690 F.2d 1368 (Fed. Cir. 1982), 82-19, South Corp. v. United States

Docket Nº:Appeal No. 82-19.
Citation:690 F.2d 1368
Party Name:1 Fed. Cir. (T) 1 SOUTH CORPORATION and Seal Fleet, Inc., Appellants, v. The UNITED STATES, Appellee.
Case Date:October 28, 1982
Court:United States Courts of Appeals, Court of Appeals for the Federal Circuit

Page 1368

690 F.2d 1368 (Fed. Cir. 1982)

1 Fed.

Cir. (T) 1

SOUTH CORPORATION and Seal Fleet, Inc., Appellants,


The UNITED STATES, Appellee.

Appeal No. 82-19.

United States Court of Appeals, Federal Circuit

October 28, 1982

Page 1369

John K. Meyer, Houston, Tex., argued for appellants. With him on the brief was Hinds & Meyer, Houston, Tex.

Madeline B. Kuflik, New York City, argued for appellee. With her on the brief were Asst. Atty. Gen. J. Paul McGrath, Washington, D. C., Director David M. Cohen, and Atty. in Charge Joseph I. Liebman, New York City.


MARKEY, Chief Judge.

This appeal is the first to be heard, and this opinion the first to be published, by the United States Court of Appeals for the Federal Circuit, established October 1, 1982 by the Federal Courts Improvement Act of 1982, Pub.L.No.97-164, 96 Stat. 25.

The court sits in banc to consider what case law, if any, may appropriately serve as established precedent. We hold that the holdings of our predecessor courts, the United States Court of Claims and the United States Court of Customs and Patent Appeals, announced by those courts before the close of business September 30, 1982, shall be binding as precedent in this court.

Respecting the merits, South Corporation (South) and Seal Fleet, Inc. (Seal) appeal from a judgment of the United States Court of International Trade (Edward D. Re, Chief Judge), upholding the imposition of foreign repair duties under 19 U.S.C. § 1466(a). 1 We affirm that judgment, 531 F.Supp. 180.


The parties stipulated that the involved vessels were at all material times: (a) engaged exclusively in oceanographic research and intended solely for that purpose; and

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(b) designed and used primarily for purposes other than transporting passengers or property in the foreign or coasting trade.

South's vessel M/V NORTH SEAL departed the United States on July 18, 1972 and was on a foreign voyage until its return to the United States on December 23, 1972. Repairs costing $98.40 were made on December 2, 1972 at Montego Bay, Jamaica. Duty of $49.20 was assessed and paid under § 1466(a).

Seal's vessel M/V ATLANTIC SEAL departed the United States in December 1970. Repairs were made on December 29, 1970 and on January 2, January 22, and February 9, 1971, all at Ancona, Italy, at a total cost of $3,274.10. Duty totalling $1,637.05 was assessed and paid under § 1466(a).

South and Seal timely protested the duties. When Customs overruled the protests, South and Seal each filed an action for refund in the United States Court of International Trade. The court consolidated the causes and, holding that the repair duties were properly assessed and imposed, dismissed the consolidated action.


The sole issue on the merits is whether error occurred in upholding imposition of repair duties under 19 U.S.C. § 1466(a).


I. Choice of Governing Law.

As a foundation for decision in this and subsequent cases in this court, we deem it fitting, necessary, and proper to adopt an established body of law as precedent. That body of law represented by the holdings of the Court of Claims and the Court of Customs and Patent Appeals announced before the close of business on September 30, 1982 is most applicable to the areas of law within the substantive jurisdiction of this new court. It is also most familiar to members of the bar. Accordingly, that body of law is herewith adopted by this court sitting in banc. 2

To proceed without precedent, deciding each legal principle anew, would for too long deprive the bar and the public of the stability and predictability essential to the effort of a free society to live under a rule of law. As the Supreme Court said in Moragne v. States Marine Lines, Inc., 398 U.S. 375, 90 S.Ct. 1772, 26 L.Ed.2d 339 (1970):

Very weighty considerations underlie the principle that courts should not lightly overrule past decisions. Among these are the desirability that the law furnish a clear guide for the conduct of individuals, to enable them to plan their affairs with assurance against untoward surprise; the importance of furthering fair and expeditious adjudication by eliminating the need to relitigate every relevant proposition in every case; and the necessity of maintaining public faith in the judiciary as a source of impersonal and reasoned judgments.

Id. at 403, 90 S.Ct. at 1789.

The considerations listed by the Court as underlying restraint upon the power to overrule are applicable equally to the power to start afresh. An orderly administration of justice would not be aided by the latter course. For every panel of judges of this court to examine anew every issue presented would be a practice devoid of counterbalancing advantage. Such an alternative, "start from scratch" approach would entail years of delay in constructing a body of law worthy of description as the law of the circuit. We choose therefore to begin on a readily available and clearly identifiable base, maintaining at the same time a controlled

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capacity for change when change is compelled.

The adoption of precedents here announced continues the stability in those areas of the law previously within the jurisdiction of our predecessor courts. That jurisprudence was established in great part by judges now members of this court. The public and the bar have presumably structured their legal affairs in accordance with that jurisprudence. To abandon it at this stage would be to cast the court, the public, and the bar adrift on a sea of uncertainty.

Other than that created by our predecessor courts, no body of law established by any other court or set of courts would appear a suitable candidate for adoption. No other such body would include all or as many of the areas of law with which this court will be dealing. In those areas new to this court, selection of one from many available bodies of law would require an immediate rush to resolution of numerous conflicts existing among them; yet resolution of conflict, a major element in this court's...

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