Friday, December 10, 2010

Pleading

I have never intended this blog to be nothing more than a repository of case law from the Court of International Trade and the Court of Appeals for the Federal Circuit. My goal is that this blog serves as a place to find analysis of developments in the area of customs law and compliance. Early on, I blogged on more general topics involving corporate compliance and regulatory changes. Lately, I have not had much inspiration to do so. I want that to change. In fact, for 2011 I resolve to post more often on regulatory and compliance developments. If you want to help me improve the blog for next year, feel free to send me questions or post ideas. My friends and readers out there have been of great assistance in making this blog work. So, to the Retired Customs Guy, the Broker in Texas, to Matt, and to Anonymous, keep the comments and questions coming. It helps keep the bold interesting for all involved.

Now that I am done pleading with you, I will talk about a pleading case from the Court of International Trade: FAG Holding Corp. v. United States.

This is another of those cases where the procedural rules got in the way of the plaintiff getting a decision on the merits. That is not to suggest that the decision is unfair or incorrect. It is just a reminder to all of us that the technical aspects of presenting a case to the CIT matter. Given the current state of the law, I think it is fair to say that these things matter more than they have in the past.

The law requires that a complaint present "sufficient factual matter, accepted as true, to 'state a claim to relied that is plausible on its face.'" That is a mash-up of two Supreme Court cases: Ashcroft v. Iqbal and Bell Atl. Corp. v. Twombly. That means that the complaint must be more than speculative. That was not always the case. Prior to these Supreme Court cases, it was possible to file a complaint asserting a right to relief on the assumption that the plaintiff's lawyer could use discovery to find facts sufficient to show a right to relief. Today, the lawyer needs to know and assert the facts that make out a plausible right to relief. And, since we can't just assert facts we do not have some basis to believe, this change in burden is meaningful.

FAG involves the application of dumping duties to to two entries. Plaintiff protested the application of the antidumping duties, claiming that the entries had liquidated by operation of law without the antidumping duties. To make out a case for deemed liquidation, the plaintiff needs to allege and prove that (1) the suspension of liquidation from the dumping case terminated, (2) the Customs was notified that the suspension terminated, and (3) that Customs failed to liquidate the entries within six months. Those are pretty specific requirements.

For the plaintiff to have a right to relief, it needs to allege in its complaint the date of entry of the merchandise. This is a prerequisite to determining the dumping review period and, therefore, the date of suspension of liquidation. In this case, the Court looked to the physical entry documents to determine the entry date. "Entry" in this context is the filing of documents necessary to secure the release of the merchandise. Here, the importer used the "immediate delivery" process to secure a quick release of the goods. Under this process, the time of entry is defined in the regulations as the time the entry summary document is filed in proper form with estimated duties attached. This is a week or so later than the date alleged in the complaint. That puts the entries in a subsequent antidumping review period and means that the suspension of liquidation had not terminated at the time of liquidation.

Based on those facts, the Court held that the complaint did not allege facts sufficient to create a plausible right to relief. As a result, the Court dismissed the action.