Sneaker Circus, Inc. v. Carter
| Decision Date | 10 November 1977 |
| Docket Number | No. 75,D,75 |
| Parties | SNEAKER CIRCUS, INC., Blazer Sports International, Inc. and Bob Wolfe Associates, Inc., Plaintiffs-Appellants, v. Jimmy CARTER, President of the United States, Robert S. Strauss, Special Representative for Trade Negotiations, Stephen J. Lande, Deputy Special Representative for Trade Negotiations, and United States International Trade Commission, Defendants-Appellees. ocket 77-6092. |
| Court | U.S. Court of Appeals — Second Circuit |
Vito R. Vincenti, New York City (Vincenti & Schickler, New York City, Jonathan S. Gaynin, Kenneth M. Weinman and Robert F. Moraco, New York City, of counsel), for plaintiffs-appellants.
Joan M. Dolan, Asst. U. S. Atty., Brooklyn, N.Y. (David G. Trager, U. S. Atty. for the Eastern District of New York, Bernard J. Fried, Asst. U. S. Atty., Brooklyn, N.Y., of counsel), for defendants-appellees.
Before KAUFMAN, Chief Judge, SMITH and ANDERSON, Circuit Judges.
This is an appeal from a judgment entered in the United States District Court for the Eastern District of New York, Mark A. Costantino, Judge, which denied injunctive relief and dismissed the complaint for want of subject matter jurisdiction. Appellants Sneaker Circus, et al., retailers, wholesalers and importers of footwear, sought injunctive and declaratory relief to invalidate certain U.S. trade agreements with the Republic of Korea and the Republic of China, 1 which were negotiated pursuant to the Trade Act of 1974, 19 U.S.C. §§ 2101 et seq. We find error in the determination of lack of subject matter jurisdiction and reverse and remand.
The Trade Act of 1974 is designed to encourage "open and nondiscriminatory world trade" by providing, inter alia, procedures for safeguarding American industry and labor against injurious import competition. The Act authorizes the President to negotiate orderly marketing agreements with foreign countries after reviewing recommendations prepared by the International Trade Commission.
The agreements in question limit the quantity of footwear exported from the Republic of Korea and the Republic of China to the United States during a four-year period, and are enforced by sanctions imposed by the foreign governments. The role of the U.S. Customs Service, under the terms of the agreement, is to count footwear arriving in this county to determine that quantities do not exceed the terms of the agreement, and to check goods for valid export visas.
In its complaint, Sneaker Circus asserts that these trade agreements are invalid, because they were not negotiated in conformity with the procedural requirements of the Act. It is further alleged that the failure to hold statutorily required public hearings represents a violation of the appellants' due process rights under the United States Constitution. 2
The District Court did not reach the question of whether the trade agreements were concluded in conformity with statutory and constitutional requirements, nor do we. The question at issue is, rather, which federal court, if any, is the appropriate forum for the determination of the validity of the Trade Agreements. Sneaker Circus argues that the case raises federal questions which require the interpretation of the fifth amendment to the United States Constitution and the Trade Act of 1974; that it is barred, by the terms of the agreements, from litigating these issues in the U.S. Customs Court; and that consequently the District Court has jurisdiction of the matter, pursuant to 28 U.S.C. §§ 1331, 1337 and the Administrative Procedure Act, 5 U.S.C. §§ 701 et seq.
Appellees, U.S. Government officials, argue to the contrary that 28 U.S.C. § 1582(a), as amended, assigns the Customs Court exclusive subject matter jurisdiction over this case.
As we noted in our opinion in J. C. Penney Co. v. U.S. Treasury Department, 439 F.2d 63 (2d Cir.), cert. denied, 404 U.S. 869, 92 S.Ct. 60, 30 L.Ed.2d 113 (1971), it is the general rule that disputes which concern the customs laws of the United States, and which arise under the Tariff Act of 1930, as amended, may be adjudicated only in the Customs Court pursuant to the grant of exclusive jurisdiction in 28 U.S.C. § 1582(a). This is the case even when those disputes are largely constitutional in nature, and even when they have not yet "ripened" sufficiently to permit immediate adjudication as justiciable "cases or controversies." 3 This rule is supported both by sound considerations of policy and by consistent historical precedent. 4
In Patchogue-Plymouth Mills Corp. v. Durning, 101 F.2d 41 (2d Cir. 1939), and in David L. Moss Co. v. United States, 103 F.2d 395 (Cust. & Pat.App.1939), the courts indicated that jurisdictional exclusivity was a necessary condition of the uniform and consistent application of the customs laws.
There is, however, an exceptional class of cases which, while arising under the Tariff Act of 1930, is for practical or jurisprudential reasons, barred from the Customs Court by statute. In these cases, and in these cases alone, jurisdiction is vested in the District Courts by virtue of 28 U.S.C. §§ 1331 and 1337. 5 While this exceptional category must be narrowly construed so as not to defeat the policy justifications of the general rule, it is, nevertheless, well-grounded in federal practice and precedent. See Timken Co. v. Simon, 176 U.S.App.D.C. 219 at 224, 539 F.2d 221 at 226 n. 7 (1976).
The case at bar is among these exceptions to the exclusive jurisdiction of the Customs Court.
28 U.S.C. § 1582, which delineates the jurisdiction of the Customs Court, reads in pertinent part:
(a) The Customs Court shall have exclusive jurisdiction of civil actions instituted by any person whose protest pursuant to the Tariff Act of 1930 as amended, has been denied, in whole or in part, by the appropriate customs officer, where the administrative decision, including the legality of all orders and findings entering into the same, involves: . . . (4) the exclusion of merchandise from entry or delivery under any provisions of the customs laws . . . .
(c) The Customs Court shall not have jurisdiction of an action unless (1) either a protest has been filed, as prescribed by section 514 of the Tariff Act of 1930, as amended, and denied in accordance with the provisions of section 515 of the Tariff Act of 1930, as amended, or if the action relates to a decision under section 516 of the Tariff Act of 1930, as amended, all remedies prescribed therein have been exhausted . . . .
Under the terms of the Act, Customs Court jurisdiction is invoked only when an individual protests a specific administrative ruling made at a United States port of entry, and when that protest has been denied.
In the present case, the trade agreements regulate export from a foreign nation. Violation of these export limits subjects the foreign exporter to heavy civil and criminal sanctions in the country of export. 6 There is accordingly every likelihood that the agreements will be effectively enforced abroad, with the result that no occasion for protest under section 514 will ever present itself, and no Customs Court jurisdiction under 28 U.S.C. § 1582 will arise. The point is not that the dispute is not presently ripe for adjudication in the Customs Court, but rather that the case will never ripen sufficiently to meet the statutory requirements for jurisdiction. When this situation occurs, jurisdiction over a customs matter which presumptively inheres in the Customs Court reverts to the District Court under 28 U.S.C. §§ 1331 and 1337. 7
Our decision today is consistent with two recent cases decided in the Court of Appeals for the District of Columbia. In Timken Co. v. Simon, supra, 176 U.S.App.D.C. 219, 539 F.2d 221, decided under the Anti-Dumping Act, 19 U.S.C. §§ 160 et seq., the court found that because goods had entered the country prior to the effective date of the Act, and because the Act functions prospectively, there could in principle be no opportunity for protest under the terms of section 516, and thus no effective access to the Customs Court. In this special circumstance, the court noted: "Since Timken has no remedy pursuant to section 516 in the Customs Court, we decline to hold that the District Court lacked jurisdiction over this action." 176 U.S.App.D.C. 219 at 224, 539 F.2d 221 at 226 n. 7.
Similarly, in Consumers Union of United States, Inc. v. Kissinger, 165 U.S.App.D.C. 75, 506 F.2d 136, cert. denied, 421 U.S. 1004, 95 S.Ct. 2406, 44 L.Ed.2d 673 (1974), import restraints were voluntarily accepted by private companies, and enforced abroad. Thus there could never, in principle, have been a Customs Service decision which could be protested under section 514. Accordingly, the Customs Court lacked jurisdiction under 28 U.S.C. § 1582, and jurisdiction was accepted by the District Court. 8
The government asserts that as a factual matter appellants will be able to protest the actions of customs officials on at least three types of occasions, and so come within Customs Court jurisdiction: (1) They can order goods without first obtaining a visa, and protest the refusal by Customs officials to permit entry; (2) They can protest the counting of shipments with visas against the quotas; and (3) They can protest if goods in excess of the quotas are refused entry. 9
The first and third of these supposed occasions, however, require that foreign exporters risk substantial liability by violating the trade agreements. And the second occasion is simply not one of the opportunities for protest acknowledged by the statute. In short, the government's effort to fit the present case within the rubric of 28 U.S.C. § 1582 is contrived at best. We cannot condition the adjudication of a case of this type on the subjection of appellants and their trading partners to foreign punishment. 10
It might be urged that even if the Customs Court lacks jurisdiction of ...
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