Penrod Drilling Co. v. US

Citation13 CIT 1005,727 F. Supp. 1463
Decision Date13 December 1989
Docket Number87-04-00608,Court No. 87-02-00170,87-10-01022 and 87-11-01073.
CourtU.S. Court of International Trade

Haight, Gardner, Poor & Havens, John W. McConnell, Jr., New York City, for plaintiff.

Stuart M. Gerson, Asst. Atty. Gen., Joseph I. Liebman, Atty. in Charge, International Trade Field Office, Commercial Litigation Branch, Civ. Div., U.S. Dept. of Justice, Barbara M. Epstein, Washington, D.C., for defendant.



Plaintiff brings these actions to recover duties assessed by the United States Customs Service ("Customs") under section 466(a) of the Tariff Act of 1930, 19 U.S.C. § 1466(a) (1988), on entries of repairs (including the cost of equipment, parts and materials) completed on four of plaintiff's vessels abroad.1 Defendant moves to dismiss the actions for lack of jurisdiction because plaintiff allegedly failed to pay all liquidated duties, charges or exactions prior to commencement of the actions as required by 28 U.S.C. § 2637(a) (1982). Defendant also maintains that two of the actions are jurisdictionally defective because the protests were untimely filed. Plaintiff claims jurisdiction is proper under 28 U.S.C. §§ 1581(a) and (i) (1982), and 28 U.S.C. §§ 2631(a) and (i) (1982). Oral argument was heard on February 2, 1989.


In the four actions presently before the Court, Customs found the vessel repairs dutiable under § 1466(a) as they were "made in a foreign country upon a vessel documented under the laws of the United States...." 19 U.S.C. § 1466(a).2 Plaintiff challenged the dutiability of the vessel repairs under § 1466(a) and sought remission (or refund) of those duties pursuant to § 1466(d).3 The administrative procedure for challenging the duties is outlined in Customs regulation 19 C.F.R. § 4.14 (1988).

Plaintiff applied for relief under subsection (d) of 19 C.F.R. § 4.14, challenging the dutiability of the repairs under § 1466(a) and seeking remission under § 1466(d), but its application for relief was denied, as was its petition for review on the denial of its application for relief.4 The entries were liquidated, and plaintiff protested the liquidations pursuant to 19 C.F.R. § 4.14(f) and Part 174 of the Customs Regulations.

The first two protests were dismissed as untimely filed, and the remaining two protests were deemed denied after plaintiff requested accelerated disposition.

Plaintiff now seeks review in this Court, under 28 U.S.C. § 1581(a) and 19 U.S.C. § 1514, of Customs' denial of its protests and the finding that the vessel repairs were dutiable pursuant to § 1466(a). Alternatively, under 28 U.S.C. § 1581(i), plaintiff challenges the Secretary's decision not to grant remission or refund of duties. The alternative basis for jurisdiction is proper, plaintiff asserts, because claims challenging the denial of a remission or refund under § 1466(d) are subject to a different appeal route than the customary protest procedure, which here applies only to the treatment of the items or repairs dutiable under § 1466(a). See 19 C.F.R. § 4.14(f).

I. Nonpayment of liquidated duties and exactions

In an action contesting the denial of a protest, the payment of all liquidated duties, charges or exactions at the time the action is commenced is a condition precedent to invoking the jurisdiction of this Court. 28 U.S.C. § 2637(a); see also American Air Parcel Forwarding Co. v. United States, 6 CIT 146, 150, 573 F.Supp. 117, 120 (1983). An action is "commenced" for purposes of § 2637(a) when the summons is filed. See 28 U.S.C. § 2632(b); USCIT Rule 3; Nature's Farm Products, Inc. v. United States, 10 CIT 676, 677, 648 F.Supp. 6, 7 (1986), aff'd, 819 F.2d 1127 (1987). Plaintiff filed four summonses in the respective actions without having paid all the duties and/or interest due. Therefore, all four cases must be dismissed as they have not satisfied the requirements of § 2637(a). These requirements are strictly applied and the statute precludes any exercise of discretion by the court. United States v. Boe, 64 CCPA 11, 16, C.A.D. 1177, 543 F.2d 151, 155 (1976); Syva Co. v. United States, 12 CIT ___, ___, 681 F.Supp. 885, 887 (1988); Glamorise Foundations v. United States, 11 CIT ___, ___, 661 F.Supp. 630, 632-33 (1987).5

Plaintiff argues that the jurisdictional requirements of § 2637(a) are inapplicable in these actions because the vessel repairs were entered prior to the effective date of 19 U.S.C. § 1505(c) (1988). Plaintiff's Memorandum at 16. In 1984, § 1505 was amended to add § 1505(c), which established interest on delinquent duties commencing on the 15th day after liquidation. Since the present merchandise was entered prior to the effective date of § 1505(c), plaintiff concludes that the interest assessed pursuant to the statute should not be included for jurisdictional purposes. Thus, except for Court No. 87-11-01073, all the duties would have been paid when the respective summonses had been filed. See Plaintiff's Memorandum at 16-17. The court in Syva, however, expressly held that § 1505(c) is applicable to merchandise entered before the effective date of the statute. 12 CIT at ___, 681 F.Supp. at 889-90.

Section 1505(c) was intended to apply where duties were already assessed since they "would be due thirty days following enactment." Therefore, there is no basis to conclude that only goods entered after the effective date of the statute would be subject to those time limits.

Id. at ___, 681 F.Supp. at 890 (emphasis added). The liquidation is the operative event for purposes of § 1505(c). As the instant entries were liquidated after the statute's effective date, they are subject to interest payments, the nonpayment of which affects the jurisdictional requirements.

Plaintiff's attempt to distinguish Syva fails. The Court finds no merit in distinguishing Syva on the ground that the Syva plaintiff paid no interest whatsoever, whereas the interest remaining in the instant actions amounted to only nominal amounts. As the Court has already stated, § 2637(a) is to be applied strictly, no exception may be read into law for nominal amounts left unpaid at the time the summons is filed.6

The Court holds that since all duties, charges or exactions were not paid prior to the filing of the summonses, these actions are dismissed for lack of jurisdiction.

II. Filing of a timely protest

In addition to the four actions lacking jurisdiction because of the nonpayment of duties, Court Nos. 87-02-00170 and 87-04-00608 are also jurisdictionally defective because the protests were untimely filed.

A. Court No. 87-02-00170

Plaintiff filed the protest in this action on December 23, 1986, ninety-eight days after bulletin notice of liquidation was posted in the Customhouse (August 15, 1986). Plaintiff does not dispute that the filing of a protest within ninety days of liquidation and the subsequent denial thereof is a jurisdictional prerequisite for the Court to exercise subject matter jurisdiction over the involved action. See 19 U.S.C. § 1514(c)(2)(A) and 28 U.S.C. § 1581(a); Frederick Wholesale Corp. v. United States, 6 CIT 306, 309, 585 F.Supp. 640, 642 (1983), aff'd, 754 F.2d 349 (1985); United States v. A.N. Deringer, Inc., 66 CCPA 50, C.A.D. 1220, 593 F.2d 1015 (1979)).

However, plaintiff contends that there was no proof that the bulletin notice was ever posted in compliance with Customs regulation 19 C.F.R. § 159.9 (1988),7 and further states that it first received notice in a Customs Service Bill on or before September 26, 1986.8See Plaintiff's Memorandum at 8. Plaintiff, thus, asks the Court to treat the date of receipt of the Bill as the proper date of notice of liquidation. The December 23, 1986 protest, then, would have been filed within the statutory ninety-day period.

Plaintiff's position is untenable. It is well settled that proper notice of liquidation refers to the bulletin notice of liquidation. Goldhofer Fahrzeugwerk GmbH v. United States, 13 CIT ___, 706 F.Supp. 892, aff'd, 885 F.2d 858 (Fed.Cir.1989); St. Regis Paper Co. v. United States, 13 CIT ___, Slip Op. 89-166 (Dec. 11, 1989); Timken Co. v. United States, 6 CIT 75, 569 F.Supp. 65 (1983). Bulletin notice is the statutorily mandated notice: "the date of liquidation shall be the date the bulletin notice is posted in the customhouse." United States v. Reliable Chemical Co., 66 CCPA 123, 127, C.A.D. 1232, 605 F.2d 1179, 1183 (1979); Goldhofer, 13 CIT at ___, 706 F.Supp. at 895. The importer bears the burden for examining all notices posted to determine whether its goods have been liquidated, and to protest timely. Omni U.S.A., Inc. v. United States, 11 CIT ___, ___, 663 F.Supp. 1130, 1133 (1987), aff'd, 840 F.2d 912 (Fed.Cir.1988), cert. denied, ___ U.S. ___, 109 S.Ct. 56, 102 L.Ed.2d 34; Goldhofer, 13 CIT at ___, 706 F.Supp. at 895.

Moreover, there is a presumption of regularity which attaches to government acts. United States v. Frank & Lambert, 2 Ct.Cust.Appls. 239, 242, T.D. 31973 (1911). "It is presumed that public officials perform their duties in a manner consistent with law...." Commonwealth Oil Refining Co. v. United States, 60 CCPA 162, 167, C.A.D. 1105, 480 F.2d 1352, 1357 (1973); see also INS v. Miranda, 459 U.S. 14, 18, 103 S.Ct. 281, 283, 74 L.Ed.2d 12 (1982); Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 415, 91 S.Ct. 814, 823, 28 L.Ed.2d 136 (1971). Plaintiff has put forth no evidence which would in any way rebut this presumption.

B. Court no. 87-04-00608

In this action, plaintiff allegedly delivered to Federal Express mail courier service on February 25, 1987 (expecting overnight delivery), documents purported to be a protest9 under 19 U.S.C. § 1514. The ninety-day time period within which to file a valid protest expired on February 26, 1987. Customs received the protest papers from the carrier on February 27, 1987, one day after the...

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