Sunshine Int'l Trading, Inc. v. United States, Slip Op. 13 - 25

CourtU.S. Court of International Trade
Docket NumberCourt No. 12-00190,Slip Op. 13 - 25
Decision Date26 February 2013


Slip Op. 13 - 25
Court No. 12-00190


February 26, 2013

Before: Judith M. Barzilay, Senior Judge

Defendant's Motion to Dismiss is granted.

Stein Shostak Shostak Pollack & O'Hara, LLP (Elon A. Pollack, Joseph P. Cox, and Juli C. Schwartz) for Plaintiff, Sunshine International Trading, Inc.

Stuart F. Delery, Acting Assistant Attorney General; Barbara S. Williams, Attorney in Charge, International Trade Field Office, Commercial Litigation Branch, Civil Division, United States Department of Justice (Beverly A. Farrell); Office of the Assistant Chief Counsel, International Trade Litigation, United States Customs and Border Protection (Paula S. Smith, Of Counsel) for Defendant, United States.

BARZILAY, Senior Judge: Before the court is Defendant United States' motion to dismiss for lack of subject matter jurisdiction or, alternatively, for failure to state a claim under USCIT Rule 12(b). Plaintiff Sunshine International Trading, Inc. ("Sunshine") initiated this action to challenge the U.S. Customs and Border Protection's ("Customs") rejection of its attempted entry of women's jeans. While Sunshine alleges that Customs' rejection amounted to

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a protestable exclusion under 19 U.S.C. § 1514(a)(4), the Government asserts that no protestable event occurred and that the court is without jurisdiction under 28 U.S.C. § 1581(a). For the reasons set forth below, the court grants the Government's motion.


Sunshine is a California company that imports women's apparel. On May 17, 2012, Sunshine attempted to enter a shipment of jeans at the Port of Los Angeles, and filed an "Entry/Immediate Delivery" form, No. ANR-3013258-2, accompanied by an ocean bill of lading, a commercial invoice, and a packing list. The latter two documents identified the exporter of the goods as Guangzhou Jointsum Trading Co., Ltd. ("Jointsum"). The commercial invoice stated that Jointsum sold 1,690 dozen pairs of jeans to Sunshine at a per unit price of $2.70. In a column on the invoice titled "Mark" the jeans were identified as "Shylo Made in China" and "Masoi Made in China." A column titled "Description of Goods" described two different types of jeans in the shipment: (1) ladies 98% cotton, 2% polyester jeans, and (2) ladies 55% cotton, 40% fieer, 5% spandex jeans. The invoice also contained the handwritten notation "6204.62.4011/16.6%."

Customs subsequently issued an "Entry/Summary Rejection Sheet" dated May 1, 2012, rejecting entry ANR-3013258-2.1 In issuing the rejection, Customs made the following remarks:

Merchandise has been reappraised at $6.14/pc net; packed (ladies 55% cotton 40% fieer 5 spandex jeans)
Merchandise has been reappraised at $6.33/pc net; packed (ladies 98% coton 2% polyester jeans)
Reference 19 CFR 141.862 and 19 CFR 141.903 for contents of invoices and general requirements, to include style numbers and the manufacture [sic] name and address, HTS number and rate of duty.

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Reference 113.13(d)
Live entry required with a single transaction bond for the duty, taxes and fees.
Please resubmit a live entry, STB and a corrected invoice and a check.

Customs' reappraisal of the jeans is consistent with an April 2012 entry made by Sunshine when it entered jeans similar to those at issue here. The earlier entry involved two types of jeans with entry documents setting forth per unit prices of $2.70 and $2.90. As it did in this case, Customs issued an "Entry/Summary Rejection Sheet" re-appraising the jeans at $6.14 and $6.13, and directing Sunshine to resubmit "a live entry, STB and a corrected invoice and a check." In that instance, Sunshine complied by filing corrected entry paperwork and depositing duties reflecting the higher appraised value.

In this case, rather than complying, Sunshine filed a protest challenging Customs' rejection. In its protest, Sunshine claimed that that the rejection was invalid as a matter of law because it was dated May 1, 2012, more than two weeks before its entry papers were filed. Sunshine also argued that Customs had no basis for rejecting its merchandise under 19 C.F.R. § 141.86 because the commercial invoices submitted upon entry provided the identity of the seller and the identifying marks of the goods. Finally, Sunshine argued that, contrary to Customs' reappraisal, the value of the merchandise set forth in its entry documents was correct because it was based on the jeans' transaction value. To support this last argument, Sunshine submitted purchase orders containing a per unit price of $2.70, the same price set forth in its entry

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documentation. Sunshine also filed an HSBC bank wire transfer acknowledgement purporting to show a payment from Sunshine to Jointsum in the amount of $54,756.00, the total amount that would be paid for 1,690 pairs of jeans at a per unit price of $2.70.

Some of the documents filed with the protest, however, confused the facts surrounding the attempted entry. Unlike the commercial invoice filed with Sunshine's entry paperwork, which indicated that Sunshine purchased 1,690 pairs of jeans from Jointsum, the purchase orders attached to the protest showed an order size of 1,710 pairs of jeans, and identified the seller of those jeans as a company called Gunanzhou Long Jun Trade Development, Co., Ltd. Additionally, Sunshine's protest was accompanied by an entry summary indicating that the May 2012 entry of jeans consisted 1,690 pairs of jeans at a total entered value of $126,250.00. This entered value equates to a per unit price of $6.23 - a value much closer to the reappraisal values contained in Customs' rejection.

On June 27, 2012, Customs issued its ruling on Sunshine's protest denying it in full while also stating that it had been erroneously filed. In doing so, a Customs import specialist checked a box on the protest stating that it was "Denied in full for the reason checked" which was followed by a checked box stating "Other, namely" and finally an explanation that read, in full: "Reference 19 CFR 141.11 Entry was rejected on May 25th 2012. Protest filed in error."4

Sunshine subsequently initiated this action alleging four counts in its complaint: (1) unlawful decision to refuse admission from entry; (2) illegal or prohibited valuation; (3) evidence to demonstrate transaction value and right to make entry provided to customs; and (4) notice of rejection null and void on its face. Compl. ¶¶ 17-32. Sunshine asserts that Customs

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denied its protest under 19 U.S.C. § 1514(a)(4) and claims the court has jurisdiction under 28 U.S.C. § 1581(a).


A. Motion to Dismiss Standard

"The CIT is a court of limited jurisdiction, possessing 'only that power authorized by the Constitution and federal statutes, which is not to be expanded by judicial decree.'" Almond Bros. Lumber Co. v. United States, 651 F.3d 1343, 1350 (Fed. Cir. 2011) (quoting Sakar Int'l Inc. v. United States, 516 F.3d 1340, 1349 (Fed. Cir. 2008)). Sunshine invokes the court's jurisdiction under 28 U.S.C. § 1581(a), which gives this court exclusive jurisdiction over cases commenced to contest the denial of a protest under section 515 of the Tariff Act of 1930, as amended 19 U.S.C. § 1515.5 Section 1515(a), in turn, refers to protests filed to contest one of the seven categories set forth in 19 U.S.C. § 1514(a). Section 1514(a)(4), the provision relied on by Sunshine, allows for the filing of protests to challenge the wrongful "exclusion of merchandise from entry or delivery." For jurisdictional purpurses, it is essential to determine whether Customs' rejection was an exclusion under § 1514(a)(4) because a plaintiff's protest needs to have involved a "'decision' made by Customs under 19 U.S.C. § 1514. . . . [I]f 'Customs' underlying decision does not relate to any of these seven categories, the court may not exercise § 1581(a) jurisdiction . . . .'" Am. Nat. Fire Ins. Co. v. United States, 30 CIT 931, 939-40, 441 F. Supp. 2d 1275, 1285 (2006) (quoting Playhouse Imp. & Exp., Inc....

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