Cisco Sys., Inc. v. United States

• Decision Date: 18 November 2011
• Docket Number: Slip Op. 11–140.Court No. 04–00135.
• Citation: 33 ITRD 2267,804 F.Supp.2d 1326
• Parties: CISCO SYSTEMS, INC., Plaintiff, v. UNITED STATES of America, Defendant.
• Court: U.S. Court of International Trade

33 ITRD 2267

804 F.Supp.2d 1326

CISCO SYSTEMS, INC., Plaintiff,

v.UNITED STATES of America, Defendant.

Slip Op. 11–140.Court No. 04–00135.

United States Court of International Trade.

Nov. 18, 2011.

Neville Peterson, LLP (Michael K. Tomenga, Washington, DC, and Meredith A. DeMent), for Plaintiff Cisco Systems, Inc.

Tony West, Assistant Attorney General; Barbara S. Williams, Attorney–in–Charge, International Trade Field Office, U.S. Department of Justice (Alexander J. Vanderweide), for Defendant United States.

OPINION

WALLACH, Judge:

I

INTRODUCTION

Cisco Systems, Inc. (“Plaintiff” or “Cisco”) seeks reclassification of “networking equipment and parts” entered into the United States between 2001 and 2002. Summons, Doc. No. 1. Defendant United States (“Defendant” or “the Government”) contests the court's jurisdiction over the entries listed in certain challenged protests alleging that Cisco did not “specifically name and accurately identify the merchandise at issue” and that amendments to some of those protest were filed untimely. Defendant's Partial Motion to Dismiss, Doc. No. 48 (“Defendant's Motion”); Memorandum in Support of Defendant's Partial Motion to Dismiss, Doc. No. 48 at 1 (“Defendant's Memo”).

The Motion to Dismiss filed by the Defendant United States is DENIED. Taking as true all allegations in Plaintiff's Complaint that are “plausible on [their] face,” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), the Plaintiff filed valid protests, and the court therefore has jurisdiction pursuant to 28 U.S.C. § 1581(a).

II

BACKGROUND

Cisco seeks reclassification of merchandise entered into the United States between 2001 and 2002. Summons at 2–4; Complaint, Doc. No. 4 ¶ 14. Customs liquidated these entries under Subheadings 9013.80.90 and 9013.90.90 of the Harmonized Tariff Schedule of the United States (“HTSUS”) between 2002 and 2003. Defendant's Memo at 2; Complaint ¶ 14. It is contested whether Cisco filed timely protests requesting reliquidation of the articles under various subheadings of HTSUS Chapter 85. See Complaint ¶ 15; Answer, Doc. No. 15 ¶ 15.

In its protests, Cisco challenged the classification of its merchandise as “networking equipment and parts thereof” and as “networking equipment and parts thereof, including amplifiers and transponders for optical fiber systems.” See Defendant's Exhibit A, Cisco Systems, Inc., Detailed Reasons for Protest Against Appraised Value and Classification, Doc. No. 48–2 at 2; Defendant's Exhibit B, Cisco Systems, Inc., Detailed Reasons for Protest, Doc. No. 48–3 at 2. Customs reliquidated those entries it could determine contained amplifiers, transponders, and/or dispersion compensation modules (“DCMs”).¹ Defendant's Memo at 2–3. “Customs denied in whole or in part the 23 protests between October 2, 2003 and October 7, 2003 ... because [it said] Cisco's description of its goods as ‘networking equipment and parts thereof’ was so overly broad that Custom's could not determine what merchandise other than amplifiers, transponders, and/or DCMs was being challenged.” Id. Before Customs ruled on Cisco's protests, Cisco filed amendments to a number of the protests, but Customs deemed these amendments untimely and did not consider them. Id. at 3–4.

In its Summons subsequently filed with the court in March 2004, Cisco listed specific HTSUS headings for each type of merchandise covered by the entries. Id. at 4; Summons at 2.² Cisco filed its Complaint in September 2005, and Defendant filed its Answer in April 2006. Complaint; Answer to Complaint, Doc. No. 11.

The Government has filed a Partial Motion to Dismiss in accordance with USCIT Rule 12(b)(1) and USCIT Rule 12(b)(5). Defendant's Motion at 1. ³

III

STANDARD OF REVIEW

When the court's jurisdiction is challenged, “[t]he party seeking to invoke ... jurisdiction bears the burden of proving the requisite jurisdictional facts.” Former Emps. of Sonoco Prods. Co. v. United States, 27 CIT 812, 814, 273 F.Supp.2d 1336, 1338 (2003) (citing McNutt v. Gen. Motors Acceptance Corp., 298 U.S. 178, 189, 56 S.Ct. 780, 80 L.Ed. 1135 (1936)). However, in deciding a motion to dismiss, “the Court assumes that ‘all well-pled factual allegations are true,’ construing ‘all reasonable inferences in favor of the nonmovant.’ ” United States v. Islip, 22 CIT 852, 854, 18 F.Supp.2d 1047, 1051 (1998) (quoting Gould, Inc. v. United States, 935 F.2d 1271, 1274 (Fed.Cir.1991)). “To survive a motion to dismiss, 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, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955).

Therefore, in this case, Plaintiff must prove the requisite jurisdictional facts. Here, where Defendant filed the motion to dismiss, the court must construe all reasonable inferences in favor of Plaintiff. See Sonoco Prods., 27 CIT at 814, 273 F.Supp.2d at 1338–39; Islip, 22 CIT at 854, 18 F.Supp.2d at 1051.

IV

DISCUSSION

Defendant argues that the “court lacks jurisdiction over the entries listed [in several protests] because the protests do not specifically name and accurately identify the merchandise at issue.” Defendant's Memo at 1. Furthermore, the Defendant argues that “this Court lacks jurisdiction over the claims and merchandise referenced in” amendments to several of those protests because they were not filed pursuant to statutory requirements. Defendant's Motion at 1–2. In its response, Cisco claims that its protests and the amendments thereto are valid and convey subject-matter jurisdiction on this court. Plaintiff's Response to Defendant's Partial Motion to Dismiss, Doc. No. 58 at 1–2 (“Plaintiff's Response”). Cisco further requests that the court consider Defendant's Motion to dismiss under the standards applicable to a motion for summary judgment under USCIT R. 56. Id. at 2.

Whether this court has jurisdiction depends upon the validity of Plaintiff's protest under 28 U.S.C. § 1581(a) and whether Plaintiff has filed a valid protest under the standard of review applicable to a motion to dismiss. See infra Part IV.A. Given that standard, the protests at issue are valid because Cisco did adequately specify the merchandise at issue. See infra Part IV.B. The court has jurisdiction over the amended protests. See infra Part IV.C. Due to the posture of this case at this time, Plaintiff's motion to dismiss will not be converted to a motion for summary judgment. See infra Part IV.D.

ARelevant Statutory Framework

Under 28 U.S.C. § 1581(a) “[t]he Court of International Trade shall have exclusive jurisdiction of any civil action commenced to contest the denial of a protest, in whole or in part, under section 515 of the Tariff Act of 1930.” 28 U.S.C. § 1581(a). Whether the court has jurisdiction over the case under § 1581(a) depends on whether the plaintiff filed a valid protest. Computime, Inc. v. United States, 772 F.2d 874, 878–79 (Fed.Cir.1985). 19 U.S.C. § 1514(c)(1) sets out the requirements for validity:

A protest must set forth distinctly and specifically—

(A) each decision described in subsection (a) as to which protest is made;

(B) each category of merchandise affected by each decision set forth under paragraph (1);

(C) the nature of each objection and the reasons therefor; and

(D) any other matter required by the Secretary by regulation.

19 U.S.C. § 1514(c)(1). The pertinent regulation, 19 C.F.R. § 174.13, further requires the protest to contain “[a] specific description of the merchandise affected by the decision as to which protest is made.” 19 C.F.R. § 174.13(a)(5). Additionally, subject to limitations not applicable here:

[A] protest may be amended ... to set forth objections ... which were not the subject of the original protest, in the form and manner prescribed for a protest, any time prior to the expiration of the time in which such protest could have been filed under this section. New grounds in support of objections raised by a valid protest or amendment thereto may be presented for consideration ... at any time prior to the disposition of the protest in accordance with that section.

19 U.S.C. § 1514(c)(1). For entries made prior to December 18, 2004, amendments may be made within the 90–day period after the date of notice of liquidation. 19 C.F.R. § 174.12(e). Customs has discretion whether to consider any “alternative claims and additional grounds or arguments” submitted after the 90–day period has expired “with respect to any decision which is the subject of a valid protest at any time prior to disposition of the protest.” 19 C.F.R. §§ 174.28, 174.14(a).

In a protest “[t]echnical precision is not required; but the objections must be so distinct and specific, as, when fairly construed ... it was sufficient to notify the [duty] collector of its true nature and character.” Davies v. Arthur, 96 U.S. 148, 151, 24 L.Ed. 758 (1877) (citations omitted). A protest has been deemed valid and therefore confers jurisdiction as long as it is “sufficiently distinct and specific to enable the Customs Service to know what is in the mind of the protestant.” Computime, Inc., 772 F.2d at 879 (quoting United States v. Parksmith Corp., 62 C.C.P.A. 76, 82, 514 F.2d 1052 (1975)).⁴ “Protest sufficiency does not turn on whether Customs can decide the entire claim based solely on information contained in the papers submitted .... the protest ‘should have prompted Customs to seek the precise factual evidence necessary to evaluate [it].’ ” Estee Lauder, Inc. v. United States, Slip Op. 2011–23, 2011 WL 770001 at *6–7, 2011 Ct. Intl. Trade LEXIS 23 at *19–20 (CIT March 1, 2011) (quoting Saab Cars USA, Inc. v. United States, 276 F.Supp.2d 1322, 1329 (CIT 2003), aff'd, 434 F.3d 1359 (Fed.Cir.2006)); see also Am. Nat'l Fire Ins. Co. v. United States, 441 F.Supp.2d 1275, 1282 (CIT 2006); Koike Aronson, Inc. v. United States, 21 CIT 1056, 1056–57, 976...