DOJ Moves to Partially Dismiss Customs Row Over Improper Jurisdiction in CIT

Commercial airline operator NetJets Aviation's lawsuit in the Court of International Trade over CBP's assessment of customs user fees on certain of its flights should be partially dismissed since NJA, in part, is claiming the wrong jurisdiction, the Department of Justice said. NJA challenged CBP's denial of its customs protest, filing its case under Section 1581(a) and 1581(i) in CIT, the latter being a challenge to agency action. Submitting a partial motion to dismiss on July 7, DOJ said that NJA's 1581(i) claim should be tossed since 1581(a) exists as the proper avenue of jurisdiction (NetJets Aviation, Inc. v. United States, CIT #21-00142).

According to DOJ, "it is well settled that the denial of a protest challenging the 'rate and amount of duty chargeable' is reviewable in this court pursuant to 28 U.S.C. § 1581(a). Indeed, NJA itself invokes jurisdiction pursuant to section 1581(a) and makes no allegation that its remedy pursuant to section 1581(a) is, in any way, inadequate."

NJA is a company that provides services to people who wish to fly in a corporate jet but do not need full-time access to it. A customer may purchase the right to a certain amount of flight time per year in one of the corporate jets that they operate. The law requires that each passenger of a commercial aircraft must be assessed customs user fees. However, CBP does not collect these fees directly from the passengers, rather they collect from the entity that issues a ticket for entrance into the United States. The U.S. Court of Appeals for the Federal Circuit held, though, that airlines aren't required to pay uncollected fees since they are primarily the passenger's responsibility.

CBP conducted an audit of NJA's flights from 2016 and found that NJA was indeed a commercial airline and should be collecting the customs user fees. However, since the airline was not collecting them, the customs agency found that NJA owed zero dollars. NJA filed its complaint March 26 contesting CBP's determination that it operates commercial aircraft and that it issued tickets to passengers, making it responsible for the fee collection.