Atari Caribe, Inc. v. US

• Citation: 16 CIT 588,799 F. Supp. 99
• Decision Date: 14 July 1992
• Docket Number: Court No. 89-02-00087
• Parties: ATARI CARIBE, INC., Plaintiff, v. The UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

799 F. Supp. 99

16 CIT 588

ATARI CARIBE, INC., Plaintiff, v. The UNITED STATES, Defendant.

Court Nos. 89-02-00087, 89-02-00087-S.

United States Court of International Trade.

July 14, 1992.

COPYRIGHT MATERIAL OMITTED

George R. Tuttle, P.C., George R. Tuttle III, for plaintiff.

Stuart M. Gerson, Asst. Atty. Gen., Joseph I. Liebman, Atty. in Charge, Intern. Trade Field Office, Civ. Div., Dept. of Justice, Mark S. Sochaczewsky, Stephen Berke, Atty., U.S. Customs Service, of counsel, for defendant.

OPINION

RESTANI, Judge:

Plaintiff filed suit contesting the denial of its tariff classification protests by the United States Customs Service ("Customs"). Between April of 1983 and May of 1984, plaintiff Atari Caribe, Inc. ("Atari Caribe") imported merchandise invoiced as chip-on-board ("COB") assemblies through the port of San Juan, Puerto Rico. Atari Caribe entered its merchandise under Item A734.20 of the Tariff Schedules of the United States ("TSUS"), as parts of game machines, seeking duty-free treatment under the Generalized System of Preferences.¹ In August of 1984, Customs liquidated the merchandise under Item 687.74, TSUS.² This action was taken pursuant to Customs Headquarters Ruling Letter 072542, issued September 14, 1983, which classified COB devices as monolithic integrated circuits.³ In November of 1984, Atari Caribe filed protests contesting Customs' classification and requesting further review pursuant to 19 U.S.C. § 1514 (1988). Defendant now moves to limit the scope of plaintiff's action to one issue; specifically, whether there existed a uniform and established practice ("UEP") on the part of Customs to classify plaintiff's merchandise under Item A734.20, TSUS. Defendant also moves to sever and dismiss so much of this action as relates to two of plaintiff's protests, together with the entries they cover, for lack of jurisdiction.

I. Protest numbers XXXXX-XXXXXX and XXXXX-XXXXXX must be severed from this action and dismissed for lack of jurisdiction.

Defendant moves to dismiss protest numbers XXXXX-XXXXXX and XXXXX-XXXXXX for lack of jurisdiction. The record indicates that entries covered by protest number XXXXX-XXXXXX were liquidated on August 3, 1984, while the protest was filed on November 2, 1984. The entries covered by protest number XXXXX-XXXXXX were liquidated on August 10, 1984, while the protest was filed on November 13, 1984. Clearly, then, both protests were filed more than ninety days after liquidation of the underlying entries.

Pursuant to 19 U.S.C. § 1514(c)(2) and 19 C.F.R. § 174.12(e), upon liquidation of its merchandise an importer has ninety days within which to file a protest. This statute of limitations is strictly construed. Where a protest is untimely filed, courts have declined to assert jurisdiction regardless of the ensuing hardship visited upon a party. See Noury Chemical Corp. v. United States, 4 CIT 68, 1982 WL 2245 (1982); Arista Oil Products Co. v. United States, 31 Cust.Ct. 251, Abs. 57492 (1953).

Where one party challenges the court's jurisdiction in an appropriate manner, it is incumbent upon the adverse party to support the exercise of jurisdiction with competent proof. McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189, 56 S.Ct. 780, 785, 80 L.Ed. 1135 (1936). Atari Caribe has had notice of defendant's intent to seek dismissal of these two protests since at least June 13, 1990, the date the government filed its Answer to Plaintiff's First Amended Complaint. Despite almost two years of opportunity for discovery on this issue, plaintiff presents no tangible evidence to counter the prima facie untimeliness which renders these filings stale; instead, plaintiff simply asserts that "it is possible that the two protests in question were timely faxed to Customs but that the actual mailed copies were date-stamped on the date received through the mail, rather than the date received by fax." See Plaintiff's Response In Opposition To Defendant's Motion In Limine And To Sever And Dismiss, at 2. As a result, plaintiff responds with a request for additional discovery to resolve this factual issue.

Atari Caribe has had ample time to develop evidence which supports this assertion, if it exists. In fact, most of the evidence would be within its own control. Significantly, although plaintiff relies upon the recollections of several employees regarding confirmation of faxes with Customs' employees, not one substantiating affidavit has been offered in support. Jurisdiction may not be premised upon bald assertions in light of manifest evidence to the contrary. See Schering Corp. v. United States, 67 CCPA 83, 88, C.A.D. 1250, 626 F.2d 162, 167 (1980); cf. Lowa, Ltd. v. United States, 5 CIT 81, 83, 561 F.Supp. 441, 443 (1983), aff'd, 2 Fed.Cir. (T) 27, 724 F.2d 121 (1984). Given the state of the record, it is inappropriate for the court to exercise jurisdiction over these two protests. Thus, protest numbers XXXXX-XXXXXX and XXXXX-XXXXXX must be severed from this action and dismissed.

II. Plaintiff may introduce independent grounds for classification of COB devices under Item A734.20, TSUS.

A. Facts.

Protest number XXXXX-XXXXXX is representative of the other protests at issue in this action. Specifically, Atari Caribe stated:

Protest and Application for Further Review of Protest is hereby made against your classification decision, and the liquidation and assessment of duty on all merchandise consisting of Chip-On-Board devices ... liquidated sic under Item 687.74 ... or under other provisions of the tariff.

We claim that the said merchandise is properly classifiable as assessed, but that an allowance should have been made for ... an exemption from duty under Item 807.00....⁴

We further claim ... that a uniform and established practice existed prior to the issuance of the ruling of September 14, 1983 to classify such Chip-On-Board ... devices under Item 734.20 (or A734.20, when eligible for GSP). The change of the established practice, by the said ruling, therefore requires that a prior written notice be published of such change, pursuant to the provisions of 19 U.S.C. § 1315(d) and 19 C.F.R. 177.11(c). sic The higher rate of duty under the new classification will, thus, be applicable only to entries made after the publication of the statutorily required prior notice.

Text of Protest No. 49094-000210, dated Oct. 31, 1984 (emphasis added). Apparently, Customs did not consider Ruling Letter 072542 a deviation from an existing UEP since it failed to publish the requisite notice of change in practice, pursuant to 19 C.F.R. § 177.10(c) (1983).

Customs responded to Atari Caribe's protests with two ruling letters. Initially, Customs denied both the UEP and 807 claims in Ruling Letter 077091, issued December 26, 1985. Subsequently, however, Customs amended its decision in Ruling Letter 554075, issued June 10, 1986, by permitting Atari Caribe to present the requisite documentation to support a claim for an 807 exemption. On May 13, 1988, Atari Caribe submitted additional documentation to the District Director of Customs for Puerto Rico. Thereafter, Customs reliquidated plaintiff's merchandise, granting U.S. made components duty-free treatment pursuant to Item 807.00, TSUS, and assessing duty on the remaining components at the rate provided for under Item 687.74, TSUS, in accordance with its original classification.

B. Plaintiff has adequately exhausted administrative remedies.

As indicated, Atari Caribe brings suit challenging denial of its protests under 19 U.S.C. § 1514(a).⁵ Jurisdiction in this court is predicated upon 28 U.S.C. § 1581(a).⁶ The first question presented is whether Customs' denial of plaintiff's UEP claims constitutes partial denial of a protest as contemplated by 28 U.S.C. § 1581(a) and 19 U.S.C. § 1514(a), despite the fact that plaintiff's alternative 807 claims were ultimately granted in full. In general, either full or partial denial of an importer's protest is a jurisdictional prerequisite to suit. See National Corn Growers Ass'n v. Baker, 6 Fed.Cir. (T) 70, 81, 840 F.2d 1547, 1555-56 (1988); Wear Me Apparel Corp. v. United States, 1 CIT 194, 195-96, 511 F.Supp. 814, 816 (1981). Only where exercise of § 1581(a) jurisdiction is found to be manifestly inadequate, see Mast Industries, Inc. v. Regan, 8 CIT 214, 221, 596 F.Supp. 1567, 1574 (1984), or results in adherence to useless formality, United States Cane Sugar Refiners' Ass'n v. Block, 3 CIT 196, 201, 544 F.Supp. 883, 887, aff'd, 69 CCPA 172, 683 F.2d 399 (1982), have courts dispensed with this requirement. The instant case does not present such situations.

In Sanyo Electric, Inc. v. United States, 81 Cust.Ct. 114, C.D. 4775 (1978), Customs liquidated plaintiff's merchandise under Item 685.50, TSUS. Plaintiff then protested, requesting classification under either Items 685.30 or 678.50. Upon Customs' denial of plaintiff's preferred claim and reliquidation of the merchandise under the proposed alternative classification, plaintiff filed suit arguing that the protest had been denied in part. The court held that where Customs grants one of several claims, and in so doing entirely abandons its original decision, that protest has been granted in full. See id. at 115. Thus, plaintiff's action was dismissed for lack of jurisdiction based on the absence of a protest denied.

Significantly, in stating this rule the court noted that the appropriate yardstick is not simply whether all but one among several alternative claims presented in a protest are denied, but the extent to which any part of the original decision survives reclassification. Id. at 115.⁷ This distinction is particularly evident in the present case. Despite granting Atari Caribe's 807 claims, Customs' original classification of plaintiff's merchandise under Item 687.74 survived as to those components not fabricated within the United States. Clearly this treatment is not in accord with Atari Caribe's alternative claim for complete...