US Shoe Corp. v. US

• Decision Date: 25 October 1995
• Docket Number: Slip Op. 95-173. Court No. 94-11-00668.
• Citation: US Shoe Corp. v. US, 19 CIT 1284, 907 F. Supp. 408 (Ct. Int'l Trade 1995)
• Parties: UNITED STATES SHOE CORP., Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

907 F. Supp. 408

UNITED STATES SHOE CORP., Plaintiff, v.UNITED STATES, Defendant.

Slip Op. 95-173. Court No. 94-11-00668.

United States Court of International Trade.

October 25, 1995.

Siegel, Mandell & Davidson, P.C., New York City(Brian S. Goldstein, Steven S. Weiser, Laurence M. Friedman and Paul A. Horowitz), for plaintiff.

Frank W. Hunger, Assistant Attorney General, David M. Cohen, Director, Jeanne E. Davidson, Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice(John K. Lapiana), Richard McManus, Office of the Chief Counsel, United States Customs Service, and Martin Cohen, Office of the General Counsel, United States Army Corps of Engineers, of counsel, Washington, DC, for defendant.

Baker & McKenzie, Washington, DC (William D. Outman, II, Thomas P. Ondeck and Kevin M. O'Brien) for Brown-Forman Corporation, Fisher Controls International Co., Hewlett-Packard Corporation, International Business Machines Corporation, Minnesota Mining & Manufacturing Corporation and Seagate Technology Corporation, amici curiae.

Barnes, Richardson & Colburn, Chicago, IL (Robert E. Burke, Matthew E. McGrath, Christopher E. Pey, Mark T. Wasden and Cindy H. Chan), for Polaroid Corporation and Amoco Chemical Company, amici curiae.

Coudert Brothers, New York City(Steven H. Becker, Charles H. Critchlow and Claire R. Kelly), for Texaco Refining and Marketing Inc., American Natural Soda Ash Corp., United Export Corp., ABRO Industries, GSI Exim America, Inc., Vitol S.A., Inc., M-C International D/B/A McLane Group International L.P., Bridgestone/Firestone Inc., Dorland Management, Inc., FAI Trading Co., Star Enterprises, Inc., Vista Chemical Co., Champion International Corp., Champion Export Corp. and ISP Technologies, Inc., amici curiae.

Crowell & Moring, Washington, DC (Barry E. Cohen and Mark Tesone), for E.I. du Pont de Nemours & Co., amicus curiae.

DeKieffer, Dibble & Horgan, Washington, DC (J. Kevin Horgan), for Armstrong World Industries, Inc., amicus curiae.

Dorsey & Whitney P.L.L.P., Washington, DC (John B. Rehm and Munford Page Hall, II) for New Holland North America, Inc., amicus curiae.

Grunfeld, Desiderio, Lebowitz & Silverman, New York City, (Steven P. Florsheim and Erik D. Smithweiss), for Boise Cascade Corporation, Etonic Inc., Germain-Webber Lumber Co., Inc., International Veneer Co., Mondial International Corp. and The Heil Co., amici curiae.

Katten, Muchin & Zavis, Chicago, IL (Mark S. Zolno, Lynn S. Baker, Kirk T. Hartley and Michael E. Roll), for Baxter Healthcare Corporation, The Nutrasweet Company and Nestlé U.S.A., Inc., amici curiae.

LeBoeuf, Lamb, Greene & MacRae, L.L.P., Washington, DC (Melvin S. Schwechter, John C. Cleary and Wendy L. Klunk), for Aluminum Company of America, Alcoa International, S.A., Alcoa Inter-America, Inc., Alcoa Memory Products, Inc., H-C Industries, Inc. and The Stolle Corporation, amici curiae.

Irving A. Mandel, Miami Beach, FL, Jeffrey H. Pfeffer, Plainview, NY, Steven R. Sosnov, Norristown, PA, and Thomas J. Kovarcik, New York City, of counsel, for Allied Textiles Sales Company, Sheftel International Inc., Fab-Tech Inc., Sirex, Ltd., Debois Textiles, Inc., Capital Textiles, Inc., M. Kopepel Company, Dumont Export Corporation, United Overseas Corporation, Regent Corporation and Muran Universal, Inc., amici curiae.

McKenna & Cuneo, Washington, DC (Peter Buck Feller, Joseph F. Dennin, Michael K. Tomenga, Lawrence J. Bogard and Brian O'Shea), for Swisher International, Inc., amicus curiae.

Neville, Peterson & Williams, New York City, (John M. Peterson, George W. Thompson, Peter J. Allen and James A. Marino), for Aris-Isotoner, Inc., Berwick Industries, Inc., Chevron Chemical Company, Inc., Chevron Chemical International Sales, Inc., Chevron International Oil Company, Chevron Overseas Petroleum, Inc., Chevron U.S.A., Inc., Fieldston Clothes, Inc., General Glass International Corporation, Microsoft Corporation, The Pillsbury Company, Rhone-Poulenc Inc., Uniroyal Chemical Company Inc., Xerox Corporation, Xerox Corporation, Americas Operations Division, Xerox Corporation, Southern California Manufacturing Operations Division and Xerox International Partners, amici curiae.

Rode & Qualey, New York City, Patrick D. Gill and John S. Rode, of counsel, of General Chemical Corporation, Sumitomo Corporation of America, Newell International, Siemens Energy & Automation, Inc., Siemens Power Corp., Siemens Medical Systems, Inc., Siemens Transportation Systems, Inc., Siemens Solar Industries and Unisys Corporation, amici curiae.

Before DiCARLO, Chief Judge and RESTANI and MUSGRAVE, JJ.

OPINION

DiCARLO, Chief Judge:

Article I, Section 9, Clause 5 of the United States Constitution(the "Export Clause") provides "no Tax or Duty shall be laid on Articles exported from any State."The question presented is whether the Harbor Maintenance Tax, 26 U.S.C. §§ 4461-62(1988 & Supp. V 1993)(Internal Revenue Code) hereinafter "Tax", when imposed upon merchandise exported from the United States, violates this prohibition.The court concludes that it does.

I

This case comes before the court on cross-motions for summary judgment pursuant to USCIT Rule 56.The parties agree there are no material facts in dispute.They also agree that the court has subject-matter jurisdiction to determine the constitutionality of the Tax.

Congress has given the Court of International Trade jurisdiction over matters arising out of the Tax: "For purposes of determining the jurisdiction of any court of the United States or any agency of the United States, the tax imposed by this subchapter shall be treated as if such tax were a customs duty."26 U.S.C. § 4462(f)(2).This language directs that taxes imposed upon both imports and exports shall be treated as if they were customs duties, in other words, as import transactions.

Congress's purpose in centralizing jurisdiction over import transactions in the Court of International Trade was to dispel the jurisdictional confusion existing as to the Court of International Trade's predecessor, the Customs Court, and to reflect the true scope of the court's jurisdiction.SeeH.R.Rep. No. 1235, 96th Cong., 2d Sess. 47(1980), reprinted in1980 U.S.C.C.A.N. 3729, 3758-59.As the legislative history of the Customs Courts Act of 1980 shows, Congress sought, by permitting a single court to hear these suits, "to eliminate much of the difficulty experienced by international trade litigants who in the past commenced suits in the district courts only to have those suits dismissed for want of subject matter jurisdiction."H.R.Rep. No. 1235, at 47, 1980U.S.C.C.A.N.at 3759.Accordingly, Congress granted the court exclusive jurisdiction over any civil action against the United States arising out of federal laws governing import transactions, because of the court's "already developed expertise in international trade and tariff matters."Conoco, Inc. v. United States Foreign-Trade Zones Bd., 12 Fed.Cir. (T) ___, ___, 18 F.3d 1581, 1586(1994).This authority includes the inherent responsibility to review challenges to the constitutionality of a law within that area of expertise.See28 U.S.C. §§ 251,1331,1585 (1988)(providing this court with all powers of U.S. district courts including original jurisdiction over actions arising under Constitution);see, e.g.,28 U.S.C. § 255(a)(1)(1988)(permitting designation of three-judge CIT panels to hear and determine constitutional issues).In addition to the statutory language, the legislative history of the Tax supports this court's jurisdiction.S.Rep. No. 228, 99th Cong., 1st Sess. 10(1986), reprinted in1986 U.S.C.C.A.N. 6705, 6715.

Finally, this is not the first case where the court has taken jurisdiction over matters arising from the Tax; the court recently exercised jurisdiction over claims for restitution of taxes paid by passenger liners pursuant to the Tax in Carnival Cruise Lines, Inc. v. United States,18 CIT ___, 866 F.Supp. 1437(1994).In sum, in light of the Tax's plain language, its legislative history and the Court of International Trade's traditional role as the proper forum for review of actions governing import transactions, the court possesses jurisdiction to hear and determine the constitutionality of the Tax.

II

Congress established the Tax as part of the Water Resources Development Act of 1986, Pub.L. No. 99-662,100 Stat. 4082(codified as amended in scattered titles of U.S.C.) hereinafter the "Act".While it named the charge imposed upon port users a "tax,"26 U.S.C. ch. 36, subch.A, this nomenclature is not necessarily binding on the court, seeFairbank v. United States,181 U.S. 283, 304, 21 S.Ct. 648, 656, 45 L.Ed. 862(1901)("we must regard things rather than names").The provisions of the Act, including the Tax, are severable.Water Resources Development Act § 949, 33 U.S.C. § 2304(1988).

The Tax imposes an ad valorem tax on "any port use" of federally-maintained navigable waterways.26 U.S.C. §§ 4461,4462(a)(2).The statute defines "port use" as "the loading and unloading of commercial cargo on or from a commercial vessel at a port,"26 U.S.C. § 4462(a)(1), and "port" as any channel or harbor open to public navigation that is not an inland waterway, 26 U.S.C. § 4462(a)(2)(A).The Tax is applied against imports and exports, and domestic shipments, as well as passengers.26 U.S.C. §§ 4461(c)(1),4462(a)(3)(A).Presently, the amount of the Tax imposed is 0.125 percent of the value of the commercial cargo involved.26 U.S.C. § 4461(b)(Supp. V 1993).This is without regard to the size of the vessel, the manner or extent of use of port facilities, or the condition of the particular port.For passengers, the statute calculates value based on the actual charge paid for the transportation.See26 U.S.C. § 4462(a)(5)(B).Further, Congress does not distinguish among port users or particular ports in expending funds for harbor maintenance or operations,...