The Guild's test case began in April 2009 when it shipped 23 ancient Cypriot and Chinese coins to Baltimore. Spink, a dealer in London, supplied the coins, and the Guild had the archaeological material flown aboard a British Airways passenger flight to the United States. “According to the Spink invoice, each coin was minted in Cyprus or China, had '[n]o recorded provenance,' and had a '[f]ind spot' that was 'unknown,'" noted the district court.
Customs officers detained the artifacts because their entry violated CPIA import regulations authorized by the bilateral agreements (also called Memoranda of Understanding) in force between the United States and the nations of Cyprus and China.
The ACCG first sought a declaratory judgment when the government delayed starting legal proceedings, which gave birth to Ancient Coin Collectors Guild v. U.S. Customs and Border Protection; U.S. Department of State; Assistant Secretary of State, Educational and Cultural Affairs, a case that ultimately sided with the government and ruled against the ACCG.
Both the District Court of Maryland and the Fourth Circuit Court of Appeals in that case rejected the ACCG's claims (1) that import restrictions on Cypriot and Chinese ancient coins were the product of ultra vires (extralegal) acts, (2) that the government violated the Administrative Procedures Act (APA), or that (3) the government transgressed the First and Fifth Amendments of the U.S. Constitution. The courts found that federal agencies did not need to demonstrate, as the ACCG contended, that all coins of the types listed for restricted import were 'first discovered within'' their countries of origin. The case concluded after four years with the U.S. Supreme Court declining to hear the matter.
Federal prosecutors then sought title to the seized ancient coins. The U.S. Attorneys Office for the District of Maryland in April 2013 filed the civil forfeiture case of U.S. v. Three Knife-Shaped Coins et al. pursuant to 19 U.S.C. § 2609 of the CPIA, contending that the ACCG imported archaeological material designated in CBP Regulation 19 C.F.R. § 12.104g in violation of 19 U.S.C. § 2606 and 19 C.F.R. § 12.104a(b) and that that the Guild failed to produce any documentation to CBP that demonstrated the legitimacy of the import as demanded by 19 U.S.C. § 2606(b). The ACCG soon filed as a claimant.
The ACCG continued to challenge to validity of CPIA import controls throughout the forfeiture case, causing the district court, in June 2014, to repeat that there could be no "further challenge to the validity of the regulations.”
A little over two weeks ago, District Judge Catherine Blake ruled on the ACCG’s motion for summary judgment and the government’s cross-motion for summary judgment, reinforcing the legality of CPIA restrictions on specifically identified types of ancient coins. Citing the words of the Fourth Circuit Court of Appeals, Judge Blake wrote:
The appellate court addressed the ACCG's ... complaint "that [the Department of] State and CBP acted ultra vires by placing import restrictions on all coins of certain types without demonstrating that all coins of those types were 'first discovered within' China or Cyprus." The [Circuit] court disagreed by explaining that "State and CBP are under no obligation to list restricted items with more specificity than the statute commands, and they are certainly not required to impose restrictions on a coin-by-coin basis. Such a requirement would make the statutory scheme utterly unworkable in practice
The "first discovered" argument imagines that federal attorneys, as part of their prima facie case to forfeit regulated imports, must show that ancient coins were “first discovered within” or were “subject to the export control of" a State Party to the 1970 UNESCO Convention on the Means of Prohibiting and Preventing the Illicit Import, Export and Transfer of Ownership of Cultural Property. Put another way, the ACCG's argument posits that authorities may not seek to forfeit archaeological imports unless they first establish (1) that they are the type of cultural artifacts appearing on the designated lists of archaeological materials that are subject to import restrictions under the CPIA, which implements the 1970 UNESCO Convention in the United States; (2) that the artifacts were first discovered within and subject to the export control of the State Party to the 1970 UNESCO Convention; and (3) that the artifacts were removed unlawfully from the State Party only after the U.S. put the CPIA import restrictions in place.
If successful, the "first discovered" argument would have raised the legal bar for federal authorities to detain and forfeit unlawfully imported cultural property. That is because it is almost impossible to demonstrate the location where a looter first clandestinely dug up an ancient coin. The ACCG has argued instead that an ancient coin's find spot is difficult to determine because ancient coins circulated from one region to another, which is a claim that has been challenged.
Regardless of the merits of either argument, the Maryland district court rejected the ACCG's legal theory on statutory grounds, explaining in depth:
The Guild’s argument appears to conflate two terms defined in the CPIA: “archaeological . . . material of the State Party” ... and “designated archaeological . . . material” .... “Archaeological material of the State Party” is “any object of archaeological interest . . . which was first discovered within, and is subject to export control by, the State Party.” 19 U.S.C. § 2601(2). “Designated archaeological material” is “any archaeological . . . material of the State Party” which is “covered by an agreement under this chapter” and “listed by regulation under section 2604.” Id. § 2601(7). Only “designated” material is subject to import restrictions under § 2606 [of the CPIA] and potentially “subject to seizure and forfeiture” under § 2609 [of the CPIA]. Id. §§ 2606(a), 2609(a).
The Guild’s source for the “first discovered within” and “subject to export control by” requirements is the reference to “archaeological material of the State Party” in § 2604 [of the CPIA], which provides that “the [US] Secretary [of the Treasury] . . . shall by regulation promulgate (and when appropriate shall revise) a list of the archaeological or ethnological material of the State Party covered by the agreement.” Id. § 2604. Rather than supporting the Guild’s arguments, however, this provision illustrates the distinction between “archaeological material of the State Party” and “designated archaeological material.” “Archaeological material of the State Party” includes all material that may be restricted by [US Customs and Border Protection] pursuant to an applicable agreement, whereas “designated archaeological material” is the subset that has been restricted through the process of creating or amending a designated list. See id. §§ 2601, 2604. By asserting that the government must prove in every forfeiture action that “designated archaeological material” does, in fact, constitute “archaeological material of the State Party,” the Guild seeks to impose a burden on the government that the CPIA does not: the requirement to prove, as part of its initial showing, that the decisions incorporated into its underlying regulations are sound. … Further, nothing in the statute or legislative history supports the Guild’s proposal to substitute one defined term, “archaeological material of the State Party,” for another, “designated archaeological material,” in §§ 2606 and 2609. The court declines the Guild’s invitation to rewrite the statute in this way.Besides seeking to dismantle the CPIA's cultural property protections over ancient coins, the ACCG also pursued the more practical goal of reclaiming its imported Cypriot and Chinese coins from federal custody. Both sides scored a victory on this issue.
It was the government's burden to show "that the [detained] property has been 'listed in accordance with section 2604'" of the CPIA. "If so, 'the burden of proof . . . shifts to [the Guild] to establish, by a preponderance of the evidence, that the property is not subject to forfeiture, or to establish an applicable affirmative defense.'" Applying this analysis, Judge Blake assigned title of all the Cypriot coins and some of the Chinese coins to the United States, and gave the Guild seven Chinese coins.
Judge Blake explained the law of the case this way. Once the government establishes its burden to prove that detained coins are among the types listed on the CPIA's § 2604 designated list, then the claimant bears the burden to show that the coins are importable. The burden "'shifts to [the claimant] to establish, by a preponderance of the evidence, that the property is not subject to forfeiture, or to establish an applicable affirmative defense.' (Quoting U.S. v. Eighteenth Century Peruvian Oil, 597 F. Supp. 2d 618, 623 (E.D. Va. 2009))," meaning that the ACCG had to produce documentation that the coins were, as the earlier Fourth Circuit opinion declared, "(1) lawfully exported from its respective state while CPIA restrictions were in effect; (2) exported from its respective state more than ten years before it arrived in the United States; or (3) exported from its respective state before CPIA restrictions went into effect." The Guild failed to produce any documentation.
To satisfy its burden, the Guild wanted the court to accept expert witness testimony instead. While the court acknowledged that there was "the possibility … that the Guild could rely on expert testimony to prove that ‘these specific coins were exported from their respective States before CPIA restrictions went into effect," the ACCG failed to supply sufficient information about the specific Cypriot or Chinese coins at issue in the case.
The Guild's legal counsel, Attorney Peter Tompa, told the Maryland court in a letter dated May 27, 2009 that "[t]he Guild has admitted that it cannot provide the documentation ..." for any of the coins (labeled for clarity's sake in sequential numbers from 1 through 22). So the ACCG supplied alternative evidence in the form of expert testimony from Douglas Mudd, a numismatic expert and curator of the American Numismatic Association museum, and from Michael McCullough, a noted art and cultural property attorney based in New York.
The district court commented that 'the Guild offers Mudd’s testimony to prove, by a preponderance of the evidence, that the coins were “exported from [their] respective state before CPIA restrictions went into effect.' It offers McCullough’s testimony to prove, as a matter of law, that the Cypriot coins were 'lawfully exported from [their] respective state while CPIA restrictions were in effect,' and to raise an issue of material fact as to whether the Chinese coins were 'lawfully exported from [their] respective state while CPIA restrictions were in effect.'"
Federal prosecutors objected to the consideration of the ACCG's experts, pointing out that CPIA § 2606 does not authorize the evaluation of scholarly evidence, only permitting proof by way of "a certification or other documentation which certifies that such exportation was not in violation of the laws of the State Party." The ACCG countered that the broader federal customs statute, of which the CPIA is only a single chapter, in fact did allow for the use of learned evidence in forfeiture cases, citing 19 U.S.C. § 1615.
The court declined to resolve the dispute, leaving the evidentiary question open, because Judge Blake concluded that it did not matter. "If claimants in CPIA forfeiture actions are limited to the forms of documentation specified in § 2606, the Guild—which has conceded that it cannot provide such documentation—has failed to satisfy its burden to rebut the government’s prima facie case," wrote the judge. "If, on the other hand, § 1615 permits courts to consider scholarly evidence, the court still must look to the substantive law to determine whether the proffered expert testimony establishes the Guild’s entitlement to summary judgment or raises a disputed issue of material fact. Neither the Mudd nor McCullough testimony supports the Guild’s claims."
The court added that “even if 19 U.S.C. § 1615 provides the applicable evidentiary standard and authorizes the Guild to rely on scholarly evidence, that scholarly evidence must be particularized to the coins at issue... .The Mudd testimony and McCullough testimony regarding the Chinese coins are insufficiently particularized, and the McCullough testimony regarding both the Cypriot and Chinese coins fails as a matter of law. The Guild has provided no other evidence or argument that “establish[es], by a preponderance of the evidence, that the property is not subject to forfeiture, or . . . establish[es] an applicable affirmative defense.” See Peruvian Oil, 597 F. Supp. 2d at 623. Accordingly, the government is entitled to summary judgment as to coins 1-6, 12-13, and 16-22. See id.”
Still, the district court did suggest that an expert could have been used by the government to satisfy its burden that the Chinese coins ultimately returned to the ACCG were the kinds subject to CPIA import restrictions.
When the court reviewed whether the imported coins properly fell under the § 2604 CPIA restrictions lists, it found that government lawyers relied on an invoice from Spink, descriptions and photos of the coins that the litigants produced, and admissions made by the ACCG. And so, Judge Blake declared, “[r]egarding coins 1-6, 12-13, and 16-22, the court finds that the government has satisfied its initial burden to show that the coins are of restricted types. Indeed, the Guild admitted in response to the government’s request for admissions that coins 1-6 and 12-13 are of types that appear on the designated list for coins from China and that coins 16-22 are of types that appear on the designated list for coins of Cypriot type.”
But Judge Blake pointedly observed that the ACCG “did not concede ... that ... coins [numbered 7-11 and 14-15] are of types that appear on the designated list for China. Rather, it stated that it was 'unable to admit or deny whether [the coins] are of types that appear on the Chinese designated list' because it 'ha[d] no working knowledge of the Chinese language' [according to representations made by Attorney Tompa]. The court agrees that the relevant documents, including the Spink invoice, are insufficient to establish that coins 7-11 and 14-15 are of types that appear on the Chinese designated list."
Judge Blake concluded that "[b]ecause the government has not produced a Chinese language expert or provided any other evidence showing that the coins are of restricted types, the court finds that the government has failed to satisfy its initial burden regarding coins 7-11 and 14-15." As a result, the ACCG notched its first win in its test case.
The district court criticized federal attorneys for trying to place the government's initial burden on the ACCG, emphasizing that the “initial burden lies with the government to show that the coins have been 'listed . . . in accordance with section 2604,' not with the claimant to prove that they have not. 19 U.S.C. § 2610. As the government has provided no evidence to establish that the coins are of types that appear on the designated list, there was no 'initial showing' for the Guild to rebut.”
The court, meanwhile, struck down the ACCG's Fifth Amendment due process claims, which alleged that the judiciary changed the burden of proof standard set by lawmakers and that CPIA import regulations did not give adequate fair notice of what was prohibited:
First, as explained above, the burden-shifting framework in CPIA forfeiture actions is governed by a combination of generally applicable laws and provisions of the CPIA. Reading 19 U.S.C. § 1615 and 19 U.S.C. § 2610 together, Congress placed the initial burden on the government and the burden of rebuttal on the claimant. In forfeiture actions involving material subject to § 2606, the government must establish “that the material has been listed . . . in accordance with section 2604.” 19 U.S.C. § 2610. The burden then transfers to the claimant to rebut the government’s prima facie case. Peruvian Oil, 597 F. Supp. 2d at 622-23 (citing 19 U.S.C. § 1615). Because this analysis gives effect to, rather than altering, the burden-shifting framework created by Congress, the Guild has not raised a valid due process claim.
Second, the Guild argues that the regulations fail to provide it with “fair notice” of what is prohibited. In a CPIA forfeiture action, the relevant regulations are the designated lists. See 19 U.S.C. §§ 2606, 2609. The Fourth Circuit previously concluded that the designated lists satisfy 19 U.S.C. § 2604’s “fair notice” requirement, holding that “CBP has listed the Chinese and Cypriot coins by type, in accordance with 19 U.S.C. § 2604.” Ancient Coin Collectors Guild, 698 F.3d at 183; see 19 U.S.C. § 2604 (requiring that the designated lists “be sufficiently specific and precise to insure that . . . fair notice is given to importers and other persons as to what material is subject to such restrictions”). The Guild does not appear to argue that the alleged due process violations arise from a lack of specificity or precision in the designated lists. Rather, the Guild grounds its “fair notice” claim in the premise that 19 C.F.R. § 12.104 conflicts with the “first discovered within” and “subject to export control by” requirements of the CPIA. As discussed above, however, the provisions of the CPIA that govern this action—including §§ 2606, 2609, and 2610—relate to whether a given type of material has been added to a designated list, not whether it should have been. Thus, for purposes of this forfeiture action, it does not appear that a conflict involving the “first discovered within” and “subject to export control by” requirements would deprive the Guild of fair notice, so long as the designated lists included sufficiently specific and precise descriptions of the types of items subject to forfeiture. Further, to the extent that the Guild seeks to relitigate its challenge to the validity of the regulations in the form of a due process claim, that argument is inappropriate here.
Text and original photos copyrighted by Cultural Heritage Lawyer, a blog commenting on matters of cultural property law, art law, cultural heritage policy, antiquities trafficking, and museum risk management. Blog url: culturalheritagelawyer.blogspot.com. Any unauthorized reproduction or retransmission of any blog post without the express written consent of CHL is prohibited. CHL is a service of Red Arch Cultural Heritage Law & Policy Research, Inc.