Opinion ID: 3167457
Heading Depth: 2
Heading Rank: 1

Heading: Statutory Authority to Waive Certificates of

Text: Origin
The majority opinion states that “the Trade Court was correct to apply Chevron deference in reviewing Customs’ remand explanations.” Maj. Op. at 8. A court reviewing an agency’s interpretation of a statute it is entrusted to administer applies Chevron deference if the “agency interpretation claiming deference was promulgated in the exercise of [Congressionally delegated] authority.” United States v. Mead Corp., 533 U.S. 218, 227 (2001). An agency may exercise Congressionally delegated authority through adjudication, notice-and-comment rulemaking, or through some other “legislative type of activity” indicative of “comparable congressional intent.” Id. at 227, 232. Ford argues that no deference is due because Cus- toms’ remand explanation is “far removed not only from [the] notice-and-comment process, but from any other circumstances reasonably suggesting that Congress ever thought of . . . deserving [ ] deference.” Appellant’s Br. at FORD MOTOR COMPANY v. US 11 16 (quoting Mead, 533 U.S. at 231). Customs repeats the Trade Court’s rationale that Customs’ interpretation is reasonable under Chevron. Yet Customs fails to explain why its remand explanation should be afforded Chevron deference at all. I would find that Chevron deference does not apply to Customs’ remand explanation. Customs does not identify any instance in which it officially interpreted its authority to waive certificates of origin for refund claims as stemming from reconciliation statutes. To the contrary, Customs’ publications suggest that reconciliation is a vehicle by which refunds and certificate of origin waivers are granted under § 1520(d). See, e.g., Modification of National Customs Automation Program Test Regarding Reconciliation, 62 Fed. Reg. 51,181, 51,182 (Sept. 30, 1997) (characterizing reconciliation as a “vehicle to file post-importation refunds claims under 19 U.S.C. § 1520(d)”) (emphases added). See also, e.g., Modification and Clarification of Procedures of the National Customs Automation Program Test Regarding Reconciliation, 67 Fed. Reg. 61,200, 61,201 (Sept. 27, 2002) (“There are two ways to make a 1520(d) NAFTA claim: One way is to file [a traditional 1520(d) claim] and the other is to make a 1520(d) claim in accordance with the Reconciliation process.”). The Trade Court agreed that Customs’ sources con- sistently cite § 1520(d) as authority for issuing refunds through reconciliation. Ford, 978 F. Supp. 2d at 1358 (“The court notes that Customs has not always provided importers the clearest guidance on this issue and has referenced § 1520(d) when discussing the Reconciliation Program, which implies that ‘waiver’ is the same whether the claim was made through reconciliation or not.”). Customs points to no regulations, letters, or documents supporting its current interpretation. Customs’ remand explanation thus finds no basis in any source that would ordinarily demand Chevron deference. 12 FORD MOTOR COMPANY v. US Customs argued in its brief to this court prior to this court’s most recent remand that the reconciliation program was consistent with waiver authority under § 1520(d). In its brief, Customs explained that “Customs expressly waived the timely submission of the Certificate of Origin requirement of § 1520(d) with regard to all claims submitted pursuant to Customs’ Reconciliation Program.” Appellee’s Br. at 10. Customs explained that reconciliation program certificate waiver arose under § 181.22(d)(1)(i), because “Customs satisfies itself that imported goods will qualify for NAFTA treatment when it accepts participants into the reconciliation program.” Ford IV, 715 F.3d at 916. At oral argument, Customs still indicated that its ability to waive the certificate of origin filing requirement under reconciliation was pursuant to NAFTA section 503, therefore arising under § 181.22(d)(1)(i). Oral Argument at 17:49, available at http://oralarguments.cafc. uscourts. gov/default.aspx?fl=2012-1186.mp3. Customs argued that the application process governing reconciliation justified treating the two types of refund claims differently. Ford IV, 715 F.3d at 916. Customs’ interpretation morphed on remand. In its brief in the current appeal, Customs argues that its remand report “justifies the different treatment given to certificate of origin waivers under traditional section 1520(d) claims and to section 1520(d) claims made through the Reconciliation Program.” Appellee’s Br. at 29. The majority opinion finds that Customs exercised its authority to prescribe regulations to govern traditional 19 U.S.C. § 1520(d) claims by promulgating 19 C.F.R. § 181.22, and that “Customs was duly authorized by 19 U.S.C. § 1484(b) to implement the reconciliation program.” Maj. Op. at 6–7. It explains that “Customs has interpreted the various statutes as creating two separate FORD MOTOR COMPANY v. US 13 frameworks: one governs Customs’ waiver authority with respect to traditionally-filed claims, and the other prescribes the particular process of waiver with respect to reconciliation-based claims.” While this may be Custom’s current interpretation, I would not accord this interpretation deference, as there is no indication that Customs interpreted the statutes this way in the past. It appears that Customs’ current interpretation of the basis for waiver in reconciliation—as arising not under § 1520(d) and 19 C.F.R. § 181.22(d)(1)(i) but instead under other statutes discussing reconciliation generally—was crafted for the purpose of this litigation. As a mere “convenient litigation position,” Customs’ interpretation is not entitled to Chevron deference. See Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 213 (1988). “Congress has delegated to the administrative official and not to appellate counsel the responsibility for elaborating and enforcing statutory commands.” Id. (quoting Inv. Co. Inst. v. Camp, 401 U.S. 617, 628 (1971)). I therefore would review the statutes without Chevron deference to Customs’ interpretation. Even if not entitled to Chevron deference, a statutory interpretation by Customs is ordinarily entitled to deference proportional to the “‘thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade.’” See Mead, 533 U.S. at 228 (quoting Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944)); Deckers Corp. v. United States, 752 F.3d 949, 954 (Fed. Cir. 2014). An interpretation that a court finds unpersuasive, however, as I find Customs’ interpretation, is not entitled to deference, particularly when the interpretation emerges during litigation with no opportunity for public comment. See Christopher v. SmithKline Beecham Corp., 132 S. Ct. 2156, 2169–70 (2012). Accordingly, I would employ traditional tools of statutory interpretation to determine whether Customs has independent 14 FORD MOTOR COMPANY v. US authority under reconciliation statutes to waive certificates of origin. ii. Source of Certificate of Origin Waiver Authority NAFTA Article 501(1) requires NAFTA governments to establish “a Certificate of Origin for the purpose of certifying that a good being exported from the territory of a Party into the territory of another Party qualifies as an originating good.” NAFTA art. 501(1), 32 I.L.M. at 358. Article 502 defines certificate of origin requirements for claiming preferential tariff treatment at the time of importation or later through a refund claim. An importer claiming preferential tariff treatment at the time of importation must “make a written declaration, based on a valid Certificate of Origin, that the good qualifies as an originating good,” and “have the certificate in its possession at the time the declaration is made.” Id. art. 502(1), 32 I.L.M. at 358. Similarly, an importer applying for a refund of excess duties paid must present both “a written declaration that the good qualified as an originating good at the time of importation” and “a copy of the Certificate of Origin.” Id. art. 502(3), 32 I.L.M. at 358. NAFTA Article 503 is a provision establishing specific exceptions to the certificate of origin requirement. See id. art. 503, 32 I.L.M. at 358–59. Article 503 states that a “Certificate of Origin shall not be required” in three circumstances. Id. at 358. The first two exceptions apply to the importation of goods whose value does not exceed U.S. $1,000 or the equivalent. Id. art. 503(a), (b), 32 I.L.M. at 358–359. The third exception applies to the importation of goods into the territory of a party that has waived the certificate of origin requirement. Id. art. 503(c), 32 I.L.M at 359. Article 503’s exceptions apply to both preferential tariff claims at importation and refund claims because, as a specific provision, Article 503 is an exception to Article 502’s general requirements. See, e.g., Morton v. Mancari, 417 U.S. 535, 550–51 (1974) (“Where FORD MOTOR COMPANY v. US 15 there is no clear intention otherwise, a specific statute will not be controlled or nullified by a general one.”) (citations omitted); see also Medellin v. Texas, 552 U.S. 491, 506 (2008) (“The interpretation of a treaty, like the interpretation of a statute, begins with its text.”). As this court explained in Ford II, by implementing NAFTA Article 502’s refund provision, § 1520(d) also implemented Article 503’s certificate of origin exceptions. Ford II, 635 F.3d at 555 (“While § 1520(d) does not specifically refer to the waiver provision of NAFTA Article 503(c), it is obvious that § 1520(d) was designed in part to permit the implementation of Article 503(c)’s waiver authority via Customs’ regulations.”). Like Article 502(3), § 1520(d) requires an importer to submit a copy of a certificate of origin. While no domestic statutory provision parallels NAFTA Article 503 precisely, NAFTA’s Statement of Administrative Action, 19 U.S.C. § 3311, injects Article 503’s exceptions into § 1520(d) for the purpose of refund claims. Id. at 555, n.2; Bestfoods v. United States, 165 F.3d 1371, 1374 (Fed. Cir. 1999) (“With [the NAFTA Implementation Act], Congress approved NAFTA, as well as a ‘statement of administrative action’ that was submitted with the legislation.”); Medellin, 552 U.S. at 504–05 (explaining that a treaty is domestic law either when self-executing or when implemented by Congress). In sum, § 1520(d) implements NAFTA’s certificate of origin waiver authority as negotiated by the NAFTA Parties. Absent § 1520(d)’s implementing provisions, the United States could not waive certificate of origin requirements for NAFTA-traded goods. In contrast to § 1520(d), the statutory provisions governing reconciliation were not subject to NAFTA negotiations and not part of NAFTA’s implementing legislation. The reconciliation provisions do not address NAFTA refund claims specifically. See 19 U.S.C. §§ 1401(s), 1484(b). Sections 1401(s) and 1484(b) define and regulate the electronic reconciliation process. That process did not 16 FORD MOTOR COMPANY v. US exist at the time NAFTA entered into effect. It is true that the reconciliation statutes’ language relates to imports generally. Yet such general language cannot be construed to independently authorize § 1520(d) refund claims or certificate of origin waivers associated with those refund claims because those matters are “dealt with in another part of the same enactment,” § 1520(d). See RadLAX Gateway Hotel, LLC v. Amalgamated Bank, 132 S. Ct. 2065, 2071 (2012) (quoting D. Ginsberg & Sons v. Popkin, 285 U.S. 204, 208 (1932)). I would hold that the reconciliation statutes do not independently implement Article 503’s certificate of origin exceptions for § 1520(d) refund claims.