Opinion ID: 365814
Heading Depth: 1
Heading Rank: 1

Heading: Exclusive Customs Court Jurisdiction

Text: 24 Plaintiffs contend that the district court has subject-matter jurisdiction over a substantive and procedural challenge to the 1979 Allocation Rules because the rules, although peripherally related to imports, do not involve any actions by Customs Service officials and have a primary purpose other than the traditional tariff objectives of raising revenues and controlling the flow of imported goods into the United States. They rely strongly on Federal Energy Administration v. Algonquin SNG, Inc., 426 U.S. 548, 96 S.Ct. 2295, 49 L.Ed.2d 49 (1976). 25 Algonquin was an action in the district court against the Secretary of the Treasury, challenging the President's authority under the Trade Expansion Act, 19 U.S.C. § 1862, to impose certain license fees on imported oil. The jurisdictional issue was addressed only in an unpublished opinion by the district court, and not by either the Supreme Court or circuit court opinions. See Algonguin SNG, Inc. v. Federal Energy Administration, 171 U.S.App.D.C. 113, 128, 518 F.2d 1051, 1066 (1975), Rev'd, 426 U.S. 548, 96 S.Ct. 2295, 49 L.Ed.2d 49 (1976). 26 In Algonquin, the district court determined that the license fee system promulgated by the President pursuant to his authority under 19 U.S.C. § 1862(b) to adjust the imports of (oil) and its derivatives so that such imports will not so threaten to impair the national security was not a tariff or duty within the intent of 28 U.S.C. § 1582(a)(2). The court determined that the fee was not substantively grounded on the customs laws, but was a  'regulatory measure enacted for the protection of national security.'  Therefore jurisdiction was predicated, not on 28 U.S.C. § 1582(a)(2), but on 28 U.S.C. §§ 1331 or 1340. 27 Algonquin is consistent with those cases which look, not to the method, but to the purpose of the statute. See, e. g., Precise Imports Corp. v. Kelly, 218 F.Supp. 494 (S.D.N.Y.1963), Aff'd, 378 F.2d 1014 (2d Cir.), Cert. denied, 389 U.S. 973, 88 S.Ct. 472, 19 L.Ed.2d 465 (1967); Croton Watch Co. v. Laughlin, 208 F.2d 93 (2d Cir. 1953). In each of these cases, the purposes of the challenged statutes were other than customs purposes, and the statutes were found not to be a part of the customs laws. Thus exclusive jurisdiction did not lie in the Customs Court. 28 The present case is distinguishable from the Algonquin line of cases because the 1979 Allocation Rules have a substantial relation to traditional customs purposes, I. e., protection of domestic industry from foreign competition and the raising of revenues, even though the rules also have the concurrent purpose of promoting insular economic development. Both the legislative history of Public Law 89-805 and the preamble to the 1979 Allocation Rules reflect the substantial purpose of protecting domestic industry by discouraging funnel-through operations. See S.Rep. No. 1679, 89th Cong., 2d Sess., Reprinted in (1966) U.S.Code Cong. & Admin.News, pp. 4389, 4395-96; 43 Fed.Reg. 60313. And, viewed as a whole, the statute and rules merely provide for a partial exemption from duties normally imposed on foreign goods. See General Headnote 3(a) of the Tariff Schedules of the United States, 19 U.S.C. § 1202. Thus it is apparent that the customs purpose is not peripheral and that plaintiffs' challenge to the 1979 Allocation Rules is one directed at the classification and rate and amount of duties chargeable under the Tariff Act of 1930, as amended. Therefore, jurisdiction is exclusively vested in the Customs Court pursuant to 28 U.S.C. § 1582(a). 29 Our decision is guided by the intent of Congress. In enacting 28 U.S.C. § 1582, Congress intended that matters involving customs laws should be heard by one tribunal so that uniformity of decision would result. J. C. Penney Co. v. U. S. Treasury Department, 439 F.2d 63, 66 (2d Cir.), Cert. denied, 404 U.S. 869, 92 S.Ct. 60, 30 L.Ed.2d 113 (1971); See also Fritz v. United States, 535 F.2d 1192, 1194 (9th Cir. 1976); Sneaker Circus, Inc. v. Carter, 566 F.2d 396, 399 (2d Cir. 1977). If the district court should have jurisdiction over this type of action, inconsistent district and circuit court opinions on both jurisdictional and substantive revenue and protection claims would result. Moreover the Customs Court would be denied jurisdiction in the greatest area of its expertise. We do not believe that Congress intended these results.