Fritz v. U.S., 75-1227

• Decision Date: 19 May 1976
• Docket Number: No. 75-1227,75-1227
• Parties: Arthur J. FRITZ, Jr., Plaintiff-Appellant, v. UNITED STATES of America et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1192

535 F.2d 1192

Arthur J. FRITZ, Jr., Plaintiff-Appellant, v. UNITED STATES of America et al., Defendants-Appellees.

No. 75-1227.

United States Court of Appeals, Ninth Circuit.

May 19, 1976.

John J. Ruprecht (argued), of Ruprecht, Delich & U'Ren, San Francisco, Cal., for plaintiff-appellant.

Velta A. Melnbrencis, Asst. Atty. Gen. of U. S. Dept. of Justice, Civil Division, Customs Section, New York City (argued), for defendants-appellees.

OPINION

Before SMITH ^* and WRIGHT, Circuit Judges, and WILLIAMS, ^** District Judge.

SMITH, Circuit Judge:

Arthur J. Fritz, Jr. (hereinafter Fritz) owns and operates a customhouse brokerage firm. On or about September 4, 1971, as a result of a clerical mistake made by one of his own employees, Fritz overpaid almost $6,000 in customs duties on imported merchandise brokered by his firm. This mistake went undetected until November 27, 1972 when it was discovered by Fritz's auditors.

On December 4, 1972, Fritz, utilizing the procedures established by 19 U.S.C. § 1520(c), applied for an administrative refund of his excess customs payment. The Customs Bureau while acknowledging that Fritz had made an overpayment, ruled that his claim for a refund was time-barred by 19 U.S.C. § 1520(c)(1) since more than one year had elapsed between the overpayment and the subsequent claim for an administrative refund.

Rebuffed in his attempt to obtain administrative redress, Fritz filed an action in the United States District Court for the Northern District of California (Samuel Conti, Judge ) in a further effort to force a refund of his excess customs payment. However, Judge Conti, in a well-reasoned opinion, dismissed Fritz's action holding that, as a result of the subject matter of the suit, the Customs Court was the only federal court with jurisdiction to entertain Fritz's claim.

This appeal followed.

For the reasons outlined below, we agree with Judge Conti that the Customs Court has exclusive jurisdiction over matters such as that raised by Fritz's suit and that the district court consequently lacked jurisdiction over the action filed below. Accordingly, the suit was properly dismissed.

We therefore affirm.

I.

Fritz argues that the district court had jurisdiction over his action by virtue of the Tucker Act. That Act provides in pertinent part:

(a) The district courts shall have original jurisdiction, concurrent with the Court of Claims, of:

(2) Any other civil action or claim against the United States, not exceeding $10,000 in amount, founded either upon the Constitution, or any Act of Congress. . . .

28 U.S.C. § 1346(a)(2) (emphasis added).

There is no question but that Fritz's claim for a refund of his excess customs payment falls within the literal language of this statute. Nevertheless, we agree with Judge Conti that § 1346(a)(2), notwithstanding its all-embracing language, did not give the district court jurisdiction over Fritz's action.

The broad provisions of the Tucker Act must be construed in conjunction with 28 U.S.C. § 1582(a), which provides (a) The Customs Court shall have exclusive jurisdiction of civil actions instituted by any person whose protest pursuant to the Tariff Act of 1930, as amended, has been denied, in whole or in part, by the appropriate customs officer, where the administrative decision, including the legality of all orders and findings entering into the same, involves:

(7) the refusal to reliquidate an entry under (19 U.S.C. § 1520).

28 U.S.C. § 1582(a) (emphasis added).

There is, of course, a conflict in the literal terms of these two statutes. 28 U.S.C. § 1346(a)(2) confers upon the district courts jurisdiction over "any" civil action against the United States in which the damages sought are less than $10,000. However, 28 U.S.C. § 1582(a) expressly gives the Customs Court exclusive jurisdiction over actions relating to specified customs matters. 28 U.S.C. § 1582(a), if applied literally, must carve out an exception to the broad mandate of 28 U.S.C. § 1346(a)(2) which, on its face, makes no special exemption for customs cases.

The conflict between § 1582(a) and general jurisdictional provisions, such as § 1346(a)(2), is one which the courts have confronted before. Repeatedly, the courts of this and other circuits have held that the jurisdiction of the Customs Court is exclusive and that, notwithstanding the broad, all-encompassing language of statutes such as 28 U.S.C. § 1346(a)(2), the district courts have no jurisdiction over matters which 28 U.S.C. § 1582(a) confides exclusively to the Customs Court. See, e. g., J. C. Penney Co. v. United States Treasury Dept., 439 F.2d 63 (2d Cir. 1971); Riccomini v. United States, 69 F.2d 480 (9th Cir. 1934).

Since these earlier decisions have discussed at length the rationale for their holdings, it is unnecessary for us to review here the relevant considerations. Suffice it to say that the exclusivity of Customs Court jurisdiction, as embodied in the language of 28 U.S.C. § 1582(a), represents a considered congressional policy articulated in most explicit terms. The legislative history of § 1582(a), and its predecessors, makes clear that Congress intended § 1582(a) to prevail over any broadly-worded statutes which, on their face, might appear to grant concurrent jurisdiction over customs matters to the district courts. J. C. Penney, supra, at 66.

Fritz has demonstrated no reason for us to change our view of the congressional intent behind § 1582(a). That intent must be accorded controlling weight.

Hence, we adhere to the decisions of the various courts of appeals holding that the district courts have no jurisdiction over matters which are confided to the exclusive authority of the Customs Court by the terms of 28 U.S.C. § 1582(a). We further hold that the exclusivity of Customs Court jurisdiction under § 1582(a) is not affected or impaired by other statutes, such as 28 U.S.C. § 1346(a)(2), whose expansive terms confer general jurisdiction on the district courts. Conflicts between broad grants of jurisdiction to the district courts and the grant of exclusive jurisdiction to the Customs Court are to be resolved by upholding the exclusivity of the Customs Court's jurisdiction.

II.

Fritz nevertheless cites Carriso v. United States, 106 F.2d 707 (9th Cir. 1939), and argues, on its authority, that the Tucker Act gives the district courts jurisdiction concurrent with that of the Customs Court, notwithstanding the literal terms of 28 U.S.C. § 1582(a) and the extensive case law affirming the exclusivity of the Customs Court's jurisdiction.

Reliance on Carriso is misplaced. Carriso merely held that Tucker Act jurisdiction was available in the district courts to challenge certain navigation fees collected by Treasury officials. The Carriso court did not address the issue of the Customs Court's jurisdiction since that issue was not raised by the parties.

Indeed, the Carriso opinion never even refers to the Customs Court probably because the claim raised by the plaintiff in Carriso was clearly outside the jurisdiction of the Customs Court. Puget Sound Freight Lines v. United States, 173 F.2d 578, 581-82, 36 CCPA 70 (1949). Hence, no question of competing jurisdiction arose in Carriso since there was no basis for asserting Customs Court jurisdiction in the first place.

In short, it is well-established that § 1582(a) means what it says: the jurisdiction of the Customs Court is exclusive. Even when other, broadly- worded statutes seem to confer concurrent jurisdiction on the district courts, the exclusivity of Customs Court jurisdiction reflects a policy of paramount importance which overrides the literal effect of such statutes as 28 U.S.C. § 1346(a)(2).

III.

In an attempt to avoid the implications of this conclusion, Fritz argues that, for procedural reasons, his suit is not one over which the Customs Court can exercise jurisdiction. Fritz's argument may be summarized as follows.

Under 28 U.S.C. §§ 1582(a) and (c), the Customs Court exercises jurisdiction only if an administrative "protest" has been denied "by the appropriate customs officer." ¹ The "protest" to which §§ 1582(a) and (c) refer must be made in accordance with the formal procedures established by 19 U.S.C. § 1514(b)(1). ² Thus, if there is no compliance with the protest procedures of § 1514(b)(1), there is no jurisdiction in the Customs Court.

However, Fritz points out, in addition to a formal protest pursuant to § 1514(b)(1), a clerical error, such as that giving rise to this controversy, may be challenged under a less elaborate administrative procedure established by 19 U.S.C. § 1520(c). ³

According to Fritz's interpretation of this statutory scheme, the availability of two different, allegedly independent administrative remedies, one under § 1514(b)(1) and the other under § 1520(c), creates two different routes to judicial review, one which leads to the Customs Court, the other which leads to the district court. If a formal § 1514(b)(1) protest is filed, according to Fritz, the Customs Court assumes exclusive jurisdiction by virtue of § 1582(a). However, Fritz asserts, if a person utilizes the less elaborate procedure available under § 1520(c), there is no formal protest and thus no Customs Court jurisdiction, exclusive or otherwise.

Hence, pursuit of the § 1520(c) remedy obviates the need to utilize the formal protest mechanism of § 1514(b)(1), Fritz argues, and, when a § 1520(c) challenge is denied (as it was here), jurisdiction attaches to the district court under the Tucker Act, since the jurisdiction of the Customs Court is predicated on the prior filing of a § 1514(b)(1) protest.

The court below rejected this argument and properly so.

Fritz is wrong when he asserts that § 1520(c) establishes a separate administrative channel independent of the procedures prescribed by § 1514(b) (1). The statutory provisions which establish the formal protest machinery specifically provide that persons, like Fritz, who utilize the...