Tuesday, May 11, 2010

CIT Decisions

The Court of International Trade issued a couple decisions on May 6 that are worthy of note on technical grounds.

In Shinyei Corp. of America, the plaintiff filed protests to challenge liquidation instructions relating to the assessment of antidumping duties. Unfortunately, that is a challenge to a decision of the U.S. Department of Commerce, not Customs and Border Protection. As a result, the customs protest was invalid and the subsequent case not properly before the Court on the basis of 28 USC 1581(a). The Court struck the complaint and gave Shinyei 30 days in which to amend the complaint, at which time it will likely assert jurisdiction on the basis of 1581(i).

The other case is Great American Insurance Co. This case goes to a fundamental requirement for getting into Court to challenge a liquidation: you need to pay the duties before you ask for them back. Under 28 USC 2637(a), a civil action contesting the denial of a protest may be brought in the Court of International Trade only after all liquidated duties, charges, or exactions have been paid. GAIC put the summons in certified mail and then paid the duties. Unfortunately, there is CIT Rule that says a summons is deemed filed on the date of certified mailing. Payment to Customs, on the other hand, takes place only when Customs actually receives the money.

The summons and the payment legally (if not factually) crossed in the mail. Because the case was commenced prior to paying the duties, there was technically nothing to fight about and no relief that could be granted. According to the Court, the law on this issue is unambiguous and the Court declined to equitably change either the effective date of payment or of commencing the suit.

These cases represent the kinds of decisions that baffle lay people. Everyone knows that Shinyei can get into Court to have its claim addressed. Assuming no statute of limitations problem, it is just a matter of citing the proper jurisdictional basis. Similarly, GAIC did pay the duties it wants refunded. So, why not just let the cases proceed since "everyone knows" that's the right thing to do?

The problem for the Court is that the law makes it very hard to sue the United States of America. In the old days, it was just completely impossible to sue the king. This was sovereign immunity in its purest form. In the U.S., the government enjoys sovereign immunity unless Congress has specifically waived it. Since the default position is that the U.S. government is immune from lawsuits, Courts very strictly construe waivers of that immunity. Similarly, the Court of International Trade, like all federal courts (but even more so) is a court of special and limited jurisdiction. If you want to be in the Court of International Trade, you need to be there for a reason clearly within its exclusive jurisdiction. Taken together, these two principles mean that there are many ways to screw up an effort to get your case before the CIT. That is not always the best way to get to a just result. Unfortunately, it is the law.

1 comment:

Anonymous said...

Larry -

Good column! In both cases the problem might be traced to poor legal advice. Not necessarily by counsel, but by SOMEONE who thinks (s)he knows the law but doesn't. Whether the advice was given by a broker, a lawyer, or some in-house staffer is immaterial. The first rule before initiating any kind of suit is to be VERY sure that you are on solid legal ground. And you must take into consideration the fact that the CIT will usually defer to Customs' opinion when the case is a "narrow" one.

Your faithful Customs retiree.