Reply Brief — Consumers Union of United States, Inc. v. Committee for Implementation of Textile Agreements

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— Supreme Court, U.S,

{ PILED

WAR 13 1978

IN THE MICHAEL RODAK, JR., CLERK

Supreme Court of the United States

OCTOBER TERM, 1977

N 0. 77-785

CONSUMERS UNION OF UNITED STATES, INC.,

Petitioner,

V.

COMMITTEE FOR THE IMPLEMENTATION OF TEXTILE

AGREEMENTS, et al.,

Respondents.

REPLY OF PETITIONER TO RESPONDENTS’

MEMORANDUM IN OPPOSITION TO

PETITION FOR CERTIORARI

° LEONARD C. MEEKER

JAMES N. BARNES

Center for Law and Social Policy

1751 N Street, N.W.

Washington, D.C. 20036

(202) 872-0670

Attorneys for Petitioner

MARK SILBERGELD

Consumers Union of United States

1714 Massachusetts Avenue, N.W.

Washington, D.C. 20036

Of Counsel

WILSON - Eres PRINTING Co.. INC. - RE 7-6002 - WASHINGTON. D.C. 20001

IN THE

Supreme Cuurt of the United States

OCTOBER TERM, 1977

No. 77-785

CONSUMERS UNION OF UNITED STATES, INC.,

0 Petitioner,

COMMITTEE FOR THE IMPLEMENTATION OF TEXTILE

AGREEMENTS, et al.,

Respondents.

REPLY OF PETITIONER TO RESPONDENTS’

MEMORANDUM IN OPPOSITION TO

PETITION FOR CERTIORARI

This reply, filed pursuant to Rule 24(4) of the Rules

of the Supreme Court, responds to arguments first raised

by the Solicitor General in his Memorandum for the Re-

spondents in Opposition to the Petition for a Writ of

Certiorari. Petitioner submits that these arguments mis-

construe the statutory allocation of jurisdiction between

the Customs Court and the federal district courts.

I. THE CUSTOMS COURT HAS NO JURISDICTION

OVER AN ACTION BROUGHT BY PETITIONER

CONSUMERS UNION

The Solicitor General’s Memorandum in Opposition sug-

gests (p. 5, n.2) that Petitioner could challenge the Re-

spondents’ administration of Section 204 of the Agricul-

2

tural Act of 1956 by filing suit in the Customs Court

under 28 U.S.C. § 1582 (a), following Petitioner’s un-

successful protest of an administrative decision exclud-

ing from this country textiles shipped in excess of the

quotas imposed by Respondents. The Memorandum pre-

sumes (p. 5, n.2) that a protest would be filed first, be-

cause 28 U.S.C. S 1582 (e) specifically denies jurisdiction

to the Customs Court, wnless “(1) either a protest has

been filed, as prescribed by Section 514 of the Tariff Act

of 1930, as amended, . . . or if the action relates to a

decision under Section 516 of the Tariff Act of 930, 28

amended, all remedies prescribed therein have been ex-

hausted. .. .”

The Solicitor General does not dispute Petitioner’s view

(Pet. 18, n. 15) that Section 516 has no relevance to the

present case. The only other mechanism for obtaining ac-

cess to the Customs Court is through the filing of a pro-

test “as prescribed by Cvetion 514 of the Tariff Act of

1930, as amended.” Under Section 514(b) (1), however,

the only parties that may file a protest are:

“the importer, consignee, or any authorized agent

of the person paying any charge or exaction, or fil-

ing any claim for drawback, or seeking entry or

delivery, with respect to merchandise which is the

subject of a decision in subsection (a) of this action.”

Petitioner Consumers Union is not such a party. The

legislative history of Section 514 clearly shows that its

basic purpose was to establish a protest mechanism fcr

importers or other persons having a property interest in

imported merchandise. Language of similar intent first

appeared in the Customs Administrative Act of 1890,

c. 407, § 14, 26 Stat. 137:

Act of May 28, 1954, 70 Stat. 200, as amended by Pub. L. 87-

488, 76 Stat. 104, 7 U.S.C. § 1854.

3

“That the decision of the collector as to the rate

and amount of duties chargeable upon imported

merchandise, including all dutiable costs and charges

. . shall be final and conclusive against all persons

interested therein, unless the owner, importer, con-

signee or agent of such merchandise, or the person

paying such fees, charges and exactions other than

duties, shall within ten days . . give notice in writ-

ing to the collector, setting forth therein distinctly

and specifically, and in respect to each entry or pay-

ment, the reasons for his objections thereto, and if

the merchandise is entered for consumption shall

pay the full amount of the duties and charges ascer-

tained to be due thereon.”

Section 14 of the 1890 Act further provided for appeal

from the collector to a “board of three general apprais-

ers“.

The Payne-Aldrich Tariff Act of 1909, 36 Stat. 11,

created the U.S. Court of Customs Appeals (36 Stat.

105), but preserved the language of the 1890 Act respect-

ing who may file an appeal from the collector to the

Board of General Appraisers. Section 29 of the 1909 Act

bestowed the right to appeal decisions of the Board upon

“the importer, owner, consignee or agent of any imported

merchandise, or the collector or Secretary of the Treas-

ury”. (36 Stat. 107).

The Tariff Act of 1922 discarded the awkward and

obscure words “agent of such merchandise” in favor of

the language that appears today in Section 514, with a

few later modifications not here relevant. The commit-

tee reports on the 1922 Act are almost silent on the rea-

sons for the revision. But one comment by the House

Ways and Means Committee reveals that Committee’s

* This board was the predecessor of the Customs Court. See

H.R. Rep. No. 91-267, 9ist Cong., 2nd Sess., 1970 U.S. Code, Cong.

& Adm. News 3189.

1

understanding of the original purpose of the protest

mechanism:

The right of review by the Court of Customs Ap-

peals of questions of law affecting the validity of

reappraisement is extended to the Government. There

is no reason why the Government should be denied

this remedy now afforded importers.” (emphasis

added)

This understanding of the section was reaffirmed by

the Ways and Means Committee in 1930, in its report on

the Tariff Act of 1930:

“Section 514 of the 1922 Act, relating to protest

against collectors’ decisions, provides that such de-

cisions shall be final unless the importer, within 60

days, files a protest in writing with the collector. . .”

(emphasis added) .*

The decided cases underscore the rule that only a limit-

ed class of persons, basically importers, may utilize the

protest mechanism which is prerequisite to the filing of

an action in Customs Court. In Hancock Gross Mfg., Inc.

v. U.S., 400 F. Supp. 813, 815 (Cust. Ct. 1975), the

Court stated:

“Under Section 514 of the Tariff Act of 1930, the

party filing a protest must be ‘the importer, con-

signee, or agent of the person paying such charge or

exaction’. Fundamentally, of course, the court lacks

jurisdiction over a protest filed by a party which

does not fall within one of the authorized classes of

persons specified in section 514.“

H.R. Rep. No. 248, 67th Cong., Ist Sess. 26 (1921).

H.R. Rep. No. 7, 71st Cong., Ist Sess. 178 (1929).

Accord United States v. Sherman & Sons Co., 237 U.S. 146,

152; 35 S.Ct. 520, 523; 59 L.Ed. 883 (1915); United States v.

Wedemann, Godknecht, Inc., 515 F.2d 1145, 1147 (C.C.P.A. 1975) ;

Border Brokerage Co. v. United States, 314 F. Supp. 788, 791

(Cust. Ct. 1970).

5

Petitioner Consumers Union is not an importer, con-

signee or authorized agent of any person paying any

charge or exaction. The complaint below alleges the

status of Consumers Union and its members as “pur-

chasers and consumers of textiles and textile products

which are or may be subject te quantitative import limi-

tations.” Complaint, { 3. The complaint further alleges

that Consumers Union and its members are and will be

injured “in their capacity as consumers, by the imposi-

tion of restraints on the importation of textiles and tex-

tile products in the absence of legally required determi-

nations. (emphasis added). Complaint, J 18. The

$15,000 worth of textiles that Petitioner purchases an-

nually for testing and other purposes is purchased at

retail to ensure that the merchandise tested is representa-

tive of items sold to members and consumers. For these

reasons, Petitioner does not and could not qualify as an

importer within the meaning of Section 514(b) (1). Ac

cordingly, Petitioner could not file a protest under Sec-

tion 514, nor bring suit in the Customs Court under 28

U.S.C. § 1582.

II. THE UNAVAILABILITY OF CUSTOMS COURT

JURISDICTION ACTS TO CONFER JURISDICTION

UPON THE DISTRICT COURT

Petitioner’s exclusion from the Customs Court brings

this case within the “exceptional class of cases” to which

the Second Circuit referred in Sneaker Circus, Inc. v.

Carter, 566 F.2d 396, 399 (1977). In each of these cases,

a court held that the unavailability of the Customs Court

acts to confer original jurisdiction on the district court.“

*In Timken Co. v. Simon, 539 F.2d 221 (D.C. Cir. 1976), a

domestic manufacturer sought an injunction from the district

court to force the Secretary of the Treasury to impose an anti-

dumping duty on imported merchandise, under the Anti-Dumping

Act, 19 U.S.C. §§ 160 et seg. The court found that because goods

had entered the country prior to the effective date of the Act, and

6

These holdings followed and upheld the presumption of

availability of judicial review of administrative decisions,

reflected in numerous Supreme Court cases.’

Petitioner’s Memoranda and briefs in the District

Court* and Court of Appeals advanced and developed

the contentions that the Customs Court is not empowered

to hear cases brought by consumers, and that claims that

the Customs Court cannot hear should be heard in the

district court.

because the Act functioned prospectively, there could be no protest

under Section 516, and thus no acceas to the Customs Court. The

Court of Appeals concluded: “Since Timken has no remedy pur-

suant to section 516 in the Customs Court, we decline to hold that

the District Court lacked jurisdiction over this action.” (emphasis

in original). 539 F.2d 226, n.7. In National Milk Producers F edera-

tion v. Shultz, 372 F. Supp. 745 (D. D.C. 1974), the court accepted

jurisdiction of a challenge by milk producers to the Secretary of

the Treasury's refusal to assess countervailing duties against im-

ported dairy products. In view of an earlier holding that American

manufacturers could not bring an action in the Customs Court

respecting countervailing import duties, the district court took

jurisdiction, ruling that the unavailability of jurisdiction in the

Customs Court “acts to confer original jurisdiction upon this court

under 28 U.S.C. § 1340.“ 372 F. Supp. 746. See also Consumers

Union of United Stat’, Inc. v. Kissinger, 506 F.2d 136 (D.C. Cir.

1974), cert. denied, 421 U.S. 1004 (1975); J.C. Penney Company v.

United States Treasury Department, 439 F.2d 63, 68 (2nd Cir.

1971), cert. denied, 404 U.S. 869 (1971).

’ See, e.g., Citizens to Preserve Overton Park, Inc. v. Volpe, 401

U.S. 402 (1971); Abbott Laboratories v. Gardner, 387 U.S. 136

(1967) ; United States ez rel. Accardi v. Shaughnessy, 347 U.S. 260

(1954); Pillai v. Civil Aeronautics Board, 485 F.2d 1018 (D.C. Cir.

1973); Environmental Defense Fund, inc. v. Hardin, 428 F.2d 1093,

1100 (D.C. Cir. 1970) ; American Airlines, Inc. v. Civil Aeronautics

Board, 348 F.2d 349 (D.C. Cir. 1965); Imbert Imports, Inc. v.

United States, 314 F. Supp. 784 (Cust. Ct. 1970); aff'd 331 F. Supp.

1400 (Cust. Ct. 2d Div. App. Term 1971), aff'd 475 F.2d 1189

(C.C.P.A. 1978).

*Memorandum of Points and Authorities in Opposition to De-

fendants’ Motion for Judgment on the Pleadings or in the Alterna-

tive for Summary Judgment and in Support of Plaintiff's Cross-

Motion for Partial Summary Judgment 69-74.

Reply Brief of Plaintiff-Appellant, 9-15.

7

The decision of the Court of Appeals in the present

case has the effect of denying consumers access to any

forum. Consumers such as Petitioner cannot fit into the

Court of Appeals formula:

“

*

. . if anyone wishes to challenge the Committee’s

action, he can do so as other challenges of that na-

ture are made, i.e. as an importer or as an American

manufacturer, producer or wholesaler, bringing tex-

tiles into the United States.” 561 F.2d 872, 874

(Pet. 20a).

Contrary to the assertion of the Solicitor General, the

holding of the Court of Appeals conflicts directly with

decisions in this and other circuits to the effect that a

piaintiff whose complaint challenges the imposition of re-

straints or imports, but who does not meet the require-

ments of 28 U.S.C. § 1582, may sue in the district courts.

Respectfully submitted,

LEONARD C. MEEKER

JAMES N. BARNES

Center for Law and Social Policy

1751 N Street, N.W.

Washington, D.C. 20036

(202) 872-0670

Attorneys for Petitioner

MARK SILBERGELD

Consumers Union of United States

1714 Massachusetts Avenue, N.W.

Washington, D.C. 20036

Of Counsel