[Federal Register Volume 60, Number 98 (Monday, May 22, 1995)]
[Notices]
[Pages 27075-27077]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-12497]
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DEPARTMENT OF COMMERCE
Export Administration
[Docket Number AB1-89]
Final Decision and Order Affirming in Part Order of the
Administrative Law Judge
In the Matter of: Town & Country Plastic, Inc., Respondent.
Before me for decision is the appeal of the Office of Antiboycott
Compliance (OAC) from the decision and order of the Administrative Law
Judge (ALJ). The ALJ dismissed as unproven OAC's charge that Town &
Country Plastics, Inc. (T&C), violated Sec. 769.2(d)(1)(iv) of the
Export Administration Regulations (15 CFR 769.2(d)(1)(iv)) (the
``Regulations'').
I. Jurisdictional Issues
T&C questions my jurisdiction to entertain the appeal, alleging
that the appeal was not timely filed and properly served. After having
reviewed the administrative record, I have concluded that I have
jurisdiction to entertain the appeal and that the decision of the ALJ
should be affirmed in part, as set forth below.
a. Timeliness
The threshold question is whether OAC's appeal was timely filed and
properly served. Section 788.22(b) of the Regulations (15 CFR
788.22(b)) requires the filing of appeals within 30 days of the date on
which the order appealed from was served. Applying this rule literally
in this case, the appeal should have been filed on or before October
21, 1990, which happened to be a Sunday. T&C correctly points out that
there is nothing in the rules explicitly extending the time for filing
documents when the last day falls on a Sunday. On the other hand, OAC
refers to the Federal Rules of Civil Procedure where Rule 6 provides
that, when the last day allowed for filing a document falls on a
Sunday, the document may be filed up until the close of business on the
next business day. OAC did file its appeal on Monday, October 22, 1990.
I have concluded that the procedural rules relating to antiboycott
appeals should be construed in conjunction with the Federal Rules of
Civil Procedure. Accordingly, I find that the appeal was timely filed.
b. Service
T&C also argues that OAC failed to serve the appeal in accordance
with the rules. In support of its argument, T&C points out that Section
788.6(a) of the Regulations (15 CFR 788.6(a)) requires that all papers
served in the administrative proceedings shall be simultaneously served
on other parties. While OAC appended a certificate of service to its
appeal stating that it had caused a copy of the appeal to be mailed to
T&C on October 22, 1990, the envelope in which the appeal was received
by T&C was postmarked October 23, 1990, one day later than the last day
the appeal could be filed. OAC responds that on October 22, 1990, it
did cause the appeal to be mailed in accordance with customary
departmental mailing procedures in which all mailings first go to the
Department's centralized mailing room, and it cannot control when a
mailing will be actually postmarked by the Post Office.
I have concluded that OAC did serve the appeal in a timely fashion.
In my opinion, it is sufficient that the appeal was mailed in
accordance with standard departmental mailing procedures on the day
when the service was required to be accomplished. [[Page 27076]]
II. Furnishing Information
This brings me to the substantive issues. T&C is charged with one
violation of Section 769.2(d)(1)(iv) of the Regulations which provides:
No United States person may furnish or knowingly agree to
furnish information concerning his or any other person's past,
present, or proposed business relationships with any other person
who is known or believed to be restricted from having any business
relationship with or in a boycotting country.
In order to establish that T&C violated the Regulations as alleged,
OAC must establish that T&C: (1) Is a United States person, (2) who, in
connection with its activities in United States commerce, (3) provided
information concerning its business relationships with another person
known or believed to be restricted from having any business
relationship with or in a boycotting country, and (4) with intent to
comply with, further, or support an unsanctioned foreign boycott.
The ALJ found that OAC established the first two elements and
neither party contests those findings. (Initial Decision and Order, at
15-6.) Accordingly, I affirm that portion of the ALJ's finding.
However, the ALJ found that OAC had not met its burden with regard
to elements three and four listed above. This Final Decision and Order
addresses the latter two issues.
The record shows that T&C sold some tanks late in 1984 to a
distributor in the United States. The distributor thereafter exported
the tanks to Saudi Arabia, but there is nothing in the record to
indicate that T&C knew that the tanks were to be ultimately exported to
Saudi Arabia at the time of the sale to the distributor.
The distributor wrote to T&C in early 1986 advising that its client
was experiencing difficulty in clearing T&C tanks through Saudi Arabian
customs because of confusion resulting from the similarity between
T&C's name and another name, Town and Country York, Inc. (TCY). The
letter read in part as follows:
A little more than one year ago we purchased some tanks from
you.
Our client is having trouble clearing these goods as the Customs
Department of Saudi Arabia is confusing your name with another
company. The other company's name is Town & Country York, Inc.
Would you be good enough, if possible, to send us a letter
certifying that Town and [sic] \1\ Country Plastics, Inc. is not the
same as Town and Country York, Inc., if this is the case.
\1\ (The sic refers to the use of ``and'' in the correspondence
instead of the ampersand which appears in Respondent's corporate
name.
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Agency Exhibit 1.
T&C responded to the distributor as follows:
Town & Country Plastics, Incorporated is not associated or
related to a company by the name of Town and Country York,
Incorporated. Our company is sometimes confused with other
companies. We hope this confusion is resolved for you.
Agency Exhibit 2, Hearing Transcript (``Transcript''), at 18-9.
It is this response that OAC charges constitutes a violation of the
regulation.
a. Intent element
Both the statutory and regulatory language established intent as an
element of the violation charged.
Section 8(a)(1) of the Export Administration Act provides in part:
[T]he President shall issue regulations prohibiting any United
States person, with respect to his activities in the interstate or
foreign commerce of the United States, from taking or knowingly
agreeing to take any of the following actions with intent to comply
with, further, or support any boycott fostered or imposed by a
foreign country against a country which is friendly to the United
States.* * *
50 U.S.C. app. Sec. 2407.
The regulations provided in pertinent part:
* * * * *
(2) A United States person has the intent to comply with,
further, or support an unsanctioned foreign boycott when such a
boycott is at least one of the reasons for that person's decision to
take a particular prohibited action. So long as that is at least one
of the reasons for that person's action, a violation occurs
regardless of whether the prohibited action is also taken for non-
boycott reasons. Stated differently, the fact that such action was
taken for legitimate business reasons does not remove that action
from the scope of this part if compliance with an unsanctioned
foreign boycott was also a reason for the action.
(3) Intent is a necessary element of any violation of this part.
It is not sufficient that one take action that is specifically
prohibited by this part. It is essential that one take such action
with intent to comply with, further, or support a foreign boycott.
Accordingly, a person who inadvertently, without boycott intent,
takes a prohibited action, does not commit any violation.
(4) Intent in this context means the reason or purpose for one's
behavior. It does not mean that one has to agree with the boycott in
question or desire that it succeed or that it be furthered or
supported. But it does mean that the reason why a particular action
was taken must be established.
* * * * *
(7) In seeking to determine whether the requisite intent exists,
all available evidence will be examined.
Section 769.1(e), 15 CFR 769(e).
To demonstrate evidence of intent, OAC relies on T&C's
distributor's letter plus T&C's prior experience in 1984 with respect
to a different transaction.
In May of 1984, T&C received an express package from the Saudi
Arabia Israel Boycott Office. The transmittal letter therein explained
that the accompanying ``boycott questionnaire'' was received from
``Saudi Arabian Customs Authorities.'' The top left corner of the
``questionnaire'' shows that it was issued from the Saudi Regional
Israel Boycott Office. (Transcript, at 89-92; Agency Exhibit 5.)
Concerning that incident, T&C's president testified that he was
offended by the questionnaire and that, not knowing the applicable
Regulations, went to considerable effort to learn what action should be
taken. Upon determining the correct procedure, T&C filed a Report of
Request for Restrictive Trade Practice or Boycott, Form ITA-621P with
OAC. (Initial Decision, at 8-9; Transcript, at 94-95; Agency Exhibit
5.) (Transcript, at 37-8.)
OAC asserts that T&C's experience rendered it sufficiently aware of
the antiboycott provisions of the Regulations that T&C would or should
have recognized a boycott request thereafter. T&C answers that it did
not respond to the 1984 inquiry; that it reported the request to OAC on
its own initiative, and that it and the 1986 incident do not relate in
any fashion to one another. (Transcript, at 38.)
The legislative history provides some guidance regarding analysis
of the circumstances or context in which a request is received:
Intent to comply with a boycott could be presumed, subject to
rebuttal, where from all the circumstances it is reasonably clear
that the information is sought for boycott enforcement purposes * *
*. On the other hand where the information is sought in a context
which does not make it reasonably clear that the purpose is boycott
related, no illegal intent should be presumed.
S. Rep. No. 95-104, 95th Cong., 1st Sess. 40 (1978), quoted in
Briggs & Stratton v. Baldrige, 539 F.Supp. 1307, 1313-1314 (E.D.
Wis. 1982), aff'd, 728 F.2d 915 (7th Cir.) cert. denied, 469 U.S.
826 (1984).
Initial Decision and Order, at 14-15.
Referring to the regulatory language, OAC has consistently argued
throughout this proceeding that boycott-related intent does not have to
be the only or principal reason behind an allegedly prohibited
response. A showing that the boycott played some part in T&C's decision
to provide the response is enough, according to OAC. While I agree with
that interpretation of the regulatory language and believe it to be an
appropriate standard or measure of proof, I concur with the ALJ in this
case that additional evidence is necessary to [[Page 27077]] show that
the response in issue was provided with the intent to comply with,
further, or support an unsanctioned foreign boycott.
The evidentiary record in this case shows that it is not reasonably
clear that T&C's purpose in responding was boycott related. The
legislative history excerpted above notes that, in such circumstances,
illegal intent should not be inferred or presumed. OAC's witness
testified that the fact that the inquiry originated from Saudi Arabian
Customs would in his experience suggest that the inquiry was probably
boycott related, but he could not testify from personal knowledge that
the specific inquiry in question was, in fact, boycott related.
(Transcript at 13-16.)
By contrast, T&C's witness testified that the inquiry was simply
viewed as a routine name clarification request, and it did not occur to
T&C that the inquiry might be boycott-related.
(Transcript, at 96-98, 106-7.)
There is the fact, as I mentioned earlier, that there were
literally dozens of requests that we get each year that people
calling up wanting to know if we are Town and Country Diner, Town
and Country Realty, Town and Country Hairdressers, whether we are
Town and Country Chevrolet. It is spelled in different ways.
Sometimes it is T-o-w-n-e. At one time we had a competitor in the
tank business who was our main supplier who had the name of County
Plastics. There was some confusion to that being somewhat similar to
Town and Country Plastics.
Transcript, at 107.
In resolving the question of whether T&C acted with the requisite
intent in favor of T&C, the ALJ relied heavily on the credibility of
the T&C testimony. While not absolutely binding on me, the ALJ's
findings regarding credibility are entitled to great weight. Todd
Pacific Shipyards v. Director, OWCP, 913 F.2d 1426, 1432 (9th Cir.
1990); Carrier Corp. v. N.L.R.B., 768 F. 2d 778, 782 (6th Cir. 1985).
See, Universal Camera Corp. v. N.L.R.B., 340 U.S. 474 (1951).
The Administrative Law Judge distinguished the two incidents,
noting:
[T]he present case differs significantly from the events in
1984. In 1984, the inquiry was issued from the Saudi Regional Israel
Boycott Office, a division of the Saudi Customs (Agency Ex. 5). Both
the office of origin and the content of the questionnaire
affirmatively indicated a boycott relationship. By comparison, the
1986 inquiry referred only to the Saudi Arabia Customs Service and
the single inquiry referenced only a confusion of names. The
evidence presented by Respondent establishes that such confusion was
routine because of the frequency of the Town & Country prefix in the
title of many businesses. At the hearing many pages from the nearby
New York telephone directory were introduced which show a great
proliferation of the name ``Town & Country'' among businesses, and
Respondent Mr. Mermel testified of frequent confusion by mail and
telephone respecting the name (Emphasis added).
Initial Decision and Order, at 12-13.
T&C's witness testified that he was concerned with preserving the
company's trademark in circumstances where companies constantly confuse
T&C with similarly named entities. He stated that he specifically
thought the reference to Saudi Customs had something to do with billing
for duties, as he frequently encountered similar problems with the U.S.
Customs Service. He averred that he would never have answered the
inquiry had he suspected it to be boycott-related, as demonstrated by
his conduct in reporting the 1984 incident that clearly was boycott-
related to the Department of Commerce and in not answering the inquiry.
The witness also testified concerning profound personal and family
reasons for not wanting to do anything to comply with such unsanctioned
boycott.
(Transcript, at 92-98; Initial Decision, at 8-10.)
OAC has failed to advance reasons sufficient for discounting the
credibility attributed to the T&C testimony by the ALJ.
Accordingly, I AFFIRM the ALJ's finding that OAC did not meet its
burden of proof on the intent element.
b. Knowledge Element
The ALJ also based his decision on a separate finding that OAC had
failed to meet its burden of proof on another element of the violation
charged. Specifically, the ALJ found that OAC failed to meet its burden
of proof regarding a showing that T&C knew or believed that TCY was
restricted from having any business relationship in a boycotting
country, hereafter referred to as the ``knowledge element''. OAC argues
that the ALJ misconstrued the nature of the proof required on the
knowledge element.
Having decided that the ALJ should be affirmed on account of his
decision relative to the intent element, however, it is unnecessary to
resolve the controversy regarding the knowledge element. Accordingly, I
have decided not to address that issue in this case. Should a later
case turn on that issue, however, this office will not treat the ALJ's
decision in this case as a precedent and will resolve the issue on the
merits as presented in any later case.
Based on review of the administrative record and for the reasons
stated above, the order of the ALJ dismissing the charge against T&C is
hereby affirmed in part.
Dated: May 16, 1995.
William A. Reinsch,
Under Secretary for Export Administration.
[FR Doc. 95-12497 Filed 5-19-95; 8:45 am]
BILLING CODE 3510-DT-M
