonograph records, photographs, microfilms, microfiche, tapes, or other informational materials, which are not otherwise controlled for export under section 5 of the Export Administration Act of 1979 or with respect to which no acts are prohibited by chapter 37 of title 18, United States Code.

Walsh contends that a proper interpretation of the amendment entirely nullifies the earlier regulation as applied to his proposed trip to Cuba because Congress intended to deny the President any further authority even indirectly to regulate importation from any country of posters or other "informational materials." This position is bolstered by Walsh's uncontroverted declaration stating that it is necessary for him to proceed to Cuba to arrange for any importation of Cuban posters. He states that Cuban poster publishers require his presence in Cuba before they will make the necessary technical, financial and transportation arrangements. Walsh wishes to spend U.S. currency in Cuba for local travel costs, hotel bills, food bills, business entertainment, etc. He further notes his personal need to be in Cuba to choose from thousands of posters, to meet the artists and engage in "give and take" negotiations on the spot as well as to arrange other aspects of a commercial deal. These representations are consistent with his experience in other countries from which he has imported political posters.

The Secretary took and continues to take a much narrower view of the meaning and effect of the amendment. This is reflected in the slight change made in the Cuban Assets Control Regulations to accommodate the amendment, which now simply provides as follows:

All financial and other transactions directly incident to the physical importation or exportation of informational materials are authorized.

54 Fed.Reg. 5234 (Feb. 2, 1989).

Thus, although the Secretary recognizes that "informational materials," such as posters, are exempted from certain previous Cuban Assets Control prohibitions, he is unwilling to authorize payment of U.S. currency to Cubans for travel to or related expenditures within Cuba looking toward settling arrangements for importation of such materials. Although the amendment lacks any meaningful legislative history, the Secretary contends that it did not restrict his authority on behalf of the President to prohibit travel-related expenditures of U.S. currency to or within Cuba. The Secretary rests his position...