U.S. v. Inn Foods, Inc.

• Decision Date: 13 September 2004
• Docket Number: No. 04-1035.,04-1035.
• Citation: 383 F.3d 1319
• Parties: UNITED STATES, Plaintiff-Appellant, v. INN FOODS, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

383 F.3d 1319

UNITED STATES, Plaintiff-Appellant, v. INN FOODS, INC., Defendant-Appellee.

No. 04-1035.

United States Court of Appeals, Federal Circuit.

September 13, 2004.

Michael S. Dufault, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for plaintiff-appellant. With him on the brief were Peter D. Keisler, Assistant Attorney General; David M. Cohen, Director; and Patricia M. McCarthy, Assistant Director.

Robert Scott Whiteley, Horton, Whiteley & Cooper, of Oakland, California, argued for defendant-appellee. With him on the brief was Craig A. Mitchell, of Newport Beach, California.

Before NEWMAN, RADER, and BRYSON, Circuit Judges.

BRYSON, Circuit Judge.

The government appeals the decision of the Court of International Trade dismissing the government's complaint against Inn Foods, Inc., as time-barred. United States v. Inn Foods, Inc., 264 F.Supp.2d 1333 (Ct. Int'l Trade 2003); United States v. Inn Foods, Inc., 276 F.Supp.2d 1359 (Ct. Int'l Trade 2003) (denying motion for reconsideration). Because we conclude that the complaint was filed within the period permitted by Inn Foods' waiver of the statute of limitations, we reverse.

I

The government filed suit against Inn Foods on December 14, 2001, alleging that Inn Foods deprived the government of duties on imported produce through the use of false importation documents, in violation of 19 U.S.C. § 1592. The government alleged that, from January 22, 1987, to January 19, 1990, the price of the produce declared by Inn Foods was less than Inn Foods and its importer, Seaveg, Ltd., actually paid for the produce.

Under 19 U.S.C. § 1621, the government had five years within which to bring an action against Inn Foods. That statute provides, in pertinent part:

[I]n the case of an alleged violation of section 1592 or 1593a of this title, no suit or action (including a suit or action for restoration of lawful duties under subsection (d) of such sections) may be instituted unless commenced within 5 years after the date of the alleged violation or, if such violation arises out of fraud, within 5 years after the date of discovery of fraud....

At the government's request, Inn Foods agreed to waive the statute of limitations for a two-year period commencing on December 15, 1993. Inn Foods subsequently agreed to three additional two-year extensions of the waiver of the limitations period commencing on the 14th day of December in 1995, 1997, and 1999. With respect to the final two-year period, Inn Foods executed a waiver that provided:

Inn Foods, Inc. hereby waives the period of limitations contained in Title 19, United States Code, Section 1621 ... for a period of TWO YEARS, commencing on December 14, 1999.

The government filed its complaint against Inn Foods in the Court of International Trade on December 14, 2001. Inn Foods moved to dismiss the complaint as time-barred, asserting that its waiver of the statute of limitations expired on December 13, 2001, one day prior to the filing date of the complaint. The government argued that the waiver expired on the anniversary of the commencement date of the waiver, pursuant to Court of International Trade Rule 6(a) and the decision in United States v. Neman Bros. & Associates, 777 F.Supp. 962 (Ct. Int'l Trade 1991). The trial court agreed with the government that if the statutory limitations period were in issue, Rule 6(a) would apply and a filing on the anniversary date of the event from which the limitations period ran would be timely. The court refused to apply Rule 6(a) to the waiver of the limitations period, however. Instead, the court concluded that the plain meaning of the waiver document required that it be interpreted to mean that the waiver period "was to begin on December 14, 1999, and expired at 11:59 p.m. on December 13, 2001 (two years from the effective date of the waiver)."

In support of its interpretation of the waiver, the trial court concluded that Customs had a policy of counting the first day of any waiver period when computing the length of that waiver. The policy referred to by the court was stated in a Treasury Decision that provided:

Customs has adopted a policy permitting offers by a party to "waive" the statute of limitations for a period of not less than two years. It should be noted that the two-year period ordinarily commences from the date of the waiver, unless another commencement date is specified by the waiving party.

Treas. Dec. No. 90-11, 55 Fed.Reg. 3682 (Feb. 2, 1990).

The trial court distinguished Neman and several court of appeals opinions on the ground that they did not address the question whether Rule 6(a) of the Federal Rules of Civil Procedure or the Rules of the Court of International Trade is applicable to a waiver agreement that designates the day on which the waiver period begins to be counted.

The government moved the trial court for reconsideration, seeking to introduce documents that, according to the government, showed that Inn Foods understood the waiver to extend until December 14, 2001. The trial court refused to consider those documents, because the government had failed to introduce them prior to its motion for reconsideration and had not alleged that the documents were newly discovered.

II

The government argues that the trial court should have followed the earlier decision of the Court of International Trade in United States v. Neman Bros. & Associates, 777 F.Supp. 962 (Ct. Int'l Trade 1991). In Neman, the defendants waived the limitations period in 19 U.S.C. § 1621 for "one (1) year commencing August 1, 1988." Id. at 963. The court in Neman concluded that "[b]ecause Rule 6(a) of this Court is analogous to Fed. R. 6(a), and other precedent holds that the time computation method used in Fed. R. 6(a) applies to waivers, then the `anniversary' method will be used in this case." Id. at 964. Applying the "anniversary" method, the Neman court concluded that "[t]he waiver period included August 1, 1989," the anniversary of the date on which the limitations period commenced. Id.

Inn Foods acknowledges that the anniversary method of calculating the limitation period set forth in Rule 6(a) would apply to the underlying statute of limitations, but argues that it should not apply to the waiver of the statute of limitations at issue in this case. According to Inn Foods, the plain meaning of the waiver language, "for a period of TWO YEARS, commencing on December 14, 1999," contemplates that in counting the two-year period, the first day, December 14, 1999, is to be counted. If the first day is counted, the two-year period would expire on December 13, 2001.

Court of International Trade Rule 6(a), on which the Neman court relied, provides:

(a) Computation. In computing any period of time prescribed or allowed by these rules, by order of the court, or by any applicable statute, the day of the act, event, or default from which the designated period of time begins to run shall not be included....

That Rule is identical to Federal Rule of Civil Procedure 6(a) in all relevant respects.

Both rules identify two separate points in time — the day of the event that triggers the running of a time period, and the day on which the time period begins to be counted. The rules provide that the time period begins to be counted on the day following the day of the event that triggers the beginning of the time period. Applying that counting method to this case would require us to conclude that the waiver began on December 14, 1999, but the counting of the two years did not begin until December 15, 1999. The final day of the waiver would then be December 14, 2001, the anniversary of the beginning of the waiver.

The parties agree that if the issue in this case were the method to be used for counting a statutory limitations period, Rule 6(a) would govern and the anniversary method of counting would be applied. Other courts concur, and the counting method of Federal Rule 6(a) has been applied in a variety of statutory contexts. For example, in Patterson v. Stewart, 251 F.3d 1243, 1246 (9th Cir.2001), quoting Union Nat'l Bank v. Lamb, 337 U.S. 38, 41, 69 S.Ct. 911, 93 L.Ed. 1190 (1949), the court wrote: "Rule 6(a) is widely applied to federal limitations periods. The Supreme Court has held that because Rule 6(a) had the concurrence of Congress, it can apply to `any applicable statute' in the absence of contrary policy expressed in the statute." See also Am. Canoe Ass'n, Inc. v. City of Attalla, 363 F.3d 1085, 1086 (11th Cir.2004) ("This circuit has long recognized as a general policy a legislative intent to apply Rule 6(a) to all federal statutes enacted or amended after the adoption of Rule 6(a). That policy generally prevails unless the statute in question itself reflects a contrary intent."); Bronaugh v. Ohio, 235 F.3d 280, 284 (6th Cir.2000); Lawson v. Conyers Chrysler, Plymouth, and Dodge Trucks, Inc., 600 F.2d 465, 466 (5th Cir.1979) ("This court has consistently used Rule 6(a)'s method for computing federal statutory time limitations."). See generally 4A Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1163 (2d ed.1987).

For purposes of choosing the method to use in computing time, we see no reason to treat a waiver of a statute of limitations, which is effectively a consensual extension of the limitations period, any differently than the underlying statute of limitations itself. See, e.g., United States v. Guldman, No. 03-00047, 2004 WL 909742 (Ct. Int'l Trade Apr. 28, 2004) ("The court has long analogized the computation of effective dates of statute of limitations waivers with the computation of the limitation periods themselves.").

Statutes of limitations (and waivers thereof) use a variety of verbal formulas to describe the starting date for the limitations period, such as "beginning on," "within one year from," "after," "within two years after," or "from" a specified...