Degussa Canada Ltd. v. U.S., 95-1449
| Decision Date | 24 June 1996 |
| Docket Number | No. 95-1449,95-1449 |
| Citation | 87 F.3d 1301 |
| Parties | DEGUSSA CANADA LTD., Plaintiff-Appellant, v. The UNITED STATES, Defendant-Appellee. |
| Court | U.S. Court of Appeals — Federal Circuit |
Rufus E. Jarman, Jr., Barnes, Richardson & Colburn, New York City, argued for plaintiff-appellant. With him on the brief was Alan Goggins.
Amy M. Rubin, Commercial Litigation Branch, Civil Division, Department of Justice Before ARCHER, Chief Judge, FRIEDMAN, Senior Circuit Judge, and MAYER, Circuit Judge.
International Trade Field Office, New York City, argued for defendant-appellee. With her on the brief were Frank W. Hunger, Assistant Attorney General, David M. Cohen, Director, and Joseph I. Liebman, Attorney in Charge, International Trade Field Office
Under 19 U.S.C. § 1520(c)(1) (1988), the Customs Service (Customs) "[n]otwithstanding [that] a valid protest was not filed," may reliquidate a previous entry to correct a "mistake of fact ... in any ... liquidation." The question is whether the Court of International Trade correctly held that the district director's unawareness when he liquidated certain entries that the classification of other entries of the same merchandise by another district director was under review by Customs Service headquarters, was not such a "mistake of fact" that justified reliquidation. Degussa Canada Ltd. v. United States, 889 F.Supp. 1543, 1547 (C.I.T. 1995). We affirm.
The facts are undisputed.
A. This case involves the classification of automotive emission catalysts that the appellant, Degussa Canada Ltd. (Degussa), imported through the port of Detroit, Michigan between February and June 1990. The district director classified the merchandise as "other parts and accessories of motor vehicles" under subheading 8708.99 of the Harmonized Tariff Schedule of the United States, and liquidated the entries in July and August 1990 at a duty of 3.1 percent. Degussa filed a protest in December 1990, which the district director denied. Degussa then filed suit challenging the classification in the Court of International Trade, which dismissed the complaint because the protest was not timely filed. Degussa Canada Ltd., 889 F.Supp. at 1545.
B. At the same time Degussa also imported the identical merchandise through the port of Buffalo, New York. The Buffalo district director classified the merchandise the same way. Degussa filed a protest of this classification and an application for further review on July 9, 1990. The Commissioner of Customs sustained the protest in September 1991, holding that the goods should have been classified as "catalytic preparations" under subheading 3815.12.00 of the Tariff Schedule, which were duty free.
C. In December 1991, after the Commissioner's decision, Degussa filed with the district director in Detroit a petition for reliquidation pursuant to 19 U.S.C. § 1520(c)(1). It contended that the original liquidation had been the result of "a clerical error, mistake of fact, or other inadvertence not amounting to an error in the construction of a law," in that if the district director had been aware of the pending review by the Commissioner, he would have deferred liquidation and, following the Commissioner's decision, would have classified the merchandise in accordance with that decision.
The district director denied reliquidation and, following denial of Degussa's protest of the denial, Degussa filed suit in the Court of International Trade. Degussa Canada Ltd., 889 F.Supp. at 1545. The court granted the government's motion to dismiss Degussa's complaint for failure to state a claim upon which relief may be granted, because
[i]t is clear from the facts herein and the papers filed in this case, that plaintiff has failed to establish that the alleged error in classification resulted from a clerical error, mistake of fact, or other inadvertence. This case concerns a challenge to classification, which resulted from an error in the construction of the applicable law.
A Customs classification decision is final unless a protest thereof is filed within ninety days. 19 U.S.C. § 1514(a); see generally United States v. Utex Int'l Inc., 857 F.2d 1408, 6 Fed. Cir. (T) 166 (1988). There is a narrow exception to this rule in § 1520(c), which provides:
Notwithstanding a valid protest was not filed, the appropriate customs officer may (1) a clerical error, mistake of fact, or other inadvertence not amounting to an error in the construction of a law, adverse to the importer and manifest from the record or established by documentary evidence, in any entry, liquidation, or other customs transaction, when the error, mistake, or inadvertence is brought to the attention of the appropriate customs officer within one year after the date of liquidation or exaction....
in accordance with regulations prescribed by the Secretary, reliquidate an entry to correct--
19 U.S.C. § 1520(c) (1988).
In its appeal here, Degussa relies solely on the "mistake of fact" element of the foregoing provision.
The only factual basis in Degussa's Court of International Trade complaint for its contention that the liquidation of the Detroit entries involved a "mistake of fact" was the assertion in paragraph 8 that "[t]he Detroit District Director was unaware at the times the Detroit entries were liquidated that the 416 AFR [Buffalo Protest and Application For Further Review No. 0901-0-00416] was pending before Customs Headquarters." Although the complaint also alleged that the Detroit district director's "lack of knowledge ... that the 416 AFR was pending before Customs Headquarters constituted a mistake of fact ... within the meaning of 19 U.S.C. § 1520(c)" (Par. 9) and that "due to ... mistake of fact ... the Detroit entries were liquidated under subheading 8708.99, HTSUS" (Par. 18), those allegations track the language of the statute and therefore are conclusions of law that the court need not accept. See Fabrene, Inc. v. United States, 17 C.I.T. 911, 913 (1993).
Degussa contends that, in holding that the complaint failed to state a claim on which relief could be granted, the Court of International Trade failed to accept as true the complaint's factual allegations. To the contrary, the court concluded that, even accepting the factual allegations, Degussa had not stated a valid claim. As the court stated in its conclusion: "Plaintiff has failed to allege sufficient facts to establish that the alleged error in classification resulted from a clerical error, mistake of fact, or other inadvertence by Customs as contemplated by 19...
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