Court Opinion

ID: 818438
Source: CourtListenerOpinion
Date Created: 2013-02-02 23:37:01.062069+00
Date Added: 2024-06-11T15:25:00.412212
License: Public Domain

SLIP OP. 06-57

                  UNITED STATES COURT OF INTERNATIONAL TRADE

____________________________________
                                    :
WEST TRAVEL, INC.,                  :
                                    :
                  Plaintiff,        :                  Before: Jane A. Restani, Chief Judge
                                    :
            v.                      :                  Court No. 98-09-02786
                                    :
UNITED STATES,                      :
                                    :
            Defendant.              :
____________________________________:

                                             OPINION

[Defendant’s motion for summary judgment granted; case dismissed.]

                                                                               Dated: April 25, 2006

       Lane, Powell, Spears, Lubersky, LLP (Diane M. Butler) for plaintiff.

        Peter D. Keisler, Assistant Attorney General, David M. Cohen, Director, Todd M. Hughes,
Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of
Justice (Tara K. Hogan), Richard McManus, Office of the Chief Counsel, United States Bureau of
Customs and Border Protection, of counsel, for defendant.

               Restani, Chief Judge: This matter is before the court on the parties’ cross-motions

for summary judgment. Plaintiff seeks refund of Harbor Maintenance Tax (26 U.S.C. § 4461 et seq.

(2000)) (“HMT”) payments for various quarters from 1992 through 1996, which were made on

account of its Alaska passenger cruises. Plaintiff alleges that Alaska ports at which its cruises

stopped are statutorily exempt from the tax. The court finds that the claim plaintiff makes now

claim is not properly before the court, and that any amendment to assert such a claim would be futile

as the statute of limitations has run and the court lacks jurisdiction for other reasons.
COURT NO. 98-09-02786                                                                             Page 2

                                           BACKGROUND

                Plaintiff commenced this action on September 8, 1998, alleging that the HMT was

unconstitutional and asserting jurisdiction under 28 U.S.C. § 1581(i) (2000) (residual jurisdiction).

Related litigation has resolved all constitutional challenges, and the HMT has been upheld as

constitutional with regard to passenger cruises. See Princess Cruises, Inc. v. United States, 201 F.3d

1352, 1360 (Fed. Cir. 2000); Carnival Cruise Lines, Inc. v. United States, 200 F.3d 1361, 1369 (Fed.

Cir. 2000).1

                In response to defendant’s motion for summary judgment, plaintiff concedes that its

constitutional claim must fail, but alleges for the first time before the court that its cruises to Alaska

were exempt from the tax by virtue of 26 U.S.C. § 4462(b) (exempting Alaska, Hawaii, and

possessions from HMT on “cargo” loaded and unloaded at their ports) and, therefore, it is owed a

refund of $28,046.05, a much reduced claim from that asserted in its original constitutional cause

of action. Plaintiff has not filed a motion to amend its complaint to include this statutory claim.

Furthermore, plaintiff did not file for an administrative refund under 19 C.F.R. § 24.24(e)(4) (2000),

obtain an administrative denial, and protest that denial as prerequisites to a suit under 28 U.S.C. §

1581(a) (protest denial jurisdiction). Because this action was stayed for several years while the

constitutional litigation was completed in all respects, the court will not look for procedural niceties,

but will consider whether it may or should permit plaintiff to amend its complaint to assert the new

cause of action.

        1
         The tax is unconstitutional as applied to exports, United States v. U.S. Shoe Corp., 523
U.S. 360, 370 (1998), but those provisions are severable. Princess Cruises, 201 F.3d at 1358.
COURT NO. 98-09-02786                                                                         Page 3

                                          DISCUSSION

               In Swisher Int’l, Inc. v. United States, 205 F.3d 1358, 1364–65 (Fed. Cir. 2000), the

court determined that the 19 C.F.R. § 24.24(e) refund procedure was a viable way to challenge the

constitutionality of the HMT so that protest jurisdiction would lie under 28 U.S.C. § 1581(a). Prior

to that time, there was no established administrative procedure for constitutional challenges to HMT

collections. If there was any doubt as to the viability of 19 C.F.R. § 24.24(e) for general HMT

assessment issues, it was resolved by Swisher. Furthermore, as of early 2000, Swisher confirmed

that Customs Service refund regulations did not provide a time limit for filing refund claims. 205

F.3d at 1368. Thereafter, on July 2, 2001, after a period of notice and comment, the then United

States Customs Service promulgated a regulatory time-limit of one year from the date of payment

for requesting refunds thereof. See 19 C.F.R. § 24.24(e)(4)(ii) (2002); see also M.G. Maher & Co.,

Inc. v. United States, 26 CIT 1040, 1044 (2002) (upholding regulatory time limit for refund claims.)

Thus, for more than a year from the date of the Swisher opinion until the regulation became

effective, it should have been clear that administrative relief was available for past HMT refund

claims.2

               Plaintiff argues that it did not wish to split its cause of action, but it should have

known from early 2000, when the Carnival Cruise decision issued, that its constitutional claim would

not succeed and, in fact, it seems not to have decided to assert a statutory claim until late 2005 or

2006, when it decided to pursue the current claim. See infra next paragraph. Thus, plaintiff had

       2
        The court notes that until very recently, it maintained a website specific to HMT issues
by which all persons easily could stay abreast of legal developments. Of course, as indicated
above, legally sufficient notice existed apart from the website.
COURT NO. 98-09-02786                                                                           Page 4

nothing to split in 2000-2001, when it should have acted, as numerous parties did.3

               In 2005, after the court was informed by the Government that the court established

administrative claims procedures arising out of U.S. Shoe, 523 U.S. 360, had been completed and

that collateral litigation relating to interest on export based claims had been resolved, the court

determined to lift its general stay originally covering thousands of cases and to dismiss the remaining

HMT actions, save for cause shown.4 Plaintiff’s suit was not dismissed, rather, it was permitted to

litigate its claim based on its statements that it had constitutional claims remaining and a claim under

Princess Cruises, Inc. v. United States, 397 F.3d 1358 (Fed. Cir. 2005) (layover claims). See West

Travel, Inc. v. United States, No. 98-09-02786 (CIT Oct. 13, 2005) (order granting motion to stay

dismissal). It asserts neither claim now. (See Pl.’s Mot. for Summ. J.)

               Given these developments, the court sees no genuine excuse for plaintiff’s delay.

Nonetheless, assuming arguendo that all of the legal uncertainty surrounding the HMT and the

general stay do provide a good reason for seeking an amendment at this time, the court will address

whether such an amendment would be futile.

               First, it is clear that a suit under 28 U.S.C. § 1581(i) must be brought within two years

of claim accrual. See 28 U.S.C. § 2636(i)(2000). None of the payments which plaintiff seeks to

       3
           Apart from the challenges based on the effects on the HMT statute, as a whole, of the
successful challenge under the Export Clause, some parties challenged the HMT based on the
Port Preference and Uniformity Clauses of the Constitution because of the very exemptions now
relied on by plaintiff. Those challenges failed. See, e.g., Thomson Multimedia Inc. v. United
States, 340 F.3d 1355, 1363–66 (Fed. Cir. 2003).
       4
        See U.S. Shoe Corp. v. United States, Slip Op. 05-89, 2005 WL 1767959 (CIT Jul. 27,
2005). The court had over the years lifted the stay at various times to allow action in individual
suits.
COURT NO. 98-09-02786                                                                           Page 5

recover were made after August 8, 1996. (Def.’s App. to Mot. for Summ. J. 1–2.) This suit was

filed more than two years later, in September 1998. Thus, 28 U.S.C. § 1581(i) jurisdiction is not an

available avenue for recovery of the payments at issue.5

               Second, plaintiff cannot assert a claim under 28 U.S.C. § 1581(a) because it has not

obtained a denial of a protest.6 Such a jurisdictional prerequisite begins with a refund request under

19 C.F.R. 24.24(e). Plaintiff has not alleged that it has ever begun the process that leads to 28 U.S.C.

§ 1581(a) jurisdiction. Neither party has opined as to whether such an administrative refund claim

is viable at this date, and it would appear to be too late under the current regulation. If, for some

reason, it is viable, plaintiff’s claim under 28 U.S.C. § 1581(a) is not ripe. In any case, no

amendment to the complaint based on this alternative jurisdictional basis is possible at this time.

               Accordingly, plaintiff may not amend its complaint to allege a statutory claim and this

action under 28 U.S.C. § 1581(i) will be dismissed.

                                                        /s/ Jane A. Restani
                                                              Jane A. Restani
                                                              Chief Judge

Dated: New York, New York.

This 25th day of April, 2006.

       5
         A companion case, West Travel, Inc. v. United States, Court No. 98-09-02785, decided
simultaneously herewith, addresses claims that are not time-barred for purposes of 28 U.S.C. §
1581(i).
       6
         Date of protest denial controls the statute of limitations under 28 U.S.C. § 1581(a).
See 28 U.S.C. § 2636(a).