CHEMSOL, LLC and MC International, LLC, Plaintiffs-Appellants, v. UNITED STATES and United States Customs and Border Protection, Defendants-Appellees.
Nos. 2013-1402, 2013-1403
United States Court of Appeals, Federal Circuit
June 24, 2014
Rehearing and Rehearing En Banc Denied Sept. 11, 2014.
753 F.3d 1345
Before O‘MALLEY, MAYER, and WALLACH, Circuit Judges.
Claudia Burke, Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for defendants-appellees. With her on the brief were Stuart F. Delery, Assistant Attorney General, and Jeanne E. Davidson, Director. Of counsel was Justin Reinhart Miller, Attorney, International Trade Field Office, of New York, N.Y. Of counsel on the brief was Yelena Slepak, Attorney, Office of the Assistant Chief Counsel, International Trade Litigation, United States Customs and Border Protection, of New York, N.Y.
WALLACH, Circuit Judge.
Appellants Chemsol, LLC and MC International, LLC (d/b/a Miami Chemical) (“MCI“) appeal the decision of the United States Court of International Trade (“CIT“) dismissing their case for lack of subject matter jurisdiction. Chemsol, LLC v. United States, 901 F.Supp.2d 1362 (Ct. Int‘l Trade 2013). Because the CIT properly held it did not have jurisdiction over this case, this court affirms.
BACKGROUND
In 2009, Chemsol made six entries of citric acid, purportedly from the Dominican Republic, and in 2009 and 2010, MCI made thirteen entries of citric acid, purportedly from India (collectively, “the Entries“). Appellants claimed duty-free status for the Entries and therefore did not deposit any duties on entry. In 2010, United States Immigration and Customs Enforcement (“ICE“) and United States Customs and Border Protection (“Customs“) (collectively, “the Government“) initiated an investigation to determine whether Chinese citric acid was being transshipped through other countries to evade antidumping and countervailing duties applicable to imports of citric acid from China. Customs suspected that Appellants’ Entries were actually produced in China, but were transshipped through the Dominican Republic and India to avoid duties.
To complete the transshipment investigation, Customs extended the deadline for liquidation of the Entries pursuant to
In response to the extensions, Appellants filed suit in the CIT on December 16, 2011, seeking “relief declaring the extensions unlawful such that the entries have therefore been ‘deemed’ liquidated by operation of law.” Chemsol, 901 F.Supp.2d at 1363; see J.A. 31, 43. Though the Entries were not yet deemed liquidated because the liquidation period was extended with notice, Appellants asserted the CIT had jurisdiction under
The CIT agreed, observing that “[i]n the time that has elapsed since the commencement of this action, ICE has completed its investigation and, but for [Appellants‘] suit, Customs could complete its administrative process and liquidate [Appellants‘] remaining entries.”2 Chemsol, 901 F.Supp.2d at 1365. The CIT held “the statutory review process for challenging liquidation of [Appellants‘] entries under ...
Appellants filed these timely appeals. This court has jurisdiction pursuant to
DISCUSSION
I. Standard of Review
This court reviews de novo the CIT‘s dismissal for lack of subject matter jurisdiction. Ford Motor Co. v. United States, 688 F.3d 1319, 1322 (Fed. Cir. 2012).
II. Legal Framework
A. Jurisdiction
The CIT‘s limited jurisdiction is enumerated in
In addition to the jurisdiction conferred upon the [CIT] by subsections (a)-(h) of this section ..., the [CIT] shall have exclusive jurisdiction of any civil action commenced against the United States, its agencies, or its officers, that arises out of any law of the United States providing for—
- revenue from imports or tonnage;
- tariffs, duties, fees, or other taxes on the importation of merchandise for reasons other than the raising of revenue;
- embargoes or other quantitative restrictions on the importation of merchandise for reasons other than the protection of the public health or safety; or
administration and enforcement with respect to the matters referred to in paragraphs (1)-(3) of this subsection and subsections (a)-(h) of this section.
While the residual jurisdiction provision is a “catch all provision,” “is[n‘t] overly broad interpretation of this provision ... would threaten to swallow the specific grants of jurisdiction contained within the other subsections and their corresponding requirements.” Norman G. Jensen, Inc. v. United States, 687 F.3d 1325, 1329 (Fed. Cir. 2012). Therefore, this court has repeatedly held that subsection (i) “may not be invoked when jurisdiction under another subsection of § 1581 is or could have been available, unless the remedy provided under that other subsection would be manifestly inadequate.” Ford, 688 F.3d at 1323 (quoting Miller & Co. v. United States, 824 F.2d 961, 963 (Fed. Cir. 1987)). Thus, if a litigant has access to the CIT under subsections (a) through (h), “it must avail itself of this avenue of approach by complying with all the relevant prerequisites thereto” unless the remedy available under another subsection is “manifestly inadequate.” Hartford Fire Ins. Co. v. United States, 544 F.3d 1289, 1292 (Fed. Cir. 2008) (quoting Am. Air Parcel Forwarding Co. v. United States, 718 F.2d 1546, 1549 (Fed. Cir. 1983)). A litigant asking the court to exercise jurisdiction over his or her claim has the burden of establishing that jurisdiction exists. See Rocovich v. United States, 933 F.2d 991, 993 (Fed. Cir. 1991) (citing KVOS, Inc. v. Associated Press, 299 U.S. 269, 278 (1936)).
B. Liquidation
When importing merchandise into the United States, “the importer of record shall deposit with [Customs] at the time of entry ... the amount of duties and fees estimated to be payable on such merchandise,” including applicable antidumping or countervailing duties.
Before the elapse of the one-year liquidation period, however, under
Whether by Customs’ action or by operation of law, liquidation is final unless an importer files a timely protest with Customs challenging its decision “within 180 days after but not before ... [the] date
III. The CIT Properly Dismissed for Lack of Jurisdiction
A. Relief is Available to Appellants Under 28 U.S.C. § 1581(a)
The CIT held it lacked jurisdiction under § 1581(i) because Appellants’ “challenge to Customs’ extensions of the time for liquidation may be brought, after liquidation, by filing a protest and obtaining jurisdiction in this court under Section 1581(a).” Chemsol, 901 F.Supp.2d at 1366. The CIT noted that Customs’ actions in this case were “well within the four-year period allowed for extensions; Customs continues to actively investigate the appropriate liquidation for the entries.” Id. Furthermore, the CIT stated, “[u]pon conclusion of that process and liquidation of the entries, the importers will have ample opportunity to raise any issues through the protest and judicial review process that culminates in § 1581(a).” Id.
Appellants argue the CIT erred in failing to find § 1581(i) confers subject matter jurisdiction over this action. In support, Appellants first argue the CIT failed to follow this court‘s opinion in Ford, 688 F.3d at 1323, which Appellants claim involves a “materially identical fact pattern” and “legal issues.” Appellants’ Br. 10 (capitalization removed).
In Ford, this court found jurisdiction under § 1581(i) available for a deemed liquidation claim in which Customs’ inaction was at issue. In doing so, this court noted that “[i]t is undisputed that at the time of filing of Ford‘s complaint, [Customs] had not affirmatively liquidated any of the nine entries. It is also undisputed that the general one-year time period imposed by Congress for liquidating such entries had long since expired.” Ford, 688 F.3d at 1321-22. This court then held (1) the case involved “a valid invocation of the court‘s residual jurisdiction, as the importer could not have asserted jurisdiction under any of the other enumerated provisions of § 1581,” and (2) “post-complaint efforts by [Customs] to clear the importer‘s accounts did not undo such jurisdiction.” Id. at 1321. This court concluded that “[w]here, as here, there has been an allegation that [Customs] unlawfully failed to make any [protestable] decision, we cannot see how an administrative appeal could have been
Appellants insist the CIT erred when it found Ford distinguishable because, here, Customs extended the liquidation period with proper notice, whereas in Ford Customs failed to act altogether. Appellants contend this is a misreading of the facts in Ford because only the first claim of Ford‘s Complaint alleged that none of its entries was extended, while the second, third, and fourth claims of the Complaint alleged, in the alternative, that if Customs did issue extensions, such extensions “lacked notice, reasoning, or validity.” Appellants’ Br. 14. On this basis, Appellants argue “[t]he fact pattern and legal issues now before the Court are all but identical to [Ford] in every material way” because “[i]n both cases, the importer asserted that [Customs] purported to extend liquidation for certain entries, and notice thereof was issued, but either no reason or an invalid reason was given for the extensions, thereby rendering them void.”3 Id. at 12 (emphases added).
Appellants’ reliance on Ford is misplaced. In contrast to Ford, here deemed liquidation had not yet occurred when Appellants filed their complaints, and Customs had extended the liquidation period pursuant to its statutory authority in
In addition, unlike in this case, whether extensions had occurred was an issue very much in dispute in Ford. Indeed, in determining whether Ford had conceded this issue in a post-complaint statement, this court stated “[w]e read Ford‘s statement as only acknowledging that [Customs] had taken some administrative action with the purpose of extending liquidation, and not necessarily as conceding that extension had been effectuated.” Ford, 688 F.3d at 1330. Thus, Appellants’ statement that “[i]n both cases, the importer asserted that [Customs] purported to extend liquidation for certain entries, and notice thereof was issued,” Appellants’ Br. 12 (emphasis added), is a mischaracterization of the facts in Ford. Appellants’ reliance on the other claims of Ford‘s Complaint also does not help their argument. This court recognized that Ford argued, in the alternative, that if any extension had been effectuated, Ford “received no notice of such an extension or suspension, and urged that notice was required for any putative extension to be effective.” Ford, 688 F.3d at 1322. Here, there is no dispute that Appellants received proper notice. Appellants’ insistence that notice was issued in both cases, and that this case is “materially identical” to Ford, is erroneous.
Appellants’ suggestion that these cases are identical also ignores another substantial difference: in this case, Customs extended the liquidation period for the express purpose of undertaking a fraud investigation because it suspected that Appellants’ Entries were fraudulently made. In contrast, in Ford it was unclear whether Customs had extended the liquidation period and, if so, why extensions were necessary. There is no suggestion that Ford stands for the broad proposition that any challenge to an extension of liquidation is immediately reviewable under § 1581(i). Appellants’ argument would vitiate the extension provision available to Customs under
Customs’ reason for extending the liquidation period for [Appellants‘] imports is to allow ICE time to conclude its investigation of possible transshipment of goods. To allow [Appellants] to interrupt the administrative process currently underway by providing declarative relief would severely undermine Customs and ICE‘s ability to conduct meaningful investigations into possible fraudulent activity.
Chemsol, 901 F.Supp.2d at 1368.
Appellants also argue jurisdiction over their claims is proper under § 1581(i) because no other basis of jurisdiction is available and adequate. They say that jurisdiction under subsection (a) is not available because Customs “has not made and might never make a protestable decision.” Appellants’ Br. 20 (capitalization removed). That is, Appellants contend, because Customs may never affirmatively liquidate the Entries before they are deemed liquidated in Appellants’ favor, it is uncertain whether Appellants will ever need to protest a Customs decision. In contrast, Appellants continue, subsection (i) “offers an affirmative avenue to the court where an importer, after the liquidation period has uneventfully elapsed, can ... go straight to court for a judicial declaration that such liquidation has occurred, and thereby fore-
These arguments ignore established law. Congress created an express statutory scheme in § 1581(a) for administrative and judicial review of Customs’ actions, providing for a protest before Customs and review of protest denials in the CIT.
Customs’ decision to extend the liquidation period is a normal, if infrequent, part of its processing of entries, see
Appellants apparently believe immediate review of extension decisions is necessary so they need not wait for the four-year deemed liquidation period to end. Immediate review by the courts would extend the time to liquidate far past that deadline, as evidenced by this case. Further, such interim review might not obviate the need for a subsequent protest to final liquidation after the extension challenge is fully litigated. In other words, allowing earlier review of extension decisions delays the administrative process until final resolution of the extension challenge, at which point the administrative process resumes and could very well lead to an administrative protest of the final liquidation decision anyway. Indeed, earlier review could cut off legitimate investigatory work conducted by Customs, such as the investigation into the suspected fraudulent transshipment scheme in this case, preventing Customs from concluding its investigation.
Only where Customs fails to extend the liquidation period, or fails to notify the importers of an extension as required by statute (as occurred in Ford), may importers seek a declaration that their entries have liquidated by operation of law once the deemed liquidation period has passed. Where extensions are made with proper notice during ongoing investigations by Customs, however, § 1581(a) provides jurisdiction for importers who object to the final liquidation, or any interim decisions merged therein, including the decision to extend the liquidation period.
Appellants also argue the CIT erred in finding § 1581(a) would become available
Appellants are incorrect. For example, in Norman G. Jensen, upon which Appellants rely, this court stated, “jurisdiction over the present suit could be procured under another subsection of § 1581 simply by requesting accelerated disposition under
Appellants are correct that in Ford this court stated “that subject matter jurisdiction is determined at the time of the complaint, and ... does not depend on subsequent events.” Ford, 688 F.3d at 1324. This does not mean immediate review under the residual jurisdiction provision is appropriate when Customs is engaged in a statutorily-authorized administrative process that will lend itself to jurisdiction under another provision of § 1581. Indeed, the “mere recitation of a basis for jurisdiction [is] not ... controlling,” and courts “must look to the true nature of the action in a district court in determining jurisdiction.” Hartford Fire, 544 F.3d at 1293 (citing Norsk Hydro Can., Inc. v. United States, 472 F.3d 1347, 1355 (Fed. Cir. 2006)). Here, the CIT properly found “the true nature of [Appellants‘] action is a challenge to Customs’ extensions of the time for liquidation. But Customs’ actions, as alleged in [Appellants‘] complaints, are well within the four-year period allowed for extensions.” Chemsol, 901 F.Supp.2d at 1366. Unlike Ford, where Customs failed to take any reviewable action prior to the time the entries liquidated by operation of law, here subsection (a) is the appropriate avenue for challenging an extension made with proper notice. See Hartford Fire, 544 F.3d at 1292. Because jurisdiction under subsection (a) would be available, the CIT correctly declined to exercise jurisdiction under subsection (i). See Norman G. Jensen, 687 F.3d at 1330 (“[B]ecause Jensen could obtain jurisdiction under § 1581(a), jurisdiction under § 1581(i) does not exist.“) (citing Hartford Fire, 544 F.3d at 1292).
B. Relief Under 28 U.S.C. § 1581(a) is Not Manifestly Inadequate
Finally, Appellants argue that even if jurisdiction under § 1581(a) is available, it is “manifestly inadequate” be-
Appellants’ arguments misstate both the facts and law, however. The statute does not allow Customs to delay liquidation “indefinitely,” Appellants’ Br. 19, or at its whim. Rather, the statute specifies that Customs may extend liquidation “if ... the information needed for the proper appraisement or classification of the imported or withdrawn merchandise, ... or for ensuring compliance with applicable law, is not available to the Customs Service.”
Here, Customs extended liquidation with proper notice. As to Appellants’ concern about “certainty in their liabilities and predictab[ility] in the processing of their customs obligations,” Appellants’ Br. 27, under the express statutory scheme established by Congress, Appellants’ Entries will certainly be affirmatively liquidated by Customs or deemed liquidated in their favor by four years from the date of entry at the latest. Indeed, if Customs fails to liquidate within the four-year period and a deemed liquidation notice is not issued, Appellants could seek redress by filing a subsection (i) complaint seeking a declaration of deemed liquidation under Ford. That is not this case. As the CIT found:
Final agency action has not occurred and the record shows that Customs’ investigation continues to be active and has not lapsed into inactivity as it did in Ford. The matter can be brought under § 1581(a) after the [Appellants‘] entries have liquidated and [Appellants have] filed an administrative protest, should [they] continue to feel at that point in time that [they] have been injured. In this context, [Appellants] cannot claim that the § 1581(a) remedy is manifestly inadequate as there is no meaningful assertion of harm in letting Customs process and liquidate their entries.
Chemsol, 901 F.Supp.2d at 1368 (citations omitted).
“[A] belief that [a plaintiff] had no remedy under subsection 1581(a) [does] not make that remedy inadequate.” Hartford Fire, 544 F.3d at 1294, and Appellants “cannot take it upon [themselves] to determine whether it would be futile to protest or not,” Int‘l Custom Prods., 467 F.3d at 1328 (Fed. Cir. 2006). For these reasons, the CIT properly found that jurisdiction under § 1581(a)
CONCLUSION
Accordingly, the decision of the Court of International Trade is
AFFIRMED
EVAN J. WALLACH
CIRCUIT JUDGE