Ammex, Inc. v. U.S., Slip Op. 99-81.
| Decision Date | 13 August 1999 |
| Docket Number | Slip Op. 99-81.,Court No. 99-01-00013. |
| Citation | 62 F.Supp.2d 1148 |
| Parties | AMMEX, INC., Plaintiff, v. UNITED STATES, Defendant. |
| Court | U.S. Court of International Trade |
Serko & Simon LLP (David Serko, New York City, Christopher M. Kane, Farmingdale, NY and Jerome L. Hanifin, New York City), for plaintiff.
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 (Amy M. Rubin), New York City; Beth C. Brotman, Office of Assistant Chief Counsel, United States Customs Service, of counsel, for defendant.
This case comes before the Court on Plaintiff's Motion For Discovery. In essence, Plaintiff requests that certain documents be added to the administrative record for Customs Headquarters Ruling 227385 and that discovery be allowed to provide the Court with a full explanation of Customs' decision in this matter. For the reasons below, the Court grants Plaintiff only limited discovery, since Plaintiff has generally failed to provide the Court with a reasonable basis to believe that the record as filed is incomplete, that agency decisionmakers exhibited bad faith or improper behavior, or that any other exception to the general limitation on discovery is applicable.
Underlying the parties' current discovery dispute is Plaintiff's challenge of Customs Headquarters Ruling 227385 of February 12, 1998 ("HQ 227385"). In HQ 227385, Customs reaffirmed a 1994 headquarters ruling which found that the activities of duty-free stores should not be extended to cover unidentifiable fungible goods, such as gasoline, when sold on a retail basis. In the 1994 ruling, Customs found, inter alia, that because gasoline could not be subject to marking or other identification under 19 U.S.C. § 1555(b)(3)(D),1 Customs would have no practical way of ensuring that the duty-free gasoline was "declared" when vehicles returned to the United States. See Customs Headquarters Ruling 225287, June 27, 1994 ("HQ 225287"), at 4-5.
In HQ 227385, Customs revisited the issue of duty-free gasoline sales in light of Plaintiff's requests that Customs reconsider its 1994 ruling. Analyzing the relevant legislative history of the Omnibus Trade and Competitiveness Act of 1988, which established legislative guidelines for Customs' administration of duty-free shops, Customs concluded that "the fact that Congress did not specifically reject Customs policy regarding the sale of gasoline by duty-free stores means that Congress did not object to such practice." Id. at 8. Thus, it reasoned, "in holding that gasoline and diesel fuel may not be sold by duty-free stores, it was proper to follow the precedent established by ruling letter 200396."2 Id. Further, in HQ 227385 Customs also rejected Plaintiff's argument that, in allowing U.S. residents to apply merchandise purchased from a U.S. duty-free store against their $400 personal duty-free allowance, the Miscellaneous Trade and Technical Corrections Act of 1996 rendered Ruling Letter 200396 and HQ 225287 obsolete. Besides pointing to the lack of any explicit Congressional intent to overturn these determinations, Customs observed that
the eligibility for a duty exemption does not exempt the imported merchandise from being subject to other customs laws. The exemption from duty depends on the status of the individual and the circumstances regarding the exportation of the goods, the time spent out of the United States, and the frequency of the claims for eligibility. In order to administer those requirements, the need for simple effective controls has not been lessened by the 1996 statutory change.
Pursuant to Plaintiff's challenge of HQ 227385, on February 24, 1999, Defendant filed a copy of the administrative record for both HQ 227385 and HQ 225287 with the Clerk of the Court, in accordance with USCIT R. 72. See Letter from Amy M. Rubin, U.S. Dept. of Justice Trial Attorney, to Raymond F. Burghardt, Clerk of the Court of International Trade, of 02/24/99. Plaintiff, however, believed the record to be incomplete and, in a letter dated March 5, 1999, requested that Defendant supplement the administrative record. Letter from David Serko, Plaintiff's Attorney, to Amy M. Rubin of 03/05/99, Attachment 2 to Plaintiff's Memorandum In Support Of Plaintiff's Motion For Discovery. Following a telephonic status conference with the parties on March 17, 1999, at which the Court was informed that supplementation of the administrative record might be necessary, the Court issued an order giving Defendant until March 31, 1999, to file any additional materials. On March 29, 1999, Defendant mailed a supplemental list of 43 documents to the Clerk of the Court, although the actual documents were mistakenly not included in the mailing. See Letter from John J. Mahon, U.S. Dept. of Justice Assistant Branch Director, to Raymond F. Burghardt of 3/31/99. On March 31, 1999, Defendant corrected its omission and submitted the actual 43 documents. See id.
Although Plaintiff and Defendant appear to have had further communications concerning the make-up of the administrative record, on April 19, 1999, Plaintiff filed its Motion For Discovery and its Memorandum In Support Of Plaintiff's Motion For Discovery (collectively, "Discovery Motion"). It is this Motion which is currently before the Court.
USCIT R. 72(a) Does Not Conclusively Define The Contents of The Administrative Record.
Before analyzing the reasons why Plaintiff claims that discovery is appropriate, it is necessary to determine what constitutes the administrative record that the Court is to review. Defendant interprets USCIT R. 72(a) and 28 U.S.C. § 2635(d) as requiring the administrative record to contain only those documents that were actually considered by the decisionmaker in rendering the challenged decision. Defendant's Response To Plaintiff's Motion For Discovery ("Defendant's Response") at 2-5. Pursuant to this interpretation, Defendant argues that the administrative record in this case is, in fact, complete, as evidenced by the Declaration of John Durant, Director of Customs' Commercial Rulings Division, Office of Regulations and Rulings ("Durant Declaration"),3 that every document considered by Customs' Office of Regulations and Rulings ("OR & R") in rendering HQ 227385 has been submitted to the Clerk of the Court. See id. at 2, 5. Accordingly, Defendant states, it "would not be an appropriate application of the relevant law" for the Court to allow Plaintiff to supplement the record with documents that were not considered by the actual decisionmaker. Id. at 6.
Although the Court generally agrees with Defendant that the administrative record need only include information that was directly or indirectly considered by the relevant agency decisionmakers, the Court does not agree that this principle is embodied in USCIT R. 72(a) or the corresponding U.S.Code provision, 28 U.S.C. § 2635(d) (1994).4 In relevant part, USCIT R. 72(a) provides that
in all actions in which judicial review is upon the basis of the record made before an agency ... the agency shall file with the clerk of the court the items specified in paragraphs (a), (2) and (3) of this subdivision (a), if they exist, and the certified list specified in paragraph (4) of this subdivision (a), as part of the official record of the civil action.
(1) A copy of the contested determination and the findings or report upon which such determination was based.
(2) A copy of any reported hearings or conferences conducted by the agency.
(3) Any documents, comments, or other papers filed by the public, interested parties, or governments with respect to the agency's action....
(4) A certified list of all items specified in paragraph (1), (2) and (3) of this subdivision (a).
A close reading of USCIT R. 72(a) reveals that, as indicated by its title, "DOCUMENTS FURNISHED IN ALL OTHER ACTIONS BASED UPON THE AGENCY RECORD," this Rule simply provides for the delivery of certain documents from the agency involved to the Clerk of the Court. Although paragraphs (1)-(4) of Subsection (a) define those documents which, in the normal course, will constitute the administrative record for a particular determination, nothing in USCIT R. 72(a) indicates that this Rule is meant to strictly delineate, or in any way limit, the materials that the Court should examine in reviewing agency action. In this regard, a useful contrast can be drawn between USCIT R. 72(a) and USCIT R. 71(f). USCIT R. 71(f), entitled "FILING OF THE RECORD WITH THE CLERK OF THE COURT — WHAT CONSTITUTES," makes clear that the submission of documents in accordance with either subdivision (a) or (b) of USCIT R. 71 constitutes the "filing of the record" in antidumping and countervailing duty cases. USCIT R. 72 contains no comparable provision. Had USCIT R. 72 been intended to similarly delineate the scope of the record that this Court is to review, it would contain a similar provision.5
In its Motion For Discovery, Defendant argues that its interpretation is supported by the only case from this Court which discusses USCIT R. 72(a) at any length, National Corn Growers Ass'n v. Baker, 10 CIT 345, 636 F.Supp. 921 (1986), rev'd on other grounds, 840 F.2d 1547 (Fed.Cir. 1988). In that case, like this one, the plaintiffs asked that supplemental documents be added to the administrative record. In response, the government submitted an affidavit of an official directly involved in the decision at issue, John T. Roth. Mr. Roth stated that many of the documents that the plaintiffs sought to introduce were not before the decisionmaker at the time of decision and, therefore, were not considered by the government to be part of the record. Id. at 347-48, 636 F.Supp. at 927-29. The plaintiffs challenged...
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