Blink Design, Inc. v. United States

• Citation: 986 F.Supp.2d 1348
• Decision Date: 21 May 2014
• Docket Number: Court No. 14–00032.,Slip Op. 14–56.
• Parties: BLINK DESIGN, INC., Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

986 F.Supp.2d 1348

BLINK DESIGN, INC., Plaintiff,

v.UNITED STATES, Defendant.

Slip Op. 14–56.

Court No. 14–00032.

United States Court of

International Trade.

May 21, 2014.

John M. Peterson, Richard F. O'Neill, and Elyssa R. Emsellem, Neville Peterson, LLP, of New York, NY, for Plaintiff.

Jason M. Kenner and Alexander J. Vanderweide, Commercial Litigation Branch—Civil Division, U.S. Department of Justice, of New York, NY, for Defendant. With them on the brief were Stuart F. Delery, Assistant Attorney General, and Amy M. Rubin, Acting Assistant Director. Of counsel on the brief was Paula Smith, Office of the Assistant Chief Counsel, United States Customs and Border Protection of New York, NY.

OPINION & ORDER

BARNETT, Judge:

Defendant, United States, moves to dismiss this case, pursuant to USCIT Rule 12(b)(1) for lack of subject matter jurisdiction or, in the alternative, pursuant to USCIT Rule 12(b)(5) for failure to state a claim upon which relief can be granted. ( See generally Def.'s Mem. Supp. Mot. Dismiss (“Def.'s Mot.”).) Plaintiff, Blink Design, Inc. (“Blink”), opposes the motion. ( See generally Mem. P. & A. Opp'n Def.'s Mot. Dismiss (“Pl.'s Opp'n”).) For the reasons stated below, the court finds that it lacks subject matter jurisdiction over Plaintiff's claims to the extent that they challenge the seizure of its merchandise and orders this action stayed. Plaintiff has also moved for a preliminary injunction and, for reasons discussed below, that motion is denied.

Background and Procedural History

In November 2013, Plaintiff sought to import certain wearing apparel into the United States under cover of eight consumption entries filed at the Port of Los Angeles/Long Beach, California.¹ (Compl. ¶¶ 5, 12.) Upon examination of the entries by the Bureau of Customs and Border Protection (“Customs”), Customs inspectors determined that the quantities of garments in the containers for each of the eight entries exceeded those reported on their accompanying commercial invoices and packing lists. While the overage varied somewhat for each entry, overall, the actual quantity attempted to be entered was more than double the declared quantity. Customs subsequently detained the entries. (Compl. ¶ 16; Pl.'s Mot. Expedite Ex. B, ECF No. 8.) After receiving notice of the detentions, (Pl.'s Opp'n Am. Ex. 3, ECF No. 32), Plaintiff directed the exporter of the merchandise to prepare and forward to it corrected invoices. (Compl. ¶¶ 17–18.) Upon receiving the corrected invoices, Plaintiff attempted to file Port of Entry Amendments (“PEAs”) with Customs and asked that Customs release the merchandise. (Compl. ¶ 19.) Plaintiff tendered the requisite additional estimated duties based on the quantities and values in the PEAs, and filed prior disclosures with Customs, indicating that incorrect values and quantities had been reported on the entries. (Compl. ¶¶ 19–20.) Customs did not release the merchandise and returned the PEAs. (Compl. ¶ 21.)

A contested number of the entries were deemed excluded from entry, pursuant to 19 U.S.C. § 1499(c)(5)(A), on various dates in December 2013 and January 2014.²See infra. On December 30, 2013, Plaintiff filed a protest with Customs to challenge the deemed exclusions. (Compl. ¶ 24.) Customs seized the entries between December 6, 2013 and January 2, 2014, pursuant to 19 U.S.C. § 1595a(a) and (c)(1)(A), and issued Notices of Seizure to the Plaintiff between December 20, 2013 and January 16, 2014.³ (Compl. ¶¶ 26–27; Pl.'s Mot. Expedite Ex. B.) The Notices of Seizure stated that the declared quantities in the seized entries “were used to facilitate the importation of the wearing apparel ... that was attempted to be clandestinely introduced” into the country (i.e., the undeclared quantities), in violation of 19 U.S.C. §§ 1481, 1484, and 1485.⁴ (Compl. ¶¶ 26–27; Pl.'s Mot. Expedite Ex. B.) Customs denied Plaintiff's protest on January 15, 2014, citing the seizure of the entries as the basis for its denial. (Compl. ¶ 25.)

On January 28, 2014, Plaintiff filed suit in this court to contest Customs' denial of its protest, invoking 28 U.S.C. § 1581(a)as the basis for the court's subject matter jurisdiction. ( See Summons, ECF No. 1.) Defendant now moves to dismiss this case, pursuant to USCIT Rule 12(b)(1) for lack of subject matter jurisdiction or, in the alternative, pursuant to USCIT Rule 12(b)(5) for failure to state a claim upon which relief can be granted. Defendant argues that Customs seized five of the eight entries at issue within thirty days of their presentation to Customs for examination. According to Defendant, these entries were not deemed excluded, and no protestable event occurred. Consequently, Defendant argues this court has no subject matter jurisdiction over these entries because 28 U.S.C. § 1356 grants exclusive jurisdiction over most seizures to the district courts. ⁵ (Def.'s Mot. 1, 9.) Defendant further contends that Customs seized the remaining three entries before Plaintiff filed this action and before the court's jurisdiction attached to the denied protests. Therefore, the court has no subject matter jurisdiction over these additional entries either. (Def.'s Mot. 1.) Defendant further urges that the court dismiss the action for failure to state a claim upon which relief can be granted, because Customs seizure of Plaintiff's entries precludes the court from providing Plaintiff with the only remedy it seeks: release of the merchandise. (Def.'s Mot. 2.) Plaintiff opposes Defendant's motion in full. ( See generally Pl.'s Opp'n.)

Legal Standard

A court has “an independent duty” to assure that it has subject matter jurisdiction over the matters before it. Suntec Indus. Co. v. United States, 37 CIT ––––, ––––, 951 F.Supp.2d 1341, 1345 (2013) (citation omitted). When subject matter jurisdiction is challenged, the plaintiff bears the burden of demonstrating that jurisdiction exists. E & S Express Inc. v. United States, 37 CIT ––––, ––––, 938 F.Supp.2d 1316, 1320 (2013) (citations omitted) (citing Trusted Integration, Inc. v. United States, 659 F.3d 1159, 1163 (Fed.Cir.2011)). When reviewing a Rule 12(b)(1) motion, the court sculpts its approach according to whether the motion “challenges the sufficiency of the pleadings or controverts the factual allegations made in the pleadings.” H & H Wholesale Servs., Inc. v. United States, 30 CIT 689, 691, 437 F.Supp.2d 1335, 1339 (2006) (citation omitted). If the motion challenges the sufficiency of the pleadings, the court assumes that the allegations within the complaint are true. Id. (citation omitted). If the motion controverts factual allegations within the complaint, as does Defendant's motion, “ ‘the allegations in the complaint are not controlling,’ and ‘are subject to factfinding’ ” by the court. Id. at 691–92, 437 F.Supp.2d at 1339 (quoting Cedars–Sinai Med. Ctr. v. Watkins, 11 F.3d 1573, 1583–84 (Fed.Cir.1993)). Moreover, “[w]here, as here, claims depend upon a waiver of sovereign immunity, a jurisdictional statute is to be strictly construed.” Celta Agencies, Inc. v. United States, 36 CIT ––––, ––––, 865 F.Supp.2d 1348, 1352 (2012) (citing United States v. Williams, 514 U.S. 527, 531, 115 S.Ct. 1611, 131 L.Ed.2d 608 (1995)).

Discussion

I. Whether Entries Were Deemed Excluded

a. Defendant's Contentions

Defendant asserts that the court lacks subject matter jurisdiction over five of Plaintiff's entries because Customs seized them before they were deemed excluded. (Def.'s Mot. 6–9.) Deemed exclusion is governed by 19 U.S.C. § 1499(c)(5)(A), which states that “[t]he failure by the Customs Service to make a final determination with respect to the admissibility of detained merchandise within 30 days after the merchandise has been presented for customs examination ... shall be treated as a decision of the Customs Service to exclude the merchandise.” 19 U.S.C. § 1499(c)(5)(A). According to Defendant, Plaintiff improperly calculated this thirty-day period as beginning on the date of entry of its merchandise, rather than the date when “the merchandise [was] presented for customs examination.” Id. Defendant claims that this error has led Plaintiff to mistakenly assert that all of its entries were deemed excluded.

Defendant notes that § 1499 does not define when merchandise is presented for customs examination, and Defendant directs the court to Customs regulation 19 C.F.R. § 151.16(b). (Def.'s Mot. 6–7.) The regulation states:

Decision to detain or release. Within the 5–day period (excluding weekends and holidays) following the date on which merchandise is presented for Customs examination, Customs shall decide whether to release or detain merchandise. Merchandise which is not released within such 5–day period shall be considered to be detained merchandise. For purposes of this section, merchandise shall be considered to be presented for Customs examination when it is in a condition to be viewed and examined by a Customs officer. Mere presentation to the examining officer of a cargo van, container or instrument of international traffic in which the merchandise to be examined is contained will not be considered to be presentation of merchandise for Customs examination for purposes of this section. Except when merchandise is examined at the public stores, the importer shall pay all costs relating to the preparation and transportation of merchandise for examination.

19 C.F.R. § 151.16(b). In light of this regulation, Defendant contends that Customs considers merchandise “presented for examination” when “it is in a condition to be examined by a Customs official.” (Def.'s Mot. 7 (quotation marks omitted).) When Customs requests that merchandise be delivered to a container examination station (“CES”) for inspection, as occurred in the present action, Defendant specifies that “Customs routinely considers the date on which merchandise is presented for examination as being the date that the last requested container is delivered to the CES, its...