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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK ----------------------------------------------------------------x UNITED STATES OF AMERICA ) ) Plaintiff, ) ) v. ) ) ONE TYRANNOSAURUS BATAAR SKELETON ) a/k/a Lot 49315 Listed on Page 92 of the Heritage ) Auctions May 20, 2012 Natural History Auction ) Catalog; ) ) Defendant-in-rem. ) ------------------------------------------------------------------x

12 Civ. 4760 (PKC)

MEMORANDUM OF LAW IN SUPPORT OF CLAIMANT ERIC PROKOPIS MOTION TO DISMISS

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TABLE OF CONTENTS INTRODUCTION ............1 STATEMENT OF FACTS. ..........3 I. II. III. The Bataar .................3 Fossil Sales, Prokopi and the Preparation of the Display Piece ...............4 The Auction, the Media Circus, and the Seizure ......................................5

ARGUMENT ....................................................................................................................6 I. The Government Has a High Burden for Pleading a Forfeiture Complaint .................................................................................................6 II. The Complaint Should Be Dismissed .......................................................9 A. Prokopi Was Not Given Fair Notice of Either Mongolian Law or Country of Origin or Valuation Rules Relating to Paleontological Objects.9 B. The Display Piece Was Not Stolen. ............15 1 Current Mongolian Law Does Not Unambiguously Declare Mongolia the Owner of Fossils, Much Less the Display Piece...15

2. The Complaint Fails to Allege that Mongolia has Ever Enforced its Laws As Vesting Title19 3. The Complaint Fails to Allege Particular Facts that the Display Piece ever actually existed in Mongolia and was Taken Without Mongolias Permission ...............................................20 4. The Complaint Fails to Allege Particular Facts that Prokopi Knew the Display Piece was Stolen. .....................................................21 CONCLUSION ...............................................................................................................21

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TABLE OF AUTHORITIES Cases Allen v. Scholastic Inc., 739 F. Supp. 2d 642, 645 (S.D.N.Y. 2011) ................4 Ancient Coin Collectors Guild v. U.S. Customs and Border Protection, 801 F. Supp. 2d 383 (D. Md. 2011), appeal docketed, No. 11-2012 (4th Cir. Sept. 21, 2011)........................13, 14 Chambers v. Time Warner, Inc., 282 F.3d 147 (2nd Cir.2002)4 County of Suffolk v. First American Real Estate Solutions, 261 F.3d 179, 194 (2nd Cir. 2001)10 Federal Communications Commn v. Fox Television Stations, Inc., 132 S. Ct. 2307, 2012 U.S. LEXIS 4661 (June 21, 2012) ..............10, 13,14 Giannone v. Bank of America, NA, 812 F.Supp. 2d 216 (E.D.N.Y 2011).4 Meisel v. Grundberg, 651 F. Supp. 2d 98 (S.D.N.Y. 2009)..4. Peru v. Johnson, 720 F. Supp. 810 (C.D. Cal. 1989), affd sub nom. Peru v. Wendt, 1991 U.S. LEXIS 10385 (9th Cir. 1991) ..........................................19 Schubert v. City of Rye, 775 F. Supp. 2d 689 (S.D.N.Y. 2011 .........................................4 United States v. $22,173.00 in United States Currency, No. 09 Civ. 7386(SAS), 2010 U.S. Dist. LEXIS 33494 (S.D.N.Y. Apr. 5, 2010)6, 7 United States v. $49,000 Currency, 330 F.3d 371 (5th Cir. 2003)6 United States v. Approximately 64,695 Pounds of Shark Fins, 520 F.3d 976 (9th Cir. 2008)11, 13, 14 United States v. An Antique Platter of Gold, 184 F.3d 131, 135 (2nd Cir. 1999), cert. denied, 528 U.S. 1136 (2000) .......................................8, 9 United States v. Burgess, 1987 U.S. Dist. LEXIS 11227 (N.D. Ill. Dec. 1, 1987)..11 United States v. Davis, 648 F.3d 84, 89 (2d Cir. 2011) ........7 United States v. General Elec. Co. v. United States Environmental Protection Agency, 53 F.3d 1324 (D.C. Cir. 1995)11, 13, 14

ii

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United States v. Mask of Ka-Nefer-Nefer, No. 4:11CV504 HEA, 2012 U.S. Dist. LEXIS 47012 (E.D. Mo. Mar. 31, 2012), appeal filed, No. 12-2578 (8th Cir. March 16, 2011). .....................................20 United States v. McClain, 545 F.2d 988 (5th Cir. 1977)15,16 United States v. McClain, 593 F.2d 658 (5th Cir. 1979), cert. denied, 444 U.S. 918 (1979) ...................................... 15,16 United States v. Schultz, 333 F.3d 393 (2nd Cir. 2003), cert. denied, 540 U.S. 1106 (2004)15, 16, 18, 19 United States v. Turley, 352 U.S.407 (1957).8 Constitutions, Statues and Treaties 1924 Constitution of Mongolia14, 15, 17 1992 Constitution of Mongolia ..............12, 15, 17,18 1970 UNESCO Convention on the Means of Prohibiting and Preventing Illicit Import, Export and Transfer of Ownership of Cultural Property ...........13,14 2001 Mongolian Cultural Heritage Law .................16, 17, 18 2002 Mongolian Criminal Code Art.175 ..........16, 18 North American Free Trade Agreement Implementation Act (Pub. L. 103-182, 107 Stat. 2057) ...........11 18 U.S.C. 545 ............7, 8,17 18 U.S.C. 981.. ....7, 8 18 U.S.C. 2314.8, 18 18 U.S.C. 23158, 18, 21 19 U.S.C. 1595a.. 7, 8,9,21 19 U.S.C. 2601 .................14 19 U.S.C. 2604 .............14 19 U.S.C. 2607 .................14 Rules and Regulations

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1924 Mongolian Rules to Protect Antiquities16, 17 19 C.F.R. 134.1(b)12 Fed. R. Civ. P. Supp. R. G.7, 21 Other Authorities Russ Buetter, Sale of $1 Million Dinosaur Skeleton is Halted After Origin Questioned, The New York Times (June 19, 2012)1,5 P.J. Currie, Theropods from the Cretaceous in Mongolia in The Age of Dinosaurs in Russia and Mongolia (Michael J. Benton et al. eds. Cambridge 2003)3 HSI Takes Custody of Tyrannosaurus Dinosaur Skeleton Looted From Mongolia, U.S. Immigration and Customs Enforcement (June 22, 2012)6 Steppe in an Ugly Direction: A Former President is Detained Ahead of Elections, The Economist (April 28, 2012) 5 Thomas O. Jewett, Thomas Jefferson Paleontologist, Archiving Early America website4 Thomas Laird, The Story of Tibet: Conversations with the Dalai Lama (Grove Press 2006) .............2 Tyrannosaurus Bataar is to be Delivered into Mongolia by U.S. Military Aircraft, InfoMongolia.com (July 19, 2012) ......................6 Wynne Parry, More Dinosaur-Smuggling Cases May Follow on Tyrannosaurs Heels, Live Science (June 28, 2012) . ..........................4 U.S. Customs and Border Protection Informed Compliance Publication, What Every Member of the Trade Community Should Know About: Works of Art, Collectors Pieces, Antiques, and Other Cultural Property (May 2006) ...........................................11, 12

iv

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INTRODUCTION Eric Prokopi (Prokopi) is a small businessman who has collected fossils since he was a young man. He purchased several groups of fossils on the open market and spent a year of his life and considerable expense identifying and compiling component parts of, and then restoring and mounting, the Tyrannosaurus bataar1 fossil (the Display Piece) so that it could be sold at auction. Prokopi thought he had recouped his considerable investment primarily in his own time and expertisewhen the Display Piece sold for $1.05 million at Heritage Auctions (Heritage) in New York. But then, a media campaign stirred up by academic paleontologists prompted Mongolias President to demand that the Display Piece be sent to Mongolia because it must have been stolen from there.2 Prokopi and Heritage had entered into negotiations with Mongolias President in order to settle the dispute, when on June 18, 2012, the United States filed a Civil Forfeiture Complaint in rem (Complaint) seeking forfeiture of the Display Piece. Prokopi is now forced to not only protect his considerable investment in time, money and expertise, but his reputation. The Governments action is unprecedented. Fossil collecting is well established, and has been intertwined with paleontology for generations. At least since the fall of Communism, fossils from China, Kazakhstan, Mongolia and Russia have been openly sold on the international market, and have been avidly collected in the United States by both individuals and museums. Yet, as the Government would now have it, all dinosaur fossils of presumed Mongolian origin are stolen property and should be returned to that country.
1

The Tyrannosaurus bataar, an Asian Cousin of the North American Tyrannosaurus Rex, is more properly known as a Tarbosaurus bataar, but will be referred to as a Tyrannosaurus bataar or Bataar here to be consistent with the terminology in the Complaint.

See Russ Buetter, Sale of $1 Million Dinosaur Skeleton is Halted After Origin Questioned, The New York Times (June 19, 2012) (available at http://www.nytimes.com/2012/06/20/nyregion/dinosaurs-sale-halted-afterpaleontologist-questions-its-origins.html) (last visited August 16, 2012).

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In making its demand, the Government relies on a seriously flawed Complaint that: (1) assumes Tyrannosaurus bataar (Bataar) fossils are only found in Mongolia, when two of the Governments own experts have said otherwise; (2) assumes that the Bataar fossils in this case were from one specimen3 and were shipped together from the United Kingdom to the United States, when the Governments own experts who examined the Display piece knew or should have known that the Display piece was a composite; and (3) largely bases its stolen property claim on a confiscatory 1924 Soviet-era constitution and regulations4 that were superseded by a 1992 post-Communist constitution and laws that recognize private property rights and which do not vest ownership of all paleontological objects in the Mongolian State. The Court should not countenance the Governments efforts to announce a new policy on the import of fossils through a forfeiture proceeding based primarily upon technical violations of country of origin and valuation rules where no such rules have been published and upon foreign laws that are largely unavailable to American citizens and are unclear in both their meaning and application. Instead, Claimant Prokopis Motion to Dismiss should be granted, not only to ensure that the fruits of his labor are rightly returned to him but to encourage the
Although not directly relevant to this Motion, the Governments experts knew or should have known that the Display Piece is a composite specimen based upon the bone map provided to the auction house and their own examination of the Display Piece (Complaint 23): Approximately 75% of the completed Display Piece is made up of organic, fossilized material. Of this fossilized material, approximately 50% was from a single Bataar specimen and the balance was pieced together from multiple specimens; Approximately 25% of the completed Display Piece is made up of inorganic, plastic material molded from other fossil specimens. After this litigation was commenced, Prokopi also subsequently informed counsel for the Government that the Display Piece is in fact a composite. Prokopi notes that here as well for claritys sake, though his motion does not depend on the composite nature of the Display Piece.
4 3

Mongolias 1924 constitution was promulgated after a Communist takeover that saw the confiscation of private property and the utter destruction of its Buddhist religious tradition. See Thomas Laird, The Story of Tibet: Conversations with the Dalai Lama 284 (Grove Press 2006) (After the 1911 revolt against the Manchu Empire, the Mongols suffered even worse fate than the Tibetans had. While the Chinese, embroiled in Civil War, were unable to occupy either Tibet or Mongolia, several Russian armies invaded the state in the 1920s. By 1942, Stalin exterminated Buddhism in Mongolia.).

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Government to regulate fossil collecting if at all -- prospectively through the legislative and regulatory process rather than retroactively through this unprecedented forfeiture action. STATEMENT OF FACTS I. The Bataar The Bataar is a dinosaur from the late Cretaceous period, approximately 70 million years ago. (Complaint 6). Although the Bataar lived well before humankind, the Government is adamant that all their fossil remains belong to the modern nation state of Mongolia because they allegedly can only be found there. In particular, the Complaint boldly proclaims that Bataar fossils have only been recovered from a small area of the Gobi Desert known as the Nemegt Basin located in Mongolia. (id. 8, 24) Moreover, the Government assures us that this claim is based on expert opinion of several paleontologists who specialize in Bataars. (id. 23) Thus, the Government specifically cites the opinion of one of those experts, Philip J. Currie, as stating Tarbosaurus bataar skeletons have only ever been recovered from the Nemegt basin and adjacent regions in Mongolia, which indicates that [the Defendant Property] was collected in Mongolia. (Id. 24; Letter of Philip J. Currie and Mark Norell to Elbegdorj Tsakhia, President of Mongolia, Complaint, Ex. B.) However, this critical assumption is contradicted in the fine print of one of the expert reports appended to the Complaint, as well as in a book written by Currie long before this litigation was commenced. In particular, a representative from the Mongolian Academy of Sciences admits in her appended report that fragmentary remains of large tyrannosaurids have been found in China and Kazakhstan Letter from Bolortseteg Minjin, Institute for Study of Mongolian Dinosaurs. (id.) Moreover, Mr. Currie himself has previously written about the recovery of Bataar fossils in Kazakhstan, Russia and China. P.J. Currie, Theropods from the

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Cretaceous in Mongolia in The Age of Dinosaurs in Russia and Mongolia 443, 448 (Michael J. Benton et al. eds. Cambridge 2003) (relevant pages attached to Declaration of Peter K. Tompa in Support of Motion to Dismiss (Tompa Decl. Exhibit (Ex.) A.).5 Finally, despite media reports that bataar fossils are rare, Currie has also previously stated that such fossils are common enough that paleontologists sometimes leave them in situ once found. (Id.) II. Fossil Sales, Prokopi and the Preparation of the Display Piece Fossil collecting is well established, and has been intertwined with paleontology in the United States at least since Thomas Jefferson converted the entry room of his home at Monticello into a natural history museum. Thomas O. Jewett, Thomas Jefferson Paleontologist, Archiving Early America website (available at http://www.earlyamerica.com/review/2000_fall/jefferson_paleon.html) (last visited Aug. 16, 2012). At least since the fall of Communism, fossils from the China, Kazakhstan, Mongolia and Russia have been openly sold on the international markets, and have been avidly collected both here and abroad by both individuals and museums. See Wynne Parry, More DinosaurSmuggling Cases May Follow on Tyrannosaurs Heels, Live Science (June 28, 2012) (available at http://www.livescience.com/21263-mongolian-fossils-easily-bought.html) (last visited August 16, 2012). Prokopi is a commercial paleontologist who runs a small business in Gainesville, Florida. (Complaint 17). He purchased several groups of fossils on the open market and spent a year of his life and considerable expense identifying and compiling component parts of, and then
5

In assessing a Motion to Dismiss, the Court may properly consider documentary evidence plaintiff had possession of, had knowledge of, or otherwise relied upon when framing a complaint. Chambers v. Time Warner, Inc., 282 F.3d 147, 153 (2nd Cir. 2002); Giannone v. Bank of America, NA, 812 F.Supp. 2d 216, 219 (E.D.N.Y 2011); Meisel v. Grundberg, 651 F. Supp. 2d 98, 107 (S.D.N.Y. 2009). Moreover, the Court may also take judicial notice of publicly reported facts, such as existence of press coverage or the contents of books. Schubert v. City of Rye, 775 F. Supp. 2d 689, 711 n. 20 (S.D.N.Y. 2011); Allen v. Scholastic Inc., 739 F. Supp. 2d 642, 645 (S.D.N.Y. 2011).

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restoring and mounting, the Display Piece so that it could be sold at auction. See Claim of Interest in Defendant in Rem (July 27, 2012) (Dkt. No. 8). III. The Auction, the Media Circus, and the Seizure Consistent with the open sale of fossils both in the United States and abroad, Prokopi completed his work on the Display Piece and consigned it to Heritage for placement in their May 2012 Natural History and Fine Arts Auction in New York as lot 49315. (Complaint 22). After describing the body as 75% complete and the skull 80%, the lot description also stated, [b]one map and restoration details available on request. (See Heritage Lot Description available at http://fineart.ha.com/c/item.zx?saleNo=6068&lotNo=49315.) (last visited August 16, 2012). A New York Times report aptly summarized the whirlwind tale of what happened next after Mark Norell, one of the Governments experts who excavates in Mongolia at the sufferance of its government, saw the Display Piece in the Heritage catalogue: (1) Norell composed an open letter condemning the auction of the Display Piece by claiming that Bataars are only found in Mongolia; (2) the letter went viral, ending up on the desk of Mongolias President, Tsakhia Elegdorj;6(3) President Elegdorj engaged the services of a Houston lawyer to try to stop the auction; (4) the Houston lawyer procured a Texas State Court TRO, despite that courts lack of in rem jurisdiction over the Display Piece; (5) the auction nonetheless proceeded in New York; (6) the lot sold for $1,052,500 to an anonymous buyer despite the controversy; (7) Prokopi and Heritage nonetheless agreed to halt the sale pending an investigation; and (8) the U.S. Government filed the Complaint. Russ Buetther, Sale of $1 Million Dinosaur Skeleton is Halted After Origin Questioned, The New York Times (June 19, 2012) (NY Times Report) (available
6

Elegdorj is himself embroiled in controversy at home over his harsh treatment of Mongolias immediate past president. See Steppe in an Ugly Direction: A Former President is Detained Ahead of Elections, The Economist (April 28, 2012) (available at http://www.economist.com/node/21553503) (last visited August 16, 2012).

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at http://www.nytimes.com/2012/06/20/nyregion/dinosaurs-sale-halted-after-paleontologistquestions-its-origins.html) (last visited August 16, 2012). Other media and internet reporting of this matter has been far less accurate, and far more damaging to Prokopis reputation.7 For example, U.S. Customs and Border Protection (CBP) inaccurately suggested in a press release that the Display Piece had already been forfeited. HSI Takes Custody of Tyrannosaurus Dinosaur Skeleton Looted From Mongolia, U.S. Immigration and Customs Enforcement (June 22, 2012) (available at http://content.govdelivery.com/bulletins/gd/USDHSICE-45e63d) (last visited August 16, 2012). And more recently, the Mongolian Presidents lawyer has been quoted (inaccurately one hopes) as stating that the Display Piece is to be delivered to Mongolia in 1-2 months by U.S. Military aircraft and that Prokopi had repeatedly committed crimes as such and had repeatedly had illegal assets confiscated on an attempt to enter an auction. Tyrannosaurus Bataar is to be Delivered into Mongolia by U.S. Military Aircraft, InfoMongolia.com (July 19, 2012) (available at http://www.infomongolia.com/ct/ci/4563) (last visited August 16, 2012). ARGUMENT I. The Government Has a High Burden for Pleading a Forfeiture Complaint. Given the impact of forfeiture on property rights, forfeiture complaints are subject to rigorous review. To survive, the Complaint must state sufficiently detailed facts to support a reasonable belief that the Government will be able to meet its burden of proof at trial. Fed. R. Civ. P. Supp. R. (Supp. Rule)G(2)(f) (emphasis added); see United States v. $22,173.00 in United States Currency, No. 09 Civ. 7386(SAS), 2010 U.S. Dist. LEXIS 33494 *2 (S.D.N.Y. Apr. 5, 2010); see also United States v. $49,000 Currency, 330 F.3d 371, 375 n.8 (5th Cir. 2003). This pleading standard is more stringent than the general pleading requirements [as] an implicit
7

On August 16, 2012, a Google search of the words Mongolia, dinosaur and Prokopi generated 8,140 results.

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accommodation to the drastic nature of the civil forfeiture remedy. $22,173.00 in U.S. Currency, 2010 U.S. Dist. LEXIS 33494, at *5. The particularity-of-pleading requirements in forfeiture cases provide a way of ensuring that the government does not seize and hold, for a substantial period of time, property to which, in reality, it has no legitimate claim. United States v. Daccarett, 6 F.3d 37, 47 (2d Cir. 1993) (citation omitted). The Complaint identifies three major statutory bases for its forfeiture claims: 18 U.S.C. 545 and 981(a)(1)(C), and 19 U.S.C. 1595a(c). (Complaint 1, 26-38.) The three statutes require proof that the Display Piece was either (1) introduced into commerce by means of false statements8 and/or (2) transported in foreign or interstate commerce knowing it to be stolen or converted9:

Section 1595a(c) authorizes forfeiture of property that is both introduced into the United States contrary to law and stolen. Id. at 1595a(c)(1)(A). Contrary to law means illegally, unlawfully, or in a manner conflicting with established law, United States v. Davis, 648 F.3d 84, 89 (2d Cir. 2011). The Complaint alleges there is probable cause to believe that the Display Piece was stolen from Mongolia and introduced into the United States contrary to law, in that it was (1) introduced into commerce of the United States by means of false statements and/or (2) transported in foreign commerce knowing it was stolen or converted. (Complaint 36.) Section 545 provides for the forfeiture of merchandise that is knowingly import[ed] ...contrary to law. The Complaint alleges that there is probable cause to believe that the Display Piece is merchandise that was introduced into the United States (1) by means of false statements in violation of 18 U.S.C. 542 (merchandise introduced by means of any fraudulent or false invoiceor by means of any false statementas to any matter material thereto without reasonable cause to believe in the truth of such statement) and/or (2) imported into the United States knowing it was stolen or converted. (Id. 37.) Section 981 (a) (1) (C) authorizes forfeiture of property that constitutes or is derived from a violation of certain criminal laws. The Complaint alleges that there is probable cause to believe that the Display Piece is property, real or personal, that is derived from a

The Cause of Action in 36 of the Complaint fails to state a statutory basis for the Governments first theory in violation of 1595a(c).
9

The Cause of Action in 37 of the Complaint fails to state a statutory basis for the Governments second theory in violation of 545.

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violation of 18 U.S.C. 2314 (transportin interstate or foreign commerce any merchandise knowing the same to have been stolen ) and/or 18 U.S.C. 2315 (receives, possesses, conceals, barters, sells, or disposes of any merchandisewhich have crossed a State or United States boundary after being stolen, unlawfully converted, or taken, knowing the same to have been stolen, unlawfully converted, or taken ). (Id. 38.) An object is stolen if it is taken from its owner, without consent, and with the intent to deprive the owner of the rights and benefits of ownership. See United States v. Turley, 352 U.S. 407, 408 (1957); United States v. Schultz, 333 F.3d 393, 399 (2d Cir. 2003), cert denied, 540 U.S. 1106 (2004). Thus, to establish that the Display Piece was stolen, the Government would need to prove that Mongolia owned it; and that it was taken from Mongolia without permission and with the intent to deprive Mongolia of its property.10 All three causes of action require proof that Prokopi had culpable knowledge, but there are slight differences as to when that culpable knowledge must have arisen. The Governments theories under Section 1595a, Section 545 and Section 981 that rely upon a knowing violation of Section 542 and/or Sections 2314 require proof that Prokopi knew at the time of import that the Display Piece was stolen. The Governments theories under Section 1595a, Section 545 and Section 981 that rely upon a knowing violation of Section 2315 require proof that Prokopi knew that the Display Piece was stolen when Prokopi possessed it in the United States. Furthermore, the Governments theories under Section 1595a and Section 545 rely on a violation of Section 542 require the Government to show that the violation of Section 542 was material. United States v. An Antique Platter of Gold, 184 F.3d 131, 135 (2nd Cir. 1999), cert. denied, 528 U.S. 1136 (2000). Under that standard, the Court asks whether the false statements would have a natural tendency to influence customs officials, i.e., whether a reasonable customs

Even if Prokopi does not prevail on this Motion to Dismiss, the Government will have to prove each portion of the Display Piece is subject to forfeiture in order to forfeit the whole. Of course, the Government can have no claim to the 25% of the Display Pierce that is made of molded plastic material.

10

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officer would consider the statements significant to the exercise of his or her official duties. Id. at 135-36. II. The Complaint Should Be Dismissed

The Governments forfeiture Complaint is predicated on the Display Piece being either stolen under Mongolian law or fraudulently imported into the United States.11 But Prokopi never received fair notice of either Mongolian law or the country of origin or valuation criteria for importing dinosaur fossils. Even assuming Prokopi did received fair notice, the Governments stolen property claims fail as a matter of law: Second Circuit precedent requires that Mongolia had enacted a statute vesting title in the State and that Mongolia has asserted its rights as an owner by actively enforcing the statute within its own borders against Mongolian citizens and foreign nationals by a large, well-organized police force. For these reasons, the Complaint should be dismissed. A. Prokopi Was Not Given Fair Notice of Either Mongolian Law or Country of Origin or Valuation Rules Relating to Paleontological Objects. The Court should not countenance the Governments efforts to announce a new policy on the import of fossils through a forfeiture proceeding based primarily upon technical violations of country of origin and valuation rules where no such rules have been published, and upon foreign laws that are largely unavailable to American citizens and are unclear in both their meaning and application. Indeed, Prokopis Motion to Dismiss should be granted, not only to ensure that the fruits of his labor are rightly returned to him, but to encourage the Government to regulate fossil collecting if at all-- prospectively through the legislative and regulatory process rather than retroactively through this forfeiture proceeding.
11

The Governments claim under 19 U.S.C. 1595a(c) for false statement must fail because false statements alone are not on the list of introduct[ions]contrary to law listed in Section 1595a(c). The Governments claim under 1595a can only proceed if there is probable cause to believe the Display Piece is stolen, smuggled, or clandestinely imported or introduced under 1595a(c)(1).

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The U.S. Supreme Court recently held in Federal Communications Commn v. Fox Television Stations, Inc., 132 S. Ct. 2307, 2012 U.S. LEXIS 4661 (June 21, 2012), that due process requires fair notice of applicable regulations. In that case, the Supreme Court held that because the FCC failed to give Fox Television Stations or ABC, Inc. fair notice that fleeting expletives and momentary nudity could be found to be actionably indecent, the FCCs standards as applied to these broadcasts were vague. Id. In so doing, the Court observed, A fundamental principle in our legal system is that laws which regulate persons or entities must give fair notice of conduct that is forbidden or required. See Connally v. General Constr. Co., 269 U. S. 385, 391, 46 S. Ct. 126, 70 L. Ed. 322 (1926) ("[A] statute which either forbids or requires the doing of an act in terms so vague that men of common intelligence must necessarily guess at its meaning and differ as to its application, violates the first essential of due process of law"); Papachristou v.Jacksonville, 405 U. S. 156, 162, 92 S. Ct. 839, 31 L. Ed. 2d 110 (1972) ("Living under a rule of law entails various suppositions, one of which is that '[all persons] are entitled to be informed as to what the State commands or forbids'" (quoting Lanzetta v. New Jersey, 306 U.S. 451, 453, 453 S. Ct. 618, 83 L. Ed. 888 (1939) (alteration in original))). This requirement of clarity in regulation is essential to the protections provided by the Due Process Clause of the Fifth Amendment. See United States v.Williams, 553 U. S. 285, 304, 128 S. Ct. 1830, 170 L. Ed. 2d 650 (2008). It requires the invalidation of laws that are impermissibly vague. A conviction or punishment fails to comply with due process if the statute or regulation under which it is obtained "fails to provide a person of ordinary intelligence fair notice of what is prohibited, or is so standardless that it authorizes or encourages seriously discriminatory enforcement." Ibid. As this Court has explained, a regulation is not vague because it may at times be difficult to prove an incriminating fact but rather because it is unclear as to what fact must be proved. See id., at 306, 128 S. Ct. 1830, 170 L. Ed. 2d 650. Even when speech is not at issue, the void for vagueness doctrine addresses at least two connected but discrete due process concerns: first, that regulated parties should know what is required of them so they may act accordingly; second, precision and guidance are necessary so that those enforcing the law do not act in an arbitrary or discriminatory way. See Grayned v. City of Rockford, 408 U. S. 104, 108-109, 92 S. Ct. 2294, 33 L. Ed. 2d 222 (1972).

10

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132 S. Ct. at 2317-1812 Accord County of Suffolk v. First American Real Estate Solutions, 261 F.3d 179, 194 (2nd Cir. 2001) (Due process requires that before a criminal sanction of significant civil or administrative penalty attaches, and individual must have fair warning of the conduct prohibited by the statute or the regulation that makes such a sanction possible.); United States v. Approximately 64,695 Pounds of Shark Fins, 520 F.3d 976 (9th Cir. 2008) (Government seizure of shark fins improper because neither applicable statute nor regulations provided notice to Defendant that shark fins could be seized from a vessel because it would be considered a fishing boat); United States v. General Elec. Co. v. United States Environmental Protection Agency, 53 F.3d 1324, 1328 (D.C. Cir. 1995) (case relates to environmental regulations concerning the disposal of PCBs; court observes that fair notice requirement has now been thoroughly incorporated into administrative as well as criminal law); United States v. Burgess, 1987 U.S. Dist. LEXIS 11227 (N.D. Ill. Dec. 1, 1987) (historical discussion of fair notice requirement back to Blackstones criticism of Caligula who (according to Dio Cassius) wrote his laws in a very small character, and hung them up on high pillars, the more effectively to ensnare the people.). Here, Prokopi could have no fair notice of the country of origin or valuation rules for fossils because none exist. Title VI of the North American Free Trade Agreement Implementation Act (Pub. L. 103-182, 107 Stat. 2057), also known as the Customs Modernization Act, requires CBP to provide the public with adequate information concerning the trade community's rights and responsibilities under customs regulations and related laws.13

It is worth noting that the Supreme Court took into account the inevitable reputational injury that came from the Governments unjustified action in its ruling. See Fox Television Stations, Inc., 132 S. Ct. at 2318-19. Here, the continuing media campaign to send the Display Piece to Mongolia has already damaged Prokopis reputation. 13 See North American Free Trade Agreement Implementation Act , Section 625.(e) PUBLIC INFORMATION. The Secretary may make available in writing or through electronic media, in an efficient, comprehensive and timely manner, all information, including directives, memoranda, electronic messages and telexes which contain

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In May of 2006, CBP issued a revised Informed Compliance Publication which included guidance on the proper tariff classification of fossils,14 but failed to issue guidance on how to determine the country of origin or value of fossils or even of archaeological objects. In fact, the CBP regulations only state a general definition of the country of origin of imported merchandise: Country of origin means the country of manufacture, production, or growth of any article of foreign origin entering the United States. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the country of origin within the meaning of this part15 Since no regulatory guidance exists on how to apply this definition, there is no way for an importer of fossils to know how to proceed. In fact, an importer would be hard-pressed to respond to a customs brokers inquiry about the country of origin of a dinosaur fossil that existed millions of years before the emergence of Homo sapiens and even longer before the concept of a country was established. Moreover, Prokopi could have no fair notice of Mongolias laws cited in the Complaint16 the basis for the Governments stolen property claim --- because they are not readily

instructions, requirements, methods or advice necessary for importers and exporters to comply with the Customs laws and regulations. 14 See U.S. Customs and Border Protection Informed Compliance Publication, What Every Member of the Trade Community Should Know About: Works of Art, Collectors Pieces, Antiques, and Other Cultural Property, 13 (May 2006) (In addition to collections and collectors pieces of numismatic interest, collections and collectors' pieces of zoological, botanical, mineralogical, anatomical, historical, archeological, palaeontological, or ethnographic interest are also classified under heading 9705, specifically subheading 9705.00.00.90. This subheading includes, for example: ...... Geological specimens for the study of fossils (extinct organisms which have left their remains or imprints in geological strata), whether animal or vegetable.) See http://www.cbp.gov/linkhandler/cgov/trade/legal/informed_compliance_pubs/icp061.ctt/icp061.pdf (last visited August 16, 2012).
15

19 C.F.R. 134.1(b).

16

The website of the Embassy of Mongolia does link to Mongolias 1992 Constitution, which presumably superseded the Communist era 1924 Constitution cited in the Complaint 9-11, 14. See http://www.mongolianembassy.us/government_and_policy/the_constitution_of_mongolia.php (last visited August 16, 2012). How the 1992 Constitution differs from the 1924 Constitution in several critical respects will be discussed more fully below.

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available to the general public, much less to attorneys who practice in the cultural property field. (See Tompa Decl., attached.) Indeed, the utter lack of available regulatory guidance on these issues raises far more serious due process concerns than those which resulted in judgment for the Defendant in each of the above mentioned cases that also arose in a regulatory context: Fox Television Stations, Inc., General Elec. Co. and 64,695 Pounds of Shark Fins. In each of those cases, there was at least a regulatory scheme that provided some basis for the disputed Government action. Here, in contrast, Congress has affirmatively decided not to regulate the import of fossils from foreign lands, as described below. Yet, the Government has nonetheless seized Prokopis property based on disparate statutes that assume wrongdoing where no clear standards outlining such alleged wrongdoing exist. It is true that both Mongolia and the United States are signatories to the 1970 UNESCO Convention on the Means of Prohibiting and Preventing the Illicit Import and Transfer of Ownership of Cultural Property (the 1970 UNESCO Convention). (See Complaint 16 (noting that Mongolia became a signatory in 1991)). It is also true that the 1970 UNESCO Conventions designates objects of paleontological interest as cultural property of a state party. 1970 UNESCO Convention, Art. 1 (a) (available at http://exchanges.state.gov/heritage/culprop.html) (last visited August 16, 2012). However, the United States Senate only gave its advice and consent to the 1970 UNECO Convention subject to six understandings, one of which was that the provisions of the Convention [are] to be neither self-executing nor retroactive, and, as a result, the provisions of the Convention were only partly enacted into U.S. law with the passage of the 1983 Convention on Cultural Property Implementation Act. 19 U.S.C. 2601 et seq. (CPIA). Ancient Coin Collectors Guild v. U.S.

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Customs and Border Protection, 801 F. Supp. 2d 383, 388 (D. Md. 2011), appeal docketed, No. 11-2012 (4th Cir. Sept. 21, 2011). The CPIA only governs the import of archaeological and ethnological artifacts pursuant to Article 9 of the 1970 UNESCO Convention and only such other cultural property stolen from the inventory of a museum or a secular or public monument pursuant to Article 7 of the 1970 UNESCO Convention. See 19 U.S.C. 2601, 2604, 2607. Congress decided not to regulate the import of undocumented paleontological objects when it passed the CPIA. In addition, there is no U.S. regulatory guidance in the form of Informed Compliance Publications, Directives or Bulletins issued by CBP on how to determine the country of origin or valuation of fossils. Likewise, there is no U.S. statue or regulation stating what constitutes a stolen paleontological object unless they are stolen from the inventory of a museum or like institution. Fossils including those from China, Kazakhstan, Mongolia and Russiaare widely and openly available on the domestic and international markets. The cited Mongolian law, even if applicable, is simply unavailable to American citizens. Under the circumstances, Prokopi, even more so than the claimants in Fox Television Stations, Inc., General Elec. Co. and 64,695 Pounds of Shark Fins, had no fair notice of what the State commands or forbids. Accordingly, the Complaint should be dismissed, so that the Government will be encouraged instead to regulate the import of fossilsif at allthrough the legislative and regulatory process on a prospective basis, and not through an ad hoc enforcement action aimed at depriving Prokopi of his substantial work and financial investment in the Display Piece.

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B. The Display Piece Was Not Stolen. The backbone of the Complaint is that the Display Piece was stolen under laws dating back to Mongolias 1924 Soviet constitution.17 Even assuming for the sake of argument that Prokopi had fair notice of Mongolian law, the Governments argument fails because (1) a 1992 constitution superseded the 1924 Mongolian Communist era constitution; (2) that 1992 constitution (and the other post-communist law cited in the Complaint) fail to vest clear title to fossils in the State; and (3) the Government has not- because it cannot- allege that Mongolia has asserted its rights as an owner by actively enforcing the statute within its own borders against Mongolian citizens and foreign nationals by a large, well-organized police force. 1. Current Mongolian Law Does Not Unambiguously Declare Mongolia the Owner of Fossils, Much Less the Display Piece.

Foreign countries have adopted a wide variety of laws and regulations aimed at protecting and preserving cultural patrimony. These range from outright declarations of national ownership at one extreme, down to far more modest controlssuch as export limits, reporting statutes, rights of first refusal, classification systems, limits on transfer, limits on excavation, and the like. Our research could locate no reported decision concerning the alleged illegal removal of paleontological specimens abroad triggering a foreign stolen property claim. However, there are three Court of Appeals decisions addressing whether an antiquity removed from a foreign country in violation of its patrimony laws constitutes stolen property within the meaning of United States law. All three decisions, United States v. McClain, 545 F.2d 988, 1002 (5th Cir. 1977) (McClain I), United States v. McClain, 593 F.2d 658, 670 (5th Cir. 1979) (McClain II), cert. denied, 444 U.S. 918 (1979); and United States v. Schultz, 333 F.3d at 410, have reached the same general conclusion: the removal renders the property stolen under United
17

Prokopi acknowledges and appreciates the courtesy of the Governments counsel in supplying his counsel with copies of translated copies of the Mongolian laws cited in the Complaint.

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States law only if the foreign law clearly and unambiguously declares the foreign state the owner of the object. These decisions reach this conclusion because ownership is a prerequisite of theft, and preservation laws, transfer restrictions, registration requirements, and export controls do not create ownership in the state. The state comes to own property only when it acquires such property in the general manner by which private persons come to own property, or when it declares itself the owner. McClain I, 545 F.2d at 1002. See also United States v. Schultz, 333 F.2d at 410 (distinguishing between laws intended to assert true ownership of certain property and those that merely ... restrict the export of that property). This declaration of ownership must be clear and unequivocal. McClain II, 593 F.2d at 670; see also Schultz, 333 F.3d at 402 (clear and unambiguous). Moreover, due process requires that a foreign ownership law be drafted with sufficient clarity to survive translation into terms understandable by and binding upon American citizens and the criminal laws (on which the Government here bases its forfeiture claims) cannot properly be applied to items deemed stolen only on the basis of unclear pronouncements by a foreign legislature. McClain II, 593 F.2d at 670-71. Thus, if the foreign law does not unambiguously declare state ownership, that is the end of the analysis, and no expert testimony purporting to clarify or amplify that law can change the result. See id. (emphatic expert testimony from multiple witnesses that Mexico has considered itself the owner of all pre-Columbian artifacts for almost 100 years is insufficient, where written law was ambiguous prior to 1972). Any other result would put auctioneers, dealers, collectors and museums in the untenable position of having to look beyond the plain language of foreign laws, and attempt to assess and predict the risk that foreign officials or

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purported experts might later claim that the laws mean something other than what they say in the context of litigation. Here, the Government relies upon one constitution, two statutes and a regulation to support its claim that Mongolia owns the Display Piece: a 1924 Soviet-era constitution; a 1924 Soviet-era regulation; a 2001 heritage law; and a 2002 criminal law. (Complaint 9-15.) However, the Soviet-era constitution and regulations have been superseded by other laws that recognize private property and the wording of the later laws fall short of what is required to establish state ownership under applicable case law. While the Complaint relies upon a 1924 Soviet era constitution to establish state ownership over fossils, it fails to mention that this constitution and its communist era successors18 were superseded in 1992 by another constitution that recognizes private property rights and which sees the State as a protectornot sole ownerof cultural objects19. In particular, the Government cites Article Three, Section One of the First Mongolian constitution, enacted in 1924 for the proposition that all assets and resourcesshall be under the possession of the people, thus making private property of them prohibited. (Complaint 10.) On the other hand, Article Sixteen, Section Three of Mongolias post-communist 1992 constitution explicitly protects [r]ight to fair acquisition, possession and inheritance of movable and immovable property. 1992 Constitution Art. 16 (3), Tompa Decl.Ex. B. And while mineral wealth shall be the property of the state nothing is said of paleontological objects found on or in the soil.

The 1924 Constitution was supersceded by a 1940 Constitution, then by a 1957 Constitution, then by a 1960 Constitution, and finally by a 1992 Consitution. As set forth in the Tompa Decl., the 1992 Constitution is posted on the website of the Mongolian Embassy in the United States. See http://www.mongolianembassy.us/government_and_policy/the_constitution_of_mongolia.php (last visited August 16, 2012). It is unclear when that document was uploaded onto the Mongolian Embassys website.
19

18

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Id. Art. 6 (1)-(2). Indeed, we are only told that Historical cultural, scientific and intellectual heritages of the Mongolian people shall be under State protection. Id. Art. 7 (1). The cited statutes also fail to establish that the Mongolian state clearly and unambiguously owns fossil resources found in the country in the post-communist period. The Government has alleged that a 1924 Soviet era regulation vests title in the state. (Complaint 11.) However, the current statutory scheme suggests that Mongolia has departed from its Communist past. The Government cites Article Thirteen, Section One of the 2001 Mongolian cultural heritage law that states, [t]he territory and land bowels where historically, culturally and scientifically significant objects exist shall be under state protection and any such findings shall be state property. (Complaint 12.) On the other hand, different provisions of that same statute make clear that fossils can be privately owned. See Law of Mongolia, on Protection of Cultural Heritage, Art. 3.1 (suggesting private ownership); Art. 3.1.8 (imprints of ancient animals); Art. 5 (grading and evaluation of cultural objects); Art. 8.2 (registration of privately owned historical and cultural objects); Art.14.1.2 (right to exhibit objects and receive income); Art.15.1.3 (right to acquire and collect); Art. 16 (right to sell to the State or transfer to other Mongolians), attached to Tompa Decl. Ex. C.20 Moreover, Mongolias post-Communist export control laws do not constitute in and of themselves vesting statutes: Art. 175.2 of the 2002 Criminal Code again only allows for seizure for artifacts if they are smuggled. (See Complaint 15; Tompa Decl. Ex. D.) In short, the current 1992 Mongolian constitution and related statutes recognize private ownership of fossils, and do not transfer title to the State, much less do so clearly and unequivocally. Because current Mongolian law does not clearly and unambiguously declare that Mongolia owns all fossils, as a matter of law any removal of the Display Pieces constituent
20

It should be noted that the translation provided indicates the statue has been amended. The impact of these amendments is unclear.

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parts from Mongolia did not render it stolen property within the meaning of 18 U.S.C. 2314 and 2315, the criminal statutes on which the Governments major forfeiture theory is based. See McClain II, 593 F.2d at 671; Schultz, 333 F.3d at 402. Accordingly, the Governments stolen property claims should be dismissed. 2. The Complaint Fails to Allege that Mongolia has Ever Enforced its Laws As Vesting Title. While facial clarity is necessary, it alone is not sufficient. Even an apparently clear foreign law does not vest ownership if the foreign state has not actually enforced its own law as granting it title. For example, in Peru v. Johnson, 720 F. Supp. 810 (C.D. Cal. 1989), affd sub nom Peru v. Wendt, 1991 U.S. LEXIS 10385 (9th Cir. 1991), Peru sought to reclaim antiquities, relying on a law declaring that artifacts in historical monuments are the property of the State and that unregistered artifacts shall be considered to be the property of the State. Id. at 814. Finding that [t]here is no indication in the record that Peru ever has sought to exercise its ownership rights in such property, so long as there is no removal from that country, the Court concluded that the Peruvian laws did not vest title in the state, and dismissed Perus claims. Id; cf. Schultz, 333 F.3d at 402 (stressing the Egyptian governments active enforcement in concluding that its laws did vest title). This rule prevents a country unwilling to take the politically unpopular step of seizing antiquities from its own people from asking the United States to do so on its behalf. It also prevents a country from rediscovering laws that have previously not been enforced, thereby unsettling the reasonable expectations that have developed about the meaning of those laws. Nothing in the Complaint provides the required reasonable belief that the Government will be able to present enforcement evidence here. The Complaint is silent on whether Mongolia has ever before, in any context, enforced its laws granting the state ownership of paleontological 19

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objects. The failure to allege prior enforcement provides an additional reason the Complaint fails to adequately allege that the Display Piece is stolen. 3. The Complaint Fails to Allege Particular Facts that the Display Piece ever actually existed in Mongolia and was Taken Without Mongolias Permission. An essential element in proving that the Display Piece is stolen is establishing that it actually existed in Mongolia and was removed without the permission of appropriate government authorities. The Government has not met its burden of pleading particular facts showing that the Display Piece existed in Mongolia or that it was removed without permission. A district courts recent decision in United States v. Mask of Ka-Nefer-Nefer, No. 4:11CV504 HEA, 2012 U.S. Dist. LEXIS 47012 (E.D. Mo. Mar. 31, 2012), appeal filed, No. 122578 (8th Cir. March 16, 2011), is instructive. There, the Governments evidence showed that an Egyptian mask had been in storage at an Egyptian government facility in the 1960s and had disappeared by the early 1970s before turning up in the global market in 1998, and that there was no record that the mask had been sold or given to a private party in the intervening years. Nonetheless, the Court dismissed the Governments forfeiture complaint for failing to allege adequately that the mask was stolen, holding that [t]he Government cannot simply rest on its laurels and believe that it can initiate a civil forfeiture proceeding on the basis of one bold assertion that because something went missing from one party in 1973 and turned up with another party in 1998, it was therefore stolen and/or imported or exported illegally. 2012 U.S. Dist. LEXIS 47012, at *8-9. In Ka-Nefer-Nefer, the Government at least had evidence that the mummy mask at issue was at one time in the foreign states actual possession and that there was no record of a subsequent sale or gift. Here, an appended report of one of the Governments experts acknowledges that fragmentary remains of large tyrannosaurids have been found in China and 20

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Kazakhstan, and another at most supposes that the Bataars fossilized remains were unearthed in Mongolia sometime between 1995-2005 or possibly before the 2001 and 2002 Mongolian legislation cited in the Complaint was even promulgated.(Letter from Bolortseteg Minjin, Institute for Study of Mongolian Dinosaurs (June 6, 2012); Khishigjav Tsogtbataar, Statement of Fossil Bones (June 6, 2012), Complaint Ex. B.) Accordingly, the Government has not alleged that the Display Piece was ever in the actual possession of the Mongolian government, and the Government makes no allegation of the absence of gift or sale records. If the inference of theft was unavailable to the Government with regard to a mask that disappeared from the Egyptian governments storeroom at some unknown point within a single decade, such an inference surely is unavailable here. Absent allegations sufficient to support a reasonable belief that the Government will be able to prove theft of the Display Piece, the Complaint must be dismissed. 4. The Complaint Fails to Allege Particular Facts that Prokopi Knew the Display Piece was Stolen.

The Government bears the burden of alleging sufficient facts to support a reasonable belief that it will be able to prove at trial Prokopi knew that the Display Pieces constituent parts were stolen. See Supp. Rule G(2)(f); 18 U.S.C. 545, 2314, 2315; 19 U.S.C.1595a(c). The Complaint makes no such allegations against Prokopi. Accordingly, the Governments stolen property claims must be dismissed on that basis as well. CONCLUSION It may or may not be time to regulate fossil collecting like antiquities collecting, but surely any such regulatory effort should only be accomplished prospectively through the legislative or administrative process rather than retroactively through a forfeiture action prompted by a media frenzy and foreign politics. The Government should not be allowed to seize 21

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property based upon obscure foreign laws or unwritten interpretations of country of origin or valuation rules for fossils. Moreover, the Government has not alleged sufficient facts to establish a reasonable basis to believe that it could meet its burden to prove that the Display Piece was stolen. For all these reasons, the Complaint should be dismissed.

Dated: August 17, 2012

Respectfully submitted,

/s/ Michael McCullough ___________________________________ Michael McCullough Michael McCullough LLC 155 Water St, 3rd Floor Brooklyn, NY 11201 T: 646.262.7630 F: 866.941.5720 Michael@McCulloughLLC.com

/s/ Peter K. Tompa _____________________________________ Peter K. Tompa BAILEY & EHRENBERG PLLC 1015 18th Street, N.W. Suite 204 Washington, D.C. 20036 Tel: (202) 331-4209 Fax: (202) 318-7071 pkt@becounsel.com Attorneys for Eric Prokopi

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CERTIFICATE OF SERVICE The undersigned certifies that this 17th day of August 2012, he served the foregoing via electronic filing and email on plaintiffs counsel, pursuant to Civil Rule 5.2 of the Local Rules of the United States District Court for the Southern District of New York. /s/ Peter K. Tompa ________________________ Peter K. Tompa

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