Nat'l Fisheries Inst. Inc. v. United States Bureau of Customs

• Decision Date: 21 October 2010
• Docket Number: Slip Op. 10–120.Court No. 05–00683.
• Citation: 751 F.Supp.2d 1318
• Parties: NATIONAL FISHERIES INSTITUTE, INC., et al., Plaintiffs,v.UNITED STATES BUREAU OF CUSTOMS AND BORDER PROTECTION, Defendant.
• Court: U.S. Court of International Trade

751 F.Supp.2d 1318

NATIONAL FISHERIES INSTITUTE, INC., et al., Plaintiffs,

v.UNITED STATES BUREAU OF CUSTOMS AND BORDER PROTECTION, Defendant.

Slip Op. 10–120.Court No. 05–00683.

United States Court of International Trade.

Oct. 21, 2010.

Steptoe & Johnson LLP (Eric C. Emerson, Gregory S. McCue, and Michael A. Pass) for plaintiffs.Tony West, Assistant Attorney General, Jeanne E. Davidson, Director, Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice (Stephen C. Tosini and David F. D'Alessandris); Chi S. Choy, Customs and Border Protection, United States Department of Homeland Security, of counsel, for defendant.

OPINION

STANCEU, Judge.

Plaintiffs (the “NFI Importers” or “NFI”) are domestic shrimp importers who brought this action to contest a new, more stringent bonding requirement (the “enhanced bonding requirement,” or “EBR”) that United States Customs and Border Protection (“Customs,” “CBP,” or the “Agency”) applied to all importers of shrimp products subject to antidumping duty orders. See Nat'l Fisheries Inst., Inc. v. U.S. Bureau of Customs & Border Prot., 34 CIT ––––, ––––, 714 F.Supp.2d 1231, 1232 (010) (“ Nat'l Fisheries IV ”). Before the court is the amended second redetermination upon remand (“Amended Second Remand Redetermination”), which Customs submitted to the court in response to the remand order in National Fisheries IV, 34 CIT at ––––, 714 F.Supp.2d 1231, 1243. The court affirms the redetermined bond amounts in the Amended Second Remand Redetermination. The court orders permanent injunctive relief under which Customs, with a limited exception, is required to implement the Amended Second Remand Redetermination within sixty days of the entry of judgment.

I. Background

Background information, presented in National Fisheries Institute, Inc. v. U.S. Bureau of Customs & Border Protection, 30 CIT 1838, 1843–47, 465 F.Supp.2d 1300, 1305–09 (2006) (“ National Fisheries I ”), National Fisheries Institute, Inc. v. U.S. Bureau of Customs & Border Protection, 33 CIT ––––, ––––, 637 F.Supp.2d 1270, 1274–81 (2009) (“ National Fisheries II ”), and National Fisheries IV, 34 CIT at ––––, 714 F.Supp.2d at 1231–37, is summarized and supplemented herein.

Early in these proceedings, the court ordered limited preliminary injunctive relief in favor of the eight of twenty-seven plaintiffs who testified before the court and established, inter alia, that they would suffer irreparable harm absent such relief. Nat'l Fisheries I, 30 CIT at 1840–43, 465 F.Supp.2d at 1303–05. More recently, in ruling on plaintiffs' motion for judgment upon the agency record, the court remanded for redetermination the bond sufficiency determinations that Customs, in implementing the EBR, applied to all of the plaintiffs. Nat'l Fisheries II, 33 CIT at ––––, 637 F.Supp.2d at 1304–05. In National Fisheries II, the court held that Customs exceeded its discretion in applying the EBR, arbitrarily and capriciously imposed increased bond requirements only on importers of shrimp products, and unreasonably applied a formula for determining bond liability limits that secures potential antidumping duties at a substantial amount over the required cash deposit. Id. at ––––, 637 F.Supp.2d at 1294. In determining that remand proceedings were appropriate, the court held in abeyance plaintiffs' request for permanent injunctive relief. Id. at ––––, 637 F.Supp.2d at 1300–01. Defendant moved for a clarification of the order the court issued in National Fisheries II, a motion the court denied. Nat'l Fisheries Inst., Inc. v. U.S. Bureau of Customs & Border Prot., Slip Op. 09–104, 33 CIT ––––, 2009 WL 3053727 (Sept. 25, 2009) (“ National Fisheries III ”).

Concluding that the redetermined bond amounts in the remand redetermination that Customs issued in response to National Fisheries II did not address adequately the remaining issues in this litigation, the court again remanded the action to Customs in National Fisheries IV, 34 CIT at ––––, 714 F.Supp.2d 1231, 1239–40. Customs filed a second redetermination on June 23, 2010, on which plaintiffs submitted comments on July 21, 2010. Pls.' Comments in Resp. to Second Remand Results (“Pls.Comments”). Defendant filed a response to plaintiffs' comments on August 20, 2010. Def.'s Resp. to NFI's Remand Comments (“Def.Resp.”). On September 2, 2010, defendant filed an unopposed motion for leave for Customs to file an amended second remand redetermination. Def.'s Consent Mot. for Leave to File Am. Remand Results. After plaintiffs informed the court that they would file no further comments, the court accepted the Amended Second Remand Redetermination for filing on September 8, 2010. Order, Sept. 8, 2010.

II. Discussion

A. Standard of Review

The court reviews the Amended Second Remand Redetermination according to the standard of review set forth in Section 301 of the Customs Courts Act of 1980, 28 U.S.C. § 2640(e), under which it “shall review the matter as provided in section 706 of title 5.” 28 U.S.C. § 2640(e) (2006). In accordance with Section 706 of the Administrative Procedure Act, 5 U.S.C. § 706, the court will “compel agency action unlawfully withheld or unreasonably delayed,” 5 U.S.C. § 706(1), and “hold unlawful and set aside agency action, findings, and conclusions found to be ... arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law,” id. § 706(2)(A).

B. The Bond Amounts in the Second Amended Remand Redetermination

In accordance with the court's order in National Fisheries IV, 34 CIT at ––––, 714 F.Supp.2d at 1240, Customs redetermined the limits of liability on plaintiffs' bonds using the 10% bond formula of Customs Directive 99–3510–004, which was in effect prior to the adoption of the enhanced bonding requirement. Am. Second Remand Redetermination 2; see Monetary Guidelines for Setting Bond Amounts, Directive 99–3510–004 (July 23, 1991), http:// www. cbp. gov/ linkhandl er/cgov/trade/legal/directives/3510–004.ctt/3510–004.txt (last visited Oct. 21, 2010). The court directed that “[o]n remand, Customs must reconsider its application of the 10% formula to amounts that include entries for which duty liability, as determined upon liquidation, is already satisfied.” Nat'l Fisheries IV, 34 CIT at ––––, 714 F.Supp.2d at 1241. The court reasoned that

[a]pplication of the 10% formula to the entire amount of duties, taxes, and fees for the bond period, including duties on entries for which liquidation is final and liability is satisfied, results in an actual level of security that could exceed substantially the guideline level of 10%, as applied to the actual amount of duties at risk of nonpayment.

Id. at ––––, 714 F.Supp.2d at 1242. Upon reconsidering the question, Customs reduced the bond amounts to adjust for entries on which liquidation is final. Am. Second Remand Redetermination 2 (stating that “the total duties, taxes, and fees paid during the bond period was reduced by the total duties, taxes and fees relating to entries that were liquidated and the time to file a protest had expired without a protest having been filed”). In response, plaintiffs state that they “do not contest the bond redeterminations made by Defendant in its second remand results.” Pls. Comments 1. The court affirms the redetermined limits of liability for the bonds at issue in this action, as set forth in the Amended Second Remand Redetermination.

In the Amended Second Remand Redetermination, Customs states that it is issuing the redetermined bond amounts “under protest,” taking the position that “once a bond is in place, its limit of liability should not be retroactively redetermined.” Am. Second Remand Redetermination 1. Customs states that retroactive redetermination “foregoes security to which the agency may otherwise be entitled,” limits the agency's ability to aggressively collect debts, and impedes “efficient administration of bonds.” Id. at 1–2. The court does not affirm the portion of the Amended Second Remand Redetermination stating the Agency's position against redetermined bond amounts. This position contradicts the court's holdings in this action. It rests on the untenable premise that Customs should be free to maintain in place indefinitely bonds for which the limits of liability were determined contrary to law. Customs cannot be said to be foregoing security to which it “otherwise may be entitled,” id. at 1, when it has acted contrary to law in ordering that security.

C. Timing of the Required Cancellation of the Bonds

Customs will be required to cancel all bonds at issue in this case, whether or not it chooses to require a replacement (“superseding”) bond in an amount determined without regard to the EBR and in accordance with the Amended Second Remand Redetermination. See Nat'l Fisheries II, 33 CIT at ––––, 637 F.Supp.2d at 1305. In their comments on the Amended Second Remand Redetermination, plaintiffs advocate that the court “set a time certain by which Defendant must cancel all bonds calculated under the enhanced bonding requirement.” Pls. Comments 1. Plaintiffs argue that “a fixed deadline is necessary to ensure that Defendant takes action on these illegally calculated bonds,” id. at 1–2, urging that the court allow Customs thirty days for this purpose, id. at 3. Defendant proposes, instead, a judgment in which Customs would be required to take no action until thirty days from the date on which the judgment becomes final and conclusive, i.e., after all appeals have been exhausted. Def. Resp., Judgment 1 (proposing that the court order Customs to implement the Amended Second Remand Redetermination “within 30 days of any final and conclusive judgment in this matter which sustains those remand results”). Defendant objects that plaintiffs are attempting to obtain relief that would void the bonds such that the bonds could not be reinstated should the government successfully appeal a judgment entered in this...