Frontier Ins. Co. v. U.S.
| Decision Date | 17 July 2003 |
| Docket Number | Court No. 95-08-01041.,SLIP OP. 03-86. |
| Parties | FRONTIER INSURANCE COMPANY, A New York Corporation, Real Party in Interest, Plaintiff, v. THE UNITED STATES, Defendant. |
| Court | U.S. Court of International Trade |
Law Offices of Elon A. Pollack, a P.C. (Elon A. Pollack and Xinyu Li) for the plaintiff.
Peter D. Keisler, Assistant Attorney General; John J. Mahon, Acting Attorney in Charge, International Trade Field Office, Commercial Litigation Branch, Civil Division, U.S. Department of Justice (Amy M. Rubin); Office of Assistant Chief Counsel, International Trade Litigation, U.S. Bureau of Customs and Border Protection (Paula S. Smith), for the defendant, of counsel.
based upon pleaded claims that that merchandise should have been classified either under (1) subheading 4107.19.30 or (2) 4103.20.00 of the Harmonized Tariff Schedule of the United States ("HTSUS") (1992) rather than the subheading 4107.19.60 decided upon by the U.S. Customs Service. Plaintiff's third pleaded cause of action is to the effect that the entries at issue should not have been assessed duties pursuant to the Final Affirmative Countervailing Duty Determination and Countervailing Duty Order; Leather From Argentina, 55 Fed.Reg. 40,212 (Oct. 2, 1990), of the International Trade Administration, U.S. Department of Commerce ("ITA").
Since joinder of issue on these claims, the plaintiff has interposed a uniquely-styled Motion for Summary Adjudication of Issue(s).1 On its part, the defendant has filed a "cross-motion" for summary judgment. These submissions each contain statements of facts alleged to be material yet not engendering issues requiring trial within the meaning of USCIT Rule 56(i), which since their filings has been relettered (h). Plaintiff's Separate Statement of Undisputed Material Facts is as follows:
1. The reptile2 skins in issue were entered into the United States between the dates of September 30, 1992 and December 23, 1992. . . .
2. Customs classified the reptile skins under HTSUS 4107.19.60 as [] "fancy leather," at a rate of 2.4% ad valorem, and assessed countervailing duties in the amount of 14.9% ad valorem. . . .
3. The importer of record timely filed a protest to challenge Customs' classification and assessment of countervailing duties on the grounds that the skins should be classified under HTSUS 4107.19.30 at a rate of 5% ad valorem, or HTSUS 4103.20.00 "free of duty." . . .
4. Frontier timely paid the liquidated duties, including the countervailing duties, for all the entries which are the subject of this civil action, except Entry Nos. 328-0071094-2, 328-0070064-6, and 328-0071779-8. Frontier paid $3003.70 of the liquidated duties including countervailing duties for Entry No. 328-0071094-2.
. . . . .
5. On August 9, 1995, . . . Frontier, the importer's surety and real party in interest, timely filed the instant action, after Customs denied the importer of record's protest. . . .
6. By notice published in the Federal Register on August 1, 1997 . . . Commerce retroactively revoked its countervailing duty order on leather including lizard skins from Argentina.
7. According to the terms of the revocation notice, the Commerce Department found that the case of Ceramica Regiomontana v. United States, 64 F.3d 1579, 1582 (Fed.Cir.1995) applied to its countervailing duty orders against Argentina.
8. . . . Commerce ". . . determine[d] that based upon . . . Ceramica, it does not have the authority to assess countervailing duties on entries of merchandise covered by these orders occurring on or after September 20, 1991." . . .
9. All of the merchandise which is the subject of this case was entered after September 20, 1991 . . . .
Citations omitted.
The defendant admits paragraphs 1 and 4 through 9; it also admits material aspects of paragraphs 2 and 3. Defendant's Statement of Additional Material Facts as to Which There Are No Genuine Issues to be Tried is:
1. At the time of entry, the countervailing duty order on Argentine leather was in effect.
2. No party sought review of the order for the period from January 1, 1992 through December 31, 1992.
3. . . . Commerce issued liquidation instructions for the period from January 1, 1992 through December 31, 1992 on December 14, 1993.
4. The entries were liquidated in accordance with Commerce's liquidation instructions. . . .
None of these averments is controverted by the plaintiff. However, it does claim that a genuine issue of material fact exists which it summarizes as "whether the reptile skins were `fancy' or `not fancy' at the time of entry." Plaintiff's Reply, p. 13. See generally id. at 11-13.
That issue is indeed of genuine moment. As discussed hereinafter, it is the linchpin to this action.
The headings of HTSUS chapter 41, which encompasses "Raw Hides and Skins (Other Than Furskins) and Leather", not surprisingly, commence with raw hides and skins of bovine and equine animals (4101) and then cover raw skins of sheep or lambs (4102), other raw hides and skins (4103), leather of bovine and equine animals "without hair on" (4104), sheep or lamb skin leather "without wool on" (4105), goat or kidskin leather (4106), leather of other animals "without hair on" (4107), etc. Plaintiff's merchandise caused Customs to stop at that last heading, in particular subheading 4107.19.60 thereunder, to wit:
Leather of other animals, without hair on . . .:
* * * * * *
Of reptiles:
* * * * * *
Other:
* * * * * *
Fancy . . . . . . . . . . . . . . . . . . . . 2.4%[.]
Plaintiff's first pleaded cause of action would have the court settle on the line above this subheading, at 4107.19.30 in the Schedule, which applies to "Not fancy" reptile leather, albeit at a duty rate of five percent ad valorem, or more than double the rate Customs collected.
The Tariff Act of 1930, as amended, and the Customs Courts Act of 1980 entail significant waiver of the sovereign U.S. government's immunity, but those and other, related acts of Congress do not (and could not) waive the requirement of Article III of the Constitution that this Court of International Trade only hear and decide genuine cases and controversies. See, e.g., 3V, Inc. v. United States, 23 CIT 1047, 1048-49, 83 F.Supp.2d 1351, 1352-53 (1999), and cases cited therein.
Of course, genuine cases and controversies with the Service, which recently has become the Bureau of Customs and Border Protection, can and often do involve matters that are not just monetary. Stated another way, their judicial resolution often leads to equitable and/or other relief not measured in dollars and cents. But this is not possible here. As quoted above, plaintiff's amended complaint seeks "refund of duties". Moreover, the party pressing this prayer is a surety, which makes no showing in its papers at bar of any interest in this action other than financial. Ergo, this court has no authority to grant relief upon plaintiff's first cause of action, asserted on its own.
The refund for which the plaintiff prays would include, however, the countervailing duties collected pursuant to the ITA's order, supra, the ambit of which seemingly has motivated counsel to press for classification under HTSUS subheading 4107.19.30 (as opposed to 4107.19.60) with its concomitant higher rate of duty. That is, the ITA specifically excluded from the order's coverage the "not fancy reptile leather" contemplated by plaintiff's preferred subheading. See 55 Fed.Reg. at 40,213 (Scope of Investigation). Hence, given the magnitude of additional, countervailing duties assessed pursuant to that order, 14.97 percent ad valorem, plaintiff's third alleged cause of action is at least a mathematical case or controversy. It is comprised of two claims, namely, the underlying goods upon entry were not fancy within the meaning of HTSUS subheading 4107.19.30, and Customs should not have collected countervailing duties on them.
(1)
The court's subject-matter jurisdiction for matters of classification under the HTSUS is pursuant to 28 U.S.C. §§ 1581(a), 2631(a). And, in light of the facts recited above, the court concludes that it can resolve the issue of the classifiable nature of the goods imported and also that it can do so by way of summary judgment. While that issue, as posited by the plaintiff, supra, is definitely the material one, it is not exclusively a matter of fact, given the existing law referred to hereinafter. Moreover, the court finds sufficient evidence already on the record via the parties' cross-motions to "determine `whether the government's classification is correct, both independently and in comparison with the importer's alternative.'" H.I.M./Fathom, Inc. v. United States, 21 CIT 776, 778, 981 F.Supp. 610, 613 (1997), quoting Jarvis Clark Co. v. United States, 733 F.2d 873, 878, reh'g denied, 739 F.2d 628 (Fed.Cir.1984). In other words, trial is not necessary because the court is unable to conclude that the parties' factual disagreement is "such that a reasonable trier of fact could return a verdict against the movant"3 government.
Analysis of an issue of classification is a two-step process. First, the court must ascertain "the proper meaning of specific terms in the tariff provision". David W. Shenk & Co. v. United States, 21 CIT 284, 286, 960 F.Supp. 363, 365 (1997). That meaning is a question of law, and the court proceeds de novo pursuant to 28 U.S.C. § 2640. E.g., Russell Stadelman & Co. v. United States, 23 CIT 1036, 1037, 83 F.Supp.2d 1356, 1357 (1999), aff'd, 242 F.3d 1044 (Fed.Cir.2001). Second, the court must determine under...
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