Delgado v. U.S., Slip Op. 07-70.

Citation491 F.Supp.2d 1252
Decision Date11 May 2007
Docket NumberSlip Op. 07-70.,Court No. 06-00030.
PartiesMiguel A. DELGADO, Plaintiff, v. UNITED STATES, Defendant.
CourtU.S. Court of International Trade

The Mooney Law Firm (Neil B. Mooney), for the plaintiff.

Peter D. Keisler, Assistant Attorney General; Barbara S. Williams, Attorney In Charge, International Trade Field Office, Commercial Litigation Branch, United States Department of Justice (Marcella Powell); Ilena Pattie, Office of the Associate Chief Counsel, United States Customs and Border Protection, of counsel, for the defendant.

MEMORANDUM OPINION AND ORDER

MUSGRAVE, Judge.

By his complaint Miguel A. Delgado ("Delgado") alleges that United States Customs and Border Protection1 ("Customs" or "CBP") improperly determined that his customhouse brokers license ("License") should be revoked. Delgado raises four main issues in support of his position, arguing that: (1) the Administrative Law Judge ("ALP) who presided at the administrative hearing ("Hearing") improperly applied the doctrine of collateral estoppel; (2) the ALJ's determination that it was proper to revoke Delgado's License because Delgado violated a Customs statute or regulation by making false or misleading statements was in error; (3) the ALJ's determination that it was proper to revoke Delgado's License because Delgado was convicted of a felony that was based on either: (a) the importation or exportation of merchandise or (b) the conduct of Delgado's customs business was in error; and (4) that the letter informing Delgado that his License was being revoked insufficiently notified him of the facts and reasons underlying Customs's determination.2

Background

On September 26, 1989, Delgado was issued customhouse brokers license 11634. Compl. at para. 2. In 1990, Delgado formed a corporation, Lancer International ("Lancer"), which he ran for approximately ten years. Tr. at 161.

Some time prior to May 1997, questions were raised about certain shipments of merchandise handled by Lancer. See United States v. Delgado, 321 F.3d 1338, 1341 (11th Cir.2003) ("Delgado"). Specifically, Customs inspectors found that shipments arriving in Port Everglades, Florida that were described as containing "foodstuffs," contained both foodstuffs and liquor. See tr. at 116. Because of this seeming irregularity, Customs and the Bureau of Alcohol, Tobacco, Firearms and Explosives ("ATF") initiated an investigation. Tr. at 116-17.

On August 24, 2000, at the conclusion of the investigation, Delgado was indicted by a federal grand jury in the Southern District of Florida on twenty-nine felony counts of being a co-conspirator in a scheme to introduce liquor into United States commerce without the payment of excise taxes thereon. See United States of America v. Deepak Kumar et al., Ct. No. 00-0682 (Aug. 24, 2000), R. at 173 (citing 26 U.S.C. §§ 5601(a)(11), (12), 5608(b); 18 U.S.C. §§ 2, 371). In early 2001, Delgado was tried by a jury and convicted of twenty-eight of the twenty-nine counts. See United States v. Miguel Delgado, Ct. No. 00-0682, (Sept. 6, 2001), R. at 165 ("Judgment"). At trial it was affirmatively established that Delgado was aware of, and participated in, the conspiracy. Tr. at 252-53; Judgment, Count One, R. at 165 (citing 18 U.S.C. § 371), Delgado, 321 F.3d at 1346 ("Contrary to what Delgado claims, the jury had sufficient evidence to find him guilty of the conspiracy."). At no point was Delgado accused, indicted, or convicted of violating any law or regulation enforced by Customs3. In September, Delgado was sentenced to twenty-seven months in prison and ordered to pay restitution. Judgment, R. at 168-69, 171. Delgado timely appealed the trial Court's decision. See Delgado, 321 F.3d at 1343. After his release, Delgado resumed actively working in the customs field with the knowledge and oversight of the District Court. Tr. at 215; see also Letter from United States District Court/District of Southern Florida/Probation Office of 6/18/04, R. at 113.

On August 28, 2002, the Acting Port Director for the Miami Service Port sent a memo to the Associate Chief Counsel recommending that Delgado's License be revoked. See Recommendation for Revocation of Customhouse Broker Miguel A. Delgado's License, R. at 267. The memo stated that "[t]he proposal for revocation of this license (for cause) is under consideration in accordance with 19 CFR 111.53(b)(1). As per guidelines provided by the Office of Field Operations, your review and recommendation are requested." Id.

Some time in late 2002 or early 2003, Delgado filed his "Triennial Status Report" with Customs. See R. at 272. In this document, Delgado responded in the affirmative to a question requesting whether he had "engaged in any conduct that could constitute grounds for suspension or revocation under Title 111.53? [sic] (i.e. convicted of a felony)." Id.

On February 20, 2003, the Court of Appeals for the 11th Circuit issued its opinion on Delgado's appeal. See Delgado, 321 F.3d 1338. The appellate Court affirmed Delgado's conviction on all twenty-eight counts and the trial Court's "decision in all respects." Id. at 1349.

Some time in mid-2003, "concerns" were raised about Delgado's continuing active involvement in the customs field. See Informed Compliance Contact Sheet ("Contact Sheet") #1 of 3/24/04, R. at 240; Contact Sheet #2 of 3/24/04, id. at 2414. Contact Sheet #1 memorialized that, "on or about August 2003," an unidentified broker approached Customs and inquired as to why it would "allow a person to operate as a broker after being convicted." R. at 240. The unidentified broker complained that Delgado "was pulling clients he had under his old filer code ... [and the unidentified broker] wanted to know if Customs was doing anything about this matter." Id. Contact Sheet #2 memorialized that, on September 30, 2003, an unidentified broker5 spoke to a Customs representative "about his and the trade's concern that Miguel Delgado, having been convicted and arrested was still allowed to operate as a broker. [The unidentified broker] was concerned that Customs would allow [a broker] to continue to operate in this type of situation." R. at 241.

On March 9, the Port Director for the Miami Service Port sent Delgado a "Notice and Statement of Charges." See R. at 153 ("Statement of Charges"). The Statement of Charges informed Delgado that his License might be revoked pursuant to 19 C.F.R. §§ 111.53(c) & 111.32 (violating Customs law or regulation by filing false documentation), 19 C.F.R. § 111.53(b) (convicted of a felony either involving importation or exportation of merchandise or "arising out of customs business), or 19 C.F.R. § 111.53(d) (aiding and abetting violation of Customs law). Id. at 153-546. In addition, the Statement of Charges informed Delgado that 5 U.S.C. §§ 554 and 558 "are applicable to formal proceedings," that he could be represented by counsel, and that the Hearing would be held on May 18, 2004. Id. at 159, 161; see also Order of 3/3/04, R. at 145, 147.

On, May 18, the Hearing was held in Miami. See generally, Tr. of Proceedings, Vols. I & II. At the Hearing, the ALJ took testimony from various Customs and ATF officials, and several other people who testified as to Delgado's good character. See generally Transcripts.

On December 17, the ALJ issued the recommendation as to the revocation of Delgado's License. See Recommended Decision and Order, R. at 18 ("Recommended Decision"). This document recited the various elements relevant to the ALJ's determination. In summary, the ALJ stated that:

IT IS HELD that by a preponderance of the evidence contained in the record of this hearing supports license revocation as a matter of law.

IT IS RECOMMENDED that the facts warranting revocation be seriously reconsidered in light of the circumstances of Miguel A. Delgado being permitted by a United States District Court to continue in a licensed Customs business, and in further light of the good character testimony ..., and the fact that there were no violations of the fiduciary duty of accounting owed by Mr. Delgado to customer-importers, and no customer was injured.

Recommended Dec., R. at 34. On May 31, 2004, the Recommended Decision and a certified copy of the Hearing record were sent to the Department of Homeland Security ("DHS"). See Certification of Record, R. at 9, 13.

On August 2, 2005, the Acting Director of Cargo and Transportation Policy, Office of Planning and Policy, Border and Transportation Security Directorate ("BTS") sent a memorandum to the Acting Assistant Secretary for Policy and Planning, BTS ("Acting Assistant Secretary"). See R. at 3 ("Decision Memorandum"). The Decision Memorandum requested that the Acting Assistant Secretary affirm revocation of Delgado's License. See id. On that same day, the Acting Assistant Secretary sent a letter to the Commissioner of CBP. See, R. at 1 ("Action Letter"). In the Action Letter, the Acting Assistant Secretary notified the Commissioner of CBP that BTS was affirming "CBP's revocation of Mr. Delgado's license." R. at 2. The letter requested the Commissioner "ensure that CBP takes the appropriate steps to inform Mr. Delgado of this decision pursuant to 19 CFR 111.74." R. at 2.

On December 3, the Assistant Commissioner of the Office of Field Operations for CBP sent Delgado formal notification that his License was being revoked. See compl. ex. A ("Notification Letter"). The Notification Letter stated, in relevant part, that "[y]ou are hereby notified that the U.S. Department of Homeland Security has affirmed U.S. Customs and Border Protection's (CBP) decision to revoke your Customshouse brokers license." Id.

Thereafter, on January 27, 2006, Delgado commenced this action.

Jurisdiction and Standard of Review

Customs has the authority to initiate a proceeding to suspend or revoke a customhouse brokers license pursuant to 19 U.S.C. § 1641(d)(2)(B) (2000). This Court has exclusive jurisdiction to review a determination...

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2 cases
  • Delgado v. U.S., Slip Op. 07-177.
    • United States
    • U.S. Court of International Trade
    • 11 Diciembre 2007
    ...remanded the matter to DHS with instructions that a proper notification letter be provided to Mr. Delgado. See Delgado v. United States, 31 CIT ___, 491 F.Supp.2d 1252 (2007). In response to that remand order, the Government has issued to Mr. Delgado a revised notification letter purporting......
  • Delgado v. U.S., Slip Op. 08-103. Court No. 06-00030.
    • United States
    • U.S. Court of International Trade
    • 29 Septiembre 2008
    ...extensively summarized in the court's previous opinions on this matter and need not be fully repeated here. See Delgado v. United States, 31 CIT ___, 491 F.Supp.2d 1252 (2007) and 536 F.Supp.2d 1328. In April 2001 Mr. Delgado was convicted on twenty-eight felony counts stemming from his inv......

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