International Custom Products, Inc. v. United States

Slip Op. 05-145

UNITED STATES COURT OF INTERNATIONAL TRADE

___________________________________
:
INTERNATIONAL CUSTOM PRODUCTS, :
INC., :
:
Plaintiff, :
: Before: Richard K. Eaton,
: Judge
V. :
: Court No. 05-00509
:
UNITED STATES OF AMERICA, :
:
Defendant. :
___________________________________:

MEMORANDUM OPINION

[Plaintiff’s Motion for a Preliminary Injunction and Judgment on
the Agency Record denied; defendant’s Motion to Dismiss for
mootness and lack of a justiciable controversy granted]

November 8, 2005

Mayer, Brown, Rowe & Maw, LLP (Andrew A. Nicely and Simeon
Munchick Kriesberg), for plaintiff.

Peter D. Keisler, Assistant Attorney General, Civil
Division, United States Department of Justice; David M. Cohen,
Director, Commercial Litigation Branch, Civil Division, United
States Department of Justice (Edward F. Kenny), for defendant.

Eaton, Judge: This matter is before the court on the Motion

for a Preliminary Injunction and Judgment on the Agency Record1

1
Plaintiff’s motion initially requested a preliminary
injunction in its prayer for relief. Following entry of its
white sauce on September 19 and 20, however, plaintiff abandoned
that request. See Letter from Mayer, Brown, Rowe & Maw LLP to
Court No. 05-00509 Page 2

of plaintiff International Custom Products, Inc. (“ICP”), and the

Motion to Dismiss of defendant United States. By its motion,

plaintiff asks the court to (1) grant specified relief with

respect to any future entries of its merchandise and (2) grant it

attorney’s fees and other costs. Defendant asks that plaintiff’s

motion be denied and makes its own motion to dismiss for mootness

and lack of a justiciable controversy. For the reasons set forth

below, the court denies plaintiff’s motion and grants defendant’s

motion to dismiss.

BACKGROUND

This dispute has a substantial history. See Int’l Custom

Prods., Inc. v. United States, 29 CIT __, 374 F. Supp. 2d 1311

(2005) (“ICP I”) and Int’l Custom Prods., Inc. v. United States,

29 CIT __, slip op. 05-117 (Sept. 1, 2005) (“ICP II”). Reference

is made to these previously issued opinions for a complete

rehearsal of that history. What follows is a brief outline of

the facts necessary to decide the instant motions.

Plaintiff is an importer of a milk-fat based white sauce

product used as an ingredient in sauces, salad dressings, and

U.S. Court of International Trade of 9/22/05 (“On behalf of
International Custom Products, Inc. (“ICP”), we write to inform
the Court that ICP is withdrawing its request for a preliminary
injunction.”).
Court No. 05-00509 Page 3

other food products. On January 20, 1999, the United States

Customs Service (now the Bureau of Customs and Border Protection)

issued New York ruling letter D86228 (“Ruling Letter”), which

classified the white sauce under HTSUS 2103.90.9060 (later

numbered 2103.90.9091) as “[s]auces and preparations therefor.”

Pl.’s Conf. Mem. of Points and Authorities in Supp. of Pl.’s App.

for a Temporary Restraining Order and Mot. for a Prelim.

Injunction (“Pl.’s Mem.”) at 4. The current duty rate for HTSUS

2103.90.9091 is 6.4%. Id.

As a result of the earlier litigation, on June 2, 2005, a

Declaratory Judgment was issued by this Court which, among other

things:

ORDERED that the Notice of Action2 issued to
the Plaintiff by the Bureau of Customs and
Border Protection (“Customs”) dated April 18,
2005, for entry number 180-05864154, and
including a number of entries, is declared
null and void, and it is further

ORDERED that Customs reliquidate no later than
June 27, 2005, any and all entries liquidated
pursuant to the above-referenced Notice of Action
at tariff classification item 2103.90.9091 and at
the rate of duty in effect for that tariff
classification item at the time of importation;
and it is further

2
The legality of the Notice of Action, which would have
effectively reclassified plaintiff’s white sauce under HTSUS
0405.20.3000 with a substantially higher duty, was the subject of
the litigation resulting in the June 2, 2005, Declaratory
Judgment. See ICP I, 29 CIT __, 374 F. Supp. 2d 1311.
Court No. 05-00509 Page 4

ORDERED that New York letter ruling number
D86228 dated January 20, 1999 remains in full
force and effect for the merchandise
described therein until such time as Customs
revokes or modifies the ruling in compliance
with the procedures set forth in 19 U.S.C. §
1625 and regulations relating thereto . . . .

Decl. J. Order of 6/2/05.

Thereafter, the United States sought to stay the effect of

the Declaratory Judgment both in this Court and, as it had

appealed to the United States Court of Appeals for the Federal

Circuit (“CAFC”), in that Court as well. All stays have now

either expired by their terms or have been denied. See ICP I, 29

CIT __, 374 F. Supp. 2d 1311 (USCIT Order of 6/20/05 and CAFC

Order of 6/27/05). As a result, the Declaratory Judgment,

although on appeal, remains in effect.

On June 13, 2005, Customs’ Office of Finance, apparently

having been made aware of the Court’s Declaratory Judgment, sent

a letter to plaintiff requesting a continuous bond of $400,000 on

entries of the white sauce.3 See Pl.’s Ex. A-8. On June 17,

2005, however, when plaintiff sought to enter its merchandise, it

was informed that in addition to the $400,000 continuous entry

bond, it would be required to post a single entry bond for each

3
A continuous bond is intended to secure payment of
duties, taxes, or other charges on the imported merchandise. See
19 C.F.R. § 113.62.
Court No. 05-00509 Page 5

entry equal to three times the value of the merchandise entered.

Thus, for a typical entry valued at $2.1 million, plaintiff would

be required to post a single entry bond in the amount of $6.3

million, in addition to the $400,000 continuous entry bond.

Pl.’s Mem. at 11. As a result, plaintiff did not enter its

merchandise.

On September 12, 2005, plaintiff commenced the present

action “to challenge [the] prohibitive bond requirements that

were imposed for the unlawful purpose of preventing ICP from

importing white sauce in accordance with an advance

classification ruling that the company obtained more than six

years ago . . . .” Compl. at 1. Plaintiff claimed that by

imposing the single entry bond requirement, Customs sought to

nullify both this Court’s Declaratory Judgment and plaintiff’s

statutory due process protections by effectively reclassifying

plaintiff’s white sauce under a classification requiring a higher

duty.

On September 15, 2005, this court entered a temporary

restraining order which instructed Customs to rescind all single

entry bond requirements imposed on plaintiff’s white sauce. The

temporary restraining order was stayed pending the outcome of

court-ordered mediation, but came into full force and effect on

September 19, 2005, when the stay was lifted. Thereafter,
Court No. 05-00509 Page 6

Customs complied with the court’s order, and on September 19 and

20, 2005, all of plaintiff’s merchandise subject to the single

entry bond requirements was entered into the United States.

Plaintiff claims jurisdiction under 28 U.S.C. § 1581(i).

Defendant does not dispute this claim.

DISCUSSION

Although all entries that were the subject of the single

entry bonds have now entered the United States, plaintiff still

insists that the court grant it relief. The essence of

plaintiff’s continuing claim is that when it seeks to enter its

white sauce in the future, it will be faced with a renewed demand

for single entry bonds or the imposition of other “requirements

or restrictions.” Compl. at 17. As set forth in the Request for

Judgment and Relief portion of the complaint, plaintiff seeks to

enlist the court on its behalf by seeking a judgment:

(1) declaring the Bond Requirements null and void ab

initio, both with respect to shipments of white sauce

currently in storage in ICP’s Customs bonded warehouse

and all future entries of white sauce;

(2) declaring that the continuous-entry bond of

$400,000 required by the Office of Finance is the

only bond that Customs may impose with respect to

ICP’s white sauce entries until such time as
Court No. 05-00509 Page 7

Defendant revokes NYRL D86228 in accordance with

19 U.S.C. § 1625(c), 19 C.F.R. § 177.12, the

“compelling reason” standard, the APA, and the

Constitution;

(3) enjoining Defendant from imposing any bond

requirement other than or in excess of the

$400,000 continuous-entry bond required by the

Office of Finance until such time as Defendant

revokes NYRL D86228 in accordance with 19 U.S.C. §

1625(c), 19 C.F.R. § 177.12, the “compelling

reason” standard, the APA, and the Constitution;

(4) enjoining Defendant from imposing requirements or

restrictions of any kind that would in any way

impede ICP’s ability to enter additional white

sauce, other than those requirements or

restrictions that were in place prior to March 1,

2005, until such time as Defendant revokes NYRL

D86228 in accordance with 19 U.S.C. § 1625(c), 19

C.F.R. § 177.12, the “compelling reason” standard,

the APA, and the Constitution;

(5) vacating all Notices and other actions carried out

in accordance with the Bond Requirements;

(6) ordering Defendant to pay to ICP the reasonable

attorney fees, expenses, and court costs incurred
Court No. 05-00509 Page 8

by ICP and as to which it is entitled under the

Equal Access to Justice Act;

(7) ordering that the revocation process for ICP’s

ruling, which Customs commenced by publishing a

notice of proposed revocation in the Customs

Bulletin on August 24, 2005, be stayed until

Customs rescinds the Bond Requirements, so that

ICP is able to import in reliance of its ruling

during the notice and comment period, as provided

for in Section 1625(c); and

(8) awarding ICP such other and further relief as the

Court deems appropriate.

Compl. at 16–18.

Defendant contends, however, that this court lacks subject

matter jurisdiction to hear plaintiff’s claims based on the

doctrines of mootness and justiciability.4 Defendant insists

4
The outer limits of the federal courts’ subject matter
jurisdiction are set forth in Article III, Section 2 of the U.S.
Constitution, which states:

The judicial Power shall extend to all Cases, in Law
and Equity, arising under this Constitution, the Laws
of the United States, and Treaties made, or which shall
be made, under their Authority;—to all Cases affecting
Ambassadors, other public Minister and Consuls;—to all
Cases of admiralty and maritime Jurisdiction;—to
Controversies to which the United States shall be a
Party;—to Controversies between two or more
States;—between and State and Citizens of another
Court No. 05-00509 Page 9

that:

In this case, the only entries belonging to ICP which
are actually located in the United States and/or for
which ICP was required to post single entry bonds were
the eleven warehouse entries. No other entries were
subject to these single entry bond requirements; no
other entries were in fact subject to any type of
increased bonding requirements (other than, of course,
the [$400,000] continuous entry bond requirement).
Indeed, ICP has not even attempted to enter any other
merchandise into the United States other than that in
the eleven warehouse entries.

Because the temporary restraining order required
Customs to permit entry of these eleven warehouse
entries without single entry bonds, and Customs did so,
no entry of any nature exists which can be the subject
of ICP’s present action, and consequently, this action
should be dismissed for lack of justiciable issue and
mootness.

Def.’s Resp. to Pl.’s Mots. for Prelim. Injunction and for J. on

the Agency R. (“Def.’s Resp.”) at 9 (emphasis in original).

With respect to any claim plaintiff might concerning future

entries, defendant states:

As to the other claims made by ICP in its complaint
regarding possible future entries, jurisdiction does
not lie over these claims. As noted previously, in
order to plead a justiciable case or controversy, ICP
must have alleged “a real and substantial controversy
admitting of specific relief through a decree of a

State;—between Citizens of different States;—between
Citizens of the same State claiming Lands under Grants
of different States, and between a State, or the
Citizens thereof, and foreign States, Citizens or
Subjects.

U.S. Const., Art. III; § 2, cl. 1.
Court No. 05-00509 Page 10

conclusive character, as distinguished from an opinion
advising what the law would be upon a hypothetical
state of facts.”

Here, ICP has not attempted to make any other entries
other than the eleven warehouse entries. It indeed
claims that the remainder of its merchandise is in a
warehouse in New Zealand. Similarly, Customs has not
required ICP to provide single entry bonds for any
other entry. Therefore, entry by ICP of any other
merchandise other than that in the eleven warehouse
entries is purely speculative. Whether Customs would
require single entry bonds for these speculative
entries is hypothetical.

Def.’s Resp. at 12 (citation omitted)(emphasis in original).

I. Plaintiff’s Claims Under Paragraphs (1), (5), and (7) of the
Request for Judgment and Relief5 are Moot

Defendant insists that, at least with respect to plaintiff’s

merchandise that has been entered into the United States, this

case is moot.

In this case, the final relief sought by ICP was entry
of its eleven warehouse entries without having to post
single entry bonds, and protection for its future
entries. In having its application for a temporary
restraining order granted, ICP received all of the
relief it sought regarding the eleven warehouse entries
– its entries were admitted without single entry bonds.
ICP received permanent relief on this issue as well
through the temporary restraining order, because once
its entries were made without single entry bonds, even

5
While the court references paragraphs from the
complaint’s Request for Judgment and Relief, these paragraphs
correspond to the counts found in the complaint as follows: Count
I, paragraphs 1, 5, and 7 of the Request for Judgment and Relief;
Count II, paragraphs 1, 5, and 7; Count III, paragraphs 1, 2, 3,
4, and 8; Count IV, paragraphs 1, 2, 3, 4, 5, 7, and 8; Count V,
paragraphs 1, 2, 3, 4, 5, 7, and 8; and Count VI, paragraphs 1,
2, 3, 4, 5, 7, and 8.
Court No. 05-00509 Page 11

if [defendant] were to prevail on the merits of the
preliminary injunction or ICP’s motion for judgment on
the administrative record, Customs cannot retroactively
seek a higher entry bond because the entries were
already made.

Def.’s Resp. at 11-12.

Generally, a case is moot when the relief sought has been

attained. In order for a case to escape dismissal for mootness,

“[i]t must be a real and substantial controversy admitting of

specific relief through a decree of a conclusive character, as

distinguished from an opinion advising what the law would be upon

a hypothetical state of facts.” Aetna Life Ins Co. v. Haworth,

300 U.S. 227, 241 (1937)(emphasis added). Here, because all of

the white sauce subject to the single entry bond requirements has

been entered, and there is no present demand for single entry

bonds, the relief sought in paragraphs (1)(declaring the single

entry bond requirements null and void) and (5) (vacating notices

and other actions relating to the single entry bond requirements)

of the Request for Judgment and Relief has been attained.

Likewise, the relief sought in paragraph (7) (seeking a stay of

the administrative action to revoke the Ruling Letter until the

single entry bond requirements were rescinded) has been attained

as well. Plaintiff’s case, therefore, insofar as it is contained

in those paragraphs, is moot. Because “[m]oot cases do not

present live controversies . . . federal courts have no
Court No. 05-00509 Page 12

jurisdiction to decide them.” Kimberly-Clark Corp. v. Procter &

Gamble Distrib. Co., Inc., 973 F.2d 911, 913 (Fed. Cir. 1992).

As a result, this court finds that it has no jurisdiction to

grant the desired relief in paragraphs (1), (5), and (7) of the

Request for Judgment and Relief.

II. Plaintiff’s Claims under Paragraphs (2), (3), (4), and (8)
of the Request for Judgment and Relief Are Based on
Speculation and Are Thus Not Ripe and Do Not Present
Justiciable Controversies

While one part of a controversy may be rendered moot, other

issues in a case may remain alive and the proper subject of this

Court’s jurisdiction. With respect to certain other requests for

relief based on claims made in the complaint, however, the court

finds that they are not ripe for adjudication and therefore do

not present a justiciable controversy. The purpose of the

ripeness doctrine is “to prevent the courts, through avoidance of

premature adjudication, from entangling themselves in abstract

disagreements over administrative policies, and also to protect

the agencies from judicial interference until an administrative

decision has been formalized and its effects felt in a concrete

way by the challenging parties.” Abbott Labs. v. Gardner, 387

U.S. 136, 148 (1967); see also Nat’l Right to Life Political

Action Comm. v. Connor, 323 F.3d 684, 692 (2003). A claim is not

ripe for adjudication if it rests upon “‘contingent future events
Court No. 05-00509 Page 13

that may not occur as anticipated, or indeed may not occur at

all.’” Texas v. United States, 523 U.S. 296, 296 (1998) (quoting

Thomas v. Union Carbide Agric. Prods. Co., 473 U.S. 568, 580–81

(1985)).

Here, plaintiff has no merchandise either in the United

States ready for entry or in transit. See Tr. of 9/15/05 at 17.

Nor is it certain that there will be any future imports.

Plaintiff may, for instance, decide that it will purchase the

white sauce from a domestic producer. Beyond the question of

whether there will be any future entries, it is further not known

the extent to which plaintiff, at some future time, will be

entitled to enter its merchandise subject to the continuous entry

bond alone. For instance, there is no way of knowing whether

plaintiff, on the future date of a hypothetical white sauce

entry, will have a history of timely compliance with Customs’

requirements with regard to other merchandise it might import.6

6
Title 19 C.F.R. § 113.13(b) sets the guidelines for
determining the amount of a bond, including:

(1) The prior record of the principal in timely payment of
duties, taxes, and charges with respect to the
transaction(s) involving such payments;
(2) The prior record of the principal in complying with
Customs demands for redelivery, the obligation to hold
unexamined merchandise intact, and other requirements
relating to enforcement and administration of Customs
and other laws and regulations; [and] . . .
(5) The prior record of the principal in honoring bond
commitments, including the payment of liquidated
Court No. 05-00509 Page 14

As a result, it is not known, nor is it knowable, whether

Customs’ regulatory guidelines dealing with bond requirements

will come into play. Similarly, it is within the Port Director’s

discretion7 to determine the type of security demand that will be

imposed on merchandise based on the facts at the time of entry.

Thus, for instance, the Port Director, on the date of a future

entry, may have legitimate concerns about whether the duty on the

entry ultimately will be paid. Therefore, the Port Director may

rightfully conclude that the entry of plaintiff’s merchandise

would place the revenue of the United States in jeopardy and

demand further security.

As the foregoing examples indicate, plaintiff’s claims for

future relief rest on the premise that the facts with respect to

the entry of its merchandise will not change. They are therefore

based on “speculative contingencies [that] afford no basis for

[the court] passing on the substantive issues the appellants

would have [the court] decide . . . .” Hall v. Beals, 396 U.S.

45, 49 (1969). For example, paragraph (2) of plaintiff’s Request

damages . . . .
7
Under 19 C.F.R. § 113.13(d), if the Port Director
“believes that acceptance of a transaction secured by a
continuous bond would place the revenue in jeopardy or otherwise
hamper the enforcement of Customs laws or regulations, he shall
require additional security.” Id.
Court No. 05-00509 Page 15

for Judgment and Relief asks the court to declare that the

continuous entry bond of $400,000 required by the Office of

Finance is the only bond that Customs may impose on its white

sauce. This request is thus based on the supposition that there

will be future entries and that the facts as to these entries

will otherwise remain static. In like manner, the relief

requested in paragraphs (3)(seeking an injunction against the

imposition of any bond requirement other than the $400,000

continuous bond), (4) (seeking an injunction preventing Customs

from imposing requirements or restrictions of any kind that would

impede plaintiff from importing its white sauce until the Ruling

Letter is revoked), and (8) (seeking other and further relief)

are equally speculative. Because the requests for relief in

paragraphs (2), (3), (4), and (8) are speculative, the court

declines to hear them on the grounds that they are not ripe for

adjudication and therefore do not present a justiciable case or

controversy. See Am. Spring Wire Corp. v. United States, 6 CIT

122, 124, 569 F. Supp. 73, 75 (1983)(“Straying into a prediction

of future events is no substitute for showing an actual

controversy, or even one that is likely to recur.”); see also

Charles Alan Wright, Arthur R. Miller,& Edward H. Cooper, Federal

Practice and Procedure § 3532, at 112 (2d ed. 2002)(stating that

with respect to ripeness, “[t]he central concern is whether the

case involves uncertain or contingent future events that may not
Court No. 05-00509 Page 16

occur as anticipated, or indeed may not occur at all.”).

III. Plaintiff Is Not Entitled to Attorney’s Fees and Other
Costs Under the Equal Access to Justice Act

Plaintiff cannot be granted the relief sought under

paragraph (6) of the Request for Judgment and Relief requesting

“attorney[’s] fees, expenses, and court costs,” pursuant to the

Equal Access to Justice Act, 28 U.S.C. § 2412, because the court

has found that it does not have jurisdiction over the underlying

claims. See Hudson v. Principi, 260 F. 3d 1357, 1363 (Fed. Cir.

2001) (“This court and others have established that there cannot

be an award of attorneys’ fees unless the court has jurisdiction

of the action.”). Therefore, the court denies so much of

plaintiff’s motion as seeks this relief.

CONCLUSION

For the foregoing reasons, plaintiff’s Motion for Judgment

on the Agency Record is denied and defendant’s Motion to Dismiss

is granted. Judgment shall be entered accordingly.

/s/ Richard K. Eaton
Richard K. Eaton

Dated: November 8, 2005
New York, New York