Di Jub Leasing Corp. v. United States, Court No. 80-11-00038.

• Decision Date: 05 December 1980
• Docket Number: Court No. 80-11-00038.
• Citation: 505 F. Supp. 1113,1 CIT 42
• Parties: DI JUB LEASING CORP., Dianne Pellecchia, and Susan Jubert, Plaintiffs, v. The UNITED STATES of America; the Secretary of the Department of the Treasury; the Commissioner of Customs, United States Customs Service; Regional Commissioner of Customs, United States Customs Service, New York Region; Area Director of Customs, United States Customs Service, Port of Newark, Defendants.
• Court: U.S. Court of International Trade

505 F. Supp. 1113

1 CIT 42

DI JUB LEASING CORP., Dianne Pellecchia, and Susan Jubert, Plaintiffs, v. The UNITED STATES of America; the Secretary of the Department of the Treasury; the Commissioner of Customs, United States Customs Service; Regional Commissioner of Customs, United States Customs Service, New York Region; Area Director of Customs, United States Customs Service, Port of Newark, Defendants.

Court No. 80-11-00038.

United States Court of International Trade.

December 5, 1980.

Serko & Simon, New York City (David Serko, Margaret Sachter and Steven Wolosky, New York City, of counsel), for plaintiffs.

Alice Daniel, Asst. Atty. Gen., Washington, D. C. (Joseph I. Liebman, Atty. in Charge, Field Office for Customs Litigation, Saul Davis, trial attorney, New York City), for defendants.

MEMORANDUM AND ORDER ON PLAINTIFFS' APPLICATION FOR PRELIMINARY INJUNCTION AND DEFENDANTS' CROSS-MOTION TO DISMISS.

NEWMAN, Judge:

This is an action to review a decision of the Commissioner of Customs revoking the customhouse cartman's license of plaintiff Di Jub Leasing Corporation ("Di Jub"). Subject matter jurisdiction is asserted by plaintiffs under 28 U.S.C. § 1581(i)(1) and (4). The jurisdictional predicate, as we shall see infra, raises an issue of first impression.

Presently before the Court for consideration are plaintiffs' application for a preliminary injunction and defendants' cross-motion to dismiss for lack of subject matter jurisdiction.

Extensive oral argument was heard by the Court on November 10, 1980 in connection with plaintiffs' motion under Rule 65, brought on by an order to show cause.

JURISDICTION

Initially, we consider the threshold jurisdictional issue presented by defendants' cross-motion to dismiss. As noted supra, plaintiffs predicate jurisdiction on the provisions of 28 U.S.C. § 1581(i)(1) and (4), viz., a "residual grant of jurisdictional authority" to this Court under the Customs Courts Act of 1980, effective November 1, 1980, P.L. 96-417, 94 Stat.1727, H.R.Rep.No.96-1235, 96th Cong. 2d Sess. 47, U.S.Code Cong. & Admin.News 1980, p. 7088. Although these residual provisions relied on by plaintiffs are clear on their face, Congressional intent that they be given broad application in cases arising out of our international trade laws is evident from the legislative history of the Customs Courts Act.

Over the years, complex jurisdictional issues have been raised in cases arising out of our international trade laws due to the ill-defined division of jurisdiction between this Court's predecessor, the United States Customs Court, and the federal district courts.¹ This division of jurisdiction resulted in "inconsistent judicial decisions with litigants proceeding cautiously when choosing a forum for judicial review". H.R.Rep.No.96-1235, 19, U.S.Code Cong. & Admin.News 1980, p. 7090. In the instant case, we are confronted again with the question of whether plaintiffs are properly before this Court.

The recently enacted Customs Courts Act of 1980 creates a comprehensive system for the judicial review of civil actions arising out of international trade law, and greatly expands the status, jurisdiction and powers of the former United States Customs Court (renamed on November 1, 1980, the United States Court of International Trade). One of the major objectives of the legislation was to eliminate the confusing division of jurisdiction over international trade law disputes between the Customs Court and the federal district courts. Thus, in its report accompanying the bill which became the Customs Courts Act of 1980 (H.R. 7540) the House Committee on the Judiciary stated (H.R.Rep.No.96-1235, at 27-28, U.S.Code Cong. & Admin.News 1980, p. 7098):

H.R. 7540 provides for significant and much-needed reform and clarification of the statutes governing the status, jurisdiction and powers of the United States Customs Court. This legislation seeks to accomplish several major goals;

* * * * * *

3. The re-emphasis and clarification of Congress' intent that the expertise and national jurisdiction of the Court of International Trade and the Court of Appeals for International Trade, Patents and Trademarks be exclusively utilized in the resolution of conflicts and disputes arising out of the tariff and international trade laws, thereby eliminating the present jurisdictional conflicts between these courts and the federal district and appellate courts;

In expanding the jurisdiction of the Customs Court, Congress granted the newly named Court² exclusive jurisdiction over certain specified actions, as enumerated in 28 U.S.C. § 1581(a) through (h), and provided a broad residual grant of jurisdictional authority in § 1581(i). The purpose of the residual jurisdictional provisions in § 1581(i) is stressed in the House Judiciary Committee's Report (H.R.Rep.No.96-1235, at 47, U.S.Code Cong. & Admin.News 1980, p. 7118):

The purpose of this broad jurisdictional grant is to eliminate the confusion which currently exists as to the demarcation between the jurisdiction of the district courts and the Court of International Trade. This provision makes it clear that all suits of the type specified are properly commenced only in the Court of International Trade. The Committee has included this provision in the legislation to eliminate much of the difficulty experienced by international trade litigants who in the past commenced suits in the district courts only to have these suits dismissed for want of subject matter jurisdiction. The grant of jurisdiction in subsection (i) will ensure that these suits will be heard on their merits.

With the purposes and objectives of the residual jurisdictional provisions in mind, we shall proceed to determine whether this action is properly before the Court under § 1581(i)(1) and (4), as urged by plaintiffs. These provisions read:

(i) In addition to the jurisdiction conferred upon the Court of International Trade by subsections (a)-(h) of this section and subject to the exception set forth in subsection (j) of this section, the Court of International Trade shall have exclusive jurisdiction of any civil action commenced against the United States, its agencies, or, the officers, that arises out of any law of the United States providing for —

(1) revenue from imports or tonnage.

* * * * * * (4) administration and enforcement with respect to the matters referred to in paragraphs (1)-(3) of this subsection and subsections (a)-(h) of this section.

Specifically, plaintiffs contend that this action contesting the administrative revocation of a customhouse cartman's license "arises out of" the "administration and enforcement" of a law providing for revenue from imports. I agree.

The Customs regulations providing for the licensing of customhouse cartmen are set forth in 19 CFR §§ 112, et seq., and these regulations are authorized by 19 U.S.C. §§ 66, 1551a, 1565 and 1624. The regulations describe the role of the cartman in international trade as the transportation of goods or merchandise, on behalf of the Government or importers, within the limits of a port, for the purposes of storage in warehouse and/or subsequent examination of the merchandise by customs officers, either in premises under Customs custody, or under the custody of importers. Further, the regulations require that customhouse cartmen be licensed by the District Director, and be bonded.

Plaintiffs have submitted as exhibits attached to their memorandum of law an application form for a customhouse cartman's or lighterman's license, together with the form of bond required for that license (Customs Form 3855). An examination of these documents discloses that the primary objective of licensing and bonding cartmen and lightermen is to secure the revenue from imports on which customs duties have not yet been paid. In this connection, it has been noted that the undertaking form provides that in the event of failure to safely transport and deliver the merchandise to the appropriate customs officer, the cartman is liable for certain sums of liquidated damages. Significantly, the damages for loss of a shipment on which duty is owed are "an amount equal to the duties" on such merchandise. Moreover, if a shipment is delivered to the ultimate consignee or owner of the merchandise before it has been released by Customs, the liquidated damages specified in the bond are the duty owing plus twenty-five percent of that duty. It should be noted that a bond is a condition precedent to obtaining a cartman's license.

Customs Collection District No. 10 (New York), through which passes more imported merchandise than any other district in the United States, includes the ports of New York, and Newark and Perth Amboy, New Jersey. Imported merchandise in Customs custody, on which many millions of dollars in duty are owed to the Government, must be transported within and away from that area from port to port or to bonded warehouses. Obviously, before duties are paid, imported merchandise cannot be released to the consignee, or to carriers and truckers without protection of the revenue from imports. Hence, all persons in possession of such goods must be bonded, from the importer who has an Immediate Delivery Permit to the licensed customhouse cartman who picks up the merchandise at the pier, so that the Government has recourse under the bonds for the payment of duties. Essentially, the revenue from imports is thereby protected.

In accordance with 19 U.S.C. § 1551a (Pub.Resol. 108 of June 19, 1936), "The Secretary of the Treasury * * * is * * * authorized, when it appears to him to be in the interest of commerce, and notwithstanding any provision of law or regulations requiring the transportation of imported merchandise be by a bonded common carrier, to permit such imported merchandise which has been entered and examined for customs purposes to be transported by bonded cartmen or bonded lightermen between the ports of New York, Newark, and Perth Amboy, which are...