Halperin Shipping Co., Inc. v. US

• Decision Date: 02 July 1990
• Docket Number: Court No. 87-02-00371.
• Citation: 14 CIT 438,742 F. Supp. 1163
• Parties: HALPERIN SHIPPING CO., INC., Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

742 F. Supp. 1163

14 CIT 438

HALPERIN SHIPPING CO., INC., Plaintiff, v. UNITED STATES, Defendant.

Court No. 87-02-00371.

United States Court of International Trade.

July 2, 1990.

Serko & Simon (Joel K. Simon, David Serko and Leibert L. Greenberg), New York City, for plaintiff.

Stuart M. Gerson, Asst. Atty. Gen., David M. Cohen, Director, Commercial Litigation Branch, Civ. Div., U.S. Dept. of Justice, Washington, D.C., Joseph I. Liebman, Atty. in Charge, International Trade Field Office, New York City, Al J. Daniel, Jr., for defendant.

OPINION

CARMAN, Judge:

This action is before the Court on motion of the defendant United States (hereinafter the government) to dismiss this action for lack of jurisdiction and failure to state a claim upon which relief can be granted pursuant to USCIT Rule 12. The government claims this Court lacks jurisdiction because plaintiff Halperin Shipping Co., Inc. (hereinafter Halperin) failed to timely file a protest under section 514 of the Tariff Act of 1930 as amended, 19 U.S.C. § 1514 (hereinafter section 1514), thereby failing to meet the jurisdictional requirements of 28 U.S.C. § 1581(a). For the reasons that follow, this Court determines that it lacks subject matter jurisdiction and must dismiss this action. Accordingly, the Court will not address the government's other claims.

BACKGROUND

Halperin initiated this action pursuant to 28 U.S.C. § 1581(a) to recover Customs duties it allegedly paid twice to the United States Customs Service (hereinafter Customs) for the importation of a single entry of gold necklaces entered at the port of JFK New York on August 14, 1980. The estimated duty on this entry was $9,141.47. Neither Halperin nor anyone else timely filed an entry summary or paid the estimated duty. In its amended complaint Halperin claims it originally paid the duties at issue to its licensed customhouse broker, Saar Systems Inc. (hereinafter Saar), for remittance to Customs. Apparently Saar stole the monies and never remitted them to Customs.

Nearly two years later, on June 18, 1982, Customs sent Halperin a "Notice of Liquidated Damages Incurred and Demand For Payment" (hereinafter Notice of Liquidated Damages).¹ The notice demanded that Halperin, as importer of record, pay $9,141.47 to the government for the estimated duties due and $90,039.47 in liquidated damages for failure to file the entry summary and estimated duties. Halperin neither filed a protest nor petitioned for remission or mitigation of the penalties pursuant to 19 U.S.C. § 1618 at this time.

Subsequent to the June 18, 1982 notice, Halperin and the government engaged in lengthy negotiations towards settling the government's claims on the entry at issue in this case and twenty-seven other entries for which Halperin was delinquent in paying duties.² On March 31, 1983, after considerable negotiation, offers of settlement and counter offers, the then Assistant Secretary of the Treasury John M. Walker, Jr.³ notified Halperin by letter of the government's final offer of settlement and compromise. See Defendant's Original Brief, Exhibit L. The letter provided clear notice that the government would institute suit within the week if payment were not received forthwith.⁴

On April 18, 1983 Halperin made another offer of settlement to the Regional Commissioner of Customs and tendered payment of the $219,586.00 Halperin seeks to recover in this case. See Memorandum in Support of Defendant's Renewed Motion to Dismiss (hereinafter Renewed Motion to Dismiss Brief), Exhibit A. Customs accepted this offer and negotiated the checks. Id., Minsky Declaration ¶¶ 8 and 9; Defendant's Original Brief, Exhibit N. Thereafter, Customs closed its files on the case without bringing an action against Halperin.

On June 8, 1983 Halperin filed a purported protest which it asserts is a proper predicate for this Court to exercise jurisdiction. Halperin's "protest" referred to Assistant Secretary Walker's March 31, 1983 letter as a "demand for payment" from which Halperin was aggrieved. See Court File (entry papers). Customs denied the protest on January 30, 1987, declaring the issue was not protestable under section 1514. Id.

Thereafter, Halperin filed suit in this Court seeking return of the alleged duplicate payment of duties to Customs. Halperin claimed that Saar was an agent of the government and that Customs' negligence in failing to timely notify Halperin that duties were owed on the imports resulted in the so-called duplicate payment of the duties and that Halperin was entitled to a refund of the alleged excess payment of duties. Before issue was joined, the government moved to dismiss this action on grounds substantially similar to the motion now before the Court. In Halperin Shipping Co., Inc. v. United States, 13 CIT ___, Slip Op. 89-78, 1989 WL 61811 (June 6, 1989), this Court denied the motion to dismiss with leave to renew. After the government filed its answer and discovery had been initiated, the government filed its renewed motion to dismiss.

CONTENTIONS OF THE PARTIES

The government contends that this Court lacks subject matter jurisdiction over this action due to Halperin's failure to file a timely protest of the June 18, 1982 Notice of Liquidated Damages that demanded payment of estimated duties and liquidated damages. The government notes that under section 1514 of title 19 of the United States Code decisions of Customs officials are final and conclusive unless a protest is filed within ninety days of the protestable decision. In order to obtain jurisdiction in this Court the government argues Halperin would have had to file a protest within ninety days of the June 18, 1982 Notice of Liquidated Damages. Halperin's alleged protest, filed on June 8, 1983, fell outside this jurisdictional time limit. Furthermore, the government argues that the March 31, 1983 letter from Assistant Secretary Walker was not a protestable decision, thus Halperin's alleged protest filed within ninety days of the Walker letter did not give rise to jurisdiction in this Court.

Halperin opposes this motion contending that the decision of this Court denying the government's original motion to dismiss operates to bar the current motion by virtue of the law of the case and stare decisis. Additionally, Halperin contends the government mischaracterizes its action as one for liquidated damages when in actuality it is an action to recover a duplicate payment of duties. Halperin claims it properly protested Assistant Secretary Walker's March 31, 1983 letter, pursuant to 19 U.S.C. § 1514(a)(3), which provides for protest of "all charges or exactions of whatever character within the jurisdiction of the Secretary of the Treasury." Halperin claims the Walker letter was "an actual assessment of a specific sum of money," a protestable decision, from which Halperin timely filed a protest. See Plaintiff's Memorandum in Opposition to Defendant's First Motion to Dismiss at 6-7 (incorporated by reference in Plaintiff's Memorandum in Opposition to Defendant's Second Motion to Dismiss).

DISCUSSION

As a preliminary matter the Court notes that contrary to Halperin's assertions neither law of the case nor stare decisis operate to preclude this Court from assessing its subject matter jurisdiction. Subject matter jurisdiction cannot be waived by the parties or this Court and can be raised at any time. Capron v. Van Noorden, 2 Cranch (6 U.S.) 126, 2 L.Ed. 229 (1804); Morganroth v. Quigg, 885 F.2d 843, 845 (1989) (court raised issue sua sponte). Moreover, it is well settled that when a jurisdictional issue is raised, plaintiff has the burden to prove that jurisdiction exists. See e.g., Hambro Automotive Corp. v. United States, 66 CCPA 113, 117, C.A.D. 1231, 603 F.2d 850, 853 (1979); Lowa, Ltd. v. United States, 5 CIT 81, 83, 561 F.Supp. 441, 443 (1983), aff'd, 2 Fed.Cir. (T) 27, 724 F.2d 121 (1984).

Halperin predicates jurisdiction in this Court under 28 U.S.C. § 1581(a)⁵ and 19 U.S.C. § 1514,⁶ which provide that the filing of a valid protest of an action of the Customs Service, within ninety days from its date, is a condition precedent to the establishment of jurisdiction in this Court. Halperin contends the Walker letter was a protestable decision for purposes of jurisdiction in this Court. An examination of the statutory scheme and the facts of this case lead this Court to conclude the Walker letter was not a protestable decision.

It is uncontroverted that Halperin did not file a protest within ninety days of the government's Notice of Liquidated Damages dated June 18, 1982. Nevertheless, contrary to the government's contention, the June 18, 1982 Notice of Liquidated Damages was not a protestable decision. This argument has been squarely rejected by the Court of Appeals for the Federal Circuit, which has held that "an assessment of liquidated damages is not a `charge or exaction' that must be challenged by protest under 19 U.S.C. § 1514...." United States v. Toshoku America, Inc., 879 F.2d 815, 818 (Fed.Cir.1989) (construing United States v. Utex Int'l, Inc., 6 Fed.Cir. (T) 166, 857 F.2d 1408 (1988)). Since the June 11, 1982 Notice of Liquidated Damages was not a protestable decision it did not start the ninety day filing deadline and the fact that Halperin did not protest the Notice of Liquidated Damages does not deprive this Court of jurisdiction. However, since Halperin's alleged protest, dated June 8, 1983, was clearly filed within ninety days of the March 31, 1983 Walker letter, well within the time limitation of 19 U.S.C. § 1514(c)(2), this Court must decide whether the Walker letter constituted a protestable "charge or exaction" for purposes of establishing jurisdiction in this Court.

As the importer of record in this case, Halperin was obligated to pay the estimated duties upon entry of the merchandise. See 19 U.S.C. § 1505(a) (1982) and 19 C.F.R. § 141.1(b) (1980). Apparently, the first time Halperin learned the duties had not been paid on...