Bell v. US
| Decision Date | 19 November 1993 |
| Docket Number | Court No. 92-11-00764,Slip Op. 93-218. |
| Citation | 17 CIT 1220,839 F. Supp. 874 |
| Parties | Jeffrey S. BELL, Plaintiff, v. UNITED STATES of America, Defendant. |
| Court | U.S. Court of International Trade |
Daniel M. Ogden, Washington, DC, for plaintiff.
Frank Hunger, Asst. Atty. Gen., Joseph I. Liebman, Attorney-in-Charge, Intern. Trade Field Office, Commercial Litigation Branch, Civil Div., U.S. Dept. of Justice, (John J. Mahon), U.S. Customs Service, of counsel, for defendant.
On November 16, 1992, plaintiff filed a Summons and Complaint with this court, contesting the decision of the Secretary of the Treasury to affirm the denial of plaintiff's application for a customs broker's license. Plaintiff has moved for leave to present additional evidence. This court has jurisdiction under 28 U.S.C. § 1581(g)(1) (1988) to review the Secretary's decision to affirm the denial of a customs broker's license under 19 U.S.C. § 1641(b)(2) (1988); 19 C.F.R. §§ 111.16, 111.17 (1993).
On September 1, 1989, plaintiff, Jeffrey S. Bell, applied to the Customs Service for an individual customs broker's license under 19 U.S.C. § 1641(b)(2) (1988). Shortly thereafter, plaintiff passed the written broker's examination required by 19 C.F.R. § 111.13 (1993). Customs conducted a background investigation of plaintiff and issued its report on December 5, 1989, pursuant to 19 C.F.R. § 111.14 (1993). Administrative Record ("Ad.Rec."), Attachment U.
At the time of his license application and background investigation, plaintiff was employed by Alliance Broker's International, Inc. ("Alliance"). Since its incorporation on December 7, 1988, Bell has served as vice-president and as a director of Alliance. Previously, from 1980 to December 1988, Bell had been employed as an account executive with Expeditors International, Inc. ("Expeditors"). Id.
Shortly before issuing the investigation report regarding Bell's individual customs broker's license, Customs issued its investigation report on Alliance's corporate broker's license application on September 13, 1989. Ad.Rec., Attachment V. In the Alliance investigation, Customs interviewed Joe Ramos, president of Expeditors. Ramos claimed that while employed by Expeditors, Bell had accepted kickbacks totalling approximately $1,000 from Mike Hooks, an employee of Empire Truck Lines. Ramos filed formal charges against Bell for criminal bribery, but the Tarrant County District Attorney's Office declined to prosecute the case due to the lack of verifiable information. In addition to the insufficient evidence, the small dollar amount involved was a contributing factor. The Bell and Alliance investigations also noted several reference interviews with individuals who each commented on Bell's acceptance of alleged kickbacks. Id.
Although Bell admitted that he accepted money from Hooks when asked by Customs investigators, he also argued that Ramos, his employer, had granted him permission to do so. Given Ramos' apparent consent, Bell regarded the money as legitimate commissions. If the payments had been illegitimate, Bell claims he would not have had the checks mailed to his home nor would he have reported the extra income on his annual tax returns. Bell also hypothesized that the derogatory statements stemmed from Ramos' resentment over Bell's departure from Expeditors to start Alliance, a competing custom-house brokers company. Ad.Rec., Attachment V.
On May 23, 1990, Joe Ramos wrote a letter to Customs Special Agent Linda Fairchild admitting that his comments during the investigation regarding Bell "were made at a highly emotional time and were biased." Ad. Rec., Attachment Q. Ramos admitted that he incorrectly stated that Bell had taken Expeditors documents when Bell left Expeditors to start Alliance.
In a letter dated April 12, 1991, Customs informed Bell that his license application had been denied. Ad.Rec., Attachment M. The denial was based upon "derogatory information" regarding plaintiff disclosed during the investigation. The April 12, 1991 denial letter noted that plaintiff admitted to "accepting money in the form of kick-backs" and that the payments totaled approximately $900. The letter quoted the entire provision of 19 C.F.R. § 111.16(b)1 but did not specify the provision and pertinent facts that were the basis for denying Bell's license application.
On May 16, 1991, pursuant to 19 C.F.R. § 111.17(a) (1993), plaintiff appealed his license denial to the Commissioner of Customs. Ad.Rec., Attachment K. Bell charged that Customs' investigations were not thorough and made several erroneous generalized conclusions in denying his application. Protesting Customs' finding that he received "kick-backs," Bell again described his receipt of payments as "freely offered commissions" that Ramos had verbally sanctioned. Id. Bell said that other Expeditors' employees as well as other customs brokers accepted similar commissions. Plaintiff further declared that he was a "victim of a vindictive previous employer." Id.
As he requested in his appeal letter, Customs Service officials Jerry Laderberg and Robert Page met with Bell on June 27, 1991. Ad.Rec., Attachments E & F. Aside from establishing the date of the meeting, the administrative record, however, does not contain a record of the matters discussed.
On July 26, 1991, the office of the Customs Service Commissioner denied plaintiff's appeal, specifically citing 19 C.F.R. § 111.16(b)(3), (4), and (6). Ad.Rec., Attachment D. The Commissioner's letter, however, lacked any discussion of the facts supporting any of the three cited grounds for Bell's application denial.
On September 25, 1991, plaintiff filed with the Secretary of the Treasury an appeal of the Commissioner's decision to affirm the initial denial of plaintiff's broker's license application, pursuant to 19 C.F.R. § 111.17(b) (1993). Ad.Rec., Attachment A. Plaintiff's appeal requested that Treasury reverse the denial of plaintiff's application, or alternatively, that Treasury remand the case to the Customs Service with instructions that a thorough and complete investigation of plaintiff be performed, focusing on the allegations that plaintiff accepted illegal payments. Plaintiff also requested either a formal or informal on-the-record hearing to allow him the opportunity to present additional evidence.
On April 17, 1992, Joe Ramos wrote a letter to Customs officials further explaining the circumstances surrounding his comments regarding Bell and the alleged kickbacks. Ad.Rec., Attachment C. Ramos admitted that when Bell approached him to ask about the propriety of accepting commissions from truck lines, he thought Bell was asking the question jokingly. Thus, Ramos, also in jest, replied that Bell could accept the money as commissions. Ramos assumed that Bell understood that the entire exchange was tongue in cheek. Upon reflection, Ramos noted that Bell might have honestly and in good faith misconstrued his statement as consent to accept the money.
Nearly one year after plaintiff's appeal was filed, on September 15, 1992, Treasury sent plaintiff a one-page letter denying his appeal. Plaintiff's Complaint, Exhibit F. The letter stated that "after thorough consideration of the facts as presented in the administrative record, the Secretary of the Treasury found sufficient grounds for denying plaintiff's appeal . . . pursuant to 19 CFR 111.16(b)." No specific grounds for the denial of plaintiff's application were discussed.
Plaintiff commenced this civil action seeking review of the decision of the Secretary of the Treasury to affirm the denial of plaintiff's license application. Plaintiff seeks judgment reversing Treasury's decision and directing Customs to grant plaintiff a customs broker's license. Alternatively, plaintiff requests that the court remand this case for reconsideration of all evidence regarding the factual findings made by Customs.
Plaintiff has moved for leave to present additional evidence to that contained in the agency record before the court. The government argues that plaintiff has not demonstrated that the evidence he wishes to present is "additional" or that reasonable grounds existed for the failure to present such evidence at the administrative level as prescribed by 19 U.S.C. § 1641(e)(4).
An applicant may appeal the decision of the Secretary of Treasury denying a customs broker's license by filing with this court a written petition requesting that the decision be modified or set aside in whole or in part. 19 U.S.C. § 1641(e)(1) (1988).
As an initial matter, the court addresses the apparent inconsistency in the statutes providing for the court's standard of review of broker's license denial actions.
The Secretary of the Treasury has authority over matters involving customs brokers under section 641 of the Tariff Act of 1930 (codified as amended at 19 U.S.C. § 1641 (1988)). Section 1641(e) sets forth the provisions regarding judicial appeal of broker's license matters. The Secretary's findings of fact shall be conclusive "if supported by substantial evidence." 19 U.S.C. § 1641(e)(3) (1988) (emphasis added).
Certain types or categories of actions before this court, however, are to be determined "upon the basis of the record made before the court." 28 U.S.C. § 2640(a) (1988).2 Among these are actions involving a review of the Secretary of the Treasury's determination to affirm Customs' denial of a broker's license.
Plaintiff argues that 28 U.S.C. § 2640(a)(5) is in fatal conflict with 19 U.S.C. § 1641(e)(3). Plaintiff asserts that 2640(a)(5) requires license denial actions to be conducted as a trial de novo before the court. Plaintiff further asserts that de novo review precludes the court from considering the agency record. Plaintiff argues it is contradictory that, on the one hand, license denial actions are to be determined upon the record made before the court und...
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