Schick v. U.S., Slip Op. 07-182. Court No. 06-00279.

• Decision Date: 18 December 2007
• Docket Number: Slip Op. 07-182. Court No. 06-00279.
• Citation: 533 F.Supp.2d 1276
• Parties: Arthur C. SCHICK, III and Schick International Forwarding, Inc., Plaintiffs, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

533 F.Supp.2d 1276

Arthur C. SCHICK, III and Schick International Forwarding, Inc., Plaintiffs, v. UNITED STATES, Defendant.

Slip Op. 07-182. Court No. 06-00279.

United States Court of International Trade.

December 18, 2007.

COPYRIGHT MATERIAL OMITTED

Neville Peterson LLP, New York, NY (John M. Peterson, George W. Thompson, Maria E. Celis, and Curtis W. Knauss) for plaintiffs.

Jeffrey S. Bucholtz, Acting Assistant Attorney General, Barbara. S. Williams, Attorney in Charge, International Trade Field Office, Mikki Graves Walser, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, United States Department of Justice; Benjamin B. Hamlow, Office of Associate Chief Counsel, United States Customs and Border Protection, of counsel, for defendant.

OPINION

STANCEU, Judge.

Plaintiffs Arthur C. Schick III ("Schick") and Schick International Forwarding, Inc. ("Schick International") brought this action to contest the revocation of Schick's customs broker's license for failure to file a timely status report ("triennial report") with Customs and Border Protection, United States Department of Homeland Security ("Customs") as required by Section 641(g) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1641(g) (2000). At the time they brought this action, plaintiffs also sought to prevent Customs from revoking Schick International's corporate customs broker's license for failure to appoint a licensed customs broker to serve as a qualifying officer as required by 19 U.S.C. § 1641(b)(5).

Invoking the subject matter jurisdiction of the Court of International Trade as set forth in 28 U.S.C. § 1581(i)(1) and (i)(4) (2000), plaintiffs make three claims on behalf of Schick and one on behalf of Schick International. On behalf of Schick, plaintiffs claim, first, that the revocation of Schick's license by Customs was conducted without the observance of specific procedures, including a hearing, that plaintiffs contend were required by 19 U.S.C. § 1641(d)(2)(B). Compl. ¶¶ 16-20. Second, plaintiffs claim that Customs was required by the Fifth Amendment to the United States Constitution to afford Schick due process of law prior to depriving Schick of the property right consisting of Schick's individual license, and, further, that due process of law, as required by the Administrative Procedure Act ("APA"), included the conducting of a hearing. Id. ¶¶ 22-29, 31. Plaintiffs' third claim is that the revocation of Schick's license was an excessive fine or sanction prohibited by the Eighth Amendment to the Constitution. Id. ¶¶ 33-36. The complaint also claims, on behalf of Schick International, that the company lacked a licensed qualifying officer only as a result of an unlawful revocation of Schick's individual customs broker's license and that revocation of Schick International's corporate license on that basis would be similarly unlawful. Id. ¶¶ 38-40. Defendant United States moves to dismiss this action for lack of subject matter jurisdiction and for failure to state a claim upon which relief can be granted.

The court concludes that 28 U.S.C. § 1581(i)(4) provides subject matter jurisdiction over plaintiffs' claim that Schick was entitled to the benefit of the procedure, including a hearing, that is provided for in 19 U.S.C. § 1641(d)(2)(B). However, the court also concludes that 19 U.S.C. § 1641 does not require resort to the procedure of § 1641(d)(2)(B) when a license is revoked under § 1641(g). For this reason, plaintiffs' first claim is not one upon which relief can be granted. The court concludes, further, that 28 U.S.C. § 1581 does not provide the court jurisdiction to adjudicate plaintiffs' claim that the revocation of Schick's license was a violation of due process of law as guaranteed by the Fifth Amendment and as provided by the APA. In addition, the court concludes that 28 U.S.C. § 1581 does not provide jurisdiction over plaintiffs' claim that the revocation was an excessive fine or sanction prohibited by the Eighth Amendment. The court lacks jurisdiction to hear plaintiffs' claim with respect to the possible revocation of the corporate license of Schick International because that claim is now moot as a result of events occurring after this action was commenced. Finally, the court concludes in the circumstances of this case that transfer to another court is not in the interest of justice. Because plaintiffs' claim pertaining to 19 U.S.C. § 1641(d)(2)(B) is not one on which relief can be granted, because the court lacks subject matter jurisdiction to hear any of plaintiffs' other claims, and because transfer is not in the interest of justice, the court will grant defendant's motion and enter judgment dismissing this action.

I. BACKGROUND

The facts pertaining to the revocation of Schick's customs broker's license and the status of Schick International's corporate customs broker's license are summarized herein based on plaintiffs' complaint, exhibits attached thereto, and plaintiffs' various other submissions.

In 2006, Schick, "[a]s the result of illness," failed to file a timely triennial report with Customs. Compl. ¶ 9. By letter dated on or about March 5, 2006, Customs notified Schick that Schick's customs broker's license had been suspended pursuant to 19 C.F.R. § 111.30(d) (2005) for failure to timely file the triennial report. Id. ¶ 10, Ex. A at 1. The letter informed Schick that if the required report and the $100 fee imposed under the agency's regulations were not submitted within sixty days, Schick's license would be revoked "by operation of law without prejudice." Id. Ex. A at 1. "Again by reason of illness," Schick did not file the required triennial report within the sixty-day period. Id. ¶ 10. By letters dated June 22 and June 26, 2006, and addressed to Schick at the address of Schick International, Customs informed Schick International that Schick's customs broker's license had been revoked under 19 C.F.R. § 111.30(d). Id. ¶¶ 12-13, Ex. B at 1, Ex. C at 1. The June 22 letter also advised Schick International that the failure to designate another individual possessing a customs broker's license to act as' the qualifying officer for Schick International would result in the revocation by operation of law of Schick International's corporate customs broker's, license on September 3, 2006 under 19 C.F.R. § 111.45(a) (2006), Id. ¶ 12, Ex. B at 1. The June 26 letter advised Schick International that if Schick International did not designate, by November 3, 2006, a licensed customs broker holding a permit to do business in the Los Angeles Customs District, the agency would revoke under 19 C.F.R. § 111.45(b) the corporation's permit to engage in customs business in that district. Id. ¶ 13, Ex. C at 1. Schick International subsequently avoided the revocation of its corporate broker's license and its permit. Mem. of P. & A. in Opp'n to Def.'s Mot. to Dismiss 6 n. 3 (stating that "Schick International Forwarding, Inc. has, to this writing, been able to maintain its Corporate license" by appointing new qualifying officers) ("Resp. to Def.'s Mot.").

On August 2, 2006, plaintiffs' counsel sent to the Port Director of Customs, in, Los Angeles a written request that Customs withdraw the "proposed revocations" of Schick's individual license and of Schick International's corporate license. Id. at 6. Plaintiffs argued that Schick was entitled to a hearing under 19 U.S.C. § 1641(d) and its implementing regulations before his license could be revoked. Id. Customs denied plaintiffs' request and declined to grant Schick a hearing. Id.

Plaintiffs filed suit on August 18, 2006, asserting the aforementioned claims under 19 U.S.C. § 1641, the APA, and the Fifth' and Eighth Amendments to the Constitution. Compl. ¶¶ 15-40. Defendant moves to dismiss the complaint under USCIT Rule 12(b)(1) for lack of subject matter jurisdiction and under USCIT Rule 12(b)(5) for failure to state a claim upon which relief can be granted. Def.'s Mot. to Dismiss 1.

II. DISCUSSION

To avoid dismissal in whole or in part for lack of subject matter jurisdiction, Schick and Schick International must plead facts from which the court may conclude that it has subject matter jurisdiction with respect to each of their claims. See McNutt v. Gen. Motors Acceptance Corp., 298 U.S. 178, 189, 56 S.Ct. 780, 80 L.Ed. 1135 (1936) (explaining that a plaintiff "must allege in his pleading the facts essential to show jurisdiction."). With respect to a claim within the court's subject matter jurisdiction, dismissal for failure to state a claim upon which relief can be granted is proper if plaintiffs' factual allegations are not "enough to raise the right to relief above the speculative level on the assumption, that all of the allegations in the complaint, are true (even if doubtful in fact)." Bell Atlantic Corp. v. Twombly, ___ U.S. ___, ___, 127 S.Ct. 1955, 1965, 167 L.Ed.2d 929 (2007) (internal citations omitted). In ruling on a motion to dismiss for failure to state a claim upon which relief Can be granted, the court assumes that all well-pleaded factual allegations in the complaint are true and draws all reasonable inferences in the plaintiffs' favor. Leider v. United States, 301 F.3d 1290, 1295. (Fed.Cir.2002).

A. Relief Cannot Be Granted upon Plaintiffs' Claim that Customs Was Required to Follow the Procedures in 19 U.S.C. § 1641(d)(2)(B) Before Revoking Schick's License

Plaintiffs' first claim is that the revocation of Schick's individual broker's license was unlawful because Schick was not first provided the notice and the opportunity. for a hearing that are specified by 19 U.S.C. § 1641(d)(2)(B) and the Customs regulations related to that provision. See Compl. ¶¶ 16-20 ("Count I: Violation of 19 U.S.C. § 1641(d)"). According to plaintiffs, Customs is required by the statute and the regulations to follow the procedures of 19 U.S.C., § 1641(d)(2)(B) "prior to revoking the license of an individual to act as a Custom house broker." Id. ¶ 16. Plaintiff...