Xerox Corp. v. U.S.
| Decision Date | 22 August 2002 |
| Docket Number | No. 99-02-00086.,SLIP.OP 02-94.,99-02-00086. |
| Citation | 219 F.Supp.2d 1345 |
| Parties | XEROX CORPORATION Plaintiff, v. UNITED STATES, Defendant |
| Court | U.S. Court of International Trade |
Neville Peterson LLP, John M Peterson, Washington, DC (Curtis W. Knauss), for Plaintiffs.
Robert D. McCallum, Jr., Assistant Attorney General, United States Department of Justice; John J. Mahon, Acting Attorney in Charge, International Trade Field Office; (Barbara M. Epstein, Amy M. Rubin), Civil Division, United States Department of Justice, Commercial Litigation Branch; Beth C. Brotman, Attorney, Office of Assistant Chief Counsel, International Trade Litigation, United States Customs Services, for Defendant, of counsel.
This case is before the court on cross-motions for summary judgment. Plaintiff ("Xerox"), a domestic importer, challenges Defendant's ("Customs" or "Government") denial of its petition to reliquidate twelve entries of Xerox merchandise under 19 U.S.C. § 1520(c)(1)(1994).1 Defendant moves for summary judgment, alleging that Plaintiff's incorrect entry of the merchandise was a "mistake of law," which is not remediable under § 1520(c)(1), as the entry-writer was mistaken as to the correct classification of the merchandise, but knew the nature and capabilities of the merchandise and, furthermore, that Plaintiff lacks evidence to prove that the classification was due to "mistake of fact," inadvertence, or clerical error. Plaintiff cross-moves claiming that the classification was a "mistake of fact," as the entry-writer was misled by the invoice accompanying the merchandise and was unaware of the actual physical nature and capabilities of the merchandise, and, alternatively, that the customs broker failed to protest misclassified entries due to reliance on a faulty database. The court grants Defendant's motion for summary judgment in part and denies it in part, and denies Plaintiff's motion for summary judgment, as it finds material facts at issue regarding the entry procedures used by Plaintiff's custom broker as discussed below.
From May through September 1995, Xerox imported multi-function printers consisting of "MajestiK" models 5760, 5760 ADF, and 5765 and "Regal" model 5790.2 Def.'s Statement of Material Facts Not in Issue, at ¶ 7, 9 ("Def.'s Statement"); Pl.'s Resp. to Def.'s Statement of Material Facts Not in Issue, at ¶ 7,9 ("Pl.'s Resp."). The merchandise entered through the Port of Los Angeles, California. Mem. In Supp. of Def. Mot. For Summ. J. at 2. Xerox's designated customhouse broker at this port is A.J. Fritz Companies ("Fritz"), as Associated Customhouse Brokers, Inc. ("ACB" or "Associated"), Xerox's principal customhouse broker, does not have an office in Los Angeles. Id. at 5. Jared Hirata, entry writer at Fritz, classified the entry of the merchandise under subheading 9009.12.00 of the Harmonized Tariff Schedule of the United States ("HTSUS").3 Deposition of Nathan Reep ("Reep Dep.") at 20. Between September 1995 and January 1996, Customs liquidated the merchandise under this heading at 3.7% ad valorem. Pl.'s Mem. of P. & A. in Supp. of Pl.'s Cross-Mot. for Summ. J. ("Pl.'s Br."), at 1-2. In December 1995 and February 1996, Xerox pursued a Customs' ruling on the correct classification of the "Regal" and "MajestiK" models, respectively. See New York Customs Ruling 817475 of December 22, 1995 ("NY Customs' Ruling 817475"); New York Customs Ruling A80061 of February 14, 1996 ("NY Customs Ruling A80061").
Prior to Customs' ruling, on July 17, 1995, Mr. Graham Cassano, Corporate Manager for Customs and Tariff administration at Xerox, issued a letter instructing Mr. Glenn Levitt of ACB to enter these models under subheading 8471.92.54004 with duty-free status and to protest any entries previously entered under 9009.12.00. Letter from Cassano to Levitt of 7/17/95. The twelve entries at issue were classified under subheading 9009.12.00; however, they were not protested within the 90 day time period after liquidation allowed by 19 U.S.C. § 1519. Plaintiff claims this was due to the reliance on a incomplete database by ACB. Def.'s Statement, at ¶ 1; Pl.'s Br., at 5. On December 22, 1995 and February 14, 1996, Customs ruled that the "Regal" and "MajestiK" models were to be classified under the duty free subheading of HTSUS 8471 for liquidation . Xerox provided Mr. Reep with written instructions to this effect on March 20, 1996 for the "MajestiK" model and on April 15, 1996 for the "Regal" model. Def.'s Statement, at ¶ 14; Pl.'s Resp., at ¶ 14.
On September 10, 1996, Xerox petitioned for reliquidation of these twelve entries, within the year period allowed by § 520(c)(1).5 Customs denied Xerox's petition and subsequent protest of the denial, concluding that the entry of the merchandise as 9009.12.00 instead of 8471.92, was a "mistake of law" not remediable under § 520(c)(1). Xerox filed a timely summons in this Court to challenge Customs' decision. Customs then filed its motion for summary judgment and Xerox subsequently filed its cross motion.
Summary judgment is appropriate when "the pleadings, depositions, answers to interrogatories, and the admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law." USCIT R. 56(c). "This may be done by producing evidence showing the lack of any genuine issue of material fact or, where the non-moving party bears the burden of proof at trial, by demonstrating that the nonmovant has failed to make a sufficient showing to establish the existence of an element essential to its case." Black and White Vegetable Co., v. United States, 125 F. Supp 2d 531, 536, 24 CIT ___, ___ (2000) .
In determining if a party has met its burden the court does not "weigh the evidence and determine the truth of the matter, but .. determine[s] whether there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The court views all evidence in the light most favorable to the non-moving party, drawing inferences in the nonmovant's favor. United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962).
Section 520(c) of the Tariff Act of 1930, as amended at 19 U.S.C. § 1520(c) provides that in certain cases, notwithstanding that a valid protest was not filed, an entry may be reliquidated to correct:
a clerical error, mistake of fact, or other inadvertence not amounting to an error in the construction of a law, adverse to the importer and manifest from the record established by documentary evidence, in any entry, liquidation, or other customs transaction, when the error, mistake, or other inadvertence is brought to the attention of the appropriate customs officer within one year after the date of liquidation or exaction.
Section 1520(c)(1). This section is not a remedy for every mistake, but offers relief in a limited number of circumstances. See PPG Industries, Inc. v. United States, 7 CIT 118, 123 (1984). "A `mistake of fact exists where a person understands the facts to be other than they are, whereas a mistake of law exists where a person knows the facts as they really are but has a mistaken belief as to the legal consequences of those facts.'" Hambro Automotive Corp. v. United States, 66 C.C.P.A., 113, 118, 603 F.2d 850, 854 (1979) (quoting 58 C.J.S. Mistake p. 832). An inadvertence is defined as an oversight or involuntary accident. PPG, 7 CIT at 124. Clerical errors are a mistake made by a subordinate, who does not have any duty to exercise judgment with regard to the classification. See Ford Motor Co. v. United States, 24 CIT ___, ___, 116 F.Supp.2d 1214, 1241 (2000) (citing Yamada v. United States, 26 C.C.P.A. 89, 94 (Cust. & Pat.App.1938)). Clerical mistakes are often mistakes in actual writing or entering of numbers. See PPG, 7 CIT at 124.
Xerox points to two mistakes evident in the record which it claims are correctable under § 520(c)(1). Xerox claims that the failure of ACB to protest the entries after they had been wrongly classified was an inadvertence and, therefore, correctable under § 520(c)(1). If the entries had been properly protested Customs would have granted relief through the protest. The second mistake is one of fact, that the person making the actual entries for Fritz mistakenly relied on the description given on the invoice to determine the proper classification. The invoice description was incomplete because it did not describe the actual contents of the entries. In this way a mistake as to the correct characteristics of the product led to the incorrect HTS number on the entry documents.
Xerox seeks to expand the scope of Section 520(c) to allow a party to correct a failure to protest an improper classification. Pl.'s Br. at 19. Previous cases have held that despite failure to protest a mistake of fact can be corrected. However, no case on record holds a failure to protest can be mistake of fact in itself.
Prior to securing a Customs ruling confirming the status of the two printers as classifiable at the duty-free subheading, Xerox instructed its brokers to classify them under this subheading and protest any entries already entered. Cassano Aff. at ¶ 5; Cassano Letter to Levitt, July 17, 1995. According to Mr. Levitt of Associated Customhouse Brokers, he developed a database to track the entries. Levitt Aff. at ¶ 5. Based on this database,...
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...does not point to any mistake in the original classification that could be corrected under § 1520. See Xerox Corp. v. United States, 26 CIT ___, ___, 219 F.Supp.2d 1345, 1350-51 (2002). Failure by an importer to protest a liquidation before it becomes final is not a mistake which is correct......