Retamal v. U.S. Cust., Border Prot., Homeland Sec.

• Citation: 439 F.3d 1372
• Decision Date: 06 March 2006
• Docket Number: No. 05-1332.,05-1332.
• Parties: Sergio U. RETAMAL, Plaintiff-Appellant, and John J. Galvin, Sanctioned Party-Appellant, v. UNITED STATES CUSTOMS AND BORDER PROTECTION, DEPARTMENT OF HOMELAND SECURITY, Defendant-Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

439 F.3d 1372

Sergio U. RETAMAL, Plaintiff-Appellant, and John J. Galvin, Sanctioned Party-Appellant, v. UNITED STATES CUSTOMS AND BORDER PROTECTION, DEPARTMENT OF HOMELAND SECURITY, Defendant-Appellee.

No. 05-1332.

United States Court of Appeals, Federal Circuit.

March 6, 2006.

John J. Galvin, Galvin & Mlawski, of New York, New York, argued for plaintiff-appellant and sanctioned party-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 and David M. Cohen, Director, of Washington, DC; and Barbara S. Williams, Attorney-in-Charge, International Trade Field Office, of New York, New York. Of counsel on the brief was Marc K. Matthews, Attorney, Office of Associate Chief Counsel, United States Customs and Border Protection, of Long Beach, California.

Before NEWMAN, MAYER, and SCHALL, Circuit Judges.

MAYER, Circuit Judge.

Sergio U. Retamal appeals the United States Court of International Trade's grant of summary judgment in favor of the United States Customs and Border Protection, Department of Homeland Security, Retamal v. U.S. Customs & Border Prot. Dep't of Homeland Sec., 27 I.T.R.D. (BNA) 1396 (Ct. Int'l Trade Nov. 24, 2004). John J. Galvin appeals the trial court's written admonition against him, Retamal, No. 03-00613, slip. op. 05-15 (Ct. Int'l Trade Feb. 3, 2005). Because the trial court was without subject matter jurisdiction, we remand with instructions that the case be dismissed. We further hold that the admonition of Galvin constitutes a sanction and, because we find its imposition was an abuse of discretion, we reverse.

Background

Retamal was a licensed customhouse broker who was not actively engaged in transacting business as a customs broker. In 2003, he failed to file his triennial status report on or before March 1, as required by 19 U.S.C. § 1641(g)(1)¹ and 19 C.F.R. § 111.30(a).² As a result, his license was suspended pursuant to 19 U.S.C. § 1641(g)(2).³ As required by statute, the United States Customs Service ("Customs" or "the government") sent written notice of the suspension to Retamal; however, the notice was returned undelivered. Retamal contends he prepared his triennial status report and payment on April 30, 2003, but the report and payment were not sent until May 24, 2003. On June 5, 2003, Customs returned the report and payment to Retamal and advised him that his broker's license had been revoked on May 6, 2003. Customs denied his requests for relief from revocation.

Retamal then filed suit pro se in the Court of International Trade. The trial court granted summary judgment to the government and, relying upon 28 U.S.C. § 2636(g),⁴ dismissed the action as time-barred.

John Galvin then undertook pro bono representation of Retamal and filed a motion for rehearing on December 15, 2004. The government filed an opposition, and Galvin filed a reply. On January 21, 2005, the trial court sua sponte issued an order to show cause why Galvin "should not be sanctioned for violation of the Court's rules of practice." The court denied the motion for rehearing and admonished Galvin to adhere to the court's rules. The court amended its initial decision by deleting the reference to the statute of limitations in 19 U.S.C. § 1641(e)(1) and 28 U.S.C. § 2636(g) and adding the statement that "this action is still time-barred by operation of law," citing 19 U.S.C. § 1641(g)(2). Retamal appeals the trial court's grant of summary judgment in the government's favor; Galvin appeals the admonition.

Discussion

I.

"As an appellate body, we have inherent jurisdiction to determine whether a lower tribunal had jurisdiction." Interspiro USA v. Figgie Int'l, 18 F.3d 927, 930 (Fed.Cir.1994) (citing C.R. Bard, Inc. v. Schwartz, 716 F.2d 874, 877 (Fed.Cir. 1983)). Therefore, before addressing the trial court's decision on the timeliness of the action, we first determine if it had jurisdiction.⁵ Because jurisdiction is an issue of law, our review is de novo. Xerox Corp. v. United States, 289 F.3d 792, 793-94 (Fed.Cir.2002).

The Court of International Trade's jurisdiction is set forth generally at 28 U.S.C. § 1581. All agree that section 1581(g) does not provide the trial court jurisdiction over Retamal's case. Although section 1581(g) provides jurisdiction to review the revocation of licenses under certain statutory provisions, revocations under 19 U.S.C. § 1641(g) is not one of them.

Retamal contends, however, that jurisdiction lies under section 1581(i)(4). Although we have described this subsection as a "broad residual jurisdictional provision," Miller & Co. v. United States, 824 F.2d 961, 963 (Fed.Cir.1987), it is of no avail here. This subsection provides the Court of International Trade with jurisdiction 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 . . . administration and enforcement with respect to the matters referred to in paragraphs (1) — (3) of this subsection and subsections (a) — (h) of this section . . . ." 28 U.S.C. § 1581(i)(4) (2000). However, Retamal's claims do not relate to the "administration and enforcement" of a matter referred to in subsections 1581(a)-(h) or in 1581(i)(1)-(3). Therefore, section 1581(i)(4) does not provide an independent ground for jurisdiction in this case.

Retamal's reliance on Allen v. Regan, 607 F.Supp. 133 (Ct. Int'l Trade 1985), for the conclusion that jurisdiction exists under section 1581(i)(4) is unpersuasive. "Apart from the obvious comment that Court of International Trade decisions are not binding precedent on this court," Nat'l Corn Growers Ass'n v. Baker, 840 F.2d 1547, 1556 (Fed.Cir.1988), Allen is entirely different from the case before us. That case involved an applicant for a customhouse broker's license who had passed the requisite examination and was awaiting the results of an investigation into his integrity and financial responsibility. After four years passed with no decision, the applicant filed suit in the Court of International Trade. The court concluded that it had jurisdiction under section 1581(i)(4) regardless of whether jurisdiction was "technically proper under 28 U.S.C. § 1581(g)," 607 F.Supp. at 134, because reviewing the delay in the licensing process related to the "administration and enforcement" of a matter referenced in 28 U.S.C. §§ 1581(a)-(h) or 28 U.S.C. §§ 1581(i)(1)-(3), namely 28 U.S.C. § 1581(g). Here, however, the revocation of a license under 19 U.S.C. § 1641(g)(2) is not referenced anywhere in 28 U.S.C. §§ 1581(a)-(h) or 28 U.S.C. §§ 1581(i)(1)-(3) and, therefore, jurisdiction cannot lie under section 1581(i)(4). Because "an appellate court has no jurisdiction to decide the merits of the case if the court from which the appeal was taken was without jurisdiction," Glasstech, Inc. v. Ab Kyro Oy, 769 F.2d 1574, 1577 (Fed.Cir. 1985), we vacate the trial court's decision.

II.

Although we conclude that the trial court lacked jurisdiction over the merits of this case, we recognize that under Court of International Trade Rule 11⁶ and its inherent power, the court has the authority to discipline attorneys appearing before it. See Chambers v. NASCO, 501 U.S. 32, 41, 111 S.Ct. 2123, 115 L.Ed.2d 27 (1991). Therefore, the trial court had authority to discipline Galvin.

In Precision Specialty Metals, Inc. v. United States, 315 F.3d 1346 (Fed.Cir. 2003), we held that the explicit and formal reprimand of the attorney in an unpublished opinion constituted a sanction that was immediately appealable. We reasoned that "a judicial reprimand is likely to have a serious adverse impact upon a lawyer's professional reputation and career. A lawyer's reputation is one of his most important professional assets. Indeed, such a reprimand may have a more serious adverse impact upon a lawyer than the imposition of a monetary sanction." 315 F.3d at 1352-53. This reasoning applies here and compels the conclusion that the admonition was a sanction.

We review the imposition of the sanction for abuse of discretion. Id. at 1354. The trial court based its admonition of Galvin upon purported violations of Rules 75(c), 7(d), and 11(b). We give "broad deference to the trial court's application of local procedural rules in view of the trial court's need to control the parties and flow of litigation before it." SanDisk Corp. v. Memorex Prods., 415 F.3d 1278, 1292 (Fed.Cir.2005). However, it is an abuse of discretion where "`(1) the decision was clearly unreasonable, arbitrary, or fanciful; (2) the decision was based on an erroneous conclusion of law; (3) the court's findings were clearly erroneous; or (4) the record contains no evidence upon which the court rationally could have based its decision.'" Id. (quoting Genentech, Inc. v. Amgen, Inc., 289 F.3d 761, 774 (Fed.Cir.2002)).

The trial court concluded that Galvin violated Rule 75 by filing a notice of appearance form instead of filing a substitution of counsel form. Rule 75(c) states that "[a] party who desires to substitute an attorney may do so by serving a notice of substitution upon the prior attorney of record and the other parties." In addition, Rule 75(a) unmistakably uses the term "attorneys" as distinct from the term "individuals." In this context, Retamal was an "individual" and not an attorney and, since he had previously proceeded pro se, he did not substitute a new attorney for a previous attorney. Therefore, under the trial court's own rules, Galvin properly filed a notice of appearance. This conclusion is bolstered by the fact that the clerk of court sent Retamal a letter informing him that any future counsel should "file with our Court their Notice of Appearance as soon as possible." To the extent that the sanction was grounded upon a violation of Rule 75, it was based on an erroneous...