Hitachi Asks Supreme Court to Hear Case on CBP Dragging Feet on Import Duty Protests
Hitachi Home Electronics (America) wants the U.S. Supreme Court to step in and strengthen a 42-year-old federal statute that bars CBP from dragging its feet on import duty protests, it said in a July 30 petition. Only the Supreme Court "can remedy the harm caused by the Federal Circuit's decision which affects all customs duty protests and, potentially, all imports into the United States," it said. "This case, containing no factual disputes, offers this Court a clean opportunity to examine the federal question of paramount importance raised in this case." Responses to Hitachi's Supreme Court request are due Aug. 31.
In 2003, Hitachi began importing plasma TVs into the U.S. produced at its factories in Mexico, the petition says. The TVs were made or assembled in Mexico in 2005. Customs liquidated them as dutiable under HTS 8528.12.72 at a rate of 5% ad valorem. Hitachi claimed that the TVs qualified for duty-free treatment under NAFTA, and filed 10 protests of the duty rate along with the required documentation.
'Two Year Limitation'
But Customs never acted on the protests, contrary to the Customs Courts Act of 1970, which places a "two-year limitation" on granting or denying such protests, it said. Hitachi filed and lost its suit in the Court of International Trade, which, Hitachi argued, had jurisdiction under 28 USC 1581(a) or 28 USC 1581(i). Last October, the U.S. Appeals Court for the Federal Court ruled that notwithstanding the two-year limitation in the statute, "Customs may take as long as it wants to allow or deny protests," the petition said. Problem is, "importers file tens of thousands of such protests annually, disputing the assessment and collection of billions of dollars in duty assessments and payments," it said. Unless the Supreme Court intervenes, letting stand the Appeals Court ruling "will embolden Customs'' practice of ignoring the two-year limitation" in the statute and will "empower Customs to refuse to decide any protests, thus increasing uncertainty and costs to U.S. consumers and businesses," it said.
The lower Court of International Trade dismissed this case for lack of jurisdiction. Using the same reasoning, the Court of Appeals for the Federal Circuit affirmed the CIT's decision. Both the CAFC and the CIT ruled that the two-year time limit of 1515(a) is only directory, and not mandatory, since CBP was not expressly prohibited from acting after the specified time period and no adverse consequences are imposed for a delay. CAFC and CIT also said Hitachi did have an available remedy in that it could have filed a request for accelerated disposition of the protest. If the protest would have been "deemed denied" following a lack of CBP action on the accelerated disposition within 30 days, Hitachi could have challenged the protest denial under CIT's 1581(a) jurisdiction for denied CBP protests. But because the two-year period for CBP protest decisions is directory and not mandatory, CIT said it couldn't compel a decision on Hitachi's protest under the catch-all 1581(i) jurisdiction provision.
(See ITT's Online Archives 10050432 for a summary of the U.S. Court of International Trade decision against Hitachi. See ITT's Online Archives 11111428 for summary of the Court of Appeals for the Federal Circuit decision against Hitachi.See ITT's Online Archives 12040207 for summary of the Federal Appeals Court's decision not hear an en banc review of the case. See also ITT's Online Archives 12081301 for summary of CAFC's recent ruling against a challenge brought by a customs broker for similar reasons.)
Email documents@brokerpower.com for a copy of the Hitachi filing.