Saturday, January 24, 2015

Welcome to 2015

In case I have not already said it, Happy New Year. April of this year will mark the 10th year that I have written every word that appears on this blog. I am glad to have done it and hope it continues to be of value to all of you. At this point, I see no reason to stop or slow down and only good reasons to continue the effort. In fact, I would love some ideas from readers on what might make the blog more useful and more valuable, while keeping in mind that this is a side project and not an actual job. What I would really like is to see the blog readership numbers increase and much more interaction in the comments. I am certain not everyone agrees with what I say, what CBP does, or what the courts do. Let me know and we can have some discussion about it. I'd also like to see the blog make it into the "Niche" category of the ABA Journal's Blawg 100. I should get there just for longevity if not for my scintillating content.

In the meantime, let's learn a lesson from American Power Pull Corp. v. United States. This is the kind of case I might skip in the ordinary course. But given that it is the first Court of International Trade decision of 2015, I figure it deserves a note.

The quick summary of the case is as follows. The law requires that an importer who seeks judicial review of a denied protest to pay all the liquidated duties, taxes, and fees before filing a summons in the Court of International Trade. The job of the CIT is to order refunds of duties that should not have been collected; it is not (in the ordinary case) designed to tell CBP that it should not collect duties. Yes, there are exceptions that and the CIT can grant injunctions just like any district courts. But, here, we are talking about denied protest review under 28 USC 1581(a).

Also, a summons must be filed within 180 days of the date CBP denies the protest.

This case is about the intersection of those two requirements.

It seems that the plaintiff filed a timely summons before it paid the duties owed. Plaintiff then voluntarily dismissed the action without prejudice against a refiling. It then paid the duties owed and refiled the case. The problem is that plaintiff refiled the case after the 180 day statute of limitation had run. Plaintiff argued that the filing of the first case was sufficient to meet the statutory deadline and that the second summons should relate back in time to the original filing date.

The Court of International Trade disagreed. According to the Court, the voluntary dismissal of the first case makes it a nullity. It is as if that first case had never been filed. The second summons was out of time and could not be saved by the earlier filing date. That resulted in the second case being dismissed for lack of subject matter jurisdiction.

This requirement that duties be paid before filing the summons sometimes results in harsh realities. I don't know how much was at issue here. Apparently not so much that plaintiff could not pay the duties. But, in other cases, it can be a significant bar. The ongoing dispute about the classification of "white sauce" is a good example. If an alleged error in classification results in out of quota duties of maybe 300% or a dispute over the scope of an antidumping duty order produces a liability of 200%, it is possible that a small company might be incapable of paying the duties owed as a prerequisite to getting into Court. Unfortunately, that is the way law is written and has been applied.

What to do? One strategy, if you are confident in your argument, is to wait to be sued by Customs. As a defendant, the importer can assert its arguments about the correct classification or scope. But, no one wants to be a defendant. This seems like something that Congress should look at. Customs already has a surety bond protecting it. Maybe an additional litigation bond would provide the necessary security.

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