Borusan Mannesmann Boru Sanayi Ve Ticaret A.S. v. United States
| Decision Date | 01 June 2022 |
| Docket Number | Slip Op. 22-58,Court No. 21-00186 |
| Citation | 578 F.Supp.3d 1333 |
| Parties | BORUSAN MANNESMANN BORU SANAYI VE TICARET A.S. and Gulf Coast Express Pipeline, LLC, Plaintiffs, v. UNITED STATES, Defendant. |
| Court | U.S. Court of International Trade |
Julie C. Mendoza, R. Will Planert, Edward J. Thomas III, Morris, Manning & Martin, LLP, of Washington, D.C., argued for plaintiff Borusan Mannesmann Boru Sanayi ve Ticaret A.S. With them on the brief were Donald B. Cameron, Jr., Brady W. Mills, Mary S. Hodgins, Jordan L. Fleischer, and Nicholas C. Duffey. Jonathan T. Stoel and Jared R. Wessel, Hogan Lovells US LLP, of Washington, D.C., argued for plaintiff Gulf Coast Express Pipeline, LLC. With him on the brief were Nicholas W. Laneville.
Guy R. Eddon, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of New York, N.Y., argued for defendant United States. With him on the brief were Brian M. Boynton, Acting Assistant Attorney General, Patricia M. McCarthy, Director, Aimee Lee, Assistant Director, and Justin R. Miller, Attorney-in-Charge. Of counsel on the brief was Alexandra Khrebtukova, Office of the Assistant Chief Counsel, International Trade Litigation, U.S. Customs and Border Protection, of New York, N.Y.
The action before the court involves a motion to dismiss for lack of subject matter jurisdiction pursuant to United States Court of International Trade ("USCIT") Rule 12(b)(1). Plaintiffs, Borusan Mannesmann Boru Sanayi Ticaret A.S. ("BMB") and Gulf Coast Express Pipeline LLC ("GCX"), initiated this action to challenge the denial of Protest No. 531221100010 by U.S. Customs and Border Protection ("Customs") and contest Customs’ denial of administrative refunds of tariffs on 19 entries of imported Turkish steel pipe. Compl. ¶ 1, ECF No. 7. Defendant, the United States ("defendant"), moves to dismiss this action for lack of subject matter jurisdiction because the subject entries are unliquidated. Def.’s Mot. to Dismiss ("Def. Mot.") at 1-2, ECF No. 21.
On March 8, 2018, and pursuant to section 232 of the Trade Expansion Act of 1962 ("Section 232"), 19 U.S.C. § 1862 (2018),1 the President issued Presidential Proclamation 9705.2 See Proclamation 9705 of March 8, 2018, Adjusting Imports of Steel into the United States , 83 Fed. Reg. 11,625 (Mar. 15, 2018) ("Proclamation 9705"). Proclamation 9705 introduced Heading 9903.80.01, imposing a 25 percent ad valorem tariff on U.S. imports of certain steel products.3 See id. at 11,626. Proclamation 9705 authorized the U.S. Department of Commerce ("Commerce") to grant exclusions from Section 232 duties "for any steel article determined not to be produced in the United States in a sufficient and reasonably available amount or of a satisfactory quality and ... to provide such relief based upon specific national security considerations." Id. at 11,627. The Bureau of Industry and Security of the U.S. Department of Commerce ("BIS") established procedures for processing exclusion requests. The procedures provide that:
The Department will grant properly filed exclusion requests which meet the requisite criteria, receive no objections, and present no national security concerns. After an exclusion request's 30-day comment period ... BIS will work with [Customs] to ensure that the requester provided an accurate HTSUS statistical reporting number. If so, BIS will immediately assess the request for satisfaction of the requisite criteria and any national security concerns. If BIS concludes that the request satisfies the criteria and identifies no national security concerns with granting the request, BIS will expeditiously post a decision on regulations.gov granting the exclusion request.
Submissions of Exclusion Requests and Objections to Submitted Requests for Steel and Aluminum , 83 Fed. Reg. 46,026, 46,043 (Dep't Commerce Sept. 11, 2018) ; see also Requirements for Submissions Requesting Exclusions from the Remedies Instituted in Presidential Proclamations Adjusting Imports of Steel into the United States and Adjusting Imports of Aluminum into the United States; and the Filing of Objections to Submitted Exclusion Requests for Steel and Aluminum, 83 Fed. Reg. 12,106, 12,110 (Dep't Commerce Mar. 19, 2018).
Once a product has been granted an exclusion, the importer may apply for a refund of the Section 232 tariffs with Customs. Customs, through its Cargo Systems Messaging Service ("CSMS"), notified the public of the procedures for "submitting retroactive claims for Section 232 ... product exclusions to Customs." See U.S. Customs and Border Prot., CSMS # 42566154 – Section 232 and Section 301 – Extensions Requests, PSCs, and Protests , https://content.govdelivery.com/accounts/USDHSCBP/bulletins/289820a (May 1, 2020, 5:05 PM) ("CSMS # 42566154"); U.S. Customs and Border Prot., CSMS # 39633923 – UPDATE Submitting Imports of Products Excluded from Duties on Imports of Steel or Aluminum , https://content.govdelivery.com/accounts/USDHSCBP/bulletins/25cc403 (Sept. 3, 2019, 11:08 AM) ("CSMS # 39633923"). Customs explained:
CSMS # 42566154; see also CSMS # 39633923 ( ).
This action covers 19 entries of certain welded line pipe from Turkey entered into the United States by BMB from August 5, 2018, through February 7, 2019. See Compl. ¶¶ 1, 26. BMB is the importer of record of the subject merchandise and GCX is the "consignee of the merchandise." Id. ¶¶ 6-7. The subject merchandise is specialized X70 large diameter welded line pipe manufactured by BMB in Turkey. Id. ¶ 22. BMB imported the subject merchandise for the construction of the Gulf Coast Express Pipeline. Id.
On April 24, 2018, GCX submitted two exclusion requests to BIS covering the two different sizes of specialized X70 pipe. Id. ¶ 25. Between August 5, 2018, and February 7, 2019, BMB imported 20 entries of specialized X70 alloy steel pipe and paid the Section 232 tariffs on each entry. Id. ¶ 26.4 On May 22, 2020, BIS granted GCX the exclusions. Id. ¶¶ 22, 32. The exclusions had retroactive effect back to April 24, 2018, the date on which GCX submitted the initial requests. Id. ¶ 32; Pls’. Resp. to Mot. to Dismiss ( ), ECF No. 28, at Ex. 1, Attach. 5.
On June 18 and 19, 2020, BMB submitted to Customs post-summary corrections ("PSCs") to apply the GCX product exclusions to the 19 entries. Compl. ¶ 33. BMB included in its submissions "extensive documentation" demonstrating that the 19 entries of the subject merchandise fell within the category of Section 232 exclusions granted by BIS. Pls. Resp. at 9, Ex. 2, Attach. 8. The documentation also confirmed that all entries entered the United States between August 5, 2018, and February 7, 2019, and, therefore, entered during the time period for which GCX's exclusions were effective (April 24, 2018, through May 21, 2021). Id . On June 30, 2020, the Customs specialist reviewing the PSCs:
[A]dvised BMB that BMB needed to file a request for [sic] administrative refund in order to receive the requested refunds of the Section 232 tariffs prior to liquidation. BMB complied and filed a written request for administrative refund for all of the entries, enabling [Customs] to refund the tariffs prior to liquidation.5
Compl. ¶ 35.
During the administrative refund process, the liquidation of 18 of the 19 entries at issue was enjoined due to two separate cases before the Court — Transpacific Steel LLC v. United States and Borusan Mannesmann Boru Sanayi ve Ticaret A.S. v. United States . See line of cases captioned Transpacific Steel LLC v. United States ;6 the line of cases captioned Borusan Mannesmann Boru Sanayi ve Ticaret A.S. v. United States .7 Accordingly, the liquidation for these 18 entries is suspended during the pendency of the litigation of those cases, including any appeals.8 Def. Reply Mem. in Further Support of its Mot. to Dismiss ("Def. Reply Mem.") at 5-6, ECF No. 33; Pls. Resp. at 9-10. The nineteenth entry, no. 002-7131800-8, is not subject to the litigation described above; however, the entry remains unliquidated as liquidation for this entry has been extended until August 5, 2022.9 Def. Reply Mem. at 7-8; see Compl. ¶ 13, n.1.
On September 10, 2020, Customs denied the PSCs submitted by BMB and denied the request for administrative refunds. Pls. Resp. at 10, Ex. 2, Attach. 10.10 On March 8, 2021, BMB and GCX filed jointly Protest Number 531221100010 ("the Protest") to challenge Customs’ decision to deny the administrative refunds. Compl. ¶ 15. On April 6, 2021, Customs denied the Protest.11 Id. ¶ 45. On April 22, 2021, plaintiffs commenced this action under 28 U.S.C. § 1581(a) to challenge Customs’ denial of the Protest and administrative refunds.
When the Court's jurisdiction is challenged, " ‘the burden rests on plaintiff to prove that jurisdiction exists.’ "...
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