Slip Op. 05-20 UNITED STATES COURT OF INTERNATIONAL TRADE

BEFORE: CARMA N, JUDGE

____________________________________ : CHURCH & DWIGHT CO., INC., : : Plai ntiff, :

: v. : Court No. 02-00763

: UNITED STATE S, : : Defendant. : ____________________________________: [Upon cons ideration of motion papers r egard ing Def endant’ s motion for

relief f rom judg ment, Defendant’s motion is denied. Defendant is hereby ordered to pay

to Plaintiff the outstanding balance of duty

refund pursuant to their Stipulated Judgment, plus any inter est as may be required by

law.] Hogan & H

artson, LLP (

Lewis E. Leibowitz, William D. Nussbaum ), Washington, D.C., for Plaintiff. Peter D. Keisler , Assistan t Attorne y G eneral , U.S. Dep artment o f Justice; Barbara S. Williams , Attorney-in-Char ge, Inter national Trade Field Office, U.S. Depa rtment of Justice; Bruce N. S

tratvert , Attorney, Commercial L itigation Branch, Civil Division, U.S. Department of Justice; Beth C. Brotman , Of Counse l, U.S. Customs and Border Pro tection, for Def endant.
Dated: February

8, 2005 O PINI ON C ARMAN , J UDGE : Def

end ant Uni ted St ate s m ove s fo r re li ef f rom ju dgm ent und er U SC IT R. 60(a)-(b). Defendant reque sts relief from the Stipulated Judgment on Agreed Statement of Facts by e ither modifying or vacating the judgment. ( See Church &

Dwight Co., Inc. v. United States , Court No. 02-00763, Stipulated J. on Agreed Statement of Facts (July 15, 2004) (“Stipulated Judgment”).) Pursuant to the parties’ Stipulated Judgment, this action was decidedCourt No. 02-00763 Page 2

1 This Court notes that the subject merchandise was entered into the customs territory of the United States during the y ears from 1997 through 2002. The tariff pr ovisions at issue did not chang e during

this perio d, but the d

uty rates va ried for HTSUS tar

iff provision 3823. 19.20, wit h a 2.3% duty ra

te for the ye ars from 2000 to 2002. on July 15, 2004, and the Clerk of the Court entered f inal judgment. This Court denies Defendant’s motion from relief from judgment.
B ACKGROUND This matte

r involve s the cla ssificat

ion and du

ty r ate for palm fatt y a cids distil late (“PFAD ”) imp orted by Church & Dwight Co., Inc. (“Ch urch & D wight ”) from 1997 t hrough 2002. The United States Customs Service, now the United States Bureau of Customs and Border Protection (“Customs”), classified the subject merchandise under tar iff provision 3824.90.40 of the Harmonized Tariff Schedule of the United States (“HTSUS”), subjec t to duty at 4.6% ad valorem . In 2002 and 2003, Church & Dw ight timely protested Customs’ classifica tion of the subject merchandise, claiming that the proper c lassification was the duty fr ee tariff provision HTSUS 1511.90.00. When Customs denied the protests, Church & Dwight timely commenced an action in this Court. In subsequent negotiations during 2003 and 2004, the parties agreed that the proper classification for the subject mercha ndise was HTSUS tariff provision 3823.19.20, subject to duty at 2.3% ad valorem

. 1 On July 7, 2004, parties filed the Stipulated Judgment. On July 15, 2004, this Court ordered this action decided, and the Clerk of the Court enter ed final judgment. On November 17, 2004, Plaintiff wrote a letter to this Court complaining of Defendant’s noncompliance with the Stipulated Judgment. Although Customs has partially paid the duty refund to Plaintiff, Defendant disputes the full amount owed for the reliquidated entrie s. Plaintiff contends that theCourt No. 02-00763 Page 3

Stipulated Judgment unambiguously states that the subject mer chandise is to be reliquidated “at the rate of 2.3% ad valorem. ” Defe ndant cla ims it intend

ed the la nguag e to rea

d “at the rate in effect at the time of entry .” On November 23, 2004, this Court convened an in-chambers conference to discuss the dispute. Thereaf ter, Defendant moved for relief fr om judgment pursuant USCIT R. 60. Plaintiff opposed this motion. In their motion papers, the parties agree that the a mount in disp

ute is $101 ,436.68, n

ot includin

g inter est. D ISCU SSI ON This matter comes before this Court because a dispute has ar isen between the parties regarding the perf

ormance of their Stipulated Judgment. This Court notes that the final judgment was orde red on July

15, 2004, b

ut this dispu

te was no t brough

t to the att

ention of this Court u

ntil four months later. Although Defendant subsequently moved for relief from judgment, it was the Plaintiff that requested this Court’s guidance on how to proceed in lig ht of Defendant’s noncompliance and instigated the in-chambers c onference to resolve the dispute. Courts look favorably upon stipulations, where parties negotiate and come to an agreement on their own terms. See Hemstreet v. Spiegel, Inc. , 851 F.2d 348, 350 (Fed. Cir. 1988) (“ The law s trongly

favors s ettlemen

t of litig ation, an

d there i s a compe lling pub lic inter est and policy in upholding a nd enforcing settlement agre ements voluntarily entere d into.”) (citation omitted). This Stipulated Judgment was negotiated, approved, signed and submitted by opposing parties. This Court then ordered this action decided on July 15, 2004, and the Clerk of the Court entered final judgment. This Court holds that if a party were able to unilaterally

disavow a stipulate d judgme

nt of ag reed sta tement of facts, w hich was entere d into in g ood faith , the publi c policy underly

ing negotiated agre ements would be undermined.Court No. 02-00763 Page 4

The provision at issue is paragraph 4 of the Stipulated Judgment: “The par ties agree that the import

ed merchandise i s classif

iable as ‘[i]ndustria

l monocar boxyl ic fatty

acids; a cid oils from refining:... Other:... Derived from c oconut, palm-kernel oil’ under sub-heading 3823.19.20, HTSUS at the rate of 2.3% ad valorem .” This statement plainly and ordinarily means that the subject merchandise will be reliquidated at the rate of 2.3% ad valorem for all e ntries inc luded in th

is case. Althoug

h both parties negotiated drafts and signe d the final stipulation, Defendant contends “[i]t was never Customs’ intention, however, to agree to a duty rate other than the genera l duty rates in eff

ect for subheading 3823.20, HTSUS, at the time that the subject entries were filed .” (Def .’s Mem. in Supp. of I ts Mot. for

Relief f rom J. (“De f.’s Mot. ”) at 2 ( emphasis added) ( citing D ecl. of B eth C.
Brotman (“Bro tman Dec l.” ) at ¶

4).) De fendant

contends that it er roneousl y or mistakenl

y di d not includ

e the pro vision “a

t the time the subjec t entries were fi led” as i

ntended. Grounde d in its contention that this is a remedial mistake or error, Defendant c laims relief from judgment pursuant USCIT R. 60 or uni lateral

mistake pu

rsuant to principle s of contr

act law. (Def.’ s Reply Br. in Supp. of Mot. for Relief from J. and in Opp’n to Pl.’s Resp. (“Def.’s Reply Br.”) at 8.) A. USCIT R. 60 Defendant contends it committed unintended error, mistake, inadverte nt mistake, excusable neglect and mistake under USCIT R. 60(a) and (b). (Def.’s Mot. at 8 n. 5, 9, 10.) USCIT R. 60(a) and (b) allow discr etionary re lief from a judgment or order: (a) Clerical mistakes in judgments, orders or other pa rts of the record and errors therein a rising from oversight or omission may be cor

rected by the court at any

time on its own initiative or on motion of any party

and after such notice, if any, as the court orders....Court No. 02-00763 Page 5

2 USCIT R. 60 is modeled after Fed. R. Civ. P. 60. Since they are substantially similar, Fed. R. Civ. P. 60 case law provides guidance in interpre ting the application of the USCIT R. 60. (b) On motion of a party

or upon its own initiative and upon such terms as are just, the court may relieve a party

or a party’s leg al representative from a final judgme nt, order, or proceeding for the following r easons: (1) mistake, inadvertence, surprise, or excusable neglect;... (4) the judg ment is void;... or (6) any other r

eason justifying r

elief from the operation of the judgment.... An examination of the case law interpreting Fe d. R. Civ. P. 60(a) lends guidance to the definition and scope of “clerical mistake.” 2 No longer literally read as a mistake confined to a clerk, t his phras e now “me

rely describ es the ty

pe of er ror iden tified wit h mistakes

in transcription, alteration or omission of any papers and documents which are traditionally or customarily handled or c ontrolled by clerks but which pa pers or documents may

be handled by others.” Porter v. United Sta tes, 84 Cust. Ct. 191, 194, C.D. 4857, 493 F. Supp. 591, 593 (1980) (citing In re Merry Queen Transfer Corp. v. O’Rourke , 266 F. Supp. 605, 607 (E.D.N.Y. 1967)). Merry Queen offers further guidance on the applicability of subsections Rule 60(a ) and (b) by explaining that a “clerical mistake under Rule 60(a) ma y be diffe rentiated from the mistake or inadver tence r eferr ed to in Rule

60(b)(1 ), upon the

ground that the la

tter app lies prima

rily to errors or omissions committed by an a ttorney or by

the court which are not apparent on the record.” Merry Queen , 266 F. Su pp. at 607 (citation omitted) ; see also Porter , 84 Cust. Ct. at 194 (“It is well settled that a cleric al error specifically refers to error of transcription, copy ing or calculation.”) (citation omitted). In the present case, Defendant admits attorneyerror, not clerktype err or; therefore, subsection (a) is inapplicable. Ac cordingly , relief from the alleged attorney mistake in this case must be sought under subsection (b).Court No. 02-00763 Page 6

The moving party

has the burden to present facts sufficient to demonstrate mistake, inadvertence, surprise or excusable neglect under USCIT R. 60(b)(1). See W ashington I

nt’l Ins. Co. v. United States , 16 CIT 480, 483, 793 F. Supp. 1091, 1093 (1992). This Court will then determine, based on specific facts prese nted to it, whether there exists mistake, inadvertence, surprise or excusable neglect sufficient to g rant relief under Rule 60(b). Id. The rec ord ref lects that both Defendant and Customs had experienced counsel reading , commenting and approving the negotiated drafts of the Stipulated Judgment. Customs’ counsel approved the lang uage of
parag raph 4 of the Stipula

ted Judgme

nt. (Bro tman Dec l. ¶ 2, 4; see also Lette r from Str atvert to Nussbaum of 3/17/04, at 2.) In fact, Customs’ counsel admits in her de claration that she “overlooked the fact that parag raph 4 [] indicated that the goods were to be classified under subheading 3823.19.20 at the rate of 2.3% ” (emphasis original) and once she “ determined (erroneously

) that this paragraph did not need to be chang ed, [she] did not consider the paragraph any furthe

r.” (Brotman Decl. ¶ 3.) Def endant’s counsel also admits that “[t]here were a number of iterations to this process leading up to the final version of the Stipulated Judgment as filed with the Court by the parties” ( Def.’s Mot. at 2), where Defenda nt’s counsel made extensive

comments t

o drafts and also a

pproved the fina l version of the Stip

ulated Judg

ment (De f.’s Repl

y Br. at 6 ). This Cou

rt obser ves that D efenda

nt’s asse rtion that it somehow

overlook ed the pla in langua ge of p aragr

aph 4, whi ch state s that the s ubject me rchandi se was to b e reliqu idated a t a rate of 2.3%, is e ither disi

ngenuo us or amou

nts to car elessne ss. This Court has found that “[n]either ignorance nor carele ssness on the part of a litigant or his attorney provides g

rounds for relief under Rule 60(b)(1).” Napp Systems, Inc. v. United States, 22 CIT 11 06, 11 07 (19 98) (ci ting Avon Products, Inc. v. United States , 13 CIT 670, 672Court No. 02-00763 Page 7

3 Since this Court holds that this Stipulated Judgment is an enforceable contract and Defend ant ackn owledg es its authority

to sign a stipulate d judgme

nt, this Cour

t will not pe

rmit Defendant to subsequently assert that it lacked authority by simply

trying to fa shion the agreement as a “settlement compr omise.” (1989) (citations omitted)); see also Sutherland v. ITT Continental Baking Co. , 710 F.2d 473, 476-77 (8th Cir. 1983) (“Rule 60(b) has never been a vehicle for relief because of an attorney’ s incompetence or carelessness.”). N egligence is also not a g round for relief under Rule 60(b)(1). See Greenspahn v. Joseph E. Seagram & Sons, Inc. , 186 F.2d 616, 619 (2d Cir. 1951) (“[I]f the defendant was guilty

of gross carelessness in making the mistake , his negligence will dispose the court not to exercise its discretion in his favor [under Rule 60(b)(1)].”). This Court finds that Defendant’s attorneys’ actions of overlooking a mistake in numerous iterations of a wr itten agreement amount to carelessne ss, which is insufficient for relief under USCI T R. 60(b)(1). Accordingly , this Court also finds this carelessness bars relief under the alterna tive grounds found in USCIT R. 60(b)(4) and (6). I n the absence of finding an enumer ated ground for relief under USC IT R. 6 0, this Cour t holds tha

t Defend ant should

not be g ranted r elief fr om judgme

nt. B. Contract Law This Court holds that the Stipulated Judgment is an enforceable agreeme nt governed by contract law. 3 See Anita’s New Mexico Style Mexican Food, Inc . v. Anita’s Mexican Foods Corp. , 201 F.3d 314, 319 (4th Cir. 2000) (“Because a stipulated judg ment is analogous to a consent order or decree, it is also treate d as a contract for the purposes of enfor cement sought here.” ). Defe

ndant con tends unil ateral m

istake un der principles of

contract law. (D ef.’s Re ply Br. at 8.) Plaintiff agrees that the Stipulated Judgment is gove rned by princ iples of contract law but argues that unambiguous terms are a ccorded their ordinary

meaning in contract law. (Pl.’sCourt No. 02-00763 Page 8

Mem. in Opp ’n to Def

.’s Mot. f or Relief from J. (“Pl .’s Opp’ n”) at 6. ) A unilat eral mist ake is only remedial if the mistaken pa rty can show tha

t the mistake “has a material effect on the ag reed exchange of performance s” and either “(a) the effe ct of the mistake is such that enforcement of the contract would be unconscionable, or (b) the other party had r

eason to know of the mistake or his fault c aused the

mistake.”

Restatem ent (Sec ond) of Contracts § 153 (1981). The record does not support a finding of unconscionable behavior by the Plaintiff or that the Plaintiff had reason to know of Defendant’s mistake or Plaintiff’s fault caused De fendant’s mistake regarding paragraph 4. On the contrar y, the rec ord reflects that throughout a series of dr afts negotiated between parties, Defendant approve d the draft language of paragraph 4 as the final lang uage, only commenting that the pa ragraph was misnumbered. (Letter from Stratvert to Nussbaum of 3/17/04, at 2.) A basic tenet of contract law is that unambiguous terms, abse nt fraud or duress, are given their ordinary me aning. See King v. Dept. of the Navy , 130 F.3d 1031, 1033 (Fed. Cir. 1997); Torres v. Walker , 356 F.3d 238, 245 (2d Cir. 2004) (“If a contract is clear, courts must take care not to alter or go bey

ond the express terms of the agreement, or to impose obliga tions on the parties that are mandated by the unambiguous terms of the agree ment itself.”) (citation omitted); McCarthy v. Am. Int’l Group, Inc. , 283 F.3d 121, 124 ( 2d Cir. 200 2) (“Un ambiguo us terms a

re to be given their plain and ordinary meaning....”) (citations omitted); Assicurazioni Generali S.p.A. v. Black &

Veatch Corp., 362 F.3d 1 108, 1116- 17 (8th Cir . 2004) (“ The enf orceme nt of cont racts according to their unambiguous terms, howeve r, serves an important purpose in the law.... Where an agreement is clear , the parties are entitled to rely on an expectation that it will be enforced as written.”) ; United States v. Bielak, 660 F. Supp. 818, 826 (N.D. In. 1987) (“ One ofCourt No. 02-00763 Page 9

the basic precepts of contract law is that a c ontract must give effect to the clear and unambiguous terms of a contract when co nstruing it.”) (c itations om

itted). T here is n o claim of

fraud or duress in the record. This Court h

olds that c ontract

principle s bar De fendant from atte mpting to create ambiguity whe

re none exists. See Torres , 356 F.3d at 245 (“A par ty c annot cr

eate an ambigui ty in an otherwise plain agreement mere ly by urg[ing] different interpretations....”) (citations omitted). In Torres , the Second Circuit found that “the language of the stipulation plainly and unambiguously provide d for the pay ment of [] attorneys’ fees.” Torres , 356 F.3d at 245. Paragraph 4 states that “[t]he parties agre e that the imported merchandise is classifiable... under sub-heading 3823.19.20, HTSUS at the rate of 2.3% ad valorem .” This Court, as in Torres , finds that the la nguag e of the St

ipulated Judgment i s plain an

d unambig

uous. Acc ordingl

y, Pl aintiff i s entitled t o the full a

mount of th e duty

refund a s stated in

parag raph 4, w hich the p arties a

gree i s $101,436.68 in compliance with the terms of the Stipulated Judgment, plus any inter est as may be required by

law. C ONCLUSI ON For the aforementioned reasons, De fendant’s motion for relief from judgment is denied. Accordingly , Defendant is ordered to pay to Plaintiff the outstanding balance due pursuant to the Stipulated Judgment, plus any interest as may be required by

law.
/s/ Gregory

W. Carman Gregory W. Carman Judge
Dated: February

8, 2005 New York, New York