D & M WATCH CORP. v. US

• Decision Date: 24 April 1992
• Docket Number: No. 83-12-01775.,83-12-01775.
• Citation: 16 CIT 285,795 F. Supp. 1160
• Parties: D & M WATCH CORP., Plaintiff, v. The UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

795 F. Supp. 1160

16 CIT 285

D & M WATCH CORP., Plaintiff, v. The UNITED STATES, Defendant.

No. 83-12-01775.

United States Court of International Trade.

April 24, 1992.

Irving A. Mandel, Steven R. Sosnov and Jeffrey H. Pfeffer, for plaintiff.

Stuart M. Gerson, Asst. Atty. Gen., Joseph I. Liebman, Atty. in Charge, James A. Curley, Atty., Intern. Trade Field Office, Commercial Litigation Branch, U.S. Dept. of Justice, New York City, Edward N. Maurer, Office of Asst. Chief Counsel, U.S. Customs Service, New York City, of counsel, for defendant.

OPINION AND ORDER

AQUILINO, Judge:

Final judgment entered in the above-numbered action on May 7, 1990 and in 104 other, similar actions between April 1990 and December 1991 on behalf of various named plaintiff importers, including D & M Watch Corp., docketed in this Court of International Trade as 83-01-00040-S, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, 83-07-00988-S, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, 83-09-01287-S, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX, XX-XX-XXXXX and XX-XX-XXXXX. Each of the judgments had been submitted to the court upon an agreed statement of facts and bearing the names of the respective lead counsel of record. Each provides in haec verba:

"This action, as prescribed by Rule 58.1 of the Rules of the United States Court of International Trade, has been stipulated for judgment on agreed statement of facts, in which the parties agree that the merchandise in issue on the attached schedule is limited to quartz watches having less than 17 jewels and their components identifiable from the invoices and other entry documents as watches, quartz analogue watches, quartz digital watches, watches incorporating a battery or components (cases, movements and bands) which are similar in all material respects to the merchandise in Belfont Sales Corp. v. U.S., 666 F.Supp. 1568 (CIT 1987), reh'g denied, 698 F.Supp. 916 (CIT 1988), aff'd 878 F.2d 1413 (Fed.Cir.1989) or Texas Instruments Inc. v. United States, 518 F.Supp. 1341 (CIT 1981), aff'd, 69 CCPA 136, 673 F.2d 1375 (CCPA 1982) ... which records have been incorporated herein, are properly dutiable as entireties and classifiable as "electrical articles and electrical parts of articles, not specially provided for: Other." or as solid-state electronic timepieces under T.S.U.S. item 688.45 as modified by item 688.42 or 688.43, or under item 688.36, at the rate of duty in effect at the date of entry.

All other claims are abandoned. Batteries are not included.

It is hereby ORDERED that the Regional Commissioner at the port of entry shall reliquidate the entry (entries) at the rate of duty in effect at the time of entry and refund all excess duties paid, together with interest as provided by law.

BY ORDER OF THE COURT"

Appended to each judgment is a schedule of the entries and protests encompassed by the encaptioned civil action. Some schedules set forth entry numbers which have been annotated as "not stipulable" by counsel. The judgment in the above D & M action, for example, covers 20 entries, none of which was so marked prior to signing by the court.

Come now the plaintiffs, alleging that the defendant has refused, and continues to refuse, to reliquidate the scheduled entries in compliance with the court's final judgments. Upon receipt of a proposed order to show cause, an immediate hearing was held thereon in open court, during which counsel did not deny that the government did not comply with the mandates. The defendant was thereupon directed to show cause why an order enforcing the judgments should not issue pursuant to CIT Rules 7(e) and 63

1) compelling it to turn over all relevant entry papers to the Court; 2) compelling it to reliquidate the Customs entries included in the cases herein with refunds of duty together with interest; 3) adding to the Schedules attached to the Judgment Orders all entries represented by Customs as "missing" but found to be available; 4) compelling it to search for all entries initially reported by Customs as missing and not yet found, for subsequent addition to the Schedules; and 5) to pay reasonable counsel fees necessitated by this proceeding.

The defendant was also restrained temporarily from disposing of or removing the entry papers covered by the final judgments.

A hearing in conformity with Rule 63 commenced on April 3 and concluded on April 13, 1992. This opinion represents the court's findings of fact and conclusions of law.

I

As recited in the judgments, they are based on Belfont Sales Corp. v. United States, 11 CIT 541, 666 F.Supp. 1568 (1987), reh'g denied, 12 CIT 916, 698 F.Supp. 916 (1988), aff'd, 878 F.2d 1413 (Fed.Cir.1989). In that test case within the meaning of CIT Rule 84, this court had found, among other things, that a quartz analogue watch or "QAW" does contain a watch movement when viewed in the light of Texas Instruments Inc. v. United States, 82 Cust.Ct. 272, C.D. 4810, 475 F.Supp. 1183 (1979), aff'd, 67 CCPA 59, 620 F.2d 269 (1980), Texas Instruments Inc. v. United States, 82 Cust.Ct. 287, C.D. 4811, 475 F.Supp. 1193 (1979), aff'd, 67 CCPA 57, 620 F.2d 272 (1980), and Texas Instruments Incorporated v. United States, 1 CIT 236, 518 F.Supp. 1341 (1981), aff'd, 69 CCPA 136, 673 F.2d 1375 (1982), but had concluded that such a timepiece was properly classifiable under Schedule 6 to the Tariff Schedules of the United States, specifically item 688.45, as opposed to TSUS item 715.05, upon which the defendant had relied in imposing duties. The courts in the last of those Texas Instruments cases had reached the same conclusion with regard to quartz digital watches.

The Court of Appeals for the Federal Circuit issued its mandate in Belfont in June 1989, by which time hundreds of actions had been suspended under that test case pursuant to CIT Rule 84(a). In accordance with Rule 85, a suspension disposition calendar was then established for those actions for a period of 90 days, and all of the plaintiff importers were so notified in September 1989. On its part, the defendant responded with a letter to the court dated October 5, 1989, indicating that "about 600 cases" had been suspended under Belfont and stating:

We are advised by the Customs Service that marking of the entry papers will not be necessary for merchandise that entered through the Port of New York. However, for entries through other ports, marking will be necessary. It will also be necessary for the Government to determine whether the duties were paid in a timely manner for all entries, and the protests and summonses were timely filed.

Many cases have a large number of entries. Missing entries will have to be reconstructed before they can be stipulated. Based on our past experience with similar large disposition calendars, we estimate that between one and two years may be necessary to dispose of all stipulable cases and entries we expect to receive.

Counsel for certain plaintiff importers tended to agree that more than 90 days would be needed to process the actions to judgment off the suspension disposition calendar. Motions for extensions of the time and concomitant scheduling conferences between counsel and the court ensued. Some motions were denied. E.g., E. Gluck Corp. v. United States, 13 CIT 922, 1989 WL 131307 (1989). Some actions were dismissed. E.g., Fada Industries, Inc. v. United States, 14 CIT ___, Slip Op. 90-89, 1990 WL 133203 (Sept. 7, 1990). In others, extensions were granted, but only upon adequate showings "that counsel had conducted `reasonable inquiry' of the kind contemplated by CIT Rule 11 and that, after such review and consideration, the Rule 1 goal of a just, speedy, and inexpensive determination of every action would be furthered by grant of an extension of time", to quote the admonition in E. Gluck Corp., 13 CIT at 923 n. 2.

By late summer 1990, the court had entered final judgments agreed to by both sides in some of the actions enumerated above. However, by that time the court had also received copies of correspondence sent by plaintiffs' counsel to the defendant, complaining about the processing of them by Customs, alleging, among other things, on August 31, 1990 that the Service was "still losing an extraordinary number of analogue watch and other entries" and on September 10, 1990 that "Customs is again demanding that the importer reconstruct these entries based solely on the unwarranted threat that no duty refunds will be issued" emphasis deleted. Those accusations led to a conference in chambers on October 2, 1990, at which plaintiffs' counsel appeared with draft complaints for their actions in hand, ready for filing as a means under Rule 85(c) for removal from the suspension disposition calendar within the period set by the court. Defendant's counsel protested however that removal and then joinder of issue...