Saturday, May 21, 2011

Court Catch Up 1: In Which the Surety Does Not Get Notice

I have another FOIA case to post. But, while I have been steadily (and happily) busy at work, the Courts have been busy too. Here is an update.

United States v. American Home Assurance Co. is a penalty case that is in the early stages. The defendant, a surety, asked the court to grant summary judgment in its favor and to stay any further discovery until the court acts on the summary judgment motion. The United States has also asked for a stay, but it wants a stay of the summary judgment motion until discovery is complete. The basis for the defendant's motion is that Customs apparently suspended liquidation of the relevant entries but never notified the surety of that suspension. According to the surety, that means the suspension was ineffective.

This case involves merchandise subject to an antidumping duty order. The importer's entries were, like all entries subject to the case, suspended when someone requested an administrative review. Customs should have notified the surety of the suspension but did not. Years later, the government is trying to collect antidumping duties from the surety, who is defending on the grounds that the lack of notice means the entries liquidated more than six years ago. Any action, according to the defendant, is now time barred.

The Court did what courts should do and took a careful look at the statute. It found that the law requires that a surety receive notice after Customs suspends liquidation. From this, the Court concluded that notice is not a condition precedent to the lawful suspension of duties. Rather, the lawful suspension creates an obligation to provide notice. There is nothing in the language of the statute, 19 USC 1504(c), indicating that the failure to provide notice will void the suspension. That leaves it up to the Court to decide whether the lack of notice harmed the surety and , if so, whether any remedy is appropriate. In this case, the Court said that whether the surety could make out harm as a result of the lack of notice will depend on the facts uncovered in discovery. Thus, the Court denied both the motion to stay discovery and the motion to stay the summary judgment process (which the court said was ready to be resolved).

More to follow.


Anonymous said...

Larry -

The Court got this one ABSOLUTELY RIGHT. Now what must be decided as a practical matter is how much harm the surety suffered by not being timely notified. In my humble opinion this is the result of SLOPPY CUSTOMS WORK, pure and simple, and in the absence of statutory or regulatory time limits, the Court should establish what is reasonable (I'd go for no more than 60 days) and use its powers to make Customs do things rhe right way. There's too much "slipping through the cracks" to be forgivable nowadays. My message to Customs is DO YOUR JOB PROPERLY, so that these events cease occurring.

Your faithful Customs retiree

surety bonds said...

Court should prevail a high justice for those who does not get their surety. Every company should sustain every employees need.