Frontier Insurance v. United States

Slip Op. 03 - 86

UNITED STATES COURT OF INTERNATIONAL TRADE

- - - - - - - - - - - - - - - - - - -x

FRONTIER INSURANCE COMPANY, :
A New York Corporation,
REAL PARTY IN INTEREST, :

Plaintiff, :

v. : Court No. 95-08-01041

THE UNITED STATES, :

Defendant. :
- - - - - - - - - - - - - - - - - - -x

Opinion

[Upon motions as to assessment of duties on
imports of lizard skins from Argentina,
summary judgment for the defendant.]

Decided: July 17, 2003

Law Offices of Elon A. Pollack, a P.C. (Elon A. Pollack and
Xinyu Li) for the plaintiff.

Peter D. Keisler, Assistant Attorney General; John J. Mahon,
Acting Attorney in Charge, International Trade Field Office,
Commercial Litigation Branch, Civil Division, U.S. Department of
Justice (Amy M. Rubin); Office of Assistant Chief Counsel, Inter-
national Trade Litigation, U.S. Bureau of Customs and Border Pro-
tection (Paula S. Smith), of counsel, for the defendant.

AQUILINO, Judge: The amended complaint filed on behalf

of Frontier Insurance Company, a surety alleged to be the real

party in interest, prays, among other things, for judgment

overruling the appraisement, classification, and liquida-
tion and . . . directing the reliquidation of the
merchandise described on the entries involved herein, and
for refund of duties accordingly,

based upon pleaded claims that that merchandise should have been
Court No. 95-08-01041 Page 2

classified either under (1) subheading 4107.29.30 or (2) 4103.20.00

of the Harmonized Tariff Schedule of the United States ("HTSUS")

(1992) rather than the subheading 4107.29.60 decided upon by the

U.S. Customs Service. Plaintiff's third pleaded cause of action is

to the effect that the entries at issue should not have been

assessed duties pursuant to the Final Affirmative Countervailing

Duty Determination and Countervailing Duty Order; Leather From
Argentina, 55 Fed.Reg. 40,212 (Oct. 2, 1990), of the International

Trade Administration, U.S. Department of Commerce ("ITA").

I

Since joinder of issue on these claims, the plaintiff has

interposed a uniquely-styled Motion for Summary Adjudication of

Issue(s)1. On its part, the defendant has filed a "cross-motion"

for summary judgment. These submissions each contain statements of

facts alleged to be material yet not engendering issues requiring

trial within the meaning of USCIT Rule 56(i), which since their

filings has been relettered (h). Plaintiff's Separate Statement of

Undisputed Material Facts is as follows:

1
In fact, the plaintiff specifically objects to defendant's
characterization of this motion as one for summary judgment or
partial summary judgment. See Plaintiff's Reply to Defendant's
Opposition to Plaintiff's Motion for Summary Adjudication and
Memorandum in Opposition to Defendant's Cross-Motion for Summary
Judgment [hereinafter "Plaintiff's Reply"], p. 2, n. 1.
Court No. 95-08-01041 Page 3

1. The reptile[2] skins in issue were entered into
the United States between the dates of September 30, 1992
and December 23, 1992. . . .

2. Customs classified the reptile skins under HTSUS
4107.29.60 as [] "fancy leather," at a rate of 2.4% ad
valorem, and assessed countervailing duties in the amount
of 14.9% ad valorem . . ..

3. The importer of record timely filed a protest to
challenge Customs' classification and assessment of
countervailing duties on the grounds that the skins
should be classified under HTSUS 4107.29.30 at a rate of
5% ad valorem, or HTSUS 4103.20.00 "free of duty." . . .
4. Frontier timely paid the liquidated duties,
including the countervailing duties, for all the entries
which are the subject of this civil action, except Entry
Nos. 328-0071094-2, 328-0070064-6, and 328-0071779-8.
Frontier paid $3003.70 of the liquidated duties including
countervailing duties for Entry No. 328-0071094-2.
. . .

5. On August 9, 1995, . . . Frontier, the importer's
surety and real party in interest, timely filed the
instant action, after Customs denied the importer of
record's protest. . . .

6. By notice published in the Federal Register on
August 1, 1997 . . . Commerce retroactively revoked its
countervailing duty order on leather including lizard
skins from Argentina.

7. According to the terms of the revocation notice,
the Commerce Department found that the case of Ceramica
Regiomontana v. United States, 64 F.3d 1579, 1582 (Fed.
Cir. 1995) applied to its countervailing duty orders
against Argentina.

8. . . . Commerce ". . . determine[d] that based
upon . . . Ceramica, it does not have the authority to
assess countervailing duties on entries of merchandise
covered by these orders occurring on or after September
20, 1991." . . .

2
Papers filed in this matter refer to Tupinambis tequixin,
the tegu lizard of Colombia and north-central South America,
whereas the court notes in passing that the much-rarer tegu liz-
ard of Argentina is Tupinambis merianae. Perhaps, the skinning
of one species spares the skinning of the other.
Court No. 95-08-01041 Page 4

9. All of the merchandise which is the subject of
this case was entered after September 20, 1991. . . .

Citations omitted.

The defendant admits paragraphs 1 and 4 through 9; it

also admits material aspects of paragraphs 2 and 3. Defendant's

Statement of Additional Material Facts as to Which There Are No

Genuine Issues to be Tried is:

1. At the time of entry, the countervailing duty
order on Argentine leather was in effect.

2. No party sought review of the order for the
period from January 1, 1992 through December 31, 1992.

3. . . . Commerce issued liquidation instructions
for the period from January 1, 1992 through December 31,
1992 on December 14, 1993.

4. The entries were liquidated in accordance with
Commerce's liquidation instructions . . ..

None of these averments is controverted by the plaintiff.

However, it does claim that a genuine issue of material fact

exists, which it summarizes as "whether the reptile skins were

'fancy' or 'not fancy' at the time of entry." Plaintiff's Reply,

p. 13. See generally id. at 11-13.

II

That issue is indeed of genuine moment. As discussed

hereinafter, it is the linchpin to this action.

The headings of HTSUS chapter 41, which encompasses "Raw

Hides and Skins (Other Than Furskins) and Leather", not surpris-
Court No. 95-08-01041 Page 5

ingly, commence with raw hides and skins of bovine and equine

animals (4101) and then cover raw skins of sheep or lambs (4102),

other raw hides and skins (4103), leather of bovine and equine

animals "without hair on" (4104), sheep or lamb skin leather

"without wool on" (4105), goat or kidskin leather (4106), leather

of other animals "without hair on" (4107), etc. Plaintiff's

merchandise caused Customs to stop at that last heading, in
particular subheading 4107.29.60 thereunder, to wit:

Leather of other animals, without hair on . . .:

* * *

Of reptiles:

* * *

Other:

* * *

Fancy .................... 2.4%[.]

A

Plaintiff's first pleaded cause of action would have the

court settle on the line above this subheading, at 4107.29.30 in

the Schedule, which applies to "Not fancy" reptile leather, albeit

at a duty rate of five percent ad valorem, or more than double the

rate Customs collected.

The Tariff Act of 1930, as amended, and the Customs

Courts Act of 1980 entail significant waiver of the sovereign U.S.

government's immunity, but those and other, related acts of
Court No. 95-08-01041 Page 6

Congress do not (and could not) waive the requirement of Article

III of the Constitution that this Court of International Trade only

hear and decide genuine cases and controversies. See, e.g., 3V,

Inc. v. United States, 23 CIT 1047, 1048-49, 83 F.Supp.2d 1351,

1352-53 (1999), and cases cited therein.

Of course, genuine cases and controversies with the

Service, which recently has become the Bureau of Customs and Border
Protection, can and often do involve matters that are not just

monetary. Stated another way, their judicial resolution often

leads to equitable and/or other relief not measured in dollars and

cents. But this is not possible here. As quoted above, plain-

tiff's amended complaint seeks "refund of duties". Moreover, the

party pressing this prayer is a surety, which makes no showing in

its papers at bar of any interest in this action other than finan-

cial. Ergo, this court has no authority to grant relief upon

plaintiff's first cause of action, asserted on its own.

B

The refund for which the plaintiff prays would include,

however, the countervailing duties collected pursuant to the ITA's

order, supra, the ambit of which seemingly has motivated counsel to

press for classification under HTSUS subheading 4107.29.30 (as

opposed to 4107.29.60) with its concomitant higher rate of duty.

That is, the ITA specifically excluded from the order's coverage

the "not fancy reptile leather" contemplated by plaintiff's pre-
Court No. 95-08-01041 Page 7

ferred subheading. See 55 Fed.Reg. at 40,213 (Scope of Investiga-

tion). Hence, given the magnitude of additional, countervailing

duties assessed pursuant to that order, 14.97 percent ad valorem,

plaintiff's third alleged cause of action is at least a mathe-

matical case or controversy. It is comprised of two claims,

namely, the underlying goods upon entry were not fancy within the

meaning of HTSUS subheading 4107.29.30, and Customs should not have
collected countervailing duties on them.

(1)

The court's subject-matter jurisdiction for matters of

classification under the HTSUS is pursuant to 28 U.S.C. §§ 1581(a),

2631(a). And, in light of the facts recited above, the court

concludes that it can resolve the issue of the classifiable nature

of the goods imported and also that it can do so by way of summary

judgment. While that issue, as posited by the plaintiff, supra,

is definitely the material one, it is not exclusively a matter of

fact, given the existing law referred to hereinafter. Moreover,

the court finds sufficient evidence already on the record via the

parties' cross-motions to "determine 'whether the government's

classification is correct, both independently and in comparison

with the importer's alternative.'" H.I.M./Fathom, Inc. v. United

States, 21 CIT 776, 778, 981 F.Supp. 610, 613 (1997), quoting

Jarvis Clark Co. v. United States, 733 F.2d 873, 878, reh'g denied,

739 F.2d 628 (Fed.Cir. 1984). In other words, trial is not

necessary because the court is unable to conclude that the parties'
Court No. 95-08-01041 Page 8

factual disagreement is "such that a reasonable trier of fact could

return a verdict against the movant"3 government.

Analysis of an issue of classification is a two-step

process. First, the court must ascertain "the proper meaning of

specific terms in the tariff provision". David W. Shenk & Co. v.

United States, 21 CIT 284, 286, 960 F.Supp. 363, 365 (1997). That

meaning is a question of law, and the court proceeds de novo pur-
suant to 28 U.S.C. §2640. E.g., Russell Stadelman & Co. v. United

States, 23 CIT 1036, 1037, 83 F.Supp.2d 1356, 1357 (1999), aff'd,

242 F.3d 1044 (Fed.Cir. 2001). Second, the court must determine

under which of those tariff terms the subject merchandise falls.

See, e.g., Bausch & Lomb, Inc. v. United States, 148 F.3d 1363,

1365 (Fed.Cir. 1998). This determination is also, ultimately, a

question of law. Id. Summary judgment is appropriate "when there

is no genuine dispute as to the underlying factual issue of exactly

what the merchandise is". Id. Although there is a statutory pre-

sumption of correctness that attaches to the factual aspects of

classification decisions by Customs per 28 U.S.C. §2639(a)(1), that

presumption does not apply where the court is presented with a

question of law by a proper motion for summary judgment. See, e.g.,

Universal Elecs., Inc. v. United States, 112 F.3d 488, 492

(Fed.Cir. 1997).

3
Ugg Int'l, Inc. v. United States, 17 CIT 79, 83, 813 F.-
Supp. 848, 852 (1993), quoting Pfaff American Sales Corp. v.
United States, 16 CIT 1073, 1075 (1992).
Court No. 95-08-01041 Page 9

The General Rules of Interpretation ("GRI") of the HTSUS

govern classification. See, e.g., Carl Zeiss, Inc. v. United

States, 195 F.3d 1375, 1379 (Fed.Cir. 1999). According to GRI 1,

"for legal purposes, classification shall be determined according

to the terms of the headings and any relative section or chapter

notes". E.g., Vanetta U.S.A. Inc. v. United States, 27 CIT ,

, Slip Op. 03-67, p. 8 (June 25, 2003), citing Orlando Food
Corp. v. United States, 140 F.3d 1437, 1440 (Fed.Cir. 1998). Only

after construing the language of a particular HTSUS heading should

the court turn to an examination of its subheadings. See GRI 1, 3,

6. If the meaning of a term is not defined therein or in its leg-

islative history, the correct one is its common meaning. See,

e.g., Pillowtex Corp. v. United States, 171 F.3d 1370, 1374

(Fed.Cir. 1999). To determine that common meaning, "the court may

rely upon its own understanding of the terms used, and it may

consult lexicographic and scientific authorities, dictionaries, and

other reliable information". Baxter Healthcare Corp. of Puerto

Rico v. United States, 182 F.3d 1333, 1338 (Fed.Cir. 1999), quoting

Brookside Veneers, Ltd. v. United States, 847 F.2d 786, 789

(Fed.Cir. 1988). The term's common and commercial meanings are

presumed to be the same. See, e.g., Carl Zeiss, Inc. v. United

States, 195 F.3d at 1379.

Here, the parties agree that the lizard skins were

treated prior to entry. In its Protest No. 2402-94-100028, the
Court No. 95-08-01041 Page 10

importer indicates that the skins had been drum-dyed.4 The defend-

ant argues that drum-dyeing cannot proceed until skins have been

tanned. See Defendant's Cross-Motion for Summary Judgment, p. 30.

According to Sharphouse, Leather Technician's Handbook, pp. 6-7

(1971), leather processing occurs in three stages. During the

first phase, designated "Before Tannage", the skin of an animal is

removed; it is washed, cured, limed, dehaired (if necessary),
defleshed, de-limed, and then pickled, drenched, or soured.

During the second stage, called "Tannage", that skin is tanned by

whatever method is appropriate for the type involved. The final

phase is "After Tannage", during which the tanned leather may be

dyed, fatliquored, dried, and finished.5

4
See Defendant's Cross-Motion for Summary Judgment, Exhibit
A. During drum-dyeing, leather that has undergone tanning is ro-
tated in a drum containing hot water, dye and acid or "fatliquor"
solutions. The mechanical action of spinning, in much the same
manner as a conventional clothes-washing machine, provides pene-
tration of the dye(s) into the leather, thereby coloring it. The
process is "used on most types of leather with the exception of
those which may suffer from the vigorous action, e.g., very thin
tender skins may be torn, [or] snake skins or bellies may knot
up". Sharphouse, Leather Technician's Handbook, p. 215 (1971).
5
Despite this well-known, common processing, plaintiff's
second alleged cause of action is to the effect that the lizard
skins herein can be classified under HTSUS heading 4103, which
states:

Other raw hides and skins (fresh, or salted, dried,
limed, pickled or otherwise preserved, but not tanned,
parchment-dressed or further prepared), whether or not
dehaired or split . . .[.]

On its face, this heading is inapposite since drum-dyeing
occurred after those skins had been tanned. Thus, the GRI pre-
clude further consideration of plaintiff’s alternative classi-
fication under HTSUS subheading 4103.20.00.
Court No. 95-08-01041 Page 11

Having determined that HTSUS heading 4103 does not cover

this case, the court turns to heading 4107, which both parties

accept to the six-digit level of 4107.29. Concurring in their

judgment, the court must determine whether "Not fancy" per sub-

heading 4107.29.30 better classifies plaintiff's merchandise than

does "Fancy" of subsequent subheading 4107.29.60.

Additional U.S. Note 1 to HTSUS chapter 41 defines the
term

"fancy" as applied to leather [to] mean[] leather which
has been embossed, printed or otherwise decorated in any
manner or to any extent (including leather on which the
original grain has been accentuated by any process
. . .).

Underscoring in original. In this matter, at the request of the

importer for "further review"6, the Customs laboratory in New

Orleans examined the lizard skins at issue under a stereo micro-

scope and found that they "ha[ve] a coating accentuating the grain

on the surface" and were thus "fancy by tariff definition". See

Defendant's Cross-Motion for Summary Judgment, Exhibit C, first

page. Based on this finding, the Service determined, and the de-

fendant presses now, that those skins were "otherwise decorated"

within the meaning of this Additional Note 1.

The plaintiff counters that there remains an open and

unresolved question of fact as to whether the "coating" was suffi-

6
See Defendant's Cross-Motion for Summary Judgment, Exhibit
B.
Court No. 95-08-01041 Page 12

cient to constitute decoration or accentuation of the grain of the

lizards' skins. See generally Plaintiff's Reply, pp. 11-13. Ac-

cording to the plaintiff, that was not sufficient, whereupon it is

suggested that the entries were "crust"7, which has been classified

in one administrative decision as "not fancy"8, and that the

coating may be "merely a method of preservation from putrefac-

tion"9. See id. at 12-13. The plaintiff cites Leather's Best,
Inc. v. United States, 708 F.2d 715 (Fed.Cir. 1983), for the

general proposition that courts require processing that is more

than "slight" before an entry can be classified as "fancy". The

court in that case, as the plaintiff itself points out, required

merely a "scintilla" of evidence of decoration. 708 F.2d at 718

("the process made [the leather] 'brighter,' which we consider to

be at least a scintilla of decoration, all that is required").

To repeat, Additional U.S. Note 1 provides for leather

that has been "otherwise decorated in any manner or to any ex-

7
"Crust" is defined as "10. Leather Manuf. The state of
sheep or goat skins when merely tanned and left rough prepara-
tory to being dyed or coloured", The Oxford English Dictionary,
vol. IV, p. 88 (2d ed. 1989), and "6: the state of rough-tanned
skins before they are dyed". Webster's Third New International
Dictionary, p. 547 (1981). "Crust" has also been defined as
"leather that has been tanned but not finished". Thorstensen,
Practical Leather Technology, p. 318 (3rd ed. 1985).
8
See NY C80873 (Nov. 7, 1997).
9
"PUTREFACTION is the result of bacterial growth which
promptly starts once an animal is dead, especially on the ex-
posed flesh side of the flayed skin, unless it is properly
cured". Sharphouse, Leather Technician's Handbook, p. 20 (1971).
Court No. 95-08-01041 Page 13

tent"10, which includes "leather on which the original grain has

been accentuated by any process"11. It does not specify the type

of process or coating used, nor does it refer to the extent to

which the respective process has been employed. Dyeing, by defini-

tion, advances the leather beyond crust, and embellishes through a

change in color, often profoundly. This court cannot find that

such change does not amount to decoration and that this process did
not accentuate the grain of the skins. Indeed, the scrutiny of the

coating by the Customs laboratory that found it accentuated their

grain bolsters this inability. Undoubtedly, these two factors,

together or individually, constitute a "mere scintilla" of evidence

that the lizard skins are decorated and therefore "fancy".

Whereupon, this court holds the dyed, lizard-skin leather underly-

ing this matter to be decorated and thus "fancy" within the meaning

of HTSUS subheading 4107.29.60.

(2)

Were the correct classification "not fancy", as the

plaintiff postulates, its merchandise would not have been within

the scope of the ITA's countervailing-duty investigation, given

that agency's specific exclusion of such reptile leather covered by

10
Emphasis added. To "decorate" is "to furnish or adorn
with something becoming, ornamental or striking: EMBELLISHMENT".
Webster's Third New International Dictionary, p. 587 (1981).
"Embellish" is defined, in part, as "1: to make beautiful". Id.
at 739.
11
Emphasis added. "Accent" is defined as "3 a: to give
prominence to or increase the prominence of: make more emphatic,
noticeable, or distinct...INTENSIFY, SHARPEN". Webster's Third
New International Dictionary, p. 10 (1981).
Court No. 95-08-01041 Page 14

HTSUS subheading 4107.29.30. But plaintiff's experienced counsel

doubtless know that Commerce's reference to or reliance on the

Tariff Schedule does not govern Customs' own, independent responsi-

bilities thereunder. See, e.g., Tak Fat Trading Co. v. United

States, 24 CIT 1376, 1379 (2000), and cases cited therein. On the

other hand, once the ITA has reached a final determination of

countervailable subsidy and set a duty thereon, the responsibility
of Customs is merely ministerial, simply to collect that additional

amount. See 19 C.F.R. §355.21 (1992). And uncertainties with

regard thereto are to be addressed to Commerce, not Customs, e.g.,

by requesting an individuated scope determination from the Depart-

ment pursuant to 19 C.F.R. §355.29 (1992). In the light of the

record developed herein, such an approach would have been advis-

able, but the importer did not take it.

In fact, according to the statements submitted with the

parties' cross-motions and quoted from above, the importer (and its

surety) took no timely steps toward the ITA with regard to its

countervailing-duty order prior to the protest to Customs and the

appeal from its denial to this court. By the time of this action's

commencement, the underlying entries had all been liquidated (on

December 14, 1994). Then, some two years after this action had

been filed, on August 1, 1997, the ITA published Leather From

Argentina . . .; Final Results of Changed Circumstances Counter-

vailing Duty Reviews, 62 Fed.Reg. 41,361, in which the

Department determines that based upon the ruling of the
U.S. Court of Appeals for the Federal Circuit in Ceramica
Court No. 95-08-01041 Page 15

Regiomontana v. United States, 64 F.3d 1579, 1582 (Fed.
Cir. 1995), it does not have the authority to assess
countervailing duties on entries of merchandise covered
by these orders occurring on or after September 20, 1991.
As a result, we are revoking the orders on Wool, Leather,
and OCTG with respect to all unliquidated entries occur-
ring on or after September 20, 1991.

This determination was explained, in part, as follows:

The countervailing duty orders on Leather . . . from
Argentina were issued pursuant to former section 303 of
the Tariff Act of 1930, as amended (the Act)(repealed,
effective January 1, 1995, by the Uruguay Round Agree-
ments Act). Under former section 303, the Department
could assess (or "levy") countervailing duties without an
injury determination on two types of imports: (i)
Dutiable merchandise from countries that were not signa-
tories of the 1979 Subsidies Code or "substantially
equivalent" agreements (otherwise known as "countries un-
der the Agreement"), and (ii) duty-free merchandise from
countries that were not signatories of the 1947 General
Agreement on Tariffs and Trade (1947 GATT). . . .

When these countervailing duty orders were issued,
Wool, Leather, Cold-Rolled and OCTG, were dutiable. Al-
so, at that time, Argentina was not a "country under the
Agreement" and, therefore, U.S. law did not require in-
jury determinations as a prerequisite to the issuance of
these orders.

* * *

. . . [T]he Federal Circuit . . . held, in a case
involving imports of dutiable ceramic tile, that once
Mexico became a "country under the Agreement" on April
23, 1985 pursuant to the Understanding between the United
States and Mexico Regarding Subsidies and Countervailing
Duties (the Mexican MOU), the Department could not assess
countervailing duties on ceramic tile from that country
under former section 303(a)(1) of the Act. . . . "After
Mexico became a 'country under the Agreement,' the only
provision under which ITA could continue to impose
countervailing duties was section 1671." [] One of the
prerequisites to the assessment of countervailing duties
under 19 U.S.C. § 1671 (1988), according to the court, is
an affirmative injury determination. See also Id. at
§1671e. However, at the time the countervailing duty or-
Court No. 95-08-01041 Page 16

der on ceramic tile was issued, the requirement of an
affirmative injury determination under U.S. law was not
applicable.
* * *

In Ceramica . . . the countervailing duty order on
ceramic tile was issued in 1982 and Mexico did not become
a country under the Agreement until April 23, 1985.
Therefore, the court held that in the absence of an
injury test and the statutory means to provide an injury
test, the Department could not assess countervailing
duties on ceramic tile and the court ordered the Depart-
ment to revoke the order effective April 23, 1985 . . ..
As the court stated, once Mexico became a "country under
the Agreement,""[t]he only statutory authority upon which
Congress could impose duties was section 1671. Without
the required injury determination, Commerce lacked
authority to impose duties under section 1671."

* * *

On September 20, 1991, the United States and
Argentina signed the Understanding Between the United
States of America and the Republic of Argentina Regarding
Subsidies and Countervailing Duties (Argentine MOU).
Section III of the Argentine MOU contains provisions
substantially equivalent to the provisions in the Mexican
MOU that were before the court in Ceramica. . . .12

Unfortunately for the plaintiff, this determination can-

not be the basis for any relief herein. First and foremost, Cus-

toms liquidation of duties is essentially an irrevocable act.

Compare 19 U.S.C. §1514(a) with §1514(b). See Zenith Radio Corp.

v. United States, 710 F.2d 806, 810 (Fed.Cir. 1983); Cementos Ana-

huac del Golfo, S.A. v. United States, 13 CIT 981, 983, 727 F.Supp.

620, 622 (1989). Hence, all the retroactive relief that the ITA

12
62 Fed.Reg. at 41,361-62 (congressional and case cita-
tions omitted). Cf. Cementos Anahuac del Golfo, S.A. v. United
States, 12 CIT 401, 687 F.Supp. 1558 (1988), rev'd, 879 F.2d 847,
reh'g denied, 1989 U.S. App. LEXIS 15898 (Fed.Cir. 1989), cert.
denied sub nom. Cementos Guadalajara, S.A. v. United States,
494 U.S. 1016 (1990).
Court No. 95-08-01041 Page 17

could grant in 1997 was with respect to "all unliquidated entries

occurring on or after September 20, 1991".13

The nature of Customs liquidation also strictly circum-

scribes this court's jurisdiction to grant relief. When that

jurisdiction is challenged, as the defendant does here, the burden

is on the plaintiff to establish such authority. E.g., Earth Is-

land Institute v. Christopher, 19 CIT 1461, 1465, 913 F.Supp.2d
559, 564 (1995), citing Lujan v. Defenders of Wildlife, 504 U.S.

555, 559 (1992); McNutt v. General Motors Acceptance Corp., 298

U.S. 178, 189 (1936). For purposes of this matter, the congres-

sional express waiver of sovereign immunity is found in 28 U.S.C.

§1581, subsections (a) and (c)14 of which authorize civil actions

against the United States and agencies and officers thereof as

follows:

13
62 Fed.Reg. at 41,361 (emphasis added). In response to a
comment by the petitioners to its published preliminary determi-
nation, 62 Fed.Reg. 24,085 (May 2, 1997), the ITA emphasized that
it
no longer has jurisdiction over liquidated entries and
cannot amend its liquidation instructions. . .. See,
e.g., Zenith Radio Corp. v. United States, 710 F.2d 806
(Fed.Cir. 1983). For this reason, the Department ex-
pressly limited its preliminary results to all unliqui-
dated entries occurring on or after September 20, 1991.

Id. at 41,364 (emphasis in original).
14
The plaintiff also urges jurisdiction under 28 U.S.C. §
1581(i). This provision cannot be invoked, however, unless the
party seeking its use could not have invoked jurisdiction under
28 U.S.C. §1581(c) or shows that that primary provision was some-
how "manifestly inadequate". See, e.g., Norcal/Crosetti Foods,
Inc. v. United States, 963 F.2d 356, 359 (Fed.Cir. 1992). Here,
the plaintiff does not satisfy either exception.
Court No. 95-08-01041 Page 18

(a) The Court of International Trade shall have
exclusive jurisdiction of any civil action commenced to
contest the denial of a protest, in whole or in part,
under section 515 of the Tariff Act of 1930.

* * *

(c) The Court of International Trade shall have
exclusive jurisdiction of any civil action commenced
under section 516A of the Tariff Act of 1930.

With such exposure to suit, Congress and the agencies

responsible for administering the international trade laws, partic-

ularly after passage of the Trade Agreements Act of 1979, Pub. L.

No. 96-39, 93 Stat. 144 (1979), have created a regime that every

importer must comply with before it may properly invoke this

court’s intervention. The roles of Customs and Commerce have been

clearly differentiated by the 1979 act and are reflected in the

foregoing subsections 1581(a) and (c).

When a good enters the United States, the importer

deposits with Customs the duties that may be owed upon liquidation,
which is the "final computation or ascertainment of the duties or

drawback accruing on an entry." 19 C.F.R. §§ 141.101, 141.103,

159.1. In order to determine the proper amount, the port director

determines the classification under the HTSUS. See 19 U.S.C. §

1202; 19 C.F.R. §152.11. If the importer disagrees with that

determination, it may file a protest within 90 days. See 19 U.S.C.

§1514; 19 C.F.R. §§ 174.11(b), 174.12(e). And, if Customs denies

a timely protest, the importer may appeal to this court pursuant to

section 1581(a), supra. On the other hand, if the importer fails
Court No. 95-08-01041 Page 19

to so proceed within the 90-day limit, the duty assessed becomes

"final and conclusive", foreclosing judicial review. See 19 U.S.C.

§1514(a).

If there is an outstanding antidumping or countervailing-

duty order, Customs, in its merely-ministerial capacity, adds and

collects the appropriate duty thereunder. To repeat, since passage

of the 1979 Trade Agreements Act, it has no role in determining
whether such duties are appropriate and may not consider protests

thereto. This is solely the province of the administrative

agencies. See 19 U.S.C. ch. 4, subtitle IV. Under 28 U.S.C.

§1581(c) and 19 U.S.C. §§ 1516a(a)(2)(A) and 1516a(a)(2)(B)(i) and

(ii), an importer that does not believe such additional duties are

appropriate may challenge the order. That is, once Customs informs

the importer that duties are due under a countervailing-duty order,

for example, the importer must seek relief first from the ITA.

Only thereafter may it seek judicial relief, and the importer must

do so within 30 days. See 19 U.S.C. §§ 1516a(a)(2)(A) and

1516a(a)(2)(B)(iv); 28 U.S.C. §1581(c).

In the matter at bar, the importer could have sought a

scope review by the ITA that would have determined whether its

entries were indeed implicated by its countervailing-duty order in

light of the Understanding Regarding Subsidies and Countervailing

Duties signed at Buenos Aires on September 20, 1991 between the

United States and Argentina. By not doing so, and standing still
Court No. 95-08-01041 Page 20

as the imported goods were liquidated on December 14, 1994, a chal-

lenge pursuant to 28 U.S.C. §1581(c), supra, became time-barred.

An importer or surety simply cannot, under the regulatory

and relevant case law, obtain judicial review in this court "of

questions relating to [countervailing] duties by challenging

Customs’ denial of protests to that agency’s application of those

orders." Sandvik Steel Co. v. United States, 164 F.3d 596, 601
(Fed.Cir. 1998), citing Nichimen America, Inc. v. United States,

938 F.2d 1286 (Fed.Cir. 1991); Mitsubishi Electronics America, Inc.

v. United States, 44 F.3d 973 (Fed.Cir. 1994). As this court

stated in Xerox Corp. v. United States, 24 CIT 1145, 1147, 118 F.-

Supp.2d 1353, 1356 (2000), rev’d on another ground, 289 F.3d 792

(Fed.Cir. 2002), "what the plaintiff would in effect now have is a

judicial determination ab initio of the scope of the ITA’s order,

but Congress has not authorized such an approach for this court any

more than it has for the Customs Service." Having failed to take

advantage of and to exhaust its administrative remedies15, the

plaintiff cannot now obtain judicial relief.

15
See, e.g., McKart v. United States, 395 U.S. 185, 193
(1969), quoting Myers v. Bethlehem Shipbuilding Corp., 303 U.S.
41, 50-51 (1938):

The doctrine of exhaustion of administrative
remedies . . . provides "that no one is entitled to
judicial relief for a supposed or threatened injury
until the prescribed administrative remedy has been
exhausted."

The Federal Circuit has held that to proceed otherwise would be
"inappropriate". Sandvik Steel Co. v. United States, 164 F.3d
596, 599 (1998), quoting Sharp Corp. v. United States, 837 F.2d
1058, 1062 (Fed.Cir. 1988).
Court No. 95-08-01041 Page 21

III

In view of the foregoing, plaintiff's Motion for Summary

Adjudication of Issue(s) must be denied, whereas defendant's Cross-

Motion for Summary Judgment, dismissing this action, can be

granted. Judgment will enter accordingly.

Decided: New York, New York
July 17, 2003

Judge