Monday, June 23, 2014

Ford Recon Decision Redux

Back in 2004 and 2005, Ford Motor Company imported some vehicles from the UK, which I will assume were Jaguars even though that is completely irrelevant. Ford flagged the entries for reconciliation. When it filed the reconciliation entry, Ford sought a refund of overpaid duties. Ford did not get the refunds and ended up in the Court of International Trade seeking to recover overpaid duties on the grounds that the reconciliation entries liquidated by operation of law at the amount of duty asserted by Ford. Because I image these vehicles as expensive Jaguars, I assume a lot of money is involved. Customs, for its part, believes that the liquidation of the reconciliation entries were properly extended and that Ford was given proper notice.

The Court of International Trade agreed with the government in this opinion.

The dates involved become important to see how this plays out. Ford commenced the action on April 15, 2009. At that time, CBP had not liquidated any of the entries. However, while the case was pending, CBP liquidated and in some cases reliquidated the entries. Ford claims the liquidations or reliquidations are meaningless because the reconciliation entry was deemed liquidated a year after filing. So, the question is what happened first: deemed liquidation or affirmative liquidation? If deemed liquidation happened first, Ford wins.

If this all sounds familiar, it is because these issues had been addressed previously and, on appeal to the Federal Circuit, remanded back to the CIT. And, here we are . . . again.

Ford raised a number of related arguments. Its second point was that CBP did not give proper notice of the extension of the liquidation dates. According to Ford, this made any extensions invalid. Similarly, Ford argued that the notices did not provide a reason for the extension and that to the extent the reason was to permit CBP to gather more information, it never asked for it.

For two entries, Ford argued that Customs improperly extended the liquidation to a date beyond the four year maximum. And, for one entry, Ford argued that because CBP requested information prior to liquidation, it was not permitted to deny Ford's claim when Ford responded with legal objections to the request.

The government has asked the Court to dismiss a number of the claims because the two year statute of limitations applicable to these cases had expired when the case was filed. Despite Ford's argument that the Federal Circuit implicitly found the case to have been timely, the Court of International Trade noted that it has an obligation to ensure that cases are properly brought before it. Further, nothing in the decision from the Court of Appeals indicates that that Court considered the statute of limitations argument. Consequently, it considered the government's argument.

To have a claim, Ford must have brought this action within two years of the date it first had the right to do so and reasonably knew it could do so. Looking at three of the entries involved, the Court found that they were filed on June 29, July 28, and August 26, 2005. Absent a valid extension, they would have been deemed liquidated one year later, respectively. When Ford failed to receive a liquidation notice after "a reasonable period" following the allege deemed liquidation dates, it should have known it needed to pounce like a big predatory cat (a jaguar, maybe) within two years. According to the Court, even measured from the date of Ford's actual knowledge that a notice of extension should have been received, Ford failed to commence the action within the two-year limitations period.

The remaining issue for the Court was whether to entertain Ford's claim for declaratory judgment. This is an action that asks the Court to determine the rights of the parties to a real case or controversy. These cases are pretty unusual at the CIT, but bravo to Ford for pressing the issue. The Court seems to concede that it could have decided the issue presented in this claim.

However, on discretionary grounds, the Court declined to do so. The main point in favor of not addressing the issue was that Ford has another case currently pending in the CIT addressing denied protests covering the same issues and entries. This is a different way for the Court to review the same questions. But, in the review of a denied protest, the parties engage in discovery and the Court can look beyond the administrative record. Because that case will be arguably a better means of getting to a resolution of the matter, the CIT declined to decide the declaratory judgment action.

That means I will get to write at least on more post on this issue.

If I was less tired, I would go back and insert analogies to striking cobra's, galloping mustangs, and maybe the Court's need to focus on dates. Would be too much to imply that the analysis of the case explorer-ed a fusion of legal principles? At this point, Ford's counsel could probably use a pint-o' something cold to drink, although this is not a fiesta. Instead, I leave all that to your imagination.

No comments: