National Corn Growers Ass'n v. Baker
| Decision Date | 09 February 1988 |
| Docket Number | Nos. 87-1147,s. 87-1147 |
| Citation | 840 F.2d 1547 |
| Parties | , 9 ITRD 2535, 6 Fed. Cir. (T) 104, 6 Fed. Cir. (T) [PG70 NATIONAL CORN GROWERS ASSOCIATION, New Energy Company of Indiana, Archer Daniels Midland Company, Ohio Farm Bureau Federation, and A.E. Staley Manufacturing Company, Plaintiffs-Cross-Appellants, v. James BAKER, III, Secretary, John M. Walker, Jr., Assistant Secretary, William Von Raab, Commissioner, United States of America, Citicorp International Co., Inc. and RAJ Chemicals, Inc., Defendants-Appellants. to 87-1149 and 87-1160. |
| Court | U.S. Court of Appeals — Federal Circuit |
Stephen L. Urbanczyk, of Williams & Connolly, Washington, D.C., argued, for appellee National. With him on the brief, were Aubrey M. Daniel, III, Manley W. Roberts, Robert W. Hamilton, and William R. Murray, Jr.
David M. Cohen, Director, of the Commercial Litigation Branch, Dept. of Justice, New York City, argued, for defendant-appellant Baker. With him on the brief, were Richard K. Willard, Asst. Atty. Gen., Joseph I. Liebman, Attorney-in-Charge, Intern. Trade Field Office and Kenneth N. Wolf.
A. Douglas Melamed, of Wilmer, Cutler & Pickering, Washington, D.C., argued, for defendant-appellant Citicorp. With him on the brief, were Robert C. Cassidy, Jr. and Deborah M. Levy.
Joseph A. Artabane, of Spriggs, Bode & Hollingsworth, Washington, D.C., argued, for defendant-appellant RAJ. With him on the brief, were William H. Bode, Mark J. Riedy and Joseph L. Nellis.
Robert J. Leo, New York City, was on the brief, for amicus curiae, American Ass'n of Exporters and Importers.
William F. Demarest, Jr., J. Peter Luedtke, and Thomas C. Jones, Jr., of Holland & Hart, Washington, D.C., were on the brief, for amicus curiae Citgo Petroleum Corp.
Before BISSELL and MAYER, Circuit Judges, and NICHOLS, Senior Circuit Judge.
Secretary of the Treasury James Baker (in his official capacity on behalf of the United States), Citicorp International Co., Inc. (Citicorp), and RAJ Chemicals, Inc. (RAJ) appeal the decision of the Court of International Trade, No. 85-08-01151, 9 CIT 571, 623 F.Supp. 1262 (1985), arguing that the trial court lacked jurisdiction. Upon examination of the complete record and decisions below, this court holds that the Court of International Trade indeed lacked jurisdiction to entertain the suit. We reverse and remand with instructions to dismiss the plaintiffs-cross-appellants/appellees' suit with prejudice.
In 1983, Congress added a new temporary provision to the Tariff Schedule of the United States (TSUS), imposing a sixty-cent per gallon (60cents per gallon) tariff on ethanol "provided for in item 427.88." Section 901.50 provides:
Ethyl alcohol (provided for in item 427.88, part 2D, schedule 4) when imported to be used in producing a mixture of gasoline and alcohol or a mixture of a special fuel and alcohol for use as fuel, or when imported to be used otherwise as fuel * * *. 60cents per gal.
TSUS 427.88 previously imposed a three percent (3%) ad valorem duty on imports of ethanol. In September 1984, the Customs Service (Customs or Service), through the Commissioner of Customs, established a practice that certain mixtures of ethanol would not be dutiable under TSUS 901.50, but only 427.88. Upon various importers' request, Customs issued several private ruling letters as to mixtures of ethanol, with as little as 7.5 percent other additives.
Domestic producers, hearing of this, filed informal objections with Customs and began an intense lobbying campaign to convince Customs to revoke the existing policy. Objections by Senators Robert Dole and Richard Lugar, among others, reinforced the domestic producers' arguments that exemption from the 60cents duty resulted in a subsidy of sorts for importers of non-pure ethanol. On August 2, 1985, such domestic producers, including appellees, National Corn Growers Association (NCGA), New Energy Company of Indiana (NECI) and others, achieved their goal. The Department of the Treasury announced Commissioner William von Raab's decision to apply the 60cents per gallon duty to "ethanol imports mixed with other additives." The announcement clearly stated that the change "revers[ed] a previous Customs ruling."
After thus revoking the September 1984 rulings, Customs notified various importers by letter, among them Citicorp and RAJ, that the additional TSUS 901.50 60cents per gallon duty would apply to mixed ethanol imports. In order to avoid unfairness, attention was invited to the sixth paragraph of the August 2, 1985, revocation which provided the importers the opportunity to present evidence indicating reliance on ruling letters issued prior to the policy revocation. Specifically, Customs stated:
With respect to any entries made after the effective date of the instant [August 2, 1985] ruling, Customs will consider all facts and evidence in connection with claims of reliance on the ruling previously issued.
Both Citicorp and RAJ submitted evidence arguably showing reliance on rulings issued before August 2, 1985, though the scheduled imports were to enter the United States after the August 2 deadline. Based on each company's submission, Customs issued new ruling letters--pursuant to 19 C.F.R. Sec. 177.8--in August of 1985, permitting the importation of certain shipments of mixed ethanol under the pre-August 2, 1985, practice--i.e., the 60cents per gallon duty would not apply. The letters to Citicorp were issued on August 7 and August 27, 1985. The letter to RAJ was dated August 27, 1985.
Relying on the Customs rulings, as they say, RAJ imported the permissible number of gallons stated in the ruling letters prior to the deadline set by Customs, i.e., November 1, 1985, 5:00 p.m. Citicorp imported its allotted number of gallons prior to the November 1 deadline also, ceasing all shipments after their October 28 and 29, 1985, entries. Citicorp has not entered mixtures since then.
Appellees, distressed at the continued importation of exempted ethanol and without waiting for all the actual entries or the filing by them of formal protests, filed suit against the government for injunctive relief in the Court of International Trade on August 29, 1985, challenging the post-August 2 ruling letters issued to Citicorp and RAJ. Appellees questioned the Customs Service's authority to exempt appellants from payment of duties because of appellants' reliance on previously stated Customs' policies. "Appellees sought * * * a declaration that the Service's grandfather Appellees renewed their motion for preliminary injunction which was denied on November 26, 1985, by Court of International Trade Judge Aquilino. On the same day, Judge Aquilino granted Citicorp's motion to intervene, having previously granted RAJ's motion to intervene. On December 4, 1985, the trial court held a pre-trial conference at which a trial schedule developed. The case was tried before Judge Aquilino on December 16, 1985, and January 6-7, 1986. The court took the case under advisement on January 22, 1986.
decisions were unlawful and that the full statutory duties were owing on all ethanol blends entered after August 2 * * *." (Appellees' brief at 8.) Judge Carman denied appellees', then plaintiffs in the action, motions for temporary restraining orders and preliminary injunctions on September 20, 1985. The motions before Judge Carman specifically sought a suspension of the liquidation of the shipments authorized by the August 1985 ruling letters to both Citicorp and RAJ
In the meantime, Customs liquidated the remaining imports of ethanol in issue belonging to Citicorp and the 90-day period for finality of liquidation began to run. 19 U.S.C. Sec. 1514. Judge Aquilino entered judgment and issued his decision on May 23, 1986, after all entries relevant herein had been liquidated, and the entries had become final pursuant to section 1514. See the appendix for the full text of relevant statutes. We understand that Customs did reliquidate when the finality period had not run. The trial court held that it had jurisdiction to hear the case, regardless of appellees' failure to protest Customs' rulings pursuant to section 516 of the Tariff Act of 1930, 19 U.S.C. Sec. 1516, and 28 U.S.C. Sec. 1581(b), which govern such complaints by domestic manufacturers. The court reviewed the circumstances of each entry and challenged them as not made in reasonable reliance, but it also held that Customs had no authority to issue ruling letters exempting Citicorp, RAJ, and others from the August 2, 1985, imposition of the 60cents per gallon duty, regardless of any reliance proven by the parties involved. As appears from the language used, it took the position that once Customs had determined that mixed ethanol was dutiable under section 901.50, any liquidation of any entry whenever made at a lower rate was lawless behavior. It took no notice of any possible right to limit the retroactive effect of any change of practice. Lastly, the court held that the parties were not entitled to rely on the Customs' ruling letters permitting entry of ethanol shipments at a lower duty. It ordered RAJ and Citicorp to pay into the Treasury the amounts the Commissioner's alleged malfeasance had enriched them, no reliquidation of the entries being needed in the court's view.
Upon filing and denial of appropriate post-trial motions, this appeal ensued.
The threshold issue to dispose of before all others in this appeal is whether the Court of International Trade appropriately claimed jurisdiction of the present suit under authority of 28 U.S.C. Sec. 1581(i) or the Administrative Procedures Act, 5 U.S.C. Sec. 701 et seq. If, as we hold, it did not, all other issues are preempted however extensively the parties have discussed them.
OPINIONAppellees allege that the Secretary...
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