Slip Op. 07 – 47 

UNITED STATES COURT OF INTERNATIONAL TRADE 

VOLKSWAGEN OF AMERICA, INC., 

 Before: Richard W. Goldberg, 

 Plaintiff, Senior Judge 

 v. Court No. 96-01-00132 

UNITED STATES, PUBLIC VERSION

 Defendant. 

OPINION

[Judgment for Defendant.] 

Dated: March 28, 2007 

Law Offices of Thomas J. Kovarcik (Thomas J. Kovarcik), for 

Plaintiff Volkswagen of America, Inc. 

Peter D. Keisler, Assistant Attorney General; Barbara S. 

Williams, Attorney in Charge, International Trade Field Office, 

Commercial Litigation Branch, Civil Division, U.S. Department of 

Justice; Yelena Slepak, Office of Assistant Chief Counsel, 

International Trade Litigation, U.S. Customs and Border 

Protection, Of Counsel, for Defendant United States. 

GOLDBERG, Senior Judge: In this case, Plaintiff Volkswagen of 

America, Inc., (“Volkswagen”) seeks an allowance against import 

duties for the value of imported automobiles that were allegedly 

defective at the time of importation. The United States Customs 

Service1

 (“Customs”) liquidated the entries without an allowance 

 

1

 The United States Customs Service has since become the Bureau 

of Customs and Border Protection per the Homeland Security Act 

of 2002, § 1502, Pub. L. No. 107-296, 116 Stat. 2135, 2308-09 

(Nov. 25, 2002), and the Reorganization Plan Modification for 
Court No. 96 - 01 - 00132 Page 2 

in the appraised value of the merchandise. Customs denied 

Volkswagen’s protests, and Volkswagen commenced an action to 

challenge the protest denials in this Court. Both Customs and 

Volkswagen filed motions for summary judgment. The Court held 

that it lacked jurisdiction over vehicles that were repaired 

after the date of protest because Volkswagen “could not have had 

in mind defects to automobiles that had not been repaired before 

the protests were filed.” Volkswagen of Am., Inc. v. United 

States, 27 CIT 1201, 1206, 277 F. Supp. 2d 1364, 1369 (2003) 

(“Volkswagen I”). As for the remaining claims, the Court denied 

both motions because factual issues remained as to whether the 

defects existed at the time of importation and the amount of 

allowances tied to those defects. See id. at 1208, 277 F. Supp. 

2d at 1371. The Court specifically noted that “[w]hat remains 

for trial is development of the factual record to ‘independently 

confirm the validity’ of the repair records, to establish that 

the defects did indeed exist at the time of importation.” Id.

(quoting Samsung Elecs. Am., Inc. v. United States, 23 CIT 2, 8, 

35 F. Supp. 2d 942, 947 (1999), aff’d 195 F.3d 1367 (Fed. Cir. 

1999). 

After the Court’s decision in Volkswagen I, this action was 

stayed pending the resolution of Saab Cars USA, Inc. v. United 

 

the Department of Homeland Security, H.R. Doc. 108-32, p. 4 

(Feb. 4, 2003). 
Court No. 96 - 01 - 00132 Page 3 

States, 434 F.3d 1359 (Fed. Cir. 2006) (“Saab III”). The 

circumstances in Saab III are very similar to those presented in 

this action. The Federal Circuit held that Saab failed to prove 

by a preponderance of the evidence that its merchandise was 

defective at the time of importation. See id. at 1375. After 

Saab III was decided, the Court ordered Volkswagen to attempt to 

demonstrate how that case was distinguishable from the 

circumstances of Volkswagen’s case.2 Volkswagen has complied 

with this order, and has made clear that with the additional 

trial evidence it has submitted, its supporting brief 

constitutes its summation at trial. Pl.’s Br. 4. Accordingly, 

 

2

 The order stated the following in relevant part: 

[I]t is hereby ORDERED that Plaintiff Volkswagen of 

America, Inc. (“Plaintiff”), shall . . . file a brief 

addressing why it believes the evidence in this case, 

and in particular the evidence produced after this 

Court’s denial of Plaintiff’s summary judgment motion 

August 13, 2003, establishes that the alleged defects 

existed at the time of importation; and it is further 

ORDERED that such brief endeavor to distinguish the 

circumstances of this case from the circumstances in 

Saab Cars USA, Inc. v. United States, 434 F.3d 1359 

(Fed. Cir. 2006), where the U.S. Court of Appeals for 

the Federal Circuit held that that plaintiff’s 

reliance on probabilistic warranty tracking evidence, 

though “generally reliable,” was not sufficient to 

sustain a plaintiff’s burden of proving by a 

preponderance of the evidence that the particular 

defects in that case as to which allowances were 

claimed under 19 C.F.R. § 158.12 existed at the time 

of importation . . . . 

Sched. Order 1, May 8, 2006.
Court No. 96 - 01 - 00132 Page 4 

the decision rendered in this action will be submitted as a 

final judgment. 

I. JURISDICTION

In its evidence submitted for trial, Volkswagen includes 

repairs completed after the vehicles’ respective protest dates. 

Volkswagen claims that the Court has jurisdiction over these 

repairs, because as long as at least one repair was done prior 

to protest, the Court has jurisdiction over the “vehicle.” 

Consequently, the Court would have jurisdiction over every 

subsequent repair performed on that vehicle, even if the repair 

was done after the date of protest. Customs disagrees, and 

argues that all claims relating to repairs that occurred after 

the date of protest should be dismissed for lack of 

jurisdiction. 

The Court has exclusive jurisdiction over “any civil action 

commenced to contest the denial of a protest, in whole or in 

part, under [19 U.S.C. § 1515].” 28 U.S.C. § 1581(a) (2000). 

The Court does not have jurisdiction over the action pursuant to 

§ 1581(a) if the plaintiff has not filed a valid protest. See

Computime, Inc. v. United States, 772 F.2d 874, 875 (Fed. Cir. 

1985). If certain vehicle repairs are not covered by a valid 

protest, the Court has no jurisdiction over those repairs. 

 A valid protest must set forth distinctly and specifically 

each decision as to which a protest is made, and the nature of 
Court No. 96 - 01 - 00132 Page 5 

and reasons for each objection. See 19 U.S.C. § 1514(c)(1) 

(2000); 19 C.F.R. § 174.13(a)(6) (2006). The governing 

principles concerning what constitutes a valid protest were 

articulated by the Supreme Court in Davies v. Arthur: 

[T]he objections [in a protest] must be so distinct 

and specific, as, when fairly construed, to show that 

the objection taken at the trial was at the time in 

the mind of the importer, and that it was sufficient 

to notify the collector of its true nature and 

character, to the end that he might ascertain the 

precise facts, and have an opportunity to correct the 

mistake and cure the defect, if it was one which could 

be obviated. 

96 U.S. 148, 151 (1878); accord VWP of Am., Inc. v. United 

States, Slip Op. 06-144, 2006 Ct. Intl. Trade LEXIS 146, at *16 

(CIT Sept. 26, 2006) (“The minimal requirement has long been 

whether the importer has sufficiently conveyed to Customs an 

impression of the injury it believes it suffered by Customs’ 

decision or action.”). In its evidence submitted for trial, 

Volkswagen has included thousands of repairs that occurred after 

the protest date. These alleged defects could not have been “in 

the mind of the importer” when the protest was made. 

Additionally, Customs would never have had the opportunity to 

“correct the mistake and cure the defect” if a valid protest 

could include thousands of repairs added post-protest. A 

protest should sufficiently define the outside parameters of the 

dispute so that they are brought to the attention of the Customs 
Court No. 96 - 01 - 00132 Page 6 

Service.3 See Lykes Pasco, Inc. v United States, 22 CIT 614, 

615, 14 F. Supp. 2d 748, 750 (1998). In this case, the 

parameters of the dispute would not be sufficiently defined by 

the protest if Volkswagen was permitted to continually add 

defects and repair evidence as they are discovered. 

Following these principles, the Court held in Volkswagen I

that it did “not have jurisdiction over vehicles repaired after 

the individual protest dates of each of the eighteen entries.” 

27 CIT at 1206, 277 F. Supp. 2d at 1369. The Court reasoned as 

follows: 

It is clear that [Volkswagen] had in mind at the time 

of protest defective automobiles that had already been 

repaired; however, [Volkswagen] could not have had in 

mind defects to automobiles that had not been repaired 

before the protests were filed. Therefore, the Court 

does not have jurisdiction over the automobiles that 

were repaired after the date [Volkswagen] filed its 

protests with Customs. See Mattel, 72 Cust. Ct. at 

260, 377 F. Supp. at 959 (“a protest . . . must show 

fairly that the objection afterwards made at the trial 

was in the mind of the party at the time the protest 

was made”). 

Id. (footnote omitted). To support its theory of jurisdiction, 

Volkswagen focuses on the Court’s statement in Volkswagen I that 

“the Court does not have jurisdiction over the automobiles that 

 

3

 This is not to say that all omissions, including minor and 

inadvertent ones, could divest the Court of jurisdiction. As 

long as the original protest gave sufficient notice to Customs 

of the actual claim, then jurisdiction will lie. See VWP, Slip 

Op. 06-144, 2006 Ct. Intl. Trade LEXIS 146, at *16-17. (stating 

that an inadvertent error in entry number contained in original 

protest is not a jurisdictional bar if Customs was apprised of 

the proper entry number). 
Court No. 96 - 01 - 00132 Page 7 

were repaired after the date [Volkswagen] filed its protests . . 

. .” Id. (emphasis added). Volkswagen puts great emphasis on 

the fact that the Court used the word “automobiles” instead of 

“repairs” when making this statement. Additionally, the Federal 

Circuit in Saab III “affirm[ed] the decision of the CIT 

dismissing those claims relating to cars as to which no repair 

existed at the time of protest, because Saab provided no 

evidence that it was aware of those defects at that time.” 434 

F.3d at 1368 (emphasis added). Once again, because the focus of 

this language is on “cars,” and not “repairs,” Volkswagen 

believes that once the Court has jurisdiction relating to a 

vehicle, it has jurisdiction over repairs to that vehicle 

discovered after the protest date. 

Volkswagen is incorrect because its theory of jurisdiction 

is completely divorced from the requirements of a valid protest. 

Regardless of how the jurisdictional holdings were phrased in 

both Volkswagen I and Saab III, the principles set forth in 

Davies v. Arthur and 19 U.S.C. § 1514(c)(1) must be followed. 

Additionally, Volkswagen fails to note that in Saab I, the Court 

clearly stated that it “lacks jurisdiction over claims for 

vehicle repairs that occurred after the vehicles’ respective 

protest dates.” Saab Cars USA, Inc. v. United States, 27 CIT 

979, 991, 276 F. Supp. 2d 1322, 1333 (2003) (“Saab I”) (emphasis 

added). This language clarifies that the Court did not intend 
Court No. 96 - 01 - 00132 Page 8 

to make a distinction between vehicles that had at least one 

repair before the protest date and vehicles that had no repairs. 

Instead, the Court found a relevant legal distinction between 

the defects Volkswagen knew about at the time of protest, and 

the defects that were unknown at that time. 

In light of the above, the Court does not have jurisdiction 

over defects discovered (as evidenced by repairs done) after the 

date of protest. The Court does have jurisdiction over 

Volkswagen’s remaining claims pursuant to 28 U.S.C. § 1581(a). 

II. STANDARD OF REVIEW

Customs’ appraisement decisions are ordinarily entitled to 

a statutory presumption of correctness. See 28 U.S.C. 

2639(a)(1) (2000); Saab Cars USA, Inc. v. United States, 28 CIT 

__, __, 306 F. Supp. 2d 1279, 1283 (2004) (“Saab II”), aff’d, 

Saab III, 434 F.3d at 1359. However, this presumption “carries 

no force as to questions of law.” Universal Elecs. Inc. v. 

United States, 112 F.3d 488, 492 (Fed. Cir. 1997). “[A] 

question as to the legal sufficiency of the evidence is a 

question of law.” Kent v. Principi, 389 F.3d 1380, 1383 (Fed. 

Cir. 2004). In the present case, the Court is asked to 

determine, in light of Saab II and Saab III, whether Volkswagen 

has put forth sufficient evidence to sustain its burden of 

proving by a preponderance of the evidence that certain defects 
Court No. 96 - 01 - 00132 Page 9 

existed in its merchandise at the time of importation. Because 

this is a question of law, the Court will review it de novo. 

III. DISCUSSION

A. Volkswagen’s Evidence Submitted for Trial 

Volkswagen’s trial evidence consists of two exhibits.4

 

Exhibit A includes eighteen documents; one for each of the 

eighteen subject entries. See Pl.’s Ex. A (Confidential); Pl.’s 

Br. 12. Each document contains a chart with eighteen columns of 

warranty repair details. The eighteen information categories 

Volkswagen has provided are: (1) vehicle model number, (2) 

vehicle identification number (“VIN”), (3) repair order number, 

(4) warranty claim type, (5) damage code, (6) deciphered damage 

code, (7) mileage, (8) in-service date, (9) repair date, (10) 

labor cost, (11) part cost, (12) other costs and credits, (13) 

total repair cost paid by plaintiff, (14) adjustments, (15) 

repair cost billable to factory, (16) qualifying warranty repair 

cost, (17) qualifying warranty overhead cost, (18) total 

qualifying warranty cost. See Pl.’s Ex. A (Confidential); Pl.’s 

Br. 12. Most of this information was already before the Court 

in Volkswagen I, with the exception of the vehicle model number, 

the deciphered damage code, mileage, and the in-service date. 

 

4

 For a discussion of evidence already before the Court in 

Volkswagen I, see 27 CIT at 1206-08, 277 F. Supp. 2d at 1370-71. 
Court No. 96 - 01 - 00132 Page 10 

Volkswagen has also provided the Court with Exhibit B, 

which is entitled “Damage Code Key.” See Pl.’s Ex. B 

(Confidential). This exhibit categorizes the different warranty 

claim types listed in Exhibit A. Volkswagen first lists what it 

considers to be “included claim types.” These are warranty 

claim categories that, according to Volkswagen, necessarily 

encompass repairs of defects existing at the time of 

importation. For example, the list of “included claim types” 

includes emissions warranty repairs, recall repairs, paint 

claims and powertrain defect repairs.5

 See Pl.’s Br. 15-16. 

Volkswagen claims that all repairs performed under these claimtypes reflect defects that existed at the time of importation. 

If a repair reflects damage that did not exist at importation, 

it would be categorized under one of the several “excluded claim 

types” listed in Exhibit B. 

Additionally, Exhibit B contains more detailed descriptions 

of the repairs listed in Exhibit A. In order to connect the 

more detailed descriptions in Exhibit B to the repairs in 

Exhibit A, the Court is required to look at [ ] listed in 

Exhibit A. That [ ] code is further deciphered in Exhibit B. 

This process is further discussed below. 

 

5

 The complete list of “included claim types” is as follows: [ ]. 

See Pl.’s Ex. B (Confidential); Pl.’s Br. 16-17 (Confidential). 
Court No. 96 - 01 - 00132 Page 11 

B. An Allowance for Damage Existing at the Time of 

Importation Pursuant to 19 C.F.R. § 158.12 

An importer may claim an allowance in value for merchandise 

that is partially damaged at the time of importation. See 19 

C.F.R. § 158.12 (2006).6 In order to successfully claim a § 

158.12 allowance, an importer must “establish by a preponderance 

of the evidence which entries had defects at the time of 

importation.”7

 Volkswagen I, 27 CIT at 1208; accord Fabil Mfg. 

Co. v. United States, 237 F.3d 1335, 1339 (Fed. Cir. 2001). In 

Volkswagen I, this Court was satisfied that Volkswagen could, in 

part, link defective merchandise to specific entries. See 27 

CIT at 1208, 277 F. Supp. 2d at 1371. While Volkswagen was able 

 

6

 Section 158.12 states the following: 

Merchandise partially damaged at time of importation. 

(a) Allowance in value. Merchandise which is subject 

to ad valorem or compound duties and found by the port 

director to be partially damaged at the time of 

importation shall be appraised in its condition as 

imported, with an allowance made in the value to the 

extent of the damage. 

19 U.S.C. § 158.12. 

7

 There are actually three requirements for an importer to 

successfully claim an allowance under 19 C.F.R. § 158.12: (1) 

the importer must show that it contracted for defect-free 

merchandise, (2) the importer must link the defective 

merchandise to specific entries, and (3) the importer must prove 

the amount of the allowance value for each entry. See

Volkswagen I, 27 CIT at 1207, 277 F. Supp. 2d at 1370; Samsung, 

23 CIT at 4-6, 35 F. Supp. 2d at 945-46. Volkswagen has already 

successfully established that it contracted for “defect-free” 

merchandise. See Volkswagen I, 27 CIT at 1207, 277 F. Supp. 2d 

at 1370. 
Court No. 96 - 01 - 00132 Page 12 

to connect evidence of repairs to specific vehicles, and in turn 

connect those vehicles to specific entries, it still needed to 

develop the factual record to “independently confirm the 

validity” of the repair records. Id. This independent 

confirmation is necessary to “establish that the defects did 

indeed exist at the time of importation.” Id.

C. Independent Confirmation of the Validity of the Repair 

Records 

The Court discussed the “independent confirmation” 

requirement in detail in Samsung, 23 CIT at 7-9, 35 F. Supp. 2d 

at 947-48. In that case, Samsung presented consumer warranties 

as evidence that the subject merchandise was damaged at 

importation. See id. at 7, 35 F. Supp. 2d at 947. Samsung’s 

warranty only covered repairs for defective merchandise, and not 

merchandise damaged through misuse or mishandling. See id. at 

8, 35 F. Supp. 2d at 947. In addition, an executive from 

Samsung stated via affidavit that under the warranty, only 

merchandise with latent defects was repaired or replaced. See

id. The Court found this evidence insufficient. The Court 

stated that “[a]lthough the Court has no reason to doubt the 

veracity of Samsung’s assertions, without additional, 

independent evidence to corroborate the assertions, the Court 

cannot verify that the merchandise was actually defective at the 

time of importation, as opposed to damaged later through misuse 
Court No. 96 - 01 - 00132 Page 13 

or mishandling.” Id. The Court went on to describe how a 

claimant could prevail on a § 158.12 claim: 

[T]o make a section 158.12 claim, a claimant should 

provide specific descriptions of the damage or defect 

alleged and, in some manner, relate that defective 

merchandise to a particular entry. Such descriptions 

are necessary because both the Court and Customs must 

independently confirm the validity of an allowance 

claim. And, descriptions or samples provide a 

reasonably objective basis upon which to assess such a 

claim. For example, descriptions can be reviewed by 

the Court and by independent experts to confirm that 

the alleged damage existed at the time of importation, 

or that the damage is recognizable as a true 

manufacturing defect. 

Id. at 8, 35 F. Supp. 2d at 947-48.8

In Saab II, the importer Saab attempted to meet this 

evidentiary standard by providing the Court with short 

descriptions of each vehicle part or component that was 

allegedly defective. 28 CIT at __, 306 F. Supp. 2d at 1283. 

The Court again found these insufficient because they were “not 

detailed enough for anyone to ascertain whether the alleged 

defects existed at the time of importation.” Id. at __, 306 F. 

Supp. 2d at 1285. The Federal Circuit affirmed, and elaborated 

 

8

 The Court in Samsung applied a “clear and convincing” 

evidentiary standard to § 158.12 claims, 23 CIT at 6, 35 F. 

Supp. 2d at 946, which is obviously a stricter standard than is 

currently applied in these cases. See Fabil Mfg. Co., 237 F.3d 

at 1339 (holding that the elements of § 158.12 must be proven by 

a preponderance of the evidence). However, the language in the 

Samsung cases regarding sufficiency of evidence for § 158.12 

claims has been adopted in later cases applying the 

preponderance of the evidence standard. The requirement of 

independent verification must be met in order to meet the 

preponderance of the evidence standard. 
Court No. 96 - 01 - 00132 Page 14 

on the requirement that the evidence needed to prove defects 

existed at the time of importation be independently verifiable.9 

See Saab III, 434 F.3d at 1374-75. In light of these 

precedents, Volkswagen’s brief descriptions for each repair are 

insufficient to permit an objective fact-finder to conclude by a 

preponderance of the evidence that the claimed defects existed 

at the time of importation. 

First, Volkswagen argues that repairs covered by certain 

warranties, classified by “claim-types,” are evidence of defects 

 

9

 The Saab III court stated the following: 

We conclude that although some repairs authorized 

under the various warranties may relate to damage that 

existed at the time of importation, they do not 

necessarily so relate. Saab’s rigorous system for 

tracking and auditing warranty repair claims does not 

alter this result. That system, which involves 

specialized databases that allow Saab to track all 

vehicle repairs by VIN and uses three levels of audits 

to ensure that dealers are making only appropriate 

warranty claims, certainly increases one’s confidence 

that Saab’s warranty claims in the aggregate are 

generally reliable. Operating as it does, however, by 

auditing a limited number of claims from a limited 

number of dealers, it provides somewhat less assurance 

that any particular warranty claim is valid. We 

acknowledge, of course, the probative value of the 

kind of statistical assurance that the auditing system 

provides, but conclude that our cases’ emphasis on the 

need for specificity in allowance claims requires more 

than this kind of probabilistic evidence. 

Saab III, 434 F.3d at 1374-75. 
Court No. 96 - 01 - 00132 Page 15 

existing at the time of importation.10 It has therefore listed 

all repairs made pursuant to certain “included claim-types” in 

Exhibit A. Even if these warranties make it clear that 

Volkswagen would be reimbursed by the manufacturer only for 

actual manufacturing or design defects in the imported 

automobiles, still “it is not clear that all warranty repairs 

necessarily indicate damage that existed at the time of 

importation as required for an allowance under § 158.12.” Id.

at 1374; accord Samsung, 23 CIT at 8, 35 F. Supp. 2d at 947 

(holding that evidence of warranty that only covers repairs for 

defective merchandise is insufficient to prove § 158.12 claim 

without “additional, independent evidence to corroborate”). In 

other words, evidence of warranty claims alone is not sufficient 

without corroboration, even if the warranty only covers repairs 

for design and manufacturing defects.11

 

10 Volkswagen also argues that every repair that was made 

pursuant to a recall is, by definition, a repair of a design 

defect that constitutes damage that existed at the time of 

importation pursuant to § 158.12. See Pl.’s Br. 30. However, 

recall repairs are not “by definition” repairs of damage that 

existed at importation, because when the vehicle was ordered and 

imported, it may have been manufactured exactly to the 

construction specifications requested by Volkswagen. If this is 

the case, the vehicle was not damaged at the time of 

importation. Thus, the Court cannot conclude simply from the 

evidence before it that repairs done pursuant to a recall 

constitute evidence of damage that existed at the time of 

importation. 

11 Volkswagen argues that when evidence of a warranty is 

presented, it should be assumed that any repair of that vehicle 
Court No. 96 - 01 - 00132 Page 16 

Second, Volkswagen discusses the descriptions it has 

provided of each repair. The short descriptions in Exhibit A 

provide slightly more detail than Saab’s brief descriptions of 

repaired parts; however, as Volkswagen recognizes, they are 

still insufficient to make a § 158.12 claim. See Pl.’s Br. 20. 

For example, VIN [ ]12 corresponds to the following description: 

“steering lock/cylinder; stiff (sticks, jams); replaced.” This 

short statement does not give the Court or Customs enough 

objective, independent and recognizable information to determine 

wither the alleged defect existed at the time of importation. 

Volkswagen goes on to explain that the Court can further 

decipher the vehicle’s damage code by looking at Exhibit B, the 

Damage Code Key, to find more information about the nature of 

the repair. According to Volkswagen, the Damage Code Key 

contains descriptions of “each defect in each part with detail 

sufficient to prove that it existed at importation.” Id. 14. 

For VIN [ ], the relevant portion of the damage code is [ ]. 

When these [ ] are cross-referenced with the Damage Code Key, 

the Court finds the following statement: “Binding – All moving 

 

within the warranty time period represents a defect that existed 

at the time of importation in the absence of intervening events. 

See Pl.’s Br. 22. This incorrectly shifts the burden to Customs 

to prove the existence of intervening events. The burden is 

undoubtedly on Volkswagen to prove the elements of its claim. 

12 This VIN No. is found in the file in Exhibit A (Confidential) 

for Entry No. 110-1030393-9.
Court No. 96 - 01 - 00132 Page 17 

parts which stick, jam, are too tight, seized, locked, difficult 

to shift, rubbing, insufficient play, do not engage or disengage 

properly. Examples: Seized or scored pistons, door hinges.” 

Ex. B 46. This language explains that this particular part was 

damaged at the time it was repaired, but it certainly does 

nothing to demonstrate, with independent and verifiable 

evidence, that a defect existed at the time of importation. 

Even the descriptions that use the word “defect,” or 

similar words, are not adequate. VIN [ ]13 is described as “oe 

power antenna; electrical defects; replaced.” In the Damage 

Code Key, this repair is further described as “Electrical 

malfunction – Malfunctions in the electrical or electronic 

system (where mechanical defects, corrosion or noise cannot be 

determined), such as an open or shorted electrical circuit or no 

current flow . . . Examples: Alternator not charging, incorrect 

indication, flasher inoperative[.]” This description explains 

that there was an electrical malfunction, but it does nothing to 

verify that the malfunction was caused by a defect that existed 

at importation. Volkswagen is asking the Court and Customs to 

assume that any repair listed in Exhibit A must be the result of 

a latent defect, but the evidence does not compel this 

conclusion. Volkswagen does label the repair as a “defect,” but 

 

13 This VIN No. is found in the file in Exhibit A (Confidential) 

for Entry No. 110-1030393-9. 
Court No. 96 - 01 - 00132 Page 18 

this description is merely conclusory. It does not allow an 

independent fact-finder to conclude that this repair was 

necessary to remedy a defect that more likely than not existed 

at the time of importation. 

D. The Distinction between Port Repairs and Warranty Repairs 

In Saab II, the Court made a distinction between port 

repairs and warranty repairs. A “port repair” was performed 

“almost immediately after importation,” so the Court was less 

concerned “that the repairs might have been made to remedy 

damage resulting from intervening circumstances.” Saab II, 28 

CIT at __, 306 F. Supp. 2d at 1287. Regarding port repairs, 

Saab met its burden of proof with its short, simple descriptions 

of the repaired part. On the other hand, a “warranty repair” is 

performed at some time after importation. When a repair is not 

performed at the time of importation, the claimant must provide 

more specific evidence as described above. See Saab III, 434 

F.3d at 1374 (holding that in the absence of evidence of 

temporal proximity, claimant must provide more than warranty 

agreements and more specific descriptions). 

In the present case, Volkswagen contends that all repairs 

made before the “in-service date” should be considered “port 

repairs.” The Court will not adopt this sweeping 

generalization. The Court will not assume that any vehicle 

repaired before its “in-service date” was unlikely to be damaged 
Court No. 96 - 01 - 00132 Page 19 

due to intervening circumstances. If Volkswagen wished to 

alleviate the Court’s concerns about intervening misuse or 

mishandling, Volkswagen should have (1) clearly identified the 

vehicle repairs that it likened to the “port repairs” in Saab 

II, and (2) demonstrated that the repairs were completed 

“immediately” after importation. It did not do this. All the 

repairs are lumped together in Exhibit A, and the import dates 

are not listed at all.14

IV. CONCLUSION

Volkswagen used a categorical approach to attempt to prove 

that over 300,000 defects existed at the time of importation of 

certain entries. According to Volkswagen, it has provided 

Customs and the Court with a straightforward compilation of 

Volkswagen’s defect claims. For any particular repair, if more 

description is needed, the Court and Customs need only turn to 

the Damage Code Key in Exhibit B (Confidential). However, this 

shortcut method is not sufficient to meet the burden set forth 

in Saab III. As discussed above, it requires the Court and 

Customs to make too many unfounded assumptions about whether any 

damage actually existed at the time of importation. Section 

 

14 In its Reply Brief, Volkswagen attached a list of the import 

dates for each entry. This last-minute addition does not help 

Volkswagen to sufficiently identify, in a manner that is 

readable by the Court, which repairs that it considered “port 

repairs” because they were completed immediately after 

importation. Therefore, Volkswagen has failed to meet its 

burden of proof. 
Court No. 96 - 01 - 00132 Page 20 

158.12 does permit an allowance for any defect that existed at 

the time of importation, even when the damage is discovered 

later. See Saab III, 434 F.3d at 1371. However, claimants must 

keep in mind that “[o]nce Customs has liquidated merchandise, it 

can be damaged through a number of causes, including misuse or 

mishandling. This makes it difficult, or in some cases 

impossible, to identify the root cause of the damage or defect.” 

Samsung, 23 CIT at 8, 35 F. Supp. 2d at 947. Volkswagen has 

failed to overcome this difficult task with the evidence it has 

submitted for trial in this case.15

For the foregoing reasons, judgment will be entered in 

favor of the defendant. 

 /s/ Richard W. Goldberg

 Richard W. Goldberg 

 Senior Judge

Date: March 28, 2007 

 New York, New York 

 

15 Because Volkswagen has failed to prove that the damage at 

issue existed at the time of importation, the Court need not 

address the question of proving the value of that damage. 
UNITED STATES COURT OF INTERNATIONAL TRADE

VOLKSWAGEN OF AMERICA, INC., 

 

 Plaintiff, 

v. 

UNITED STATES, 

 

 Defendant. 

Before: Richard W. Goldberg, 

 Senior Judge 

Court No. 96-01-00132 

JUDGMENT

 Upon consideration of Plaintiff Volkswagen of America, 

Inc.’s Brief Demonstrating that its Additional Evidence 

Submitted For Trial Herewith Is Sufficient to Prove An Allowance 

for Defects, Defendant United States’ Memorandum in Opposition 

to Plaintiff’s Brief, Plaintiff’s Reply Brief, and all 

accompanying papers, and upon due deliberation, it is hereby: 

ORDERED, ADJUDGED AND DECREED that the Court lacks subject 

matter jurisdiction over repairs performed after the date of 

Volkswagen’s protests; and it is further 

ORDERED, ADJUDGED AND DECREED that, as to the remaining 

repairs, judgment is entered for Defendant. 

IT IS SO ORDERED. 

 

 /s/ Richard W. Goldberg

 Richard W. Goldberg 

 Senior Judge 

Date: March 28, 2007 

 New York, New York