Amoco Oil Co. v. U.S.

Decision Date14 December 2000
Citation234 F.3d 1374
Parties(Fed. Cir. 2000) AMOCO OIL COMPANY, Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee. 00-1122 DECIDED:
CourtU.S. Court of Appeals — Federal Circuit

Lawrence M. Friedman, Barnes, Richardson & Colburn, of Chicago, Illinois, argued for plaintiff-appellant. With him on the brief were Robert E. Burke, and Robert F. Seely.

Todd M. Hughes, Assistant Director, Commercial Litigation Branch, Civil Division, Department of Justice, of Washington, DC, argued for defendant-appellee. With him on the brief were David W. Ogden, Assistant Attorney General, and David M. Cohen, Director. Of counsel on the brief was Richard McManus, Attorney, Office of the Chief Counsel, U.S. Customs Service, of Washington, DC. Of counsel were Lara Levinson, Attorney, and Jeanne E. Davidson, Deputy Director, Commercial Litigation Branch, of Washington, DC.

Robert B. Silverman, Grunfeld, Desiderio, Lebowitz & Silverman, LLP, of New York, New York for amicus curiae. Of counsel was Michael T. Cone.

Before MAYER, Chief Judge, NEWMAN and LOURIE, Circuit Judges.

LOURIE, Circuit Judge.

Amoco Oil Company appeals from the decision of the United States Court of International Trade granting the government's motion to dismiss for failure to state a claim upon which relief can be granted. Amoco Oil Co. v. United States, 63 F. Supp. 2d 1332 (Ct. Int'l Trade 1999). Because the Court of International Trade did not err in concluding that the unconstitutional export provision of the Harbor Maintenance Tax ("the HMT"), codified at 26 U.S.C. § 4461 (1994), is severable from the remainder of the HMT, we affirm.

BACKGROUND

The HMT, contained in Title XIV of the Water Resources Development Act of 1986, Pub. L. No. 99-662, 100 Stat. 4082 (1986) ("WRDA"), is an ad valorem tax on commercial cargo involved in "any port use," including imports. 26 U.S.C. § 4461(a). The HMT was intended to help finance the general maintenance and improvement of U.S. ports. S. Rep. No. 99-126, at 9-10 (1985), reprinted in 1986 U.S.C.C.A.N. 6639, 6640-47. The relevant portions of the HMT provide as follows:

§ 4461. Imposition of tax

(a) General rule.--There is hereby imposed a tax on any port use.

(b) Amount of tax.--The amount of the tax imposed by subsection (a) on any port use shall be an amount equal to 0.125 percent of the value of the commercial cargo involved.

(c) Liability and time of imposition of tax.-- (1) Liability.--The tax imposed by subsection (a) shall be paid by--

(A) in the case of cargo entering the United States, the importer,

(B) in the case of cargo to be exported from the United States, the exporter . . .

26 U.S.C. § 4461.

As an importer, Amoco was subject to the HMT under 26 U.S.C. § 4461(c)(1)(A). After allegedly making payments in excess of $1,000,000, Amoco filed a complaint in the Court of International Trade, challenging the constitutionality of the import provision of the HMT, 26 U.S.C. § 4461(c)(1)(A), in light of the Supreme Court's decision inUnited States v. U.S. Shoe Corp., 523 U.S. 360 (1998). Amoco, 63 F. Supp. 2d at 1335. In U.S. Shoe, the Supreme Court held that the export provision of the HMT, 26 U.S.C. § 4461(c)(1)(B), violated the Export Clause of the Constitution. U.S. Const. art. I, § 10, cl. 2.

The government filed a motion to dismiss for failure to state a claim upon which relief can be granted, which the Court of International Trade granted. The court concluded that: (1) the export provision of the HMT is severable from the remainder of the HMT; (2) the HMT does not violate the Uniformity Clause, U.S. Const. art. I, § 8, cl. 1; and (3) the HMT does not violate the Port Preference Clause, U.S. Const. art. I, § 9, cl. 6. Amoco, 63 F. Supp. 2d at 1339-41. With respect to the severability issue, the court based its conclusion on the existence of a general severability provision within the WRDA, codified at 33 U.S.C. § 2304, and on its duty to interpret statutes "so as to maintain, rather than destroy, their constitutionality" when possible. Amoco, 63 F. Supp. 2d at 1335-39. As for the remaining constitutional issues, the court concluded that the HMT did not violate either the Uniformity Clause or the Port Preference Clause because the "geographically-specific" provisions did not result in a discriminatory preference and Amoco had failed to demonstrate that Congress explicitly discriminated against any particular state. Id. at 1340-41.

Amoco timely appealed to this court. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(5) (1994).

DISCUSSION

The decision of the Court of International Trade to grant a motion to dismiss for failure to state a claim upon which relief can be granted is a question of law, which we review de novo. See Ponder v. United States, 117 F.3d 549, 552 (Fed. Cir. 1997). On a motion to dismiss for failure to state a claim, any factual allegations in the complaint are assumed to be true and all inferences are drawn in favor of the plaintiff. Id. Dismissal for failure to state a claim is proper only when it is beyond doubt that the plaintiff can prove no set of facts that would entitle it to relief. Id. (citing Conley v. Gibson, 355 U.S. 41, 45-46 (1957)).

Amoco argues that the issue of severability is a question of fact, and that it was therefore improper for the court to dismiss Amoco's complaint without giving Amoco a reasonable opportunity to conduct discovery and present additional evidence. Amoco further contends that the severability clause in Title IX of the WRDA does not apply to the HMT, and that Congress did not intend the export provision of the HMT to be severable from the import provision because a tax on imports alone would violate the General Agreement on Tariffs and Trade ("GATT").

The government responds that the Court of International Trade did not err in denying Amoco's request for discovery because the issue of severability is a question of law, not fact. The government further asserts that this court has previously held that the severability clause in Title IX of the WRDA applies to the HMT, and that the export provision of the HMT is severable from the remainder of the HMT. Finally the government argues that the HMT does not violate the Uniformity Clause or the Port Preference Clause, and that Amoco has waived any arguments to the contrary by failing to raise them in its opening brief.

With respect to Amoco's procedural argument, we agree with the government that the issue of severability is a question of law. As we have previously indicated, the issue of severability is a matter of statutory interpretation. See Princess Cruises, Inc. v. United States, 201 F.3d 1352 (Fed. Cir. 2000) (citing Alaska Airlines v. Donovan, 766 F.2d 1550, 1555 (D.C. Cir. 1985), for the proposition that the question of severability "reduces to a matter of statutory interpretation"). Moreover, we have repeatedly stated that issues of statutory interpretation are questions of law. See, e.g., IBM Corp. v. United States, 201 F.3d 1367, 1370 (Fed. Cir. 2000); Rheem Metalurgica S/A v. United States, 160 F.3d 1357, 1358 (Fed. Cir. 1998). Accordingly, Amoco's argument that severability is a question of fact, and that it was therefore improper for the court to dismiss Amoco's complaint without giving Amoco a reasonable opportunity to conduct discovery, is without merit.

With respect to Amoco's remaining arguments, the government correctly points out that this court has previously addressed the severability issue raised in this appeal. In two recent opinions, we have specifically held that the unconstitutional export provision in the HMT is severable from the remainder of the statute. Princess Cruises, 201 F.3d at 1358; Carnival Cruise Lines, Inc. v. United States, 200 F.3d 1361 (Fed. Cir. 2000). In Carnival, we expressly rejected the argument that the severability clause in the WRDA, 33 U.S.C. § 2304, does not apply to the HMT. Carnival, 200 F.3d at 1368. Furthermore, we also rejected the argument that Congress did not intend to make the export provision of the HMT severable from the import provision because a tax on imports alone would violate the GATT. Id. at 1369. Accordingly, Amoco's argument that Congress did not intend the export provision of the HMT to be severable from the import provision is beyond the power of this panel to accept, and Amoco makes no request that this court hear the issue...

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