Court Opinion

ID: 2724226
Source: CourtListenerOpinion
Date Created: 2014-09-08 16:00:50.954207+00
Date Added: 2024-06-11T10:03:03.726974
License: Public Domain

Slip Op. 14-103

                UNITED STATES COURT OF INTERNATIONAL TRADE

                               :
CARBON ACTIVATED CORP.,        :
                               :
          Plaintiff,           :
                               :                      Before: Gregory W. Carman, Judge
                 v.            :                      Court No. 13-00366
                               :
UNITED STATES AND U.S. CUSTOMS :
AND BORDER PROTECTION,         :
                               :
          Defendant.           :
                               :

                                      OPINION & ORDER

[Defendant’s motion to dismiss is granted.]

       Nancy A. Noonan, Arent Fox LLP, of Washington, DC, for plaintiff.

       Antonia R. Soares, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S.
Department of Justice, of Washington, DC, for defendant. With her on the brief were Stuart F.
Delery, Assistant Attorney General, Jeanne E. Davidson, Director, and Claudia Burke, Assistant
Director. Of Counsel on the brief was Edward N. Maurer, Deputy Assistant Chief Counsel, U.S.
Customs & Border Protection, of New York, NY.

                                                                             September 8, 2014

       CARMAN, JUDGE: Before the Court is the Motion to Dismiss (“MTD”) of Defendant

United States and U.S. Customs and Border Protection (“Defendant” or “Customs”) for lack of

subject matter jurisdiction pursuant to USCIT Rule 12(b)(1), or, in the alternative, for failure to

state a claim upon which relief may be granted pursuant to USCIT Rule 12(b)(5). ECF No. 13.

For the reasons set forth below, the Court grants Defendant’s motion to dismiss for lack of

subject matter jurisdiction.
Court No. 13-00366                                                                               Page 2

                                             BACKGROUND

          This action challenges Customs’ liquidation of three entries in 2008. See Compl. ¶ 12,

ECF No. 5. Plaintiff Carbon Activated Corporation (“Plaintiff” or “Carbon Activated”) claims

that these three entries were prematurely and unlawfully liquidated. See id. ¶ 13. Plaintiff

argues that it was unaware that these entries “had been erroneously liquated” until June 2012,

and consequently filed a protest, despite its belief that it “would not resolve the problem.” Pl.

Carbon Activated Corp.’s Resp. to Def.’s Mot. to Dismiss the Compl. (“Pl.’s Resp.”) at 4, ECF

No. 17. Plaintiff implies that it cannot challenge the denial of its protest under 28 U.S.C.

§ 1581(a) (2006) 1 because Customs has not yet “acted upon” this protest. Id. Plaintiff asserts

that the Court has jurisdiction over this case pursuant to 28 U.S.C. § 1581(i) because “any other

jurisdictional provision is manifestly inadequate.” Id.

          Originally Plaintiff claimed that Customs violated an injunction ordered by the court in

Hebei Foreign Trade & Adver. Corp. v. United States, 35 CIT__, 708 F. Supp. 2d 1317 (2011). 2

Compl. ¶ 7, Ex. A. Subsequently Plaintiff stated that it “is abandoning its claim that [Customs]

failed to comply with the injunction ordered” in Hebei. Pl.’s Resp. at 1 n.1. However, Plaintiff

continues to assert that its cause of action accrued with the issuance of the decision in Hebei

because that was “the date that Carbon Activated was notified that the rate used upon liquidation

was inaccurate.” Id. at 2. Plaintiff therefore argues that because this case was filed within two

years of the Hebei decision, “this case is timely.” Id.

1
    All citations to the Unites States Code refer to the 2006 edition unless otherwise stated.
2
    Hebei involved separate unliquidated entries by the same importer of record.
Court No. 13-00366                                                                               Page 3

        Defendant moves to dismiss Plaintiff’s Complaint. Defendant asserts that “[i]t is settled

that jurisdiction pursuant to 28 U.S.C. § 1581(i) is not available if jurisdiction pursuant to

another subsection of section 1581 is, or could have been, available.” MTD at 5. Defendant

explains that jurisdiction was available under subsection (a), which provides for challenges to

timely protested denials. Id. Defendant claims that in first failing to protest within 180 days of

liquidation and then failing to file a court challenge to a denial of that protest within two years of

liquidation, Plaintiff failed to follow the “Congressionally-mandated process” for obtaining a

remedy and is therefore “preclude[d] . . . from pursuing these claims in this Court pursuant to

section 1581(i).” Id. Accordingly, Defendant argues that the Court lacks subject matter

jurisdiction to hear Plaintiff’s case.

                                            JURISDICTION

        Plaintiff carries the burden of establishing jurisdiction. See McNutt v. Gen. Motors

Acceptance Corp. of Ind., 298 U.S. 178, 189 (1936). A court’s determination of subject matter

jurisdiction is a threshold inquiry. In the instant action, Plaintiff claims jurisdiction is proper

pursuant to 28 U.S.C. § 1581(i). Compl. ¶ 3. It is well-settled that subsection (i) may only be

invoked if the other jurisdictional provisions are “manifestly inadequate.” Miller & Co. v.

United States, 824 F.2d 961, 963 (Fed. Cir. 1987). Here, subsection (a) would have been

available to Plaintiff because the correct avenue for challenges to liquidations is first to lodge a

protest with Customs within 180 days of the liquidation and then to challenge any denial of that

protest in this court. See Juice Farms, Inc. v. United States, 68 F.3d 1344, 1346 (Fed. Cir. 1995).

Plaintiff filed a protest but it did so three years after the alleged erroneous liquidation. It is

established that “a remedy is not inadequate simply because [a party] failed to invoke it within
Court No. 13-00366                                                                               Page 4

the time frame it prescribes.” Id. (internal quotations and citations omitted). Accordingly,

Plaintiff had an adequate remedy for its alleged erroneous liquidation, but it lost that remedy

because its protest was untimely, not because the remedy was inadequate.

        It is a tenet of customs law that the importer has a duty to monitor liquidation of entries.

Id. (citations omitted). Plaintiff concedes this point. Pl.’s Resp. at 1-2. Therefore Plaintiff’s

claim that it “was first made aware [in June 2012] that these three entries had been erroneously

liquidated as entered in April and May of 2008” is insufficient to extend the statute of

limitations. Id. at 4. Plaintiff has the duty to monitor the liquidation of its entries, and a

statutory remedy is in place to challenge any erroneous liquidations for a diligent importer who

complies with this duty. Plaintiff’s failure to pursue that remedy in a timely manner does not fall

under the rubric of “manifestly inadequate” and therefore Plaintiff cannot invoke subsection (i)

jurisdiction in this case.

        Plaintiff claims that “filing a protest in November 2008 would not have resulted in

liquidation at the proper rate” because the final rate was unknown until the court’s decision in

Hebei. Pl.’s Resp. at 6-7. Plaintiff asks the Court to consider its “protest remedy under section

1581(a) manifestly inadequate” on that ground. Id. at 7. While recognizing that prior decisions

have “not found that filing a protest is manifestly inadequate in similar cases,” Plaintiff argues

that an “importer only definitively knows that the rate was incorrect upon final resolution of the

proceeding” before the Department of Commerce, which here was the date of publication of the

Hebei decision.

        This argument is unpersuasive. Had Plaintiff followed the proper procedure by first

timely protesting the liquidation within 180 days, and, if the protest was denied, filing in this

court within two years of liquidation, it could have brought this action under 28 U.S.C. §
Court No. 13-00366                                                                                Page 5

1581(a). As Defendant points out, “[w]hile the lack of information about the final rate would

have prevented [Customs] from acting to grant the protest,” it “would have kept a protest

pending until instructions [as to the final rate] became available.” MTD at 12. Plaintiff claims

filing a protest to protect its rights before the final rate is determined would be “a waste of

administrative resources” and filing a suit in this court to challenge any denial would be “a waste

of judicial resources.” Pl.’s Resp. at 7. But this efficiency argument does not demonstrate that

the subsection (a) remedy is manifestly inadequate. Therefore, the Court lacks jurisdiction to

hear this case under subsection (i) and grants Defendant’s motion to dismiss pursuant to USCIT

Rule 12(b)(1).

                                            CONCLUSION

         For the foregoing reasons, it is hereby

         ORDERED that Defendant’s motion to dismiss is granted; and it is further

         ORDERED that Plaintiff’s motion for oral argument is denied.

         Judgment to enter accordingly.

                                                                        /s/ Gregory W. Carman
                                                                     _________________________
                                                                       Gregory W. Carman, Judge

Dated:    September 8, 2014
          New York, NY