United States v. JOAN AND DAVID HELPERN CO., INC., Court No. 83-7-00969.

• Decision Date: 17 June 1985
• Docket Number: Court No. 83-7-00969.
• Citation: 9 CIT 275,611 F. Supp. 985
• Parties: UNITED STATES, Plaintiff, v. JOAN AND DAVID HELPERN COMPANY, INC., Defendant.
• Court: U.S. Court of International Trade

611 F. Supp. 985

9 CIT 275

UNITED STATES, Plaintiff, v. JOAN AND DAVID HELPERN COMPANY, INC., Defendant.

Court No. 83-7-00969.

United States Court of International Trade.

June 17, 1985.

Richard K. Willard, Acting Asst. Atty. Gen., David M. Cohen, Director, Commercial Litigation Branch, Civil Div., Dept. of Justice, A. David Lafer, Washington, D.C., for plaintiff.

Gaston Snow & Ely Bartlett, Robert D. Canty and Daniel J. Lyne, Boston, Mass., for defendant.

Memorandum Opinion and Order

FORD, Judge:

The United States instituted this action against defendant Joan and David Helpern Company, Inc., for alleged violations of 19 U.S.C. § 1592. Before the Court is defendant's motion for summary judgment under Rule 56(b) of the Rules of this Court. Defendant alleges the Government's delay in initiating this action violates both the requirements of due process and the specific directive of 19 U.S.C. § 1604. In the alternative, defendant moves for dismissal with prejudice under Rule 41(b)(2) for the Government's failure to prosecute with due diligence. The Government opposes both motions in all respects. Jurisdiction is pursuant to 28 U.S.C. § 1582.

Defendant is a Massachusetts corporation doing business as a wholesaler of footwear. Between October 2 and November 29, 1978, defendant, through its customs broker, imported boots from Italy under eleven customs consumption entries at the Port of Boston. The Government filed this action on July 21, 1983, alleging the entries involved constitute violations of Section 592 of the Tariff Act of 1930, as amended, 19 U.S.C. § 1592.

As noted above, the entries at issue were made in October and November of 1978. Upon arrival of the merchandise at the Port of Boston, defendant's customs broker paid the freight charges and prepared the consumption entry forms based on the documentation accompanying the shipment. Duty was paid on the merchandise as entered, and the boots were shipped to defendant's place of business. Soon thereafter, the Customs Service requested a sample of the merchandise, which defendant promptly forwarded.

On August 15, 1979, defendant was issued a Prepenalty Notice demanding $18,400.00 in loss of revenues and $73,601.92 in damages for fraud in the importation of the merchandise. It is alleged the entries were false and material in that they stated the merchandise was footwear having uppers of which over 90 percent were rubber or "plastic, other" with a duty rate of 6 percent. In fact, the uppers were less than 90 percent rubber or "plastic, other" and the applicable duty rate was 20 percent, resulting in an actual loss of $678.58 in duties. On February 11, 1980, defendant was served with formal Notice of Penalty in the above amounts. Defendant filed a request for mitigation on February 20, 1980.

In May of 1980, Customs again issued a Prepenalty Notice to defendant. Defendant waived all notice periods and sought consideration of its request for mitigation. On October 21, 1980, the request was denied and payment was demanded.

On March 10, 1981, the United States instituted an action against defendant under 19 U.S.C. § 1592 in U.S. District Court in Boston. Two days later the action was voluntarily dismissed by reason of this Court's exclusive jurisdiction of actions brought under 19 U.S.C. § 1592.

Some fifteen months later, in May of 1982, defendant received customs invoices totaling $17,721.90. As this figure corresponded with the loss of revenue claimed by Customs, defendant offered to make payment on the condition of full satisfaction of the claim. On July 14, 1982, defendant was notified by its surety of a demand by the Government for payment of $17,721.90. Defendant informed the surety the matter was being contested. The Government withdrew its demand and notified defendant that a new complaint would be issued.

One year later, on July 21, 1983, the present action was filed. The Government moved to amend its complaint on August 3, 1983. Defendant moved for an extension of time to September 5, 1983 to file its answer. Defendant served its answer on September 2, 1983. However, due to either clerical or mailing error, the answer was not recorded by the Court at that time.

On January 16, 1984, an Offer in Compromise was submitted to the Government by defendant. In October of 1984, defendant was notified its answer had not been recorded by the Court.¹ On November 27, 1984, defendant's motion to record its answer effective September 2, 1983, was granted. Defendant's Offer in Compromise was rejected by the Government on February 13, 1985, at which time the Government served defendant a Request for Production of Documents. Defendant filed the motions presently before the Court on March 7, 1985.

Defendant's motion for summary judgment cites 19 U.S.C. § 1604, the relevant part of which reads:

It shall be the duty of the Attorney General of the United States immediately to inquire into the facts of cases reported to him by customs officers and the laws applicable thereto, and if it appears probable that any fine, penalty or forfeiture has been incurred by reason of such violation ... forthwith to cause the proper proceeding to be commenced and prosecuted, without delay, for the recovery of such fine, penalty or forfeiture ...

Defendant's alternative request for relief is dismissal under Rule 41(b)(2) of the Rules of this Court, which provides:

(b) ...

(2) Whenever it appears that an assigned action is not being prosecuted with due diligence, the court may upon its own initiative after notice, or upon motion of a defendant, order the action dismissed for lack of prosecution.

The crux of defendant's alternate claims for relief centers on the Customs Service delay in processing the penalty claim at the administrative level, which together with the Government's inaction in prosecuting this action, allegedly amounts to material prejudice requiring this lawsuit be dismissed. Of initial concern is defendant's motion for summary judgment under Rule 56(b). The law is well-settled that summary judgment may not be granted if any genuine issue of fact exists between the litigants. Golding Bros. v. United States, 6 CIT ___, Slip Op. 83-89 (1983); S.S. Kresge Co. v. United States, 77 Cust.Ct. 154, C.R.D. 76-6 (1976). The burden of proof in establishing the lack of a triable issue is upon the moving party. Symphonic Electronics Corp. v. United States, 77 Cust.Ct. 147, C.R.D. 76-5 (1976); Gimbel Bros. v. United States, 73 Cust.Ct. 223, C.R.D. 74-8 (1974). This burden requires the moving party to clearly establish the lack of disputed facts.

The chronology of events previously noted herein is not in dispute. However, the substantive issue in this case has yet to be either heard by the Court or briefed by the parties. The statute of limitations governing the commencement of actions brought pursuant to 19 U.S.C. § 1592 is 19 U.S.C. § 1621, which affords the Government five years from the discovery or commission of a violation to commence suit. This case was commenced within that period, and as the action is not time-barred, triable issues of fact remain before the Court and this matter is thus not ripe for summary judgment. Defendant's motion for...