1 Available at http://www.cit.uscourts.gov/slip_op/Slip_op06/06-184

. pdf (last visited the

date of this decision). Slip Op 07 - 41 

## UNITED STATES COURT OF INTERNATIONAL TRADE

: AVECI A, IN C. : : Plaintiff, :

: v. : Befor e: MUSGRA

VE, Judge : Consol. Court No. 05-00183 and UNITED STATES OF AMERI CA, : Court No. 06-00140 : Defend ant. : :

OPINION [Defendant’s moti on for “rehear ing, modification, clarification, and/or reconsideration” g ranted as to severance of three entries, other wise denied.] Decided: March 19, 2007 Buchanan Ingersoll PC

( Steven E. Bizar , Jill W

. Rogers ); Crowell &

Moring LLP (

Alexander Schaefer ), for the plaintiff. Peter D. Ke isler , Assistant Attorney Gene ral , Barbara S. Williams , Attorney in Charg e, International

Trade Field Offi ce, Co mmercial Litigation Br anch, Civil Division, United States Department

of Justice ( Saul Dav is ); Offic e of Assistant Chief Counsel, International Tra de Litigation, U.S. Customs and Border Protection ( Beth C. Brotman ), of cou nsel, for the defe ndant.

As discussed in Slip Opinion 06-184, a certain protest sent to the director for the P ort of Philadelp hia

challenged three entry

classifi cations for products imported thr ough the ports of Newark and Balti more, in add itio n to t he clas sifi catio n of se veral o ther en tries throu gh that port. See Avecia, Inc. v. United States , 30 CIT ___, Slip Op. 06-184 at 23-25 (Dec. 19, 2006). 1 After the prot e st’sConsol. Court No. 05-00183 and Court No. 06-00140 Page 2

denial, Avecia included

it in this suit. 28 U.S.C. § 1581(a) provides that this Court has “exclusive jurisdiction of any civil ac tion commenced to contest the denial of a protest, in wh ole or in part, under section 515 of the Tariff Act of 1930.” The re ferenced section is codified at

19 U.S.C. § 1514. Subsection (c)(1) requires that “[a] pr otest of a decision under sub section ( a) of this section s hall be filed . . . in accordance with regulations prescribed by the Secre

tary.” 19 U.S.C. § 1514(c) (1). One of those regulations, 19 C.F.R. § 174. 12(d), provide s that “[p]rotests shall be filed with the port director whose decision is protested.” The government thus challenged the Court’s subject matter jurisdiction over

the three entries. After

examining the law of this area, the court concluded that no statute or regulation precluded the director for the Port of Philadelphia from rendering a substantive decisionwith respect to entries from another port, that the director denied the protest “in full” per the rationale of HQ 967005 (May 18, 2004), and

since the decision of Customs had apparently been to relax the place-of-filing reg ulation with respect to those three entries, the court concluded t hat it possessed jurisdiction over the subject matter. Slip Op. 06-184 at 25. The gover

nment now

moves for

“rehea ring, mo dificati o n, clarifi cation, and/o r

r econsideration” of that fi nding. D isposition o f such a motion is with in the Cour

t’ s discretion

. See USCIT Rule 59(a). See , e.g. , Kerr-M cGee Chem. Corp. v. United States , 14 CIT 582, 583 (1990); Union Camp Corp. v. United States , 21 C IT 371, 372, 963 F. Supp. 1212, 1213 (1997). The purpose of reconsideration

is to rectify “a

significant flaw in the conduct of the origina l proceeding.” W.J. Byrnes &Co. v. U

n ited States , 68 Cust. Ct. 358, 358 (1972) (footnote omitted). However, a court should not d

isturb its p rior dec ision unle ss it is “manifestly er roneous.” See , e.g. , Starkey Labs, Inc. v. United States , 24 CIT 504, 505, 110 F. Supp. 2d 945, 946-47 (2000); Volkswagen of Am., Inc.Consol. Court No. 05-00183 and Court No. 06-00140 Page 3

v. United States , 22 CIT 280, 282, 4 F. Supp. 2d 1259, 1261 (1998). To the extent the gove rnment’s motion raises a colorable “significant flaw” or “manifest error” in Slip Opinion 06-184, the matter merits further discussion. See Starkey Labs

. Substantiv ely , the go vernmen t interpr ets Slip Opi

nion 06-18 4 as appa

rently agreeing “that the combinat

ion of the statute a nd the per tinent re gulatio ns mandat

ed, as a j u risdictiona l prerequisite, the filing of the protest at the port at which thedecision was made ,” Def. ’s Reply at 3, and i

targues that in addition to the requirements governing form and content under 19 U.S.C. § 1514(c), the place of filing a pro te st is clearly appa rent from 19 U.S.C. § 1515(a), which requires a protest’s re view within two years

by “the appr

opriate customs officer.” The gov ernment argue s that this “ can only be the officer designated for suc h review p ursuant to § 1514(c) and the regulations” and tha t therefore compliance with 19 C.F.R. § 174.12(d) is a mandatory condition of jurisdiction which the director for the Port of Philadelphia had no authority to waive. D ef.’s Mot. at 5-9 (referencing Grover Piston Ring Co. v. United States , 752 F .2 d 626 (Fed. Cir. 1985), Noury Chem. Corp. v. United States , 4 CIT 68 (1982), Po Chien, Inc. v. United States , 3 CIT 17 (1982), and United States

v. Reliable Chem. Co. , 66 CCPA 123, 605 F.2d 1179 ( 1979) ); Def. ’s Rep ly at 7-8 ( referen cing inter alia DaimlerChrysler Corp. v. United States , 442 F.3d, 1313, 1319 (Fed. Cir. 2006), Autoalliance Int’l, Inc. v. United States , 357 F.3d 1290, 1293-94 (Fed. Cir. 2004), and Ford Motor Co. v. United States , 425 F. Supp. 2d 1324, 1332, n.12 (2006), reh’g den . 30 CIT __, Slip Op. 06-145 (Sep. 29, 2006)). Avecia

apparently disputes whe

ther Slip Op inion 06-184 even addressed whether com pliance with 19 C.F.R. § 174.12(d

) amounts to anunwaivable condition of subject matter jurisdiction. SeeConsol. Court No. 05-00183 and Court No. 06-00140 Page 4

Pl.’s Resp. at 2 & n. 1 (refe rencin g Arbaugh v. Y&H Corp. , 546 U.S. 500, ___, 126 S.Ct. 1235, 1237 (2006) (“when

Congre ss does not ran k a statutory limitation on covera

ge as ju risdictio nal, cour

ts should treat the restriction as nonjurisdictional in character”) ). See also Def.’s Br. passim ; Def.’s Reply passim (disting

uis hing Arbaugh on the authority of Federal Nat’l Mortg. Ass’n v. United States , 469 F.3d 968 (2006 )). Avecia i s corre ct, but wh ether it a rguab ly d id, the conclusion m

ust again b e that co mpliance

with the r

egulat ion is not su

ch as may not be wa

ived by Customs. The government elaborates in its motion that the proper interpreta tion of “t he appropri ate customs office

r” in 19 U.S.C. § 1515(a) mandates that protests only be de cided by the port dire ctor who made the

origina l decision s affecting the

entry or entrie s, and y

et subsection 1515( a) simply mandates that review of a protest be completed wi thin two years f rom the date of filing by

“the appropr iate customs officer.” It is a de adline for Customs. It also provides for further review b y

“ another app ropria

te customs officer.” Cf

. 19 U.S.C. § 1515(a) (italics added). To the extent the provision imposes a

filing c ondition di

rected to the pro testant, t

he phras e “the a

ppropria te customs officer” is vague. As implied by Slip Opinion 06-184, one cannot definitely conclude

that the port director of Philade lphia was

an “inap propria te ” customs officer to act with respect to entries incorre ctly

included on an othe

rwiseproperl

y- filed pro test

at that po rt. Even i f “appr opriate customs officer” may be

clarified by

reference to the place- of-filing regulation, 19 C.F.R. § 174.12(d), section 1515 does not control the Cour t’s juris diction, which is delimited in 28 U.S.C. § 1581(a) by reference to the parameters of 19 U.S.C. § 1514. See , e.g. , Volkswagen of Am., Inc. v. United States , 31 CIT __, Slip Op. 07-26 at 6 (Feb. 21, 2007) (“Section 1514 is not a jurisdiction-granting statute; it defines the ty pes of ac tions that a

re poten tially reviewa ble under § 1581(a )” (cita ti on omitted)).Consol. Court No. 05-00183 and Court No. 06-00140 Page 5

There, in contra st to the sta tutory particu lars for the conte nt of a pr otest, Cong

ress did not specify in section

1514 that a protest had to be in a particular form, or that it had to be filed in a particular place. See Slip Op. 06-184 at 25. Cf . 28 U.S.C. § 1581(a) & 19 U.S.C. § 1514(c)(1) with 19 U.S.C. § 1515(a

). Rather , Congre ss merely require d that pro tests nee d to be “filed in writing . . . inaccordancewith regulations prescribed by the Secretary .” 19 U.S.C. § 1514(c)(1). Since the place of filing is not a plain and specific statutory condition of invoking the jurisdict ion of this Court, compliance with 19 C.F .R. § 174.1 2(d) is no t a condit ion of subj ect matte

r jurisdiction but ra

ther is an eleme nt of a put

ative pla intiff’s claim. See , e.g. , Arbaugh . It is also noteworthy that in section 1514 Congre ss specif

ically deleted all refe rences to “the appropriate customs officer” or substituted “the Customs Ser

vice” th erefor

when ena

cting th e North A

me ri can Free Trade Ag reement Implementation Act, see Pub. L. 103-182 § 645(1)(A), (E), (2) (Dec. 8, 1993). Fu nd am en ta ll y, the government’s argume nt, that subje ct matter

jurisdict ion at this C ourt is lacking because no port director other than the port direc tor who rendered the decision on the original classification has the authority to render a

decision on a

protest, depends for its validity upon the government’s interpretation of the place-of-filing reg

ulation, which is to say that the arg ument grafts a meaning

onto thatregulation that the regulation does not curr ently possess. Cf

. 19 C.F.R. § 174.12(d) (“[p]rotests shall be filed with the port director whose decision is protested”). Even if the regulation possessed such meaning, the c ondition that a protest be filed at a particular

place is beyond the metes and bound s of the su

bject mat ter juris diction e stablishe d for this Courtby s tatute by Congress. See 28 U.S.C. § 1581(a) & 19 U.S.C. 1514. The government argue s that “the require ments of the regulations promulgated pursuant to the de legation authority in § 1514(c) areConsol. Court No. 05-00183 and Court No. 06-00140 Page 6

juris dicti onal [,]” Def.’s Repl y at 4 (referencing G rover Piston Ring , Noury Chemical , and Po Chien ), butthat is not a proper interpretation of residual deleg ation. Congress may de le gate c ertain legislative policy determinationsto the executive branch, see , e.g. , Marshall F ield & Co. v. Clark

, 143 U.S. 649, 693-94 (1892), Star-Kist Foods, Inc. v. United States , 47 CCPA 52, 60, 275 F.2d 472, 480 (1959), but

only Congre ss may delimit federa l court subject

matter jurisdiction. See U.S. Const., Art. II I, § 1. See , e.g. , Kontrick v. Ryan , 540 U.S. 443, 453 ( 2004); Cary v. Curtis , 44 U.S. 236, 244 (1845). Cf

. 19 U.S.C. § 1514(c )(1)(D ) (a pro test must be “filed . . . in acc ordance

with regulations prescribed

by the Secre

tary”) . And for this court to construe 19 C.F.R. § 174.12(d) with the meaning the government here advocate s would effectively amount to legislating the Cou rt’s own s u bject matter jurisdict i on. Plainly, it is inappropriate for the c ourt, or Cu stoms, to do so. Moreo ver, to construe the regulation in the manner advo c ated by the g overnment would theoretically preclude subject matter jurisdiction over anyprotest not perfect ly “filed .

. . in accordance with regula tions prescribed

by t he Se cr et ar y,” ev en if on ly s li gh tl y flawed , and thus would contradict the inherent authority of agencies to interpret their own re gulatory requirements as appropriate and nece ssary . See , e.g. , PAM S.p.A. v. United States , 463 F.3d 1345, 1349 (Fed. Cir. 2006) (agency has discretion to relax compliance with notice regulation where no substantial pre jud ice r esults); National Customs Brokers and Forwarders Ass’n of Am., Inc. v. United States , 18 CIT 754, 762, 861 F. Supp. 121, 130 (1994) (defendant argued in fa vor of “Customs’ longstanding practice” to a llow cer tain duty-free shipments

entry “unde

r relaxed entry pr

ocedures without the requirement of a broker ”); Lee Yuen Fund Trading Co., Inc. v. D ep’t of Tre asury , 18 CIT 139, 141 (1994) (Customs recognizing that noncomplying

submission w as timely

and informing plaintiff

to file pr eferr ed Protes t Form 19) ; SachsConsol. Court No. 05-00183 and Court No. 06-00140 Page 7

Auto. Prods. Co. v. United States , 17 CIT 290, 294 n.3 (1993) (compliance with regulation waived by agenc y) ; accord

, American Farm Lines v. Black Ball Freight Serv. , 397 U.S. 53 2, 539 (197 0). And it should go without saying

that the Court’s subject matter jurisdiction must encompass hearing whether there ha s been compliance with a re levant r

ule or re gulatio n, if juris dictio n is otherw ise satisfied. See , e.g. , Kyocera Indus. Ceramics Corp. v. United Sta tes , 30 CIT __, Slip Op. 06-187 (Dec. 21, 2006) ; Carolina Tobacco Co. v. U.S. Customs Serv. , 28 CIT __, Slip Op. 04-20 (Mar. 4, 2004); see also Indianapolis Mach. &Exp. Co., Inc. v. United States , 42 Cust. Ct. 137 (1959). Since the function of the Court is to find the narrowest resolution, Slip Opinion 06-184 sought to avoi d a speci fic findi ng on wh ether th e place of filing

a protes t amounts to a “jurisdic tional” prerequisite, because whether it is, or is not, it is solely a regulatory requirement, and

as such may be wa

ived. The government attempts to force the issue again, but the primary

support for its motion is United States v. Reliable Chemical Co. , 66 CCPA 123, 605 F.2d 1179 (197 9), a ca se that considered Customs’s attempted waiver of an explicit sta

tutory jurisdict ional re quireme

nt. See Def.’s Br. at 9 ; Def.’s

Reply at 11. The

circumst ances of this matte

r are no t analog ous t o tha t situation but are rather akin to those of Angelus Milling Co. v. Commissioner of Internal

Revenue , 325 U.S. 293 (1946), which involved the Commissioner’s waiver of complianc e with regulatory filing re qu ir em en ts pr om ul ga te d b y it s a ge nc y pu rs ua nt to th e s am e t ype of au th or it y g r anted by Congre ss that this a

ction pre sently

confron ts vis à vis

19 U.S .C. § 1514(c)(1) and subsection (c)(1)(D) (“any othe

r matter r equired by the Sec retary by reg ulation”). Cf

. 325 U.S. at 295 n.1 (“Section 903 of Title VII of the 1936 Revenue Act, 49 Stat. 1648, 1747 . . . requires that no refund be made or a

llowed ‘u nless . . . a

claim for refund has been filed . . . in acc ordance with regulationsConsol. Court No. 05-00183 and Court No. 06-00140 Page 8

prescribed

by the Commissioner with the approval of the Secretary ’”) with 19 U.S.C. § 1514(c)(1). The Supreme Court’s observation in that case appears e qually apt to the circumstanc es at bar:

Congre ss has gi

ven the T reasur y th is rule-making power

for self-protection and notfor self-imprisonment. If the Commissioner chooses not to stand on his own formal or detai led requ irements , it would be

making a

n empty abstraction, and not a practicalsafegua rd, of a regulation to allow the Commissionerto invoke technical ob jec tions after he has investigated the merits of a claim and taken action upon it. Even tax administration does not as a matte r of principle pr

eclude c onsidera

tions of fa

irness. 325 U.S. at 397. To summari ze, neither 19 U.S.C. § 1514(c)(1), § 1515(a), nor 19 C.F.R. § 174.12(d) precludes a port dir

ector f rom ruling

on entrie s from a d

iffere nt port. Cf. also 19 C.F.R. 174.13(b) (regarding

“multiple

entries”: “[ a ] single protest may be filed with respect to more than one entry at any port if all such entrie s involve t he same c ategor

y of mercha ndise and a

decision or decisions

common to all entries [is/]are the subject of the protest”) (italics added). The cour t has considered the gov ernment’s other propositio ns, from Da imlerChrysler , Autoalliance , Ford , etc ., and finds them unavailing in the circumstances of this matter. The court therefore remains unpersuade d that there is manifest

error in its prior conclusion that it possesses jurisdiction over the disputed subject matter. See Slip Op. 06-184 at

25 (qu otin g American Farm Lines , 397 U .S. at 539). As an as ide, a ltho ugh all three entries were encompassed by the protest originally

summonsed to t his action, two of the entries have since been encompasse d by Court No. 0 6-00140. The Judgm ent on 06- 184 could only encompa ss the remaining entry , of course, but the government repre sents that it wou ld pre fer to separa te the jurisdictional issue from the other entri e s covered by this action, and the parties have conferred and ag ree tha t a preferable procedural posture is to sever those entries and make them theConsol. Court No. 05-00183 and Court No. 06-00140 Page 9

res of a new, separate civil action which shall then abide the Judgment of this action. The court concludes that the motions to sever and amend must be granted and will enter orders to that effect after a ny necessa

ry consulta tions with the partie s.

/s/ R. Kenton Musgrave R. KENTON MUSGRAVE, JUDGE Dated: March 19, 2007 New York, New York