Ovan Int'l, Ltd. v. United States
| Decision Date | 23 February 2015 |
| Docket Number | Court No. 13–00390.,Slip Op. 15–17 |
| Citation | 49 F.Supp.3d 1327 |
| Parties | OVAN INTERNATIONAL, LTD. and BBS Automotive Group, Inc., d/b/a Carriage House Motor Cars, Plaintiffs, v. UNITED STATES, Defendant. |
| Court | U.S. Court of International Trade |
Julius W. Cohn, Cohn & Spector, of White Plains, NY, for the plaintiffs.
Alexander J. Vanderweide, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for the defendant. On the brief were Stuart F. Delery, Assistant Attorney General and Amy M. Rubin, Assistant Director. Of Counsel on the brief was Yelena Slepak, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, DC.
This matter is before the court on a motion for summary judgment1 submitted by the plaintiffs Ovan International Ltd. (“Ovan”) and BBS Automotive Group, Inc. (“Carriage House”) and a cross-motion for judgment on the pleadings filed by the defendant United States in opposition to the plaintiffs' motion.2 As discussed below, the plaintiff Ovan lacks standing to commence this action under 28 U.S.C. § 2631 and must be dismissed from the case. The remaining plaintiff, Carriage House, failed to file a valid timely protest with U.S. Customs and Border Protection (“Customs”) prior to commencing the action and as a result has not satisfied the jurisdictional requirements. Accordingly, the court must grant the defendant's cross-motion and deny the plaintiffs' motion.
Carriage House is the owner of the merchandise at issue, a 1958 Rolls Royce Silver Cloud motor vehicle (“subject vehicle”). The complaint challenges Customs' determination that a protest filed with respect to duties imposed upon the re-importation of the subject vehicle was not valid.3 The subject vehicle was first imported into the U.S. in the 1970's and was transferred at the then-owner's death to his son.4 On February 20, 2007, Carriage House purchased the subject vehicle from the son and transferred it to its affiliate, Auto Style Leasing, Ltd. (“Auto Style”).5
According to the papers, the subject vehicle was exported from the U.S. to the United Kingdom in March 2012 to be sold by auction house RM Auctions at an auction taking place in Monaco on May 12, 2012. Compl. ¶ 4; Def's Mot. at 2. The subject vehicle was “transferred” back to Carriage House on April 3, 2012 prior to shipment.6 RM Auctions hired Schumacher Cargo Logistics to arrange shipment of the subject vehicle which in turn used Ovan as its customs broker. Schudroff Affidavit ¶ 9; Def's Mot. at 2. The subject vehicle did not sell at auction and was returned to Carriage House in the U.S. by RM Auctions using Ovan as the importer. Compl. ¶¶ 5–6; Schudroff Affidavit ¶¶ 11–12, and at Exhibit E; Def's Mot. at 2.
The subject vehicle was imported under cover of Entry No. EJG–0229816–0 with the relevant customs entry form dated July 11, 2012 listing Ovan as the importer of record and Carriage House as the consignee. Compl. ¶ 6; Answer, PDoc 9 (April 11, 2014) (“Answer”) ¶ 6. On the entry form, Ovan entered the subject vehicle under Harmonized Tariff Schedule of the United States (“HTSUS”) subheading 9801.00.25, a duty-free provision.7 On August 14, 2012, Customs issued Ovan a Notice of Action stating that the subject vehicle did not qualify for duty-free treatment and would be classified under HTSUS subheading 8703.23.00 at liquidation.8
On January 23 and February 11, 2013, plaintiffs' counsel wrote to Customs Entry Specialist and Team Leader Curtis W. Gilbert concerning the subject vehicle. On February 14, 2013, Supervisory Entry Officer Evan Johnson (“Johnson”) and Officer Pearlman of Customs called plaintiffs' counsel and requested that he email additional information to Johnson concerning the subject vehicle. Compl. ¶ 8; Answer ¶ 8.
The plaintiffs aver that on February 22, 2013, Customs liquidated the entry (“liquidation date”) of the subject vehicle under HTSUS subheading 8703.23.00 with a duty rate of 2.5% ad valorem. Compl. ¶ 3. On April 9, 2013, or 46 days after liquidation, plaintiffs' counsel emailed a sworn affidavit of Michael Schudroff, the president and sole shareholder of Carriage House, dated April 8, 2013 and six attached exhibits to Customs. The affidavit requested that Customs “waive and cancel all duty, interest and related charges relative to” the subject vehicle. Compl. ¶ 9; Schudroff Affidavit ¶¶ 1, 16. On June 24, 2013, plaintiffs' counsel emailed Johnson indicating that counsel had not received a response to the April 9, 2013 email containing the Schudroff Affidavit. Compl. ¶ 9; Answer ¶ 9. On August 30, 2013, or 189 days after liquidation, plaintiffs' counsel filed Protest No. 4601–13–101369 with Customs, via facsimile, on standard protest Form 19 against the liquidated entry. Compl. ¶ 12 and at Exhibit C; Answer ¶ 12. On October 11, 2013, Customs informed the plaintiff that protest No. 4601–13–101369 was denied as “untimely filed”. Compl. ¶ 13 and at Exhibit D; Answer ¶ 24. On October 28, 2013, Ovan paid Customs $23,641.70 in tariffs and associated fees for the subject vehicle. Compl. ¶¶ 7, 14 and at Exhibit E; Answer ¶ 14. On December 4, 2013, plaintiffs' counsel filed a summons and complaint before this court. Compl.; Summons, PDoc 1 (Dec. 4, 2013).
The plaintiffs now move for summary judgment asking the court to find that the Schudroff Affidavit filed on April 9, 2013 constituted a valid timely protest and to annul the rejection of the purported protest by Customs. Pl's Mot. at 1, 3. The defendant cross-moves for judgment on the pleadings asking the court: (1) to dismiss Ovan as a plaintiff to this action averring that it lacks standing under 28 U.S.C. § 2631, and (2) to dismiss the action for lack of subject matter jurisdiction under 28 U.S.C. § 1581(a) because a valid timely protest was not filed, or if jurisdiction exists, (3) to dismiss the plaintiffs' complaint for failure to state a claim upon which relief can be granted because the complaint does not explicitly set forth the classification claim and because the subject vehicle fails to qualify for a duty exemption under HTSUS subheading 9801.00. Def's Mot. at 1–2, 4, 12–13.
Under 28 U.S.C. § 2631(a) “[a] civil action contesting the denial of a protest, in whole or in part, under section 515 of the Tariff Act of 1930 may be commenced in the Court of International Trade by the person who filed the protest pursuant to section 514 of such Act, or by a surety on the transaction which is the subject of the protest.” (italics added). It was Carriage House, not Ovan, who filed both protest No. 4601–13–101369 and the Schudroff Affidavit. Ovan, further, is not a surety on the transaction.9 Although the plaintiffs concede these facts, they still bid the court to find that Ovan has standing in this action, because Ovan was the Importer of Record listed on the entry summary, because Ovan was the agent for and was given power of attorney by Carriage House to deal with Customs on its behalf concerning the subject vehicle, and because Ovan provided payment to Customs on behalf of Carriage House for the tariff on the subject vehicle. See Compl. ¶ 1; see also Pl's Resp. at 1, referencing Schudroff Affidavit ¶ 10. The language of 28 U.S.C. § 2631(a), however, is clear that to have standing to appeal a denied protest Ovan must have either filed the protest or have served as a surety on the transaction, neither of which it did. Ovan cites no case law to support its claims that an importer of record, an agent to or a party who is given power of attorney by the protestor, or a party who pays a tariff for the protestor but does not file the protest or is not a surety to the transaction, may be provided standing in an action concerning the denied protest.10 Ovan, as a result, does not have standing to bring this action and must be dismissed as a plaintiff from the case.
Concerning the court's jurisdiction to consider the claim of the remaining plaintiff, Carriage House, the court has jurisdiction over “any civil action commenced to contest the denial of a protest [before customs], in whole or in part”. 28 U.S.C. § 1581(a). This jurisdiction, however, is limited to appeals of valid and timely protests that have been denied by Customs.11 Pursuant to 19 U.S.C. §§ 1514(a) and 1514(c)(3), to be timely a protest must be filed within 180 days after the date of liquidation. Although protests are to be construed liberally,12 “[t]he requirements for a valid protest are contained in section 1514(c)(1) and the implementing regulation [19 C.F.R. § 174.13(a) ] ... [and] are mandatory”. Koike, supra, 165 F.3d at 908–09 () (italics added). 19 U.S.C. § 1514(c)(1) (2006) currently requires that:
19 U.S.C. § 1514(c)(1). Under authority granted by the statute, Customs has implemented further requirements for a valid protest through its regulations. 19 C.F.R. § 174.13(a) addresses the general content of a valid protest and requires as follows:
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