Slip Op. 10 - 49
UNITED STATES COURT OF INTERNATIONAL TRADE
BEFORE: HONORABLE NICHOLAS TSOUCALAS, SENIOR JUDGE
___________________________________x
GREAT AMERICAN INSURANCE COMPANY :
OF NEW YORK as surety for
SMITHFIELD DISTRIBUTORS, INC., :
Plaintiff, :
v. : Court No. 06-00155
UNITED STATES, :
Defendant. :
___________________________________x
Held: Defendant’s Motion to Dismiss granted. Plaintiff’s Motion to
Amend the Summons denied.
Dated: May 6, 2010
Law Offices of Barry M. Boren (Barry M. Boren) for Plaintiff.
Tony West, Assistant Attorney General; Barbara S. Williams,
Attorney in Charge, International Trade Field Office, Commercial
Litigation Branch, Civil Division, U.S. Department of Justice
(Alexander Vanderweide); Beth Brotman, Office of Assistant Chief
Counsel, International Trade Litigation, U.S. Customs and Border
Protection, Of Counsel, for Defendant.
OPINION
TSOUCALAS, Senior Judge: Before the Court is a Motion to
Dismiss by Defendant United States (the “Government”). Also under
consideration is Plaintiff Great American Insurance Company’s
Court No. 06-00155 Page 2
(“GAIC”) Motion to Amend the Summons. For the reasons discussed
herein, the Court concludes that it does not have jurisdiction over
this action; accordingly Plaintiff’s motion is denied, Defendant’s
motion is granted, and the action is dismissed.
BACKGROUND
The following facts are undisputed. The subject merchandise
was imported on March 14, 2002, as Entry No. AV3-0011596-9 under
Subheading 2402.10.30, Harmonized Tariff Schedule of the United
States (“HTSUS”). See Compl. ¶¶ 4, 7. On May 9, 2003, Customs and
Border Protection (“Customs”) liquidated the imported merchandise
under Subheading 2402.20.80, HTSUS. See Compl. ¶¶ 4, 8. On August
6, 2003, Protest No. 5201-03-100394 was filed and, two years later
on November 18, 2005, denied. See Compl. ¶ 4; Def.’s Mot. to
Dismiss at 2.
GAIC, surety to the importer, mailed a summons to the Court on
May 10, 2006 to challenge the denial of the protest under 28 U.S.C.
§ 1581(a) (2006). See Summons; Def.’s Mot. to Dismiss at Ex. C.
The Summons was received by the Clerk of the Court on May 15, 2006.
See id. GAIC also mailed the full bond amount of fifty-thousand
dollars to Customs on May 10, 2006. See Def.’s Mot. to Dismiss at
Ex. A. Payment was received by Customs on May 12, 2006. See id.
at Ex. A-B.
PARTIES’ ARGUMENTS
Defendant asserts that jurisdiction is lacking because GAIC
Court No. 06-00155 Page 3
did not pay all duties prior to commencing the action, as
prescribed in 28 U.S.C. § 2637(a) (2006). Instead, the Government
argues, GAIC filed the Summons before full payment of duties was
received by Customs 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. See Def.’s Mot. to
Dismiss at 3-4. Defendant thus concludes that the statutory
prerequisites were not met.
GAIC, citing Rule 1 of the United States Court of
International Trade (“[the USCIT Rules] shall be construed and
administered to secure the just, speedy, and inexpensive
determination of every action”)1 , asserts that the Court should
deny Defendant’s motion and allow Plaintiff its day in court in
order to render a just determination. See Pl.’s Resp. to Def.’s
Mot. to Dismiss & Mem. in Supp. of Pl.’s Mot. to Am. Summons at 3.
In order to prevent dismissal on a technicality and allow the case
to be heard on its merits, Plaintiff asks the Court to amend the
Summons, claiming that it will cure any jurisdictional defect. See
id. at 13.
STANDARD OF REVIEW
The United States Court of International Trade (“CIT”), like
all federal courts established under Article III of the
1
In accordance with USCIT Rule 89, the version of the USCIT
Rules that were effective as of May 2006 control the present
action. See USCIT R. 89(a).
Court No. 06-00155 Page 4
Constitution, is a court of limited jurisdiction. See U.S. Const.
art. III, § 2, cl. 1. Without proper jurisdiction the Court may
not proceed and must dismiss the case before it. See Ford Motor
Co. v. United States, 30 CIT 788, 792, 435 F.Supp.2d 1324, 1329
(2006).
GAIC, as the party attempting to invoke the Court’s
jurisdiction, bears the burden of proving that jurisdiction is
proper. See Former Employees of Sonoco Prods. Co. v. U.S. Sec’y of
Labor, 27 CIT 812, 814, 273 F.Supp.2d 1336, 1338 (2003) (citing
McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189, 56
S.Ct. 780, 785, 80 L.Ed. 1135, 1141 (1936)). The Court must limit
its inquiry to the jurisdictional question and avoid examining the
merits of the case. See Syva Co. v. United States, 12 CIT 199,
201, 681 F.Supp. 885, 887 (1988).
The Court has discretion to allow a summons to be amended,
absent prejudice to an opposing party, in accordance with USCIT
Rule 3(e). A summons is intended as a vehicle to provide notice to
defendants of the nature of the suit and triggers attachment of the
Court’s jurisdiction. See 19 U.S.C. § 1516a(a)(2)(A) (2006).
DISCUSSION
28 U.S.C. § 2637(a), regarding any civil actions contesting
the denial of a protest under § 515 of the Tariff Act of 1930,
codified at 19 U.S.C. § 1515, specifies that such an action may be
brought in the CIT “only if all liquidated duties, charges, or
Court No. 06-00155 Page 5
exactions have been paid at the time the action is commenced.”
An action is “commenced” for the purposes of § 2637(a) when a
summons is filed with the Clerk of the Court. See USCIT R.
3(a)(1). Where a summons is mailed by certified or registered
mail, the USCIT Rules specify that it is “deemed filed as of the
date of mailing.” USCIT R. 5(e). Customs Regulations direct that
all liquidated duties, charges or exactions are considered paid as
of “the date on which the payment is received by Customs.” 19
C.F.R. § 24.3a(c)(5) (2006).
Plaintiff disputes that the commencement date is the date of
mailing. Citing § 2637(a), GAIC posits that “[i]nasmuch as this
action is predicated on the denial of a Protest, it [sic] [c]an
only be commenced when all duties, charges, or exactions have been
paid.” Pl.’s Resp. to Def.’s Mot. to Dismiss & Mem. in Supp. of
Pl.’s Mot. to Am. Summons at 7. In other words, Plaintiff claims
that an action can only be commenced once all the statutory
prerequisites have been met, not when the Summons alone has been
filed. See id. at 10. Taking this one step further, GAIC reasons
that even if the date of filing is the date of mailing, the date of
commencement has to be the date of receipt, with the result that
the present action was properly filed. See id.
Alternatively, Plaintiff contends that since payment is a part
of the filing requirement, there is no reason why the mailing
requirement cannot be met in the same manner as service is made of
Court No. 06-00155 Page 6
all pleadings and other papers. See id. at 10-11. GAIC asserts
that the Court owes no deference to Customs’s determination of when
payment is due, especially since the USCIT Rules do not themselves
set out when payment is deemed complete. See id. at 12.
In accordance with its arguments, GAIC proposes that the Court
elect May 15, 2006, the date the Clerk of the Court received the
Summons, as the commencement date. See id. at 11. Plaintiff
contends that this date conforms with legislative purpose and
intent, since all charges and exactions would have been paid by the
date of receipt and all statutory requirements would have been met.
See id. GAIC maintains that using the date of receipt as the date
of commencement does not prejudice either side, since both the date
of the mailing and the date of receipt were within the 180-day
filing deadline.2 See id.
The Court declines to alter the commencement date or amend the
Summons. GAIC’s argument is a patent attempt at ‘cherry-picking’,
selectively accepting the statutes and rules that support its own
outcome and ignoring the others. When read in conjunction, §
2637(a) and USCIT Rules 3(a)(1) and 5(e) conclusively establish
that the date on which a summons is mailed qualifies as the date of
filing for purposes of commencing an action. To interpret the
2
An action on the denial of a protest “is barred unless
commenced . . . within one hundred and eighty days after the date
of mailing of notice of denial of a protest.” 28 U.S.C. §
2636(a) (2006).
Court No. 06-00155 Page 7
scope of USCIT Rule 3(e) and amend the Summons in the manner that
GAIC proposes would have the effect of voiding USCIT Rule 5(e),
which explicitly states that a mailed summons is deemed filed as of
the date of mailing. Neither the Court nor the parties may select
a date for the Summons to be deemed filed, especially not to the
exclusion of express and unambiguous filing requirements.
The validity of these elements is well established. First, an
action to contest the denial of a protest is commenced on the date
a summons is filed. See USCIT R. 3(a)(1); Penrod Drilling Co. v.
United States, 13 CIT 1005, 1007, 727 F.Supp. 1463, 1465 (1989),
aff’d, 925 F.2d 406 (Fed.Cir.1991). Second, a properly mailed
summons by certified or registered mail is deemed filed as of the
date of mailing. See USCIT R. 5(e); Nature’s Farm Prods., Inc. v.
United States, 10 CIT 676, 648 F.Supp. 6 (1986), aff’d 819 F.2d
1127 (Fed.Cir.1987). Lastly, an action may be commenced “only if”
all duties, charges or exactions have been paid. See § 2637(a);
Peking Herbs Trading Co. v. Dept. of the Treasury, U.S. Customs
Service, 17 CIT 1182 (1993); Glamorise Found., Inc. v. United
States, 11 CIT 394, 661 F.Supp. 630 (1987); Am. Air Parcel
Forwarding Co. v. United States, 6 CIT 146, 573 F.Supp. 117 (1983).
The facts reflect that GAIC mailed the Summons on May 10,
2006. See Summons; Def.’s Mot. to Dismiss at Ex. C. Thus, under
USCIT Rule 5(e) and 3(a)(1), May 10, 2006 is the date of
commencement for § 2637(a). Applying Customs Regulation §
Court No. 06-00155 Page 8
24.3a(c)(5) to the equation, Customs did not receive payment until
May 12, 2006. See Def.’s Mot. to Dismiss at Ex. A-B. Therefore,
all liquidated duties, charges, or exactions were not paid by May
10, 2006, the date of commencement, and the requirements of §
2637(a) are not met. Since satisfying § 2637(a) is a condition
precedent to invoking the jurisdiction of the CIT, the Court has no
jurisdiction over this action. See Am. Air Parcel Forwarding, 6
CIT at 150, 573 F.Supp. at 120.
Case law unambiguously holds that the requirements of §
2637(a) are strictly applied and the statute precludes any exercise
of discretion by the Court. See Dazzle Mfg., Ltd. v. United
States, 21 CIT 827, 828, 971 F.Supp. 594, 596 (1997); Penrod
Drilling, 13 CIT at 1007, 727 F.Supp. at 1466; Glamorise Found., 11
CIT at 397, 661 F.Supp. at 632-33; United States v. Boe, 64 CCPA
11, 16, C.A.D 1177, 543 F.2d 151, 155 (1976).
For the same reasons, the Court refuses to amend the Summons.
GAIC is not merely asking the Court to amend a technical deficiency
in the content of the original summons. The effect of amending the
commencement date in the Summons would serve to impermissibly
expand this Court’s jurisdiction, which has already been
unequivocally rejected. See Melco Clothing Co., Inc. v. United
States, 16 CIT 889, 804 F.Supp. 369 (1992) (the Court dismissed for
lack of jurisdiction wherein the plaintiff failed to pay duties as
required under § 2637(a) before the action commenced even though
Court No. 06-00155 Page 9
the complaint was later amended).
Finally, Plaintiff has asked this Court to grant it equitable
relief to deem the action jurisdictionally sound. However, the
jurisdictional requirement of § 2637(a) is not subject to excuse or
waiver based upon equitable principles. See Dazzle Mfg., 21 CIT at
829, 971 F.Supp. at 596; Glamorise Found., 11 CIT at 397-98, 661
F.Supp. at 633. Thus, the Court has no discretion in the matter.
Even if equitable powers were available, they should “not be
invoked to excuse the performance of a condition by a party that
has not acted with reasonable due care and diligence.” United
States v. Lockheed Petroleum Serv., Ltd., 709 F.2d 1472, 1475-76
(Fed.Cir.1983). GAIC failed to exercise due diligence when it
mailed its payment to Customs and its Summons to the Court on the
same day.
Plaintiff relies on dicta from Atlantic Steamer and Supply
Co., Inc. v. United States, 12 CIT 479 (1988) (“Atlantic Steamer”)
to support its claim for equitable relief.3 See Pl.’s Resp. to
Def.’s Mot. to Dismiss & Mem. in Supp. of Pl.’s Mot. to Am. Summons
at 3-4, 13. The Court acknowledges that much of the case law,
including Atlantic Steamer, may be distinguished from the present
3
“In passing, it may be noted that had plaintiff mailed his
payment from New Jersey to New York even one or two days earlier,
the check might have been received prior to the filing of the
summons, or the Court might have found some equitable grounds to
infer due diligence on the part of the plaintiff and somehow
brought the case within the requirements of § 2637(a).” Atlantic
Steamer, 12 CIT at 480.
Court No. 06-00155 Page 10
facts whereby the date of mailing, the date of payment to Customs,
and the date of receipt by the Clerk were all within the 180-day
time limit (which did not run until May 17, 2006). However, under
both Atlantic Steamer and in the present facts, the Summons and
check were mailed on the same day. Since payment was not received
before the Summons was filed, the necessary jurisdictional
requirements were not met and the Court dismissed the action. The
dispositive issue in these cases remain: Customs received payment
after the action was commenced, in contravention of § 2637(a). The
Court has no leeway and the statute must be strictly construed.
Court No. 06-00155 Page 11
CONCLUSION
Pursuant to 28 U.S.C. § 2637(a), all charges and exactions
must be paid prior to the commencement of an action. For the
foregoing reasons, Defendant’s motion is granted and Plaintiff’s
motion is denied. This action is dismissed.
______________/s/ Tsoucalas_________
NICHOLAS TSOUCALAS, SENIOR JUDGE
New York, New York
Dated: This 6th day of May, 2010