International Maven, Inc. v. McCauley

• Decision Date: 20 January 1988
• Docket Number: Court No. 87-12-01163.
• Citation: 678 F. Supp. 300,12 CIT 55
• Parties: INTERNATIONAL MAVEN, INC., Plaintiff, v. Patricia McCAULEY, District Director of Customs, and United States of America, Defendants.
• Court: U.S. Court of International Trade

678 F. Supp. 300

12 CIT 55

INTERNATIONAL MAVEN, INC., Plaintiff, v. Patricia McCAULEY, District Director of Customs, and United States of America, Defendants.

Court No. 87-12-01163.

United States Court of International Trade.

January 20, 1988.

Peter S. Herrick, Miami, Fla., for plaintiff.

Richard K. Willard, Asst. Atty. Gen., Washington, D.C., Joseph I. Liebman, Atty. in Charge, Intern. Trade Field Office, Commercial Litigation Branch, U.S. Dept. of Justice, Mark S. Sochaczewsky, New York City, for defendants.

MEMORANDUM OPINION AND ORDER

TSOUCALAS, Judge.

Plaintiff initiated this action to contest the seizure of its imported toiletry products bearing the English Leather trademark. Concurrent with filing the complaint, plaintiff moved for an order to show cause why a temporary restraining order and preliminary injunction should not issue prohibiting Customs from denying plaintiff's merchandise entry into the country. Defendant cross-moved to dismiss for lack of jurisdiction. Oral arguments were heard on December 14, 1987, at which time the Court denied plaintiff's application for injunctive relief, and reserved decision on defendants' motion to dismiss for lack of jurisdiction.¹ This opinion is issued in conformity with that order and further addresses defendants' motion.

BACKGROUND

On August 17, 1987, when plaintiff attempted to enter the English Leather toiletries, Customs seized the merchandise for violation of 19 C.F.R. § 133.23a, 18 U.S.C. § 545, and 19 U.S.C. § 1595a(c),² alleging it was counterfeit, as indicated in the notice of seizure dated August 21, 1987. See Plaintiff's Memorandum of Law in Support of Motion for Injunctive Relief, Affidavit of Peter S. Herrick, Exhibit C.

On August 26, 1987, plaintiff responded to an ELECTION OF PROCEEDINGS FORM issued by Customs, requesting that Customs consider its petition for relief from seizure administratively, thereby opting against immediate commencement of administrative forfeiture proceedings. See Herrick Affidavit, Composite Exhibit B. On September 22, 1987, plaintiff petitioned for relief from seizure, which is apparently still pending with the Office of Regulations and Rulings. See Defendants' Memorandum of Law in Support of Motion To Dismiss, Affidavit of Richard O. Litsey. Subsequently, plaintiff continued to provide documents to Customs in an effort to establish the genuineness of the goods. On October 9, 1987, plaintiff filed a protest challenging the "seizure" of the merchandise, and the protest was denied on November 13, 1987. Plaintiff continued in its attempts to resolve the matter administratively until it filed this action.

Apparently, MEM, the owner of the American trademark for English Leather, conducted independent tests on samples of the seized merchandise which reveal: 1) the cologne bottles were not to specification; 2) according to gas chromatograph studies, the essential oil is not English Leather; 3) the deodorant stick was underweight, incorrect in color, filled by direct pour rather than cast method, and the essential oil was not the English Leather fragrance. See Defendants' Memorandum, Affidavit of Robert G. Burch. However, plaintiff claims that it purchased certain English Leather products from Industria de Tocador Peruana S.R.L., a Peruvian company, who was authorized by MEM to manufacture the imported goods. Plaintiff stresses that documents establish the existence of this agreement.³ It is alleged, that if a difference in product formula results, it may be due to MEM's failure to properly maintain quality control, or it could result from variations in the alcohol which is used to produce these particular goods.

Injunctive Relief

Plaintiff claimed it would be irreparably harmed if its goods were not released before the holiday season, as this would represent a financial loss, and if the toiletries remained in Customs' custody for an extended period of time, any loss in value could not be recovered against the government. The Court concluded that these potential financial losses were not sufficient to establish irreparable injury. In order to grant the TRO, plaintiff was required to demonstrate: 1) the threat of immediate irreparable harm; 2) the likelihood of success on the merits; 3) that the public interest is better served by issuing rather than by denying the injunction; and 4) that the balance of hardships to the parties favors the issuance of an injunction. Zenith Radio Corp. v. United States, 710 F.2d 806, 809 (Fed.Cir.1983); S.J. Stile Assocs., Ltd. v. Snyder, 68 CCPA 27, 30, C.A.D. 1261, 646 F.2d 522, 525 (1981).

Additionally, a preliminary injunction generally should issue only to protect the status quo, and should not be granted to award plaintiff the ultimate relief it seeks. Associated Dry Goods Corp. v. United States, 1 CIT 306, 311, 515 F.Supp. 775, 780 (1981). The status quo is not as plaintiff argues, allowing the entry to proceed, rather, it is the detention of the goods. In protecting the public interest, Customs has prevented the entry of allegedly counterfeit goods. "Turning possession of the goods over to plaintiff for resale would defeat that goal and might frustrate the ability of the defendant to pursue the available remedies should the latter prevail on the merits." R.J.F. Fabrics, Inc. v. United States, 10 CIT ___, ___, 651 F.Supp. 1431, 1436 (1986).

DISCUSSION

Plaintiff initially asserted that jurisdiction was properly invoked under 28 U.S. C. § 1581(i), but at the hearing moved to amend its jurisdictional basis to include in the alternative, 28 U.S.C. § 1581(a). Under § 1581(a) this court has jurisdiction to hear actions contesting the denial of a protest. Plaintiff stresses that in accordance with R.J.F., supra, its goods were excluded and not seized, and since its protest against the exclusion of its merchandise was denied, then jurisdiction is properly invoked. In R.J.F., the plaintiff protested the exclusion of the imported goods which were later seized, this Court held that it had jurisdiction over the action, contesting the denial of the protest, pursuant to § 1581(a). That opinion set forth a distinction between exclusion and seizure:

The practical effect of ... exclusion is to deny entry into the customs territory of the United States. The importer may then dispose of the goods as he chooses. In the case of seizure, however, the government often takes control of the merchandise, and may ultimately institute forfeiture proceedings.

10 CIT at ___, 651 F.Supp. at 1433. The distinction is relevant in determining the proper forum to challenge the agency action, since pursuant to 28 U.S.C. § 1356 (1982):

The district courts shall have original jurisdiction, exclusive of the courts of the States, of any seizure under any law of the United States on land or upon waters not within admiralty and maritime jurisdiction, except matters within the jurisdiction of the Court of International Trade under section 1582 of this title.

Section 1582 addresses actions commenced by the United States and is thus, not applicable. Further, R.J.F. does not stand for the proposition that a seizure may be protested, but merely enunciated this Court's interpretation that its jurisdiction over protested exclusions did not necessarily cease once the goods were subsequently seized. 10 CIT at ___, 651 F.Supp. at 1433.

The Court must conclude that plaintiff was in fact protesting the seizure, not the exclusion of the goods based on the following reasons: (1) the protest itself states that it challenges the seizure of the goods; (2) in August 1987, plaintiff received a notice of seizure; (3) as admitted by plaintiff, the government has control of the merchandise; and (4) after this "seizure", plaintiff was required to make a choice as to whether immediate forfeiture should begin or whether plaintiff wanted to petition for relief from seizure. There does not appear to have been any exclusion, but rather the goods were seized from the inception of their attempted entry. Thus, jurisdiction over this action does not properly lie under § 1581(a).

It should be noted that a petition pursuant to 19 U.S.C. § 1618 is "the usual avenue for importers recovering possession of seized property." Siaca v. United States, 754 F.2d 988, 990 (Fed.Cir.1985); see 19 C.F.R. § 162.31 and § 171.0, et. seq. In the majority of cases, this petition for remission or mitigation settles the dispute, eliminating the need for judicial intervention. Siaca, supra, citing United States v. Eight Thousand Eight Hundred and Fifty ($8,850) Dollars in United States Currency, 461 U.S. 555, 566-67, 103 S.Ct. 2005, 2013, 76 L.Ed.2d 143 (1983); United States v. Forty-Seven Thousand Nine Hundred and Eighty ($47,980) Dollars in Canadian Currency, 804 F.2d 1085, 1089 (9th Cir. 1986). If this process does not resolve the issue, then by the government bringing a judicial condemnation proceeding, the claimant is permitted to assert his claim or interest in the property. Siaca, 754 F.2d at 990-91. If plaintiff is challenging a delay in the commencement of forfeiture proceedings, it may have a cause of action in district court. $8,850, 461 U.S. at 566-67, 103 S.Ct. at 2013; $47,980, 804 F.2d at 1089.

As to whether jurisdiction may be properly claimed under 28 U.S.C. § 1581(i),⁴ it is settled that this is not the appropriate court to hear claims brought pursuant to § 545. See 28 U.S.C. § 1355 (1982); United States v. Gold Mountain Coffee, Ltd., 8 CIT 247, 597 F.Supp. 510 (1984), reh'g denied, 8 CIT 336, 601 F.Supp. 212 (1984). Further, the Court again must distinguish its position in R.J.F., from the factual situation presented herein. The detention of plaintiff's goods in R.J.F. occurred to prevent the attempted entry of merchandise, restricted by quota, under allegedly false documents. As was stated in that case, even if the exclusion was not protestable, the controversy nonetheless required a determination of country of origin of the merchandise...