Uniroyal, Inc. v. United States, 81-113

• Decision Date: 04 December 1981
• Docket Number: Court No. 81-8-01122.,No. 81-113,81-113
• Citation: 529 F. Supp. 661
• Parties: UNIROYAL, INC., Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

529 F. Supp. 661

UNIROYAL, INC., Plaintiff, v. UNITED STATES, Defendant.

No. 81-113; Court No. 81-8-01122.

United States Court of International Trade.

December 4, 1981.

Barnes, Richardson & Colburn, New York City (Andrew P. Vance and Raymond F. Sullivan, Jr., New York City, of counsel), for plaintiff.

J. Paul McGrath, Asst. Atty. Gen., Joseph I. Liebman, New York City, Atty. in Charge, Intern. Trade Field Office, Commercial Litigation Branch (Barbara M. Epstein, Bellmore, N. Y., on the briefs), for defendant.

Memorandum and Order

MALETZ, Judge:

This is an action filed under 28 U.S.C. § 1581(i)¹ in which plaintiff, Uniroyal, Inc., an importer of leather uppers and rubber soles manufactured in Indonesia, seeks declaratory and injunctive relief from a United States Customs Service's determination that the merchandise must be marked with the country of origin. Defendant contends that the action should be dismissed for lack of jurisdiction and failure to exhaust administrative remedies.

The facts are these. The merchandise was entered for consumption on January 2, 1980 and January 16, 1980 (entry Nos. 615934 and 615975). On January 21, 1980 and January 22, 1980, pursuant to 19 C.F.R. § 134.51(a),² the Customs Service issued a Notice of Redelivery as to each of these entries, thereby requiring Uniroyal to redeliver the merchandise to Customs' custody or to mark the merchandise with the country of origin in conformity with section 304 of the Tariff Act of 1930, as amended, 19 U.S.C. § 1304(a).³ The Notice of Redelivery advised that unless such steps were taken within 30 days, Uniroyal would be liable for liquidated damages.

Uniroyal did not redeliver or mark the merchandise as required by the Notices of Redelivery and did not file a protest of the Notices of Redelivery as permitted by 19 U.S.C. § 1514(a)(4).⁴

What Uniroyal did instead was submit on March 4, 1980 an internal advice request as to whether the "ultimate purchaser" exemption provided for in 19 U.S.C. § 1304(a)(3)(H)⁵ was, as Uniroyal contended, applicable to entries 615934 and 615975. In response to this request, Customs Headquarters issued a ruling, dated July 2, 1981, holding that the uppers and soles were required to be marked individually with the country of origin.

On August 28, 1981, Uniroyal filed this action seeking a declaration that the merchandise need not be marked with the country of origin. Thereafter, on November 13, 1981, plaintiff applied for a preliminary injunction to restrain the Customs Service from issuing additional notices to mark or redeliver; from initiating any demand for liquidated damages pursuant to 19 C.F.R. § 134.54(a); and from assessing any additional marking duties. Relevant to this application, it is to be noted that subsequent to entries 615934 and 615975, Uniroyal imported additional quantities of the same merchandise and received additional Notices of Redelivery from Customs.

In arguing for dismissal, defendant stresses the fact that a demand for redelivery is protestable under 19 U.S.C. § 1514(a)(4) and that the denial of such a protest may be reviewed by this court pursuant to 28 U.S.C. § 1581(a).⁶ Because of the availability of such protest and review, the argument proceeds, this court's broad residual jurisdiction provided for in 28 U.S.C. § 1581(i) may not be invoked here. This same contention was, however, rejected in Wear Me Apparel Corp. v. United States, 1 CIT ____, 511 F.Supp. 814, 817 (1981), where the court stated that "* * * section 1581(i) does not require the filing or denial of a protest as a prerequisite for the exercise of jurisdiction by this court."

Defendant also contends, in the alternative, that plaintiff has failed to exhaust its administrative remedies as required by 28 U.S.C. § 2637(d) which states that this court "shall, where appropriate, require the exhaustion of administrative remedies." The question presented then is whether given the circumstances here, it would be appropriate for the court to require further administrative proceedings.

As noted earlier, Uniroyal filed a request for internal advice from Customs Headquarters on March 4, 1980, pursuant to section 177.11 of the Customs Regulations (19 C.F.R. § 177.11).⁷ In its request, Uniroyal contended that the merchandise need not be marked with the country of origin because the ultimate purchaser exception of section 304(a)(3)(H) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1304(a)(3)(H), was applicable. This contention was, however, specifically rejected by Customs Headquarters in a ruling dated July 2, 1981. The significance of this response to plaintiff's request for internal advice is made clear by 19 C.F.R. § 177.11(b)(6) which states:

(6) Effect of advice received from the Headquarters Office. Advice furnished by the Headquarters Office in response to a request therefor represents the official position of the Customs Service as to the application of the Customs laws to the facts of a specific transaction. If the field office believes that the advice furnished by the Headquarters Office should be reconsidered, it shall promptly request such reconsideration. Otherwise, the advice furnished by the Headquarters Office will be applied by the field office in its disposition of the Customs transaction in question.

Here, the field office has not requested reconsideration and the ruling is therefore controlling authority governing not only field office determinations as to whether the marking of plaintiff's merchandise is required but also the disposition of any protest which might be filed challenging such field office determinations. Stated otherwise, a protest by plaintiff of Customs' marking requirement on the ground that such requirement violates the ultimate user exception would present nothing for resolution as Customs has already authoritatively determined this precise question. Because of this, the court concludes that no legitimate interest of defendant will be served by requiring plaintiff to file a protest here and that mandating further administrative proceeding would be purposeless and thus not appropriate. See, e.g., Porter Cty. Chap. of Izaak Walton League v. Costle, 571 F.2d 359, 363 (7th Cir. 1978), cert. denied, 439 U.S. 834, 99 S.Ct. 115, 58 L.Ed.2d 130 (1978); Am. Fed. of Government Emp. v. Dunn, 561 F.2d 1310, 1314 (9th Cir. 1977).

This does not mean that litigants may file requests for internal advice in order to avoid the general requirement that they obtain a denied protest before seeking judicial review. In this connection, 19 C.F.R. § 177.11(b)(5)(ii) provides:

The Headquarters Office may refuse to consider the questions presented to it in the form of a request for internal advice whenever * * * (ii) the questions presented can subsequently be raised by the importer or other interested party in the form of a protest filed in accordance with the provisions of Part 174 of this chapter.

Thus, where Customs declines to provide internal advice a litigant will...