Incorporado v. United States

• Decision Date: 13 May 2014
• Docket Number: Slip Op. 14–54.,Court No. 12–00349.
• Citation: 978 F.Supp.2d 1359
• Parties: LDA INCORPORADO, Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

978 F.Supp.2d 1359

LDA INCORPORADO, Plaintiff,

v.UNITED STATES, Defendant.

Slip Op. 14–54.

Court No. 12–00349.

United States Court of

International Trade.

May 13, 2014.

Ronald M. Wisla, Lizbeth R. Levinson, Kutak Rock LLP of Washington, DC, for Plaintiff.

Saul Davis, Senior Trial Counsel, U.S. Department of Justice, Civil Division, Commercial Litigation Branch, of Washington, DC, for Defendant. With him on the brief were Stuart F. Delery, Assistant Attorney General, Amy M. Rubin, Acting Assistant Director, Beverly A. Farrell, Trial Attorney. Of counsel on the brief was Beth C. Brotman, Office of the Assistant Chief Counsel, International Trade Litigation, U.S. Customs and Border Protection, of Washington, DC.

OPINION AND ORDER

KELLY, Judge:

Plaintiff LDA Incorporado (“Plaintiff”) challenges Defendant United States Customs and Border Protection's (“Defendant” or “Customs”) denial of its protest regarding Plaintiff's entry of merchandise. Plaintiff asserts Customs erroneously determined that Plaintiff's merchandise was not excluded from the scope of the antidumping and countervailing duty orders on Circular Welded Carbon Quality Steel Pipe from the People's Republic of China, 73 Fed.Reg. 42,547 (Dep't Commerce July 22, 2008) (notice of antidumping duty order) (“ ADD Order ”) and Circular Welded Carbon Quality Steel Pipe from the People's Republic of China, 73 Fed.Reg. 42,545 (Dep't Commerce July 22, 2008) (notice of amended final affirmative countervailing duty determination and notice of countervailing duty order) (“ CVD Order ”) (collectively the “Orders”). Plaintiff claims Customs' mistake in not determining the proper amount of duties chargeable to Plaintiff's entry is a protestable decision under Section 514(a)(2) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1514(a)(2) (2006),¹ and the denial of its protest gives rise to the court's jurisdiction under 28 U.S.C. § 1581(a) (2006).²

Defendant moves to dismiss Plaintiff's complaint for lack of jurisdiction pursuant to USCIT Rule 12(b)(1), claiming Customs' determination that Plaintiff's merchandise was within the scope of the Orders was not a protestable decision under 19 U.S.C. § 1514(a)(2). Instead, Defendant argues Plaintiff was required to seek a timely scope ruling from the Department of Commerce (“Commerce”), and that its failure to do so deprives this Court of jurisdiction. The court concludes that Customs' determination that Plaintiff's merchandise was not excluded from the scope of the Orders is a protestable decision of the type specified in § 1514(a)(2). Therefore, the court denies Defendant's motion to dismiss.

Background

On July 22, 2010, Plaintiff imported a single entry of merchandise, which it described as electrical rigid metal conduit steel, a type of rigid steel conduit product. Plaintiff classified the merchandise under Harmonized Tariff Schedule of the United States (“HTSUS”) 7306.30.50.25,³ as duty free, without reference to the Orders.

Plaintiff believed the merchandise was specifically excluded from the scope of the Orders as “finished electrical conduit.” See Pl.'s Response 4, Dec. 24, 2013, ECF No. 17. Plaintiff's merchandise is both internally and externally coated with zinc, a conductive material, i.e., galvanized, but is not internally coated with a non-conducting liner (such as rubber or plastic). Therefore, the interior of Plaintiff's electrical conduits would conduct electricity.⁴ The Orders define the scope of the subject merchandise as

welded carbon quality steel pipes and tubes, ... regardless of wall thickness, surface finish (e.g., black, galvanized, or painted), end finish (e.g., plain end, beveled end, grooved, threaded, or threaded and coupled), or industry specification (e.g., ASTM, proprietary, or other), generally known as standard pipe and structural pipe (they may also be referred to as circular, structural, or mechanical tubing) ... Standard pipe is made primarily to American Society for Testing and Materials (ASTM) specifications, but can be made to other specifications. Standard pipe is made primarily to ASTM specifications A–53, A–135, and A–795. Structural pipe is made primarily to ASTM specifications A–252 and A–500. Standard and structural pipe may also be produced to proprietary specifications rather than to industry specifications. ⁵ADD Order at 42,547; CVD Order at 42,545. However, “finished electrical conduit” is explicitly excluded from the scope. Specifically the Orders state:

The scope of this investigation does not include: (a) pipe suitable for use in boilers, superheaters, heat exchangers, condensers, refining furnaces and feedwater heaters, whether or not cold drawn; (b) mechanical tubing, whether or not cold-drawn; (c) finished electrical conduit; (d) finished scaffolding; (e) tube and pipe hollows for redrawing; (f) oil country tubular goods produced to API specifications; and (g) line pipe produced to only API specifications.

ADD Order at 42,548; CVD Order at 42,546.

At the time of entry, Customs performed laboratory inspections on the merchandise and subsequently sent Plaintiff a Notice of Action on January 10, 2011, stating that the merchandise was subject to the Orders without re-classifying the goods or providing any further explanation.⁶See Pl.'s Response Ex. 1 at 19, Dec. 24, 2013, ECF No. 17–1. Plaintiff claims that it attempted to convince Customs that its merchandise was “finished electrical conduit” to no avail. Pl.'s Response 7–9. In April of 2011, Customs forwarded the matter to Customs Headquarters, which advised Plaintiff to obtain a scope ruling from Commerce. On January 27, 2012, Customs liquidated Plaintiff's entry. Id. at 10. On February 22, 2012, Plaintiff filed a scope inquiry with Commerce. Id.

On April 26, 2012, Plaintiff filed a timely protest with Customs, which Customs denied on May 12, 2012. See Pl.'s Response Ex. 6, Dec. 24, 2013, ECF No. 17–6. On July 2, 2012, Commerce issued its scope ruling, finding that Plaintiff's merchandise was finished electrical conduit and therefore excluded from the scope of the Orders.

Discussion

Standard of Review

The party seeking the court's jurisdiction has the burden of establishing that jurisdiction exists. See Norsk Hydro Can., Inc. v. United States, 472 F.3d 1347, 1355 (Fed.Cir.2006). “If a Rule 12(b)(1) motion simply challenges the court's subject matter jurisdiction based on the sufficiency of the pleading's allegations—that is, the movant presents a ‘facial’ attack on the pleading—then those allegations are taken as true and construed in a light most favorable to the complainant.” Cedars–Sinai Med. Ctr. v. Watkins, 11 F.3d 1573, 1583 (Fed.Cir.1993) (citations omitted). Where

the Rule 12(b)(1) motion denies or controverts the pleader's allegations of jurisdiction, however, the movant is deemed to be challenging the factual basis for the court's subject matter jurisdiction. In such a case, the allegations in the complaint are not controlling, and only uncontroverted factual allegations are accepted as true for purposes of the motion. All other facts underlying the controverted jurisdictional allegations are in dispute and are subject to fact-finding by the ... court.Cedars–Sinai Med. Ctr., 11 F.3d at 1583–84 (internal citations omitted). Moreover, “[w]here, as here, claims depend upon a waiver of sovereign immunity, a jurisdictional statute is to be strictly construed.” Celta Agencies, Inc. v. United States, 865 F.Supp.2d 1348, 1352 (CIT 2012) ( citing United States v. Williams, 514 U.S. 527, 531, 115 S.Ct. 1611, 131 L.Ed.2d 608 (1995)).

Analysis

Under 28 U.S.C. § 1581(a), the court has “exclusive jurisdiction of any civil action commenced to contest the denial of a protest, in whole or in part, under [19 U.S.C. § 1515].” Section 1515(a) instructs Customs to timely review and decide any protest filed in accordance with 19 U.S.C. § 1514, subsection (a) which lists the Customs decisions that may be protested. Section 1514(a) provides that for

any clerical error, mistake of fact, or other inadvertence, whether or not resulting from or contained in an electronic transmission, adverse to the importer, in any entry, liquidation, or reliquidation, and, decisions of the Customs Service, including the legality of all orders and findings entering into the same, as to—

(1) the appraised value of merchandise;

(2) the classification and rate and amount of duties chargeable;

(3) all charges or exactions of whatever character within the jurisdiction of the Secretary of the Treasury;

(4) the exclusion of merchandise from entry or delivery or a demand for redelivery to customs custody under any provision of the customs laws, except a determination appealable under section 1337 of this title;

(5) the liquidation or reliquidation of an entry, or reconciliation as to the issues contained therein, or any modification thereof, including the liquidation of an entry, pursuant to either section 1500 or section 1504 of this title;

(6) the refusal to pay a claim for drawback; or

(7) the refusal to reliquidate an entry under subsection (d) of section 1520 of this title;

shall be final and conclusive upon all persons (including the United States and any officer thereof) unless a protest is filed in accordance with this section, or unless a civil action contesting the denial of a protest, in whole or in part, is commenced in the United States Court of International Trade in accordance with chapter 169 of Title 28 within the time prescribed by section 2636 of that title. When a judgment or order of the United States Court of International Trade has become final, the papers transmitted shall be returned, together with a copy of the judgment or order to the Customs Service, which shall take action accordingly.

19 U.S.C. § 1514(a). Thus, a proper protest under § 1514(a) that is then denied by Customs will form the basis of the court's jurisdiction under 28 U.S.C. § 1581(a).

Section 1514(b) excludes determinations under subtitle IV, 19 U.S.C. §§...