TABLE OF CONTENTS I. INTRODUCTION II. OVERVIEW OF THE CIT's 2009-2010 CASELAW III. JURISDICTION UNDER 28 U.S.C. [section] 1581(A) A. Clarification of Summons Requirements under [section] 1581(a) 1. Great Am. Ins. Co. v. United States (GAIC) 2. All Tools, Inc. v. United States B. Clarification of Pleading Requirements under [section] 1581(a) C. Whether a Revocation of a Customs Classification Ruling Actually Occurred IV. CLASSIFICATION CASES DECIDED IN 2009 UNDER THE CIT's 28 U.S.C. [section] 1581 (A) JURISDICTION A. The CIT's Decision in Outer Circle Products v. United States B. The CAFC's Reversal in Outer Circle Products v. United States C. The CIT's Decision in storeWALL LLC v. United States . D. The CAFC's Reversal in storeWALL LLC v. United States V. CLASSIFICATION CASES DECIDED IN 2010 UNDER THE CIT's 28 U.S.C. [section] 1581 (A) JURISDICTION A. The CIT's Decision in CamelBak Products, LLC v. United States B. The CAFC's Reversal of CamelBak Products LLC v. United States C. The CIT's Decision in BenQ Am. Corp. v. United States. D. The CAFC's Reversal in BenQ Am. Corp. v. United States VI. WHAT THE CAFC REVERSALS OF CLASSIFICATION CASES DECIDED UNDER THE CIT's 28 U.S.C. [section] 1581 (A) JURISDICTION HAVE IN COMMON VII. CONCLUSION I. INTRODUCTION
Over the last two years, the United States Court of International Trade's (CIT) decisions in [section] 1581 (a) cases have addressed a number of issues concerning filing requirements, attorney's fees, and classification. This article is intended to address some of the practical concerns of regular customs practitioners and litigants regarding the U.S. Court of International Trade's recent handling of cases resulting from the denial of an administrative protest. Some of the cases that were selected for discussion in this article were chosen because they addressed filing issues or technical aspects of litigation before this specialized court. Still others were chosen as a consequence of recent trends in classification litigation--specifically classification reversals in cases appealed to the U.S. Court of Appeals for the Federal Circuit (CAFC).
Importers adversely affected by U.S. Customs and Border Protection's (CBP or Customs) actions against their import transactions are entitled to judicial review before the CIT. (1) Pursuant to 28 U.S.C. [section] 1581(a), the CIT has exclusive jurisdiction over any civil action commenced to contest the denial of an administrative protest, whether in whole or in part, by Customs. While the geographical jurisdiction of the CIT extends throughout the United States, the court's subject matter jurisdiction is limited. (2) Thus, in order for the court to have jurisdiction over a claim under [section] 1581 (a), Customs' decision must have been challenged through a valid administrative protest. (3)
OVERVIEW Or THE CIT's 2009-2010 CASELAW
The CIT issued 152 slip opinions in 2009 and 142 slip opinions in 2010. However, of those decisions, the CIT only issued a total of thirty-five dispositive decisions that invoked the court's jurisdiction under 28 U.S.C. [section] 1581 (a). In instances where 28 U.S.C. [section] 1581 (a) was invoked, the majority of these decisions involved an importer's challenge to Customs' protest decisions as to the classification of imported merchandise.
During 2009 and 2010, the issues litigated by importers under 28 U.S.C. [section] 1581 (a) were primarily legal (and not factual) and therefore most of the cases were decided on motions for summary judgment without the necessity of a trial or an evidentiary hearing. In analyzing the seventeen dispositive cases decided under the CIT's [section] 1581(a) jurisdiction in 2009, twelve of the cases were dispatched on motions for summary judgment. Of these twelve cases: nine dealt with the proper classification of imported goods; (4) two involved issues regarding the proper value or fees charged by Customs; (5) and the final case involved drawback. (6) Of the five remaining dispositive decisions, four were orders or opinions issued to conform to CAFC reversals and remands, and the final case was a judgment order rendered after trial on a value issue.
As for the eighteen dispositive holdings in 2010 that were made pursuant to the CIT's [section] 1581 (a) jurisdiction, similar to the prior year, twelve of the cases were decided on motions for summary judgment. Of these twelve cases: nine decisions dealt with the proper classification of imported goods; (7) two involved issues regarding the proper value or fees charged by Customs; (8) and the final case involved CBP's alleged revocation of an administrative ruling and a classification issue. (9) Of the six remaining dispositive decisions: three were on procedural or jurisdictional grounds granting the government's motions to dismiss; (10) one was an opinion issued after remand to CBP; (11) and the final one regarded an application for attorney's fees and costs. (12)
As can be seen from the above analysis, the majority of the decisions issued in the past two years involve issues relating to the proper classification of imported merchandise. This article will briefly address some of the more interesting jurisdictional and procedural dispositive decisions of 2009 and 2010 and then discuss the more significant classification decisions. The classification cases that were selected for discussion in this article were chosen in order to clarify and address the growing trend by the CIT to make a rigid classification paradigm and the CAFC's reversal under the "common commercial meaning doctrine" or for practical commercial reasons. The following sections address specific CIT filing requirements. Part III addresses cases clarifying jurisdictional requirements. Parts IV and V discuss classification cases decided by the CIT in 2009 and 2010 that were subsequently reversed by the CAFC. Finally, Part VI discusses commonalities among the classification cases reversed by the CAFC.
JURISDICTION UNDER 28 U.S.C. [section] 1581(A)
Since passage of the Customs Court Act of 1980, (13) importers have regularly invoked [section] 1581(a) to contest adverse decisions made by Customs before the CIT. Pursuant to 19 U.S.C. [section] 1514 ([section] 515 of the Tariff Act of 1930), an importer may file an administrative protest against a final agency decision made by CBP as to:
(1) the appraised value (14) of merchandise imported into the United States;
(2) CBP's classification (15) and rate and amount of duties chargeable on imported goods;
(3) all charges or exactions of whatever character within the jurisdiction of the Secretary of the Treasury;
(4) CBP's exclusion (16) of merchandise from entry (17) or delivery or a demand for a products redelivery to customs custody;
(5) the liquidation (18) or reliquidation of any entry;
(6) the refusal to pay a claim for drawback; or
(7) Customs' refusal to reliquidate an entry.
Thus, it is the agency's denial of an importer's protest, whether in whole or in part, that gives rise to an importer's right to commence an action in the CIT pursuant to 28 U.S.C [section] 1581 (a). (19)
Clarification of Summons Requirements under [section] 1581(a)
Section 1581 (a) actions are commenced by filing a summons with the CIT. In 2010, two cases discussed the CIT's [section] 1581 (a) summons filing requirements. In Great American Insurance Co. v. United States (GAIC) (20) and All Tools, Inc. v. United States, (21) the importers' failure to comply with the CIT's jurisdictional prerequisites was a jurisdictional bar to the court hearing the cases on their merits. What these two cases have in common is the strict construction that the CIT gives to administrative prerequisites. In GAIC, the CIT discussed the payment of duties requirement, and in All Tools the court discussed timing requirements.
Great Am. Ins. Co. v. United States (GAIC)
In GAIC, the importer challenged the denial of a protest by filing a summons with the CIT. (22) On the same day that GAIC filed its summons, it mailed the full bond (23) amount of $50,000 to Customs. (24) The government alleged that jurisdiction was lacking because GAIC did not pay all duties prior to commencing the action as required by 28 U.S.C. [section] 2637. (25) Section 2637(a) states that "regarding any civil actions contesting the denial of a protest" under 19 U.S.C. [section] 1515, those actions can be brought before the CIT only if "all liquidated duties, charges, or exactions have been paid at the time the action is commenced." Pursuant to United States Court of International Trade (USCIT) Rule 3(a) (1), an action is "commenced" when the summons is filed with the Clerk of Court. Additionally, when a document is mailed by certified or registered mail, USCIT Rule 5 (e) specifies that it is "deemed filed as of the date of mailing."
The government claimed that GAIC filed the summons prior to Customs receiving the full payment of duties, "since certified or registered mail is deemed filed as of the date of the mailing and payments to Customs are credited on the date payment is received." (26) Accordingly, the government claimed that the statutory requisites had not been met. (27) In response, GAIC argued that pursuant to USCIT Rules 3 and 5, it should be allowed its day in court and, thus, should be able to amend its summons to cure the jurisdictional defect. (28)
The CIT held that importers could not "cherry pick" parts of statutes and rules that result in their favor. (29) Both the statute and USCIT Rules 3 (a) (1) and 5 (e) establish that the date on which a summons is mailed qualifies as the date of filing for the purposes of commencing an action before the CIT. (30) Applying Customs regulation 19 C.F.R. [section] 24.2a(c) (5), that payment is credited when received, in this case GAIC's payment to CBP was not received until two days after the summons was filed. (31) The CIT explained that the case law regarding [section] 2637 unambiguously held that the...