Orlando Food Corp. v. U.S.

• Decision Date: 14 September 2005
• Docket Number: No. 04-1612.,04-1612.
• Parties: ORLANDO FOOD CORP., Plaintiffs-Appellant, v. UNITED STATES, Defendant-Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

423 F.3d 1318

ORLANDO FOOD CORP., Plaintiffs-Appellant, v. UNITED STATES, Defendant-Appellee.

No. 04-1612.

United States Court of Appeals, Federal Circuit.

September 14, 2005.

Steven P. Florsheim, Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP, of New York, New York, argued for plaintiff-appellant.

Jack S. Rockafellow, Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, of New York, New York, argued for defendant-appellee. With him on the brief were Peter D. Keisler, Assistant Attorney General, David M. Cohen, Director, and Barbara S. Williams, Attorney in Charge, International Trade Field Office. Of counsel on the brief was Edward N. Maurer, Attorney, Office of Assistant Chief Counsel, International Trade Litigation, United States Customs and Border Protection, of New York, New York.

Before MICHEL, Chief Judge, NEWMAN and LINN, Circuit Judges.

Opinion for the court filed by Circuit Judge LINN.

Dissenting opinion filed by Chief Judge MICHEL.

LINN, Circuit Judge.

Orlando Food Corp. ("Orlando") appeals from the United States Court of International Trade's grant of summary judgment in favor of the government denying interest on its overpayment of duties. Because the Court of International Trade erred in its interpretation of the relevant statutes, we reverse and remand.

I. BACKGROUND

Orlando imported certain tomato products into the United States in 1989 and 1990. These shipments were erroneously classified in Harmonized Tariff Schedule of the United States ("HTSUS") Subheading 2002.10.00. Orlando timely challenged the classification of most of these shipments. The Court of International Trade held that Orlando's tomato products should have been classified under HTSUS Subheading 2103.90.60, and this court affirmed. Orlando Food Corp. v. United States, 21 C.I.T. 187 (1997), aff'd, 140 F.3d 1437 (Fed.Cir.1998). Orlando apparently received interest on its overpayment on those shipments under 19 U.S.C. § 1505. However, Orlando failed to protest one of its entries.

Orlando petitioned Congress for relief on the single entry that it failed to protest, and Congress provided that relief in section 1408 of the Tariff Suspension and Trade Act of 2000, providing for reliquidation of Orlando's improperly liquidated entry. Pub.L. No. 106-476, 114 Stat. 2101, 2148. Pursuant to that provision, Orlando sought reliquidation of its entry, and the government paid Orlando a refund according to the proper classification. However, the government refused to pay interest on the claim. Orlando filed an action in the Court of International Trade challenging the government's denial of interest. Orlando moved for summary judgment that it was entitled to interest, and the government cross-moved for summary judgment that Orlando was not entitled to interest. The Court of International Trade granted the government's cross-motion for summary judgment denying Orlando's claim for interest.

Orlando timely appeals to this court. We have jurisdiction under 28 U.S.C. § 1295(a)(5).

II. DISCUSSION

A. Standard of Review

We review the Court of International Trade's grant of summary judgment de novo. Int'l Trading Co. v. United States, 412 F.3d 1303, 1307 (Fed.Cir.2005) ("We review the Court of International Trade's grant of summary judgment for correctness as a matter of law, deciding de novo (i) the proper interpretation of the governing statute and regulations; and (ii) whether genuine issues of material fact exist.").

B. Analysis

As a general rule, the United States is immune from claims seeking an award of interest. Library of Cong. v. Shaw, 478 U.S. 310, 314-15, 106 S.Ct. 2957, 92 L.Ed.2d 250 (1986) ("This basic rule of sovereign immunity, in conjunction with the requirement of an agreement to pay interest, gave rise to the rule that interest cannot be recovered unless the award of interest was affirmatively and separately contemplated by Congress."). The only exception to this general rule that is relevant in this case is where Congress has expressly provided for interest. Courts are not free to infer waivers of sovereign immunity, and any express waivers must be narrowly construed. Id. at 318, 106 S.Ct. 2957 ("In analyzing whether Congress has waived the immunity of the United States, we must construe waivers strictly in favor of the sovereign and not enlarge the waiver beyond what the language requires." (quotation marks and citations omitted)); Hartog Foods Int'l, Inc. v. United States, 291 F.3d 789, 791 (Fed.Cir.2002).

The sole issue before this court is whether the Court of International Trade correctly concluded that Orlando was not entitled to interest pursuant to a reliquidation under section 1408 of the Tariff Suspension and Trade Act of 2000. The Court of International Trade recognized that 19 U.S.C. § 1505(b) provides for interest on "excess moneys deposited." Orlando Food Corp. v. United States, 343 F.Supp.2d 1375, 1380 (Ct. Int'l Trade 2004). However, the Court of International Trade held that Orlando was not entitled to interest on its overpayment. The Court of International Trade relied on the proposition that waivers of sovereign immunity immunity must be narrowly construed and on the fact that some provisions of the Tariff Suspension and Trade Act of 2000 contained language expressly mentioning interest while section 1408 did not. Id. at 1380-82. Based on these two factors, the Court of International Trade concluded that without more specific language referring to interest in section 1408, it could not hold that the waiver of sovereign immunity in section 1505 applied to liquidations or reliquidations under section 1408.

A brief overview of the processing of entries of imported goods is necessary to the analysis in this case. Subject to certain exceptions, soon after merchandise is imported, an importer is required to deposit estimated duties with the United States Customs Service.¹ 19 U.S.C. § 1505(a) (2000)²; Travenol Labs., Inc. v. United States, 118 F.3d 749, 752 (Fed.Cir.1997). Liquidation generally must occur within one year from the time of entry, again subject to exceptions. 19 U.S.C. § 1504(a). The procedure for liquidation is prescribed by 19 U.S.C. § 1500. Once liquidation has occurred, an importer has 90 days to protest that decision, or the decision becomes final. Id. § 1514(a), (c)(3).³ Customs may also voluntarily reliquidate an entry within 90 days of an original liquidation, whether or not an importer files a protest. Id. § 1501. Additionally, 19 U.S.C. § 1520(c) authorizes Customs to reliquidate an entry, even if a protest was not filed, to correct certain limited errors.⁴ Where a liquidation or reliquidation occurs, Customs is required to refund any excess moneys deposited with interest pursuant to 19 U.S.C. § 1505(b). However, no statute prescribing or authorizing liquidation or reliquidation refers to section 1505 or mentions interest. Moreover, 19 U.S.C. § 1515(a), relating to protests, does not even mention liquidation or reliquidation but provides for a refund of "any duties, charge, or exaction found to have been assessed or collected in excess" as a result of a protest. Section 1515(a) also does not mention interest or section 1505.

With this legislative scheme as a backdrop, Congress passed the Tariff Suspension and Trade Act of 2000. Section 1408 states:

(a) IN GENERAL.—Notwithstanding section 514 of the Tariff Act of 1930 (19 U.S.C. 1514) or any other provision of law and subject to the provisions of subsection (b), the United States Customs Service shall, not later than 180 days after the receipt of the request described in subsection (b), liquidate or reliquidate each entry described in subsection (d) containing any merchandise which, at the time of the original liquidation, was classified under subheading 2002.10.00 of the Harmonized Tariff Schedule of the United States (relating to tomatoes, prepared or preserved) at the rate of duty that would have been applicable to such merchandise if the merchandise had been liquidated or reliquidated under subheading 2103.90.60 of the Harmonized Tariff Schedule of the United States (relating to tomato sauce preparation) on the date of entry.

...

(c) PAYMENT OF AMOUNTS OWED.—Any amounts owed by the United States pursuant to the liquidation or reliquidation of an entry under subsection (a) shall be paid not later than 180 days after the date of such liquidation or reliquidation.

Pub.L. No. 106-476, 114 Stat. 2101, 2148. Section 1408(a) provides for liquidation or reliquidation of entries covered by that section, notwithstanding section 1514. As noted supra, section 1514 provides for the finality of liquidations absent a timely protest. Thus, section 1408(a) provides an exception to section 1514 for the entries covered by section 1408.⁵ Subsection (c) provides for payment of amounts owed pursuant to the liquidation or reliquidation but does not mention interest.

Orlando's primary argument is that the authorization of liquidation or reliquidation in section 1408(a) invokes section 1505(b), which requires Customs to pay interest on any excess moneys deposited. We agree. Section 1505(b) is not limited to liquidations or reliquidations under any particular provision. Also, section 1505(b) "unambiguously waives sovereign immunity ... for interest awards on `excess moneys deposited.'" Hartog Foods, 291 F.3d at 792. As we said in Hartog Foods, "`excess moneys deposited' refers to an overpayment of estimated duties, i.e., the deposit or payment of money beyond legal requirements." Id. Orlando's deposit of funds in excess of those legally required based on an erroneous classification meets this definition. Thus, section 1505(b) provides for interest on Orlando's refund. Although we must construe waivers of sovereign immunity narrowly, there is no principled basis for holding that Orlando's overpayment was not "excess moneys deposited."

The government, however, raises a number of arguments...