*1 STATES, Plaintiff- The UNITED
Appellant, CO., INSURANCE HANOVER
Defendant/Cross-Appellant. 95-1192, 95-1215.
Nos. Appeals, Court of
Federal Circuit.
1,May 1996. Schnare, Attorney,
Rhonda K. Commercial Justice, Branch, Department Litigation D.C., Washington, argued plaintiff-appel- him on the was Frank W. lant. With brief Attorney Hunger, Assistant General and Cohen, David M. Director. Gerdes, Sandler,
Ronald Travis & W. Miami, Florida, PA, Rosenberg, argued for defendanVcross-appellant. With him on the Lee and Arthur brief were Gilbert Sandler K. Purcell. Jarvis,
Wayne Michael G. Hodes and Pilón, Sawyer,-Hodes Chicago, L. & James Curiae, Illinois, Amicus were on the brief for Intercargo Company. Insurаnce MAYER, BRYSON, RICH, Before Judges. Circuit Opinion for the court filed Circuit Dissenting opinion filed Judge MAYER. Judge BRYSON. *2 MAYER, Judge. justification” citing “legal these threats the Court of International Trade had appeals judg The United States from a they dismissed Customs’ claims because Court of Interna ment of by were barred the statute of limitations. holding that the United tional Trade Customs dismissed response may not enforce a time- Customs Service untimely legally both and insufficient. antidumping by barred сlaim for duties re procedures. sort to administrative United Hanover then a filed motion for civil con- Co., F.Supp. 950 Ins. States v. Hanover tempt prior in the action before the Court of (Ct. 1994). Int’l affirm. Trade We arguing International Trade that the threat- ened administrative actions contravened the Background dismissing pursuant the case of responded statute limitations. Customs dispute. The facts are not On Novem- its actions did not violate that ordеr 10, 1992, ber the United States commenced only prevented because it enforcement of the against Compa- an action Hanover Insurance by legal process; debt the order did not (Hanover), ny Import for Gambles extinguish Customs’ to collect. The Corporation, unpaid antidumping to recover , argued also that the statute of duties and interest. Customs issued the apply limitations does not to administrative original antidumping bills for thesе duties proceedings and thus did not bar administra- some 14 before this action was action exclusively tive Hanover based Subsequent negotiations filed. failed and the on Customs’ time-barred claim. September claim accrued Co., 1986. United States Hanover Ins. rejected The Court of International Trade (1993). Int’l Ct. Trade 693 On Hanover’s government’s arguments. It concluded motion, dismissed the action as “jurisdiction it had to determine the limitations, year barred the six statute of of, effect and to judgments,” enforce its own 2415(a) (1988). § Id. legal and therefore could determine the ef- dismissal, Despite Customs continued fect of its dismissal. 869 at payment to demand and threatened Hano- 952.2 The court reasoned that the structure ver with administrative sanctions. legislative These of 28 U.S.C. and its histo- directing ry sanctions included all district and demonstrates that intended for regional accept any period directors not to mer- the limitation to administra- chandise covered bonds underwritten tive actions. Id. at 953-55. It held that Hanover, requesting Treasury Customs could not circumvent the statute of limitations, dismissal, by remove Hanover from the list and the order of approved coercing sureties pay through to 19 U.S.C. Hanover to administra- (1988).1 § 1623 processes exclusively claimed that de- tive based on Customs’ spite the dismissal the Court of Interna- time-barred claim. Id. at 957-58. The court Trade, tional accordingly enjoined had the to refuse to do Customs from further attempts business with Hanover" “unless Hanover to collect the claim. significant demonstrated the a existence of It also denied Hanover’s motion for civil con- legal justification nonpayment” for tempt of the because Customs’ was not a responded justice. time-barred duties. Hanover to willful obstruction of 1623(b) provides part: 1. 19 supplemental jurisdiction U.S.C. "When- court with to hear "all law, required ever a bond is authorized other claims that are so related to [an] claims in regulation, Secretary or instruction which the original jurisdiction they [its] action within Treasury or the Customs Service is autho- part controversy form of the same case or under enforce, Secretary Treasury rized to may Article III of the United States Constitution.” (2) approval Provide —... 1367(c)(3) provides a district court with Section bond, regard sureties on such without discretion to hear related claims even after the general provision of law.” forming jurisdiction the basis for has been on, address, rely dismissed. We neither nor this 2. The Court of International Trade also cited 28 jurisdiction. asserted basis of (1988 1993) Supp. U.S.C. & V as a basis jurisdiction. Section authority to en- Trade also has International
Discussion
join
regardless of whether the
that conduct
jurisdiction
first address the
contempt.
conduct amounts to civil
Trade to entertain.
of International
Court
the statute of
turn to the effect of
contempt, and to We
for civil
Hanover’s motion
*3
2415,3
limitations,
§
on Customs’
28 U.S.C.
administrative
enjoin
pursuing
from
Customs
attempts
collect
administrative
to
subsequent
government
The
against Hanover.
remedies
government
duties.
did not
the
the order of dismissal
argues that
time-barred
not
of limitations does
take,
claims that the statute
or
from tak-
to
refrain
dirеct Customs
by
taken
Cus-
administrative actions
requisite
to
any
there was no
ing,
action. Thus
§
and the
to 19 U.S.C.
toms
give rise to con-
order which could
coercive
regulation
at 19 C.F.R.
juris-
implementing
contempt
tempt in this case. Without
113.38,
only
preclude
to
the
but serves
diction,
argues
government
the
Han-
collecting duties from
using
government from
enjoin
admin-
could not
judicial
support, it cites
by
process. As
pay
over
procedures to force Hanоver
istrative
expressly
language in section
which
disagree with the
debt. We
the time-barred
filing
complaint
of a
in court
refers to the
analysis.
for
requirement
that the action be
reviewed Customs’
The trial court
government then ar-
money damages. The
against Hanover in
processes
administrative
a
“refus[ing] to do business with
gues that
judgment
the claim
previous
of its
surety
nonpayment is not an
as a result of
by the statute of limitations.
was barred
money damages
contemplated
action for
courts,
Like district
see
It admits that
statute of limitations.”
the
(1994),
has
of International Trade
the Court
effectively
action would
its administrative
power
the effect
the inherent
to determine
of
business,
import
eliminate Hanover’s
injunctions
protect
judgments and issue
its
“simply the
that this result
is
but reasons
against attempts to attack or evade those
exercising
consequence of the Government
thе court on
judgments. The issue before
marketplace
in
power
the
its economic
motion for civil
was
sureties,
power
any private
of
similar to the
attempt
Customs’
to circumvent
whether
actor.”
period by
limitation
resort to
simply
is not
a
contrary
But the
prior
to the
order of
actions was
marketplace
in
of bonds
squarely
private
falls
actor
Such an inquiry
dismissal.
regulator
imported goods, it is a
of that
power to deter
the court’s inherent
within
power
keep
judgments. marketplace and it has
of
mine the
its
effect
violation,
participating in it. The choice
or Hanover from
party’s
conduct is
Where
pay the
evasive,
government offers
prior judgment,
of
of a
Court
Hanover —
thereof,
agency
pertinent
officer or
of
parts
to this
ed States or an
of 28 U.S.C. 2415
3. The
agency
case
an officer or
are:
claim of the United Statеs or
(a)
opposing parly,
co-party,
or
Subject
provisions
thereof
of section 2416
title,
provided by
except
party
this
as otherwise
out of the transaction or
a third
that arises
every
Congress,
op-
action for
subject
matter of the
occurrence that is
States or an officer or
the United
posing party's claim. A claim of the United
upon any
agency
con-
thereof which is founded
agency
or
thereof thаt does
States or-an officer
fact,
express
implied
shall
tract
or
in law or
occurrence
not
out of the
or
arise
transaction
complaint
filed within six
barred unless
years
subject
opposing parly’s
that is the
matter
action accrues or within
after the
time-barred,
only by
may,
be asserted
if
year
have been rendered
one
after final decisions
way
an amount
offset and
be allowed in
proceedings
apрlicable administrative
re-
in
quired by
Provided,
opposing party’s
the amount of the
not to exceed
law,
is later:
contract or
whichever
recovery.
partial pay-
That in the event of later
debt,
acknowledgment of
ment or written
right
pre-
provisions
not
of this section shall
again
at
action shall be deemed to accrue
agency
or an officer or
vent the United States
payment
acknowledg-
the time of eаch such
collecting any claim of the United
thereof from
ment. ...
offset,
in ac-
means of administrative
section 3716 of title 31.
cordance with
(£)
pre-
provisions
not
of this section shall
assertion,
against the Unit-
vent the
in an action
claim or be eliminated from the
administrative offset.
time-barred
Administrative offset
illusory.
reject
judicial
Thus, Congress
is not a
market —is
appeal
only
judicial
treat
it as
other
considered and dealt not
Customs’
with
extra-judicial
actions in section
actor
has the
to do busi-
market
who
with
agency actions
pleases.
explained
as well. This is
ness with whom
As
confirmed
(i).
legislative history
thorough
of subsection
the Court of International Trade’s
953-54;
at
S.Rep.
opinion,
prevail
for the
(1982),
Cong., 2d
reprinted
Sess. 16-17
“in
argument, the court must find that
enact-
3377, 3392-93.
1982 U.S.C.C.A.N.
ing
intended to do no
prohibit
more than
the commencement of
express
offsets,
exception
Unlike
“Congress
court аctions” and that
intended Congress
exception
did not
include
*4
agencies to be free to assert their claims at
agency
for coercive
actions
any
by any
time and
means other than court
predicated upon an otherwise time-barred
actions,
period
unencumbered
of limi-
claim,
and we decline the
invi-
2415(a).”
imposed by
tation
869
judicially legislate
tation to
one. Were coer-
F.Supp. at 952. Like the Court of Interna-
available,
agency
cive
remedies
“Customs
Trade,
tional
we do not
this is
believe
what
position
could be
a better
disputes
some
Congress intended.
six-year
if it
period
expire,
and
allows
impose
then threatens
sanctions. The
language
Examination of the
right
opposing party
any
to assert
structure of section 2415 leaves the convic-
defenses available in a court of law would be
that,
express exceptiоn,
tion
absent an
Con-
longer present.”
no
at 957.
gress
agencies
intended
assert
their
years
claims within six
or lose the
enacted
promote
section 2415 “to
2415(a) provides,
enforce them. Section
... notwithstanding
fairness
preju-
whatever
part,
“every
might
action for
thereby
dice
accrue
to the Government
brought by the United
or an officer
negligence
States
or
result of the
of its officers.”
S.E.R.,
agency
upon any
thereof which is founded
Progress,
Jobs
Inc. v. United
fact, States,
express
implied
(Fed.Cir.1985) (citations
contract
or
law or
759 F.2d
omitted).4
complaint
shall be barred unless the
is filed
government’s interpretation
The
within six
encourage
after the
of action would not
bring
Customs to
ac-
(f)
(i) provide
accrues.”
and
unpaid
Subsections
two
tions for collection
promptly,
claims
exceptions
general
to the
rule in subsection
and it would allow Customs to collect stale
(a).
(f)
beyond
ability
Subsection
allows the United States
claims far
private
defensively
actor,
by marketplace
assert
time-barred claims
which is how Customs
way portrays
offset
counterclaim. Most relevant
itself.
claims
When
are time
barred,
in refuting
government’s present argu-
Customs cannot avoid the statute of
ments,
subsection
states that the statute
threat of administrative action
prevent
agency
will not
collecting
exclusivеly
nonpayment
based
of the time-
by way
claim of the United
agree
of barred claim. We therefore
with the
Report
preservation
assumption
4. The Senate
of 28 U.S.C. 2415 states:
of records on the
they
required
possible
salutary
will be
Statutes of
have the
substantiate a
limitation
effect of
requiring litigants
existing
to institute suits within a rea-
claim anor
claim increases the cost of
sonable time of the incident or situation
keeping
passes
records. As time
the collection
way
which the action is based. In this
the issues
problems invariably increase. The Government
presented at the trial can be decided at a time
difficulty
finding
in even
the individuals
witnesses, documents,
necessary
when the
they may
whom it
a claim
have
other evidence are still available. At the same
simply disappeared.
prob-
have died or
These
time,
testify
the witnesses are better able to
cоn-
lems have been
to the attention of the
cerning the facts involved for
memories
their
previously
committee
in connection with other
passage
have not been dimmed
of time.
legislation.
This bill
the means to re-
prompt
The committee feels that the
resolution of
solve these difficulties.
necessary
the matters covered
the bill is
to an
Rep.
S.
(1966),
2d
Sess.
orderly
justice....
and fair administration of
reprinted in 1966 U.S.C.C.A.N.
passage
prejudiсe
Even if
of time does not
2503-04.
claim,
presentation
the effective
of a
the mere
issue,
time-barred, obligation. That
ing,
that Customs’
but
Trade
Court of International
however,
by the Court of
should be decided
contrary
order of dis-
actions were
challenge brought
in a
International Trade
injunction
missal,
the court’s
and we sustain
Proce-
under the Administrative
Hanover
pro-
against further coercive
Act;
underlying
part of the
it is not
dure
ceedings.
brоught by the
action that was
enforcement
cross-appeal of the de
On
been dismissed.
States and has
United
in con
to hold Customs
nial of its motion
sought
to recover
order,
previous
we review
tempt of the
ni an enforcement
against Hanover
for abuse of discretion.
action,
of limitations
lost on statute
Corp.
Patent Crusher &
v. Williams
MAC
sought to
then
grounds.
(Fed.Cir.
Co.,
767 F.2d
Pulverizer
surety for
serving as a
bar Hanover from
1985) (federal
contempt deter
court’s
district
paid
Hanover
the amount
importers until
narrowly
for abuse of dis
mination
reviewed
subject of the unsuccessful
that had been the
cretion).
trial court stated that even
The court holds that
enforcement action.
“by
to collect
though
attempt
disqualify
is
Hanover as
the effort
contrary to this
debt
the time-barred
by the same statute of limitations
barred
decision,” may
have reason
court’s
*5
government’s enforcement
barred the
of limitations
ably
that the statute
believed
to read the statute of
That seems to me
using sanctions to
preclude it from
“did not
broadly.
too
limitations
F.Supp. at 958. The
collect the debt.” 869
statute,
2415(a),
estab-
as a
not see Customs’ conduct
court thus did
“every
period for
six-year
lishes
justice.
agree that
willful obstruction
money damages brought by the
adequately presented a
government has
contract,
and it
founded
United States”
matter, and
legal position in this
reasoned
limited to that class of cases. The
should be
court’s
of discretion
detect no abuse
such
government’s enforcement action was
of the motion.
denial
2415(a)
action,
was therefore
and section
properly invoked to determine whether
Conclusion
action was barred.
government’s enforcement
Accordingly,
judgment of the United
disqualification pro-
But the administrative
Trade is af-
of International
States Court
ceeding
“action for
is not an
firmed.
States,”
and it is
the United
AFFIRMED.
2415(a).
not barred
section
addressing
scope of section
The eases
BRYSON,
Judge, dissenting.
2415(a)
treating
it as limited
are consistent
respect
I
issue
concur with
money damages.
actions for
to civil
(Hanover’s cross-appeal)
respectfully
dis- S.E.R.,
Progress,
Inc. v. United
Jobs for
respect to the statute of limitations
sent with
(Fed.Cir.1985) (section
States,
F.2d
5
759
(the
appeаl).
government’s
issue
2415(a) inapplicable to administrative deci
government mon
in this
sion that contractor owes
the court
The result reached
Alvarado,
ey);
v.
5 F.3d
United States
may
right: The
case
well be
Cir.1993) (section 2415(a)
(11th
inap
obligation by
1429-30
a time-barred
effort to enforce
action);
plicable
foreclosure
ques-
looks
using
leverage over Hanover
its
Corp. v.
Small
I
Land
may
unlawful. But
dis- Westnau
tionable and
Cir.1993)
(2d
Admin.,
Id. 113.39. Once surety’s question
lation raises the whether a obligation that has pay
refusal a bond a refusal
been held unenforceable constitutes “failure to pay “a valid demand” or the my In obligation
honor an on that bond.”