Hohenberg Bros. v. United States

Citations: 301 F.3d 1299; 2002 U.S. App. LEXIS 17644Docket: Nos. 01-1460, 01-1461, 01-1462, 01-1463, 01-1464, 01-1465, 01-1466, 01-1467, 01-1468, 01-1469, 01-1470, 01-1471, 01-1472, 01-1473, 01-1474, 01-1475, 01-1476, 01-1477, 01-1478, 01-1479, 01-1480, 01-1481, 01-1482, 01-1483, 01-1484, 01-1485, 01-1486, 01-1487

Court: Court of Appeals for the Federal Circuit; August 26, 2002; Federal Appellate Court

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The United States Court of Appeals upheld the Court of International Trade's denial of Hohenberg Bros. Co.’s motion to amend consent judgments regarding refunds of the Harbor Maintenance Tax (HMT). The HMT, established by the Water Resources Development Act of 1986, is an ad valorem tax on commercial cargo shipments. Several exporters challenged its constitutionality, leading to a landmark case where the Court found the HMT unconstitutional as applied to exports, a ruling later affirmed by the Supreme Court.

Following this, the Court of International Trade implemented a refund procedure, allowing claimants, including Hohenberg, to receive immediate HMT refunds under consent judgments. These judgments specified the court's jurisdiction under 28 U.S.C. 1581 and included a provision for interest contingent upon appellate outcomes in test cases, notably involving IBM. However, a subsequent ruling determined that no statute permitted an interest award under 28 U.S.C. 1581.

In October 2000, Hohenberg and other exporters sought to amend their consent judgments to establish jurisdiction under 28 U.S.C. 1581(a) and to claim post-summons interest under 28 U.S.C. 2644. The Court of International Trade denied this amendment request in December 2000, and Hohenberg later renewed its motion in March 2001, citing procedural rules.

Hohenberg requested post-summons interest under 28 U.S.C. 2644 and pre-summons interest under 19 U.S.C. 1505, or alternatively under the U.S. Constitution. The trial court denied this motion on May 10, 2001, while recognizing Hohenberg's jurisdiction under 28 U.S.C. 1581(a) for protest denial, but maintained that the judgment was not defective and refused to amend it. The Court of International Trade asserted jurisdiction under both 28 U.S.C. 1581(a) and (i). Hohenberg appealed, claiming the court's decision in Swisher necessitated an amendment to the jurisdictional statement in the judgment. He argued entitlement to post-summons interest on Harbor Maintenance Tax (HMT) refunds, referencing IBM to support his position. Additionally, Hohenberg contended that HMT is considered a customs duty under 26 U.S.C. 4462(f)(1), warranting pre-summons interest under 19 U.S.C. 1505, or alternatively, that the Export Clause requires interest payment on HMT refunds. He claimed the government's retention of interest on the allegedly unconstitutional HMT constituted a Fifth Amendment taking. The appellate court reviews denials of relief by the Court of International Trade for abuse of discretion and legal determinations de novo. Consent judgments are interpreted per contract law principles, with their terms binding the involved parties. The consent judgment from March 30, 1999, stated the court had jurisdiction under 28 U.S.C. 1581(i) and outlined conditions for interest payments on refunded amounts, contingent upon appellate resolution in a related case. The judgment also included a waiver of all claims related to HMT export payments for specified quarters.

The Court of International Trade held jurisdiction under 28 U.S.C. 1581(i) and determined that interest on refunded amounts is contingent upon the outcome of the IBM case, which serves as a test case for interest claims. Hohenberg waived all future claims under paragraph 9 of the judgment. In the IBM ruling, the Federal Circuit reversed the interest award, stating that the U.S. is liable for interest only if there is a clear statutory waiver of sovereign immunity, which neither 28 U.S.C. 2411 nor any customs law provisions provide for HMT refunds. Consequently, Hohenberg is not entitled to interest on its HMT refunds due to the jurisdictional basis of the consent judgment being under 28 U.S.C. 1581(i).

Hohenberg argues that the Swisher decision necessitates amending the judgment to reflect jurisdiction under 28 U.S.C. 1581(a), as it asserts that it exhausted administrative remedies before filing. While Hohenberg initially claimed both 28 U.S.C. 1581(a) and (i) as jurisdictional bases, it ultimately consented to the judgment citing 28 U.S.C. 1581(i). By signing the consent judgment, Hohenberg opted for immediate HMT refunds and waived future claims against the government. 

Hohenberg's request for post-summons interest under 28 U.S.C. 2644 relies on the assertion that jurisdiction should be recognized under 28 U.S.C. 1581(a). However, the Court of International Trade did not abuse its discretion in refusing to amend the judgment, and thus Hohenberg is not entitled to post-summons interest on its HMT refunds.

Hohenberg's claims for interest on Harbor Maintenance Tax (HMT) refunds under 19 U.S.C. 1505, the Export Clause, and the Takings Clause were denied based on precedent from United States Shoe Corp. v. United States, which established that neither constitutional nor statutory provisions require interest payments. Thus, Hohenberg lacks entitlement to pre-summons interest on HMT refunds. The Court of International Trade acted within its discretion when it denied Hohenberg's motion to amend the March 30, 1999 consent judgment. Each party is responsible for its own costs. The jurisdiction of the Court of International Trade over HMT refund claims is affirmed, as supported by Swisher International, Inc. v. United States, which confirmed jurisdiction under 28 U.S.C. 1581(a) for properly protested claims. Additionally, 28 U.S.C. 1581(i) outlines the court's exclusive jurisdiction over actions arising from U.S. laws related to import revenues, duties, tariffs, and enforcement matters.