Chemsol, LLC v. U.S. & U.S. Customs & Border Prot.

• Decision Date: 11 September 2014
• Docket Number: Nos. 2013–1402,2013–1403.,s. 2013–1402
• Citation: 755 F.3d 1345
• Parties: CHEMSOL, LLC and MC International, LLC, Plaintiffs–Appellants, v. UNITED STATES and United States Customs and Border Protection, Defendants–Appellees.
• Court: U.S. Court of Appeals — Federal Circuit

755 F.3d 1345

CHEMSOL, LLC and MC International, LLC, Plaintiffs–Appellants,

v.UNITED STATES and United States Customs and Border Protection, Defendants–Appellees.

Nos. 2013–1402, 2013–1403.

United States Court of Appeals, Federal Circuit.

June 24, 2014.

Rehearing and Rehearing En Banc Denied Sept. 11, 2014.^*

Russell A. Semmel, Neville Peterson LLP, of Washington, DC, argued for plaintiffs-appellants. With him on the brief was George W. Thompson.

Claudia Burke, Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for defendants-appellees. With her on the brief were Stuart F. Delery, Assistant Attorney General, and Jeanne E. Davidson, Director. Of counsel was Justin Reinhart Miller, Attorney, International Trade Field Office, of New York, N.Y. Of counsel on the brief was Yelena Slepak, Attorney, Office of the Assistant Chief Counsel, International Trade Litigation, United States Customs and Border Protection, of New York, N.Y.

Before O'MALLEY, MAYER, and WALLACH, Circuit Judges.

WALLACH, Circuit Judge.

Appellants Chemsol, LLC and MC International, LLC (d/b/a Miami Chemical) (“MCI”) appeal the decision of the United States Court of International Trade (“CIT”) dismissing their case for lack of subject matter jurisdiction. Chemsol, LLC v. United States, 901 F.Supp.2d 1362 (Ct.Int'l Trade 2013). Because the CIT properly held it did not have jurisdiction over this case, this court affirms.

Background

In 2009, Chemsol made six entries of citric acid, purportedly from the Dominican Republic, and in 2009 and 2010, MCI made thirteen entries of citric acid, purportedly from India (collectively, “the Entries”). Appellants claimed duty-free status for the Entries and therefore did not deposit any duties on entry. In 2010, United States Immigration and Customs Enforcement (“ICE”) and United States Customs and Border Protection (“Customs”) (collectively, “the Government”) initiated an investigation to determine whether Chinese citric acid was being transshipped through other countries to evade antidumping and countervailing duties applicable to imports of citric acid from China. Customs suspected that Appellants' Entries were actually produced in China, but were transshipped through the Dominican Republic and India to avoid duties.

To complete the transshipment investigation, Customs extended the deadline for liquidation of the Entries pursuant to 19 U.S.C. § 1504(b) (2006). For Chemsol, as of the time it filed this suit, Customs had extended liquidation for all of its Entries at least twice. As to MCI, as of the date of filing, Customs had extended liquidation once for all of its Entries, a second time for most of its Entries, and a third time for one Entry. It is undisputed that both Chemsol and MCI received notice of these extensions.

In response to the extensions, Appellants filed suit in the CIT on December 16, 2011, seeking “relief declaring the extensions unlawful such that the entries have therefore been ‘deemed’ liquidated by operation of law.” Chemsol, 901 F.Supp.2d at 1363; see J.A. 31, 43. Though the Entries were not yet deemed liquidated because the liquidation period was extended with notice, Appellants asserted the CIT had jurisdiction under 28 U.S.C. § 1581(i) (2006), the CIT's “residual jurisdiction” provision. The Government moved to dismiss for lack of subject matter jurisdiction,¹ claiming Appellants could not rely on § 1581(i) because they were first required to challenge the extensions before Customs by means of a post-liquidation protest, after which they could seek judicial review of any protest denial pursuant to 19 U.S.C. § 1515, the Tariff Act's “review of protests” provision. Jurisdiction over such a denial, the Government argued, would then be proper under 28 U.S.C. § 1581(a).

The CIT agreed, observing that “[i]n the time that has elapsed since the commencement of this action, ICE has completed its investigation and, but for [Appellants'] suit, Customs could complete its administrative process and liquidate [Appellants'] remaining entries.” ²Chemsol, 901 F.Supp.2d at 1365. The CIT held “the statutory review process for challenging liquidation of [Appellants'] entries under ... 19 U.S.C. §§ 1515– 16 [ ] and 28 U.S.C. § 1581(a), provides an adequate remedy for [Appellants'] claims,” and accordingly granted the Government's motion to dismiss for lack of subject matter jurisdiction. Id. at 1363–64 (footnote omitted).

Appellants filed these timely appeals. This court has jurisdiction pursuant to 28 U.S.C. § 1295(a)(5).

Discussion

I. Standard of Review

This court reviews de novo the CIT's dismissal for lack of subject matter jurisdiction. Ford Motor Co. v. United States, 688 F.3d 1319, 1322 (Fed.Cir.2012).

II. Legal Framework

A. Jurisdiction

The CIT's limited jurisdiction is enumerated in 28 U.S.C. § 1581(a) through (i). Subsection (a) vests the CIT with “exclusive jurisdiction of any civil action commenced to contest the denial of a protest [by Customs].” Subsections (b) through (g) delineate other specific grants of jurisdiction. Subsection (i), the “residual jurisdiction” provision, provides:

In addition to the jurisdiction conferred upon the [CIT] by subsections (a)-(h) of this section ..., the [CIT] shall have exclusive jurisdiction of any civil action commenced against the United States, its agencies, or its officers, that arises out of any law of the United States providing for—

(1) revenue from imports or tonnage;

(2) tariffs, duties, fees, or other taxes on the importation of merchandise for reasons other than the raising of revenue;

(3) embargoes or other quantitative restrictions on the importation of merchandise for reasons other than the protection of the public health or safety; or (4) administration and enforcement with respect to the matters referred to in paragraphs (1)-(3) of this subsection and subsections (a)-(h) of this section.

28 U.S.C. § 1581(i).

While the residual jurisdiction provision is a “catch all provision,” “[a]n overly broad interpretation of this provision ... would threaten to swallow the specific grants of jurisdiction contained within the other subsections and their corresponding requirements.” Norman G. Jensen, Inc. v. United States, 687 F.3d 1325, 1329 (Fed.Cir.2012). Therefore, this court has repeatedly held that subsection (i) “ ‘may not be invoked when jurisdiction under another subsection of § 1581 is or could have been available, unless the remedy provided under that other subsection would be manifestly inadequate.’ ” Ford, 688 F.3d at 1323 (quoting Miller & Co. v. United States, 824 F.2d 961, 963 (Fed.Cir.1987)). Thus, if a litigant has access to the CIT under subsections (a) through (h), “ ‘it must avail itself of this avenue of approach by complying with all the relevant prerequisites thereto’ ” unless the remedy available under another subsection is “manifestly inadequate.” Hartford Fire Ins. Co. v. United States, 544 F.3d 1289, 1292 (Fed.Cir.2008) (quoting Am. Air Parcel Forwarding Co. v. United States, 718 F.2d 1546, 1549 (Fed.Cir.1983)). A litigant asking the court to exercise jurisdiction over his or her claim has the burden of establishing that jurisdiction exists. See Rocovich v. United States, 933 F.2d 991, 993 (Fed.Cir.1991) (citing KVOS, Inc. v. Associated Press, 299 U.S. 269, 278, 57 S.Ct. 197, 81 L.Ed. 183 (1936)).

B. Liquidation

When importing merchandise into the United States, “the importer of record shall deposit with [Customs] at the time of entry ... the amount of duties and fees estimated to be payable on such merchandise,” including applicable antidumping or countervailing duties. 19 U.S.C. § 1505(a). Customs generally must “liquidate” the entries “within 1 year from ... the date of entry.” See id. § 1504(a)(1). “Liquidation means the final computation or ascertainment of the duties ... accruing on an entry,” after which the final amount due (if any) is calculated and billed, completing the import transaction. 19 C.F.R. § 159.1 (2010); Ford, 688 F.3d at 1321 (“The process for bringing ... customs transactions to final resolution is called ‘liquidation.’ ”). If Customs does not liquidate the entry within one year, the entry is “deemed liquidated at the rate of duty, value, quantity, and amount of duties asserted by the importer of record” on its entry documentation. 19 U.S.C. § 1504(a)(1). In other words, “deemed liquidation” is liquidation by operation of law.

Before the elapse of the one-year liquidation period, however, under § 1504(b)(1), Customs “may extend the period in which to liquidate an entry if ... the information needed for the proper appraisement or classification of the imported or withdrawn merchandise, ... or for ensuring compliance with applicable law, is not available to [Customs].” However, Customs may only extend the liquidation period three times, resulting in a total of four years from the date of entry within which Customs must liquidate the entries or they will be deemed liquidated. Id. § 1504(b); 19 C.F.R. § 159.12(e), (f).

Whether by Customs' action or by operation of law, liquidation is final unless an importer files a timely protest with Customs challenging its decision “within 180 days after but not before ... [the] date of liquidation.” 19 U.S.C. § 1514(c)(3)(A) (emphasis added). “Absent such a protest, the Customs decision is final” and is no longer subject to administrative or judicial review. Hartford Fire, 544 F.3d at 1292 (citation omitted). This court has confirmed that liquidation is the “final challengeable event” and “[f]indings related to liquidation,” such as the need for extensions, “merge with the liquidation.” See Volkswagen of Am., Inc. v. United States, 532 F.3d 1365, 1370 (Fed.Cir.2008); see also United States v. Utex Int'l Inc., 857 F.2d 1408, 1410 (Fed.Cir.1988) (“ ‘All findings involved in a [Customs] decision merge in the liquidation. It is the liquidation which is final and subject to protest,...