Chrysler Corp. v. U.S.
| Citation | 87 F.Supp.2d 1339 |
| Decision Date | 07 February 2000 |
| Docket Number | Court No. 93-10-00698.,Slip Op. 00-12. |
| Parties | CHRYSLER CORPORATION, Plaintiff, v. The UNITED STATES, Defendant. |
| Court | U.S. Court of International Trade |
Barnes, Richardson & Colburn, Chicago, IL, (Lawrence M. Friedman and Aaron M. Gothelf), for Plaintiffs.
David W. Ogden, Acting Assistant Attorney General; Joseph I. Liebman, Attorney in Charge, International Trade Field Office, Commercial Litigation Branch, Civil Division, United States Department of Justice (Aimee Lee); Yelena Slepak, Office of Assistant Chief Counsel, International Trade Litigation, United States Customs Service, Washington, DC, for Defendant.
At issue in this case is the 1991 importation by the Chrysler Corporation (now DaimlerChrysler Corporation, or "Chrysler") of certain "Clubcab" pickup trucks and the refusal of the U.S. Customs Service ("Customs") to grant Chrysler a partial duty exemption on those imports pursuant to item 9802.00.80 of the Harmonized Tariff Schedule of the United States ("HTSUS"). Although Chrysler did not initially seek such an exemption in entering the Clubcabs into the United States, Chrysler claims that its failure to do so was due to a clerical error that caused it to mistakenly believe that the trucks' engines were not of U.S. origin. Chrysler argues that, as it brought this clerical error and mistaken belief to Customs' attention in a timely manner, Customs must reliquidate its entries pursuant to 19 U.S.C. § 1520(c)(1) and grant it the partial duty exemption to which it is entitled. In relevant part, 19 U.S.C. § 1520(c)(1) provides that "the Customs Service may ... reliquidate an entry or reconciliation to correct ... a clerical error, mistake of fact, or other inadvertence."
Before the Court are the parties' respective motions for summary judgment. For the reasons stated below, the Court finds there to be genuine issues of material fact that preclude summary judgment for both parties.
In 1991, Chrysler imported from its subsidiary, Chrysler de Mexico, Clubcab pickup trucks containing a 5.9 liter, in-line six cylinder, turbo, diesel engine manufactured by the Cummins Engine Company ("Cummins") in the United States. Plaintiff's Statement Of Undisputed Material Facts ("Plaintiff's Statement") at ¶¶ 2-3; Defendant's Response To Plaintiff's Statement Of Undisputed Material Facts at ¶¶ 2-3. Despite the U.S. origin of these Cummins engines, Chrysler did not file a claim for partial duty exemption, pursuant to HTSUS Subheading 9802.00.80,1 when it entered the Clubcab trucks into the United States. Defendant's Statement Of Undisputed Material Facts ("Defendant's Statement") at ¶ 4. According to Chrysler, it did not do so because its import processing system mistakenly concluded that the engines were of Mexican origin. This mistake, Chrysler asserts, was caused when Chrysler de Mexico made arrangements with Cummins' Mexican subsidiary, Cummins S.A., to purchase the same, U.S.-manufactured engines that Chrysler was purchasing directly from Cummins in the United States and shipping to Chrysler de Mexico for assembly. Plaintiff's Memorandum In Support Of Its Motion For Summary Judgment ("Plaintiff's Memorandum") at 5. Because these purchases were pursuant to a Chrysler de Mexico purchase order, Chrysler claims, its automated process for making claims under Subheading 9802.00.80 did not recognize the U.S. origin of these engines. Id.
On October 1, 1991, Donald D. Rivait, a Chrysler employee responsible for customs compliance and reporting concerning components entered under Subheading 9802.00.80, was advised that the Cummins engines at issue had actually been manufactured in the United States and might qualify for duty-free treatment. Defendant's Statement at ¶ 12. Accordingly, by letter dated October 15, 1991, Mr. Rivait informed Customs that Chrysler was seeking a duty exemption for the subject engines. Id. at ¶ 13. On November 8, 1991, Chrysler's broker, Daniel B. Hastings, also advised Customs that certain Clubcab trucks, including those subject to this action, had U.S. origin engines. Id. at ¶ 15.
Despite these notices, from November 15 through November 29, 1991, Customs liquidated the relevant Clubcab trucks without granting Chrysler a duty exemption for the engines. Id. at ¶ 16. Chrysler did not challenge this action by filing a protest within the ninety days allowed under 19 U.S.C. § 1514 to challenge the classification of merchandise following liquidation.2 Id. at ¶ 17. Rather, on June 18, 1992, Chrysler filed a claim seeking the reliquidation of the subject entries pursuant to 19 U.S.C. § 1520(c)(1), which allows Customs to correct "a clerical error, mistake of fact, or other inadvertence ... not amounting to an error in the construction of a law." Id. at ¶ 18. Customs denied this claim on September 11, 1992, id., and Chrysler filed a timely protest of this decision on December 9, 1999. Id. at ¶ 19. This protest was, in turn, denied by Customs on April 30, 1993, id., and it is the denial of this protest that Chrysler has timely challenged. This Court has jurisdiction over this matter pursuant to 19 U.S.C. § 1581(a).
On June 11, 1999, Chrysler filed its Motion For Summary Judgment, arguing that the facts of this case establish, as a matter of law, that the actions of Chrysler and Chrysler de Mexico amount to clerical errors, mistakes of fact or other inadvertences which entitle it to a reliquidation of its Clubcab entries and a refund of duties improperly paid. On August 3, 1999, Defendant filed its Cross-Motion For Summary Judgment. For its part, Defendant argues that Chrysler's mistake constitutes an "error in the construction of a law" which cannot be remedied under 19 U.S.C. § 1520(c)(1), since both Chrysler and Customs had actual knowledge of the true origin of the engines before the expiration of the protest period following the liquidation of the Clubcabs. Alternatively, Defendant argues that, even if Chrysler's mistake is not "an error in the construction of a law," it is still entitled to summary judgment because Chrysler has failed to demonstrate any mistake of fact, clerical error or inadvertence through documentary evidence.
Under USCIT R. 56(d), summary judgment is appropriate when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." The moving party bears the burden of demonstrating the absence of all genuine issues of material fact. Avia Group Int'l, Inc. v. L.A. Gear California, Inc., 853 F.2d 1557, 1560 (Fed.Cir.1988). This may be done by producing evidence showing the lack of any genuine issue of material fact or, where the non-moving party bears the burden of proof at trial, by demonstrating that the nonmovant has failed to make a sufficient showing to establish the existence of an element essential to its case. Id.; Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).
To successfully oppose a properly supported motion for summary judgment, the nonmovant may not simply rest on its pleadings. Rather, it must produce evidence "by affidavits or as otherwise provided in [USCIT R. 56]" which "set forth specific facts showing that there is a genuine issue for trial." USCIT R. 56(f); see also Mingus Constructors, Inc. v. United States, 812 F.2d 1387, 1390-91 (Fed.Cir. 1987) ().
In determining whether the parties have met their respective burdens, the Court does not "weigh the evidence and determine the truth of the matter," but simply determines "whether there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). In so doing, the Court views all evidence in a light most favorable to the nonmovant, drawing all reasonable inferences in the nonmovant's favor. United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962); Avia Group Int'l, 853 F.2d at 1560.
Chrysler Did Not Make an "Error in the Construction of a Law."
As noted above, Defendant argues that summary judgment is appropriate because Chrysler committed an error in the construction of a law which, based on the plain language of 19 U.S.C. § 1520(c)(1), cannot be remedied under this provision. Because this claim, if true, would be dispositive of both parties' Motions, the Court's initial inquiry is whether the facts of this case support Defendant's argument. See Ford Motor Co. v. United States, 157 F.3d 849, 858 (Fed.Cir.1998) ().
Chrysler's Error Does Not Constitute "an Error in the Construction of a Law," as Traditionally Defined.
19 U.S.C. § 1520(c) allows for reliquidation to correct "a clerical error, mistake of fact, or other inadvertence ... not amounting to an error in the construction of a law." Although not specifically defined by statute or regulation, the distinction between a mistake of fact and an error in the construction of a law for purposes of § 1520(c) has evolved in case law:
[M]istakes of fact occur in instances where either (1) the facts exist, but are unknown, or (2) the facts do not exist as they are believed to. Mistakes of law, on the other hand, occur where the facts are known, but their legal consequences are not known or are believed to be different than they really are.
Executone Information Systems v. United States, 96 F.3d 1383, 1386 (Fed.Cir.1996) (quoting ...
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