Saab Cars Usa, Inc. v. U.S.
| Decision Date | 14 July 2003 |
| Docket Number | No. Slip Op. 03-82.,Court No. 00-00041.,Slip Op. 03-82. |
| Citation | 276 F.Supp.2d 1322 |
| Parties | SAAB CARS USA, INC., Plaintiff, v. UNITED STATES, Defendant. |
| Court | U.S. Court of International Trade |
Gibson, Dunn & Crutcher LLP (Judith A. Lee and Brian J. Rohal), Washington, DC, for plaintiff Saab Cars USA, Inc.
Peter D. Keisler, Assistant Attorney General; John J. Mahon, Acting Attorney in Charge; and Barbara S. Williams, Civil Division, Commercial Litigation Branch, United States Department of Justice; Paula Smith, Office of Assistant Chief Counsel, International Trade Litigation, United States Bureau of Customs and Border Protection, for defendant United States, of counsel.
Saab Cars USA, Inc. ("SCUSA") imports into the United States automobiles from Swedish manufacturer Saab Automobile AB ("Saab Auto"). SCUSA protested the United States Customs Service's1 ("Customs") liquidation of several entries of automobiles that were appraised at transaction value. In the protests, SCUSA argued that an allowance in value should be granted for defects present in the automobiles at importation. Customs denied SCUSA's protests.
SCUSA timely appealed Customs' denial of those protests to the Court of International Trade on January 20, 2000. On March 6, 2001, SCUSA filed a motion for summary judgment requesting a partial refund of duties for the defective automobiles. Customs filed a cross-motion for summary judgment on June 4, 2001, requesting that the Court dismiss this action. For the reasons that follow, both parties' motions for summary judgment are denied.
SCUSA imports into the United States automobiles manufactured by Saab Auto. The automobiles purchased by SCUSA from Saab Auto are subject to a warranty agreement (the "Warranty"). The terms of the Warranty are contained in the Warranty Policy and Procedures Manual dated January 11, 1995, and updated by warranty policy letters. According to SCUSA, the terms of the Warranty reimbursed SCUSA for the following specific repair expenses: (1) "pre-warranty," which covers [ ], but does not include damage from [ ]; (2) new car warranty, covering the car when it [ ]; (3) emission warranty, when [ ]; (4) perforation warranty, which covers [ ]; and (5) the importer's own extended warranty. Warranty Manual, Plaintiff's Exhibit 1 (Confidential), ¶ 4.2.1.
To claim reimbursement from Saab Auto under the terms of the Warranty, the retailer must submit the repairs to SCUSA's AS-400 Warranty System. The AS-400 Warranty System is a database system designed for SCUSA to track the automobile repairs which correspond to each Vehicle Identification Number ("VIN"). The AS-400 Warranty System also runs a series of "edits" to confirm that the repair was subject to the Warranty. In addition, Saab Auto requires SCUSA (along with other importers) to audit dealers' warranty repair claims to [ ]
At issue in this case are entries of automobiles SCUSA imported from Saab Auto between June of 1996 and July of 1997. At the time of importation, SCUSA declared the transaction value of the automobiles to be the price it paid Saab Auto for defect-free automobiles. While the vehicles were still at the port, SCUSA claims it identified defects in certain automobiles. The defects were repaired by SCUSA. The costs associated with the repairs are "port repair expenses" and are documented either through the AS-400 Warranty System or through invoices sent to SCUSA. The total port repair expenses claimed by SCUSA are [ ].
Prior to expiration of the Warranty period, but after the vehicles were shipped from the port, additional defects were discovered in the vehicles. To restore the vehicles to defect-free condition the dealers repaired the vehicles. The costs associated with those repairs represent SCUSA's "warranty expenses." The total warranty expenses claimed by SCUSA at the outset of this litigation was [ ].
Customs liquidated the entries, appraising the vehicles at their transaction values. SCUSA protested the liquidations, requesting allowances under 19 C.F.R. § 158.12 for "damage [or] latent manufacturing defects." The following protests were filed by SCUSA to request the allowances: (1) protest number 0502-98-100033, filed on June 30, 1998; (2) protest number 0502-98-100041, filed on September 14, 1998; (3) protest number 0502-99-100003, filed on January 12, 1999; and (4) protest number 0502-99-100008, filed on March 26, 1999. The protests correspond to the following entry numbers:
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PROTEST NUMBER ENTRY NUMBER (112-
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0502-98-100033 9896032-6,* 9903676-1,* 9850980-0,* 9873165-1,* 9876403-3,*
9885094-9,* 9906444-1,* 9915803-7,* 9888725-5,* 9891683-1,*
9910140-9,* 9978449-3, 9011040-0, 9995282-7
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0502-98-100041 9805210-8,* 9814363-4,* 9818038-8,* 9822519-1,* 9826593-2,*
9970288-3,* 9978449-3, 9801057-7,* 9964040-6,* 9964123-0,*
9940682-4,* 9022943-2, 9026932-1, 9974345-7, 9929365-1
9930525-7, 9933194-3, 9958484-4, 9968124-4, 9983272-2
9986698-5, 9006647-9, 9016015-7, 9018813-3, 9030595-0
9943632-6, 9947519-1, 9950291-1
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0502-99-100003 9016015-7, 9018813-3
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0502-99-100008 9936275-3
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SCUSA penned the following in each of its protests:
We protest the appraised value of automobiles contained in the entries set forth in Attachment A.
The automobiles listed in these entries were purchased by [SCUSA] from Saab Automobile AB. SCUSA ordered perfect merchandise from Saab Automobile AB. Despite this order, some of the vehicles delivered contained latent manufacturing defects at the time of importation. Section 158.12 of the Customs Regulations, 19 C.F.R. 158.12, provides that `merchandise which is subject to ad valorum or compound duties and found by the port director to be partially damaged at the time of importation shall be appraised in its condition as imported, with an allowance made in the value to the extent of the damage.' See Samsung Electronics America, Inc. vs. United States, 106 F.3d 376 (Fed.Cir.1997).
Therefore, pursuant to 19 C.F.R. § 158.12, an allowance in the value of the imported vehicles set forth in the protested entries should have been made to the [sic] reflect the extent of the defects. We hereby request that the protested entries be reliquidated and that the vehicles set forth therein be appraised in the condition as imported. In addition, we request that Customs delay its consideration of this protest until the Court of International Trade ("CIT") has issued its decision on remand in the Samsung case. Based on instructions from the Court of Appeals, the anticipated CIT decision will clarify how the § 158.12 allowance will be implemented.2
SCUSA Protest, Nos. 0502-98-100033 (June 30, 1998), 0502-98-100041 (Sept. 14, 1998), 0502-99-100003 (Jan. 12, 1999), 0502-00-100008 (March 26, 1999). These protests were denied by Customs on August 9, 1999, citing "no evidence of damage at time of import" as the only reason for denial.
SCUSA filed a timely summons before the Court on January 20, 2000, and filed the complaint on August 11, 2000. SCUSA has submitted to the Court the VINs and corresponding repair descriptions for all of the entries protested. The Court, upon cursory review of the repair descriptions submitted as evidence by SCUSA, estimates there are approximately 108,000 port and Warranty repairs covered by the protests. The Court has jurisdiction pursuant to 28 U.S.C. § 1581(a).
This case is before the Court on SCUSA's motion for summary judgment and Customs' cross-motion for summary judgment. The court will grant summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." USCIT R. 56(d). A party opposing summary judgment must "go beyond the pleadings" and by his or her own affidavits, depositions, answers to interrogatories, and admissions to file, designate "specific facts showing that there is a genuine issue for trial." Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). "While it is true that Customs' appraisal decisions are entitled to a statutory presumption of correctness, see 28 U.S.C. § 2639(a)(1), when a question of law is before the Court, the statutory presumption of correctness does not apply." Samsung Electronics America, Inc. v. United States, 23 CIT 2, 5, 35 F.Supp.2d 942, 945-46 (1999) (citing Universal Elecs., Inc. v. United States, 112 F.3d 488, 492 (Fed.Cir.1997)) (hereinafter "Samsung III").
The Court has "exclusive jurisdiction of any civil action commenced to contest the denial of a protest, in whole or in part, under section 515 of the Tariff Act of 1930." 28 U.S.C. § 1581(a) (2000). Therefore, a prerequisite to jurisdiction by the Court is the denial of a valid protest. Washington Int'l Ins. Co....
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