Presitex Usa Inc. v. U.S., Slip Op. 10-9.

• Decision Date: 26 January 2010
• Docket Number: Slip Op. 10-9.,Court. No. 08-00379.
• Citation: 674 F.Supp.2d 1371
• Parties: PRESITEX USA INC., Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

674 F.Supp.2d 1371

PRESITEX USA INC., Plaintiff, v. UNITED STATES, Defendant.

Slip Op. 10-9.

Court. No. 08-00379.

United States Court of International Trade.

January 26, 2010.

COPYRIGHT MATERIAL OMITTED

Peter S. Herrick, P.A. (Peter S. Herrick) for Plaintiff Presitex USA Inc.

Tony West, Assistant Attorney General; Barbara S. Williams, Attorney-in-Charge, International Trade Field Office, Commercial Litigation Branch, Civil Division, U.S. Department of Justice (Justin R. Miller); and Chi S. Choy, Office of the Assistant Chief Counsel, International Trade Litigation, U.S. Customs and Border Protection, Of Counsel, for Defendant United States.

OPINION

WALLACH, Judge.

I INTRODUCTION

This action arises after nearly three years of correspondence between Plaintiff Presitex USA Inc. ("Presitex") and United States Customs and Border Protection ("Customs") regarding the classification of certain apparel that Presitex imported from Nicaragua in 2005. Pursuant to Rules 12(b)(1) and 12(b)(5) of the United States Court of International Trade, Defendant United States ("Defendant") has moved to dismiss this action "for lack of jurisdiction over the subject matter" and "for failure to state a claim upon which relief can be granted." Defendant's Memorandum in Support of Its Motion to Dismiss ("Defendant's Motion") at 1. Because this court lacks jurisdiction over Presitex's 19 U.S.C. § 1520(d) claim and will not exercise whatever jurisdiction it may have over Presitex's unripe 19 U.S.C. § 4034 claim, Defendant's motion is GRANTED and this action is dismissed in its entirety.

II BACKGROUND

In September 2005, Presitex¹ filed entry summaries and paid estimated duties of 16.6 percent ad valorem at the Port of Los Angeles-LAX for seven entries ("the subject entries") of apparel from Nicaragua ("the subject goods") that it classified under subheading 6204.62.40 of the Harmonized Tariff Schedule of the United States ("HTSUS"). See Defendant's Motion Ex. 1: Entry Summaries for Entry Nos. HSY 1020712-4, HSY 1020612-6, HSY 1020453-5, HSY 1020655-5, HSY 1020663-9, HSY 1020664-7, and HSY 1020671-2 ("Entry Summaries").

In February 2006, Presitex reclassified the subject goods under HTSUS subheading 9820.11.27 in order to obtain the dutyfree treatment provided by the United States-Caribbean Basin Trade Partnership Act, Trade and Development Act of 2000, Title II, P.L. 106-200, 114 Stat. 251 (May 18, 2000) ("CBTPA"). See Defendant's Motion Ex. 3: Post Summary Adjustment Coversheets for Entry Nos. HSY 1020712-4, HSY 1020612-6, HSY 1020453-5, HSY 1020655-5, HSY 1020663-9, HSY 1020664-7, and HSY 1020671-2 ("Post Summary Adjustment Coversheets").² The Post Summary Adjustment Coversheets submitted to Customs for this purpose made legal reference only to HTSUS, CBTPA, and 19 U.S.C. § 1520(c). See Post Summary Adjustment Coversheets. 19 U.S.C. § 1520(c) is a provision concerning reliquidation that Congress had repealed in 2004. See Miscellaneous Trade and Technical Corrections Act of 2004, P.L. 108-429, 118 Stat. 2434 (December 3, 2004).

Customs rejected Presitex's reclassification by notating the Post Summary Adjustment Coversheets on receipt with "Disagree. Cutting & sewing done in China, so CBTPA does not apply." Post Summary Adjustment Coversheets. In July 2006, Customs liquidated the subject entries at the original duty rate of 16.6 percent ad valorem. Defendant's Motion at 3.

In March 2007, Presitex protested Customs' adjustment decisions on the ground that "cutting & sewing was done in Nicaragua." U.S. Customs and Border Protection, Protest Nos. 2720-07-100148, 2720-07-100149, 2720-07-100150, 2720-07-100151, 2720-07-100152, 2720-07-100153, and 2720-07-100154 (March 26, 2007). Customs denied each protest on receipt as "[u]ntimely filed". Id. More than one year later, Presitex filed another protest covering all seven adjustment decisions. See U.S. Customs and Border Protection, Protest No. 2720-08-100289 (May 27, 2008). Customs again denied this protest on receipt as untimely. See id.

In July 2008, Presitex sent a letter to Customs requesting reliquidation of the subject entries and "refunds of duty and interest ... pursuant to 19 U.S.C. § 1520(d)." Defendant's Motion Ex. 4: Letter from Peter S. Herrick to Port Director, U.S. Customs and Border Protection (July 17, 2008) ("July 2008 Letter") at 1. 19 U.S.C. § 1520(d) permits reliquidation of qualifying goods in accordance with legislation implementing certain free trade agreements, including the Dominican Republic-Central America-United States Free Trade Agreement ("CAFTA-DR"). See 19 U.S.C. § 1520(d); see also infra Part IV.A.

Customs received Presitex's letter at the Port of Long Beach and treated it as a protest. See July 2008 Letter; Defendant's Motion at 4. In September 2008, Customs directed Presitex to withdraw the letter and resubmit it at the Port of Los Angeles-LAX, the port at which the subject goods had been entered. See Defendant's Motion at 5. When Presitex resubmitted the letter that month, Customs returned it with an "insufficiency notice" explaining that Presitex's two previous protests were untimely and noting a "[p]ossible issue for the Court of International Trade." Plaintiff [sic] Memorandum in Support of Its Opposition to Defendant's Motion to Dismiss ("Plaintiffs Response") Ex. A: Letter from Peter S. Herrick to Port Director, U.S. Customs and Border Protection (September 8, 2008) ("September 2008 Letter"); Plaintiffs Response Ex. B: U.S. Customs and Border Protection, Insufficiency Notice (September 26, 2008). Presitex commenced this action in October 2008 and asserted jurisdiction under 28 U.S.C. § 1581(i). See Complaint for Damages (October 27, 2008).

On April 8, 2009, Presitex submitted an "administrative request for the retroactive application of [CAFTA-DR's] tariff provisions" to the subject entries pursuant to the Customs regulation implementing 19 U.S.C. § 4034. See Plaintiffs Ex. E: Letter from Peter S. Herrick to Port Director, U.S. Customs and Border Protection (April 8, 2009) ("April 2009 Letter") at 1 (citing 19 C.F.R. § 10.625).³ 19 U.S.C. § 4034 "provides for the retroactive application of [CAFTA-DR] and payment of refunds for any excess duties paid with respect to entries of textile and apparel goods of eligible CAFTA-DR countries that meet certain conditions and requirements." 19 C.F.R. § 10.625(a). Presitex's April 2009 request was still pending before Customs as of August 28, 2009. Defendant's Reply Memorandum in Support of Its Motion to Dismiss ("Defendant's Reply") at 7.⁴

The dispute between Presitex and Customs occurred within an evolving legal framework. In August 2005, Congress amended 19 U.S.C. § 1520(d) to reflect CAFTA-DR and enacted 19 U.S.C. § 4034. See Dominican Republic-Central America-United States Free Trade Agreement Implementation Act, P.L. 109-53, 119 Stat. 462 (August 2, 2005) ("CAFTDR Act"). In April 2006, CAFTA-DR entered into force with respect to Nicaragua. See Proclamation 7996 of March 31, 2006 To Implement the Dominican Republic-Central America-United States Free Trade Agreement With Respect to Honduras and Nicaragua, 71 Fed.Reg. 16,971 (April 4, 2006) ("Proclamation 7996"); Defendant's Motion Ex. 6: Press Release, U.S. Trade Representative, Statement of USTR Portman Regarding Entry Into Force of the U.S.-Central America-Dominican Republic Free Trade Agreement (CAFTA-DR) for Honduras and Nicaragua (March 31, 2006). As a result, Nicaragua no longer qualified as a CBTPA country for the purposes of CBTPA. See Proclamation 7996, 71 Fed.Reg. at 16,971. On January 1, 2009, CAFTA-DR entered into force with respect to Costa Rica, the final state party. See Proclamation 8331 of December 23, 2008 To Implement the Dominican Republic-Central America-United States Free Trade Agreement With Respect to Costa Rica and for Other Purposes, 73 Fed.Reg. 79,585 (December 23, 2008); Press Release, U.S. Trade Representative, Statement of U.S. Trade Representative Susan C. Schwab Regarding Entry into Force of the CAFTA-DR for Costa Rica (December 23, 2008).⁵

III STANDARD OF REVIEW

In deciding a motion to dismiss, "the Court assumes that `all well-pled factual allegations are true,' construing `all reasonable inferences in favor of the nonmovant.'" United States v. Islip, 22 CIT 852, 854, 18 F.Supp.2d 1047 (1998) (quoting Gould, Inc. v. United States, 935 F.2d 1271 (Fed.Cir.1991)).

"Dismissal for failure to state a claim upon which relief can be granted is proper if the plaintiff's factual allegations are not `enough to raise the right to relief above the speculative level on the assumption that all the allegations in the complaint are true (even if doubtful in fact).'" Int'l Custom Prods., Inc. v. United States, 549 F.Supp.2d 1384, 1389 (CIT 2008) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)); cf. Ashcroft v. Iqbal, ___ U.S. ___, 129 S.Ct. 1937, 1950, 173 L.Ed.2d 868 (2009) ("[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged—but it has not `show[n]'—`that the pleader is entitled to relief.'") (quoting Fed.R.Civ.P. 8(a)(2)).

When a court's jurisdiction is challenged, "[t]he party seeking to invoke ... jurisdiction bears the burden of proving the requisite jurisdictional facts." Former Employees of Sonoco Prods. Co. v. United States, 27 CIT 812, 814, 273 F.Supp.2d 1336 (2003) (citing McNutt v. Gen. Motors Acceptance Corp., 298 U.S. 178, 189, 56 S.Ct. 780, 80 L.Ed. 1135 (1936)).

IV DISCUSSION

Presitex asserts that this court has jurisdiction under 28 U.S.C. § 1581(i) and appears to claim two independent legal bases for the customs duty refunds that it ultimately seeks. See Plaintiff's Response at 2-7.⁶ These legal bases are 19 U.S.C. § 1520(d), as implemented by 19 C.F.R. § 10.590, and 19 U.S.C. § 4034, as implemented by 19 C.F.R. § 10.625. Presitex's claim under 19 U.S.C. § 1520(d) fails because...