American Air Parcel Forwarding Co. v. United States, Court No. 83-7-00995.

• Citation: 6 CIT 146,573 F. Supp. 117
• Decision Date: 20 September 1983
• Docket Number: Court No. 83-7-00995.
• Parties: AMERICAN AIR PARCEL FORWARDING COMPANY, LTD., and E.C. McAfee Company, Plaintiffs, v. UNITED STATES of America, U.S. Customs Service, and The Commissioner of Customs, Defendants.
• Court: U.S. Court of International Trade

573 F. Supp. 117

6 CIT 146

AMERICAN AIR PARCEL FORWARDING COMPANY, LTD., and E.C. McAfee Company, Plaintiffs, v. UNITED STATES of America, U.S. Customs Service, and The Commissioner of Customs, Defendants.

Court No. 83-7-00995.

United States Court of International Trade.

September 20, 1983.

Sandler & Travis, P.A., Miami, Fla. (Leonard L. Rosenberg, Miami, Fla., on motion), for plaintiffs.

J. Paul McGrath, Asst. Atty. Gen., Washington, D.C., Joseph I. Liebman, Atty. in Charge, Intern. Trade Field Office, Commercial Lit. Branch, New York City (Kenneth N. Wolf, New York City, on motion), for defendants.

MEMORANDUM AND ORDER

CARMAN, Judge:

This matter is before me on plaintiffs' motion for a preliminary injunction and defendants' motions for partial dismissal and/or partial summary judgment.

Plaintiffs' request in their motion for a preliminary injunction, pursuant to Rule 65(a) of the Rules of the United States Court of International Trade, that this court:

a. Cancel all liquidations occurring after October 17, 1980 of plaintiffs' entries of certain made-to-measure clothing exported from Hong Kong;

b. Refrain from liquidating any of plaintiffs' entries of certain made-to-measure clothing exported from Hong Kong, in violation of Customs Ruling CLA-2: RRUCV 065056 CW TAA # 10;

c. Refrain from acting on any protests filed by plaintiffs or their sureties in connection with the liquidation of entries of certain made-to-measure clothing exported from Hong Kong;

d. Refrain from implementing any directive, policy statement or ruling that would result in the liquidation of plaintiffs' entries of certain made-to-measure clothing exported from Hong Kong, or in the disposition of any pending protests filed by plaintiffs or their sureties in connection with the liquidation of such entries;

e. Refrain from initiating any demands on the plaintiffs' sureties for payment of additional duties on entries of certain made-to-measure clothing exported from Hong Kong.

The parties in this case have stipulated to the following facts:

1. The plaintiff, AMERICAN AIR PARCEL FORWARDING COMPANY, LTD. ("AAP"), is a corporation organized and existing under the laws of Hong Kong.

2. The particulars regarding entry, liquidation and protest the specific entry of which is the subject of this action are as follows:

                     Entry             Entry           Date of
                     Number            Date            Liquidation
                     337670           01/02/81         03/05/82
                Protest Number:    XXXX-X-XXXXXX
                Protest Filed:     June 1, 1982
                Protest Denied:    April 21, 1983
                

3. All duties demanded of the importer at time of liquidation of Entry No. 337670 of January 2, 1981, have been paid prior to the filing of this action by a check drawn by AAP's surety St. Paul Fire and Marine Insurance Company.

4. The merchandise which is the subject of this action is various items of wearing apparel.

5. On or about January 16, 1980, following discussions with plaintiff AAP regarding the valuation of the merchandise AAP imported from Hong Kong, the District Director of Customs, Detroit, Michigan, requested internal advice of Customs Service Headquarters pursuant to 19 C.F.R. § 177.11 regarding the appraisement of AAP's merchandise.

6. On October 17, 1980, in response to the aforesaid request for internal advice, the Director, Classification and Value, Headquarters issued a ruling identified as follows: CLA-2: RRUCA 065056CW TAA # 10 (hereinafter referred to as "TAA # 10"). (TAA # 10 is also known as IA 25/80.)

7. On March 11, 1981, the Customs Service published TAA # 10 in the Customs Bulletin (15 Cust. Bull. & Dec., No. 10). TAA # 10 was identified as C.S.D. 81-72 at the time of its publication.

8. Subsequent to the issuance of TAA # 10, the Director, Classification and Value in San Francisco requested reconsideration of TAA # 10 as it related to appraisement of merchandise on the basis of transaction value under Section 402(b), Tariff Act of 1930, as amended by the Trade Agreements Act of 1979 and the Director, Classification and Value in Detroit submitted a memorandum to Customs Service Headquarters in Washington, D.C. in support thereof.

9. On July 23, 1981, Customs Service Headquarters in a ruling referred to as CLA-2: RRUCV, 542406 BLS, affirmed TAA # 10.

10. On September 9, 1981, Customs Service Headquarters issued a telex directed to, inter alia, District Directors, San Francisco and Detroit, pertaining to TAA # 10.

11. Neither plaintiffs nor the importing public were given prior notice of the telex dated September 9, 1981.

12. On October 19, 1981, Customs issued a ruling referred to as: CLA-2-CO:R:CV:V,542643 TLL, TAA # 40 (hereinafter referred to as TAA # 40).

13. TAA # 40 revoked TAA # 10.

14. TAA # 40 revoked TAA # 10 retroactively, citing section 177.9(d) of the Customs Regulations (19 C.F.R. § 177.9(d)) as authority for that action.

15. TAA # 40 was never published in the Customs Bulletin, Federal Register, or in any other publication which would give the general importing public notice of its contents.

16. The defendants did not seek the comments of the plaintiffs or the general public prior to the issuance of TAA # 40.

17. Defendants did not publish a notice in the Federal Register or the Customs Bulletin that TAA # 10 was under review.

18. Subsequent to the revocation of TAA # 10, many entries made by the plaintiffs were liquidated at values two (2) to three (3) times as great as the entered values, thereby causing bills for increased duties to be issued in the amounts in excess of approximately $20,000 and $30,000 per entry.

19. The total increased duties due from the plaintiffs on or before October 18, 1983, is in excess of one million dollars ($1,000,000).

20. The duties due on October 18, 1983, are due in connection with protests denied on April 21, 1983.

21. Demands for payment of increased duties have been made upon plaintiffs' surety companies.

22. Plaintiff AAP has placed itself within the protection of the United States Bankruptcy Court.

23. Increased duties have been paid only as to Entry No. 337670.

JURISDICTION

Plaintiffs commenced this action on July 14, 1983,¹ to contest the United States Customs Service's (hereinafter "Customs Service") appraisement of Entry No. 337670 of made-to-measure clothing from Hong Kong dated January 2, 1981, to obtain judicial review of the Customs Service's alleged revocation of an internal advice decision TAA # 10, and to seek an injunction as to Entry No. 337670 and other numerous entries.

It has been conceded by the defendants that this court has jurisdiction over Entry No. 337670 of January 2, 1981, pursuant to 28 U.S.C. § 1581(a) (Supp. V 1981)² since plaintiffs have exhausted their administrative remedies and paid the increased duties as to this entry. The defendants object to this court taking jurisdiction over other numerous and unspecified entries set forth by the plaintiffs.

With respect to the numerous and unspecified entries, although plaintiffs have exhausted their administrative remedies, they have not paid the additional duties that have been assessed. Since the tender of additional duties determined to be due on liquidation is a condition precedent to invoking the jurisdiction of this court pursuant to 28 U.S.C. § 2637(a) (Supp. V 1981)³, this court lacks subject matter jurisdiction as to all entries for which the additional duties have not been paid. United States v. Boe, 64 CCPA 11, 18, C.A.D. 1177, 543 F.2d 151 (1976); Dexter v. United States, 78 Cust.Ct. 179, C.R.D. 77-1, 424 F.Supp. 1069 (1977).

It has been argued by the plaintiffs that the circumstances of this case give rise to jurisdiction under 28 U.S.C. § 1581(i)(4) (Supp. V 1981)⁴, citing Schaper Manufacturing Co. v. Regan, 5 CIT ___, 566 F.Supp. 894 (1983)⁵. Plaintiffs assert that they are seeking enforcement of regulations concerning the establishment and revocation of a uniform practice and specifically the process surrounding the revocation of TAA # 10 thereby providing this court with subject matter jurisdiction. This court cannot agree with this assertion of jurisdiction.

In United States v. Uniroyal Inc., 69 CCPA ___, 687 F.2d 467 (1982), the court clearly stated that 28 U.S.C. § 1581(i) cannot be used to circumvent the procedures of 28 U.S.C. § 1581(a), and noted that the legislative history of section 1581 evidences Congress' intention that subsection (i) not be used generally to bypass administrative review by meaningful protest. An importer must file a protest, receive a denial of that protest and pay the assessed duties before the jurisdiction of this court can be invoked. Subject matter jurisdiction under section 1581(i) of a cause of action, which might otherwise be available under section 1581(a), lies only when the relief available under section 1581(a) is manifestly inadequate or necessary because of special circumstances to avoid extraordinary and unjustified delays caused by the exhaustion of administrative remedies. United States Cane Sugar Refiners' Association v. Block, 69 CCPA ___, 683 F.2d 399 (1982); Lowa, Ltd. v. United States, 5 CIT ___, 561 F.Supp. 441, (March 16, 1983), appeal docketed, No. 83-1018 (Fed.Cir. May 13, 1983). This court does not find that section 1581(a) is manifestly inadequate or that special circumstances exist in this case.

Therefore, defendants' motion for partial dismissal as it relates to entries other than Entry No. 337670 is granted.

Plaintiffs' Motion for Preliminary Injunction

Having determined that this court has subject matter jurisdiction only as to Entry No. 337670, the court now turns to plaintiffs' motion for a preliminary injunction as to that one entry⁶.

In order to prevail on a motion for a preliminary injunction, the petitioner must show (1) that without the relief requested the petitioner will be irreparably injured; (2) that there is a substantial likelihood of success on the merits; (3) that the issuance of the relief requested will not substantially...