Totes-Isotoner Corp. v. U.S., No. 2009-1113.

CourtUnited States Courts of Appeals. United States Court of Appeals for the Federal Circuit
Writing for the CourtDyk
Citation594 F.3d 1346
PartiesTOTES-ISOTONER CORPORATION, Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee.
Docket NumberNo. 2009-1113.
Decision Date05 February 2010
594 F.3d 1346
TOTES-ISOTONER CORPORATION, Plaintiff-Appellant,
v.
UNITED STATES, Defendant-Appellee.
No. 2009-1113.
United States Court of Appeals, Federal Circuit.
February 5, 2010.

[594 F.3d 1349]

John M. Peterson, Neville Peterson LLP, of New York, NY, argued for plaintiff-appellant. With him on the brief were Michael T. Cone, Maria E. Celis, and Matthew G. Shaw.

Jeanne E. Davidson, Director, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for defendant-appellee. With her on the brief were Tony West, Assistant Attorney General, Reginald T. Blades, Jr., Assistant Director, and Aimee Lee and David S. Silverbrand, Trial Attorneys. Of counsel on the brief were Karen P. Binder, Assistant Chief Counsel, and Yelena Slepak, Attorney, United States Customs and Border Protection, of New York, NY, and Elizabeth Baltzan, Office of the General Counsel, United States Trade Representative, of Washington, DC.

Curtis W. Knauss, Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP, of New York, NY, for amicus curiae Wolff Shoe.

Before LOURIE, DYK, and PROST, Circuit Judges.

Opinion for the court filed by Circuit Judge DYK. Opinion concurring in the result filed by Circuit Judge PROST.

DYK, Circuit Judge.


Totes-Isotoner Corporation ("Totes") appeals from a judgment of the United States Court of International Trade dismissing its complaint against the United States for failure to state a claim. Totes alleged that the Harmonized Tariff Schedule of the United States ("HTSUS") unconstitutionally denies the equal protection of the laws by imposing different rates of duty on seamed leather gloves "for men" and seamed leather gloves "for other persons." See Totes-Isotoner Corp. v. United States, 569 F.Supp.2d 1315, 1319 (Ct. Int'l Trade 2008) ("Totes I"). We affirm.

BACKGROUND

Totes is a United States importer of men's seamed leather gloves. As an importer of goods, Totes is required to pay import tariffs as set forth in the HTSUS. Subheading 4203.29.30 of the HTSUS classifies "[m]en's" leather gloves and provides for a duty rate of 14 percent ad valorem, whereas gloves "[f]or other persons" are classified under 4203.29.40 and 4203.29.50, HTSUS, which provide for a duty rate of 12.6 percent ad valorem. The relevant portions of the HTSUS are set forth below:

4203 Articles of apparel and clothing accessories, of
                 leather or of composition leather:
                ...
                 Gloves, mittens and mitts:
                ...
                4203.29 Other [than those for sports]:
                ...
                 Other [than horsehide or cowhide
                 (except calfskin) leather]:
                ...
                 [Seamed]:
                4203.29.30 Men's..................14%
                 10 Not lined ...doz. prs.
                 20 Lined ......doz. prs.
                 For other persons:
                4203.29.40 00 Not lined ...doz. prs. ..12.6%
                4203.29.50 00 Lined ......doz. prs. ..12.6%
                
594 F.3d 1350

Totes filed a complaint with the Court of International Trade, which has "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 ... revenue from imports or tonnage." See 28 U.S.C. § 1581(i)(1). In its complaint, Totes alleged that by imposing different tariff rates for "[m]en's" gloves and "other" gloves, the HTSUS "unlawfully and unconstitutionally discriminate[s] on the basis of gender or age." See Complaint at 1, Totes I, 569 F.Supp.2d 1315. Totes sought a refund of duties "unconstitutionally exacted in liquidation under HTSUS Subheading 4203.29.30." Id. at 7.

The government filed a motion to dismiss on various grounds. In a decision dated July 3, 2008, the Court of International Trade concluded that Totes' equal protection claims were justiciable and that Totes had standing to bring its claims. See Totes I, 569 F.Supp.2d at 1319. Nonetheless, the court dismissed Totes' complaint for failure to plead facts sufficient to state a claim of unconstitutional discrimination. The dismissal was without prejudice as to the filing of an amended complaint. Id. Both Totes and the government sought reconsideration. On reconsideration, the government also argued that the court lacked jurisdiction because Totes failed to exhaust its administrative remedies, having failed to invoke the Court of International Trade's jurisdiction under 28 U.S.C. § 1581(a) by filing a protest with the United States Customs Service ("Customs"). On November 4, 2008, the court denied both parties' motions for rehearing. See Totes-Isotoner Corp. v. United States, 580 F.Supp.2d 1371, 1374 (Ct. Int'l Trade 2008) ("Totes II"). Totes chose not to amend its complaint, and the court accordingly dismissed the complaint with prejudice. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(5).

DISCUSSION
I Jurisdiction and Related Questions

The government argues that the Court of International Trade did not have jurisdiction to entertain this action, that Totes lacks standing, and that this controversy is non-justiciable. These are questions of law which we review de novo. Int'l Custom Prods., Inc. v. United States, 467 F.3d 1324, 1326 (Fed.Cir.2006).

A Jurisdiction Under 28 U.S.C. § 1581(i)

In arguing that the Court of International Trade lacked jurisdiction under 28 U.S.C. § 1581(i), the government points out that jurisdiction under section 1581(i) is not available if jurisdiction is available under other subsections of 1581, and argues that section 1581(a) would have been available if Totes had filed a protest.1 We disagree. It is 28 U.S.C. § 1581(i), the residual jurisdiction provision, and not 28 U.S.C. § 1581(a) that provides the jurisdictional mechanism for a challenge to the constitutionality of a tariff. In Thomson Consumer Electronics, Inc. v. United States, 247 F.3d 1210, 1215 (Fed.Cir.2001), we held that filing a protest with Customs under section 1514(a), which is a prerequisite

594 F.3d 1351

to jurisdiction under section 1581(a), was not required where a plaintiff challenged the constitutionality of a tariff pursuant to section 1581(i). This was so because section 1581(a) did not provide a remedy. We reasoned that there is no protest remedy available to one challenging an unconstitutional statute because Customs lacks the power to declare a statute unconstitutional. See id.; see also Orleans Int'l, Inc. v. United States, 334 F.3d 1375, 1380 (Fed.Cir.2003); U.S. Shoe Corp. v. United States, 114 F.3d 1564, 1569-71 (Fed.Cir.1997), aff'd, 523 U.S. 360, 118 S.Ct. 1290, 140 L.Ed.2d 453 (1998).

However, the government relies on United States v. Clintwood Elkhorn Mining Co., 553 U.S. 1, 128 S.Ct. 1511, 170 L.Ed.2d 392 (2008), and suggests that Clintwood has effectively overruled Thomson. In Clintwood, a taxpayer claimed that the government had unlawfully imposed a tax on exports and sought a refund. 128 S.Ct. at 1515. The taxpayer had not, however, filed a claim for refund with the IRS and the statute, 26 U.S.C. § 7422, provided that "[n]o suit or proceeding shall be maintained in any court for the recovery of any internal revenue tax alleged to have been erroneously or illegally assessed or collected ... until a claim for refund or credit has been duly filed with [the IRS]." See Clintwood, 128 S.Ct. at 1516. In holding that the statute required initial resort to the IRS, the Supreme Court did not address whether the IRS could in fact provide a refund by declaring the tax unconstitutional. The Court held that exhaustion was required in all circumstances. But the language of the exhaustion provision in Clintwood, as the Supreme Court noted, was "unusually emphatic." Id. ("Five `any's' in one sentence and it begins to seem that Congress meant the statute to have expansive reach."). There is no similar provision here unequivocally requiring resort to the protest procedures and section 1581(a). We conclude that Clintwood does not alter our holding in Thomson, and that the Court of International Trade properly exercised jurisdiction under section 1581(i).

B Standing

The government also argues that Totes lacks standing to maintain this action. Totes must demonstrate that its claim meets Article III of the Constitution's "case or controversy" requirements. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). To establish Article III standing, Totes must demonstrate (1) that it has suffered an injury-in-fact; (2) that there is a causal connection between the government's conduct and its injury-in-fact; and (3) that its injury is redressable by the court. See id. Totes alleges that it has suffered an injury-in-fact — the payment of customs duties at the 14 percent rate. Totes also alleges that this injury is caused by the government's allegedly discriminatory tariff rates, and seeks refund of any excess duty paid. These allegations typically would satisfy constitutional standing requirements. See, e.g., U.S. Shoe, 523 U.S. at 365-66, 370, 118 S.Ct. 1290.

The government argues that since all importers of "[m]en's" gloves, including Totes, pay the same tariff rate, there is no discriminatory treatment and that Totes has suffered no injury-in-fact. This argument is frivolous. Equal protection requirements still apply even though everyone in the targeted group is targeted equally. See Loving v. Virginia, 388 U.S. 1, 9, 87 S.Ct. 1817, 18 L.Ed.2d 1010 (1967) ("[E]qual application [of Virginia's miscegenation statute] does not immunize the statute from the very heavy burden of justification which the Fourteenth Amendment has traditionally required of state statutes drawn according to race.").

594 F.3d 1352

The government also argues that if there is any discrimination, it is against the purchasers of gloves, and not the importers of gloves. However, the Supreme Court has held that a vendor may indeed be the proper plaintiff where the vendor itself is injured by the alleged discrimination, even though the vendor is not the object of the discrimination.

In Craig v. Boren, the Supreme Court held that a beer vendor had third-party...

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    ...often will differ, in ways relevant to § 1862, from its relations with other countries. See Totes-Isotoner Corp. v. United States , 594 F.3d 1346, 1357 (Fed. Cir. 2010) ("The reasons behind different duty rates vary widely based on country of origin, the type of product, the circumstances u......
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    ...U.S. 662, 129 S. Ct. at 1949-50 (citing Bell Atlantic Corp. v. Twombly, 550 U.S. at 555-57, 570); Totes-Isotoner Corp. v. United States, 594 F.3d 1346, 1354-55 (Fed. Cir.), cert. denied, 131 S. Ct. 92 (2010); Bank of Guam v. United States, 578 F.3d 1318, 1326 (Fed. Cir.) ("In order to avoid......
  • Ford Motor Co. v. United States, Slip Op. 11–130.Court No.: 09–00375.
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    ...of these drawback claims. Plaintiff's Response at 4–5 (citing Totes–Isotoner Corp. v. United States, 580 F.Supp.2d 1371 (CIT 2008), aff'd 594 F.3d 1346 (Fed.Cir.2010)).6BPlaintiff's Challenge Presents A Case Or Controversy That Is Ripe Defendants argue that Plaintiff's challenge with respec......
  • New Hampshire Flight Procurement, LLC v. United States, No. 13-567C
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    ...are true (even if doubtful in fact).'" (quoting Bell Atl. Corp. v. Twombly, 550 U.S. at 555)); Totes-Isotoner Corp. v. United States, 594 F.3d 1346, 1354-55 (Fed. Cir.), cert. denied, 131 S. Ct. 92 (2010); Bank of Guam v. United States, 578 F.3d 1318, 1326 (Fed. Cir.) ("In order to avoid di......
  • Request a trial to view additional results
68 cases
  • Transpacific Steel LLC v. United States, 2020-2157
    • United States
    • United States Courts of Appeals. United States Court of Appeals for the Federal Circuit
    • July 13, 2021
    ...often will differ, in ways relevant to § 1862, from its relations with other countries. See Totes-Isotoner Corp. v. United States , 594 F.3d 1346, 1357 (Fed. Cir. 2010) ("The reasons behind different duty rates vary widely based on country of origin, the type of product, the circumstances u......
  • Harris v. United States, No. 09-421C
    • United States
    • United States Courts of Appeals. United States Court of Appeals (District of Columbia)
    • November 21, 2011
    ...U.S. 662, 129 S. Ct. at 1949-50 (citing Bell Atlantic Corp. v. Twombly, 550 U.S. at 555-57, 570); Totes-Isotoner Corp. v. United States, 594 F.3d 1346, 1354-55 (Fed. Cir.), cert. denied, 131 S. Ct. 92 (2010); Bank of Guam v. United States, 578 F.3d 1318, 1326 (Fed. Cir.) ("In order to avoid......
  • Ford Motor Co. v. United States, Slip Op. 11–130.Court No.: 09–00375.
    • United States
    • U.S. Court of International Trade
    • October 18, 2011
    ...of these drawback claims. Plaintiff's Response at 4–5 (citing Totes–Isotoner Corp. v. United States, 580 F.Supp.2d 1371 (CIT 2008), aff'd 594 F.3d 1346 (Fed.Cir.2010)).6BPlaintiff's Challenge Presents A Case Or Controversy That Is Ripe Defendants argue that Plaintiff's challenge with respec......
  • New Hampshire Flight Procurement, LLC v. United States, No. 13-567C
    • United States
    • Court of Federal Claims
    • August 29, 2014
    ...are true (even if doubtful in fact).'" (quoting Bell Atl. Corp. v. Twombly, 550 U.S. at 555)); Totes-Isotoner Corp. v. United States, 594 F.3d 1346, 1354-55 (Fed. Cir.), cert. denied, 131 S. Ct. 92 (2010); Bank of Guam v. United States, 578 F.3d 1318, 1326 (Fed. Cir.) ("In order to avoid di......
  • Request a trial to view additional results

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