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Int'l Custom Products, Inc. v. United States

United States Court of Appeals, Federal Circuit

June 30, 2015

INTERNATIONAL CUSTOM PRODUCTS, INC., Plaintiff-Appellant
v.
UNITED STATES, Defendant-Appellee

Page 1330

[Copyrighted Material Omitted]

Page 1331

Appeal from the United States Court of International Trade in No. 1:08-cv-00189-GWC, Judge Gregory W. Carman.

GREGORY HUGH TEUFEL, OGC Law, LLC, Pittsburgh, PA, argued for plaintiff-appellant. Also represented by JEREMY L. SAMEK, Eckert, Seamans, Cherin, & Mellott LLC, Pittsburgh, PA.

REGINALD THOMAS BLADES, JR., Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, DC, argued for defendant-appellee. Also represented by JOYCE R. BRANDA, JEANNE E. DAVIDSON, MARTIN M. TOMLINSON; EDWARD FRANCIS KENNY, AMY RUBIN, International Trade Field Office, New York, NY.

JOHN MICHAEL PETERSON, Neville Peterson LLP, New York, NY, for amicus curiae The American Association of Exporters and Importers. Also represented by RICHARD F. O'NEILL, RUSSELL ANDREW SEMMEL.

Before LOURIE, BRYSON, and CHEN, Circuit Judges.

OPINION

Page 1332

Lourie, Circuit Judge.

International Custom Products, Inc. (" ICP" ) appeals from the United States Court of International Trade (" the Trade Court" ) decisions (1) dismissing Counts 1-9 of ICP's complaint, Int'l Custom Prods., Inc. v. United States, 931 F.Supp.2d 1338 (Ct. Int'l Trade 2013) (" Decision I " ), and (2) denying ICP's motion to reconsider, alter, or amend the judgment and/or to amend the complaint, Int'l Custom Prods., Inc. v. United States, 991 F.Supp.2d 1335 (Ct. Int'l Trade 2014) (" Decision II " ). Because the Trade Court did not err, we affirm.

Background

I

" It is a 'well-established principle that federal courts . . . are courts of limited jurisdiction marked out by Congress,'" Norcal/Crosetti Foods, Inc. v. United States, 963 F.2d 356, 358 (Fed. Cir. 1992) (quoting Aldinger v. Howard, 427 U.S. 1, 15, 96 S.Ct. 2413, 49 L.Ed.2d 276 (1976)), and Congress has delineated the specific boundaries of the Trade Court's jurisdiction in 28 U.S.C. § 1581 (2000). Subsections (a)--(h) grant the Trade Court exclusive jurisdiction over specific actions. Subsection (i), on the other hand, offers a residual jurisdiction provision, which we have repeatedly held " may not be invoked when jurisdiction under another subsection of § 1581 is or could have been available, unless the remedy provided under that other subsection would be manifestly inadequate." Miller & Co. v. United States, 824 F.2d 961, 963 (Fed. Cir. 1987); accord Am. Air Parcel Forwarding Co. v. United States, 718 F.2d 1546, 1549 (Fed. Cir. 1983) (" [W]here a litigant has access to [the Trade Court] under traditional means, such as 28 U.S.C. § 1581(a), it must avail itself of this avenue of approach complying with all the relevant prerequisites thereto." ).

To invoke the Trade Court's jurisdiction under subsection (a), an aggrieved importer must first file a protest under 19 U.S.C. § 1514, which the United States Customs and Border Protection (" Customs" ) then denies. 28 U.S.C. § 1581(a) (stating that the Trade Court " shall have exclusive jurisdiction of any civil action commenced to contest the denial of a protest" under 19 U.S.C. § 1515); 19 U.S.C. § 1515; id. § 1514(a) (identifying the decisions subject to a protest, such as " classification and rate" and " liquidation or reliquidation of an entry" ). Once Customs denies that protest, the importer must then pay " all liquidated duties, charges, or exactions" owed before commencing suit in the Trade Court. 28 U.S.C. § 2637. ICP contests the constitutionality of that pre-payment requirement on appeal.

II

This case has an extensive history, but we recount below only the facts most relevant to this appeal. ICP is an importer and distributor of products sold to processed food manufacturers, including the " white sauce" at issue here. In late 1998, ICP sought a tariff classification ruling from Customs for " white sauce" under the Harmonized Tariff Schedule of the United States (" HTSUS" ). Consequently, Customs issued NYRL D86228 (" Ruling Letter" ), classifying " white sauce" under HTSUS 2103.90.9060 (1999) as " sauces and preparations therefor."

Page 1333

In 2004, Customs notified ICP that it was initiating a new investigation into the classification of " white sauce." Based on the results of that investigation, Customs issued a Notice of Action (" 2005 Notice" ), without providing the requisite notice and comment, reclassifying " white sauce" under HTSUS 0405.20.3000 (2005) as " [d]airy spreads." Customs informed ICP that the reclassification would impact all pending and future entries of " white sauce." Ultimately, the reclassification effected a tariff increase of almost 2400%, and several waves of litigation followed.

The first began in 2005 after Customs liquidated sixty of ICP's then-pending entries under the 2005 Notice. ICP did not protest the liquidation of those sixty entries as is required to establish jurisdiction under § 1581(a), but it nonetheless filed a complaint in the Trade Court challenging the validity of the 2005 Notice. That court exercised its residual jurisdiction under § 1581(i), finding that § 1581(a) proved " manifestly inadequate" because its requisite protest procedure would put ICP, a company on the " brink of bankruptcy," out of business. Int'l Custom Prods., Inc. v. United States, 374 F.Supp.2d 1311, 1321-22, 29 Ct. Int'l Trade 617 (Ct. Int'l Trade 2005). It then found the 2005 Notice void because Customs did not comply with the notice and comment procedures of 19 U.S.C. § 1625(c). Id. at 1326.

On appeal, we reversed and vacated, instead holding that the Trade Court lacked jurisdiction under § 1581(i). Int'l Custom Prods., Inc. v. United States, 467 F.3d 1324 (Fed. Cir. 2006) (" ICP I " ). We reasoned that § 1581(a) was not " manifestly inadequate" because " mere allegations of financial harm . . . do not make the remedy established by Congress manifestly inadequate," and thus ICP could not try to " circumvent the prerequisites of 1581(a) by invoking jurisdiction under 1581(i)." Id. at 1327. ICP had to protest the liquidation and then pay the duty owed before it could commence such a lawsuit in the Trade Court.

Another wave began in 2007 after Customs liquidated several additional " white sauce" entries at the duty rate prescribed in the 2005 Notice. Customs first liquidated eleven entries ICP made into its warehouse in 2005. ICP protested the liquidation of one of those entries, and that protest was deemed denied thirty days later pursuant to 19 U.S.C. § 1515(b). ICP paid the duty owed on that entry and commenced suit in the Trade Court under § 1581(a). Customs then liquidated eighty-four similar entries made between 2003 and 2005. ICP protested those liquidations, but Customs voluntarily suspended those protests pending the outcome of ICP's suit.

Before the Trade Court, ICP argued that Customs' failure to comply with the notice and comment procedures of 19 U.S.C. § 1625(c) rendered the 2005 Notice void. The Trade Court agreed, and ordered Customs to reliquidate the entry pursuant to the Ruling Letter. See Int'l Custom Prods., Inc. v. United States, 878 F.Supp.2d 1329, 1350 (Ct. Int'l Trade 2012). On the government's appeal, we affirmed. Int'l Custom Prods., Inc. v. United States, 748 F.3d 1182, 1189 (Fed. Cir. 2014) (" ICP IV " ). We held that the 2005 Notice was an interpretive ruling that effectively revoked the Ruling Letter, and was thus subject to the strict requirements set forth in 19 U.S.C. § 1625(c). Id. at 1186. Customs' failure to abide by those requirements rendered ...


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