## United States Court of Appeals for the Federal Circuit

05-1332

SERGIO U. RETAMAL, Plaintiff-Appellant,
and JOHN J. GALVIN, Sanctioned Party-Appellant,

v.

UNITED STATES CUSTOMS AND BORDER PROTECTION, DEPARTMENT OF HOMELAND SECURITY, Defendant-Appellee.

John J. Galvin , Galvin & Mlawski, of New York, New York, argued for plaintiffappellant and sanctioned party-appellant. Jack S. Rockafellow , Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, of New York, New York, argued for defendantappellee. With him on the brief were Peter D. Keisler , Assistant Attorney General and David M. Cohen , Director, of Washington, DC; and Barbara S. Williams , Attorney-inCharge, International Trade Fi eld Office, of New York, New York. Of counsel on the brief was Marc K. Matthews , Attorney, Office of Associat e Chief Counsel, United States Customs and Border Protection, of Long Beach, California. Appealed from: United States Court of International Trade Senior Judge Thomas J. Aquilino, Jr.

## United States Court of Appeals for the Federal Circuit

05-1332

SERGIO U. RETAMAL, Plaintiff-Appellant,
and JOHN J. GALVIN, Sanctioned Party-Appellant,

v. UNITED STATES CUSTOMS AND BORDER PROTECTION, DEPARTMENT OF HOMELAND SECURITY, Defendant-Appellee.

__________ ________________ DECIDED: March 6, 2006

__________________________ Before NEWMAN, MAYER, and SCHALL, Circuit Judges

. MAYER, Circuit Judge

. Sergio U. Retamal appeals the United States Court of International Trade’s grant of summary judgment in favor of the Unit ed States Customs and Border Protection, Department of Homeland Security, Retamal v. U.S. Customs & Border Prot. Dep’t of Homeland Sec. , 27 I.T.R.D. (BNA) 1396 (Ct. Int’l Trade No v. 24, 2004). John J. Galvin appeals the trial court’s wri tten admonition against him, Retamal , No. 03-00613, slip.op. 05-15 (Ct. Int’l Trade Feb. 3, 2005). Bec ause the trial court was without subject matter jurisdiction, we remand with instructions that the case be dism issed. We further hold that the admonition of Galvin consti tutes a sanction and, because we find it s imposition was an abuse of discretion, we reverse. Background Retamal was a lic ens ed custom house brok er who was not activ e ly engaged in transacting business as a customs broker. In 2003, he failed to file his triennial status report on or before March 1, as r equired by 19 U.S. C. § 1641( g)(1) 1 and 19 C.F.R. § 111.30(a). 2 As a result, his licens e wa s suspended pursuant to 19 U.S.C. § 1641(g)(2). 3 As required by statute, the United States Custom s Service (“Customs” or

1 19 U.S.C. § 1641(g)(1) states that “[o]n February 1, 1985, and on February 1 of each third year thereafter, each person who is licens ed under subsection (b) of this section shall f ile with the Secretary of the Treasury a report as to— (A) whether such person is acti vely engaged in business as a customs broker; and (B) the name under, and the address at, which such business is being transacted.”

2 19 C.F.R. § 111.30(a) states that “[w]hen a br oker c hanges his business address, he must immediately gi ve written notice of his ne w address to eac h director of a port that is affected by the ch ange of addr ess. In addition, if an indiv i dual broker is not actively engaged in transacting business as a broker and changes his non-business mailin g ad dress, he must give written notice of the new addr e ss in the status report required by paragraph (d) of this section.”

3 19 U.S.C. § 1641(g)(2) provides: (2) Suspension and revocation. If a person licensed under subsec tion (b) of this section fails to file the requ ired repor t by March 1 of the reporting year, the license is s u spended, and ma y be thereafter revoked s u bject to the following procedures: (A) The Secretary shall transmi t written notice of suspension to the licensee no later than Ma rch 31 of the reporting year. (B) If the licensee files the r equired report within 60 days of receipt of the Secretary’s not ice, the license shall be reinstated.

05-1332 2“the government”) sent written not ice of the suspension to Re tamal; however, the notice was returned undeliv ered. Retamal contends he prep ared his triennial status report and payment on April 30, 2003, but the report and payment were not sent unt il May 24, 2003. On June 5, 2003, Cu stoms returned the report and pay ment to Retamal and advised him that his broker’s license had been revoked on May 6, 2003. Customs denied his requests for relie f from revocation.
Retamal th en file d suit pro se in the Court of Internati onal Trade. The trial c o urt granted summary judgment to the government and, relying upon 28 U.S.C. § 2636(g), 4
dismissed the action as time-barred. John Galvin then undertook pro bono repr esentation of Retamal and filed a motion for rehearing on Decem ber 15, 2004. The government filed an op position, and Galvin filed a reply. On January 21, 2005, the trial court sua sponte issued an order to show caus e why Galvin “should not be sancti oned for violation of the Court’s rules of practice.” The court denied the motion for rehearing and ad monished Galv in to adhere to the court’s rules. The court amended it s in itial dec ision by deleting the reference to the statute of limitations in 19 U.S.C. § 1641(e)(1) and 28 U. S.C. § 2636(g) and adding
the statement that “this action is still time-barred by o peration of law,” citing 19 U.S.C.
(C) In the event the required re port is not filed within the 60- day period, the license shall be revoked wit hout prejudice to the filing of an applicat ion for a new licens e.

4 28 U.S.C. § 2636(g) states that “[a] civil action contesting the denial or revocation by the Sec r etary of the Treasur y of a customs broker’s licens e or permit under subs ection (b) or (c) of section 641 of the Tariff Act of 1930, or the revocation or suspension of such license or permit or th e imposition of a monet ary penalty in lieu thereof by such Secretar y under section 641(d) of su ch Act, is barred unless commenced in accordance with t he rules of the Court of International Trade within s i xty days after the date of the entry of the decision or order of such Secretary.”

05-1332 3§ 1641(g)(2). Retamal appeals the trial cour t’s grant of summary judgment in the government’s favor; Galvin appeals the admonition. Discussion
I. “As an appellate body, we have inherent jurisdiction to determine whet her a lower tribu nal had jurisdictio n .” Interspiro USA v. Figgie Int’l , 18 F.3d 927, 930 (Fed. Cir. 1994) (citing C.R. Bard, Inc

. v. Schwartz , 716 F.2d 874, 877 (Fed. Cir. 1983)). Therefore, before addressing the trial court’s decision on the timeliness of the action, we first determine if it had jurisdiction. 5 Because jurisdiction is an issue of law, our review is
de novo

. Xerox Corp. v. United States , 289 F.3d 792, 793-94 (Fed. Cir. 2002). The Court of Internati onal Trade’s jurisd iction is set forth generally at 28 U.S.C. § 1581. All agree that section 1581(g) does not provide the tr ial court jurisdiction ov er Retamal’s case. Although section 1581(g) provides j u risdiction to review the revocatio n of licens es under certain statut ory provisions, revocations under 19 U.S.C. § 1641(g) is not one of them.
Retamal c ontends, however, that jurisd iction lies under sect ion 1581(i)(4). Although we have described this subsecti on as a “broad residual ju risdictiona l provision,” Miller & Co . v. United States , 824 F.2d 961, 963 (Fed. Cir. 1987), it is of no avail here. This subsection provides the C ourt of International Trade with jurisdiction

5 The trial court observed in its amended op inion that “the statutes ‘do not address [] or confer jurisdiction in cases in volving rev o cation of a broker’s licens e by operation of 19 U.S.C. § 1641(g)(2)(C).’” Although this language suggest s that the court recognized that it lacked subject matte r jurisdiction, and the government says that the case was in fact dismissed for a lack of ju risdiction, the trial court’s ultimate conclus i on was that the action was time-barr ed, not that it lacked jurisdiction.

05-1332 4over “ any civil action c o mmenced against the United St ates, its agencies, or its officers, that arises out of any law of t he United States providing for . . . administ r ation and enforcement with respect to th e matters referred to in paragraphs (1) – (3) of this
subsection and subs ections (a) – (h) of this sect ion . . . .” 28 U.S.C. § 1581(i)(4) (2000).
Howev e r, Retamal’s claims do not relate t o the “adm inistratio n and enforc e ment” of a matter refe rred to in subsections 1581(a)-(h) or in 1581(i)(1)-(3). Therefore, section 1581(i)(4) does not provide an independent ground for jurisdiction in this case.
Retamal’s relia nce o n Alle n v. Re gan , 607 F. Supp. 133 (Ct. Int’l Tr ade 1 985), for the conclusion that jurisdicti on exists under section 1581(i )(4) is unpersuasive. “Apart from the obvious c o mment that Court of In ternational Trade decisi ons are not bindin g precedent on this court,” Nat’l Corn Growers Ass’n v. Baker , 840 F.2d 1547, 1556 (Fed. Cir. 1988), Allen is entirely different from the case before us. That case involv ed an applicant for a customhouse br oker’s license who had passed the requis ite examinat ion and was awaiting the results of an invest igation into his integrity and financial responsibility. After four years passed wit h no decision, the applicant filed suit in the Court of International Trade. The court concluded that it had jurisdiction under section 1581(i)(4) regardless of whether jurisdicti on was “technically pr oper under 28 U.S.C. § 1581(g),” 607 F. Supp. at 134, because r e viewing the delay in t he lic ensing process related to the “administrat ion and enforcement” of a ma tter referenced in 28 U.S.C. §§ 1581(a)-(h) or 28 U.S.C. §§ 1581(i)(1)-(3), namely 28 U. S.C. § 1581(g). Here, however, the revocation of a lic ense under 19 U.S.C. § 1641(g)(2) is not r e ferenced anywhere in 28 U.S.C. §§ 1581(a)-(h) or 28 U.S.C. §§ 1581(i)(1)- (3) and, therefore, jurisdiction cannot lie under sec t ion 1581(i )(4). Because “an appellate court has no

05-1332 5jurisdiction to decide t he merits of the case if the court from whic h the appeal was taken was without jurisdiction,” Glasstech, Inc. v. Ab Kyro Oy , 769 F.2d 1574, 1577 (Fed. Cir. 1985), we vacate the tria l court’s decision.
II. Although we conclude that t he tri a l court lacked jurisdiction over the merits of this case, we recogniz e t hat under Cour t of International Trade Rule 11 6 and its inh e ren t power, the court has the authority to di sc ipline attorneys appearing befor e it. See Chambers v. NASCO , 501 U.S. 32, 41 (1991). Therefore, the trial court had authority to discip lin e Galvin.
In Precisio n Spec ialty Metals, Inc. v. Unite d States , 315 F.3d 1346 (Fed. Cir. 2003), we held that the explic it and formal repr imand o f the attorney in an un published opinion constituted a sanction that was imm ediately appealable. We reasoned that “a judicial reprimand is likely to have a serious adverse impact upon a lawy er’s professional reputation and care er. A lawy er's reputation is one of his most important professional assets. Indeed, such a r eprimand may have a more serious adverse impact upon a lawyer than the imposition of a monetary sanc tion.” 315 F.3d at 1352-53. This reasoning applies her e and compels the conclusi on that the admonition was a sanction. We review the impos ition of the sanction f o r abuse of discretion. Id. at 13 54. The trial court based its admonition of Galvin upon pur ported violations of Rules 75(c), 7(d), and 11(b). We give “broad deference to the trial court’s application of local

6 Although the Federal Rules of Civil Procedur e do not apply in cases before the Court of International Trade, In re N.C. Trading , 586 F.2d 221, 231 (CCP A 1978), the court has its own Rule 11 that is i dentica l in scope to the federal rule. All references to “Rules” are to the Rules of the Court of In ternational Trade.

05-1332 6procedural rules in view of the trial cour t's need to control the parties and flow of litigation before it.” Sandisk Corp. v. Me morex Prods. , 415 F.3d 1278, 1292 (Fed. Cir. 2005). However, it is an abus e of discret ion wher e “‘(1) the decision was clearly unreasonable, arbitrary, or fanciful; (2) the decis io n was based on an erroneous conclus i on of law; (3) the court's findings were clearly erroneous; or (4) the record contains no evidence upon whic h the court ra tionally could have bas ed its decision.’” Id. (quoting Genentech, Inc. v. Amgen, Inc. , 289 F.3d 761, 774 (Fed. Cir. 2002)).
The trial c ourt concluded that Galvin violated Rule 75 by filing a notic e of
appearanc e form instead of filing a substitution of counsel form. Rule 75(c) states that “[a] party who desires to substitute an a ttorney may do so by serving a notice of substitution upon the prior attorney of recor d and the other parties.” In addition, Rule 75(a) unmistakably us es the term “attorneys” as distinct from th e term “ind ividuals.” In this context, Retamal was an “indiv i dual” and not an attorney and, since he had previously proceeded pro se , he did not substitute a new attorney for a previous attorney. Therefore, under the trial court’s own rules, Galvin properly fil ed a notice of
appearanc e. This conclus i on is bolstered by the fact that the cl erk of court sent Retamal a letter informing him that any future counsel should “file with our Court their Notice of Appearanc e as soon as possible.” To the extent that the sanction was grounded upon a violat ion of Rule 75, it was based on an erroneous conclus i on of law.
The trial c ourt also grounded its sanction on a violation of Rule 7(d). Absent leave of the court, the trial court’s rules al low reply briefs only when a dis p ositive motion is at issue. Rule 7(d) ; Volkswagen of Am. v. United States , 4 F. Supp. 2d 1259, 1261 n.1 (Ct. Int’ l Trade 1998). Rule 7(g) defines dispos itiv e motions: “Dispositiv e motions

05-1332 7include: motions for judgment on the pl eadings; motions for summary judgment; motions for judgment upon an agency record; motions to dismiss an action; and any other motion for a final determi nation of an action.” Althoug h a motion for rehearing is not expres sly listed as dispositiv e in Ru le 7 ( g), the trial court has previously said, “In this court’s view, a motion for rehearing pursuant to CIT Rule 59, depending on its content,
can be eit her dispos itive wit hin the foregoing definitio n [o f Rule 7(g)] or not.” Belfont Sales Corp . v. United States , 698 F. Supp. 916, 919 n.7 (C t. Int’l Trade 1988) (citations omitted); see also 4 F

. Supp. 2d at 1261 n.1 (“Although not obvious from the court rules, a motion for rehearing is not a dispos itive mo tion unless it will re sult in the fina l determination of the case. Thus, a motion for rehearing pursuant to USCIT R. 59 may or may not be dispos itive depending on its content.” (cit ations omitted)). Here, the trial court concluded that the reply brief was improperly filed bec ause the motion for rehearing was not dispositive. We under stand that the motion for rehearing would not necessarily result in a final dispositi on because it argued for the case to be heard on the merits, as opposed to a specific final dis position. However, we also note that the government filed its response to the motion within the thirty day tim e limit for dis positive m o tions and not within the t en day limit for nondispositive motions

. In addition, the court’s electr onic docketing system identified t he motion as dispos itive. At best, the nature of the moti on and the propriety of filing a reply brief were unclear. Finally, because the motion for rehearing wa s neither frivolous nor inappropriat e the trial court abused its discret ion by basing the sa n c tion on a violation of Rule 11 or the court’s rules concerning rehearings. The court has an establis hed standard for rehearing:

05-1332 8A rehearing may be proper when there has been some error or irregularity in the trial, a serious evidentiary flaw, a discovery of important new evidence which was not available, even to the diligent party , at the time of trial, or an occurrence at trial in the nature of an accident or unpredictable surprise or unavoidable mistake whic h severely impaired a party’s abi lity to adequately pres ent its case. In short, a rehearing is a method of rectifying a signific ant flaw in the conduct of the original proceeding

. N. Am. For e ign Tradin g Corp. v. United States , 607 F. Supp. 1471, 1473 (Ct. Int’l Trade 1985) (quoting W.J. Byrnes & Co. v. United States , 68 Cust. Ct. 358 (1972) ) (additiona l citations omitted). In addi tion, Rule 61 prov ides: No error . . . in any ruling or order or in anything done or omitted by the court or by any of the parti es is ground for granting a new trial or for se tting aside a verdict or for vacating, modifying, or other wis e disturbing a judgm ent or order, unless refusal to take such action appears to the court incons istent with substantial ju stice. The court at every stage of the proceeding must disr egard any error or defect in the proceeding which does not affect the substantial rights of the parties. Citing the precedent of ot her courts, the tri a l court also said that such a motion is only proper where it will probably br ing about a different result. Relying on thes e standards, the court concluded that ther e was no injus t ice to correct and the motion for rehearing would not result in a different outcome. In arguing for rehearing, Galvin contended that the trial court’s decision was “manifestly erroneous.” The court responded by observing that while it has applied the “manifestly erroneous ” standard, it is only properly applied when another court’s denial of a motion for rehearing is being reviewed; it is not the proper standard in ruling on such a motion in the first instance. But some decisions of the tria l court do indeed recite the “manifestly erroneous” standard in ru ling on a motion for rehearing in the firs t

05-1332 9instance. See Asoc iacion Colombiana de Exportador es de Flores v. United States , 19 F. Supp. 2d 1116, 1118 (Ct. Int’l Trade 1998) (“[A ] court’s previous decision will not be disturbed [on a motion for rehearing] unless it is ‘manifestly erroneous.’” (citation omitted)). Therefore, in t he context of reviewing a sancti on against Galvin for filing a frivolous or unwarranted motion, we bear in mind that this standar d has occasionally been applied by the trial court itself. Regardless of the proper standard, we conclude that the motion was not a violation of the trial co urt’s rules. While we r e ject Galv in’s jurisdict i ona l argu ment, we do not see it as frivolous. Conclusion The judgment of the United Stat es Court of Internat ional Trade is vacated in part, reversed in part, and the case is re manded with instructions to dismiss. COSTS Each party shall bear its own costs.

VACATED IN PART, REVERSED IN PART , AND RE MANDE D

05-1332 10