Opinion ID: 211089
Heading Depth: 2
Heading Rank: 4

Heading: Scope of Investigation

Text: The trial court found as fact that [i]mportations related to the 1992 model year and thereafter were not within the scope of Customs' investigation. Negligence Decision, 395 F. Supp. 2d at 1196. It based that finding entirely on the testimony of Customs' own witness, Inspector Turner, who testified in his deposition that [w]e told Ford we were looking five years backward, and that importations occurring in 1992 would be outside the scope of the investigation. Id. He further testified at trial that the investigation had to be cut off at some point because the scope of the investigation would only extend that far—we knew we couldn't extend the investigation forever.4 Despite that finding, in calculating Ford's penalty, the trial court appears to have included tenders related to the 1992 and 1993 model years, including engines for the 1993 Taurus SHO (payment of $404,100); V-6 engines for the 1992 model year 4 Turner's trial testimony suggested that the cut-off could have been in 1992 or 1993, but he retreated from that position when presented with his deposition testimony, which stated that the investigation did not include importations occurring in 1992 or later. 05-1584 23 (payment of $695,874); and transmissions for the 1992 model year (payment of $458,893). See id. at 1201-03. These tenders were outside the scope of the investigation, Ford argues, and therefore should not have been included in the penalty. Ford further alleges that the trial court included in its calculation of tenders for which it was unclear to which model year the tenders related. Several tenders included within the calculations related to both in-scope model years and out-of-scope model years. See, e.g., id. at 1200 ¶ 54 (tender relating to undeclared engineering and tooling cost prior to 1993 model); id. at 1200 ¶ 61 (tender relating to lump-sum payments for the 1991 and 1992 model year Festiva); id. at 1203 ¶ 80 (tender relating to transmissions imported for the 1989 through 1992 model year); id. at 1201 ¶ 67 (tender relating to 1993 Taurus SHO engines); id. at 1197-98 (tenders relating to tooling assists and payments for model years 1987-1992). Ford asserts that Customs' failure to prove the extent to which the duties at issue under these disclosures related to matters within the scope of Customs' investigation means that these tenders must be excluded from any penalty calculations. The government contends that the trial court's finding 18—which states that entries relating to the 1992 model year were outside the scope of the investigation— was taken out of context and pertained only to the scope of the investigation at its inception in mid-1991. It offers no support for this assertion, however, save citation to the very pages of the transcript relied upon by the trial court in rendering its fact-finding. The government also asserts that various documents in the record demonstrate[] the [Customs] agents' understanding that the scope of the investigation included model year 1992 vehicles and parts even if the entries relating to the 05-1584 24 merchandise post-dated the June [7, 1991] meeting. We reject this attempt to overturn the trial court's fact-findings, which the government has not appealed. The trial court found, as fact, that importations related to the 1992 model year were not within the scope of Customs' investigation. Negligence Decision, 395 F. Supp. 2d at 1196. That finding appears in a section of the opinion titled Findings of Fact Relevant to the Commencement and Scope of Customs' Investigation. Id. at 1193. The statement's context and plain meaning are both unmistakeable: the scope of the investigation did not include entries relating to any model year after 1991. The Court of International Trade therefore erred when it included tenders relating to model years 1992 and later in its penalty calculations. The tenders relating to post-1991 model years in paragraphs 67, 75, and 79 of the trial court's opinion should have been excluded from those calculations. With respect to tenders involving multiple model years, the question is more complicated. Ford asserts that Customs had the burden of proving the extent to which those disclosures related to matters within the scope of the investigation; the government argues that Ford's tenders failed to satisfy the specific requirements for prior disclosures set forth in 19 C.F.R. § 162.71(e) and § 162.74, and therefore cannot claim the prior disclosure safe harbor from violations of 19 U.S.C. § 1592. We agree that whether Ford's tenders relating to multiple model years qualified as prior disclosures is irrelevant to whether the trial court properly included those tenders in its penalty calculations. To the extent that those tenders included amounts relating to model years outside the scope of the investigation, no violation was ever alleged or proved with respect to them, and they have no need of the prior disclosure 05-1584 25 safe harbor. The appropriate remedy for this error is to remand the case to the Court of International Trade for additional fact-finding as to which portion of the multi-year tenders related to model years within the scope of the investigation.