CIT Rules Importer Whose Identity Was Allegedly Stolen Cannot Sue as Time Barred

The Court of International Trade has ruled that an importer whose identity is alleged to have been stolen and used by another to enter goods that never came into the importer's possession, may not sue for a refund of liquidated damages as the importer failed to seek timely relief under 28 USC 1581(a) by protesting CBP's Notice of Redelivery. CIT stated that had the importer protested the Notice, it could have raised the exact issues raised in this suit.

(Kairali Decan, Inc. is an importer and wholesaler of foreign foods. On January 17, 2007, a shipment of food from Sri Lanka arrived in San Francisco with Kairali Decan listed as the importer and was signed for by “Khan,” listed as the CEO. On January 24, 2007, the shipment was delivered, per instructions on purported Kairali Decan letterhead signed by "Salman F. Khan, Director" to a warehouse belonging to SF Food, whose lease was signed by Abdul Salman-Fariz.)

Kairali Decan Listed as Importer, but Entry Was Actually Handled by Salman

On January 23, 2007, the Food and Drug Administration received the entry documents, which contained no contact information. On February 1, 2007, an FDA import specialist asked Kairali Decan's CEO, Joseph Thomas, about the entry, and was told that Mr. Salman was handling the entry and was given Mr. Salman's phone number. The FDA import specialist contacted Mr. Salman, who was overseas at the time. The FDA specialist later left a phone message requesting Mr. Salman call back to tell FDA who picked up the shipment, its current location, and the name of anyone else who could assist with an FDA inspection in his absence. Mr. Salman did not return the call.

Kairali Didn't Reply to CBP Redelivery Notice, CBP Gave Notice of Liq Damages

On February 13, 2007, the FDA, having discovered that Mr. Salman was the subject of a prior case for failure to redeliver imports for FDA inspection, asked CBP to issue a Notice of Redelivery to Kairali Decan to facilitate FDA inspection. CBP issued the Notice on February 16, 2007 and mailed it to Kairali Decan's office; however, Kairali Decan did not respond to it.

On April 20, 2007, CBP issued a Notice of Liquidated Damages in the amount of $24,606 to Kairali Decan, who claimed that it received the Notice in July 2007 when the surety forwarded a copy. Kairali Decan filed a petition for relief from liquidated damages, together with evidence that Mr. Salman-Fariz was the actual importer at issue, but CBP refused to cancel or mitigate liquidated damages.

Kairali Said it Never Received Redelivery Notice to File a 1581(a) Protest

Kairali Decan stated that it never received the Notice of Redelivery. As it never received the Notice, Kairali Decan contended that it was unable to protest the Notice, and therefore, the remedy of filing a protest and bringing a 28 USC 1581(a) suit was unavailable. Kairali Decan also contended that the CIT has jurisdiction under 28 USC 1581(i) to decide whether an importer (i) that is a “complete stranger” to an entry and (ii) who “may or may not” have received a Notice to Redeliver that entry, must file a protest in order to preserve the right to challenge the Notice in the CIT.

CBP Argued Kairali Had "Actual Knowledge" of Redelivery Notice

CBP argued that Kairali Decan should be charged with having actual knowledge of the Notice of Redelivery for three reasons: (1) it is legally presumed to have received the properly-mailed notice; (2) even if it did not receive the notice, it admitted that it had ample notice of the substance of the notice in February 2007; and (3) it received the Notice of Liquidated Damages in late April or early May 2007 and then had actual knowledge of the February 2007 Notice to Redeliver within the time for protesting the earlier Notice.

Said Kairali Could've Raised Identity Theft Claim in Protest to Redelivery Notice

CBP also maintained that Kairali Decan could have protested the Notice to Redeliver because it was the importer shown on the entry papers. CBP insisted that Kairali Decan would have been able to raise its identity theft claim in its protest as a defense to the Notice and could have appealed an adverse decision to the CIT under 28 USC 1581(a).

CIT Found Kairali Could Have Protested Notice as Was Importer on Entry Papers

The CIT explained that protests may be filed by the importers or consignees shown on the entry papers within 180 days after a Demand for Redelivery. If a protest is denied, that denial may be challenged in the CIT by the person who filed the protest. The CIT stated that because Kairali Decan was the importer shown on the entry papers, it was authorized to file a protest challenging the Notice of Redelivery, despite not being the actual importer of the goods at issue. Therefore, the CIT stated that 1581(a) jurisdiction would have been available to Kairali Decan had it acted within the allotted time.

Even if Kairali Hadn’t Received Notice, It Learned of it in Time to File a Protest

Kairali Decan admitted that it received the Notice of Liquidated Damages, at the latest, in July 2007. The CIT stated that it didn’t matter that Kairali Decan did not specify when in July it received the notice as the time for filing a protest (180 days) had not expired by July 31, 2007, which was 165 calendar days after the issuance of the Notice of Redelivery. The CIT stated that this demonstrated that Kairali Decan could have filed a protest, since it learned of the Notice of Redelivery at least two weeks before the time to file a protest expired. Therefore, Kairali Decan could have filed a protest and challenged any denial under 1581(a).

CIT Found it Lacked Jurisdiction Under 1581(i), Case May be Dismissed

The CIT concluded that because Kairali Decan had an adequate remedy available via 1581(a), but failed to make use of that remedy, Kairali Decan cannot now invoke jurisdiction under 1581(i)(4). The CIT therefore found that it did not have jurisdiction over this case under 1581(i), but permitted for any party to file before August 17, 2011 a letter showing that the interest of justice requires transfer of this case to another judicial forum, absent of which the case will be dismissed.

(Slip Op. 11-99, dated 08/10/11)