National Corn Growers Association, New Energy Company of Indiana, Archer Daniels Midland Company, Ohio Farm Bureau Federation, and A.E. Staley Manufacturing Company, Plaintiffs-Cross-Appellants v. James Baker, Iii, Secretary, John M. Walker, Jr., Assistant Secretary, William Von Raab, Commissioner, United States of America, Citicorp International Co., Inc. And Raj Chemicals, Inc.
Docket: 87-1147
Court: Court of Appeals for the Federal Circuit; March 13, 1988; Federal Appellate Court
The United States Court of Appeals for the Federal Circuit reversed a decision from the Court of International Trade regarding jurisdiction in a case involving the Secretary of the Treasury and several corporations, including Citicorp International Co. Inc. and RAJ Chemicals, Inc. The court held that the Court of International Trade lacked jurisdiction over the suit brought by the National Corn Growers Association and other domestic producers. The case stems from a change in tariff policy enacted by Congress in 1983, which imposed a 60 cents per gallon tariff on ethanol. Prior to the change, a 3% ad valorem duty applied to ethanol imports. In 1984, the Customs Service established a practice exempting certain ethanol mixtures from this tariff, prompting objections from domestic producers who argued this created an unfair subsidy for importers. Following lobbying efforts, the Department of the Treasury in 1985 announced a reversal, applying the 60 cents duty to ethanol imports mixed with additives, effectively addressing the concerns raised by domestic producers. The appellate court remanded the case with instructions to dismiss the plaintiffs' claims with prejudice.
Customs revoked previous rulings from September 1984 regarding the duty on mixed ethanol imports, notifying importers, including Citicorp and RAJ, that a new duty of 60 cents per gallon would apply. However, importers were invited to present evidence of reliance on earlier rulings prior to the revocation. Both Citicorp and RAJ submitted evidence suggesting reliance, prompting Customs to issue new letters in August 1985 that allowed certain mixed ethanol shipments to be imported without the new duty, based on previous practices. RAJ and Citicorp imported their specified quantities before the November 1, 1985 deadline set by Customs.
In response to ongoing imports and without waiting for formal protests, appellees filed a lawsuit on August 29, 1985, in the Court of International Trade, challenging Customs' authority to exempt these importers from duties. They sought a declaration that the exemptions were unlawful and that full statutory duties should apply to all ethanol blends imported after August 2. Judge Carman denied their motions for temporary restraining orders and preliminary injunctions to suspend liquidation of the shipments authorized by the August 1985 rulings. A renewed motion for injunction was also denied by Judge Aquilino on November 26, 1985, who allowed Citicorp and RAJ to intervene in the case.
The trial took place in December 1985 and January 1986, with the court taking the case under advisement by January 22, 1986. Meanwhile, Customs liquidated the relevant imports, starting the 90-day period for finality. Judge Aquilino issued a judgment on May 23, 1986, after the entries had been liquidated and had become final, affirming the court's jurisdiction to hear the case despite the appellees’ failure to protest under the relevant statutes.
The court determined that Customs lacked the authority to issue ruling letters exempting Citicorp and RAJ from the 60 cents per gallon duty imposed on August 2, 1985, regardless of any reliance by the parties. It concluded that once Customs classified mixed ethanol as dutiable under section 901.50, any liquidation of entries at a lower rate was unlawful, and it did not consider any potential limitations on the retroactive application of this practice change. Furthermore, the court ruled that the parties could not rely on Customs' ruling letters that allowed for lower duty rates on ethanol shipments. Consequently, RAJ and Citicorp were ordered to pay amounts obtained through alleged malfeasance directly into the Treasury, without the need to reliquidate the entries.
The appeal raised the critical issue of the Court of International Trade's jurisdiction under 28 U.S.C. Sec. 1581(i) or the Administrative Procedures Act. The appellees claimed that the Secretary of the Treasury and the Customs Commissioner acted unlawfully by not applying the appropriate tariffs to ethanol shipments and sought a retroactive application of a change in practice. They contended that their complaints included issues beyond just duty rates, asserting that section 1516 was not applicable. The trial court upheld this interpretation and exercised jurisdiction under section 1581(i), but did not address the appellees' assertions regarding incorrect duty and classification applications.
Disagreement exists regarding the trial judge's interpretation of section 1516 and the assertion that jurisdiction was under section 1581(i). Section 1516 permits only prospective relief for the domestic industry, regardless of circumstances. The exhaustion of administrative remedies is a principle that restricts judicial review of administrative decisions, as established by the Supreme Court in Aircraft, Diesel Equipment Corp. v. Hirsch. The Court emphasized that when Congress mandates initial or exclusive administrative judgments, courts lack authority to preempt these decisions, which are intended to ensure uniformity, expertise, and finality in administrative processes. Congress delineated an administrative framework for domestic industries to challenge import tariffs under 19 U.S.C. § 1516, with judicial review through 28 U.S.C. § 1581(b). The precedent set in Louisiana v. McAdoo limits standing to challenge tax applications to the affected parties. Even if section 1516 were not the appropriate relief avenue for fraudulent claims, this case does not qualify as such. The authority of the Secretary to interpret Customs law is affirmed, and while Commissioner von Raab’s decision may be questioned, it does not render the decision void. Appellees incorrectly cite Tracy v. Swartwout, assuming the Secretary must collect duties deemed appropriate, but the Secretary is bound by law and does not have to retroactively alter duty collections based on changed interpretations. Citicorp and RAJ's reliance on prior policies regarding duty exemptions is misplaced, as the law does not require retroactive adjustments to duties.
Individuals should not face penalties for adhering to Customs regulations as they were understood at the time of a transaction, even if Customs later changes its interpretation. Relevant case law, such as Heraeus-Amersil, Inc. v. United States and Siemens America, Inc. v. United States, supports this principle. The Treasury has the authority to issue ruling letters with delayed effective dates, reflecting discretionary powers of the Secretary in interpreting Customs laws, as established in McAdoo v. United States. The responsibilities of the Secretary related to sugar tariffs are executive in nature, involving judgment rather than being merely ministerial tasks, which cannot be reviewed by mandamus.
Challenges to the validity of the Secretary's or Commissioner's actions are misguided, as courts typically refrain from substituting their judgment for that of the officials responsible for executing the laws. The Court of International Trade failed to respect the required deference to these officials, leading to the unsustainability of its decision. The House Report to the Customs Court Act of 1980 clarifies that section 1516 allows American manufacturers to protest administrative determinations about imports, with Congress deciding that any resulting relief would be prospective only. Section 1514(a) outlines the finality of Customs liquidations, indicating that decisions regarding appraised values, duty classifications, and other Customs actions are conclusive unless a protest is filed or a civil action is initiated in the Court of International Trade within the designated timeframe. Final judgments from the Court are to be communicated to the appropriate Customs officer for action. Section 1514 reinforces that Customs liquidations are final unless protested, with limited exceptions not applicable to American manufacturers' protests.
The legislative history of sections 1514 and 1516 emphasizes the need for certainty for importers and domestic producers, establishing that importers are entitled to rely on enacted statutes and congressional policy. Section 1516 grants American manufacturers, producers, or wholesalers the right to protest against importations, although importers are generally unaware of such protests until their merchandise has been entered and liquidated. Importers should be protected in their reliance on existing practices and government interpretations.
The committee reports related to the Tariff Act of 1930 affirm that appellees were required to pursue actions under section 1516 to protest the Customs Service's treatment of imported goods, despite potential relief being prospective only. Section 1516 recognizes the interest of domestic producers in the appraisal and classification of imported merchandise, allowing them to protest against appraisements of similar goods.
Congress intended for section 1516 to be the exclusive remedy for industry protests, and appellees' failure to follow the prescribed statutory procedure contradicts both the statute's plain meaning and congressional intent. Section 1516 could not have prevented the completion of prior importations, as it was designed only to address future shipments. The statute's invocation would have resulted in prospective decisions regarding value and classification but did not provide remedies for actions already taken. Even if the appellees could impose duties retroactively, it would not alter the market impact of previous shipments, which would remain unchanged.
Appellees' request for retroactive assessment of duties is not permissible under section 1516 or other trade laws, as such relief cannot effectively remedy their situation. The trial court may have misinterpreted section 1516 as only applicable to nonfrivolous duty rate disputes, failing to recognize that Customs' subsequent actions excusing duty payments were unlawful. While some argue that section 1516 may not address all issues, this case is not among them. Historical practices of limiting retroactive effects of changed rulings by revenue services are acknowledged as legitimate. The Commissioner of Customs acted in good faith based on established regulations and practices, which importers are entitled to rely on. The Secretary of the Treasury and the Commissioner possess discretionary authority over the collection of duties, and their actions define applicable law until modified. Uniform practices concerning effective dates for tariff collection fall under this authority. The Supreme Court has noted that long-standing executive practices should be respected, as they form the basis for legal interpretation and application. Appellants relied on these practices and interpretations in their import transactions, and the validity of the law at the time of their actions remains binding, irrespective of later challenges to Customs' interpretations.
Appellees argue that jurisdiction in the Court of International Trade should be based on section 1581(i) rather than section 1581(b), contending that the Customs Service's actions are reviewable under the Administrative Procedures Act (APA) and section 1581(i)’s general authority, rather than through section 1516. They assert that the specific grant of review under section 1581 does not preclude broader judicial review of actions not explicitly covered. However, federal courts, including the Court of International Trade, operate under limited jurisdiction as defined by 28 U.S.C. Sec. 1581, which restricts their authority to civil actions arising from import transactions related to international trade laws.
Subsection 1581(b) provides exclusive jurisdiction for civil actions under section 516 of the Tariff Act of 1930, and existing legislative reports indicate that prerequisites, such as the filing and denial of a protest, must be met before initiating a civil action. The Senate Judiciary Committee's report emphasizes that these prerequisites, including exhausting section 1516 procedures, are preserved and must be adhered to, indicating that appellees improperly sought judicial review without following the mandated process.
Appellees' reliance on section 1581(i) and the APA to justify their claims is challenged by the legislative intent to maintain existing jurisdictional boundaries without expanding the Court's authority to create new causes of action. They reference the case Luggage, Leather Goods Mfrs. of Am. v. United States, which allowed a trade association to seek judicial review without first filing a section 1516 petition, to support their position.
The reliance of the appellees on specific legal authority is disputed, primarily because decisions from the Court of International Trade are not binding on this court. The case cited, Luggage, Leather Goods Mfrs., is distinguishable as the administrative relief sought was deemed futile; the authorities could not override a presidential proclamation and Customs officials were legally barred from granting the requested relief. In contrast, the present case involves Customs policies that are within the authority of the Customs Service to amend.
The appellants reference Miller, Co. v. United States to argue that Congress intended for a single remedy for the relief sought, asserting jurisdiction under section 1581(b). In Miller, the Federal Circuit ruled that jurisdiction under section 1581(i) could not be claimed if another subsection of section 1581 was available. The court found that the appellant in Miller did not engage in the required administrative review, leading to the conclusion that the remedy was not inadequate but rather unavailable due to procedural failure.
The appellees' claims of inadequate remedies and the trial court's findings are challenged, with the assertion that only extraordinary circumstances should allow for jurisdiction under section 1581(i) instead of section 1581(b). The trial court's reasoning—that the prospective nature of section 1516 relief renders it inadequate—is critiqued for lacking a proper basis, as the relief sought must be appropriate under substantive law. The appellees are positioned similarly to Miller, claiming the Customs Service did not fulfill its duties regarding tariff collection. However, the appropriate procedure for these assertions lies within section 1516, despite the appellees' reference to Timken Co. v. Simon, which operates under a different legal framework.
Appellees are unable to invoke jurisdiction under section 1581(b) due to their failure to file a required section 1516 protest, which is fundamental for establishing jurisdiction under this statute. They cannot bypass this jurisdictional requirement by claiming that the available remedies are inadequate. The court supports the view that the intended procedural framework cannot be easily circumvented by litigants; thus, mere strategic pleading does not allow for altering the statutory scheme set by Congress. The reliance on section 1581(i) for jurisdiction is incorrect, as this subsection has a limited scope and does not create new causes of action. Legislative history indicates that Congress did not intend for the Court of International Trade to have jurisdiction over completed transactions when the proper protest process was not followed. The trial court erred by interpreting section 1581(i) as an independent jurisdictional basis to disregard established limitations under section 1516. Statutory construction principles dictate that when Congress has detailed a specific process for claims, particularly against the United States, that process should be regarded as exclusive. Claims cannot bypass these defined parameters by referencing more general legislation, as illustrated by the precedent set in Brown v. GSA.
Sec. 717's structure and requirements contradict the petitioner's claim that it serves solely as supplementary judicial relief. Unlike other remedies, Sec. 717 integrates both administrative and judicial enforcement, which would be undermined if courts were accessible under less demanding statutes. This would disrupt the intended administrative framework mandated by Congress for addressing employment discrimination. The excerpt references Preiser v. Rodriguez to highlight that Congress would not design a system that allows for circumvention through altered pleadings. It also notes a Supreme Court ruling that Medicare B providers cannot use the Tucker Act for lawsuits, as they were intentionally excluded from the Medicare Act's review provisions. The Court of Claims case Fiorentino v. United States illustrates that consent for suit from federal employees is preempted by the Privacy Act of 1974. Furthermore, the proper jurisdiction for an American manufacturer's protest regarding imported goods is established under section 1581(b) of the Tariff Act, while the Administrative Procedures Act (APA) does not provide jurisdiction for the Court of International Trade to review Customs Service actions, as supported by established precedents. The APA does not act as a jurisdictional statute, reaffirming that courts must already possess jurisdiction independently of the APA.
The excerpt addresses the recurring issue of whether the Administrative Procedure Act (APA) provides independent jurisdictional authority for courts. Various circuits and the U.S. Claims Court have consistently concluded that the APA does not grant such distinct authority for jurisdiction. Key cases, including *Matter of Chicago, Milwaukee, St. Paul, Pacific RR Co.*, *Assiniboine Sioux Tribes v. Board of Oil and Gas*, and others, support this conclusion. The Supreme Court's decision in *Califano v. Sanders* is pivotal, wherein the Court clarified that the APA does not imply jurisdiction for judicial review of agency actions, emphasizing that jurisdiction must be established by external statutory law. Specifically, 5 U.S.C. § 702 allows for judicial review of agency actions but does not serve as an independent jurisdictional basis, as per § 703, which refers to courts specified by statute. In the current case, the Court of International Trade lacked authority to review Customs Service actions under section 1581 because the appellees did not adhere to the required statutory procedures. Additionally, the excerpt discusses section 1514, which addresses the finality of determinations, noting that appellants contend that certain shipments were finalized after a 90-day period, rendering them binding on all parties involved.
Liquidation is defined as the final determination of duties or drawbacks on an entry, binding all parties, including the United States. Under 19 C.F.R. Sec. 159.1, liquidation must occur within a year, as stipulated by section 1504, unless Customs suspends it for valid reasons. If Customs fails to suspend liquidation, it is deemed final after 90 days. In this case, Customs did not suspend liquidation, rendering it final. Attempts by the court to achieve payments without reliquidation were deemed improper, as they attempted to modify the established statutory process.
The court did not evaluate standing determinations, as they were moot based on jurisdiction findings. Appellees could not validate their claims to uphold the Court of International Trade's decision; their path for review should align with section 1516, establishing jurisdiction under section 1581(b) rather than section 1581(i). The court disagreed with the assertion that remedies under section 1516 were inadequate, asserting that retroactive relief was unavailable under trade law, and the appellees’ claims were fundamentally misplaced. The court referenced several precedential cases to reinforce its conclusion that jurisdiction cannot be based on the Administrative Procedure Act (APA) as the Supreme Court and Federal Circuit have previously ruled against such interpretations.
Ultimately, the Court of International Trade's decision was reversed and remanded for dismissal, reinforcing the statutory framework set out in 19 U.S.C. Sec. 1516 regarding petitions by domestic interested parties.
Manufacturers, producers, or wholesalers in the U.S., as well as certified or recognized unions representing these industries, or associations predominantly composed of such entities, are recognized as interested parties in matters related to imported merchandise. Upon receiving a petition from these parties, the Secretary of Commerce is required to assess and, if necessary, correct the appraised value, classification, or duty rate of the merchandise. The Secretary must notify the petitioner of any determinations made. Merchandise entered for consumption after thirty days from the notice will be appraised according to this determination.
If the Secretary finds the initial appraisal or classification to be correct, the petitioner can contest this decision within thirty days. The Secretary will then publish his determination and provide the petitioner with relevant information to facilitate contesting the duty assessment. Customs officers are instructed to notify the petitioner via mail when the first entry related to the contest is liquidated.
Merchandise associated with a Secretary's published decision will be liquidated according to that decision, regardless of any ongoing legal actions, unless specified otherwise in the chapter. Final liquidations will be conclusive for all parties involved. Additionally, consignees or their agents have the right to participate as parties in interest in proceedings before the United States Court of International Trade. The appraisal and duty assessment will align with any final judicial decisions that partially or wholly sustain the cause of action, which may lead to the suspension of liquidation and subsequent publication.
If a cause of action is upheld by the U.S. Court of International Trade or the U.S. Court of Appeals for the Federal Circuit, merchandise affected by the Secretary's published decision will be appraised, classified, and assessed duties according to the final judicial ruling. Liquidation of entries for such merchandise will be suspended until the action is resolved, at which point they may be liquidated or reliquidated as necessary. The Secretary must publish the court decision notice within ten days of its issuance.
The Court of International Trade has exclusive jurisdiction over various civil actions, including those contesting the denial of protests under the Tariff Act of 1930, and reviewing final determinations regarding eligibility for worker adjustment assistance, firm adjustment assistance, and community adjustment assistance under the Trade Act of 1974. It also holds exclusive jurisdiction over actions regarding the Secretary of the Treasury's determinations under the Trade Agreements Act of 1979, as well as decisions related to customs broker licenses and permits.
Additionally, the Court has exclusive jurisdiction to review rulings by the Secretary of the Treasury regarding classification, valuation, duty rates, and similar matters before the importation of goods, provided that the party can demonstrate potential irreparable harm without judicial review prior to importation.
The Court of International Trade has exclusive jurisdiction over civil actions against the United States, its agencies, or officers related to U.S. laws on revenue from imports, tariffs, duties, taxes on imports (excluding revenue-raising), embargoes or restrictions not aimed at public health or safety, and the enforcement of these matters, subject to specific exceptions noted in subsection (j). Notably, the Court does not have jurisdiction over actions arising under section 305 of the Tariff Act of 1930.
Decisions made by customs officers regarding the appraised value of merchandise, classification and rates of duties, charges within the Secretary of the Treasury's jurisdiction, exclusion of merchandise, liquidation or reliquidation of entries, claims for drawback, and refusals to reliquidate are final unless a protest is filed or a civil action is commenced in the Court of International Trade within the time limits set by section 2636 of Title 28. Once a judgment from the Court is final, relevant documents shall be returned to the customs officer for appropriate action. Additionally, determinations made under section 1303 or subtitle IV are also final unless contested in the Court.
Protests regarding decisions under subsection (a) must be filed in writing with the designated customs officer, clearly detailing each decision, the affected merchandise categories, and the objections with supporting reasons. Only one protest is allowed per merchandise entry, although separate protests can be filed for different merchandise categories. Protests from different authorized individuals regarding a single category are considered a single protest. Amendments to protests can be made before the filing deadline, allowing for additional objections not originally included. New arguments can also be introduced during the review process. Protests can be submitted by specific parties, including importers, consignees, and authorized agents, within 90 days of notice of liquidation or the decision date. A surety with an unsatisfied claim may file a protest within 90 days of a demand notice, certifying it is not collusive. Additionally, the reliquidation of an entry does not permit protests on issues not related to that reliquidation. The document also references a court motion concerning a perceived slight to counsel's reputation, clarifying that the court will address any concerns directly when necessary.
If an opinion lacks specific language, it implies no intent to "chide" should be inferred. The case involves a semantic issue regarding the reliance on the Administrative Procedures Act (APA) to support the trial court's jurisdiction, which was deemed erroneous. Counsel asserted their intention to use the APA not as a standalone jurisdictional grant but as substantive law supporting the trial court's jurisdiction under 28 U.S.C. § 1581(i). However, this argument was found to be unsound regardless of the framing. The motion was denied. Circuit Judge Mayer concurred, noting that the National Corn Growers Association had claimed the Court of International Trade properly exercised its jurisdiction under § 1581(i) to review actions under the APA, despite the court's opinion suggesting otherwise. Mayer agreed with the court's decision to leave the opinion unchanged due to the semantic difference not affecting the outcome, and affirmed that there was no intent to criticize counsel. The Senate Report accompanying S. 1654 references subsections of Title 28, detailing prerequisites for civil suits in the Court of International Trade, specifically section 2637(b), which requires exhaustion of procedures before contesting a denial under section 516 of the Tariff Act. In this case, the necessary procedures were not followed, as there was no filing or denial of a protest.
