Michelin Tire Corp. v. United States

• Decision Date: 26 February 1979
• Docket Number: Court No. 75-9-02467.,C.R.D. 79-6
• Citation: 469 F. Supp. 270
• Court: U.S. Court of Customs and Patent Appeals (CCPA)
• Parties: MICHELIN TIRE CORPORATION v. UNITED STATES.

469 F. Supp. 270

MICHELIN TIRE CORPORATION v. UNITED STATES.

C.R.D. 79-6; Court No. 75-9-02467.

United States Customs Court.

February 26, 1979.

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Windels, Marx, Davies & Ives, New York City (Paul Windels, Jr., John Y. Taggart, New York City, of counsel), for plaintiff.

Barbara Allen Babcock, Asst. Atty. Gen., Washington, D. C. (David N. Cohen, Chief Customs Section, Edmund F. Schmidt, Trial Atty., New York City, for defendant.

WATSON, Judge:

This matter is before the court on defendant's motion for summary judgment.

Plaintiff commenced this action pursuant to 28 U.S.C. § 2632 to contest the denial of its administrative protest against the assessment of countervailing duties on tires it had imported from Canada. The levy of that additional duty was made pursuant to Section 303 of the Tariff Act of 1930.¹ In general terms, the involved statute requires the assessment of additional duty when a bounty or grant is bestowed on the manufacture, production or export of an imported article.

In the motion for summary judgment defendant argues that this court is restricted to reviewing the facts contained in the record of the Secretary of the Treasury's administrative investigation into the question of the existence of a bounty or grant. Defendant further argues that this court is limited to judging whether the resulting decision of the Secretary of the Treasury² was unreasonable, arbitrary or capricious.

Defendant also seeks a summary judgment without regard to the asserted restrictions on the court's power to try the issues in the case. However, defendant's continued emphasis on such restrictions led plaintiff to concentrate on this point. This resulted in an imprecise and incomplete confrontation between the opposing contentions. In its present form the motion does not present a clear formulation of the dispute and does not persuade the court that material factual issues are entirely absent.

To a certain extent the awkwardness of the motion and the confusion it engenders is derived both from defendant's insistence on a restricted court proceeding and from plaintiff's preoccupation with the conduct of the administrative investigation in which the Secretary of the Treasury found that a bounty or grant was being bestowed on these tires.

Once it is made clear that this is an independent action in which this court has the power to determine all disputed questions of fact or law concerning the correctness of the assessment of this additional duty, the court expects the confusion to dissipate. However, the fact that a question as to this court's power to try the issues in this case is being repeatedly raised³ and vigorously pressed by the government more than 80 years after the creation of countervailing duty legislation⁴ indicates that a state of confusion exists, or is developing, with regard to the function of this court.

Therefore, the court believes that this matter needs fundamental re-examination in order to restore the proper focus of this action; encourage the complete resolution of its issues; and generally clarify this aspect of proceedings in the court.

Defendant bases its contentions on an argument that judicial inquiry in this action is governed by general principles of judicial review of administrative actions. Defendant argues that under those principles and, in the case of statutory silence on the matter, (particularly in the absence of a specific provision for trial de novo), the scope of judicial "review" is confined to the administrative record, or is shaped by the particular administrative proceeding being "reviewed." Defendant also argues that the restrictions it espouses have been applied to the role of this court in cases involving duty assessed under the flexible tariff provisions (Section 336 of the Tariff Act of 1930, 19 U.S.C. § 1336) and the Antidumping Act of 1921 (19 U.S.C. §§ 160 et seq.)

Defendant also relies upon a recent decision of this court in which general principles of judicial review of administrative action were utilized as the basis for a finding of subject matter jurisdiction. Suwannee Steamship Co. v. United States, 70 Cust.Ct. 327, C.R.D. 73-3 (1973).

Defendant's arguments go on to include the alleged latitude given to the Secretary of the Treasury in making his investigation into the existence of a bounty or grant; the purported exercise by the Secretary of judgments in the political, legislative, or policy spheres; and the asserted futility of the administrative investigation if the issue is tried "de novo" before this court.

In this opinion the court concludes that this action is an independent civil action commenced and conducted in the form and manner provided by statute.

Examination of the basic and related statutory terminology shows clearly that this court is to determine all relevant issues of fact and law in actions within its subject matter jurisdiction. It is further determined that this judicial proceeding is not a mere review of a record created on the administrative level and is not a review in an appellate sense of any particular administrative action or proceeding. The purported restrictions on this court's power to try and judge all relevant issues of fact and law are found to be without support in the statutes and case law. In fact, those sources support the opposite conclusion. Moreover, historical analysis shows that this type of action existed before the administrative process of which defendant would make it a mere review. Thus, the correct view of this action is derived from the statutory expressions of legislative intent, the case law, and the true historical nature of the action. In light of these fundamental sources of the court's authority the administrative phase affects the conduct of these judicial proceedings in only two respects. First, the content of the administrative activity defines the subject matter jurisdiction of the court and second, the exhaustion of the remedies offered on the administrative level is a procedural requirement for the commencement of the independent action in this court. Beyond that, the administrative phase has no bearing or influence on the manner in which this court determines issues of fact and law.

Issues are before this court as a result of the commencement of an independent civil action provided by Congress, not by virtue of the operation of the Administrative Procedure Act (5 U.S.C. §§ 551, et seq.) or pursuant to general principles of judicial review of administrative actions. Accordingly, restrictions on judicial inquiry derived from those sources are inapplicable.

Restrictions expressed in decisions regarding other areas of customs law are either unclear, distinguishable, or based on outmoded considerations. Arguments founded on unusual or discretionary powers purportedly given to the Secretary of the Treasury in matters of countervailing duty are erroneous.

The court concludes that, within the subject matter jurisdiction granted to it by Congress, it is the exclusive, unlimited and unrestricted forum for the determination of all relevant issues of fact and law. Its powers are unaffected by the manner in which some issues may have been decided on the administrative level.

I. The Statutes

A. 28 U.S.C. § 2632

The proper starting place for determining the complete nature of a judicial proceeding in this court is the statute which allows the commencement of the action, namely 28 U.S.C. § 2632(a):

A party may contest (1) denial of a protest . . . by bringing a civil action in the Customs Court.

The very existence of a statutory starting point for analyzing the nature of an action before this court as a distinct action, is a matter of importance. For prior to the enactment of § 2632 in 1970⁵ there was no statutory provision for the commencement of an independent action in this court. Instead, the court was simply the automatic recipient of the papers in a dispute commenced on the administrative level. Briefly stated, the prior statutory provisions for the administrative review of decisions contained a further step directing the transmittal of the final administrative decision together with the entry and the accompanying papers to the Customs Court for judicial resolution. See for example, Section 515 of the Tariff Act of 1930, in the pre-1970 form.⁶

This was a reflection of the fact that the court was a continuation of the Board of General Appraisers. The Board was an administrative tribunal which conducted hearings of customs disputes with "the incidents of a trial in court".⁷ It developed from legislation passed in 1890⁸ which provided for a level of administrative review by "general appraisers" and subsequent appeals to the circuit courts (the district courts of the time.)⁹ The evolution of the Court from the Board of General Appraisers, the Court's inheritance of the Board's antiquated and convoluted forms of hearings, and the lack of a clear separation from the administrative process, may have tended to retard the perception of the court as an independent judicial institution. If the circumstances of this court's evolution had any part in the development of a mistaken impression as to its powers, the impression was eliminated by Congress in the 1970 legislation.¹⁰ The legislative history of that Act displays a profound awareness of the archaic forms within which this court was functioning. The Senate Committee report noted that "in many respects, the court has continued to function as would an administrative tribunal reviewing the actions of the Bureau of Customs, despite the fact that in 1956 Congress declared it to be an Article III court."¹¹

In 1970 Congress did not simply create a civil action where none had existed before. Among other things, it eliminated the single characteristic of this court which most impeded the recognition of its full independent judicial powers. The 1970 law ended the automatic receipt of administrative disputes, the most...