BOTTOM LINE: Maryland counterfeiting statute which prohibits, among other things, the willful display of goods that have “retail value” and bear a counterfeit mark, is neither facially overbroad nor facially void-for-vagueness.
CASE: McCree v. State, No. 20, Sept. Term, 2014 (filed Dec. 18, 2014) (Judges Barbera, Harrell, Battaglia, Greene, Adkins, McDonald & WATTS). RecordFax No. 14-1218-23, 20 pages.
FACTS: The State charged Bernard McCree with numerous crimes, including violating CR §8-611, which prohibits trademark counterfeiting. In the circuit court, McCree moved to dismiss the charges on the ground that CR § 8-611 was unconstitutional, arguing that the statute was facially overbroad and facially void-for-vagueness. The circuit court denied the motion to dismiss.
At trial, a trooper of the Maryland State Police testified that, during a traffic stop of a vehicle that McCree had been driving, 206 DVDs were found in the vehicle. Dennis Supik, an investigator with the Content Protection Office of the Motion Picture Association of America, testified as an expert in the field of the identification of counterfeit DVDs. Supik testified that all 206 DVDs contained “numerous counterfeit marks” and thus were “counterfeit reproductions” of movies on DVD.
On his own behalf, McCree testified that he was a licensed vendor whom the State had authorized to sell the DVDs. McCree denied that he had manufactured the DVDs or that he knew whether the DVDs were counterfeit. A jury convicted McCree of violating CR §8-611, and the circuit court sentenced him to ten years’ imprisonment, with all but one year suspended, for the violation of CR §8-611, consecutive to other sentences, followed by three years of supervised probation.
McCree appealed to the Court of Special Appeals, which affirmed. McCree then appealed to the Court of Appeals, which affirmed the judgment of the Court of Special Appeals.
LAW: McCree contended that CR §8-611 was facially overbroad because it criminalizes conduct that the Free Speech Clause of the First Amendment to the United States Constitution protects. Specifically, McCree argued that CR §8-611 broadly applies to the display or distribution of goods (such as signs or pamphlets) that include trademarked words or labels, terms, devices, designs, or words that are not registered with any government entity. McCree asserted that CR §8-611 was substantively identical to a previous version of Pennsylvania’s trademark counterfeiting statute, which the Supreme Court of Pennsylvania struck down as overbroad.
An overbroad statute criminalizes conduct that the Free Speech Clause of the First Amendment to the United States Constitution1 protects. See Grayned v. City of Rockford, 408 U.S. 104, 114-15 (1972). Even if a statute is not overbroad as applied to a particular defendant’s actions, the defendant may contend that the statute is facially overbroad because of a judicial prediction or assumption that the statute’s very existence may chill third parties’ speech. Hill v. Colorado, 530 U.S. 703, 731-32 (2000). Such a facial challenge succeeds if and only if the statute is substantially overbroad – i.e., there is a realistic danger that the statute will significantly compromise third parties’ speech. N.Y. State Club Ass’n, Inc. v. City of New York, 487 U.S. 1, 11 (1988).
CR §8-611 states, in relevant part, that a “counterfeit mark” means: (i) an unauthorized copy of intellectual property; or (ii) intellectual property affixed to goods knowingly sold, offered for sale, manufactured, or distributed, to identify services offered or rendered, without the authority of the owner of the intellectual property. Based on the language of CR §8-611 and the applicable authorities, CR §8-611 is not facially overbroad. Read in its entirety, CR §8-611 criminalizes the display or distribution of goods that bear or are identified by a counterfeit mark, only if the goods have “retail value.” CR §8-611(c), (d).
Specifically, by their plain language, the penalty provisions delineate that, if the aggregate retail value of the goods is $1,000 or more, the defendant is guilty of a felony. CR §8-611(c). If the aggregate retail value of the goods is less than $1,000, the defendant is guilty of a misdemeanor. “Retail value” means a “selling price.” CR §8-611(a)(4)(i), (ii). In other words, CR §8-611 does not criminalize the display or distribution of goods that have no retail value and are not meant to be sold. Accordingly, CR §8-611 does not criminalize conduct that the Free Speech Clause indisputably protects (for example, the mere display of signs or distribution of pamphlets.)
This conclusion was supported by the doctrine of noscitur a sociis (“it is known from its associates”), under which the meaning of a word is known from the accompanying words so that general and specific words, capable of analogous meaning, when associated together, take color from each other, so that general words are restricted to a sense analogous to less general. Emmert v. Hearn, 309 Md. 19, 25 (1987). CR §8-611 criminalizes the manufacture, production, display, advertisement, distribution, offering for sale, sale, or possession with the intent to sell or distribute goods or services that a defendant knows are bearing or are identified by a counterfeit mark.” CR §8-611(b). Six of the eight types of conduct that CR §8-611 criminalizes (manufacture, production, advertisement, offering for sale, sale, and possession with the intent to sell or distribute) directly relate to commercial acts or purposes. Viewed in context with these six other types of conduct, “display” and “distribute” obviously also relate to commercial acts or purposes.
Although the Free Speech Clause partially protects commercial speech, that protection has never been interpreted as applying to criminal or unlawful activity. See Va. State Bd. of Pharmacy v. Va. Citizens Consumer Council, Inc., 425 U.S. 748, 749-50, 770 (1976). Stated otherwise, regulation of commercial speech concerning illegal activity is entirely permissible and does not infringe upon any protections provided by the Free Speech Clause. In short, selling or displaying counterfeit items intended for sale, while perhaps commercial activity, is unlawful activity that the Free Speech Clause does not protect. For these reasons, CR §8-611 is not facially overbroad.
Accordingly, the judgment of the Court of Special Appeals was affirmed.
COMMENTARY: McCree also contended that CR §8-611 was facially void-for-vagueness because CR §8-611(a)(3)’s definition of “intellectual property,” which is incorporated into CR §8-611(a)(2)’s definition of “counterfeit mark,” “is almost limitless” in that it includes any label, term, device, design, or word adopted or used by a person to identify the goods or services of the person. A statute is void-for-vagueness where the statute’s prohibitions are not clearly defined, thus violating the Due Process Clause of the 14th Amendment to the United States Constitution. City of Mesquite v. Aladdin’s Castle, Inc., 455 U.S. 283, 289 (1982). A statute’s prohibitions are not clearly defined where people of common intelligence must necessarily guess at the statute’s meaning and differ as to the statute’s application. F.C.C. v. Fox Television Stations, Inc., 132 S. Ct. 2307, 2317 (2012).
As stated, CR §8-611 criminalizes the manufacture, production, display, advertisement, distribution, offering for sale, sale, or possession with the intent to sell or distribute goods or services that a defendant knows are bearing or are identified by a counterfeit mark. CR §8-611(b). A “counterfeit mark” is an unauthorized copy of intellectual property, or intellectual property affixed to goods knowingly sold, offered for sale, manufactured, or distributed, to identify services offered or rendered, without the authority of the owner of the intellectual property. CR §8-611(a)(2)(ii). CR §8-611’s prohibitions of certain acts involving “intellectual property” are clearly defined, and there is no need to guess at CR §8-611’s meaning or differ as to CR §8-611’s application. As such, the Court of Special Appeals correctly concluded that the circuit court was correct in determining that CR §8-611 is not facially void-for-vagueness.
PRACTICE TIPS: A clear and precise enactment in a statute may nevertheless be “overbroad” if in its reach it prohibits constitutionally protected conduct. The crucial question is whether the ordinance sweeps within its prohibitions what may not be punished under the First Amendment.
BOTTOM LINE: Disbarment was the appropriate sanction for Maryland attorney who violated Maryland Lawyers’ Rules of Professional Conduct through his misappropriation of his client’s funds, his deceit about those funds, and the work he did for that client.
CASE: Attorney Grievance Commission v. Wills, Misc. Docket AG No. 99, Sept. Term, 2013 (filed Dec. 18, 2014) (Judges BARBERA, Harrell, Battaglia, Greene, Adkins, McDonald & Watts). RecordFax No. 14-1218-21, 15 pages.
FACTS: Talieb Wills was admitted to the Maryland Bar on December 19, 2002. In 2009, Millicent Goode, who was in her 80s and in poor health, entered into an attorney-client relationship with Wills. No formal retainer agreement was ever executed. During his representation, Goode was residing in a retirement home, and she relied on Wills to care for her finances.
In April 2010, Wills prepared, and Goode executed, a “Durable Power of Attorney for Financial and Business Matters of Millicent R. Goode.” The Power of Attorney appointed the Wills as Goode’s agent to make financial and health care decisions and provided that all of Goode’s future tax returns were to be prepared, executed, and filed by Wills. The same day that Goode signed the Power of Attorney, Wills added his name as a joint owner of her Bank of America bank account. At that time, the account had a balance of $14,157.
Once Wills had his name added to the joint bank account, he began withdrawing cash and making debit card purchases for his personal use. By the end of June 2010, the account balance was less than $3. On June 30, 2010, Goode sold her home, located in Washington, D.C., for $245,972. That sum was deposited into the joint bank account. Wills began accessing those funds for his own use. He wrote himself multiple checks from the account and withdrew tens of thousands of dollars in cash.
In or about March 2011, Goode suffered a stroke and was admitted to Howard University Hospital. By the time of Goode’s death in June 2012, there were no funds left in the joint bank account. Wills nevertheless wrote several checks from the account to cover her funeral and burial expenses. Those checks were returned for insufficient funds. Following Goode’s death, the civil service annuity payments she had been receiving monthly in the amount of $3,000 continued to be deposited into her account. Wills did not return the money to the government but instead spent it.
After Goode’s death, her son, Clyde Goode, hired an attorney, Steven Weinberg, to assist him in closing the estate. Weinberg, who later was appointed the personal representative of the estate, sent repeated requests to Wills asking for information relating to Wills’s work for Goode. On August 26, 2012, Wills provided Mr. Weinberg with a “Memorandum,” which Wills intended to serve as his response to Mr. Weinberg’s request. With the Memorandum, Wills included an itemized account summary that explained some of the work he had done on Goode’s behalf.
After reviewing the Memorandum and itemized account summary, Weinberg repeatedly requested additional documentation. Wills did not respond to those requests. The hearing judge found that Wills’s itemized “accounting” of the work he had performed for Mrs. Goode was fabricated by Wills in an effort to knowingly and intentionally mislead Weinberg and Clyde Goode and to cover up his misappropriation.
On October 31, 2012, Clyde Goode filed a complaint with the Attorney Grievance Commission of Maryland. Wills failed to respond to the three letters sent by Bar Counsel. Eventually an investigator working on behalf of the Commission reached Wills by personally serving him with a subpoena at a courthouse. After receiving the subpoena for himself and for the Bank of America records held by Wills, Wills agreed to provide a statement under oath.
Bar Counsel interviewed Wills on April 30, 2013. Although Wills gave a statement under oath, he failed to bring any of the subpoenaed documents with him. Wills refused to answer any substantive questions about the Goode matter or about Bar Counsel’s investigation. He failed to respond to subsequent communication attempts by an investigator with the Commission.
On February 19, 2014, the Attorney Grievance Commission of Maryland, acting through Bar Counsel, filed with the Court of Appeals a Petition for Disciplinary or Remedial Action against Wills. The Petition alleged violations of the Maryland Lawyers’ Rules of Professional Conduct (“MLRPC”) in connection with Wills’s misappropriation of funds belonging to his client, Millicent Goode, and his deceitful responses to questions, from Bar Counsel and others, concerning both his use of those funds and his representation of Goode. The mater was referred to a circuit court judge to conduct an evidentiary hearing and issue written findings of fact and conclusions of law.
Wills did not file a response to the Petition. On April 23, 2014, the hearing judge entered a default order against Wills. Wills did not move to vacate the order, although he appeared, unrepresented, at the subsequent hearing on the Petition on July 16, 2014. The hearing judge issued findings of fact and conclusions of law, concluding that Wills had violated MLRPC 4.1(a) (truthfulness in statements to others); MLRPC 8.1(a) and (b) (Bar Admission and Disciplinary Matters); and MLRPC 8.4(a), (b), (c), and (d) (misconduct). Neither party filed exceptions to either the hearing judge’s factual findings or his legal conclusions. Bar Counsel recommended disbarment as the appropriate sanction. An order for Wills’s disbarment was entered.
LAW: MLRPC 4.1(a) provides that in the course of representing a client, a lawyer shall not knowingly make a false statement of material fact or law to a third person. A misrepresentation to another attorney violates MLRPC 4.1(a). See Attorney Grievance Comm’n v. Zhang, 440 Md. 128, 166 (2014). In the Memorandum he sent to Weinberg, Wills knowingly and intentionally made multiple misrepresentations about his representation of Goode to Weinberg. Wills even fabricated an account of Goode’s funds and provided it to Mr. Weinberg, omitting from that accounting the many thousands of dollars he had drawn from Goode’s bank account, for his own use. These facts supported a violation of MLRPC 4.1(a).
According to MLRPC 8.1(a), a lawyer in connection with a disciplinary matter shall not knowingly make a false statement of material fact, or fail to disclose a fact necessary to correct a misapprehension known by the person to have arisen in the matter. Wills knowingly misrepresented to Bar Counsel that Goode’s file was in a storage facility and that he would meet Bar Counsel’s investigator at the facility to retrieve the file. He did not reply to or meet with the investigator after receiving a subpoena for the file and agreeing to the meeting. Wills never did produce the file to bar Counsel. By these actions, Wills violated MLRPC 8.1( a). See Attorney Grievance Comm’n v. Lee, 393 Md. 385 (2006).
Under MLRPC 8.1(b), a lawyer shall not knowingly fail to respond to a lawful demand for information from an admissions or disciplinary authority. Wills thrice failed to reply to Bar Counsel’s initial requests for information. Thus, Wills also violated MLRPC 8.1(b).
MLRPC 8.4 provides that it is professional misconduct for a lawyer to violate or attempt to violate the MLRPC. The hearing judge found that Wills had stolen and misappropriated funds from Goode’s bank account when he was her attorney, in violation of Md. Code Ann., Crim. Law §7-104(a)(1), (a)(2), and (a)(3), and Crim. Law §7-113(a)(1) and (a)(2). Those findings established a violation of MLRPC 8.4(b). See Attorney Grievance Comm’n v. Nussbaum, 401 Md. 612, 644 (2007).
The hearing judge found that Wills’s misrepresentations to Weinberg and Bar Counsel and his misappropriation of Goode’s money was laden with deceit and dishonesty. That finding established that Wills violated MLRPC 8.4(c). See Zhang, 440 Md. at 169. That same misconduct by Wills also established a violation of MLRPC 8.4(d). See Attorney Grievance Comm’n v. Zimmerman, 428 Md. 119, 132 (2012). Wills’s violation of these provisions of the MLRPC constituted a violation of MLRPC 8.4(a).
The appropriate sanction for Wills’s misconduct was disbarment. An order for Wills’s disbarment was accordingly entered.
COMMENTARY: Misappropriation of funds by an attorney is an act infected with deceit and dishonesty and ordinarily will result in disbarment in the absence of compelling extenuating circumstances justifying a lesser sanction. Zimmerman, 428 Md. at 144. Wills’s misconduct in misappropriating funds was exacerbated by multiple other violations, including the creation of the Memorandum with the intent to deceive Weinberg. In addition, Wills was evasive and dishonest with Bar Counsel throughout the investigative process. These combined violations created an even stronger case for disbarment. See Attorney Grievance Comm’n v. Page, 430 Md. 602, 637 (2013). Wills did not offer, nor did the hearing judge find, any mitigating circumstances, compelling or otherwise, that would justify a lesser sanction. Accordingly, disbarment was the appropriate sanction.
PRACTICE TIPS: The severity of the sanction for an attorney’s misconduct depends on the circumstances of each case, the intent with which the acts were committed, the gravity, nature and effect of the violations, and any mitigating factors.