Suwannee Steamship Company v. United States

• Decision Date: 08 February 1973
• Docket Number: Court No. 70/2603.,C.R.D. 73-3
• Citation: 354 F. Supp. 1361
• Parties: SUWANNEE STEAMSHIP COMPANY v. UNITED STATES.
• Court: U.S. Court of Customs and Patent Appeals (CCPA)

354 F. Supp. 1361

SUWANNEE STEAMSHIP COMPANY v. UNITED STATES.

C.R.D. 73-3; Court No. 70/2603.

United States Customs Court.

February 8, 1973.

Toole, Taylor, Moseley, Gabel & Milton, Jacksonville, Fla. (James F. Moseley, Jacksonville, Fla., of counsel), for plaintiff.

Harlington Wood, Jr., Asst. Atty. Gen. (Martin L. Rothstein, New York City, trial attorney), for defendant.

MEMORANDUM OPINION

RE, Judge:

Defendant has moved under Rule 4.7(b)(2) to dismiss this action for lack of jurisdiction over the subject matter.

Rule 4.7(b)(2) of the rules of this court provides:

"(b) Defenses: How presented: The following defenses may be made by a motion to dismiss: * * * (2) lack of jurisdiction of the subject matter; * * *. A motion making any of these defenses may be made before answer."

It is noted at the outset that, when read together with Rules 4.4 through 4.7, it might appear that the jurisdictional defense pleaded may be raised only on a motion to dismiss the complaint, and not on a motion to dismiss the action. The court does not adopt such a construction since it could needlessly prolong the final disposition of an action defective on jurisdictional grounds.

Plaintiff, operator of the vessel SS "Volusia" during 1968, seeks remission of duties assessed at 50 per centum ad valorem under section 466 of the Tariff Act of 1930, 19 U.S.C. § 257 (section 3114 of the Revised Statutes), on the cost of foreign repairs made on the vessel during April and June 1968 in Port of Spain, Trinidad, and Capetown, South Africa. Upon liquidation of the vessel repair entry in August 1969, plaintiff filed with the regional commissioner of customs in Miami, Florida, a petition for relief from assessment of duties. The petition was denied, and plaintiff thereafter paid the vessel repair duties. Under section 466 of the Tariff Act of 1930, 19 U.S.C. § 258 (section 3115 of the Revised Statutes), it has brought action in this court to recover the duties paid.

Sections 257 and 258 of Title 19 of the United States Code, in effect prior to January 5, 1971,¹ provided in pertinent part as follows:

"§ 257. Duty on equipments or repair parts for vessels.

The equipments, or any part thereof, including boats, purchased for, or the repair parts or materials to be used, or the expenses of repairs made in a foreign country upon a vessel documented under the laws of the United States to engage in the foreign or coasting trade, or a vessel intended to be employed in such trade, shall, on the first arrival of such vessel in any port of the United States, be liable to entry and the payment of an ad valorem duty of 50 per centum on the cost thereof in such foreign country; * * *.

§ 258. Remission for necessary repairs.

If the owner or master of such vessel furnishes good and sufficient evidence—

(1) That such vessel, while in the regular course of her voyage, was compelled, by stress of weather or other casualty, to put into such foreign port and purchase such equipments, or make such repairs, to secure the safety and seaworthiness of the vessel to enable her to reach her port of destination; * * *

then the Secretary of the Treasury is authorized to remit or refund such duties, and such vessel shall not be liable to forfeiture, and no license or enrollment and license, or renewal of either, shall hereafter be issued to any such vessel until the collector to whom application is made for the same shall be satisfied, from the oath of the owner or master, that all such equipments or parts thereof or materials and repairs made within the year immediately preceding such application have been duly accounted for under the provisions of this section and section 257 of this title, and the duties accruing thereon duly paid * * *."

The complaint alleges that plaintiff's petition for remission of duties—

"* * * was denied based upon the theory that the repairs upon which the duty was assessed, were necessitated by events and acts that occurred prior to the voyage during which the repairs were made and that remission pursuant to 19 U.S.C. Section 258(1) would not, therefore, be proper";

and that—

"* * * the Custom sic Bureau's interpretation of U.S.C. 19, Section 258(1) is narrow and contrary to the intent of the law."

The basis of this action, plaintiff asserts, arose when the SS "Volusia", while en route from Morocco to Norfolk, Virginia in January and March 1968, encountered heavy weather and, needing additional ballast, used salt water in the fresh water tanks for ballast. The chief engineer's failure to follow instructions, and to flush the salt water from the tanks upon reaching Norfolk, resulted in contaminating the fresh water taken on board at that port. After sailing from Norfolk the contaminated water salted both of the boilers, thus requiring the foreign repairs.

The complaint alleges that the Bureau of Customs

"* * * held that the cause of the damage was the addition of salt water into the fresh water tanks and the failure to flush the tanks before departing from Norfolk, Virginia on the voyage in which the repairs were made. The Customs Bureau thus determined that the cause of the damage took place before the beginning of the voyage and, therefore, the cause or casualty which led to the repairs occurred before the beginning of the voyage in question."

Plaintiff contends that the boilers were damaged from the effects of the sea water working on them during the voyage from Norfolk; and that the failure to flush the fresh water tanks, which was the underlying cause, was "latent in nature" and not discoverable until the damage had been done.

Defendant has moved to dismiss the action on the ground that the authority conferred upon the Secretary of the Treasury or his delegate under section 466 to remit vessel repair duties collected pursuant thereto is "entirely discretionary, and that the exercise of that discretion is final and not subject to review in any court."

The basic question presented is whether the exercise of the discretionary authority conferred upon the Secretary is judicially reviewable.

The principle has been clearly established that preclusion of judicial review of administrative action adversely affecting private rights is not lightly to be inferred. Furthermore, judicial review of final agency action is not precluded unless there is persuasive reason to believe that nonreviewability was intended by Congress. Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 91 S.Ct. 814, 28 L.Ed.2d 136 (1971); Data Processing Service v. Camp, 397 U.S. 150, 90 S.Ct. 827, 25 L. Ed.2d 184 (1970); Abbott Laboratories v. Gardner, 387 U.S. 136, 87 S.Ct. 1507, 18 L.Ed.2d 681 (1967). As stated in Barlow v. Collins, 397 U.S. 159, 166, 90 S.Ct. 832, 838, 25 L.Ed.2d 192 (1970), "Indeed, judicial review of such administrative action is the rule, and nonreviewability an exception which must be demonstrated."²

Judicial review of administrative action is therefore to be presumed, and in the words of one thoughtful scholar:

"* * * in cases of statutory ambiguity or silence, and in new situations in which there are factors pro and con, the issue of reviewability may become acute. In such situations the presumption of reviewability plays a decisive role." Jaffe, Judicial Control of Administrative Action, 336 (1965).

A basic distinction must therefore be made between the availability of judicial review, and the scope of that review. Furthermore, the existing limitations upon the scope of judicial review of the exercises of administrative discretion have been largely self-imposed. The courts have abstained from inquiring into certain administrative acts by virtue of the application of the judicially conceived rule, as expressed by Mr. Justice Douglas in United States v. George S. Bush & Co., 310 U.S. 371, 380, 60 S. Ct. 944, 946, 84 L.Ed. 1259 (1940), quoting Mr. Justice Story in Martin v. Mott, 25 U.S. (12 Wheat.) 19, 30, 6 L.Ed. 537 (1827), that "Whenever a statute gives a discretionary power to any person, to be exercised by him upon his own opinion of certain facts, it is a sound rule of construction, that the statute constitutes him the sole and exclusive judge of the existence of those facts."

Although this description of discretionary authority was painted by Mr. Justice Story with a broad brush, the scope of "administrative absolutism" (Mr. Justice Douglas in Data Processing Service v. Camp, supra, 397 U.S. at 157, 90 S.Ct. 827) has, in practice, been more narrowly defined. Thus, in George S. Bush, supra, although the court upheld the President's freedom to act under the flexible tariff provisions of the Tariff Act of 1930, it noted that he had acted "in full conformity with the statute." Indeed, as Mr. Justice Marshall observed in Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 410, 91 S.Ct. 814, 820, 821, 28 L.Ed.2d 136 (1971), the exception from judicial review of acts committed to agency discretion is "very narrow" and is applicable "in those rare instances" where there "is no law to apply."

Many customs cases may be cited for the proposition that where discretionary power is granted, the court, although precluded from evaluating the facts, may nevertheless review the administrator's action for the purpose of determining whether he has exceeded his statutory authority, has proceeded upon an erroneous theory of law, or has failed to comply with the pertinent statute. Carl Zeiss, Inc. v. United States, 76 F.2d 412, 23 CCPA 7, T.D. 47654 (1935); Kleberg & Co. (Inc.) v. United States, 71 F.2d 332, 21 CCPA 110, T.D. 46446 (1933); United States v. Central Vermont Railway Co., 17 CCPA 166, T.D. 43474 (1929); United States v. Tower & Sons, 14 Ct.Cust.Appls. 421, T.D. 42058 (1927); Corpus Company et al. v. United States, 69 Cust.Ct. ___, C.D. 4390 (1972), appeal pending; H. Z. Bernstein Co., Inc. v. United States, 41 Cust.Ct. 282, C.D. 2053 (1958); Elof Hansson, Inc. v. United States, 41 Cust.Ct. 519, R.D. 9212 (1958),...