United States v. Uniroyal, Inc.

• Decision Date: 02 September 1982
• Docket Number: No. 82-9.,82-9.
• Citation: 687 F.2d 467
• Parties: The UNITED STATES, Appellant, v. UNIROYAL, INC., Appellee.
• Court: U.S. Court of Customs and Patent Appeals (CCPA)

687 F.2d 467

The UNITED STATES, Appellant, v. UNIROYAL, INC., Appellee.

No. 82-9.

United States Court of Customs and Patent Appeals.

September 2, 1982.

J. Paul McGrath, Asst. Atty. Gen., Washington, D. C., David M. Cohen, Director, Joseph I. Liebman, New York City, Attorney-in-Charge, and Barbara M. Epstein, New York City, for appellant.

Andrew P. Vance and Richard Haroian, New York City, for appellee.

Before MARKEY, Chief Judge, and RICH, BALDWIN, MILLER and NIES, Judges.

BALDWIN, Judge.

This is an interlocutory appeal from a judgment of the United States Court of International Trade, 2 CIT 259, 529 F.Supp. 661 (1981), in which the Court of International Trade denied a motion to dismiss an action challenging a Customs Service ruling issued in response to a request by Uniroyal for internal advice under 19 CFR 177.11.¹ The Court of International Trade, at the government's request, certified the issue of whether it had subject matter jurisdiction in this case. We reverse and remand, with instructions to dismiss for lack of jurisdiction.

Background

Uniroyal, an importer of leather uppers and rubber soles for shoes, received six "Notices of Redelivery,"² all dated before April 29, 1980, each concerning a separate entry of merchandise made between January and April of 1980. On March 4, 1980, ten days after the date of the third such notice, Uniroyal filed a "request for internal advice" under 19 CFR 177.11 with the Regional Commissioner of Customs, New York. Uniroyal urged that the imported shoe parts in question need not be marked with the country of origin (Indonesia), because the "ultimate purchaser" exception of 19 U.S.C. § 1304 applied.³ Until Customs Headquarters rejected Uniroyal's argument some 16 months later, in a ruling dated July 2, 1981, appellant apparently took no further action regarding the involved Notices of Redelivery.

Proceedings in the Trial Court

After receiving the adverse ruling, Uniroyal brought an action in the Court of International Trade for declaratory and injunctive relief, alleging that Customs Headquarters had erred in requiring that the imported uppers and soles carry "Made in Indonesia" markings. In its complaint, Uniroyal stated that the trial court had exclusive jurisdiction "by virtue of the provisions of 28 U.S.C. § 1581(i)."⁴ The government, however, argued that demands for redelivery were protestable during the relevant time period,⁵ and that, consequently, Uniroyal was restricted to the filing of a protest (and the appeal from a denial of such a protest) as the means for invoking the jurisdiction of the Court of International Trade under 28 U.S.C. § 1581(a).⁶ Therefore, the government moved to dismiss the action for lack of jurisdiction, Uniroyal having filed no protest.

The trial court, while agreeing with the government that the demands for redelivery had been protestable, cited Wear Me Apparel Corp. v. United States, 1 CIT 194, ___, 511 F.Supp. 814, 817 (1981), for the proposition that § 1581(i), unlike § 1581(a), does not require the filing and denial of a protest as a prerequisite for the trial court's exercising its jurisdiction. Moreover, the trial court characterized the filing of a protest by Uniroyal as "purposeless" in light of the extant ruling under 19 CFR 177.11. Hence, Uniroyal was not required to exhaust administrative remedies in satisfaction of 28 U.S.C. § 2637(d).⁷ Accordingly, the trial court denied the motion to dismiss, but on reconsideration granted the government's request that the jurisdiction issue be certified here for interlocutory appeal pursuant to 28 U.S.C. § 1541(b).

OPINION

Since we hold that the trial court lacked jurisdiction, regardless of whether demands for redelivery per se were protestable prior to the 1980 amendment of 19 U.S.C. § 1514(a)(4), we will initially adopt, for exposition purposes, Uniroyal's position that such demands in fact were not protestable under the old law.⁸ From this premise, we conclude upon review of the legislative history of 28 U.S.C. § 1581 that Uniroyal cannot obtain judicial review regarding the six completed import transactions, since a protest-related review procedure remains available for resolving the marking issue. In addition, we conclude that Uniroyal has not invoked the jurisdiction of the Court of International Trade with regard to prospective importations of similar merchandise.

Relief Sought by Uniroyal

Uniroyal's concern over the impact of the "internal advice" ruling on its rights and liabilities takes two forms. First, Uniroyal fears that, at some time in the future, it will be subject to marking duties, liquidated damages, and, perhaps, a penalty under 19 U.S.C. § 1592, all stemming from the import transactions already completed. Second, Uniroyal is concerned about the fate of current and planned shipments of unmarked uppers and soles, in light of the implication of the Customs Headquarters ruling that such shipments may be barred from entry.

Uniroyal concedes that it could address the marking issue in a protest, should the Customs Service assess marking duties or liquidated damages as a result of Uniroyal's failure to redeliver the unmarked merchandise, and that an appeal of a denial of such a protest could then be effected under 28 U.S.C. § 1581(a).⁹ However, Uniroyal argues that "an action concerning the propriety of requiring country of origin marking is encompassed within the broad jurisdictional parameters" of § 1581(i), thereby allowing the Court of International Trade to exercise its discretionary authority under 28 U.S.C. § 2643(c)(1) to grant Uniroyal declaratory relief from any further assessments. According to Uniroyal, this route to declaratory judgment is preferable to the alternative of appealing the denial of a protest, since the latter process would "not enable a prompt resolution of the controversy * * * and would force Uniroyal either to proceed at its peril with regard to future entries or to succumb to the Government's interpretation and thus be denied * * * the opportunity of judicial review."

Legislative History of the "Residual Jurisdiction" Provision of 28 U.S.C. § 1581

Nevertheless, the legislative history of the Customs Courts Act of 1980 demonstrates that Congress did not intend the Court of International Trade to have jurisdiction over appeals concerning completed transactions when the appellant had failed to utilize an avenue for effective protest before the Customs Service. Both the immediate predecessors in the House and Senate to the bill that became the Customs Courts Act of 1980 contained a section delimiting the scope of a broad "catch-all" jurisdictional provision somewhat like § 1581(i). In effect, these restrictive sections granted the Court of International Trade jurisdiction to review a ruling issued without the prior filing and denial of a protest only when the party seeking review could show "irreparable harm" (or, in the Senate version, "commercial impracticability") in having to wait and file a protest against later Customs actions based on the ruling.¹⁰

During hearings on the predecessor bills, representatives of the Association of the Customs Bar testified in favor of providing for judicial review of "final" administrative rulings that effectively precluded importation.¹¹ However, there was also substantial testimony by enforcement officials against allowing appeal from a ruling prior to an actual importation, the denial of a protest regarding that importation, and the payment of assessed duties as a prerequisite to filing a civil action.¹²

The bill finally enacted into law did not contain the restrictive provision qualifying the "residual" jurisdiction of the Court of International Trade under § 1581(i). Instead, a new section was inserted affirmatively ceding to the Court of International Trade exclusive jurisdiction "to review, prior to the importation of the goods involved, a ruling issued by the Secretary of the Treasury * * *, but only if the appealing party * * * demonstrates to the court that he would be irreparably harmed unless given an opportunity to obtain judicial review prior to such importation." 28 U.S.C. § 1581(h) (1980). Thus, Congress, while providing in § 1581(h) for judicial review without the denial of a prior protest as to prospective importations, ultimately deleted from the bill the language of its predecessors which could be read as permitting such review when the transaction in question had already taken place.¹³

Conclusion

In light of the foregoing, we conclude that Uniroyal's effort to obtain judicial review of the "internal advice" ruling regarding marking must fail.¹⁴ The jurisdiction of the Court of International Trade under § 1581(i) is expressly "in addition to the jurisdiction conferred * * * by subsections (a)-(h)," and the legislative history of § 1581 further evidences Congress' intention that subsection (i) not be used generally to bypass administrative review by meaningful protest.¹⁵ Accordingly, Uniroyal's concern over anticipated assessments arising from the six completed entries must be addressed by means of timely protests filed when and if such assessments are made, as Congress intended.¹⁶ In addition, to the extent that Uniroyal's prayer for relief is directed to future importations of uppers and soles, Uniroyal has not demonstrated the "irreparable harm" Congress has required before the trial court can exercise jurisdiction over an appeal of a ruling prior to the importation of goods and the filing and denial of a protest.¹⁷

The judgment of the United States Court of International Trade is, therefore, reversed. The case is hereby remanded for the vacating of the trial court's Memorandum and Order of December 4, 1981, and the dismissal of Uniroyal's action.

REVERSED AND REMANDED.

NIES, Judge, concurring.

I concur in the majority view that the Court of International Trade does not have jurisdiction under 28 U.S.C. § 1581(i) over the subject complaint. However, in my...