JAZZ P HOTO CORP ORATION , Plaintiff,

v. UNITED STATE S ,

Defend ant. Slip Op. 05-7
UNITED STATES COURT OF INTERNATIONAL TRADE

Court No. 04-00514 Before: Judge Timothy C. Stanceu

[Motion for ex parte

temporary r

estraining order denied] Decided: January 25, 2005 Neville P eterson LLP

( John M. P

eterson, George W

. Thompson

, Curtis W

. Knauss, M

aria E. Celis and Catherine Chess Chen ) for plaintiff. Peter D. Keisler , Assistant Attorney Gene ral, David M. Cohen , Director, Patricia M. McCarthy , Assistant Director, Stefan Shaibani , Trial Attorney, Commerc ial Litigation Branc h, Civil Division, United

States De

partmen t of Justice ; Beth Brotman and Paul Pizzeck, United States Customs and Border Protection, Department of Homeland Security , of counsel, for defenda nt. OPINION AND ORDER STANCEU, Judge: Plaintiff Jazz Photo Corporation (“ Jazz) moves th is court ex parte , pu rsu ant to US CIT Rule 65(b), for a ten-day

temporary r

estraining order enjoining United States Customs and Border Protection (“Customs”) from “sampling, ha ndling, removing, transporting, destroy ing or testing any of

the merchandise” that plaintiff entered for c onsumption at Newark, New Jersey , on Septembe r 12, 2004 , under E

ntry No. DT4- 0028917- 9. Pl.’s Ap plication for a T.R .O. at 1; seeCourt No. 04-00514 Page 2

1 Backg round on previous i

mportations of Jazz’s L

FFPs is pr

ovided in t

he opinion

of this court in Jazz Photo Corporation v. United States , Slip Op. 04-146 (Ct. Intl. Trade Nov. 17, 2004), appeal docketed

, No. 05-1096 (Fed. Cir. Nov. 19, 2004). Compl. ¶ 15. Because plaintiff has not made a showing of immediate and irreparable injury sufficient to warrant an ex parte temporary r

estraining order, the motion must be denied.
I. B ACKGROUND The merc handise a t issue in th

is litiga tion consi sts of “le

ns-fitte d film packages ” (“LFFPs”) , commonly refe rred to as “disposable cameras” or “ one time use cameras,” from the People’s Republic of China. 1 See Compl. ¶ 23. Customs excluded the subject LFFPs from entry into the United States, deeming them to be inadmissible under a gener al exclusion order that the U.S. International Trade Commission (“I TC”) issued in 1999 under Section 337 of the Tariff Act of 1930, as amended, 19 U.S.C. § 1337 (2000) (“Section 337”). See Compl. ¶¶ 14, 16. In the ITC’s investigation under Section 337, F uji Photo Film Co., Ltd. (“Fuji”), claiming infring ement of its various patents used in manufacturing L FFPs, had sought an order to exclude from entry into the United States the LFFPs of various importers, including Jazz, that are in the business of “refur bishing” (with new

film and ot

her comp onents) a

nd re-imp orting L

FFPs ori ginally manufactured and sold by Fuji and its licensees. See In th e Matter o f Certain Le

ns-Fitted Film Packages , USITC I

nv. No. 337-TA-406, Pub. No. 3219 (1999). The cur rent litig ation ar

ose from the denia l by Customs of Ja

zz’s adminis trative protest, filed September 26, 2004, in which Jazz contested the exclusion of the LFFPs from entry

. See Compl. ¶ 17. After Customs denied the protest on October 8, 2004, plaintiff brought this action to contest the denial of the protest, invoking this court’s jurisdiction under 28 U.S.C. § 1581(a) (2004). See id. ¶¶ 2, 18.Court No. 04-00514 Page 3

In its present motion, plaintiff maintains that a temporary injunction “will do nothing more than preserve the status quo with respect to the excluded merchandise at bar pendente lite .” Pl.’s Application for a T.R.O. at 2. Jazz argues that an order to this effect would permit the government to respond to, and the court to fully consider, Plaintiff’s Application for a Preliminary I

njunction Restraining Defendant from Sampling or Testing the Imported Merchandise Except by

Order of Court (“Plaintiff’s Application for a Preliminary Injunction”) that was filed simultaneously with Jazz’s motion for the temporary restraining order on January 3, 2005. Id. at 2. In Plaintiff’s Application for a Preliminary Injunction, Jazz demands court supervision over the sampling and testing by Customs of the excluded merchandise, which plaintiff describes as currently located “in Customs bonded storage.” Plaintiff’s Application for a Preliminary I

njunction at 6 n.3. Plaintiff refers to the reasoning set forth in its Application for a Preliminary I

njunction to support its request for a temporary restraining order.
II. D IS CUSS ION Rule 65(b) of this Court’s rules sets forth the “immediate and irrepara ble injury” standar

d applying to motions for ex parte tempora ry restrai ning ord ers. The Rule provides as f

ollows: A temporary

restraining order may

be granted without written or oral notice to the adverse party or that party’s a

ttorney only

if (1) it clearly appears from specific facts shown by affidavit or by the verified complaint that immediate and irreparable injury, loss, or damage will result to the applicant before th e advers e party or that party ’s attorne

y can be heard in opposition , and (2) the applicant’s attorney certifies to the court in writing the efforts, if any , which have been made to give the notice and the reasons supporting his claim that notice should not be required. USCIT R. 65(b) (emphasis added). I n Plaintiff’s Application for a Temporary Restraining Order, Jazz certifies that it served a copy of this motion on defenda nt’s attorneys. See Pl.’s ApplicationCourt No. 04-00514 Page 4

for a T.R .O. at 1 n. 1. Howev er, Jazz fai ls to show that immedia te, irre parable injury will befa ll Jazz if its appl ication f

or a temp orary

restrai ning ord er is not g ranted. Such a showing is required in order for this court to grant “ the extraordinary e quitable relief that is a temporary restraining order.” Warner-Lambert Co. v. United States , 24 CIT 205, 208 (2000). Jazz supplies the court with a variety of reasons to support its request for a temporary restraining order, including the unconvinc ing argument that Customs must attain leave of court before conducting any

future sampling or testing of the imported mercha ndise that is the subject of this action. See Pl.’s Application for a T.R.O. at 2; Pl.’s Application for a Preliminary Injunction at 4-5. Jazz directs attention to the holding of this Court in Washington International Insurance Co. v. United States , 25 CIT 207, 218, 138 F. Supp. 2d 1314, 1326 (2001), quoting specific ally

the lang uage in the opinio

n stating that “[j]uri sdiction o ver Custom s’ action s is

measure d at the time the summo ns is filed . Once e

ntries ar e proper ly b efore t

he Court, Customs is powerl ess to exer

t authorit y ov er these

entries i n the abse nce of a Court orde

r.” The holding i n Washington International Insurance Co. , however, does not support plaintiff’s contention. In relevant part, Washington International Insurance Co. addressed the issue of whether Customs has

the authority , absent a

court or der, to r eliquida te entrie s after t

he jurisd iction of t his Court under 28 U.S.C. § 1581(a) has attached to an action to contest the denial of a n administrative protest challenging the original liquidations. In that situation, this Court held the
agency ’s action in reliquidation to be null and void, reasoning that reliquidation of the entries after the commencement of litigation essentially would divest the Court of jurisdiction to preside over the action. See Washington International Insurance Co. , 25 CIT at 218, 138 F. Supp. 2d at
1326. The Court

conclude d that hold

ing othe rwise “c ould unila

terally hinder th e judicia

l proces sCourt No. 04-00514 Page 5

and arbitrarily

divest this Court of jurisdiction over legitimate legal claims.” Id. Jazz does not, and indeed could not, maintain that this court will be divested of jurisdict ion to hea r this matte

r if Customs

conducts some samp ling or t

esting o f the mer

chandise that Customs excluded from entry. Nor does Jazz convince this court that some sampling or testing will prevent Jazz from proceeding with this litigation. This court finds nothing in the holding of Washington International Insurance Co. , or elsewhere, that would deprive defenda nt of the opp ortunity

to sample or test the

subject me

rchandi se within t

he limits of

the perm issible process of discovery . To the contrary , defendant United States must be permitted to conduct proper discovery

and prepare its defense in this action in accorda nce with this Court’s rules. See USCIT R. 26(b)(1). Jazz makes the

further argume nt that an y in formation that may

be produ ced fro m postexclusion sampling or testing amounts to “post-litigation ‘evidence.” See Pl.’s Application for a Prelimina ry Injun ction at 7 -8. Jazz dema

nds that th e court, at the ve ry least, pr event Cus toms from sampling and/or testing the subject merchandise “until [the] plaintiff has had the opportunity to depose the Customs officials who made the protested decision to exclude” the subject merchandise. Id. at 7. Jazz posits that such a deposition is central to this litigation because it may

reveal whether “Customs instructed its port officers to exclude plaintiff’s g oods on the basis of improper or illegal factors.” Id. at 8. The court finds this argument unpersuasive. Plaintiff is challe nging the denia l by Customs of i

ts protest of the de terminat ion to exclu

de its merchandise from entry , based on the ITC’s g eneral exclusion order. The court reviews the protest d enial de novo , as requ

ired by 28 U.S.C. § 2 640(a)( 1). I n this de novo procee ding, plaintiff bears th e burden

of provin g that th e decisi on of Custo ms to exclude the merc handiseCourt No. 04-00514 Page 6

2 The importance of proving where the shells that were used to refurbish the imported disposable cameras were first sold stems from the United States Court of Appea ls for the Federal Circuit’s holding in Jazz Photo Corporation v. International Trade Commission , 264 F.3d 1094 (Fed. Cir. 2001), cert. denied, 536 U.S. 950 (2002). In Jazz Photo Corporation , the Court of Appeals for the F ederal

Circuit he ld that L

FFPs tha t underw ent a pat

ent-exha usting f irst sale in the United States and that are refurbished by a process constituting “permissible repair” do not violate the intellectual property rights of the patent holder. was incorrect. See Universal Elec. Inc. v. United States , 112 F.3d 488, 491 (Fed. Cir. 1997) (citing 28 U.S.C. § 2639(a)(1)). Even were plaintiff able to show that the decision to exclude the merchandise was based on insufficient evidence or “improper factors,” such a showing would not be central to this litigation because it would be insufficient to satisfy the burden of proof required of plaintiff by statute. Jazz also contends that court supervision over any sampling or testing of the subject mercha ndise is ne cessar

y in order to protect the integ rity of Jazz’s “Master L ot Number ” sy stem,
i.e. , the inventory control sy stem under which the LFF Ps were refurbished. See Pl.’s Application for a Preliminary

Injunction at 6-7. According to Jazz, the Master Lot Number sy stem is an internal tracking sy stem developed to ensure, inter alia , that the used camera cases (“she lls”) from which the imported disposable cameras were produced were subject to a patent-exhausting first sal e in the Un

ited State s. 2 See id. at 6-7. “ Accord ingly , any separa tion of g oods from

their constituent entries, or removal of goods from their pac kages, whether for testing or otherwise, could impair plaintiff’s ability to present its ca se-in-chief.” Id. at 7. Jazz has not shown how the presentation of its case will be impaired by the de fendant’s selection and handling of samples such that Jazz would suffer immediate or irrepara ble injury. It is in the interest of each par ty to preserve

identifying infor

mation during the selection and handling of samples, including preservation of a ll cartons and other packaging , so that theCourt No. 04-00514 Page 7

samples will have probative value. This identify ing information would include, but would not

necessa rily be limited

to, marks on packa ges tha t could ide

ntify plaintiff ’s Master Lot Nu mbers, which plaintiff relied upon in presenting its case in Jazz Photo Corporation , Slip Op. 04-146, a case involving “substantially identical [disposable] cameras.” Pl.’s Application for a Preliminary Injunction at 2. Neither party reasonably

could expect to gain an advantage in litiga tion from sampling that is conducted carelessly or in bad faith, and plaintiff has made no showing that defendant intends to conduct sampling in this way . Moreover, the court is not aware of any thing that would prevent plaintiff from conducting its own sampling during the discovery pr

ocess. The court expe cts that th e partie s will extend to each o ther the

coopera tion in disc overy

that is contempl ated by

the Rules o f this Cour

t. Next, Jazz argues that the testing process will destroy the merchandise tested, thus inflictin g Jazz with e conomic harm. Jazz ass erts that : any testing of

plaintiff’s merchandise which attempts to determine whether the goods have been “ permissibly repaire d” or whether the goods un derwen t a first s ale in the

United Sta

tes is nec essarily destructive testing. Such testing involves, at a minimum, the removal of the goods from their outer packa ging and the removal of inner packages and labe ls, rendering the goods unsalable. I t may also involve opening the camera shells, breaking the light-tight boxes, and

exposing t

he film, r enderin g the ca mera not only unsalable but also unusable. Pl.’s Application for a Preliminary I njunction at 8. Jazz argues that any such “ destructive testing ” will impa

ir its “pr operty interest ” in the su

bject L FFPs, po inting ou

t that Jazz is fr

ee to export the excluded disposable cameras and sell such merchandise in other mar kets. See id. The shortcoming of this argument is the lack of any showing that defendant, absent an ex parte temporary r

estraining order, will subject to destructive testing so g reat a quantity of

the importedCourt No. 04-00514 Page 8

LFF Ps as to ca

use plain tiff economic har

m. Absent s

uch a showing, th

is court w ill not pre sume th at de fe nd an t i nt en ds to co nd uc t s am pl in g a nd te st in g, or ot he r a sp ec ts of di sc ov er y, unreasonably , uncooperatively , or in bad faith. The remaining arguments made in Jazz’s applications for injunctive relief present evidentiary issues that do not addr ess whether Jazz will suffer immediate, irreparable harm if a tempora ry retrain ing orde r is not issu

ed. Such i ssues ar

e not ripe for dec ision durin

g this ea rly stage of the litigation.
III. C ONCLUS ION The factual assertions and argume nts advanced by

plaintiff do not constitute a showing of immediate and irreparable injury . Therefore, it is hereby ORDERED that Plaintiff’s Application for a Temporary

Restraining Order is denied. /s/ Timothy C. Stanceu Timothy C. Stanceu Judge

Dated: January 25, 2005

New York, New York