Depersia v. U.S.

Citation637 F.Supp.2d 1244
Decision Date11 August 2009
Docket NumberSlip Op. 09-84. Court No. 08-00115.
PartiesJennifer DEPERSIA, Plaintiff, v. UNITED STATES, Defendant.
CourtU.S. Court of International Trade

Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP, New York City (David M. Murphy; Frances P. Hadfield; Michael J. Khorsandi) for Jennifer Depersia, Plaintiff.

Tony West, Assistant Attorney General; Barbara S. Williams, Attorney-in-Charge, International Trade Field Office; Saul Davis, Civil Division, Commercial Litigation Branch, United States Department of Justice; Of Counsel, Christopher Chen, Office of the Chief Counsel, United States Customs and Border Protection, for the United States, Defendant.

Before: NICHOLAS TSOUCALAS, Senior Judge.

OPINION

TSOUCALAS, Senior Judge.

Plaintiff moves for judgment upon the agency record, pursuant to Rule 56.1 of the Rules of the United States Court of International Trade ("USCIT"), seeking review of the denial of her application for a customs broker's license, which was based on her failure to achieve a passing score of 75% on the requisite examination. Specifically, Plaintiff petitions this Court for reversal of a decision by the Assistant Secretary of Homeland Security ("the Secretary" or "DHS") affirming the denial of credit for her answer to one examination question. Defendant has filed a response in opposition, seeking that the Court up-hold the Secretary's decision. For the reasons stated below, Plaintiff's Motion for Judgment on the Agency Record is denied.

BACKGROUND

Plaintiff sat for the April 2, 2007, administration of the Customs Broker License examination. In a letter dated June 22, 2007, the United States Customs and Border Protection1 ("Customs" or "CBP") advised Plaintiff of her score of 71.25% (57 correct answers) on the examination, whereas a minimum passing grade of 75% (60 correct answers) or higher was required.2 On July 24, 2007, Plaintiff wrote a letter to the Broker Management Branch of Customs challenging CBP's grading of four test questions. Customs notified Plaintiff on November 9, 2007, that her appeal as to all challenged questions was denied. In its letter, Customs included an explanation of the single correct answer and several incorrect answers for every question that Plaintiff challenged.

By letter of December 26, 2007, Plaintiff next sought to have the matter reviewed by DHS. The Director of Cargo, Maritime and Trade Policy informed Plaintiff of its determination to affirm the denial of credit for the four contested questions in a letter dated February 19, 2008. Suit in this Court subsequently followed when Plaintiff filed her summons and complaint on April 9, 2008, followed by an amended complaint on April 14, 2008. Plaintiff challenges the Secretary's denial of her score on the April 2, 2007 examination, specifically question 9.3 Plaintiff further moves for relief under the Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412(d), for attorney's fees and expenses.

JURISDICTION AND STANDARD OF REVIEW

The Court has exclusive jurisdiction over this matter pursuant to 28 U.S.C. § 1581(g)(1) (2006). Regarding the appropriate standard of review, the statute provides that "[t]he findings of the Secretary as to the facts, if supported by substantial evidence, shall be conclusive." 19 U.S.C. § 1641(e)(3). Substantial evidence includes "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Universal Camera Corp. v. NLRB, 340 U.S. 474, 477, 71 S.Ct. 456, 95 L.Ed. 456 (1951). This is something less than the weight of the evidence and the possibility of drawing two inconsistent conclusions from the evidence does not prevent the agency's finding from being supported by substantial evidence. See Boynton v. United States, 517 F.Supp.2d 1349, 1351 (internal citations omitted).

While the factual findings of the Secretary must be based on substantial evidence, both 19 U.S.C. § 1641 and 28 U.S.C. § 2640 are silent as to the standard of review the Court should apply to legal questions in a customs broker's license denial case. Therefore, in reviewing legal questions, the Court is guided by the Administrative Procedure Act ("APA") "which gives general guidance regarding the scope and standard of review to be applied in various circumstances." United States v. Ricci, 21 CIT 1145, 1146, 985 F.Supp. 125, 126 (1997); see also O'Quinn v. United States, 24 CIT 324, 325, 100 F.Supp.2d 1136, 1137 (2000). Under the standard laid out in the APA, the Court will uphold the final administrative determination of the Secretary, unless the decision was "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A) (2006). "When applied to agency action independent of review of findings of fact, the arbitrary and capricious test requires that the agency engage in reasoned decision-making in grading the exam." O'Quinn, 24 CIT at 325, 100 F.Supp.2d 1136, 1138 (internal citations omitted).

DISCUSSION

Consistent with the broad powers vested in the Secretary for licensing customs brokers under the statute, is the authority to deny an application for a license based on the failure to pass the licensing examination. See Kenny v. Snow, 401 F.3d 1359, 1361 (Fed.Cir.2005) ("Among the lawful grounds for denying a license is the failure to pass the licensing examination."). 19 U.S.C. § 1641(b)(2) provides that:

Before granting the license, the Secretary may require an applicant to show any facts deemed necessary to establish that the applicant is of good moral character and qualified to render valuable service to others in the conduct of customs business. In assessing the qualifications of an applicant, the Secretary may conduct an examination to determine the applicant's knowledge of customs and related laws, regulations and procedures, bookkeeping, accounting, and all other appropriate matters.

In its administration of this statutory provision Customs has promulgated regulations governing the conduct of the customs broker's license exam. See 19 C.F.R. § 111.11(a)(4) ("to obtain a broker's license, an individual must ... attain[ ] a passing (75 percent or higher) grade on a written examination"); 19 C.F.R. § 111.16(b)(2) ("grounds sufficient to justify denial of an application for a license include ... [t]he failure to meet any requirement set forth in [19 C.F.R.] § 111.11.").4

In reviewing the Secretary's decision to deny Plaintiff's application for a license, the Court "must necessarily conduct some inquiry into plaintiff's arguments and defendant's responses" concerning the question at issue. Di Iorio v. United States, 14 CIT 746, 747 (1990). Although the Court reviews the exam question being challenged, the "[p]arties should not conclude from the court's detailed examination of the test answers that the court is some kind of final reviewer of the [exam]." Id. at 752. With this in mind, the Court turns to Plaintiff's challenge of question 9.

The exam instructs applicants to choose the best answer from among the five alternatives presented. See Def.'s Mem. at 2. Question 9 requires the examinee to assess the type of ruling an importer is entitled to given a specific factual situation. The question reads as follows:

Question 9

In the following scenario, what type of ruling is the importer entitled to?

• CBP has rejected the importer's claim as to the tariff classification of green olives grown in Spain.

• Entries filed for these ongoing shipments have NOT been liquidated.

• Proposed rate advances (CBP Form 29) will result in substantial duty increases.

• A ruling has NOT been requested or issued on these import transactions.

A. A Ruling request submitted to the National Commodity Specialist Division

B. A NAFTA Advance Ruling request forwarded to CBP Headquarters

C. A protest application for further review filed at the CBP port of entry

D. An Internal Advice request submitted through the CBP port of entry

E. The importer is not entitled to request a ruling from CBP on this transaction

The official answer to question 9 is (D). Plaintiff in turn selected (A), and claims that she was improperly denied credit for her answer in large part because of how the word "entitled" was construed by Customs. According to Plaintiff, this term, as used in question 9, speaks to an action that the agency must take. Therefore, if Customs' proposed answer (D) is deemed correct, the action that CBP must afford the requesting importer is Internal Advice.5 See Pl.'s Mem. at 5. Plaintiff points to § 177.11(b)(5) which describes the conditions under which Customs may refuse to issue Internal Advice to a requesting importer.6 See Pl.'s Mem. at 5. Therefore, Plaintiff argues, an importer is never entitled to such advice, but rather "an internal advice ruling may be requested." Id.

On the other hand, because the question's hypothetical facts indicate that the shipments at issue were "ongoing," it is Plaintiff's contention that the importer would be entitled to submit a tariff classification ruling request to the National Commodity Specialist Division, as described in answer choice (A). Id. at 4; see also 19 C.F.R. § 177.2(a) ("Requests for tariff classification rulings should be addressed to the Director, National Commodity Specialist Division ..."); § 177.2(b)(2)(B) ("Rulings issued by the Director, National Commodity Specialist Division ... are limited to prospective transactions."). In focusing on the stem of question 9 which asks, "what type of ruling is the importer entitled to?" the Plaintiff alleges that the word "entitled" operates to describe the importer's right to receive a classification ruling, as opposed to the discretionary authority of Customs in providing Internal Advice. See Pl.'s Mem. at 8. Plaintiff further notes that even if the official answer is deemed correct, her answer was also an appropriate response to question 9. See id.

Defendant explains that answer choice (D) is correct "because an...

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