Slip Opinion 08-104
UNITED STATES COURT OF INTERNATIONAL TRADE
TRAVELERS [NDEMNITY CO.,
Plaintiff,
Before: WALLACH, Judge
v. : Court No.: 06-00151
UNITED STATES,
Defendant.
[Plaintiff's Motion for Surnmary judgment is DEN[ED; Defendant’s Cross-M0tion for Sunimary
Judgment is GRANTED.]
Dated: September 29, 2008
Akin Gurng Strauss Hauer & Feld LLP (Warren E. Connelly , and (Anne K.Cusick), C0-C0unsel
for Plaintiff Travelers lndemnity Co.
Giunfeld Desiderio Lebowitz Si]vennan & Klestadt LLP (Edward B. Ackerrnan), Co-Counsel
for Plaintiff Trave]ers Indemnity Co.
Grego;y G. Katsas, Assistant Attorney General; Barbara S. Willia:ins, Attorney in Charge,
Intemational Trade Field Office, Comrnercial Litigation Branch, Civil Division, U.S. Departrnent
of Justice (Amy Rubin); Edward N. Maurer, Deputy Assistant Chief Counsel, lnternational Trade
Litigation, U.S. Customs and Border Protection, and William J. Kovatch Jr., Senior Attorney,
Office of the Chief Counse1 for lmport Adrninistration, U.S. Department of Commerce, of
C0unsel, for Defendant United States.
OPINION
Wallach, Judge
I
INTRODUCTION
This case establishes that publication of a case in the Customs Bulletin Weeklv ("the
Bulletin”) is not sufficient notice to the United States Bureau of Customs and Border Protection
("Customs") ' to invoke the deemed liquidation rule of 19 U.S.C. § l504(d) (“Section l504(d)").
Plaintiff Travelers Indemnity Company, (“Travelers") has filed a Motion for Summary judgment
claiming publication leads to deemed liquidation Defendant United States has cross-
moved. This court exercises jurisdiction pursuant to 28 U.S.C. § 15 Sl(a). Because publication
of a case in the did not constitute "notice" under Section l504(d),2 the deemed
liquidation rule of Section l504(d) does not apply. Accordingly, Plaintiff’ s Motion for Summary
Judgment is denied and Defendant’s Cross-Motion for Summary Judgment is Granted.
II
BACKGROUND
On December 29, 1986, the United States Department of Commerce (“Commerce")
published the final results of the first administrative review of imports from producers of certain
Taiwanese color television receivers "CTVs" that entered the United States between Oct0ber l9,
1983, and March 3l, l985. §ee_ Color Te1evision Receivers. Except for Video Monitors. From
Taiwan; Final Results of Antidumping Duty Adrnin. Review, 51 Fed. Reg. 46895 (December 29,
1986) ("the 1983-1985 Review"); Plaintiff’ s Brief in Support of Its Motion for Summary
l The United States Customs Service is now called the Bureau of Customs and Border Protection. g
Homeland Seeurity Aet of 2002, Pub. L. No. 107-296, §1502, 116 Stat. 2136 (2002); and Reorganization
Plan for the Department of Homeland Security, I-I.R. Doc. No. 108-32 (2003). This opinion will refer to
Customs rather than the Customs Border Patrol, because the facts occurred during a period (1981-1995)
when Customs administered the deemed liquidation rule of Section 15 04(d).
2 19 U.S.C. § l504(d) (“Section l504(d)") provides in relevant part:
when a suspension required by statute or court order is removed, the Customs
Service shall liquidate the entry... within 6 months after receiving notice of the
removal from the Department of Commerce, other agency, or a court with jurisdiction
over the entry. Any entry ... not liquidated by the Customs Service within
6 months after receiving such notice shall be treated as having been liquidated
at the rate of duty, va]ue, quantity, and amount of duty asserted at the time
of entry by the importer of record.
Judgrnent ("Plaintiff’s Motion") at 2. One of the Taiwanese producers that participated in the
initial review was AOC Intemational ("AOC”). Plaintiff’ s Motion at 2. ln the 1983-1985
Review, Commerce established a cash deposit rate of 1.38% for CTVs that AOC exported to the
United States and that had entered American customs territory after December 29, 1986. §
Between November 1987 and March 1988, a company called Funai USA imported 17 entries of
AOC-manufactured CTVs into the United States and paid cash deposit of 138% ad valorem
antidumping duties on the 17 entries. lc_l_.
On December 16, 199l, Commerce published the final results of a subsequent
administrative review of CTVs exported by various Taiwanese producers for the period April 1,
1987 through March 31, l988. S_e§ Color Television Receivers, Except for Video Monitors.
From Taiwan; Final Results of Antidumping Dutv Admin. Review. 56 Fed. Reg. 65218
(December 16, 1991) ("the 1987-1988 Review"). The 1987~1988 Review results covered the 17
Funai USA entries at issue. § @; Plaintiff"s Motion at 3. Commerce imposed an antidumping
duty margin of 7.43% for the 17 Funai USA entries from the 1987-1988 Review period.
Plaintiff’ s Motion at 3. Upon notification of the results of the 1987-1988 Review, AOC appealed
Commerce’s final results. _Id_= While the appeal to this court was pending, liquidation remained
suspended on the 17 Funai USA entries pursuant to a preliminary injunction under 19 U.S.C. §
15 l6a(c)(2). This court affirmed both Commerce’s original determination and the remand
determination decision. Zenith Elecs. Co;p., v. United States, 18 CIT 1105 (1994), appeal after
yi, 19 CIT 602 (1995). AOC appealed that affirmation to the Court of Appeals for the
Federal Cireuit ("Federal Cireuit"). §ge Zenith Elecs Coru.. v. United States, 99 F.?)d 1576 (Fed.
Cir. 1996), (“ze_riiri_i_i_l")?
The Federal Circuit affirmed and held that Commerce had correctly calculated the
antidumping duty margin in the 1987-1988 Review. I;d. at 1579. was issued by the
Federal Circuit on November 7, 1996, but a petition for rehearing with a suggestion for rehearing
g b_an__g was filed. I;d. at 1576; Defendant’s Memorandum in Opposition to Plaintiff’ s Motion for
Summary Judgment and ln Support of Cross-Motion for Summary Judgment, ("Defendant’s
Response and Cross-Motion") at 3. The petition was denied in an unpublished order on February
26, 1997. Defendant’s Response and Cross-Motion at 3. The time for petitioning for a writ of
certiorari expired on May 27, 1997, without a petition being filed. Ld. At that point,
became final, and suspension of the liquidation was removed. Defendant’s Response and Cross
Motion at 3; _S_e§ Fuiitsu Gen. Am.. Inc. v. United States, 283 F.3d 1364 (Fed. Cir. 2002).
ln the Federal Circuit determined that substantial evidence supported the final
results of Commerce’s 1987-1998 Review. , 99 F.3d at 1577; Defendant’s Response and
Cross Motion at 3. On October 22, 1997, after the Federal Circuit had rejected AOC’s cause of
action in , Customs published the decision in its publication.
Plaintiff" s Motion, Exhibit 4.
On March 18, 2005, Customs liquidated the 17 Funai USA entries, in accordance with
electronic message No. 5035206 which was issued by Commerce on February 4, 2005. l_d=
Customs assessed the increased antidumping duties at the 7.43% rate, plus interest, for a total bill
of $615,767.17. Defendant’s Response and Cross-Motion at 4. The figure equaled the difference
SZenith Elecs. Co;p., v. United States, 99 F.3d 1576 (Fed. Cir. 1996). In this opinion when the court uses
"Zenith Il" it is referring to the 1996 Federal Circuit opinion and not the earlier Court of Intemationa1
Trade decision.
4
between the cash deposit calculated using the entered rate of 1.38% and the higher final rate of
7.43%, plus accrued interest. Plaintiff’ s Motion at 5; § Customs sent the bills to Funai USA’s
business address in Tetersboro, New Jersey, but upon learning that Funai USA had dissolved,
Customs issued a demand upon Funai USA’s surety, Travelers. Plaintiff’ s Motion at 5.
Defendant’s Response and Cross Motion at 4. Travelers timely filed a protest on September 12,
2005 and the protest was denied on November 10, 2005. Defendant’s Response and Cross
Motion at 4. On May 8, 2006, Travelers paid $90,000 to Customs, which was the limit of its
liability as surety on Funai USA’s bond. Plaintiff’ s Motion at 6.
Travelers claims that the October 22, 1997 publication of Zenith II in the
constituted notice to Customs of removal of suspension of the 17 Funai USA entries of CTVs.
Plaintiff’ s Motion at 5. Additionally, Trave1ers asserts the 17 Funai USA entries were deemed
liquidated on April 22, 1998, (six months after the publication of the Zenith 11 decision in the
Bulletin) using an antidumping rate of 1.38%. Ld. at 5-6. Customs disagrees. Both parties have
moved for summary judgment and maintain that there are no genuine issues of material fact to be
resolved by a trial on the merits. Plaintiff’ s Motion at 1-2, 6; Defendant’s Reply and Cross-
Motion at 4. The sole issue is whether Customs received notice of the liquidation suspension
removal for purposes of Section l504(d) more than six months before it liquidated the entries at
issue. § Plaintiff' s Motion at 1-2, 6; Defendant’s Response and Cross-Motion at 6.
III
STANDARD FOR DECISION
Summary judgment is appropriate if the court determines that "the pleadings,
depositions, answers to interrogatories, and admissions on file, together with the affidavits, if
any, show that there are no genuine issues as to any material fact, and that the moving party is
entitled to a judgment as a matter of law." USCIT R.56 (d); Anderson v. Libertv Lobbv. lnc., 477
U.S. 242, 249, 106 S. Ct. 2505, 91 L. Ed.2d 202 (1986). Under 28 U.S.C. § 2640(21)(1), this
court reviews § n_gy_q the denial of an administrative protest under 19 U.S.C. § 1515.
IV
DISCUSSION
A
The Deemed Liquidati0n Rule Requires Notice to Customs
Travelers bases its entire case upon application of the "deemed liquidation" doctrine.
Section 1504(d) provides that when a suspension of liquidation required by statute or court order
is removed, Customs shall liquidate the entry within six months after receiving notice of the
removal from Commerce, another agency or a court with jurisdiction over the entry. Section
1504(d). Any entry not liquidated by Customs within six months after receiving such notice shall
be treated as having been liquidated at the rate of duty, value, quantity, and amount of duty
asserted at the time of entry by the importer of record. lcL Because Section 1504(d) provides that
an entry will be deemed liquidated by operation of law if Customs does not liquidate the entry
within six months of receiving notice, it is "critical to determine ... what constitutes notice of the
removal [of liquidation] suspension to Customs." lnt’l Trading Co. v. United States, 281 F.3d
6
1268, 1271 (Fed. Cir 2002).
For deemed liquidation to occur: "(1) the suspension of liquidation that was in place must
have been removed; (2) Customs must have received notice of the removal of the suspension;
and (3) Customs must not liquidate the entry at issue within six months of receiving such notice."
h, 283 F.3d at 1376. The notice Customs must receive to remove suspension is the central
issue here. The Federal Circuit has held that specific liquidation instructions from Commerce via
email or mailed notice, and publishing notice of a decision in the Federal Regjster are adequate
fonns of "notice" under Section 1504(d). NEC Solutions (Am.), lnc. v. United States, 411 F.3d
1340, 1347 (Fed. Cir. 2005); _l§`_qjitiu, 283 F.3d 1364 at 1382; lnt’l Trading, 281 F.3d at 1275.
These methods of notice are acceptable, but they are not exclusive Thus, publication in the
must be analyzed as a potential additional method of adequate notice.
B
Publication in the Bulletin Does Not Initiate the Deemed Liquidation Rule
1
The Bulletin ls Not a "Familiar Manner of Providing Notice"
111 Int’l Trading, the Federal Circuit held that publication in the Federal Register and
direct email to Customs are both sufficient notice under Section 1504(d). Int’l Trading, 281 F.3d
at 1275. Contrary to Travelers’ arguments (Plaintiff’ s Motion at 9-10), however, Int’l Trading
does not hold that any publication of a judicial decision affirming the results of an antidumping
duty order provides Customs with adequate notice.
Travelers attempts to equate the publishing of Zenith l`[ in the Bulletin to publication of
final results in the Federal Register as "a familiar manner of providing notice to parties" in
antidumping proceedings. lnt’l Trading, 281 F.3d at 1275. Travelers believes lnt’l Trading refers
to any general publication of an administrative review or a decision affecting a review,
(Plaintiff"s Motion at l0), although the case only addresses publication in the Federal Regjster
when it says “publication in the Federal Register is a familiar mariner of providing notice to
parties in antidumping proceedings." lnt’l Trading, 281 F.3d at 1275.
Timing also distinguishes Int’l Trading, 'l`here, the results were final when published; the
results in Zenith Il were not." In fact, the publication of Zenith [[ is not the
unambiguous and familiar notice described by Int’l Trading,
2
Publication in the Bulletin Does Not Impute Knowledge to Customs Employees
In i, the Federal Circuit held that publication of a court decision does not
necessarily result in notice to Customs of removal of liquidation suspensions 1, 283 F.3d at
1383. Commerce published notice of a case in the Federal Register. l_cL at 1369. Commerce then
sent Customs an e-mail instructing it to liquidate pertinent entries at the affirmed rate. Ld;
Customs liquidated the entries within six months after the email was sent. ld._ at 1370. Fujitsu
sued claiming Customs received notice before the email was sent because the earlier decision
was available commercially in a variety of print and electronic media.§ l_d; at 1379-80.
The Federal Circuit determined that the availability of the earlier case in a "variety of
commercially available print and electronic media" did not constitute public and unambiguous
‘Zenith l`l was not final when issued because Zenith II’s petition for rehearing was pending and the time for
seeking a writ of certiorari had not expired
5 Fujitsu also involves certain jurisdictional questions not at issue here. § Fujitsu Gen. Am., Inc. v.
United States, 283 F.3d 1364, 1370~76 (Fed. Cir. 2002).
5 Fujitsu claimed in an earlier case the Clerk of the Federal Circuit served counsel for the Department of
Justice ("DOJ") and service upon him constituted notice. I_d. at 1379. The Federal Circuit disagreed. I;d.
8
notice. Ld. lt rejected the notion that because the decision was widely available through that
media, Customs was provided with notice for purposes of Section 1504(d). Ld. at 1380. The
court further stated that “there is no evidence that in fact Customs received general media
notice. ..." E;
Travelers is not relying on service of Zenith 11 on Govemment’s counsel or on its general
media publication (@ §§ n.6). Rather, it relies on the ’s status as a Customs
publication Plaintiff's Motion at 12. That fact alone, however, does not prove that the
publication in the constituted unambiguous and public notice; Travelers has offered
neither positive evidence to support its conclusion, nor rebuttal evidence to contest the contrary
testimony offered by Defendant. § discussion in@ Part lV D la-d, 2.
Rather, Travelers has asserted that because the _l§irll;etin is a Customs publication, the
entire agency had notice when Zenith ll appeared in the Bulletin. Plaintiff"s Motion at l5;
Defendant’s Response and Cross Motion at 14-15. I1nputing knowledge to all Customs
employees because of a publication in the Bulletin too broadly defines notice. That supposition
of implied notice is both factually incorrect and it directly contradicts l;`i_ij@’s holding that
publication of a court decision does not necessarily result in receipt by Customs of notice that a
suspension of liquidation had been removed. 1, 283 F.3d at 1383. Indeed, Travelers’
argument implicitly seeks to impute knowledge of any Customs employee to the entire Agency
and by extension, to hold gl_l Customs employees responsible for knowing the information
available to each employee. Such omniscience may not be implicated by law.
Publication in the Bulletin Does Not Constiiute Unambiguous Notice to the Reasonable
Customs Oflicial
Travelers also relies on NEC Solutions, 411 F.3d at 1340. That case considered whether
an email message Commerce sent to Customs provided unambiguous and public notice that
suspension of liquidation had been removed after dumping margins case had become final.? Ld__. at
1341-1342. The court held that for notice from Commerce to trigger the six month period within
which Customs has to liquidate entries, the notice must be unambiguous that suspension of
liquidation has been lifted but does not need to include specific liquidation instructions. _ld_. at
1344. Here, Travelers has not proved the is unambiguous notice that would be
recognized by a "reasonable Customs official" (@ at 1346; g mg Part lV D la-b), nor has it
proven that reading the is a required task for Customs workers, a position Customs has
contradicted by direct evidence.
C
Customs’ Administrative Policies Do Not Require Reading the Bulletin
Travelers argues that the marmer by which Customs proceeds to liquidate entries (OTO3
message board) is irrelevant to the issue of whether Customs has received adequate notice of
removal of suspension of liquidation because the OTO3 message board is also used for accepted
forms of notice such as Federal Register notices announcing final court decision (§ijits£) or the
final results of an administrative review (lnt’l Trading). Plaintiff` s Response to Defendant’s
TNEC Solutions, also addresses whether service of an opinion on DOJ is service on Customs because DOJ
represented Commerce. NEC Solutions, §Am. 1, Inc. v. United States, 411 F.3d 1340, 1346 (Fed. Cir.
2005). 'I`he court ruled that DOJ receipt of court opinions lifting the suspension of liquidation did not give
Customs notice of such lifting. I_€L
10
Memorandum in Opposition for Summary Judgment and Opposition to Defendant’s Cross-
Motion for Summary Judgment ("Plaintiff" s Response") at 10-13. Travelers carmot however,
ignore the reality that publication in the Federal Register is an acknowledged, unambiguous and
public notice recognized by Customs, this court, and the Federal Circuit. The is not an
unambiguous and public form of notice, particularly because the Customs employees who are
charged with liquidation are not: 1) responsible to read the , 2) do not receive the
on a regular basis, and 3) receive notice only through the OTO3 message board where
the is never posted. §§ g Part IV, D, la~d, 2).
D
While Genuine Issues of Material Fact Defeat Travelers’ Motion, Customs
Has Submitted Suflicient Competent Evidence to Support Its P0siti0n
CIT Rule 56 standards require that a party seeking summary judgment must on, an issue
by issue basis, submit admissible evidence properly cognizable by the court, which supports each
element of that party’s claim or defense. § USCIT R. 56. On a Motion for Summary
Judgment, the movant has the burden of propounding evidence to support the factual allegations
in its clairns. See Celotex Cog:_) v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 91 L. Ed.2d 265
(1986)(quoting Fed. R. Civ. P. 56(c)) ("a party seeking summary judgment always bears the
initial responsibility of informing the district court of the basis for its motion, and identifying
those portions of ‘the pleadings, depositions, answers to interrogatories and admissions on file,
together with the affidavits, if any,’ which it believes demonstrate the absence of a genuine issue
of material fact.") A party opposing summary judgment may do so i@' L, by demonstrating
the incompetence of a witness, the inadmissibility of evidence, or the failure of the evidence to
11
conclusively establish a necessary fact.
ln this case, the key contested element is whether Bulletin publication constitutes notice
to Customs. Defendant has submitted to the court competent declarations demonstrating that, in
fact, its employees who are concerned with liquidation neither necessarily regularly read nor rely
upon, the contents of that publications Travelers has not responded to Defendant’s evidence with
competent countervailing evidence. g Plaintiff' s Response at 2, 11. lt failed to do so at its
legal peril.
1
Customs Has Demonstrated the Bulletin Is Not an Unambiguous Form of Notice
Defendant has submitted to the court four Customs employee declarationsg to
demonstrate the ambiguous nature of the Each declaration provides relevant factual
information on personal knowledge about the way the interplays with everyday work at
Customs,
a
Declaration of Dirik Lolkus
ln essence, Defendant argues that its employees actually charged with liquidation
simply do not necessarily read each copy of the Bulletin, and that in any case, they are trained
and instructed not to rely on its contents. Central to Customs’ argument is the Lolkus
Declaration.
s § Defendant’s Response and Cross Motion, Attachment A: Declaration of Karen Biehl ("Biehl
Declaration"); Attachment B: Declaration of Dirik J. Lolkus ("Lolkus Declaration"); Attachment C:
Declaration of David Genovese ("Genovese Declaration"); Mr. Genovese is the Chief of the
Antidumping/Countervailing Duty Policy and Programs Branch. Genovese Declaration at l 11 1_
9 Customs submitted the factual Biehl Declaration, Lolkus Declaration, and Genovese Declaration as well
as a legal/factual analysis. Attachment D: Declaration of Edward Maurer. ("Maurer Declaration”).
12
Mr. Lolkus is a Senior lrnport Specialist at the Port of Los Angeles. Defendant’s
Response and Cross Motion, Attachment B: Declaration of Dirik Lolkus ("Lolkus Declaration")
at 1 11 1. Lolkus was the team leader of Tearn 737, the team which handled the entries at issue
and he has no recollection of noticing the 1997 Zenith ll decision in the Bulletin. ld_: at 2 ‘|l 4.
More importantly, however, he sets out clearly, the general practices in which he and his team are
trained:
[I]mport specialists are instructed to stay current on information relating
to their work, and providing a copy of the Bulletin is one way that import
specialists are encouraged to stay current. However, reading the Bulletin
is not required. lt is up to each specialist, to the extent he or she believes
necessary or appropriate to review the Bulletin for information that may
be relevant.
Lolkus Declaration at 1-2 1111 2-5 (emphasis in original).
He goes on:
[I]mport specialists are specifically instructed that the only source for
instructions upon which they are to take action with respect entries
subject to antidumping or countervailing duties ... are the instructions
contained in messages that are posted to what is known as the OTO3
bulletin board.
ld_. ‘[Hi 5, 7 (emphasis in original).
Defendant has offered probative evidence that the Bulletin is not the unambiguous notice
of lnt’l Trading, Irnport specialists are not required to read the , and the amount of time
an import specialist might spend on reading the varies widely. Lolkus Declaration at 2-3
1111 3, 5-7. Given its failure to refute Lolkus’s testimony, Travelers has not proved that the
is a "familiar manner of providing notice" as described in lnt’l Trading, 231 F.3d at
1275.
13
The Lolkus Declaration is evidence that the is not unambiguous notice to the
"reasonable Customs official." NEC Solutions, 411 F.3d at 1346. Defendant has given
unchallenged evidence ti'orn a "reasonable Customs official" (Lolkus) that illustrates that
publication in the was not unambiguous notice. l_