Heartland by-Products, Inc. v. U.S.

• Decision Date: 10 June 2009
• Docket Number: No. 2008-1245.,2008-1245.
• Parties: HEARTLAND BY-PRODUCTS, INC., Plaintiff-Appellee, v. UNITED STATES, Defendant-Appellant.
• Court: U.S. Court of Appeals — Federal Circuit

568 F.3d 1360

HEARTLAND BY-PRODUCTS, INC., Plaintiff-Appellee, v. UNITED STATES, Defendant-Appellant.

No. 2008-1245.

United States Court of Appeals, Federal Circuit.

June 10, 2009.

Stanley McDermott, III, DLA Piper U.S. LLP, of New York, NY, argued for plaintiff-appellee. Of counsel on the brief were Daniel J. Gluck and Robert M. Klingon, Simon Gluck & Kane LLP, of New York, NY.

Aimee Lee, Trial Attorney, International Trade Field Office, Civil Division, United States Department of Justice, of New York, NY, argued for defendant-appellant. With her on the brief were Jeanne E. Davidson, Director, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC. Of counsel on the brief was Yelena Slepak, Attorney, Office of Assistant Chief Counsel, United States Customs & Border Protection, of New York, NY. Of counsel was Karen P. Binder, Attorney, Office of Assistant Chief Counsel, International Trade Litigation, United States Customs and Border Protection, of New York, NY.

Before GAJARSA, CLEVENGER, and DYK, Circuit Judges.

DYK, Circuit Judge.

This case primarily presents the question whether our customs duty classification decision in Heartland By-Products Inc. v. United States, 264 F.3d 1126 (Fed. Cir.2001) ("Heartland II") must be treated by the Court of International Trade as retroactive as to entries made before our Heartland II decision. We hold that the Court of International Trade erred in holding that our Heartland II decision was not retroactive, and we reverse.

However, Heartland By-Products, Inc. ("Heartland"), also asserts that U.S. Customs and Border Protection ("Customs") acted unlawfully in liquidating or reliquidating entries during the period between our decision in Heartland II and the issuance of the Heartland II mandate. The United States ("the government"), as a matter of policy, has agreed not to attempt to collect duties at the high Tariff Rate Quota ("TRQ") rate approved in Heartland II with respect to entries liquidated or reliquidated at the low non-TRQ rate before the issuance of our Heartland II mandate. We conclude that Heartland's request for coercive relief as to these entries is moot.

BACKGROUND

This is the third time that this dispute between Heartland and Customs has come before our court. The dispute began in 1995 when Heartland requested, and Customs issued, a ruling letter classifying the sugar syrup Heartland planned to import as exempt from high TRQ duties on sugar.¹ Heartland then established a sugar refining business and began importing sugar syrup. In 1999 Customs, under 19 U.S.C. § 1625(c), revoked its ruling letter and re-classified Heartland's sugar syrup imports as subject to TRQ duties.² This re-classification was adverse to Heartland, increasing the duty on Heartland's sugar syrup imports by approximately two orders of magnitude. The revocation ruling was to become effective on November 8, 1999, sixty days after it was issued, as provided in 19 U.S.C. § 1625(c).

Before the revocation ruling became effective, however, Heartland filed suit in the Court of International Trade, requesting pre-importation review of the revocation ruling under 28 U.S.C. § 1581(h) and seeking to enjoin Customs from enforcing the revocation ruling under 28 U.S.C. § 1581(i). The Court of International Trade held under § 1581(h) that Customs's revocation ruling was unlawful, declared that Heartland's sugar syrup imports should be classified as exempt from TRQ duties, but did not grant injunctive relief (which is not authorized by § 1581(h), see 28 U.S.C. § 2643(c)(4)). Heartland By-Prods., Inc. v. United States, 74 F.Supp.2d 1324, 1329, 1345 (Ct. Int'l Trade 1999) ("Heartland I"). After the Court of International Trade's decision in Heartland I, Heartland continued importing sugar syrup.

Our court subsequently reversed and remanded Heartland I, upholding Customs's revocation ruling re-classifying Heartland's sugar syrup imports as subject to TRQ duties. Heartland II, 264 F.3d at 1137. The Heartland II decision issued on August 30, 2001, and the mandate issued on December 11, 2001. Heartland stopped importing sugar syrup as of August 30, 2001.

An "entry" refers to the "documentation required ... to be filed with the appropriate Customs officer to secure the release of imported merchandise from Customs custody, or the act of filing that documentation." 19 C.F.R. § 141.0a(a). Liquidation is "the final computation or ascertainment of the duties (not including vessel repair duties) or drawback accruing on an entry." 19 C.F.R. § 159.1. Customs generally liquidates entries within one year of the date of entry. If Customs does not liquidate an entry within one year, it is deemed liquidated at the rate asserted by the importer. 19 U.S.C. § 1504(a)(1). Customs may extend this one-year liquidation period for a period of up to three additional years if "the information needed for the proper ... classification of the imported ... merchandise ... or for ensuring compliance with applicable law, is not available to the Customs Service." 19 U.S.C. § 1504(b)(1). Customs also may reliquidate a previously liquidated entry within ninety days of its liquidation. 19 U.S.C. § 1501. In most cases, liquidation or reliquidation becomes final unless the importer files a protest within 180 days after the liquidation or reliquidation. 19 U.S.C. § 1514(a), (c).

After the Court of International Trade's October 19, 1999, decision in Heartland I, Customs refrained from liquidating Heartland's entries at the TRQ duty rate until our decision in Heartland II. Most of Customs's liquidations or reliquidations of Heartland's entries at the TRQ duty rate occurred after the issuance of the mandate. However, Customs liquidated or reliquidated some of Heartland's sugar syrup entries at the TRQ duty rate before the Heartland II mandate issued. Heartland filed protests challenging the TRQ liquidations and reliquidations. Customs asserts that Heartland owes more than $65 million in TRQ duties.

After our court's decision in Heartland II, Heartland filed a motion for entry of judgment in the Court of International Trade, seeking a determination that Customs's liquidation or reliquidation of any entries made prior to the issuance of the Heartland II mandate should not be at the TRQ rate. The Court of International Trade declined to exercise jurisdiction under § 1581(h) and dismissed Heartland's complaint, noting that Heartland might be able challenge Customs's treatment of entries made between Heartland I and Heartland II under the provisions of § 1581(a).³ Heartland By-Prods., Inc. v. United States, 223 F.Supp.2d 1317, 1335-36 (Ct. Int'l Trade 2002) ("Heartland III"). Heartland did not appeal this dismissal.

Heartland and Customs attempted to reach an agreement for the payment of some of the assessed TRQ duties so as to create jurisdiction under § 1581(a), but that attempt failed. Heartland then filed a new complaint in the Court of International Trade under § 1581(h). Heartland challenged Customs's treatment of entries made between the issuance of the Court of International Trade's decision in Heartland I and the issuance of our mandate in Heartland II, seeking "a declaratory judgment that Customs cannot liquidate and/or reliquidate Heartland's entries at TRQ duty rates" and "a preliminary and permanent injunction prohibiting Customs from liquidating and/or reliquidating Heartland's entries at TRQ duty rates." Compl. ¶¶ 51-52, 57-58. The Court of International Trade dismissed Heartland's complaint for lack of jurisdiction. Heartland By-Prods., Inc. v. United States, 341 F.Supp.2d 1284, 1290 (Ct. Int'l Trade 2004) ("Heartland IV").

Our court subsequently reversed and remanded Heartland IV, concluding that the Court of International Trade had "ancillary jurisdiction to determine the scope and effect of its prior decision in [Heartland I]." Heartland By-Prods., Inc. v. United States, 424 F.3d 1244, 1245 (Fed. Cir.2004) ("Heartland V").

On remand, Heartland moved for summary judgment and an order enjoining Customs from collecting duties at the TRQ rate on Heartland's entries. The Court of International Trade granted Heartland's summary judgment motion and determined that Customs was required to liquidate at the non-TRQ duty rate any entries Heartland made before our court's mandate issued in Heartland II. Heartland By-Prods., Inc. v. United States, 521 F.Supp.2d 1386 (Ct. Int'l Trade 2007) ("Heartland VI"). The court reasoned that "an importer must be able to rely on a favorable judgment issued pursuant to § 1581(h)" and that retroactive liquidation or reliquidation of Heartland's pre-mandate entries at the TRQ duty rate would "undermine the purpose of pre-importation review" provided by § 1581(h). Heartland VI, 521 F.Supp.2d at 1392, 1394. The Court of International Trade held that although it is prohibited from issuing injunctive relief in a § 1581(h) action by 28 U.S.C. § 2643(c)(4),⁴ it has inherent authority to "issue injunctions to protect against attempts to attack or evade" its judgments. Heartland VI, 521 F.Supp.2d at 1395 (quoting Heartland V, 424 F.3d at 1251). The court, however, did not actually issue an injunctive order.⁵

The government timely appealed the Court of International Trade's Heartland VI decision. We have jurisdiction under 28 U.S.C. § 1295(a)(5). We requested, and the parties provided, supplemental briefing on the applicability of 19 U.S.C. § 1516(f); on the question whether any liquidations or reliquidations were made during the period between the issuance of our Heartland II decision and the issuance of our mandate; and on the effect of any such liquidations or reliquidations.

We review the grant of summary judgment by the Court of International Trade without deference. Airflow Tech., Inc. v. United States, 524 F.3d 1287, 1290 (Fed.Cir.2008); Structural Indus., Inc. v. United States, 356 F.3d 1366, 1368 (Fed. Cir.2004).

DISCUSSION

I

We first address...