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NATIVE AMERICAN ARTS, INC. v. BUNDY-HOWARD
October 15, 2001
NATIVE AMERICAN ARTS, INC., PLAINTIFF,
BUNDY-HOWARD, INC., ETC., ET AL., DEFENDANTS.
The opinion of the court was delivered by: Shadur, Senior District Judge.
MEMORANDUM OPINION AND ORDER
Native American Arts, Inc. ("Native American") has filed a six-count
Complaint against numerous defendants, alleging violations of the Indian
Arts and Crafts Act (the "Act," 25 U.S.C. § 305e*fn1). Defendants
Bundy-Howard, Inc. d/b/a Bear Tracks ("Bear Tracks") and 9-Mile Creek
Traders (collectively "Movants") now move for judgment on the pleadings
pursuant to Fed.R.Civ.P. ("Rule") 12(c), arguing that the Act is
unconstitutional. For the reasons set forth in this opinion, the motion
Judgment on the pleadings in favor of a defendant is appropriate when
defendant clearly establishes that plaintiff cannot prove any set of
facts that would support the claim for relief and that there are no
material issues of fact to be resolved (Northern Ind. Gun & Outdoor
Shows, Inc. v. City of South Bend, 163 F.3d 449, 452 (7th Cir. 1998)). In
considering such a motion the court must accept as true all facts alleged
by plaintiff and must draw all reasonable inferences from the pleadings
in plaintiffs favor (id.; Gillman v. Burlington N.R.R., 878 F.2d 1020,
1022 (7th Cir. 1989)), though the court is not bound to accept
defendant's legal characterization of the facts (Scott v. O'Grady,
975 F.2d 366, 368 (7th Cir. 1992)). Hence this opinion's factual recital
is drawn from Native American's Amended Complaint (cited "Count ___
¶ ___"), and it omits "Native American alleges" or any like usage
(without of course making or implying any factual findings).*fn2
Bear Tracks and 9-Mile Creek Traders violated the Act by offering,
displaying for sale and selling art, crafts and jewelry in a manner that
falsely suggests the goods were Indian-made (Count I ¶¶ 18, 25,
29-38). Section 305e(a) prohibits:
directly or indirectly, offer[ing] or display[ing] for
sale or sell[ing] a good, with or without a Government
trademark, in a manner that falsely suggests it is
Indian produced, an Indian product, or the product of
a particular Indian or Indian tribe or Indian arts and
crafts organization, resident within the United
States. . . .
Several of the terms in that subsection have statutory definitions.
Thus Section 305e(d)(1) says an "Indian" is "a member of an Indian tribe"
or a person "certified as an Indian artisan by an Indian tribe." While
"Indian product" is not defined in the statute, Section 305a(d)(2) says
the term is to be defined in regulations promulgated by the Secretary of
the Interior. Sections 305 through 305d vest power in the Indian Arts and
Crafts Board ("Board"), an Interior Department agency, to enforce much of
the Act — and Section 305b specifies "[t]hat all rules and
regulations proposed by the Board shall be submitted to the Secretary of
the Interior and shall become effective upon his approval."*fn4 In turn
the Board has defined "Indian product" as "any art or craft product made
by an Indian" (Reg. § 309.2(d)). Under Sections 305e(a) and (b)
plaintiffs may recover the greater of treble damages or $1,000 per day for
each day that the offending product is offered for sale or sold, as well
as punitive damages and attorney's fees.
Constitutionality of the Act
In support of their motion for judgment on the pleadings, Movants
contend that the Act is unconstitutional because (1) it violates
procedural due process, (2) it also violates substantive due process and
(3) Board's regulations exceed the scope of its authority. Those
arguments will be addressed in turn.
Procedural Due Process Challenge
Movants' procedural due process attack has two prongs: first, various
provisions assertedly fail to provide fair notice to putative defendants,
and second, there is assertedly no standard for application of the
punitive damages and attorney's fees provision. Because the Act provides
adequate notice of what is prohibited by the statute and provides
adequate standards for non-arbitrary enforcement, both challenges are
1. Void-for-Vagueness Doctrine
Under the void-for-vagueness doctrine, a law is unconstitutional "if
its prohibitions are not clearly defined" (Karlin v. Foust, 188 F.3d 446,
458 (7th Cir. 1999), quoting Grayned v. City of Rockford, 408 U.S. 104,
108, 92 S.Ct. 2294, 33 L.Ed.2d 222 (1972)). There are two parts of the
vagueness test: Laws must "give the person of ordinary intelligence a
reasonable opportunity to know what is prohibited," and they must contain
"explicit standards" to avoid "arbitrary and discriminatory enforcement"
(Grayned, 408 U.S. at 108-09, 92 S.Ct. 2294; Karlin,
188 F.3d at 458-59). What level of vagueness is constitutionally
tolerable depends on a congeries of factors — and in this case
those factors not only counsel in favor of tolerating some imprecision in
the statute but also compel the rejection of Movants' position even apart
from any generous construction of the language employed.
First, economic regulations are subject to a less stringent vagueness
test than laws that inhibit the noncommercial exercise of
constitutionally protected rights (Village of Hoffman Estates v.
Flipside, Hoffman Estates, Inc., 455 U.S. 489, 498-99, 102 S.Ct. 1186, 71
L.Ed.2d 362 (1982)). Here the parties agree that the Act impacts
commercial speech (M.Mem.5), and although such commercial speech is also
protected by the First Amendment (Virginia State Bd. of Pharmacy v.
Virginia Citizens Consumer Council, Inc., 425 U.S. 748, 762, 96 S.Ct.
1817, 48 L.Ed.2d 346 (1976)), the fact that such protection is grounded
in providing the public with truthful and accurate information deprives
commercial speech that is deceitful, misleading or fraudulent of such
protection (Central Hudson Gus & Elec. Corp. v. Public Serv. Comm'n of
N.Y., 447 U.S. 557, 561-64, 100 S.Ct. 2343, 65 L.Ed.2d 341 (1980); United
States v. Raymond, 228 F.3d 804, 815-16 (7th Cir. 2000)).
In that respect Section 305e(a) prohibits displaying, offering for
sale, or selling an item in a manner that creates the false impression
that the item was Indian-made when in fact it was not. So the statute
directly addresses false and misleading speech that misrepresents
authenticity — hence unprotected conduct.*fn5
Second, it is true that the Act requires some products to contain
affirmative representations about their origin to avoid creating a "false
suggestion" (goods that may appear to be "Indian products" but were
actually not Indian-produced). But that relatively minor infringement on
expression — in this instance, the imposition of compelled
expression — does not appreciably increase the stringency of a
Again the speech involved is commercial speech, afforded less
constitutional protection than other forms of expression (Central
Hudson, 447 U.S. at 562-63, 100 S.Ct. 2343). And that being so, Zauderer
v. Office of Disciplinary Counsel of Supreme Court of Ohio, 471 U.S. 626,
651 & n. 14, 105 S.Ct. 2265, 85 L.Ed.2d 652 (1985) teaches there are
"material differences between disclosure requirements and outright
prohibitions on speech," such that "the First Amendment interests
implicated by disclosure requirements are substantially weaker than those
at stake when speech is actually suppressed."
2. Vagueness of the Act's Language?
With those principles established, this opinion turns to Movants'
challenges to several of the statutory terms on that basis. They will be
dealt with seriatim. And because the speech at issue is commercial in
nature, the focus will be on the statute's impact on Movants — as