U.S. Supreme Court
K Mart Corp. v. Cartier, Inc., 485 U.S. 176 (1988)
K Mart Corp. v. Cartier, Inc.
Argued October 6, 1987
Decided March 7, 1988
485 U.S. 176
A "gray market" good is a foreign-manufactured good that bears a valid United States trademark and is imported without the consent of the United States trademark owner. Section 526(a) of the Tariff Act of 1930 prohibits the importation of certain gray market goods. The Customs Service's implementing regulation allows importation where the foreign manufacturer is affiliated with the United States trademark owner or has received the owner's authorization to use its trademark. Respondent Coalition to Preserve the Integrity of American Trademarks and two of its members filed a Federal District Court suit against the Government for injunctive and declaratory relief, asserting, inter alia, that the regulation is inconsistent with § 526(a), and is therefore invalid. Petitioner 47th Street Photo, Inc., intervened as a defendant and filed a motion to dismiss on the ground that the Court of International Trade had exclusive jurisdiction over the case. The District Court rejected the motion and upheld the regulation. The Court of Appeals affirmed the jurisdictional ruling, but reversed on the merits.
1. The District Court had jurisdiction under both the general federal question provision, 28 U. S.C. § 1331, and the specific provision regarding actions "arising under any Act of Congress relating to . . . trademarks." § 1338(a). P. 485 U. S. 182.
2. The Court of International Trade did not have exclusive jurisdiction under 28 U.S.C. § 1581(i)(3), which grants such jurisdiction over certain suits involving
"embargoes or other quantitative restrictions on the importation of merchandise for reasons other than the protection of the public health or safety."
Pp. 485 U. S. 182-190.
(a) Although the Court of Appeals properly rejected the theory that § 526(a) imposes an "embarg[o]" within the meaning of § 1581(i)(3), the court's reasoning -- that § 1581(i)(3) only extends to embargoes arising chanrobles.com-red
out of trade policy -- is unpersuasive. Trade policy is not the sole, nor perhaps even the primary, purpose served by embargoes, which are also imposed, inter alia, to protect the public health, safety, or morality. Had Congress intended to constrain the meaning of "embargoes" as suggested by the Court of Appeals, it would have been unnecessary to exclude expressly health or safety embargoes from § 1581(i)(3)'s jurisdictional grant, or to deny the Court of International Trade jurisdiction over suits arising from the importation of prohibited "immoral articles," see § 1581(j). P. 485 U. S. 184.
(b) The ordinary meaning of "embargo," which Congress apparently adopted in § 1581(i)(3), is a governmentally imposed quantitative restriction -- of zero -- on the importation of merchandise. Section 526(a)'s importation prohibition is not such an "embargo," since, rather than reflecting a governmental restriction on the quantity of a particular product that will enter, it merely provides a mechanism by which a trademark owner might, at its own option, enlist the Customs Service's aid in barring foreign-made goods bearing its trademark in order to enforce its own private trademark right. The contention that "embargo" should be defined as any governmental "import regulation that takes the form of a prohibition, regardless of . . . its ultimate purpose," is rejected, since, in fact, not every governmental import prohibition is an embargo. Pp. 485 U. S. 185-187.
(c) Section 1581(i)(3)'s purpose of eliminating jurisdictional confusion and its legislative history provide no indication that Congress intended to depart from the ordinary meaning of "embargoes." If Congress had meant to give the Court of International Trade exclusive jurisdiction over "importation prohibitions" rather than "embargoes," it would have said so. Pp. 485 U. S. 187-190.
3. The Court of International Trade did not have exclusive jurisdiction under 28 U.S.C. §1581(i)(4), which grants such jurisdiction over certain suits involving "administration and enforcement with respect to the matters referred to" in § 1581(a), which in turn applies to actions contesting the administrative "denial of a protest" challenging a Customs officer's order excluding merchandise from entry. Since this action does not involve the "matte[r] referred to" in § 1581(a) -- the "denial of a protest," or at the very broadest, "a protest" -- it cannot involve "administration and enforcement with respect to" that matter. Pp. 485 U. S. 190-191.
4. The cases are restored to the calendar for reargument on the merits. P. 485 U. S. 191.
252 U.S.App.D.C. 342, 790 F.2d 903, affirmed in part.
BRENNAN, J., delivered the opinion of the Court, in which WHITE, MARSHALL, BLACKMUN, and STEVENS, JJ., joined. SCALIA, J., filed a dissenting opinion, chanrobles.com-red
in which REHNQUIST, C.J.,and O'CONNOR, J., joined, post, p. 485 U. S. 191. KENNEDY, J., took no part in the consideration or decision of the case. chanrobles.com-red