CAFC Reverses CIT's Denial of Ford Claims for Reconciliation Duty Refunds

The Court of Appeals for the Federal Circuit reversed part the Court of International Trade’s July 2010 dismissal of Ford’s request to liquidate and refund duties paid on ten reconciliation entries of imported Jaguar brand vehicles that Ford argued should have been deemed liquidated. In 2010, CIT had dismissed Ford’s claims for lack of subject matter jurisdiction and lack of controversy, and had declined to issue a judgment on other claims. CAFC reversed CIT’s jurisdiction ruling because CIT’s ruling was based on events that occurred after Ford filed its court complaint, reversed CIT’s dismissal for lack of controversy, and vacated CIT’s decision to dismiss other Ford claims.

(In 2005 and 2006, Ford filed reconciliation entries claiming a refund of $6.2 million on ten entries of Jaguar cars from 2004 and 2005, because it had concluded that its estimated duty payments were too high. By 2009, when Ford filed its CIT complaint, CIT still hadn’t affirmatively liquidated nine of the entries. As the one-year statutory time limit for liquidation had expired, Ford argued that the entries should have been deemed liquidated and Ford’s requested refund paid. But following Ford’s CIT filing, CBP liquidated five of the nine entries. In its July 2010 ruling, CIT said that CBP’s post-complaint action stripped it of jurisdiction in the case, and dismissed some of Ford’s claims for lack of subject matter jurisdiction. CIT also found that Ford had conceded the extension of time for liquidation of five of the nine entries, and dismissed Ford’s claims that these entries should have been deemed liquidated because they weren’t extended. Finally, CIT decided not to enter judgment on the rest of Ford’s claims. See ITT’s Online Archives 10072920 for summary of CIT’s ruling.)

CAFC Says Jurisdiction Determined at Time of Complaint

In its CIT complaint, Ford had said CIT had jurisdiction under 28 USC 1581(i), a catch-all for certain trade issues not enumerated in the statue’s other categories of jurisdiction in 28 USC 1581(a)-(h). But in 2010, CIT ruled that Ford’s complaint was instead properly filed under 28 USC 1581(a), which confers CIT jurisdiction over lawsuits contesting protest denials under Section 515 of the Tariff Act of 1930, in light of CBP’s liquidation of Ford’s entries in 2009 and 2010. CBP argued that Ford can, and in fact did, dispute these post-complaint liquidations administratively and, failing that, could bring a separate lawsuit under 28 USC 1581(a).

But CAFC disagreed. According to CAFC, Ford could not have exhausted the administrative remedies necessary to establish jurisdiction under 28 USC 1581(a) at the time of its original CIT filing. Instead, CAFC said, the correct avenue for jurisdiction at the time of its filing was 28 USC 1581(i). Numerous Supreme Court rulings have said subject matter jurisdiction is determined that the time of the complaint, and does not depend on subsequent events, CAFC said. CAFC rejected CBP’s arguments to the contrary. According to CAFC, “a defendant cannot defeat jurisdiction by simply creating a new avenue for exhaustion of administrative remedies that had not been available at the time of the original filing.”

CIT 'Misses the Mark' in Finding Ford Admitted Extension of Liquidation

In 2010, CIT dismissed Ford’s claim that liquidations of six entries were not validly extended because, according to CIT, Ford admitted that the liquidations were extended in a court document. CAFC reversed CIT’s ruling on this issue, because the statement in question was “equivocal.” According to CAFC, Ford’s statement only acknowledged that CBP had taken some administrative action with the purpose of extending liquidation, not that the extension had actually been valid.

CAFC Remands Other Issues Based on Flawed Judgments

Finally, CAFC vacated CIT’s dismissal of claims over which CIT acknowledged it had subject matter jurisdiction but had nonetheless declined to issue an opinion. CAFC said CIT’s dismissals of these claims were predicated on its flawed logic when dismissing other claims. CAFC said CIT retains authority, but no obligation, to revisit this question on remand.