Court Opinion

ID: 819395
Source: CourtListenerOpinion
Date Created: 2013-02-05 02:38:11.683444+00
Date Added: 2024-06-11T09:02:57.920570
License: Public Domain

Slip Op. 00-172

        UNITED STATES COURT OF INTERNATIONAL TRADE
____________________________________
                                    :
HOHENBERG BROS. COMPANY,            :
                  Plaintiff,        :    Court No. 96-09-02074
            v.                      :              and
                                    :    Court No. 95-04-00450
THE UNITED STATES,                  :
                   Defendant.       :
____________________________________:

____________________________________
                                    :
A.C. MONK AND COMPANY, INC.,        :
                  Plaintiff,        :    Court No. 96-09-02014
            v.                      :
                                    :
THE UNITED STATES,                  :
                   Defendant.       :
____________________________________:

____________________________________
                                     :
THE AUSTIN TOBACCO COMPANY, INC.,    :
                  Plaintiff,         :   Court No. 96-09-02141
            v.                       :
                                     :
THE UNITED STATES,                   :
                   Defendant.        :
____________________________________:
____________________________________
                                     :
CARGILL AMERICAS, INC.,              :
                   Plaintiff,        :   Court No. 96-12-02808
            v.                       :             and
THE UNITED STATES,                   :   Court No. 97-06-00970
                   Defendant.        :
____________________________________:

____________________________________
                                    :
CARGILL CITRO-AMERICA, INC.,        :
                  Plaintiff,        :    Court No. 97-08-01358
            v.                      :
                                    :
THE UNITED STATES,                  :
                   Defendant.       :
____________________________________:
COURT NO.   96-09-02074                                         PAGE   2

____________________________________
                                    :
CARGILL FERTILIZER, INC.,           :
                  Plaintiff,        :   Court No. 97-06-00969
            v.                      :             and
                                    :   Court No. 95-04-00449
THE UNITED STATES,                  :
                   Defendant.       :
____________________________________:

____________________________________
                                    :
CARGILL, INCORPORATED,              :
                  Plaintiff,        :   Court No. 95-04-00448
            v.                      :             and
                                    :   Court No. 96-09-02073
THE UNITED STATES,                  :
                   Defendant.       :
____________________________________:

____________________________________
                                    :
CAROLINA LEAF TOBACCO               :
COMPANY, INC.,                      :
                  Plaintiff,        :   Court No. 96-09-02024
            v.                      :
                                    :
THE UNITED STATES,                  :
                   Defendant.       :
____________________________________:

____________________________________
                                    :
DIBRELL BROTHERS, INC.,             :
                  Plaintiff,        :   Court No. 96-09-02028
            v.                      :
                                    :
THE UNITED STATES,                  :
                   Defendant.       :
____________________________________:

____________________________________
                                    :
EXCEL CORPORATION,                  :
                   Plaintiff,       :   Court No. 95-04-00379
            v.                      :
                                    :
THE UNITED STATES,                  :
                   Defendant.       :
____________________________________:
COURT NO.   96-09-02074                                         PAGE   3

____________________________________
                                    :
GENERAL ELECTRIC COMPANY,           :
                  Plaintiff,        :   Court No. 96-09-02126
            v.                      :             and
                                    :   Court No. 97-08-01360
THE UNITED STATES,                  :
                   Defendant.       :
____________________________________:

____________________________________
                                    :
K.R. EDWARDS LEAF TOBACCO           :
COMPANY, INC.,                      :
                  Plaintiff,        :   Court No. 96-09-02052
            v.                      :
                                    :
THE UNITED STATES,                  :
                   Defendant.       :
____________________________________:

____________________________________
                                    :
MACLIN-ZIMMER-McGILL TOBACCO        :
CO., INC.,                          :
                  Plaintiff,        :   Court No. 96-09-02057
            v.                      :
                                    :
THE UNITED STATES,                  :
                   Defendant.       :
____________________________________:

____________________________________
                                    :
MONK-AUSTIN INTERNATIONAL, INC.,    :
                  Plaintiff,        :   Court No. 96-09-02059
            v.                      :
                                    :
THE UNITED STATES,                  :
                   Defendant.       :
____________________________________:

____________________________________
                                    :
THORPE-GREENVILLE EXPORT TOBACCO    :
CO., INC.,                          :
                  Plaintiff,        :   Court No. 96-09-02114
            v.                      :
                                    :
THE UNITED STATES,                  :
                   Defendant.       :
____________________________________:
COURT NO.   96-09-02074                                         PAGE   4

____________________________________
                                    :
T.S. RAGSDALE COMPANY, INC.,        :
                  Plaintiff,        :   Court No. 96-09-02083
            v.                      :
                                    :
THE UNITED STATES,                  :
                   Defendant.       :
____________________________________:

____________________________________
                                    :
UNIVERSAL LEAF TOBACCO              :
COMPANY, INC.,                      :
                  Plaintiff,        :   Court No. 96-09-02118
            v.                      :
                                    :
THE UNITED STATES,                  :
                   Defendant.       :
____________________________________:

____________________________________
                                    :
U.S. STEEL INTERNATIONAL, INC.,     :
                  Plaintiff,        :   Court No. 96-09-02115
            v.                      :             and
                                    :   Court No. 96-12-02820
THE UNITED STATES,                  :
                   Defendant.       :
____________________________________:

____________________________________
                                    :
U.S. STEEL MINING CO., INC.,        :
                  Plaintiff,        :   Court No. 96-09-02116
            v.                      :             and
                                    :   Court No. 96-12-02811
THE UNITED STATES,                  :
                   Defendant.       :
____________________________________:

____________________________________
                                    :
USX CORPORATION,                    :
                   Plaintiff,       :   Court No. 96-09-02091
            v.                      :
                                    :
THE UNITED STATES,                  :
                   Defendant.       :
____________________________________:
COURT NO.   96-09-02074                                                    PAGE   5

____________________________________
                                    :
USX ENGINEERS & CONSULTANTS, INC.,  :
                  Plaintiff,        :     Court No. 96-09-02092
            v.                      :
                                    :
THE UNITED STATES,                  :
                   Defendant.       :
____________________________________:

[Motion to Amend Judgment Denied.]

                                           Dated:   December      , 2000

     McKenna & Cuneo, L.L.P. (Peter Buck Feller and Daniel G.
Jarcho) for moving plaintiffs.

     David W. Ogden, Assistant Attorney General, David M. Cohen,
Director, Commercial Litigation Branch, Civil Division, United
States Department of Justice (Jeffrey A. Belkin) for defendant.

                                 OPINION

      RESTANI, Judge:      This matter is before the court on

plaintiffs’ motions to amend judgment.          The captioned cases

involve claims falling within the two-year statute of limitations

for suits under 28 U.S.C. § 1581(i) (1994).           The judgment for

which amendment is sought is the form consent judgment developed

for resolution of suits seeking refund of Harbor Maintenance Tax

(“HMT”) paid on exports.       See U.S. Shoe Corp. v. United States,

No. 98-126, 1998 WL 544680 (Ct. Int’l Trade Aug. 28, 1998); 26

U.S.C. § 4461, et seq. (1994).          Such taxes were found to be

unconstitutional in United States v. U.S. Shoe Corp., 523 U.S.

360, 366-70 (1998).       Plaintiffs voluntarily entered into the
COURT NO.   96-09-02074                                         PAGE   6

judgments at issue, and payment of principal has been made

thereon.

      In IBM Corp. v. United States, 201 F.3d 1367, 1374 (Fed.

Cir. 2000), petition for cert. filed, 69 U.S.L.W. 3259 (U.S. Sep.

28, 2000) (No. 00-482), the court found interest was not owing on

such refunds made under this court’s 28 U.S.C. § 1581(i)

jurisdiction.     In Swisher Int’l., Inc. v. United States, 205 F.3d

1358, 1364-65 (Fed. Cir.), cert. denied, 121 S. Ct. 624 (2000),

the court found that 28 U.S.C. § 1581(a) jurisdiction existed for

HMT refund claim denials that were properly protested.      As in

Swisher, these plaintiffs perfected § 1581(a) protest denial

jurisdiction.     Id. at 1361.   Accordingly, plaintiffs seek

amendment of the form judgments to recite § 1581(a) jurisdiction

instead of § 1581(i) jurisdiction and rewording the interest

provision thereof so that interest will be owed from date of

summons under 28 U.S.C. § 2644.1     By its terms 28 U.S.C. § 2644

applies to § 1581(a) jurisdiction cases (challenge to denial of

protest under section 515 of the Tariff Act of 1930), but not to

§ 1581(i)(residual jurisdiction) cases.2

      1
        Plaintiffs also seek interest from date of payment of the
tax under 19 U.S.C. § 1505(c). This provision appears to be
limited to import transactions.
      2
          28 U.S.C. § 2644 reads in relevant part:
                                                       (continued...)
COURT NO.   96-09-02074                                             PAGE   7

      First, contrary to plaintiffs’ argument, the judgments are

not jurisdictionally defective.     It is clear that the court has

jurisdiction in this matter under 28 U.S.C. § 1581, whether it is

under subsection (a) or (i).     Thus, the disposition of

plaintiffs’ claims via a consent judgment was proper and the

court did not lack jurisdiction to enter the judgment.

      Second, prior to the Swisher decision it was settled law

that § 1581(i) jurisdiction did not exist if § 1581(a)

jurisdiction provided an adequate remedy, whether or not a

plaintiff availed himself of the underlying administrative

procedure.     See Miller & Co. v. United States, 824 F.2d 961, 963

(Fed. Cir. 1987), cert. denied, 484 U.S. 1041 (1988).       Thus,

attorneys could not have predicted that any factual scenario

leading to § 1581(a) jurisdiction was possible after the Supreme

Court found 28 U.S.C. § 1581(i) jurisdiction in U.S. Shoe.          523

U.S. at 365.     Nonetheless, the Federal Circuit did fashion in

Swisher what is apparently an exception to the normal rule, so

      2
       (...continued)
      If, in a civil action in the Court of International
      Trade under section 515 of the Tariff Act of 1930, the
      plaintiff obtains monetary relief by a judgment or
      under a stipulation agreement, interest shall be
      allowed . . . . Such interest shall be calculated from
      the date of the filing of the summons in such action to
      the date of the refund.
COURT NO.   96-09-02074                                           PAGE   8

that both parties who proceeded via the administrative refund

route and those parties who sued directly may recover.3

      Third, although this jurisdictional avenue was not

predictable, the law firm representing Swisher before the Federal

Circuit, which is also the firm representing these plaintiffs,

continued to press its § 1581(a) jurisdictional argument based on

denial of a refund request (for which no time limit was set) in

order to avoid the two-year statute of limitations applicable to

§ 1581(i) claims.     See 28 U.S.C. § 2636(i).   As officers of the

court, they surely would not have pressed this argument if it

were frivolous.     Aware of their own argument in Swisher, and

deeming it worth pursuing in this court and the Court of Appeals,

they nonetheless allowed the consent judgment forms to be signed,

entered and payment to be made thereon.

      3
        The result seems to be based on equitable considerations
including the fact that the refund procedure originally endorsed
by Customs (that is, protest of the collection as opposed to
refund denial) was not the correct one. There is at least an
element of affirmatively misleading action (albeit innocent) on
the part of government officials. One also might read Swisher as
a generally applicable limitation or abrogation of the Miller
rule, but an appellate panel may not overrule a previous panel.
Thus, the court concludes that a Miller exception has been carved
out for HMT refunds. At what point parties must opt for a §
1581(a) or a § 1581(i) method of recovery is not made clear. The
court need not resolve this issue here because these cases have
been resolved by agreement.
COURT NO.   96-09-02074                                        PAGE   9

      Fourth, the court made clear that although it believed

interest was owing in suits filed under § 1581(i), it indicated

that the matter was by no means clear.    See U.S. Shoe Corp. v.

United States, 20 CIT 206, 207 (1996).    Thus, if interest were of

importance to its clients, plaintiffs’ attorney should not have

banked solely on an award of interest for claims made pursuant to

cases settled under § 1581(i), but should have preserved the

claims under § 1581(a) by not signing form consent judgments

awarding judgment under § 1581(i), with interest expressly made

dependent on the outcome of IBM, the § 1581(i) interest test

case.

      Plaintiffs’ counsel never sought more flexible language on

interest or on jurisdiction in the judgment form, although they

are not strangers to the process that resulted in the claim

resolution process and the form.    Obviously, they expected that

the consent judgment as written ultimately would give their

clients all they were due, with the advantage of payment of

principal earlier than could be expected if the cases remained

stayed pending the Swisher litigation or perhaps proceeded

separately.

        The court was very liberal in allowing test cases to proceed

on various types of claims on various theories.    The court cannot
COURT NO.   96-09-02074                                         PAGE   10

say what might have happened if plaintiffs had sought a different

procedure for their claims or whether they could have obtained

early payment of principal and yet preserved these arguments.

History cannot be undone, however.

      Statutes providing for HMT on exports should not have been

passed.     The internal revenue interest statute should have

provided for interest on HMT claims more clearly.     Unfortunately,

these statutory errors did occur.     The court regrets all parties

may not be made completely whole because they may be limited to

post-judgment interest.     This is an important concern, but also

of concern is the need to end litigation and to hold parties to

their bargain so that such bargains can be relied on now and in

the future.

      Contrary to the government’s preference for one payout, the

court required that principal be paid before the interest issue

was resolved in order to limit harm if interest was not owed.

The government met its payment deadlines.     The court will not

compel the government to pay money on certain conditions and then

change the conditions after payment is made, without a more

serious case of injustice than is made here.     If justice can

tolerate the non-payment of interest on the § 1581(i) claims, as
COURT NO.   96-09-02074                                           PAGE   11

is the result of IBM, justice can tolerate holding these well-

represented parties to their bargain.

      Unless the Supreme Court reverses the IBM decision, these

plaintiffs will not get interest from date of summons in 1995,

1996, and 1997, to dates of judgment, which would not have been

earlier than late 1998.      This is the bargain that was made.

      Motion to Amend Judgment Denied.

                                  ____________________________
                                          Jane A. Restani
                                              JUDGE

Dated:      New York, New York

            This 28th day of December, 2000.