Florsheim Shoe Co., Div. of Interco, Inc. v. US, Court No. 82-4-00484.
| Decision Date | 07 July 1983 |
| Docket Number | Court No. 82-4-00484. |
| Citation | 6 CIT 1,570 F. Supp. 734 |
| Parties | The FLORSHEIM SHOE COMPANY, DIVISION OF INTERCO, INC., Plaintiff, v. The UNITED STATES, Defendant. |
| Court | U.S. Court of International Trade |
Baker & McKenzie, Washington, D.C. (William D. Outman, II and Munford Page Hall, II, Washington, D.C., of counsel), for plaintiff.
J. Paul McGrath, Asst. Atty. Gen., Washington, D.C., Joseph I. Liebman, Atty. in Charge, International Commercial Litigation Branch and Michael P. Maxwell, New York City, for defendant.
ON DEFENDANT'S MOTION TO DISMISS
This case presents several questions arising out of Presidential action taken under the Generalized System of Preferences ("GSP"), a vitally important international trade program. By Title V of the Trade Act of 1974 (88 Stat. 2066-2071, Pub.L. 93-618, 19 U.S.C. § 2461 et seq.) Congress created the GSP which authorizes the President to provide duty-free treatment for any eligible article imported from any beneficiary developing country for the purpose of furthering the economic development of such country. Section 501 of the Trade Act of 1974 (19 U.S.C. § 2461).1 In this connection, India has been designated by the President as a beneficiary developing country for purposes of Title V of the Trade Act of 1974 (see section 502 (19 U.S.C. § 2462)). It should also be mentioned at this juncture that under section 504 (19 U.S.C. § 2464) — the centerpiece of this litigation — the President may, or under certain circumstances must, deny duty-free treatment under the GSP.
On January 24, 1977, the President placed buffalo leather on the list of articles eligible for duty-free treatment under the GSP (Executive Order No. 11960, 42 FR 4317). Shortly thereafter, on February 28, 1977, buffalo leather imported from India was excluded from duty-free treatment (Executive Order No. 11974, 42 FR 11230A). On March 28, 1980, goat and kid leather, not fancy, were added to the list of GSP eligible articles, but imports of such articles from India were excluded from duty-free entry by Executive Order No. 12204, 45 FR 20740. The latter Order also continued the denial of duty-free treatment for imports of buffalo leather from India. Finally, by Executive Order No. 12302 of April 2, 1981 (46 FR 19901), the President continued the denial of duty-free treatment for imports of buffalo leather and goat and kid leather, not fancy, from India.
Florsheim, a domestic manufacturer of footwear, imports buffalo leather and goat and kid leather, not fancy, from India for use in its products. In 1979, Florsheim filed a petition with the United States Trade Representative ("USTR") requesting a separate category in the Tariff Schedules of the United States ("TSUS") for water buffalo leather, and asking for the duty-free treatment of such leather from India under the GSP as allegedly no like or directly competitive article was produced in the United States on January 3, 1975, the effective date of the Trade Act of 1974. By letter dated July 11, 1980, the USTR denied the petition since the USTR had determined that an article directly competitive with water buffalo leather was produced in the United States as of January 3, 1975.2
In 1980, Florsheim filed another petition with the USTR requesting duty-free treatment for water buffalo leather and also for goat and kid leather, not fancy, as allegedly no like or directly competitive article was produced in the United States on January 3, 1975. The second petition was denied on June 11, 1981 because the USTR found that there was domestic production of goat and kid leather, and that water buffalo leather, while not produced domestically, is directly competitive with calf leather.
Having been unsuccessful in its petitions at the administrative level to obtain duty-free treatment under the GSP for water buffalo leather and for goat and kid leather, not fancy, Florsheim commenced this action on April 19, 1982 (covering 122 entries) to review the denial of its protests by the United States Customs Service against the classification of buffalo leather and goat and kid leather, not fancy, imported from India as dutiable merchandise under items 121.55 and 121.62, TSUS. Plaintiff claims that the subject merchandise should have been classified as duty-free under items A121.55 and A121.62, TSUS.
There is no dispute that this Court has subject matter jurisdiction under 28 U.S.C. § 1581(a).
It is evident from the complaint that plaintiff's grievance lies in the President's Executive Orders denying the subject merchandise duty-free treatment under the GSP. The gravamen of the complaint is that the President's action was predicated upon section 504(c)(1)(B) (19 U.S.C. § 2464(c)(1)(B)), which in essence requires the President to deny duty-free treatment for GSP eligible articles imported from a beneficiary developing country if more than 50 percent of the appraised value of the total United States imports of such article during any calendar year are exported from that country. The President must deny duty-free treatment respecting imported articles which meet this "competitive need formula", unless he makes certain additional findings specified by the statute. However, the competitive need limitation specified in section 504(c)(1)(B) "does not apply" to imported articles if "no like or directly competitive article" was produced in the United States on January 3, 1975. Section 504(d).
In substance, plaintiff alleges that the President's action was ultra vires in denying duty-free treatment to the subject merchandise under the competitive need formula on the ground that the USTR erroneously determined under section 504(d) () that articles like or directly competitive with the importations were produced in the United States on January 3, 1975. Plaintiff contends, therefore, that in taking action under section 504(c)(1)(B) the President failed to comply with section 504(d), and hence Customs incorrectly classified the imported buffalo leather and the goat and kid leather as dutiable articles under items 121.55 and 121.62, TSUS. As previously mentioned, plaintiff seeks to have the entries reliquidated duty-free under items A121.55 and A121.62, TSUS.
Presently before us is defendant's motion pursuant to Rule 12(b)(5) of this Court's rules to dismiss the action for failure to state a claim upon which relief can be granted. Defendant's motion is based upon three grounds:
(1) Florsheim lacks standing to seek review of the Presidential action challenged by the complaint;
(2) The President acted within his delegated authority under section 504 in denying duty-free treatment to the merchandise in question; and
(3) The President's action was not subject to judicial review, except to insure conformity with the President's delegated authority and compliance with the procedural prerequisites to taking action.
Defendant's contention that plaintiff lacks standing to bring this action may be quickly disposed of. On this aspect of the case, defendant posits that Florsheim's claim is based on sections 504(c)(1)(B) and 504(d), and that Florsheim is not within the "zone of interests" protected by those provisions. On that score, defendant insists that only domestic companies which produce goods competitive with the imported articles are protected by sections 504(c)(1)(B) and 504(d), and hence only such domestic companies that seek to compel the President to withdraw duty-free treatment under the competitive need formula (section 504(c)(1)(B)) could conceivably have standing to bring an action.3 Defendant further relies upon the broad delegation of authority to the President under section 504(a) to withdraw, suspend, or limit duty-free treatment under the GSP as indicative that "Congress does not intend to protect entities aggrieved by loss of duty-free treatment" (Defendant's memorandum, at 10).
In support of its standing to bring the instant action, plaintiff relies primarily upon 28 U.S.C. § 2631(a), which reads:
I have concluded that plaintiff, the importer and ultimate consignee of the goods in question, whose protests against the duty assessments on the importations were denied by Customs under section 515 of the Tariff Act of 1930 (19 U.S.C. § 1515), has statutory standing to contest such denial under section 2631(a). Clearly, Florsheim has standing to claim entitlement to duty-free treatment of its importations under the GSP and challenge the classification and assessment of duties by Customs.
The instant case is readily distinguishable from Colligan v. Activities Club of New York, Ltd., 442 F.2d 686 (2d Cir.), cert. denied, 404 U.S. 1004, 92 S.Ct. 559, 30 L.Ed.2d 557 (1971), relied upon by defendant, wherein consumers sought to bring an action for alleged violations of the Lanham Act grounded on false descriptions or representations, and the Court, not surprisingly, determined that the statute conferred standing only on commercial entities.
The short of the matter is that I disagree with defendant's contention that the "zone of interests" test bars this plaintiff from seeking judicial review of the claim that its imported merchandise was erroneously assessed with duties. Accordingly, defendant's motion to dismiss on the ground that plaintiff lacks standing in this action is denied.
We reach plaintiff's contention that the President's action in this case was ultra vires.
The gist of Florsheim's complaint is that the President improperly denied duty-free treatment to...
To continue reading
Request your trial
-
Maple Leaf Fish Co. v. United States
...other, possibly countervailing, factors." Florsheim Shoe Co. v. United States, 744 F.2d 787 at 795-96 (Fed.Cir.1984), aff'g 6 C.I.T. ___, 570 F.Supp. 734 (1983). Moreover, the legislative history of the Trade Act of 1974 pertaining to the escape clause provisions is replete with references ......
-
Pac Fung Feather Co., Ltd. v. US
...and whether the statutory language authorizing the agency action has been properly construed. Cf. Florsheim Shoe Co. v. United States, 6 CIT 1, 11, 570 F.Supp. 734, 743 (1983) (discussing judicial review of exercise of broad discretionary authority delegated by Congress to President), aff'd......
-
Florsheim Shoe Co., Div. of Interco, Inc. v. U.S.
...may be subject to severely limited judicial review, there was no ground for disputing it here. The CIT's opinion is reported at 570 F.Supp. 734 (CIT 1983). Florsheim also challenges an earlier CIT decision, suspending discovery pending disposition of the Government's motion to dismiss. Flor......
-
Sunburst Farms, Inc. v. United States, Court No. 82-12-01753.
...and held that the President had acted within his statutory authority in restricting duty-free treatment. Florsheim Shoe Co. v. United States, 6 C.I.T. ___, 570 F.Supp. 734, 747 (1983), aff'd, 744 F.2d 787 (Fed.Cir. 1984). The court also held that the court could review neither the factual f......