Heartland by-Products, Inc. v. U.S., Slip Op. 02-22.

CourtU.S. Court of International Trade
Writing for the CourtBarzilay
Citation223 F.Supp.2d 1317
PartiesHEARTLAND BY-PRODUCTS, INC., Plaintiff, v. UNITED STATES of America, Defendant, and United States Beet Sugar Association, Defendant-Intervenor.
Docket NumberCourt No. 99-09-00590.,Slip Op. 02-22.
Decision Date26 February 2002
223 F.Supp.2d 1317
HEARTLAND BY-PRODUCTS, INC., Plaintiff,
v.
UNITED STATES of America, Defendant, and
United States Beet Sugar Association, Defendant-Intervenor.
Slip Op. 02-22.
Court No. 99-09-00590.
United States Court of International Trade.
February 26, 2002.

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COPYRIGHT MATERIAL OMITTED

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Mayer, Brown, Rowe & Maw, (Simeon M. Kriesberg), Andrew A. Nicely, Eldad Z. Malamuth, and Serko & Simon, David Serko, Daniel J. Gluck, Jerome L. Hanifin for Plaintiff.

Robert D. McCallum, Jr., Assistant Attorney General; John J. Mahon, Acting Attorney-in-Charge, International Trade Field Office, Commercial Litigation Branch, Civil Division, Department of Justice (Aimee Lee); Karen P. Binder, Office of Assistant Chief Counsel, International Trade Litigation, Customs Service, (Yelena Slepak) and Allan Martin, Associate Chief Counsel, Customs Service, (Ellen Daly), of counsel, for Defendant.

Wilmer, Cutler & Pickering, (Lewis J. Liman), Rick A. Bierschbach, for Defendant-Intervenor.

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American Association of Exporters and Importers, (John P. Simpson, President) Amicus Curiae.

OPINION

BARZILAY, Judge.


I. INTRODUCTION

This case is one of first impression for two important issues. First, the court is asked to determine the scope of its jurisdiction under 28 U.S.C. § 1581(h)(1994), review of pre-importation rulings. Second, the court is asked to interpret the application of the 60 day grace period provided by 19 U.S.C. § 1625(c)(1999) to an importer when a ruling by the United States Customs Service ("Customs") changes the tariff treatment of imported merchandise.

The court has before it a motion for Entry of Judgment on behalf of Heartland By-Products, Inc. ("Heartland"). See Mem. of Points and Authorities in Supp. of Pl.'s Mot. for Entry of J. (December 13, 2001) ("Pl.'s Br."). This motion comes as a consequence of the disposition by the Court of Appeals for the Federal Circuit of an earlier decision by this court. Heartland By-Products, Inc. v. United States, 264 F.3d 1126 (Fed.Cir.2001). The original complaint challenged a revocation ruling by the Customs Service which would have increased the tariff duty owed on Heartland's primary import 10,000 percent. Revocation of Ruling Letter & Treatment Relating to Tariff Classification of Certain Sugar Syrups, 33 Cust. Bull. No. 35/36 at 41 (Sept. 8, 1999)("Revocation"). This court considered the original case on an expedited basis and held the Revocation contrary to law. Heartland By-Products, Inc. v. United States, 23 C.I.T. 754, 74 F.Supp.2d 1324 (1999). That decision was reversed by the Court of Appeals for the Federal Circuit after a two year interval.

In the meantime, Plaintiff imported thousands of entries relying on this court's decision. The Customs Service liquidated those entries, in some cases prior to the date the appeals court announced its decision. Pl.'s Br. at 1. In response to Customs' actions, Plaintiff filed protests with Customs and asked this court to enter a judgment, pursuant to 19 U.S.C. § 1625(c), specifying the time of application for the higher duty rate to be 60 days after the decision of the Court of Appeals became final. Plaintiff also challenges Customs' authority to liquidate entries at the higher duty rate prior to the time when the Federal Circuit issued its mandate. Defendant responds that the court lacks jurisdiction over liquidation of the entries because the original case was brought under 28 U.S.C. § 1581(h) which is limited to pre-importation review. Defendant also claims that the 60 day notice period provided by 19 U.S.C. § 1625(c) expired in 1999.

The court finds that 28 U.S.C. § 1581(h) does confer subject matter jurisdiction on this court to consider issues applicable to actual entries, which were the contemplated entries considered when the court first took jurisdiction. The court, however, declines to exercise this jurisdiction at this point, to permit issues of fact to be resolved at the administrative level regarding the status of the entries, the rates of final liquidation and whether the Customs Service properly extended any of the entries. In addition, deferring adjudication of the application of 19 U.S.C. § 1625(c) will allow the court to consider the full scope of relief requested by Plaintiff.

II. PROCEDURAL HISTORY

The Plaintiff is a sugar refiner that imports sugar syrup from Canada and refines the syrup into liquid sucrose. Prior to beginning business operations, Heartland sought an advance ruling from Customs

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to determine the imported product's classification and duty rate under the Harmonized Tariff Schedule of the United States ("HSTUS"). New York Ruling Letter 810328. Based upon this ruling Heartland, in 1997, began importing the syrup into the United States for refining.

Customs Headquarters published a notice of proposed revocation of the New York Ruling Letter in Customs Bulletin Volume 33, No. 22/23 dated June 9, 1999, after domestic trade associations, the United States Cane Sugar Refiners' Association, the United States Beet Sugar Association and their member companies filed a petition under 19 U.S.C. § 1516 and/or 19 U.S.C. § 1625 seeking reclassification of Heartland's sugar product. Heartland, 74 F.Supp.2d at 1328. On September 8, 1999, Customs issued a final notice revoking the New York Ruling. In the absence of any other action the Revocation would have taken effect November 8, 1999, under 19 U.S.C. § 1625(c), which provides that, "[t]he final ruling or decision shall become effective 60 days after its date of publication."1

In light of the 60 day effective date this court heard Heartland's challenge to the Revocation on an expedited schedule. The court took jurisdiction under 28 U.S.C. § 1581(h), which allows for actions to be heard prior to importation of the goods involved only if, "the party commencing the civil action demonstrates to the court that he would be irreparably harmed unless given an opportunity to obtain judicial review." On October 19, 1999, this court issued an opinion and order finding the Revocation to be contrary to law. Because the court was able to reach a decision before the 60 day time limit elapsed, any application of the Revocation was prohibited. No preliminary injunction was necessary to limit Customs' behavior, because the court's decision resting on § 1581(h) jurisdiction applied to all prospective entries contemplated by the ruling. These two factors, the expedited review and jurisdiction under § 1581(h), frame the issues currently before the court.2

On August 30, 2001, the Court of Appeals for the Federal Circuit issued a decision reversing this court's decision. On December 11, 2001, the Federal Circuit issued its mandate formally relinquishing it of jurisdiction of the case and returning jurisdiction to this court for any further

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action, including entry of judgment. At some point between the announcement of the decision and the mandate, Customs commenced to liquidate or reliquidate entries, liquidation of which may have been extended pending conclusion of judicial consideration.3 Under normal circumstances entry of judgment by this court is a routine ministerial act; however, Plaintiff has raised two serious questions. First, after the revocation ruling was upheld by the Federal Circuit at what point may Customs apply the higher rate of duty? Second, may Customs begin liquidating entries before this court issues an entry of judgment upon receipt of the Federal Circuit mandate?

III. DISCUSSION

Plaintiff makes several appeals for relief with its motion for entry of judgment. The essential point to all of the claims is that any application of the Revocation must apply to entries, not liquidations, made sometime after December 11, 2001, when the appeal decision became final. Specifically, Heartland argues:

1) 19 U.S.C. § 1625(c) expressly requires that importers be provided with 60 days advance notice of change to any interpretive ruling that has been in effect for 60 days or more.

2) That it is improper to apply the upheld Revocation retroactively to entries imported after publication of the Revocation, but prior to the Federal Circuit's decision.

3) This court can delay the effective date of the Revocation by a reasonable period even in the absence of a statute requiring a notice period.

4) Retroactive application of the Revocation to Heartland is prevented by Customs' regulations.

5) The court should supplement the 60 day notice period with an additional period of time, so as to restore Heartland to a position it would have had absent Customs' acting prematurely.

Defendant contends that the court cannot rule on the questions presented by Plaintiff for three jurisdictional reasons. First, Defendant claims that, because the original case was brought under 28 U.S.C. § 1581(h), there are no "designated entries which were before this Court" and that subsection (h) is applicable only to "prospective entries." Def.'s Opp. to Pl.'s Mot. for Entry of J. at 11 (January 7, 2002) ("Def.'s Br."). Second, consideration of the § 1625(c) issue is beyond the scope of the mandate. Id. at 16. Third, Defendant claims that for the Plaintiff to sustain its claim of improper liquidation it must reestablish jurisdiction under § 1581(h) or (i). Id. at 9. Defendant contends the facts could not support that jurisdiction, therefore, the case must be dismissed to be brought under § 1581(a), after a protest has been filed by the importer and denied by Customs.

The court begins its analysis with Defendant's first point directly relating to the specific jurisdiction of this court under § 1581(h). The court rests its analysis on the history of § 1581(h) and its context within general federal law and customs law, and concludes that it does confer jurisdiction on this court to adjudicate entries that come before it pursuant to § 1581(h). To do otherwise would render subsection (h) meaningless as an avenue of relief (See 28...

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13 practice notes
  • Heartland by-Products, Inc. v. U.S., No. 2008-1245.
    • United States
    • United States Courts of Appeals. United States Court of Appeals for the Federal Circuit
    • June 10, 2009
    ...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 Heartland and Customs attempted to reach an agreement for ......
  • One World Technologies, Inc. v. United States, Slip Op. 18-173
    • United States
    • U.S. Court of International Trade
    • December 14, 2018
    ...traditionally placed on those challenging a decision by Customs." Heartland By-Prods., Inc. v. United States, 26 CIT 268, 274, 223 F.Supp.2d 1317, 1324 (2002). A plaintiff may invoke subsection (h) "only when the traditional route will inflict irreparable harm on a plaintiff." Id. at 274, 2......
  • Otter Prods., LLC v. United States, Slip Op. 14–154.
    • United States
    • U.S. Court of International Trade
    • December 23, 2014
    ...to importation.” Subsection (h) applies only to “prospective entries.” Heartland By–Prods., Inc. v. United States, 26 CIT 268, 280–81, 223 F.Supp.2d 1317, 1330–31 (2002) ; accord Inner Secrets/Secretly Yours, 18 CIT at 1032, 869 F.Supp. at 963 (“[J]udicial review pursuant to 28 U.S.C. § 158......
  • Otter Prods., LLC v. United States, Slip Op. 14–154.
    • United States
    • U.S. Court of International Trade
    • December 23, 2014
    ...to importation.” Subsection (h) applies only to “prospective entries.” Heartland By–Prods., Inc. v. United States, 26 CIT 268, 280–81, 223 F.Supp.2d 1317, 1330–31 (2002); accord Inner Secrets/Secretly Yours, 18 CIT at 1032, 869 F.Supp. at 963 (“[J]udicial review pursuant to 28 U.S.C. § 1581......
  • Request a trial to view additional results
13 cases
  • Heartland by-Products, Inc. v. U.S., No. 2008-1245.
    • United States
    • United States Courts of Appeals. United States Court of Appeals for the Federal Circuit
    • June 10, 2009
    ...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 Heartland and Customs attempted to reach an agreement for ......
  • One World Technologies, Inc. v. United States, Slip Op. 18-173
    • United States
    • U.S. Court of International Trade
    • December 14, 2018
    ...traditionally placed on those challenging a decision by Customs." Heartland By-Prods., Inc. v. United States, 26 CIT 268, 274, 223 F.Supp.2d 1317, 1324 (2002). A plaintiff may invoke subsection (h) "only when the traditional route will inflict irreparable harm on a plaintiff." Id. at 274, 2......
  • Otter Prods., LLC v. United States, Slip Op. 14–154.
    • United States
    • U.S. Court of International Trade
    • December 23, 2014
    ...to importation.” Subsection (h) applies only to “prospective entries.” Heartland By–Prods., Inc. v. United States, 26 CIT 268, 280–81, 223 F.Supp.2d 1317, 1330–31 (2002) ; accord Inner Secrets/Secretly Yours, 18 CIT at 1032, 869 F.Supp. at 963 (“[J]udicial review pursuant to 28 U.S.C. § 158......
  • Otter Prods., LLC v. United States, Slip Op. 14–154.
    • United States
    • U.S. Court of International Trade
    • December 23, 2014
    ...to importation.” Subsection (h) applies only to “prospective entries.” Heartland By–Prods., Inc. v. United States, 26 CIT 268, 280–81, 223 F.Supp.2d 1317, 1330–31 (2002); accord Inner Secrets/Secretly Yours, 18 CIT at 1032, 869 F.Supp. at 963 (“[J]udicial review pursuant to 28 U.S.C. § 1581......
  • Request a trial to view additional results

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