This ag ency ’s name w as off icially chang ed ef

fec tive Marc h 31, 2 007. See Na me 1 Chang e F rom the B urea

u of I mmigration and Customs E n fo rce ment to U.S. I mmigration and Customs Enforc ement, and the Bur eau o f C u s t o m s and B order Protection to U.S. Cust oms and Bor der Protec tion, 72 Fed. Reg . 20,131 (De p’t Homeland Sec urity , Apr. 17, 2007). Slip Op. 07-70 

## UNI TED STATES COU

RT OF INTERNATIO

NAL TRADE

____________________________________ : MI GUEL A. DEL GADO, : : Plaintiff, :

: Before: M USGRA VE, Jud ge v. : : Court No. 06- 00030 UN I TE D ST AT ES, : : De fe nd ant. : ____________________________________: M EM OR

AN DU M OP IN ION AN D O RD ER [P laintiff alleg ed inade quate notification of agen cy d ec i sion. The cour t found that ag ency

action might no t b e proper

beca use statute provide d that a “w ritten deter mination” was to be “ issued” at the conc lusion of the admini s t rative process a nd it was not clea

r whe ther the a g ency

had done so. Matter r emande d for f

urther pr ocee dings.] Dated: Ma y 11, 2007 Th e Mo on e y

L aw F ir m ( Neil B. Mooney ) for

the plaintiff. Peter D. Ke isler , A ssi sta nt A tto rn e y

Ge ne ra l; Barbara S. W

illiams , At t o rn ey I n Charg e, I nter n a ti o n a l T r a d e F ie ld

O f f ic e , Commercial L itigation B ranc h, United States Depa rtment of Just ice ( Ma rc e lla Po we ll); Il e na Pa tti e , Offic e of the Associate Chief Counsel, U nited States Customs and Bor der Protec tion, of counsel, for the def endant. By his complaint Miguel A. D elgado ( “De lga do”) a lleg es that United States Customs and Bor der Protec tion (“Customs” or “ CBP”) imprope rly deter mined that his customhouse broker s 1 license ( “L icense ”) should be r evoked. D elg ado raises f our main issues in support of his position, arguing that: ( 1) the Administrative L aw J udg e (“A L J ”) who presided at the administrative hea ringCourt No. 06-00030 Pag e 2

Delg ado also re quests the awa rd of attorney

fee s and costs p u rs u ant to the Equal 2 Acc ess to J ustice Ac t. See compl. para s. 45–46 (citing 28 U.S.C. § 2412(d)(1)( A)). (“H ear ing” ) improper ly

applied the doc trine of collateral estoppel ; (2) the AL J ’s deter mination that it was proper

to revoke Delg ado’s L icense beca use Delga do violated a Customs statute or re g ulation by making false or misleading statements was in e rror ; ( 3) the AL J ’s deter mination that it was proper to r evoke Delg ado’s L icense beca use De lga do was c onvicted of a felony that was ba sed on either : (a ) t he imp or ta tio n o r e xpor

tatio n o f m e rc ha

nd ise or (b ) t he c on du c t of

De lg a do ’s c us tom s b us ine ss was i n e r

r o r ; an d ( 4 ) th a t th e le tt e r in f o r mi n g D e lg a d o th a t h is L ic e n s e w a s b e in g revoke d insufficiently

notified him of the fa cts and re asons under ly ing Customs’s deter mination. 2 Bac kgr ound On Se pte mbe r 2 6, 19 89 , D e lg a do wa s is su e d c us tomho us e br ok e rs lic e ns e 11 63 4. Com pl. at par a. 2. In 1990, Delg ado for med a c orporati o n , L ancer International (“L ance r”) , which he r an for a pproxi mately

ten y ear s. Tr. at 161. Som e tim e pr ior to May 19 97 , qu e sti on s we re ra ise d a bo ut c e rt a in sh ipm e nts of

me rc ha nd ise handled by

L ance r. S

e e U n it e d S ta te s v . D e lgado , 3 2 1 F. 3 d 1338, 1341 (11th Cir. 2003) (“ Delgado ” ). Spe c if

ic a lly , Cu sto ms i ns pe c tor s f ound that sh ipm e nts arri vi ng in P or t E ve rg la de s, Florida that wer e d es cr i bed as c ontaining “ foodstuffs,” contained both f oodstuffs and liquor. See tr. at 116. B eca

use of this seemingirregularity , Customs and the B urea u o f Al cohol, Tobac co, Fire arms and E x plosives (“ATF ”) initiated a n investigation. Tr. at 116–17. On Aug ust 24, 2000, at the conclusion of the investig ation, Delg ado wa s indicted by a fe dera l g rand jury in the Southern District of Florida on twenty -nine felony counts of beinga co- conspirator in a sche me t o i ntroduce liquor into United St ates c ommerce without the pay ment of excise taxesCourt No. 06-00030 Pag e 3

Th is i s p os sib ly

so be c a us e a t so me po int

pr ior to D e lg a do ’s i nd ict men t Cu sto ms 3 dropped out of the investigation. See tr. at 117. there on. See Un ite d S

tat es o f A me ric a v . D e e

pa k Kum ar e t al

. , Ct. No. 00-0682 (Aug

. 24, 2 0 0 0 ), R. at 173 (citing 26 U. S

. C

. §§ 5601(a) (11), ( 12), 5608(b) ; 18 U.S.C. §§ 2, 371). I n ear ly 2001, Delg ado wa s tried by

a jury and convic ted of twe nty -eig ht of the t wenty -nine c ounts. See United States v. Miguel De lgado , Ct. No. 00-0682, (Sept. 6, 2001), R. at 165 (“Judgment” ). At trial it was aff irmatively

established that De l gado wa s awa re of , and par ticipated in, the conspira cy . Tr. at 252–53; J udg ment, Count One, R. at 165 (citing 18 U.S.C. § 371), Delgado , 321 F.3d at 1 346 (“Contra ry to what Delg ado cla ims, the jury had s u fficient evidence to find him guilty of the conspirac y .”). A t no point wa s Delg ado ac cused, indicte d, or convic ted of violating any law or

re g ulatio n e nf

or c e d b y Cus tom s . In Se pte mbe r, De lg a do wa s se nte nc e d to tw e nty -s e ve n mo nth s in

3 prison and orde red to pa

y restitution. J udg ment, R. at 168–69, 171. Delg ado timely appea led the trial Court’s dec ision. See D elgado , 3 21 F .3 d at 13 43 . A ft e r h is r e le a se , D e lg a do re su me d a c tiv e ly

wo rk ingin t

he c us tom s f

ie ld wi th the kn ow le dg e and ov e rs ig ht of the Di str ic t Court . T r. a t 21 5; see als o L etter f

rom United States District Court / District of Southern Flor ida / Probation Offic e of 6/18/04, R. at 113. On Aug ust 28, 2002, the Acting Port Director for the Miami Service Port sent a me mo to the Associate Chief Counsel rec ommending that Delg ado’s L icense be re voked. See Recommendation for Revoc ation of C ustomhouse Br oker Miguel A. Delg ado’s L icense , R. at 267. The memo stated that “[t] he proposa l for r ev o cation of this l icense (for cause ) is under c onsideration in ac corda nce with 19 CFR 111.53 (b)(1)

. As p er gu i d eli nes provided by the Off ice of Field Ope rations, y our revie w and r ecommenda

tion are r equeste d.” Id.Court No. 06-00030 Pag e 4

I t is no t c le ar w hy

the se “ re c or ds ” we re no t f ile d c on te mpo ra

ne ou sly wi th t he e ve nts 4 the y purp or

t to de sc ri be

. I nd e e d, the y we re a pp are ntl y g e ne rate d s e ve ra l w e e ks after Customs set into moti on the proc ess to revoke Delg ado’s L icense

.

Due to re dactions, it is unclear whether the sec ond broker

is the same per son as the 5 first broker

. Som e tim e in l a te 20 02 or e arl y 20 03 , D e lg a do fi le d hi s “ Tr ie nn ia l Status Re po rt ” wi th Customs

. See R. at 272. I n this document, Delg ado re spo n d ed i n the af firmative to a que stion reque sting whe ther he had “e ng ag ed in any conduct that could consti tute g rounds for suspe nsion or

revoc ation under Title 111.53? [si c] (i.e. convicte d of a f elony ).” Id

. On Fe b r u ar y 2 0 , 2 0 0 3 , th e Co u rt o f A p p e a ls f o r th e 1 1 th Ci r c u it is s u e d it s o pinion on Delg ado’s appea l. See D elgado , 321 F.3d 1338. The appellate Court affir med Delg ado’s c onviction on all twenty -eig ht counts and the trial Court’s “ decision in all respe cts.” Id. at 1349. Some t i me in mid-2003, “conc erns” wer e ra ised about De lga do’s continuing active involvement in the customs field. See I nformed Compl iance Contact Sheet (“Contact Sheet”) #1 of 3/24/04, R. at 240; C ontact Sheet #2 of 3/24/04, id. a t 24 1 . Co nta c t Sh e e t #1 me mor ia lize d th a t, 4

“ on or a bo ut Au g us t 2003 ,” an unid e nti fi e d bro ke r ap pr oa c he d Cust oms and inq uir e d a s to wh y

it would “ a ll o w a p e r s o nto o p e r a te a s a

b r o k e r a f te r b e in g c o n v ic te d

. ” R. a t 2 4 0

. T h e u n id entified broker complained that De lga do “was pulling clients he ha d under his old filer c ode . . . [and the unidentified broke r] wanted to know if Customs was doing any thing a bout this m atter.” Id . Contact She e t #2 me mor ia lize d th a t, o n Se pte mbe r 3 0, 20 03 , a n unid e nti fi e d b ro ke r sp ok e to a Cus tom s 5 repr esentative “about his and the trade ’s concern that Migue l Delg ado, havingbeen c onvicted and

arr ested w as still allowed to oper ate a s a broke r. [The unidentified broke r] was conc erne d that Customs would allow [a broker ] t o continue to oper ate in this ty pe of situation.” R. at 241.Court No. 06-00030 Pag e 5

Whil e it is not c lear to w hich y ear ’s re g ulations the Statement of Charg es re fer s, the 6 court notes that the regulations r eleva nt to this discussion wer e last revised 2000. See Rules and Reg ulations, 65 Fed. Reg . 13,880, 13,898–94 (De p’t Tre as. Mar . 15, 2000) (final rule). Since that time, the regulation’s lang uag e has r emaine d u n change d. Compare 19 C.F.R. §§ 111.32, .53–.81 (2000) with 19 C.F.R. §§ 111.32, .53–.81 (2007) On Marc h 9, the Port Direc tor for the Miami Service Port sent De lga do a “N otice and Statement of Charg es.” See R. at 153 (“Stateme nt of Charg es”) . The Statement of Cha rg es informe d Delg ado that his L icense might be re voked pursua nt to 19 C.F.R. §§ 111.53(c) & 111.32 (violating Customs law or r eg ulation by filing f al s e documentation), 19 C.F.R. § 111.53(b) ( convicted of a fe lony e ith e r i nv olv ingimp or

ta tio n o r ex po rt atio n o f m e rc ha nd ise or “ ari sin g ou t of

” c us tom s business), or 19 C.F.R. § 111.53(d) ( aiding and abe tting violation of Customs law). Id. at 153–54

. 6 I n addition, the Statement o f C h arg es informe d Delg ado that 5 U.S.C. §§ 554 and 558 “a re applic a b le to f o r ma l p r o c e e d in g s , ” th a t h e c o u ld b e r e p r e s e n te d

b y c o u n s e l, an d

th a t t h e H e a ring would be held on Ma

y 18, 2004. Id . at 15 9, 16 1; se e als o Orde r of 3/3/04, R. at 145, 147. On, M ay 18, the Hearing was held in Miami. Se e ge ne ra lly , T r . o f P r o c e e d i n g s , V o l s . I & I I . At the Hea

ring , the AL J took testimony from var ious Cust oms and ATF o fficia ls, and sever al other pe ople who testified a s to Delg ado’s g ood char acte r. Se e ge ne ra lly Tr ans c ri pts

. On Dec ember

17, the AL J issue d t h e re commendation as to the r evocation of Delg ado’s L icense

. See Re c omm e nded Dec isi on and Or de r, R. at 18 (“ Re c omm e nd e d D e c isi on ” ). Th is d o c u m e n t r e c i t e d t h e v ar i o u s e l e m e n t s r e l e v an tt o t h e A LJ ’ s d e t e r m i n a t i o n . Ins u m m ar

y , t h e A LJ state d th a t: I T I S HE L D that by a preponde ranc e of t h e e v i d ence

contained in the r ecor d of t his hear ing suppor ts license re vocation as a matter of law.Court No. 06-00030 Pag e 6 I T I S REC OMMENDED that the fac ts warr anting revoc ation be ser iously

rec onsidered in lig ht of the circ umstances of Migue l A. Delg ado being permitted by a United States District Court to continue in a license d Customs business, and i n further light of the g ood char acte r testimony

. . . , and the fact that ther e we re no violations of the fiducia

ry duty of accounting owed by Mr. Delg ado to customerimporters, and no c ustomer was injure d. Recommende d Dec ., R. at 34. On May 31, 2004, the Recommende d Dec ision a nd a ce rtified copy of the He aring rec ord were sent to the Depa rtment of Homela

nd Security

(“D HS”). See Certification of Recor d, R. at 9, 13. On Aug ust 2, 2005, the Acting Direc tor of Carg o and Tra ns p o rt at i o n Policy , Offic e of Planning a

nd Policy , Bor der a

nd Transpor

tation Security

Direc torate ( “B TS”) sent a memorandum to the Acting Assistant Secreta ry for Pol icy and P lanning , BTS (“Acting Assistant Secreta ry ”). See R. at 3 (“D ecision Memorandum”). The Decision Memorandum requested that the ActingAssistant Secre tary aff irm revoc ation of De lga do’s L icense

. See id. On t hat s ame da y , the ActingAssistant Secre tary sent a letter

to the Commi ssioner of CB P. See , R. at 1 (“Ac tion L etter” ). In t he Ac tion L etter, the Acting Assistant Secreta ry notified the Commissi oner of C BP t hat B TS was af

firming “CBP’s r evoca

tion of Mr. Delg ado’s lice nse.” R. at 2. The letter re quest ed t h e C ommissi oner “ensur e that CBP take s the appropr iate st eps t o inform M r. Delga do of t his decision pursuant to 19 CFR 111.74.” R. at 2. On Dec ember

3, the Assistant Commi ssioner of the Office of Field Ope rations for CB P sent De l gad o fo rmal notification that his L icense was be ing r evoked. See compl. ex. A (“Notification L e tte r” ). Th e No tif

ic a tio n L e tte r s ta te d, in r e le va nt p art , tha t “[y ]ou ar e he re by no tif ie d th a t th e U. S. De pa rtme nt o f H ome land

Se c ur ity ha s a ff ir me d U .S. Cus toms and Bor de r P ro te c tio n’ s ( CB P) decision to revoke y our Customshouse brokers lice nse.” Id

.Court No. 06-00030 Pag e 7

There afte r, on January

27, 2006, Delg ado commenc ed this action. Jurisdi ction and S tandard of Review Cus tom s h a s th e a

uth or ity to ini ti ate a

pr oc e e din g to s us pe nd

or re vo ke a c us tom ho us e broker s license pur suant to 19 U.S.C. § 1641(d)( 2)(B ) (2000). This Court has exclusi ve jurisdiction to reviewa dete rmination to revoke a customhouse broke rs l icense pursuant to 28 U.S.C. § 1581(g )(2) (2000). See Shiepe v. U n i t ed S t ates , 23 CI T 66, 72, 36 F. Supp. 2d, 402, 408 (1999) (citing 28 U.S.C. § 1581(g) (2) ( 1988)). The scope of the Court’s re view of such a proce eding is set out in 28 U.S.C . § 2640(a) (5) ( 2000), which provides for “Civil actions commenced to revie w any decision of the Sec reta

ry of the Tr easur

y under section [1641] , with the exception of dec isions under section [1641(d)(2)( B) ], which shall be g overne d by subdivision (d) of this section.” The c ourt pauses he re. As or ig ina lly

e na c te d, “ su

bd ivi sio n ( d) ” re a d a s fo llo ws : “ I n any c ivi l a c tio n no t sp e c if ie d in this section, the Court of I nternational Trade shall review the m atter as provided in section 706 of title 5.” 28 U.S.C. § 2640(d) (1976 Supp. V)

. I n other words, the statute direc tly tied this Court’s revie w of de terminations made by t h e S ecretar y of Tre asury

to provisions of Title 5—the Administrativ e P ro ce du re A ct (“ APA”). In 1987, 19 U.S.C. § 1641 and 28 U.S.C. § 2640 were g re a tly re vis e d. F ir st, in s e c tio n 1 64 1, Congress add ed la ngua g e de fi nin g the te rm “ c us tom s business.” See 19 U.S.C. § 1641(a)(2) (1982 Supp. V). Ne x t, Congre ss outlined the specific ty pes of disciplinary

proce dures Customs could initi ate a g ainst customs brokers, includingthe impositi on of monetar

y penalties (19 U .S.C. § 1641(d)(2)(A )), a nd the suspension or re vocation of lice nses (19 U. S.C. § 1 64 1( d) (2 )( B )) . In a dd iti on to the se c ha ng e s, the “ sc op e and

sta nd ard of re vie w” fo r t

his Court’s revie w of matters concer ning Custom s’s disciplinary proce dures wa s revised. See 28 U. S.C.Court No. 06-00030 Pag e 8

§ 2 6 4 0 (a )( 5 ) (1982 Supp. V). Spec ifically , this subdivi sion was modified to provide that de te rm inatio ns ma de by

the Ag e nc y we re to be re vie we d o n th e re c or d ma de be fo re the Court “ wi th the exception of dec isions under section [1641(d)(2)( B) ], which shall be g overne d by subdivision (d) of this section.” Id

. At that time, “ subdivision (d)” continued to firmly point to the APA. See id .; see also Shiepe , 23 CI T at 72, 36 F. Supp. 2d at 408 (citing 28 U.S.C. §§ 2640(a)(5) , (d) ( 1988)). I n 1 99 3, 28 U. S.C. § 26 40 (a ) wa s a g a in a me nd e d. At that ti me , Co ng re ss r e -w ro te the statut e t h u s l y: (4) Sec tion 2640 is amended—

(A) by rede signating subsec tion (d) as subsection (e); and (B ) by inserting afte r subsection (c ) the followingnew subsection:

“ (d ) I n a ny c ivi l a c tio n c omm e nc e d to revie w any

order o r decision of the Customs Service under se ction 499(b) of the Ta riff A ct of 1 9 3 0, the cour t shall review

the ac tion on the basis of the re cord befor e the Customs S ervic e at t he ti me of issuing such dec ision or order .”. [sic] P.L . 1 03 -18 2 Sec . 6 84 (a )( 4) , 1 07 Stat. 2 21 9; see 28 U.S.C. § 2640(d) (1988 Supp. V). As state d i nt h e l e g i s l a t i v e h i s t o r

y: Section 684 amends 28 U.S.C. 2640 to provide that in any civil action commence d to reviewan orde r or de cision by Customs with respec t to the denial, suspension or r evocation of the ac cre ditation of a private la boratory , the cour

t shall review the action on the basis of the rec ord bef

ore Customs at the time of issuing such de cision or orde r.Court No. 06-00030 Pag e 9

North Am. F r e e T r a d e Ag ree ment and I mplementation Act, 1993 U.S.C.A.A.N. 2552, 2707. In other words, Cong ress provi d ed a ne w scope of re view for deter minations made by

the Secr etar

y of Trea sury related to the ac cre ditation of private labor atories in “ n e w ” s u b d iv is ion 2640( d), and move d the “residual” APA sc ope of r eview to “ new” subdivision 2640(e). See 28 U.S.C. §§ 2640(d), (e) (1988 Supp. V). No other part of se ction 2640 was modified—includingsubdivision (a)(5), w hich continued to provide that “dec isions under section [1641(d)(2) (B )] . . . shall be g overned by

su bd ivi sio n ( d) of

thi s se c tio n. ” 28 U. S.C. § 26 40 (a )( 5) (1 98 8 Su pp . V ). Th e up sh ot o f t his Congr essional leg erde main is that now, instead of the statute fi rm ly basing this Court’s scope of revie w for a ctions initi ated under 19 U.S.C. 1641(d) (2)( B) on the APA, this Court i s directe d that the s c o p e o f it s r e v ie w is in f o r me d b y r e f

e r e n c e to th e “ d e n ia l, s u s p e n s io n o r r e v o c ation of the

acc reditations of a

private la boratory .” See 28 U. S.C. § 264 0( d) , (e ) (2 00 6) . I n r e vis ingthe statut e thusly , Congr ess has c reated a patent statutory absurdity

. Specifica lly , the statute now mandate s that the scope of this Cou rt’s re view of a deter mination to suspend or revoke a customhouse br okers license is to be based on the record made bef ore Customs in a proce eding to suspend or re voke the

a c c re dit a tio n o f a pr ivate la bo rator y . Thi s c ourt

ha s st a te d th a t, “ [w]he n th e lit e ra l w or ds of a statut e

cre ate a n absurd r esult, such a litera l interpretation m u s t b e rejected.” Koyo Corp. of U.S.A. v. United States , 2 9 C I T _

_ , _ _ , 4 0 3 F. S u

p p . 2 d 1 3 0 5 , 1 3 1 0 (2 0 0 5 ) ( c i t i n g Holy Trinity Church v. United States , 143 U.S. 4 57, 460 (1892)) . Her e, bec ause a literal re ading of the statute c reates an absurd result, the court, there fore , reje cts the plain meaning of the statute and finds that subdivision (e) sets out the proper

scope of revie w for this ac tion. see Kenny v. Snow , 401 F.3d 1359, 1361 ( Fe d. Cir . 2 00 5) (c iti ng5 U .S. C. § 70 6 w he n re vie wi ngde nia l of a c us tomho us e br ok e rs lic e ns e ). Th is be ingso , th e APApr ov ide s, in r e le va nt p art :Court No. 06-00030 Pag e 10 To the extent nece ssary to decision and wh en prese nted, the revie wing court shall de ci d e all rele vant questions of law, inter pret constitutional and statutory provisions, and dete rmine the mea ning or applicability

of th e t er m s of an a g ency action. The revie wing court shall— . . . (2) hold unlaw ful and set a side ag ency action, finding s, and conc lusions found to be— (A) a rbitrar y , capr icious, an abuse of dis c re tio n, or

otherwise no t in acc ordanc e with law . . . . 5 U .S. C. § 70 6. F ur

the rm or e , w he n r e vie wi ngCus tom s’ s d e te rm inatio ns to r e vo ke a c us tom ho us e broker s license, “ [t ]he findings of the Secre tary as t o the facts, if supported by substantial evidence , shall be conc lusive.” 19 U.S.C. § 1641(e)( 3). See U PS Customhouse Brokerage , Inc. v . United States , 30 CI T __, __, 442 F. Supp. 2d 1290, 1304 (2006) . Finally , the Court may not cons ider

argume nts that we re no t ra ise d be fo re the a g e nc y , unle ss re a so na ble g ro un ds e xiste d for

fa ili ngto do so. See 19 U.S.C. § 1641(e)(2)

. Whil e De lg a do ra ise s se ve ra l argume nts in s up po rt of his c a se , th e c ourt be g ins its ana ly sis by revi e w in g w h e th e r

Cu s to ms ’ s a d mi n is tr a ti v e p r o c e d u r e s w e r e p r o p e r . Sp e c if ic a ll y , th e c o u rt must a d d ress De lga do’s claim that the Notific ation L etter did not suffic iently apprise him of Customs ’s final de cision in this m atter. Discussion By statute, it is provided, in releva nt part, that: “F ollowing the c onclusion of the hea ring , the hear ing of

fice r shall transmit promptly the record of

the hea ring along with the finding s of fa ct and

rec ommendations to the Secre tary for de cision. The Secr etar y will issue a written decision, base dCourt No. 06-00030 Pag e 11

so le ly on the re c or d, se tti ngfo rt h th e fi nd ing s o f f

a c t and the re a so ns fo r t

he de c isi on .” 19 U. S.C. § 1 64 1( d) (2 )( b) . F ur

the rm or e , r e g ulatio ns pr ov ide , in re le va nt p art : I f the Sec reta

ry of the Trea sury , in the exercise of his discretion and based solely

on the re cord, issues a

n o rd er s uspending a broke r’s license or permit for a specifie d period of time or revokinga broke r’s lic e ns e or pe rm it .

. . the As sis tant C omm iss ion e r w ill pr omptl y provide wr itten notification of the orde r to the broke r . . . . 19 C.F .R. § 1 11 .7 4. Thus , th e pr oc e ss c on te mpl a te s th e fo llo wi ng : ( 1) that th e “ he ari ngof fi c e r” wi ll, at the conc lusion o f a hear ing, se nd the re cord of that hear ing a

nd a re commended de cision to the Assistant Comm issioner; (2) those mate rials will be re viewed, cul m inating in the issuanc e of a written decision that sets out the finding s of fac t a nd rea sons f

or the de cision; and finally , (3) notice that the customhouse broke rs license has bee n revoke d will be sent to a broke r. He re, the Record shows the following

. First, the AL J , at the conc lusion of the Hea ring , submitt ed the Rec ommended Dec ision and rec ord of the pr ocee ding to the D HS Office of Ge nera l Counsel. See Certification of Record, R. at 13. Second, a c o mponent of DHS (the B HS) revie wed the r ecor d and the Recommende d Dec ision. Se e, g e ne ra lly , Dec . Memo., R. at 3. I n the Dec ision Memorandum, BT S explained that revoc ation of Delga do’s L icense was warra nted and set out the facts and re asoning underlying that deter

mination. Id

. Th e De c isi on Me mor and

um s ta te d th a t th e Ag e nc y too k in to consideration the good charac ter evidence attested to at t he Hearing and explained that re vocation was still warra

nted because “[t] hese facts do not neg ate the a ctuality that [Delga do] was convicted on 28 felony

counts that involved impo rtation or exportation of liquor, and that a rose out of the

c on du c t of

his Cus tom s b us ine ss, and the a tten da

nt h arm to t he pu bli c that Co ng re ss h a s f

ound in making such conduc t criminal.” Id . at 5. B TS then sent a l et t er to the Assistant Secreta ry . See Action L et t er , R

. at 1 . I n this document, BTS summarized its determination, stated that it wasCourt No. 06-00030 Pag e 12

a ff ir min g re vo c a tio n o f D e lg a do ’s L ic e ns e , and re qu e ste d th a t “ CB P take s th e a pp ro pr ia te ste ps to i n fo rm M r. Delg ado of this dec ision pursuant to 19 CFR 111.74.” R. at 7. Finally , DHS sent De lg a do the No tif

ic a tio n L e tte r. I n th is l e tte r D HS s ta te d th a t “[y ]ou ar e he re by no tif ie d th a t th e U. S. De pa rtme nt o f H ome land

Se c ur ity ha s a ff ir me d U.S

. Cu stoms and

B or de r P ro te c tio n’ s ( CB P) decision to revoke y our Customshouse brokers lice nse.” N otification L etter. Delg ado conte nds that the Notification L etter “fa ils to addre ss e ither the fac tual basis or the

re a so nin g un de rl y ingthe de te rm inatio n o f t he De pa rtme nt o f H ome land

Se c ur ity and the CB P to

re vo ke De lg a do ’s Cu st om s bro ke r l ic e ns e . A g e nc y a c tio n w ill on ly

be up he ld o n [th e ] ba sis

art ic ulate d b y

[the ] ag e nc y .” Me m. i n Supp

. of P l. ’s Ru le 56.1 (a ) M ot. fo r J. o n th e Ag e nc y R. ( “ P l

. ’s M em . ”) at 5 (c i t i n g SEC v. Chenery Corp. , 3 1 8 U

. S

. 8 0 , 9 5 ( 1 9 4 3 ) )

. D e l g a d o a rg ue s th a t, here , the Notificat i o n L etter w as inade quate be cause he only “re ceive d a letter

containing one sentenc e dec lari n g revoc ation of his L icense without a rea son provided, and two se ntence s mentioning the r ight to appe al.” Id . at 5 ( c iti ng No tif ic a tio n L e tte r)

. Cus tom s a rgue s th a t 19 C.F .R. § 111.74 require s only that the Assistant Comm issioner notify the broke r that the l icense has been revoke d. This is exactly what wa s stated in the revoc ation letter that Mr. Delg ado rec eived from CBP. Fur thermore , Mr. Delg ado wa s alway s awa re of the re asons under ly ing CB P’s decision to revoke his lice nse. I ndeed, Mr . Delg ado re ceive d a Notice and Statement of Char g es, wh i ch specifie d the re levant re g ulatory pr ov isi on s and

fa c tua l ba se s u

po n w hic h CB P so ught to r e vo ke his license. Def .’s Mem. at 7–8 (c iting Statement of Char g es, R. at 153). I n response , Delg ado conte nds that the Notification L etter

contains no re ason whatsoever f or the re vocation, and doe s not addre ss new issues ar ising at the h ea ri n g. I t does not expl ain howCourt No. 06-00030 Pag e 13 violating ATF rules amounts to violations of CBP re g ulations, does not expl ain why

DHS/CBP ignor ed Judge Sippel’s re commendation to “seriously

rec onsider” r evocation, does not state why a monetar

y pe na lty or lic e ns e su sp e nsion

wa s in a de qu a te — it

do e s n ot e xpla in a t h i n g. Pl.’s Reply

at 6 (Notification L etter) . For the following rea sons the court allows that the Ag ency ’s pr oc e dure may

no t be pr op e r i n th is r e sp e c t. As an initial matter, a r eview of the Notification L etter shows that it does not, as pointed out by De lg a do , c on ta in a

ny fa c tua l f ind ing s o r r e a so nin g that su pp or t Cu sto ms’ s d e te rm inatio n to revoke Delg ado’s L icense . As argued by defe ndant, howeve r, there is nothing in the reg ulations that require any

such notification to include a fu l l re ci t ation of Customs’s reasoning . The que stion become s, then, whethe r De lga d o s hould have be en somehow a pprised of the underpinning s of Customs ’s deter

mination. As noted above, by statute Customs must “issue a written de cision, based

so le ly on the re c or d, se tti ng fo rt

h the fi nd ing s o f f

a c t and the re a so ns fo r t

he de c isi on .” 19 U. S.C. § 1641(d)( 2)(B ). He re, the court unde rstands t hat Delga do was not issued a doc ument that contained Customs ’s re asoning (for exampl e, t h e Action L etter, the Dec ision Memorandum, or some other “wr itten decisi o n ”)

. T h e cour t considers this to be a plausible sc enar io as the Ac tion L etter a nd Dec ision Memorandum appe ar to be internal ag ency memoranda , see R. at 1, 3, and there is no other document on the Rec ord that could other wise be c onstrued as be in g a “w ritten dec ision” that was issued to Delg ado. I f De lga do did not rece ive notice of the fa cts an d re asoning underlying Cus tom s’ s f

ina l det e rm inatio n, the qu e sti on , th e n, is w he the r C us tom s h a s f ull y c omp lie d w ithits statutory mandate, a

nd the cour

t cannot find, at this t ime, that it has. This is so because, a ssuming that the Action L etter and the Decision Memorandum f ulfill in principle the functions of the “ order ” and “w ritten dec ision,” it would seem that Customs must “issue” one or both of these documents (orCourt No. 06-00030 Pag e 14

Fundamental principles of fairne ss would seem to dictate that a broke r mu st be 7 provided with such infor mation. Defe ndant’s position that Delg ado wa s “a l wa y s awa re of the rea sons underlying CB P’s decisi on to revoke his license” at the time Delg ado initiated this action ri ng s h oll owbe c a

us e Cus tom s’ s d e te rm inatio ns a ft e r t he He ari ng we re no t ba se d so le ly on the fa c ts that formed the basis of the Statement of Ch ar ges . I ndeed, Customs’s deter minations after the Hea ring took into account a b ro ad er ra ng e of issues, includingthe conspira cy , Delg ado’s a ctions af t er t h e c o n s p i ra cy , an d

t h e go o d ch ar ac t er t es t i m o n y

at t es t edt o at t h e H ea ri n g. so me oth e r “w ri tte n de c isi on ” ) to an a ff e c te d part y —a nd he re that w a s n ot d on e . Co nv e rs e ly , if it is Cust oms’s position t hat the st atute does not require it to “issue” a “written decision” to a n aff ecte d pa rt y , it no wh e re e xpla ins wh y

it w a s n ot n e c e ssa

ry to d o s o. Th us , th e cou rt mus t r e mand

thi s 7 matter so that Customs may explain thi s proce ss further

.

Conclusion This matter is rema

nded so that def

endant may file a repor

t w ith the court indicating whether either: (1) pursuant to 19 U.S.C. § 1641(d)( 2)(B ), Delg ado should ha ve been i s s u ed a written decision that contained the facts and reasoning for revoking his L icense ; or (2) why the statute does not mandate that Customs issue Delg ado such a document. De fenda nt shall file this report by

May 25 , 2 00 7. I f Cus tom s d e te rm ine s th a t D e lg a do sh ou ld h a ve be e n is su e d a wr itt e n d e c isi on , it

sh a ll issue one to him by May 25, 2007, and De lga do may file a br ief a ddressing that written dec ision by June 15 , 2 00 7; d e fe nd a

nt may fi le a re sp on se to a

ny su c h b ri e f b y

June 29 , 2 00 7; D e lg a do may re ply to any such re sponse b y J uly

13, 2007. I f Customs determines that it need not issue a w ritten de te rm inatio n to De lg a do , D e lg a do may su bmi t a br ie f a dd re ssi ngthat is su e by

June 15 , 2 00 7;Court No. 06-00030 Pag e 15

de fe nd ant may re sp on d to any su c h bri e f by June 29 , 200 7; De lg a do may re ply to any su c h r e sp on se by J uly 13, 2007. All filings shall not exceed f ive pag es in leng th. SO OR DE RE D

/s/ R. Kenton Musgr ave R. KENTON MUSGRAVE, JUDGE Dated: May

11, 2007 New Y ork, Ne w York