American Permac, Inc. v. U.S.

• Decision Date: 01 September 2000
• Docket Number: SLIP OP. 00-114.,No. 94-10-00589.,94-10-00589.
• Parties: AMERICAN PERMAC, INC., Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

116 F.Supp.2d 1317

AMERICAN PERMAC, INC., Plaintiff, v. UNITED STATES, Defendant.

SLIP OP. 00-114.

No. 94-10-00589.

United States Court of International Trade.

September 1, 2000.

As Amended October 18, 2000.

Barnes, Richardson & Colburn (Rufus E. Jarman, Jr.), New York, NY; Alan Goggins, for plaintiff, of counsel.

David W. Ogden, Assistant Attorney General of the United States; Joseph I. Liebman, Attorney in Charge, International Trade Field Office, Commercial Litigation Branch, Civil Division, United States Department of Justice (James A. Curley); Edward N. Maurer, Office of the Assistant Chief Counsel, International Trade Litigation, United States Customs Service, for defendant, of counsel.

OPINION

CARMAN, Chief Judge.

This case is before this Court on remand from the United States Court of Appeals for the Federal Circuit (Federal Circuit). See American Permac, Inc. v. United States, 191 F.3d 1380 (Fed.Cir.1999). Plaintiff, American Permac, Inc. (American Permac), argues it is entitled to judgment as a matter of law because the entries at issue were liquidated by operation of law prior to the United States Customs Service's (Customs) 1994 liquidation of the entries.

Defendant, United States, argues it is entitled to judgment as a matter of law because the entries at issue were not liquidated by operation of law prior to Customs's 1994 liquidation. Also, defendant argues it is entitled to judgment as a matter of law on its counterclaims because Customs's 1994 liquidation of the entries at issue, although valid, contained errors. Plaintiff argues the Court may not consider defendant's counterclaims due to its lack of subject matter jurisdiction or, alternatively, because the issues presented are res judicata. This Court has jurisdiction pursuant to 28 U.S.C. § 1581(a).

BACKGROUND

The facts in this case have been recounted in greater detail in American Permac, Inc. v. United States, 984 F.Supp. 621, 622 (CIT 1997), and American Permac, Inc. v. United States, 191 F.3d at 1381. The facts pertinent to this opinion are set forth below.

This case involves three entries of dry-cleaning machinery from Germany. After Customs liquidated the three entries in 1994, assessing antidumping duties, plaintiff timely filed protests against the 1994 liquidations alleging the entries had been liquidated by operation of law, i.e., without antidumping duties, prior to Customs's 1994 liquidation. After Customs denied the protests, plaintiff timely filed a summons with this Court asserting the Customs's 1994 "liquidation and assessment of antidumping duties [on the three entries] were barred by the statute of limitations," (Summons at 2.), as the entries were liquidated by operation of law prior to that date.

In its answer to plaintiff's complaint, defendant denied plaintiff's claim and filed two counterclaims asserting that while Customs had validly liquidated the entries at issue, Customs had erred by under-assessing the antidumping duties owed on two of the three entries at issue.¹ Customs under-assessed antidumping duties on the two entries in the amount of $7,186.04.² In response to defendant's counterclaims, plaintiff raised no defenses in its pleadings.³ (See [Plaintiff's] Reply.)

In 1997, this Court held the entries at issue were liquidated by operation of law and thus declined to address defendant's counterclaims. See American Permac, 984 F.Supp. at 629. On appeal, however, the Federal Circuit reversed this Court and held the entries were not liquidated by operation of law and remanded the matter for further proceedings. See American Permac, 191 F.3d at 1382. Subsequent to the remand and upon request of the parties, this Court ordered the parties to submit "supplemental briefing concerning the government's counterclaims." (Scheduling Order (Stipulation) signed January 31, 2000.)

CONTENTIONS OF THE PARTIES

A. Plaintiff

Plaintiff, American Permac, argues the Court may not properly consider or, alternatively, the Court should deny defendant's counterclaims because no protest was filed to contest the Customs's determinations involved in defendant's counterclaims, i.e., Customs's assessment of antidumping duties. Therefore those determinations are final and conclusive on all parties under 19 U.S.C. § 1514 (1994).⁴ Citing United States v. Cherry Hill Textiles, Inc., 112 F.3d 1550 (Fed. Cir.1997) and Export Packers Co., Ltd. v. United States, 795 F.Supp. 422 (CIT 1992), plaintiff argues a protest "defines the scope of what is contested, and all other aspects of the liquidation not contested become final and conclusive." (Plaintiff's Supplemental Brief on Remand Regarding Defendant's Counterclaims at 3.) Accordingly, when a defendant counterclaims on an issue not raised in a plaintiff's protest, the Court may not consider the counterclaim because the Court lacks subject matter jurisdiction or the issue posed by the counterclaim is res judicata, i.e., an issue already judged.⁵

In this matter, plaintiff claims the only issue raised in its protest was the validity of Customs's 1994 liquidation of the entries at issue, i.e., whether the entries at issue were liquidated by operation of law prior to Customs's 1994 liquidations. According to plaintiff, defendant's counterclaims involve the amount of antidumping duties assessed in Customs's liquidations, a separate and distinct issue not challenged by plaintiff. Therefore, plaintiff argues defendant may not now assert counterclaims on the amount of antidumping duties assessed as it is final and conclusive under the statute. To bolster its argument, plaintiff notes the statute treats the assessment of duties and the validity of liquidation as separate issues by enumerating the issues in separate subsections of the statute, 19 U.S.C. § 1514(a)(3) and 19 U.S.C. § 1514(a)(5), respectively.

Accordingly, plaintiff argues the Court may not properly consider defendant's counterclaims due to lack of subject matter jurisdiction or, alternatively, the Court should deny defendant's counterclaims as the issues involved are res judicata.

B. Defendant

Defendant, United States, in its cross-motion for summary judgment claims that, pursuant to 28 U.S.C. § 1583 (1994), Customs under-assessed the amount of antidumping duties on two of the entries at issue. Defendant argues it is entitled to collect $7,186.04 plus prejudgment interest in under-assessed antidumping duties from plaintiff.

Defendant contends the Court may properly consider its counterclaims under 28 U.S.C. § 1583, which states, in relevant part, the Court of International Trade "shall have exclusive jurisdiction to render judgment upon any counterclaim ... if [] such claim ... involves the imported merchandise that is the subject of such civil action." Defendant maintains there is no dispute among the parties that its counterclaims involve those entries cited in plaintiff's claim, therefore, the Court has subject matter jurisdiction over defendant's counterclaims.

Defendant also argues plaintiff's other arguments against the Court's consideration of the defendant's counterclaims are meritless. First, defendant contends plaintiff's arguments may not be considered by the Court because plaintiff's arguments in opposition to defendant's counterclaims have nothing to do with the effect of the appellate court's decision. Therefore, plaintiff's arguments are beyond the scope of the supplemental brief allowed by the Court in this matter. Accordingly, it is inappropriate for the Court to consider these arguments.

Second, defendant contends, contrary to plaintiff's assertions, the issue of assessment of duties is not final and conclusive under 19 U.S.C. § 1514, because plaintiff challenged both the validity of Customs' liquidation and the assessment of antidumping duties in its protest to Customs and summons before the Court. (See Summons at 2.) Moreover, defendant asserts plaintiff's claim that the entries at issue were liquidated by operation of law under 19 U.S.C. § 1504(d), requires the Court to determine whether the actual liquidation is valid and, if so, the correct rate and amount of duty on the entry. Defendant argues proper liquidation and the proper assessment of duties are necessarily linked. Therefore, defendant argues its counterclaims regarding the assessment of duties may be properly considered by this Court.

Finally, defendant argues plaintiff's reliance on Cherry Hill is misplaced. See Cherry Hill, 112 F.3d at 1550. Defendant argues the situation at bar is factually distinct from that presented in Cherry Hill.

Accordingly, defendant argues the Court should consider its counterclaims and its cross-motion for summary judgment should be granted.

STANDARD OF REVIEW

This case is before the Court on plaintiff's motion and defendant's cross-motion for summary judgment. Summary judgment is appropriate if, based on the papers before the Court, "there is no genuine issue as to any material fact" and "the moving party is entitled to a judgment as a matter of law." U.S. CIT R. 56(c). The Court finds summary judgment is appropriate in this case because there are no genuine issues of material fact in dispute. See United States v. Shabahang Persian Carpets, Ltd., 963 F.Supp. 1207, 1209 (CIT 1997).

DISCUSSION

This matter is before the Court on remand from the United States Court of Appeals for the Federal Circuit. See American Permac, 191 F.3d at 1381.

On appeal, the Federal Circuit reversed and remanded this Court's determination in American Permac, 984 F.Supp. at 621, holding "American Permac's argument for liquidation by operation of law must fail." American Permac, 191 F.3d at 1382. Therefore, all that remains for this court to decide on remand are the issues brought forth by defendant's cross-motion for summary judgment on its counterclaims.

A. Jurisdiction

Plaintiff argues this Court may not consider defendant's counterclaims because it lacks subject matter jurisdiction. This Court disagrees.

Section 1583 of Title...