Chemsol, LLC v. United States

• Citation: 901 F.Supp.2d 1362
• Decision Date: 20 March 2013
• Docket Number: Slip Op. 13–35.,11–00517.,Court Nos. 11–00516
• Parties: CHEMSOL, LLC, Plaintiff, v. UNITED STATES, Defendant. MC International, LLC, Plaintiff, v. United States, Defendant.
• Court: U.S. Court of International Trade

901 F.Supp.2d 1362

CHEMSOL, LLC, Plaintiff,

v.UNITED STATES, Defendant.

MC International, LLC, Plaintiff,

v.United States, Defendant.

Slip Op. 13–35. Court Nos. 11–00516, 11–00517.

United States Court of International Trade.

March 20, 2013.

George W. Thompson, and Russell A. Semmel, Neville Peterson LLP, of New York, NY, for the Plaintiffs.

Justin R. Miller, Michael Panzera, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, for the Defendant. With him on the briefs were Stuart F. Delery, Acting Assistant Attorney General; Jeanne E. Davidson, Director; and Reginald T. Blades, Jr., Assistant Director. Of counsel on the briefs were, Yelena Slepak, Office of the Assistant Chief Counsel, International Trade Litigation, U.S. Customs and Border Protection, and Michael Panzera, Office of the General Counsel, United States Trade Representative.

OPINION

POGUE, Chief Judge:

In these actions, Plaintiffs MC International, LLC (“MCI”) and Chemsol, LLC challenge the United States Customs and Border Protection's (“Customs”) extension of the statutory liquidation period for their entries of citric acid. Plaintiffs seek relief declaring the extensions unlawful such that the entries have therefore been “deemed” liquidated by operation of law. The Defendant moves to dismiss for lack of subject matter jurisdiction under USCIT Rule 12(b)(1) or, in the alternative, for failure to state a claim under USCIT Rule 12(b)(5). Defendant's Memorandum in Support of Its Motion to Dismiss—MCI, ECF No. 23, at 1 (“Def. Mem. Supp. Mot. Dismiss MCI”); Defendant's Memorandum in Support of Its Motion to Dismiss—Chemsol, ECF No. 23, at 1 (“Def. Mem. Supp. Mot. Dismiss Chemsol”).

Because the statutory review process for challenging liquidation of Plaintiffs' entries under sections 514 and 515 of the Tariff Act of 1930, 19 U.S.C. §§ 1515–16,¹ and 28 U.S.C. 1581(a), provides an adequate remedy for Plaintiffs claims, the government's motion to dismiss for lack of subject matter jurisdiction is granted.

BACKGROUND

Under 19 U.S.C. § 1504(a), Customs generally has one year within which to liquidate entries. If Customs fails to liquidate the entries during that one year period, the entries liquidate by force of law, that is, they are deemed liquidated. Entries that are deemed liquidated are assessed at the duty rates asserted by the importer of record at the time of entry. 19 U.S.C. § 1504(a). Before the one year time period elapses, however, Customs may extend the time in which it may liquidate an entry. Customs may only extend the time period for liquidating an entry three times, resulting in a total of four potential years before the entry will liquidate by operation of law. 19 U.S.C. § 1504(b); ²19 C.F.R. § 159.12(f).

The entries at issue in this proceeding were imported by MCI and Chemsol (“Plaintiffs”). Specifically, during 2009–2010, MCI made thirteen consumption entries consisting of citric acid from India.³ During 2009, Chemsol made six consumption entries consisting of citric acid from the Dominican Republic.⁴Id. at ¶ 19.

In 2010, U.S. Immigration and Customs Enforcement (“ICE”) ⁵ and Customs initiated an investigation to determine whether Chinese citric acid was being transshipped through other countries to evade antidumping and countervailing duties. Def. Mem. Supp. Mot. Dismiss MCI at 2; Def. Mem. Supp. Mot. Dismiss Chemsol at 2. Pursuant to this investigation, Customs issued several requests to Plaintiffs for information (RFIs) for the entries at issue and notices of action (NOAs) for certain of the entries. MCI Compl. ¶¶ 14, 16; Chemsol Compl. ¶ 13; Def. Mem. Supp. Mot. Dismiss MCI at 2; Def. Mem. Supp. Mot. Dismiss Chemsol at 2. Plaintiffs allege that they provided a comprehensive response to each RFI and NOA. MCI Compl. ¶¶ 28, 33, 35, 40, 42; Chemsol Compl. ¶¶ 23, 24, 29. Nonetheless, citing the continuing investigation, Customs extended the deadline for liquidation on Plaintiffs' entries, in some cases more than once.⁶

Faced with Customs' extensions, MCI and Chemsol commenced this suit claiming that the extensions were unlawful and void under 19 U.S.C. § 1504(b) and seeking declaratory relief stating that the entries have been deemed liquidated pursuant to 19 U.S.C. § 1504(a). MCI Compl. ¶ 3–4; Chemsol Compl. ¶ 3–4. Plaintiffs assert that the court has jurisdiction under 28 U.S.C. § 1581(i)(4).⁷ As noted above, the government contends that the actions should be dismissed for lack of subject matter jurisdiction or for failure to state a claim. Def. Mem. Supp. Mot. Dismiss MCI at 1; Def. Mem. Supp. Mot. Dismiss Chemsol at 1. Specifically, in its motion, Defendant claims that Plaintiffs cannot assert § 1581(i) jurisdiction but rather must wait until Customs affirmatively liquidates the entries and then file a protest and subsequently seek review of any denial of the protest pursuant to 28 U.S.C. § 1581(a) (2006).⁸ Def. Mem. Supp. Mot. Dismiss MCI at 6; Def. Mem. Supp. Mot. Dismiss Chemsol at 6. Defendant additionally contends that the actions should be dismissed for failure to state a claim under USCIT Rule 12(b)(5) because affirmative liquidation is an element of a claim under 19 U.S.C. § 1514(a) and that element has not yet been satisfied. Def. Mem. Supp. Mot. Dismiss MCI at 16; Def. Mem. Supp. Mot. Dismiss Chemsol at 16.

In the time that has elapsed since the commencement of this action, ICE has completed its investigation and, but for Plaintiffs' suit, Customs could complete its administrative process and liquidate Plaintiffs' remaining entries. Def.'s Resp. to the Court's Feb. 28, 2013 Inquiry, ECF No. 49 at 1–2. In addition, a few of Plaintiffs' entries auto-liquidated duty free in Plaintiffs' favor and are therefore moot. Id.

STANDARD OF REVIEW

Plaintiffs bear the burden of establishing jurisdiction. Rocovich v. United States, 933 F.2d 991, 993 (Fed.Cir.1991) (“[the] party seeking the exercise of jurisdiction in its favor[,] has the burden of establishing that [ ] jurisdiction exists.”) (citing KVOS, Inc. v. Associated Press, 299 U.S. 269, 278, 57 S.Ct. 197, 81 L.Ed. 183 (1936)). Specifically, the party seeking jurisdiction under 1581(i) has the burden of showing that jurisdiction under any other section of 1581 is manifestly inadequate. Am. Air Parcel Forwarding Co. v. United States, 718 F.2d 1546, 1549–51 (Fed.Cir.1983); 5 U.S.C. § 704 (“[F]inal agency action ... for which there is no other adequate remedy” is subject to judicial review).

Unless jurisdictional facts are in dispute, the basis of the court's determination is limited to the facts stated on the face of the complaint, documents appended to the complaint, and documents incorporatedin the complaint by reference. See Asahi Seiko Co. v. United States, Slip Op. 09–131, 2009 WL 3824745 at *4 (CIT Nov. 16, 2009) (citing Allen v. WestPoint–Pepperell, Inc., 945 F.2d 40, 44 (2d Cir.1991)).

When reviewing a motion to dismiss for failure to state a claim, the court “must accept as true the complaint's undisputed factual allegations and should construe them in a light most favorable to the plaintiff.” Bank of Guam v. United States, 578 F.3d 1318, 1326 (Fed.Cir.2009) (quoting Cambridge v. United States, 558 F.3d 1331, 1335 (Fed.Cir.2009)).

To survive a motion to dismiss for failure to state a claim, “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). To be plausible, the complaint need not show a probability of plaintiff's success, but it must evidence more than a mere possibility of a right to relief. Id. at 678, 129 S.Ct. 1937.

DISCUSSION

This court's jurisdiction is set forth in 28 U.S.C. § 1581(a)–(i). The provision under which Plaintiffs have brought their claim, § 1581(i), is considered the “residual jurisdictional provision” and while it is “broad” in scope, it is well settled that Congress did not intend for it to be used if jurisdiction has been, is, or could be available under another sub-section of § 1581. See Hartford Fire Ins. Co. v. United States, 544 F.3d 1289 (Fed.Cir.2008) (citing Int'l Custom Prods. v. United States, 467 F.3d 1324, 1327 (Fed.Cir.2006)). Faced with the availability of the review process specified in Sections 1581(a)–(h), the party seeking judicial review must establish a reason to avoid use of those provisions, such as futility or the inadequacy of the available administrative remedy. SeeCharles H. Koch, Jr., Admin. L. & Prac. § 12.22 (3d ed.). As a result, to repeat, this court will not entertain a claim under § 1581(i) where “another subsection of 1581 is or could have been available, unless the other subsection is shown to be manifestly inadequate.” Hartford Fire Ins. Co. v. United States, 544 F.3d at 1292; Int'l Custom Prods. Inc. v. United States, 467 F.3d at 1327.

In addition, when considering whether to assert jurisdiction under § 1581(i), the Court of Appeals has instructed this Court to look to “the true nature of the action” at the outset of a proceeding in order to determine which avenue of review is appropriate. Norsk Hydro Can., Inc. v. United States, 472 F.3d 1347, 1355 (Fed.Cir.2006) (citation omitted).

Here, the true nature of Plaintiffs' action is a challenge to Customs' extensions of the time for liquidation. But Customs' actions, as alleged in Plaintiffs' complaints, are well within the four-year period allowed for extensions; Customs continues to actively investigate the appropriate liquidation for the entries. Upon conclusion of that process and liquidation of the entries, the importers will have ample opportunity to raise any issues through the protest and judicial review process that culminates in § 1581(a). Section 1514(a) lists the decisions of Customs that may be the subject of protests....