Frontier Ins. Co. v. U.S., SLIP OP. 02-12.
| Citation | 185 F.Supp.2d 1375 |
| Decision Date | 04 February 2002 |
| Docket Number | SLIP OP. 02-12.,No. 00-09-00470.,00-09-00470. |
| Parties | FRONTIER INSURANCE COMPANY (Surety for Imagereader, Inc., dba Info Peripherals, Inc.) Plaintiff, v. THE UNITED STATES OF AMERICA, Defendant |
| Court | U.S. Court of International Trade |
Law Offices of John M. Daley and Glad & Ferguson P.C., San Francisco, CA (John M. Daley), for Plaintiff.
Robert D. McCallum, Jr., Assistant Attorney General, United States Department of Justice; John J. Mahon, Acting Attorney in Charge, International Trade Field Office United States Department of Justice, (Amy Rubin); Beth C. Brotman, Office of the Assistant Chief Counsel, International Trade Litigation, U.S. Customs Service, for Defendant, of counsel.
This case is before the court on cross-motions for summary judgment. Plaintiff ("Frontier") was the surety for the importer. Pursuant to 19 U.S.C. § 1304 (1998), Defendant ("Customs") required that Frontier pay a 10% marking duty for the alleged failure of its client to properly mark the country of origin on the retail packages of imported computer scanners. Frontier commenced this action for a refund of the marking duties claiming that the imported merchandise at issue was properly re-marked prior to liquidation. Frontier asserts that Customs (1) cannot prove the merchandise was not properly re-marked, (2) is not authorized to assess marking duties on its theory that the importer failed to obtain a release from Customs verifying that the merchandise was properly re-marked, (3) cannot recover marking duties because the importer failed to hold the merchandise pending receipt of a release from Customs, and (4) should have issued a Notice to Redeliver which would have caused Customs to verify the accuracy of the re-marking of the merchandise. Customs argues that it never received the required certification from the importer that the merchandise was properly re-marked and that the importer failed to comply with the relevant statutory and regulatory requirements including the Notice to Mark. Therefore, Customs alleges it properly assessed a 10% marking duty on the imported merchandise. This court has jurisdiction pursuant to 28 U.S.C. § 1581(a) (1994).
At issue before this court is an entry of imported computer scanners from China. The computer scanners were imported by Imagereader, Inc., dba Info Peripherals, Inc. ("importer") on July 28, 1998, at the Port of San Francisco under entry number K80-0848683-0. The following facts are not disputed. Frontier acted as surety for the importer and bonded the imported entry at issue. The retail packages of the scanners were not properly marked to identify the country of origin. On July 30, 1998, Customs sent the importer a Notice to Mark (Customs Form 4647) which stated: See Def.'s Cross-Mot. for Summ. J. ("Def.'s Br.") at 1.
According to Jeff Ghielmetti, Vice President of Operations for the importer, the marking problems were corrected. Aff. of Jeff Ghielmetti ("Ghielmetti Aff.") at ¶ 3. In his affidavit, Mr. Ghielmetti declares that he personally signed the "Importer Certification" portion of the Notice to Mark and mailed the original certification to his broker and a copy to Customs in San Francisco. Ghielmetti Aff. at ¶ 6. However, the Customs commodity team in San Francisco denies having received the certification from the importer. Declaration of Brian Carter at ¶ 6. Thus, on June 15, 1999, Customs sent a Notice of Action (Custom Form 29) notifying the importer and its broker that Customs proposed to liquidate the entry with a 10% marking duty for failure to mark unless Customs received a response from the importer within 20 days. Since neither the importer nor the broker responded to the Notice of Action, Customs reliquidated the entry on July 23, 1999, with a 10% marking duty.1 Sometime after it responded to the Notice to Mark and before the Notice of Action issued, the importer went out of business. Therefore, Customs demanded that Frontier pay for the marking duties owed on the imported scanners. Frontier filed a timely protest which was denied because the importer failed to (1) provide a signed release from Customs that the remarking was approved and (2) hold the merchandise until receiving a written release from Customs. Def.'s Br. at 3. Following the protest denial, on August 14, 2000, Frontier paid the marking duties in accordance with Customs' payment demand and filed this action seeking a refund of $41,386.30, plus interest from Customs.
Summary judgment is appropriate when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law." USCIT R. 56(c). Moreover, summary judgment is a favored procedural device "`to secure the just, speedy and inexpensive determination of every action.'" Celotex Corp. v. Catrett, 477 U.S. 317, 327, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (quoting Fed.R.Civ.P. 1); Sweats Fashions, Inc. v. Pannill Knitting Co., 833 F.2d 1560, 1562 (Fed.Cir. 1987). Whether a disputed fact is material is identified by the substantive law and whether the finding of that fact might affect the outcome of the suit. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). "Civil actions contesting the denial of a protest ..." shall be tried de novo. 28 U.S.C. § 2640(1)(a) (1994).
The requirements for the proper marking of merchandise imported into the United States are specified at 19 U.S.C. § 1304 which states in pertinent part:
(a) Marking of articles
Except as hereinafter provided, every article of foreign origin (or its container, as provided in subsection (b) hereof) imported into the United States shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or container) will permit in such a manner as to indicate to an ultimate purchaser in the United States the English name of the country of origin of the article.
. . . . .
(h) Additional duties for failure to mark If at the time of importation any article (or container, as provided in subsection (b) of this section) is not marked in accordance with the requirements of this section, and if such article is not exported or destroyed or the article (or its container ...) marked after importation in accordance with the requirements of this section (such exportation, destruction, or marking to be accomplished under customs supervision prior to the liquidation of the entry covering the article, and to be allowed whether or not the article has remained in continuous customs custody), there shall be levied, collected, and paid upon such article a duty of 10 per centum ad valorem, which shall be deemed to have accrued at the time of importation, shall not be construed to be penal, and shall not be remitted wholly or in part nor shall payment thereof be avoidable for any cause.
The Customs regulations found in 19 C.F.R. § 134 (1998) detail further requirements and necessary action that an importer must undertake to properly mark the imported merchandise after entry to avoid the assessment of a 10% marking duty.
Articles not marked as required by this part shall be subject to additional duties of 10 percent of the final appraised value unless exported or destroyed under Customs supervision prior to the liquidation of the entry....
19 C.F.R. § 134.2.
(a) Notice to mark or redeliver. When articles or containers are found upon examination not to be legally marked, the port director shall notify the importer on Customs Form 4647 to arrange with the port director's office to properly mark the article or containers, or to return all released articles to Customs custody for marking, exporting, or destruction.
. . . . .
(c) Supervision. Verification of marking, exportation, or destruction of articles found not to be legally marked shall be at the expense of the importer and shall be performed under Customs supervision unless the port director accepts a certification of marking as provided for in § 134.52 in lieu of marking under Customs supervision. 19 C.F.R. 134.51(a), (c). To comply with the "supervision" requirement of 19 C.F.R. § 134.51(c) by a certificate of marking, the importer is obligated to act in accordance with the requirements of 19 C.F.R. § 134.52.
(a) Applicability. Port directors may accept certificates of marking supported by samples of articles required to be marked, for which Customs Form 4647 was issued, from importers or from actual owners complying with the provision of § 141.20 of this chapter, to certify that marking of the country of origin on imported articles as required by this part has been accomplished.
(b) Filing of certificates of marking. The certificates of marking shall be filed in duplicate with the port director, and a sample of the marked merchandise shall accompany the certificate. The port director may waive the production of the marked sample when he is satisfied that the submission of such sample is impracticable.
(c) Notice of acceptance. The port director shall notify the importer or actual owner when the certificate of marking is accepted. Such notice of acceptance may be granted on the duplicate copy of the certificate of marking by use of a stamped notation of acceptance. The port director is authorized to spot check the marking of articles on which a certificate has been filed. If a spot check is performed, the approved copy of the certificate, if approval is granted, shall be returned to the importer or actual owner after the spot check is completed.
Frontier argues that Customs has...
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...section 1304), the duty could not have arisen."), amended on reh'g by, 135 F.3d 760 (Fed. Cir. 1998); Frontier Ins. Co. v. United States, 185 F. Supp. 2d 1375, 1379 (Ct. Int'l Trade 2002) ("As Customs correctly concludes, § 1304 mandates the assessment of a 10% marking duty when (1) at the ......