Timeliness of CBP Demand for Payment Is Protestable, CIT Says

The Court of International Trade on Oct. 10 dismissed a challenge to the timeliness of a CBP demand for payment from a surety related to an importer’s unpaid antidumping duties on preserved mushrooms from China. Hartford Fire Insurance argued the six-year and 30-day deadlines for CBP’s demand ran out because it should have been calculated from the date of deemed liquidation in 2006, not from the date CBP actually liquidated the entries in 2011. CIT found it did not have jurisdiction over the case because the issue should have been raised in a protest and challenged in a denied protest lawsuit under 28 USC 1581(a), not under CIT’s “residual” jurisdiction under 28 USC 1581(i).

Hartford issued the single transaction bonds to cover an importer’s potential AD duty liability of 198.63% on six entries. The surety raised the timeliness issue in protests on two of the six entries filed after CBP’s demand for payment. After those protests were denied, it filed lawsuits under CIT’s denied protest jurisdiction covering all six entries. Hartford subsequently changed course, filing a second lawsuit under CIT’s residual jurisdiction provision.

CIT has long held that residual jurisdiction is only available when no other avenues to court are available. Hartford claimed that 19 USC 1514, the statute covering protests, does not provide for protests challenging the timeliness of demands for payment. That means there would be no denied protest to challenge at CIT, leaving the court’s residual jurisdiction as the only available way to have its case heard at CIT as a “matter of administration or enforcement” under 28 USC 1581(i). It also said lawsuits that raise constitutional arguments, as Hartford’s does, should be raised under the residual jurisdiction provision.

The trade court disagreed, finding the timeliness of demands for payment is protestable under 19 USC 1514(a)(3), which provides for protests of “charges or extractions.” Hartford must file its lawsuit under CIT’s denied protest jurisdiction, the trade court said. Hartford may also raise its arguments as defenses in a Section 1582 collections case filed by the government, it said. CIT also found that Hartford’s constitutional claims mean the case must be filed under Section 1581(i). “The inclusion of a constitutional claim of some nature does not necessarily render” a denied protest challenge under 28 USC 1581(a) “unavailable or inadequate,” CIT said. “If a constitutional claim may be disposed of on non-constitutional grounds, a litigant is required to exhaust its administrative remedies,” it said.

(Hartford Fire Ins. Co. v. U.S., Slip Op. 17-139, CIT # 13-00352, dated 10/10/17, Judge Katzmann)

(Attorneys: Frederic Deming Van Arnam of Barnes Richardson for plaintiff Hartford Fire Insurance Company; Edward Kenny for defendant U.S. government; Paul Rosenthal of Kelley Drye for amici curiae)