Xerox Corp. v. U.S., 05-1076.

• Decision Date: 19 September 2005
• Docket Number: No. 05-1076.,05-1076.
• Parties: XEROX CORPORATION, Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

423 F.3d 1356

XEROX CORPORATION, Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee.

No. 05-1076.

United States Court of Appeals, Federal Circuit.

September 19, 2005.

John M. Peterson, Neville Peterson LLP, of New York, New York, argued for plaintiff-appellant. With him on the brief was Maria E. Celis.

Amy M. Rubin, Attorney, International Trade Field Office, Commercial Litigation Branch, Civil Division, United States Department of Justice, of New York, New York, argued for defendant-appelee. With her on the brief were Peter D. Keisler, Assistant Attorney General; David M. Cohen, Director, of Washington, DC; and Barbara S. Williams, Attorney in Charge, of New York, New York. Of counsel on the brief was Sheryl A. French, Attorney, International Trade Litigation, Office of Assistant Chief Counsel, United States Customs and Border Protection, of New York, New York.

Before CLEVENGER, GAJARSA, and PROST, Circuit Judges.

CLEVENGER, Circuit Judge.

Plaintiff-appellant Xerox Corporation ("Xerox") appeals the United States Court of International Trade's decision dismissing Xerox's protest of the liquidation by the United States Customs Service ("Customs")¹ of goods imported from Mexico at the rate indicated by Xerox upon entry to be applicable. See Xerox Corp. v. United States, No. 02-00111, slip op. 04-127, 2004 WL 2272221 (Oct. 7, 2004) ("Dismissal"). The Court of International Trade determined that liquidation by Customs of the goods "as entered," rather than at a more preferential rate pursuant to the North American Free Trade Agreement ("NAFTA"), Dec. 17, 1992, 32 I.L.M. 289 (1993), was not a protestable decision under 19 U.S.C. § 1514 because "the issue of whether the subject merchandise was eligible for the NAFTA preference was simply never before Customs." Dismissal, 2004 WL 2272221 at 3. The court found that Xerox's protest was therefore invalid and did not give rise to jurisdiction under 28 U.S.C. § 1581(a). Id. at 3. Because Xerox did not claim preferential treatment under NAFTA for its goods at the time of entry, as provided by 19 C.F.R. § 181.21, or make a post-importation claim within a year of entry, as required by 19 U.S.C. § 1520(d), we agree that the protest was invalid and affirm the Court of International Trade's decision.

I

In 1990, leaders from the United States, Canada and Mexico entered into negotiations for the creation of a free trade zone on the North American continent. The resulting agreement, NAFTA, promotes the free flow of goods between the three signatory countries through a reduction or phased elimination of tariffs and non-tariff barriers to trade. Made in the USA Found. v. United States, 242 F.3d 1300, 1302-03 (11th Cir.2001); see also CPC Int'l, Inc. v. United States, 956 F.Supp. 1014, 1021-22 (CIT 1997) (recognizing the stated objectives of NAFTA: "to eliminate barriers to trade in, and facilitate the cross-border movement of goods between the territories of the NAFTA Parties"). On December 8, 1993, Congress passed the NAFTA Implementation Act, wherein it approved NAFTA and enacted law to effectuate and enforce the provisions of the trade agreement. See Pub.L. No. 103-182, 107 Stat.2057 (1993) (codified as amended at 19 U.S.C. §§ 3301-3473). The present case arises from a failed attempt by Xerox to claim preferential treatment under NAFTA and the NAFTA Implementation Act for certain entries of electrostatic photocopiers and wire harnesses.

Between January 19 and March 2, 1998, Xerox imported 22 entries of electrostatic photocopiers and wire harnesses into the United States at the U.S. port of entry in Laredo, Texas. Xerox claimed classification of the goods at the 3.7% ad valorem rate under subheading 9009.12 of the Harmonized Tariff Schedule of the United States ("HTSUS"), applicable to entries of photocopiers, and the 5.3% ad valorem rate of HTSUS subheading 8544.41, applicable to entries of wire harnesses. Xerox did not claim at entry the preferential, duty-free tariff treatment provided by NAFTA because Xerox did not possess the requisite NAFTA Certificates of Origin, as required by 19 C.F.R. § 181.21-.22. On December 4, 11, 18 and 28 of 1998, and on January 4, 8 and 15 of 1999, Customs liquidated Xerox's entries "as entered," i.e., it assessed Column 1 Normal Trade Relation Duty rates for goods classified under HTSUS subheadings 9009.12 and 8544.41.

At some point in time after entry, the Mexican exporter of Xerox's goods issued NAFTA Certificates of Origin covering the goods. On March 2, 1999, Xerox submitted the Certificates to Customs and for the first time asserted that its entries were entitled to a duty-free preference under NAFTA in a protest of the liquidation pursuant to 19 U.S.C. § 1514(a). On November 6, 2001, Customs decided upon further review that the subject entries "should have been claimed under 19 U.S.C. § 1520(d)," id. at 85, which allows an importer to file a post importation claim for NAFTA preference, but only within one year after the date of importation. Customs determined that "[a]llowing conversion to a post-importation NAFTA claim only the last entry [of March 2, 1998] is timely and will be processed with a refund." Id. Customs therefore reliquidated that single entry at a more preferential rate under NAFTA and denied Xerox's protest as to the remaining 21 entries.²

Xerox appealed the partial denial of its protest to the Court of International Trade. Customs moved to dismiss the appeal for lack of subject matter jurisdiction because of the absence of a protestable decision by Customs to deny Xerox NAFTA treatment. Xerox moved for summary judgment, arguing that the filing of a protest under 19 U.S.C. § 1514(a), even in the absence of an earlier claim for reliquidation under 19 U.S.C. § 1520(d), is a statutorily authorized method for asserting an importer's right to a preferential rate of duty under NAFTA.

On October 7, 2004, the Court of International Trade found sections 1514(a) and 1520(d) to be "complementary statutes addressing different factual circumstances;" the former is directed towards actual decisions by Customs, and the latter applies when no claim for preferential treatment was made upon entry. Dismissal at 3. The court thus framed the question before it as whether Customs made a decision to deny Xerox NAFTA preference. Answering in the negative, the court determined that the issue of NAFTA eligibility for Xerox's entries was never before Customs and that Customs therefore did not make a protestable decision to deny Xerox a preferential NAFTA rate. Id. at 3. The court held that Xerox's protest was invalid and could not give rise to jurisdiction under 28 U.S.C. § 1581(a). Id. ("[I]t is too much of a reach to construe Customs' decision to assess Column 1 duties as a negative decision regarding preferential NAFTA treatment.").

The Court of International Trade thus dismissed Xerox's protest for lack of subject matter jurisdiction. Xerox appeals. We have jurisdiction over the appeal pursuant to 28 U.S.C. § 1295(a)(5).

II

The Court of International Trade's jurisdictional ruling was based upon that court's interpretation of 19 U.S.C. §§ 1514 and 1520. We review the Court of International Trade's interpretation of those statutory provisions de novo. Goodman Mfg., L.P. v. United States, 69 F.3d 505, 508 (Fed.Cir.1995). We also review under a de novo standard the decision by the Court of International Trade to dismiss the case for lack of jurisdiction. Friedman v. Daley, 156 F.3d 1358, 1360 (Fed.Cir.1998).

III

Xerox argues on appeal that the Court of International Trade erred in finding no protestable decision by Customs to liquidate Xerox's entries "as entered." Recognizing that Customs was required by law to "fix the final classification and rate of duty applicable to" Xerox's entries, 19 U.S.C. § 1500(b) (1994), Xerox contends that Customs's liquidation of Xerox's entries "as entered" presupposes an earlier finding by Customs that the entries were not entitled to the duty-free preference of NAFTA. Xerox then urges that this finding merged into the liquidation by Customs of the subject goods, such that the liquidation itself was a protestable decision. Xerox also points to 19 C.F.R. § 10.112, a regulation that allows an importer to file, before liquidation becomes final, any document necessary for free or reduced duties under any agreement if the importer's failure to file upon entry was not the result of willful negligence or fraudulent intent. Xerox claims that the Court of International Trade erred in failing to find the regulation dispositive in its favor.

The government responds that "[b]ecause Customs' `as entered' liquidation of Xerox's merchandise was indisputably correct based on the information provided at entry, and because any potential claim for a NAFTA preference had expired by the time that Xerox filed its `protest,' the `protest' was invalid because it was not based on an actual protestable decision." (Appellee's Br. at 44-45.) The government concludes that the Court of International Trade was correct in dismissing the case because invalid protests cannot give rise to jurisdiction under 28 U.S.C. § 1581(a).

A

Section 1514(a) of Title 19 of the U.S.Code provides a procedural mechanism by which an importer can protest certain decisions of Customs. See United States v. Cherry Hill Textiles, Inc., 112 F.3d 1550, 1557 (Fed.Cir.1997) ("the underlying policy of section 1514 . . . is to channel challenges to liquidations through the protest mechanism"). At the time of Xerox's protest, section 1514(a) provided that

decisions of the Customs Service, including the legality of all orders and findings entering into the same, as to—

(1) the appraised value of merchandise;

(2) the classification and rate and amount of duties chargeable;

(3) all charges or exactions of whatever character within the jurisdiction of the Secretary of the Treasury;

(4) the exclusion of merchandise from entry or delivery or a demand...