Nufarm America's, Inc. v. U.S.

• Citation: 398 F.Supp.2d 1338
• Decision Date: 05 October 2005
• Docket Number: Court No. 02-00162.,Slip Op. 05-133.
• Parties: NUFARM AMERICA'S, INC., Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

398 F.Supp.2d 1338

NUFARM AMERICA'S, INC., Plaintiff, v. UNITED STATES, Defendant.

Slip Op. 05-133.

Court No. 02-00162.

United States Court of International Trade.

October 5, 2005.

COPYRIGHT MATERIAL OMITTED

Joel R. Junker, Joel R. Junker & Associates, Seattle, WA; David J. Shaffer, Ronald A. Schmidt, Garvey Schubert Barer, for Plaintiff NuFarm America's, Inc.

Robert D. McCallum, Jr., Assistant Attorney General, Barbara S. Williams, Acting Attorney in Charge, International Trade Field Office, Civil Division, Department of Justice, Commercial Litigation Branch; Beth C. Brotman, Office of Assistant Chief Counsel, International Trade Litigation, U.S. Customs and Border Protection, for Defendant United States.

OPINION

WALLACH, Judge.

I INTRODUCTION

The Plaintiff in this case, Nufarm America's Inc. ("Nufarm") seeks to create a class of plaintiffs to join in challenging a duty deferral program administered by the United States Bureau of Customs and Border Protection ("Customs"). The plaintiff class would comprise all individuals or entities who paid duties pursuant to 19 C.F.R. § 181.53 (2000) (duty-deferral programs) at any time during the period within applicable statutes of limitations, and all individuals or entities who would be subject to such duties in the future. Defendant moves pursuant to USCIT Rule 12(b)(1) and (5) to dismiss those paragraphs of Plaintiff's Consolidated Complaint which claim jurisdiction pursuant 28 U.S.C. § 1581(i) (2000). See Plaintiff NuFarm America's Inc. Motion for Class Certification ("Plaintiff's Motion"); see also Defendant's Motion to Dismiss Paragraphs 3, 24, and 25 of Plaintiff's Consolidated Complaint ("Defendant's Motion"). Plaintiff's failure to satisfy jurisdictional and numerocity requirements mandates that its Motion for Class Certification be denied, and Defendant's Partial Motion to Dismiss be granted.

II BACKGROUND

NuFarm is a supplier of agricultural chemicals. NuFarm imported certain base chemicals under the HTS Subheading 9813.00.05 as "articles to be processed into articles manufactured or produced in the United States." HTSUS 9813.00.05. NuFarm imported the merchandise under bond as part of a duty deferral program. The imported merchandise was shipped to Montana for processing into new products that were subsequently shipped for sale in Canada. Following export to Canada, Plaintiff filed the subject consumption entry pursuant to 19 C.F.R. § 181.53, and paid the required duty.

NuFarm, after paying the assessed duties, fees and other charges pursuant to 19 C.F.R. § 181.53, filed timely protests claiming that § 181.53 is unconstitutional. These protests were denied. It subsequently filed the instant action to recover those sums and challenge the protest denial claiming jurisdiction under 28 U.S.C. § 1581(a) (2000) and challenging the constitutionality of the regulation under 28 U.S.C. § 1581(i). Plaintiff's Motion at 4 (citing Thomson Consumer Electronics, Inc. v. United States, 247 F.3d 1210 (Fed.Cir.2001), as controlling authority for claiming concurrent jurisdiction under both §§ 1581(a) and 1581(i)).

Plaintiff filed its original Complaint on February 13, 2002, challenging the imposition of duties on merchandise originally imported under certain duty deferral programs which were subsequently exported to Canada or Mexico. Plaintiff claims that these duties violate the Export Clause of the United States Constitution, Art. I. § 9, U.S. Const. ("Export Clause"). Plaintiff amended its Complaint alleging a class action as to all duty deferral programs under 19 C.F.R. § 181.53. Plaintiff now seeks class certification under United States Court of International Trade Rule 23(a), 23(b)(2) and (3).¹

As discussed below, the court has jurisdiction over this matter pursuant to 28 U.S.C. § 1581(a) (2000).

III JURISDICTION

Plaintiff originally brought its Complaint under 28 U.S.C. § 1581(a), its protests having been denied by U.S. Customs and Border Protection Agency ("Customs").² Plaintiff later filed an Amended Complaint claiming jurisdiction under 28 U.S.C. § 1581(i), covering residual jurisdiction. Jurisdiction pursuant to § 1581(a) is limited to those entries which have satisfied all of the statutory requirements under Title 19 U.S.C. § 1514; that they were validly protested, those protests were denied and the duties paid. See Koike Aronson, Inc. v. United States, 165 F.3d 906, 908-09 (Fed.Cir.1999). Section 1581(i) grants exclusive jurisdiction to the Court of International Trade ("CIT") over any civil action commenced against the United States, its agencies, or its officers, that arises out of any law of the United States providing for, inter alia, tariffs, duties, fees, or other taxes on the importation of merchandise for reasons other than the raising of revenue. See Miller & Co. v. United States, 824 F.2d 961, 963 (Fed.Cir.1987); see also Thomson, 247 F.3d at 1214. However, in order to invoke § 158(i) jurisdiction, the party must establish that the case directly relates to the proper administration and enforcement of an international trade law, and either no other basis for jurisdiction is available, or the basis that is available cannot yield an adequate remedy. See Miller, at 963.

The jurisdictional issue which the court must decide is whether relief under the other sections of 28 U.S.C. § 1581 would be inadequate, and therefore a basis for (i) jurisdiction exists. As discussed in detail below, due to the relief the Plaintiff is seeking, jurisdiction is not properly conferred by section 1581(i).

IV

APPLICABLE LEGAL STANDARD

A CLASS CERTIFICATION

Plaintiff moves for class certification under USCIT Rule 23. Under USCIT Rule 23(c), the court is to determine by order whether a class action may be maintained as soon as practicable.

USCIT Rule 23(a) ennumerates the prerequisites to a class action: (1) numerosity, (2) commonality, (3) typicality, and (4) adequacy of representation. USCIT Rule 23(b) states that in addition to these prerequisites, one of three conditions must be met pursuant to Rule 23(b)(1-3). Plaintiff seeks to proceed under Rule 23(b)(2) and (b)(3). Plaintiff's Motion at 15. Rule 23(b)(2) requires that "the party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole." Id. Rule 23(b)(3) requires the court to find that "the questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy." Id. Rule 23(b)(3) then sets out several matters pertinent to such a finding. These matters are: "(A) the interest of members of the class in individually controlling the prosecution or defense of separate actions; (B) the extent and nature of any litigation concerning the controversy already commenced by or against members of the class; (C) the desirability of concentrating the litigation of the claims in the particular forum; (D) the difficulties likely to be encountered in the management of a class action." USCIT R.23.

B MOTION TO DISMISS

Defendant moves for dismissal of Paragraphs 3, 24, and 25 of Plaintiff's Consolidated Complaint pursuant to USCIT Rules 12(b)(1) and (5). When a plaintiff's assertion of jurisdiction is challenged, under USCIT Rule 12(b)(1), it has the burden to establish the basis for jurisdiction. See Rocovich v. United States, 933 F.2d 991, 993 (Fed.Cir.1991); Former Emples. of Sonoco Prods. Co. v. United States Sec'y of Labor, 273 F.Supp.2d. 1336, 1338 (2003) (citing McNutt v. Gen. Motors Acceptance Corp., 298 U.S. 178, 189, 56 S.Ct. 780, 80 L.Ed. 1135 (1936)); Elkem Metals Co. v. United States, 23 CIT 170, 175, 44 F.Supp.2d 288 (1999). On a motion to dismiss for failure to state a claim pursuant to USCIT Rule 12(b)(5), the Defendant is entitled to dismissal where, after accepting Plaintiff's factual allegations in its complaint and drawing all inferences in favor of Plaintiff, it appears beyond doubt that no set of facts can be proven that would entitle Plaintiff to relief. See Constant v. Advanced Micro-Devices, Inc., 848 F.2d 1560, 1565 (Fed.Cir.1988); United States v. Ford Motor Co., 2005 WL 400399, *5 (CIT Feb. 18, 2005); Kemet Electronics Corp. v. Barshefsky, 976 F.Supp. 1012, 1027 (CIT 1997).

V ARGUMENTS

Two related issues are currently before the court. The first is whether the court has jurisdiction to hear Plaintiff's claims, the second is whether the Plaintiff has successfully established the requisite elements for class certification.

A

The Parties Agree That Jurisdiction Over Plaintiff's Claims Lies Under 28 U.S.C. § 1581(a) But Disagree Whether It Lies Under 28 U.S.C. § 1581(i)

Plaintiff challenges Customs' denial of its protest, claiming jurisdiction under 28 U.S.C. § 1581(a) and challenges the constitutionality of 19 C.F.R. § 181.53 under 28 U.S.C. § 1581(i). Plaintiff cites to Thomson Consumer Electronics, Inc. v. United States, 247 F.3d 1210 (Fed.Cir.2001), as controlling authority for claiming concurrent jurisdiction under both §§ 1581(a) and 1581(i).

Each potential basis for jurisdiction is addressed in turn. Plaintiff and Defendant agree, and the court hereby finds, that because the named plaintiff, NuFarm, has met the jurisdictional prerequisite of exhausting its administrative remedies, jurisdiction exists under § 1581(a) for NuFarm's claims.

Plaintiff supports its contention that the court has jurisdiction under § 1581(i), noting that "the Court of Appeals [in Thomson] allowed HMT [harbor maintenance tax] importer claims to be brought under 28 U.S.C. § 1581(i), even though 1581(a) jurisdiction was clearly available. It reasoned that making a purely constitutional claim before Customs as to the validity of the statute would be futile." Plaintiff's Reply to...