Travenol Laboratories, Inc. v. US, Slip Op. No. 96-114. Court No. 89-08-00469.

• Decision Date: 23 July 1996
• Docket Number: Slip Op. No. 96-114. Court No. 89-08-00469.
• Citation: 936 F. Supp. 1020
• Parties: TRAVENOL LABORATORIES, INC., Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

936 F. Supp. 1020

TRAVENOL LABORATORIES, INC., Plaintiff, v. UNITED STATES, Defendant.

Slip Op. No. 96-114. Court No. 89-08-00469.

United States Court of International Trade.

July 23, 1996.

Katten Muchin & Zavis (Mark S. Zolno and Lynn S. Baker), Chicago, IL, for plaintiff.

Frank W. Hunger, Assistant Attorney General; Joseph I. Liebman, Attorney in Charge, International Trade Field Office, Commercial Litigation Branch, Civil Division, U.S. Department of Justice (James A. Curley); Office of the Assistant Chief Counsel, U.S. Customs Service (Sheryl A. French), of counsel, Washington, DC, for defendant.

OPINION & ORDER

AQUILINO, Judge:

The North American Free Trade Agreement Implementation Act, Pub.L. No. 103-182, 107 Stat. 2057 (Dec. 8, 1993), has spawned a number of issues of seeming first impression, including several raised now in this test case in which final judgment entered in February 1993 pursuant to the court's slip op. 93-15, 17 CIT 69, 813 F.Supp. 840,

that each of the kidney dialysis devices at issue in the case was correctly classifiable under item 960.15 or item 870.67 of the Tariff Schedules of the United States and thus entitled to entry free of duty; and

. . . . .

ORDERED that the United States Customs Service reliquidate the entries which were the basis of this case under the aforesaid TSUS items and refund to the plaintiff any duties paid, together with interest thereon as provided by law.

I

As a test case within the meaning of CIT Rule 84 finally decided, this judgment resulted in reliquidation and refund not only in it¹ but also in CIT Nos. 89-09-00511, 89-10-00560, 90-03-00114, 91-01-00028, 91-11-00803, 91-12-00923, 92-02-00101, 92-05-00332, 92-07-00452, 92-09-00610, 92-11-00732 and 93-01-00008, which cases had also been brought in the name of the above-captioned plaintiff (or of Baxter Healthcare Corporation), encompassing some 688 entries of the same or similar merchandise between January 1985 and May 1992, and which had been suspended pursuant to that rule and/or Rule 85. Stipulated judgments upon agreed statements of facts within the meaning of CIT Rule 58.1 were entered in each of those cases on or prior to December 8, 1993.

Before the court now is plaintiff's Motion to Enforce Judgment, ostensibly made pursuant to CIT Rules 7 and 60(b)(6), praying that Customs reliquidate the referenced entries "and pay additional interest on the duties already refunded, computed from the date of deposit to the date of summons of each entry", to quote from the proposed form of order accompanying it. That is, according to the motion, between January 1994 and August 1995 the Service reliquidated the entries and refunded the duties which had been deposited and also paid interest thereon from the dates of their respective court summonses. However,

Customs did not refund interest from the date of deposit as allowed by 19 U.S.C. § 1505(c), which became effective prior to the reliquidation of the entries in question.

8. It is plaintiff's position that the amendment of 19 U.S.C. § 1505(c) allowing interest from the date of deposit applies to any liquidations and reliquidations made after December 8, 1993 and so applies to the reliquidations of the entries listed on Schedule A.

Plaintiff's Motion to Enforce Judgment, paras. 7, 8.

The defendant does not deny the facts which underlie this motion², but it denies that the above-cited NAFTA implementation act, case law or logic supports the relief requested.

II

At the times of the entries in question, as well as of the court's slip op. 93-15, 813 F.Supp. 840, and judgment, the Tariff Act of 1930, as amended, required deposit of estimated duties per 19 U.S.C. § 1505(a) while section 1520(d) of that title ("Interest rates; calculation") provided that, upon reliquidation,

interest shall be allowed on any amount paid as increased or additional duties under section 1505(c) of this title at the annual rate established pursuant to that section and determined as of the 15th day after the date of liquidation or reliquidation. The interest shall be calculated from the date of payment to the date of (1) the refund, or (2) the filing of a summons under section 2632 of Title 28, whichever occurs first.³

Section 642 of the implementation act repealed this section 1520(d) and redrafted section 1505 into four lettered (a through d) subsections, including:

(c) INTEREST. — ... Interest on excess moneys deposited shall accrue, at a rate determined by the Secretary, from the date the importer of record deposits estimated duties, fees, and interest to the date of liquidation or reliquidation of the applicable entry or reconciliation.

Pub.L. No. 103-182, § 642(a), 107 Stat. at 2205 (1993). Ergo, plaintiff's current claim(s).

A

The defendant does not contest that these claim(s) have been presented within the "reasonable time" required of a motion pursuant to CIT Rule 60(b)(6)⁴ or otherwise gainsay that this court has jurisdiction to reach a decision on the merits. Indeed, there is residual authority to consider relief from the operation of a judgment within the meaning of that rule, including those stipulated upon agreed statements of facts. E.g., United States v. The Hanover Ins. Co., 18 CIT 991, 869 F.Supp. 950 (1994), aff'd, 82 F.3d 1052 (Fed.Cir.1996); D & M Watch Corp. v. United States, 16 CIT 285, 795 F.Supp. 1160 (1992).

B

On its claim(s), plaintiff's position is articulated substantially as follows: The intent of Congress in amending 19 U.S.C. § 1505 was to "provide equity in the collection and refund of duties and taxes, together with interest, by treating collections and refunds equally." H.R.Rep. 361, part I, 103d Cong., 1st Sess. 140 (1993), U.S.Code Cong. & Admin.News 1993, pp. 2552, 2691. The resultant section 642 of the NAFTA improvements act "is clear on its face and should be given its plain meaning." Plaintiff's Memorandum of Law, p. 9. The court's judgments herein and hereunder are also clear. The responsibility of Customs in regard thereto was purely ministerial; the Service was not at liberty to resolve any perceived ambiguity on its own:

... Customs was required to follow the law of interest in effect at the time of reliquidation. The statute clearly states that interest accrues back to the date of deposit. There is no ambiguity, because this Court has previously decided that with respect to this exact statute, it is reliquidation which is the triggering event with respect to calculation of interest.

Id. at 7-8 (emphasis deleted), citing Syva Company v. United States, 12 CIT 199, 681 F.Supp. 885 (1988), and Penrod Drilling Co. v. United States, 13 CIT 1005, 727 F.Supp. 1463 (1989), reh'g denied, 14 CIT 281, 740 F.Supp. 858 (1990), aff'd, 925 F.2d 406 (Fed. Cir.1991).

Whatever the appeal of this advocacy on its face, it is not conclusive of the issue as joined by the defendant.⁵ To begin with, the U.S. Department of the Treasury and its Customs Service are responsible for enforcement of the Tariff Act of 1930, as amended, not the courts, which cannot "supply by creative interpretation the necessary clear direction that Congress omitted." Kalan, Inc. v. United States, 944 F.2d 847, 850 (Fed.Cir. 1991), cert. denied, 503 U.S. 906, 112 S.Ct. 1263, 117 L.Ed.2d 492 (1992). Any waiver of such sovereign's immunity is to be strictly construed, and, in

the absence of express congressional consent to the award of interest separate from a general waiver of immunity to suit, the United States is immune from an interest award.

Library of Congress v. Shaw, 478 U.S. 310, 314, 106 S.Ct. 2957, 2961, 92 L.Ed.2d 250 (1986). In relying on this axiom, the court of appeals in Kalan concluded that the law governing Customs (prior to the NAFTA implementation act) left

little doubt that excess estimated duties are refunded without interest. Neither section 1520(d) itself nor related sections 1505(a)-(c) clearly mandate the payment of interest on duties deposited at entry and subsequently refunded. Besides that, the sole statutory provision dealing directly with the refund of excess deposits § 1505(a) is silent about the addition of interest.

944 F.2d at 850.

The primary enactment waiving the government's immunity in this Court of International Trade is the Customs Courts Act of 1980, as amended, 28 U.S.C. ch. 169. And necessarily, that statute was key to the decisions the plaintiff attempts to rely on, namely, Syva and Penrod Drilling, supra. Neither advances its cause. In dismissing the former for lack of jurisdiction under 28 U.S.C. § 2637(a), the court did conclude that liquidation was "the operative event triggering the time for assessment of interest"⁶, albeit on the delinquent payment of liquidated duties by the importer, but that that event occurred after 19 U.S.C. § 1505(c) had been enacted, thereby dispelling any claim of retroactive application.⁷ In any event, interest owed on that payment had to have been paid before the commencement of judicial review thereof, which was found not to be the case. See 12 CIT at 205, 681 F.Supp. at 890. Penrod Drilling implicated the same requirement for court intervention — and to the same negative outcome for the plaintiff therein.

As indicated, and as the plaintiff here properly argues, Syva and Penrod Drilling do stand for the proposition that "liquidation is the operative event for purposes of previous § 1505(c)", to quote from the latter, 13 CIT at 1007, 727 F.Supp. at 1466. But this is no longer true for that section as amended by the NAFTA implementation act, deposit of estimated duties is the trigger. And it is safe to assume from the history of this case that the predicate deposits were made well before Title VI ("Customs Modernization") of that statute became effective on December 8, 1993. Nothing in its section 692, establishing that date for that title, including section 642, supra, or in any other part of the omnibus implementation act states or implies legislative intent that the amendments to section...