Court Opinion

ID: 3153192
Source: CourtListenerOpinion
Date Created: 2015-11-09 20:01:30.671956+00
Date Added: 2024-06-11T12:03:57.666635
License: Public Domain

Slip Op. 15-
                                       

              UNITED STATES COURT OF INTERNATIONAL TRADE

DESIGN INTERNATIONAL GROUP,
INC.,

     Plaintiff,                         Before: Nicholas Tsoucalas,
                                                Senior Judge
v.
                                        Court No. 14-00119
UNITED STATES,

     Defendant.

                                OPINION

[Defendant’s motion to dismiss          for   lack    of    subject   matter
jurisdiction is granted.]

                                                     Dated: /PWFNCFS

John N. Politis, Politis & Politis, of Pasadena, CA for Plaintiff.

St. Lutheran Tillman, Trial Attorney, Commercial Litigation
Branch, Civil Division, U.S. Department of Justice, of New York,
New York, for Defendant. With him on the brief were Benjamin C.
Mizer, Principal Deputy Assistant Attorney General, Amy M. Rubin,
Assistant Director. Of counsel on the action was Beth C. Brotman,
Office of the Assistant Chief Counsel, International Trade
Litigation, United States Customs and Border Protection, of New
York, NY.

             Tsoucalas, Senior Judge:     This case is before the court

on Defendant’s motion to dismiss for lack of subject matter

jurisdiction.     See Def.’s Mem. in Supp. of its Mot. To Dismiss,

ECF No. 9 (July 17, 2015)(“Def.’s Br.”); see also Reply Mem. in

Supp. of Def.’s Mot. To Dismiss, ECF No. 13 (Sept. 3, 2015).

Plaintiff,     Design   International     Group,     Inc.    (“Design”     or
Court No. 14-00119                                                     Page 2

“Plaintiff”), opposes Defendant’s motion.           See Pl.’s Mem. in Opp.

Def.’s Mot. To Dismiss, ECF No. 10 (Aug. 10, 2015)(“Pl.’s Br.”).

                                 BACKGROUND

            This action concerns two entries of pencils, Entry Nos.

BKC    0138174-9   and   BKC    0138213-5,   made   at   the   Port    of   Los

Angeles/Long Beach. Compl. at ¶¶ 14-18. Plaintiff is the importer

of record for these entries.        Id. at ¶ 1.     On June 7, 2013, U.S.

Customs and Border Protection (“Customs”) liquidated both entries.

Id. at ¶ 2.    On July 9, 2013, Design’s customs broker filed Protest

Nos.    2704-13-101337    and    2704-13-101339,     challenging      Customs’

calculation of the number of pencils included in each entry and

the resulting assessment of duties.          Id. at ¶ 14.      On August 15,

2013, Customs denied both protests.          Id.

            On October 10, 2013, Design’s counsel filed a third

protest, Protest No. 2704-13-102066. Id. at ¶ 2.               This protest

also challenged Customs’ calculation of the number of pencils

covered by Entry Nos. BKC 0138174-9 and BKC 0138213-5.             See id. at

¶ 25. On November 19, 2013, Customs denied Plaintiff’s protest as

untimely.     Id. at ¶ 4, 5.

            After the denial of Design’s October 10, 2013 protest,

Design insisted that it timely filed its protest, and that Customs

should withdraw its denial.        Id. at ¶ 6.      However, denial of the
Court No. 14-00119                                                  Page 3

protest was not withdrawn.         Id. at ¶ 7.     Instead, Customs placed

Design on the sanction list for failing to pay the increased duties

on the subject entries.      Id. at ¶ 7.      Customs required Design to

file “live” entries, which delayed release and increased costs of

shipments.      Id. at ¶ 8.        Design informed Customs that this

situation was a mistake, and Customs responded that they would

change the status of Design’s protest from “decided” to “open” in

order to remove Design from the sanctions list.           Id. at ¶ 9.

             On March 10, 2014, Customs denied Design’s October 10,

2013 protest again, changing the reason for denial from “Untimely

filed” to “Rejected as non-protestable.”            Id. at ¶ 10.    In the

denial, Customs explained that “[w]e have no [j]urisdiction over

this [p]rotest, since a denial of a protest is not a protestable

action.” Id. at ¶ 10.

             On May 16, 2014, Design filed an action in this Court

challenging the denial of Protest No. 2704-13-102066. Id. at ¶ 4.

                           STANDARD OF REVIEW

             “Plaintiffs   carry    the   burden   of   demonstrating   that

jurisdiction exists.” Techsnabexport, Ltd. v. United States, 16

CIT 420, 422, 795 F. Supp. 428, 432 (1992) (citing McNutt v. Gen.

Motors Acceptance Corp., 298 U.S. 178, 189 (1936)). In deciding a

Rule 12(b)(1) motion to dismiss that does not challenge the factual
Court No. 14-00119                                                              Page 4

basis for the complainant’s allegations, the court assumes “all

factual allegations to be true and draws all reasonable inferences

in plaintiff's favor.” Henke v. United States, 60 F.3d 795, 797

(Fed. Cir. 1995).

                                      DISCUSSION

            In   order   to     invoke       the   Court’s     jurisdiction      under

§ 1581(a), a civil action must be based on the denial of a valid

protest filed in accordance with 19 U.S.C. § 1514 (2012).                           See

Koike Aronson, Inc. v. United States, 165 F.3d 906, 908–09 (Fed.

Cir. 1999).      Customs contends that the Court lacks subject matter

jurisdiction under § 1581(a) because Design’s third protest filed

on October 10, 2013, Protest No. 2704-13-102066, was not a valid

protest.    See Def.’s Br. at 3-5.             In response, Plaintiff asserts

that the action was “timely commenced within 180 days of denial of

protest    number   2704-13-102066           in    accordance      with    28   U.S.C.

§ 1581(a) and 28 U.S.C. § 2636(a).”                See Pl.’s Br. at 2.

            The issue in the instant action is whether Design’s

protest is valid in light of the “one entry, one protest” rule

outlined in 19 U.S.C. § 1514(c)(1)(D).                  See 19 U.S.C. § 1514(c)

(“Only     one    protest       may     be     filed     for       each    entry     of

merchandise . . . .”).          Section 1514(c)(1) generally prohibits

multiple    protests     from    being       filed     for   the    same    entry    of
Court No. 14-00119                                                          Page 5

merchandise.        Accordingly, “[w]here a plaintiff has invalidly

filed a second protest, the court lacks jurisdiction to entertain

plaintiff’s claims.”          Mitel, Inc. v. United States, 16 CIT 4, 9,

782 F. Supp. 1567, 1571 (1992).

            Plaintiff argues that a third protest was permitted

because 19 U.S.C. § 1514(c) provides exceptions to the one protest

rule,     stating     that    “separate     protests    filed        by   different

authorized persons with respect to any one category of merchandise

. . . that is the subject of a protest are deemed to be part of a

single protest.”         Pl.’s Br. at 3 (citing 19 U.S.C. § 1514).

Specifically, Plaintiff asserts that its broker and its counsel

are “different authorized persons,” and thus, insists that Customs

violated the exceptions outlined in § 1514(c) when it failed to

consolidate the third protest filed by its counsel (Protest No.

2704-13-102066), with the two previous protests filed by its broker

(Protest Nos. 2704-13-101337 and 2704-13-101339).                Id. at 3-4.

            The court disagrees with Plaintiff’s assertions.                    The

exception articulated in 19 U.S.C. § 1514(c)(1) does not permit a

party to file an additional protest after a previous protest has

already    been     denied,   even   when   one   is   filed    by    a   different

authorized person: “only the first protest received by Customs for

filing may practicably be treated as valid.”             Alcan Aluminum Corp.
Court No. 14-00119                                            Page 6

v. United States, 28 CIT 2067, 2068 n.2, 353 F. Supp. 2d 1374,

1375 n.2 (2004); see also id. (“Because 19 U.S.C. § 1514(c)(1)

precludes the filing of two protests relating to the same entries

and same category of merchandise [. . .] only the first protest

received by Customs for filing may practicably be treated as

valid.” (citing Russ Togs, Inc. v United States, 79 Cust. Ct. 119,

122 (1977)(emphasis in original))).       Furthermore, allowing an

additional protest contesting an entry that was already subject to

the denial of a previous protest would “allow [a] plaintiff to

file an unending series of protests each protesting the previous

protest denial.” Wally Packaging, Inc. v. United States, 7 CIT 19,

22–23, 578 F. Supp. 1408, 1412 (1984) (“[S]ection 1514 does not

permit a party to protest the denial of a protest . . . such a

procedure would allow plaintiff to file an unending series of

protests    each   protesting   the   previous   protest   denial.”).

Additionally, § 1514(c)(1) provides that “[n]ew grounds in support

of objections raised by a valid protest or amendment thereto may

be presented for consideration in connection with the review of

such protest pursuant to section 1515 of this title at any time

prior to the disposition of the protest in accordance with that

section.”   19 U.S.C. § 1514(c)(1) (emphasis added).
Court No. 14-00119                                             Page 7

           Here, Customs denied Protest Nos. 2704-13-101337 and

2704-13-101339 on August 15, 2013.         Design’s October 10, 2013

protest,   Protest   No.    2704-13-102066,    effectively   contested

Customs’ denial of its first two protests.      As a result, Design’s

October 10, 2013 protest is invalid.       See Alcan Aluminum Corp, 28

CIT at 2068 n.2, 353 F. Supp. 2d at 1375 n.2 (citing Russ Togs,

Inc., 79 Cust. Ct. at 122 (1977)); see also Wally Packaging, Inc.,

7 CIT at 22–23, 578 F. Supp. at 1412.       The court therefore lacks

jurisdiction to entertain Plaintiff’s claims.      See Mitel, Inc., 16

CIT at 9, 782 F. Supp. at 1571.

                              CONCLUSION

           For the reasons stated, Defendant’s motion to dismiss

for lack of subject matter jurisdiction is GRANTED.      Judgment will

be entered accordingly.

                                              /s/ Nicholas Tsoucalas
                                                Nicholas Tsoucalas
                                                   Senior Judge
Dated: /PWFNCFS

       New York, New York