SAKAR INTERNATIONAL, INC. , Plaintiff,
v. UN ITED STA TES ,

De fe nd ant. Slip Op. 06-181 UNITED STAT ES COURT OF INTERNATIONAL TRADE

Before: Tim othy C. Stanceu, Judge Court No. 06- 00025

OP IN ION [Granting de fenda

nt’s motion to di smiss for failure to state a c laim on which re lief ca n be g rante d and deny

ing f or futility plaintiff’s subseque nt motion t o amend its first amende d c omp la int ] Dated: De cembe r 12, 2006 Tuttl e Law Offices (

J am es C. Tut tle ) for

plaintiff. Peter D. Ke isler , Assistant Attorney Gene ral, David M. Cohen , Direc tor, Commercial L itigation B ranc h, Civil Division, United St ates De partment of Justice ( DomeniqueKirchner); Br ian Mo rri

s , Senior Attorney , Offic e of the Associate Chief Counsel, Bure au of Customs and B or de r P ro te c tio n, Un ite d St ate s D e pa rtme nt o f H ome land

Se c ur ity , o f c ouns e l, f

or de fe nd ant. Stanceu, Judge : Plainti ff Saka r International, I nc. (“ Sakar” ) cha lleng es as unlaw ful an administrative dec ision iss ued on De cembe r 29, 2005 by the B urea

u of Customs and Borde r Protection, United States Depa rtment of Homela

nd Security

(“Customs”), a ssessing Saka r a mitigated pe nalty

of $67,775 for

the importation by

Sakar of merc handise that Customs alleg ed to be counter feit. F ollowing a motion by

defe ndant United States to dismiss for lack of subjec t matter jurisdiction and the f ailure to state a

claim on which r elief c an be grante d, plaintiff moved to a me nd its c omp la int , whic h it

pr e vio us ly

ha d ame nd e d o nc e a s a

matte r o f c ours e , to se t f

or th
a dd iti on a l g ro un ds in s up po rt of its a sse rt ion

of su bje c t matte r j ur isd ic tio n. Th e c ourt g ra ntsCourt No. 06- 00025 P age 2

defe ndant’s motion to dism iss the first amende d complaint for f ailure to state a

claim on which
re lie f c an b e g ra

nte d a nd de nie s a s f

uti le pla int if

f’ s mo tio n to ame nd

tha t c omp la int
. I. B ACKG ROUND In an administrative de cision dated De cembe r 29, 2005, Customs assessed Sakar a mitigated c ivil penalty

of $67,775 “unde r the provisions of 19 U.S.C. § 1526(f) ” and pr ovided Saka r 3 0 d ay s in

wh ic h to pa

y the mit ig ate d p e na lty . F ir st A m. C omp l. E x. 1 a t 1. Ac c or din gto plaintiff’s plea ding, Saka r did not pay

the mitigate d penalty

and the United States ha s not ins tit ute d, in a ny c ourt , a pr oc e e din gto r e c ov e r o n th e pe na lty c la im. The fa cts surroundingthe issuance of the De cembe r 29, 2005 dec ision are summarized here in based on plaintiff’ s pleadingand the e x hibits t o plaintiff’s submissions. On October 7, 2002, at the port of N ewa rk, Ne w J erse y , Sakar e ntere d for c onsumption 500 t rave l char g ers f or persona l digital assistants (“ PDAs”) a nd 2,311 mini-key

boards f or PDAs, all of whic h wer e products of the People’s Republic of China. Id. ¶ 1 6 & Ex. 1 at 2. Cus tom s se ize d th is
merc handise on De cembe r 18, 2002 for alleg ed violations of subsection (e ) of Sec tion 526 of the Tarif f Ac t of 1930, as ame nded, 19 U.S.C. § 1526(e) (2000) ( “Section 526”)
. Id. ¶ 18. Section 526(e) direc ts the seizure of mer chandise bear ing a counter feit mark that is im ported into the United States in violation of provisions of the L anham Ac t. See15 U. S.C. § 1 12 4 ( 20 00 ). With limit ed exceptions, merc handise so seized must be forf eited and de stroy ed. See19 U. S.C. § 1526(e) . Customs conclude d that the trave l char g ers violated Sec tion 526(e) be cause they bore a counte rfe it mark of Unde rwriter s L aboratories and that the ke y boards displayed, on a f

unction ke y , a c ounte rf e it “ F lyingWind ow ” tr a de mark of the Mic ro so ft

Cor po ra tio n. F ir st A m. C omp l. Ex . 2 at 1.Court No. 06- 00025 P age 3

Pla int if f p e tit ion e d Cu sto ms f

or re lie f f ro m f or fe iture . Cu sto ms d e nie d Saka r a ny re lie f i n the administrative for feiture proce eding
. Id. ¶ 1 9; seeDef .’s Opp’n to Pl.’s Mot. for Stay of Ex ecution of Pena lty

Enforc ement or Collection and D ef.’ s Mot. to Dism iss Pl .’s Compl. 3 (“D ef.’ s First Mot. to Dismiss ”). A fter that denial, plaintiff did not exercise its rig ht, as provided in the Customs regulations, to demand that Customs i nitiate a judicial for feiture proce eding
. See ge ne ra lly , 1 9 C. F .R. Part 16 2, Sub pa

rt E– Tr e atme nt o f S e ize d M e rc ha nd ise (2 00 2) . A s a

re su lt, Cus tom s d e str oye d th e imp or te d me rc ha

nd ise on Au g us t 28 , 2 00 3. De f. ’s F ir st M ot. to Dismiss 3 & App. 8-9. Customs then conduc ted an a dminist rative c ivil penalty proce edingunder Sec tion 526(f), which subjec ts any

person importingmerc handise seized under Section 526(e) to a “c ivil fine.” See id. ; 19 U.S.C. § 1526(f). The f ine for “ the first such se izure” is “not more tha n the value that the merc handise would have had if it were g enuine, a ccor ding to the ma nufac turer’ s sugg ested reta il price, de termined unde r re g ulations promulgated by the Secr etar

y [of the Trea sury ].” 19 U.S.C. § 1526(f)(2) . The fine “[f]or the second seizure a nd there afte r” is “not more than twice the va lue that the mer chandise would have ha d if it were g enuine, a s determined unde r regulations promulgated by the Secr etar

y [of the Trea sury ].” Id. § 1526(f) (3). Customs based the ca lculation of the fine on a findingthat Sakar inc urre d penalties for two prior violations of 19 U.S.C. § 1526. SeeF ir st A m. C omp l. E x. 1 at 2- 3 ( de te rm ini ng , in an inte rn a l Cu sto ms
me mor and

um d ate d D e c e mbe r 1 4, 20 05 , a mit ig ate d p e na lty

amou nt o f $ 67 ,7 75 in r e sp on se to Sakar’ s October

20, 2005 petition for mitigation); De f.’s F irst Mot. to Dism iss 3-4. In the administrative pena lty

proce eding , Customs orig inally deter mined the pena lty

amount to be $381,500 and later

mitigated the penalty

to half that amount, or $190,750. SeeF ir st A m. C omp l.Court No. 06- 00025 P age 4

Plaintiff amended its orig inal complaint as a matter of c ourse f ollowing the c ourt’s 1 denial of pla intiff’s motion to st ay any ag ency action to enf

orce the civil penalty

claim pending finality of the judicial re view. The court de nied this moti on due to plaintiff’s f ailure to satisfy the re qu ir e me nts fo r p re lim ina ry inj un c tiv e re lie f, inc lud ing , in pa rt ic ula r, the re qu ir e me nts perta ining to likelihood of succ ess on the mer its and irrepa rable harm. Sakar Int’l, Inc . v. United States , 30 CI T __, Slip Op. 06-24 (Fe b. 22, 2006). Ex . 1 at 1. In the pena lty decision cha lleng ed her ein, Customs l ower ed its determination of manufa cture r’s sug g ested re tail price f rom $190,750 to $67,775, assessed a penalty at twice that
amou nt, and the n mi tig ate d th e pe na lty by 50 pe rc e nt t o a

rr ive at a fi na l a dmi nis tr ativ e c ivi l penalty amount of $67,775. Id. ¶ 6 & Ex . 1 at 1. Pla int if f’ s f ir st a me nd e d c omp la int

a lle g e s th at th e pe na lty

no tic e and

un de rl yingpe na lty de te rm inatio n b y

Cus tom s are c on tr ary

to l aw i n s e ve ra l r e sp e c ts. Pla int if f c on te nd s th at, 1 contra ry to the plain languag e of 19 U .S.C. § 1526(f)(2) a nd (3), no r egulations were promulg ated unde r which Customs may deter mine a manuf

actur er’ s sugg ested re tail price. Id
. ¶¶ 29, 44. Plaintiff alleg es that Customs did not proper ly deter mine a “ma

nufac turer’ s sugg ested reta il price” for “ g enuine” merc handise be cause no such merc handise, a nd no such price , exis t. Id . ¶¶ 30, 43. With respec t to the travel c harg ers, plaintiff ma intains that the Underwriters L aboratories mark w as pre maturely applied by

the vendor

of the travel cha

rg ers but that Under writers L aboratories belate dly acknow ledg ed its approva l of the cha rg ers within a f

ew
wee ks of the ar

rival of the g oods in the United States. Id . ¶ ¶ 3 5, 36 . T he ke y

bo ard s, a c c or din gto plaintiff, wer e not counter feit bec ause the display of the Micr osoft Flying Window sy mbol on a function key

was a fair use of that sy

mbol and a tec hnical use r efe renc e for the conve nience of the key board use r. Id . ¶

¶ 3 8, 39 . F ur

the r, the me tho d Cu sto ms u se d to de te rm ine tha t bo th classes of merc handise we re c ounterfe it was, in plaintiff’s view, c ontrary to “empirica lCourt No. 06- 00025 P age 5

marke tplace a

nd method proof r equire ments, fair use notions, and relate d requisites for counter feit g oods leg al deter minations” as set for

th in prior decisions of the Court of International Trade
. Id. ¶ 42. B ased on the se alleg ations, plaintiff’s first ame nded complaint seeks a judgme nt vacating the Customs penalty decision or, a lternatively , a dec laratory judgme nt ho ldi ngthat th e Cus tom s c ivi l pe na lty de te rm inatio n is inv a lid

a s c on tr ary

to 1 9 U .S. C. § 1 52 6( f) (3 ), is a

rb itr ary , c a

pr ic iou s, an a

bu se of dis c re tio n, or

oth e rw ise no t in

a c c or da nc e wi th law, and violate s the Due Proc ess Clause of the Fifth Ame ndment of the Constituti on of the United States. Id. at 19. Def endant moves to dismiss the first amende d complaint under U SCI T R. 12(b)(1) for lack of subject matter jur isdiction, or alternatively under U SCI T R. 12(b)(5) for f ailure to state a
c la im o n whic h r e lie f c an b e g ra nte d. De f. ’s Mo t. t o D ism iss Pl. ’s Am . Co mpl . a nd De f. ’s Re ply to Pl.’s Opp’n to Def.’ s Mot. to Dism iss Pl .’s Compl. 3 (“Def .’s Second Mot. to Dismiss”). Def endant a rgues that 28 U.S.C. § 1581 (2000) does not g rant the Court of I nternational Trade jurisdiction over this action, that the issue is not ripe for judicial decision bec ause the United States has not broug ht an ac tion in any court to re cover

the civil penalty , and that the issuanc e of a civil pena lty

notice, abse nt an ac tion to recove r the pe nalty , does not constitute an injury in fac t confe rringon the plaintiff standingto sue. Id. at 11-12, 29-30, 36- 38. II. D I S CUS S I ON Th is c a se pr e se nts tw o is su e s p e rt a ini ngto s ub je c t matte r j ur isd ic tio n. Th e fi rs t is su e is whether plaintiff’s first amended c omplaint, by itself or whe n considere d with the proposed amendment, plea ds fac ts sufficient to bringthe ca se within 28 U.S.C. § 1581(a), under which the court ha s exclusive jurisdiction over case s contestingdenials of a dminist rative pr otests ofCourt No. 06- 00025 P age 6

de c isi on s b y

Cus tom s. Th e se c on d is su e is whe the r p la int if f’ s c a se fa lls wi thi n 2 8 U .S. C. § 1581(i), which grants the Court of I nternational Trade exclusive jurisdiction t o hear case s ag ainst the United States ar ising unde r var ious laws of the United States that § 1581( i) descr ibes by subject matter. Plaintiff has the burde n of plea ding f acts fr om which the cour

t could conclude that it has jurisdiction over the subjec t matter of this ac tion. Mc Nut t v . G e n. Mo tor

s A c c e pta nc e Cor

p ., 298 U.S. 178, 189 (1936) (pla intiff “must alleg e in his pleadingthe fa cts essential to show jurisdiction”). F or the re asons stated be low, the cour t concludes that jurisdiction is lackingunder 28 U.S.C. § 1581(a) but that the c ourt may exercise jurisdiction over the subject matter

of plaintiff’s ca se pursua

nt to 28 U.S.C . § 1581(i). A. J urisdiction I s L ackingunder 28 U .S.C. §1581(a) Th e fi rs t ame nd e d c omp la int , e ve n whe n r e a d a s mo dif ie d b y the pr op os e d ame ndme nt,
re ve a ls that pl a int if

f’ s c a se do e s n ot s atis fy

the jur isd ic tio na l pr e re qu isi te s o f 2 8 U .S. C. § 1581(a) . Under

28 U.S.C. § 1581(a), the Court of I nternational Trade has “e x clusive jur isd ic tio n o f a

ny c ivi l a c tio n c omm e nc e d to c on te st t he de nia l of

a pr ote st, in who le or

in p art , under [19 U.S.C. § 1515] .” Section 1515 provide s for a dminist rative r eview of protests filed purs ua nt t o 1 9 U .S. C. § 15 14 . 1 9 U .S. C. § 15 15 (2 00 0) . O nc e a pa rt y ha s f ile d w ithCus tom s a pr ote st that satis fi e s th e re qu ir e me nts of 19 U. S.C. § 1 51 4, and

Cus tom s h a s a c te d o n th at pr ote st, the pa rt y may c on te st a de nia l of the pr ote st, in who le or

in p art , b y

tim e ly fi lin ga summo ns in the Court of International Trade
. See id. §§ 1514(a) , (c) , 1515 (2000); 28 U.S.C. § 2636(a) (2000) ( imposing a 180- day time limi t on the commence ment of a judicia l action contestingthe denial of a

protest). The fac ts plaintiff has pleade d in its first amended complaint, and pr oposedCourt No. 06- 00025 P age 7

to plead in its amendment, do not establish the filingof a va lid protest, a protest denia l, and a timely contest of a

protest denial, so a s to satisfy the re quirements of 19 U .S.C. § 1514 and 28 U.S.C. § 2636(a). Plaintiff alleg es that it protested the e x clusion of its mercha ndise from e ntry , a dec ision by Customs that specific ally is made protesta

ble by 19 U.S.C. § 1514(a)(4) . Howeve r, plaintiff does not cha lleng e in this lit igation the exclusi on of the mer chandise from entr y but instead challeng es its liabilit y

for a civil fine stemming f

rom the administrative proc eedingin which Customs seized and for feited, a nd subsequently

destroy ed, the mer chandise . Even we re the court to c on str ue pla int if

f’ s c la im a s c ha lle ng ingthe e xclu sio n o f t he me rc ha

nd ise , th e c ourt

wo uld
c on c lud e that pl a int if

f h a s f a ile d to ple a d f

a c ts e sta bli sh ingjur isd ic tio n und e r 2 8 U .S. C. § 1581(a) . Plaintiff has failed to a lleg e fa cts demonstratingcompliance with the proce dural
re qu ir e me nts a

pp lic a ble to p ro te sts . Plaintiff asserts jurisdiction under § 1581( a) on the basis of 19 U.S.C. § 1499, under which the f

ailure by Customs to make a f

inal deter mination on the admissibil ity of deta ined
merc handise within thirty day s of the pre sentation of that mer chandise for e x amination is treated as a de cision by

Customs to exclude the merc handise for purposes of the filing of

a prote st. 19 U.S.C. § 1499(c)(5) (A) ( 2000). A pa rty may file a pr otest to challeng e the de emed e x clusion afte r the c lose of the thirtieth day
. Id. I f C us tom s d oe s n ot a c t on su c h a pr ote st w ith in t

hir ty day s of the filingdate of

that protest, the prote st is deemed denie d on the thirtieth day
. Id. § 1499(c) (5)( B)
. In it s p ro po se d ame ndme nt t o th e fi rs t ame nd e d c omp la int , p la int if f i mpl ie s th at it

va lid ly
c on te ste d, un de r 1 9 U .S. C. § 15 14 (a )( 4) , th e de nia l of its pr ote sts of

the e xclu sio n o f i tsCourt No. 06- 00025 P age 8

merc handise. Pl.’s Mot. for L eave to File Amendme nts to First Am. Compl. 1-2 (“contesting defe ndant’s denia l of plaintiff’s pe tition protests as to ‘the exclusion of merchandise from entr y or deliver y . . . under a

ny provision of the customs laws . . .’ unde r 19 U.S.C. § 1514(a)( 4).”) (“ Pl. ’s Mo t. t o A me nd

F ir st A m. C omp l.” ). In th e pr op os e d ame ndme nt, Saka r a sse rt s jurisdiction “by

virtue of the unde rlying 19 U .S.C. § 1514(a)(4) protest of CB P’s deemed
e xclu sio n o f P la int if

f’ s g oo ds wi thi n te rm s o f § 15 14 (a )( 4) , a nd § 1 51 5( c ) R e vie w o f P ro te sts , said dee med exclusion having oc curr ed, on information and belief, on or about Novembe r 8, 2002 (thirty

(30) da y s following the prese ntation of the g oods for c ustoms ex amination on or about Octobe r 7-or -8, 2002) . . . .” Id. at 2- 3. In it s r e sp on se to d e fe nd ant’ s mo tio n to dis mis s, plaintiff cha

rac terizes its March 3, 2003 pe tition as constitut ing a valid protest that was “ denied” by a dec ision of Custom s dated Mar ch 18, 2003. SeePl. ’s Re sp . in Op p’ n to De f. ’s Mo t. t o Dismiss 21 & Ex. 1 at 3-8 (“Pl.’s Resp. to Def.’ s First Mot. to Dismiss ”). In the Marc h 3, 2003 petition, plaintiff contests the administrative seizure a nd forf eiture of its mercha

ndise. See id. Ex . 1 at 4-9. A pe tition contesting a se izure and for feiture , howeve r, usually does not qualify

as an a dminist rative pr otest of a de cision by Customs to exclude
merc handise for

purposes of 19 U .S.C. § 1514. See CDCOM ( U.S.A.) Int’l, Inc . v. United States , 2 1 C I T 4 3 5 , 4 3 8 -3 9 , 9 6 3 F. S u p p . 1 2 1 4 , 1 2 1 8 -1 9 (1 9 9 7 ) ( ci t i n g Int’l Mav en, Inc . v. Mc Cauley , 12 CI T 55, 57, 678 F. Supp. 300, 302 (1988) and R.J.F. Fabrics, I nc. v. U nited States , 1 0 C IT 73 5, 73 8, 65 1 F . Su

pp . 1 43 1, 14 33 (1 98 6) ); se e als o 19 U. S.C. § 1 51 4( c )( 1) (D ) ( re qu ir ingthat a pr ote st i nc lud e “ any

oth e r m atte r r e qu ir e d b y

the Se c re tary

by re g ulatio n” ); compare 19 C.F .R. Part 171 (2002) ( conce rningCustoms regulatory proce dures f

or filingpetitions for remission or mitigation of fine s, penalties, and f orfe itures) with 19 C.F.R. Part 174 (2002) ( conce rningCourt No. 06- 00025 P age 9

Congr ess amende d 19 U.S.C. § 1514(c)(3) to leng then the prote st period to 180 day s. 2 Miscellaneous Tr ade a

nd Tec hnical Corre ctions Act of 2004, Pub. L . No. 108-429, § 2103(2) (B ), 118 Stat. 2434, 2597-98 (2004). The amendment to § 1514(c )(3) applies to merc handise e ntere d on or af ter De cembe r 18, 2004. Id. § 2108. Customs regulatory

proce dures f

or protests) and

19 C.F.R. § 174.13 (conc erningthe contents of a pr ote st) . N oth ingin t

he Marc h 3 , 2 00 3 p e tit ion ind ic ate s th at th is s ub mis sio n w a s inte nd e d a s a pr ote st und e r 1 9 U .S. C. § 15 14 or wa s inte nd e d to satis fy

the re qu ir e me nts fo r p ro te sts established by

the Customs reg ulations. SeePl.’s Resp. to Def.’s F irst Mot. to Dism iss Ex . 1 at 3
- 8
. M o r e o v e r , a f

t e r p l a i n t i f f d e c l i n e d t o e x e r c i s e i t s r i g h tt o c o n t e s tth e f o r f e i tur e j u d i c i a l l y, exclusion from entry

arguably beca me moot upon the final administrative for feiture and destruction of the merc handise. Even if the c ourt wer e to brush aside these diff iculties and assume that the Marc h 3, 2003 petition for re lief could c onstitut e a pr otest, the petition, beca use of untimeliness, could not constitute a timely

protest on the fa cts that plaintiff has plea ded. Plaintiff alleg es a date “on or about Novembe r 8, 2002” a s the date of the dee med exclusion, based on an e x amination date of October 7 or 8, 2002. Pl.’s Resp. in Opp’n to Def .’s Mot. to Dismis s Pl.’s First Am. Compl. 20 (“ Pl. ’s Re sp . to De f. ’s Se c on d M ot. to D ism iss ” ). To be tim e ly un de r 1 9 U .S. C. § 15 14 (c ) a s in eff ect at that time, any

protest ag ainst the dee med exclusion would have had to have bee n filed
no late r t ha n n ine ty da y s a ft e r t he date of the de c isi on

be ingc ha lle ng e d. 19 U. S.C. § 1 51 4( c )( 3) (B ). I f t

he No ve mbe r 8 , 2 00 2 d ate of de e me d e xclu sio n is c or

re c t, p la int if

f w ou ld 2 h av e h a d t o f i l e a v a l i d p r o t e s tc h a l l e n g i n gth e d e e m e d e x c l u s i o nb y F e b r

u ar y 6 , 2 0 0 3 , n e ar l y aCourt No. 06- 00025 P age 10

The amended c omplaint and attachme nts indicate that the other petitions cited by 3 plaintiff as prote sts were filed af ter the Ma

rch 3, 2003 pe tition. P laintiff filed a petition dated Oc tob e r 1 5, 20 03 in r e sp on se to t he pe na lty

no tic e iss ue d b y

Cus tom s in

wh ic h Cu sto ms s ou g ht a penalty of $381,500. F irst Am. Compl . Ex . 1 at 2. Plaintiff filed a suppleme ntal petition dated Oc tob e r 1 4, 20 05 in r e sp on se to t he de c isi on

of Cus tom s in

wh ic h Cu sto ms m iti g ate d th e pe na lty by 50 perc ent to $190,750. Id. Ex . 3. Customs issued the final de cision in response to the supplemental petition. Id. Ex . 1 at 1. month before the filing of plaintiff’s f irst petition. SeePl. ’s Re sp . to De f. ’s F ir st M ot. to

3 Dismiss Ex . 1 at 3-8. More over, a lthough the Customs protest “de nial” is alleg ed to have
occur red on Ma

rch 18, 2003, the summons in t his case w as filed on January 25, 2006, long a fter the 180-da

y period for

the filing of a summons expired. See28 U. S.C. § 2 63 6( a ). F or the se
sever al re asons, the cour

t concludes that plaintiff has fa iled to plead fa cts sufficie nt for the exercise of

jurisdiction under 28 U.S.C. § 1581(a) ba sed on 19 U.S.C. § 1499. B. Jurisdiction I s L ackingunder 28 U .S.C. § 1581(i)(4) as it Relates to § 1581(a ) Plaintiff invokes jurisdiction under § 1581(i)( 4) as it re lates to protest denia ls under § 1581(a) . First Am. Compl. ¶ 4. Under § 1581(i)(4) , the Court of International Trade is gr anted exclusive jurisdiction of any civil action ag ainst the United States that ar ises out of any law of the United States providingfor a dminist ration and e nforc ement with re spect to the matter s ref err ed to in the various other subse ctions of § 1581, includingsubsection (a ). In support of its argument for jurisdiction under

these provisions, plaintiff re lies principally on Vivitar Corp. v. United States , 761 F.2d 1552 ( Fe d. Cir. 1985), a c ase ove rturned on jur isdictional gr ounds by the Supreme Court in K Mart Corp. v. Cart ier, Inc. , 485 U.S. 176, 182 (1988). In Vivitar , the Court of Appe als for the Fe dera l Circuit (“Court of Appe als”) he ld that the Court of International Trade proper ly had exerc ised jurisdiction under subsec tions (i)(3) a nd (i)(4) of 28 U.S.C. § 1581 to hear a challeng e to the re g ulations promulgated by the Depa rtmentCourt No. 06- 00025 P age 11

The Supreme Court gr anted c ertiora ri in K Mart Corp. to resolve a jurisdictional conflict 4 amongthe Circuits arisingfrom cha lleng es to the implementation of the Tr easur y regulations interpre ting Sec tion 526(a). In Coalit ion to Preservethe Integrity of Am. Trademark s v. United States , 790 F.2d 903 ( D.C. Cir. 1986) and Olympus Corp. v. United States , 792 F.2d 315 ( 2d Cir. 1986), jurisdiction to challeng e the Tr easur y regulations was held to lie in the district courts and not in the Court of International Trade
. of the Tr easur

y interpre ting Sec tion 526(a). 761 F .2d at 1560. Section 526(a ) provides that
m e r c h an d i s e o f

f o r e i g nm anu f

a c tur e b e ar i n ga

r e g i s t e r e d

an d r e c o r d e d tr a d e m ar k o w n e d b y a U.S. citiz en, cor

poration, or a ssociation is prohibited ge nera lly from importation absent the written conse nt of the trade mark owne r. See19 U. S.C. § 1 52 6( a ). Th e Court of Ap pe a ls
c on c lud e d th at th e g e ne ra l im po rt pr oh ibi tio n o f S e c tio n 5 26 (a ) c on sti tut e d a n “ e mba rg o” wi thi n the meaningof 28 U.S.C. § 1581(i)(3). Vivitar , 761 F.2d at 1560. The Court of Appe als furthe r held in Vivitar

that th e Court

of Inte rn atio na l T ra de ha d e xclu siv e jur isd ic tio n p ur su ant t o 28 U.S.C. § 1581(i)(4), a s a cor ollary to protest jurisdiction under § 1581(a ). Id. The Supreme Court overturne d the jurisdictional holding of Vivitar in K Mart Corp. , re a so nin gtha

t th e Court

of Inte rn atio na l T ra de did

no t ha ve jur isd ic tio n und e r 2 8 U .S. C. § 1581(i)(3) beca

use Section 526(a ) did not cre ate a n “emba rg o” within the meaningof the statute. See K M

ar t Corp., 485 U.S. at 183-84. Fur ther, the Supre me Court reje cted the 4 “cor ollary to protest jurisdiction” rea soning, unde r which the Court of Appea ls in Vivitar found jurisdiction to ex ist under 28 U.S.C. § 1581(a) when re ad tog ether with § 1581(i)(4), be cause no actua l protest was involved in the c ase. Id. at 19 0- 91 . B e c a us e pla int if

f h a s n ot p le a de d f

a c ts
un de r whic h th e c ourt

may c on c lud e that th is c a se inv olv e s a va lid pr ote st, the c ourt

re je c ts pla int if f’ s c on te nti on

that th e c ourt

may e xer c ise jur isd ic tio n und e r 2 8 U .S. C. § 15 81 (i )( 4) a s it relates to § 1581(a)
.Court No. 06- 00025 P age 12

C. J urisdiction I s L ackingunder 28 U .S.C. § 1581(i)(4) as it Relates to § 1581(i)( 1) Init s p r o p o s e d

ame n dme n t t o th e f

ir s t a me n d e d c o mp la int, p la inti f

f s e e k s to a d d

te xt
asser ting jurisdiction under

28 U.S.C. § 1581(i)(1) a

nd (i)(4) . Under

§ 1581(i)(1) , the Court of International Trade is gr anted e x clusive jurisdiction of any civil action commenc ed ag ainst the United States that arise s out of any law of the United States providingfor “ reve nue for imports or tonnag e.” Plaintiff a

rgues that subsec tion (i)(1), whe n construed in c onjunction with subsection (i)(4) , confe rs jurisdiction upon the court. Ac cordingto plaintiff, this case a rises out of a la

w providing for “ administration and enf orce ment with respec t to matters in” § 1581(i)( 1). Pl.’s Mot. to Amend First Am. Compl. 1. Pl aintiff points to the Tariff Act of 1930, of

which Section 52 6( f) is a

pa rt , a s a law p ro vid ingfo r r e ve nu e fo r i mpo rt s. Pl. ’s Re sp . to De f. ’s Se c on d M ot. to Dismiss 14. On the facts plea ded, the c ourt must consider this case to arise out of Sec tion 526. As an a lte rn ativ e , p la int if f c ha ra c te ri zes Se c tio n 5 26 (f

)( 3) a s r a isi ng“ so me de fa c to r e ve nu e to the g overnme nt.” Pl.’s Resp. to Def.’s F irst Mot. to Dism iss 13. Section 526(f), whic h imposes civil fines associated with seizures of imported c ounterfe it mercha ndise, is not, in any

ordinary
se ns e , a law p ro vid ingfo r r e ve nu e fr om i mpo rt s. D. Subject Matter Jurisdiction I s Available unde r 28 U.S.C. § 1581(i)(4) Plaintiff invokes jurisdiction under 28 U.S.C. § 1581(i)(3) a nd (4), unde r which the Court of International Trade has jurisdiction of any civil action ag ainst the United States that ar ises out of any law of the United States providingfor “ embar g oes or other quantitative re strictions on the importation of merc handise for rea sons other than the pr otection of the public he alth or saf ety” or
ari se s o ut o f a

ny law o f t he Un ite d St ate s p ro vid ingfo r “ a dmi nis tr atio n a nd e nf or c e me nt w ith respe ct to the matters r efe rre d to” in, inte r a lia , § 15 81 (i )( 3) . F ir st A m. C omp l. ¶ ¶ 2 -3 ; seeCourt No. 06- 00025 P age 13

28 U. S.C. § 1 58 1( i) (3 )- (4 ). Th e c ourt c on c lud e s th at pl a int if

f h a s p le a de d f

a c ts s uf fi c ie nt t o bringits case within 28 U.S.C. § 1581(i)(4). The thre shold question is whether plaintiff’ s case arises out of subse ction (e) of Se c tio n 5 26 , whic h is a

se izur e and

fo rf e iture pr ov isi on

a pp lyingto i mpo rt e d me rc ha nd ise bear ing c ounterfe it marks, or out of subsec tion (f), whic h is a related, but separ ate, pr ovision
su bje c tin gto a

c ivi l f ine any pe rs on wh o d ir e c ts t

he imp or tatio n o f m e rc ha

nd ise fo r s a le or

pu bli c distribution t hat is seized under Sec tion 526(e). Plaintiff appe ars to cha rac terize its case a s arisingout of Section 526(e) . Plaintiff refe rs in its amended c omplaint to “the 19 U.S.C. 1526 I mport Prohibiti on and seizure pr ovisions as to viol ative g oods” and de scribes the se provisions as amounting“to an ‘ embar g o’ or ‘ other qua ntitative restriction’ in ter ms of 28 U.S.C. 1581(i)(3) as an Import Prohibiti on of a c lass of violative g oods that are subject to g overnme nt exclusi on from the Customs Territory .” F irst Am. Compl . ¶ 2. Despite plaintiff’ s char acte rization, the court conc ludes that Sakar’ s civil action arise s out of Section 526(f

), not Section 526(e) . Be cause Section 526(e) is a seizure and f orfe iture pr ov isi on , n ot a

c ivi l pe na lty

pr ov isi on , a

n a c tio n th at ari se s so le ly out of Se c tio n 5 26 (e ) w ou ld be an in rem seizure and f orfe iture proc eeding . An ac tion arising out of Section 526(f) is of a differ ent cha

rac ter in that it nece ssarily entails an in personam ci v i l p en al ty p ro ce ed i n g. Pla int if f’ s c a se is in personam in c ha ra c te r b e c a

us e it c on te sts the lia

bil ity of Saka r f or a c ivi l f i n e . A n y in rem cause of ac tion on which Sakar e ver c ould have sue d in any court to conte st the
se izur e and

fo rf e iture of its g oo ds wa s e xtinguis he d whe n th e a dmi nis tr ativ e fo rf e iture of its
merc handise be came “fina l,” i.e. , no longe r appe alable. T he extinguishing event oc curr ed whe n Sakar w aived its rig ht to request that the United States c ommence a judicial forf

eiture pr ocee dingCourt No. 06- 00025 P age 14

to adjudicate whether

the United States could take title to the imported mercha ndise. The c ourt conclude s that plaintiff has not pleade d fac ts sufficient to state a case arisingout of the seizure and for feiture provision established in Section 526(e) . I t follows that jurisdiction over plaintiff’s
c a se do e s n ot l ie so le ly

un de r 2 8 U .S. C. § 15 81 (i )( 3) . T he c ourt ’s jur isd ic tio na l ana ly sis , howeve r, ca

nnot end there
. The c ourt is gr anted jurisdiction under 28 U.S.C. § 1581(i)(4) of c ases a g ainst the United States that arise out of a

law providingfor “ administration and enf orce ment” of the matters ref err ed to in § 1581(i)(3) , which matter s would include an “ embar g o” within the meaningof the latter provision. Ther efor e, the c ourt next considers whether § 1581(i)(4) would confe r jurisdiction over plaintiff’s c ase if Sec tion 526(e) we re de emed to provide for “ embar g oes or oth e r q ua nti tativ e re str ic tio ns ” wi thi n th e me anin gof tho se te rm s a s u se d in

28 U. S.C. § 1581(i)(3) . As to this question, t he par ties disag ree . Plaintiff argues that Section 526(e ) imposes an embar g o in banningcounter feit g oods from entry into the Custom s territory . Pl.’s Re sp . to De f. ’s Se c on d M ot. to D ism iss 17 . D e fe nd ant r e lie s o n th e Sup re me Court ’s ho ldi ngin K M ar t Corp. for the pr oposition t hat Section 526(e ) does not cr eate an “e mbarg o” within the meaningof 28 U.S.C. § 1581(i)(3) a nd also argues that jurisdiction does not exis t thereunde r beca use the district cour

ts, not the Court of I nternational Trade , are g rante d jurisdiction to hear
s ei z ure an d

fo rf ei ture ca s es . De f. ’s S ec o n d M o t . t o Di s m i s s 2 2 -2 5 (c i t i n g K M ar t Corp. , 485 U.S. at 184-85). Th e c ourt is n ot p e rs ua de d b y

de fe nd ant’ s a

rgume nt t hat K Mart Corp. resolves the qu e sti on of wh e the r s ub se c tio n ( e ) o f S e c tio n 5 26 c re ate s a n e mba rg o f or purp os e s o f 2 8 U .S. C. § 1581(i)(3) . The Court of International Trade , in the somewhat diff ere nt context of an importerCourt No. 06- 00025 P age 15

seekingto invoke § 1581(i)(3) jurisdiction for a c halleng e to a se izure eff ecte d under Sec tion 52 6( e ), pr e vio us ly

ha s c on c lud e d th at Se c tio n 5 26 (e ), in p ro vid ingfo r t he se izur e of

c ounte rf e it g oods, does not cre ate a

n embar g o or other qua

ntitative restriction for

purposes of § 1581( i)(3). CDCOM (

U.S.A.) Int’l, Inc

. , 2 1 CI T at 44 0, 96 3 F . Su pp . at 12 18 -1 9. De fe nd ant c ite s to CDCOM (

U.S.A.) Int’l, Inc

. in s up po rt of its mot ion

to d ism iss . D e f. ’s Se c on d M ot. to Dismiss 24-25. The narr ow question of whe ther subsec tion (e) of Section 526 cre ates a

n “emba rg o” within the meaningof that term a s used in 28 U.S.C. § 1581(i)(3) is, howeve r, one that the Supreme Court did not have occa sion to consider in K Mart Corp. , and on which the Court of Ap pe a ls f

or the F e de ra l Cir c uit

ha s n ot r ule d. Th e Sup re me Court ’s c on c lus ion in K M ar t Corp. that th e Cus tom s r e g ulatio ns int e rp re tin gSe c tio n 5 26 (a ) c ou ld n ot b e c ha lle ng e d in the Court of International Trade under 28 U .S.C. § 1581(i)(3) re sted on the Court’s view that an embar g o did not result from subsection (a ) of Sec tion 526. See485 U.S. at 185-90. Sub se c tio n ( e ) o f S e c tio n 5 26 wa s n ot r e le va nt t o th at ana ly sis
. In K M ar t Corp. , the Supreme Court c oncluded that “ the ordinar y meaningof ‘e mbarg o,’ and the mea

ning that Congre ss appar ently adopted in the statutory

languag e ‘e mbarg oes or other quantitative re strictions,’ is a g overnme ntally imposed quantitative restric tion–of zero–on the importation of merc handise.” Id. at 185 (quoting28 U.S.C. § 1581(i)(3)). “ An importation prohibition is not an emba rg o if rathe r than re flec ting a governm ental re str ic tio n o n th e qu anti ty of a pa rt ic ula r p ro du c t th at w ill e nte r, it m e re ly pr ov ide s a

me c ha nis m by wh ic h a pr ivate pa

rt y might, at it s o wn

op tio n, e nli st the Go ve rnme nt’ s a id i n r e str ic tin gthe qu anti ty of imp or ts i n order to enforc e a pr ivate rig ht.” Id. Sub se c tio n ( a ) o f S e c tio n 5 26 , a c c or din gto t he Sup re me Court , r e late s to e nf

or c e me nt o f a

pr ivate ri g ht a

nd is v e ry dif fe re nt f ro m an e mba

rg o b e c a us e , inCourt No. 06- 00025 P age 16

addition to the tradema

rk owne r, any

other importer

havingthe owner ’s conse nt may import the g ood without lim itation. Id. at 185-86. Subsection (e) of Section 526 protec ts the rig hts of owner s of g enuine tra demar ks from i mp o rt at i o n s o f

c o un t e r f e i tg o o d s , b u tth e s c o p e o f th e p r o v i s i o ni s mu c hb r o a d e r th anth at . It provides that any

merc handise imported into the United States in violation of 15 U.S.C. § 1124

“ sh a ll b e se ize d. ” 19 U. S.C. § 1 52 6( e ). Un de r 1 5 U .S. C. § 11 24 , a pr ov isi on

of the L anh am A c t, no article of imported mer chandise bear ing a counter feit trade mark, a s defined the rein, “ shall be admitted to entry

at any customhouse of the United States.” 15 U.S.C. § 1124. The provision incorpora tes only a limited exception for classe s of ar ticles, as identified by

regulation under Section 526(d), that a

re imported by

trave lers for

persona l use. Id .; see19 U.S.C. § 1526(d). Thus, Section 526(e) and the r elated pr ovision of 15 U.S.C. § 1124 t og ether establish a g ener al prohibition on the importation of, and the exclusion from entry of, counte rfe it mercha

ndise, and bo th f or m th e pr e dic ate fo r a sse ssm e nt o f c ivi l f ine s und e r S e c tio n 5 26 (f

). Th is s tatut or

y sc he me does not permit the owne r of a trade mark to import counter feits of its trade marke d merc handise. Nor doe s it permit goods be aringa counte rfe it trademar k to be re lease d into commerce , even with the consent of the owner of the g enuine tra demar

k. The tra demar

k owner ’s conse nt has the eff ect unde r subsec tion (e) only of allowing , in the discretion of the Trea sury Secre tary , a limited exception to the require d forf eiture a nd destruction of me rcha

ndise alre ady

seized: if the owner consents, and the counter feit trade mark is obliterate d, the merc handise may be donate d to a g overnme nt ag ency

or ele emosy

nary org anization or, if no such ag ency has a ne ed for

the
merc handise, sold by

Customs at public auc tion. 19 U.S.C . § 1526(e)
.Court No. 06- 00025 P age 17

The re ason for

the import restra int of subsection (e) of Section 526 diffe rs from that of subsection (a ). As the Supre me Court observe d in K M ar t Corp. , the subsection (a ) import control does not re flec t what the Supreme Court considere d to be a “ g overnme ntal” re striction but instead provides a

mecha nism by which a pr ivate par

ty might, at its own option, enlist the g ov e rnme nt’ s a id i n r e str ic tin gthe qu anti ty of imp or ts b e ari ngthe g e nu ine tr a de mark in o rd e r t o enfor ce a private r ight. See K M

ar t Corp. , 485 U.S. at 185. Prohibiti ngthe importation of g oods bear ing a counter feit, as oppose d to ge nuine, trade mark not only serve s the private inter est of the trade mark owne r but also re flec ts the g overnme nt’s interest in the strict enf orce ment of intellectual prope rty

law to protec t the U.S. economy and to protec t the consuming public from the ef fec ts of a counte rfe it good. SeeAnticounterf eiting Consumer

Protection Act of 1996, Pub. L . N o. 10 4- 15 3, § 2 , 1 10 Stat. 1 38 6, 13 86 (1 99 6) (“ Antic ounte rf e iti ngAc t” ). F or

the se re a so ns , the c ourt c on c lud e s th at th e statut or y sc he me c on tr oll ingthe imp or tatio n o f c ounte rf

e it
merc handise that is established by subsection (e ) of Sec tion 526 and the re lated provision of 15 U. S.C. § 1 12 4 is su ff

ic ie ntl y dis sim ila r t o s ub se c tio n ( a ) o f S e c tio n 5 26 tha t th e Sup re me Court, in K M

ar t Corp. , cannot be considere d to have de cided the que stion of whether Section 52 6( e ) a nd 15 U. S.C. § 1 12 4 im

po se an “ e mba

rg o” wi thi n th e me anin gof that te rm a s u se d in 28 U.S.C. § 1581(i)(3). The Supreme Court’s discussion in K M ar t Corp. i s i n s tr

u c t i v e i nd e s c r i b i n gth e w i d e l yvary ing f orms in which embar g oes may be fa shioned. “An e mbarg o is a ‘[g]overnme nt order prohibiting c ommercia l trade w ith indivi duals or businesses of other nations.’” 485 U.S. at 184 (quoting Bla ck’s L aw Dic tionary 468 (5th ed. 1979)) . “It is ‘[ a] policy which pre vents g oods from ente ringa nation’ a

nd which ‘ma

y be imposed on a pr oduct or on a n individual country .’”Court No. 06- 00025 P age 18

Id . ( qu oti ngJ. B e re nyi, T he Mo de rn Am e ri c an B us ine ss D ic tio na ry 10 3 ( 19 82 )) . T he Sup re me Court’s opinion in K M

ar t Corp. noted that “e mbarg oes” a s ref err ed to in 28 U.S.C. § 1581(i)(3)
are not confined to “ embar g oes that ar e g rounded in tra de policy” but ty pically serve a g ov e rnme nta l pu

rp os e in b e ingdir e c te d to sp e c if ic c ate g or ie s o f g oo ds , f

or e xamp le , p ub lic health or sa fety , morality , law enf orce ment, fore ign a ffa irs, or ec ology
. Id . Section 526(e) incorpora tes by ref ere nce, a nd enfor ces through seizure and f orfe iture, the spec ific exclusion from entr y that the L anham Ac t, in 15 U.S.C . § 1124, applies to imported merc handise be aring counter feit trade marks. Tog ether , the two statutory provisions establish an import control that falls within the definitions of “e mbarg o” on which the Supreme Court base d its analy sis of Section 526(a) and 28 U.S.C. § 1581(i)(3)
. Th e ne xt que sti on

is whe the r t

he e mba rg o e sta bli sh e d b y

Se c tio n 5 26 and

15 U. S.C. § 1124 falls within the broade r terms of 28 U .S.C. § 1581(i)(3), which grants the Court of International Trade jurisdiction over ca ses ar ising unde r a la w providingfor “ embar g oes . . . for
re a so ns other than the protec tion of the public hea lth or safe ty .” 28 U.S.C. § 1581(i)(3) (empha sis added). Subsec tion (e) wa s added to Sec tion 526 by the Customs P roce dural Ref orm
an d Si mp li f ic ati o nA c t o f

1 9 7 8 , Pu b
. L
. N o . 9 5
- 4 1 0 , § 2 1 1 , 9 2 St at. 8 8 8 , 9 0 3
- 0 4 ( 1 9 7 8 )
. T h e te xt of the a dded subsec tion (e) de monstrated that Cong ress, in ena ctingimport prohibitions on
me rc ha nd ise be ari ngc ounte rf

e it m ark s, wa s a

wa re that c ounte rf

e it m e rc ha

nd ise c ou ld p os e a

ri sk t o p u b l i c h ea l than d

s af et y . T h e a d d eds u

b s ec t i o n(e ) p ro v i d edth at“m er ch an d i s e b ea ri n g a counter feit mark . . . sha ll be seized and, in the abse nce of the written c onsent of the tra demar kCourt No. 06- 00025 P age 19

Upon the ame ndment of Section 526 in 1978 to add subsec tion (e), subsec tion (e) 5 pr ov ide d in

re le va nt p art : Any such merc handise be aringa counte rfe it mark . . . shall be seized and, in the absenc e of the written conse nt of the trade mark owne r, for feited f or violations of the customs laws. Upon seizure of such merc handise, the Sec reta ry shall notify the owner of the tra demar

k, and shall, af

ter for feiture , obliterate the trade mark wher e fe asible and dispose of the g oods seized – (1) by delivery to such Fe dera l, State, and local g overnme nt ag encie s as in the opinion of the Secre tary

have a need f or such mer chandise , (2) by g ift to such elee mosy

nary instit utions as in the opinion of the Secre tary have a need f or such mer chandise , (3 ) m or e tha

n 1 y e ar a ft e r t

he date of fo rf e iture , b y sa le by a pp ro pr iate c us tom s of fi c e rs at pu

bli c a uc tio n und e r s uc h r e g ulatio ns a s th e Se c re tary pr e sc ri be s, except that befor e makingany such sale the Secre tary

shall determine that no Fe dera l, State, or local g overnme nt ag ency or ele emosy

nary instit ution has established a ne ed for

such merc handise unde r par ag raph ( 1) or ( 2), or ( 4) if the merchandise is unsafe or a hazard to health, by de struction
. Cus tom s Pr oc e dura l Re fo rm and Simp lif ic atio n A c t of

19 78 , § 21 1, 92 Stat. at 90 3- 04 (e mph a sis added)
. owner , forf

eited for violations of the customs laws.” Id. Subsection (e) allowed f our 5 alternatives for the disposal of the g oods seized. Id . The four th alternative require d disposal by destruction “if

the merc handise is unsafe or a ha zard to health.” Id. ; see19 U.S.C. § 1526(e)(4) (1982). Subsection (e) rema ined uncha ng ed until Congre ss, in enactingthe Anticounter feitingAct in 1996, amended the section to modify subsection (e ) and to a dd subsection (f) , the afor ementioned c ivil penalty provision. Anticounterfe iting Ac t, §§ 2, 9-10, 110 Stat. at 1386, 1388-89. Section 2 of the 1996 statute set forth a s findings that [t ]he counterf

eiting of trade marke d and copy

rig hted merc handise– (1 ) h a s b e e n c onne c te d w ithor g anize d c ri me ; (2) de prives leg itimate tradema rk and c opy

rig ht owners of

substantial reve nues and c on sume r g oo dw ill ; (3 ) p os e s h e a lthand

sa fe ty thr e ats t o U nit e d St ate s c on sume rs ;Court No. 06- 00025 P age 20

As ame nd e d in

19 96 , Se c tio n 5 26 (e ) p ro vid e d in re le va nt p art : 6 Any such merc handise be aringa counte rfe it mark . . . shall be seized and, in the absenc e of the written conse nt of the trade mark owne r, for feited f or violations of the customs laws. Upon seizure of such merc handise, the Sec reta ry shall notify the owner of the tra demar

k, and shall, af

ter for feiture , destroy

the merc handise. Alternatively , if t

heme rc ha nd

iseis n ot u ns afeor

a h az ar d to he alt h , and the Secre tary has the c onsent of the tra demar k owner , the Secr etar

y may obliterate the trade mark whe re f

easible a nd dispose of the g oods seized – (1) by delivery to such Fe dera l, State, and local g overnme nt ag encie s as in the opinion of the Secre tary

have a need f or such mer chandise , (2) by g ift to such elee mosy

nary instit utions as in the opinion of the Secre tary have a need f or such mer chandise , or (3 ) m or e tha

n 9 0 d ay s a ft e r t

he date of fo rf e iture , b y sa le by the Cus tom s Se rv ic e at pu

bli c a uc tio n und e r s uc h r e g ulatio ns a s th e Se c re tary pr e sc ri be s, except that befor e makingany such sale the Secre tary

shall determine that no Fe dera l, State, or local g overnme nt ag ency or ele emosy

nary instit ution has established a ne ed for

such merc handise unde r par ag raph ( 1) or ( 2). SeeAnticounterf

eiting A ct, § 9, 110 Stat. at 1388 (empha sis added). (4) e liminates United States jobs; and ( 5 ) i s a mu l t i b i l l i o n - d o l l ar

dr a i no nth e U n i t e d

S t at e s e c o n o m y. Id. § 2 , 1 10 Stat. at 13 86 . T hu s, Con g re ss i nd ic ate d in Se c tio n 2 that pr ote c tio n o f t he pu bli c health and sa fety

from risks assoc iated with counter feit merc handise wa s a matter of conce rn. Th e 19 96 ame ndme nts mod if ie d s ub se c tio n ( e ) b y

int e g ratin gsu

bs e c tio n ( e )( 4) int o th e ma in p o rt i o no f s u

b s ec t i o n(e ), th er eb y

re qu i ri n g gen er al l y

th e d es tru ct i o no f m er ch an d i s e b ea ri n g a counter feit trade mark a

nd allowingan exception to destruction only “if the me rcha

ndise is not unsafe or a ha zard to health.” Id. § 9, 110 Stat. at 1388. Specifica lly , under subse ction (e) as 6
ame nd e d, on ly

if the me rc ha

nd ise wa s d e te rm ine d n ot t o b e un sa fe and no t a ha zar d to he a lth could the Secr etar

y , upon obtaining the consent of the trade mark owne r, “obliterate the trade mark whe re f

easible a nd dispose of the g oods seized” via one of the three rema ining alternatives in subsection (e)
. Id. ; 19 U.S.C. § 1526(e).Court No. 06- 00025 P age 21

The e nactment of

the 1996 amendme nts to S ection 526(e ) demonstrates that protec tion of the public hea lth and safe ty was among the rea sons for maintainingand expandingthe statutory reg ime direc ted ag ainst the importation of counter feit merc handise. B ut it also demonstrates that Con g re ss, in S e c tio n 5 26 (e ), wa s f ur the ri ngno t on ly

pr ivate tr a de mark

ri g hts but a lso g o v e r n m e n t a l o b

j e c t i v e s th atar e d i s t i n c tf r o mth e p r o t e c t i o no f

p u b l i c h e a l than d

s a f e ty, including pr eser

ving jobs in the United States a nd preve nting a

multibi llion-dollar drain on the U n i t e d S t at e s e c o n o m y. Neither the plain meaningnor the leg islative history of 28 U.S.C. § 1581(i)(3) indicates that Congr ess intended to exclude fr om the jurisdiction of the Court of International Trade case s arisingout of a lawproviding for a n embar g o for whic h anyrea son relate s to the public health or
sa fe ty . T o th e c on tr ary , th e re po rt of the Ho us e Committe e on the Judic iary

on the Cus tom s Courts Act of 1980, in discussing the mark- up of the bill, H.R. 7540, that resulted in § 1581(i)( 3) in its current for

m, expl ained that the dr aft jurisdictional provision as set for th in the previous version of the bill had ge nerated conc erns of witnesses, spec ifically

the Amer ican Importers Association, that the Court of International Trade would exercise jurisdiction of c ivil actions under the Fe dera l Food, Dr ugand Cosmetic Act a

nd the Toxi c Substance s Control Act, that the public health or sa fety

questions thereunde r should be tre ated the sa me whethe r a c ourt is dealing with domestic or imported g oods, and that such public he alth or saf ety questions more appropr iately

should come within the jurisdiction of the district courts. H.R. Rep. No. 96- 1235, at 47-48 (1980) , re

pr inte d in 1980 U.S.C.C.A.N. 3729, 3759. The embar g o cre ated by Section 526(e) and the r elated 15 U .S.C. § 1124 bars importation and entry of counte rfe it goods whether or not those g oods pose a thre at to public health or sa fety . That a g ood could pose aCourt No. 06- 00025 P age 22

threat to public health or saf ety related to cong ressional motivation for the e nactment but wa s not a condition pre cede nt to the exclusi on from entr y of any specific g ood. The de termination of whether a par ticular g ood falls within the embar g o require s a cour t to determine whe ther the trade mark borne by

the g ood is counterf

eit within the meaningof the L anham Ac t, not whether the g oo d it se lf

po se s a thr e at to the pu

bli c he a lthor

sa fe ty . B e c a

us e qu e sti on s o f h e a lthor sa fe ty do not arise whe n a cour

t determines the sc ope of this embar g o, it is notthe ty pe of e mbarg o that g ener ated the c oncer

n of dual jurisdiction that was e x presse d in the House c ommitt ee r eport. F or the se se ve ra l r e a so ns , th e c ourt c on c lud e s th at th e e mba

rg o c re ate d b y

Se c tio n 5 26 (e ) i n conjunction with 15 U.S.C. § 1124 satisfies the require ment of 28 U.S.C. § 1581(i)(3) that the law i n q ue sti on pr ov ide fo r “ e mba

rg oe s . . . fo r r e a so ns oth e r t ha n th e pr ote c tio n o f t

he pu bli c health or sa fety .” The c ourt disag ree s with defenda nt’s argument that plaintiff’s ca se lac ks jurisdiction
un de r § 15 81 (i )( 3) be c a

us e Con g re ss h a s p la c e d ju ri sd ic tio n o ve r s e izur e and fo rf e iture c a se s in the dis tr ic t c ourt s. Un de r 2 8 U .S. C. § 13 55 , th e dis tr ic t c ourt s a re g ra nte d ju ri sd ic tio n g e ne ra lly over f orfe iture ac tions; under 28 U.S.C. § 1356, the district courts possess jurisdiction of “any seizure under

any law of the United States on land or upon wa ters not within admiralty

and maritime jurisdiction, ex cept matter s within the jurisdiction of the Court of International Trade under se ction 1582 of this titl e.” 28 U .S.C. §§ 1355, 1356 (2000). Defe ndant’s ar g ument does not take into consideration that the case plaintiff has plea ded does not c ontest a seizure or a forf eiture e ffe cted unde r Section 526(e ) but instead conte sts liabili ty or potential liability

for a civil fine under

Section 526(f)
.Court No. 06- 00025 P age 23

In summary , plaintiff has plea ded fa cts sufficie nt to demonstrate that its case arises out of a law, Sec tion 526(f), that in providingfor a dminist ration and e nforc ement of the import pr oh ibi tio n e sta

bli sh e d b y

Se c tio n 5 26 (e ) a

nd the e xclu sio n f

ro m e ntr y re qu ir e d b y

15 U. S.C. § 1124, cre ates a

n embar g o on the importation of counter feit g oods for re asons other tha n the protec tion of the public hea lth or safe ty . The c ourt there fore is gr anted jurisdiction over the g ener al subject matter

of plaintiff’s c ase by

28 U.S.C. § 1581(i)(4). E. Plaintiff Has Not Stated a Claim upon which Relief Can Be Gra

nted De fe nd ant a sse rt s v ari ou s g ro un ds in s up po rt of its argume nt t

hat pl a int if

f h a s f a ile d to
e sta bli shjur isd ic tio n o r t o s tate a c la im o n whic h r e lie f c an b e g ra nte d. In a dd iti on

to i ts arguments pertainingto the scope of 28 U.S.C. § 1581(i), defe ndant ar g ues that plaintiff ha s failed to e stablish standing to sue a nd, submitt ing that no final ag ency action is ava ilable for revie w, that plaintiff’s c ase la cks ripene ss. SeeDef .’s Second Mot. to Dismiss 28-31, 36-38. Un de r U SCI T Ru le 8( a )( 2) , th e ple a din gre qu ir e me nt i s sa tis fi e d b y “ a sh or t and pla in state me nt o f t

he c la im s ho wi ngthe ple a de r i s e nti tle d to re lie f. ” In r uli ngon a mot ion to d ism iss , the cour t acc epts as true the fa cts alleg ed in plaintiff’s plea ding a nd construes a ll inferenc es in the plaintiff’s fa

vor. See She arin v. United States , 992 F.2d 1195, 1195- 96 (F ed. Cir. 1993). The court may not dismi ss for fa ilure to state a c laim unless it appear s beyond doubt that the plaintiff could prove no set of fa cts consistent with the plaintiff’s a lleg ations that would entitle the plaintiff to relief

. See Hishon v. King & Spalding , 4 67 U. S. 6 9, 73 (1 98 4) ; Conley v. G ibson , 355 U.S. 41, 45-46 (1957). Saka r’s amended c omplaint and associate d submissi ons, when e valuated
un de r t he se sta nd ard s, re ve a l th at Saka

r h a s f a ile d to ple a d a

c a us e of a c tio n und e r whic h it would be entitled to re lief.Court No. 06- 00025 P age 24

In addition to citing the jurisdictional provision of 28 U.S.C. § 1581(i), plaintiff’ s
ame nd e d c omp la int

c ite s, a s th e ba sis fo r i ts a c tio n, 28 U. S.C. §§ 26 32 (a ), (b ), and 26 40 (e ). F ir st Am. Compl. 1. Neither of these sections cr eate s a ca use of a ction. The provisions of § 2632 specify how a c ivil action is commenced in the Court of I nternational Trade , i.e. , g ener ally by the fi lin gof a summo ns and

c omp la int

purs ua nt t o s ub se c tio n ( a ) o r b y

the fi lin gof

a summo ns on ly in t he ins tanc e of

a c ivi l a c tio n b ro ug ht u

nd e r 1 9 U .S. C. § § 1 51 5 o r 1 51 6 p ur su ant t o subsection (b). 28 U .S.C. §§ 2632(a)-( b) (2000) . The statute, in § 2640(e ), def ines the scope and standard of

revie w for c ivil actions not specified in subsec tions (a) through (d) of that section and, ther efor e, dire cts how the Court of International Trade is to review a matter within the subject matter jur isdiction of § 1581(i). 28 U.S.C. § 2640(e) ( 2000). In so doing, § 2640( e) doe s not cre ate a

cause of ac tion under which a plaintiff may

challeng e an a g ency

decision but instead ref ers to the sc ope and sta

ndards of revie w applica

ble under the Administrative Proce dure A ct (“A PA”), 5 U.S.C. § 706 (2000). Id. A ca se brought under the jurisdiction of 28 U.S.C. § 1581(i) may rely for its ca use of action on the APA “ rig ht of revie w” pr ovision, 5 U.S.C . § 702, which g ener ally entitles any person “ suffe ringleg al wrongbeca use of a g ency

action, or a dverse ly

aff ecte d or ag g rieve d by
a g e nc y a c tio n w ith in t

he me anin gof

a re le va nt s tatut e . . . to jud ic ia l r e vie w the re of .” 5 U .S. C. § 7 02 (2 00 0) ; see Shinyei Corp. of Am. v. United States , 355 F.3d 1297, 1304- 06 (F ed. Cir. 2004) (c on c lud ingthat juri sd ic tio n is pr op e r u nd e r 2 8 U .S. C. § 15 81 (i )( 4) and tha t an im po rt e r h a s a
c a us e of a c tio n und e r 5 U. S.C. § 7 02 to c ha lle ng e the liq uid atio n o f e ntr ie s c on du c te d p ur su ant t o
err oneous instructions of the De partment of Commerc e). Plaintiff’s a mended c omplaint does not
a sc ri be Saka

r’ s c a us e of a c tio n to the APA . E ve n h a d it do ne so , th e ame nd e d c omp la int wo uldCourt No. 06- 00025 P age 25

not suffice to state a va lid claim under the A PA, which limits ag ency revie w to “[a]genc y

action made r eviewa

ble by statute and fina l ag ency

action for

which ther e is no other a dequate reme dy in a cour t . . . .” 5 U.S.C. § 704 (2000). The a ction taken by Customs in issuing under Section 52 6( f) the mit ig ate d p e na lty de c isi on of De c e mbe r 2 9, 20 05 is n ot e xpre ssl y ma de re vie wa

ble in a suit ag ainst the United States, either by Section 526(f) or by

any other statute. To be
re vie wa ble un de r t

he APA , th e a g e nc y

a c tio n b e ingc ha lle ng e d mu st b e “ fi na l” su c h th at it “ mus t mark the c onsummation of the ag ency ’s dec isionmaking proc ess” a nd, in addition, “must be one by wh ic h r ig hts or

ob lig atio ns have be e n d e te rm ine d, or fr om whic h le g a l c on se qu e nc e s w ill flow.” Benne tt v. Spear , 520 U.S. 154, 177-78 (1997) ( internal quotation marks omitted). Th e De c e mbe r 2 9, 20 05 le tte r s tate s th at “ this decision constitutes the final administrative
re v ie w an aly

sis av ail ab leun de r th e pr ov isi on s o f P ar t 17 1 o

f th e Cus tom s R e

gu lat ion s. No further petitions w ill be acce pted. ” F ir st A m. C omp l. E x. 1 at 1 ( re ply ing , in the Cus tom s de c isi on date d D e c . 2 9, 20 05 , to Saka r’ s su pp le me nta l pe tit ion

fo r m iti g atio n o f t

he c ivi l penalty ). Howe ver, it does not nec essar ily follow that the De cembe r 29, 2005 dec ision marks the consummation of the ag ency ’s dec ision making proc ess. Under Section 526(f) , “[t] he imposition of a fi ne un de r t

his su bs e c tio n s ha ll b e wi thi n th e dis c re tio n o f t he Cus tom s Se rv ic e .” 19 U. S.C. § 1526(f) (4). B y

statute, there fore , the United States could initiate no judicial ac tion to recove r a pe na lty un le ss C us tom s, in t

he dis c re tio n o f t

he Cus tom s Co mmi ssi on e r, fi rs t make s a de c isi on to g o forwa rd with such an a ction, which it would do initially by means of a

ref err al to the Depa rtment of Just ice. See19 C.F.R. § 171.22 (providingthat wher e pay ment of a mitig ated penalty is not made within the eff ective date of a

mitigation dec ision, refe rra l will be made to the Depa rtment of Just ice unless other action has be en dire cted by the Customs C ommissi oner)
.Court No. 06- 00025 P age 26

Plaintiff’s pleadingdoes not indicate that this di scre tionary decision by

Customs has bee n made; in any event, it ca

nnot be said for

cer tain whether , and on what alleg ed fa cts, the De partment of Justi c e wi ll b ri ngan a c tio n in dis tr ic t c ourt

on be ha lf of Cus tom s to re c ov e r f

ro m Saka r a c ivi l fi ne un de r S e c tio n 5 26 (f

). Th e De pa

rtme nt o f Jus tic e may

do so on ly

by br ing ingan a c tio n in dis tr ic t c ourt

un de r 2 8 U .S. C. § 13 55 (a ). Th at st atut or y pr ov isi on

g ra nts the dis tr ic t c ourt s orig inal jurisdiction of any action to re cover

or enf orce a civil fine or

penalty incurre d under a

ny Act of Cong ress, e x cept matter s within the jurisdiction of the Court of International Trade under 28 U.S.C. § 1582. See28 U.S.C. § 1355(a); 28 U.S.C. § 1582 (2000) (e x cludingSection 526(f) penalties fr om amongthose for which a c ollection action may be instituted in the Court of International Trade ). Acc ording ly , the fa cts and c ircumstance s prese nted in plaintiff’s submissions do not establish that the Dec ember 29, 2005 decision is the culmination of the Customs decision making pr oc e ss. Ev e n w e re the c ourt to p re sume the de c isi on

to b e su c h a

c ulm inatio n, pla int if

f’ s c a se still would be def

icient in stating a

n APA claim. Plaintiff has fa iled to alleg e fa cts under which the cour t may conclude that the Dec ember 29, 2005 decision, af

ter the c lose of the 30- day eff ective pe riod of that dec ision, determined rig hts or obligations or ga ve rise to f

urther le g al
c on se qu e nc e s. Ac c or din gto p la int if f’ s p le a din g s a

nd do c ume ntatio n, the Cus tom s administrative proc eedingwas ba sed on finding s of fa ct and c onclusions of law made by Cus tom s and

c ulm inate d in

the a sse ssm e nt o f a

mit ig ate d c ivi l pe na lty

of $6 7, 77 5. F ir st A m. Compl. ¶¶ 5-7. Sakar

did not pay

the pena lty

within the 30 day s allowed by Customs for
acc eptanc e of the mitigated pe nalty decision. See id. ¶¶

6- 8, Ex. 1 at 1. Th at de c isi on , a s a result, has e x pired a

nd is now of no leg al ef

fec t. See19 C.F .R. § 1 71 .2 2 ( pr ov idi ngthat aCourt No. 06- 00025 P age 27

mitigated pe nalty

decision is in effe ct for a limit ed time as spec ified in the dec ision and that the fa ilure to p ay

wi thi n th e e ff

e c tiv e pe ri od

wi ll r e su lt i n th e fu ll p e na lty be ingde e me d a

pp lic a ble and re fer ral of the claim to the Depa rtment of Just ice unless the Customs Commi ssioner deter mines otherwise)
. An a c tio n b ro ug ht b y

the Un ite d St ate s to re c ov e r a pe na lty fr om S aka

r u nd e r 2 8 U .S. C. § 1355(a) would be a de novo proce edingbefor e the district cour t. I n g rantingto the district
c ourt s g e ne ra lly

the or ig ina l ju

ri sd ic tio n to he ar c ivi l pe na lty a c tio ns , Co ng re ss d id n ot a llo w i n 28 U.S.C. § 1355 for a proc eedingunder which the district cour t could revie w on the ag ency
rec ord a matter such a s is described in plaintiff’ s pleading
. See28 U. S.C. § 1 35 5; Griekspoor v

. United States , 433 F. Supp. 794, 799 (M.D. F la. 1977) (obse rvingin dic ta that had the g overnme nt sought to collec t a civil penalty under 28 U .S.C. § 1355, “a full dress he aringand trial would have taken plac e . . . in the District Court.”) . For these re asons, the finding s of fa ct and conc lusions of law that Customs m ade dur ing the administrative proc eedingare no longe r of any binding leg al ef

fec t. De sp ite the e xpir e d s tatus of the De c e mbe r 2 9, 20 05 de c isi on , th e pr ay e r f or re lie f i n plaintiff’s first amended c omplaint seeks “a judgme nt reve rsing , setting a side, and va catingthe
a g e nc y ’s De c e mbe r 2 9, 20 05 2XMSRP C ivi l Pe na lty De c isi on de te rm inatio n . . . .” F ir st A m. Com pl. 19 . Saka

r s e e ks , in

the a lte rn ativ e , a

de c larator

y jud g me nt h old ingthat th e c ivi l pe na lty decision is invalid as contra ry to Section 526(f)( 3), ar

bitrary , capr icious, an abuse of discre tion, or otherw ise not in acc ordanc e with law, a nd a denia l of due proc ess. Id. Sakar e ssentially asks the Court of International Trade to gr ant a de clar atory judgme nt on fac ts, which Sakar ha s p l e a d e d , th atp e rt a i ns o l e l y t o th e n o w - c o n c l u d e d a dm i n i s tr at i v e p r o c e e d i n g . In s u m m ar y,Court No. 06- 00025 P age 28

beca use that proc eedingwas c oncluded without a pe nalty beingpaid, and be cause the United S t at es h as n o tas s ert edan y p en al ty cl ai mun d er

2 8 U. S
. C
. § 1 3 5 5 (a ), S ak ar h as fa i l edt o al l ege fac ts under which the court c ould find that the Customs decision now has any eff ect on Saka

r’s ri g hts or ob lig atio ns . Nor ha s Sakar a lleg ed any fac ts pertainingto the Dec ember 29, 2005 decision under which that dec ision has resulted in furthe r leg al conse quence s sufficient to justify APA revie w. In respondingto the motion to di smiss, pl aintiff dire cts the cour t’s attention to a J uly

23, 2004 letter in which Customs notified Sakar that it had r ece ived no re sponse to a notice of penalty of $259,000, dated Ma

y 24, 2004, that Customs had sent to Sakar
. SeePl. ’s Re sp . to De f. ’s F ir st Mo t. t o D ism iss 27 & Ex. 3 . T he le tte r s tate d th at if no re sp on se wa s r e c e ive d w ith in t hir ty da y s, “th[e] case will be re fer

red to the D epar

tment of J ustice for

collection ac tion and the Interna l Revenue Service wher e a lien w ill be placed a g ainst y our income tax return.” Id. Ex . 3 at 1. Plaintiff includes with its first amended c omplaint an aff idavit of its Chi ef O perating Of fice r
re fe rr ingto t

he July 23 , 2 00 4 le tte r f

ro m Cu sto ms a

nd statin gthat Saka

r w ou ld b e ir

re pa ra bly injured in the eve nt of a c ollection action and inc ome tax li en. Id. Ex . 5 at 2. The thre at of a

collection ac tion and tax l ien, as wa s stated in the J uly 23, 2004 letter a

nd char acte rized in the aff

idavit of Sakar’ s Chief Oper atingOffic er, doe s not suffice a s an alleg ation that the Dec ember

29, 2005 decision has oc casione d leg al conse quence s for Saka r. That letter , a c c or din gto t

he May 24 , 2 00 4 p e na lty

no tic e in t

he amou nt o f $ 25 9, 00 0, pe rt a ins to C us tom s pe na lty c a se no . 2 00 4- 46 01 -3 00 36 5- 01 , whic h is a dif fe re nt p e na lty

c a se tha n th e pe na lty

c a se that is the subject of this action. See id. Ex . 3 at 2-3. The penalty case at issue in this action,
acc ordingto the documentation plaintiff pr ovides, is Custom s penalty case no. 2003-4601-Court No. 06- 00025 P age 29

30 04 04 -0 1. F ir st A m. C omp l. E x. 1 at 1- 2. Pla int if f’ s su bmi ssi on s d o n ot a lle g e fa c ts o r c ite to documentation esta

blishing that the United States ha s imposed, or threatened to impose, a tax lie n in the pe na lty

pr oc e e din gthat f

or ms the ba sis of

pla int if f’ s c la im. F or the fo re g oin gre a so ns , p la int if f h a s p le a de d n o c a

us e of a c tio n th at c ou ld e nti tle it t o relief under the APA. In the abse nce of a valid APA ca

use of a ction, and in the abse nce of another statute under which the Customs decision of Dec ember 29, 2005 is made re viewable , pla int if f’ s c a se may

pr oc e e d b e y on d th e ple a din g s st a g e if it a lle g e s f

a c ts a llo wi ngthe c ourt

to conclude that Sakar ha s an ava ilable re medy under a “nonstatutory ,” i.e. , constitutional, cause of action. Se e Mo tio ns Sy

ste ms Cor p. v . B us h , 4 3 7 F. 3 d

1 3 5 6 , 1 3 5 9 (2 0 0 6 ). P l ai n t i ff ’s p l ea d i n gs
atte mpt to a sse rt su c h a c la im i n a lle g ingthat th e Cus tom s d e c isi on wa s “ un c on sti tut ion a l a s a De nia l of Du e Pr oc e ss o f L aw. ” F ir st A m. C omp l. 2 . T he c ourt c on c lud e s th at th is i s n ot a statement of a

claim upon which r elief c an be grante d. The De cembe r 29, 2005 pena lty decision imposed a mitigated pena lty of $67,775 but did not state any conseque nce that would attend the failure of Sakar

to pay the mitigate d penalty

within the 30-day

period in which the decision wa s in effe ct. Id. Ex . 1 at 1. Nor did the de cision initi ate a ny further proce eding . As discussed previously , the fa cts alleg ed re veal that the se izure and for feiture of Sakar ’s merc handise a re now final and be y ond the jurisdiction of any court to re view. The only alleg ed fa ct to which plaintiff has direc ted the cour

t that conce ivably

could re late to a due proce ss claim involves a threa t of a tax l ien in an entire ly

differ ent pena lty

proce eding
. SeePl. ’s Re sp . to De f. ’s F ir st M ot. to Dismiss Ex . 3 at 1-2.Court No. 06- 00025 P age 30 F. Plaintiff’s Proposed A mendment Fa ils to C ure the Insufficie nt Compl aint F ina lly , th e c ourt

a dd re sse s th e re ma ini ngiss ue inv olv ingpla int if f’ s mo tio n to ame nd

its first amende d complaint and conc ludes that the propose d amende d complaint does not cure the insufficient plea ding of

a cla im on which relief

can be g rante d. SeePl. ’s Mo t. t o A me nd F ir st Am. Compl. The court pre viously discussed this proposed ame ndment in the context of subject matter jurisdiction. Althoug h, as provided by USCI T R. 15(a), le ave to amend a plea ding is to be “fr eely g iven when justice so require s,” a c ourt may deny a motion to amend a plea ding when doing so w ould be futile. See U nited States v. Ford Motor Co. , 463 F.3d 1286, 1296- 98 (F ed. Cir. 2006). In this inst ance , no purpose would be serve d by the cour t’s g rantingplaintiff’s mot ion to a me nd its c omp la int
. In the proposed a

mendment, plaintiff see ks to alleg e additional fa cts perta ining to a de nial of a pr otest as the pre dicate on which plaintiff would have the cour t exercise jurisdiction under 28 U.S.C. § 1581(a). Pl.’s Mot. to Amend First Am. Compl. 1-2. Under 19 U.S.C. §§ 1514 and 1515, a plaintiff is expressly g iven the rig ht to challeng e judicially the denial of

a prote st of any of the sp e c if

ie d c ate g or ie s o f d e c isi on s o f C us tom s. I t is , th e re fo re , th e or e tic a lly po ssi ble that a validly pleade d cause of ac tion would have re sulted had plaintiff plea ded fa cts allowingthe cour t to find a valid protest, a

denial ther eof, a

nd the timely

filing of a summons to contest that denial. As discussed pre viously , the fa cts as alleg ed in the first amended c omplaint, even as a ug mented by the pr op os e d ame ndme nt, are ins uf fi c ie nt t o e sta

bli sha ba sis fo r j ur isd ic tio n und e r 2 8 U .S. C. § 1 58 1( a ). Pla int if

f f a ils to a lle g e the fi lin gof

any do c ume nt t

hat c ou ld c on sti tut e a

va lid pr ote st,
and pla int if f d id n ot f ile a tim e ly summo ns to c ha lle ng e wh at pl a int if f a lle g e s w a s a

pr ote stCourt No. 06- 00025 P age 31

de nia l. T he pr op os e d ame ndme nt, a c c or din g ly , f a ils to c ur e pla int if

f’ s f a ilure to p le a d a

c la im entitling it to relief. III . C ONCL US I ON Pla int if f’ s f ir st a me nd e d c omp la int , whe the r c on sid e re d a lon e or in c on jun c tio n w ithits proposed a

mendment there to, fails to state a c laim on which the cour t could g rant re lief. Plaintiff ha s a sse rt e d n o v a lid

c a us e of a c tio n und e r t

he APAor

any oth e r s tatut e . T he re is n o s e t of fa c ts that plaintiff could prove that would entitle it to relief consistent with the constitutional due pr oc e ss c la im that pl a int if f h a s st ate d in

its ple a din g s. Pla int if

f’ s mo tio n to ame nd

its fi rs t
ame nd e d c omp la int

do e s n ot a lle g e fa c ts s uf

fi c ie nt t o c ur e the de fe c tiv e ple a din gand the re fo re is futile. J udg ment g rantingdefe ndant’s motion to dism iss and denying f or futility plaintiff’s
m o t i o nt o am e n d

th e c o mp l a i n tw i l l b e e n t e r e d a c c o r d i n g l y. /s/ Timot hy

C. St ance u Timothy C. St ance u J u d ge Dated: Dec ember

12, 2006 New Y ork, Ne w York