United States v. Great American Insurance
2013 U.S. App. LEXIS 25713
| Fed. Cir. | 2013Background
- Commerce determined antidumping duties on PRC freshwater crawfish tail meat (prelim. and final determinations) and suspended liquidation, requiring cash deposits or bonds. New Phoenix imported entries between Oct 2000–May 2001 and posted bonds issued by Great American (agent James C. Davis) and Washington International.
- Five contested Great American single-transaction bonds were for $1,219,458 each; Great American’s records allegedly showed Davis’s authority capped at $1,000,000 on a Form 5297 previously filed with Customs; the government’s records reflected higher authority.
- Commerce initiated an administrative review covering the entries; liquidation remained suspended until final results (Apr. 21, 2003); Customs liquidated the entries in July–Aug. 2003 and sought payment; the government sued Great American and Washington International in 2009 to recover bond amounts plus interest.
- The Court of International Trade granted summary judgment for the government on the bonds but entered judgment without pre- or postjudgment interest; the government moved under Rule 59(e) to amend for interest and was denied; the government appealed and Great American cross-appealed liability.
- Central factual/legal disputes: whether failure of Customs to notify the surety of suspension under 19 U.S.C. § 1504(c) invalidated the suspension or impaired suretyship (statute of limitations/discharge defenses), whether the bonds exceeded the agent’s authority, and whether prejudgment/postjudgment interest should be awarded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Postjudgment interest entitlement | Mandatory under 28 U.S.C. § 1961; courts must award even if raised late | (Great American did not contest) | Remanded: trial court must award postjudgment interest; section 1961 applied via § 1585 powers |
| Prejudgment interest (statutory §580 and equitable) | Entitled to prejudgment interest (statutory and equitable) | Forfeited because government failed to develop/request it before judgment | Affirmed denial: government forfeited prejudgment interest by not developing it in merits filings; Rule 59(e) too late |
| Failure to notify surety under §1504(c) — statute of limitations and discharge for impairment | Notice defect invalidates suspension -> liquidation occurred earlier -> suit time-barred; or lack of notice impaired suretyship, discharging liability | Suspension valid unless surety shows prejudice; no evidence of prejudice or altered recourse | Affirmed: notification omission was harmless under APA §706 standard; no triable issue of prejudice or impairment of suretyship |
| Agent authority / apparent authority (bonds exceeded $1M alleged cap) | Bonds unenforceable because agent exceeded $1M authority on Form 5297 | Government reasonably relied on apparent authority due to pattern of prior excessive bonds and Great American’s acquiescence | Affirmed: summary judgment for government — facts support apparent authority as a matter of law |
Key Cases Cited
- Wolff Shoe Co. v. United States, 141 F.3d 1116 (Fed. Cir. 1998) (during administrative review, liquidation is suspended)
- Shinseki v. Sanders, 556 U.S. 396 (2009) (harmless-error standard for agency procedural errors)
- Diaz v. Dep’t of the Air Force, 63 F.3d 1107 (Fed. Cir. 1995) (agency procedural violations do not automatically void action)
- United States v. Federal Ins. Co., 857 F.2d 1457 (Fed. Cir. 1988) (section 580 interest discussed where court remanded for interest on import duties)
- Uphoff v. Elegant Bath, Ltd., 176 F.3d 399 (7th Cir. 1999) (prejudgment remedies generally must be sought before judgment)
- Deere & Co. v. Int’l Trade Comm’n, 605 F.3d 1350 (Fed. Cir. 2010) (principal may act silently in a way that gives agent apparent authority)
- Kenealy v. American Nat. Fire Ins. Co., 72 F.3d 264 (2d Cir. 1995) (apparent authority may arise from principal’s silence and pattern of conduct)