Autoalliance Intern., Inc. v. U.S.

• Decision Date: 30 August 2005
• Docket Number: Court No. 01-01070.,Slip Op. 05-115.
• Citation: 398 F.Supp.2d 1326
• Parties: AUTOALLIANCE INTERNATIONAL, INC. Plaintiff, v. UNITED STATES of America, Defendant.
• Court: U.S. Court of International Trade

398 F.Supp.2d 1326

AUTOALLIANCE INTERNATIONAL, INC. Plaintiff, v. UNITED STATES of America, Defendant.

Slip Op. 05-115.

Court No. 01-01070.

United States Court of International Trade.

August 30, 2005.

Baker & Hostetler, LLP (Shelby F. Mitchell and Elizabeth A. Scully), Washington, DC, for Plaintiff.

Peter D. Keisler, Assistant Attorney General; Barbara S. Williams, Attorney in Charge, International Trade Field Office, U.S. Department of Justice; Saul Davis and Aimee Lee, Civil Division, Commercial Litigation Branch, U.S. Department of Justice, for Defendant.

OPINION

CARMAN, Judge:

Pursuant to United States Court of International Trade ("CIT") Rule 12(b),¹ Defendant, the United States, moves to sever and dismiss Count II of Plaintiff's Amended Complaint for lack of subject matter jurisdiction. (Def.'s Mot. to Sever and Dismiss Count II of Pl.'s Compl. ("Def.'s Mot.") at 1.) Plaintiff asserts that this Court has jurisdiction over Count II of its Amended Complaint pursuant to 28 U.S.C. § 1581(i). Defendant claims the Court lacks jurisdiction over Plaintiff's claim because, among other reasons, 1) Plaintiff had adequate remedy under 28 U.S.C. § 1581(a), but Plaintiff failed to timely file its claim and 2) Plaintiff failed to follow procedural prerequisites of 28 U.S.C. § 1581(i). This Court finds that it does not have jurisdiction over Plaintiff's Amended Complaint and severs and dismisses Count II of Plaintiff's Amended Complaint.

BACKGROUND

The case before this Court already has a long procedural history and the Court has yet to reach the substance of the matter. The facts of this case were discussed in AutoAlliance Int'l, Inc. v. United States ("AAI1"), 26 CIT 1316, 240 F.Supp.2d 1315 (2002). In 1991, Plaintiff, AutoAlliance International, Inc. ("Plaintiff" or "AAI"), imported several shipments of welding machines and related equipment. Id. at 1316. The United States Customs Service ("Customs")² liquidated the entries in August 1995, classifying each imported item separately and applying a value advance for "design and development" costs. Id. at 1316-17.

AAI protested Customs' liquidation of its importations of welding machines and related equipment on two separate grounds: classification and valuation, specifically the imposition of the value advance.³ Id. at 1317. Customs issued its decision on AAI's protest in a Headquarters ruling. HQ 960755 (Aug. 15, 2000). In the ruling, Customs partially granted AAI's protest with regard to classification and denied it in full with regard to valuation. AAI1, 26 CIT at 1317, 240 F.Supp.2d 1315. Customs reliquidated AAI's entries in October 2000. Id. at 1318. The reliquidation affected the classification of some imported items but left their valuation unchanged, including the imposition of the value advance that AAI challenged in its protest. Id. In January 2001, AAI protested the reliquidation of the entries, again challenging the classification and valuation of the imported items. Id. Although filed within the requisite ninety-day (90) period after reliquidation, in June 2001, Customs denied — as untimely filed — the protest concerning the reliquidated entries. Id. On December 6, 2001, AAI filed a summons and complaint in this Court to dispute the denial of the protest concerning the reliquidated entries. Id. The summons was filed within one hundred eighty (180) days of the denial of the protest concerning the reliquidated entries but nearly fourteen (14) months after Customs denied the protest of the original entries, in which Customs denied AAI's protest concerning the value advance. Id.

Plaintiff's Complaint asserted two causes of action: one related to the value advance and the other related to the tariff classification of AAI's imported items. In AAI1, this Court severed and dismissed the value advance claim for lack of subject matter jurisdiction but held subject matter jurisdiction for part of the classification claim. AAI1, 26 CIT at 1329, 240 F.Supp.2d 1315. This Court severed and dismissed AAI's value advance claim because Plaintiff did not file a summons with this Court concerning the value advance within the statutorily-established period of one hundred eighty (180) days following the mailing of notice denying its protest. Id. at 1325, 240 F.Supp.2d 1315; 28 U.S.C. § 2636(a)(1) (2000).⁴ The case was stayed pending Plaintiff's appeal of this Court's decision concerning its subject matter jurisdiction over the value advance claim. The Court of Appeals for the Federal Circuit ("Federal Circuit") upheld this Court's severance and dismissal of the valuation claim from Plaintiff's case. Autoalliance Int'l, Inc. v. United States, 357 F.3d 1290 (Fed.Cir.2004) ("AAI2").⁵

On May 28, 2004, Plaintiff filed its Amended Complaint, which again contained two counts. Count I of Plaintiff's Amended Complaint in substance remains unchanged and relates to the classification of certain imported equipment used in the assembly of automobiles. (Pl.'s Am. Compl. at 14.) Count I is not currently at issue. Count II of Plaintiff's Amended Complaint relates to the value advance imposed by Customs and the agency's procedural and administrative handling thereof. AAI claims that this Court has jurisdiction over Count II based upon 28 U.S.C. § 1581(i)(" § 1581(i)").⁶

When Defendant failed to timely answer or otherwise plead to Plaintiff's Amended Complaint, Plaintiff moved for and was granted by this Court's Clerk of Court entry of default against Defendant. This Court set aside the entry of default. AutoAlliance Int'l, Inc. v. United States, 28 CIT ___, 350 F.Supp.2d 1244 (CIT 2004). Defendant then filed its Motion to Sever and Dismiss Count II of Plaintiff's [Amended] Complaint, which motion is currently before this Court.

The specific contentions of the parties in support of their positions are discussed below.

PARTIES' CONTENTIONS

I. Plaintiff's Contentions

Plaintiff argues that it has standing and has adequately pleaded a timely cause of action in Count II of its Amended Complaint pursuant to the Administrative Procedure Act ("APA"). (Pl.'s Opp'n to Def.'s Mot. to Sever & Dismiss Count II of Pl.'s Compl. ("Pl.'s Opp'n") at 2-5.) In support thereof, Plaintiff notes that Customs failed to produce documents requested pursuant to the Freedom of Information Act ("FOIA"), never had a rational basis for applying the value advance, and failed to conduct further administrative review of the denied 2001 protest as required by Customs regulation. (Pl.'s Opp'n at 3-4.) Plaintiff submits that Customs' actions were "arbitrary, capricious, an abuse of discretion, and otherwise not in accordance with the law" and are the type of wrongs the APA is designed to redress. (Pl.'s Opp'n at 4.)⁷

Plaintiff filed Plaintiff's Supplemental Memorandum of Law in Further Support of Its Opposition to Defendant's Motion to Sever and Dismiss Count II of Plaintiff's Complaint ("Supplemental Memo"), in which Plaintiff reasserted the viability of its APA claim based upon this Court's opinion in Int'l Custom Prod. v. United States, 374 F.Supp.2d 1311 (CIT 2005). In the Supplemental Memo, Plaintiff adds the claim that it asserted its APA claim as soon as practicable. (Pl.'s Supplemental Mem. of Law in Further Supp. of Its Opp'n to Def.'s Mot. to Sever & Dismiss Count II of Pl.'s Compl. at 2.)

Plaintiff further asserts that the Court has jurisdiction to hear Count II of its Amended Complaint pursuant to 28 U.S.C. § 1581(i)(4). (Pl.'s Opp'n at 5-7.) AAI claims that § 1581(i) confers jurisdiction on this Court because "AAI's claim does not contest the denial of a protest, but concerns Customs' administrative actions and failure to follow its procedures and regulations when assessing a duty and thereafter handling AAI's protest." (Pl.'s Opp'n at 5.) According to AAI, its "claim addresses the fundamental principle that Customs should be required to follow its governing procedures and regulations and cannot act arbitrarily and capriciously." (Pl.'s Opp'n at 5.) Plaintiff argues that § 1581(i) jurisdiction is proper when a party challenges an agency's failure to follow its procedures and regulations. (Pl.'s Opp'n at 6 (citing Jilin Henghe Pharm. Co. v. United States, 342 F.Supp.2d 1301 (CIT 2004)).)

II. Defendant's Contentions

Defendant argues that this Court is precluded from reviewing any aspect of Customs denial of a protest when the civil action is not commenced timely. (Def.'s Mot. at 3-4) (citing 28 U.S.C. § 2636(a) (" § 2636(a)"); 19 U.S.C. § 1514(a)⁸ (" § 1514(a)")). Defendant points out that the Federal Circuit stated that § 2636(a) must be strictly construed because it is a waiver of sovereign immunity. (Def.'s Mot. at 4) (quoting AAI2, 357 F.3d at 1293.) According to Defendant, Congress "`barred' any civil action contesting the denial of a protest, unless the civil action was commenced within 180 days `after the date of mailing of notice of denial of a protest under section 1515(a) ... or within 180 days after the date of denial of a protest by operation of law'...." (Def.'s Mot. at 4 (internal citations omitted).)

Defendant points out that Congress intended that liquidations become final and conclusive unless the complaining party meets two prerequisites: (1) the party files a timely protest; and (2) the party files a timely summons to the CIT. (Def.'s Mot. at 7.) Defendant quotes the following language from the legislative history of § 1514 in support of its contention:

Section 514 of the Tariff Act of 1930 [19 U.S.C. § 1514(a)] is also amended to provide that administrative decisions set forth in section 514(a) shall be final and conclusive on all persons, including the United States and any officer thereof, unless a protest is filed in accordance with this section and, in the event that such a protest is denied in whole or in part, unless a civil action contesting such denial is commenced in the United States Customs Court⁹ in accordance with sections 2631 and 2632 of title 28 of the United...