CAFC Throws out Challenge to CBP's "Deemed Liq" of AD Duty as no Protest Filed

The Court of Appeals for the Federal Circuit overturned a decision by the Court of International Trade that had ruled an importer's antidumping duty entries were improperly “deemed liquidated’ by U.S. Customs and Border Protection while liquidation was suspended. According to the CAFC, all liquidations, whether legal or not, must be timely protested before litigation can occur.

CBP "Deem Liquidated" Entries at Higher Rate

Pending the final results of the AD administrative review of chlorinated isocyanurates from Spain for the review period of June 1, 2006, through May 31, 2007, the International Trade Administration suspended liquidation of entries made by importer Alden Leeds Inc., who posted cash deposits at the pre-existing AD rate of 24.83%. The ITA later determined the assessment was 4.07%, but CBP, unnoticed by the importer, posted a Bulletin Notice of liquidation announcing that the importer’s entries had been liquidated by operation of law (deemed liquidated) at the 24.83% rate.

CIT Ruled that Since CBP Failed to Follow Rules, Legal Challenge Could Occur

The CIT had ruled in October 2010 that, since 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 occur were in place, the importer was not prevented from proceeding with its legal challenge to CBP’s liquidation.

CAFC Overturns, Says Protest Needed Before "Deemed Liq" Litigation

However, the CAFC overturned that ruling, saying the lower court did not have jurisdiction because the importer should have filed a timely protest against CBP’s action prior to filing suit at the CIT. The CAFC reasoned that the statute "specifically identifies decisions ‘as to’ deemed liquidations…as protestable decisions.”

The CAFC agreed with the CIT that deemed liquidation could not have occurred as a matter of law in the absence of the necessary preconditions, but disagreed with the lower court’s ruling that the importer was not required to protest CBP’s Bulletin notice. The appeals court noted that “(1) Customs makes a ‘decision’ within the meaning of [28 USC section] 1514(a) when it posts a bulletin notice of liquidation; and (2) even when that decision in incorrect, it becomes final if no protest is filed.”

Because Alden Leeds “had an adequate remedy available," i.e., filing a protest with CBP, it could not resort instead to litigation at the CIT, the CAFC ruled, remanding the case to the lower court for dismissal.

(See ITT’s online archives 10102213 for summary of lower court ruling in favor of the importer’s challenge.)

(Appeal 2011-1280, dated 03/08/2012, Judge Eaton)