NORCAL% 61CROSETTI FOODS v. US Customs Service

• Decision Date: 12 February 1990
• Docket Number: Court No. 89-09-00495.
• Citation: 14 CIT 69,731 F. Supp. 510
• Parties: NORCAL/CROSETTI FOODS, INC., et al., Plaintiffs, v. UNITED STATES CUSTOMS SERVICE, et al., Defendants.
• Court: U.S. Court of International Trade

731 F. Supp. 510

14 CIT 69

NORCAL/CROSETTI FOODS, INC., et al., Plaintiffs, v. UNITED STATES CUSTOMS SERVICE, et al., Defendants.

Court No. 89-09-00495.

United States Court of International Trade.

February 12, 1990.

Titchell, Maltzman, Mark, Bass, Ohleyer & Mishel, Richard D. Maltzman, Robert Ted Parker and Richard C. Insalaco, San Francisco, Cal., for plaintiffs.

Stuart M. Gerson, Asst. Atty. Gen., Joseph I. Liebman, Attorney-in-Charge, Intern. Trade Field Office, Commercial Litigation Branch, U.S. Dept. of Justice, Washington, D.C., and Susan Burnett Mansfield, for defendants.

MEMORANDUM OPINION AND ORDER

MUSGRAVE, Judge.

Plaintiff filed action seeking proper interpretation of 19 U.S.C. § 1304, concerning the conspicuousness of country of origin marking requirements on imported frozen vegetable packaging. The government moves to dismiss for lack of jurisdiction.

Held: The government's motion is denied; jurisdiction in this Court is proper under 28 U.S.C. § 1581(i)(4).

This action was originally filed in the United States District Court for the Northern District of California on February 23, 1989. The case was transferred to this Court under a stipulation of transfer on August 30, 1989.¹

In their complaint, Norcal/Crosetti Foods, Inc., Patterson Frozen Food, Inc. and Richard A. Shaw, Inc. (hereinafter "Norcal") claim that the U.S. Customs Service ("Customs") has failed to properly ensure that packaging of imported frozen vegetables exhibits the country of origin marking in a conspicuous place, as required by 19 U.S.C. § 1304² and its implementing regulation, 19 C.F.R. § 134.41(b).³ Having received a negative ruling from Customs concerning the adequacy of country of origin marking requirements, Norcal now seeks a determination by this Court regarding the proper interpretation of the above-referenced statute and regulation.

The government opposes jurisdiction in this Court and has moved to dismiss the action, claiming that, although plaintiffs assert this is a marking case, claims that imported merchandise are not properly marked are ultimately claims that the merchandise was not properly classified, and are thus within the province of 19 U.S.C. § 1516.⁴ Because plaintiffs have failed to exhaust their administrative remedies accompanying that code section (see 28 U.S.C. § 2637(b)⁵), they have not met the jurisdictional prerequisites to filing a claim with this Court. Thus, jurisdiction in this Court under 28 U.S.C. § 1581(b)⁶ is alleged to be lacking, and the action, according to the government, should be dismissed.

During oral argument, Norcal invoked jurisdiction in this Court under 28 U.S.C. § 1581(h), or, in the alternative, under § 1581(i)(4). The former statute provides:

(h) The Court of International Trade shall have exclusive jurisdiction of any civil action commenced to review, prior to the importation of the goods involved, a ruling issued by the Secretary of the Treasury, or a refusal to issue or change such a ruling, relating to classification, valuation, rate of duty, marking, restricted merchandise, entry requirements, drawbacks, vessel repairs, or similar matters, but only if the party commencing the civil action demonstrates to the court that he would be irreparably harmed unless given an opportunity to obtain judicial review prior to importation. (Emphasis supplied).

After consideration of the parties' arguments advanced in the pleadings as well as during oral arguments, the Court concludes that the government's position is erroneous. Because jurisdiction under 28 U.S.C. § 1581(h) is lacking, this Court may take jurisdiction pursuant only to the "residual jurisdiction" of 28 U.S.C. § 1581(i)(4)⁷, since the case directly relates to the proper administration and enforcement of an international trade law (marking) referred to in 28 U.S.C. § 1581(a)-(h).

Because resort to this Court's residual jurisdiction is not warranted unless one of the more specific provisions of § 1581(a)-(h) does not apply, Norcal's § 1581(h) claim must first be addressed. As the government notes, 28 U.S.C. § 2631(h) limits the ability of prospective plaintiffs to file suit in this Court:

(h) A civil action described in section 1581(h) of this title may be commenced in the Court of International Trade by the person who would have standing to bring a civil action under section 1581(a) of this title if he imported the goods involved and filed a protest which was denied, in whole or in part, under section 515 of the Tariff Act of 1930. (Emphasis added.)

The government relies on U.S. Cane Sugar Refiners Ass'n v. United States, 698 F.Supp. 266 (CIT 1988) to support their position that because Norcal is not an importer, plaintiffs cannot rely on § 1581(h). In that case, the Court declined to take jurisdiction because "standing ... challenging a classification ruling⁸ prior to importation is limited in 28 U.S.C. § 2631(h), roughly speaking, to the prospective importer of the goods in dispute." Id. at 268, n. 1. Because Norcal is not an importer, 28 U.S.C. § 2631(h) would preclude invocation of 28 U.S.C. § 1581(h) as the proper jurisdictional basis, argues the government.

As the government conveniently overlooked, though, the above-cited language is contained in a footnote and has no precedential value. This Court is not constrained to accept dicta as controlling law.

Moreover, the restrictive standing language of § 2631(h) has been broadened by Congress. Although ostensibly limited to importers, § 1581(h) can be utilized by any person who would have standing under § 1581(a). Thus, an examination of 19 U.S.C. § 1514(c)(1)(A)-(E), which sets forth the standing requirements for bringing an action under § 1581(a), is necessary:

(1) ... Except as provided in sections 1485(d) and 1557(b) of this title, protests may be filed with respect to merchandise which is the subject of a decision specified in subsection (a) of this section by —

(A) the importers or consignees shown on the entry papers, or their sureties;

(B) any person paying any charge or exaction;

(C) any person seeking entry or delivery;

(D) any person filing a claim for drawback; or

(E) any authorized agent of any of the persons described in clauses (A) through (D).

Thus, invocation of § 1581(a) is not limited only to importers, but allows a variety of persons involved in the disputed import transaction to file a protest.

Furthermore, when the import consists of a raw agricultural product, as do the imports in this case, Congress has allowed a broad interpretation of the term "interested party." In the government's view, 19 U.S.C. § 1516 controls the issue in this case, yet that statute provides:

Any producer of a raw agricultural product who is considered under section 1677(4)(E) of this title to be part of the industry producing a processed agricultural product of the same class or kind as the designated imported merchandise shall, for purposes of this section, be treated as an interested party producing such processed agricultural product.

19 U.S.C. § 1516(a)(3) (emphasis supplied).

In any event, resolution of the standing issue pertaining to § 1581(h) need not be decided because the refusal by Customs to issue the ruling requested by Norcal is not a protestable event. Those actions by Customs which can be challenged through the traditional protest route are set out in 19 U.S.C. § 1514(a)(1)-(7), which reads in pertinent part:

§ 1514. Protests against decisions of appropriate customs officers

(a) Finality of decisions; return of papers

... decisions of the appropriate customs officer, including the legality of all orders and findings entering into the same, as to —

(1) the appraised value of merchandise;

(2) the classification and rate and amount of duties chargeable;

(3) all charges or exactions of whatever character within the jurisdiction of the Secretary of the Treasury (4) the exclusion of merchandise from entry or delivery or a demand for redelivery to customs custody under any provision of the customs law, except a determination appealable under section 1337 of this title;

(5) the liquidation or reliquidation of an entry, or any modification thereof;

(6) the refusal to pay a claim for drawback; and

(7) the refusal to reliquidate an entry under section 1520(c) of this title, shall be final and conclusive upon all persons (including the United States and any officer thereof) unless a protest is filed in accordance with this section, or unless a civil action contesting the denial of a protest, in whole or in part, is commenced in the United States Court of International Trade ...

Only if one of these seven events is present can parties invoke jurisdiction under § 1581(a). Since none of these events appear in this case, § 1581(a) cannot apply. Thus, resort to § 1581(h) is not possible since that provision may be invoked only if the plaintiff could have filed an action under § 1581(a). Because § 1581(a) can be used only to review a protestable event, and Norcal has nothing to protest, jurisdiction in this Court cannot be asserted under 28 U.S.C. § 1581(h).

Before examining the propriety of jurisdiction under 28 U.S.C. § 1581(i)(4), this Court will dispose of the government's untenable position. Defendant argues that claims by domestic interested parties that merchandise of others was not properly marked are claims that the merchandise was not properly classified and was not assessed at the correct rate of duty. Such claims would properly fall within the purview of 19 U.S.C. § 1516, with jurisdiction in this Court following under § 1581(b). Since Norcal failed to exhaust their mandatory administrative remedies, defendant maintains that the Court lacks jurisdiction.

The government relies on The Diamond Match Company v. United States, 49 CCPA 52, C.A.D. 796 (1962), and Bradford Co., et al. v. American Lithographic Co., 12 Ct.Cust.App. 318 (1924) to bolster this truly sweeping pronouncement. In Diamond Match, the main issue presented was whether...