Orlando Food Corp. v. United States

Error: Bad annotation destination
United States Court of Appeals for the Federal Circuit

04-1612

ORLANDO FOOD CORP.,

Plaintiff-Appellant,

v.

UNITED STATES,

Defendant-Appellee.

Steven P. Florsheim, Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP, of
New York, New York, argued for plaintiff-appellant.

Jack S. Rockafellow, Attorney, Commercial Litigation Branch, Civil Division,
United States Department of Justice, of New York, New York, argued for defendant-
appellee. With him on the brief were Peter D. Keisler, Assistant Attorney General,
David M. Cohen, Director, and Barbara S. Williams, Attorney in Charge, International
Trade Field Office. Of counsel on the brief was Edward N. Maurer, Attorney, Office of
Assistant Chief Counsel, International Trade Litigation, United States Customs and
Border Protection, of New York, New York.

Appealed from: United States Court of International Trade

Judge Evan J. Wallach
 United States Court of Appeals for the Federal Circuit
04-1612

ORLANDO FOOD CORP.,

Plaintiffs-Appellant,

v.

UNITED STATES,

Defendant-Appellee.

__________________________

DECIDED: September 14, 2005
__________________________

Before MICHEL, Chief Judge, NEWMAN and LINN, Circuit Judges.

Opinion for the court filed by Circuit Judge LINN. Dissenting opinion filed by Chief
Judge MICHEL.

LINN, Circuit Judge.

Orlando Food Corp. (“Orlando”) appeals from the United States Court of

International Trade’s grant of summary judgment in favor of the government denying

interest on its overpayment of duties. Because the Court of International Trade erred in

its interpretation of the relevant statutes, we reverse and remand.

I. BACKGROUND

Orlando imported certain tomato products into the United States in 1989 and

1990. These shipments were erroneously classified in Harmonized Tariff Schedule of

the United States (“HTSUS”) Subheading 2002.10.00. Orlando timely challenged the

classification of most of these shipments. The Court of International Trade held that
Orlando’s tomato products should have been classified under HTSUS Subheading

2103.90.60, and this court affirmed. Orlando Food Corp. v. United States, 21 C.I.T. 187

(1997), aff’d, 140 F.3d 1437 (Fed. Cir. 1998). Orlando apparently received interest on

its overpayment on those shipments under 19 U.S.C. § 1505. However, Orlando failed

to protest one of its entries.

Orlando petitioned Congress for relief on the single entry that it failed to protest,

and Congress provided that relief in section 1408 of the Tariff Suspension and Trade

Act of 2000, providing for reliquidation of Orlando’s improperly liquidated entry. Pub. L.

No. 106-476, 114 Stat. 2101, 2148. Pursuant to that provision, Orlando sought

reliquidation of its entry, and the government paid Orlando a refund according to the

proper classification. However, the government refused to pay interest on the claim.

Orlando filed an action in the Court of International Trade challenging the government’s

denial of interest. Orlando moved for summary judgment that it was entitled to interest,

and the government cross-moved for summary judgment that Orlando was not entitled

to interest. The Court of International Trade granted the government’s cross-motion for

summary judgment denying Orlando’s claim for interest.

Orlando timely appeals to this court. We have jurisdiction under 28 U.S.C.

§ 1295(a)(5).

II. DISCUSSION

A. Standard of Review

We review the Court of International Trade’s grant of summary judgment de

novo. Int’l Trading Co. v. United States, 412 F.3d 1303, 1307 (Fed. Cir. 2005) (“We

review the Court of International Trade’s grant of summary judgment for correctness as

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a matter of law, deciding de novo (i) the proper interpretation of the governing statute

and regulations; and (ii) whether genuine issues of material fact exist.”).

B. Analysis

As a general rule, the United States is immune from claims seeking an award of

interest. Library of Cong. v. Shaw, 478 U.S. 310, 314-15 (1986) (“This basic rule of

sovereign immunity, in conjunction with the requirement of an agreement to pay

interest, gave rise to the rule that interest cannot be recovered unless the award of

interest was affirmatively and separately contemplated by Congress.”). The only

exception to this general rule that is relevant in this case is where Congress has

expressly provided for interest. Courts are not free to infer waivers of sovereign

immunity, and any express waivers must be narrowly construed. Id. at 318 (“In

analyzing whether Congress has waived the immunity of the United States, we must

construe waivers strictly in favor of the sovereign and not enlarge the waiver beyond

what the language requires.” (quotation marks and citations omitted)); Hartog Foods

Int’l, Inc. v. United States, 291 F.3d 789, 791 (Fed. Cir. 2002).

The sole issue before this court is whether the Court of International Trade

correctly concluded that Orlando was not entitled to interest pursuant to a reliquidation

under section 1408 of the Tariff Suspension and Trade Act of 2000. The Court of

International Trade recognized that 19 U.S.C. § 1505(b) provides for interest on “excess

moneys deposited.” Orlando Food Corp. v. United States, 343 F. Supp. 2d 1375, 1380

(Ct. Int’l Trade 2004). However, the Court of International Trade held that Orlando was

not entitled to interest on its overpayment. The Court of International Trade relied on

the proposition that waivers of sovereign immunity must be narrowly construed and on

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the fact that some provisions of the Tariff Suspension and Trade Act of 2000 contained

language expressly mentioning interest while section 1408 did not. Id. at 1380-82.

Based on these two factors, the Court of International Trade concluded that without

more specific language referring to interest in section 1408, it could not hold that the

waiver of sovereign immunity in section 1505 applied to liquidations or reliquidations

under section 1408.

A brief overview of the processing of entries of imported goods is necessary to

the analysis in this case. Subject to certain exceptions, soon after merchandise is

imported, an importer is required to deposit estimated duties with the United States

Customs Service.1 19 U.S.C. § 1505(a) (2000)2; Travenol Labs., Inc. v. United States,

118 F.3d 749, 752 (Fed. Cir. 1997). Liquidation generally must occur within one year

from the time of entry, again subject to exceptions. 19 U.S.C. § 1504(a). The

procedure for liquidation is prescribed by 19 U.S.C. § 1500. Once liquidation has

occurred, an importer has 90 days to protest that decision, or the decision becomes

final. Id. § 1514(a), (c)(3).3 Customs may also voluntarily reliquidate an entry within 90

days of an original liquidation, whether or not an importer files a protest. Id. § 1501.

Additionally, 19 U.S.C. § 1520(c) authorizes Customs to reliquidate an entry, even if a

1
Effective March 1, 2003, the United States Customs Service (“Customs”)
was renamed the United States Bureau of Customs and Border Protection. Homeland
Security Act of 2002, Pub. L. No. 107-296, § 1502, 116 Stat. 2135, 2308-09.
2
Most of the statutory provisions cited in this paragraph have been
amended subsequent to the events pertinent to this appeal. See Miscellaneous Trade
and Technical Corrections Act of 2004, Pub. L. No. 108-429, §§ 1563(e), 2004(c), 2102,
2103(2)(B), 2104, 2105, 118 Stat. 2434, 2585-87, 2592, 2597-98; Trade Act of 2002,
Pub. L. No. 107-210, § 383, 116 Stat. 933, 992. Section 1505 has been amended twice
since 2000, but neither of these amendments is relevant to the present appeal.

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protest was not filed, to correct certain limited errors.4 Where a liquidation or

reliquidation occurs, Customs is required to refund any excess moneys deposited with

interest pursuant to 19 U.S.C. § 1505(b). However, no statute prescribing or authorizing

liquidation or reliquidation refers to section 1505 or mentions interest. Moreover, 19

U.S.C. § 1515(a), relating to protests, does not even mention liquidation or reliquidation

but provides for a refund of “any duties, charge, or exaction found to have been

assessed or collected in excess” as a result of a protest. Section 1515(a) also does not

mention interest or section 1505.

With this legislative scheme as a backdrop, Congress passed the Tariff

Suspension and Trade Act of 2000. Section 1408 states:

(a) IN GENERAL.—Notwithstanding section 514 of the Tariff Act of
1930 (19 U.S.C. 1514) or any other provision of law and subject to the
provisions of subsection (b), the United States Customs Service shall, not
later than 180 days after the receipt of the request described in subsection
(b), liquidate or reliquidate each entry described in subsection (d)
containing any merchandise which, at the time of the original liquidation,
was classified under subheading 2002.10.00 of the Harmonized Tariff
Schedule of the United States (relating to tomatoes, prepared or
preserved) at the rate of duty that would have been applicable to such
merchandise if the merchandise had been liquidated or reliquidated under
subheading 2103.90.60 of the Harmonized Tariff Schedule of the United
States (relating to tomato sauce preparation) on the date of entry.
...
(c) PAYMENT OF AMOUNTS OWED.—Any amounts owed by the United
States pursuant to the liquidation or reliquidation of an entry under
subsection (a) shall be paid not later than 180 days after the date of such
liquidation or reliquidation.

3
In 2004, Congress extended the time for filing a protest to 180 days.
Miscellaneous Trade and Technical Corrections Act of 2004, Pub. L. No. 108-429,
§ 2103(2)(B), 118 Stat. 2434, 2597-98.
4
This provision was repealed in 2004. Miscellaneous Trade and Technical
Corrections Act of 2004, Pub. L. No. 108-429, § 2105, 118 Stat. 2434, 2598.

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Pub. L. No. 106-476, 114 Stat. 2101, 2148. Section 1408(a) provides for liquidation or

reliquidation of entries covered by that section, notwithstanding section 1514. As noted

supra, section 1514 provides for the finality of liquidations absent a timely protest.

Thus, section 1408(a) provides an exception to section 1514 for the entries covered by

section 1408.5 Subsection (c) provides for payment of amounts owed pursuant to the

liquidation or reliquidation but does not mention interest.

Orlando’s primary argument is that the authorization of liquidation or reliquidation

in section 1408(a) invokes section 1505(b), which requires Customs to pay interest on

any excess moneys deposited. We agree. Section 1505(b) is not limited to liquidations

or reliquidations under any particular provision. Also, section 1505(b) “unambiguously

waives sovereign immunity . . . for interest awards on ‘excess moneys deposited.’”

Hartog Foods, 291 F.3d at 792. As we said in Hartog Foods, “‘excess moneys

deposited’ refers to an overpayment of estimated duties, i.e., the deposit or payment of

money beyond legal requirements.” Id. Orlando’s deposit of funds in excess of those

legally required based on an erroneous classification meets this definition. Thus,

section 1505(b) provides for interest on Orlando’s refund. Although we must construe

waivers of sovereign immunity narrowly, there is no principled basis for holding that

Orlando’s overpayment was not “excess moneys deposited.”

5
The dissent interprets the language in section 1408 stating
“[n]otwithstanding section 514 of the Tariff Act of 1930 or any other provision of law” as
superseding all other inconsistent provisions of law. We have no doubt that the dissent
is correct on this point. However, the dissent extends that proposition to interest, about
which section 1408 says nothing. The difficulty with the dissent’s position is in inferring
an intent to exclude interest from silence, especially in view of the fact that sections
1500, 1501, 1515, and 1520 also do not mention interest and yet section 1505(b)
applies to all of these provisions, as discussed infra.

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 The government, however, raises a number of arguments against such an

interpretation. First, the government argues that any waiver of sovereign immunity must

be present in the statute providing the cause of action, which it argues in this case is

section 1408. To support this proposition, the government cites McGehee v. Panama

Canal Commission, 872 F.2d 1213 (5th Cir. 1989). In McGehee, the Fifth Circuit noted

two exceptions to the government’s immunity from interest. The first of these

exceptions was where “Congress has expressly consented to such an award.” Id. at

1214. The court then explained, “The focus of the first exception is whether the

legislation giving rise to the cause of action expressly subjects the government to

interest payments.” Id. at 1215. The government argues that this language means that

only section 1408 can provide for a recovery of interest because it contains the cause of

action. We do not read the term “legislation” in the court’s statement so narrowly. The

court in McGehee was simply trying to determine whether Congress had expressly

consented to an award of interest. The court did not impose a restriction upon the

particular language providing for interest such that it had to appear in the same section

or public law as the cause of action. In McGehee, the damages provision that

purportedly sanctioned an award of interest and the cause of action provision were

different sections, but the court did not reject the claim on that basis. Interpreting the

statement in McGehee as we have, the inquiry devolves into whether section 1505(b)

applies to a liquidation or reliquidation under section 1408. We have already answered

that question in the affirmative.

The government’s next argument is that section 1505 only applies to liquidations

under 19 U.S.C. § 1500, not those pursuant to section 1408. However, the plain

04-1612 7
language of the statutes does not support the government’s argument. On its face,

section 1505(b) refers to excess moneys deposited “as determined on a liquidation or

reliquidation.” Section 1500 provides a procedure for liquidation but does not mention

reliquidation. Thus, section 1505(b) at least facially applies to more than section 1500.

Section 1505(b) appears to apply to section 1501, providing for voluntary reliquidation

by Customs, and to section 1520(c), providing for reliquidation based on certain specific

errors even if a protest was not filed.6 Moreover, 19 U.S.C. § 1515(a) provides for

disposition of protests and states that “any duties, charge, or exaction found to have

been assessed or collected in excess shall be remitted or refunded.” Despite the fact

that the statute does not mention liquidation or reliquidation as a result of a protest,

certainly section 1505(b) applies to any excess moneys deposited as determined as a

result of a protest. Cf. 19 C.F.R. § 159.6(b)(1) (2005) (referring to “reliquidation

following the allowance of a protest”). Nothing in sections 1500, 1501, 1515, or 1520

specifically refers to section 1505 or to the provision of interest, nor does section 1505

specifically refer to sections 1500, 1501, 1515, or 1520. The only statutory language

linking these provisions is the phrase “excess moneys deposited.” There is no basis

then for concluding that the interest provision of section 1505(b) is limited to section

1500.

The government next contends that a refund pursuant to section 1408 is not of

“excess moneys deposited” under section 1505. The government argues that Orlando’s

payment of duties under the improper classification did not result in excess moneys

deposited because Orlando failed to timely file a protest, resulting in the original

6
As noted supra, this provision was repealed in 2004.

04-1612 8
erroneous classification becoming final. The government’s argument is without merit.

In Hartog Foods, we defined “excess moneys deposited” in section 1505 to mean “an

overpayment of estimated duties, i.e., the deposit or payment of money beyond legal

requirements.” 291 F.3d at 792. Despite the government’s assertions, there is no

question that Orlando was required to pay money in excess of legal requirements. See

S. Rep. No. 106-503, at 70 (Oct. 12, 2000) (“[Section 1408] directs the U.S. Customs

Service to liquidate or reliquidate these entries at the correct rate of duty.” (emphasis

added)). Even if Orlando never challenged its assessment and never received a

congressional exemption from the finality of its original liquidation, Customs’

classification of Orlando’s products would remain legally erroneous, and any duties paid

based on that classification would remain in excess of legal requirements. A decision is

not legally correct simply because it is not challenged. Orlando’s overpayment

determined pursuant to section 1408 falls within the express language of section

1505(b).

The government additionally argues that section 1408 should not be construed to

authorize the payment of interest in light of other provisions in the same Act expressly

mentioning interest. The Tariff Suspension and Trade Act of 2000 contains five

provisions that expressly mention interest:

[Section 1402](b) PAYMENT OF AMOUNTS OWED.—Any amounts
owed by the United States pursuant to the liquidation or reliquidation of an
entry under subsection (a), with interest provided for by law on the
liquidation or reliquidation of entries, shall be paid by the Customs Service
within 90 days after such liquidation or reliquidation.
[Section 1403](b) PAYMENT OF AMOUNTS OWED.—Any amounts
owed by the United States pursuant to the liquidation or reliquidation of an
entry under subsection (a), with interest accrued from the date of entry,
shall be paid by the Customs Service within 90 days after such liquidation
or reliquidation.

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 [Section 1407](a) IN GENERAL. . . . [T]he Customs Service shall—
...
(2) within 90 days after such liquidation or reliquidation, refund any
duties paid with respect to such entries, including interest from the date of
entry.
[Section 1412](b) PAYMENT OF AMOUNTS OWED.—Any amounts
owed by the United States pursuant to the liquidation or reliquidation of
the entry under subsection (a), with interest accrued from the date of
entry, shall be paid by the Customs Service within 90 days after such
liquidation or reliquidation.
[Section 1425](b) PAYMENT OF AMOUNTS OWED.—Any amounts
owed by the United States pursuant to the liquidation or reliquidation of an
entry under subsection (a), with interest provided for by law on the
liquidation or reliquidation of entries, shall be paid by the Customs Service
within 90 days after such liquidation or reliquidation.

Pub. L. No. 106-476, 114 Stat. 2101, 2141, 2147, 2153, 2159 (emphasis added).

Essentially the government contends and the Court of International Trade held that the

inclusion of a reference to interest in some provisions but not in section 1408 indicated

that Congress did not intend for any refund under section 1408 to include interest. The

government’s argument rests on two principles of statutory construction: (1) statutes

should be construed to avoid holding language to be redundant, and (2) expressio unius

est exclusio alterius. Adopting the government’s position would require us to counteract

the plain meaning of section 1505 based upon an inference supplied by principles of

statutory construction.

As noted supra, section 1505(b) expressly applies to excess moneys deposited,

and the liquidation or reliquidation of an entry under section 1408 results in a

determination of excess moneys deposited. The rules of statutory construction

advocated by the government do not provide a basis for rejecting the plain meaning of

section 1505(b) in this case. First, the rule that statutes should be construed to avoid

redundant language is only a rebuttable presumption. United States v. Precise Imports

04-1612 10
Corp., 458 F.2d 1376, 1380 (CCPA 1972) (holding that presumption had been rebutted

and that use of “Pistols and revolvers” was not an indication by Congress that the term

“pistol” could not include “revolver” even though the term “pistol” was used alone in a

separate provision). The presumption has been rebutted here by the plain language of

section 1505(b), which contradicts the rule of construction regarding redundant

language. Second, the maxim expressio unius est exclusio alterius is not useful when

its application would produce a result that is inconsistent with the plain language of the

statute. See Pauley v. Bethenergy Mines, Inc., 501 U.S. 680, 703 (1991) (“[S]uch an

inference provides no guidance where its application would render a regulation

inconsistent with the purpose and language of the authorizing statute. See Sunstein, 90

Colum. L. Rev., at 2109, n. 182 (recognizing that the principle expressio unius est

exclusio alterius ‘is a questionable one in light of the dubious reliability of inferring

specific intent from silence’).”). Therefore, we decline to use these principles of

construction to overturn the plain language of section 1505(b).

Finally, the government argues that Customs’ ruling denying interest in this case

is entitled to deference under Skidmore v. Swift & Co., 323 U.S. 134 (1944), because it

is contained in a formal letter ruling. See Ltr. Rul. HQ229222 (U.S. Customs Serv. Mar.

8, 2002). The government is correct that Skidmore expresses the measure of

deference due Customs’ formal letter ruling. Hartog Foods, 291 F.3d at 791 (“Customs’

rulings or interpretations that do not qualify as official statutory constructions

nevertheless receive a measure of deference proportional to their persuasiveness.”).

We conclude, however, that Customs’ ruling is not entitled to deference because its

reasoning is not persuasive. Customs based its denial of interest on the inclusion of

04-1612 11
references to interest in some provisions of the Tariff Suspension and Trade Act of 2000

but not in section 1408, but that ignored the plain language of section 1505(b), which

applies to excess moneys deposited as determined on a reliquidation under any section,

including section 1408.

III. CONCLUSION

Because the Court of International Trade erred in holding that 19 U.S.C. § 1505

did not apply to amounts determined to be excess moneys deposited as a result of a

reliquidation pursuant to section 1408 of the Tariff Suspension and Trade Act of 2000,

we reverse and remand.

REVERSED AND REMANDED

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 United States Court of Appeals for the Federal Circuit

04-1612

ORLANDO FOOD CORP.,

Plaintiff-Appellant,

v.

UNITED STATES,

Defendant-Appellee.

MICHEL, Chief Judge, dissenting.

I am troubled by the ease with which the majority casts off well-established

principles of statutory construction to imply from silence a waiver of sovereign immunity

as to interest on refunds of estimated Customs duties where the relevant statute,

section 1408 of the Tariff Suspension and Trade Act of 2000 (“Act”), provides for none.

Because I believe that the Court of International Trade correctly determined that

Orlando is not entitled to interest on its reliquidated entries, I respectfully dissent.

To rationalize the Act’s other provisions pertaining to liquidation or reliquidation of

certain entries of goods that expressly direct Customs to refund moneys owed with

interest, the majority finds the presumption against redundant constructions rebutted

and the application of expressio unius unhelpful. The majority discounts the canons of

statutory constructions far too lightly. First, the majority overlooks that section 1408 of

the Act begins with the words “[n]otwithstanding section 514 of the Tariff Act of 1930 or

any other provision of law. . . ,” suggesting a Congressional intent that the provisions of

section 1408 supersede all other inconsistent parts of the statutory scheme. See
Cisneros v. Alpine Ridge Group, 508 U.S. 10, 18 (1993) (“As we have noted previously

in construing statutes, the use of such a ‘notwithstanding’ clause clearly signals the

drafter’s intention that the provisions of the ‘notwithstanding’ section override conflicting

provisions of any other section.”) (citing Shomberg v. United States, 348 U.S. 540, 547-

48 (1955)). The applicability of § 1505 should thus not be so lightly inferred. Second,

the majority’s conviction that the interest afforded in § 1505(b), the general provision

regarding refunds of moneys upon liquidation or reliquidation, prevails over the silence

regarding interest in section 1408(c) undercuts yet another bedrock principle of statutory

construction, that the more specific statute trumps the more general. See, e.g., Bulova

Watch Co., Inc. v. United States, 365 U.S. 753, 758 (1961). Here, section 1408,

enacted in 2000 for the specific purpose of liquidating or reliquidating certain of

Orlando’s tomato sauce entries and setting forth a mechanism for the repayment of

“[a]ny amounts owed by the United States pursuant to the liquidation or reliquidation,”

yet saying nothing regarding interest on such amounts must control the more generic

interest provisions of § 1505(b), introduced by amendment in 1993.

Finally, while the legislative history of the Act is scant at best, this much is clear.

The original bill did not contain what is now section 1408. See H.R. 4868, 106th Cong.,

2d Sess. (2000) (as introduced on July 18, 2000). It did, however, include several other

provisions regarding liquidation and reliquidation of certain classes of entries, such as

telephone systems (section 1401), color television receivers (section 1402), or copper

and brass sheet and strip (section 1403). Sections 1401 and 1403 expressly provided

for interest on any amounts owed by the United States, while section 1402 did not.

Section 1408, along with sections 1409, 1410, and 1411, also pertaining to liquidations

04-1612 2
or reliquidation of tomato sauce preparation entries, were added to the bill in the Senate

by the Finance Committee. See H.R. 4868, 106th Cong., 2d Sess. (2000) (as reported

to the Senate on September 27, 2000). The bill was officially amended on October 13,

2000 to reflect these and other changes. See H.R. 4868, 106th Cong., 2d Sess. (2000)

(text to Senate amendment). From its inception, section 1408 did not contain language

about interest. Neither did sections 1409 through 1411, all dealing with tomato sauce

preparations. The new section 1412 added by the Finance Committee, pertaining to

liquidation or reliquidation of neoprene synchronous timing belt entries, however, did. In

view of the fact that these provisions — some containing express language regarding

interest on amounts owed — were added at the same time, by the very same Senate

committee, to the same Act, I decline to regard the differences in their language as

coincidental or insignificant. I am equally loath to pronounce the express language

providing for interest in some sections of the bill mere surplusage and the absence of

such language in section 1408 an implied waiver of sovereign immunity.

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