US Law Banning Export Smuggling Doesn't Cover Emails, Federal Court Says

A U.S. District Court in Kentucky on July 24 said that the U.S. statute barring the smuggling of goods from the U.S. covers only material items and doesn't extend to emails. U.S. District Judge for Western Kentucky David Hale dismissed a charge against defense contractor Quadrant Magnetics, along with several of its employees, which said the parties smuggled goods from the U.S. by "emailing magnet schematics to Chinese manufacturers."

Earlier this month, the court denied Quadrant's motion to dismiss charges alleging that the company and its employees smuggled weapons out of the U.S. by selling drawings of a rare earth permanent magnet used in F/A-18 Super Hornets to China (see 2407150060). The court rejected a claim that the law at issue in those charges, a provision of the International Traffic in Arms Regulations, was unconstitutionally vague.

At issue in the court's most recent decision was 18 U.S.C. Section 554 -- the statute barring the unlicensed export of "any merchandise, article, or object contrary to any law or regulation of the United States." Hale said that given that the terms "merchandise" and "object" refer only to "tangible items," the only path for the statute to cover emails travels through the word "article."

The court said the government points to "two definitions, both of which tend to show that an article must also be material." The U.S. definitions were taken from the Oxford English Dictionary, which defined an article as a "particular material thing," and Black's Law Dictionary, which defined an article "as '[g]enerally, a particular item or thing,' without reference to tangibility."

In addition, the term "article" must be "understood within the context of the phrase" it's in, and because "object" and "merchandise" refer to tangible items, the statute is "unlikely to present one of the" few instances where article references an intangible thing, the judge said. The court held that another canon of statutory interpretation, ejusdem generis, which says the "scope of a broader term that follows a narrower term in a list is understood as cabined by the preceding, more specific term," also supports this reading.

Hale ruled that the broader statutory context and scheme further support restricting the law to physical goods. The law came under Section 311 of the Reducing Crime and Terrorism at America's Seaports Act of 2005, and it's "unlikely that Congress would have intended a provision of an Act addressing America’s seaports to prohibit email communications, absent language clearly communicating that intent."

Every other provision issued under Section 311 covering the smuggling of goods from the U.S. "reinforces" the court's understanding, making "clear that § 311 as a whole was concerned with the treatment, and smuggling, of 'goods' or 'merchandise.'"