Kahrs Intern., Inc. v. U.S.
| Citation | 645 F.Supp.2d 1251 |
| Decision Date | 18 September 2009 |
| Docket Number | Court No. 07-00343.,Slip Op. 09-101. |
| Parties | KAHRS INTERNATIONAL, INC., Plaintiff, v. UNITED STATES, Defendant. |
| Court | U.S. Court of International Trade |
Law Offices of George R. Tuttle, A.P.C. (Carl D. Cammarata, George R. Tuttle, and Stephen P. Spraitzar) for Plaintiff.
Tony West, Assistant Attorney General; Jeanne E. Davidson, Director; Barbara S. Williams, Attorney in Charge, International Trade Field Office, Commercial Litigation Branch, Civil Division, United States Department of Justice (Mikki Cottet); Yelana Slepak, Senior Attorney, Office of Assistant Chief Counsel, International Trade Litigation, U.S. Customs & Border Protection, of counsel, for Defendant.
In this omnibus Slip Opinion, the Court entertains and decides the following motions (1) Defendant United States' ("Government") motion to dismiss the Seventh Cause of Action and all "reasonable care" claims in Plaintiff's complaint, pursuant to USCIT R.12(b)(1) and R.12(b)(5); (2) motion to strike certain allegations contained in Plaintiff's complaint, pursuant to USCIT R.12(f); (3) Plaintiff's motion for leave to file a sur-reply to Defendant's motion to dismiss; (4) Plaintiff's motion for summary judgment on the First Cause of Action in its complaint, pursuant to USCIT R.56; (5) Defendant's cross-motion for summary judgment on the First Cause of Action in Plaintiff's complaint, and motion for summary judgment on the Third, Fourth and Sixth Causes of Action in Plaintiff's complaint, pursuant to USCIT R.56; (6) Plaintiff's motion for summary judgement on the Second Cause of Action, pursuant to USCIT R.56; and (7) Defendant's cross-motion for summary judgment on the Second Cause of Action, pursuant to USCIT R.56.
The Court exercises jurisdiction pursuant to 28 U.S.C. § 1581(a) (2000). For the reasons set forth below, the Court (i) denies Plaintiff's motion for leave to file a sur-reply; (ii) grants Defendant's motion to dismiss Plaintiff's Seventh Cause of Action; (iii) denies Defendant's motion to strike; (iv) grants Defendant's cross-motion for summary judgment on Plaintiff's First and Second Causes of Action; (v) grants Defendant's motion for summary judgment on Plaintiff's Third, Fourth and Sixth Causes of Action; (vi) denies Plaintiff's motions for summary judgment on the First Cause of Action; and (vii) denies Plaintiff's motions for summary judgment on the Second Cause of Action.
Plaintiff Kährs International, Inc. ("Kahrs") is the U.S. division of AB Gustaf Kähr the Swedish parent company founded in 1857 and Europe's largest wood flooring manufacturer.1 Kahrs is a Pennsylvania corporation with its principal place of business located in Florida. (See Complaint ("Compl.") ¶ 2; see also n.1, supra.) Kahrs is the owner and importer of record of the six entries2 of merchandise that are the subject of this action (the "subject merchandise"), alternatively described as "engineered wood flooring panels" or "pre-finished flooring strips."3 Kahrs' six entries were imported via the Port of Los Angeles/Long Beach and classified by the importer under subheading 4418.30.00 of the Harmonized Tariff Schedule of the United States ("HTSUS") (Compl. Exhibits ("Ex.") 2-7). This duty-free provision is for "Builders' joinery and carpentry of wood, including cellular wood panels and assembled parquet panels; shingles and shakes: parquet panels." 4418.30.00 HTSUS (2006). Following importation and entry of Kahrs' merchandise, the United States Customs and Border Protection ("CBP" or "Customs") issued successive notices of action ("CF-29s") on each entry and subsequently liquidated them under Heading 4412 ("Plywood"), at the duty rate of 8% ad valorem, on or between October 27, 2006 and February 16, 2007.4 Kahrs subsequently filed a protest with CBP, Protest Number 270407-101011, which was denied on August 15, 2007 (Compl.Ex. 1A).
On September 12, 2007, Kahrs commenced its lawsuit against the United States challenging the denial of its protest over the "liquidation, classification, duties, and fees assessed on the pre-finished, veneered, hardwood, flooring strips," imported by Kahrs. (Compl.p.1.) The Government filed its Answer to the Complaint on February 14, 2008. Kahrs' Complaint sets forth seven causes of action.
In the First Cause of Action, Plaintiff alleges that certain "prior rulings and decisions," which it claims permitted Kahrs to classify "imported shipments of similar or substantially identical [engineered wood flooring]" as "parquet panels under 4418.30.0000, HTSUS," were unlawfully revoked by CBP's issuance of certain CF-29's, because such revocation violated the notice and comment provisions of 19 U.S.C. § 1625(c) (2006). (Compl.¶¶ 1-29.)
The Second Cause of Action in Plaintiff's Complaint alleges that CBP's act of imposing a higher duty for the "imported [engineered wood flooring]" contravened an "established and uniform practice" whereby, as a result of "hundreds of entries of these similar or identical" products made each year for several years prior to August 16, 2006, the agency permitted Kahrs and other importers throughout the U.S. to import "similar or identical [engineered wood flooring] under subheading 4418.30.0000, HTSUS, as parquet flooring panels." (Compl. ¶¶ 30-39.) This imposition of a higher duty by CBP is alleged to have violated the publication requirement of 19 U.S.C. § 1315(d) (2006). (Id. at ¶¶ 36-39.)
Plaintiff's Third, Fourth and Sixth Causes of Action allege Kahrs' preferred and alternative classifications of the imported "[engineered wood flooring]" under 4418.30.00 HTSUS ("[p]arquet panels"), 4418.90.20 HTSUS ("edge-glued lumber"), and 4418.90.4590 HTSUS (), respectively. (Compl. ¶¶ 40-41 (3d Cause of Action); ¶¶42-47 (4th Cause of Action); ¶¶ 63-65 (6th Cause of Action).)
Plaintiff's Fifth Cause of Action, the "Commercial Designation" claim, alleges that "[i]n the wholesale wood flooring trade, the scope of the commercial designation of the term `plywood' does not include pre-finished multilayer flooring strips." (Compl.¶ 59.) As a result, Plaintiff contends that its imported products are properly classifiable duty-free under 4412.29.56 HTSUS () (Id. ¶ 62.) Resolution of this claim on the merits has been stayed5 pending the decision on the balance of the case.
Finally, in Plaintiff's Seventh Cause of Action, Kahrs alleges jurisdiction under 28 U.S.C. § 1581(i) and presents a potpourri of allegations in support of its request for declaratory relief. (Compl.¶¶ 66-75.) Specifically, Kahrs requests, inter alia, that this Court declare as erroneous the denial of its protest by CBP; declare its preferred classification—4418.30.00 HTSUS—as the correct one; and declare that Kahrs "exercised reasonable care as required by 19 U.S.C. § 1484 when classifying the subject [engineered wood flooring] covered by" its protest. (Compl., Prayer for Relief, pp. 26-28, and ¶¶ 66-75.)
The Government moved (1) to dismiss Kahrs' Seventh Cause of Action for lack of subject matter jurisdiction, pursuant to USCIT R. 12(b)(1) and for failure to state a claim upon which relief can be granted pursuant to USCIT R.12(b)(5); and (2) to strike, inter alia, certain allegations throughout the Complaint that Kahrs "exercised reasonable care" in its classification of the imported merchandise. (See Defendant's Motion To Dismiss Part Of This Action And To Strike ("Mot.Dismiss").) Plaintiff opposed these motions. Both Kahrs and the Government additionally filed separate cross-motions for summary judgment,6 pursuant to USCIT R.56, regarding Plaintiff's First and Second Causes of Action in its complaint. Defendant also pursued summary judgment on the Third, Fourth, and Sixth Causes of Action to Plaintiff's complaint.7 This Court will first address the Government's motion to dismiss and motion to strike.
As a preliminary matter, the Court must entertain Plaintiff's Motion For Leave To File Sur-Reply To Defendant's Reply To Plaintiff's Opposition To Defendant's Motion To Dismiss ("Sur-Reply Mot."). Kahrs requests the Court's indulgence and moves to file a sur-reply "in order to bring to the Court's attention certain facts that are omitted from Defendant's Reply [to its motion to dismiss] but that are relevant to the issues raised by Defendant and were not previously presented to the Court." (Sur-Reply Mot. 1.) In "the interests of time and ease of administration," Plaintiff filed its proposed Sur-Reply along with its motion. (Id.)
The Government objected to Kahrs' motion for a sur-reply and filed opposition papers. ("Def.'s Sur-Reply Op.") Defendant contends that it "did not omit any `facts' from [its] reply brief which could be pertinent or relevant to the Court's determination" on the Government's motion to dismiss. (Def.'s Sur-Reply Op. 2.) Additionally, Defendant argues that Kahrs has failed to demonstrate a basis for "the extraordinary privilege of filing a sur-reply brief here." (Id. at 3.)
The Rules of the U.S. Court of International Trade do not provide for the filing sur-replies to motion papers. Cf. C.J. Tower & Sons of Buffalo, Inc. v. United States, 68 Cust.Ct. 377, 343 F.Supp. 1387, 1394 (1972) (); see also U.S. COURT OF INT'L TRADE, RULES AND ANNOTATIONS. Generally, the "decision to permit the filing of a sur reply is purely discretionary and should generally only be allowed when `a valid reason for such additional briefing exists, such as where the movant raises new arguments...
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