Ford Motor Co. v. United States, Slip Op. 11–130.Court No.: 09–00375.

Citation33 ITRD 2167,806 F.Supp.2d 1328
Decision Date18 October 2011
Docket NumberSlip Op. 11–130.Court No.: 09–00375.
PartiesFORD MOTOR COMPANY, Plaintiff, v. UNITED STATES of America, U.S. Department of Homeland Security, U.S. Customs and Border Protection, Defendants.
CourtU.S. Court of International Trade

OPINION TEXT STARTS HERE

Baker & Hostetler LLP (Matthew W. Caligur and C. Thomas Kruse), Houston, TX, and Paulsen K. Vandevert, Of Counsel, Dearborn, MI, for Plaintiff Ford Motor Company.

Tony West, Assistant Attorney General; Jeanne E. Davidson, Director, Washington, DC, Barbara S. Williams, Attorney– in–Charge, International Trade Field Office, U.S. Department of Justice (Justin R. Miller, Blue Bell, PA, and David S. Silverbrand); and Yelena Slepak, U.S. Customs and Border Protection, for Defendants United States, U.S. Department of Homeland Security, and U.S. Customs and Border Protection.

OPINION

WALLACH, Judge:

I

INTRODUCTION

Defendants United States of America, U.S. Department of Homeland Security, and U.S. Customs and Border Protection move to dismiss Plaintiff Ford Motor Company's Second Amended Complaint for lack of subject matter jurisdiction. Defendants' Motion to Dismiss, Doc. No. 74 (Defendants' Motion”); Defendants' Memorandum of Support of Its Motion to Dismiss, Doc. No. 74 at 9–25 (Defendants' Memo). Because Plaintiff's claims are ripe and within the court's 28 U.S.C. § 1581(i) jurisdiction, Defendants' Motion is DENIED.

II

BACKGROUND

A “drawback” is a refund of duties paid on an import that has been exported or destroyed, 19 U.S.C. § 1313; 19 C.F.R. § 191.2(i)(k); a “drawback entry” is the form filed by a claimant to request a drawback payment, 19 C.F.R. § 191.2(j).1 Customs finalizes that payment through “liquidation” of the drawback entry. 19 C.F.R. §§ 159.1, 191.81. 2 In some circumstances, Customs pays the claimant the estimated drawback before it liquidates the drawback entry. 19 C.F.R. § 191.92. Subject to certain exceptions, entries that are not affirmatively liquidated by Customs in a timely manner are “deemed liquidated” by operation of law at the amount originally asserted by the claimant. 19 U.S.C. § 1504(a)(2)(A). If Customs determines that it has overpaid on a drawback entry that has already liquidated (whether affirmatively or by operation of law), it normally cannot recover the difference from the claimant. See 19 U.S.C. §§ 1514(a), 1520(a)(4); United States v. Nat'l Semiconductor Corp., 30 CIT 769, 774, 2006 WL 1663279 (2006).

For the deemed liquidation of drawback entries, Congress enacted the current 19 U.S.C. § 1504(a)(2) as part of the Miscellaneous Trade and Technical Corrections Act of 2004. See Miscellaneous Trade and Technical Corrections Act of 2004, Pub.L. 108–429, § 1563, 118 Stat. 2434 (2004). Although Plaintiff and Defendants disagree on the proper interpretation of this provision, see Second Amended Complaint for Injunctive and Declaratory Relief, Doc. No. 38 at 7–10 (Second Amended Complaint); Defendants' Memo at 2–4, resolution of Defendants' Motion does not depend on the substance of that disagreement. 3

The instant action includes all drawback entries that Plaintiff filed prior to December 3, 2004 and that Customs had not affirmatively liquidated when the action commenced on September 2, 2009. See Second Amended Complaint, Doc. No. 38 at 2–3; id., Ex. A; Plaintiff's Consent Motion to Sever Liquidated Drawback Claims, Doc. No. 65 at 3; Summons, Doc. No. 1 at 1; Defendants' Memo at 5–6. The 17 drawback entries specifically identified by Plaintiff were all filed between 1996 and either 1997 or 1998. Second Amended Complaint at 6. Plaintiff argues that all of these entries are now deemed liquidated. Id. at 3. Accordingly:

[P]ursuant to 28 U.S.C. § 1581(i), 5 U.S.C. § 706, 28 U.S.C. § 2643(c)(1), and 28 U.S.C. § 2201, Ford seeks a declaratory judgment from the Court that (1) the Drawback Claims have been deemed liquidated by operation of law pursuant to 19 U.S.C. § 1504(a)(2); (2) Customs has no legal authority to review and/or affirmatively liquidate any drawback claims that have been deemed liquidated by operation of law; and (3) any action by Customs to review and/or affirmatively liquidate drawback claims that have been deemed liquidated by operation of law is [unlawful].... Ford also seeks a permanent injunction enjoining Customs from (1) reviewing and/or affirmatively liquidating these Drawback Claims; (2) taking any action adverse or detrimental to Ford relating to these Drawback Claims; and (3) restraining Customs from taking any steps or actions to collect additional duties from Ford any amounts relating to these Drawback Claims, and taking any actions adverse to Ford in respect of these Drawback Claims, including, but not limited to placing Ford on national sanctions.

Id. at 3–4.

Although Defendants do not explicitly state whether they believe any of these drawback claims are deemed liquidated, see generally Defendants' Memo; Defendants' Reply Memorandum in Support of Its Motion to Dismiss, Doc. No. 117 (Defendants' Reply”), they do note that “Customs is actively liquidating” certain drawback entries filed by Plaintiff, Defendants' Memo at 5. Indeed, after Plaintiff commenced this action, Customs affirmatively liquidated five of the drawback entries included in it. See Second Amended Complaint at 3, 15; id., Ex. A at 1; Defendants' Memo at 6, 23.

Defendants now move to dismiss this action, arguing that (1) Plaintiff's claims with respect to the 12 drawback entries that have not been affirmatively liquidated present no justiciable case or controversy and remain unripe and that (2) the court's jurisdiction under 28 U.S.C. § 1581(i) does not extend to any of the 17 drawback entries. Defendants' Memo at 9–25.

III

STANDARD OF REVIEW

In deciding a motion to dismiss, “the Court assumes that ‘all well-pled factual allegations are true,’ construing ‘all reasonable inferences in favor of the nonmovant.’ United States v. Islip, 22 CIT 852, 854, 18 F.Supp.2d 1047, 1051 (1998) (quoting Gould, Inc. v. United States, 935 F.2d 1271, 1274 (Fed.Cir.1991)).4 When the court's jurisdiction is challenged, [t]he party seeking to invoke ... jurisdiction bears the burden of proving the requisite jurisdictional facts.” Former Emps. of Sonoco Prods. Co. v. U.S. Sec'y of Labor, 27 CIT 812, 814, 273 F.Supp.2d 1336, 1338 (2003) (citing McNutt v. Gen. Motors Acceptance Corp., 298 U.S. 178, 189, 56 S.Ct. 780, 80 L.Ed. 1135 (1936)).

IV

DISCUSSION

Plaintiff challenges Customs' authority to act with respect to the drawback entries at issue. See infra Part IV.A. That challenge presents a case or controversy that is both ripe, see infra Part IV.B, and within the court's 28 U.S.C. § 1581(i) jurisdiction, see infra Parts IV.C–D.

APlaintiff Challenges Customs' Authority To Act

Plaintiff asks this court to declare that Customs lacks the statutory authority to act, and to accordingly enjoin Customs from acting, with regard to any of the drawback claims at issue. See Plaintiff's Response in Opposition to Defendants' Motion to Dismiss, Doc. No. 114 at 1–2 (Plaintiff's Response) (“The purpose of Ford's suit ... is to obtain declaratory judgment that Customs has no legal authority to review, liquidate, or take any action with respect to the Drawback Claims, other than to recognize their proper status as finally liquidated at the amounts claimed by Ford.”); Second Amended Complaint at 2 (“Customs is without legal authority to review and/or liquidate [these] drawback claims”), 3–4 (seeking injunctive and declaratory relief), 24–25 (same).

Plaintiff's essential challenge is therefore to the existence, rather than to the exercise, of Customs' authority over these drawback claims. See Plaintiff's Response at 15 (“Customs' improper actions deprive Ford of its fundamental due process rights by requiring Ford to participate in a statutorily barred and unlawful process in which the Drawback Claims that have been deemed finally liquidated by operation of law are reopened and reassessed.”), 21 (“Ford is challenging the legality and constitutionality of Customs taking any action at all on [these drawback claims], including requiring Ford to verify the correctness of the claims, protest liquidations of certain [of these claims], and then to challenge Customs' actions where Customs' unlawful ‘decisions' were adverse to Ford.”); Ford's Sur–Reply in Opposition to Defendants' Motion to Dismiss and Brief in Support, Doc. No. 46 at 2 (Plaintiff's Sur-reply) (“Customs is currently and actively engaged in a systematic review of the Drawback Claims, despite its lack of any legal authority to conduct such a review.).5 Indeed, Plaintiff argues that Customs was and is legally unable to even reach a protestable decision with respect to any of these drawback claims. Plaintiff's Response at 4–5 (citing Totes–Isotoner Corp. v. United States, 580 F.Supp.2d 1371 (CIT 2008), aff'd 594 F.3d 1346 (Fed.Cir.2010)).6

BPlaintiff's Challenge Presents A Case Or Controversy That Is Ripe

Defendants argue that Plaintiff's challenge with respect to the drawback claims that Customs has not affirmatively liquidated does not present a “case or controversy” and is not ripe. Defendants' Memo at 10–14.

An action for declaratory judgment presents a “case or controversy” if “the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of [that] declaratory judgment.” MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 127, 127 S.Ct. 764, 166 L.Ed.2d 604 (2007) (quoting Maryland Casualty Co. v. Pacific Coal & Oil Co., 312 U.S. 270, 273, 61 S.Ct. 510, 85 L.Ed. 826 (1941)). The court's “analysis must begin with the recognition that, where threatened action by government is concerned, we do not require a plaintiff to expose himself to liability before bringing suit to challenge the basis for the threat—for example, the constitutionality of a law...

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