Opinion ID: 209941
Heading Depth: 2
Heading Rank: 2

Heading: Deemed Liquidation and Commerce Error

Text: Judicial review under the APA is precluded if any other statute that grants consent to suit expressly or impliedly forbids the relief which is sought. 5 U.S.C. § 702. In Shinyei-CAFC(I), we held that the liquidation of Shinyei's entries did not preclude judicial review of Shinyei's Commerce-error claim under the APA, because the Tariff Act does not expressly or impliedly forbid the relief sought by Shinyei for erroneous liquidation instructions  namely, reliquidation of the subject entries at the lower rate so [Shinyei] can receive a refund of the overpaid duties. 355 F.3d at 1306, 1310 n. 8 (explaining that `reliquidation' is the re-calculation of the duties or drawback accruing on an entry). We acknowledged that the Tariff Act does not explicitly provide for this relief, but wrote that [w]e reject the [United States'] suggestion that the statute's silence as to reliquidation in the context of Commerce error can be construed as a prohibition of reliquidation in such cases. Shinyei-CAFC(I), 355 F.3d at 1312. Although in Shinyei-CAFC(I) we assumed that Shinyei's entries had been actually liquidated pursuant to Commerce's clean-up instructions, and we therefore did not consider the section of the Tariff Act concerning deemed liquidation, we now hold that nothing in the deemed-liquidation statute forbids the Court of International Trade from ordering reliquidation as a remedy for Commerce's failure to comply with 19 U.S.C. § 1675(a)(2)(C) in its liquidation instructions to Customs. The deemed-liquidation statute, 19 U.S.C. § 1504, was enacted in 1978. See Pub.L. No. 95-410, § 209(a), 92 Stat. 888, 902 (1978). The prior law had been that Customs might delay liquidation as long as it pleased, and with or without a formal suspension notice. Ambassador Div. of Florsheim Shoe v. United States, 748 F.2d 1560, 1562 (Fed.Cir.1984). In Ambassador, we noted that Congress enacted the statute because of `the uncertainty importers were being kept in, often for years, as to whether they might face further exactions, or when the refunds to which they might be entitled would be paid.' Wolff Shoe, 141 F.3d at 1118-19 (internal citations omitted). Thus, as we have explained, [t]he primary purpose of section 1504 was to `increase certainty in the customs process for importers, surety companies, and other third parties with a potential liability relating to a customs transaction.' Int'l Trading Co. v. United States, 281 F.3d 1268, 1272 (Fed.Cir.2002) (quoting Dal-Tile Corp. v. United States, 829 F.Supp. 394, 399 (1993)). Here, the parties agree that Shinyei's entries were deemed liquidated in 1998 under subsection (d) of the deemed liquidation statute, which applies after liquidation has been suspended pending litigation. In 1998 this subsection read as follows. Except as provided in section 751(a)(3) [19 U.S.C. § 1675(a)(3)], when a suspension required by statute or court order is removed, the Customs Service shall liquidate the entry within 6 months after receiving notice of the removal from the Department of Commerce, other agency, or a court with jurisdiction over the entry. Any entry not liquidated by the Customs Service within 6 months after receiving such notice shall be treated as having been liquidated at the rate of duty, value, quantity, and amount of duty asserted at the time of entry by the importer of record. 19 U.S.C. § 1504(d) (1994). This statute does not discuss reliquidation of an entry deemed liquidated  reliquidation is neither expressly provided for nor expressly prohibited. Yet the Court of International Trade held that judicial review of Shinyei's APA claim was precluded by this section, reasoning that [w]hen courts have determined that entries were deemed liquidated under 19 U.S.C. 1504(d), they have previously set aside Customs' actual liquidation and have treated the deemed liquidation as being final, and citing four cases in support of this proposition. Shinyei-CIT(II), 491 F.Supp.2d at 1220. The cases relied on by the Court of International Trade, however, do not hold or suggest that entries deemed liquidated under section 1504(d) may never be reliquidated, even where the deemed liquidation resulted from Commerce's error in issuing liquidation instructions. Rather, these cases hold only that when an entry is deemed liquidated, the duty rate is the deposit rate, and Customs may not recover additional duties from the importer thereafter. See NEC Solutions, 411 F.3d at 1343 ([B]ecause Customs did not liquidate within six months, the entries should have been deemed liquidated[, and thus] NEC is entitled to a refund of any additional duties imposed....); Int'l Trading Co., 281 F.3d at 1271 (affirming holding of deemed liquidation) (ITC [the importer]... contend[s] that the entries should be deemed liquidated at the deposit rate.); United States v. Cherry Hill Textiles, 112 F.3d 1550, 1560 (Fed.Cir.1997) (In cases in which a liquidation has become final, the government cannot seek to recover additional duties simply by making a new liquidation of the original entry.); Am. Int'l Chem., Inc. v. United States, 387 F.Supp.2d 1258, 1269-1270 (2005) (Because Customs did not liquidate the four entries ... at issue in this action within six months from the date Customs received notice of the removal of the suspension of liquidation, the entries liquidated by operation of § 1504(d) at the zero rate of antidumping duty asserted by plaintiff at the time of entry[, and] Plaintiff, therefore, is entitled to a refund....); cf. SKF USA, Inc. v. United States, 512 F.3d 1326, 1331 (Fed.Cir.2007) ([S]ection 1504(d) mandates deemed liquidation at the cash deposit rate regardless of whether the cash deposit rate is higher or lower than the rate instructed by Commerce....). Indeed, we recently confirmed that [u]nder the statutory tariff scheme enacted by Congress, the character of a deemed liquidation is procedural not substantive. Koyo Corp. of U.S.A. v. United States, 497 F.3d 1231, 1242 (Fed.Cir.2007). The deposit rate is the correct rate of duty assessed for a deemed liquidation under the procedures of 19 U.S.C. § 1504(d), but if it is adverse to the party being assessed the duties because it is contrary to the final review results then it is unlawful and has no substantive effect. Id. at 1242-43. [3] Although the Koyo case concerned a claim of Customs error rather than Commerce error, this core holding  that a deemed liquidation is unlawful and of no substantive effect if it is contrary to final review results  is equally applicable in the context of Shinyei's APA claim. Assuming that Shinyei's entries were covered by the Amended Review Results, their deemed liquidation at the deposit rate was unlawful because that liquidation was contrary to the Amended Review Results, which set forth lower duty rates than the deposit rate. See Shinyei-CAFC(I), 355 F.3d at 1302 (If Shinyei's entries were indeed covered by the Amended Review Results, as it claims, there was presumably an error somewhere in the instruction/liquidation process.). If there was an error in the instruction process, then Shinyei is entitled to a judgment ordering reliquidation pursuant to new, correct instructions. Nothing in the deemed-liquidation statute forbids this relief on the facts as alleged. Thus, regardless of whether the disputed entries are considered to have been deemed liquidated or actually liquidated, the Court of International Trade must reach the merits of Shinyei's Commerce-error claim before the court can decide whether this claim supports the remedy of reliquidation.