Black & White Vegetable Co. v. U.S., Slip Op. 00-162.

• Decision Date: 12 December 2000
• Docket Number: Slip Op. 00-162.,Court No. 96-11-02568.
• Parties: BLACK & WHITE VEGETABLE CO., Plaintiff, v. UNITED STATES of America, Defendant.
• Court: U.S. Court of International Trade

125 F.Supp.2d 531

BLACK & WHITE VEGETABLE CO., Plaintiff, v. UNITED STATES of America, Defendant.

Slip Op. 00-162.

Court No. 96-11-02568.

United States Court of International Trade.

December 12, 2000.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Givens and Associates, PLLC (Robert T. Givens), Houston, TX, for Plaintiff.

David W. Ogden, Assistant Attorney General; Joseph I. Liebman, Attorney in Charge, International Trade Field Office, Commercial Litigation Branch, Civil Division, Department of Justice, Amy M. Rubin, Trial Attorney; Beth C. Brotman, Office of the Assistant Chief Counsel, International Trade Litigation, United States Customs Service, of counsel, Washington, DC, for Defendant.

OPINION

WALLACH, Judge.

I Preliminary Statement

Plaintiff, Black & White Vegetable Company, Inc. ("Black & White"), sued to challenge the refusal by the United States Customs Service to reliquidate certain shipments of "Persian limes" imported by Black & White. Plaintiff now moves for summary judgment, claiming that reliquidation is required under 19 U.S.C. § 1520(c) (1988) because a mistake of fact regarding the botanical name of the subject limes resulted in misclassification. The Government admits that the various Customs import specialists involved were mistaken as to the botanical name of the limes, but contends the mistake is one of law rather than of fact, and is therefore barred from reliquidation under 19 U.S.C. § 1520(c). On this basis, the Government cross-moves for summary judgment.

Because the proper botanical classification of an imported botanical item is not part of the legal analysis for classification purposes, the court denies the Government's motion and grants the Plaintiff summary judgment.

II Background

A. Subject Merchandise

At issue are fifty-nine entries of "Persian limes" imported from Mexico and entered at the Laredo California Customs facility between July 1, 1993 and February 23, 1993 and liquidated between October 22, 1993 and June 10, 1994. The parties agree that both Customs and the entire lime importing community were under the mistaken belief the limes were of the "Citrus aurantifolia" variety, when, in fact, they were actually of the "Citrus latifolia" variety. As a result, the limes were erroneously entered by the Plaintiff's importer, under 0805.30.40 of the Harmonized Tariff Schedule of the United States ("HTSUS,") which referred to "[L]imes (Citrus Aurantifolia)," eo nomine, at a duty rate of 2.2 cents per kilogram during 1993 and 1.9 cents per kilogram during 1994.¹ Customs subsequently classified and liquidated the limes under this subheading and imposed duties accordingly. However, limes of the Citrus latifolia variety, should have been entered under the subheading 0805.90.00 HTSUS, at a duty rate of .9% ad valorem in 1993 and duty free in 1994.²

B. Plaintiff's Reliquidation Request

On June 30, 1994, Administrative Message 94-0661 ("Message") was posted to the OTO5 Bulletin Board. The Message gave notice of statistical breakout changes to subheading 0805.90.00 and added a new statistical breakout, 0805.90.10, HTSUS, which referred to Limes, Citrus latifolia, eo nomine. This new subheading covers "Tahitian, Persian Limes and Other Limes of the Citrus latifolia Variety." Thus it was discovered that, until then, Persian Limes, which are of the Citrus latifolia variety, should have been entered under the basket subheading 0805.90.00, HTSUS, as "Other." Following this discovery, Customs and the importing community began entering Persian Limes under the new subheading 0805.90.10, HTSUS.

More than ninety days later, but within one year of liquidation, Plaintiff, on October 21, 1994, requested that Customs reliquidate these entries under the new subheading 0805.90.10. Customs treated this request as a 19 U.S.C. § 1520(c) protest and denied it on February 8, 1995, asserting that Black & White had failed to satisfy the criteria of § 1520. Plaintiff then expressly filed a request for reliquidation under § 1520(c) on May 9, 1995 which was denied by Customs on April 12, 1996. See Customs Headquarters Ruling 226453 ("HQ 226453"). Again, although conceding that Plaintiff's claim could have been addressed under 19 U.S.C. § 1514 within ninety days of liquidation, Customs denied that Plaintiff was entitled to relief under § 1520(c), because Plaintiff had not filed its reliquidation requests within the ninety-day time limit imposed by § 1514.³ Id. at 7. Ultimately, Plaintiff commenced the current action to challenge Customs' refusal to reliquidate the entries under § 1520(c).

III Arguments

A. Plaintiff Argues There is a Correctable Mistake of Fact

The Plaintiff avers that a mistake was committed by its broker, Jimmy Santos, resulting in the erroneous entry of the limes under subheading 0805.30.40, HTSUS. Moreover, the Plaintiff asserts Customs committed the same mistake. See Plaintiffs Memorandum In Support of Plaintiff's Motion for Summary Judgment ("Plaintiff's Memo") at 8. While both parties agree that the mistake concerns the proper botanical designation of the limes as "Citrus latifolia" as opposed to "Citrus aurantifolia," the Plaintiff, unlike the Defendant, contends that the mistake at issue is factual in nature. Plaintiff's Memo at 2-4. The Plaintiff further argues that had the parties been aware of the correct botanical designation of the limes, they would have properly entered the limes as "other" under 0805.90.00, HTSUS, and points to the Defendant's admission that "if the involved import specialist had understood the meaning of the term `Citrus aurantifolia'... the goods would have been classified as other." Defendant's Answer ¶ 12; Id. at ¶ 8; see also Defendant's Response to Plaintiff's Statement of Material Facts As To Which There Are No Genuine Issues To Be Tried ¶ 20.

Secondly, Plaintiff recognizes that mistakes of law are correctable only by timely protest, but maintains that it is still entitled to reliquidation through 19 U.S.C § 1520(c)(1) (1994). Specifically, the Plaintiff asserts that subsequent to the ninety-day time limit for protesting the liquidation, but within one year after such liquidation, the broker learned of the true nature of the merchandise and timely filed for relief and refund under § 1520(c)(1) by seeking reliquidation of the entries and refund of the excess duties that had been paid. Plaintiff's Memo at 10.

B. Defendant Argues There is a Mistake of Law Which is Not Correctable Under § 1520(c)(1)

Defendant argues that Plaintiff's claim for reliquidation under 19 U.S.C. § 1520(c)(1) is precluded because the "`mistake' in this case simply does not amount to a mistake of fact." Defendant's Memorandum In Support of Its Cross-Motion For Summary Judgment And In Opposition to Plaintiff's Motion for Summary Judgment ("Defendant's Memo") at 9 (citations omitted). Rather, Defendant asserts that "[a] determination by Customs as to the classification of merchandise is a conclusion of law." Id. at 6. The Government also states that "[a]bsent specific circumstances to establish that the classification error actually did result from a mistake of fact," the Plaintiff's claim is merely "is nothing more than a mere challenge to classification, that is, an error in the construction of law that cannot be remedied by a section 1520(c)(1) claim." Id. at 7 (citations omitted). As such, the Defendant contends that the Plaintiff should have filed a protest under 19 U.S.C. § 1514 within ninety days of liquidation. See Id. at 13.

Secondly, the Defendant interprets previous decisions of this court to limit mistakes of fact to those that stem from the "physical nature" of the goods at issue. Id. at 9 (emphasis omitted). The Defendant argues that this case is distinguishable from these previous decisions as here "the parties had complete knowledge of the physical nature of the limes in [sic] issue, but misclassified them because they did not understand the meaning or scope of the term `Citrus Aurantifolia' used in the relevant tariff provision." Id. at 9 (emphasis omitted).

Finally, Defendant contends that by failing to determine whether the limes fell within the Latin botanical designation which prefaced the erroneous tariff provision, Black & White and its broker failed to exercise "reasonable care...in entering the limes and filing the relevant papers with Customs." Id. at 11. As a result, the Defendant further contends that even if the subject mistake was factual in nature, "this mistake was the result of the failure on the part of Black & White and its broker to comply with their own legal responsibilities." Id.

IV Standard of Review

A. Summary Judgment

Under USCIT R. 56(c), summary judgment is appropriate when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." The moving party bears the burden of demonstrating the absence of all genuine issues of material fact. Avia Group Int'l, Inc. v. L.A. Gear California, Inc., 853 F.2d 1557, 1560 (Fed.Cir.1988). This may be done by producing evidence showing the lack of any genuine issue of material fact or, where the non-moving party bears the burden of proof at trial, by demonstrating that the nonmovant has failed to make a sufficient showing to establish the existence of an element essential to its case. Id.; Celotex Corp. v. Catrett, 477 U.S. 317, 324-325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

To successfully oppose a properly supported motion for summary judgment, the nonmovant may not simply rest on its pleadings. Rather, it must produce evidence "by affidavits or as otherwise provided in [USCIT R. 56]" which "set forth specific facts showing that there is a genuine issue for trial." USCIT R. 56(f); see also Mingus Constructors, Inc. v. United States, 812 F.2d 1387, 1390-91 (Fed.Cir. 1987) ("[T]he party...