Petition for Writ of Certiorari — Byungmin Chae, Petitioner v. Janet L. Yellen, Secretary of the Treasury, et al.

APPENDIX

l. THE UNITED STATES COURT OF

INTERNATIONAL TRADE COURT NO. 20-00316

JUDGEMENT ENTERED: JUNE 6. 2022

2. THE UNITED STATES COURT OF APPEALS FOR

FEDERAL CIRCUIT COURT NO. 22-2017

JUDGEMENT ENTERED: APRIL 25. 2023

3. THE UNITED STATES COURT OF APPEALS FOR

FEDERAL CIRCUIT COURT NO. 22-2017

JUDGEMENT ON PETITION FOR PANEL REHEARING

AND REHEARING EN BANC ENTERED: JUNE 12.

2023

14

Slip Op. 22-59

UNITED STATES COURT OF INTERNATIONAL TRADE

BYUNGMIN CHAE,

Plaintiff.

v.

JANET YELLEN, United States

Secretary of the Treasury,

ALEJANDRO MAYORKAS, United

States Secretary of Homeland

Security, UNITED STATES

DEPARTMENT OF THE TREASURY,

UNITED STATES DEPARTMENT OF

HOMELAND SECURITY, and UNITED

STATES,

Before^ Timothy M. Reif,

Judge Court No. 20-00316

Defendants.

OPTNTON

[Denying plaintiff s motion for judgment on the agency record.]

Dated: June 6, 2022

Matthew C. Moench, King Moench Hirniak & Mehta, LLP, of Morris Plains,

N.J., argued for plaintiff.

Marcella Powell. Senior Trial Counsel, Commercial Litigation Branch, Civil

Division, U.S.Department of Justice, of New York, N.Y., argued for

defendants. With her on the brief were Brian M. Boynton, Acting Assistant

Attorney General, Jeanne E. Davidson. Director, Justin R. Miller, AttorneyinCharge, International Trade Field Office, and Aimee Lee, Assistant

Director.

Of counsel on the brief was Mathias Rabinovitch, Office of the ssistant

Chief Counsel, International Trade Litigation, U.S. Customs and Border

Protection.

* -k -k

Court No. 20-00316

Page 2

Reif, Judge: Plaintiff, Byungmin Chae, brings this action pursuant to

U.S. Court of International Trade (“USCIT” or the “Court”) Rule 56.1

to challenge the decision of U.S. Customs and Border Protection

(“Customs”) upholding the denial of plaintiffs appeal of his result

on the Customs Broker License Exam (“CBLE” or “exam”).l

Am. Compl., ECF No. 20; Br. in Supp. of Pl.’s Mot. for J. on the

R. (“PI. Br.”), ECF No. 39; Reply (“PL Reply Br.”), ECF No. 43;

section 641(e) of the Tariff Act of 1930, as amended, 19 U.S.C.

§ 1641(e) (2018).2 Customs denied plaintiffs appeal based on his

failure to attain a passing score of 75% or higher on the CBLE held

on April 25, 2018 (“April 2018 exam”). Def.’s Opp. to Pl.’s Mot. for J.

on the R. (“Def. Resp. Br.”), ECF No. 40; 19 C.F.R. § 111.11(a)(4).

l The court notes with appreciation the participation of Matthew C. Moench as pro bono counsel

in this action.

^ Further citations to the Tariff Act of 1930, as amended, are also to the relevant portions of

Title 19 of the U.S. Code, 2018 edition.

Court No. 20-00316

Plaintiff appeals to the court Customs’ decision to deny

plaintiff credit for five questions on the April 2018

exam.3 See PI. Reply Br. at 2. Should plaintiff

receive credit for three of the five contested questions,

he would attain a passing score of 75%. Plaintiff

contends also that he is eligible to receive attorney

fees and other expenses under the Equal Access to

Justice Act (“EAJA”), 28 U.S.C. § 2412(d).

3 Plaintiff appealed initially Customs’ decision to deny plaintiff credit for seven

questions on the exam. See PI. Br.at l; Am. Compl. Following the filing of

defendants’ memorandum in opposition to plaintiffs motion, however,

plaintiff “concedetd] to the Government’s interpretation and explanation” of

two questions on the exam, and consequently withdrew his challenges to

those questions. PI. Reply Br. at Accordingly, plaintiff contends that he

should receive credit for five questions: questions 5, 27, 33, 39 and 57. Id.

Page 3

Court No. 20-00316

Page 4

See PL Br. at 13-14. Defendants oppose plaintiffs motion and

argue that Customs’ decision to deny plaintiff credit for each

contested question was supported by substantial evidence.

SeeTlei. Resp. Br. at 8; Def.’s Answer to First Am. Compl., ECF

No.27. On this basis, defendants assert that plaintiff did not

attain a passing score of 75% or higher on the April 2018 exam

and, consequently, that Customs’ “decision not to grant plaintiff a

license due to his failure to attain a passing score .. . was not

arbitrary, capricious, an abuse of discretion, or otherwise not in

accordance with law.” Def. Resp. Br. at 5-6, 22- 23; 5 U.S.C. §706

(2)(A). Defendants contest also plaintiffs argument that he is

entitled to attorney fees and other expenses under the EAJA.

See id. at 21-23. For the reasons discussed below, plaintiffs motion

is denied.

BACKGROUND

Plaintiff sat for the CBLE on April 25, 2018. See Am. Admin. R.

Ex. A, ECF No. 51. On May 18, 2018, Customs notified plaintiff that

he had received a score of 65% —10% below the passing score of 75%.

See id. Plaintiff appealed this result, and the Broker Management

Branch (“BMB”) of Customs notified plaintiff on August 23, 2018,

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that, upon further review, his score had improved by two questions,

resulting in a score of 67.5% — still short of the 75% score required to

pass. See Am. Admin. R., Exs. B, C. Plaintiff then initiated with Customs’

Executive Assistant Commissioner (“EAC”) a review of the BMB’s decision.

See Am. Admin. R., Ex. D. By letter dated May 23, 2019, the EAC

informed plaintiff that his score had improved by three additional

questions, resulting in a 71.25% score — again, short of 75%. See Am.

Admin. R., Ex. L.

Plaintiff inquired how to appeal the EAC’s decision but was informed that

“[t]here is no 3rd appeal.” Am. Admin. R., Ex. M. Plaintiff learned

subsequently, however, that he had been able to appeal his result to the

USCIT and attempted to file a complaint on March 4, 2020. See PI. Br. At 2

The Court docketed plaintiffs complaint on September 11, 2020.4

4 “It is unclear what exactly precipitated such a lengthy delay between [plaintiffs] filing

and the Court’s docketing! however, the court notes that plaintiffs original filing coincided

with the onset of the COVID-19 pandemic.” Chae v. Sec’yofthe Treasury (Chael),

45 CIT 518 F. Supp. 3d 1383,1390(2021)

Court No. 20-00316

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In a decision dated May 7, 2021, the court denied defendants’ motion

to dismiss plaintiffs complaint, granted plaintiff leave to amend his

complaint to bring it into compliance with the procedural

requirements of USCIT Rule 10(a), and sua sponte invited plaintiff

to amend his complaint to bring it into compliance with the

substantive requirements of USCIT Rule 12(b)(6). Chae I, 45 CIT at,

518 F. Supp. 3d at 1389-90. On July 6, 2021, plaintiff filed an

amended complaint seeking review of Customs’ decision to deny

plaintiffs appeal. See Am. Compl. at 1-2.

LEGAL FRAMEWORK

I. Application for a customs broker’s license

Customs brokers are responsible for the application of

statutes and regulations “governing the movement of merchandise

into and out of the customs territory of the United States.”

Dunn- Heiser v. United States, 29 CIT 552, 553, 374 F. Supp.

2d 1276, 1278 (2005). Pursuant to 19 U.S.C. § 1641(b)(2), the

Secretary of the Treasury is vested with “broad powers” with

respect to the licensing of customs brokers. DePersia v. United

States, 33 CIT 1103, 1105, 637 F. Supp. 2d 1244,1247 (2009).

Court No. 20-00316

19 U.S.C. § 1641(b)(2) provides:

The Secretary may grant an individual a customs broker’s license

only if that individual is a citizen of the United States. Before

granting the license, the secretary may require an applicant to

show any facts deemed necessary to establish that the

applicant is of good moral character and qualified to render

valuable service to others in the conduct of customs

business. In assessing the qualifications of an applicant, the

Secretary may conduct an examination to determine the

applicant’s knowledge of customs and related laws, regulations

and procedures, bookkeeping, accounting, and all other

appropriate matters.

19 U.S.C. § 1641(b)(2).

Customs has promulgated several regulations to implement this

Statute. For instance, 19 C.F.R. § 111.11 (a) details the

“[bjasic requirements” for an Individual to obtain a customs

broker’s license:

(a) INDIVIDUAL. In order to obtain a broker’s license,

an individual must:

(l) Be a citizen of the United States on the date of

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Court No. 20-00316

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submission of the application... and not an officer or

employee of the United States Government;

(2) Attain the age of 21 prior to the date of

submission of the application ...;

(3) Be of good moral character; and

(4) Have established, by attaining a passing (75 percent or

higher) grade on an examination taken within the 3-year

period before submission of the application .. that he has sufficient

knowledge of customs and related laws, regulations and

procedures, bookkeeping, accounting, and all other appropriate

matters to render valuable service to importers and exporters.

19 C.F.R. § lll.ll(a)(l)-(4).

Further, 19 C.F.R. § 111.12(a) provides information with

respect to the submission of an application for a customs

broker’s license, and 19 C.F.R. §111.13 regulates the

examination that is described in 19 C.F.R. § 111.11(a)(4).

See 19 C.F.R. §§ 111.12(a), 111.13.

II.

Customs Broker License Exam

Customs’ regulations provide that “[t]he examination for an

individual broker’s license” — referred to as the CBLE — is

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“designed to determine the individual’s knowledge of customs

and related laws, regulations and procedures, bookkeeping,

accounting, and all other appropriate matters necessary to render

valuable service to importers and exporters.” Id. § 111.13(a);

see 19 U.S.C. § 1641(b)(2). The fact that this “comprehensive

written licensing exam” constitutes one of the requirements to obtain

a customs broker’s license reflects the “complex[ity]” of the applicable

statutes and regulations as well as the “integral role [of customs brokers]

in international trade.” Dunn'Heiser, 29 CIT at 553-54, 374 F. Supp.

2d at 1278.

Court No. 20-00316

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Customs administers the CBLE twice each year, in April and

October. 19 C.F.R. § 111.13(b). The exam consists of 80 multiple

choice questions. See Am. Admin. R., Ex. N, at *1. In addition,

“[t]he exam is open book,” and applicants are advised to bring certain

specified materials to which they may refer during the exam,

including the Harmonized Tariff Schedule of the United States

(“HTSUS”) and Title 19 of the Code of Federal Regulations (“CFR”).5

Dunrr Heiser, 29 CIT at 554, 374 F.Supp. 2d at 1278.

^See also Customs Broker License Exam (CBLE), U.S. CUSTOMS AND BORDER PROT.,

httpsV/www.cbp.gov/trade/programs-administration/customs-brokers/license- examinationnotice- examination (last visited June 1,2022) (providing a list of permitted reference

materials).

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As noted, an applicant is required to attain a score of 75% or

higher to pass the CBLE. 19 C.F.R. § 111.11(a)(4); 19 U.S.C.

§ 1641(b)(2). However, an applicant who does not attain a

passing score is entitled to retake the exam without penalty.

19 C.F.R.§ 111.13(e). In addition, an applicant who does not

attain a passing score is entitled to appeal this result to the

BMB. Id.

§ 111.13(f). Should the BMB affirm the result, the applicant is entitled

to request that the EAC review the BMB’s decision. Id. Should the EAC

uphold the BMB’s decision, the applicant is then entitled to appeal

the EAC’s decision to the USCIT. 19 U.S.C. § 1641(e)(1) (“[An]

applicant... may appeal... by filing in the Court of International

Trade, within 60 days after the issuance of the decision or order, a

written petition requesting that the decision or order be modified

or set aside in whole or in part.”).

STANDARD OF REVIEW

This Court has jurisdiction to hear plaintiffs appeal pursuant to

28 U.S.C. §158l(g)(l) (“The Court of International Trade shall have

exclusive jurisdiction of any civil action commenced to review . . .

Court No. 20-00316

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any decision of the Secretary of the Treasury to deny a customs

broker’s license.”).

The U.S. Court of Appeals for the Federal Circuit (“Federal Circuit”)

has determined that two elements of review apply with respect to

the appeal of an applicant’s result on the CBLE. See Kenny v.

Snow, 401 F.3d 1359,1361 (Fed. Cir. 2005).

The first element addresses whether Customs’ decision to deny

an applicant credit for a contested question was supported by

“substantial evidence.” Id. at 136T62 (concluding that the “decision

to deny credit [for the contested question] [was] supported by

substantial evidence”) (citing 19 U.S.C. § 1641(e)(3)).

The second element addresses whether, on the basis of an applicant’s

failure to attain a passing score on the CBLE, Customs’ decision to

deny the applicant a customs broker’s license was “arbitrary,

capricious, an abuse of discretion, or otherwise not in accordance

with law.” Id. at 1361 (citing 5 U.S.C.§ 706).

I.

“Substantial evidence”

In reviewing Customs’ decision to deny an applicant credit for a

contested question on the CBLE, the Court must determine whether

the decision was supported by “substantial evidence.” 19 U.S.C.

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§164l(e)(3). In Kenny, a case involving the appeal of an applicant’s

result on the CBLE, the Federal Circuit stated:

Underpinning a decision to deny a license arising from

an

applicant’s

failure

to

pass

the

licensing

examination are factual determinations grounded in

examination administration issues ... which are subject to

limited judicial review because “[t] he findings ... as to the

facts, if supported by substantial evidence, shall be

conclusive.”

Kenny 401 F.3d at 1361 (citing 19 U.S.C. § 1641(e)(3)). “Substantial

evidence is ‘such relevant evidence as a reasonable mind might

accept as adequate to support a conclusion.’” Id. (citing Consol. Edison

Co. v. NLRB, 305 U.S. 197, 229 (1938)). Further, “the possibility of

drawing two inconsistent conclusions from the evidence does not

prevent the agency’s finding from being supported by substantial

evidence.”

DePersia, 33 CIT at 1104, 637 F. Supp. 2d at 1247.

With respect to the appeal of questions on the CBLE, the

substantial evidence standard does not require that Customs draft

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perfect questions. See Di Iorio v. United States, 14 CIT 746,

748*49 (1990) (“While not perfect, the question was adequate so

that, as to this question, plaintiffs appeal was rejected reasonably.”);

Harak v. United States, 30 CIT 908, 922-23 (2006) (“[A] question

or answer choice need not reflect the precise wording of the regulation

in order to be valid......Though the question is not a perfect reflection

of the regulation’s language, it is not inadequate.”). For instance, in

Di Iorio, the court reviewed the plaintiffs appeal of a question

concerning copyright infringement as provided in 19 C.F.R. §

133.43(a):

(a) NOTICE TO THE IMPORTER. If the district director

has any reason to believe that an imported article may

be an infringing copy or phonorecord of a recorded

copyrighted work, he shall withhold delivery, notify the importer of

his action, and advise him that if the facts so warrant he may

file a statement denying that the article is in fact an infringing

■ copy and alleging that the detention of the article will result

in a material depreciation of its value, or a loss or damage to him.

The district director also shall advise the importer that in the

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absence of receipt within 30 days of a denial by the importer that the

article constitutes an infringing copy or phonorecord, it shall

be considered to be such a copy and shall be subject to seizure and

forfeiture.

19 C.F.R. § 133.43(a) (1989); see Di Iorio, 14 CIT at 748. The question

that the plaintiff contested stated:

Your client, who is just starting to import toy stuffed

dinosaurs, has a shipment under detention by Customs for

possible copyright violation. Following your advice, he wrote to

the District Director of Customs asserting that: (l) the

articles are not piratical copies, and (2) because the dinosaurs

are sold seasonally, continued detention will force him out of

business. The District Director will:

A. Release the shipment to the importer unconditionally

because they are seasonal and the District Director has

authority to determine if they violate the copyright.

B. Furnish the copyright owner with a sample and release the

shipment if he does not respond within 30 days.

C. Release the shipment if the importer agrees to post an additional

bond.

Court No. 20-00316

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D. Consider the goods to be restricted and seize the shipment.

Id. The plaintiff selected answer choice (D), whereas

Customs designated answer choice (B) as the correct response.

See id.

In support of his appeal, the plaintiff argued that the contested

question was ambiguous because the question required an

applicant to make three assumptions: (l) the District Director of

Customs “actually received” a written statement from the client;

(2) the District Director received such a statement within 30 days;

and (3) such a statement constituted “an acceptable denial” within

the meaning of 19 C.F.R. § 133.43(a). Id. According to the plaintiff,

Customs “erred in rejecting [his] appeal because requiring the

examinee to leap through these assumptions in arriving at the correct

answer placed an unreasonable burden on any test-taker.” Id.

In rejecting this appeal, the court stated that the question, “[w]hile

not perfect” in view of the absence of the foregoing information,

nonetheless provided the applicant with sufficient information to

apply 19 C.F.R. § 133.43(a) and to select the correct answer choice.

Id. at 748-49. On this basis, the court concluded that Customs’

decision to deny the plaintiff credit for this question was reasonable.

See id.

Court No. 20-00316

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The Court’s standard of review with respect to questions on the

CBLE is one of reasonableness. See Rudloff v. United States,

19 CIT 1245, 1249 (1995), affd, 108 F.3d 1392 (Fed. Cir. 1997)

(“[T]he question is fair as it reasonably tests ‘an applicant’s

knowledge of customs and related laws, regulations and

procedures.’” (citing 19 U.S.C. § 1641(b)(2))); Dilorio, 14 CIT at

747 (“[T]his court notes that, as a general matter, it will not

substitute its own judgment on the merits

of the Customs examination, but will examine decisions made in

connection therewith on a reasonableness standard.”). The Court

“must necessarily conduct some inquiry into plaintiffs arguments

and defendant’s responses concerning each of the ... challenged

test questions.” Dilorio, 14 CIT at 747. However, the Court is

not “some kind of final reviewer” of the CBLE, id. at 752, and

Customs is “entitled to certain latitude in the design and scoring of’

the exam.

Dunn-Heiser, 29 CIT at 556, 374 F. Supp. 2d at 1280.

In determining whether Customs’ position with respect to a

contested question is reasonable and meets the substantial evidence

standard, the Court previously has stated that “susceptibility of

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different meanings” does not necessarily render a question or term

used therein ambiguous, and that the meaning of the question or

term “may be colored by the context in which it is used.” DePersia,

33 CIT at 1110-12, 637 F. Supp. 2d at 1251. Further, the fact that a

question or term is susceptible of more than one interpretation

will fail to meet the substantial evidence standard only in limited

circumstances. See, e.g., Harak, 30 CIT at 928; O’Quinn v. United

States, 24 CIT 324, 328,100 F. Supp. 2d 1136,1140 (2000). These

circumstances include that: (l) the omission of relevant statutory or

regulatory language would result in the question falsely characterizing

the applicable provision, see Harak, 30 CIT at 928 (citing Carrier v.

United States, 20 CIT 227, 232 (1996)); (2) the inclusion or omission

of language would result in “the question’s incorrect use of’ a relevant

term, O’Quinn, 24 CIT at 328,100 F. Supp. 2d at 1140;

or (3) the inclusion or omission of language would result in the

question “not containing] sufficient information [for an applicant] to

choose an answer.” Id.

II. “Arbitrary, capricious, an abuse of discretion, or otherwise not

in accordance with law”

Customs’ regulations list four requirements for an individual to obtain

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a customs broker’s license, one of which is that the applicant “attainO

a passing (75 percent or higher) grade on” the CBLE. 19 C.F.R. §

lll.ll(a)(l)-(4).

In reviewing Customs’ decision to deny a customs broker’s license,

the Court must determine whether such a decision was “arbitrary,

capricious, an abuse of discretion, or otherwise not in accordance

with law.” 5 U.S.C. § 706(2)(A); see Kenny, 401 F.3d at 1361; DunnHeiser, 29 CIT at 555, 374 F. Supp. 2d at \m\DHorio, 14 CIT at 747.

Should the Court determine that Customs’ decision to deny an

applicant credit for contested questions on the CBLE was supported

by substantial evidence, and consequently that an applicant attained

less than a 75% score on the exam, then Customs’ denial of a

customs broker’s license will not have been “arbitrary, capricious, an

abuse of discretion, or otherwise not in accordance with law.” 5

U.S.C. § 706(2)(A).

DISCUSSION

The court concludes that Customs’ decision to deny plaintiff credit for

questions 5, 27, 33 and 39 on the April 2018 exam was supported

by substantial evidence, but that Customs’ decision with respect to

question

Court No. 20-00316

57 was not supported by substantial evidence. On this basis, On this

Page 20

basis, plaintiff does not establish that he scored 75% or higher on the

April 2018 exam.

Accordingly, the court concludes that Customs’ decision to deny plaintiff a

customs broker’s license was not “arbitrary, capricious, an abuse of

discretion, or otherwise not in accordance with law.” 5 U.S.C. §

706(2MA). The court concludes also that plaintiff is not entitled to

receive attorney fees and other expenses under the EAJA. 28

U.S.C. § 2412(d).

I. Customs’s denial of credit for the contested questions

A. Question 5

First, plaintiff appeals Customs’ decision to deny plaintiff credit for question

5 on the April 2018 exam. SeePl. Br. at 4. Question 5 states^

Which of the following customs transactions is NOT required to be

performed by a licensed customs broker?

A. Temporary Importation under Bond

B. Transportation in bond

C. Permanent Exhibition Bond

D. Trade Fair Entry

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E. Foreign Trade Zone Entry

1.

Positions of the parties

Customs designated answer choice (B) as the correct response to

question 5.

See Def.Resp.Br at 8. Plaintiff selected answer choice (E) but does not

contest that answer choice (B) is also correct. See Pl.Br.at 4.

Accordingly, the parties dispute only whether Customs’ decision to

deny plaintiff credit for his selection of answer choice (E) was

supported by substantial evidence.

See id.at 5;Def.Resp.Br.at 9-10. Plaintiff contends that Customs’

decision to deny plaintiff credit for his selection of answer choice (E)

was not supported by substantial evidence. See Pl.Br.at 5.

Plaintiff argues that answer choice (E) is correct because “Foreign

Trade Zone Entry” is not required to be performed by a licensed

customs broker.

See id. at 4. Plaintiff applies a “common understanding” of the term

“entry” and contends that the process of “admission” set forth in 19

C.F.R. § 146.32 (a)(l) — which does not require a customs broker’s

license pursuant to 19 C.F.R. § 111.2(a)

constitutes a type of “Foreign Trade Zone Entry.” Id.

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Plaintiff points first to 19 C.F.R. § 146.32(a)(1). See id. This

regulation provides^ § 146.32 APPLICATION AND PERMIT FOR

ADMISSION OF MERCHANDISE.

(a)(1) APPLICATION ON CBP FORM 214 AND PERMIT. Merchandise

may be admitted into a zone only upon application on a uniquely and

sequentially numbered CBP Form 214 (“Application for Foreign

Trade Zone Admission and/or Status Designation”) and the issuance

of a permit by the port Director. The applicant for admission shall

present the application to the port director and shall include a

statistical copy on CBP Form 214-A for transmittal to the Bureau of

Census, unless the applicant has made arrangements for the direct

transmittal of statistical information to that agency.

19 C.F.R. § 146.32(a)(1). Plaintiff and defendants agree that the process of

Admission set forth in this provision does not constitute “customs

business” that is required to be performed by a licensed customs

broker. See PI. Br. at 4\

Oral Arg. Tr. at 4-3*9, ECF No. 52; 19 C.F.R. §§ 111.1 (defining

“customs business”), 111.2(a)(2)(vi) (providing that an activity such as

admission into a foreign trade zone, which does not “involve the

transfer of merchandise to the customs territory of the United States,”

is not required to be performed by a licensed customs broker).

Court No. 20-00316

Next, plaintiff argues that the process of “admission” set forth

in 19 C.F.R. § 146.32(a)(1) falls within a “common

understanding” of the term “entry,” which plaintiff asserts to be

“the act of entering or the acting of making or entering a

record.” PL Br. At 5.

Page 23

Page 24

Court No. 20-00316

Plaintiff contends that the use of this “common understanding” is

appropriate because answer choice (E) — “Foreign Trade Zone Entry” —

is not a term of art that appears in Customs’ regulations.6 See id. at 4;

Oral Arg. Tr. at 20:9-13 (contending that use of a “common understanding”

of a term is appropriate if the term is “not otherwise defined”). In support

of his interpretation of the term “entry,” plaintiff refers also to an article

on Customs’ website, of which plaintiff requests that the court take judicial

notice.See PL Reply Br. at 4-5 n.l! Oral Arg. Tr. at 9:18-10:19.

Plaintiff points to the use in this article of the term “entry” to challenge

defendants’ ‘hyper-technical distinction between ‘admission’ and ‘entry.’”

See Oral Arg. Tr. at 10:15-17.

^In addition, plaintiff argues in his memorandum in support of his motion for judgment

on the agency record that the use of a “common understanding” of the term “entry” is

appropriate because the phrase in answer choice (E) is not capitalized. See PL Br. at 4. At

oral argument, however, plaintiff notes that the parties learned subsequent to the

submission of their respective briefs that the phrase in answer choice (E) — “Foreign Trade

Zone Entry” — had in fact been capitalized in the April 2018 exam. See Oral Arg. Tr. at

1E2T14:6. The record has since been corrected to include the full exam. See Am. Admin.

R., Ex. N. Accordingly, plaintiff withdraws his argument with respect to the

capitalization of the term “entry.”

Court No. 20-00316

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On this basis, plaintiff argues that, applying a “common understanding”

of the term “entry,” the process of “admission” set forth in 19 C.F.R. §

146.32(a)(1) constitutes a type of “Foreign Trade Zone Entry” that does not

require a customs broker’s license pursuant to 19 C.F.R. § 111.2(a).

PI. Br. at 4-5.

Accordingly, plaintiff contends that answer choice (E) is also correct.

See id. at 4. Defendants argue that answer choice (E) is not correct.

See Def. Resp. Br. At 8-10. According to defendants, plaintiff applies

mistakenly a “common understanding” of the term “entry,” which leads

plaintiff to rely incorrectly upon 19 C.F.R. § 146.32(a)(1). See id. Rather,

defendants argue that plaintiff should have but did not rely upon 19

C.F.R. §146.62 in responding to the question. See id.

To start, defendants refer to 19 C.F.R. § 146.62, which provides:

§ 146.62 ENTRY.

(a) GENERAL. Entry for foreign merchandise that is to be

transferred from a zone, or removed from a zone for

exportation or transportation to another port, for

consumption or warehouse, will be made by filing an

in-bond application pursuant to part 18 of this chapter,

CBP Form 3461, CBP Form 7501, or other applicable

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CBP forms. If entry is made on CBP Form 3461, the

person making entry shall file an entry summary for all the

merchandise covered by the CBP Form 3461 within 10 business

days after the time of entry.

19 C.F.R. § 146.62(a); see id. § 146.63-146.64. Defendants note that

Customs’ regulations provide that the process of “entry” set forth in 19

C.F.R. § 146.62 constitutes “customs business” that is required to be

performed by a licensed customs broker. See Def. Resp. Br. at 10; 19

C.F.R. §§ 111.1,111.2(a)(1).

According to defendants, plaintiff should have relied upon 19 C.F.R. § 146.

62 in responding to question 5, as the phrase in answer choice (E) —

“Foreign Trade Zone Entry” —“reasonably refers” to the process of

“transferring or removing merchandise from an FTZ” that is described in

the regulation. Def. Resp. Br. at 9-10.

Defendants argue that, rather than relying upon 19 C.F.R. § 146.62,

plaintiff applies mistakenly a “common understanding” of the term “entry.”

See id. Defendants contend that this “common understanding” leads

plaintiff to rely incorrectly upon the process of “admission” set forth in

19 C.F.R. § 146.32(a)(1). See id. at 9.

1

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Defendants point to the substantive differences between the process

of “admission” set forth in 19 C.F.R. § 146.32(a)(1) and the process of

“entry” set forth in 19 C.F.R. § 146.62. See id. According to

defendants, “admission” as set forth in 19 C.F.R. § 146.32(a)(1)

concerns the process through which “animporter brings

merchandise into a [foreign trade zone].” Id.

In contradistinction, defendants note that “entry” as set forth in

19 C.F.R. § 146.62 concerns the process through which “merchandise

is transferred or removed from a zone for consumption or warehouse.”

Id. To emphasize further this distinction, defendants note that 19

C.F.R. § 146.32(b)(2), a subsection of the regulation to which plaintiff

points, itself distinguishes “admission” from “entry.” SeeOxaX Arg. Tr. at

8:1-8 (citing 19 C.F.R. § 146.32(b)(2) (“The applicant for admission shall

submit with the application a document similar to that which

would be required as evidence of the right to make entry hr

merchandise in Customs territory.”) (emphasis supplied)).

On this basis, defendants argue that plaintiff conflates

erroneously “admission” pursuant to 19 C.F.R. § 146.32(a)(1)

with “entry” pursuant to 19 C.F.R. § 146.62.

See Def. Resp. Br. at 8-9.

Court No. 20-00316

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According to defendants, the proper interpretation and application of 19

C.F.R. § 146.62 supports the conclusion that “Foreign Trade Zone

Entry” is required to be performed by a licensed customs broker

and, consequently, that answer choice (E) is not correct. See id. at 8-10.

Accordingly, defendants argue that Customs’ decision to deny plaintiff

credit for question 5 was supported by substantial evidence. Id. at

10.

2.

Analysis

Customs’ decision to deny plaintiff credit for question 5 was supported

by substantial evidence. Plaintiffs position with respect to question 5 is not

persuasive for three reasons. First, plaintiff applies mistakenly a “common

understanding” of the term “entry” in arguing that answer choice (E) is

correct. Second, the article on Customs’ website to which plaintiff refers does

not support his position with respect to question 5. Third, plaintiff

conflates erroneously the process of “admission” set forth in 19 C.F.R. §

146.32(a)(1) with the process of “entry” set forth in 19 C.F.R. § 146.62.

First, plaintiff applies mistakenly a “common understanding” of the

term “entry.” The Court previously has stated that an applicant is required

to consult “customs and related laws, regulations and procedures” in

responding to questions on the CBLE. Rudloff, 19 CIT at 1249 (citing

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19 U.S.C. § 1641(b)(2)). Provided that a contested question “reasonably tests”

an applicant’s knowledge of the foregoing authorities, the Court will accord “a

measure of deference” to Customs’ determination with respect to the question.

Id: Dunn-Heiser, 29 CIT at 556, 374 F. Supp. 2d at 1280.

Plaintiff argues that his use of a “common understanding” of the term

“entry” is appropriate because the phrase “Foreign Trade Zone Entry” is not a

term of art that appears as a standalone phrase in Customs’ regulations.

See PL Br. at 4-5. This argument, however, is not consistent with the

Court’s standard for evaluating questions on the CBLE. A phrase in a

contested question is not required to appear in Customs’ regulations for

the phrase to refer “reasonably” to the regulations. See Harak, 30 CIT at

922 (“[A] question or answer choice need not reflect the precise wording of the

regulation in order to be valid.”); Di Iorio, 14 CIT at 748-49 (“While not perfect,

the question was adequate so that, as to this question, plaintiffs appeal was

rejected reasonably.”).

With respect to question 5, the phrase in answer choice (E) — “Foreign

Trade Zone Entry”— “reasonably test[ed]” plaintiffs ability to identify the

relevance of and to apply 19 C.F.R. §146.62. See Rudloff, 19 CIT at 1249.

19 C.F.R. § 146.62 concerns the process of “[ejn try for foreign merchandise

that is to be transferred from a zone, or removed from a zone for

exportation or transportation to another port, for consumption or

Court No. 20-00316

Page 30

warehouse.”? Consequently, Customs determined reasonably that the

use of a “common 19 C.F.R. § 146.62(a) (emphasis supplied). Further, 19

C.F.R. § 146.62, which is entitled “Entry,” is located in Part 146,

“Foreign Trade Zones,” of Title 19 of the CFR.

Based on the language of 19 C.F.R. § 146.62 and the context within which the

provision is located in Customs’ regulations, Customs concluded reasonably

that the phrase in answer choice (E)

— “Foreign Trade Zone Entry” — is drafted in a manner that indicates its

reference to this provision. Am. Admin. R., Ex. N, at *5. understanding” of the

term “entry” is not appropriate in responding to question 5.

Turning to plaintiffs second argument, plaintiff does not establish that the

article on Customs’ website supports his position with respect to question 5.

See PI. Reply. Br. at 4-5 n.l. Plaintiff requests that the court take judicial

notice of this article pursuant to Federal Rule of Evidence (“FRE”) 201(b)(2),

which provides that a “court may judicially notice a fact that is not subject

to reasonable dispute because it... can be accurately and readily

determined from sources whose accuracy cannot reasonably be questioned.”

Fed. R. Evid.20l(b)(2); 28 U.S.C. § 2641(a).

7 See 19 C.F.R. § 146.1(a) (defining terms used in Part 146 of Title 19 of the CFR) (citing 19 U.S.C.

§ 81 “The term ‘zone’ means a ‘foreign-trade zone.’”)).

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Other federal courts have taken judicial notice of information published

by a government agency on a government website on the basis that

such a website constitutes a “source 0 whose accuracy cannot

reasonably be questioned.” Fed.R. Evid. 201(b)(2); see Lopez v. Bank

ofAm., N.A., 505 F. Supp. 3d 961,970 (N.D. Cal. 2020)

(“The Court will... take judicial notice ... of the document... as it is

clear on the face of the document — and the Court has

independently confirmed — that it comes from a government agency

website.”); Dark Storm Indus. LLC v.Cuomo, 471 F. Supp. 3d 482,

490 n.2 (N.D.N.Y. 2020), appeal dismissed, cause remanded sub nom.

Dark Storm Indus. LLC v. Hochul, No. 20- 2725-CV, 2021 WL 4538640

(2d Cir. Oct. 5, 2021). In such circumstances, courts have “considered

separately” the “relevanfcej” of the information of which judicial notice is

taken. Michael v. New Century Fin. Servs., 65 F. Supp. 3d 797, 804

(N.D. Cal. 2014).

The article to which plaintiff points is featured on the “Information Center

section of Customs’ website, and it is “clear on the face of the article that

it was published by Customs. Lopez, 505 F. Supp. 3d at 970. The

“accuracy” of Customs’ website “cannot reasonably be questioned,” and

consequently the court concludes that this article meets the standard for

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judicial notice. Fed. R. Evid. 201(b)(2).

However, the court concludes that this article does not support plaintiffs

argument with respect to question 5. The article, which is entitled, “Do I

need a Customs Broker to clear my goods through Customs and Border

Protection (CBP)?” states that “[tjhere is no legal requirement for you

to hire a Customs Broker to clear your goods.” PL Reply Br. at Ex. A.

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In addition, the article cites to a publication by Customs, entitled

“Importing into the United States,”8 which provides more comprehensive

information to individuals who “choose to file [their] own customs entry.” Id.

However, this publication expressly states that “the information

provided [therein] is for general purposes only” and that “reliance solely on

th [is] information ... may not meet the ‘reasonable care’ standard

required of importers.” Customs Importing Publication at 1- % see 19 U.S.C.

§ 1484(a)(1) (requiring the use of “reasonable care” in providing Customs

with “documentation” or “information” with respect to the entry of

merchandise). Moreover, the CBLE expressly directs applicants to

refer to the following materials: the HTSUS, Title 19 of the CFR, the

Instructions for the Preparation of Customs Form 7501, and the Right to

Make Entry Directive 3530-002A. See Am. Admin. R., Ex. N, at *1.

8 Importing into the United States, U.S. CUSTOMS AND BORDER PROT.,

https7/www.cbp.gov/sites/default/files/documents/Importing%20into%20the°/o20U.S.pdf

(last revised 2006) (“Customs Importing Publication”).

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The third reason that plaintiffs argument with respect to question 5

is not persuasive is that plaintiff conflates erroneously the processes

set forth in 19 C.F.R. § 146.32(a)(1) and 19 C.F.R. § 146.62. 19 C.F.R.

§ 146.32(a)(1) concerns the process to apply and secure a permit

for the “admission of merchandise” into a foreign trade zone.

19 C.F.R.§ 146.1 defines “admit” as “to bring merchandise into a

zone with zone status.” In contradistinction, 19 C.F.R. §146.62

concerns the process of “[e]ntry for foreign merchandise that

is to be transferred from a zone, or removed from a zone for

exportation or transportation to another port, for consumption or

warehouse.” Pursuant to 19 C.F.R. § 111.1 and 111.2, this process

of entry constitutes “customs business” that is required to be

performed by a licensed customs broker. See 19 C.F.R. §111.1

(providing that activities that “concern □ the entry ... of

merchandise” constitute “customs business”).

In sum, 19 C.F.R. § 146.32(a)(1) involves bringing merchandise into a

foreign trade zone, while 19 C.F.R. § 146.62 involves “transferring]” or

“removing]” merchandise from a foreign trade zone for “consumption or

Court No. 20-00316

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warehouse.” Compare id. § 146.32(a)(1) with id. § 146.62. The provisions

Regulate distinct administrative processes that question 5 reasonably called

upon an applicant to distinguish. Plaintiffs counsel presented the most

effective possible arguments in briefing and at oral argument; however,

ultimately, the arguments cannot save the choice plaintiff made during the

exam. Customs’ decision to deny plaintiff credit for question 5 was

supported by substantial evidence.

B. Question 27

Second, plaintiff appeals Customs’ decision to deny plaintiff credit for

question 27 on the April 2018 exam. See PL Br.at 5

Question 27

states:

Which of the following mail articles are not subject to

examination or inspection by Customs?

A. Bona-fide gifts with an aggregate fair retail value

not exceeding $800 in the country of shipment

B. Mail packages addressed to officials of the U.S. Government

containing merchandise

C. Diplomatic pouches bearing the official seal of France

and certified as only containing documents

D. Personal and household effects of military and civilian

Court No. 20-00316

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personnel returning to the United States upon the

completion of extended duty abroad

E. Plant material imported by mail for purposes of immediate

exportation by mail

Am. Admin. R., Ex. N, at *13

l. Positions of the parties

Customs designated answer choice (C) as the correct response to question 27.

See Def.Resp. Br. at 10. Plaintiff selected answer choice (B), but does not

contest that answer choice (C) is correct.

See PL Br. at 6.

Accordingly, the parties dispute only whether Customs’ decision to

deny plaintiff credit for his selection of answer choice (B) was supported

by substantial evidence. See id.', Def. Resp. Br. at 11-12.

Plaintiff advances two arguments with respect to question 27.

First,plaintiff contends that question 27 is ambiguous because the question

does not indicate “where the mail packages are coming from.” PL Br. at 6.

Answer choice (B) points to “[mjail packages addressed to officials of the U.S.

Government containing merchandise.” Am. Admin. R., Ex. N, at *13.

Plaintiff argues that if the mail packages are sent from a domestic source,

then the packages described in this answer choice would not be subject

Court No. 20-00316

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to examination or inspection by Customs. $eePl. Br. at 6.

Without this information, however, plaintiff argues that the question is

ambiguous. See id.

Second, plaintiff contends that answer choice (B) also is correct.

See id.; PL Reply Br. at 6. In support of this contention, plaintiff points

to two of Customs’ regulations. See PI. Br. at 6. To start,

19 C.F.R. § 145.2(b)(1) provid es that “[m]ail known or believed

to contain only official documents addressed to officials of the U.S.

Government”is not “subject to Customs examination. ”

Plaintiff next turns to 19 C.F.R. § 145.37. See PL Reply Br. at 6.

This regulation provides that certain “[b]ooks ... and engravings,

etchings, and other articles ... shall be passed free of duty without

issuing an entry when they are addressed to the Library of

Congress or any department or agency of the U.S. Government.”

Id. (quoting 19 C.F.R. § 145.37(b)). Plaintiff contends that the

articles described in 19 C.F.R. § 145.37(b) constitute “[m]ail

packages addressed to officials of the U.S. Government containing

merchandise” that shall be passed free of duty. See id.; Am. Admin.

R., Ex. N, at *13. On this basis, plaintiff argues that answer

choice (B) is correct. See Pl. Br. at 6; PL Reply Br. at 6-7.

Defendants contest both of plaintiff s arguments. See Def. Resp. Br.

Court No. 20-00316

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at 10-12. First, defendants challenge plaintiffs contention that the

mail articles described in question 27 might be sent from a domestic

■

source. See id. at 11-12.

According to defendants, question 27 “reasonably assumes that all

mail articles identified are imported into the United States” because

“[i]f the merchandise was not imported ... then custom laws would not

apply” to the question. Id. at 11. Defendants argue that the question and

answer choice (B) as drafted reasonably “test the [applicant’s] ability to

distinguish between imports that require examination or inspection and

those that do not.” Id.

Second, defendants challenge plaintiffs reliance upon 19 C.F.R. § 145.2

(b)(l) and 19 C.F.R.§ 145.37. See id. at 10-11. With respect to 19 C.F.R.

§ 145.2(b)(1), defendants note that this provision excepts from

examination by Customs “[m]ail known or believed to contain only official

documents addressed to Officials of the U.S. Government.” See id. at 11

(citing 19 C.F.R. § 145.2(b)(1)) (emphasis in original). According to

defendants, the plain language of this provision contradicts plaintiffs

conclusion that “[m]ail packages addressed to officials of the U.S.

Government containing merchandise” are not subject to examination or

*

Court No. 20-00316

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inspection by Customs. Am. Admin. R., Ex. N, at *13 (emphasis supplied);

seeDef. Resp. Br.at 11.

Defendants then turn to 19 C.F.R. § 145.37. See Def. Resp. Br. at 11.

Defendants raise two points with respect to this regulation.

First, defendants note that 19 C.F.R. § 145.37(c) distinguishes mail

articles that contain “only official documents” from articles that

contain “merchandise.” See id.

According to defendants, this regulation provides that articles that

contain “only official documents 0 shall be passed free of duty without

issuing an entry.” 19 C.F.R. § 145.37(c). In contrast, defendants note

that articles that contain “merchandise D shall be treated in the same

manner as other mail articles of merchandise.” Id. Accordingly,

defendants assert that 19 C.F.R. § 145.37(c) indicates that articles that

contain “merchandise” shall be subject to examination by Customs.

-SfeeDef. Resp. Br. at 11. On this basis, defendants contend that answer

choice (B) is not correct. See id. at 10-12.

In the alternative, defendants note that 19 C.F.R. § 145.37 does

not concern “Customs’ examination” of the subject articles, but

rather concerns how the articles “should be treated ... for duty

Page 40

Court No. 20-00316

purposes.” Oral Arg. Tr. at 2712-16. According to defendants, the

articles described in 19 C.F.R. §§ 145.37(b) and (c) “still would be

subject to Customs’ examination” even if those articles are

“passed free of duty.” Id. at 2713-14; 19 C.F.R. § 145.37(b)-(c).

On this basis, defendants contend that 19 C.F.R. §145.37

is not responsive to question 27 and consequently does not

support plaintiffs selection of answer choice (B).

See Def. Resp. Br. at 111 Oral Arg. Tr. at 2712-16.

Accordingly, defendants argue that Customs’ decision to deny plaintiff

credit for question 27 was supported by substantial evidence.

See Def. Resp. Br.at 12.

2. Analysis

Customs’ decision to deny plaintiff credit for question 27 was supported

by substantial evidence.

To start, Customs determined reasonably that question 27 presumes

that the mail articles described in the question are imported into the

United States. This presumption is reasonable based on the fact that

the CBLE is designed to examine an applicant’s ability to interpret and

apply “customs and related laws, regulations and procedures.”

Court No. 20-00316

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Rudloff, 19 CIT at 1249 (citing 19 U.S.C. § 1641(b)(2)). Without the

presumption that the mail articles described in question 27 are imported

into the United States, the foregoing authorities would not apply to this

question. In view of the purpose of the CBLE, Customs engaged in

“reasoned decision-making” in concluding that question 27 is drafted in a

manner that indicates Customs’ intention to examine whether an applicant

is able to distinguish imports that are subject to examination or inspection

by Customs from imports that are not subject to such examination or

inspection. Harak, 30 CIT at 919. For this reason, the court accords

Customs a “measure of deference” with respect to Customs’ “design” of

question 27 and concludes that the question is not ambiguous.

Dunn-Heiser, 29 CIT at 556, 374 F. Supp. 2d at 1280.

Next, Customs determined reasonably that 19 C.F.R. § 145.2(b)(1) and 19

C.F.R. § 145.37 do not support plaintiffs conclusion that answer choice

(B) is correct. 19 C.F.R. § 145.2(b)(1) excepts from examination by Customs

“[m]ail known or believed to contain only official documents addressed to

officials of the U.S. Government.” 19 C.F.R. § 145.2(b)(1) (emphasis supplied).

This regulation does not except from examination or inspection by

Customs the articles described in answer choice (B) — “[m]ail packages

addressed to officials of the U.S. Government containing merchandise.”

Am. Admin. R., Ex. N, at *13 (emphasis supplied).

Court No. 20-00316

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Further, “official documents” under 19 C.F.R. § 145.2(b)(1) do not

constitute “merchandise” within the meaning of Customs’ regulations.

Seel 6.g., 19 C.F.R.§ 145.37(c) (distinguishing mail articles that contain

“official documents” from mail articles that contain “merchandise”).

Accordingly, the plain language of 19 C.F.R. § 145.2(b)(1) contradicts

plaintiffs argument with respect tohis selection of answer choice (B).

Turning to 19 C.F.R. § 145.37, this provision is not responsive to

question 27, which instructs the applicant to determine “[w]hich of

the following mail articles are not subject to examination or inspection

by Customs? Am. Admin. R., Ex. N, at *13 (emphasis supplied).

19 C.F.R. § 145.37 does not address whether certain mail articles are

subject to “examination” or “inspection” by Customs.

Rather, this provision addresses whether the articles “shall be passed

free of duty without issuing an entry.” 19 C.F.R. § 145.37

(bMc). Whether an article “shall be passed free of duty” is a

distinct question from whether an article “shall be

subject to examination or inspection by Customs.” Id. ', Am. Admin. R.,

Ex. N, at* 13. On this basis, 19 C.F.R. § 145.37 does not support

plaintiffs selection of answer choice (B).

Accordingly, Customs’ decision to deny plaintiff credit for question

27 was supported by substantial evidence.

Court. No. 20-00316

C.

Page 43

Question 33

Third, plaintiff appeals Customs’ decision to deny plaintiff

credit for question 33 on the April 2018 exam. See PI. Br. at 7.

Question 33 states:

What is the CLASSIFICATION of current-production wall art

depicting abstract flowers and birds that is mechanically

printed, via lithography, onto sheets of paper, the paper

measuring .35 mm in thickness that have been permanently

mounted onto a backing of .50 mm thick paperboard?

A. 4911.91.2040

B. 4911.91.3000

C. 4911.99.6000

D. 9701.10.0000

E. 9702.00.0000

Am. Admin. R., Ex. N, at *14.

1.

Positions of the parties

Customs designated answer choice (B) as the correct response to question

33. See Def. Resp. Br. at 12. Plaintiff selected answer choice (E). See PI.

Br. at 7. Plaintiff argues that Customs’ decision to deny plaintiff credit for

question 33 was not supported by substantial evidence. See id. Plaintiff

does not contend that his selection of answer choice (E) is correct; rather,

Court No. 20-00316

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plaintiff argues that question 33 is ambiguous. See id. Question 33

describes the subject merchandise as “current-production wall art....that

is mechanically printed, via lithography, onto sheets of paper, the paper

measuring .35 mm in thickness that have been permanently mounted

onto a backing of .50 mm thick paperboard.” Am. Admin. R., Ex. N, at

*14. Customs designated answer choice (B) as the correct response to

question 33. SeeY\. Br. at 7.Answer choice (B) points to subheading

4911.91.3000 of the HTSUS,9 which applies to “[ljithographs on

paper or paperboard” that are “[o]ver 0.51 mm in thickness” and that

were “[pjrinted not over 20 years at the time of importation.” HTSUS,

4911.91.3000; see km. Admin. R., Ex. N, at *14. Further, Additional U.S.

Note 1 to Chapter 49 of the HTSUS states that “ [f] or the purposes of

determining the classification of printed matter produced in whole or in

part by a lithographic process .. the thickness of a permanently mounted

lithograph is the combined thickness of the lithograph and its mounting.”

Additional U.S. Note 1, Chapter 49, HTSUS.

^ All citations to the HTSUS, including Chapter Notes and General Notes, are to the 2017

Basic Edition. This edition was in effect on April 25, 2018, when plaintiff sat for the-BLE.

See Am. Admin. R., Ex. N, at *1.

Court No. 20-00316

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Plaintiff argues that question 33 is ambiguous due to Customs’ use

of the phrase “current- production.” See PL Br. at 7. Plaintiff asserts

that Customs’ designated answer choice (B) “presupposes a certain time

frame within which the goods are produced.” Id. However, plaintiff argues

that Customs “does not provide such a time in the question, instead

expecting the undefined phrase ‘current production’ to signify the answer.”

Id. Plaintiff contends that the phrase “current-production” does

not provide sufficient information to determine that the subject

merchandise was “[pjrinted not over 20 years at time of importation”

and consequently is classified properly under subheading 4911.91.3000.

See id.; Oral Argument Tr. at 28:20-29:2.

Accordingly, plaintiff argues that question 33 is ambiguous and that

Customs’ decision to deny plaintiff credit for the question was not supported

by substantial evidence. See PL Br. at 7.

Defendants contend that Customs’ decision to deny plaintiff credit for

question 33 was supported by substantial evidence. To start,

defendants contest plaintiffs argument that Customs’ use of the phrase

“current- production” renders question 33 ambiguous.

See Def. Resp. Br. at 12-14.

Defendants contend that Customs determined that “the term ‘currentproduction’ reasonably means that the printed lithography is not over 20

Court No. 20-00316

Page 46

years old.” Id. at 13.

According to defendants, this phrase, while “not a number of years ...

gives the test-taker a time reference” that provides sufficient information

to determine that the subject merchandise is classified properly under

subheading 4911.91.3000. Oral Arg. Tr. at 30:3-11; see Def. Resp. Br. at

13-14. On this basis, defendants contend that answer choice (B) is correct.

See Def. Resp. Br. at 13-14.

In addition, defendants argue that plaintiffs selected answer choice (E) is

not correct. See id. at 14. Answer choice (E) points to Heading 9702.00.000

of the HTSUS, which applies to “[ojriginal engravings, prints and lithographs,

framed or not framed.” HTSUS, 9702.00.000; see Am. Admin. R., Ex. N,

at *14. Note 2 to Chapter 97 of the HTSUS states that “[f]or purposes of

heading 9702, the expression ‘original engravings, prints and lithographs’

means impressions produced directly ... of one or of several plates wholly

executed by hand by the artist... not including any mechanical or

photomechanicalprocess!” Note 2, Chapter 97, HTSUS (emphasis supplied).

Notably, question 33 describes the subject merchandise as “mechanically

printed.” Am. Admin. R Ex.N.at*14.

Accordingly, defendants argue that in view of Note 2, Heading 9702.00.

000 does not apply to the subject merchandise. See Def. Resp. Br. at 14.

On this basis, defendants contend that answer choice (E) is not correct.

Court No. 20-00316

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See id.

Accordingly, defendants argue that Customs’ decision to deny plaintiff credit

for question 33 was supported by substantial evidence. See id. at 13-14.

2.

Analysis

Customs’ decision to deny plaintiff credit for question 33 was supported by

substantial evidence. Question 33 evaluates the ability of an applicant

to interpret and apply the HTSUS. In determining the proper tariff

classification of subject merchandise, the Court is required to apply in

numerical order the General Rules of Interpretation (“GRIs”) of the HTSUS.

See BASF Corp. v. United States, 482 F.3d 1324, 1325-26 (Fed. Cir. 2007).

GRI1 states that the classification of merchandise “shall be determined

according to the terms of the headings and any relative section or chapter

notes.” GRI 1, HTSUS. In addition, the Section and Chapter Notes

featured in the HTSUS are not “optional interpretive rules,” but rather

have the force of statutory law. Avenues in Leather, Inc. v. United

States, 423 F.3d 1326, 1333 (Fed. Cir. 2005)

Court No. 20-00316

Page 48

(quoting ParkB. Smith, Ltd. v. United States, 374 F.3d 922, 927 (Fed. Cir.

2003)).

With respect to question 33, Customs determined reasonably that

answer choice (B) — subheading 4911.91.3000 of the HTSUS — is correct.

The merchandise described in question 33 is a permanently mounted

lithograph, printed onto sheets of paper and paperboard with a combined

thickness of 0.85mm. See Am. Admin. R., Ex. N, at *14. Subheading 4911.91.

3000 of the HTSUS applies to “ [lithographs on paper or paperboard” that are

“[diver 0.51 mm in thickness,” HTSUS, 4911.91.3000 (emphasis supplied), and

Additional U.S. Note 1 to Chapter 49 of the HTSUS states that “[f]or the

purposes of determining the classification of printed matter produced in

whole or in part by a lithographicprocess... the thickness of a permanently

mounted lithograph is the combined thickness of the lithograph and its

mounting.” Additional U.S. Note 1, Chapter 49, HTSUS (emphasis supplied).

Accordingly, the merchandise described in question 33 tracks closely to

subheading 4911.91.3000 in answer choice (B).

In addition, Customs determined reasonably that plaintiffs selected answer

choice (E) is not correct. As noted, answer choice (E) refers to Heading

9702.00.000 of the HTSUS, which, pursuant to Note 2 to Chapter 97,

expressly does not cover merchandise that is produced by “any mechanical or

photomechanical process.” Note 2, Chapter 97, HTSUS; Am. Admin. R.,

1

Court No. 20-00316

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Ex. N, at *14.

Accordingly, answer choice (E) by its terms directly contradicts the language

of question 33, which explicitly describes the subject merchandise as

“mechanically printed.” Am. Admin. R., Ex. N, at *14.

Plaintiff argues that the phrase “current-production” in question 33

is not sufficiently precise to indicate that the merchandise was “[plrinted

not over 20 years” ago, per subheading 4911.91.3000 in answer choice (B).

See PL Reply Br. at 7; HTSUS, 4911.91.3000. However, the Court

previously has stated that “a question or answer choice need not reflect

the precise wording of [a statute or regulation] in order to be valid” and

supported by substantial evidence. Harak, 30 CIT at 922; see 19 U.S.C.

§ 1202. Moreover, Heading 9702.00.000, in answer choice (E), does not

classify subject merchandise with reference to any timeframe for

production, thereby providing a further indication — particularly,

in comparison with answer choice (B) — that answer choice (E) was not

a or the correct choice. Am. Admin. R., Ex. N, at *14; HTSUS

9702.00.000; see Dilorio, 14 CIT at 748.

Accordingly, the express terms of answer choice (B) track closely to

question 33, while the express terms of answer choice (E) directly

contradict question 33. “While not perfect, the question was adequate so

that, as to this question, plaintiffs appeal was rejected reasonably.” Di

Court No. 20-00316

Page 50

Iorio, 14 CIT at 748- 49.

Consequently, and despite the compelling advocacy of plaintiff s counsel in

briefing and at oral argument — on this point and, in fact, as to each of the

five questions in dispute — the court concludes that Customs’ decision to

deny plaintiff credit for question 33 was supported by substantial

evidence.

D. Question 39

Fourth, plaintiff appeals Customs’ decision to deny plaintiff

credit for question 39 on the April 2018 exam. See PL Br. at 8.

Question 39 states^ What is the CLASSIFICATION of a

teacup that is made of porcelain containing 28 percent of

tricalcium phosphate, valued at $18, and offered for sale in the

same pattern as all of the other articles listed in Additional

U.S. Note 6(b) to Chapter 69, HTSUS, with the aggregate value of

all those articles listed in that note being $900?

Court No. 20-00316

Page 51

A. 6911.10.2500

B. 6911.10.3810

C. 6911.10.5800

D. 6911.10.8010

E. 6912.00.4500

Am. Admin. R., Ex. N, at *16.

1.

Positions of the parties

Customs designated answer choice (A) as the correct response to question 39.

See Def. Resp.Br. at 14. Plaintiff selected answer choice (B). See PI. Br. at

8. Plaintiff argues that Customs’ decision to deny plaintiff credit for question

39 was not supported by substantial evidence. See id. at 9. Plaintiff does not

contend that his selection of answer choice (B) is correct; rather, plaintiff argues

that question 39 is ambiguous. See id. at 8.

Question 39 describes the subject merchandise as “a teacup that is made

ofporcelain containing 28 percent of tricalcium phosphate, valued at $18 and

offered for sale in the same pattern as all of the other articles listed in

Additional U.S. Note 6(b) to Chapter 69, HTSUS.” Am. Admin. R., Ex. N,

at *16. Customs designated answer choice (A) as the correct response to

the question. PI. Br. at 8.

Court No. 20-00316

Page 52

Answer choice (A) points to subheading 6911.10.2500 of the

HTSUS, which applies to “[t]ableware and kitchenware” that is made of

“bone chinaware” and that is valued at “[o]ther” than “not over $31.50 per

dozen pieces” — i.e., valued at over $31.50 per dozen pieces. HTSUS, 6911.10.

2500. Further, Additional U.S. Note 5(b) to Chapter 69 of the HTSUS

states that “the term ‘ bone chinaware’ embraces chinaware or porcelain

the body of which contains 25 percent or more of calcined bone or

tricalcium phosphate.” Additional U.S.Note 5(b), Chapter 69, HTSUS.

Plaintiff asserts that the reference in question 39 to “a” single teacup is

inconsistent with the reference in subheading 6911.10.2500 to a “dozen

pieces.” PI. Br. at 8. In view of this inconsistency, plaintiff contends that

question 39 is ambiguous, as the question “confuses the price of a single teacup

versus the price of a dozen cups.” Id. Plaintiff argues that he “should not be

required to guess as to the number or value” of the merchandise to which the

question refers. Id. Further, plaintiff contends that the value of the described

merchandise, $18, indicates that subheading 6911.10.1500 — which applies to

merchandise “valued not over $31.50 per dozen pieces” — is the “best fit as

the correct answer to the question.” Id. \

HTSUS, 6911.10.1500 (emphasis supplied). Given that subheading

Court No. 20-00316

Page 53

6911.10.1500 is not listed as one of the answer choices to question 39,

plaintiff contends that Customs’ decision to deny plaintiff credit for this

question was not supported by substantial evidence. SeeV\. Br. at 8-9.

Defendants contest plaintiff s argument that question 39 is ambiguous and

emphasize that the question refers “clearly” to the price of “a” single teacup.

Def. Resp. Br. at 14-15.

Defendants assert that Customs “did not confuse the price of a teacup

versus a dozen teacups.” Id. at 15. Rather, according to defendants,

question 39 “reasonably required the test taker to calculate the price

of a dozen teacups based on the fact that one teacup costs $18.” Id. This

calculation, in turn, would lead the applicant to conclude that the subject

merchandise is classified properly under subheading 6911.10.2500.

See id. Accordingly, defendants contend that question 39 is not

ambiguous and that answer choice (A) is correct. See id.

On this basis, defendants argue that Customs’ decision to deny plaintiff

credit for question 39 was supported by substantial evidence.

See id. at 14-15.

Court No. 20-00316

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2.

Analysis

Customs’ decision to deny plaintiff credit for question 39 was

supported by substantial evidence.

Customs determined reasonably that answer choice (A) is

correct. The merchandise described in question 39 — “a teacup

that is made of porcelain containing 28 percent of tricalcium

phosphate, valued at $18 and offered for sale in the same

pattern as all of the other articles listed in Additional U.S.

Note 6(b)” — is classified properly under subheading

6911.10.2500 of the HTSUS.

Am. Admin. R., Ex. N, at *16.

First, the merchandise, a teacup, constitutes “[t]ableware [or] kitchenware.”

HTSUS, 6911.10.2500. Second, the merchandise is made of “bone

chinaware” because it contains “28 percent of tricalcium phosphate.” Am.

Admin. R., Ex. N, at *16.

As Additional U.S. Note 5(b) states, “bone chinaware” encompasses

“chinaware ... the body of which contains 25percent or more of..

.tricalcium phosphate.” Additional Note 5(b), Chapter 69, HTSUS (emphasis

supplied). Last, the merchandise is valued at over $31.50 per dozen pieces.

HTSUS, 6911.10.2500. Question 39 indicates that “a” teacup is valued

Court No. 20-00316

Page 55

at $18. Am. Admin. R., Ex. N, at *16

Accordingly, by multiplying the value of a single teacup by 12, the value of

the merchandise “per dozen pieces” is $216 — i.e., greater than $31.50 per

dozen pieces. Customs determined reasonably that question 39 “test[s]

an understanding of the structure of the HTSUS” by requiring an

applicant to make the foregoing simple mathematical calculation to

determine the proper classification of the subject merchandise..

Harak, 30 CIT at 915; see Additional U.S. Note 7, Chapter 69, HTSUS

(“For the purposes of headings 6911... an article is a single tariff entity

which may consist of more than one piece.”). Plaintiffs failure to make

this calculation does not indicate that question 39 is ambiguous.

This calculation indicates that the merchandise is classified properly

under subheading 6911.10.2500, rather than subheading 6911.10.1500,

as plaintiff argues, and consequently that answer choice (A) is correct.

In addition, Customs determined reasonably that plaintiffs selection

of answer choice (B) is not correct. Answer choice (B) provides that the

proper classification of the subject merchandise is subheading 6911.10.

3810 of the HTSUS, which applies to “[o]ther... teacups and saucers ...

not over 22.9 cm in maximum” that have an “[aggregate value over

$200.” HTSUS, 6911.10.3810. The use of the term “|o]ther” indicates that

merchandise classified under this subheading 6911.10.3810 is made of

Court No. 20-00316

Page 56

“[o]ther” than bone chinaware./*^. However, pursuant to Additional U.S.

Note 5(b), the merchandise described in question 39 is made of “bone

chinaware.” Additional Note 5(b), Chapter 69, HTSUS. On this basis,

Customs determined reasonably that this merchandise is not classified

properly under subheading 6911.10.3810 and that answer choice (B) is

not correct. Accordingly, Customs’ decision to deny plaintiff credit for

question 39 was supported by substantial evidence.

Court No. 20-00316

E.

Page 57

Question 57

Last, plaintiff appeals Customs’ decision to deny plaintiff credit for

question 57 on the April 2018 exam. SeeVl. Br. at 11. Question 57 states^

Which of the following shipments does not contain restricted gray market

merchandise as defined in 19 C.F.R. § 133.23?

A. A shipment of jeans, bearing a trademark registered and

recorded in the United States, applied by a U.S. trademark

owner’s foreign licensee independent of the

U.S. trademark owner.

B. A shipment of shoes, bearing a trademark registered and

recorded in the United States, applied under the authority of a

foreign trademark owner other than the U.S. owner, a parent or

subsidiary of the U.S. owner, or a party under common

ownership or control with the U.S. owner, to whom the U.S.

owner sold the foreign title.

C. A shipment of jackets, bearing a trademark registered and

recorded in the United States, applied under the authority of a

foreign trademark owner other than the U.S. owner, a parent

or subsidiary of the U.S. owner, or a party under common

ownership or control with the U.S. owner, from whom the U.S.

Page 58

Court No. 20*00316

owner acquired the domestic title.

D. A shipment of books, bearing a U.S. registered and

recorded trademark applied by a foreign subsidiary of the U.S.

owner, determined by CBP to be different from the books authorized

by the U.S. owner for importation or sale in the United States.

The books feature a conspicuous label that they are not

authorized by the U.S. owner for importation into the U.S. and

are physically and materially different from the authorized

ones.

E. A shipment of shirts, bearing a genuine foreign trademark

owned by a foreign trademark owner, identical with or

substantially

indistinguishable

from

a

trademark

registered and recorded in the United States. The

shipment was imported without the authorization of the

U.S. owner who is not related to the foreign owner.

Am. Admin. R., Ex. N, at *25.

1.

Positions of the parties

Customs designated answer choice (E) as the correct response to question

57. See Def. Resp. Br. at 20. Plaintiff selected answer choice (D).

Court No. 20-00316

Page 59

See PI. Br. at 12. Plaintiff argues that Customs’ decision to deny plaintiff

credit for question 57 was not supported by substantial evidence.

See id. at 13. Plaintiff contends first that his selection of answer choice (D) is

correct because the shipment described in this answer choice does not contain

restricted gray market merchandise as defined in 19 C.F.R. § 133.23.

See id. at 12. 19 C.F.R. § 133.23(a) provides: §133.23 RESTRICTIONS ON IMPORTATION

OF GRAY MARKET ARTICLES.

(a) RESTRICTED GRAY MARKET ARTICLES DEFINED.

“Restricted gray market articles” are foreign-made articles bearing

a genuine trademark or trade name identical with or substantially

indistinguishable from one owned and recorded by a citizen of the

United States or a corporation or association created or organized

within the United States and imported without the authorization of

the U.S. owner. “Restricted gray market goods” include goods bearing a

genuine trademark or trade name which is:

(l) INDEPENDENT LICENSEE. Applied by

a

licensee (including a manufacturer) independent of the

U.S. owner! or

(2) FOREIGN OWNER. Applied under the authority of

a foreign trademark or trade name owner other than

Court No. 20-00316

Page 60

the U.S. owner, a parent or subsidiary of the

U.S. owner, or a party otherwise subject to common

ownership or control with the U.S. owner .. . from whom

the U.S. owner acquired the domestic title, or to whom the

U.S. owner sold the foreign title(s); or

(3) “ LEVER-RULE”. Applied by the U.S. owner, a parent or

subsidiary of the U.S. owner, or a party otherwise subject

to common ownership or control with the U.S. owner ... to

goods that [Customs] has determined to be physically and

materially different from the articles authorized by the

U.S. trademark owner for importation or sale in the U.S.

19 C.F.R. § 133.23(a)(l)-(3).

Plaintiff argues that the shipment described in answer choice (D) does not

contain restricted gray market merchandise for three reasons^ (l) the labels

are “attached in close proximity to the trademark;” (2) the labels “appearO

in [their] most prominent location on the books;” and (3) the described books

are “different from the books authorized by the U.S. owner for importation or

sale in the United States.” PI. Br. at 12. According to plaintiff, merchandise

that bears the foregoing characteristics does not constitute restricted gray

market merchandise within the meaning of 19 C.F.R. § 133.23. See id. On

this basis, plaintiff contends that answer choice (D) is correct. See id.

Court No. 20-00316

Page 61

Next, plaintiff contends that Customs’ selection of answer choice (E) is not correct

because the shipment described in this answer choice contains restricted gray

market merchandise. See id. Answer choice (E) describes a “shipment of shirts,

bearing a genuine foreign trademark owned by a foreign trademark owner,

identical with or substantially indistinguishable from a trademark registered and

recorded in the United States[,]... [which] was imported without the

authorization of the U.S. owner who is not related to the foreign owner.”

Am.Admin. R., Ex. N, at *25.

Based on this description, plaintiff argues that this merchandise falls within

the “exact definition” of restricted gray market merchandise as set forth in 19

C.F.R. § 133.23(a). PI. Reply Br. at 9.

In response, defendants challenge first plaintiffs argument with respect to

answer choice (D). Defendants argue that the three characteristics of the

merchandise as described by plaintiff “have no bearing on the definition of ‘gray

market’ goods as set forth in 19 C.F.R. § 133.23(a).” Def. Resp. Br. at 20

(citing PL Br. at 12). Further, defendants argue that the merchandise

described in answer choice (D) meets the definition of restricted gray market

merchandise provided in 19 C.F.R. § 133.23(a). See id.

Turning to answer choice (E), defendants contend that this answer choice is

correct because the described merchandise bears “a genuine foreign trademark. ”

Am.Admin. R.Ex. N, at *25 (emphasis supplied).

Court No. 20-00316

Page 62

According to defendants, 19 C.F.R. § 133.23(a) provides that restricted gray

market merchandise comprises only merchandise that bears a “genuine

trademark.” Def.Resp. Br. at 20.

Defendants argue that “regulations of foreign trademarks and their owners

are not found in 19 C.F.R. § 133.23 because such facts have no bearing on

the definition of a gray market good '.'Id. Consequently, defendants assert

that Customs determined reasonably that the shipment described in answer

choice (E) does not fall within “the definition of a gray market good” and

that this answer choice is correct. Id. at 20-21.

Accordingly, defendants argue that Customs’ decision to deny plaintiff

credit for question 57 was supported by substantial evidence. See id. at

21.

Court No. 20-00316

Page 63

2.

Analysis

The court concludes that Customs’ decision to deny plaintiff credit for

question 57 was not supported by substantial evidence. 10

i

10. Based on the foregoing analysis of questions 5, 27, 33 and 39, plaintiff has not met the

“minimum threshold” to establish entitlement to credit for at least three questions to attain

a passing score on the CBLE. Harak, 30 CIT at 929. Nonetheless, the court offers a brief

statement of its analysis and conclusions with respect to question 57. This approach

highlights that the fullest possible consideration has been given to Mr. Chae’s claims and

appeals in this matter. This approach is also consistent with past decisions of the Court.

See id. (concluding that a contested question “technically ha[d] two answers,” despite

determining that the receipt of credit for the question would not enable the plaintiff to

attain a passing score on the

exam).

Court No. 20-00316

Page 64

The court addresses first the parties’ arguments with respect to answer

choice(D). As noted, plaintiff argues that the shipment described in answer

choice (D) does not contain restricted gray market merchandise based on

three characteristics, PI. Br. at 12, while defendants contend that the three

characteristics that plaintiff identifies “have no bearing on the definition

of‘gray market’ goods as set forth in 19 C.F.R. § 133.23(a).” Def. Resp. Br.

at 20

The books described in answer choice (D) satisfy the requirements set forth in

19 C.F.R. § 133.23(b) and accordingly do not constitute restricted gray market

merchandise. 19 C.F.R. § 133.23(b) provides^

(b) LABELING

OF PHYSICALLY AND

MATERIALLY

DIFFERENT GOODS.

Goods determined by [Customs] to be physically and materially

different under the procedures of this part, bearing a genuine mark

applied under the authority of the U.S. owner, a parent or

subsidiary of the U.S. owner, or a party otherwise subject to

common ownership or control with the U.S. owner ... shall not

be detained under the provision of paragraph (c) of this section

where the merchandise or its packaging bears a conspicuous

and legible label designed to remain on the product until the

first point of sale to a retail consumer in the United States

Court No. 20-00316

Page 65

stating that: “This product is not a product authorized by

the United States trademark owner for importation and is

physically and materially different from the authorized

product.” The label must be in close proximity to the

trademark as it appears in its most prominent location on

the article itself or the retail package or container. Other

information designed to dispel consumer confusion may also be

added.

19 C.F.R. § 133.23(b).

Pursuant to 19 C.F.R. § 133.23(c), merchandise that bears the

characteristics set forth in 19 C.F.R. § 133.23(b) shall not be

subject to restrictions such as “deni[al] [of] entry” and “detention.”

19 C.F.R. § 133.23(c); seeXYZ Corp. v. United States, 41

CIT„ 253 F. Supp. 3d 1257,1269 (2017) (“Importation of the

...subject gray market [merchandise] is restricted, unless the labeling

requirements of 19 CFR § 133.23(b) have been satisfied.’” (quoting

U.S. Customs and Border Protection Grant of “Lever- Rule” Protection,

51 Cust. Bull. & Dec. No. 12 at 1 (Mar. 22, 2017))).

Court No. 20-00316

Page 66

The merchandise described in answer choice (D) bears each of the

characteristics set forth in 19 C.F.R. § 133.23(b). First, the books

described in answer choice (D) are “physically and materially different”

from books that are authorized by the U.S. owner for importation into the

United States. Am. Admin. R., Ex. N, at *25. Second, the books bear a

“conspicuous label” that indicates that the books “are not authorized by

the U.S. owner for importation into the U.S. and are physically and

materially different from the authorized ones.” Id.

Third, along with this label, the books feature a “U.S. registered and

recorded trademark.” Id. Based on the fact that the articles described in

answer choice(D) are books, rather than articles of a larger dimension,

it was not reasonable for Customs to reject plaintiffs position that the

labels featured on each book are in “close proximity” to the trademarks.

Id.\ 19 C.F.R. § 133.23(b). Last, the books “bearG a U.S. registered and

recorded trademark applied by a foreign subsidiary of the U.S. owner.”

Am. Admin. R., Ex. N, at *25. 19 C.F.R. § 133.23(b) requires that the goods

“bearO a genuine mark applied under the authority of the U.S. owner, a

parent or subsidiary of the U.S. owner, or a party otherwise subject to

common ownership or control with the U.S. owner.” 19 C.F.R. §

133.23(b).

Court No. 20-00316

Page 67

Customs’ regulations do not specify that the phrase “subsidiary of the U.S.

owner” applies only to a U.S. subsidiary. Id.’, Am. Admin. R., Ex. N,

at *25. Moreover, the regulatory history of 19 C.F.R. § 133.23(b)

supports this conclusion. See Gray Market Imports and Other

Trademarked Goods, 64 Fed. Reg. 9,058, 9,058_59 (Dep’t of the Treasury

Feb. 24,1999) (final rule).

Accordingly, it was not reasonable for Customs to reject the conclusion

that the labeling requirements of 19 C.F.R. § 133.23(b) apply with respect

to a foreign subsidiary of the U.S. owner.

On this basis, it was not reasonable for Customs to reject the

position that the merchandise described in answer choice (D) falls within

the description provided in 19 C.F.R. §133.23(b), and, pursuant to

19 C.F.R. § 133.23(c), the merchandise is not subject to restrictions

such as denial of entry or detention. See 19 C.F.R. §§ 133.23(c),

133.25.

Plaintiff identified correctly that the merchandise described in answer

Choice (D) does not constitute “restricted gray market merchandise” within

the meaning of 19 C.F.R. § 133.23. PL Br. at 12; 19 C.F.R. § 133.23.

Customs’ decision to deny plaintiff credit for his selection of this answer

choice was not reasonable, as Customs did not address the applicability

Court No. 20-00316

Page 68

of 19 C.F.R. §§ 133.23(b) and (c) to question 57 in evaluating plaintiffs

selection.

Turning to answer choice (E), the court concludes that Customs

determined reasonably that this answer choice is a correct response to

question 57. 19 C.F.R. § 133.23(a) defines restricted gray market

merchandise as “foreign-made articles bearing a genuine trademark or trade

name.” 19 C.F.R.§ 133.23(a) (emphasis supplied). Answer choice (E) describes a

“shipment of shirts, bearing a genuine foreign trademark.” Am. Admin. R.,

Ex. N, at *25 (emphasis supplied).

The inclusion of the term “foreign” in the phrase “genuine foreign

trademark” in answer choice (E) distinguishes the merchandise described

in this answer choice from merchandise that constitutes “restricted gray

market merchandise” pursuant to 19 C.F.R. § 133.23(a). Id.

Further, 19 C.F.R. § 133.23(a) is located in Part 133 of Title 19 of the CFR,

which concerns the “the recordation of trademarks, trade names, and

copyrights with the U.S. Customs and Border Protection!’

19 C.F.R. § 133.0 (emphasis supplied).

Court No. 20-00316

Page 69

The language of 19 C.F.R. § 133.23(a) and the context within which the

provision is located in Customs’ regulations demonstrate that “restricted

gray market merchandise” does not encompass merchandise that bears a

foreign trademark. On this basis, Customs determined reasonably that

answer choice (E) does not contain restricted gray market merchandise

and consequently that this answer choice is correct. Plaintiffs counsel

argued cogently in support of the position that Customs unreasonably

denied plaintiff credit for his selection of answer choice (D). For the

foregoing reasons, the court concludes that both answer choices (D) and (E)

are correct and that Customs’ decision to deny plaintiff credit for question

57 was not supported by substantial evidence.

Court No. 20-00316

II.

Page 70

Customs’ decision to deny plaintiff a customs broker’s license

A.

Positions of the parties

As discussed supra Sections I.A-E, plaintiff contends that he is entitled to

credit for the contested questions such that he “achieved the requisite

minimum passing score of 75%” on the April 2018 exam. PL Br. at 1. On

this basis, plaintiff asserts that Customs’ decision to deny plaintiff a

customs broker’s license was “arbitrary, capricious, an abuse of discretion,

or otherwise not in accordance with law.” Id. at 3; Am. Compl. at 1-2,14;

Kenny, 401 F.3d at 1361 n.3 (“[T]he denial of a license is a foregone

conclusion for an unsuccessful examinee.”) Defendants’ view is that

Customs’ “decision not to grant plaintiff a license due to his failure to attain

a passing score on the [CBLE] was not arbitrary, capricious, an abuse of

discretion, or otherwise not in accordance with law.” Def. Resp. Br.at 2223.

B.

Analysis

In reviewing Customs’ decision to deny a customs broker’s license, the

Court is required to determine whether such a decision was “arbitrary,

capricious, an abuse of discretion, or otherwise not in accordance

with law.” 5.U.S §706(2)(A); see Kenny, 401 F. 3d at 1361; DunnHeiser, 29 CIT at 555, 374 F. Supp. 2d at 1279; Dilorio, 14 CIT at 747.

Court No. 20-00316

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A lawful ground for such a decision is an applicant’s failure to pass the

CBLE. See 19 U.S.C. § 1641(b)(2); 19 C.F.R.§ 111.16(b)(2).

As discussed, a passing score on the CBLE is 75% or higher. 19

C.F.R. § 111.11(a)(4). In addition, each question on the 80 question

exam is worth 1.25% of the total score. See Am.Admin. Rec, Ex. N, at

*1. The Court previously has stated that to appeal successfully a result

on the CBLE, an applicant is required to establish entitlement to credit

for the “minimum” number of questions that the applicant requires to

achieve a passing score. Harak, 30 CIT at. 929. Should the applicant

fail to meet this “minimum threshold,” then Customs’ denial of a

customs broker’s license is not “arbitrary, capricious, or otherwise not

in accordance with law.” Id. (citing 5 U.S.C.§ 706(2)(A)).

Plaintiffs score on the April 2018 exam is 71.25%.

See km. Admin. R., Ex. L, at *1.

Consequently, to attain a passing score of 75% or higher, plaintiff is

required to establish that he is entitled to receive credit for at least

three of the five contested questions. Based on the foregoing analysis, the

court concludes that Customs’ decision to deny plaintiff credit for four of the

five contested questions was supported by substantial evidence.

Accordingly, plaintiff does not meet the “minimum threshold” to establish

entitlement to credit for at least three questions.

Court No. 20*00316

Page 72

Appeal was not “arbitrary, capricious, an abuse of discretion, or otherwise not

in accordance with law.” 5 U.S.C. § 706(2)(A); see 19 C.F.R. § 111.16(b)(2).

Court No. 20-00316

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III. EAJA attorney fees and other expenses

C. Positions of the parties

The EAJA provides that “a court shall award to a prevailing party

other than the United States fees and other expenses ... unless the

court finds that the position of the United States was substantially

justified or that special circumstances make an award unjust.”

28 U.S.C. § 2412(d)(1)(A). Plaintiff contends that, provided that he

prevails in the instant appeal, he also is entitled to attorney fees and

other expenses under the EAJA. 28 U.S.C. § 2412(d)(1)(A);

PI. Br.at 13-14. Plaintiff argues that defendants’ position in this appeal

was not “substantially justified” because the contested questions

as well as Customs’ decision to deny plaintiff credit for those

questions were “vague, ambiguous, and unfairly confusing.” Id.

at 14. Defendants argue for several reasons that the court should

deny plaintiffs request for attorney fees and other expenses

under the EAJA. See Def. Resp. Br. at 22-23 (citing 28

U.S.C. § 2412(d)(1)(A)).

Court No. 20-00316

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B.Analysis

The EAJA provides that “ court shall award to a prevailing party other than the

United States fees and other expenses ... unless the court finds that the

position of the United States was substantially justified or that special

circumstances make an award unjust.”! 1 28 U.S.C. § 2412(d)(1)(A) (emphasis

supplied). Based on the foregoing analysis, plaintiff is not a “prevailing party”

within

the meaning of the EAJA. Id.', see Former Emps. oflBMCorp., Glob. Servs. Div. v.

U.S. Sec’y of Lab., 30 CIT 1591, 1593, 462 F. Supp. 2d 1239, 124142(2006),affd sub nom. Former Emps. of IBM Corp. v. Chao, 292 F. App’x

902 (Fed. Cir. 2008) (“According to the Supreme Court, a ‘prevailing party’

for the purposes of fee-shifting statutes, such as the EAJA, must have

obtained sought-after relief through ... a ‘judgmentO on the merits’ of its

case.”) (citing Buckhannon Bd. & Care Home, Inc. v. W. Va. Dep’t of

Health &H.R., 532 U.S. 598,604 (2001)).

Whether plaintiff is a “prevailing party” is a threshold consideration with

respect to relief under the EAJA, and consequently the court is not required

to determine whether defendants’ position was “substantially justified” or

whether “special circumstances make an award unjust.” 28 U.S.C. §

2412(d)(1)(A).

Court No. 20-00316

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Accordingly, the court denies plaintiffs request for attorney fees and

other expenses under the EAJA. See DePersia, 33 CIT at 1112, 637

F. Supp. 2d at 1252-53 (concluding that the plaintiffs “request for relief

under the EAJA cannot lie” because the denial of the plaintiffs appeal

was “not arbitrary, capricious, an abuse of discretion, or otherwise not

in accordance with law”).

H In addition, to be eligible for relief under the EAJA, the party requesting relief must not have

had a net worth that exceeds $2,000,000 at the time the civil action was filed. See 28 U.S.C. §

2412(d)(2)(B). The parties do not contest that plaintiff did not have a net worth exceeding

$2,000,000 at the time he filed the instant appeal.

Page 76

Court No. 20-00316

CONCLUSION

For the foregoing reasons, the court concludes that Customs’ decision to

deny plaintiff credit for questions 5, 27, 33 and 39 on the April 2018 exam

was supported by substantial evidence, and consequently that Customs’

decision to deny plaintiff a customs broker’s license was not “arbitrary,

capricious, an abuse of discretion, or otherwise not in accordance with

law.” 5 U.S.C. § 706(2)(A). In addition, the court concludes that plaintiff is

not entitled to attorney fees and other expenses under the EAJA.

Accordingly, it is hereby

ORDERED that plaintiffs motion for judgment on the agency record

\

pursuant to USCIT Rule 56.1 is denied; and it is further

ORDERED that judgment is entered for defendants and the action is

dismissed.

Is/

Dated-' June 6, 2022

New York, New York

_____ Timothy M. Reif

Timothy M. Reif, Judge

NOTE: This disposition is nonprecedential.

United States Courts of Appeals for the Federal Circuit

BYUNGMIN CHAE

Plaintiff-Amellant

v.

JANET YELLEN, SECRETARY OF THE TREASURY, ALEJANDRO

MAYORKAS, SECRETARY OF HOMELAND SECURITY, THE

DEPARTMENT OF THE TREASURY, THE DEPARTMENT OF

HOMELAND SECURITY, THE UNITED STATES,

Defendents-Amellees

2022-20 1 7

Appeal from the United States Court of

International Trade in No. L20-cv-00316-TMR,

Judge Timothy M. Reif.

Decided: April 25, 2023

BYUNGMIN CHAE, Elkhorn, NE, pro se.

MARCELLA POWELL, Commercial Litigation Branch, Civil Division,

United States Department of Justice, New York, NY, for defendantsappellees. Also represented by

2

BRIAN M. BOYNTON, AIMEE LEE, PATRICIA M. MCCARTHY, JUSTIN

REINHART MILLER; MATHIAS RABINOVITCH, Office of Assistant

Chief Counsel, International Trade Litigation, United States Bureau of

Customs and Border Protection, New York, NY.

BEFORE NEWMAN, PROST, AND HUGHES Circuit Judges.

NEWMAN, Circuit Judge.

Appellant Byungmin Chae appeals the decision of the United States

Court of International Trade (“CIT”), which sustained the denial of

Mr. Chae’s application for a customs broker license. 1 The CIT affirmed

the ruling of United States Customs and Border Protection (“Customs” or

“CBP”) that Mr. Chae did not achieve the required passing grade of at

least 75 percent on the Customs Broker License Examination (“CBLE”)

which Mr. Chae sat for in April 2018. See 19 U.S.C. § 1641(b)(2)

(stating that the Secretary of the Treasury “may conduct an

examination to determine the applicant’s knowledge of customs and

related laws, regulations and procedures, bookkeeping, accounting,

and all other appropriate matters”);

1 Chae v. Yellen, 579 F. Supp. 3d 1343 (Ct. Int’l Trade 2022) (“CIT Op.”)

3

C.F.R. § 111.11(a)(4) (establishing “75 percent or higher”

as the sing grade on the CBLE). On appellate review, we affirm

the decision of CIT denying Mr. Chae’s customs broker license

application. 2

Background

The CBLE is an 80-question, multiple-choice examination administered

by Customs. The directions for the exam state that “[e]ach question

has a single best answer.”

Harmonized Tariff Schedule of the United

States

Title 19, Code of Federal

Regulations . . .

Instructions for Preparation of CBP Form 7501...

Right to Make Entry Directive 3530-002A Id..

2 The CBLE is administered twice a year. 19 C.F.R. § 111.13(b). “Applicants who fail the examination and do not

receive a passing score can retake the exam without penalty.” Sec’y Br. 4 (citing 19 C.F.R. § 111.13(e)). The

record before us does not state whether Mr. Chae has retaken the exam.

4

The examination is initially scored by Customs. After this initial scoring,

19 C.F.R. § 111.13(f) and 19U.S.C. § 1641(e) provide a multitiered

system of administrative and judicial review. If the passing grade of

75% is not attained, the applicant may request an initial

administrative review by the Broker Management Branch of CBP’s

Office of Trade. See 19 C.F.R. § 111.13(f). If the applicant’s score

remains below 75% after this initial review, the applicant may

request a second round of administrative review by the

“appropriate Executive Director” of CBP’s Office of Trade. Id.

If an applicant’s score remains below 75% after exhausting

these two levels of administrative review, the decision to deny a

customs broker license may be judicially appealed to the CIT.

See 19 U.S.C. § 1641(e)(1). If the applicant’s requested relief is

still not granted, another level of judicial review is available, by appeal

to the Court of Ap- peals for the Federal Circuit. See 28 U.S.C. § 1295(a)(5).

Mr. Chae initially received a score of 65% on the April 2018 CBLE.

J.A. 330. After being notified of this result, he appealed to CBP’s

Office of Trade’s Broker Management Branch, requesting review

of thirteen questions. J.A. 333.

5

The Broker Management Branch awarded Mr. Chae credit for two

additional answers, raising his score to 67.5%. J.A. 351. Mr. Chae

then appealed the Broker Management Branch’s decision to the

Executive Assistant Commissioner of CB'P’s Office of Trade, requesting

review of the remaining eleven questions for which Mr. Chae was

denied credit in his initial administrative appeal. J.A. 354. The

Executive Assistant Commissioner awarded Mr. Chae credit for three

more of his answers, raising his score to 71.25%. J.A. 398.

Mr. Chae then judicially appealed to the CIT, seeking review of

five of the remaining questions for which he had not received credit. 3

CIT Op. at 1348. The CIT granted Mr. Chae credit for one question,

raising his score to 72.5%. CIT Op. at 1353. However, his score

remained below 75%.

3 Mr. Chae initially appealed the Executive Assis- tant Commissioner’s decision to the CIT

requesting review of seven of the remaining questions for which he had not received credit.

J.A. 296. However, Mr. Chae withdrew his challenges to two of those questions. CIT Op. at

1348 n.3.

6

Mr. Chae appeals to our court. He focuses on three of the

remaining questions for which he was denied credit, pointing out that

a decision in his favor on two of these questions will raise his score to the

passing grade 75%. Chae Br.3 At issue are Questions 5,27, and 33 of

the April 2018 CBLE.

Standard of Review

In assessing CBP’s ultimate licensing decision, “[consistent with

the broad powers vested in the Secretary [of the Treasury] for

licensing customs brokers under 19 U.S.C. § 1641, the denial of a

license can be overturned only if the decision was arbitrary,

capricious, an abuse of discretion, or otherwise not in accordance

with the law.” Kenny v. Snow, 401 F.3d 1359,1361

(Fed. Cir. 2005) (citing 5 U.S.C. § 706).

Within that framework, decisions as to individual CBLE questions

are reviewed for support by substantial evidence, as detailed in KennyUnderpinning a decision to deny a license arising from

an applicant’s failure to pass the licensing ex­

amination are factual determinations grounded in

examination administration issues—[including] the

allowance of credit for answers other than the official

answer—which are subject to limited judicial review 7

because “[t]he findings of the Secretary [of the Treasury]

as to the facts, if supported by substantial evidence,

shall be conclusive.”

401 F.3d at 1361 (quoting 19 U.S.C § 1641(e)(3)). In Kenny, we also wrote

that “[o]n questions of substantial evidence, we review the decisions of the

Court Of International Trade ‘by stepping into [its] shoes and duplicating

its review.’” Id. (quoting Taiwan Semiconductor Indus. Ass’n v. Micron

Tech., Inc., 266 F.3d 1339, 1343 (Fed. Cir. 2001)).

The CIT has granted examinees credit on appeal when:

(l) the omission of relevant statutory or regulatory language

would result in the question falsely characterizing the applicable

provision, (2) the inclusion or omission of language would

result in “the question’s incorrect use of’ a relevant term, or (3)

the inclusion or omission of language would result in the

question “not containing] sufficient information [for an

applicant] to choose an answer.”

CIT Op. at 1353 (first citing Harak v. United States, 30 Ct. Int’l Trade

908, 928 (2006); and then quoting O’Quinn v. United States, 24 Ct. Int’l

Trade 324, 328, 100 F. Supp. 2d 1136, 1140 (2000)).

8

Discussion

To achieve a passing score of at least 75%, Mr. Chae must obtain credit for at

least two of the three questions discussed in this appeal. Mr. Chae argues

that there is more than one correct answer among the multiple

choices for Question 5, that Question 27 was not sufficiently clear, and

that Question 33 does not provide sufficient information to reach the

answer selected by Customs. See Chae Br. 1-2. Conversely, the

appellees maintain that there is a single “best answer” to each question.

Sec’y Br. 13, 15, 19.

I.

Question 5

Question 5 of the April 2018 CBLE asks:

5. Which of the following customs transactions is NOT required to be

performed by a licensed customs broker?

a. Temporary Importation under Bond

b. Transportation in bond

c. Permanent Exhibition Bond

d. Trade Fair Entry

e. Foreign Trade Zone Entry

J.A. 417 (emphasis in original).

9

l. Parties’ Arguments

Mr. Chae selected choice E. Customs designated choice B as the correct

answer. Mr. Chae does not dispute that choice B is a correct answer;

he argues that choice E is also correct. He argues that “E.

Foreign Trade Zone Entry” is correct because “there is no

‘foreign trade zone entry’ term itself in the regulation,” and

therefore “there is no reason to believe the entry here is the type of

port of entry as claimed by CBP.” Chae Br. 1. Mr. Chae asserts

that, because the term does not exist within Title 19 of the C.F.R.,

examinees who are new to the industry will interpret the term to

mean “the act of bringing [goods] to the U.S. territory,” also

noting that “some shipments can be cleared if you claim your

own goods” under 19 C.F.R. § 111.2(a)(2)(i). Chae Br. 1.

At the CIT, Mr. Chae argued that the “common under standing” of

the term “entry” could reasonably refer to the process of “admission” set forth

in 19 C.F.R. § 146.32(a)(1). See CIT Op. at 1354-55.

The appellees argue that 19 C.F.R. § 111.2(a) supports their position. See

Sec’y Br. 13—14.

Section 111.2(a)(1) re- cites a general requirement for a person to

obtain a cus toms broker license to transact customs business^

10

General. Except as otherwise provided in para- graph (a)(2) of

this section, a person must obtain the license provided for in

this part in order to transact customs business as a broker.

19 C.F.R. § 111.2(a)(1). To support CBP’s selected answer, appellees

point to § 111.2(a)(2), which lists “[transactions for which license is

not required” as follows(i) For one’s own account. . ..

(ii) As [an] employee of [a] broker

(iii) Marine transactions. . . .

(iv) Transportation in bond....

(v) Noncommercial shipments. . . .

(vi) Foreign trade zone activities......

19 C.F.R. § 111.2(a)(2).

To rebut Mr. Chae’s contentions, the appellees point to 19 C.F.R. §

146.62, titled “Entry” within Part 146 of Titlel9 governing

“Foreign-Trade Zones,” and argue that a “question or answer

choice need not reflect the precise wording of the regulation in

order to be valid.” Sec’y Br. 13— 14 (quoting Harak, 30 Ct. Int’l

Tr. at 922).

11

The appellees assert that “E. Foreign Trade Zone Entry”

reasonably refers to making entry of merchandise from a foreign trade

zone as governed by § 146.62, and that this type of entry is not

exempted from the license requirement set forth in 19

C.F.R.§ 111.2(a)(1).

2. Analysis

Mr. Chae argued to the CIT that “E. Foreign Trade Zone Entry”

in Question 5 does not reasonably clarify whether it is referring to

entry into a foreign trade zone as governed by 19 C.F.R. § 146.32(a)

(l) or entry from a foreign trade zone as governed by 19 C.F.R. § 146.

62. Because the parties “agree [d] that the process of admission set forth

in [19 C.F.R.§ 146.32(a)(1)] does not constitute ‘customs business’

that is required to be performed by a licensed customs broker,” CIT

Op. at 1354, we find that CBP’s decision to deny Mr. Chae credit for

Question 5 is not supported by substantial evidence.

However, granting Mr. Chae credit for his answer to Question 5 does

not, in and of itself, provide the requisite passing score

on the CBLE.

12

II.

Question 27

Question 27 of the April 2018 CBLE asks:

a. Which of the following mail articles are not subject to

examination or inspection by Customs?

i.

Bona-fide gifts with an aggregate fair retail

value not exceeding $800 in the country of

shipment

ii.

Mail packages addressed to officials of the U.S.

Government containing merchandise

iii.

Diplomatic pouches bearing the official seal of

France and certified as only containing

documents

iv.

Personal and household effects of military and

civilian personnel returning to the United

States upon the completion of extended duty

abroad

v.

Plant material imported by mail for purposes of immediate

exportation by mail

J.A. 425.

13

1. Parties’ Arguments

Mr. Chae selected choice B. Customs designated choice C as the correct

answer.Mr. Chae argues that Question 27 was not sufficiently clear.

He states that “cbp cannot [sic] assume all packages quoted in the exam are

all international,” so “[a package’s origin] is not clear if it was not

provided.” Chae Br. 2. Mr. Chae argues that a person taking the

examination could reasonably infer that answer B is referring to

packages of domestic origin. Mr. Chae further argues that “some

merchandises are allowed to pass free of duty without issuing an entry

which is not subject to examination or inspection by CBP” under

19 C.F.R. § 145.37, noting that “without is- suing an entry cbp can still

inspect” is not in Title 19 of the C.F.R. Chae Br. 2.

Section 145.37 specifies three classes of merchandise that

“shall be passed free of duty without issuing an entry”:

(a) Mail articles for copyright. Mail articles marked for copyright

which are addressed to the Library of Congress, to the U.S.

Copyright Office, or to the office of the Register of

Copyrights, Washington, DC . . .

14

(b) Books, engravings, and other articles. [Certain books,

engravings, etchings, and other articles] when they are

addressed to the Library of Congress or any department or

agency of the U.S. Government.

(c) Official government documents. Other mail articles addressed

to offices or officials of the U.S. Government, believed

to contain only official documents, [though] [s]uch

mail articles, when believed to contain merchandise,

shall be treated in the same manner as other mail

articles of merchandise so addressed.

15

19 C.F.R. § 145.37.

The appellees argue that CBP’s designated best answer is supported by

other portions of 19 C.F.R. § 145, including:

§ 145.2(b) Generally. All mail arriving from out- side the

Customs territory of the United States which is to be delivered

within the Customs territory of the United States ... is

subject to Customs examination . . .

§ 145.38 Mail articles bearing the official seal of a foreign

government with which the United States has diplomatic

relations, accompanied by certificates bearing such seal to

the effect that they contain only official communications or

documents, shall be admitted free of duty without

Customs examination.

16

The appellees argue that it is unreasonable for an examinee to argue

that the examination question could relate to domestic shipments, for the

purpose of the exam is “to determine the applicant’s knowledge of customs

and related laws, regulations and procedures, bookkeeping, ac­

counting, and all other appropriate matters.” Rudloff v. United States,

19 Ct. Int’l Tr. 1245, 1246-47 (1995) (quoting 19 U.S.C. § 1641(b)(2)).

The appellees state that “[a] reasonable examinee would presume

that all answer choices concerned an importation of mail articles into the

United States.” Sec’y Br. 16.

The appellees then argue that Mr. Chae’s reliance on 19 C.F.R. § 145.37 is

“misplaced,” as section 145.37(c) “distinguishes between mail articles

that contain only official documents and mail articles that contain

merchandise.” Sec’y Br. 16. The appellees point out that, under section

145.37(c), mail articles containing only official documents are passed free

of duty without issuing an entry, while articles containing merchandise

shall be treated in the same manner as other mail articles of

merchandise so addressed. See 19 C.F.R. § 145.37(c) supra. Thus the

packages containing merchandise mentioned in choice B are subject to

Customs examination in accordance with 19 C.F.R.

§ 145.2(b).

17

The appellees also argue that section 145.37(c) is not responsive

to Question 27, asserting that section 145.37(c) “does not address

whether certain mail articles are subject to ‘examination’ by CBP, but

rather concerns how the articles should be treated for entry and

duty purposes.”

Sec’y. Br. 17.

2. Analysis

The CIT concluded that “Customs’ decision to deny [Mr. Chae]

credit for Question 27 was supported by substantial evidence.”

CIT Op. at 1361. The CIT determined that “Customs

determined reasonably that Question 27 presumes that the mail

articles described in the question are imported into the United States”

based on the purpose of the CBLE as recited in 19 U.S.C. § 1641(b)(2)

and the references recommended to the examinees in the

CBLE’s directions.Id. At 1360. The CIT also determined that

19 C.F.R. § 145.37(c) distinguishes mail articles that contain

official documents from those that contain merchandise. Id. At 1361.

The CIT further held that:

19 C.F.R. § 145.37 ... is not responsive to question 27, which

instructs the applicant to determine “[w]hich of the following

mail articles are not subject to examination or inspection by

Customs.”

19 C.F.R. § 145.37 does not address whether certain mail articles

are subject to “examination” or “inspection” by Customs.

Rather, this provision ad- dresses whether the articles “shall be

passed free of duty without issuing an entry.” Whether an

article “shall be passed free of duty” is a distinct question from

whether an article “shall be subject to examination or

inspection by Customs.” On this basis, 19 C.F.R. § 145.37

does not support plaintiffs selection of answer choice (B).

CIT Op. at 1361 (emphasis in original) (citations omitted).

We agree with the CIT that the regulations are sufficiently

clear, and that choice B is not a reasonable selection in light of

19 C.F.R. §§ 145.2(b), 145.37(c), and 145.38. Section 145.2(b)

states that “[a]U mail arriving from outside the Customs

territory of the United States which is to be delivered

within the Customs territory of the United States ... is

subject to Customs examination.

18

19

” Under § 145.37(c), “mail articles [addressed to offices or

officials of the U.S. Government], when believed to contain

merchandise, shall be treated in the same manner as other mail

articles of merchandise so addressed.” Thus the pack- ages in

choice B cannot be exempted by section 145.37(c) as Mr. Chae argues,

and must be subject to Customs examination under section 145.2(b),

regardless of any difference in meaning between “shall be passed

free of duty” and “examination or inspection by Customs.” Section

145.38 directly supports answer choice C.

Mr. Chae’s additional arguments do not negate the conclusion that choice

C is the best answer. CBP’s decision to deny Mr. Chae credit

for his answer to Question 27 is sup- ported by substantial evidence,

and thus the CIT’s decision as to this question is affirmed.

20

III.

Question 33

Question 33 of the April 2018 CBLE asks:

33. What is the CLASSIFICATION of current- production wall

art depicting abstract flowers and birds that is mechanically

printed, via lithography, onto sheets of paper, the paper

measuring .35 mm in thickness that have been permanently

mounted onto a backing of .50 mm thick paperboard?

A. 4911.91.2040

B. 4911.91.3000

C. 4911.99.6000

D. 9701.10.0000

E. 9702.00.0000

J.A. 426 (emphasis in original).

21

1. Parties’ Arguments

Mr. Chae selected choice E. Customs designated choice B as the correct

answer. Mr. Chae argues that the wording of Question 33 does

not provide sufficient information to identify the correct answer.

Chae Br. 2 (pointing to ambiguity in Question 33, stating that “no

further detail is identified”). Mr. Chae focuses on the term “currentproduction,” arguing that the term should be construed as describing

a “process which was not discontinued” and that Question 33

identifies “no further detail on this shipment.” Chae Br. 2.

Accordingly, he asserts that the production date of the lithograph in

Question 33 is ambiguous. The classification that Mr. Chae selected,

9702.00.0000, covers “[o]riginal engravings, prints and lithographs,

framed or not framed,” with no mention of the age of the products.

Harmonized Tariff Schedule of the United States (2017) Basic Edition

(“HTSUS”), Chapter 97, p. 97-2.

The appellees describe this question as “evaluat[ing] the ability

of an applicant to interpret and apply the HTSUS” and its

General Rules of Interpretation (“GRIs”). Sec’y Br. 18 (quoting CIT

Op. at 1363). The GRIs are principles that govern the classification

22

of goods under the HTSUS and must be applied in numerical order. See BASF

Corp. v. United States, 482 F.3d 1324,1325-26. GRI1 states that

“classification [of goods] shall be determined ac- cording to the terms of the

headings and any relative section or chapter notes.”

HTSUS, GRIs, GN p.l. Furthermore, we have written that “[slection and

chapter notes ‘are not optional interpretive rules, but are statutory law,

codified at 19 U.S.C. § 1202.’” Aves. in Leather, Inc. v. United States, 423 F.3d

1326,1333 (Fed. Cir. 2005) (quoting ParkB. Smith, Ltd. v. United States, 347 F.3d

922, 927 (Fed.Cir. 2003).

The appellees support CBP’s designation of choice B as the best answer by

citing HTSUS 4911.91.3000, which covers:

Other printed matter, including printed pictures and

photographs^ Other: Pictures, designs and photographs: Printed

not over 20 years at time of importation: Other: Lithographs on

paper or paperboard: Over 0.51 mm in thickness.

HTSUS, Chapter 49, p. 49-4.

23

The appellees note that the lithograph in Question 33 is described as

wall art mechanically printed onto sheets of “paper measuring

.35 mm in thickness that have been permanently mounted onto a

backing of .50 mm thick paper- board.” J.A. 426; see also Sec’y Br. 18.

Thus “the combined thickness of the lithograph and its mounting is

0.85 mm,” Sec’y Br. 19, which is the thickness that should be used

for classification purposes, as explained in HTSUS Chapter 49,

Additional U.S. Note 1-

1. For the purposes of determining the classification of

printed matter produced in whole or in part by a

lithographic process, the thickness of such printed matter

is that of the thinnest paper contained therein, except

that the thickness of a permanently mounted lithograph is

the combined thickness of the lithograph and its mounting.

HTSUS, Chapter 49, p. 49-1. Thus the appellees argue that the wall

art in Question 33 is a lithograph “[o]ver 0.51 mm in thickness.” Id.

at p. 49-4; see also Sec’y Br. 19.

To rebut Mr. Chae’s contentions, the appellees argue that “the

term ‘current production’ refers to the time in which the merchandise

24

was printed, and, thus, reasonably means that the printed lithography

is not over 20 years old.” Sec’y Br. 19-20. The appellees state that “[t]he

question does not contain the phrase ‘current production process’ and

‘[elxaminees cannot be permitted to reach conclusions by taking a

portion of the question and formulating their own factual scenarios.’” Id.

at 20 (quoting DunirHeiser v. United States, 29 Ct.

Int’l Tr. 552, 559-60 (2005)). Appellees also note that “[elxaminees

are not permitted to ‘unilaterally rewrite the question.’” Id. (quoting Dunn~

Heiser, 29 Ct. Int’l Tr. at 560). The appellees also argue Mr. Chae’s answer,

choice E, cannot be correct considering HTSUS Chapter 97, Note 22. For the purposes of heading 9702, the expression

“original engravings, prints and lithographs” means

impressions produced directly, in black and white or in

color, of one or of several plates-wholly executed by

hand by the artist, irrespective of the process or of the

material employed by him, but not including any

mechanical or photomechanical process.

HTSUS, Chapter 97, p. 97T (emphasis in original).

3. Analysis

25

HTSUS Chapter 97, Note 2 explicitly excludes litho- graphs produced by

“any mechanical or photomechanical process” from heading 9702. Id.

Although the description of “current- production” strains the application of

“[p]rinted not over 20 years at time of importation,” it is not inconsistent.

J.A. 426; HTSUS, Chapter 49, p. 49-4. We agree with the CIT “that

Customs’ decision to deny [Mr. Chae] credit for [Qluestion 33 was supported

by substantial evidence.” CIT. Op. at 1364.

We conclude that CBP’s decision to deny Mr. Chae credit for his answer to

Question 33 is supported by substantial evidence, and thus the CIT’s

decision as to this question is affirmed.

26

Conclusion

We affirm the CIT’s decision on Questions 27 and 33. Thus even though we

find CBP’s denial of credit for Question 5 unsupported by substantial

evidence, Mr. Chae can- not attain a passing grade of at least 75%.

Absence of a passing grade on the CBLE constitutes lawful grounds for

denial of Mr. Chae’s application for a customs broker li- cense. See

Kenny, 401 F.3d at 1361 (“Among the lawful grounds for denying

a license is the failure to pass the licensing examination.” (citing 19

U.S.C. § 1641(b)(2); 19 C.F.R. § 111.11(a)(4); 19 C.F.R.

§ 111.16(b)(2))).

CBP’s denial of Mr. Chae’s application is not arbitrary, capricious, an

abuse of discretion, or otherwise not in accordance with law. The

CIT’s decision is affirmed.

AFFIRMED

COSTS

Each party shall bear its costs.

Case: 22-2017

Document: 35

Page: 1

Filed: 06/12/2023

NOTE: This order is non precedential.

United States Court of

Appeals for the Federal

Circuit

BYUNGMIN CHAE,

Plaintiff-Appellant

v.

JANET YELLEN, SECRETARY OF THE

TREASURY, ALEJANDRO MAYORKAS,

SECRETARY OF HOMELAND

SECURITY, DEPARTMENT OF THE

TREASURY, DEPARTMENT OF

HOMELAND SECURITY, UNITED

STATES,

DefendantsAppellees

2022-20 1 7

Appeal from the-UnitedStates Court of

International Trade in No. U20-cv-00316-TMR,

Judge Timothy M. Reif.

ON PETITION FOR PANEL REHEARING

AND REHEARING EN BANC

Before MOORE, ChiefJudge, NEWMAN, LOURIE.

DYK, PROST, REYNA, TARANTO, CHEN,

HUGHES, STOLL,

CUNNINGHAM, and STARK, Circuit Judges.

PER CURIAM.

Case: 22-2017

Document: 35

Page: 2

2

Filed: 06/12/2023

CHAE v. YELLEN

ORDER

Byungmin Chae filed a combined petition for

panel re- hearing and rehearing en banc. The

petition was referred to the panel that heard

the appeal, and thereafter the petition was

referred to the circuit judges who are in

regular active service.

Upon consideration thereof,

IT IS ORDERED THAT:

The petition for panel rehearing nTdenied.

The petition for rehearing en banc is denied.

The mandate of the court will issue June 20, 2023.

FOR THE COURT

June 12. 2023

Date

Isl Jarrett B. Perlow

Jarrett B. Perlow

Acting Clerk of Court