Thursday, March 15, 2012

Water Clearer after Alden Leeds

I almost missed this: The Federal Circuit has reversed the Court of International Trade's decision in Alden Leeds. For some reason, the Court has labeled it as nonprecedential. To me, that usually means, "don't bother reading this." But, since I covered the CIT decision and the Federal Circuit decision is interesting, I am happy to have received the anonymous tip to read the case.

If you don't remember the facts, you should read the original post. In summary, Customs and Border Protection improperly liquidated entries subject to a dumping case at the 25% deposit rate rather than the correct 4% assessment rate. Customs published a notice of the liquidation, which CBP claims occurred by operation of law. Alden did not notice the liquidation notice and asserted that the liquidation was void, making the notice a nullity. As a result, it went to Court seeking a refund of the duties. The Court of International Trade found in favor of Alden despite a Federal Circuit decision in a similar case that went the other way.

The issue before the CAFC was whether the Court of International Trade correctly decided that it had jurisdiction to resolve the case. The government asserted that to get into the CIT, Alden should have filed a protest of the admittedly erroneous liquidation. Alden said that because there was no valid liquidation, there was nothing to protest.

Unfortunately for Alden, the Federal Circuit has previous said that "all liquidations, whether legal or not, are subject to the timely protest requirement." That is on page 10 of the 16 page opinion. Had the Court led with that statement, we could have saved some time and paper because it is, as I learned in law school, "The Decisive Utterance."

What this means, as the Court pointed out, is that importers must monitor their entries for liquidation, whether or not that liquidation is legitimate. Failure to note and timely protest a liquidation will likely result in the protest becoming final and not subject to challenge. One interesting footnote (literally, it is footnote 3), distinguishes between agency suspensions of liquidation and violations of court imposed injunctions. If CBP liquidates contrary to an injunction, that liquidation is null and void. In addition, the fact that Alden's entries were deemed liquidated rather than actually liquidated was not a basis for a different decision. The Federal Circuit had already settled that question in another case.

That is likely a bitter pill for Alden to swallow, but it is probably not dirty pool (which is something Alden Leeds can help with).

1 comment:

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