Farrell Lines, Inc. v. United States

• Decision Date: 04 February 1982
• Docket Number: Appeal No. 80-38. C.A.D. No. 1268.
• Citation: 667 F.2d 1017
• Parties: FARRELL LINES, INC., as Successor to American Export Lines, Inc., Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee.
• Court: U.S. Court of Customs and Patent Appeals (CCPA)

667 F.2d 1017

FARRELL LINES, INC., as Successor to American Export Lines, Inc., Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee.

Appeal No. 80-38. C.A.D. No. 1268.

United States Court of Customs and Patent Appeals.

February 4, 1982.

Original Opinion as Modified by Denial of Petition for Rehearing, see 657 F.2d 1214.

ON DENIAL OF PETITION FOR REHEARING

MARKEY, Chief Judge, with whom RICH, Judge, joins, dissenting.

Our original opinion of August 20, 1981, is reported at 69 CCPA ___, C.A.D. 1268, 657 F.2d 1214 (1981). We there reversed the judgment of the Court of International Trade dismissing an action by American Export Lines, Inc. (AEL) for lack of jurisdiction, 85 Cust.Ct. ___, C.D. 4864, 496 F.Supp. 1320 (1980), and remanded for further proceedings. Familiarity with the facts and the previous opinions is presumed.

The case is now before us on the Government's petition for rehearing and AEL's opposition thereto. I respectfully but strenuously dissent from the court's refusal to grant a full rehearing. Upon review, I agree with the Government that there are "points of law or fact which ... the court has overlooked or misapprehended," CCPA Rule 6.1. For that reason, and because the case raises important questions involving sovereign immunity, the finality of liquidation, and the rules of appellate review, I would grant a full rehearing, including rebriefing and the rescheduling of oral arguments.¹

All the federal courts of appeals and the Supreme Court provide for petitions for rehearing, the rationale being that "a court which is final must also be careful; it must admit of the possibility that error may occur and that original decisions may not always be the best possible decisions." D. Louisell and R. Degnan, Rehearing in American Appellate Courts, 44 Cal.L.Rev. 627, 632 (1956). As stated in Stanton v. Stanton, 429 U.S. 501, 504, 97 S.Ct. 717, 718, 50 L.Ed.2d 723 (1977) (Justice Stevens dissenting in part), "Petitions for rehearing perform the wholesome function of providing the losing litigant with a legitimate forum for adverse comment on an adverse decision."

In my view, this case is that rarity in which the losing litigant has raised sufficient questions to warrant granting the petition and providing for rebriefing and reargument. Though we grant rehearings sparingly, the grant has produced good results. E.g., Rion v. Ault, 482 F.2d 948, 179 USPQ 152 (CCPA 1973); In re Prater, 56 CCPA 1381, 415 F.2d 1393, 162 USPQ 541 (1969); In re Nelson, 47 CCPA 1031, 280 F.2d 172, 126 USPQ 242 (1960); In re Potts, 33 CCPA 1220, 156 F.2d 555, 70 USPQ 401 (1946).

Sovereign Immunity

As the Supreme Court instructed in Lynch v. United States, 292 U.S. 571, 582, 54 S.Ct. 840, 844, 78 L.Ed. 1434 (1934): "The sovereign's immunity from suit exists whatever the character of the proceeding or the source of the right sought to be enforced ... For immunity from suit is an attribute of sovereignty which may not be bartered away."

In the dispositive portion of our opinion, it was held that the 90-day period for filing a protest to liquidation was tolled pending administrative review of AEL's petition and supplemental petition for cancellation of duties. 657 F.2d at 1218. Tolling a "statute of limitations" was viewed as necessitated by the actions of Customs Service officials. That application of tolling, however, overlooked the jurisdictional aspect of the 90-day period which in my view operates with its own jurisdiction-barring force, not merely as a statute of limitations.

The United States has consented to be sued in the Court of International Trade only if certain conditions are met. If those conditions are not met, the court lacks jurisdiction to entertain a suit against the sovereign. United States v. Sherwood, 312 U.S. 584, 586, 61 S.Ct. 767, 769, 85 L.Ed. 1058 (1941); United States v. Boe, 64 CCPA 11, 15-16, C.A.D. 1177, 543 F.2d 151, 154-55 (1976). One of those conditions is the 90-day period for filing a protest to liquidation prescribed in 19 U.S.C. § 1514 (1976). As stated in 28 U.S.C. § 1582(c) (1976): "The Customs Court shall not have jurisdiction of an action unless ... a protest has been filed, as prescribed by 19 USC 1514 (1976) ...."

In Akeroyd v. United States, 19 CCPA 249, 258, T.D. 45341, cert. denied 285 U.S. 550, 52 S.Ct. 406, 76 L.Ed. 941 (1931), this court held that the failure of an importer to file a timely protest is a jurisdictional defect. More recently, in United States v. Boe, 64 CCPA at 16, 543 F.2d at 155, this court said: "Those jurisdictional-conferring terms in 19 USC 1514 (1976) are mandatory, the statute having provided no room or opportunity for the exercise of discretion."

There is a fundamental difference between a jurisdictional period and a statute of limitations. Finn v. United States, 123 U.S. 227, 232-33, 8 S.Ct. 82, 85, 31 L.Ed. 128 (1887); Hamner v. United States, 13 Ct.Cl. 7, 14 (1877). As stated in Finn:

The general rule that limitation does not operate by its own force as a bar, but is a defence, and that the party making such a defence must plead the statute if he wishes the benefit of its provisions, has no application to suits in the Court of Claims against the United States. An individual may waive such a defence, either expressly or by failing to plead the statute; but the Government has not expressly or by implication conferred authority upon any of its officers to waive the limitation imposed by statute upon suits against the United States in the Court of Claims. Since the Government is not liable to be sued, as of right, by any claimant, and since it has assented to a judgment being rendered against it only in certain classes of cases, brought within a prescribed period after the cause of action accrued, a judgment in the Court of Claims for the amount of a claim which the record or evidence shows to be barred by the statute, would be erroneous.

I cannot see, therefore, how rules of tolling a statute of limitations can properly be applied to toll a jurisdictional time bar.

Estoppel — Agreement by Parties — Waiver

The word "tolling" was never mentioned below. Neither the word nor the concept appears anywhere in the presentation made by either side to the trial court or in that court's opinion. The sole argument made below concerning the conduct of the Customs Service was that it estopped the Government. The trial court denied that argument, quoting our holding in Air-Sea Brokers, Inc. v. United States, 66 CCPA 64, 68, C.A.D. 1222, 596 F.2d 1008, 1011 (1979):

We hold that equitable estoppel, even if available in cases involving the Government in its proprietary capacity, is not available against the Government in cases involving the collection or refund of duties on imports. Footnote omitted

496 F.Supp. at 1326.

Though our opinion says the Government is not estopped, 657 F.2d at 1219 n. 12, and cites Air-Sea, it achieves the same result under a tolling rubric. I cannot reconcile the established law that actions of the Customs Service cannot estop the Government from relying on jurisdictional statutes with a holding that those same actions can "toll" those jurisdictional statutes and thus prevent the Government from relying on them.

Numerous statements in the opinion are couched in estoppel parlance. For example, there is reference to informal meetings wherein Customs employees told AEL it would have 90 days to file a formal protest after denial of its petition for remission of duties, if the petition were denied; there is the implication of some duty on Customs in the notations that AEL was not "advised" that a formal protest should have been filed within 90 days after liquidation, that the time had expired, and that a protest was untimely; there are the statements that this is a case "where the party seeking relief has relied upon Customs officials for guidance," that "the filing of the petition and supplemental petition and their consideration appear to have been in the utmost good faith of both AEL and the Customs Service," and that "both parties consistently and in good faith treated the letters from AEL as a valid petition for remission (`cancellation') in all of their dealings, and the formal protest of September 27, 1977, was treated as a timely protest by both parties Footnote omitted."²

Implicit in the emphasis upon the parties' actions on the petition, as the basis for reversing a dismissal for lack of jurisdiction over a challenge to liquidation, is the view that the parties here conferred jurisdiction on the court. The notion that conduct of the parties, however sloppy or misguided, can confer jurisdiction in a suit against the Government is, however, simply not the law, for it is well-settled that the parties cannot do so. As stated in United States v. Boe, 64 CCPA at 20, 543 F.2d at 158:

However sincere and well-intentioned may be the judge, an attempt, by any court, to exercise a non-existent jurisdiction is an exceptional circumstance of import most grave. Such an attempt tends to chip away at that particular foundation stone in our constitutional scheme described as the separation of powers. As above indicated, courts are, in a sense, chartered institutions, operating under authority granted by the representatives of the people. Lawfully conferred jurisdiction is essential. Jurisdiction cannot be presumed, Smith v. McCullough, 270 U.S. 456 46 S.Ct. 338, 70 L.Ed. 682 (1926); Hanford v. Davies, 163 U.S. 273 16 S.Ct. 1051, 41 L.Ed. 157 (1896), or enlarged or conferred by agreement of the parties, Mitchell v. Maurer, 293 U.S. 237 55 S.Ct. 162, 79 L.Ed. 338 (1934); S. Stern & Co. v. United States, 51 CCPA 15, C.A.D. 830, 331 F.2d 310 (1963), cert. denied, 377 U.S. 909 84 S.Ct. 1169, 12 L.Ed.2d 179 (1964), or by the court itself, United States v. Torch Manufacturing Co., Inc., 62 CCPA 41, C.A.D. 1143, 509 F.2d 1187 (1975). A court's attempted exercise of power clearly beyond its charter violates its very raison d'etre.

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