Swisher International v. U.S.

• Decision Date: 28 February 2000
• Citation: 205 F.3d 1358
• Parties: (Fed. Cir. 2000) SWISHER INTERNATIONAL, INC., Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee. 99-1277 DECIDED:
• Court: U.S. Court of Appeals — Federal Circuit

Page 1358

205 F.3d 1358 (Fed. Cir. 2000)

SWISHER INTERNATIONAL, INC., Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee.

99-1277

United States Court of Appeals for the Federal Circuit

DECIDED: February 28, 2000

Appealed from: United States Court of International Trade Judge Jane A. Restani

Daniel G. Jarcho, McKenna & Cuneo, L.L.P., of Washington, DC, argued for plaintiff-appellant. With him on the brief were Peter Buck Feller, Joseph F. Dennin, Michael J. Haungs, and Myron P. Barlow.

Todd M. Hughes, Attorney, Commercial Litigation Branch, Civil Division, Department of Justice, of Washington, DC, argued for defendant-appellee. With him on the brief were David W. Ogden, Acting Assistant Attorney General; David M. Cohen, Director; Jeanne E. Davidson, Deputy Director; and Lara Levinson, Attorney.

John M. Peterson, Neville, Peterson & Williams, of New York, New York, for amici curiae, Totes-Isotoner, Inc., et al. With him on the brief were George W. Thompson, and Curtis Walter Knauss.

Erik D. Smithweiss, Grunfeld, Desiderio, Lebowitz & Silverman, LLP, of New York, New York, for amicus curiae B.P. Oil Supply Company. With him on the brief was Robert B. Silverman.

Before NEWMAN, MICHEL, and PLAGER, Circuit Judges.

MICHEL, Circuit Judge.

Swisher International, Inc. ("Swisher") appeals from a summary judgment for the government by the United States Court of International Trade, dismissing some of its claims for a refund of the unconstitutional Harbor Maintenance Tax ("HMT") as time barred. See Swisher Int'l, Inc. v. United States, 27 F.Supp.2d 234 (Ct. Int'l Trade Nov. 6, 1998). The court held that 28 U.S.C. § 1581(i) (1994), not 28 U.S.C. § 1581(a), is the proper basis of jurisdiction for this constitutional challenge to the application of the HMT to exports. The court ruled that a Customs Service decision to deny a refund request based on such a challenge was not a decision subject to protest under 19 U.S.C. § 1514(a) and thus cannot support Court of International Trade jurisdiction under 28 U.S.C. § 1581(a). Since under the HMT regulation there is no time limit for filing a request for refund of the HMT,¹ if its denial were protestable, the refund claims in the complaint would not have been dismissable, given that Swisher had timely filed its protest and the subsequent Court of International Trade suit when the protest was denied. The court thus held that 28 U.S.C. § 1581(i), affording the Court of International Trade residual jurisdiction, was the exclusive jurisdictional basis for this suit. Because it held that jurisdiction arose under section 1581(i), the court entered judgment for the United States on all of Swisher's claims that were barred by the two-year statute of limitations applicable to that subsection.² The court entered judgment for Swisher on the claims related to HMT paid within the two-year statute of limitations. Swisher timely appealed to this court and the appeal was submitted for our decision on December 10, 1999, following oral argument. Because a denial of a requested refund, we hold today, is a decision as to a charge or exaction and thus protestable, we reverse the judgment of the Court of International Trade dismissing those claims, and in light of the settled case law holding the HMT unconstitutional when applied to exports, remand for a refund calculation on all claims.

BACKGROUND

The Harbor Maintenance Tax, 26 U.S.C. § 4461, was enacted in 1986 as a means of funding maintenance of the nation's ports. The tax was enacted as part of the Water Resources Development Act ("WRDA") and operates by imposing a fee on commercial vessels using the ports. The tax was assessed on importers, exporters, domestic shippers and commercial passenger transport.³ See 26 U.S.C. §§ 4461, 4462 (1994). The revenues from the HMT are used to fund WRDA projects undertaken largely by the Army Corps of Engineers. The Department of Defense is authorized to undertake the maintenance and development projects, through the Secretary of the Army. The HMT portion of the statute is implemented by the Secretary of the Treasury, via the Customs Service. See 26 U.S.C. § 4462(i) (1994).

Congress authorized Customs to promulgate regulations and establish appropriate administrative procedures to implement the HMT. 26 U.S.C. § 4462(i). Congress also instructed that the tax should be administered and enforced as if it were a customs duty. 26 U.SC. § 4462(f)(1). Customs created a procedure in which the exporter was liable for the HMT at the time it loaded the cargo, but was not required to pay the HMT until the end of the quarter. 19 C.F.R. § 24.24(e)(2) (1998). Quarterly payments were required to be submitted accompanied by the "Harbor Maintenance Fee Quarterly Summary Report" (Customs Form 349) within 31 days of the end of the quarter. 19 C.F.R. § 24.24(f). Exporters could make supplemental payments or request refunds of overpayments by filing a Harbor Maintenance Fee Amended Quarterly Summary Report (Customs Form 350). Id. at § 24.24(e)(5).

Customs Form 350 provided four specific factual or legal reasons for requesting a refund, as well as a fifth general, catch-all provision: "(1) Calculations/Clerical Error; (2) Duplication of Payment; (3) Misinterpretation of Exemption; (4) Overvaluation of Shipments; (5) Other - Please Specify -." Neither Customs Form 350 nor the refund regulations contain any time limit for making a supplemental payment or requesting a refund of export HMT. Id.

Appellant Swisher paid HMT from the fourth quarter of 1990 through the second quarter of 1994. Swisher then sought a refund of all HMT paid, on the sole ground that its exports were exempt from the tax under Article I, Section 9, Clause 5 of the Constitution.⁴ Unlike many other exporters seeking to challenge the constitutionality of the HMT, Swisher sought its refund by filing on September 28, 1994 Amended Quarterly Summary Reports for each quarter that it had paid the HMT. Swisher used the catch-all "other" category and specified "[s]hipments exempt from tax under Article I, Section 9, Clause 5, United States Constitution" as the basis for its refund.

Customs denied Swisher's refund request in a letter dated October 26, 1994. Customs denied the request on the grounds that the HMT was a constitutional fee and alternatively that the request was not timely filed for some of the HMT at issue. The Customs letter in response to Swisher's refund request appeared to treat Swisher's refund request as a "protest" and advised Swisher that it could "file a civil action contesting the denial of this protest under 19 U.S.C. § 1514 in the Court of International Trade."

On November 21, 1994, Customs published a Federal Register notice promulgating procedures for protests concerning the constitutionality of the export HMT. The procedures instructed that protests were to be filed within 90 days of collection by Customs, on Customs Form 19 (the standard Customs protest form), in letter form, or in the form of statements of protest affixed to the Quarterly Summary Report normally used to file HMT payments. User Fee Protests, T.D. 94091, 59 Fed. Reg. 60,044 (1994). Instead of filing an action in the Court of International Trade as instructed in the refund denial letter of October 26, Swisher filed, on November 23, 1994, a protest on Customs Form 19, challenging the denial of its refund requests. On February 24, 1995, Swisher requested accelerated disposition of its protest. Accelerated requests are deemed denied as a matter of law if no action has been taken within 30 days of the request for accelerated disposition. See 19 U.S.C. § 1515. When, because of the acceleration request, the Swisher protest was denied as a matter of law on March 26, 1995, Swisher filed this action with the Court of International Trade on March 29, 1995. The action was stayed immediately upon filing pending the outcome of United States v. United States Shoe Corporation, a previously filed challenge to the export HMT. See 907 F. Supp. 408 (Ct. Int'l Trade 1995) (holding that the HMT was unconstitutional when applied to exports), affirmed United States v. United States Shoe Corp., 114 F.3d 1564 (Fed. Cir. 1997) affirmed United States v. United States Shoe Corp., 118 S. Ct. 1290 (1998).

Swisher participated in the U.S. Shoe case as an amicus curiae, asserting a unique jurisdictional argument, that the denial of an HMT refund request pursuant to the governing regulation, 19 C.F.R. § 24.24(e)(5), is a protestable decision and thus subsection 1581(a) provides the appropriate basis for Court of International Trade jurisdiction. The parties in U.S. Shoe asserted slightly different jurisdictional arguments. In U.S. Shoe, the government argued that jurisdiction was proper under section 1581(a) because the decision by Customs to accept the HMT was a protestable decision. The plaintiff in U.S. Shoe argued that jurisdiction was proper under subsection 1581(i).

The relevant portions of the jurisdictional statute state:

(a)The Court of International Trade Shall have exclusive jurisdiction of any civil action commenced to contest the denial of a protest, in whole or in part, under section 515 of the Tariff Act of 1930.

. . .

(i) In addition to the jurisdiction conferred upon the Court of International Trade by subsections (a)-(h) of this section and subject to the exception set forth in subsection (j) of this section, the Court of International Trade shall have exclusive jurisdiction of any civil action commenced against the United States, its agencies, or its officers, that arises out of any law of the United States providing for -

(1) revenue from imports or tonnage;

(2) tariffs, duties, fees, or other taxes on the importation of merchandise for reasons other than the raising of revenue;

(3) embargoes or other quantitative restrictions on the importation of merchandise for reasons other than the protection of the public health or safety; or

(4) administration and...