Sea-Land Service, Inc. v. US

• Decision Date: 28 January 1993
• Docket Number: Court No. 92-01-00019.
• Citation: 812 F. Supp. 222
• Parties: SEA-LAND SERVICE, INC., Plaintiff, v. The UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

812 F. Supp. 222

SEA-LAND SERVICE, INC., Plaintiff, v. The UNITED STATES, Defendant.

Court No. 92-01-00019.

United States Court of International Trade.

January 28, 1993.

Ross & Hardies, Myles J. Ambrose, Evelyn M. Suarez and David F. Norton (Robert S. Zuckerman, Sea-Land Service, Inc., of counsel), for plaintiff.

Stuart M. Gerson, Asst. Atty. Gen., Joseph I. Liebman, Atty. in Charge, Intern. Trade Field Office, Commercial Litigation Branch, Civ. Div., U.S. Dept. of Justice (Barbara M. Epstein, Mark G. Nackman, Intern. Trade Litigation, U.S. Customs Service, of counsel), for defendant.

OPINION

TSOUCALAS, Judge:

Defendant moves pursuant to Rule 12(b)(1) of the Rules of this Court to dismiss this action for lack of jurisdiction.¹

This action was initiated by plaintiff, Sea-Land Service, Inc. ("Sea-Land"), to recover duties assessed on repairs made overseas to its American documented vessel pursuant to 19 U.S.C. § 1466(a).² Subsequent to the assessment of duties, Sea-Land challenged the assessment by filing an application for relief with Customs' San Francisco Vessel Repair Liquidation Unit, seeking remission based on a claim that the work constituted non-dutiable modifications under 19 U.S.C. § 1466(a). Plaintiff's Exhibits B & C. On May 1, 1990, Customs determined that Sea-Land's application for relief was defective on procedural and substantive grounds. Therefore, on May 25, 1990, Customs liquidated the entry. See Bulletin Notice of Liquidation. On May 30, 1990, Customs notified Sea-Land by letter that its application for relief was denied and that it had ninety days from the date of liquidation to file a protest to this decision. On August 28, 1990, Sea-Land filed a protest to the liquidation. On July 15, 1991, Customs denied Sea-Land's protest as untimely filed. Plaintiff's Exhibit G.

The Government now brings this motion to dismiss claiming that the protest was not timely filed. Sea-Land opposes defendant's motion and cross-moves for summary judgment pursuant to Rule 56 of the Rules of this Court seeking an order holding that its protest was timely filed and directing Customs to reliquidate vessel repair entry No. C-32-0006746-1 with a refund of $262,556.50 plus interest. Sea-Land claims that in its liquidation Customs erroneously construed a charge for paint as being in U.S. dollars when in fact it was stated in Japanese yen. This charge is reflected in Item 39 of the Application for Relief. As a result, Sea-Land was assessed excess duties in the amount of $262,556.50.

DISCUSSION

According to 19 U.S.C. § 1514(c)(2) (1988 & 1992 Supp.), a protest of a Customs decision "shall be filed ... within ninety days after but not before — (A) notice of liquidation or reliquidation, or (B) in circumstances where subparagraph (A) is inapplicable, the date of the decision as to which protest is made."

In this case, Sea-Land claims that its protest was timely filed eighty-nine days after the ninety-day period began to run. Sea-Land claims that the ninety days began to run on May 30, 1990, the date they received a letter from Michael Weissman, Chief, Technical Branch, Commercial Operations Division, in which Customs notified Sea-Land that its application for relief had been denied. Defendant's Motion to Dismiss and Memorandum in Support of its Motion ("Defendant's Motion"), Exhibit B. The Government, however, claims that the ninety day statutory period began to run on May 25, 1990, the date of liquidation, and that Sea-Land's protest was untimely filed ninety-four days thereafter. Thus, the issue before this Court is from when did the ninety day period begin to run during which Sea-Land was to protest Customs' decision.

The statute clearly states that a protest of a Customs decision must be filed within ninety days after notice of liquidation. See 19 U.S.C. § 1514(c)(2). This Court has stated that "proper notice of liquidation refers to the bulletin notice of liquidation." See Penrod Drilling Co. v. United States, 13 CIT 1005, 1009, 727 F.Supp. 1463, 1467 (1989), aff'd, 925 F.2d 406 (1991); see also, Goldhofer Fahrzeugwerk GmbH v. United States, 13 CIT 54, 706 F.Supp. 892, aff'd 885 F.2d 858 (Fed.Cir.1989). Furthermore, "the date of liquidation shall be the date the bulletin notice is posted in the custom-house." United States v. Reliable Chem. Co., 605 F.2d 1179, 1183 (1979); Penrod Drilling, 13 CIT at 1009, 727 F.Supp. at 1467; Goldhofer, 13 CIT at 58, 706 F.Supp. at 895. It is the importer who "has the burden for examining all notices posted to determine whether its goods have been liquidated, and to protest timely." Penrod Drilling, 13 CIT at 1009, 727 F.Supp. at 1467; Goldhofer, 13 CIT at 58, 706 F.Supp. at 895; Omni U.S.A., Inc. v. United States, 11 CIT 480, 483, 663 F.Supp. 1130, 1133 (1987), aff'd, 840 F.2d 912 (Fed.Cir. 1988), cert. denied, 488 U.S. 817, 109 S.Ct. 56, 102 L.Ed.2d 34 (1988). The bulletin notice in this action clearly states that the date of liquidation was May 25, 1990.

Plaintiff, however, claims that in calculating the ninety day period it relied on a misleading letter sent to them on May 30, 1990. The ambiguous letter stated that the entry in question will be liquidated, when in fact it was liquidated five days earlier.³ Based on this alone, it was very possible for Sea-Land to be unsure as to the date of liquidation and, thus, Sea-Land acted reasonably in relying on Customs letter of May 30, 1990. The letter indicated that the entry had not been liquidated as of yet and Sea-Land was reasonable in assuming that the ninety days to protest would at least not begin to run until May 30.

Plaintiff relies on the court's holding in Farrell Lines, Inc. v. United States, 657 F.2d 1214 (CCPA 1981), modified, 667 F.2d 1017 (1982), and claims that under the ruling of this case, the limitations period of ninety days should be tolled from May 25, 1990, the date of liquidation, until May 30, 1990, the date Sea-Land received the letter from Customs because it was the final agency action.

In Farrell Lines, plaintiff filed a supplemental petition, and it was held that the ninety-day period of limitations for filing a protest of liquidation was tolled from the date the shipbuilder filed the supplemental petition until notice was given of the petition's denial. Moreover, the plaintiff in Farrell Lines was expressly advised by Customs that it had ninety days after the denial of the supplemental petition to file a formal protest. See Farrell Lines, 657 F.2d at 1216. Relying on this advice, plaintiff in Farrell Lines did attempt to protest within ninety days of the denial. Defendant moved to dismiss the protest as untimely, but the court denied its motion. At no time was plaintiff advised that its protest, though filed more than ninety days after liquidation, was not a valid protest. Id. at 1216-17.

In the case at hand, plaintiff was likewise misled by defendant's letter which indicated to them that liquidation had not occurred as of May 30, 1990. Thus, although they did not check the bulletin notice of liquidation, they did act reasonably in figuring that the ninety days would at least not commence to run until May 30.

While the Supreme Court has stated in Irwin v. Veterans Administration, 498 U.S. 89, 111 S.Ct. 453, 112 L.Ed.2d 435 (1990), that Federal Courts "have typically extended equitable relief only sparingly," the Court further stated that it has

allowed equitable tolling in situations where the claimant has actively pursued his judicial remedies by filing a defective pleading during the statutory period footnote omitted, or where the complainant has been induced or tricked by his adversary's misconduct into allowing the filing deadline to pass footnote omitted.

Id. at 96, 111 S.Ct. at 457-58 (emphasis supplied).

In this case, Customs' erroneous letter induced Sea-Land to allow the filing deadline to pass. This Court in good conscience cannot allow plaintiff to be deprived of its rights due to the sloppiness of Customs. While this Court is confident that Customs' error was unintentional, it was nevertheless misleading to plaintiff. Accordingly, the statutory ninety-day period is tolled from May 25 until May 30, 1990 and defendant's motion to dismiss for lack of jurisdiction is denied.

Premature Liquidation

Sea-Land alternatively alleges in its brief that Customs prematurely liquidated the entry at issue thereby causing additional confusion over the liquidation date. Plaintiff's Opposition to Defendant's Motion to Dismiss and Plaintiff's Cross-Motion for Summary Judgment at 5-6. Regulation 19 C.F.R. § 4.14(d)(vi) (1992)⁴ directs that liquidation of an entry should be suspended until thirty days after Customs notifies a party that its "application for relief" from duties has been approved or denied. In this case, Sea-Land received notice that its application for relief was denied on May 30, 1990. The entry, however, was liquidated on May 25, 1990, and thus, Customs did not comply with section 4.14(d)(vi). Sea-Land argues that if the liquidation was suspended pursuant to section 4.14(d)(vi), then liquidation would have occurred no earlier than May 30 and, subsequently, Sea-Land's protest would have been timely filed.

Customs, however, claims that the liquidation was not suspended for thirty days because Sea-Land's letter was missing the necessary elements to constitute an application for relief. See 19 C.F.R. § 4.14(d)(1). Customs reasoned that the letter was too substantively and procedurally defective to be considered a complete and valid "application for relief" within the meaning of section 4.14(d)(1), and denied the application without extending liquidation until thirty days after notification.

According to the regulations, an application for relief "need not be in any particular form." 19 C.F.R. § 4.14(d)(1)(i). However, it should allege certain things including:

that an item or a repair expense covered by the entry is not subject to duty.... The application for relief also

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