K mart Corp. v. Cartier, Inc.

486 U. S. 281

May 31, 1988

A few months after the jurisdiction battle, the Supreme Court was ready for the merits. Section 526 of a law said that foreign goods bearing US trademarks could not be imported without the trademark owner’s permission. Agency regulations provided exceptions to 526 when the same basic entity had common control of both the US trademark and the foreign manufacturer of the goods, and also when the trademark owner had authorized a foreign company to use its trademark. Several trademark owners charged that these regulatory exceptions violated the basic text of 526.

By two different 5-4 alignments, the Court ruled that the ‘common control’ exception was all right, but the ‘authorized use’ exception was not. Kennedy, who wrote the Court’s judgment, said the agency would be deferred to if the text of 526 was ambiguous (Rehnquist, White, Blackmun, O’Connor, and Scalia joined this). He found the text ambiguous with regard to the ‘common control’ issue (White joined this). But he felt that the ‘authorized use’ exception was plainly foreclosed by the statute’s plain language. As a final matter, the ‘authorized use’ exception was severable from the rest of the regulation (Rehnquist, Blackmun, O’Connor, and Scalia joined these two points).

Brennan, joined by Marshall and Stevens, provided the three final votes to maintain the ‘common control’ exception. Brennan provided a seemingly unending discourse into Congressional intent and the history of agency interpretation. Both of which, he contended, proved that ‘common control’ is appropriately understood as a valid exception from 526’s general rule. In a section joined by White, he argued that the possibility of ‘authorized use’ would have been so unthinkable to 526’s original drafters that it did no harm to the statute to recognize it as another exception, even if the plain text seemed to suggest differently.

Scalia, joined by Rehnquist, Blackmun, and O’Connor, found both regulatory exceptions inconsistent with the statute. Scalia charged that the textual statutory ambiguity with respect to the ‘common control’ exception really wasn’t there. Worse yet, he argued, the agency itself interpreted the exception far more narrowly than the Court majority did in their process of finding ambiguity. Scalia also responded to Brennan’s approval of the ‘authorized use’ exception. He found it not quite so unthinkable to the original drafters as Brennan did.

These cases are precisely the kind that cause me to abandon this project for months at a time: ones that are long, not easily distilled, highly technical, and incredibly boring. I really don’t give a rip about foreign products with US trademarks, and I feel sorry for the nine Justices that they were forced to care about the issue for several months in 1988.


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