Aluminerie Becancour, Inc. v. United States

Slip Op. 04-156

United States Court of International Trade

ALUMINERIE BECANCOUR, INC.,
c/o REYNOLDS METALS COMPANY,

Plaintiff,
Before: Pogue, Judge
v.
Court No. 00-00445
UNITED STATES,

Defendant.

[Defendant’s motion to dismiss granted.]

Decided: December 8, 2004

LeBoeuf, Lamb, Greene & MacRae, LLP (Gary P. Connelly, Melvin S.
Schwechter) for Plaintiff.

Peter D. Keisler, Assistant Attorney General, Barbara S. Williams,
Acting Attorney-in-Charge, International Trade Field Office, James
A. Curley, Attorney, Commercial Litigation Branch, Civil Division,
U.S. Department of Justice, Yelena Slepak, Attorney, Of Counsel,
Office of Assistant Chief Counsel, U.S. Bureau of Customs and
Border Protection, for Defendant.

OPINION

Pogue, Judge: Plaintiff Aluminerie Becancour, Inc.

(“Aluminerie” or “Plaintiff”) seeks to invoke the Court’s

jurisdiction to challenge the denial of its administrative protest.

Plaintiff’s protest sought to challenge the imposition of certain

Merchandise Processing Fees (“MPF”) on Plaintiff’s imports.
Court No. 00-00445 Page 2

Defendant United States Bureau of Customs and Border

Protection1 (“Customs” or “Defendant”) moves to dismiss, claiming

lack of subject matter jurisdiction because Plaintiff failed to

timely file its protest. Because Plaintiff’s protest, which

objected to three separate actions by Customs, was untimely as

regards two actions, and because the third action was not

protestable under 19 U.S.C. § 1514 (2000)2, Defendant’s motion to

dismiss is granted.3

1
Effective March 1, 2003, the United States Customs Service was
renamed the United States Bureau of Customs and Border
Protection. See Homeland Security Act of 2002, Pub. L. No. 107-
296 § 1502, 2002 U.S.C.C.A.N. (116 Stat.) 2135, 2308;
Reorganization Plan Modification for the Department of Homeland
Security, H.R. Doc. No. 108-32, at 4 (2003).
2
Because Plaintiff filed its summons in 2000, Summons of
Aluminerie at 2, the Court will refer to the 2000 versions of the
statutes or regulations. The Court acknowledges, however, that
because the events related to this action took place over an
extended period of time, various versions of each of the statutes
and regulations involved may apply. Accordingly, the Court has
reviewed the versions from 1994 until the present and found that
no amendments affecting the outcome of this case have occurred.
3
In Aluminerie Becancour, Inc. v. United States, slip. op. 04-40
(CIT Apr. 23, 2004), the Court granted Defendant's motion.
However, pursuant to USCIT R. 59(a) (stating that a "rehearing
may be granted . . . in an action finally determined”), the
Court, on June 8, 2004, ordered reconsideration of its April 23
opinion and on July 14, 2004, vacated its earlier judgment and
denied Defendant’s motion to dismiss. See Aluminerie Becancour,
Inc. v. United States, slip. op. 04-86 (CIT July 14, 2004). Due
to the probable relevance of an issue which had not been briefed
by the parties – the applicability of the holding in U.S. Shoe
Corp. v. United States, 114 F.3d. 1564 (Fed. Cir. 1997) that
passive acceptance of funds does not constitute a protestable
Customs decision – the Court ordered its July 14, 2004 opinion
and order stayed pending further briefing. See Order (CIT Aug.
12, 2004). The Court now withdraws that opinion and order.
Court No. 00-00445 Page 3

I. Background

Plaintiff’s administrative protest has a twelve-year history,

a review of which is necessary background for the motion at issue

here. On December 15, 1992, Aluminerie made a voluntary disclosure

to Customs under 19 U.S.C. § 1592(c)(4), admitting that it had

failed to pay MPF on unwrought aluminum products imported into the

United States between 1990 and the date of disclosure. Def.’s Mem.

Supp. Mot. Dismiss at 1-2 (“Def.’s Mot.”); Pl.’s Opp’n to Mot.

Dismiss at 1 (“Pl.’s Opp’n”). On September 9, 1994, Customs

requested that Aluminerie tender $88,542.87 to perfect the

voluntary disclosure. Complaint of Aluminerie at para. 5.

Aluminerie paid the requested amount on October 6, 1994. See

Letter from John Barry Donohue, Jr., Assoc. Gen. Counsel, Reynolds

Metals Co., to William D. Dietzel, Dist. Dir., Customs, Pl.’s Ex.

A at 1,4 4 (Oct. 6, 1994) (“October 6 Letter”).5

Along with its payment, Aluminerie submitted a letter in which

it advised Customs of its intent to appeal the MPF determination,

4
Documents appended to Pl.’s Opp’n are referred to as “Pl.’s Ex.”
followed by the corresponding letter. The document appended to
Plaintiff’s motion for leave to amend its memorandum of
opposition is referred to as “Pl.’s Attach.”
5
The record shows that all correspondence and documentation
referred to in this decision was either addressed to or sent by
Reynolds Metals Company, in its capacity as owner of Aluminerie
Becancour, Inc. Reynolds Metals Company also owns Canadian
Reynolds Metals Company, which is the Plaintiff in a companion
case before the Court. Canadian Reynolds Metals Co. v. United
States, Court No. 00-00444, slip op. 04-155 (CIT December 8,
2004).
Court No. 00-00445 Page 4

as it considered its entries exempt from the MPF rate demanded by

Customs. Id. at 1. Aluminerie argued that the unwrought aluminum

products were of Canadian origin, and thus qualified for special

treatment pursuant to the United States-Canada Free Trade Agreement

(“USCFTA”). Letter from Rufus E. Jarman, Jr., Barnes, Richardson

& Colburn, to Dist. Dir., Customs, Pl.’s Ex. D at 4, 4-5 (Feb. 1,

1995) (“February 1 Letter”).6 Customs, on the other hand, had

previously concluded that due to a non-Canadian additive,

Aluminerie’s entries failed to qualify for the reduced MPF rate

provided by the USCFTA. Id. at 5. Aluminerie, in turn, argued

that pursuant to the doctrine of de minimis non curat lex, the

foreign additive in the Canadian entries should be disregarded for

country of origin purposes. Id. Aluminerie informed Customs in

its payment tender letter that it understood that Customs would

refund the full amount, with interest, were Plaintiff to be

successful in its appeal to the Court of International Trade of

Customs decision to collect the MPF. October 6 Letter, Pl.’s Ex.

A at 1.

Customs responded in a letter dated November 8, 1994, stating

that it had received Aluminerie’s tender of MPF, but rejected all

conditions imposed by Aluminerie in connection to this payment.

Letter from Charles J. Reed, Fines, Penalties & Forfeitures

6
Barnes, Richardson & Colburn was Plaintiff’s legal
representative at the time. See February 1 Letter, Pl.’s Ex. D
at 4.
Court No. 00-00445 Page 5

Officer, on behalf of William D. Dietzel, Dist. Dir., Customs, to

John Barry Donohue, Reynolds Metals Co., Pl.’s Ex. B at 1 (Nov. 8,

1994) (“November 8 Letter”). Subsequently, Customs and Aluminerie

concluded an escrow agreement on December 20, 1994, in which they

agreed to let the decision in a designated test case7 control

whether a full refund of Aluminerie’s MPF payment was appropriate.

Agreement between Reynolds Metals Company and U.S. Customs Service,

Pl.’s Attach. at 1 (Dec. 20, 1994) (“Escrow Agreement” or “the

Agreement”).8 In the event that the test case decision was

favorable to Aluminerie, Customs further agreed to refund the full

tendered amount “together with such interest as may be required by

law.” Id. at 2.

On February 6, 1995, Aluminerie filed an administrative

protest. See Letter from Frederic D. Van Arnam, Jr., Barnes,

Richardson & Colburn, to Dist. Dir., Customs, Pl.’s Ex. D at 1

(Feb. 6, 1995) (“February 6 Letter”); Protest No. 0712-95-100130,

7
In subsequent amendments to the escrow agreement, concluded on
October 28, 1996, and July 13, 1998, the parties identified the
designated test case as Alcan Aluminum Corp. v. United States, 21
CIT 1238, 986 F. Supp. 1436 (1997), originally referred to as St.
Albans Protest No. 0201-93-100281 (HQ 955367) and subsequently
appealed to the Federal Circuit Court of Appeals. Letter from
Charles D. Ressin, Chief, Penalties Branch, Int’l Trade
Compliance Div., to Frederic D. Van Arnam, Jr., Barnes,
Richardson & Colburn, Pl.’s Ex. C at 3, 4 (Oct. 30, 1996); Letter
from Charles D. Ressin, Chief, Penalties Branch, Int’l Trade
Compliance Div., to Frederic D. Van Arnam, Jr., Barnes,
Richardson & Colburn, Pl.’s Ex. C at 5, 6 (July 13, 1998); Alcan
Aluminum Corp. v. United States, 165 F.3d 898 (Fed. Cir. 1999).
8
Reynolds Metals Company concluded the agreement with Customs on
behalf of Plaintiff. See Escrow Agreement, Pl.’s Attach. at 1.
Court No. 00-00445 Page 6

Pl.’s Ex. D at 3 (Feb. 6, 1995) (“Protest Form”).9 In its protest,

Plaintiff appeared to make three objections to Customs’ actions.

First, Plaintiff stated that it objected to the assessment and

payment of MPF. February 1 Letter, Pl.’s Ex. D at 4. Second, it

protested “contingencies not anticipated in the [Escrow]

[A]greement[,] or unanticipated frustration” of the same. Id. at

5-6. Plaintiff then appears to have made a third objection,

referring to Customs’ acceptance of payment. Id. at 4. In support

of this third objection, Plaintiff noted that a copy of Customs’

letter dated November 8, 1994, as well as a receipt of payment made

out by Customs on November 7, 1994, was enclosed with the protest.

Id.; see also Collection Receipt from U.S. Bureau of Customs &

9
The “protest package” provided as Exhibit D by Plaintiff
contains copies of two letters along with a copy of a completed
Customs Form 19 (Protest No. 0712-95-100130); the first letter is
dated February 1, 1995, and the second letter is dated February
6, 1995. See Pl.’s Ex. D. Accordingly, it appears as though
Plaintiff first attempted to forward a protest to Customs on
February 1, 1995, but that for reasons unclear to the Court, the
protest was not filed until February 6, 1995, the date Customs
received and stamped the protest form. Protest Form, Pl.’s Ex. D
at 3. The implementing regulation for filing of protests
confirms that a protest is considered filed on the date it is
received by Customs. 19 C.F.R. § 174.12(f) (“The date on which a
protest is received by the Customs officer with whom it is
required to be filed shall be deemed the date on which it is
filed.”). Additionally, both parties agree that the protest was
filed on February 6, 1995. See Def.’s Mot. at 2; Pl.’s Opp’n at
3. As the February 6 Letter merely serves as a complement to the
original protest attempt on February 1, 1995, however, the Court
will treat the letter dated February 1, 1995, as part of the
protest filed on February 6, 1995. See February 6 Letter, Pl.’s
Ex. D at 1 (“[W]e forwarded protests, dated February 1, 1995, in
which [Aluminerie] protested the assessment and payment of
Merchandise Processing Fee (‘MPF’).”).
Court No. 00-00445 Page 7

Border Prot., to Aluminerie Becancour, Pl.’s Ex. A at 6 (Nov. 7,

1994) (“Receipt”). Plaintiff clarified in its protest that it did

not expect Customs to act in response to its objections until final

judgment was rendered in the pending test case. February 1 Letter,

Pl.’s Ex. D at 6.

On January 5, 1999, the Federal Circuit Court of Appeals

issued its decision in the test case, Alcan Aluminum Corp. v.

United States, 165 F.3d 898 (Fed. Cir. 1999). The Alcan Aluminum

Corp. Court held that the foreign additive in question was subject

to the principle of de minimis non curat lex, and therefore, the

entries were considered of Canadian origin. 165 F.3d at 902. The

Alcan Aluminum Corp. decision became final on April 5, 1999. Pl.’s

Opp’n at 4.

Because Aluminerie’s entries qualified for preferential trade

status under the USCFTA as a result of the favorable decision in

Alcan Aluminum Corp., Customs refunded to Aluminerie the deposited

MPF amount in full “[o]n or about” February 7, 2000.10 Compl. of

Aluminerie at 3.

Customs, however, failed to tender interest pursuant to the

Agreement when it made the refund to Aluminerie. Def.’s Mot. at 2;

Pl.’s Opp’n at 4. Aluminerie then sent, on February 10, 2000, a

request for accelerated disposition of its protest. See Pl.’s

Opp’n at 4-5; Letter from F. D. “Rick” Van Arnam, Jr., Barnes,

10
No supporting exhibit was provided, but Defendant does not deny
this statement. See Def.’s Mem. at 2.
Court No. 00-00445 Page 8

Richardson, & Colburn, to Port Dir., Customs, Pl.’s Supp. Ex. A

(Feb. 9, 2000); Certified Mail Receipt, Pl.’s Supp. Ex. B (Feb. 10,

2000). Following what Aluminerie considered a denial of the

original protest by operation of law, it filed a summons with the

Court on September 7, 2000. Summons of Aluminerie at 2. Plaintiff

subsequently, on September 30, 2002, filed its complaint seeking

relief. Compl. of Aluminerie at 6. The thrust of Plaintiff’s

complaint is that Customs failed to pay interest on the refunded

MPF. Id. at 3-4. As noted above, Defendant Customs moves to

dismiss for lack of subject matter jurisdiction.

II. Standard of Review

Because Plaintiff is seeking to invoke the Court’s

jurisdiction, it has the burden to establish the basis for

jurisdiction. See Former Employees of Sonoco Prods. Co. v. United

States Sec’y of Labor, 27 CIT ____, ____, 273 F. Supp. 2d 1336,

1338 (2003) (citing McNutt v. Gen. Motors Acceptance Corp., 298

U.S. 178, 189 (1936)). At the same time, “the Court assumes ‘all

well-pled factual allegations are true,’ construing ‘all reasonable

inferences in favor of the nonmovant.’” United States v. Islip, 22

CIT 852, 854, 18 F. Supp. 2d 1047, 1051 (1998) (quoting Gould, Inc.

v. United States, 935 F.2d 1271, 1274 (Fed. Cir. 1991)).
Court No. 00-00445 Page 9

III. Discussion

Defendant moves to dismiss, alleging that because Aluminerie

failed to timely protest any Customs decision, subject matter

jurisdiction under 28 U.S.C. § 1581(a) is lacking. See Def.’s Mot

at 3-4. That statute, upon which Plaintiff’s claim relies,

provides for the review of the denial of a protest made under

section 515 of the Tariff Act of 1930, as amended at 19 U.S.C. §

1515. Compl. of Aluminerie at 1; 28 U.S.C. § 1581(a). Subsection

(a) of section 1515 authorizes Customs “to review and deny or allow

a protest as long as it is filed in accordance with 19 U.S.C. §

1514.” 19 U.S.C. § 1515(a). A suit attempting to invoke the

Court’s jurisdiction under 28 U.S.C. § 1581(a) must therefore be

based on a protest which complies with the requirements of section

1514.

Section 1514 states the requirements for protests, two of

which are at issue here. First, the protest must be of a

“decision” of the Customs service. 19 U.S.C. § 1514(a). Second,

the protest must be timely filed – that is, no more than ninety

days after the protested decision. 19 U.S.C. § 1514(c)(3).11
11
Title 19 U.S.C. § 1514(c)(3) provides as follows:

A protest of a decision, order, or finding described
in subsection (a) of this section shall be filed with
the Customs Service within ninety days after but not
before--
(A) notice of liquidation or reliquidation,
or
(B) in circumstances where subparagraph (A)
is inapplicable, the date of the decision as
Court No. 00-00445 Page 10

In its protest, Plaintiff appears to make three objections.

See February 1 Letter, Pl.’s Ex. D at 4-6. First, Plaintiff

protests the assessment and payment of MPF. Id. at 4. To the

extent Plaintiff challenged its own payment of the MPF, the protest

is invalid; Plaintiff’s tender of payment may be the result of its

own decision to do so, but it is not a Customs decision. The

demand for tender, however, is a Customs decision; Customs actively

demanded payment of the owed amount. See Complaint of Aluminerie

at para. 3; Escrow Agreement, Pl.’s Attach. at 1. The demand

occurred on September 9, 1994, but Plaintiff did not file its

protest until February 6, 1995. See Complaint of Aluminerie at

para 5; Protest Form, Pl.’s Ex. D at 3. Because a time period of

more than ninety days elapsed between the demand and the protest,

Plaintiff’s protest fails to present a timely challenge to the

assessment and payment of MPF.

Second, Plaintiff protests unanticipated frustration of, and

contingencies not foreseen in, the escrow agreement. February 1

Letter, Pl.’s Ex. D at 5-6. While Customs’ eventual refusal to pay

interest as required by the escrow agreement may have been a

protestable decision, the February 6, 1995 protest is simply

untimely with regard to Customs’ alleged failure to pay interest as

to which protest is made.

19 U.S.C. § 1514(c)(3).
Court No. 00-00445 Page 11

required by law. Title 19 U.S.C. § 1514(c)(3) states that parties

must file protests “within ninety days after but not before . . .

the date of the decision as to which protest is made.” Id.

(emphasis added). The decision the protesting party objects to

must therefore occur prior to the filing of the protest. To the

extent that Plaintiff objects to the unanticipated event of

Customs’ decision to refund MPF without interest in February 2000,

that event had not yet occurred at the time the protest was filed.12

Accordingly, under a plain reading of 19 U.S.C. § 1514(c)(3),

Plaintiff’s protective protest was untimely and invalid. See A.N.

Deringer, Inc. v. United States, 12 CIT 969, 972, 698 F. Supp. 923,

925 (1988) (holding that a protest was invalid either because it

was filed the day before Customs denied a previous claim for relief

or barred by the provision allowing only one protest per entry of

merchandise).

Third, Plaintiff appears to object to Customs’ acceptance of

its MPF tender. See February 1 Letter, Pl.’s Ex. D at 4. But the

12
Plaintiff claims that Customs made the decision not to pay
interest as early as November 8, 1994, the day it sent the
November 8 Letter. See Pl.’s Opp’n at 6. However, the parties
subsequently signed the Agreement, whereby Customs agreed to
refund the MPF amount and “interest as may be required by law” if
related litigation was successful. Escrow Agreement, Pl.’s
Attach. at 1-2. Thus, even presuming that Customs made the
decision to deprive Aluminerie of interest at such an early
stage, that decision was later vitiated by the terms of the
Agreement before the filing of the protest. Moreover, the
language of the protest – objecting to unanticipated frustration
of the Agreement – clearly refers to decisions which had not yet
been made, and not to the November 8 Letter.
Court No. 00-00445 Page 12

mere passive acceptance of funds does not constitute a Customs

decision under United States Shoe Corp. v. United States, 114 F.3d

1564 (Fed. Cir. 1997). That case found that Customs’ collection of

Harbor Maintenance Tax was not protestable, as Customs merely

passively accepted the taxes paid pursuant to statute. Id. at

1569. Customs was not involved in calculation of the tax; in

fact, the burden of calculation and payment was entirely on the

taxed party. Id. Customs’ function of collection involved no

independent thought process on its part, and its collection of

funds therefore gave rise to no protestable decision. Id.

The facts here are somewhat different than those in United

States Shoe Corp. Here, Customs appears to have actively demanded

payment of the owed MPF. See Escrow Agreement, Pl.’s Attach. at 1.

While acceptance of that demanded payment might be considered

passive, and therefore not a “decision” under the rule in United

States Shoe Corp., Customs did not merely accept Plaintiff’s

tender. Rather, Customs rejected the contingencies which Plaintiff

placed on its tender. See October 6 Letter, Pl.’s Ex. A at 1;

November 8 Letter, Pl.’s Ex. B at 1. This rejection required some

independent thought on Customs’ part; the Court is therefore

persuaded that the rejection of contingencies could be regarded as

a protestable decision, and thus the acceptance of Plaintiff’s

tender could have been protestable.

But the fact remains that on February 6, 1995, when Plaintiff
Court No. 00-00445 Page 13

protested the acceptance of tender and the rejection of Plaintiff’s

contingencies, the parties’ relationship to one another had been

changed by the conclusion of the Agreement. In the Agreement,

Customs appears to have changed its position on payment of

interest, and agreed that it would pay such interest “as may be

required by law.” See Escrow Agreement, Pl.’s Attach. at 2. The

complained-of decision to reject contingencies would therefore be

moot, being void as a matter of law. Plaintiff, however, argues

that the Agreement does not moot the November 8 decision not to pay

interest. See Pl.’s Supp. Letter Br. at 3-4 (Nov. 30, 2004).

Plaintiff avers that the contingency it placed on its tender was

not the requirement to pay “such interest as may be required by

law,” but rather, simply to pay “interest.” Id. at 4-5. Because

the tender flatly demanded the payment of interest, with or without

legal authorization, and the Escrow Agreement only required payment

of interest as required by law, Plaintiff argues that there remains

a non-mooted, protestable element to the November 8 rejection of

contingencies.

The Court is not persuaded. Plaintiff’s escrow agreement was

a contract with an arm of the federal government. Federal agencies

cannot contract as they choose; their authority to contract is

necessarily constrained by the statutes under which the agency

operates, by regulations, and by applicable case law. When

Plaintiff demanded the payment of interest on its tender, it was,
Court No. 00-00445 Page 14

or should have been, well aware that all it could demand of Customs

was that Customs pay back such interest as might be required by

law. This is precisely what Customs bound itself to in the

Agreement.13, 14

Therefore, the mere acceptance of Plaintiff’s funds was not

protestable, under the rule stated in United States Shoe Corp., and

the rejection of contingencies, which had constituted an active and

protestable decision, was void as a matter of law as a result of

the Agreement.

Accordingly, the protest upon which this case was brought was

untimely filed as to two of the decisions to which Plaintiff

objected, and the third objected decision was void as a matter of

law and therefore not protestable. Accordingly, Customs’ motion to

dismiss is hereby granted, and the Court enters judgment for

Defendant.

/s/Donald C. Pogue
Donald C. Pogue,
Judge
13
The Court is hard pressed to understand why Plaintiff would
have entered into the Agreement were the refund of its money
along with “such interest as may be required by law” manifestly
disagreeable to it. The Agreement moots the November 8 letter
either because it represents Customs’ acceptance of
contingencies, or because it represents Plaintiff’s negotiated
determination to abandon its claim to forms of interest other
than those “required by law.”
14
Because the Court finds that the protestable portion of the
November 8 letter was rendered legally void by the escrow
agreement, the Court need not reach the question of whether the
protest was timely filed as to this issue.
Court No. 00-00445 Page 15

Dated: December 8, 2004
New York, New York