404 F.

2d 441

Walter D. TEAGUE III, Charlotte Polin, United States

Committee to Aid the National Liberation Front of South
Vietnam, Liberation, Fifth Avenue Vietnam Peace Parade
Committee, and Free School of New York, Inc., PlaintiffsAppellants,
v.
REGIONAL COMMISSIONER OF CUSTOMS, REGION II
and Secretary of
the Treasury of the United States, defendants-Appellees.
Nos. 1, 2, Dockets 31966, 32077.

United States Court of Appeals Second Circuit.

Argued Oct. 4, 1968.
Decided Nov. 14, 1968, Certiorari Denied April 21, 1968, See
89 S.Ct. 1457.

Henry Winestine, New York City (Alan H. Levine, New York Civil
Liberties Union, New York City, of counsel), for plaintiffs-appellants.
Alan G. Blumberg, Asst. U.S. Atty. (Robert M. Morgenthau, U.S. Atty.
for the Southern District of New York, H. Thomas Coghill, Asst. U.S.
Atty., of counsel), for defendants-appellees.
Before LUMBARD, Chief Judge, KAUFMAN and HAYS, Circuit
Judges.
HAYS, Circuit Judge:

Appellants are the addressees of mail packages containing publications

originating in North Vietnam and mainland China. When these packages reach
the United States they are detained by the Commissioner of Customs pursuant
to the Foreign Assets Control Regulations, 31 C.F.R. 500.808 (1968).1 The
Commissioner sends letters of notice to the addressees advising them of the
detention and stating that the material will be released only if Foreign Assets
Control issues a license.

Appellants did not apply for licenses for the packages addressed to them, 2 but
brought this action, asserting that the Foreign Assets Control Regulations and
the Trading with the Enemy Act 5(b), 50 U.S.C.App. 5(b) (1964), abridge their
first amendment rights, that the statute unconstitutionally delegates legislative
power to the President, that the President has unlawfully delegated powers to
the Director of Foreign Assets Control, and that the statute and regulations
deprive appellants of property without due process of law. They seek a
declaratory judgment that the statute and regulations are unconstitutional, that
no licenses need be obtained or applied for in transactions involving the
importation of North Vietnamese or Chinese publications, and that payment for
those publications may be made directly to the publishers rather than into
blocked accounts. Appellants also ask for an injunction preventing the
Commissioner from continuing to detain the publications already in his
possession.

Plaintiffs moved for summary judgment or, alternatively, for a preliminary

injunction and the convening of a statutory three-judge court. Defendants
challenged the court's jurisdiction, and themselves sought summary judgment
dismissing the complaint.

The district court held that it had jurisdiction under Section 1337 of the Judicial
Code, 28 U.S.C. 1337 (1964), but granted summary judgment dismissing the
complaint.

Appellant Teague thereupon applied for a license. Five weeks later he received
a letter from the Federal Reserve Bank of New York requiring that he amplify
his application by answering a series of questions. He has not done so. Instead,
relying on the delay involved in processing Teague's application, plaintiffs
moved pursuant to Fed.R.Civ.P. 60(b) to vacate the order of dismissal, arguing
that the regulations involved a far more burdensome procedure than had
previously been assumed to exist. The court denied the motion, finding that the
length of the delay involved was attributable to the pending litigation, and that
while some delay could always be expected it would be closer to 10 days than
to 5 weeks.3

Plaintiffs have appealed from both judgments. We affirm.

I.

Section 5(b) of the Trading with the Enemy Act, 50 U.S.C.App. 5(b) (1964)
authorizes the promulgation, during the time of war or other national

emergency, of regulations controlling the flow of American currency to foreign

nations.4
8

In December 1950 President Truman proclaimed the existence of a national

emergency. 64 Stat. A454 (1950). That proclamation has never been revoked.
Although the proclamation took particular note of 'recent events in Korea and
elsewhere,' it also made general reference to 'the increasing menace of the
forces of communist aggression.'

As this court said in Sardino v. Federal Reserve Bank, 361 F.2d 106, 109-110
(2d Cir.), cert. denied, 385 U.S. 898, 87 S.Ct. 203, 17 L.Ed.2d 130 (1966):

10

'The declaration has never been revoked; rather it has been repeatedly and
recently reaffirmed. * * * While the courts will not review a determination so
peculiarly within the province of the chief executive, there can hardly be doubt
as to the existence of an emergency today when thousands of United States
troops are in action and many more are in readiness around the globe. Plaintiff's
contention that the national emergency provision, which came into the statute
at the time of the economic crisis of 1933, 48 Stat. 1, is limited to economic
emergencies, is sufficiently answered by the breadth of the language. The
understanding that the words mean all they say was illustrated by President
Roosevelt's freezing the assets of nationals of Norway and Denmark on the
invasion of those countries by Germany long before the United States was at
war * * *. We take the prompt Congressional ratification * * * as a
demonstration of approval of what was already lawful rather than as an
indication of doubt.'

11

Acting under the authority of the Trading with the Enemy Act and the declared
state of national emergency, the Secretary of the Treasury, to whom the
President delegated his rule-making power under the Act, promulgated the
Foreign Assets Control Regulations, 31 C.F.R. Part 500 (1968). The relevant
portions of those regulations are set forth in the margin.5
II.

12

Plaintiffs challenge the constitutionality of the Trading with the Enemy Act,
contending that the Congress has delegated legislative power to the President
without fixing standards. And they assert that the powers delegated to the
President (if constitutionally delegated to him) are personal to his office and
may not constitutionally be delegated to the Secretary of the Treasury or the
Director of Foreign Assets Control. These precise contentions were raised and

dismissed in Sardino v. Federal Reserve Bank, supra. Far from overruling

Sardino, as plaintiffs urge us to do, we reaffirm it as a sound and well-reasoned
decision.
13

Plaintiffs contend that even if Sardino is reaffirmed a different set of standards

should apply to the present case because the challenges on the basis of
overbroad delegations of power involve first amendment claims. Our
conclusion that plaintiffs' first amendment rights have not been violated makes
it unnecessary to decide that issue.

14

Sardino also provides a sufficient answer to plaintiffs' contention that the

statute and the regulations deprive them of property without due process of law.
III.

15

Plaintiffs' major contention is that the statute and regulations violate the first
amendment. They argue both that it is unconstitutional to subject the exercise
of first amendment rights-- the receipt of publications-- to 'burdensome and
time-consuming administrative procedures,' and that the regulations require the
keeping of records that impair the applicants' right to anonymity.

16

The challenged regulations were designed to limit the flow of currency to

specified hostile nations: mainland China, North Korea, and North Vietnam.
We are presently in a state of armed conflict with North Vietnam; and while we
are not at war with either China or North Korea our relations with those nations
are hardly peaceful. As we noted in Sardino, 'Hard currency is a weapon in the
struggle between the free and the communist worlds.' 361 F.2d at 112. The
regulations contribute to the furtherance of a vital interest of the government.

17

It is true that the regulations result in some limitation on the availability of

publications and films originating in China, North Korea, and North Vietnam.
To the extent of this limitation the regulations impinge on first amendment
freedoms. However, restricting the flow of information or ideas is not the
purpose of the regulations. The restriction of first amendment freedoms is only
incidental to the proper general purpose of the regulations: restricting the dollar
flow to hostile nations. Moreover there is no censorship of selected materials;
all publications from the specified nations are treated alike. 31 C.F.R. 500.204
App. P108 (1968).

18

The challenged regulations themselves provide for the availability of the

foreign publications. They can be, and are, admitted if the payments for them

are made into blocked accounts or if the publications are sent as gifts. Id. And
the publications are available at 'universities, libraries, (and) research and
scientific institutions,' 31 C.F.R. 500.204 App. P108 (1968), which are allowed
to import them without restriction as to payments.6
19

The Supreme Court has recently said: 'This Court has held that when 'speech'
and 'nonspeech' elements are combined in the same course of conduct, a
sufficiently important governmental interest in regulating the nonspeech
element can justify incidental limitations on First Amendment freedoms. To
characterize the quality of the governmental interest which must appear, the
Court has employed a variety of descriptive terms: compelling; substantial;
subordinating; paramount; cogent; strong. Whatever imprecision inheres in
these terms, we think it clear that a government regulation is sufficiently
justified if it is within the constitutional power of the government; if it furthers
an important or substantial governmental interest; if the governmental interest
is unrelated to the suppression of free expression; and if the incidental
restriction on alleged First Amendment freedom is no greater than is essential
to the furtherance of that interest.' United States v. O'Brien, 391 U.S. 367, 376377, 88 S.Ct. 1673, 1678, 20 L.Ed.2d 672 (1968).

20

Applying the Supreme Court's test here we conclude that the infringement of
first amendment freedoms is permissible as incidental to the proper, important,
and substantial general purpose of the regulations.

21

Plaintiffs point to the lengthy delays involved in processing the license

applications of Teague and Polin and argue that Freedman v. Maryland,380
U.S. 51 85 S.Ct. 734, 13 L.Ed.2d 649 (1965), requires the invalidation on
constitutional grounds of such a time-consuming procedure. The government
indicated, however, that the delays in processing the Teague and Polin
applications were attributable to this lawsuit, because the Treasury Department
was forced to coordinate its activities with the Justice Department. The district
court found that a license application can typically be processed within 10 days.
In any event, we do not consider Freedman v. Maryland controlling in a
situation such as this. Freedman was concerned with the length of time required
to adjudicate whether a film was obscene in light of the presumption of
unconstitutionality borne by any system of prior restraints of expression, see
380 U.S. at 57, 85 S.Ct. 734, and cases cited. Here, by contrast, there is no
inquiry into the content of detained material. The only delay is that required to
determine that money is not being sent to one of the designated nations; there is
no design to limit the free flow of ideas.

22

Lamont v. Postmaster General, 381 U.S. 301, 85 S.Ct. 1493, 14 L.Ed.2d 398

22

(1965), is not apposite. As Mr. Justice Brennan noted in his concurring opinion
in Lamont, id. at 309, 85 S.Ct. 1493, the solicitor general expressly conceded
that no compelling governmental interest required enactment of the statute
there called in question. The only purpose of the statute was to protect the
sensibilities of recipients of Communist political propaganda who might be
offended by getting publications espousing unpopular ideas. Here the
government's purpose is obviously enormously more important and substantial.

23

Finally, plaintiffs contend that the licensing procedure violates their fifth
amendment right against selfincrimination. They rely on Haynes v. United
States, 390 U.S. 85, 88 S.Ct. 722, 19 L.Ed.2d 923 (1968), Grosso v. United
States, 390 U.S. 62, 88 S.Ct. 709, 19 L.Ed.2d 906 (1968), and Marchetti v.
United States, 390 U.S. 39, 88 S.Ct. 697, 19 L.Ed.2d 889 (1968). We find those
cases, and Albertson v. Subversive Activities Control Bd., 382 U.S. 70, 86
S.Ct. 194, 15 L.Ed.2d 165 (1965), to be inapplicable. By answering the
questions posed on the required forms in those cases petitioners could have
found themselves subjected to criminal prosecution. The information to be
supplied by these plaintiffs on the forms required here would have no tendency
to incriminate them.

24

The judgments of the district court are affirmed.

31 C.F.R. 500.808 Customs Procedures; merchandise specified in 500.204

(a) With respect to merchandise specified in 500.204, whether or not such
merchandise has been imported into the United States, directors of customs
shall not accept or allow any:
(1) Entry for consumption (including any appraisement entry, any entry of
goods imported in the mails, regardless of value, and any other informal
entries); * * * until either;
(i) A specific license pursuant to this chapter is presented, (or)
(ii) Instructions from the Foreign Assets Control, either directly or through the
Federal Reserve Bank of New York, authorizing the transaction are received *
* *.

Plaintiff Charlotte Polin applied for the required licenses after the
commencement of this action but before its dismissal by the district court. It
took 8 weeks for the license to be issued and plaintiffs argued below that such a

delay was an excessive burden to be placed on the exercise of first amendment

rights. The court found, however, that the length of the delay was 'apparently
due to the pendency of this litigation as well as to (Polin's) own tardiness in
supplying the required information,' and that the normal delay should be only
about 10 days. Miss Polin later applied for another license, which was
processed within 10 days
3

See note 2 supra

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-(A) investigate, regulate, or prohibit, any transactions in foreign exchange,
transfers of credit or payments between, by, through, or to any banking
institution, * * * and
(B) investigate, regulate, direct and compel, nullify, void, prevent or prohibit,
any acquisition holding, withholding, use, transfer, withdrawal, transportation,
importation or exportion 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 * * *; and the President shall, in the manner hereinabove
provided, require any person to keep a full record of, and to furnish under oath,
in the form of reports or otherwise, complete information relative to any act or
transaction referred to in this subdivision either before, during, or after the
completion thereof, or relative to any interest in foreign property, or relative to
any property in which any foreign country or any national thereof has or has
had any interest, or as may be otherwise necessary to enforce the provisions of
this subdivision * * *.

500.201 Transaction involving designated foreign countries or their nationals;

effective date
(a) All of the following transactions are prohibited, except as specifically
authorized by the Secretary of the Treasury (or any person, agency, or
instrumentality designated by him) by means of regulations, rulings,
instructions, licenses, or otherwise, if either such transactions are by, or on
behalf of, or pursuant to the direction of any designated foreign country, or any
national thereof, or such transactions involve property in which any designated
foreign country, or any national thereof, has at any time on or since the

effective date of this section had any interest of any nature whatsoever, direct or
indirect:
(3) the exportation or withdrawal from the United States of gold or silver coin
or bullion, currency or securities, or the earmarking of any such property, by
any person within the United States.
(b) All of the following transactions are prohibited, except as specifically
authorized by the Secretary of the Treasury (or any person, agency, or
instrumentality designated by him) by means of regulations, rulings,
instructions, licenses, or otherwise, if such transactions involve property in
which any designated foreign country, or any national thereof, has at any time
on or since the effective date of this section had any interest of any nature
whatsoever, direct or indirect:
(1) All dealings in, including, without limitation, transfers, withdrawals, or
exportations of, any property or evidences of indebtedness or evidences of
ownership of of property by any person subject to the jurisdiction of the United
States; and
(2) All transfers outside the United States with regard to any property or
property interest subject to the jurisdiction of the United States.
(d) The term 'designated foreign country' means a foreign country in the
following schedule . . . :
SCHEDULE
COUNTRY AND EFFECTIVE DATE
1. China: December 17, 1950.
2. North Korea . . .: December 17, 1950.
3. North Viet-Nam . . . : May 5, 1964.
500.204 Importation of and dealings in certain merchandise.

(a) Except as specifically authorized by the Secretary of the Treasury (or any
person, agency, or instrumentality designated by him) by means of regulations,
rulings, instructions, licenses, or otherwise, no person subject to the jurisdiction
of the United States may purchase, transport, import, or otherwise deal in or
engage in any transaction with respect to any merchandise outside the United
States if such merchandise is:
(1) Merchandise the country of origin of which is China (except Formosa),
North Korea, or North Viet-Nam * * *.
500 204 Appendix

(108) Publications and films from China, North Korea and North Viet-Nam.
Publications anf films originating in mainland China, North Korea or North
Viet Nam are licensed for commercial importation provided all payments due
to the suppliers are made into blocked accounts. Publications and films
originating in mainland China, North Korea, and North Viet Nam are also
licensed without restrictions as to method of payment under programs approved
by the Librarian of Congress or the National Science Foundation for
universities, libraries, research and scientific institutions. Such publications and
films are also licensed in exchange for publications from the United States.
Additionally, such publications and films are licensed when the Office of
Foreign Assets Control is satisfied that they are bona fide gifts to the importers
and that there is not and has not been since the effective date any direct or
indirect financial or commercial benefit to designated countries or nationals
thereof from the importations.
6

The existence of an exception that allows a small sum of money to flow to the
hostile nations in order to protect first amendment freedoms by making the
foreign publications available to those institutions that can give the publications
the broadest exposure to the public and that can make the greatest use of them
for purposes of study, does not justify an attack on the basic regulation