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NATIVE AMERICAN ARTS, INC. v. WALDRON CORPORATION

July 22, 2004.

NATIVE AMERICAN ARTS, INC., et al., Plaintiff,
v.
THE WALDRON CORPORATION, Defendant.



The opinion of the court was delivered by: SAMUEL DER-YEGHIAYAN, District Judge

MEMORANDUM OPINION

This matter is before the court on Plaintiffs' motion for a new trial and to amend and vacate the judgment entered in favor of Defendant on November 25, 2003, in accordance with the jury's verdict. For the reasons stated below, we deny Plaintiffs' motions.

BACKGROUND

  At the conclusion of a jury trial, a jury found in favor of Defendant in this case. Plaintiffs now seek to vacate the judgment entered against them and seek a new trial. Plaintiffs argue that this court erred in refusing to utilize Plaintiffs' jury instruction regarding 25 C.F.R. § 309.24 on the basis that the regulation is unconstitutional. Plaintiffs also argue that the court erred in refusing to instruct the jury in regards to 25 C.F.R. § 309.24 because Plaintiffs contend that the ruling is contrary to rulings of prior judges in the case. Plaintiffs also claim that the court failed to instruct the jury properly on the issue of intent and that the court erred in admitting Defendant's point of purchase card. In addition, Plaintiffs contend that the court erred in admitting the opinion testimony of Sherry Baskin and Linda Olson and that the court erred in improperly instructing the jury regarding the calculation of damages. Finally, Plaintiffs argue that the court erred in denying Plaintiffs' motion for a mis-trial based on alleged personal attacks in opening arguments, closing arguments, and that the court erred in refusing to admit the statements of Bear Tracks employees. Plaintiffs also make various other cursory objections, but fail to provide any basis for their position.

  LEGAL STANDARD

  Federal Rule of Civil Procedure 59 provides as follows:
(a) Grounds. A new trial may be granted to all or any of the parties and on all or part of the issues (1) in an action in which there has been a trial by jury, for any of the reasons for which new trials have heretofore been granted in actions at law in the courts of the United States; and (2) in an action tried without a jury, for any of the reasons for which rehearings have heretofore been granted in suits in equity in the courts of the United States. On a motion for a new trial in an action tried without a jury, the court may open the judgment if one has been entered, take additional testimony, amend findings of fact and conclusions of law or make new findings and conclusions, and direct the entry of a new judgment.
(b) Time for Motion. Any motion for a new trial shall be filed no later than 10 days after entry of the judgment.
(c) Time for Serving Affidavits. When a motion for new trial is based on affidavits, they shall be filed with the motion. The opposing party has 10 days after service to file opposing affidavits, but that period may be extended for up to 20 days, either by the court for good cause or by the parties' written stipulation. The court may permit reply affidavits.
(d) On Court's Initiative; Notice; Specifying Grounds. No later than 10 days after entry of judgment the court, on its own, may order a new trial for any reason that would justify granting one on a party's motion. After giving the parties notice and an opportunity to be heard, the court may grant a timely motion for a new trial for a reason not stated in the motion. When granting a new trial on its own initiative or for a reason not stated in a motion, the court shall specify the grounds in its order.
(e) Motion to Alter or Amend Judgment. Any motion to alter or amend a judgment shall be filed no later than 10 days after entry of the judgment.
Fed.R.Civ.P. 59.

  DISCUSSION

  I. Whether Regulation was Inconsistent and Unconstitutional

  Plaintiffs argue that this court erred in refusing to instruct the jury regarding regulation 25 C.F.R. § 309.24 because it is inconsistent with the statute and is unconstitutional. The regulation reads as follows: § 309.24 How will statements about Indian origin of art or craft products be interpreted?

 
(a) In general. The unqualified use of the term "Indian" or of the term "Native American" or the unqualified use of the name of an Indian tribe, in connection with an art or craft product, is interpreted to mean for purposes of this part that —
(1) The maker is a member of an Indian tribe, is certified by an Indian tribe as a non-member Indian artisan, or is a member of the particular Indian tribe named; and
(2) The art or craft product is an Indian product.
(b) Products of Indians of foreign tribes —
(1) In general. The unqualified use of the term "Indian" or of the term "Native American" or the unqualified use of the name of a foreign tribe, in connection with an art or craft product, regardless of where it is produced and regardless of any country-of-origin marking on the product, is interpreted to mean for purposes of this part that —
(i) The maker is a member of an Indian tribe, is certified by an Indian tribe as a non-member Indian artisan, or is a member of the particular Indian tribe named;
(ii) The tribe is resident in the United States; and
(iii) The art or craft product is an Indian product.
(2) Exception where country of origin is disclosed. Paragraph (b) of this section does not apply to any art or craft for which the name of the foreign country of tribal ancestry is clearly disclosed in conjunction with marketing of the product.
Example. X is a lineal descendant of a member of Indian Tribe A. However, X is not a member of Indian Tribe A, nor is X certified by Indian Tribe A as a non-member Indian artisan. X may not be described in connection with the marketing of an art or craft product made by X as an Indian, a Native American, a member of an Indian tribe, a member of Tribe A, or as a non-member Indian artisan of an Indian tribe. However, the true statement may be used that X is of Indian descent, Native American descent, or Tribe A descent.
25 C.F.R. § 309.24 (emphasis added). At trial we instructed the jury, in accordance with the Indian Arts and Crafts Act of 1990 ("IACA"). We refused Plaintiffs' request to include a jury instruction regarding 25 C.F.R. § 309.24 and its reference to the "unqualified use" of the terms "Indian," "Native American," or the name of a tribe. We indicated at trial that the regulation was inconsistent with the plain language of the statute and that the regulation is unconstitutional. The regulation is unconstitutional because it is vague and overbroad and is also unconstitutional to the extent that it seeks to regulate commercial speech.

  A. Inconsistency With Statute

  The regulation is inconsistent with the IACA and would be misleading for a jury. The IACA provides:
§ 305e. Cause of action for misrepresentation of Indian produced goods
(a) Injunctive or equitable relief; damages
A person specified in subsection (c) of this section may, in a civil action in a court of competent jurisdiction, bring an action against a person who, directly or indirectly, offers or displays for sale or sells 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, to —
(1) obtain injunctive or other equitable relief; and
(2) recover the greater of —
(A) treble damages; or
(B) in the case of each aggrieved individual Indian, Indian tribe, or Indian arts and crafts organization, not less than $1,000 for each day on which the offer or display for sale or sale continues. 25 U.S.C. § 305e. The IACA requirement that the display be falsely suggesting indicates that the statute is intended to prevent misrepresentations and misleading displays that would deceive consumer and lead them to incorrectly conclude that the products were Indian-made. However, the regulation's statement that the unqualified use of the terms "Indian," "Native American," or the name of a tribe is inconsistent with the IACA. There are many possible ways to use the words "Indian" or "Native American" or the name of a tribe in connection with the sale of artwork or jewelry that would not falsely mislead the consumer into believing that the merchandise was necessarily Indian-made. We shall provide a hypothetical example to illustrate this point. Suppose a store sold broaches that depicted a flower standing in tall grass on the prairie. Suppose there were hundreds of the broaches, which were all identical, and the broaches on display were set in boxes with a label that read "Cherokee Indian Flower." A reasonable consumer would not automatically be lead to conclude, based upon the use of the phrase "Cherokee Indian," that the broaches were made by a Native American utilizing skills passed down from the generations in accordance with his or her time honored traditions. This is not to say that the product would be presumed not to be Indian-made. A Native American could have produced the broaches in his workshop or on machines in his factory in which Native Americans work. However, the key is that a consumer would not be lead to presume that the product was Indian-made by looking at the merchandise or the display. The regulation, on the other hand, instructs jurors to conclude that consumers of the broaches, whether they purchased the broaches at a shop that sold Indian Jewelry, or purchased the broaches at a grocery store, saw the terms "Indian" and "Cherokee" on the boxes and thought the broaches were Indian-made.
B. Unconstitutional
  We also indicated at trial that the regulation was unconstitutional. The regulation is vague, overbroad, and is also too far reaching in its regulation of commercial speech. Restrictions on speech based on "the content of the message . . . conveyed, is subjected to `the most exacting scrutiny.'" Texas v. Johnson, 491 U.S. 397, 412 (1989) (quoting Boos v. Barry, supra, 485 U.S. 312, 321 (1988)). Defendant contends and Plaintiffs concede in their pleadings that Defendant's jewelry was her artwork. Defendant's jewelry was thus artwork and was the end product of her expression of the various cultures that she learned about. Such speech is protected even if the jewelry is eventually sold. See Virginia State Bd. of Pharmacy v. Virginia Citizens Consumer Council, Inc, 425 U.S. 748, 761 (1976) (stating that "[s]peech likewise is protected even though it is carried in a form that is `sold' for profit."); Ayres v. City of Chicago, 125 F.3d 1010, 1014 (7th Cir. 1997) (holding that T-shirts sold by plaintiffs were "a medium of expression prima facie protected by the free-speech clause of the First Amendment, and they d[id] not lose their protection by being sold rather than given away.").

  To determine whether a regulation is unconstitutionally vague under the due process doctrine of vagueness, a court must consider: "(1) whether it provides sufficient notice of what may not be done, and (2) whether it contains reasonably clear guidelines so as to prevent official arbitrariness or discrimination in its enforcement. International Soc. for Krishna Consciousness v. Rochford, 585 F.2d 263, 267 (7th Cir. 1978). In 25 C.F.R. § 309.24, the reference to "unqualified use" is too vague to meet constitutional muster. A non-Indian seeking to use the mentioned terms would be lead to infer that he or she must somehow qualify the use of the words. It is unclear what is entailed in qualifying the words. Webster's Ninth New Collegiate Dictionary defines the word "qualify" in part as: "to reduce from a general to a particular or restricted form[,] . . . to make less harsh or strict[,] . . . to limit or modify the meaning of[,] . . . [or] to characterize by naming an attribute." Thus, a non-Indian seller of jewelry or artwork with the term "Indian" or "Native American" would need to try and discern what must be done to qualify the term. A non-Indian seller might conclude a number of different actions were required to qualify the term. Taking again the above example with the broaches, the seller might change the labels on the boxes to read "Johnson's Cherokee Indian Flower" thinking that a clearly non-Indian term in the phrase would qualify the use of the restricted terms. The seller might think that he could qualify the terms as long as he included, along with the general references to "Indian" "Cherokee," more specific references to the Indian culture and the Cherokee tribe. The seller might also conclude that he should provide a disclaimer stating that the product is not Indian-made. Even if the seller did so, it would be unclear what would be an acceptable way to qualify the terms. One could argue that the disclaimer should immediately follow the terms and should thus state: "Cherokee Indian Flower (this broach was not made by Native Americans)." Other sellers might conclude that a slip of paper with the disclaimer in the box accompanying the broach would be sufficient. There are any number of potential misconceptions that non-Indian sellers might have when determining what they would need to do to comply with the statute. Non-Indian sellers are thus not provided with sufficient notice of what is prohibited and because of the vague nature of the term "unqualified," the statute can be arbitrarily applied against non-Indian sellers in civil actions because each individual has a different perception of what is necessary to qualify the terms. Thus, no matter what the non-Indian seller does, there will always be an argument that the non-Indian seller did not do what is required under the regulation.

  The regulation is also overbroad. The purpose of the "overbreadth doctrine" is to prevent "the government from casting a net so wide that its regulation impermissibly burdens speech." Schultz v. City of Cumberland, 228 F.3d 831, 848 (7th Cir. 2000). A plaintiff can show that a regulation is facially overbroad by establishing that there is "a realistic danger that the statute itself will significantly compromise recognized First Amendment protections of parties not before the Court." Id. (quoting City Council of Los Angeles v. Taxpayers for Vincent, 466 U.S. 789, 801 (1984)). A regulation can be found overbroad only if "a limiting construction is ...


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