E.I. Dupont De Nemours & Co. v. U.S.

• Decision Date: 15 November 2000
• Docket Number: Slip Op. 00-152.,Court No. 97-12-02091.
• Citation: 123 F.Supp.2d 637
• Parties: E.I. DUPONT DE NEMOURS & COMPANY Plaintiff, v. UNITED STATES of America, Defendant.
• Court: U.S. Court of International Trade

123 F.Supp.2d 637

E.I. DUPONT DE NEMOURS & COMPANY Plaintiff, v. UNITED STATES of America, Defendant.

Slip Op. 00-152.

Court No. 97-12-02091.

United States Court of International Trade.

November 15, 2000.

Crowell & Moring LLP, Washington, DC (Barry E. Cohen, John I. Blanck, Jr.), for Plaintiff.

David W. Ogden, Assistant Attorney General, United States Department of Justice, Washington, DC; Joseph I. Liebman, Attorney in Charge, International Trade Field Office; (Saul Davis), Karen P. Binder, Ellen C. Daly, United States Customs Service, Office of the Chief Counsel, Of Counsel, for Defendant.

MEMORANDUM DECISION AND ORDER

BARZILAY, Judge.

INTRODUCTION

This case is before the court on cross-motions for summary judgment. Plaintiff ("DuPont"), a domestic importer, contests the Defendant's ("Customs") appraisal of its imported chemical, diuron, on the basis of computed value rather than transaction value and the denial of duty-free entry under the Generalized System of Preferences ("GSP"). The statutes at issue are: 19 U.S.C. § 1401a(b)(1) (1994), 19 U.S.C. § 1401a(d)(1), 19 U.S.C. § 1401a(e)(1), and 19 U.S.C. § 2463 (1994).¹ Defendant moves for partial summary judgment on the theory that at the time of entry the information before Customs supported only computed value as a basis of appraisal and DuPont did not demonstrate that the diuron met the requirements of duty-free entry under the GSP. Defendant further claims that DuPont is now estopped from presenting new evidence before the court that was not presented to Customs administratively. The court denies both Plaintiff's Motion for Summary Judgment and Defendant's Cross-Motion for Partial Summary Judgment. There are material issues of fact as to the proper appraisement of the imported diuron and Defendant's motion must be denied as a matter of law.

I. JURISDICTION

This court has jurisdiction under 28 U.S.C. § 1581(a) (1994), which provides for judicial review of a denied protest filed in accordance with the provisions of 19 U.S.C. § 1514 (1994).

II. BACKGROUND

At issue before this court is the importation of the agricultural herbicide "diuron technical" or "diuron flake" ("diuron"). Pl.'s Statement of Material Facts not in Dispute, at ¶ 1 ("Pl.'s Statement"); Def.'s Resp. to Pl.'s Statement of Material Facts not in Dispute, at ¶ 1 ("Def.'s Resp."). Diuron is produced from the chemical reaction of dichloropheny isocyanate ("DCPI") and dimethylamine, anhydrous ("DMA"). Pl.'s Statement, at ¶ 3; Def.'s Resp., at ¶ 3. Diuron is manufactured by DuPont's wholly owned subsidiary DuPont do Brasil ("do Brasil"). Pl.'s Statement, at ¶ 1; Def.'s Resp., at ¶ 1. Do Brazil, a Brazilian corporation, sold the diuron at issue to DuPont for [] per kilogram. Pl.'s Statement, at ¶ 6; Def.'s Resp., at ¶ 6. On April 5, 1995 DuPont imported the diuron into the United States. Pl.'s Statement, at ¶ 5; Def.'s Resp., at ¶ 5. DuPont claimed [] per kilogram as its declared value for the diuron. Pl.'s Statement, at ¶ 6; Def.'s Resp., at ¶ 6. It also claimed the imported diuron was a product or manufacture of a beneficiary developing country ("BDC") and asserted duty-free entry under the GSP. Id. Customs rejected DuPont's claims and used computed value to determine the appraised value of the diuron. Pl.'s Statement, at ¶ 11; Def.'s Resp., at ¶ 11. Customs valued the diuron at $6.35 per kilogram, denied duty-free entry, and liquidated the entry at a rate of 12.8 percent ad valorem. Plaintiff protested Customs' liquidation and, upon denial of its protest, commenced this action.

III. STANDARD OF REVIEW

Summary judgment is appropriate when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law." USCIT R. 56(d). Moreover, summary judgment is a favored procedural device "`to secure the just, speedy and inexpensive determination of every action.'" Celotex Corp. v. Catrett, 477 U.S. 317, 327, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (quoting Fed.R.Civ.P. 1); Sweats Fashions, Inc. v. Pannill Knitting Co., 833 F.2d 1560, 1562 (Fed.Cir. 1987). But "summary proceedings are not intended to substitute for trial when it is indeed necessary to find material facts." Scripps Clinic & Research Foundation v. Genentech, Inc., 927 F.2d 1565, 1570 (Fed. Cir.1991) (citing Meyers v. Brooks Shoe, Inc., 912 F.2d 1459, 1461 (Fed.Cir.1990)). Whether a disputed fact is material is identified by the substantive law and whether the finding of that fact might affect the outcome of the suit. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

IV. DISCUSSION

A. DuPont is not estopped from presenting evidence it did not present administratively.

Customs argues that DuPont should be estopped from presenting evidence before this court that it did not present administratively. Customs bases its position on a novel combining of several statutory provisions beginning with the statutory presumption of correctness that attaches to Treasury Secretary decisions. See 28 U.S.C. § 2639(a)(1) (1994). The decisions of this court and the Federal Circuit are clear that the presumption does not attach unless an underlying factual dispute exists. "[W]e squarely held that the statutory presumption of correctness under § 2639 is irrelevant where there is no factual dispute between the parties." Rollerblade, Inc. v. United States, 112 F.3d 481, 484 (Fed.Cir. 1997) (citing Goodman Mfg. L.P. v. United States, 69 F.3d 505, 508 (Fed.Cir.1995)); See also Anhydrides & Chems., Inc. v. United States, 130 F.3d 1481, 1485-86 (Fed.Cir.1997). Customs argues that in this case the court should follow the Federal Circuit's reasoning in a recent case discussing the presumption of correctness as it applies to Internal Revenue Service decisions. See Bubble Room, Inc. v. United States, 159 F.3d 553, 568 (Fed.Cir.1998). For the reasons that follow, the court declines the invitation.

Customs contends that it has the authority to use the best information available to it when an importer fails to provide documentation necessary to support the importer's appraisement claims. Congress has given Customs the authority to "fix the final appraisement of merchandise by ascertaining or estimating the value ... by all reasonable ways and means in [Customs'] power, any statement of cost or costs of production in any invoice, affidavit, declaration, other document to the contrary notwithstanding ...." 19 U.S.C. § 1500(a) (1994). In addition to express statutory authority to estimate value, Customs points to the reasonable care requirements of 19 U.S.C. § 1484 (1994) which impose an obligation on the importer to provide "such other information ... as is necessary to enable the Customs Service to properly assess duties on the merchandise. ..." 19 U.S.C. § 1484(a)(1)(B)(i). Taking these two provisions together, Customs argues that if an importer has not provided the necessary documentation at the administrative level it may not present such documentation before the court.

The fundamental flaw with Customs' argument is that it conflicts with another statutory provision stating that the court's determination in reviewing a case contesting the denial of a protest pursuant to 28 U.S.C. § 1581(a) is based on the record the court makes. See 28 U.S.C. § 2640(a)(1) (1994). Holding that an importer is estopped from presenting new evidence limits the court's express statutory authority to develop a record. See ITT Corp. v. United States, 24 F.3d 1384, 1389 (Fed.Cir.1994).² Courts are as hesitant to adopt rules that narrow their authority as they are to adopt those that expand it. See Swisher Int'l., Inc. v. United States, 205 F.3d 1358, 1366 (Fed.Cir. 2000) (citing Eurasia Import Co. v. United States, 31 C.C.P.A. 202, 211-12, 1944 WL 3690 (1944)). A court should avoid interpretations that unnecessarily place one or more provisions of the statute in conflict. See Princess Cruises, Inc. v. United States, 201 F.3d 1352, 1362 (Fed.Cir.2000) ("It is a long-held tenet of statutory interpretation that one section of a law should not be interpreted so as to render another section meaningless.").

Customs argues that its position renders all of the statutory provisions in harmony because any other reading would render 19 U.S.C. § 1484 a nullity. However, there is a better way of viewing 19 U.S.C. § 1484 that saves the conflict between it and 28 U.S.C. §§ 2638 and 2643(b) (1994), while preserving the court's authority to develop a record.³ Customs has authority to initiate civil penalty proceedings against an importer for fraud, gross negligence and negligence. See 19 U.S.C. § 1592 (1994). The legislative history accompanying the reasonable care legislation states that an importer who fails to use reasonable care may be liable for civil penalties. See H.R.Rep. No. 103-361(I), at 121 (1993), reprinted in 1993 U.S.C.C.A.N. 2552, 2671. Here, if Customs believes that Plaintiff failed to exercise reasonable care, its remedy is through civil penalty proceedings. Thus, it is through reference to the reasonable care requirements as they relate to the civil penalty provisions of 19 U.S.C. § 1592 that all of the statutory provisions can be read in harmony, and no violence done to the court's authority.

Finally, the court does not find Custom's argument regarding the presumption of correctness persuasive. The Federal Circuit did not hold in Bubble Room that it was error to permit the taxpayer to introduce evidence before the Court of Federal Claims that it did not present to the IRS. Rather, in setting forth the applicable standard of review, the court noted that the taxpayer had the burden of proving both the error of the Internal Revenue Commissioner's determination and of proving her entitlement to the refund amount claimed. See Bubble Room, Inc., 159 F.3d at 561....