Court Opinion

ID: 210849
Source: CourtListenerOpinion
Date Created: 2011-03-13 08:20:44+00
Date Added: 2024-06-11T17:28:03.340527
License: Public Domain

NOTE: This disposition is nonprecedential.

 United States Court of Appeals for the Federal Circuit

                                     2006-1531

                   INTERNATIONAL CUSTOM PRODUCTS, INC.,

                                                     Plaintiff-Appellant,

                                          v.

                                 UNITED STATES,

                                                     Defendant-Appellee.

        Simeon M. Kriesberg, Mayer, Brown, Rowe & Maw LLP, of Washington, DC, for
plaintiff-appellant. With him on the brief were Andrew A. Nicely and Priti Seksaria
Agrawal.

       Edward F. Kenny, Trial Attorney, Commercial Litigation Branch, Civil Division,
United States Department of Justice, of New York, New York, for defendant-appellee.
With him on the brief were Peter D. Keisler, Assistant Attorney General and David M.
Cohen, Director, of Washington, DC, Also on the brief was Barbara S. Williams,
Attorney in charge, International Trade Field Office, United States Department of
Justice, of New York, New York. Of counsel on the brief was Yelena Slepak, Attorney,
Office of Assistant Chief Counsel, United States Customs and Border Protection, of
New York, New York.

Appealed from: United States Court of International Trade

Judge Richard K. Eaton
                      NOTE: This disposition is nonprecedential.

 United States Court of Appeals for the Federal Circuit
                                      2006-1531

                    INTERNATIONAL CUSTOM PRODUCTS, INC.,

                                                             Plaintiff-Appellant,

                                           v.

                                   UNITED STATES,

                                                             Defendant-Appellee.

                           __________________________

                            DECIDED: January 25, 2007
                           __________________________

Before MICHEL, Chief Judge, DYK and PROST, Circuit Judges.

MICHEL, Chief Judge.

       International Custom Products, Inc. (“ICP”) appeals from a final judgment of the

Court of International Trade (“CIT”) dismissing Count I of its complaint under 28 U.S.C.

§ 1581(i) for lack of subject matter jurisdiction.   Int’l Custom Prods., Inc. v. United

States, No. 05-00615 (Ct. Int’l Trade July 18, 2006). In an unpublished order, the CIT

held that it did not have subject matter jurisdiction over Count I of ICP’s complaint

because the case should have been brought under 28 U.S.C. § 1581(a) instead. Int’l

Custom Prods., Inc. v. United States, No. 05-00615 (Ct. Int’l Trade June 20, 2006)

(“Order”).   Because the appellant’s arguments in support of reversal of the CIT’s
judgment are foreclosed by this court’s decision in Int’l Custom Prods., Inc. v. United

States, 467 F.3d 1324 (Fed. Cir. 2006), we affirm the CIT’s finding of no jurisdiction

under 28 U.S.C. § 1581(i).

                                            I

      ICP is an importer and distributor of a milk-fat based product that is used as an

ingredient in sauces, salad dressings, dips, and other food products. Prior to importing

its product, ICP requested that the United States Bureau of Customs and Boarder

Protection (“Customs”) issue an advance classification letter classifying ICP’s product

as a “sauce and preparation therefor” under the Harmonized Tariff Schedule of the

United States (“HTSUS”).      Customs granted the request and issued an advance

classification letter in January 1999, classifying ICP’s product as a “white sauce” under

HTSUS 2103.90.9091. In April 1999, ICP commenced importation of its product.

      In April 2005, Customs issued a Notice of Action notifying ICP that Customs was

reclassifying its product under HTSUS 0405.20.3000 as a “dairy spread.” On May 6,

2005, ICP commenced an action under 28 U.S.C. § 1581(i) against Customs

challenging the validity of the Notice of Action. In June 2005, the CIT found the Notice

of Action to be null and void for failure of the agency to follow the prescribed statutory

and regulatory procedures for lawfully revoking an advance ruling. Int’l Custom Prods.,

Inc. v. United States, 374 F. Supp. 2d 1311, 1326 (Ct. Int’l Trade 2005). The CIT also

held that the advance classification letter remained “in full force and effect” until

modified or revoked in compliance with Customs’ own regulations and procedures. Id.

at 1333.

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        The government appealed and on October 17, 2006, this court reversed the

CIT’s holding of jurisdiction, vacated its judgment on the merits, and remanded for

dismissal of the complaint. Int’l Custom Prods., 467 F.3d at 1326. We held that the

remedy provided by 28 U.S.C. § 1581(a) was not manifestly inadequate, and

accordingly, the CIT lacked jurisdiction under § 1581(i) to determine the validity of the

Notice of Action. Id. at 1327. This court rejected ICP’s allegations of financial hardship

and lack of prospective relief under 28 U.S.C. § 1581(a), as well as ICP’s contention

that delays inherent in proceeding under § 1581(a) would render any available relief

manifestly inadequate due to its financial distress. With regard to the latter, we held that

“delays inherent in the statutory process do not render it manifestly inadequate,” and

that Congress provided for an accelerated protest disposition process which was

available to ICP for some of its entries. Id. at 1327-28. Finally, since the CIT lacked

jurisdiction, this court held that it did not have jurisdiction to reach the merits of ICP’s

complaint, i.e., whether Customs’ Notice of Action violated 19 U.S.C. § 1625(c). Id. at

1328.

        In the interim between the government’s notice of appeal and this court’s

decision in International Custom Products, Customs published a Proposed Revocation

notice in the Customs Bulletin in August 2005 in accordance with the procedures set

forth in 19 U.S.C. § 1625(c). Customs subsequently issued a Revocation letter on

November 2, 2005 reclassifying ICP’s product as a “diary spread” under HTSUS

0405.20.3000. The Revocation became effective on January 2, 2006.

        On November 14, 2005, ICP filed another complaint against Customs before the

CIT.    In Count I of the complaint, ICP asserted that as a matter of law, the 1999

2006-1531                                    3
classification of its product as a “white sauce” was correct and the 2005 reclassification

thereof as a “dairy spread” was incorrect and violated U.S. tariff classification law. The

CIT ordered briefing on the issue of jurisdiction, and the government filed a motion to

dismiss all counts of the complaint for lack of subject matter jurisdiction. ICP argued

that the court had jurisdiction under 28 U.S.C. § 1581(i) to entertain Count I.

       When the CIT issued its Order on June 20, 2006, it did not have the benefit of

this court’s decision in International Custom Products. Nevertheless, the CIT granted

the government’s motion to dismiss Count I of ICP’s complaint for lack of subject matter

jurisdiction under 28 U.S.C. § 1581(i). The CIT held that it did not have subject matter

jurisdiction over Count I of ICP’s complaint because ICP failed to exhaust its protest

administrative remedies under 15 U.S.C. §§ 1514 and 1515 prior to filing with the CIT.

Order at 10. The CIT rejected ICP’s arguments that following administrative protest

procedures and bringing an action against the government under 28 U.S.C. § 1581(a)

would result in an unacceptable delay. Order at 11-12. In doing so, the CIT stated that

while those procedures may be “time consuming and vexing, they are nonetheless

plaintiff’s route to relief.” Order at 11.

       ICP voluntarily dismissed the remaining counts of its complaint pursuant to Fed.

R. Civ. P. 41(a)(1), and final judgment was entered. This appeal followed. This court

has jurisdiction under 28 U.S.C. § 1295(a)(5).

                                             II

       As in this court’s earlier opinion in International Custom Products, the sole issue

on appeal is whether the CIT possesses subject matter jurisdiction—here over Count I

of ICP’s complaint—under 28 U.S.C. § 1581(i). We review jurisdictional determinations

2006-1531                                    4
of the Court of International Trade without deference. DaimlerChrysler Corp. v. United

States, 442 F.3d 1313, 1316 (Fed. Cir. 2006). Jurisdiction under 28 U.S.C. § 1581(i)

may not be invoked unless jurisdiction under another subsection of § 1581 is either

unavailable or manifestly inadequate. Int’l Custom Prods., 467 F.3d at 1327 (citing

Norcal/Crosetti Foods, Inc. v. United States, 963 F.2d 356, 359 (Fed. Cir. 1992)).

       ICP presents five arguments as to why § 1581(a) jurisdiction is manifestly

inadequate: (1) § 1581(a) jurisdiction “fundamentally alters the legal framework of the

adjudication” because it requires that the court determine the correct classification of

ICP’s product de novo; (2) § 1581(a) jurisdiction is incapable of holding Customs

accountable for its failure to comply with the notice and comment process mandated by

19 U.S.C. § 1625(c); (3) § 1581(a) would lead to a more prolonged adjudication which is

incompatible with ICP’s “need for urgent relief;” (4) § 1581(a) cannot assure ICP of

prospective relief so that it may resume its business; and (5) § 1581(a) does not bind

Customs to classify future entries in accordance with the court’s classification

determination.

       We reject ICP’s latter three arguments for the same reasons stated in this court’s

earlier opinion. See Int’l Custom Prods., 467 F.3d at 1327-28. We will now address

ICP’s remaining assertions.

       First, ICP contends that § 1581(a) jurisdiction is manifestly inadequate because it

requires a de novo classification determination by the CIT, and does not allow for review

based on the administrative record. Specifically, ICP alleges that it is not seeking a de

novo tariff classification of its product, but rather is seeking judicial review of Customs’

decision to revoke its advance classification ruling. The fatal flaw in ICP’s argument is

2006-1531                                    5
that it cannot by Count I seek judicial review of Customs’ decision to revoke its advance

classification ruling because it has failed to follow the express statutory scheme for

doing so. That is, ICP failed to file a protest of Custom’s actions and avail itself of

jurisdiction under § 1581(a).    As this court held in its earlier opinion, the protest

procedure is available to ICP such that § 1581(a) is not manifestly inadequate. Int’l

Custom Prods., 467 F.3d at 1327. ICP cannot avoid the protest procedure by artfully

recharacterizing the issue on appeal.

       Second, ICP argues that § 1581(a) jurisdiction is manifestly inadequate because,

by failing to hold Customs accountable for its administrative determinations, the integrity

of 19 U.S.C. § 1625(c) is undermined and ICP’s legal rights obtained by virtue of

Customs’ advance ruling are effectively nullified.      ICP argues that, because CIT

classification determinations are not limited to the agency record, Customs will be

allowed to introduce new evidence justifying its revocation decision during a de novo

trial held by the CIT.   Under this scenario, ICP argues, § 1625(c) would have no

purpose because Customs could simply revoke an advance classification ruling at will

and avoid the consequences of its unlawful conduct by presenting new evidence to

support its decision during the ensuing trial under Section 1581(a).

       ICP’s arguments with regard to 19 U.S.C. § 1625(c) are effectively rebutted by

the government, which correctly points out that § 1581(a) is an adequate remedy, and

that, even if it were not, jurisdiction under § 1581(h) would be the only remedy available

to challenge the validity of Customs’ Notice of Action without requiring prior importation

2006-1531                                   6
of goods.∗ The government also points out that Count I is not related to violations of 19

U.S.C. § 1625(c), but challenges the classification of ICP’s goods as a matter of law.

       Finally, ICP contends that the fact that there were no prior entries of its product

distinguishes the instant appeal from our earlier decision in International Custom

Products. Specifically, ICP argues that the protest and review scheme contemplated

under § 1581(a) is unavailable because it did not import any product prior to filing this

action and has not imported any product since.         However, ICP’s decision to halt

importation of its product is its own doing. The government indicated that it was willing

to allow ICP to import a test shipment, which would be liquidated on the same day. ICP

could have filed a protest on that day, which Customs was willing to deny on the same

day.   ICP cannot manufacture jurisdiction under § 1581(i) by willfully avoiding the

prerequisites of § 1581(a).

       Therefore, for the reasons set forth above, the final judgment of the Court of

International Trade dismissing Count I of ICP’s complaint for lack of subject matter

jurisdiction is affirmed.

       ∗
               Under 28 U.S.C. § 1581(h), the CIT has exclusive jurisdiction over an
action seeking a pre-importation review of a classification ruling issued by the Secretary
of the Treasury, or a refusal to issue or change such a ruling, so long as the party
commencing the civil action demonstrates irreparable harm unless given an opportunity
to obtain judicial review prior to importation. 28 U.S.C. § 1581(h).

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