Kent International, Inc. v. United States
2017 CIT 123
Ct. Intl. Trade2017Background
- Kent International imported WeeRide Kangaroo child bicycle seats that Customs classified under HTSUS 8714.99.80 (10% duty); Kent contends they should be classified duty-free under HTSUS 9401.80.40.
- Kent brought three claims: (1) incorrect tariff classification; (2) existence of an established and uniform practice (EUP) by Customs classifying similar seats under 9401.80; (3) entitlement to "treatment" afforded other importers under 19 U.S.C. § 1625(c) and 19 C.F.R. § 177.12(c)(1)(i).
- Plaintiff relies on a 2005 NY Customs ruling (classifying under heading 8417) and later rulings (2007–2011) and liquidations that allegedly classified other importers’ child seats duty-free under 9401; Customs later issued a 2014 revocation and a 2015 HQ ruling reaffirming classification under 8417.
- Kent alleges multiple duty-free liquidations for Bell, Todson, and Brix at various ports between 2007 and 2014 while Kent’s Long Beach entries were denied duty-free treatment, though Kent’s Newark protests had been approved.
- Defendant moved to dismiss Counts 2 and 3 for failure to state claims; the court denied the motion, finding Kent’s pleaded facts sufficient to plausibly allege both an EUP and a "treatment" requiring notice-and-comment for any modification.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Kent plausibly alleged an established and uniform practice (EUP) under 19 U.S.C. § 1315(d) | Customs repeatedly classified similar child seats duty-free across multiple importers, ports, and years, creating a de facto EUP | Kent’s allegations are insufficiently specific (e.g., number of entries/ports) to allege an EUP | Denied dismissal: allegations permit a reasonable inference of an EUP given multiple rulings, liquidations at multiple ports over years |
| Whether Kent plausibly alleged a "treatment" under 19 U.S.C. § 1625(c) and 19 C.F.R. § 177.12(c)(1)(i) | Customs accorded duty-free treatment to substantially identical transactions (Bell, Todson, Brix) nationally for a multi-year period; Kent’s entries were treated differently without notice-and-comment | Prior rulings cannot constitute a treatment and Kent can’t prove national, consistent application over the two-year window | Denied dismissal: Kent sufficiently pleaded existence of a treatment, substantial similarity of transactions, modification of treatment, and a plausible notice-and-comment violation to proceed to merits |
| Whether the complaint met Rule 12(b)(6) pleading standards (Twombly/Iqbal) | Pleadings include specific rulings, timeframes, multiple importers and ports—adequate to state plausible claims | Pleadings lack detailed numerical and port-level specifics; allegations are speculative | Denied dismissal: court accepts factual allegations as true and finds the claims facially plausible |
| Whether the alleged notice-and-comment violation was sufficiently pleaded | Kent alleged that its Long Beach entries during the alleged treatment period were denied duty-free relief while others received duty-free liquidations, implying a change without required notice-and-comment | Defendant argued Kent did not show a proposed interpretive ruling triggering §1625(c) requirements | Denied dismissal: court infers plausibly that a regulation-triggering modification occurred without notice-and-comment and allows discovery to test the claim |
Key Cases Cited
- Cedars-Sinai Med. Ctr. v. Watkins, 11 F.3d 1573 (Fed. Cir.) (pleading-factual-inference standard on motion to dismiss)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (U.S.) (plausibility standard for pleading)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S.) (application of plausibility standard)
- Heraeus-Amersil, Inc. v. United States, 795 F.2d 1575 (Fed. Cir.) (factors for evaluating de facto established and uniform practice)
- Kahrs Int’l, Inc. v. United States, 645 F. Supp. 2d 1251 (CIT) (elements required to prove a §1625(c) "treatment")