Fusco v. US Treasury Dept., Court No. 87-11-01081.
Decision Date | 14 September 1988 |
Docket Number | Court No. 87-11-01081. |
Parties | Robert J. FUSCO, Plaintiff, v. UNITED STATES TREASURY DEPARTMENT, Defendant. |
Court | U.S. Court of International Trade |
Galvin, Haroian & Mlawski, Richard Haroian, New York City, for plaintiff.
John R. Bolton, Asst. Atty. Gen., Washington, D.C., Joseph I. Liebman, Atty. in Charge, Intern. Trade Field Office, Civ. Div., Commercial Litigation Branch, U.S. Dept. of Justice, New York City, Michael T. Ambrosino, Washington, D.C., for defendant.
Plaintiff filed this action to contest the decision of the Secretary of the Treasury ("Secretary") revoking his customhouse broker's license (No. 5502) pursuant to 19 U.S.C. § 1641 (1982), amended by 19 U.S. C. § 1641 (Supp. II 1984). This Court has jurisdiction under 28 U.S.C. § 1581(g)(2). Defendant has moved for judgment upon the agency record in accordance with USCIT R. 56.1(a).
On August 16, 1984, the Regional Commissioner of Customs served upon plaintiff a "Notice of Preliminary Proceedings" and a "Proposed Notice to Show Cause and Statement of Charges." This Notice indicated that the United States Customs Service ("Customs") was considering instituting formal proceedings against plaintiff for the purpose of revoking his license to practice as a customhouse broker. Administrative Record Exhibit 1.1
The preliminary proceedings afforded plaintiff the opportunity to show cause why his license should not be revoked and to avoid the institution of formal proceedings. The issue not being resolved in the preliminary stage, Customs instituted formal proceedings on December 2, 1985, by serving upon plaintiff a "Notice to Show Cause and Statement of Charges,"2 which read as follows:
The hearing concerning plaintiff's license revocation was held on January 30, 1986 before Anthony L. Piazza, the hearing officer designated by Customs pursuant to 19 U.S.C. § 1641(b), amended by 19 U.S.C. § 1641(d)(2)(B). A.R. Ex. 4. After the hearing, Mr. Piazza recommended revocation of the plaintiff's customhouse broker's license and the Assistant Secretary of the Treasury agreed, thereby revoking plaintiff's license on July 15, 1987. See A.R. Ex. 13 at 7; A.R. Ex. 27.
Plaintiff now claims that the hearing before Mr. Piazza was a nullity because it was conducted under section 641 of the Tariff Act of 1930, 19 U.S.C. § 1641(b) (1982), prior to the amendments made by section 212(a) of the Trade and Tariff Act of 1984, 19 U.S.C. § 1641(d) (Supp. II 1984) (hereinafter the "1984 Act"). Insisting that the revocation proceedings were not "instituted" until after the effective date of the 1984 Act, October 30, 1984, plaintiff maintains that the amended version of section 641 should apply to the instant action.4 Plaintiff argues that revocation proceedings are not "instituted" until the commencement of formal proceedings upon receipt of the "Notice to Show Cause and Statement of Charges." Defendant, on the other hand, asserts that revocation proceedings are instituted upon the commencement of the preliminary proceedings, when the "Proposed Notice to Show Cause and Notice of Preliminary Proceedings" are received.
The significant difference between the pre-amended and the amended statutes is that the amended version of section 641 provides for the revocation hearing to be held before an Administrative Law Judge appointed pursuant to 5 U.S.C. § 3105, whereas the pre-amended section 641 only required an "appropriate customs officer" to conduct the hearing. The plaintiff, therefore, concludes that the Secretary lacked the requisite power to enforce the hearing officer's decision in the absence of the administrative hearing required by statute.
The issue in the instant action is whether the revocation proceedings against plaintiff are deemed "instituted" from the date preliminary proceedings are commenced or from the date formal proceedings are initiated.
Plaintiff also alleges a violation of his due process rights because his request for review of the agency record prior to the hearing was denied by the hearing officer.
Section 214(d)(3) of the Trade and Tariff Act of 1984 provides that:
any proceeding for revocation or suspension of a license instituted under section 641 of the Tariff Act of 1930 before the date of the enactment of this Act shall continue and be governed by the law in effect at the time the proceeding was instituted.
Pub.L. 98-573, 98 Stat. 2948, 2989 ( )(emphasis added). The preliminary proceedings initiated against plaintiff according to 19 C.F.R. § 111.595 fit squarely within section 214 of the 1984 Act. Section 214 encompasses "any proceeding for revocation or suspension of a license"; it does not differentiate between preliminary and formal proceedings. See 19 C.F.R. §§ 111.59-.62. If Congress had intended the 1984 amendments to apply only upon the institution of formal proceedings, it would not have used the expansive "any proceedings" terminology. Furthermore, under the regulations a broker must be afforded the opportunity to participate in preliminary proceedings to possibly avoid formal proceedings against his license. 19 C.F.R. § 111.59.
Plaintiff asserts the proceedings are not "instituted" until commencement of formal proceedings, when the "Notice to Show Cause" is issued. Plaintiff reasons that the Notice to Show Cause initiates the procedures required to be followed in connection with the hearing, whereas the "Notice of Preliminary Proceedings" accompanied by the "Proposed Notice to Show Cause" triggers no such action. The Court is not persuaded by plaintiff's argument. "Preliminary Proceedings" are, in fact, proceedings within the ambit of section 214 of the 1984 Act; they are commenced under the customs regulation entitled "Preliminary proceedings." Id. (emphasis added). The applicable law, therefore, is the law in effect at the time the preliminary proceedings are instituted. The Court now turns to the question of whether the revocation decision was supported by the evidence in the record.
The applicable standard for reviewing the Secretary's decision to revoke plaintiff's broker's license is whether the determination is supported by substantial evidence. 19 U.S.C. § 1641(b). Substantial evidence means more than a mere scintilla "it means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 217, 83 L.Ed. 126 (1938). In the case at bar, the Court concludes that there is substantial evidence in the record to support the Secretary's revocation decision.
Plaintiff was charged with violating three different sections of the Customs regulations.6 The conduct which led to violation of 19 C.F.R. § 111.29(a)7 was plaintiff's failure to pay Customs $101,125.94 for Customs duties received from Jeri-Jo Knitwear ("Jer...
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