Dunn-Heiser v. U.S., SLIP OP. 05-62.

• Decision Date: 31 May 2005
• Docket Number: SLIP OP. 05-62.,Court No. 03-00725.
• Parties: Christina DUNN-HEISER, Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

374 F.Supp.2d 1276

Christina DUNN-HEISER, Plaintiff, v. UNITED STATES, Defendant.

SLIP OP. 05-62.

Court No. 03-00725.

United States Court of International Trade.

May 31, 2005.

Christina E. Dunn-Heiser, Plaintiff pro se.

Peter D. Keisler, Assistant Attorney General; Barbara S. Williams, Attorney-in-Charge, International Trade Field Office, Commercial Litigation Branch, Civil Division, U.S. Department of Justice (Harry A. Valetk); Louritha Green and Allan L. Martin, of counsel, Office of Associate Chief Counsel, Bureau of Customs and Border Protection, U.S. Department of Homeland Security, Washington, DC, for Defendant.

OPINION

RIDGWAY, Judge.

In this action, pro se plaintiff Christina E. Dunn-Heiser ("Applicant") challenges the decision of the Deputy Assistant Secretary of the U.S. Department of the Treasury upholding the determination of the U.S. Customs Service ("Customs")¹ denying her application for a customs broker's license, based on her failure to pass the requisite examination. Specifically, Applicant contends that she should be awarded credit for her answer to one exam question which customs scored as incorrect. Credit for that question would give her a passing score on the exam.

Both parties have now filed dispositive motions. See Plaintiff's untitled submission ("Applicant's Motion for Judgment on the Pleadings" or "Pl.'s Brief");² Defendant's Memorandum in Support of Its Motion for Judgment on the Administrative Record and In Opposition to Plaintiff's Motion for Judgment on the Pleadings ("Def.'s Brief").³

Jurisdiction lies under 28 U.S.C. § 1581(g)(1) (2000).⁴ For the reasons discussed more fully below, the Treasury Department's determination denying Applicant's appeal of the scoring of her customs broker license exam must be sustained. Applicant's Motion for Judgment on the Pleadings is therefore denied, and the Government's Motion for Judgment on the Administrative Record is granted.

I. Background

Customs brokers help importers and exporters navigate the labyrinthine federal laws governing the movement of merchandise into and out of the customs territory of the United States. As Customs explains:

The Customs broker is a highly knowledgeable professional. Customs brokers must possess thorough knowledge of tariff schedules and Customs Regulations and must also keep abreast of the amendments made through constant changes in law and administrative regulations. The Customs broker must be well versed in determining proper classifications and dutiable value [of imported merchandise] and be fully aware of the vast number of commodities subject to quota and other admissibility requirements. The Customs broker's base of knowledge must also encompass the requirements of more than 40 governmental agencies, such as the U.S. Department of Agriculture on meat import questions, the Environmental Protection Agency (EPA) on vehicle emission standards or the Food and Drug Administration on product safety.

U.S. Customs Service, Broker Management Handbook 11 (Jan.2002).

Because customs brokers play such an integral role in international trade, and because the relevant statutes and regulations are so numerous and so complex, applicants for a broker's license must successfully complete a comprehensive written licensing exam. The exam is designed "to determine the applicant's knowledge of customs and related laws, regulations and procedures ... and all other appropriate matters."⁵ 19 U.S.C. § 1641(b)(2); 19 C.F.R. § 111.13(a) (2002).⁶

The exam is administered twice a year (in the spring and the fall), and consists of 80 multiple choice questions covering a range of topics pertinent to a broker's duties (including entry, classification, country of origin, trade agreements, value, broker responsibilities, and marking). See 19 C.F.R. § 111.13(b) (specifying frequency of examination).

The exam is open-book. Those sitting for the test are advised to bring — and are expected to know — Customs' regulations (codified in Title 19 of the Code of Federal Regulations), the Harmonized Tariff Schedule of the United States ("HTSUS"), and other specified reference materials, which they may refer to during the course of the exam. Test-takers must correctly answer at least 60 questions to pass. Despite the open-book format of the exam, the success rate is relatively low.⁷ However test-takers who fail may retake the exam without penalty. 19 C.F.R. § 111.13(e).

Applicant in this case failed the October 2002 exam, initially receiving credit for only 58 questions. She petitioned Customs, requesting reconsideration of her answers to three questions.⁸ Customs awarded credit for one of those three answers, but denied credit for the other two. A.R. Doc. No. 3.⁹

With credit for her answers to only 59 questions, Applicant was still one answer shy of a passing score on the exam. She therefore petitioned the Treasury Department, seeking review of the two remaining questions in dispute. A.R. Doc. No. 2. Like Customs, the Treasury Department denied Applicant's request for credit for both questions. A.R. Doc. No. 1.

This action ensued, in which Applicant seeks credit for her answer to a single exam question.¹⁰ See Applicant's Letter to U.S. Court of International Trade (Oct. 7, 2003) ("Complaint") (discussing only one question); Pl.'s Brief at 2 (referring to "[t]he exam question that is being appealed") (emphasis added), 5 (concluding that she "should be granted credit for the Custom Broker exam question") (emphasis added). See also Def.'s Brief at 3 (noting that Applicant is now "focused solely" on her answer to one exam question).

II. Standard of Review

The Secretary of the Treasury is vested with broad powers over the licensing of customs brokers. See, e.g., Kenny, 401 F.3d at 1361; Bell v. United States, 17 CIT 1220, 1225, 839 F.Supp. 874, 878 (1993) (citations omitted). Consistent with those broad powers, a determination denying a license can be overturned only if that determination was "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706; Kenny, 401 F.3d at 1361.

As discussed in section I above, one of the grounds for denying a license is failure to pass the requisite examination. The Court of Appeals recently highlighted the narrow scope of judicial review of the scoring of such exams:

Underpinning a decision to deny a license arising from an applicant's failure to pass the licensing examination are factual determinations grounded in examination administration issues — such as ... the allowance of credit for answers other than the official answer — which are subject to limited judicial review.

Kenny, 401 F.3d at 1361 (citing 19 U.S.C. § 1641(e)(3)). Thus, in cases like this one, the findings of the Secretary of the Treasury as to the facts — if supported by substantial evidence — are, by statute, conclusive. 19 U.S.C. § 1641(e)(3); Kenny, 401 F.3d at 1361. See also O'Quinn v. United States, 24 CIT 324, 325, 100 F.Supp.2d 1136, 1137-38 (2000) (discussing application of "substantial evidence" test and "arbitrary and capricious" standard, in context of judicial review of scoring of customs broker license exam).

In sum, regulatory authorities are entitled to certain latitude in the design and scoring of customs broker license exams. Di Iorio v. United States, 14 CIT 746, 752, 1990 WL 169357 (1990). Officials' determinations as to "the appropriateness of various [exam] questions and the answers selected" are accorded a measure of deference. Id. at 747, 1990 WL 169357. "Judicial intrusion into ... the formulation and grading of standardized examination questions" is properly "limited in scope." Id. The court thus does not serve as "some kind of final reviewer of the Customs broker licensing examination[]," substituting its judgement for that of the responsible Customs and Treasury Department officials. 14 CIT at 747, 752, 1990 WL 169357.¹¹

III. Analysis

The express objective of the customs broker license exam is to gauge an applicant's command of Customs' positions on the relevant rules and regulations. 19 U.S.C. § 1641(b)(2); 19 C.F.R. § 111.13(a). See also Def.'s Brief at 6. As section I above notes, one subject tested on the exam is the law governing the marking of imported merchandise to indicate its country of origin. The exam question at issue in this action deals with those marking requirements.

A. Country of Origin Marking Requirements

The marking statute requires that, with certain exceptions not relevant here, "every article of foreign origin... imported into the United States shall be marked ... to indicate to an ultimate purchaser in the United States ... the country of origin of the article." 19 U.S.C. § 1304(a) (emphases added); see also 19 C.F.R. § 134.1 ("Country of Origin Marking"). Customs' marking regulations expressly define "country of origin" as the "country of manufacture, production, or growth of any article of foreign origin entering the United States." 19 C.F.R. § 134.1(b) (emphasis added). "Foreign origin" is, in turn, defined as "a country of origin other than the United States." 19 C.F.R. § 134.1(c) (emphasis added). Thus, by definition, Customs' marking requirements apply only to merchandise of foreign origin — that is, merchandise of an origin other than the United States.

The purpose of requiring that imported merchandise be properly marked with its country of origin is to help consumers make informed decisions:

Congress intended that the ultimate purchaser should be able to know by an inspection of the marking on imported goods the country of which the goods is the product. The evident purpose is to mark the goods so that at the time of purchase the ultimate purchaser may, by knowing where the goods were produced, be able to buy or refuse to buy them, if such marking should influence his will.

United States v. Friedlaender & Co., 27 C.C.P.A. 297, 302 (1940) (emphasis added).

To that end, Customs' marking regulations require that —...