Recent Raid by U.S. Justice Department on Gibson Guitar Company Over Wood Shipment Raises Questions about Lacey Act

							Legal Daily News Feature


Recent Raid by U.S. Justice Department on Gibson Guitar Company Over
Wood Shipment Raises Questions about Lacey Act
By Rebecca E. Neely


The Lacey Act is a conservation law passed in 1900 to protect wildlife, fish, and plants, and that was most recently amended in 2008
to combat activities in relation to illegal logging. The act applies to a wide range of wood products that includes lumber, paper and
other items such as hand tools, billiard tables and revolvers. The amendment requires companies to exercise ‘’due care’’ in ‘’ensuring
no one in their supply chain violates U.S. or foreign laws’’, per the September 2nd wsj.com article, ‘’Forestry Law Splits Wood
Industry’’.




                             09/03/11                                  Leonard Krause, a consultant who advises companies on
                                                                       staying in compliance with the Lacey Act, tells clients, per
                            Last week, U.S. Justice                    the September 1st wsj.com article, ‘’Gibson Guitar Wails on
                            Department officials raided the            Federal Raid Over Wood’’ to consult attorneys in the countries
                            Gibson Guitar Corp. to investigate,        where they want to purchase wood products. He was quoted
under provisions of the Lacey Act, per the September 2nd               as saying: ‘’The net effect is that it raises everybody’s cost of
wsj.com article, ‘’whether Indian ebony was shipped to the             doing business.’’
company in violation of Indian laws requiring that the wood be
processed inside India. The company says the sale was legal.’’         Henry Juszkiewicz, CEO of Gibson Guitar Corp., was quoted as
                                                                       saying in the September 1st
The raid has made the entire wood and wood products                    wsj.com article: ‘Can you imagine a federal agent saying,
industry wary. But does the entire industry need to be                 ‘You’re going to jail for five years’ and what you do is sort
concerned or just certain segments?                                    wood in the factory? I think that’s way over the top.’’ He was
                                                                       also quoted as saying that employees of Gibson were being
Laura Duncan, a San Francisco attorney who specializes in the          ‘’treated like drug criminals.’’
Lacey act was quoted as saying in the September 2nd wsj.com
article: ‘’The Justice Department has made it fairly clear that        And perhaps he has a valid point. With so many other
this is a law that they intend to enforce, and they will partner       problems afoot in the world today, does a raid on a company
with other agencies on the ground to enforce the law.’’                who manufactures musical instruments warrant such attention
                                                                       from the U.S. Department of Justice? It’s like using a chainsaw
However, Steve Chercover, a wood-products analyst with                 to cut grass. Or in this case, perhaps, a toothpick.
D.A. Davidson in Portland, Ore., was quoted as saying in the
September 2nd wsj.com article: ‘’What we’re talking about              However, certainly, real problems and consequences exist
here are exotics. In all honesty, it’s only musical instruments        because of illegal logging and the amendment to the Lacey
and high-end furniture where this is ever going to have an             Act has effectively worked to curtail these practices. Perhaps
impact.’’                                                              what’s needed is a common sense, middle ground, based on
                                                                       a company’s volume of production or other select criteria,
Per Duncan, it’s the due care provision that’s got people              versus a ‘what’s good for the goose is good for the gander’
worried, because it’s vague.                                           type approach.


In essence, the question is, does the benefit outweigh the
cost?




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