NAT. CUSTOMS BROKERS & FORWARDERS ASS'N v. US

• Decision Date: 16 August 1994
• Docket Number: Slip Op. 94-129. Court No. 94-07-00423.
• Citation: 18 CIT 754,861 F. Supp. 121
• Parties: NATIONAL CUSTOMS BROKERS AND FORWARDERS ASSOCIATION OF AMERICA, INC., Plaintiff, v. UNITED STATES; Lloyd Bentsen, Secretary of the Treasury; John P. Simpson, Deputy Assistant Secretary of the Treasury for Regulatory, Tariff and Trade Enforcement; George J. Weise, Commissioner of Customs, Defendants, Air Courier Conference of America, UPS Worldwide Forwarding, Inc. and UPS Customhouse Brokerage, Inc., International Bonded Couriers, Inc. and TNT Skypak International Express, Inc.; DHL Airways, Inc.; Federal Express Corporation, Defendant-Intervenors.
• Court: U.S. Court of International Trade

861 F. Supp. 121

18 CIT 754

NATIONAL CUSTOMS BROKERS AND FORWARDERS ASSOCIATION OF AMERICA, INC., Plaintiff, v. UNITED STATES; Lloyd Bentsen, Secretary of the Treasury; John P. Simpson, Deputy Assistant Secretary of the Treasury for Regulatory, Tariff and Trade Enforcement; George J. Weise, Commissioner of Customs, Defendants Air Courier Conference of America, UPS Worldwide Forwarding, Inc. and UPS Customhouse Brokerage, Inc., International Bonded Couriers, Inc. and TNT Skypak International Express, Inc.; DHL Airways, Inc.; Federal Express Corporation, Defendant-Intervenors.

Slip Op. 94-129. Court No. 94-07-00423.

United States Court of International Trade.

August 16, 1994.

COPYRIGHT MATERIAL OMITTED

Tompkins & Davidson, Brian S. Goldstein, Laurence M. Friedman and Harvey A. Isaacs, for plaintiff.

Frank W. Hunger, Asst. Atty. Gen., David M. Cohen, Director, Commercial Litigation Branch, Civ. Div., U.S. Dept. of Justice, Rhonda K. Schnare, (Richard McManus, U.S. Customs Service of counsel), for defendants.

Ross & Hardies, Myles J. Ambrose, Joseph S. Kaplan, Evelyn M. Suarez, John J. Vecchione and Stephen M. DeLuca, for defendant-intervenors Air Courier Conference of America, UPS Worldwide Forwarding, Inc. and UPS Customhouse Brokerage, Inc., Intern. Bonded Couriers, Inc. and TNT Sky-Pak Intern. Express, Inc.

Winston & Strawn, Eric L. Hirschhorn, Peter N. Hiebert, Edward F. Gerwin, Jr. and John R. Keys, Jr., for defendant-intervenor DHL Airways, Inc.

Mudge Rose Guthrie Alexander & Ferdon, Richard H. Abbey, Joseph J. Aronica and Edith A. Eisner, for defendant-intervenor Federal Express Corp.

OPINION

TSOUCALAS, Judge:

On July 25, 1994, pursuant to Rule 65(b) of the Rules of this Court, National Customs Brokers and Forwarders Association of America, Inc. ("NCBFAA") requested, and the Court granted, a temporary restraining order ("TRO"). Plaintiff sought to enjoin the Department of the Treasury and the United States Customs Service ("Customs") from implementing the interim regulations published in the FEDERAL REGISTER on June 13, 1994. Express Consignments; Formal and Informal Entries of Merchandise; Administrative Exemptions ("Rules and Regulations"), 59 Fed.Reg. 30,289 (1994). The proposed interim regulations, scheduled to become effective on July 28, 1994, increase the dollar limit on certain administrative exemptions and expand the class of persons deemed eligible to make informal entries of exempt merchandise.

Concurrently with the issuance of a TRO, the Court scheduled a hearing on plaintiff's motion for a preliminary injunction pursuant to USCIT Rule 65(a). Subsequently, on August 9, 1994, a full hearing was held to determine whether a preliminary injunction should issue. At the August 9th hearing, plaintiff acquiesced to the disposition of this action on the merits concurrently with the issuance or withholdment of a preliminary injunction.

Plaintiff is a trade association which represents licensed customs brokers and affiliated associations throughout the United States. Defendant-intervenor Air Courier Conference of America is an association representing the interests of the express courier and carrier industry. Defendant-intervenors UPS Worldwide Forwarding, Inc. and UPS Customhouse Brokerage, Inc. ("UPS"), International Bonded Couriers, Inc. ("IBC"), TNT SkyPak International Express, Inc. ("TNT"), and Federal Express Corporation ("FED EX") provide integrated international document and small package delivery. DHL Airways, Inc. ("DHL") provides express courier delivery service domestically and internationally.

ACCA, UPS, IBC, TNT, FEDEX and DHL presented cross claims against the Federal defendants contesting the interim regulations' requirement of "entry" for low value exempt merchandise.

Background

On December 8, 1993, the President signed into law the North American Free Trade Agreement Implementation Act ("the Act").¹ Title VI of the Act, popularly known as the "Customs Modernization Act" (the "Mod Act"), amended numerous customs laws. In particular, section 651 of the Mod Act amended section 321 of the Tariff Act of 1930, 19 U.S.C. § 1321 (1988), which authorizes administrative exemptions from customs duties and requirements for certain low value shipments. Central to this action, are the new statutory minimums increasing the dollar amounts defining the exemptions for de minimis shipments under section 321.²

On June 13, 1994, Customs published in the FEDERAL REGISTER proposed interim regulations intended to implement sections 651 and 681 of the Act and addressing practices with regard to shipments qualifying for informal entry procedures pursuant to 19 U.S.C. § 1498 (1988).

The interim regulations, inter alia, amend 19 C.F.R. § 143.26 to expressly allow consignees to make entry of low value exempt merchandise in accordance with informal entry procedure and increase to $200 the dollar limit under which merchandise may be entered free of duty and tax.³

A 30-day solicitation period for written comments with respect to the substance and the effective date of the proposed regulations commenced on the date that notice of the regulations was published in the FEDERAL REGISTER. The regulations were to become effective on an interim basis on July 28, 1994, fifteen days after the close of the comment period.

ACCA, UPS, IBC, TNT, FEDEX and DHL presented cross claims against the Federal defendants contesting the interim regulations' requirement of "entry" for low value exempt merchandise.

Discussion

A. Jurisdiction and Standing

Plaintiff carries the burden of demonstrating that the Court of International Trade has jurisdiction to hear and determine this case. McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189, 56 S.Ct. 780, 785, 80 L.Ed. 1135 (1936); Smith Corona Group, SCM Corp. v. United States, 8 CIT 100, 102, 593 F.Supp. 415, 417-18 (1984). Plaintiff asserts that the court has subject matter jurisdiction pursuant to 28 U.S.C. § 1581(i) (1988).⁴ Specifically, NCBFAA claims that jurisdiction exists under subparagraphs (1), (2) and (4) of this provision. Defendant does not contest the court's jurisdiction.

Section 1581(i) is a "residual" jurisdiction provision which grants exclusive jurisdiction to the Court of International Trade concerning issues relating to the antidumping duty law which are not specifically covered by other subparagraphs of section 1581. This section may be invoked as a basis for subject matter jurisdiction where another subsection of § 1581 is unavailable or when the remedy afforded by the other subsection would be "manifestly inadequate." See Association Colombiana de Exportadores de Flores (Asocoflores) v. United States, 13 CIT 584, 717 F.Supp. 847 (1989), aff'd, 903 F.2d 1555 (Fed.Cir.1990). See also Miller & Co. v. United States, 824 F.2d 961, 963 (Fed.Cir. 1987), cert. denied, 484 U.S. 1041, 108 S.Ct. 773, 98 L.Ed.2d 859 (1988).

Generally, challenges to classification, valuation and entry of merchandise are reviewable pursuant to 28 U.S.C. § 1581(a)⁵ after the administrative remedies afforded by 19 U.S.C. § 1514⁶ and § 1515⁷ have been exhausted. United States v. Uniroyal, Inc., 69 CCPA 179, 182, 687 F.2d 467, 471 (1982) ("Congress did not intend the Court of International Trade to have jurisdiction over appeals concerning completed transactions when the appellant had failed to utilize an avenue for effective protest before the Customs Service.").

The denial of a protest is not a condition precedent to this court's exercise of jurisdiction in all cases. Where a plaintiff challenged a Presidential Proclamation imposing quotas on sugar imports, the Court of Customs and Patent Appeals held:

We are persuaded that in this case, involving the potential for immediate injury and irreparable harm to an industry and a substantial impact on the national economy, the delay inherent in proceeding under § 1581(a) makes relief under that provision manifestly inadequate and, accordingly, the court has jurisdiction in this case under § 1581(i).

United States Cane Sugar Refiners' Ass'n v. Block, 69 CCPA 172, 175 n. 5, 683 F.2d 399, 402 n. 5 (1982); see also Mast Industries, Inc. v. Regan, 8 CIT 214, 221, 596 F.Supp. 1567, 1573 (1984) (quoting United States Cane Sugar Refiners', 69 CCPA at 175 n. 5, 683 F.2d at 402 n. 5).

In the case at bar, implementation of the interim regulations is imminent. The proposed regulations have created a predictable, but unavoidable, conflict between two competing factions of a vital service industry. Critically, with regard to plaintiff, the proposed regulations create a potential for immediate injury and irreparable harm to an industry and for a substantial impact upon the national economy which may be significant. Consequently, relief under § 1581(a) would be "manifestly inadequate." Moreover, it is imperative that Customs be unencumbered in lawfully carrying out its responsibilities under the Customs Modernization Act. With regard to defendant-intervenors, resolution of this matter will define their frontier in this industry. It is in the interest of all parties herein involved that this matter be resolved with expediency. Therefore, the Court finds that jurisdiction exists pursuant to 28 U.S.C. § 1581(i).

Defendant also challenges plaintiff's standing to bring this action. Defendant maintains that plaintiff fails to meet the standing requirements of 28 U.S.C. § 2631(i).⁸ Defendant asserts that plaintiff has not demonstrated that Customs' action pursuant to 19 U.S.C. § 1321 has caused plaintiff any injury in fact or that the interest plaintiff seeks to protect is within the zone of interests intended to be protected or regulated by 19 U.S.C. § 1321 or other laws to which plaintiff has made reference.

Plaintiff is a trade association acting on behalf of its members. It represents licensed customs brokers and local affiliated associations throughout the United States. The courts have ruled that a plaintiff-trade association...