Prosegur, Inc. v. U.S.

• Decision Date: 18 April 2001
• Docket Number: Slip Op. 01-50.,Court No. 94-08-00486.
• Citation: 140 F.Supp.2d 1370
• Parties: PROSEGUR, INC., Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

140 F.Supp.2d 1370

PROSEGUR, INC., Plaintiff, v. UNITED STATES, Defendant.

Slip Op. 01-50.

Court No. 94-08-00486.

United States Court of International Trade.

April 18, 2001.

COPYRIGHT MATERIAL OMITTED

Peter S. Herrick, Miami, FL, for Plaintiff.

Stuart E. Schiffer, Acting Assistant Attorney General, Joseph I. Liebman, Attorney-in-Charge, International Trade Field Office, John J. Mahon, Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice; and Yelena Slepak, Office of Assistant Chief Counsel, International Trade Litigation, U.S. Customs Service, Of Counsel, Washington, DC, for Defendant.

OPINION

POGUE, Judge.

Plaintiff, Prosegur, Inc. ("Prosegur"), challenges the refusal of the United States Customs Service ("Customs") to reliquidate certain jewelry entered at the port of Miami, Florida.¹ Prosegur contends that the imported merchandise should have been classified under subheading 9801.00.10,² Harmonized Tariff Schedule of the United States ("HTSUS"), free of duty, rather than under subheading 7113.19,³ HTSUS. Merchandise classified under subheading 7113.19, HTSUS, is dutiable at 6.5% ad valorem. Pursuant to USCIT Rule 56, Customs requests dismissal of Court No. 95-10-01305 for lack of jurisdiction and/or failure to state a claim on which relief could be granted. Prosegur opposes the motion, claiming that factual disputes preclude the grant of summary judgment.

Background

On April 3, 1992, Prosegur imported jewelry under entry number 459-0101159-8. Prosegur attached a "Declaration for Free Entry of Returned American Products" to the entry form. Nonetheless, Customs liquidated the goods on August 13, 1993, under subheading 7113.19, HTSUS, assessing a duty of 6.5% ad valorem.

In a letter dated March 18, 1994, Prosegur notified Customs that, according to Prosegur, Customs did not properly liquidate the goods. Customs treated the letter as a "protest," and denied it as untimely as it was filed more than ninety days after the August 13th liquidation. See 19 U.S.C. §§ 1514(a), (c).⁴ Pursuant to 19 U.S.C. § 1520(c)(1), Prosegur then filed a claim for reliquidation.⁵

Prosegur appears to make two arguments; first, that Customs did not act to extend the period of liquidation. As a result, Prosegur argues that the imported goods were deemed liquidated by law one year after their entry at the rate asserted at the time of entry, in this case duty free. See 19 U.S.C. § 1504(a).⁶ Prosegur also appears to argue that Customs, through a mistake of fact, misclassified the goods as dutiable, rather than duty free, as supported by Prosegur's declaration of the duty free nature of the goods.

Customs, on the other hand, argues that it extended the period of liquidation twice. It also claims that Prosegur was notified, prior to liquidation, that the information on the duty free nature of the goods was incomplete. As a result, Customs contends that it properly extended the liquidation period, and that it did not commit a mistake of fact by classifying the goods as dutiable. Rather, according to Customs, it considered two available options—classifying the goods as American Goods Returned; or denying that classification and choosing instead subheading 7113.19 because of insufficient documentation—and chose the classification it found more appropriate. In Customs' view, the appropriate manner of contesting the classification was for Prosegur to file a valid protest under 19 U.S.C. § 1514(a), which Prosegur failed to do.

Standard of Review

Summary judgment is appropriate when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law." USCIT Rule 56. A dispute is genuine "if the evidence is such that [the trier of fact] could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

The court resolves any doubt over material factual issues in favor of the nonmoving party, and draws all reasonable inferences in its favor. See Anderson, 477 U.S. at 255, 106 S.Ct. 2505; Mingus Constructors, Inc. v. United States, 812 F.2d 1387, 1390-91 (Fed.Cir.1987). Nevertheless, "[w]hen a motion for summary judgment is made and supported ... an adverse party may not rest upon the mere allegations or denials of the adverse party's pleading, but ... must set forth specific facts showing that there is a genuine issue for trial." USCIT Rule 56(e).

There are two issues in this case: (1) whether Prosegur makes the minimum showing that Customs did not extend the period of liquidation, and (2) whether the criteria for relief under section 1520(c)(1) can be met. Here, Prosegur failed to set forth any fact from which the court could infer that the liquidation period was not extended, and, therefore, did not offer evidence from which the court could rebut the presumption that Customs satisfactorily performed its duties. In addition, if the claimed misclassification of the imported jewelry as dutiable rather than duty free was an error, it was an error in the construction of law, not a mistake of fact. As a result, there are no genuine issues of material fact in dispute and, therefore, summary judgment is appropriate.

Discussion

A. Customs Properly Extended the Period of Liquidation

1. Notice of Extension of Liquidation

Unless Customs extends the period of liquidation,⁷ imported merchandise is to be liquidated within one year of its entry date. Otherwise, the imported goods are deemed liquidated at the rate asserted by the importer of record at the time of entry. See 19 U.S.C. § 1504(a). Customs extends the time within which it may liquidate goods by giving notice to the importer of record in accordance with section 1504(b). Customs may only extend the period of liquidation under three specific circumstances, including when "information needed for the proper appraisement or classification of the merchandise is not available to the appropriate customs officer." 19 U.S.C. § 1504(b)(1).⁸

Prosegur argues that Customs never extended the liquidation period. Consequently according to Prosegur, the goods were deemed liquidated by law on April 3, 1993, one year after the goods were entered into the United States, as duty free, the rate Prosegur asserted at the time of entry. Prosegur rests its argument entirely on information it received from Customs, pursuant to the Freedom of Information Act ("FOIA"). Prosegur requested copies of the entry summary, commercial invoices, packing lists, Customs Forms ("CF") 28 and 29,⁹ and all other documents pertaining to the imported merchandise at issue. See Letter from Peter S. Herrick, at Pl.'s Mem. Opp'n to Mot. Summ. J., Composite Ex. A. Customs responded to Prosegur's FOIA request, but did not send a copy of the electronic history file, which contains records of extension notices, CF 28s and 29s. Prosegur argues that the court should infer from the lack of a copy of the electronic history file that the extension notices were never mailed.

Customs officials are "entitled to a presumption that their duties are performed in the manner required by law." International Cargo & Sur. Ins. Co. v. United States, 15 CIT 541, 544, 779 F.Supp. 174, 177 (1991). In this case, the presumption arises that Customs sent notices extending the period of liquidation to the importer, Prosegur. This presumption can be "rebutted by a declaration or other evidence indicating that notice was not received." Id. Previously, "this court found that an affidavit from the importer's recordkeeper, stating that an extension notice had not been received, was sufficient to rebut the presumption." Id. (referring to Enron Oil Trading & Transp. Co. v. United States, 15 CIT 511, 516 (1991)). A mere "naked assertion," however, that the notice was not received does not rebut the presumption. Id. at 544-45, 779 F.Supp. at 177-78.

Defendant United States submitted affidavits from customs officials, a copy of the electronic history file containing the notices of extension, and a copy of the CF 29 sent to Prosegur. Arthur Versich, Project Leader of the Entry Processing Team, in his affidavit, described Customs' computerized database, the Automated Commercial System ("ACS"), used to generate extension notices. Versich explained that, due to the volume of extension and suspension notices, Customs does not maintain paper copies of notices sent to importers. See Affidavit of Arthur Versich ¶ 5, at Def.'s Mem. Supp. Mot. Summ. J., Collective Ex. A. Rather, the information is stored in a computer file, known as the extension/suspension history file. Id.

Roger Odom, team leader in the Production Management Section of the Computer Operations Division of the Office of Information and Technology, described in his affidavit the process used to format, print, and send the extension notices. According to Odom, the computer and printing rooms are manned and operated twenty-four hours a day, seven days a week, and are closely supervised. See Affidavit of Roger Odom ¶ 4, at Def.'s Mem. Supp. Mot. Summ. J., Collective Ex. A. Customs runs a group of programs each week, after the end of the work week. These programs are known as "end-of-week" programs. Extension notices are one such end-of-week process. Every Sunday, extension notices, or CF 4333As, are printed. See id. at ¶ 5. The printed CF 4333As are then brought to the Reports Distribution area. See id. at ¶ 8. After a final check for defects, the notices are placed in Postal Service trays. See id. at ¶ 10. Within twenty-four hours of printing, the notices are then delivered to the post office.

The printing and mailing of the extension notices are operations that the data center "must perform every week." Id. at ¶ 11 (emphasis in original). Therefore, "there is no doubt that where Customs has a record of a notice, the notice was printed at or...