Kahrs Intern., Inc. v. U.S.

• Citation: 602 F.Supp.2d 1352
• Decision Date: 19 February 2009
• Docket Number: Court No. 07-00343.,Slip Op. 09-12.
• Parties: KAHRS INTERNATIONAL, INC., Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

602 F.Supp.2d 1352

KAHRS INTERNATIONAL, INC., Plaintiff, v. UNITED STATES, Defendant.

Slip Op. 09-12.

Court No. 07-00343.

United States Court of International Trade.

February 19, 2009.

As Amended February 20, 2009.

COPYRIGHT MATERIAL OMITTED

Law Offices of George R. Tuttle, A.P.C. (Carl D. Cammarata, George R. Tuttle, and Stephen P. Spraitzar) for Plaintiff.

Michael F. Hertz, Deputy Assistant Attorney General; Jeanne E. Davidson, Director; Barbara S. Williams, Attorney in Charge, International Trade Field Office, Commercial Litigation Branch, Civil Division, United States Department of Justice (Mikki Cottet), for Defendant.

OPINION & ORDER

CARMAN, Judge:

Before the Court is Defendant United States' motion to withdraw its "deemed admissions" pursuant to Rule 36(b) of the Rules of the U.S. Court of International Trade. Plaintiff Kahrs International, Inc. ("Kahrs") opposes this motion.

PROCEDURE & BACKGROUND

Kahrs filed its law suit against the United States Customs and Border Protection ("CBP" or the "Government") on September 12, 2007 alleging seven causes of action concerning the denial of its protest over the "liquidation, classification, duties, and fees assessed on the pre-finished, veneered, hardwood, flooring strips," which were imported by Kahrs. (Complaint ("Compl.") 1.) The Government filed its Answer to the Complaint on February 14, 2008 denying, inter alia, many of the allegations contained in the first two causes of action.

Shortly thereafter,¹ Plaintiff filed its First Motion For Summary Judgment On The First Cause of Action on March 10 2008. Included with its submission, Plaintiff annexed a USCIT R. 56(h) statement attesting that there are no genuine issues of material fact in dispute concerning Plaintiffs first cause of action. However, many of the allegations alleged in Plaintiffs R.56(h) statement were the same as, or similar to, Plaintiffs Complaint, which were denied, in whole or in part, in the Government's Answer on the grounds of lack of information or knowledge sufficient to form a belief as to the allegations' truthfulness. Compare Compl. & Def.'s Answer ¶¶ 2, 7, 10, 13, 16, 19, 20, 22 with Pl.'s First Request for Admission (Def.'s Motion to Withdraw at Ex. 1) pp. 7-10, ¶ 1;10-11, ¶ 2;11, ¶ 3, et seq.

The parties then entered into discussions regarding scheduling, which yielded no accord. As a result, on April 14, 2008, Defendant filed a motion for a scheduling order and an order to stay its response to Plaintiffs Summary Judgment motion pending limited discovery as to the first cause of action. Plaintiff opposed this motion and separately requested that the Court order Defendant to expeditiously file a response to its Motion for Summary Judgment. Plaintiff contended that there would be no need for discovery because its motion on its first cause of action was dispositive of the entire matter. After deciding that Defendant was entitled to discovery, the Court granted the Government's motion, ordered limited discovery, and established a scheduling order. See Order, dated May 1, 2008 (Docket No. 18.). Ultimately, discovery was to be completed by September 1, 2008.

On May 8, 2008, Plaintiff served upon the Government certain requests for admission, interrogatories and requests for production of documents related to the first cause of action ("Pl.'s First Request for Admission"), which consisted of 52 separately numbered paragraphs. (See Def.'s Amd. Mot. To Withdraw Deemed Admissions ("Def.'s Motion to Withdraw") at Exhibit ("Ex.") 1.) Subject to the rules of this court, Defendant's responses were due on June 13, 2008. (Id. at 4.) However, as the Government concedes, its responses were served by mail on June 27, 2008, some two weeks late. (Id.) Because the Government had failed to respond to Plaintiffs requests to admit on the first cause of action within 30 days of service, the matters therein were deemed admitted under USCIT R. 36(a).

On May 29, 2008, Plaintiff served upon the Government certain requests for admission, interrogatories and requests for production of documents related to the second cause of action ("Pl.'s Second Request for Admission"), which consisted of 16 separately numbered paragraphs. (Pl.'s Resp. To Def.'s Amd. Mot. To Withdraw Admissions ("Pl.'s Resp.") at Ex. 1.) The Government's responses were due on July 3, 2008, however "as a result of inadvertence," its responses were served on July 8, 2008, some five days late. (See Def.'s Motion to Withdraw at 5 n. 4.) Because the Government had failed to respond to Plaintiffs requests to admit on the second cause of action within 30 days of service, the matters therein were deemed admitted under USCIT R. 36(a).

Plaintiff then served discovery requests on the Government pertaining to causes of action three through seven, which consisted of 113 separately numbered paragraphs. (Id.) Responses to these request were timely served by the due date of September 2, 2008. (Id.)

On July 9, 2008, Plaintiff served a "reply" on the Government pertaining to the Government's responses to its discovery requests related to the first cause of action. This document consisted of some 77 pages of material challenging each of the Government's responses, item by item. (See Def.'s Mot. to Withdraw at Ex. 2.)

Subsequently, on July 25, 2008, Plaintiff served the Government with its second request for admissions pertaining to the first cause of action, revised to consist of 62 separately numbered paragraphs. (See id. at Ex. 3.) Though the Government's responses to this request were due on August 29, 2008, the Government "objected to Kahrs' second set of discovery requests on the first cause of action and did not further respond to it." (Def.'s Mot. to Withdraw at 5.)

The Government now moves this Court for an order, pursuant to USCIT R. 36(b) to permit it to withdraw the "deemed" admissions arising from Kahrs' requests for admissions, interrogatories, and requests for production of documents related to the first and second causes of action. (Id. at 1.)

DISCUSSION

I. USCIT Rule 36

Rule 36(a) of the U.S. Court of International Trade provides, in relevant part, that a matter is deemed admitted "unless, within 30 days after service of the request . . . the party to whom the request is directed serves upon the party requesting the admission a written answer or objection addressed to the matter, signed by the party or by the party's attorney." USCIT R. 36(a). Once the assertion is admitted, the matter "is conclusively established unless the. court on motion permits withdrawal or amendment of the admission" pursuant to Rule 36(b). USCIT R. 36(b) (emphasis added); cf. Avanti Prods., Inc. v. United States, 16 CIT 453 (1992). Notwithstanding, this Court

may permit withdrawal or amendment when the presentation of the merits of the action will be subserved thereby and the party who obtained the admission fails to satisfy the court that withdrawal or amendment will prejudice that party in maintaining the action or defense on the merits.

USCIT R. 36(b) (emphasis added).

USCIT Rule 36(b) is a permissive rule and this Court is certainly not required to grant the Government's withdrawal of admissions.² See Conlon v. United States, 474 F.3d 616, 621 (9th Cir. 2007). The Court may, exercising its discretion, grant relief from an admission made under Rule 36(a) where (1) "the presentation of the merits of the action will be subserved," and (2) "the party who obtained the admission fails to satisfy the court that withdrawal or amendment will prejudice that party in maintaining the action or defense on the merits." USCIT R. 36(b); Conlon, 474 F.3d at 621; Hadley v. United States, 45 F.3d 1345, 1348 (9th Cir.1995); see also 7 JAMES WM. MOORE, FED. PRAC. § 36.13 (Matthew Bender 3d ed.).³ The two-prong test of Rule 36(b) directs the Court to focus on the effect of granting withdrawal upon the litigation and prejudice to the opposing party, "rather than focusing on the moving party's excuses for an erroneous admission." F.D.I.C. v. Prusia, 18 F.3d 637, 640 (8th Cir.1994).

As an important litigation tool, admissions are sought to narrow the issues before trial by eliminating those that can be dispensed with. See Conlon, 474 F.3d at 622; Beker Indus. Corp. v. United States, 7 CIT 361, 362 (1984). Rule 36 admissions are "not to be used in an effort to `harass the other side' or in the hope that a party's adversary will simply concede essential elements." Conlon, 474 F.3d at 622 (quoting Perez v. Miami-Dade County, 297 F.3d 1255, 1268 (11th Cir. 2002)). Thus, the rule is meant to serve two vital purposes in litigation: "truthseeking in litigation and efficiency in dispensing justice." Id. (citing Fed.R.Civ.P. 36(b) advisory committee note); see also In re Manley, 3 B.R. 97, 98 (Bankr. S.D.N.Y.1980) (Fed.R.Civ.P. 36 discovery is not necessarily meant to obtain information, but to narrow issues for trial and establish certain material facts as true, thus narrowing the range of issues.).⁴ This Court, therefore, should bear in mind these policy consideration as it considers the Defendant's motion in light of the rule's mandatory factors.

A. Presentation of the Merits

The first prong of Rule 36(b) requires this Court to determine whether granting Defendant's motion for withdrawal will have subserved the presentation of the merits of Plaintiffs first and second causes of action. This part of the test "emphasizes the importance of having the action resolved on the merits." Smith v. First Nat'l Bank of Atlanta, 837 F.2d 1575, 1577 (11th Cir.1988). It is satisfied "when upholding the admissions would practically eliminate any presentation of the merits of the case." Conlon, 474 F.3d at 622; accord Hadley, 45 F.3d at 1348.

In this case, Plaintiffs first and second causes of action are statutory claims alleging that CBP violated various aspects of 19 U.S.C. §§ 1625(c) and 1315(d) respectively. (See Compl. ¶¶ 1-29; 30-39.) The particular admissions that the...