Court Opinion

ID: 819128
Source: CourtListenerOpinion
Date Created: 2013-02-04 06:04:53.848+00
Date Added: 2024-06-11T09:02:55.606628
License: Public Domain

Slip Op. 02-23

           UNITED STATES COURT OF INTERNATIONAL TRADE

____________________________________
                                    :
SONY ELECTRONICS, INC.,             :
                                    :
                  Plaintiffs,       :
                                    :
                          v.        :                 Court No.      98-07-02438
                                    :
UNITED STATES,                      :
                                    :
                  Defendant.        :
____________________________________:

[Harbor Maintenance Tax refund awarded pursuant to 28 U.S.C. § 1581(a) jurisdiction with
post-summons interest]

       Galvin & Mlawski (John J. Galvin) for plaintiff Sony Electronics, Inc.

      Robert D. McCallum, Jr., Assistant Attorney General, David M. Cohen, Director,
Commercial Litigation Branch, Civil Division, United States Department of Justice (Jeanne E.
Davidson, Todd M. Hughes, and Jeffrey A. Belkin), Richard McManus Office of the Chief
Counsel, United States Customs Service, of counsel, for defendant.

                                            OPINION

       RESTANI, Judge: This matter is before the court for entry of judgment following the

court’s opinion finding pre-judgment interest is not owing except as provided in 28 U.S.C. §

2644. See Swisher Int’l, Inc. v. United States, Slip-Op. 01-144 (Ct. Int’l Trade Dec. 11, 2001).

The court has jurisdiction in this Harbor Maintenance Tax refund suit pursuant to 28 U.S.C. §

1581(a), which is limited to actions “contesting the denial of a protest.” See Swisher Int’l, Inc.

v. United States, 205 F.3d 1358, 1364 (Fed. Cir.), cert. denied, 581 U.S. 1036 (2000). Because

Sony timely contested Customs’ denial of its HMT refund requests through Customs’ formal
COURT NO.      98-07-02438                                                                 PAGE    2

protest process, the parties are in agreement that refunds arising under § 1581(a) are now due.

The principal to be refunded pursuant to that provision remains in dispute.

       Plaintiff Sony Electronics, Inc. (“Sony”) seeks a refund of all HMT payments made

during the last three quarters of 1990 and all of 1991 and 1992.1 The total amount requested by

Plaintiff is $522,886.71.2 Defendant argues that the court possesses § 1581(a) jurisdiction only

as to certain payments made during that time period because Plaintiff did not correctly identify

the remaining payments in its protests.3 Defendant argues that Plaintiff’s § 1581(a) refund

should, therefore, be limited to $284,655.36. The parties agree that Plaintiff is, at minimum,

entitled to a refund of the payments totaling $284,655.36 pursuant to § 1581(a) jurisdiction. The

difference between the two amounts ($238,231.35) represents payments made by Plaintiff during

the same period, as verified by Customs, but which were not included in the quarterly reports

1
  The parties agree that Plaintiff received a refund in 1999 under 28 U.S.C. § 1581(i) of three
payments made later than those at issue in these matters. See Sony v. United States, No. 95-03-
00297 (Ct. Int’l Trade 1999). Presumably, plaintiff does not seek refund under 28 U.S.C. §
1581(i) here because of the two year time bar of 28 U.S.C. § 2636(i) applicable to § 1581(i)
claims.

2
  In its proposed judgment, Plaintiff inadvertently understated the amount due. Plaintiff listed a
payment in the first quarter of 1990 as $50,220.86. In a letter to Plaintiff dated January 11,
2002, Defendant states that the amount is actually $50,226.86, a difference of $6.00. The court
will consider the higher amount conceded by Defendant as the correct amount and calculate
accordingly.

3
  While the court maintains jurisdiction under § 1581(i) for HMT refund claims not originally
protested, see U.S. Shoe v. United States, 523 U.S. 360 (1998), there is no statutory provision for
interest on claims made under § 1581(i). See IBM Corp. v. United States, 201 F.3d 1367, 1375
(Fed.Cir. 2000).
COURT NO.       98-07-02438                                                                   PAGE     3

attached to Plaintiff’s protests.4 The dispute, therefore, is whether these additional payments

were protested.

        Section 514 of the Tariff Act enumerates the requirements for a valid protest. 19 U.S.C.

§ 1514. Section 1514(c)(1) requires that a protest “must set forth distinctly and specifically . . .

each [Customs] decision . . . as to which protest is made . . . .” Although the “decisions”

traditionally protested involve imports, the Federal Circuit determined that a denial of an HMT

refund request is a protestable decision. See Swisher, 205 F.3d at 1369. Defendant argues that,

under § 1514(c)(1) and its implementing regulation,5 Plaintiff was required to explicitly identify

each contested HMT payment in its protest. The dispute at hand is a legal one and no material

facts are at issue.

        Generally, a protest “must be sufficiently distinct and specific to enable the Customs

Service to know what is in the mind of the protestant” at the time of the protest. Computime,

Inc., v. United States, 772 F.2d 874, 878-79 (Fed. Cir. 1985). “The test for determining the

validity and scope of a protest is objective and independent of a Customs official’s subjective

4
  To the extent necessary, the court considers these additional payments conceded by defendant
as amendments to Plaintiff’s protests. The court may allow amendments to assert claims which
could have been made in the original protest. See Schieffelin & Co. v. United States, 61 Cust.
Ct. 397, 401, 294 F. Supp. 53, 56 (Cust.Ct. 1968) (claim for duties added to claim for taxes on
same merchandise), aff’d 57 C.C.P.A. 66, 424 F.2d 1396 (C.C.P.A.), cert. denied 400 U.S. 869
(1970). Although a party may amend its protest at the agency level pursuant to 19 U.S.C. §
1514(c)(1)(D), it would have been futile for Plaintiff to amend these protests because, at that
time, Customs was not granting any HMT refund denial protests brought on constitutional
grounds.

5
  19 C.F.R. § 174.14(a)(6) requires that “[t]he nature of, and justification for the objection set
forth distinctly and specifically with respect to each category, payment, claim, decision, or
refusal . . . .”
COURT NO.       98-07-02438                                                                     PAGE   4

reaction to it.” See Power-One Inc. v. United States, 23 CIT 959, 964, 83 F. Supp. 2d 1300,

1305 (1999). If the protest reasonably apprises the collector of the objection, a protest is legally

sufficient. See Mattel, Inc. v. United States, 72 Cust. Ct. 257, 377 F. Supp. 955 (1974). The

court generally construes a protest in favor of finding it valid unless the protest “gives no

indication of the reasons why the collector’s action is alleged to be erroneous . . . .” See Koike

Aronson, Inc., v. United States, 165 F.3d 906, at 908 (Fed. Cir. 1999) (quoting Washington Int’l

Ins. Co. v. United States, 16 CIT 599, 602 (1992)). Customs protest procedures were not created

to address HMT refund requests and, therefore, the court will not rigidly construe ambiguities

against Plaintiff.

        Customs original protest procedures were intended to allow importers the ability to

contest more traditional Customs decisions, such as liquidation or reliquidation. See, e.g.,

Mitsubishi Electronics America, Inc., v. United States, 18 CIT 929, 932, 865 F. Supp. 877, 880

(1994) (“The protest informs Customs that corrections effected by a reliquidation have not

appeased the importer and explains why the importer finds particular corrections

unsatisfactory.”). Because Customs had not created procedures and related forms to address the

unique and unforeseen problems related to the HMT on exports, Plaintiff had no other option

than to file its constitutional protests on Customs’ standard protest form, Customs Form 19.

        Plaintiff filed two protests on separate Customs Forms 19, both dated October 23, 1995.

In the first protest, Plaintiff requested a “refund of the Harbor Maintenance Fee (HMF) deposited

with respect to the 2nd, 3rd, and 4th quarters of 1990, and 1st through 4th quarters of 1991, 1992 and

1st quarter of 1993.” Def.’s App., Tab B at 1. In the second protest, Plaintiff requested refund of

payments made during the “2nd, 3rd, and 4th quarters of 1992 and the 1st and 2nd quarters of 1993.”
COURT NO.      98-07-02438                                                                        PAGE   5

Def.’s App., Tab C at 3. Both forms clearly state the reason for protest: “It is claimed that the

HMF was unconstitutionally assessed on the exports covered by the Quarterly Summary Reports

and should be refunded pursuant to the Amended Quarterly Reports.” Defendant argues that,

because the time periods identified in the two protests overlap and because different quarterly

reports are attached to each form, this is “conclusive evidence” that Plaintiff intended each

protest to include only specific payments. The court first addresses the submission of separate

protests.

        Defendant argues that Plaintiff submitted two protests covering the same time period

because Plaintiff’s protests were directed at specific payments, not all payments, made during

that time period. It is more likely that Plaintiff submitted two protests because it was unclear

whether a single protest would sufficiently notify Customs of Plaintiff’s claims. Customs Form

19 identifies the protesting party by “importer” number.6 See Form 19, Section 1 - “Importer

and Entry Identification.” Plaintiff’s first protest identifies “Sony Electronics, Inc.” as the

importer and lists the importer number as 22-28788067NY. Def.’s App., Tab B at 1. The

second protest also identifies “Sony Electronics, Inc.” as the importer but lists the importer

number as 22-2878067SD.

        Plaintiff presumably has two importer numbers because Sony exports different goods

from different ports or through two separate exporters. The attached quarterly reports confirm

that Plaintiff made HMT payments under both numbers. It is reasonable to assume that Plaintiff

6
  The Customs form requires the protestor to submit its “importer” number. Because the Export
Clause prohibits any tax on exports, see U.S. Shoe, 523 U.S. 360, Customs would not need to
identify exporters in its protest form except in the context of an exporter’s protest of a denial of
an HMT refund request. That Form 19 identifies parties protesting HMT refund denials by
“importer” number is indicative of Form 19's overall inadequacies here.
COURT NO.      98-07-02438                                                                     PAGE   6

submitted separate protest forms because Plaintiff was unclear whether it could contest payments

made under one identification number in a protest specified under another number. That

Plaintiff submitted separate forms is more likely a result of Customs’ lack of direction than

Plaintiff’s intent to protest only specific payments. In any case, Plaintiff’s subjective intent is no

more at issue than is Customs’ subjective understanding of the protests. The court finds that

Plaintiff’s separate submissions should be interpreted as a reasonable attempt to cover as many

claims as possible given the forms provided. The court, therefore, turns to Defendant’s

argument regarding the quarterly reports attached to Plaintiff’s protests.

       Prior to U.S. Shoe, Customs required all exporters to file Harbor Maintenance Fee

Amended Quarterly Summary Reports (Customs Form 350) to indicate the value of goods

exported and the amount of HMT paid during that quarter. See Swisher, 205 F.3d at 1361

(describing Customs requirements for submitting Forms 350). Plaintiff attached several of its

quarterly reports to its protests. The reports directly correspond to the importer identification

numbers discussed previously. For example, only quarterly reports associated with 22-

28788067NY are attached to Plaintiff’s first protest, which identifies Sony as importer number

22-28788067NY. Likewise, only quarterly reports associated with Sony 22-2878067SD were

attached to the second protest, which identifies Sony as importer number 22-2878067SD.

Because both of Plaintiff’s protests request that the HMT payments “be refunded pursuant to the

Amended Quarterly Reports,” Defendant argues that Plaintiff’s refund should be limited to those

payments identified in the quarterly reports attached to Plaintiff’s Forms 19.

       Regardless of the documents attached, the core of Plaintiff’s refund requests and

subsequent protests was that the HMT was unconstitutionally assessed on exports. Defendant
COURT NO.      98-07-02438                                                                    PAGE   7

would have the court determine that Plaintiff conveyed to it only a protest of the simultaneously

documented payments as unconstitutional and that the Export Clause somehow did not apply to

those payments not listed on the attachments. The court finds Defendant’s suggestion

untenable. It is reasonable to assume that, because of the aforementioned inadequacies of the

protest process, Plaintiff’s attachments were an ad hoc method of supplementing a necessarily ad

hoc protest and, therefore, not representative of the breadth of Plaintiff’s claim. That Plaintiff

submitted two separate protests or attached specific quarterly reports to those protests is not

representative of or limiting on Plaintiff’s overall claim that the HMT is unconstitutional and

that Plaintiff was requesting refund of all HMT payments on exports for those quarters

specifically claimed on the face of the protests.

       “[H]owever cryptic, inartistic, or poorly drawn a communication may be, it is sufficient

as a protest for purposes of section 514 if it conveys enough information to apprise

knowledgeable officials of the importer's intent and the relief sought.” Mattel, 72 Cust.Ct. at

262, 377 F. Supp. at 960. Because Plaintiff was limited by the procedures and forms available

and because the protest was based on an overarching constitutional claim, the court finds that

Defendant was reasonably apprised that Plaintiff objected to the denial of a refund of all HMT

payments on exports during the listed quarters.

       The court finds that Plaintiff’s §1581(a) claims include all HMT payments on exports

made during the quarters mentioned in the protests. Judgment shall enter accordingly.

                                               ________________________
                                                     Jane A. Restani
                                                        JUDGE
       Dated: New York, New York
              This 26th day of February, 2002.