St. Eve International, Inc. v. U.S., SLIP OP. 03-54.

• Decision Date: 15 May 2003
• Docket Number: No. 03-00068.,SLIP OP. 03-54.,03-00068.
• Citation: 267 F.Supp.2d 1371
• Parties: ST. EVE INTERNATIONAL, INC, Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

267 F.Supp.2d 1371

ST. EVE INTERNATIONAL, INC, Plaintiff, v. UNITED STATES, Defendant.

SLIP OP. 03-54.

No. 03-00068.

United States Court of International Trade.

May 15, 2003.

Coudert Brothers, New York City (Robert L. Eisen and Christopher E. Pey) for the plaintiff.

Robert D. McCallum, Jr., Assistant Attorney General; John J. Mahon, Acting Attorney in Charge, International Trade Field Office, Commercial Litigation Branch, Civil Division, U.S. Department of Justice (Jack S. Rockafellow and Harry A. Valetk); and Office of Assistant Chief Counsel, International Trade Litigation, U.S. Bureau of Customs and Border Protection (Michael W. Heydrich), for the defendant, of counsel.

Opinion & Order

AQUILINO, Judge.

Discerning a trend in certain female attire in America, the U.S. Customs Service, which has since become the Bureau of Customs and Border Protection per the Homeland Security Act of 2002, § 1502, Pub. L. No. 107-296, 116 Stat. 2135, 2308-09 (Nov. 25, 2002), and the Reorganization Plan Modification for the Department of Homeland Security, H.R. Doc. 108-32, p. 4 (Feb. 4, 2003), issued to St. Eve International, Inc. three notices on Customs Form 4647 to redeliver specified imported women's wear, as well as notices of liquidated damages for failure to comply with those redelivery demands.

I

The importer protested those demands and thereafter commenced this case, praying for and obtaining expedited trial (and now this decision) of its pleaded causes of action as to the contested notices. Among other things, the complaint, which has been amended, requests revocation of each notice and "such further and additional relief as this Court may deem just, including attorney's fees and costs of suit".

The trial began or April 9, 2003. Two days later, Customs issued an apparent warning to the plaintiff that another of its entries would be rejected if it failed to execute and return a proffered Wearing Apparel Detail Sheet because

THERE ARE CURRENTLY SEVERAL ISSUES PENDING WITH RESPECT [to] IMPORTATIONS OF WEARING APPAREL BY YOUR ACCOUNT ST. EVE. INTERNATIONAL, SUCH AS PENALTY CASES, PROTESTS, AND SUMMONS TO COURT. AS THE ISSUES CENTER AROUND CLASSIFICATION/QUOTA/VISA/ADMISSABILITY ISSUES, A REVIEW OF THE PREVIOUS ENTRIES REVEALS THAT THE INVOICE DESCRIPTION USED IS NOT SUFFICIENT TO ENSURE PROPER CLASSIFICATION.

Plaintiffs Exhibit 126, first page (capitalization in original). Whereupon counsel pressed in open court for injunctive relief from such, claimed harassment by the Bureau. See trial transcript ("Tr."), pp. 750-51.

Whatever the precise intent of Customs or reaction of its object at that moment of exchange, suffice it to state that the record developed to date herein does not support the extraordinary, additional equitable relief that the plaintiff is now also requesting. Moreover, award of attorney's fees and expenses and costs under the Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412, requires that the court find that the position of the United States was not substantially justified. Compare 28 U.S.C. § 2412(d)(1)(A) with Turtle Island Restoration Network v. Mallett, 24 CIT 627, 642-43, 110 F.Supp.2d 1005, 1018-19 (2000), affd in pertinent part, rev'd on another ground in part, 284 F.3d 1282 (Fed.Cir.2002), reh'g on that ground denied, 299 F.3d 1373 (Fed.Cir.2002), cert. denied, ___ U.S. ___, 123 S.Ct. 1748, 155 L.Ed.2d 511 (2003). As recited in that case,

a position can be justified even though it is not correct, and we believe it can be substantially (i.e., for the most part) justified if a reasonable person could think it correct, that is, if it has a reasonable basis in law and fact.

24 CIT at 643, 110 F.Supp.2d at 1019, quoting Pierce v. Underwood, 487 U.S. 552, 566 n. 2, 108 S.Ct. 2541, 101 L.Ed.2d 490 (1988). See also Gavette v. Office of Personnel Management, 808 F.2d 1456, 1467 (Fed.Cir.1986), and cases cited therein.

Clearly, the record at bar shows that the government satisfies at least this standard. That is, with regard to any award under EAJA, the court cannot find that defendant's position was not substantially justified.

A

In both its complaint and amended complaint, the plaintiff erroneously pleads subject-matter jurisdiction pursuant to 19 U.S.C. § 1581(a). In its answer to the latter, the defendant admits jurisdiction over entry nos. 655-1151865-0 and 655-1152655-4 under 28 U.S.C. § 1581(a)¹ while denying any jurisdiction over the third entry at issue, No. 655-1146249-5.²

Concurring at the least with defendant's admission, the court, having granted plaintiffs application for expedition of this case,³ proceeded to trial.

B

Goods encompassed by the entries numbered 655-1146249-5 and 655-1152655-4 were landed by the plaintiff under subheading 6109.10.0037 of the Harmonized Tariff Schedule of the United States ("HTSUS") (2002) at a rate of duty of 17.4 percent ad valorem and subject to quota category 352. According to the plaintiff, entry no. 655-1151865-0 merchandise, which arrived under HTSUS subheading 6108.91.0015 "[d]ue to an error by the broker",⁴ is also "properly classified under subheading 6109.10.0037, HTSUS, subject to quota category 352." Amended Complaint, para. 26. That provision is set forth as follows:

T-Shirts, singlets, tank tops and similar garments, knitted or crocheted:

Of cotton.........................

* * * * * *

Women's or girls': Underwear (352)

...................

The defendant counters that the goods of entry no. 655-1151865-0 at issue are properly classifiable under suffix 60 to this foregoing subheading as "Women's or girls': ... Other: ... Tank tops: Women's (339)" while those of the other two impleaded entries belong under HTSUS subheading 6114.20.0010 (2002), to wit:

Other garments, knitted or crocheted:

* * * * * * * * * *

Of cotton.........................

Tops:

* * * * * *

Women's or girls' (339)

......................

As indicated, both of the classifications posited by Customs require a visa for category 339, which the importer did not produce, ergo the Service's notices to redeliver.

The parties agree at bar that since the goods at issue are garments, their classification is controlled by the use for which they are donned. See, e. g., Pretrial Order, Schedules D-1, D-2; Plaintiffs Pretrial Memorandum of Law, p. 10; Defendant's Pretrial Summary Memorandum, p. 7 and Post Trial Brief, p. 3. Each refers to HTSUS Additional U.S. Rule of Interpretation 1(a) that a tariff classification controlled by use (other than actual use) is to be determined in accordance with the use in the United States at, or immediately prior to, the date of importation of goods of that class or kind to which the imported goods belong, and the controlling use is the principal use[.]

They disagree, however, with respect to the class or kind to which the imported goods belong,⁵ although each side refers the court to United States v. Carborundum Co., 63 C.C.P.A. 98, 536 F.2d 373, C.A.D. 1172, 63 C.C.P.A. 98, 536 F.2d 373, cert, denied, 429 U.S. 979, 97 S.Ct. 490, 50 L.Ed.2d 587 (1976), among other cases, for guidance in this regard. The merchandise in that particular case was an iron-silicon alloy powder for use in the manufacture of ferrous metals, but the parties take the position that the factors applied in determining therein whether that merchandise fell within a particular class or kind apply equally now to the women's wear herein, to wit,

the general physical characteristics of the merchandise, the expectation of the ultimate purchasers, the channels, class or kind of trade in which the merchandise moves, ... the environment of the sale (i.e., accompanying accessories and the manner in which the merchandise is advertised and displayed ...), the use, if any, in the same manner as merchandise which defines the class, the economic practicality of so using the import, the recognition in the tr ade of this use.

63 C.C.P.A. at 102, 536 F.2d at 377 (citations omitted).

II

The parties stipulated in the pretrial order, and the evidence adduced thereafter at trial confirmed, that St. Eve International, Inc. is known in its industry as a women's underwear or intimate apparel company which does not advertise or market directly to the ultimate consumers. See Pretrial Order, Schedule C; Tr., pp. 404-05. Among other offers of proof pretrial was that the defendant

does not dispute that the imported merchandise which is the subject of this action, i.e., merchandise which has been referred to as shelf bra camisoles and shelf bra tank tops, is sold principally in the women's intimates or underwear departments of walk-in retail stores, and further, defendant will not introduce any evidence that the imported merchandise is sold otherwise in walk-in retail stores. Pretrial Order, Schedule C-2, para. 3.

A

Given the record since developed, the court is able to enumerate the following findings of fact:

1. St. Eve International, Inc. is a New York corporation with its principal place of business in the "lingerie building", 180 Madison Avenue, New York, New York. See Tr., pp. 87, 523.

2. That building and location in Manhattan are known in the trade for underwear, intimate apparel, and sleepwear. See id. at 89, 140-41.

3. Design of St. Eve merchandise takes place at that location. See id. at 345.

4. St. Eve International, Inc. sells nothing but underwear and sleepwear. See id. at 53, 60-61.

5. The trade in general and buyers in particular consider St. Eve International, Inc. only as a supplier of underwear and sleepwear. See id. at 58. Cf. Plaintiffs Exhibit 85.

6. St. Eve International, Inc. does not deal with buyers of sportswear. See Tr., pp. 63, 90.

7. St. Eve International, Inc. markets its camisoles as underwear. See id. at 57.

8. St. Eve International, Inc. sells underpants that match its camisoles. See id. at 60. See generally Plaintiffs Exhibits 97 and 105. Compare Defendant's Exhibits BB and BC with Exhibit BD.

9. The stores that purchase St. Eve...