Hartog Foods Intern., Inc. v. U.S., 01-1229.

• Decision Date: 17 May 2002
• Docket Number: No. 01-1229.,01-1229.
• Citation: 291 F.3d 789
• Parties: HARTOG FOODS INTERNATIONAL, INC., Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

291 F.3d 789

HARTOG FOODS INTERNATIONAL, INC., Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee.

No. 01-1229.

United States Court of Appeals, Federal Circuit.

May 17, 2002.

Rufus E. Jarman, Jr., Barnes, Richardson & Colburn, of New York, New York, argued for plaintiff-appellant. With him on the brief was Kevin W. Leonard.

James A. Curley, Attorney, International Trade Field Office, Department of Justice, of New York, New York, argued for defendant-appellee. With him on the brief were Stuart E. Schiffer, Acting Assistant Attorney General; David M. Cohen, Director, Commercial Litigation Branch, Civil Division, Department of Justice, of Washington, DC; and Joseph I. Liebman, Former Attorney in Charge, International Trade Field Office. Of counsel on the brief was Chi S. Choy, Attorney, Office of Assistant Chief Counsel, U.S. Customs Service, of New York, New York.

Before CLEVENGER, RADER, and PROST, Circuit Judges.

RADER, Circuit Judge.

On summary judgment, the United States Court of International Trade affirmed the United States Customs Service's denial of interest on Hartog Foods International, Inc.'s drawbacks. Because 19 U.S.C. § 1505 (2000) does not expressly and unequivocally waive sovereign immunity for interest awards on drawbacks, this court affirms.

I.

Hartog imported strawberry and cranberry juice products on April 19, 1990 and February 6, 1992, and paid the estimated regular duties for each entry. After importation, Hartog discovered that the juices may have originated in the European Community, thus requiring payment of an additional 100% ad valorem duty on each entry. On September 11, 1992, Hartog voluntarily disclosed the additional duty requirement to Customs and paid the duties. By this time, Customs had liquidated both entries. Moreover, Hartog had exported the April 19, 1990 entry. Hartog later exported most of the merchandise from the February 6, 1992 entry. Hartog filed for drawback. Drawback, in this case, refers to a 99% refund of import duties, payable due to export of the dutiable imports. 19 U.S.C. § 1313(a) (2000). Customs granted drawbacks on the estimated regular duties, but denied drawbacks on the ad valorem duties. Hartog filed protests in 1992 and 1993 seeking drawbacks on the ad valorem duties, which Customs granted in 1998 under new drawback regulations.^* Thus, over five years after Hartog's requests, Customs paid Hartog the appropriate drawbacks, but did not pay interest on the drawbacks.

Hartog timely filed a protest claiming that Customs owed interest on the drawbacks. Customs denied Hartog's protest for interest by allowing thirty days to lapse after its filing. 19 U.S.C. § 1515(b) (2000). Therefore, Hartog filed this suit in the Court of International Trade. The Court of International Trade affirmed Customs' denial of interest because the drawback moneys did not qualify as "excess moneys deposited" under 19 U.S.C. § 1505(b)-(c) (2000), and because the United States Code does not unequivocally waive sovereign immunity for an award of interest on drawback claims. Hartog appealed to this court. This court has jurisdiction under 28 U.S.C. § 1295(a)(5) (1994).

II.

This court reviews a grant of summary judgment, including statutory interpretation, by the Court of International Trade without deference. Int'l Light Metals v. United States, 194 F.3d 1355, 1361 (Fed.Cir.1999) (Light Metals I). Where Customs has officially and reasonably construed an ambiguous statute, this court affords such construction Chevron deference. Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842-43, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). Customs' rulings or interpretations that do not qualify as official statutory constructions nevertheless receive a measure of deference proportional to their persuasiveness. Mead Corp. v. United States, 283 F.3d 1342, 1346 (Fed.Cir.2002); Skidmore v. Swift & Co., 323 U.S. 134, 65 S.Ct. 161, 89 L.Ed. 124 (1944). In this case Customs has not officially interpreted the relevant statutory language. Therefore, this court need not extend any Chevron deference. Texport Oil Co. v. United States, 185 F.3d 1291, 1294 (Fed.Cir.1999) (declining Chevron deference where Customs' silence suggests no official statutory construction). Further, because Customs denied this protest without an official ruling, this court extends no Skidmore deference. This court therefore considers the parties' arguments in this case without deference.

Without an express statutory waiver, the United States is immune from interest. Library of Congress v. Shaw, 478 U.S. 310, 314, 106 S.Ct. 2957, 92 L.Ed.2d 250 (1986). This "no-interest rule" amplifies this court's obligation to construe waivers of sovereign immunity strictly in favor of the sovereign. This court cannot infer a waiver of sovereign immunity. Id. at 318, 106 S.Ct. 2957; Kalan, Inc. v. United States, 944 F.2d 847, 849 (Fed.Cir. 1991). A party, therefore, receives an interest award only where the United States Code unequivocally authorizes such an award. Lane v. Pena, 518 U.S. 187, 192, 116 S.Ct. 2092, 135 L.Ed.2d 486 (1996).

Thus, this court seeks statutory language that unambiguously authorizes an interest award. International Bus. Mach. Corp. v. United States, 201 F.3d 1367, 1372-1373 (Fed.Cir.2000); Kalan, 944 F.2d at 852. To meet its burden under sovereign immunity principles, Hartog offers the only statutory provision that may satisfy the strict requirement for a waiver, namely 19 U.S.C. § 1505(b). This provision recites:

(b) Collection or refund of duties, fees, and interest due upon liquidation or reliquidation

The Customs Service shall collect any increased or additional duties and fees due, together with interest thereon, or refund any excess moneys deposited, together with interest thereon, as determined on a liquidation or reliquidation. Duties, fees, and interest determined to be due upon liquidation or reliquidation are due 30 days after issuance of the bill for such payment. Refunds of excess moneys deposited, together with interest thereon, shall be paid within 30 days of liquidation or reliquidation.

19 U.S.C. § 1505(b) (emphasis added). Section 1505(b) unambiguously waives sovereign immunity only for interest awards on "excess moneys deposited." Section 1505(c), in turn, explains how to calculate interest on the "excess moneys deposited:"

(c) Interest

Interest assessed due to an underpayment of duties, fees, or interest shall accrue at a rate determined by the Secretary, from the date the importer of record is required to deposit estimated duties, fees, and interest to the date of liquidation or reliquidation of the applicable entry or reconciliation. Interest on excess moneys deposited shall accrue, at a rate determined by the Secretary, from the date the importer of record deposits estimated duties, fees, and interest or, in a case in which a claim is made under section 1520(d) of this title, from the date on which such claim is made, to the date of liquidation or reliquidation of the applicable entry or reconciliation.

19 U.S.C. § 1505(c) (emphasis added). Hence, drawbacks merit interest awards only if they qualify as "excess moneys deposited" under section 1505(b), and if so qualifying, interest on the drawbacks accrues, as specified by 1505(c), from the date of deposit.

Section 1505 provides no express definition of "excess moneys deposited." The Oxford English Dictionary defines "excess" as "beyond the usual or specified amount; beyond what is necessary, proper or right." Oxford English Dictionary (2d ed.1989). This definition is consistent with 19 U.S.C. § 1520(a)(1) (2000), which authorizes refunds on "excess deposits" "[w]henever it is ascertained on liquidation or reliquidation of an entry or reconciliation that more money has been deposited or paid as duties than was required by law to be so deposited or paid." Indeed, both sections 1505 and 1520 are codified under part III (entitled "Ascertainment, Collection and Recovery of Duties"), subtitle III of the Tariff Act of 1930. 19 U.S.C. §§ 1481-1529 (2000).

This court's case law reflects a similar understanding of "excess moneys deposited." For example, in Travenol Labs., Inc. v. United States, 118 F.3d 749, 753 (Fed. Cir.1997), this court stated that "section 1505(c) [ ] relates to interest — specifically, interest owed for either an underpayment or overpayment of estimated duties." Hence, the ordinary meaning of "excess," the definition of "excess deposits" in a related statutory provision, and this court's case law lead to the same conclusion — "excess moneys deposited" refers to an overpayment of estimated duties, i.e., the deposit or payment of money beyond legal requirements.

Customs determines overpayments at liquidation or reliquidation. 19 U.S.C. § 1505(b); Travenol, 118 F.3d at 753 (Liquidation or reliquidation "determines whether there has been an overpayment or underpayment, and thus defines the basis upon which interest might be due."). Although an overpayment does not emerge until the final reckoning at liquidation or reliquidation, the payment resulting in an excess occurred at the time of deposit. Thus, the importer makes a payment that is not identified as excess until liquidation or reliquidation. In a typical case, the importer pays estimated duties under a Harmonized Tariff Schedule of the United States (HTSUS) provision only to find — upon correct classification under a different HTSUS provision — the initial deposit was excessive. In such a case, Customs refunds the difference between the initial deposit and the required amount (i.e., the excess) with interest. Indeed, section 1505 sets the interest to accrue from the date of deposit. Thus, the statute implicitly considers the moneys excessive at the time of deposit even though the final reckoning occurs only later at liquidation or reliquidation. Thus, section 1505(c) requires the Customs to pay interest for the entire period during which it...