437 F.Supp.2d 1335 (CIT. 2006), 05-00636, H & H Wholesale Services, Inc. v. United States

Docket Nº:05-00636.
Citation:437 F.Supp.2d 1335
Party Name:H & H WHOLESALE SERVICES, INC., Plaintiff, v. UNITED STATES, Defendant. Slip Op. 06-77.
Case Date:May 23, 2006
Court:Court of International Trade

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437 F.Supp.2d 1335 (CIT. 2006)




Slip Op. 06-77.

No. 05-00636.

United States Court of International Trade.

May 23, 2006

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[Copyrighted Material Omitted]

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Edmund Maciorowski, for the plaintiff.

Peter D. Keisler, Assistant Attorney General, Barbara S. Williams, Attorney in Charge, International Trade Field Office, Commercial Litigation Branch, Civil Division, United States Department of Justice (Amy M. Rubin), Chi S. Choy, Office of the Assistant Chief Counsel, Bureau of Customs and Border Protection, Department of Homeland Security, of counsel, for the defendant.


RESTANI, Chief Judge.

This matter is before the court on defendant's Motion to Dismiss a complaint filed by plaintiff, H & H Wholesale Services, Inc. ("H & H"), alleging that the Bureau of Customs and Border Protection ("Customs") acted arbitrarily and capriciously in "excluding" a shipment of "One Touch" blood glucose test strips (the "merchandise") imported on June 25, 2005. Defendant United States (the "Government") argues that the court lacks jurisdiction under 28 U.S.C. 1581(a) and (i) (2000) to hear the matter because the products were seized, not excluded. H & H has two responses. First, it claims that sufficient indicia of exclusion exist to support the court's jurisdiction. Second, even if the facts alleged do not support jurisdiction, H & H submits that discovery is warranted prior to ruling on the Government's Motion to Dismiss.

Additionally, H & H has filed an Amended Complaint, along with a Motion to Compel Defendants to Answer Plaintiff's Amended Complaint and Limit Time to Answer ("Motion to Compel"). The Amended Complaint follows the original Complaint, save for an additional count (Count Seven), alleging that Customs behaved arbitrarily and capriciously in demanding

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redelivery of a separate shipment of One-Touch blood glucose test strips that arrived in the United States from Canada on March 8, 2006. (Am.Compl.pp 68-69.) The Government has moved to strike, or, in the alternative, to dismiss Count Seven of the Amended Complaint.


In June 2005, H & H imported a split-shipment of "One Touch" blood glucose test strips, produced by Lifescan, a subsidiary of Johnson & Johnson, Inc. (Compl.¶ 5, Ex. 1.) The shipment arrived in Detroit on June 25, 2005. (Compl.¶ 12, Ex. 7.) After taking a sample on June 27, Customs placed the shipment on "hold for intensive examination" on June 28. (Compl.pp 15-16.) On July 7, 2005, having received no notice of detention, counsel for H & H sent a letter to Customs to inquire about the status of its shipment. (Compl. ¶ 17, Pl.'s Resp. Def.'s Mot. Dismiss Ex. C.) On July 8, counsel for H & H received a letter via facsimile from Customs stating that any inquiries regarding the merchandise should be directed to the Office of Immigration and Customs Enforcement. (Pl.'s Resp. Def.'s Mot. Dismiss 5, Ex. C.) On July 14, Customs officers seized the merchandise and issued a custody receipt for the seized property. (Compl.¶ 18, Ex. 15.) On July 21, Customs issued notices of seizure to H & H, which stated that the merchandise had been seized pursuant to 19 U.S.C. § 1595a(c) (2000 & West Supp.2005) for attempted introduction of misbranded drugs into interstate commerce in violation of 21 U.S.C. §§ 331 and 352 (2000 & West Supp.2005). (Compl.Exs.16-17.) The notice included a "Notice of Seizure and Information for Claimants Form," advising H & H of its right to file a claim after forfeiture proceedings were instituted or to seek administrative relief from forfeiture. (Compl.Exs.16-17.) On August 8, 2005, H & H filed a protest "against [Customs's] classification decision; [its] appraisement decision, [its] decision to exclude the merchandise from entry or delivery and, any assessment, whether or not charged, on certain glucose test strips." (Compl.Ex.18.) Customs's hand-written response on the protest form was initially marked "denied in full for the reason checked," but was changed to reflect that the protest was "rejected as non-protestable." (Compl.Ex.18.) By way of explanation, Customs wrote: "Both entries have been seized. (FP & F Case--2005-3807-000250 and 2005-3807-000252) Please address any outstanding issues in the FP & F petitioning process." 1 (Compl.Ex.18.)

On August 23, 2005, Customs sent H & H an amended notice of seizure, stating that it had decided "not to pursue" forfeiture under 21 U.S.C. §§ 331 and 352, but would seek forfeiture of the merchandise under 19 U.S.C.§ 1526(e) for violations of Johnson & Johnson's trademark on One Touch blood glucose test strips. (Compl.Ex.22-23.) On November 18, 2005, H & H filed a summons and complaint in this court under 28 U.S.C. § 1581(a) and (i), challenging Customs's denial of its protest of the "exclusion" of its merchandise.

While this Motion to Dismiss was pending, H & H filed an Amended Complaint challenging Customs's actions regarding a separate shipment of One-Touch blood glucose test strips from Canada. This shipment arrived in the Port of Detroit on March 8, 2006, and was presented for entry on March 10. (Am.Compl.¶ 69-70.)

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Customs released the shipment on March 28, 2006, following a "hold for intensive examination." (Am.Compl.pp 72-73.) Customs then issued a demand for redelivery of the shipment the following day. (Am.Compl.¶ 74.) H & H filed a protest to the demand for redelivery on March 30. (Am.Compl.Exs.31-32.) Count Seven of the Amended Complaint alleges that Customs improperly demanded redelivery. (Am.Compl.¶ 79.) At the time the Amended Complaint was filed, Customs had not yet denied the protest. Customs did not respond to the protest and it was deemed denied on April 30, 2006. (See Pl.'s Resp. Def.'s Mot. Strike 6.)


I. H & H's Amended Complaint

Count Seven of H & H's Amended Complaint challenges the denial of its protest of Customs's demand for redelivery of the March 8, 2006 shipment. (Am.Compl.pp 74, 78.) The Government objects that the entry and protest listed in Count Seven do not appear in the summons filed to initiate this action, and has moved to strike, or in the alternative, dismiss for lack of jurisdiction, Count Seven of the Amended Complaint. Rather than issue a separate opinion, the court will address the merits of the Government's Motion to Strike here.

The initial pleading in an action under 28 U.S.C. § 1581(a) is a summons. USCIT R. 3(a)(1); DaimlerChrysler Corp. v. United States, 442 F.3d 1313, 1318 (Fed.Cir.2006) ("We conclude that the initial pleading in actions to contest the denial of a protest is the summons."). The summons must establish the court's jurisdiction, and "[b]ecause each protest forms the basis for a separate cause of action, the summons must establish the Court of International Trade's jurisdiction as to each protest." Id. at 1319. H & H's summons makes no mention of entry number DQ4-1936394-9 or protest number 3801-06-100161, and H & H acknowledges that it has not filed an amendment to the summons to reflect the new shipment. (Pl.'s Resp. Def.'s Mot. Strike 5 n. 2.) Because H & H failed to amend the summons, the court lacks jurisdiction to consider Count Seven of H & H's Amended Complaint. Count Seven of the Amended Complaint is therefore dismissed without prejudice. Consequently, H & H's Motion to Compel an answer to the Amended Complaint is denied.

II. The Court Lacks Subject Matter Jurisdiction Under § 1581(a)

The court now turns to the counts alleged in the original complaint. As the party seeking to invoke the jurisdiction of this court, H & H bears the burden of establishing jurisdiction. Cedars-Sinai Med. Ctr. v. Watkins, 11 F.3d 1573, 1583 (Fed.Cir.1993). In ruling on a Rule 12(b)(1) motion, the court must first determine whether the Motion to Dismiss challenges the sufficiency of the pleadings or controverts the factual allegations made in the pleadings. Power-One, Inc. v. United States, 23 CIT 959, 962 n. 9, 83 F.Supp.2d 1300, 1303 n. 9 (1999). If the motion challenges the sufficiency of the pleadings, the court will assume the bare allegations of the complaint are true. Id. If, however, the motion controverts factual allegations supporting the Complaint, "the allegations in the complaint are not controlling," and "are subject to fact-finding by the district court." Cedars-Sinai, 11 F.3d at 1583-84.

This case involves a challenge to one factual allegation underlying the pleadings.

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H & H contends that the merchandise was excluded prior to being seized; the Government argues that no exclusion took place. The court will therefore "review evidence outside the pleadings to determine facts necessary to rule on the jurisdictional issue." Autoalliance Int'l, Inc. v. United States, 398 F.Supp.2d 1326, 1332 (CIT 2005).

A. No Exclusion of the Merchandise Occurred Prior to Seizure on July 28, 2005

H & H asserts that the court has subject matter jurisdiction under 28 U.S.C. § 1581(a), or alternatively under 28 U.S.C. § 1581(i). The court has "exclusive jurisdiction of any civil action commenced to contest the denial of a protest, in whole or in part, under section 515 of the Tariff Act of 1930 [codified at 19 U.S.C. § 1515]." 28 U.S.C. § 1581(a). This includes a challenge to the denial of a protest concerning "the exclusion of merchandise from entry or delivery ... under any provision of the customs laws, except a determination appealable under section 1337 of this title." 2 19 U.S.C. § 1514(a)(4) (2000).

It is well established, however, that the court lacks jurisdiction under § 1581(a) to review a seizure of goods by Customs. If Customs's treatment of the merchandise "was a 'seizure' ... jurisdiction would lie with the United States District Court...

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