Design International Group Inc. v. United States

Slip Op. 15-
UNITED STATES COURT OF INTERNATIONAL TRADE
DESIGN INTERNATIONAL GROUP,
INC.,
Plaintiff,
v.
UNITED STATES,
Defendant.
Before: 	Nicholas Tsoucalas,
Senior Judge
Court No. 14-00119
OPINION
[Defendant’s 	motion 	to 	dismiss 	for 	lack 	of 	subject 	matter
jurisdiction is granted.]
Dated:
John N. Politis, Politis & Politis, of Pasadena, CA for Plaintiff.
St. 	Lutheran 	Tillman, 	Trial 	Attorney, 	Commercial 	Litigation
Branch, 	Civil 	Division, 	U.S. 	Department 	of 	Justice, 	of 	New 	York,
New 	York, 	for 	Defendant. 	With 	him 	on 	the 	brief 	were 	Benjamin 	C.
Mizer, Principal Deputy Assistant Attorney General, Amy M. Rubin,
Assistant Director. 	Of counsel on the action was Beth C. Brotman,
Office 	of 	the 	Assistant 	Chief 	Counsel, 	International 	Trade
Litigation, 	United 	States 	Customs 	and 	Border 	Protection, 	of 	New
York, NY.
Tsoucalas, Senior Judge: 	This case is before the court
on 	Defendant’s 	motion 	to 	dismiss 	for 	lack 	of 	subject 	matter
jurisdiction. 	See 	Def.’s 	Mem. 	in 	Supp. 	of 	its 	Mot. 	To 	Dismiss,
ECF 	No. 	9 	(July 	17, 	2015)(“Def.’s 	Br.”); 	see 	also 	Reply 	Mem. 	in
Supp. 	of 	Def.’s 	Mot. 	To 	Dismiss, 	ECF 	No. 	13 	(Sept. 	3, 	2015).
Plaintiff, 	Design 	International 	Group, 	Inc. 	(“Design” 	or
/PWFNCFS 
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“Plaintiff”), opposes Defendant’s motion. 	See Pl.’s Mem. in Opp.
Def.’s Mot. To Dismiss, ECF No. 10 (Aug. 10, 2015)(“Pl.’s Br.”).
BACKGROUND
This action concerns two entries of pencils, Entry Nos.
BKC 	0138174-9 	and 	BKC 	0138213-5, 	made 	at 	the 	Port 	of 	Los
Angeles/Long Beach. 	Compl. at ¶¶ 14-18. 	Plaintiff is the importer
of 	record 	for 	these 	entries. 	Id. 	at 	¶ 	1. 	On 	June 	7, 	2013, 	U.S.
Customs and Border Protection (“Customs”) liquidated both entries.
Id. at ¶ 2. 	On July 9, 2013, Design’s customs broker filed Protest
Nos. 	2704-13-101337 	and 	2704-13-101339, 	challenging 	Customs’
calculation 	of 	the 	number 	of 	pencils 	included 	in 	each 	entry 	and
the 	resulting 	assessment 	of 	duties. 	Id. 	at 	¶ 	14. 	On 	August 	15,
2013, Customs denied both protests. 	Id.
On 	October 	10, 	2013, 	Design’s 	counsel 	filed 	a 	third
protest, 	Protest 	No. 	2704-13-102066. 	Id. 	at 	¶ 	2. 	This 	protest
also 	challenged 	Customs’ 	calculation 	of 	the 	number 	of 	pencils
covered by Entry Nos. BKC 0138174-9 and BKC 0138213-5. 	See id. at
¶ 25. On November 19, 2013, Customs denied Plaintiff’s protest as
untimely. 	Id. at ¶ 4, 5.
After 	the 	denial 	of 	Design’s 	October 	10, 	2013 	protest,
Design insisted that it timely filed its protest, and that Customs
should 	withdraw 	its 	denial. 	Id. 	at 	¶ 	6. 	However, 	denial 	of 	the
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protest 	was 	not 	withdrawn. 	Id. 	at 	¶ 	7. 	Instead, 	Customs 	placed
Design on the sanction list for failing to pay the increased duties
on the subject entries. 	Id. at ¶ 7. 	Customs required Design to
file “live” entries, which delayed release and increased costs of
shipments. 	Id. 	at 	¶ 	8. 	Design 	informed 	Customs 	that 	this
situation 	was 	a 	mistake, 	and 	Customs 	responded 	that 	they 	would
change the status of Design’s protest from “decided” to “open” in
order to remove Design from the sanctions list. 	Id. at ¶ 9.
On 	March 	10, 	2014, 	Customs 	denied 	Design’s 	October 	10,
2013 protest again, changing the reason for denial from “Untimely
filed” 	to 	“Rejected 	as 	non-protestable.” 	Id. 	at 	¶ 	10. 	In 	the
denial, 	Customs 	explained 	that 	“[w]e 	have 	no 	[j]urisdiction 	over
this 	[p]rotest, 	since 	a 	denial 	of 	a 	protest 	is 	not 	a 	protestable
action.” Id. at ¶ 10.
On 	May 	16, 	2014, 	Design 	filed 	an 	action 	in 	this 	Court
challenging the denial of Protest No. 2704-13-102066. Id. at ¶ 4.
STANDARD OF REVIEW
“Plaintiffs 	carry 	the 	burden 	of 	demonstrating 	that
jurisdiction 	exists.” 	Techsnabexport, 	Ltd. 	v. 	United 	States, 	16
CIT 420, 422, 795 F. Supp. 428, 432 (1992) (citing McNutt v. Gen.
Motors Acceptance Corp., 298 U.S. 178, 189 (1936)). In deciding a
Rule 12(b)(1) motion to dismiss that does not challenge the factual
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basis 	for 	the 	complainant’s 	allegations, 	the 	court 	assumes 	“all
factual allegations to be true and draws all reasonable inferences
in 	plaintiff's 	favor.” 	Henke 	v. 	United 	States, 	60 	F.3d 	795, 	797
(Fed. Cir. 1995).
DISCUSSION
In 	order 	to 	invoke 	the 	Court’s 	jurisdiction 	under
§ 1581(a), 	a 	civil 	action 	must 	be 	based 	on 	the 	denial 	of 	a 	valid
protest 	filed 	in 	accordance 	with 	19 	U.S.C. 	§ 	1514 	(2012). 	See
Koike 	Aronson, 	Inc. 	v. 	United 	States, 	165 	F.3d 	906, 	908–09 	(Fed.
Cir. 1999). 	Customs contends that the Court lacks subject matter
jurisdiction under § 1581(a) because Design’s third protest filed
on 	October 	10, 	2013, 	Protest 	No. 	2704-13-102066, 	was 	not 	a 	valid
protest. 	See 	Def.’s 	Br. 	at 	3-5. 	In 	response, 	Plaintiff 	asserts
that the action was “timely commenced within 180 days of denial of
protest 	number 	2704-13-102066 	in 	accordance 	with 	28 	U.S.C.
§ 1581(a) and 28 U.S.C. § 2636(a).” 	See Pl.’s Br. at 2.
The 	issue 	in 	the 	instant 	action 	is 	whether 	Design’s
protest 	is 	valid 	in 	light 	of 	the 	“one 	entry, 	one 	protest” 	rule
outlined 	in 	19 	U.S.C. 	§ 	1514(c)(1)(D). 	See 	19 	U.S.C. 	§ 	1514(c)
(“Only 	one 	protest 	may 	be 	filed 	for 	each 	entry 	of
merchandise . . . .”). 	Section 	1514(c)(1) 	generally 	prohibits
multiple 	protests 	from 	being 	filed 	for 	the 	same 	entry 	of
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merchandise. 	Accordingly, 	“[w]here 	a 	plaintiff 	has 	invalidly
filed a second protest, the court lacks jurisdiction to entertain
plaintiff’s 	claims.” 	Mitel, 	Inc. 	v. 	United 	States, 	16 	CIT 	4, 	9,
782 F. Supp. 1567, 1571 (1992).
Plaintiff 	argues 	that 	a 	third 	protest 	was 	permitted
because 19 U.S.C. § 1514(c) provides exceptions to the one protest
rule, 	stating 	that 	“separate 	protests 	filed 	by 	different
authorized persons with respect to any one category of merchandise
. . . that is the subject of a protest are deemed to be part of a
single 	protest.” 	Pl.’s 	Br. 	at 	3 	(citing 	19 	U.S.C. 	§ 	1514).
Specifically, 	Plaintiff 	asserts 	that 	its 	broker 	and 	its 	counsel
are “different authorized persons,” and thus, insists that Customs
violated 	the 	exceptions 	outlined 	in 	§ 	1514(c) 	when 	it 	failed 	to
consolidate 	the 	third 	protest 	filed 	by 	its 	counsel 	(Protest 	No.
2704-13-102066), with the two previous protests filed by its broker
(Protest Nos. 2704-13-101337 and 2704-13-101339). 	Id. at 3-4.
The 	court 	disagrees 	with 	Plaintiff’s 	assertions. 	The
exception articulated in 19 U.S.C. § 1514(c)(1) does not permit a
party 	to 	file 	an 	additional 	protest 	after 	a 	previous 	protest 	has
already 	been 	denied, 	even 	when 	one 	is 	filed 	by 	a 	different
authorized person: “only the first protest received by Customs for
filing may practicably be treated as valid.” 	Alcan Aluminum Corp.
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v. 	United 	States, 	28 	CIT 	2067, 	2068 	n.2, 	353 	F. 	Supp. 	2d 	1374,
1375 	n.2 	(2004); 	see 	also 	id. 	(“Because 	19 	U.S.C. 	§ 	1514(c)(1)
precludes the filing of two protests relating to the same entries
and 	same 	category 	of 	merchandise 	[. 	. 	.] 	only 	the 	first 	protest
received 	by 	Customs 	for 	filing 	may 	practicably 	be 	treated 	as
valid.” (citing Russ Togs, Inc. v United States, 79 Cust. Ct. 119,
122 	(1977)(emphasis 	in 	original))). 	Furthermore, 	allowing 	an
additional protest contesting an entry that was already subject to
the 	denial 	of 	a 	previous 	protest 	would 	“allow 	[a] 	plaintiff 	to
file 	an 	unending 	series 	of 	protests 	each 	protesting 	the 	previous
protest denial.” Wally Packaging, Inc. v. United States, 7 CIT 19,
22–23, 	578 	F. 	Supp. 	1408, 	1412 	(1984) 	(“[S]ection 	1514 	does 	not
permit 	a 	party 	to 	protest 	the 	denial 	of 	a 	protest 	. 	. 	. 	such 	a
procedure 	would allow 	plaintiff 	to 	file 	an 	unending 	series 	of
protests 	each 	protesting 	the 	previous 	protest 	denial.”).
Additionally, § 1514(c)(1) provides that “[n]ew grounds in support
of 	objections 	raised 	by 	a 	valid 	protest 	or 	amendment 	thereto 	may
be 	presented 	for 	consideration 	in 	connection 	with 	the 	review 	of
such 	protest 	pursuant 	to 	section 	1515 	of 	this 	title 	at 	any 	time
prior 	to 	the 	disposition 	of 	the 	protest 	in 	accordance 	with 	that
section.” 	19 U.S.C. § 1514(c)(1) (emphasis added).
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Here, 	Customs 	denied 	Protest 	Nos. 	2704-13-101337 	and
2704-13-101339 	on 	August 	15, 	2013. 	Design’s 	October 	10, 	2013
protest, 	Protest 	No. 	2704-13-102066, 	effectively 	contested
Customs’ denial of its first two protests. 	As a result, Design’s
October 10, 2013 protest is invalid. 	See Alcan Aluminum Corp, 28
CIT 	at 	2068 	n.2, 	353 	F. 	Supp. 	2d 	at 	1375 	n.2 	(citing 	Russ 	Togs,
Inc., 79 Cust. Ct. at 122 (1977)); see also Wally Packaging, Inc.,
7 	CIT 	at 	22–23, 	578 	F. 	Supp. 	at 	1412. 	The 	court 	therefore 	lacks
jurisdiction to entertain Plaintiff’s claims. 	See Mitel, Inc., 16
CIT at 9, 782 F. Supp. at 1571.
CONCLUSION
For 	the 	reasons 	stated, 	Defendant’s 	motion 	to 	dismiss
for lack of subject matter jurisdiction is GRANTED. 	Judgment will
be entered accordingly.
/s/ Nicholas Tsoucalas
Nicholas Tsoucalas
Senior Judge
Dated:
New York, New York
/PWFNCFS 
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