Trayco, Inc. v. U.S., 92-1406

• Decision Date: 03 June 1993
• Docket Number: No. 92-1406,92-1406
• Citation: 994 F.2d 832
• Parties: TRAYCO, INCORPORATED, Plaintiff-Appellee, v. The UNITED STATES, Defendant-Appellant.
• Court: U.S. Court of Appeals — Federal Circuit

Page 832

994 F.2d 832

15 ITRD 1249

TRAYCO, INCORPORATED, Plaintiff-Appellee, v. The UNITED STATES, Defendant-Appellant.

No. 92-1406.

United States Court of Appeals Federal Circuit.

June 3, 1993.

Jon Rene Josey, Rogers, McBratney & Josey, Florence, SC, argued, for plaintiff-appellee.

E. Roy Hawkins, Attorney, Dept. of Justice, Washington, DC, argued for defendant-appellant. With him on the brief were Stuart M. Gerson, Asst. Atty. Gen., E. Bart Daniel, U.S. Atty., John S. Simmons, U.S. Atty. and Michael Jay Singer.

Before NEWMAN, Circuit Judge, SMITH, Senior Circuit Judge, and ARCHER, Circuit Judge.

EDWARD S. SMITH, Senior Circuit Judge.

The government appeals the decision of the United States District Court for the District of South Carolina entered on 26 March 1991. The district court held that it had jurisdiction under 28 U.S.C. §§ 1346(a)(2), 1355 (1988) to review the legality of a penalty assessed against Trayco, Inc. (Trayco) by the United States Customs Service. The court held that there was no factual basis to support the penalty imposed by Customs and ordered the government to return the mitigated penalty paid by Trayco in the sum of $7,519.00. ¹ We affirm.

Issues

The government appeals two issues. First, did the district court have subject matter jurisdiction to review the legality of a penalty imposed by the United States Customs Service under 19 U.S.C. § 1592(a), (c) (1988) in a refund suit brought by the importer? Second, is Trayco estopped from seeking judicial review because it first challenged the penalty through administrative procedures and consequently received and paid a mitigated penalty?

Background

Trayco, an importer and distributor of plumbing supplies, brought suit in the United States District Court for the District of South Carolina alleging that the United States Customs Service improperly assessed an import penalty under 19 U.S.C. §§ 1304(a), ² 1592(a), (c) ³ (1988). ⁴ Trayco alleged jurisdiction in the district court under 28 U.S.C. §§ 1346(a)(2), ⁵ 1355. ⁶

During the bench trial, the district court concluded that it had subject matter jurisdiction under 28 U.S.C. §§ 1346(a)(2), 1355. The court ordered the government to refund the mitigated penalty paid by Trayco because it found no factual basis to support the penalty. The government appeals. ⁷

Facts

In November 1986, Trayco attempted to import a shipment of individually packaged shower heads through the Port of Charleston, South Carolina. Upon inspection, Customs seized the shipment because the individual boxes were not properly marked with the country of origin as required by 19 U.S.C. § 1304(a). Customs directed Trayco to mark the boxes in accordance with the law, and released the boxes to Trayco for marking at Trayco's warehouse pursuant to regulation. 19 C.F.R. § 134.53(a)(2) (1986). On 10 December 1986, Trayco's President, J. Ray Turner, certified to Customs, in writing, that the boxes had been properly marked with the country of origin.

On 22 December 1986, a Customs official visited Trayco's premises to conduct a reinspection. An unidentified employee directed the official to cartons of shower heads in the back of the warehouse. With the exception of the contents of two cartons, none of the individual boxes of shower heads had been properly marked. The Customs official then spoke with Mr. Turner who verified that the cartons inspected were the ones that Customs had directed to be correctly marked. The two men apparently had an argument, and Mr. Turner ordered the Customs inspector off the premises. ⁸

As a result of the reinspection, Customs constructively seized the shipment pursuant to 19 U.S.C. § 1592(c)(5). Customs released the shipment to Trayco on 11 February 1987 upon the posting of a letter of credit for a security deposit of $12,030.40. On 19 October 1987, Customs sent Trayco a pre-penalty notice stating that Customs was contemplating assessing a penalty based on the improperly marked boxes of shower heads. Trayco responded both orally and in writing that a penalty was not warranted.

On 15 July 1988, Customs assessed a penalty of $12,030.40 against Trayco for gross negligence pursuant to 19 U.S.C. § 1592(a), (c). On 22 July 1988, Trayco filed a petition for mitigation or remission of the penalty pursuant to 19 U.S.C. § 1618. ⁹ On 1 August 1988, Customs denied Trayco's petition. Trayco subsequently filed a supplemental petition for relief pursuant to 19 C.F.R. § 171.33(a). ¹⁰ On 22 September 1988, Customs mitigated the penalty to $7,519.00, but declined to mitigate the penalty in its entirety based on Customs' conclusion that Trayco's certification of 10 December 1986 contained false, material facts.

Trayco filed a second supplemental petition for relief on 21 November 1988 and paid the mitigated penalty as required by 19 C.F.R. § 171.33(c)(1). ¹¹ Trayco accompanied its check for $7,519.00 with a cover letter noting that the payment was being made "under protest reserving all rights to judicial review following the exhaustion of the administrative remedies." Customs denied Trayco's second supplemental petition. Trayco then commenced this action in the United States District Court for the District of South Carolina seeking a refund of the mitigated penalty in the amount of $7,519.00 on the grounds that the penalty is unlawful, erroneous, and unsupported by the facts.

Jurisdiction

The government's first argument is that the district court's judgment should be vacated because the court lacked subject matter jurisdiction. The district court's conclusion that it possessed subject matter jurisdiction is a question of law subject to complete and independent review. See Transamerica Ins. Corp. v. United States, 973 F.2d 1572, 1576 (Fed.Cir.1992) (de novo review); Dehne v. United States, 970 F.2d 890, 892 (Fed.Cir.1992) (de novo review). See also In re Sure-Snap Corp., 983 F.2d 1015, 1017 (11th Cir.1993) (conclusions of law subject to complete and independent review).

The government asserts that Congress intended, by the detailed and comprehensive statutory scheme of the Customs Courts Act of 1980, ¹² to vest exclusive jurisdiction in the Court of International Trade for actions, like the instant one, that involve disputes regarding penalties arising from the importation of mislabeled items. We reject the government's position and conclude that a gap exists in the Court of International Trade's exclusive jurisdiction for an action brought by an importer against the United States for refund of a penalty improperly assessed and exacted under 19 U.S.C. § 1592(a), (c). Because we hold that the district court properly exercised jurisdiction under 28 U.S.C. § 1346(a)(2), we do not reach the issue whether the district court also had jurisdiction under 28 U.S.C. § 1355.

Federal district courts do not possess subject matter jurisdiction over controversies within the exclusive jurisdiction of the Court of International Trade. K Mart Corp. v. Cartier, Inc., 485 U.S. 176, 187-90, 108 S.Ct. 950, 958-60, 99 L.Ed.2d 151 (1988); Fritz v. United States, 535 F.2d 1192, 1193-94 (9th Cir.1976); J.C. Penney Co. v. United States Treasury Dep't, 439 F.2d 63, 66 (2d Cir.), cert. denied, 404 U.S. 869, 92 S.Ct. 60, 30 L.Ed.2d 113 (1971). But it is also well settled that the Court of International Trade, like other specialized courts, "operates within precise and narrow jurisdictional limits" granted by Congress. United States v. Biehl & Co., 3 Ct. Int'l Trade 158, 539 F.Supp. 1218, 1221 (1982). Despite the fact that the Customs Courts Act of 1980 broadened the exclusive jurisdiction of the Court of International Trade, it cannot exercise jurisdiction over actions not addressed by a specific jurisdictional grant.

Section 1581 of Title 28 grants exclusive jurisdiction to the Court of International Trade for certain civil actions brought against the United States. The government concedes that section 1581 does not explicitly grant exclusive jurisdiction to the Court of International Trade for a refund suit initiated by an importer against the United States. The Government, however, would have us construe 28 U.S.C. § 1581 expansively to include such an action.

As in any case of statutory construction, our starting point must be the language of the statute itself. Richards Medical Co. v. United States, 910 F.2d 828, 830 (Fed.Cir.1990) (citing Johns-Manville Corp. v. United States, 855 F.2d 1556, 1559 (Fed.Cir.1988), cert. denied, 489 U.S. 1066, 109 S.Ct. 1342, 103 L.Ed.2d 811 (1989)). A second principle of statutory construction is where a statute expressly enumerates the requirements on which it is to operate, additional requirements are not to be implied. DeSisto College, Inc. v. Town of Howey-In-The-Hills, 706 F.Supp. 1479, 1495 (M.D.Fla.), aff'd, 888 F.2d 766 (11th Cir.1989). See also Andrus v. Glover Constr. Co., 446 U.S. 608, 616-17, 100 S.Ct. 1905, 1910, 64 L.Ed.2d 548 (1980) ("Where Congress explicitly enumerates certain exceptions to a general prohibition, additional exceptions are not to be implied in the absence of evidence of a contrary legislative intent." Id.).

In subsections (a)-(i) of section 1581, Congress specifically enumerated the types of actions against the United States over which the Court of International Trade has exclusive jurisdiction. The government is asking us to look beyond the plain language of the statute to the legislative history and conclude that this importer-initiated suit for refund of a penalty is within the exclusive jurisdiction of the Court of International Trade. We reject the government's argument and conclude that if Congress had intended all import-related matters to come within the exclusive jurisdiction of the Court of International Trade it would have specifically said so.

Section 1582 of Title 28 grants exclusive jurisdiction to the Court of International Trade over civil actions arising out of import transactions commenced by the United States. Trayco's action against the...