Erwin Hymer Grp. N. Am., Inc. v. United States

• Decision Date: 22 July 2019
• Docket Number: 2018-1282
• Citation: 930 F.3d 1370
• Parties: ERWIN HYMER GROUP NORTH AMERICA, INC., fka Roadtrek Motorhomes, Inc., Plaintiff-Appellant v. UNITED STATES, Defendant-Appellee
• Court: U.S. Court of Appeals — Federal Circuit

930 F.3d 1370

ERWIN HYMER GROUP NORTH AMERICA, INC., fka Roadtrek Motorhomes, Inc., Plaintiff-Appellant

v.UNITED STATES, Defendant-Appellee

2018-1282

United States Court of Appeals, Federal Circuit.

Decided: July 22, 2019

John Michael Peterson, Neville Peterson LLP, New York, NY, argued for plaintiff-appellant. Also represented by Richard F. O'Neill.

Marcella Powell, International Trade Field Office, Commercial Litigation Branch, Civil Division, United States Department of Justice, New York, NY, argued for defendant-appellee. Also represented by Amy Rubin; Jeanne Davidson, Joseph H. Hunt, Washington, DC; Michael W. Heydrich, Office of the Assistant Chief Counsel, United States Bureau of Customs and Border Protection, United States Department of Homeland Security, New York, NY.

Before Dyk, Reyna, and Chen, Circuit Judges.

Reyna, Circuit Judge.

Erwin Hymer Group North America, Inc., appeals the final judgment of the United States Court of International Trade granting the Government’s motion for judgment on the agency record. The Court of International Trade’s assertion of residual jurisdiction under 28 U.S.C. § 1581(i) was improper because a civil action for contesting the denial of protests could have been available under 28 U.S.C. § 1581(a), and the remedy provided under § 1581(a) is not manifestly inadequate. Because the Court of International Trade lacked jurisdiction, we reverse and remand with instructions to dismiss.

BACKGROUND

In 2014, Erwin Hymer Group North America, Inc., ("Hymer") imported 149 vehicles into the United States from Canada. In 2015, the United States Customs and Border Protection ("Customs") liquidated the entries, classifying them under subheading 8703.24.00 of the Harmonized Tariff Schedule of the United States (2014) ("HTSUS"). Subheading 8703.24.00 applies a tariff of 2.5% ad valorem to "motor vehicles principally designed for transporting persons" and with a "spark-ignition internal combustion reciprocating piston engine ... [o]f a cylinder capacity exceeding 3,000 cc." Customs assessed duties accordingly.

In October 2015, Hymer timely filed a protest under 19 U.S.C. § 1514, contesting Customs’ classification of the vehicles. The protest materials included, among other things, a cover letter, a standard form ("Protest Form"),¹ and a memorandum in support of the protest. Hymer argued in its protest that the entries were entitled to duty-free treatment under HTSUS subheading 9802.00.50 and Article 307 of the North American Free Trade Agreement, a provision known as "American Goods Returned." This provision generally relates to preferential tariff treatment for qualifying goods that reenter the United States customs territory after repairs or alterations in Canada or Mexico. See 19 C.F.R. § 181.64(a).

In the cover letter attached to its protest, Hymer requested that Customs "suspend action on th[e] protest" until the Court of International Trade ("CIT") issued a decision in a different case, Roadtrek Motorhomes, Inc. v. United States , No. 11-00249. See J.A. 5, 51. The CIT had stayed the Roadtrek case pending final disposition of a test case on the issues raised: Pleasure-Way Indus., Inc. v. United States , 38 I.T.R.D. 1889 (BNA), 2016 WL 6081818 (Ct. Int’l Trade 2016) (" Pleasure-Way I "), aff’d , 878 F.3d 1348 (Fed. Cir. 2018) (" Pleasure-Way II ").²

In Pleasure-Way I , the CIT’s jurisdiction was based on 28 U.S.C. § 1581(a). The CIT addressed whether certain van-based motorhomes—similar to the vehicles at issue in this case—qualified for preferential tariff treatment under HTSUS subheading 9802.00.50. Pleasure-Way I , 2016 WL 6081818, at *3. The CIT decided that HTSUS subheading 9802.00.50 did not apply, and on January 5, 2018, this court affirmed that decision. Pleasure-Way II , 878 F.3d at 1349–50. Subsequently, entries of the vehicles were liquidated at a rate of 2.5% ad valorem , the same rate that Customs argues should apply in this case.

While Pleasure-Way was pending, a Customs Import Specialist reviewed Hymer’s protest, and on December 31, 2015, checked a box labeled "Approved" in Field 17 of the Protest Form. Customs sent a copy of the Protest Form with the checked box to Hymer but did not include a refund check or offer any explanations.

On January 5, 2016, a Customs Entry Specialist forwarded Hymer’s protest for review by a supervisor. On January 11, 2016, while the matter was pending before the Entry Specialist, Hymer received a copy of the Protest Form with the "Approved" box checked. On the same day, a Supervisor Import Specialist emailed an Entry Director asking her to locate Hymer’s protest and explaining that reliquidation should not occur because the protest was suspended. The Entry Director in turn advised other Customs employees not to reliquidate the entries. The following day, on January 12, 2016, the Entry Director informed the Supervisor Import Specialist that the protest had been returned to the Import Specialist who initially reviewed the protest because the protest had not been signed by the Supervisor Import Specialist. On January 21, 2016, the Import Specialist updated Customs’ electronic system to reflect that, per Hymer’s request, the protest was suspended pending resolution of the Roadtrek case.

On March 17, 2016, Hymer’s counsel emailed the Import Specialist indicating that, on January 11, 2016, counsel had received a copy of the Protest Form with the "Approved" box checked, and asked whether the protest was suspended. On March 27, 2016, the Import Specialist replied and confirmed that the protest was suspended pending resolution of Roadtrek .

On July 18, 2016, approximately 7 months from the date it learned of the checked-box, no-refund-check circumstance, Hymer sued the Government in the CIT, seeking an order of mandamus directing Customs to reliquidate the entries of the vehicles under HTSUS subheading 9802.00.50. Hymer asserted CIT jurisdiction under 28 U.S.C. § 1581(i)(1) and (i)(4),³ and on grounds that Customs’ failure to provide a refund check constituted unlawfully withheld action under the Administrative Procedure Act, 5 U.S.C. § 706(1). The Government answered the complaint, and both parties filed competing motions for judgment in their favor.

Hymer argued that the "Approved" box on the Protest Form constituted an "allowance" under 19 U.S.C. § 1515(a),⁴ requiring Customs to refund Hymer’s excess duty deposit. Hymer asserted that the marking of the "Approved" box definitively showed its protest was allowed. According to Hymer, this allowance in turn triggered non-discretionary reliquidation of its entries at the zero-duty rate advocated in Hymer’s protest. Hymer claimed it was due a refund check in the amount of the excess duties it deposited (2.5% ad valorem ), which it claimed Customs was improperly withholding.

The Government argued that the CIT lacked jurisdiction under § 1581(i). The Government noted that Hymer should have brought the action under § 1581(a), which gives the CIT jurisdiction over any civil action contesting the denial of a protest. In addition, the Government contended that, because Hymer’s protest remained pending, Hymer retained the option to file a request for an accelerated disposition of its suspended protest under 19 U.S.C. § 1515(b), and if denied, had a right to appeal the denial at the CIT under § 1581(a). The Government asserted that Customs’ administrative actions in processing the protest, which included the checking of the "Approved" box, did not constitute an allowance under the statute and did not trigger a non-discretionary duty to reliquidate the entries and issue a refund.

On November 3, 2017, the CIT denied Hymer’s motion for judgment on the pleadings and granted the Government’s motion for judgment on the agency record. Erwin Hymer Grp. N. Am., Inc. v. United States , 273 F. Supp. 3d 1336, 1338 (Ct. Int’l Trade 2017) (" CIT Opinion ").

First, the CIT rejected the Government’s argument that it lacked jurisdiction. The CIT agreed with Hymer that Hymer was not challenging the denial of a protest, but rather Customs’ authority to rescind, or renege on, a final decision to "allow" a protest. Id. at 1343–44, 1344 n.19. The CIT reasoned that Hymer’s challenge concerns the administration and enforcement of protests under § 1581(i)(4), not the denial of a protest under § 1581(a). Id. The CIT further determined that jurisdiction under § 1581(a) was not available because that section applies to appeals from denied protests, whereas Hymer was challenging Customs’ failure to act on an allegedly allowed protest. Id. at 1344 n.19.

Second, the CIT concluded that Customs was not obligated to refund the alleged excess duties paid. Id. at 1345–46. The CIT found that neither the statute nor the regulations defined what constitutes an allowance under § 1515(a). Id. Rejecting Hymer’s argument to the contrary, the CIT held that "[t]he statutory and regulatory scheme[s] establish[ ] reliquidation as the act which allows a protest." Id. at 1345. The CIT determined that although the Import Specialist’s checking of the "Approved" box may have indicated an initial determination, such checking did not trigger a mandatory allowance by Customs. Id. at 1346. Thus, there was no reliquidation of Hymer’s entries, and consequently, no allowed protest.

Hymer appealed. We have jurisdiction under 28 U.S.C. § 1295(a)(5).

DISCUSSION

We address the issue of the CIT’s jurisdiction. The CIT asserted jurisdiction over this case under 28 U.S.C. § 1581(i)(4). CIT Opinion , 273 F. Supp. 3d at 1344.⁵ Whether the CIT has jurisdiction is a question of law, which we review de novo . Int’l Custom Prods., Inc. v. United States , 467 F.3d 1324, 1326 (Fed. Cir. 2006) (" ICP ").

We often describe § 1581(i) as a "broad residual" grant of jurisdiction. ICP , 467 F.3d at 1327. But our precedent is "unambiguous [and] clear that [ § 1581(i) ’s] scope is strictly limited." Id. (quoting Norcal/Crosetti Foods, Inc. v. United States , 963 F.2d 356, 359 (Fed. Cir. 1992) )....