Conoco Inc. v. US Foreign-Trade Zones Bd.
| Decision Date | 07 April 1992 |
| Docket Number | Court No. 90-06-00289. |
| Citation | 790 F. Supp. 279 |
| Parties | CONOCO INC., et al., Plaintiffs, v. The UNITED STATES FOREIGN-TRADE ZONES BOARD, et al., Defendants. |
| Court | U.S. Court of International Trade |
Holland & Hart, William F. Demarest, Jr. and Adelia S. Borrasca, Washington, D.C., Lisa L. Bagley, Houston, Tex. (Conoco) and Charles M. Floren, Tulsa, Okl. (Citgo), for plaintiffs Conoco, Inc. and Citgo Petroleum Corp.
Stuart M. Gerson, Asst. Atty. Gen., Joseph I. Liebman, Atty-in-Charge, Intern. Trade Field Office, Commercial Litigation Branch, Civ. Div., U.S. Dept. of Justice, Mark S. Sochaczewsky; Rozann M. Stayden, of counsel, Atty.-Advisor, Office of the Chief Counsel for Import Admin., U.S. Dept. of Commerce, Washington, D.C., for defendants.
Plaintiffs move for judgment upon the agency record pursuant to Rule 56.1 of the Rules of this Court. Defendants cross-move for judgment upon the agency record and preliminarily seek dismissal upon the grounds that this action fails to meet the prerequisites for subject-matter jurisdiction of this Court.
This action was commenced by Plaintiffs pursuant to the Administrative Procedure Act, 5 U.S.C. § 701 et seq. ("APA"), seeking to overturn certain conditions imposed by the Foreign-Trade Zones ("FTZ") Board upon the grants of foreign-trade subzones to Conoco, Inc. and Citgo Petroleum Corporation as discriminatory, unreasonable, arbitrary and capricious, in excess of statutory authority and as an abuse of discretion. Plaintiffs claim that this Court has exclusive jurisdiction over the action pursuant to 28 U.S.C. § 1581(i)(1) and (4) (1988).
This case was originally filed in the United States District Court for the Western District of Louisiana, Lake Charles Division, as an appeal brought pursuant to the APA. On January 25, 1990, the District Court granted the government's Motion for Summary Judgment and dismissed Plaintiffs' suit for lack of subject-matter jurisdiction, without prejudice, and at Plaintiffs' costs. Conoco, Inc. and Lake Charles Harbor and Terminal District v. The United States Foreign-Trade Zone Board, et al, Civil Action No. 89-1717-LC (U.S.D.C.W.D.La., 1990). The District Court determined, after an independent review of the record and a de novo determination of the issues, that the findings of the Magistrate in his Report and Recommendation were correct. The Magistrate opined that, although 28 U.S.C. § 1581(i) does not create any substantive rights granting exclusive jurisdiction to the Court of International Trade ("CIT"), nevertheless, because the case involved an appeal of an administrative decision directly relating to tariffs on imported goods and the use of revenue in that field, § 1581(i) should be applicable to the case regardless of whether an actual tariff on foreign commerce was presently being imposed.
The Lake Charles Harbor and Terminal District submitted in June 1986 an application to the FTZ Board pursuant to the Board's regulations in 15 C.F.R. § 400.304 to designate as a special-purpose subzone the crude oil refinery of Plaintiff Conoco in Calcasieu Parish, Louisiana, adjacent to the Lake Charles port of entry. Another subzone application was filed in December 1987 on behalf of Plaintiff Citgo to designate the crude oil refinery facilities of Citgo at Lake Charles, Louisiana, as a special-purpose subzone. In response to the two applications, the FTZ Board issued two separate orders granting the special-purpose subzone status requested and imposed substantially identical conditions relating to the establishment of the two respective subzones. The conditions set forth in the separate Conoco and Citgo orders are as follows:
Resolution and Order Approving the Application of the Lake Charles Harbor and Terminal District for a Subzone at the Conoco, Inc., Refinery in Calcasieu Parish, LA, 53 Fed.Reg. 52,455 (1988); Resolution and Order Approving the Application of the Lake Charles Harbor and Terminal District for a Subzone at the Citgo Petroleum Corp. Refinery in Calcasieu Parish, LA, 54 Fed.Reg. 27,660 (1989).1
Presumably one result of the conditions placed upon the Plaintiffs is that they impose a duty upon crude oil used as refinery fuel by Plaintiffs in the subzone duty under the tariff schedules of the United States. Imposition of these conditions, which the FTZ Board has apparently applied to all new refinery subzone grants after 1985, marked a departure from prior Board practice. Between 1970 and 1985, the FTZ Board approved five applications for oil refining subzones without the conditions attached to Plaintiffs' grants (or other post-1985 grants). See Affidavit of John J. DaPonte, Jr., Executive Secretary of the Foreign-Trade Zones Board (Dec. 4, 1989) ("DaPonte Aff.").2
Plaintiffs ask this Court to strike down the imposed conditions as unlawful and seek a declaratory judgment that the conditions are unenforceable. Plaintiffs argue that because the APA as a general matter creates a cause of action against the United States and the instant action arises out of administration or enforcement of the international trade laws of the United States, this Court has exclusive jurisdiction over the case under § 1581(i).3
The Court gleans from Plaintiffs' papers, as well as its representations made at oral argument, that they assert jurisdiction under paragraphs (1) and (4) of subsection 1581(i). According to Plaintiffs, the FTZ Board's actions arise out of the Foreign-Trade Zones Act ("FTZA"), 19 U.S.C. §§ 81a-u (1988), the provisions of which "fall literally within the provisions of section 1581(i) requiring exclusive jurisdiction in this Court over civil actions arising `out of any law of the United States providing for ... administration and enforcement with respect to' revenue from imports or tonnage." Plaintiffs' Supplemental Memorandum on Jurisdiction at 18 n. 5.
Even while acknowledging that the case "may involve matters related to the areas within the jurisdiction of the Court," the Defendants maintain that the actions of the FTZ Board at issue in this case are not reviewable in this Court because they do not meet the prerequisites for subject-matter jurisdiction. Defendants' Supplemental Memorandum on Jurisdiction at 6. Defendants argue that the FTZA is not a law providing for the raising of revenue and/or the administration and enforcement thereof within the meaning of paragraphs (1) and (4) of subsection 1581(i).
Further, Defendants maintain that no provision of the FTZA makes Board determinations to either grant foreign-trade zones or attach conditions to such grants subject to judicial review. Instead, the FTZA provides for judicial review only in cases involving the revocation of foreign-trade zone grants under 19 U.S.C. § 81r(c).
This Court must determine whether it has subject-matter jurisdiction pursuant to 28 U.S.C. § 1581(i) to review the actions of the FTZ Board in granting a subzone application subject to certain conditions, one of which makes dutiable foreign crude oil used and consumed as fuel for the refinery within the subzone, even though at the time the action was filed no assessment or liquidation of duties had occurred and no protest had been filed.4
For the reasons that follow, this Court concludes that Plaintiffs' reliance upon the Court's residual jurisdiction under 28 U.S.C. § 1581(i) must fail because Plaintiffs have not shown why they should not be required to follow the usual jurisdictional path of waiting for an assessment or liquidation of goods and the filing of a protest challenging the legality of Customs' action in accordance with the prerequisites of 28 U.S.C. § 1581(a), or why such a procedure would be manifestly inadequate. See 19 U.S.C. § 1514(a) (1988). Consequently, Plaintiffs' action is dismissed as jurisdictionally premature, and therefore this Court does not reach the merits of the case.
The Court's jurisdictional mandate, as supported by its legislative history and binding case authority, demonstrates that a litigant will not be permitted to maintain a § 1581(i) action when its action may be brought under another subsection of § 1581, presently or at a future date, in accordance with the administrative prerequisites of those subsections. See 28 U.S.C. § 1581(a)-(h).
This Court derives its jurisdiction from 28 U.S.C. § 1581. Section 1581 was added to the Customs Court Act of 1980, Pub.L. No. 96-417, 94 Stat. 1727 (1980), and delineates specific instances when suit may be brought in the Court. In enacting section 1581, Congress intended to clarify jurisdictional disputes that had previously arisen between the CIT and the district courts, indicating "that the expertise and national jurisdiction of the CIT ... be exclusively utilized in the resolution of conflicts and disputes arising out of the tariff and international trade laws...." H.R.Rep. No. 1235, 96th Cong., 2d Sess., at 27-28 ("House Report"), reprinted in, 1980 U.S.C.C.A.N. 3729, 3739.
Congress' solution for resolving these jurisdictional disputes was subsection (i) of section 1581. It provides as follows:
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