Urbano v. U.S., Slip Op. 97-68.

Decision Date30 May 1997
Docket NumberSlip Op. 97-68.,Court No. 95-12-01721.
Citation967 F.Supp. 1322
PartiesJohn V. URBANO, Plaintiff, v. UNITED STATES; The United States Department of Treasury; Secretary Of Treasury; George J. Weise, Commissioner of Customs, United States Customs Service; Audrey Adams, Port Director of Customs, for the Los Angeles Customs District, Defendants.
CourtU.S. Court of International Trade

Politis & Politis (John N. Politis), Los Angeles, CA, for plaintiff.

Frank W. Hunger, Assistant Attorney General of the United States, Washington, DC; Joseph I. Liebman, Attorney in Charge, International Trade Field Office, (Mikki Graves Walser, New York City); Commercial Litigation Branch, Civil Division, Department of Justice, Stephanie J. Dick, Deputy Associate Chief Counsel, Office of Associate Chief Counsel, United States Customs Service, of counsel, for defendants.

OPINION

CARMAN, Chief Judge.

Before the Court is plaintiff John V. Urbano's ("plaintiff" or "Urbano") Motion for Judgment on the Agency Record pursuant to U.S. CIT R. 56.1. Plaintiff argues he was wrongfully deprived of his license as a United States Customs broker which was revoked pursuant to a hearing in 1994. Plaintiff maintains the commencement of formal revocation proceedings was barred by the five-year statute of limitations contained in 19 U.S.C. § 1641(d)(2) (1988). Plaintiff additionally argues the revocation hearing was tainted. Plaintiff also moves for Oral Argument pursuant to U.S. CIT R.7(c) on his Motion for Judgment on the Agency Record.

Defendants the United States, the U.S. Department of Treasury, the Secretary of the Treasury ("the Secretary"), George J. Weise, the Commissioner of Customs and Audrey Adams, the port director of Customs for the Los Angeles Customs District (collectively "defendants") oppose plaintiff's motion, arguing Customs properly instituted revocation proceedings within five years of the alleged violations. Defendants further argue the revocation hearing was conducted in accordance with the Administrative Procedure Act ("APA") and Customs regulations, and that the Administrative Law Judge's finding Customs presented substantial and overwhelming evidence to support the revocation of plaintiff's license was based upon credible evidence presented at the hearing. Defendants also oppose plaintiff's Motion for Oral Argument, arguing the issues in this case "have been thoroughly briefed by the parties and the factual materials necessary for this [C]ourt's determination are contained in the administrative record." (Defs.' Resp. to Pl.'s Mot. for Oral Arg. at 1.) As a result, defendants request this Court sustain the Secretary's decision adopting the ALJ's recommendation to revoke plaintiff's customs broker's license, deny plaintiff's motions and dismiss this action. This Court has jurisdiction pursuant to 28 U.S.C. § 1581(g)(2), which gives the Court of International Trade ("CIT") exclusive jurisdiction over "any decision of the Secretary of the Treasury to revoke or suspend a customs broker's license or permit." 28 U.S.C. § 1581(g)(2) (1988). For the reasons which follow, this Court denies plaintiff's Motion for Oral Argument and plaintiff's Motion for Judgment on the Agency Record.

BACKGROUND

Plaintiff John V. Urbano has engaged in the customs brokerage business since 1967. Plaintiff was issued individual broker's license number 6884 by the United States Customs Service ("Customs") on September 3, 1981. Plaintiff subsequently filed an application for and was granted permission by Customs to conduct business under the fictitious name "Royal International" on November 13, 1986. Plaintiff is also incorporated in the State of California as Royal International Customs Brokers, Incorporated.

On September 28, 1989, the Regulatory Audit Division of the United States Customs Service issued a report following its investigation of possible criminal violations relating to plaintiff's embezzlement of Customs duties. The audit report disclosed 583 violations by plaintiff between 1985 and 1989 and concluded plaintiff, through Royal International, had (1) misappropriated Customs duties received from importers; (2) written checks to Customs on a bank account containing insufficient funds; and (3) failed to comply with various Customs Regulations pertaining to customs brokers. Admin. R. at 736.1 The report recommended the district director revoke plaintiff's customs broker's license pursuant to 19 C.F.R. § 111.53(c),(f)2 based on plaintiff's failure to comply with numerous regulations establishing procedures for record-keeping and conducting a business.3 Admin. R. at 734-49, 1044-59, 1076-91.

After surrendering his customs broker's licence to Customs in 1990, plaintiff filed suit in this Court seeking the return of his license. This Court approved a Stipulated Judgment whereby the parties agreed and the Court ordered Customs to return to plaintiff his Customs broker's license to remain in effect until the outcome of the revocation proceedings. The judgment indicated Customs was free to institute revocation proceedings in the event it was deemed necessary. See Urbano v. United States, Court No. 91-03-00235 (CIT April 22, 1991). Customs returned plaintiff's license and he continued his employment with AFI (California), Inc. where his license supported the Los Angeles Customs District permit of his employer.

On March 9, 1993, the District Director of Customs in Los Angeles issued to plaintiff a "Notice of Preliminary Proceedings" pursuant to 19 C.F.R. § 111.59,4 indicating Customs was considering instituting a formal proceeding to revoke plaintiff's customs broker's license and affording plaintiff an opportunity to avoid such proceedings by showing cause within thirty days why formal proceedings should not be instituted. Admin. R. 1032-38. The notice was accompanied by a "Proposed Notice to Show Cause and Statement of Charges," which set forth the sections of the regulations plaintiff had allegedly violated. Plaintiff did not respond to the "Notice of Preliminary Proceedings" within the thirty-day period.

On July 5, 1994, the District Director issued a "Notice of Revocation Proceedings" with a "Notice to Show Cause and Statement of Charges," which indicated "[f]ormal proceedings looking to the revocation of Customshouse Broker's License No. 6884" were being instituted pursuant to 19 U.S.C. § 1641 (1988).5 Admin. R. at 1064. The notice informed plaintiff he would be notified of the time and place of the hearing, he was entitled to file a verified answer, and he had both the right to be represented by counsel and the right to cross examine witnesses at the formal proceedings. Id. On July 6, 1994, the Assistant Regional Counsel for Customs in Los Angeles advised plaintiff by letter of the time and date of the revocation hearing on August 2, 1994 at 9:00 a.m. before an Administrative Law Judge ("ALJ") of the Federal Communications Commission. Id. at 1146. Plaintiff did not file a verified answer.

Plaintiff objected to the hearing and by letters dated July 11, 1994, demanded the revocation proceedings be canceled immediately due to the expiration of the statute of limitations set forth in 19 U.S.C. § 1641(d)(4) (1988).6 Customs responded its institution and litigation of the charges against plaintiff were not time barred. The ALJ rescheduled the hearing date from August 2, 1994 to August 30, 1994 to allow resolution of the statute of limitations issue. In a Memorandum Opinion and Order responding to cross-motions for a Ruling on the Statute of Limitations, the ALJ indicated the revocation proceedings were not barred by the statute of limitations and ordered the hearing to proceed on August 30, 1994. See United States Customs Service v. Urbano, No. LA-92-0042 RMG (Aug. 15, 1994) (memorandum opinion and order).

Following the ALJ's determination the formal revocation proceedings were not time barred, plaintiff filed a second motion requesting a continuance to depose two Customs officials and the Customs auditor who conducted the audit of Royal International's books and records. In an order dated August 22, 1994, the ALJ denied plaintiff's motion for a continuance on the ground plaintiff failed to show cause for postponing the hearing. The ALJ denied plaintiff's request to depose the two Customs officials because there was no evidence they acted outside the scope of their authority. Additionally, the ALJ noted the auditor no longer worked for Customs and therefore could not be ordered to appear. The order, however, did permit the plaintiff to depose the auditor at plaintiffs expense if the auditor voluntarily presented himself. See United States Customs Service v. Urbano, No. LA-92-0042 RMG (Aug. 22, 1994) (order denying plaintiffs request for a continuance).

The revocation hearing was held on August 30 and 31, 1994. On February 3, 1995, the ALJ issued his decision and order, recommending to the Secretary that plaintiffs license be revoked and stating

[i]t has been held that where the government is aware that a broker has mishandled the affairs of importers, the government is obligated to investigate and, in appropriate circumstances, to revoke the broker's license. Accordingly, license revocation is recommended as the only appropriate sanction in this case to protect the importing community.

United States Customs Service v. Urbano, No. LA-92-0042 RMG, Slip Op. at 27 (Feb. 3, 1995) (decision and order) ("Revocation Recommendation".) With regard to the issue of the five-year statute of limitations, the ALJ presiding at the hearing held

[i]n Fusco v. United States Treasury Department, 695 F.Supp. 1189 (CIT 1988), the court noted that the Act does not distinguish between preliminary and formal proceedings. The court held that the revocation proceeding was instituted when the Proposed Notice To Show Cause And Notice Of Preliminary Proceeding was received by the respondent. Id. Thus, it is concluded that this...

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4 cases
  • U.S. v. Ricci, Slip Op. 97-145.
    • United States
    • U.S. Court of International Trade
    • October 28, 1997
    ...which gives general guidance regarding the scope and standard of review to be applied in various circumstances. See Urbano v. United States, 967 F.Supp. 1322, 1328 (CIT 1997); Humane Society of the United States v. Brown, 920 F.Supp. 178, 195 (CIT 1996). The statute states in pertinent The ......
  • Shiepe v. U.S., Slip Op. 15.
    • United States
    • U.S. Court of International Trade
    • February 4, 1999
    ...the Court will review whether the Secretary's decision to revoke [a] license constitutes an abuse of discretion." Urbano v. United States, 967 F.Supp. 1322, 1329 (CIT 1997), aff'd, 146 F.3d 1346 (Fed.Cir.1998). [a]fter satisfying itself [sic] the agency has acted within its statutory author......
  • Saarstahl Ag v. U.S., Slip Op. 97-147.
    • United States
    • U.S. Court of International Trade
    • November 5, 1997
    ...Metallurgical Corp. v. United States, Slip Op. 97-116 at 7, 1997 WL 527947 at *3 (CIT Aug. 20, 1997); see also Urbano v. United States, 967 F.Supp. 1322, 1328 (CIT 1997) (citation omitted) ("The Court `may not substitute its judgment for that of the administrative agency,' and `the possibil......
  • Urbano v. U.S., 97-1500
    • United States
    • United States Courts of Appeals. United States Court of Appeals for the Federal Circuit
    • June 10, 1998
    ...notice to show cause in March 1993 was sufficient to satisfy the statute of limitations for revocation proceedings. Urbano v. United States, 967 F.Supp. 1322 (CIT 1997). We agree with the Court of International Trade. The statute that sets forth the procedures for revoking or suspending bro......

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