CIT Rules Protest is Not Needed if CBP Unlawfully “Deem Liquidates” an Entry

In a September 7, 2010 decision, Alden Leeds Inc. v. U.S., the Court of International Trade denied U.S. Customs and Border Protection’s request to dismiss an importer’s claim for a refund of estimated antidumping duties deposited in excess of the final AD duty rate.

According to the CIT, the issue in this case is whether the CIT can hear the importer’s claim even though the importer failed to protest timely the unlawful posting of a notice of deemed liquidation.

Case Concerns Request for Return of Excess AD Duties Deposited

This case involves Alden Leeds, an importer, who deposited estimated AD duties of 24.83% for entries of chlorinated isocyanurates from Spain. As a result of an AD duty administrative review, liquidation of the importer’s entries was suspended. In spite of this suspension of liquidation, CBP posted a Bulletin Notice of liquidation announcing that 12 of the importer’s entries had been liquidated by operation of law (i.e., deemed liquidated).

When the International Trade Administration subsequently published the final results of the AD duty administrative review and found the subject merchandise should be subject to a AD rate of 4.07%, the importer sought a refund of the excess AD duties and was informed that the entries had been deemed liquidated at the higher estimated deposit rate.

CBP Argued No CIT Jurisdiction as Importer Failed to Protest Liquidation/Notice

CBP requested that the importer’s claim for a refund of excess AD duties and interest be dismissed as the importer failed to protest the purported deemed liquidation and that the CIT does not have subject matter jurisdiction. In the alternative, CBP argued that the importer’s complaint should be dismissed because it does not state a claim upon which relief can be granted because the importer failed to timely protest the Bulletin Notice.

CBP asserted that if the importer had wanted to dispute the purported deemed liquidation, it was first required to file a protest and, if the importer failed to get relief by way of protest, it could then have petitioned the CIT for relief pursuant to 28 USC 1581(a). CBP claimed that because 28 USC 1581(a) jurisdiction was available to the importer as an avenue for relief, it cannot now bring a case under 28 USC 1581(i).

Importer Claimed Residual Jurisdiction Exists as No Protestable Event

The importer stated that in this case, 28 USC 1581(i) jurisdiction applies because other possible remedies were “manifestly inadequate.” The importer asserted that because the Bulletin Notice was posted at the customhouse while the ITA’s liquidation suspension was in effect, its entries were not liquidated and there was no event which could be protested.

CIT Agrees with Importer: No Deemed Liq or Need for Protest, Residual Jurisdiction Exists

Because CBP posted the Bulletin Notice while liquidation of the importer’s entries was suspended and none of the 19 USC 1504(d) preconditions necessary for a deemed liquidation to take place occurred prior to the posting of the Bulletin Notice, no argument can be made to support a claim that a deemed liquidation occurred¹.

Since no deemed liquidation occurred, the CIT agreed with the importer, stating that the importer was not required to protest CBP’s legally inconsequential Bulletin Notice. Since no protest was required, judicial review under 19 USC 1581(a) was unavailable to the importer.

As a result, the importer’s case met the “manifestly inadequate” standard, thus triggering the CIT’s 28 USC 1581(i) residual jurisdiction. As a result, the CIT found that it has jurisdiction to hear the importer’s claims under 28 USC 1581(i)(4).

CIT Also Ruled Importer Has a Valid Claim for Which Relief Can be Granted

The CIT added that the importer has a valid claim for which relief can be granted, notwithstanding CBP’s contention that its protest regulations (19 USC 1514(a)) preclude any relief. As the court could grant relief to the importer by setting aside the Bulletin Notice, the CIT stated that CBP’s motion to dismiss this case fails on this argument too.

¹According to the CIT, a suspension of liquidation acts to stop liquidation, including a deemed liquidation, from occurring.