In late August 2011, federal agents reportedly raided Gibson guitar factories in Tennessee for the second time in two years as part of an investigation into potential violations of the Lacey Act. According to news reports, the US government seized ebony and rosewood because it was exported from India in an unfinished state, which the US government believes violates an Indian law prohibition on the export of unfinished ebony and rosewood, and because the import paperwork accompanying the wood was false. Gibson, the maker of the iconic Les Paul guitar, has subsequently questioned the US Department of Justice’s “interpretation of a law in India,” and stated that the actions were “taken without the support and consent of the government in India.” Additionally, there has been media speculation regarding the Lacey Act’s effect on manufacturing jobs within the United States, with questions regarding the cost to US businesses. In contrast, supporters of the Lacey Act’s increased reach over wood products have previously pointed out the consequences of a depressed US wood and logging market due to imports of illegally harvested wood, and the negative social, economic and environmental effects in countries from where the wood comes.
Whether illegal wood enters into the United States in the form of finished guitars or the wood or in the form of raw timber, the legal effect is the same: a potential violation of the Lacey Act. The Lacey Act makes it illegal for any individual in the United States to import, export, buy, sell, or transport wildlife or, since 2008, plants or plant products that were taken, harvested, or exported unlawfully – in any way. If wood coming into the United States was unlawfully exported from another country in violation of a local law or regulation, then that wood’s import into the US likely would violate the Lacey Act.
As of this date, the only proceeding brought against Gibson concerns the wood seized in 2009 that the US government was exported unlawfully from Madagascar and that Gibson purchased from a German supplier, Nagel. The US government has filed a civil forfeiture claim against Gibson, United States v. Ebony Wood in Various Forms. As of the time of this writing, the US government has filed not charges against Gibson regarding this latest seizure.
The Lacey Act provides for both criminal and civil penalties. More generally, recent precedent indicates that if criminal charges are brought and convictions handed down, the financial consequences could be considerably worse for defendants in Lacey Act prosecutions. The US Supreme Court recently declined to hear an appeal from a Second Circuit case, United States v. Bengis, in which the US government, represented at that time by Marcus Asner (now an Arnold & Porter partner), successfully argued that South Africa had a property interest in lobsters seized from its shores. As a consequence, South Africa was entitled to what will likely total millions of dollars in restitution. Because the defendants in Bengis were convicted of a conspiracy, the crime fell under Title 18 of the US code and, thus, the victims were entitled to restitution under either the Mandatory Victim Restitution Act or the Victim and Witness Protection Act.