Court Opinion

ID: 818758
Source: CourtListenerOpinion
Date Created: 2013-02-03 08:28:38.603353+00
Date Added: 2024-06-11T13:17:22.894389
License: Public Domain

Slip Op. 04-69

            UNITED STATES COURT OF INTERNATIONAL TRADE

             BEFORE: RICHARD W. GOLDBERG, SENIOR JUDGE

ABEL VALDEZ,

        Plaintiff,

   v.                                      Court No. 03-00032

UNITED STATES
SECRETARY OF THE TREASURY,

        Defendant.

[Denial of customs broker’s license sustained; defendant’s motion
for summary judgment granted.]

                                              Dated: June 16, 2004

     Law Office of Monica Zapata Notzon (Monica Z. Notzon) for
plaintiff Abel Valdez.

     Peter D. Keisler, Assistant Attorney General, Barbara S.
Williams, Attorney in Charge, Harry A. Valetk, Civil Division,
Commercial Litigation Branch, United States Department of
Justice; Diane Galiano and James N. DeStefano, Office of
Assistant Chief Counsel, International Trade Litigation, United
States Bureau of Customs and Border Protection, Of Counsel, for
defendant United States.

                              OPINION

GOLDBERG, Senior Judge: This matter is before the Court on

plaintiff’s motion for summary judgment on the pleadings and

defendant’s motion for summary judgment on the administrative

record pursuant to USCIT R. 56.1(a).    Plaintiff Abel Valdez

challenges the decision of the Deputy Assistant Secretary of the
Court No. 03-00032                                             Page 2

Department of Treasury (“Treasury” or “Secretary”) affirming the

U.S. Bureau of Customs and Border Protection’s (“Customs”) denial

of his application for a customs broker’s license.

     For the reasons that follow, the Court finds that Treasury’s

decision to deny Valdez his customs broker’s license was

reasonable and supported by substantial evidence.       The Court has

jurisdiction pursuant to 28 U.S.C. § 1581(g).

                             I. BACKGROUND

     Plaintiff Abel Valdez filed his application for a customs

broker’s license on February 29, 2000.       He passed the written

examination in April 2000.    To obtain a license, an applicant

must also pass a background investigation.       After reviewing

Valdez’s application and the results of a standard background

investigation, the Port Director at Laredo, Texas recommended

that a license be issued to Valdez in a memorandum dated May 19,

2001.   See Administrative Record (“AR”), Doc. 7.      Upon request by

Customs Headquarters, the Office of Investigations at Laredo re-

opened the investigation for Valdez.    The basis for re-opening

the investigation was information that Valdez’s automobile had

been seized by the Drug Enforcement Administration in a currency

seizure.   See AR, Doc. 8.   Furthermore, Valdez’s brother was a

fugitive being sought by Customs for conspiracy to smuggle

marijuana into the United States.    Customs also requested and

obtained from Valdez a copy of a Chapter 13 bankruptcy filing
Court No. 03-00032                                           Page 3

that Valdez had disclosed in his application, proof of discharge,

and a recent credit report.    The credit report, dated July 16,

2001, listed two judgments, a state tax lien, and a dismissed

bankruptcy action.

     Based on the above information, Customs denied Valdez’s

application in a letter dated January 8, 2002.    See AR, Doc. 12.

Valdez appealed the denial pursuant to 19 C.F.R. § 111.17.    On

July 24, 2002, Customs informed Valdez that it was unable to

approve his application upon review by the Broker Licensing

Review Board.   Valdez appealed to Treasury, which upheld the

denial on November 21, 2002.    Valdez timely appealed Treasury’s

decision to the Court of International Trade.

                          II. DISCUSSION

A.   Standard of Review

     The decision of the Secretary to deny a customs broker’s

license will be upheld by the Court as a matter of law unless

arbitrary, capricious, an abuse of discretion, or otherwise not

in accordance with law.   See O’Quinn v. United States, 24 CIT

324, 325, 100 F. Supp. 2d 1136, 1138 (2000).    Findings of fact by

the Secretary supporting a customs broker’s license denial shall

be conclusive if supported by substantial evidence.    19 U.S.C. §

1641(e)(3); see also Bell v. United States, 17 CIT 1220, 1223-25,

839 F. Supp. 874, 877-79 (1993).
Court No. 03-00032                                           Page 4

B.     Denial of Plaintiff’s Application for a Customs Broker’s
       License was Reasonable and Supported by Substantial Evidence

       The Secretary has authority over matters involving customs

brokers, including issuing licenses under 19 U.S.C. § 1641(b).

The Secretary exercised his statutory authority to reject

Valdez’s appeal and sustain Customs’ denial pursuant to 19 C.F.R.

§§ 111.16(b)(1) and (3), which provide that an application for a

license may be denied for:

       (1) Any cause which would justify suspension or revocation
       of the license of a broker under the provisions of § 111.53;
       [or]

       (3) A failure to establish the business integrity and good
       character of the applicant[.]

19 C.F.R. §§ 111.16(b)(1) and (3).

       In its denial letter, Customs cited “several instances of

financial difficulties, including debts which were incorporated

into a Chapter 13 bankruptcy in May 1998, two judgments filed

against [Valdez] (one was satisfied), a state tax lien in the

amount of $12,599 and large overdue cellular phone bills.”

See AR, Doc. 12.    As a result, Customs determined that Valdez had

failed to establish his business integrity and good character, as

required by 19 C.F.R. § 111.16(b)(3).    In addition, Customs

concluded that Valdez had violated 19 C.F.R. § 111.16(b)(1) by

failing to disclose the two judgments and the tax lien against

him.    Under § 111.53, referenced in § 111.16(b)(1), a broker’s
Court No. 03-00032                                          Page 5

license may be suspended or revoked for “omitt[ing] to state in

any application or report any material fact which was required.”

19 C.F.R. § 111.53(a).

     The Secretary affirmed Customs’ decision under §

111.16(b)(3) based on the accumulation of a large amount of debt

by Valdez and his failure to meet other financial obligations.

See AR, Doc. 18.   The Secretary determined that the manner in

which Valdez handled his personal finances justified Customs’

concern that he would continue to demonstrate a lack of financial

responsibility in the future.

     Valdez argues that the Secretary’s decision was erroneous on

two distinct grounds.    First, Valdez claims that the denial was

actually driven by “criminal concerns” – namely, the fact that

his brother is a fugitive.   Although the record indicates that

Customs was concerned with Valdez’s relationship with his

brother, there is absolutely no mention of it in the Secretary’s

decision.   Accordingly, the Court finds it unnecessary to engage

in further inquiry on this issue.

     Second, Valdez challenges the Secretary’s reference to his

debts.   Specifically, Valdez argues that the majority of the

debts belonged to his ex-wife after being awarded to her in

divorce proceedings in 1999.    See AR, Doc. 15, Ex. B (Agreed

Final Divorce Decree).   According to Valdez, these debts were not

his responsibility and thus the accumulation of a large amount of
Court No. 03-00032                                           Page 6

debt cited in the Secretary’s decision was not adequately

substantiated.   As further evidence of his financial

responsibility, Valdez points to a credit report dated January

2003 showing that he has resolved debts belonging to his ex-

wife.1   Upon considering the record made before the Court, the

Court finds that the Secretary reasonably concluded that Valdez

failed to address the debts accumulated in his name in a

sufficiently thorough and timely manner, thereby demonstrating a

lack of financial responsibility.   See Chang v. United States, 26

CIT __, __, Slip Op. 02-126, at 7 (Oct. 24, 2002) (“The

possibility of drawing two inconsistent conclusions from the

evidence does not prevent an administrative agency’s finding from

being supported by substantial evidence.”) (internal citation

omitted).   Accordingly, the Court affirms the Secretary’s

decision that Valdez failed to establish the business integrity

and good character required by 19 C.F.R. § 111.16(b)(3).

                          III. CONCLUSION

     For the aforementioned reasons, the Court holds that the

Secretary’s denial of plaintiff’s application for a customs

     1
       Valdez submitted this credit report as part of his
complaint. See AR, Doc. 20, Ex. E. As defendant correctly
notes, it was not properly presented to the Court and thus cannot
be considered by the Court. The 2003 credit report is not a part
of the administrative record, and Valdez failed to seek leave
from the Court before providing this new information as required
by 19 U.S.C. § 1641(e)(4). See Bell, 17 CIT at 1225, 839 F.
Supp. at 879.
Court No. 03-00032                                          Page 7

broker’s license under 19 C.F.R. § 111.16(b)(3) was reasonable

and supported by substantial evidence.   Accordingly, the

Secretary’s decision is sustained.

     Defendant’s motion for summary judgment on the

administrative record is granted.    Plaintiff’s motion for summary

judgment on the pleadings is denied.

     Judgment for defendant will be entered accordingly.

                                   /s/ Richard W. Goldberg
                                _________________________________
                                   Richard W. Goldberg
                                   Senior Judge

Date:   June 16, 2004
        New York, New York