CIT Dismisses Challenge of CBP Exclusion and Seizure; District Court is Correct Forum

Challenges of CBP exclusions of imported merchandise should be heard by U.S. district courts, rather than the Court of International Trade, if the excluded merchandise is seized before the court challenge is filed, said CIT in dismissing PRP Trading’s objection to CBP’s exclusion of its merchandise. CBP originally excluded the merchandise because it suspected false country of origin markings. PRP Trading argued it could challenge the exclusion at CIT, but CIT said it had no jurisdiction because the merchandise was seized by CBP before PRP Trading filed suit, which means the correct forum for the case is a U.S. district court.

In December 2011 and January 2012, PRP Trading imported aluminum extrusions from Malaysia to Puerto Rico in five entries. Upon arrival at the port, CBP detained the merchandise on suspicion of false country of origin markings. PRP Trading then presented the merchandise to CBP for examination, beginning the 30-day period for CBP to decide on admissibility of the merchandise. After examination, CBP decided to seize all five entries. PRP Trading filed suit at CIT three weeks after the seizures.

PRP Trading argued that CIT had jurisdiction under the protest denial challenge provision in 28 USC 1581(a) because the entries were “deemed” excluded. Specifically, two of the entries were “deemed” excluded after expiration of the 30-day period without a CBP decision, and the other three should have been deemed excluded but for CBP’s delay in examining them, PRP Trading said. CBP countered that because it seized the merchandise, CIT had no jurisdiction and the case should have been filed in a U.S. district court pursuant to 28 USC 1356.

CIT agreed it had no jurisdiction over the case. Although PRP Trading pointed to the 2011 CBB Group v. U.S. case as an example of CIT ruling on a CBP exclusion despite seizure of the merchandise, CIT said the case was irrelevant because CBP seized that merchandise after the exclusion challenge was filed. In this case, by contrast, CBP had already seized the merchandise when PRP Trading filed suit. CIT agreed with CBP that “the fact of seizure trumps the fact of deemed exclusion,” and dismissed PRP Trading’s challenge for lack of subject matter jurisdiction and failure to state a claim.

PRP Trading did, however, get a chance to avoid dismissal of the suit. If PRP Trading files a letter showing that the “interest of justice” requires transfer of the case to another court by Oct. 9, CIT said it would transfer it to the relevant U.S. district court. If not, CIT said it will dismiss the case on Oct. 10.

(PRP Trading Corp. v. United States, CIT Slip Op. 12-126, dated 10/03/12, Judge Carman)

(Attorneys: Peter Herrick for plaintiff PRP Trading, Justin Miller for defendant U.S. government.)