States Marine Lines, Inc. v. Shultz

• Decision Date: 14 June 1974
• Docket Number: No. 73-2065.,73-2065.
• Citation: 498 F.2d 1146
• Parties: STATES MARINE LINES, INC., Appellant, v. George P. SHULTZ, Secretary of the Treasury, et al., Appellees.
• Court: U.S. Court of Appeals — Fourth Circuit

498 F.2d 1146 (1974)

STATES MARINE LINES, INC., Appellant, v. George P. SHULTZ, Secretary of the Treasury, et al., Appellees.

No. 73-2065.

United States Court of Appeals, Fourth Circuit.

Argued December 6, 1973.

Decided June 14, 1974.

Gordon D. Schreck, Charleston, S. C. (Buist, Moore, Smythe & McGee, Charleston, S. C., on brief), for appellant.

Ronald A. Hightower, Asst. U. S. Atty. (John K. Grisso, U. S. Atty., on brief), for appellees.

Before HAYNSWORTH, Chief Judge, WINTER, Circuit Judge, and TURK,^* District Judge.

TURK, District Judge.

This case concerns the amenability to suit of certain federal officers allegedly responsible for consequential damages resulting from the seizure of plaintiff's property. The District Court concluded that the action could not be maintained because it is in substance an action against the United States and thus barred by its sovereign immunity. We vacate the dismissal order and remand the case for further proceedings.

I

The facts as set forth in plaintiff's complaint and not here disputed by defendants are as follows: The freighter SS Mani which had been chartered by the plaintiff, States Marine Lines, Inc., arrived at the Port of Charleston, South Carolina on September 7, 1971, with a cargo of general merchandise from far eastern ports destined for discharge at various ports along the East Coast of the United States. Shortly after its arrival, agents of the Bureau of Customs entered the vessel and seized a portion of her cargo without permission of the Master or States Marine. This confiscated cargo, which was subsequently appraised as having a domestic value of $39,619.45, was removed to the United States Customs House at Charleston.

Despite plaintiff's protests that the seizure was wrongful and its offer to post security to obtain release of its cargo, the District Director of Customs refused to surrender it. On September 20, 1971, government officers issued a notice to the Master of the SS Mani that certain of the seized items valued at $29,821.20 were being held subject to forfeiture for alleged violations of certain statutes of the United States and that those persons having an interest in the cargo should make application for return of the cargo and for remission or mitigation of the penalties levied. Accordingly, on November 11, 1971, after further efforts to negotiate release of the cargo had failed, a petition requesting remission or mitigation of the penalty and forfeiture was filed with the defendant Secretary of the Treasury stating that there had been no violation of the customs laws. Although the government officers knew or should have known that the seizure of the cargo was causing damage to plaintiff, no action was forthcoming on this petition despite repeated requests both verbally and in writing that action be taken.

On February 17, 1972, an additional notice was issued by the District Director of Customs that other cargo seized from the SS Mani, valued at $9,798.25, was also being held subject to forfeiture. On April 12, 1972, plaintiff filed an amended petition for remission or mitigation indicating that there was no basis for the seizure of the cargo and further indicating that the continued detention of the cargo was causing irreparable damage to those persons having an interest in it. The government officers failed to take action on this amended petition or to initiate forfeiture proceedings, despite continued requests both verbal and written that action be taken or that some arrangement be made for release of the cargo upon posting security during the pendency of the proceedings. The only explanation offered to plaintiff for the delay in acting on its petition was that of delay in the bureaucratic process or government "red tape."

Finally, on December 5, 1972, plaintiff forwarded a telegram to the Bureau of Customs in Washington, D. C., stating that if its petition were not acted upon by December 8th legal action would be taken. The telegram resulted in verbal assurances that some decision would be made, yet no decision was forthcoming. Meanwhile, plaintiff was forced to pay claims for nondelivery of the cargo which had been filed by the importers and ultimate purchasers of the seized merchandise. On January 19, 1973, States Marine took the legal action it had threatened by filing suit in U. S. District Court. It asked the court to order the defendants to institute forfeiture proceedings or in the alternative to restore the cargo to it. Additionally, incidental and consequential damages of $50,000 were alleged to have been suffered as a result of defendant's conduct.

In February, 1973, after the District Court Judge had issued an order to show cause why the defendants should not be ordered immediately to institute forfeiture proceedings or restore the cargo to States Marine, the Bureau of Customs rendered its decision that there had been no violation of law which would justify forfeiture and that the forfeiture of the cargo and associated penalties should be remitted and the cargo released. Thereafter, the District Court Judge granted the defendants' motion to dismiss on the ground that the suit was in substance against the United States and as such was barred by the doctrine of sovereign immunity.

II

There is no doubt that if this suit is in essence against the United States, then it is specifically prohibited as an exception to the waiver of sovereign immunity in the Federal Tort Claims Act. Title 28 U.S.C. § 2680 lists the exceptions to the waiver of sovereign immunity contained in Title 28 U.S.C. § 1346(b) including the following:

"(a) Any claim based upon an act or omission of an employee of the Government, exercising due care, in the execution of a statute or regulation, whether or not such statute or regulation be valid, or based upon the exercise or performance or the failure to exercise or perform a discretionary function or duty on the part of a federal agency or an employee of the Government, whether or not the discretion involved be abused.

. . . . . .

"(c) Any claim arising in respect of the assessment or collection of any tax or customs duty, or the detention of any goods or merchandise by any officer of customs or excise or any other law enforcement officer."

Thus the initial question is whether this suit is, in fact, against the sovereign and as such barred by the above exceptions. Of relevance to this question are two statutes bearing on the liability of customs officers. Title 28 U.S.C. § 2006 provides:

"Execution shall not issue against a collector or other revenue officer on a final judgment in any proceeding against him for any of his acts, or for the recovery of any money exacted by or paid to him and subsequently paid into the Treasury, in performing his official duties, if the court certifies that:

(1) probable cause existed; or

(2) the officer acted under the directions of the Secretary of the Treasury or other proper government officer.

When such certificate has been issued, the amount of the judgment shall be paid out of the appropriations of the Treasury."

Title 28 U.S.C. § 2465 provides:

"Upon the entry of judgment for the claimant in any proceeding to condemn or forfeit property seized under any Act of Congress, such property shall be returned forthwith to the claimant or his agent; but if it appears that there was reasonable cause for the seizure, the court shall cause a proper certificate thereof to be entered and the claimant shall not, in such case, be entitled to costs, nor shall the person who made the seizure, nor the prosecutor, be liable to suit or judgment on account of such suit or prosecution."

If, as the District Court found, suits against customs officers were actually against the sovereign and barred by the exceptions in 28 U.S.C. § 2680(a) and (c) then the above statutes would be unnecessary. Yet these statutes have remained in effect and have been frequently construed and applied.¹ E. g., Agnew v. Haymes, 141 F. 631 (4th Cir. 1905); United States v. Tito Campanella Societa Di Navigazione, 217 F.2d 751 (4th Cir. 1954) and cases cited therein. Traditionally, customs officers have been held liable in their individual capacities for tortious conduct committed in the performance of their duties, Truth Seeker Co. v. Durning, 147 F.2d 54, 56 (2nd Cir. 1945); Dioguardi v. Durning, 139 F.2d 774, 775 (2nd Cir. 1944), and the statutes quoted above were obviously for the protection of such officers. See, e. g., Gelston v. Hoyt, 16 U.S. (3 Wheat.) 246, 4 L.Ed. 381 (1818); Averill v. Smith, 84 U.S. (17 Wall.) 82, 21 L.Ed. 613 (1872); The Conqueror, 166 U.S. 110, 17 S.Ct. 510, 41 L.Ed. 937 (1897).

There is no indication that the exceptions in 28 U.S.C. § 2680(a) and (c) were meant to alter the established practice of holding customs officers personally liable for the improper performance of their duties, but it rather seems probable that these exceptions merely recognized the established procedure and the long-standing protections afforded by 28 U.S.C. §§ 2006 and 2465.² To construe 28 U.S.C. § 2680(a) and (c) as to afford the protection of sovereign immunity to customs officers would drain 28 U.S.C. §§ 2006 and 2465 of any purpose. This, in turn, would violate the proposition that apparently inconsistent statutes should be construed to give effect to each. Baines v. City of Danville, 337 F.2d 579, 590 (4th Cir.), cert. denied, 381 U.S. 939, 85 S.Ct. 1772, 14 L.Ed.2d 702 (1964); Fanning v. United Fruit Co., 355 F.2d 147, 149 (4th Cir. 1966); Ely v. Veelde, 451 F.2d 1130, 1134 (4th Cir. 1971).

In concluding that this suit was in essence against the United States and thus barred by the doctrine of sovereign immunity, the court below relied upon the test of sovereign immunity set forth by the Supreme Court in Hawaii v. Gordon, 373 U.S. 57, 83 S.Ct. 1052, 10 L.Ed.2d 191 (1963); Dugan v. Rank, 372 U.S. 609, 83 S.Ct. 999, 10 L.Ed.2d 15 (1963); Malone v. Bowdoin, 369 U.S. 643, 82 S. Ct. 980, 8...