UNITED STATES CANE SUGAR REFINERS'ASS'N v. Block

• Decision Date: 05 June 1982
• Docket Number: Court No. 82-5-00643.
• Citation: 544 F. Supp. 883,3 CIT 196
• Parties: UNITED STATES CANE SUGAR REFINERS' ASSOCIATION, Plaintiff, v. John R. BLOCK, Secretary of Agriculture, Donald T. Regan, Secretary of the Treasury, William E. Brock, United States Trade Representative, Defendants.
• Court: U.S. Court of International Trade

544 F. Supp. 883

3 CIT 196

UNITED STATES CANE SUGAR REFINERS' ASSOCIATION, Plaintiff, v. John R. BLOCK, Secretary of Agriculture, Donald T. Regan, Secretary of the Treasury, William E. Brock, United States Trade Representative, Defendants.

Court No. 82-5-00643.

United States Court of International Trade.

June 5, 1982.

COPYRIGHT MATERIAL OMITTED

Wilmer, Cutler & Pickering, Washington, D. C. (Daniel Marcus (argued), Max O. Truitt, Jr., Daniel K. Mayers and William F. Marmon, Jr., Washington, D. C., on the briefs), for plaintiff.

J. Paul McGrath, Asst. Atty. Gen., Washington, D. C., David M. Cohen, Director, Commercial Litigation Branch (argued), Velta A. Melnbrencis, Asst. Director, Commercial Litigation Branch, New York City, and James R. Walczak, U. S. Dept. of Agriculture, Washington, D. C., on the brief, for defendants.

Italo H. Ablondi, P. C., Washington, D. C. (F. David Foster, Italo H. Ablondi and H. Henning Vent, Washington, D. C., on the brief), for amicus curiae U. S. Sugar Cane and Sugar Beet Producers and U. S. First Processors of Sugar.

MEMORANDUM OPINION AND ORDER

NEWMAN, Judge:

INTRODUCTION

We are faced in this complex case with legal issues having diverse economic consequences of national and global dimensions which demand an expeditious resolution by the Court.

On May 5, 1982 the President issued Proclamation 4941 (P.P. 4941) imposing import quotas on sugar (Appendix 1 hereto). By an action filed on May 11, 1982 for a declaratory judgment and injunctive relief, the validity of that proclamation is challenged by the plaintiff association, comprising the six major independent refiners of cane sugar in the United States.

Pursuant to rule 65(a) of this Court, plaintiff moved for an order preliminarily enjoining defendants (and all persons acting under their direction) "from applying, invoking or enforcing in any manner or form" the provisions of P.P. 4941. However, following plaintiff's suggestion in its reply brief and rule 65(a)(2), I expedited and consolidated the hearing on the merits with the hearing on May 27, 1982¹ of plaintiff's application for a preliminary injunction.

Defendants have moved to dismiss on the ground that the Court lacks jurisdiction at the present time; that plaintiff lacks standing to bring this action; and that plaintiff has failed to state a claim upon which relief may be granted.

The parties agree that there is no dispute as to the facts, and therefore the Court will deem cross-motions for summary judgment under rule 56 to be pending before the Court.²

In support of the within application, plaintiff submitted with its memorandum of points and authorities the affidavits of: (1) Thomas C. Earley, an economist specializing in sweetener markets and policy and Vice President of Schnittker Associates, a Washington-based economic and management consulting firm; (2) I. H. Kempner, III, Chairman of the Board of Imperial Sugar Company of Sugar Land, Texas, a member of plaintiff, and processor of raw sugar and marketeer of the refined product to commercial users and retail suppliers; (3) William W. Sprague, Jr., President of Savannah Foods & Industries, Inc. of Savannah, Georgia, another member company of plaintiff, and a processor of raw sugar and marketeer of the refined product to commercial users; and (4) John H. Jackson, Professor of Law at the University of Michigan School of Law who was involved with the negotiation of the General Agreement on Tariffs and Trade.

In opposition to plaintiff's application, defendants have submitted an affidavit of Richard A. Smith, Administrator, Foreign Agricultural Service, United States Department of Agriculture.³

JURISDICTION AND STANDING

Initially, we dispose of the threshold arguments defendants proffer for closing the gate on plaintiff's case without reaching the merits. In a word, the grounds asserted by defendants are not persuasive.

As noted supra, defendants now move to dismiss the action for lack of subject matter jurisdiction, arguing that the action was filed prematurely. More precisely, defendants argue that to obtain judicial review of the validity of P.P. 4941, plaintiff's members must attempt to make an entry of sugar; file a protest against the exclusion of the merchandise from entry in accordance with 19 U.S.C. § 1514; and then after an administrative review and denial of the protest, file an action in this Court—a time consuming procedure.

In essence, defendants' position is that plaintiff may seek judicial review of the validity of the President's Proclamation solely in accordance with 28 U.S.C. § 1581(a) after the exhaustion of the administrative remedies specified in 19 U.S.C. §§ 1514 and 1515. Accordingly, defendants contend that this action was filed by plaintiff prematurely since there have been no attempted entries of sugar, no merchandise has been excluded from entry, and no protests have been filed and denied pursuant to sections 1514 and 1515.

Plaintiff, however, has invoked the Court's residual jurisdiction under 28 U.S.C. § 1581(i),⁴ arguing that it would be totally inappropriate for the Court to require plaintiff to exhaust its administrative remedies under 19 U.S.C. §§ 1514 and 1515 as a condition precedent to judicial review of the validity of P.P. 4941. I agree.

Under the circumstances presented here, plaintiff is not relegated to section 1581(a) as the sole jurisdictional predicate for judicial review of the contested proclamation. Inasmuch as plaintiff's action contests "quantitative restrictions on the importation of merchandise" (viz., import quotas), section 1581(i) explicitly grants this Court subject matter jurisdiction. Moreover, section 1581(i) does not require the filing and denial of a protest as conditions precedent to the exercise of such jurisdiction. But as observed by Judge Maletz in Wear Me Apparel Corp. v. United States, 1 CIT—, Slip Op. 81-22, 511 F.Supp. 814, 817 (1981):

This does not mean, however, that by invoking the jurisdiction of the court under section 1581(i) the mandate of section 1581(a) requiring the exhaustion of administrative remedies, i.e., the filing and denial of a protest, may thereby be dispensed with. Save in those circumstances where equity requires otherwise, the exhaustion of administrative remedies is necessary. See H.R.Rep.No.96-1235, supra at 44; S.Rep.No.96-466, 96th Cong., 1st Sess. 7 (1979), U.S.Code Cong. & Admin.News 1980, p. 3729. Emphasis added.

See also Associated Dry Goods Corp. v. United States, 2 CIT—, Slip Op. 81-70, 521 F.Supp. 473 (1981); Sanho Collections, Ltd. v. Robert E. Chasen, Commissioner of Customs, et al., 1 CIT—, Slip Op. 80-2, 505 F.Supp. 204 (1980).

Relevant here is 28 U.S.C. § 2637(d) which provides that this Court "shall, where appropriate, require the exhaustion of administrative remedies" (emphasis added). Plaintiff has clearly shown that exhaustion of administrative remedies would be inappropriate under the facts and circumstances presented here.

It would, in my judgment, be totally unreasonable —indeed, shocking—to require plaintiff's members to attempt to import over-quota sugar simply in order to obtain a protestable exclusion of the merchandise from entry under 19 U.S.C. § 1514 before seeking judicial review of the validity of the proclamation imposing the quota in a suit for injunctive and declaratory relief. Here, the President has issued a proclamation requiring the Customs officials to exclude from entry any sugar in excess of the specified quotas. The Customs officials, who would review a protest claiming that P.P. 4941 is invalid, obviously have no authority to override the presidential proclamation and admit over-quota sugar. Consequently, respecting a ruling on the validity of P.P. 4941, there is no relief which plaintiff may be granted at the administrative level. Under these circumstances, requiring the exhaustion of administrative remedies would be inequitable and an insistence of a useless formality. It is well established that exhaustion of remedies will not be required if administrative review would be futile. This is particularly the case here where the Customs officials are legally foreclosed from granting the relief sought. Cf. The Montana National Bank of Billings v. Yellowstone County of Montana, et al., 276 U.S. 499, 505, 48 S.Ct. 331, 333, 72 L.Ed. 673 (1927); and Aleknagik Natives Ltd. v. Andrus, 648 F.2d 496, 500 (9th Cir. 1980).

In sum, protestable actions and decisions are subject to administrative review under the procedures specified in 19 U.S.C. §§ 1514 and 1515, and the proper jurisdictional predicate for judicial review of the administrative determination is 28 U.S.C. § 1581(a). Exhaustion of administrative remedies is, of course, a condition precedent to invoking this Court's jurisdiction under section 1581(a).⁵ Wear Me Apparel Corp., supra. However, in circumstances where, as here, a party chooses to invoke the Court's residual jurisdiction under section 1581(i), that party must demonstrate that it would be inappropriate for the Court to require the exhaustion of administrative remedies. 28 U.S.C. § 2637(d); H.R.Rep.No.96-1235, 96th Cong. 2d Sess. 41 (1980). I find that plaintiff has made the requisite showing, and this action is ripe for judicial review.

We turn next to the issue raised by defendants concerning plaintiff's standing to bring this action. This ground for dismissal of the action warrants but brief discussion.

Plaintiff's members desire either to import or buy imported raw sugar, and have entered into contractual obligations and business relationships which could be disrupted and adversely affected by the quotas established by P.P. 4941. Further, while all users and consumers of an imported product that are the subject of import quotas are to some degree affected by the quantitative import restrictions, plaintiff's members, whose business and livelihood depend upon access to imported sugar, would be especially aggrieved by the implementation of the...