Protests Basics
Most importers and their customhouse brokers understand that an administrative protest is the vehicle by which importers challenge many (but not all) decision by Customs. Often, protests are treated as routine administrative documents. In a classification case, it is not uncommon to see protests that say "Customs classified the gizmo as X and it should be Y, so please reliquidate." That won't get you very far.
A good protest includes a fully developed argument for the correct classification and against the classification Customs applied. This is usually supported by technical drawings, photographs, and legal reasoning based on HTSUS language, court decisions, and rulings.
What is not always understood about protests is that they are jurisdictional documents. That means that often the only way to get into the Court of International Trade is to have a valid protest that clearly addresses the question presented to the Court. If a protest is untimely, does not cover the correct merchandise, or relates to some decision that is not subject to protest, you will get bounced from Court.
The issue in Estee Lauder Inc. v. United States was whether the protest sufficiently described the merchandise. The merchandise involved was several configurations of kits of cosmetics and accessories in and vanity bag. The question presented to the Court of International Trade was whether Customs and Border Protection properly liquidated the merchandise in several different tariff classifications rather than a retail set with a single tariff classification.
Customs denied the protest and Estee Lauder took the matter to Court. Once in Court, the Justice Department moved to have the case dismissed on the grounds that the protest insufficiently described the merchandise. Relying on an 1877 Supreme Court decision, the Court of International Trade started from the premise that technical precision is not required of a protest. Rather, a protest is sufficient if it shows that the challenge brought to the Court was, at the time of the protest, "in the mind of the importer, and that it was sufficient to notify [Customs] of its true nature and character. . . ." Further, the law requires that the Court should liberally interpret a protest in favor of it being sufficient to secure jurisdiction.
The government's argument was that the protest specifically described some configuration so of the cosmetics kit and, therefore, necessarily excluded other configurations. Thus, to the extent the importer sought judicial review, it can only be with respect to merchandise specifically described by the protests.
The Court agreed that it was difficult to make a precise comparison of the protests and the entry documents to determine which kits were at issue. At the same time, the Court found that the protest contained general language referring to cosmetic kits made up of "various components" and that this language was broad enough to notify Customs of the challenged classification decisions.
This seems like a close case, but I can certainly see how the Court could reach this conclusion. Considering the requirement that the Court of International Trade liberally construe protests, the broad reading of the protest seems appropriate.
The final, and interesting point, is that the Court also said that the lack of precision in the protest should not have presented an insurmountable hurdle for Customs. Rather, based on a prior court decision involving Saab cars, the Court found that Customs should have inquired of the importer to determine the scope of the question. This, I think, might be a slippery slope of sorts. My advice to importers is to not let this mean Customs must act on a sloppy protest by seeking clarification from the importer. There remains a level of specificity which the Court will require. As I have said in the past, you don't want to be the test case to determine how unclear a protest can be to still get judicial review. I also wonder whether Customs will agree that it has a duty to inquire. If this case, along with Saab, is read to create a new duty of inquiry on Customs, it is likely to end up appealed to the Federal Circuit.
So, watch this space.
A good protest includes a fully developed argument for the correct classification and against the classification Customs applied. This is usually supported by technical drawings, photographs, and legal reasoning based on HTSUS language, court decisions, and rulings.
What is not always understood about protests is that they are jurisdictional documents. That means that often the only way to get into the Court of International Trade is to have a valid protest that clearly addresses the question presented to the Court. If a protest is untimely, does not cover the correct merchandise, or relates to some decision that is not subject to protest, you will get bounced from Court.
The issue in Estee Lauder Inc. v. United States was whether the protest sufficiently described the merchandise. The merchandise involved was several configurations of kits of cosmetics and accessories in and vanity bag. The question presented to the Court of International Trade was whether Customs and Border Protection properly liquidated the merchandise in several different tariff classifications rather than a retail set with a single tariff classification.
Customs denied the protest and Estee Lauder took the matter to Court. Once in Court, the Justice Department moved to have the case dismissed on the grounds that the protest insufficiently described the merchandise. Relying on an 1877 Supreme Court decision, the Court of International Trade started from the premise that technical precision is not required of a protest. Rather, a protest is sufficient if it shows that the challenge brought to the Court was, at the time of the protest, "in the mind of the importer, and that it was sufficient to notify [Customs] of its true nature and character. . . ." Further, the law requires that the Court should liberally interpret a protest in favor of it being sufficient to secure jurisdiction.
The government's argument was that the protest specifically described some configuration so of the cosmetics kit and, therefore, necessarily excluded other configurations. Thus, to the extent the importer sought judicial review, it can only be with respect to merchandise specifically described by the protests.
The Court agreed that it was difficult to make a precise comparison of the protests and the entry documents to determine which kits were at issue. At the same time, the Court found that the protest contained general language referring to cosmetic kits made up of "various components" and that this language was broad enough to notify Customs of the challenged classification decisions.
This seems like a close case, but I can certainly see how the Court could reach this conclusion. Considering the requirement that the Court of International Trade liberally construe protests, the broad reading of the protest seems appropriate.
The final, and interesting point, is that the Court also said that the lack of precision in the protest should not have presented an insurmountable hurdle for Customs. Rather, based on a prior court decision involving Saab cars, the Court found that Customs should have inquired of the importer to determine the scope of the question. This, I think, might be a slippery slope of sorts. My advice to importers is to not let this mean Customs must act on a sloppy protest by seeking clarification from the importer. There remains a level of specificity which the Court will require. As I have said in the past, you don't want to be the test case to determine how unclear a protest can be to still get judicial review. I also wonder whether Customs will agree that it has a duty to inquire. If this case, along with Saab, is read to create a new duty of inquiry on Customs, it is likely to end up appealed to the Federal Circuit.
So, watch this space.
Comments