United States v. Cajo Trading, Inc.

• Decision Date: 15 February 1968
• Docket Number: Customs Appeal No. 5263.
• Citation: 55 CCPA 61,403 F.2d 268
• Parties: The UNITED STATES, Appellant, v. CAJO TRADING, INC., Appellee.
• Court: U.S. Court of Customs and Patent Appeals (CCPA)

55 CCPA 61, 403 F.2d 268 (1968)

The UNITED STATES, Appellant, v. CAJO TRADING, INC., Appellee.

Customs Appeal No. 5263.

United States Court of Customs and Patent Appeals.

February 15, 1968.

Barefoot Sanders, Asst. Atty. Gen., Andrew P. Vance, Chief, Customs Section, New York City, for the United States.

James R. Sharp, Washington, D. C. (Sharp, Solter & Hutchison, Washington, D. C., of counsel), for appellee.

Before WORLEY, Chief Judge, and RICH, SMITH, ALMOND and KIRKPATRICK,^* Judges.

WORLEY, Chief Judge.

The Government alleges reversible error in the judgment of the Customs Court, First Division,¹ which held that liquidation of certain spring clothespins assessed at a duty of 20 cents per gross under paragraph 412 of the Tariff Act of 1930, as prescribed by Presidential proclamation No. 3211, 72 Stat., part 2, ch. 14, T.D. 54493, was defective; that the protest respecting the entry was premature; and that it was the duty of the collector to make a valid liquidation of the entry in accordance with law.

On December 7, 1957, Presidential proclamation No. 3211 suspended previously granted Trade Agreement concessions on spring clothespins, classified under paragraph 412 and dutiable at 10 cent per gross according to the Trade Agreement, and restored the pre-Trade Agreement duty of 20 cents per gross. The instant clothespins were entered December 27, 1957, and liquidated March 13, 1958. Subsequently, the Presidential proclamation was declared void by the Customs Court in Falcon Sales Company et al. v. United States, 47 Cust.Ct. 129, C.D. 2292 (1961), appeal dismissed on Government motion, 49 CCPA 139 (1962). There the court held that the President had exceeded the authority delegated to him by Congress in restoring the pre-Trade Agreement rate rather than following the required course of either accepting or rejecting the Tariff Commission recommendation to place a quota on clothespin importations.

In January 1963, the importer here requested the collector to liquidate the subject entry at a duty of 10 cents per gross on the grounds that the 1958 "liquidation" was void in view of Falcon Sales. The collector refused on the ground that the liquidation of March 13, 1958, not having been protested within the time provided by Section 514,² had become "final and conclusive on all persons." That ruling was reversed by the Customs Court, holding that United States v. C. O. Mason, Inc., 51 CCPA 107, C.A.D. 844, certiorari denied, 379 U.S. 999, 85 S.Ct. 718, 13 L.Ed.2d 701, was stare decisis of the present appeal. The correctness of that holding is the issue before us.

Mason involved coffee imported into Puerto Rico from 1957 through 1959³ and liquidated between 1957 and 1959, the protests being filed in 1960, all beyond the 60 day period provided in Section 514. The ground for the protests in Mason was the holding of the Customs Court in Pan American Standard Brands, Inc. v. United States, 43 Cust. Ct. 122, C.D. 2115, decided September 15, 1959. There the court held unconstitutional as an unlawful delegation of legislative power a provision of Act No. 95 of the Legislature of Puerto Rico.

In Mason this court unanimously agreed with the Customs Court that

* * * the provision of Act No. 95 under which the liquidations were made, having been found unconstitutional, was not a law; that it was inoperative and afforded no basis for the alleged liquidations and subsequent protests; that its invalidity dates from the time of enactment; and that although in some situations, where a statute is declared to be unconstitutional, there may be questions of vested rights and of public policy which cannot be erased by a new judicial determination, no such factors have been presented in the cases at bar. * * *

Here the importer urges that the instant liquidation is equally void as in Mason; that the Customs Court correctly held the protest premature; and that it is the duty of the collector to make a valid liquidation of the present entry in accordance with law. The Government, on the other hand, urges that Mason is not applicable, and that the protest should be dismissed for untimeliness since the importer failed to act within the 60 days set by Section 514.

In evaluating the instant record and arguments, the Customs Court stated that it was "unanimously of the opinion that it can suggest no rational distinction, between the situation in Mason and the one at bar, sufficient to justify not following it," adding that

If a liquidation based on an unconstitutional statute is void, one founded on an unauthorized Presidential proclamation appears equally so. * *

We find no error in that reasoning or conclusion. The Government urges, however, that the authority in support of "the voidness doctrine" enunciated in Mason "clearly restricts its application to unconstitutional statutes." It further contends:

* * * There is not before this Court any question of an unconstitutional statute or executive action. In the Falcon decision, the Customs Court adverted solely to the powers regularly conferred upon the President by a statute of unquestioned constitutional validity. Even if the Supreme Court\'s expression does establish the "total voidness" of a statute found to be constitutionally unsound, and we submit that this Court did not so intimate in the Mason decision, it does not declare than an executive action, incapable of affecting rights and obligations automatically, infects all other executive acts, however remotely connected with it, with "total voidness," alike as to those who timely challenge it and to those who neglect to do so. The executive act before the Court is not the issuance by the President of the proclamation restoring the higher rate of duty on spring clothespins, but the act of the Collector in effecting a liquidation of the specific entry here in issue, an act undertaken under statutory authority (i. e., section 505 of the Tariff Act of 1930), which is beyond challenge here, and which in fact defines not only the Collector\'s authority but his obligation.

It is true that Norton v. Shelby County, 118 U.S. 425, 6 S.Ct. 1121, 30 L.Ed. 178 (1886), the authority principally relied on in Mason, relates to an unconstitutional legislative act which was held void on the premise that "an unconstitutional act is not a law" and is "as inoperative as though it had never been passed." We have reviewed Mason in light of the Government's arguments here but remain convinced of its soundness. There, as here, Section 514 was involved as reflected by the following:

* * * we think that a liquidation based on an unconstitutional provision of a statute is not a final legal liquidation to start the running of the statute of limitations within the purview of section 514.

* * * * * *

What, then, is the proper case which Congress intended will stay the 60-day requirement? * * * (Emphasis supplied.)

Presumably a literal interpretation of Section 514 in Mason to ascertain Congressional intent would have required an opposite result. Here, too a literal interpretation of that section would remove Mason as stare decisis of the instant appeal, but there is nothing in this record which justifies a different interpretation. While it may well be that there is a material difference between the collector's action here and his action under a constitutional statute or a vaild Presidential proclamation, that question is not before us. What we do say here is that we have the same difficulty as did the Customs Court in finding a valid distinction between an unconstitutional statute on the one hand, and an invalid Presidential proclamation on the other — the effect is the same in both cases. With due regard to the Government's arguments, we do not think it can fairly be said that Congress intended Section 514 to control in either instance.

The judgment is affirmed.

Affirmed.

RICH, Judge (concurring), with whom SMITH, Judge, joins.

I am unable to agree with the majority's opinion. The majority, like the Customs Court, boxes itself in by the force of what it considers an inexorable logic and holds it is bound by the decision in United States v. C. O. Mason, Inc., 51 CCPA 107, C.A.D. 844, to find here that the protest was "premature" because the liquidation was "defective." Preliminary to further discussion, the facts should be made clear.

This "premature protest" here under review was filed April 5, 1963, to a so-called "decision" of the collector dated February 12, 1963, i. e., within 52 days. The collector liquidated the entry of the imported spring clothespins five years before that, on March 13, 1958, at 20¢ per gross. No protest has ever been filed against this liquidation. Section 514 of the Tariff Act of 1930, then as now, requires protests to be filed within 60 days of liquidation. That statute provides that in the absence of protest within 60 days, a liquidation shall "be final and conclusive upon all persons (including the United States and any officer thereof) * * *."

October 18, 1961, the United States Customs Court handed down a decision in Falcon Sales Co. v. United States, 47 Cust.Ct. 129, C.D. 2292, appeal dismissed on motion of the Government-appellant, 49 CCPA 139. That case also involved an importation of spring clothespins. Duty was assessed at 20¢ a gross under authority of a Presidential proclamation, No. 3211, which had suspended for an indefinite period the 10¢ rate in effect under the Annecy Protocol to Gatt, subsequent to a finding of the Tariff Commission that the 10¢ rate was adversely affecting the domestic industry and a recommendation for an annual absolute quota on spring clothespins. The Customs Court found, in accord with the plaintiff's contentions, that the President's suspension of the 10¢ duty, when the Tariff Commission had recommended imposition of a quota, exceeded his authority, that his action was therefore void, and therefore that the 10¢ per gross duty in effect when the President attempted, without...