United States v. American Home Assurance Co.
102 F. Supp. 3d 1376
| Ct. Intl. Trade | 2015Background
- AHAC issued a continuous customs bond for importer JCOF; JCOF imported crawfish tail meat from Yangzhou and declared a 0% antidumping rate on two November 2001 entries.
- Commerce’s 2004 administrative review assigned a 223.01% antidumping duty for the period covering those entries; Customs liquidated JCOF’s entries accordingly and demanded payment which JCOF did not pay.
- Customs’ June 2004 liquidation was voided and reliquidated in 2005; Customs demanded payment from AHAC on October 2, 2005, and AHAC refused.
- The United States sued AHAC to recover unpaid antidumping duties and sought statutory prejudgment interest under 19 U.S.C. § 580 and equitable pre- and postjudgment interest.
- This Court initially awarded equitable prejudgment interest but denied § 580 interest; the Federal Circuit affirmed liability and reversed, holding § 580 interest applies and remanding to calculate the amount and to consider whether equitable prejudgment interest is also appropriate.
- On remand the Court calculated § 580 interest from October 2, 2005 to January 23, 2014 on $600,000 at 6% (total $299,441.10) and declined to award additional equitable prejudgment interest because § 580’s 6% rate overcompensates compared to the § 6621 short-term funds rate.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 580 statutory prejudgment interest applies to suits to recover antidumping duties | § 580’s plain text covers all bonds for recovery of duties, so interest applies | § 580 historically targeted ordinary customs duties, not antidumping duties | Federal Circuit held § 580 applies; this Court calculated interest accordingly |
| Proper accrual start date for § 580 interest | Interest runs from Customs’ final demand after reliquidation (Oct. 2, 2005) | Interest should run from a later demand date (Feb. 9, 2007) or earlier 2004 demand | Court held accrual began Oct. 2, 2005 (2004 demand voided; 2007 date was after denial of protest) |
| Amount and computation of § 580 interest owed | Apply 6% per annum from Oct. 2, 2005 to judgment (Jan. 23, 2014) on $600,000 principal using simple interest formula | AHAC did not offer alternative formula | Court awarded $299,441.10 calculated as $600,000 × 0.06 × (3036/365) |
| Whether equitable prejudgment interest may be awarded in addition to § 580 interest | Government sought equitable interest to fully compensate for time-value of money | AHAC argued equity is displaced by statute and alternative defenses (including CDSOA) | Court declined equitable prejudgment interest, reasoning § 580’s 6% already more than compensates versus § 6621 rates; equitable award would overcompensate |
Key Cases Cited
- United States v. Am. Home Assurance Co., 789 F.3d 1313 (Fed. Cir. 2015) (Federal Circuit holding § 580 applies and remanding for calculation and consideration of equitable interest)
- West Virginia v. United States, 479 U.S. 305 (U.S. 1987) (purpose of prejudgment interest is to compensate for loss of use of money)
- United States v. Great Am. Ins. Co. of New York, 738 F.3d 1320 (Fed. Cir. 2013) (factors for awarding equitable prejudgment interest)
- Shanghai Taoen Int’l Trading Co. v. United States, 360 F. Supp. 2d 1339 (Ct. Int’l Trade 2005) (injunction affecting liquidation timeline)
- United States v. Servitex, Inc., 535 F. Supp. 695 (N.D. Tex. 1982) (postjudgment interest is mandatory for prevailing parties)