Pr io r t o t he pa ss ag e o f the Home la ndSe cu ri ty Ac t o f 20 02 onMa rc h 1 , 2 00 3, Cus to ms 1 wa s d en om inated

Un ite d S tat es C us tom s S erv ice an d f ell un de r th e juris dic tio n o f t he Un ite d St ate s T rea sury D ep artm ent. P urs uant t o th e A ct, ho we ve r, C us tom s w as d ivi de d and ren am ed Slip-Op. 07- 157 UNITED STA TES COU RT OF INTER NATIONA L TRADE

____________________________________ : HEARTL AND BY -PRODUC TS, INC., : : Plaintiff, : : Before: Judith M. Barz ilay, Judge v. : Court No. 03-00307 : UNITED STA TES, : : De fe nd ant. : : ____________________________________:
OPINION [Plaintiff’s motion for summary judgm ent is gra nted.] Serko Simon Gluck & Kane LLP , Da nie l J. Gluc k and ( Jerom e L . H

an ifi n ); DL

A P ipe r R ud

nic k GrayCa ry , ( Sta nle

y Mc De rm ott ) and Sarah J. Storken for Plaintiff. Pe ter D. Ke isler , A ssi stant A tto rne y G en era l; Barbara S. Will iams , Attor ne y in Ch arg e, Int ern ati on al T rad e F iel d O ff ice ; ( Ai me e L ee ), Comm ercial Litigati on Branch, Civil Divis ion, Un ite d S tat es D ep artm ent of Ju sti ce; Ka ren P. Bi nd

er and Yelena Slepak , Office of A ssistant Chief Counsel, Internat ional Trade Li tigati on, United States Customs and Border Protection, of co un sel , f or D ef en dant Unit ed

St ate s. Dated: October 30, 2007 BA RZ IL AY , J ud ge : Th is c ase ret urn s to the co urt

on rem an d f rom the Fe de ral Ci rcu it,
an d p res en ts a

un iqu e o pp ort

un ityto c lar if

y th e sc op e o f t

he Co urt ’s a

uth ori ty w ithres pe ct t o judgments issued pursuantto 28 U.S.C. § 1581(h). This opinion i s the court ’s fourth opinion de tai lin g P lai nti ff

’s trou ble d d eal ing s w ithU. S. Cu sto m s an d B ord er P rot ect ion (“C us tom s”) 1Court No. 03-00307 Pa ge 2

Uni te d S ta te s C us to ms a ndBor de r P ro te ct io n a ndUni te d S ta te s I mmigr at io n a ndCus to ms Enforcement. Custom s is now a part of the Unit ed States Depar tment of Hom eland Securi ty. Fo r ad dit ion al b ack gro un d in fo rm ati on , s ee He ar tla nd By -Pro ds ., Inc . v . U

nited Sta tes , 2 23 CI T 7 54 , 7 4 F . S up p. 2d 13 24 (19 99 ) (“

Heartland I

”); He ar tla nd

By -Pro ds ., Inc . v . U

nited Sta tes , 2 64 F. 3d

11 26 (F ed . C ir. 20 01 ) (“

He ar tla nd

II ”); He ar tla nd

By -Pro ds ., Inc . v . U

nited Sta tes , 2 6 C IT 26 8, 22 3 F . S up p. 2d 13 17 (20 02 ) (“

He ar tla nd

III ”); He ar tla nd

By -Pro ds ., Inc . v . Un ite d S tates , 2 8 C IT __ , 3 41 F. Su pp . 2 d 1 28 4 (2 00 4) ( “He ar tla nd IV ”); and He ar tla nd

By

Prod s. , In c. v. Un ite d S

tates , 4 24 F. 3d

12 44 (F ed . C ir. 20 05 ) (“

Heartland V

”). The non-TRQ duty during the re levant per iod was 0.35 cents perlitercompared to the 3 hi gh erTRQ ra te of 3 5. 74 ce nt s p erki lo gr am. See Heartland V , 424 F.3d at 1246 n.2. beginning in 1995 when itsought an advanced ruling regar ding its pl an to import sugar syrup from Canada for further refining a nd ultimate sale t o its U.S. customers. Plaintiff Heartla nd By- 2 Pr od uc ts, Inc . (“ He art lan d” ), h as m ov ed fo r summ ary

jud gm ent to ch all en ge Cu sto m s’ a uth ori ty to liquida te the subj ect entr ies at t he Tariff Rate Quota (“TRQ”) rate following the rever sal of 3 this court ’s favorable pr e-importation judgment under § 1581(h)
. Se e He ar tla nd II , 2 64 F. 3d

at 1126. For the reas ons discussed he rein, Heart land’s motion for summ ary judgment is grante d. I. Background Heartland had pl ans to operat e a plant t hat refined sugarsyrup imported from C anada for sale to i ts U.S. customers. Before entry of the sugar s yrup at iss ue in this c ase, Heartl and sought an advance rul ing from C ustoms regarding the cl assificati on of its prospect ive imports. Se e 19 C.F.R. § 177. On May 15, 1995, Custom s issued New York Ruling Letter 810328 (“ Ne w Y or k Ru ling L etter ”), which clas sified the subj ect entr ies under subhe ading 1702.90.40 of the HTSUS, one of the subheadings el igible for non-TRQ trea tment. See Heartland I , 23 CIT at 760, 74 F. Supp. 2d at 1332. Having obtaine d a favorable rul ing, Heartla nd began importation and re fining operations in 1997.Court No. 03-00307 Pa ge 3

Th e re vo cat ion

of the Ne w Y

or k R uli ng Le tte r would have taken effect on November 8, 4 19 99 be cau se 1 9 U .S .C . § 16 25 (c) pro vid es 6 0 d ay s f or i m po rte rs t o m od if

y th eir pra cti ces following an interpretive ruling. Se e § 1 62 5(c ). As Heartland pet itioned t his court for r eview well before November 8, 1999, the 5 Revocation Ruli ng never took effect. Itwas essentia lly suspended dur ing the pre- importation proceeding before t his court. In response t o a petiti on filed by domestic trade as sociati ons pursuant t o 19 U.S.C. §§ 1516 and 1625 seeking re classifica tion of Heartland’ s entrie s, Customs published a notice of proposed revoca tion of the Ne w Y or k R uli ng Le tte r . Se e Pro

po sed Re vo ca tio n o

f R uli ng Le tte r & Treatment Relat ing to Tariff Classific ation of Certai n Sugar Syrups , 33 Cust. Bull. No. 22/23, at 56-57 (June 9, 1999). On September 8, 1999, Custom s issued a final notice tha t revoked the Ne w Y or k R uli ng Le tte r and reclas sified Heartl and’s sugar s yrup imports under 1702.90.10/20 of the HTSUS to which the TRQ rate applie d, effective November 8, 1999. See Revocation of 4 Ruling Letter

& Treatment Relat ing to Tariff Classific ation of Certai n Sugar Syrups , 3 3 C us t. Bu ll. No . 3 5/3 6, at 4 1 (S ep t. 8 , 1 99 9) ( “Revocation Ruli ng ”). On September 20, 1999, Heartland filed a complaint in t his court s eeking pre- importation
rev iewof the Revocation Ruli ng

pursu ant to § 1 58 1(h ). See Heartland I , 23 CIT at 754, 74 F.2d 5 at 1 32 6; seediscussion inf ra Part A(qu oti ng tex t of § 1 58 1(h )). On e m onth l ate r, t his co urt granted Heart land’s motion for judgment on the agency recor d. Se e id . at 77 7, 74 F. Su pp . 2 d at 13 45 . T he co urt

de clared Cu sto m ’s Revocation Ruli ng un law fu l, and

co nc lud ed

that H ear tland ’s
su gar syrup wa s p rop erl y c las sif ied un de r su bh ead ing 17 02 .9 0. 40 of

the HT SU S, as e sta

bli sh ed bythe Ne w Y

or k R uli ng Le tte r . See id. at 7 60 , 7 4 F . S up p. 2d at 1 33 1-3 2. Cu sto m s ap pe ale d this court ’s ruli ng but did not re quest a sta y of its judgment. Se e US CI T R . 6 2(d ) & ( e).Court No. 03-00307 Pa ge 4

Relying on Heartland I

, H ear tland co nti nu ed

to i m po rt s ug ar s yru

p into t he Un ite d States. On August 30, 2001, after t he Supreme Court had decided United States v. Mead Corp. , 533 U.S. 218 (2001), the Federal Circuit r eversed Heartland I on the gro un ds that C us tom s, wh ile ine lig ibl e to rec eiv e Chevron de fe ren ce, wa s entit led to d ef ere nc e und er Sk

idm or e concerning i ts class ification of sugar s yrup. Se e H ea rtlan d II

, 2 64 F. 3d

at 1 13 3; seeals o Mead Corp. , 533 U.S. at 235; Ch evron U. S. A. , In c. v. Na tural R es. De f. C ou nc il, Inc

. , 467 U.S. 837, 84 3-4 4 (1 98 4); Skidmore v. Swift & Co. , 323 U.S. 134, 140 (1944). Heartland s topped importing
su gar syrup the fo llo wi ng day. Af ter de ny ing He art lan d’s pe tit ion fo r re he ari ng , th e F ed era l Circuit i ssued its mandate on December 4, 2001. “Customs, however, did not wait for the
m an date t o is su e b ef

ore co mm en cin g f

ull -sc ale liq

uid ati on an d re liq uid ati on of He art lan d’s su gar syrup entri es at the TRQ rate s. Beginning on October 5, 2001, Cust oms liquidated some 1,225
en tri es p rio r to the iss uanc e o f t he m an date. ” Heartland V , 4 24 F. 3d

at 1 24 7. Sh ort ly t

he rea ft er, Customs liquidated or re liquidat ed an additi onal 3,874 entri es made prior to He ar tla nd II at the TRQ rate. On the basis of He ar tla nd II , Plaintiff then moved for entry of judgment, requesting thi s co urt to d ete rm ine the ef

fe cti ve date o f t

he Heartland I

rul ing an d th e p rop rie ty o f C us tom s’ actions. [The Court] heard oral argument on Heartl and’s motion for entry of judgment on Jan uary 2 3, 20 02 . A t or al argum ent, c ouns el f or t he go ve rnm ent re pre sented that Heartland may establi sh jurisdi ction under 28 U.S.C. § 1581(a) by pr otesting t he liquidat ion or rel iquidati on of a single entry and that Customs “would likely” su sp en d a cti on

on He art lan d’s oth er e ntr ies pe nd ingco urt pro cee din gs . In

vie w of thi s re pre sentat ion , th e tr ial co urt advis ed the parti es t o w ork

tog eth er t o s ett le the juri sdictiona l issue. . . . On February 15, 2002, two days after Heart land qu es ti on edth e n ec es si ty of d en yi ng th re e r at he r t ha n j us t o ne en try, Cus to ms res um ed liq uid ati ng an d re liq

uid ati ng He art lan d’s entri es at th e T RQ rat e. Heartland V, 42 4 F .3 d at 12 47 -48 (f oo tno te o m itt ed ).Court No. 03-00307 Pa ge 5

On Fe bru ary 26 , 2 00 2, the co urt

de nie d H ear

tland ’s m oti on

fo r entryof

jud gm ent,
expla ini ng that “[w]hile the jurisdi ctional pr edicate for 1581( h) requir es that t he entrie s be prospecti ve, this must be disti nguished from the effect of a judicial deci sion wh ich can on ly b e u sef

ul i f i t is ap pli ed

to r eal entri es. ” T he co urt thu s ru led

that it c ontin ue d to have jur isd ict ion

to a dju dic ate iss ue s p ert ain ingto t he act ua l entries covered by Heartland I : “T o f orc e an im po rte r to see k re lie f u

nd er 15 81 (h) to e sta

bli shits rig hts , and

the n f orc e it to l iti gate a ga in whe n it

see ks to en fo rce tho se r ights w ithact ua l entri es, wo uld

m ak e 1 58 1(h ) su

pe rf luo us as an av enue of rel ief .” Th e . . . co urt

als o o bs erv ed

that be cau se i ts d eci sio n in He ar tla nd

I rem ain ed

bin din g and

en fo rce ab le unti l th e is su an ce o f t he ap pe llate m an date, “[ a] nyact ion

byCu sto m s th at a

pp lie s th e [Revocation Ruli ng ] p rio r to the issuanc e of the mandate directly flout s the author ity of this cour t over rul ings under 1581(h).” No ne the les s, the [c ourt] de cli ne d to ex erc ise its jur isd ict ion un de r § 1581(h) to det ermine the temporal effect of its ruling i n Heartland I , s tat ing that a “betteralterna tive” was avai lable to Hear tland in t his case, namely, juri sdiction under 28 U.S.C. § 1581(a). The court r easoned thatwhile it had “ the option of ruling on the applicabi lity of § 1625(c) t o some of the entri es covered by [H ear tland ’s] m oti on ”—

sp eci fi cal ly, tho se e nte red an d li qu idated

pri or t o December 11, 2001— it would be unable to cons ider all of the relief reque sted by He art lan d, giv enthe un cle ar f act ua l re co rd and

the un cer tai n s tat us of oth er en tri es i n th e li qu idatio n p roc ess . T he pro tes t pr oc ess , th e co urt expla ine d, wo uld all owthe de ve lop m ent of a cl ear fa ctu al r eco rd. He nc e, the co urt co nc lud ed

that “[ i] n th is c ase , to m aintai n ju ris dic tio n und er § 15 81 (h) , o r ex ten d it un de r § 1 58 1(i ), whe n ano the r m ore co m pre he ns ive av enue is ava ila ble is unw ise .” The [court] thus entere d judgment in accordance wit h the appell ate mandate and dis m iss ed the co m pla int
. Heartland V

, 424 F.3d at 1248 (quoting He ar tla nd III , 2 6 C IT at 2 80 -81 , 2 85 , 2 23 F. Su pp . 2 d at 13 30 -31 , 1 33 4-3 5) ( cit ati on s o m itt ed ). He art lan d d id n ot a

pp eal the co urt ’s d ism iss al o f i ts c om pla int , b ut atte m

pte d to wo rk wi th C us tom s to ef

fe ct what ha d b een

su gg est ed

at o ral arg um ent w ithreg ard to arrang ingde nie d pro tes ts whic h w ou ld b rin g th e is su e b ack be fo re the Co urt

pursu ant to § 1 58 1(a ). Unf ort un ate lyCourt No. 03-00307 Pa ge 6

The record re flects let ters excha nged between Heartl and and Customs, but no 6 ag ree m en t on

pro ced ure . for both partie s, as it eve ntually bec ame clear, these arrangements could not be consummated. 6 Heartland t hen sought rel ief from this courtonce again, ch all en gin g C us tom s’ r etr oa cti ve im po sit ion of TR Q d uti es o n H ear

tland ’s s ug ar syrup entri es imported in reli ance on Heartland I. B oth co unts o f t

he co m pla int , the first st yled under § 1581(h) and the second under§ 1625(c), sought de clarat ory

jud gm ent as we ll a s a p relim inary and pe rm an ent in

jun cti on . O n July 28, 2003, the government moved to dism iss Heartl and’s complaint for lack of subject matter j urisdict ion or, in the alterna tive, for failure to state a claim upon which relie f can be granted. Id. at 1248-49. This court t hen, in a decis ion that was r eversed,
co nc lud ed

that it co uld no lon ge r ex erc ise jur isd ict ion be cau se i t “f

orm all y relinqui shed juris diction” unde r [§ 1581(h)] when it denied Hear tland’s motion for entry of judgment and dismissed the origina l case in He ar tla nd III . The pre sent ac tio n, the [c ourt] rea so ne d, “[ w] hil e invo lvi ng the sam e p art ies , e ntr ies an d und erl yin g d isp ute as He ar tla nd III . . . is an enti rely separ ate, new cause of action. There fore, Heartland ca rries t he burden of reestablishing t he jurisdi ction of this court t o survive the government’s motion to dismiss.” The [court] next de ter m ine d th at n o n ewba sis fo r § 1 58 1(h ) ju ris dic tio n e xis ted . T he [c ourt] fo un d th at H ear

tland co uld no t satis fy

the req uir em ents o f § 15 81 (h) an ew , a s al l of its entri es h ad

alr ead y b een im po rte d, an d n o p ros pe cti ve entri es w ere in dis pute. Id. at 1249 (quoti ng He ar tla nd IV , 28 CIT at __, 341 F. Supp. 2d at 1287) (ci tations omitted) . In
rev ers ingthi s co urt ’s r

uli ng , th e C ourt o f A

pp eal s expla ine d it s re aso nin g a s f oll ow s: Th e C ourt o f I nte rnatio na l T rad e co nc lud ed that be cau se i t f

orm all y re lin qu ish ed jur isd ict ion

ov er the ori gin al a cti on

inHe ar tla nd

III , jurisdi ction under § 1581( h) was no longer avai lable. Inde ed, in He ar tla nd III , th e tr ial co urt

de cli ne d to exercise jurisdi ction under § 1581( h) despite correct ly finding such jur isdicti on did lie . M ind fu l of

the fa ct that He ar tla nd

IV , n ot He ar tla nd

III , is before us on review, we nonethel ess note tha t the Court of Inte rnational Trade did not have the authorit y to simply decline to e xercise j urisdict ion conferred by § 1581(h)
. . . .Court No. 03-00307 Pa ge 7

Havin g a ssu

red its elf of § 1 58 1(h ) juris dic tio n o ve r at lea st s om e o f t

he entri es, the tri al c ourt s ho uld

have de fe rre d ru lin g o n th e g ov ernm ent’s m oti on to d ism iss pending clar ification of the factua l record a s to other e ntries ordismissed the action withoutprejudice pending such cla rificati on, rather t han enteri ng judgment that finall y dismissed the acti on. Id . at 12 50 (qu otatio ns om itt ed ). T hu s, the Co urt of Ap pe als he ld t

hat “the Co urt

of Int ern ati on al Trade erre d by holding thatit lacke d jurisdi ction to det ermine the temporal scope of its rul ing in Heartland I

and the effect of the [Federal Circ uit’s] ruli ng in He ar tla nd II .” Id . at 1253. Having
res olv ed the jur isd ict ion al i ssu e, the Co urt of Ap pe als rem an de d th is c ase fo r “f urt he r pro cee din gs on

the m eri ts. ” Id . at 1254. II. Discussion A. Scope of Heartland I Pl aintif f n owcla im s th at b eca

us e o f t he ex tra ord inary c irc um stanc es n ece ssary t o o bta in relief under § 1581( h), any acti ons by Customs that disturb t his court’ s judgment in Heartland I
are un law fu l. P l. B r. 8 . P lai nti ff arg ue s th at a

jud gm ent re nd ere d und er § 15 81 (h) su pe rce de s the statutes thatnormally govern liquida tion; the refore, all e ntries made pursuant t o Heartland I must be liquidated atthe non-TRQ rate as a matter of law. Pl. Br. 8-10. On the other hand, De fe nd an t co nte nd s th at this co urt lac ks jur isd ict ion

ov er H ear

tland ’s a ctu al e ntr ies m ad e af ter Heartland I

because those entries were necessar ily specul ative and t herefore not ri pe for review. Def. Br. 6. Moreover, Defendant asser ts that t he liquidat ion statut es provide Customs with a valid lega l basis t o liquidat e Heartland’ s entrie s at the TRQ rate. Def. Br. 21. Accordingly, thi s case requi res the cour t to define the pr actical effect of a judgm ent iss ue d p urs uant t o § 15 81 (h) . S ect ion 15 81 (h) pro vid es: Th e C ourt o f I nte rnatio na l T rad e sh all have ex clu siv e juris dic tio n o f anyciv ilCourt No. 03-00307 Pa ge 8

action comm enced to revi ew, prior to t he importation of the goods invol ved, a rul ingiss ue d b y th e S ecr etary o f t he Tr eas ury , o r a r ef

us al t o is su e o r ch an ge su ch a ru lin g, rel ati ng to c las sif icatio n, va luatio n, rat e o f d uty , m ark ing , re str ict ed m erc hand ise , e ntr

y re qu ire m ents, drawb ack s, ve sse l re pa irs , o r si m ilar m att ers , but only if the party commencing the civil ac tion demonstrat es to the cour t that he would be irreparabl

y harmed unless giv en an opportunity to obtain judi cial review prior t o such importati on . § 1581(h) (emphasis added). As t his court pr eviously expl ained, section 1581( h) is an ext raordinary instrument, and a signi ficant excepti on to the procedural requirements tra ditional ly placed on t hose challe nging a decisi on by Cu sto m s. Hi sto ric all y, in o rde r to ch all en ge a d eci sio n li ke the [ Revocation Ruling ] at is su e in

thi s ca se, it w as n ece ssary f or a partyto e xh au st r em ed ies av ail ab le thro ug h th e ad

m ini str ati ve ag en cybyfi lin g a pro tes t w ithCu sto m s. Exhaustion in suc h a case als o requires plainti ffs to pay any duties owed on the entries in question be fore filing with thi s court. Section 1581(h) allows for bypassing thes e procedural and monetar y burdens in spec ific and narr ow circumstances , namely, if the importer can demonstr ate that i t would be irrep arab ly h ar

me d u nle ss g ive n a n o

pp or tun ityto o bta in j ud

ici al revi ew

pr ior to [an] importation. He ar tla nd

III , 223 F. Supp. 2d at 1324 (cite d approvingly i n Heartland V , 424 F.3d at 1253) (ci tat ion s o m itt ed ) (e m

ph asi s ad de d); seeFa bil

Mfg. C o. v. Un ite d S

tates , 237 F.3d 1335, 1340 (Fed. Cir. 2001). This c ourt held i n He ar tla nd III that it s ruling i n He ar tla nd I applies t o all of the en tri es c ontem

plated byPl aintif

f whe n it so ug ht r ev iewun de r § 1 58 1(h ). While the j urisdict ional predi cate for § 1581(h) r equires t hat the ent ries be prospecti ve, this must be disti nguished from the effect of a judicial deci sion which can only be useful i f it is appli ed to real entries
. The entire rat ionale for pr e-i mp or tat ion rev iew

un de r § 15 81 (h ) is t ha t C us tom s w ill

bebo un d to ap

ply theco ur t’s de cis ion on thead jud ica ted ru ling to futur e en tri es. He ar tla nd

III , 2 6 C IT at 2 80 , 2 23 F. Su pp . 2 d at 13 30 (em

ph asi s ad de d); see Heartland V , 424 F. 3d at 1 24 8. Ba sed

on the pla in l an gu ag e o f t

he statut e an d le gis lat ive his tor y, Co ng res s cl ear lyCourt No. 03-00307 Pa ge 9

In r ele vant p art , th e le gis lat ive his tor y p rov ide s: 7 It is notthe Comm ittee’ s intent t o permit judicial review priorto the completion of the import transacti on in such a manner as to negat e the tra ditional method of ob tai nin g ju dic ial rev iewof im po rt tran sac tio ns . S uc h re vie w, ho we ve r, i s ex cep tio na l an d is autho riz ed on ly whe n th e re qu ire m ents o f s ub sec tio n (h ) ar e m et. H.R. Rep. No. 1235, 96th Cong., 2d Sess. 47 (1980), as rep rin ted in 1980 U.S.C.C.A .N. 3729, 3758. intended to di stinguish § 1581( h) from other jurisdict ional bases provided under § 1581. The 7 purpose of pre-importati on review is t o allevia te the ri sk of irreparable harm to importers by
asc ert ain ingdutie s o n th eir entri es be fore the init ial importation i s made. Se e He ar tla nd III , 26 CIT at 280, 223 F. Supp. 2d at 1330. In this ca se, applying t he holding of He ar tla nd II (whic h re -in stated

the Revocation Ruling that cl ass if

ied He art lan d’s entri es u

nd er the TR Q p rov isi on ) re tro act ive ly w ou ld undermine the purpose of pre-i mportation review. Heart land sati sfied the height ened burden of proof to establi sh jurisdi ction under § 1581( h) and obtaine d a favorable rul ing. See Heartland I , 23 CI T at 75 7, 77 7, 74 F. Su pp . 2 d at 13 29 , 1 34 5; see also 28 U. S. C. § 2 63 9(b ). I t ju sti fi ab ly relied on t his court’ s judgment in Heartland I when it continue d to import sugar syrup atthe non-TRQ rate. Since the Government did not request a s tay of judgment pending appeal, the decision i n Heartland I

took effect on November 18, 1999, 30 days after it was issue d. Se e § 1 62 5(c ); see also US CI T R . 6 2(d ) & ( e); Sta nd ar d H av en s Pro ds ., Inc . v . G en co r In du s. , In c. , 897 F.2d 511, 512 (Fed. Cir. 1990) (out lining re quirements for granting st ay of judgment pe nd ing ap pe al) ; De eri ng Mil lik en , In c. v. Fe d. Trad

e C om m' n , 647 F.2d 1124, 1129 n.11 (D.C. Ci r. 1 97 8) ( “T he on ly c on seq ue nc e o f f

ail ingto o bta in a

stay is that th e p rev ail ingpartym ayCourt No. 03-00307 Page 10

No tab ly, He art lan d c eas ed all im po rts of su gar syrup the day a ft er the Fe de ral Ci rcu it 8 decided He ar tla nd

II
. treat t he judgment of the districtcourt as final , notwithstandi ng that an appea l is pending.” ). “The law is well s ettled t hat the pendenc y of an appeal has no affect [sic] on the finali ty or bin din g e ff

ect of a tr ial co urt ’s h old ing .” SSIH Equip. S.A. v. ITC , 7 18 F. 2d 36 5, 37 0 (F ed . C ir. 19 83 ). F urt

he rm ore , p urs uant t o R

ule 41 (c) of

the Fe de ral Ru les of

Ap pe llate P roc ed

ure , th is court’s de cision in He ar tla nd I remained effective until t he Federal Cir cuit iss ued its mandate. Se e Fe d. R. Ap p. P. 41 (c) ; seeals o Bryant v. Ford Motor Co. , 8 86 F. 2d

15 26 , 1 52 9 (9 th C ir. 1989) (quoting Mar

y A nn Pe ns iero, Inc . v . L ingle , 8 47 F. 2d 90 , 9 7 (3 d C ir. 19 88 )). Af ter issuance of the Feder al Circuit ’s mandate, Heartland coul d no longer rel y on Heartland I
. 8 As the Fe de ral Ci rcu it r eco gn ize d, thi s co urt ha s th e inhe rent po we r to “en sure compliance with its own pri or ruling i n Heartland I ” an d “ to d ete rm ine the ef fe ct o f i ts jud gm en ts and

iss ue inj un cti on s to pro tec t ag ain st atte m pts to atta ck

or e va de tho se j ud gm ents. ” Heartland V

, 424 F.3d at 1251-52 (ci ting United States v. Hanover Ins. Co. , 82 F.3d 1052, 1054 (Fed. Cir. 1996)). I n exercisi ng that power, the court holds t hat Customs m ust liqui date all of Heartland’ s entrie s made prior to the is suance of the Federal Circuit’ s mandate at the non-TRQ rate. Any less er reli ef would relegate t he court’s ruling in He ar tla nd I to an advisory opinion lacking “pr actical concrete applicati on.” He ar tla nd III , 26 CIT at 280, 223 F. Supp. 2d at 1331; Pl. Reply Br. 8. De fe nd ant ci tes Intern ati on al C us tom Prod

uc ts, Inc . v . U

nited Sta tes , Slip Op. 05-145, 20 05 W L 2 98 05 87 (N ov . 8 , 2 00 5) ( no t re po rte d in F. Su pp .) ( “ ICP ”) as contr ary authori ty to the court’s pos ition. Def. Br. 8. It ci tes as per tinent t hat the cas e was dismissed on grounds ofCourt No. 03-00307 Page 11

In r ele vant p art , § 15 2. 16 (a) pro vid es: 9 The following procedures apply to changes in classi fication made by decision of either t he United State s Court of Internat ional Trade orthe United Stat es Court of Appeals for the Federa l Circuit , except to t he extent ot herwise provi ded in a rul ingpu bli sh ed in t he Cu sto m s B ull eti n p urs uant t o § 17 7. 10 (a) of thi s ch ap ter : (a) Ide nti cal m erc hand ise un de r de cis ion favo rab le t o G ov ernm ent. T he pri nc ipl es of any c ourt d eci sio n f

av ora ble to t he Go ve rnm ent sh all be ap pli ed to a ll merchandise identic al with thatpassed on by the cour t which is cover ed by un liq uid ate d e ntr ies , whe the r f or c on sum

pti on or w are ho us e. § 1 52 .1 6(a ). rip en ess be cau se t

he pla int if

f r eq ue ste d th at the co urt

de clare a bo nd req uir em ent nu ll and

vo id for all curr ent and futur e entries
. Se e ICP , 2005 W L 2980587, at *4-5. ICP , h ow ev er, is inapposite because itis not a § 1581(h) case. See id. at * 2. Th e h eig hte ne d b urd enof havin g to de m on str ate irr ep ara

ble harm un de r § 1 58 1(h ) pr ov ide s g rou nd s f or j uri sd ict ion

ov er d isp ute s that m ight ot

he rw ise be co ns ide red

sp ecu lat ive or n ot r ipe fo r re vie w. It i s p rec ise ly t his distinct ion that makes juris diction under§ 1581(h) extr aordinary. See St. Paul Fire & Marine Ins . C o. v. Un ite d S

tates , 6 F.3d 763, 768-69 (Fed. Cir. 1993); H.R. Rep. No. 1235, 96th Cong., 2d Sess. 47, as rep rin ted in 1980 U.S.C.C.A .N. 3729, 3770. In a dd iti on , D ef

en dant c lai m s th at the statut es and reg ulatio ns that no rm all y g ov ern liq uid ati on div est the co urt of autho rity to req

uir e th at C us tom s li qu idate the su bje ct e ntr ies at the non-TRQ rate. Def. Br. 21-26. For example, the Government relie s on 19 C.F.R. § 1 52 .1 6(a ) to argu e th at H ear tland ’s e ntr ies are su

bje ct t o th e T RQ . D ef

. B r. 2 0-2 3. Ho we ve r, 9 § 1 52 .1 6(a ) w as p rom

ulg ate d in 19 75 in t he lig ht o f t

he the n e xc lus ive po st- im po rtatio n p rot est jurisdi ction, now codified in 28 U.S.C. § 1581(a). As § 1581( h) was enacted i n 1980,Court No. 03-00307 Page 12

In p ert ine nt p art , § 15 04 (b) rea ds : 10 (b) Extensi on Th e S ecr etary o f t

he Tr eas ury

m ayex ten d th e p eri od

in whic h to liq

uid ate anentryif

-- (1) the inf orm ati on ne ed ed fo r th e p rop er a

pp rai sem ent or

cla ssi fi cat ion

of the im po rte d or withdrawn merchandise, . . . or for ens uring compliance with appl icable l aw, is not availabl e to the Customs Service . . . . § 1 50 4(b ) (1 97 8). In D ef en dant’ s Mo tio n f

or J ud gm ent on

the Ag en cyRe co rd, the Go ve rnm ent st ate s 11 that Customs “reliqui dated some of Heartland’s entr ies in the TRQ provision, and extended t he liq uid ati on of tho se e ntr ies wh ich

we re n ot y et l iqu idated ” f oll ow ing “th e F ed era l C irc uit ’s decision on August 30, 2001.” Def. Mot. J. Agency R. Statement Undisputed Mater ial Facts 3. As this court ’s holding makes clear , Customs did not have authorit y to extend li quidation pursuant to § 1504( b) nor rel iquidate Hear tland’s e ntries made in rel iance of He ar tla nd I and be fo re i ssu an ce o f t

he Fe de ral Ci rcu it’ s m an date. § 1 52 .1 6(a ) do es n ot a dd

res s it . L ike wi se, the en actm ent of 19 U. S. C. § 1 50 4 als o p rec ed ed 10 that of § 1581(h), and t here is no r eason to beli eve that i ts general language was meant to deprive § 1581(h) of its spec ific force. Se e § 1 50 4; seeals o F ak hr i v. Un ite d S

tates , Slip Op. 07-126, 20 07 W L 2 48 15 12 , at *3 (Aug . 2 0, 20 07 ) (“ Se cti on 15 04 wa s o rig ina llyen act ed in 1 97 8 to im po se a fo ur- ye ar t im e li m it f

or l iqu idatio n, wi th t

he m oti vatio n b ein g to inc rea se c ert ainty i n the customs process for importers . . . .”) (quotati ons & cita tions omitted). Mor e importantly, §§ 15 04 (b) an d 1 52 .1 6(a ) do no t op erate a s a l im itatio n o n th e co urt ’s a uth ori ty, but rathe r as a limitation on Customs’ authorit y. Se e §§ 1504(b) & 152.16(a ). 11 To repeat, beca use “[s]ection 1581(h) i s an extraor dinary instrument, and a significant exception t o the procedur al requir ements traditiona lly place d on those chall enging a decis ion by Cu sto m s, ” th e co urt

rej ect s D ef

en dant’ s ar gum ent. He ar tla nd III , 28 CIT at __, 341 F. Supp. 2d at 1324. For § 1581(h) t o have any pract ical usefulnes s for importers who validly se ek andCourt No. 03-00307 Page 13

Al tho ug h th e re lev ant st atutor y p rov isi on s m ayat f

irs t ap pe ar c on fu sin g, De f. Re ply 12 Br. 6, the court be lieves t hat the Feder al Circuithas settl ed the issue of injunctive r elief in the context of a lit igant seeki ng to enforce his r ights under a prior judgment. receive i ts benefits, i t cannot be i nterpret ed as rest ricti vely as Defendant urges . It is cl ear from the legis lative hi story thatCongress was aware § 1581(h) represent ed a significantchange at the time it was enacted and i ntended it t o be of benefit to the importing comm unity. Se e H.R. Rep. No. 1235, 96th Cong., 2d Sess. 47, as rep rin ted in 19 80 U. S. C. C. A. N. 37 29 , 3 75 8; Heartland V , 424 F.3d at 1252, 1253. Accordingly, a n importer must be able to rely on a favorable judgment iss ue d p urs uant t o § 15 81 (h) , o the rw ise the jud gm ent is ef fe cti ve ly t oo thl ess . T he ref ore , th is court’s j udgment in Heartland I , which was not stayed, i s not obviate d by the statutes and reg ulatio ns cit ed

byDe fe nd ant th at g ov ern the liq uid ati on pro ces s in

co nte xts oth er than th at found here in which the ent ries ar e subject t o a judgment issued pursuantto § 1581(h). B. Inj un cti ve R eli ef De fe nd ant ne xt argu es t

hat th e co urt

m ayno t gr ant th e re lie f H ear tland req ue sts be cau se any such reli ef would be injunctive and, thus, prohibi ted by the te rms of 28 U .S.C. § 2643(c)(4). De f. Br . 1 2-1 3; see§ 2643(c)(4) . Defendant is corre ct that i n an initi al acti on for adjudicati on under § 1581(h) i njunctive r elief is not a vailable
. Se e id . H ere , h ow ev er, we are pre sented wi th an entire ly different matter. After eightyears and five separat e court proc eedings, Heart land
see ks the co urt ’s d ete rm inatio n o n h owits entri es s ho uld be tre ate d in

vie w o f t he favo rab le jud gm en t it

ori gin all y re cei ve d und er § 15 81 (h) . T his pro cee din g, the ref ore , is no t part o f a

pre im po rtatio n a cti on

un de r § 1 58 1(h ). R ath er, “[ s] uc h an in qu iryfa lls sq uarel y w ith in t

he co urt ’s inh ere nt p ow er t o d ete rm ine the ef fe ct o f i ts p rio r ju dg m ents. ” Heartland V , 424 F.3d at 1251. 12Court No. 03-00307 Page 14

Declarator y relief is de fined as “[a] binding adjudica tion of the right s and status of 13 litiga nts even though no cons equential relief in awar ded.” Black’s Law Dicti onary 409 (6th ed. 1990). In

ju nc ti onis de fi ne d a s “ [a] co ur t o rd erpr oh ib it in g s omeo ne fr om do in g s ome 14 sp eci fi ed act or c om m an din g s om eo ne to u

nd o s om e wron g o r in

jur y. ” B lac k’s Law D ict ion ary 784 (6th ed. 1990). As the Fe de ral Ci rcu it r eco gn ize d, the Su pre m e C ourt h as “ res erv ed the us e o f anc ill ary jur isd ict ion

in s ub seq

ue nt p roc eed ing s f

or t he ex erc ise of

a f ed era l co urt ’s i nh ere nt p ow er t o
en fo rce its jud gm ents. ” Id . at 1251 (quoti ng Peacock v. Thomas , 516 U.S. 349, 356 (1996)). Although § 2643(c)( 4) state s that in “ any civil a ction descr ibed in sect ion 1581(h)” t he Court “may only order the appr opriate de clarat ory reli ef, ” th e F ed era l C irc uit co rre ctl y [13] recognized t hat “pre- importation chall enges to Customs’ rulings i n essence see k injuncti ve rel ief
. . . . ” Fabil Mfg. Co. , 237 F.3d at 1340 (quoting St. Paul Fire & M arine Ins. Co. , 6 F.3d [14] at 7 68 -69 ). D esp ite the fa ct that He ar tla nd I pro vid ed

on ly d ecl arator

y re lie f, Cu sto m s w as bound by that judgment to liqui date Heartl and’s prospec tive entr ies of sugar syrup a t 1702.90.40 HTSUS, as stated in the j udgment. See Heartland I , 23 CIT at 777, 74 F. Supp. 2d at 1345; Def. Br . 1 3. Be cau se C us tom s d id n ot r esp ect Pl aintif f’ s ri gh ts a s es tab lis he d und er the Heartland I judgment, the court may invoke ancill ary juri sdiction ove r the matter to “de termine the effect of its [p rio r] jud gm ents, ” whic h in clu de s th e author ityto “ iss ue inj un cti on s to pro tec t ag ain st att em pts to atta ck

or e va de tho se j ud gm ents. ” Heartland V , 424 F.3d at 1251. This inher ent authorit y is independentof that under § 1581(h) and, therefore, notlimited by § 2643(c)(4)
. Se e id . at 1253.Court No. 03-00307 Page 15
III. Conclusion For the reas ons stated he rein, Plai ntiff’s motion for summary judgm ent is GRANTED.

Dated : O cto be r 30 , 2 00 7 /s/ Ju dit h M . B arz ilay New York, NY Judith M. Barzi lay, JudgeUNITED STA TES COU RT OF INTER NATIONA L TRADE

____________________________________ : HEARTL AND BY -PRODUC TS, INC., : : Plaintiff, : : Before: Judith M. Barz ilay, Judge v. : Court No. 03-00307 : UNITED STA TES, : : De fe nd ant. : : ____________________________________:
JUDGMENT This case havi ng been duly submitted for decisi on, and the court , reading al l briefs submitted and after due deli beration, ha ving rendere d a decision he rein; Now, in conform ity with sai d decision, i t is here by ORDERED that Plainti ff’s m otion for summ ary judgment is GRANTED
.

Dated : Oc tob er 3 0, 20 07 /s/ Ju dit h M . B arz ilay New York, NY Judith M. Barzi lay, JudgeERRAT A

Slip Op. 07-157, issued Oct ober 30, 2007 He ar tla nd

By -Pro du cts v. Un ite d S

tates
On fi rst pa ge : Plaintiff’s law firm has name change from “DLA Piper Rudnick Gray Cary” to “DLA Piper US LLP.” Change Plantiff’s attor ney’s name from “Storken” to “ Sterken.”