Precision Specialty Metals, Inc. v. U.S.
| Decision Date | 20 September 2000 |
| Docket Number | No. 98-02-00291.,SLIP OP. 00-121.,98-02-00291. |
| Parties | PRECISION SPECIALTY METALS, INC., Plaintiff, v. UNITED STATES of America, Defendant. |
| Court | U.S. Court of International Trade |
Collier Shannon Scott PLLC, Washington, DC (Laurence J. Lasoff, Robin H. Gilbert, John M. Herrmann); Howrey, Simon, Arnold & White, Washington, DC (Jeffrey W. Brennan), for Plaintiff.
David W. Ogden, Assistant Attorney General; Joseph I. Liebman, Attorney in
Charge, International Trade Field Office; Mikki Graves Walser, Commercial Litigation Branch, Civil Division, Department of Justice, New York, New York; Chi S. Choy, Office of the Assistant Chief Counsel, International Trade Litigation, United States Customs Service, New York, New York, of counsel, for Defendant.
This case comes before the court on Defendant's Motion for Reconsideration and/or Relief From the Court's Order Dated May 24, 2000 (the "Reconsideration Motion"), and on Plaintiff's Motion for Summary Judgment Pursuant to United States Court of International Trade Rule 56 ("Plaintiff's Motion for Summary Judgment").
The Order dated May 24, 2000 struck Defendant's Opposition to Plaintiff's Motion for Summary Judgment and Cross-Motion for Summary Judgment, and the related papers filed therewith, as untimely filed, and granted summary judgment in favor of Plaintiff as Plaintiff's Motion for Summary Judgment was thus unopposed. In the Reconsideration Motion, Defendant asks the court to accept its late-filed submissions on summary judgment. In the alternative, Defendant urges the court to make an independent analysis of the merits of Plaintiff's Motion for Summary Judgment. For the reasons set forth below, the court grants the Reconsideration Motion to the extent that it seeks an independent analysis by the court of Plaintiff's Motion for Summary Judgment. The court denies the remainder of the Reconsideration Motion.
In its Motion for Summary Judgment, Plaintiff Precision Specialty Metals, Inc. ("Precision") contests Customs' denial of drawback on certain entries of stainless steel trim1 and scrap. Customs based its denial on a determination that the subject merchandise is "waste" or "valuable waste", and thus is not an "article manufactured or produced" within the meaning of the drawback statute, 19 U.S.C. § 1313(b) (1994). Plaintiff contends that, as a matter of fact and of law, the merchandise at issue is not waste, and that Plaintiff is entitled to drawback thereon. Because the court concludes that Plaintiff has failed to meet its burden on summary judgment to demonstrate the absence of any genuine issue of material fact, Plaintiff's Motion for Summary Judgment is denied.
This case involves 38 claims for substitution manufacturing drawback made pursuant to 19 U.S.C. § 1313(b), the manufacturing substitution drawback statute, and Treasury Decision ("T.D.") 81-74. T.D. 81-74 is a general drawback contract for articles manufactured using steel, and provides, in pertinent part, for the allowance of drawback on imported "[s]teel of one general class, e.g. an ingot", where the "merchandise ... which will be used in the manufacture of the exported products" is "[s]teel of the same general class, specification and grade as the [subject imported] steel[.]" The steel used in the manufacture of the exported products on which drawback is sought must be "used to manufacture new and different articles, having distinctive names, characters and uses." T.D. 81-74 further provides that "no drawback is payable on any waste which results from the manufacturing operation."
On October 23, 1991, Precision submitted a letter to Customs expressing its intention to adhere to and comply with the terms of T.D. 81-74. See App. A-1. In that letter, Precision described the various steel products on which it would claim drawback. Those products included "stainless steel coils, sheets and trim" of various chemistries identified by industry standards. Id. at 1. Customs granted Precision's request to claim drawback under T.D. 81-74.2 App. A-4 (Letter from Customs to Precision, dated January 10, 1991 [sic—1992]).
Precision filed 116 drawback entries under T.D. 81-74 between December 11, 1991 and May 13, 1996. Rule 56(i) Statement, ¶ 5. Customs liquidated 69 of these entries with full benefit of drawback, in which Precision had claimed exports of stainless steel trim, stainless steel strip, stainless steel scrap and stainless steel coils, for a total of approximately $850,000. Id. at ¶ 6. Over that period, Customs routinely requested clarifying information concerning Precision's drawback entries. Id. at ¶ 7. Prior to January 1996, Customs never questioned the eligibility of that merchandise for drawback. Id. at ¶ 7.
Documentation submitted in connection with the remaining entries, which contained the merchandise at issue, described the merchandise by various terms such as "stainless steel," "metal scrap," "scrap steel for remelting purposes only," "steel scrap sabot," "stainless steel scrap," and "desperdicio de acero inoxidable3." Id. at ¶ 18. See App. B at 2.
During 1992 and 1993, when conducting "pre-liquidation reviews" of three drawback claims that involved exports of "[s]tainless [s]teel coil ends and side trim (scrap)", Customs asked Precision for additional information and documentation on the exports involved. App. A-8 (Letter from Customs to Pat Revoir dated July 10, 1992); App. A-11 (). In response, Precision furnished Customs with additional information and documentation, showing that the exported material was stainless steel scrap. Customs liquidated each of those three drawback entries for the full amount of drawback claimed. See App. A-14 (Notice of Liquidation); Rule 56(i) Statement, ¶¶ 8-10.
In January 1996, Customs first questioned the eligibility of Precision's claims involving stainless steel trim for drawback. See Rule 56(i) Statement, ¶ 7; App. A-7 (January 10, 1996 notice from Customs to Appel-Revoir). In June 1996, Precision received a Notice of Action informing it that 38 of its drawback entries were being liquidated without the benefit of drawback in full or part, on the basis that "scrap was shown on the export bill(s) of lading" and that "[d]rawback is not available upon exports of valuable waste."4 App. A-20. The entries at issue were liquidated on June 14, 1996. Rule 56(i) Statement, ¶ 14.
On September 10, 1996, Precision filed a timely protest covering the entries at issue in this matter. See Rule 56(i) Statement, ¶ 15. Customs denied Precision's protest. Id., ¶ 16. Precision thereafter timely commenced this action by filing a summons on February 5, 1998. Precision filed its complaint on October 21, 1998.
On July 26, 1999, the court issued a scheduling order, setting the close of discovery for December 31, 1999. On January 4, 2000, the court granted the parties' consent motion for an extension of the discovery cutoff, and extended the cutoff to February 29, 2000.
At a status conference held March 2, 2000, Defendant stated that it had not yet completed its discovery efforts (which commenced shortly before the already-extended discovery cutoff date), and indicated that it wished to seek the court's permission to conduct further discovery. That day, the court issued a scheduling order (the "March 2 Order"), setting a March 9, 2000 deadline for Defendant to file any motion for limited additional discovery. This order also set a deadline of April 3, 2000 for Plaintiff to file a motion for summary judgment. Defendant was given 30 days in which to file any opposition and/or cross-motion to plaintiff's summary judgment motion. Plaintiff was given 10 days in which to file any reply brief. Trial was set for June 19, 2000, in the event that all issues were not resolved on summary judgment. On March 14, 2000, the court issued an order modifying the March 2 Order. This March 14 order granted Plaintiff 30 days in which to file reply papers in the event the Defendant filed a cross-motion, and provided that trial would be rescheduled if a cross-motion were filed.
On April 11, 2000, the court issued an order partially granting Defendant's motion for additional discovery, and providing that Defendant was to complete any such discovery no later than April 25, 2000.
Plaintiff filed its Motion for Summary Judgment on March 31, 2000.5 Thus, by the terms of the March 2 Order, Defendant was required to file any opposition and/or cross-motion papers no later than May 5, 2000.
On May 4, 2000, at 5:51 p.m., Defendant filed Defendant's Motion to Extend the Time Within Which to File Its Response to Plaintiff's Motion for Summary Judgment ("Defendant's Motion for Extension"), seeking a thirty-day extension of time in which to file its opposition to Plaintiff's Motion for Summary Judgment. Defendant's Motion for Extension, and the supporting papers, contained no request for an extension of time for Defendant to file a cross-motion for summary judgment.
On May 10, 2000, the court issued an order denying Defendant's Motion for Extension and requiring Defendant to file any opposition to Plaintiff's Motion for Summary Judgment "forthwith".
On May 19, 2000 (two weeks after the date on which Defendant's opposition papers should have been filed), Plaintiff filed Plaintiff's Motion for Establishment of a Hearing Schedule, If Necessary, on Plaintiff's Motion for Summary Judgment ("Plaintiff's Motion for Hearing Schedule"). In this motion, Plaintiff urged that briefing on its Motion for Summary Judgment should be held to be closed, in light of the fact that Defendant had yet to file any papers opposing summary judgment. Also on May 19, 2000, the court issued an order scheduling an in-court status conference.
On May 22, 2000, at 5:24 p.m. — the night before the conference set for Plaintiff's ...
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