Mohawk Recreation Products, Inc. v. United States

• Decision Date: 22 December 1976
• Docket Number: C.R.D. 76-13,Court No. 74-6-01524.
• Citation: 423 F. Supp. 932
• Parties: MOHAWK RECREATION PRODUCTS, INC. v. UNITED STATES.
• Court: U.S. Court of Customs and Patent Appeals (CCPA)

423 F. Supp. 932

MOHAWK RECREATION PRODUCTS, INC. v. UNITED STATES.

C.R.D. 76-13, Court No. 74-6-01524.

United States Customs Court.

December 22, 1976.

Sharretts, Paley, Carter & Blauvelt, New York City (Patrick D. Gill, New York City, of counsel), for plaintiff.

Rex E. Lee, Asst. Atty. Gen., Washington, D.C. (David R. Ostheimer, Trial Atty., New York City), for defendant.

OPINION AND ORDER ON DEFENDANT'S MOTION TO DISMISS FOR LACK OF JURISDICTION

NEWMAN, Judge:

Pursuant to rules 4.7(b)(1) and 4.12, defendant has moved to dismiss this civil action on the ground that plaintiff had no standing to file protest No. 0712-3-000550 under 19 U.S.C. § 1514 (1970), and therefore the court lacks jurisdiction under 28 U.S.C. § 1582 (1970). In opposition to defendant's motion, plaintiff has submitted a memorandum of law and two supporting affidavits.

I have concluded that plaintiff had the statutory right to file a protest. Accordingly, this court has jurisdiction and defendant's motion to dismiss is denied.

The pertinent statutory provisions read:

19 U.S.C. § 1514(b)(1) (1970):

(b) * * *.

(1) * * * protests may be filed by the importer, consignee, or any authorized agent of the person paying any charge or exaction * * *.

28 U.S.C. § 1582(c) (1970):

(c) The Customs Court shall not have jurisdiction of an action unless (1) * * a protest has been filed, as prescribed by section 514 19 U.S.C. § 1514 of the Tariff Act of 1930, as amended, * * *.

1.

In 1972 plaintiff, then doing business as Hilts-Willard Glove Corporation for purposes of certain transactions, imported gloves through the port of Champlain-Rouses Point, New York. Entry No. 123020 of October 20, 1972 was made for plaintiff's account by A. N. Deringer, Inc., a licensed customs broker. The commercial and special customs invoices show that Hilts-Willard Glove Corporation was the actual purchaser and owner of the imported merchandise. However, no owner's declaration or superseding bond was filed by Deringer in accordance with 19 U.S.C. § 1485(d) (1970) and 19 CFR § 8.18(d) (1970). In short, Deringer was the "nominal consignee" and importer of record, whereas Hilts-Willard Glove Corporation was the "ultimate consignee" and actual importer. Protest No. 0712-3-000550 dated December 17, 1973 and covering consumption entry No. 123020 was filed in plaintiff's name by its counsel, Sharretts, Paley.

R. L. Bronson, an attorney-in-fact for A. N. Deringer, Inc., submitted a supporting affidavit executed on October 13, 1976, averring: on October 20, 1973 affiant made entry No. 123020 for plaintiff, then doing business as Hilts-Willard Glove Corporation (its name prior to a merger in early 1972); in entry No. 123020, Deringer was the importer of record and nominal consignee; the importation of gloves was ultimately consigned to plaintiff; there was no owner's declaration or superseding bond filed in connection with the entry; Deringer paid the duties, and in turn, was reimbursed for the payment by plaintiff; further, that "we acknowledge that Mohawk Recreation Products, Inc. is the real party-in-interest and ultimate consignee in a commercial sense in all instances where we have acted as Customs brokers for Mohawk Recreation Products, Inc. or its predecessor Hilts-Willard Corp., irrespective of whether an owner's declaration or superseding bond was filed"; plaintiff acted as agent for Deringer in filing the protest, and Deringer has ratified plaintiff's action; "at all times, A. N. Deringer, Inc. and Mohawk Recreation Products, Inc. have been in agreement as to the filing of this protest by Mohawk Recreation Products, Inc. through its attorneys, Sharretts, Paley, Carter and Blauvelt, P.C."; and that upon refund of any duties resulting from a successful prosecution of this action, Deringer would forward the refund to plaintiff.

Additionally, Thomas E. Haley, plaintiff's treasurer, submitted a supporting affidavit executed on October 5, 1976, stating that on January 31, 1972 Hilts-Willard Glove Corporation was merged with Mohawk Products, Inc. and became known as Mohawk Recreation Products, Inc.; after the merger plaintiff continued to do business as Hilts-Willard Glove Corporation in order to wind up transactions commenced prior to the merger; at the time of making entry No. 123020 plaintiff was still doing business under the name of Hilts-Willard Glove Corporation for purposes of that transaction; and that by virtue of the merger, plaintiff acquired all of the rights, liabilities and interests of Hilts-Willard Glove Corp.

2.

Defendant urges that this action be dismissed for lack of jurisdiction on the ground that Deringer, who made the entry, was the proper party to file the protest. In the event this motion to dismiss should be denied, defendant "requests that its right to depose the affiants, Mr. Bronson and Mr. Haley, as to the matters contained in their affidavits, be preserved".

Plaintiff responds that it is a real party-in-interest inasmuch as it is the only party which stands to benefit from a recovery of excessive customs duties. Further, plaintiff contends that it filed the protest as agent of the importer of record, and that such filing has been ratified.

3.

The sole question for determination is whether plaintiff had the right to file a protest, either on its own behalf or as agent of the importer of record.

The courts have "consistently permitted" the actual owner and ultimate consignee of the imported goods to file protests on its own behalf. In this connection, the following pertinent observations by Judge Miller of our appellate court, concurring in United States v. Wedemann & Godknecht, Inc., a/c Atwater Throwing Co., 515 F.2d 1145, 62 CCPA 86, 93-94, C.A.D. 1151 (1975), are apposite:

The courts have consistently permitted the owner-importer of the merchandise or his agent to protest the decision of the collector, even though such owner-importer or agent (or both) was not so identified in the entry papers, upon proof of identity at the trial. See United States v. Hannevig, 10 Ct.Cust.App. 124, T.D. 38384 (1920); Adolco Trading Co. v. United States, 71 Cust.Ct. 145, C.D. 4487 (1973); Great Lakes Foundry Sand Co. v. United States, 15 Cust.Ct. 256, Abs. 50442 (1945); Bernstein v. United States, 59 Treas.Dec. 870, T.D. 44800 (Cust.Ct.1931); Davies, Turner & Co. v. United States, 58 Treas.Dec. 1216, Abs. 14407 (Cust.Ct. 1930); Gray v. Lawrence, 10 F.Cas. 1031 (No. 5,722) (C.C.S.D.N.Y.1853). The import of these decisions is that, for purposes of section 514, a protest may be filed by one who proves that he is the real party in interest or his agent. Thus, in Bernstein, supra, the concurring opinion quoted the following portion of Chief Justice Taney's opinion in Mason v. Kane, 16 F.Cas. 1044 (No. 9,241) (C.C.D.Md. 1851):

We see no inconvenience that can arise to the collector, or the public, by permitting the owner to maintain the suit in his own name, instead of suing in the name of his agent or consignee; the payment by the consignee, is the payment by the principal; and the protest of the consignee, the protest of the principal, if he thinks proper to adopt it. We think the practice in some of the circuits has sanctioned suits by the foreign owner, in cases of this description; and as this practice is consistent with a fair construction of the act of 1845, and no injustice or inconvenience can arise from it, the court are of opinion, that this objection must be overruled.

In T. W. Holt & Company v. United States, 28 Cust.Ct. 504, Abs. 56756 (1952), aff'd, 41 CCPA 8, C.A.D. 552 (1953), the plaintiff moved to punish certain officials of the Bureau of Customs for contempt in not complying with a judgment of the Customs Court granting plaintiff's petition for remission of additional duties under section 489 of the Tariff Act of 1930 (92 Treas.Dec. 226, Abs. 54422 (1957)). The customs officials, who plaintiff sought to have held in contempt, allegedly refused to refund duties to plaintiff pursuant to the court's judgment. Ostensibly, the reason for withholding a refund from the plaintiff was that the entries were made in the name of a customhouse broker (Kenneth Kittleson), and the latter filed no owner's declaration pursuant to section 485(d) of the Tariff Act. Thus, according to the Bureau, any refunds found to be due were payable to Kittleson, the importer of record, rather than to plaintiff, the ultimate consignee.

In determining whether, in withholding a refund of duties from the plaintiff, the officials had committed contempt the court noted that pursuant to sections 483 and 485(d), the importer of record (Kittleson) was liable for payment of duties and therefore was the person entitled to recover them. Significantly, the court further held (28 Cust.Ct. at 507):

Nevertheless, T. W. Holt & Company, as the actual importer of the merchandise at bar, had a right accorded by the provisions of rule 29, supra, to petition this court for the remission of the additional duties assessed by the collector. Moreover, it is essential that such a right be extant for the protection of an importer against the possible defection of a disinterested, negligent, or bankrupt nominal consignee. Emphasis added.

While section 489 was silent concerning who could file a petition for remission, rule 29 of the court then in effect provided that petitions must be signed and filed by the importer, consignee, or agent. Thus, the clear implication of the court's holding in Holt is that the ultimate consignee and actual owner of the goods may be deemed an importer or consignee for purposes of suing for a refund of duties.

Plainly, the rationale of Holt — that the right to petition was essential "for the protection of an importer against the possible defection of a disinterested, negligent, or bankrupt nominal consignee" — is applicable here to the right to file a protest.

Moreover, in determining that the customs officials had not committed contempt, the court...