United States Court of Appeals
for the Federal Circuit
__________________________
HITACHI HOME ELECTRONICS (AMERICA), INC.,
Plaintiff-Appellant,
v.
UNITED STATES,
UNITED STATES CUSTOMS AND BORDER
PROTECTION, AND
ROSA HERNANDEZ, PORT DIRECTOR,
UNITED STATES CUSTOMS AND BORDER
PROTECTION,
Defendants-Appellees.
__________________________
2010-1345
__________________________
Appeal from the United States Court of International
Trade in case no. 09-CV-0191, Chief Judge Jane A. Re-
stani.
__________________________
ON PETITION FOR PANEL REHEARING AND
REHEARING EN BANC
__________________________
SIDNEY N. WEISS, of New York, New York, filed a
petition for panel rehearing and rehearing en banc for
plaintiff-appellant. With him on the petition was STEVEN
B. ZISSER, Zisser Customs Law Group, PC, of San Diego,
California.
JUSTIN R. MILLER, Trial Attorney, Commercial Litiga-
tion Branch, Civil Division, United States Department of
Justice, of New York, New York, filed a response to the
petition for defendants-appellees. With him on the re-
HITACHI HOME ELECTRONICS v. US 2
sponse were BARBARA S. WILLIAMS, Attorney in Charge,
International Trade Field Office; TONY WEST, Assistant
Attorney General, and JEANNE E. DAVIDSON, Director, of
Washington, DC. Of counsel was PAULA S. SMITH, Office
of Assistant Chief Counsel, International Trade Litiga-
tion, United States Customs and Border Protection, of
New York, New York.
JOHN M. PETERSON, Neville Peterson LLP, of New
York, New York, for amicus curiae American Association
of Exporters and Importers. With him on the brief was
RICHARD F. O’NEILL.
MICHAEL S. O’ROURKE, Customs and International
Trade Bar Association, of New York, New York, for
amicus curiae Customs and International Trade Bar
Association.
__________________________
Before RADER, Chief Judge, NEWMAN, LOURIE, BRYSON,
LINN, DYK, PROST, MOORE, O’MALLEY, REYNA, and
WALLACH, Circuit Judges.
PER CURIAM.
REYNA, Circuit Judge, with whom NEWMAN, Circuit
Judge, joins, dissents from the denial of the petition for
rehearing en banc.
ORDER
A combined petition for panel rehearing and rehear-
ing en banc was filed by Plaintiff-Appellant, and a re-
sponse thereto was invited by the court and filed by
Defendants-Appellees.
The petition for panel rehearing was considered by
the panel that heard the appeal, and thereafter the peti-
tion for rehearing en banc, response, and briefs amicus
curiae were referred to the circuit judges who are author-
ized to request a poll of whether to rehear the appeal en
banc. A poll was requested, taken, and failed.
3 HITACHI HOME ELECTRONICS v. US
Upon consideration thereof,
IT IS ORDERED THAT:
(1) The petition of Plaintiff-Appellant for panel re-
hearing is denied.
(2) The petition of Plaintiff-Appellant for rehearing
en banc is denied.
(3) The mandate of the court will issue on April
6, 2012.
FOR THE COURT
March 30, 2012 /s/ Jan Horbaly
—————————— ——————————
Date Jan Horbaly
Clerk
United States Court of Appeals
for the Federal Circuit
__________________________
HITACHI HOME ELECTRONICS (AMERICA), INC.,
Plaintiff-Appellant,
v.
UNITED STATES,
UNITED STATES CUSTOMS AND BORDER
PROTECTION, AND
ROSA HERNANDEZ, PORT DIRECTOR, UNITED
STATES CUSTOMS AND BORDER PROTECTION,
Defendants-Appellees.
__________________________
2010-1345
__________________________
Appeal from the United States Court of International
Trade in Case No. 09-CV-0191, Chief Judge Jane A.
Restani.
__________________________
REYNA, Circuit Judge, dissenting from the denial of
the petition for rehearing en banc, with whom NEWMAN,
Circuit Judge, joins.
__________________________
This case presents an issue of paramount importance
to the U.S. trade community and warrants en banc re-
hearing by this court.
HITACHI HOME ELECTRONICS v. US 2
The issue on appeal is whether the two-year deadline
set out in the Customs protest statute, 19 U.S.C.
§ 1515(a), is mandatory or merely aspirational. As my
dissenting opinion in this case explains in detail, the
statute’s command is clear that Customs “shall review . . .
and shall allow or deny” every protest on its merits
“within two years.” See generally Hitachi Home Elecs.,
Inc. v. United States, 661 F.3d 1343, 1351-61 (Fed. Cir.
2011) (hereinafter, “Dissent”). Much is argued about
whether the word “shall” imposes an obligation upon
Customs, yet we cannot avoid that Congress chose the
strongest imperative in the English language, fully in-
tending to express a charge that was not to be evaded.
The importance of correctly resolving this issue is un-
derscored by the amicus briefs filed by the American
Association of Exporters and Importers (“AAEI”) and the
Customs and International Trade Bar Association
(“CITBA”), which strongly support en banc review to
overturn the majority’s decision. As explained by CITBA,
“importers require timely certainty as to their liability for
duties on imported goods. Any interpretation of the law
that creates even a technical possibility that Customs
may refuse to act on a protest for more than two years is
simply inconsistent with today’s business realities.”
CITBA Br. at 8.
Congress addressed those business realities when it
set out plain language that there can be no other result
under § 1515 than a protest being “allow[ed] or den[ied]”
upon the two-year deadline. The majority, however,
writes into the statute a third option for Customs—to
delay beyond the two years or, in its discretion, to never
make a substantive determination on a protest.
3 HITACHI HOME ELECTRONICS v. US
Lest there be any doubt as to the mandatory nature of
§ 1515, the legislative history repeatedly made clear that
the deadline was an “overall limit” or “maximum” time
period by which Customs “must” complete its protest
review. S. Rep. No. 91-576, at 11, 28. When § 1515 was
enacted in 1970, Customs was not viewed as likely to
exceed—or even require—the full two-year period to
complete its review of all protests. Indeed, data provided
by Customs to Congress at that time showed that “all
protests were processed in an average period of 58 days
from the date of receipt, and more than 97 percent were
fully processed within 90 days of the date of their receipt.”
S. Rep. No. 91-576, at 28. Congress gave Customs a much
longer deadline than was necessary so as to afford protes-
tors “a maximum opportunity for meaningful administra-
tive review.” H. Rep. No. 91-1067, at 28 (emphasis added).
Congress understood that the substantive value derived
from the issuance of a protest determination is premised
on Customs’ undertaking a meaningful analysis of specific
business-related facts. Congress wisely recognized that
the increasingly global trade environment would come to
mark protests with technicalities and complexities, such
as rules of origin requirements under free trade agree-
ments and cross-border trade between related companies,
and acted on the need for certainty and predictability for
U.S. trade through timely and meaningful administrative
protest reviews by Customs.
Hence, Congress intended a departure from the prac-
tice prior to the Customs Courts Act of 1970 (which codi-
fied § 1515), whereby Customs’ failure to decide a protest
within the then-proscribed 90-day time period caused
Customs to lose jurisdiction, and the protest was auto-
matically transferred to the Court of International Trade
for review. There was no provision to “allow” a protest if
the 90-day deadline was not met. The majority’s decision
HITACHI HOME ELECTRONICS v. US 4
frustrates these legislative objectives by interpreting the
statute in a way that disincentivizes timely and meaning-
ful administrative review and converts protestors into
unwilling plaintiffs who face further considerable delay
and litigation costs. Indeed, the Hitachi protests in this
case were filed as early as 2005, meaning that Customs
has permitted those protests to remain undecided nearly
five years beyond the two-year deadline. Even Hitachi’s
most recent protests have languished for more than three
years beyond the two-year deadline. Yet the majority
instructs Hitachi that if it believes the delay is unjustifi-
able, it should now abandon the protests and seek a
deemed denial under 19 U.S.C. § 1515(b) so as to be free
to sue in court. This result inspired by the majority in
dicta is clearly not envisioned in the statute or its legisla-
tive history.
The linchpin of the majority opinion is reliance upon
statutory construction cases such as Brock v. Pierce
County, 476 U.S. 253 (1986), and its progeny. The major-
ity reads these cases to suggest a “rule” that renders the
mandatory “shall” language merely aspirational because
§ 1515 allegedly fails to specify a consequence for Cus-
toms’ inaction. These cases do not compel the majority’s
ultimate conclusion because § 1515’s two-year deadline
was not interpreted in any of them. There is no applica-
ble “precedent” to this case. Thus, if we must construe
the plain language of § 1515, we should do so in accor-
dance with its own unique text and in light of its own
unique legislative history. To be sure, analogous prece-
dent may in certain circumstances be helpful to issues of
statutory construction, but Brock and its progeny are
unhelpful here because they involve short statutory
deadlines of a fundamentally different character than the
two-year deadline of § 1515. See, e.g., Dissent at 1354
(explaining that “[t]he short time limits [of 120 days or
5 HITACHI HOME ELECTRONICS v. US
less] in the respective statutes [in Brock etc.] were plainly
intended to ‘spur’ the agency to take prompt action in
various contexts,” such as in bringing criminal indict-
ments).
Nor is the majority correct that the statute does not
specify a consequence for Customs’ inaction. The statute
plainly provides that Customs shall at the end of the two-
year time period either allow or deny the protest. If it
denies the protest, Customs is required to issue a denial
letter stating reasons for the denial so that the protestor
can make future business decision on the basis of the
denial, or to serve as a basis to challenge the denial in
court. See 19 U.S.C. § 1515(a). If Customs does not deny,
then it faces the consequence of its inaction by having to
allow the protest, which means that Customs is required
to issue a notice of reliquidation and a refund check for
any overpaid duties. The majority apparently takes issue
with the notion of allowance by operation of law absent
statutory language that describes a protest as being
“deemed allowed” by inaction. Finding only the word
“allowed” in § 1515, in effect the majority is looking for a
notice of allowance. Yet, in these types of Customs trans-
actions, the allowance of a protest requires nothing more
than a notice of reliquidation and a refund. A detailed
letter regarding an allowance is not required since protes-
tors have no incentive or viable legal basis to challenge
the allowance in court. Indeed, the Committee Reports
explained that “no useful purpose would be served by
imposing on customs the burden of mailing separate
notices of allowance” since “protest allowances are re-
flected in the notices of reliquidation and in refund pay-
ments.” S. Rep. No. 91-576, at 30 (1969); H. Rep. No. 91-
1067, at 29-30 (1970).
HITACHI HOME ELECTRONICS v. US 6
The government attempts to ease this court’s concerns
regarding delay by representing that only about 8.7% of
protests require more than the two-year statutory time
period for Customs to complete its review. See Govern-
ment’s Response to Hitachi’s Petition for Panel Rehearing
and Rehearing En Banc, at 11 (representing that “for
calendar year 2009, 36,040 protests were filed . . . [and]
[o]f that number, 32,908 protests (approximately 91.3%)
were decided . . . within two years”). On the scale at
which protests are filed, however, even this small fraction
amounts to 3,132 undecided protests in 2009 alone. Over
time, the undecided protests represent a very large num-
ber of imports and a massive sum of contested duties.
Significantly, the government argues that protests like
Hitachi’s take a long time to review because they are
difficult and complex, but this argument precisely demon-
strates why such protests should be timely resolved.
When considered in the aggregate, the large number of
undecided protests, the substantial economic value of the
duties held in abeyance, and the lack of timely, meaning-
ful administrative guidance on the most significant of
important trade issues does nothing but hinder trade in a
manner opposite of what Congress intended when it
enacted § 1515.
If Customs’ best efforts to manage its docket cannot
result in all protests being decided within the two-year
deadline, its remedy lies before Congress. Under the
majority’s rule, however, Customs has no incentive to
appeal to Congress or attempt to reduce the percentage of
undecided protests. As aptly explained by the AAEI, “[i]f
processing protests is a discretionary duty that may be
discontinued without consequence, [Customs] will logi-
cally concentrate its resources on revenue-collecting and
law-enforcement activities, rather than protest-processing
activities, which can only result in the flow of monies out
7 HITACHI HOME ELECTRONICS v. US
of the treasury.” AAEI Br. at 9. In light of § 1515’s plain
language and clear purpose, we should not permit any
more protests to languish in this fashion.
For the foregoing reasons, I conclude that Customs’
practice of indefinitely putting off its statutory obligation
to review and decide all protests within two years should
be put to an end.