Amicus Curiae Brief — United States v. Swisher International, Inc.

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No. 00-415

In the Or; 2 7 ong

Supreme Court of the United Stat es

UNITED STATES OF AMERICA,

Petitioner,

versus

SWISHER INTERNATIONAL, INC.,

Respondent.

On PETITION FOR Writ oF CERTIORARI TO THE

Unrrep STATES COURT OF APPEALS FOR THE Feperat CIRCUIT

BRIEF OF AMICI CURIAE

TOTES-ISOTONER, CORPORATION ET. AL. IN OPPOSITION TO

PETITION FOR A WRIT OF CERTIORARI

JOHN M. PETERSON

Counsel of Record

MICHAEL K. TOMENGA

GEORGE W. THOMPSON

Curtis W. KNAUSS

Maria E. CELIS

Neville, Peterson & Williams

80 Broad Street,

34th Floor

New York, NY 10004

(212) 635-2730

Aitorneys for Amici Curiae

Totes-Isotoner Corporation et. al.

_ Gary & Taylor (202) 393-4141/ussupremecount@hotmail.com

i

TABLE OF CONTENTS

BARE GP PTR sissies scticsncsssnnepessececraciceseehsanane cs li

INTERESTS OF AMICI CURIAE...............cccccccccosccscosceccseeccooeceoeeees ]

SUMMARY OF ARGUMENT. ............ccccccsssccsccscsscsssssccocescecoeecsooeess 3

BOI TIITN sicsussinidneisnassnenniactinguscntinnepisertiee ter 4

TIT iicsnciiniistieiiinscinlis lee cesarean 8

A. The Federal Circuit’s Decision Does Not

Conflict With this Court’s Statements in

SE EE TG ote ee 8

B. The Exercise of the CIT’s 28 U.S.C. § 1581(i)

“Residual” Jurisdiction in United States Shoe

Does Not Bar The Exercise of 28 U.S.C. §

1581(a) “Protest” Jurisdiction in Cases Where

a Protestable “Decision of the Customs

Service” Has Been Issued................cccccccccsoocccececceceee 1]

ee aR Tc Rye AST Bete 20

i

TABLE OF AUTHORITIES

FEDERAL CASES

ASAHI METAL INDUS. CO. Vv. SUPERIOR COURT OF

CALIFORNIA, 480 U.S. 102 (1987) ........::cseeeeseeseeeeeeeeeeeeees 11

CALCIO V. UNITED STATES, 18 CT. INT'L TRADE 215 (1994)15

-CEMEX, S.A. V. UNITED STATES, 133 F.3D 897 (FED. CIR.

COLORADO RIVER WATER CONSERVATION DisT. V. UNITED

STATES, 424 U.S. 800 (1976).........:ccccssscssseeeseeesseteeeeenees 18

COMPANHIA BRASILEIRA CARBURETO DE CALCIO V. UNITED

STATES, 18 CT. INT’L TRADE 215 (1994) ......seceeeeeeeeees 15

CONOCO, INC. V. FOREIGN TRADE ZONES BD (“CONOCO”), 18

F.3D 1581 (FED. CIR. 1994) .....cccccseeseetsereereeesteeeeeeenseneens 13

EURASIA IMPORT CO., V. UNITED STATES, 31 C.C.P.A. 202,

GSELL V. INSULAR COLLECTOR OF CUSTOMS, 239 U.S. 93

(1915) ..rcccsssscsceccssassensesasavcrsnsensevessnenesusesensnuensonenenerncnsenens ll

HATTER V. UNITED STATES, 953 F.2D 626 (FED. CiR. 1992)17

HAWAIIAN INDEP. REFINERY CO. V. UNITED STATES, 460 F.

SUPP. 1249 (CUST. CT. 1978).....ccccccecseeeeseseneeeseeneneeeeneees i)

J.W. HAMPTON, JR. & Co. Vv. UNITED STATES, 276 U.S. 394

(1928) .......ccccecescssesessscssssssessessscsessecensessnsssenseseesenennensnees 17

iii

JUICE FARMS, INC. V. UNITED STATES, 68 F.3D 1344 (FED.

I i cacliandidiaieiitiaamaie 14

K MART Corp. V. CARTIER INC., 485 U.S. 176 (1988) ....... 1]

MAYOR OF PHILADELPHIA V. EDUCATIONAL EQUALITY

PI, GES UE Bes Ge CES Ty isessscnsinvvnadscsensessstesosensneneoess 1]

MCCARTHY V. MADIGAN, 503 U.S. 140 (1992)... 18

MCKESSON Corp. V. DIVISION OF ALCOHOLIC BEVERAGES &

FO te. BG CED cerccsicersasvcissinsscansesescnsnnidones 19

MILLER & Co. V. UNITED STATES, 824 F.2D 961 (FED. Cir.

1987), CERT. DENIED, 484 U.S. 1041 (1988)........ 12, 13, 16

MITSUBISHI ELEC. AM. INC. V. UNITED STATES, 44 F.3D 973

NIG III ni nes a neecicaneieinaumidaanabinbaiaieianindarmmenacddine 15

NATIONAL CORN GROWERS ASS'N. V. BAKER, 840 F.2D 1547

NS ene NOE me nbn eS | 14

NATIONAL LICORICE Co. Vv. NLRB, 309 U.S. 350 (1940)... 11

NEC Corp. v. UNITED STATES, 151 F.3D 1361 (FED. Cir.

RTE REE Ii oa oe aR RR ST AY Pe oe 15

NORCAL/CROSETTI FOODS INC. V. UNITED STATES, 963 F.2D

I sek cancccipahanunbinsenandilbiiiens 14

PAC FUNG FEATHER Co. V. UNITED STATES, 111 F.3D 114

ETERS a oe re OE 15, 16

ST. PAUL FIRE & MARINE INS. Co. V. UNITED STATES, 959

I OED ses cxncaskcsnanndisteiaccnbasslanacnsinensaidannes 15

iV

STONE CONTAINER Corp. V. UNITED STATES, 2000 U.S. App.

LEXIS 25466, No. 99-1333 (FED. CIR. 2000).........0000000. 19

TECHSNABEXPORT, LTD. Vv. UNITED STATES, 16 CT. INT'L

RRO ay cee 17

UNITED STATES CANES SUGAR REFINERS' ASS'N. V. BLOCK,

544 F. Supp. 883, 887 (CT. INT'L TRADE), AFF'D ON OTHER

GROUNDS, 683 F.2D 339 (C.C.P.A. 1982) oo... cee eeceeeeeeees 15

UNITED STATES SHOE Corp. V. UNITED STATES, 19 CT. INT'L

Neen cackuddbsmanmenane 6

UNITED STATES SHOE, 19 CT. INT'L TRADE 1284 (1995);

AFF'D, 114 F.3D 1564 (FED. CIR. 1997)... eeeceeeees a ie

UNITED STATES V. BOE (SERVCO CO., PARTY-IN-INTEREST),

ee Be I asks csaeiniacitshemeiaedaainendansinnsovietnessn 18

UNITED STATES V. PRIORITY PRODS, INC., 793 F.2D 296 (FED.

I a 17

UNITED STATES V. UNIPOYAL, INC., 69 C.C.P.A. 179 F.2D

PE ard is: SO cnisncrcrisenceanvcadtsvensonemeiananenunimmasnais 13,14

UNITED STATES SHOE CorpP. Vv. UNITED STATES, 19 CT. INT’L

I I iil a 7

UNITED STATES V. UNITED STATES SHOE CorpP., 523 U.S. 360

MUGEN SHIRE oats DONS CeO RE LONE IARI EI 2 PASSIM

FEDERAL STATUTES

URE CO ee 6, 7,9, 18

OF Se RG Oiscssissnvisicansscuninienknmnisaetidiaanibenena 2, 3, 12

a TN LR nse, mitt Nitin (00 et

PP IR 9 AI sckccatinasca ee ee 13

PU BAS § A acre aee ee ee 7

EB L, G IN so ivinisicseninscseionaciemsiain eae

ME UBL. § CORY i icici 4,9

US SO iictcksncccesaeecniensonianiee 3, 11, 15

PEALE, © BRI vvisicrbinc passim

TRUSS 6 I sniiinitintoctione eee oe 14

PRA £TS haee 15, 16

MIE OI ois isiticsiecndnncceaeiaes 16

Ee _ | | | ee Nee ee mee ee passim

TE UBE. 4 I ike hiedaeae 19

MULE. CONS. ee 5

USL. § 2631............ et 17

PUB. L. NO. 99-662, 100 STAT. 4082 (1986) ..ccsccccsescsscecseesses 4

FEDERAL REGULATIONS AND RULES

19 CLF.R. § 24.24(€)(5)cccccccccsssscssssssesssssssscsssscesssssees 2, 7, 8, 12

Br i ates © A I esx sincacerecseasbsndiciosinnhahchnboiddddaanbielinasion l

i Fe ree Tk MILE sal bt, l

Supreme Court Rule 23.1(C) ......cccccssssesssssssssesseseseseseeeeeeccc., 10

Supreme Court Rule 37.3(a) ....cccccccccccsccsccssscececesesecesececececcen, l

SUPREME COURT RULE 37.6 .....ccccscscssessssssesesesseseseecevesesescececc, l

OTHER AUTHORITIES

TREASURY DECISION 94-91 (28 CusT. B. & DEC. No. 48

LPO Ves resent cocvoxnassinninsceysscnisencososionesstatcrisanesocesssxeveeaces 5, 6

l

BRIEF AMICUS CURIAE

Pursuant to Supreme Court Rule 37.3(a), upon written

consent of all parties, amici curiae Totes-Isotoner

Corporation, et al, respectfully submit this brief amicus

curiae in support of Respondent, Swisher International, Inc..,

and submits that the petition for a writ of certiorari should be

denied.

INTEREST OF AMICI CURIAE’

Amici curiae are exporters of waterborne commercial

cargo who paid the Harbor Maintenance Tax (“HMT”)°

which this Court unanimously struck down as

unconstitutional in United States v. United States Shoe Corp.,

523 U.S. 360 (1998)(“United States Shoe’). Like

Respondent Swisher International, Inc., amici have pursued

refunds of the unconstitutionally-exacted tax by filing refund

claims with the United States Customs Service (““Customs’’),

using the refund claims procedure which Customs established

in its regulations, 19 C.F.R. § 24.24(e)(5).* Upon receiving

' Amici curiae on whose behalf this brief is filed are: Totes-

Isotoner, Corporation (as successor to Aris-Isotoner Inc.); Berwick

Industries, Inc.; Chevron Chemical Company, Inc.; Chevron Chemical

International Sales, Inc.; Chevron International Oil Company; Chevron

Overseas Petroleum, Inc.; Chevron U.S.A. Inc.; Del Monte Foods, Inc.;

Eastman Chemical Company; Fieldston Clothes, Inc.; Marconi Systems

(f/k/a Gilbarco, Inc.); Michelin North America, Inc.; Microsoft

Corporation; The Pillsbury Company; Rhodia, Inc. (f/k/a Rhone-Poulenc,

Inc.); Rockwell International Corporation; Crompton Corporation (f/k/a

Uniroyal Chemical Company Inc.); Xerox Corporation, Americas

Operations Division; Xerox Corporation, Southern § California

Manufacturing Operations Division; and Xerox International Partners.

, Counsel for the parties have consented to the filing of this

amicus brief, and the letters of consent are being filed with the Court

under separate cover. Pursuant to Supreme Court Rule 37.6, amici state

that no counsel for a party authored this brief in whole or in part. Further,

no person or entity other than the listed amici made a monetary

contribution to the preparation or submission of this brief.

‘ 26 U.S.C. § 4461 et seq.

‘ 19 C.F.R. § 24.2He)(5). Provides in pertinent part:

2

Customs decisions denying their HMT refund claims, amici

filed protests with Customs pursuant to Section 514(a)(3) of

the Tariff Act of 1930, as amended, challenging Customs’

decisions.”

Amici agree with Respondent that the Federal Circuit

correctly held: (1) that Customs’ denials of 19 C.F.R. §

24.24(e)(5) refund claims are “decisions” relating to a

“charge or exaction,” and are protestable under 19 U.S.C. §

[514(a)(3), and (2) that, following denial of a timely-filed

protest, exporters may file actions in the United States Court

of International Trade (“CIT”) pursuant to 28 U.S.C. §

1581(a), which gives that court “exclusive jurisdiction of any

civil action commenced to contest the denial of a protest, in

whole or in part, under Section 515 of the Tariff Act of

24.24. Harbor Maintenance Fee

ee

(e) Collections.

wee

(5) Refund and supplemental pavment.

When a refund is requested or a

supplemental payment is made, a Harbor

Maintenance Fee Amended Quarterly

Summary Report, Customs Form 350,

should be mailed to the U.S. Customs

Service, P.O. Box 70915, Chicago,

Illinois 60673-0915, along with a copy of

the Harbor Maintenance Fee Quarterly

Summary Report, Customs Form 349, for

the quarter(s) in which the refund is

requested or a supplemental payment is

made.

. 19 U.S.C. § 1514(a)(3) authorizes the filing of a protest to

challenge “decisions of the Customs Service” relating to “all charges or

exactions of whatever character within the jurisdiction of the Secretary of

the Treasury.”

3

1930.”° The Federal Circuit’s holding presents no significant

legal issue, but merely acknowledges the scope of the CIT’s

longstanding “protest” jurisdiction. The petition for

certiorari in this case raises no significant legal issue for

review by this Court, and should be denied.

SUMMARY OF ARGUMENT

The Federal Circuit’s decision below does not conflict

with this Court’s opinion in United States Shoe, but is

perfectly consistent therewith. This Court’s observation that

the CIT properly exercised its 28 U.S.C. § 1581(i)

jurisdiction in United States Shoe, in the absence of an

“actual Customs decision,” does not preclude the exercise of

the CIT’s 28 U.S.C. § 1581(a) “protest” jurisdiction in cases

where, as here, a litigant has obtained a protestable “decision

of the Customs Service” regarding a “charge or exaction,”

pursuant to 19 U.S.C. § 1514(a)(3).

It is well-settled that the basis for the CIT’s

jurisdiction over particular cases is based on the specific

jurisdictional facts of each case. The CIT’s decision to hear a

constitutional challenge to a statute under provision of 28

U.S.C. § 1581 does not preclude the court from hearing

similar challenges under a different part of that statute, for

example where a litigant exhausts administrative protest

remedies and invokes the CIT’s Section 1581(a) “protest”

jurisdiction.

Petitioner’s claim that this case raises issues of

sovereign immunity is also misplaced. Respondent has

complied with the statute of limitations governing the waiver

of sovereign immunity in this case. Thus, the petition

6

Amici participated in the briefing and argument of this case

before the CIT, and in the briefing of the case before the Court of Appeals

for the Federal Circuit. In addition, amici advanced their position

regarding jurisdiction in briefing and argument before those same courts

in United States Shoe, supra.

4

presents no significant issues of law for this Court.

STATEMENT

l. When the first lawsuits challenging the

constitutionality of the export HMT were filed in 1994,

exporters needed to determine the proper forum and

procedure for such challenges. The Water Resources

Development Act of 1986,’ which imposed the HMT, did not

specify a procedure for seeking refunds of the tax but only

indicated that, for purposes of determining the jurisdiction of

administrative agencies and courts, the tax should be treated

“as if it were a customs duty.” 26 U.S.C. § 4462(f)(1), (2).

Most exporters filed challenges to the HMT in the United

States Court of International Trade; some, however, brought

suit in the Court of Federal Claims or in federal district court.

In United States Shoe, this Court confirmed that the CIT

“properly exercised jurisdiction” over cases challenging the

constitutionality of the tax. 523 U.S. at 365.

While the CIT’s exclusive jurisdiction over HMT

challenges is now undisputed, Customs has consistently

sought to limit the basis for that court’s exercise of

jurisdiction, in an effort to maximize the government’s

retention of the unconstitutionally-collected taxes.

Exporters have proceeded under two subsections of

the CIT’s jurisdictional statute. These are 28 U.S.C. §

1581(a), which, as noted above, gives the CIT exclusive

jurisdiction over actions “to contest the denial of a protest,”

including protests against “charges and exactions”; and 28

U.S.C. § 1581(i), a “residual” provision which gives the CIT

exclusive jurisdiction over actions arising out of any law

providing for, inter alia, “revenues from imports or tonnage,”

“tariffs, duties, fees or other taxes on the importation of

merchandise for reasons other than the raising of revenue,”

and “administration and enforcement” of matters arising

Pub. L. No. 99-662, 100 Stat. 4082 (1986).

5

under the Customs and trade laws. While both subsections

confer jurisdiction on the CIT, they are subject to different

statutes of limitations.*®

2. While petitioner asserts that Section 1581(i)

provides the only basis for the CIT to hear HMT challenges,

it initially took the opposite position, arguing that exporters

could only invoke the CIT’s Section 1581(a) protest

jurisdiction. This position was based on Treasury Decision

94-9] (28 Cust. B. & Dec. No. 48 (1994)), in which the

Customs Service asserted that the exporter’s payment of the

HMT, and Customs’ acceptance of that payment, constituted

a protestable “decision of the Customs Service” regarding the

constitutionality of the tax, requiring exporters to file protests

within 90 days thereafter. In United States Shoe, both the

CIT and Federal Circuit held that mere payment/acceptance

of the HMT was a passive act, rather than a “decision of the

Customs Service,” and ruled that the act of payment did not

trigger a protest right. United States Shoe, 19 Ct. Int’] Trade

1284, 1297 (1995); aff'd, 114 F.3d 1564, 1569 (Fed. Cir.

1997).

3. Many exporters, believing that the mere payment

of the HMT was a passive, statutorily-mandated act, rather

than a protestable “decision,” filed suits in the CIT, invoking

that court’s 28 U.S.C. § 1581(i) jurisdiction. By late 1994,

hundreds of challenges to the constitutionality of the export

HMT had been filed in that court. After consulting with

- counsel for exporters and the government, the Chief Judge of

the CIT selected United States Shoe as a “test case” for

determining both the constitutionality of the HMT and the

basis for jurisdiction over challenges to the tax. United

States Shoe was in part selected because the plaintiff had

followed the procedure outlined by Customs in 7reasury

? Actions under Section 1581(a) must be commenced within 180

days after the mailing of notice of denial of a protest (28 U.S.C.§

2636(a)(1)), while actions under Section 1581(i) must be commenced

within two years after the plaintiff's cause of action accrues (28 U.S.C. §

2636(i)).

6

Decision 94-9] and had asserted the CIT’s jurisdiction under

both 28 U.S.C. §§ 1581(a) and (i). On February 15, 1995, the

CIT published a “Scheduling Order” designating United

States Shoe as a “test case,” staying all other export HMT

lawsuits, and directing the parties to file briefs on several

issues, including “[w]hether the court has subject matter

jurisdiction to hear and decide this type of case,” and “[i]f so,

does the court have that authority under 28 U.S.C. § 1581(a)

or (i) or (a) and (i)?””

As noted above, both the CIT and the Federal Circuit

rejected Customs’ assertion that mere payment of the HMT

constituted a protestable Customs decision, and, on the facts

of United States Shoe, held that the CIT had properly

exercised jurisdiction in that case under 28 U.S.C. § 1581(i).

4. Although the government did not seek review of

the lower courts’ jurisdictional findings in United States

Shoe, this Court’s opinion did observe (at 365-366) that the

CIT had properly exercised its 28 U.S.C. § 1581(i)

jurisdiction in that case. Referring to the act of collecting the

HMT, this Court noted that “protests are not pivotal, for

Customs ‘performs no active role,’ it undertakes ‘no analysis

[or adjudication],’ ‘issues no directives,’ ‘imposes no

liabilities’; instead, Customs ‘merely passively collects’

HMT payments. 114 F.3d at 1569.” 523 U.S. at 365. At the

same time, this Court took note of the CIT’s 28 U.S.C. §

1581(a) protest jurisdiction, stating:

Section 1581(a) surely concerns customs

duties. It confers exclusive original

jurisdiction on the CIT in “any civil action

commenced to contest the denial of a protest.”

A protest, as indicated in 19 U.S.C. Section

1514, is an essential prerequisite when one

challenges an actual Customs decision.

' United States Shoe Corp. v. United States, 19 Ct. Int’l Trade 288

(1995).

7

523 U.S. at 365-66 (emphasis added). Since there had been

no “actual Customs decision” regarding the HMT in United

States Shoe, protest jurisdiction was not appropriate in that

case.

5. In contrast to the plaintiff in United States Shoe,

Respondent Swisher, amici, and other exporters pursued

administrative remedies which did result in the issuance of a

protestable ‘“‘actual Customs decision” regarding the HMT.

Swisher filed a refund claim with Customs pursuant to the

specific procedure established in 19 C.F.R. § 24.24(e)(5),

claiming that the HMT was an unconstitutional tax on

exports, and demanding a refund. In response, Swisher

received a “decision of the Customs Service,” holding that

the export HMT was not an unconstitutional tax on exports,

but rather a permissible “user fee.” Swisher protested this

decision pursuant to 19 U.S.C. § 1514 and, upon denial of its

protest pursuant to 19 U.S.C. § 1515(b), filed this suit

invoking the CIT’s 28 U.S.C. § 1581(a) protest jurisdiction.

Swisher was apparently the first plaintiff to receive a

denied protest based upon a Customs decision rendered

pursuant to 19 U.S.C. § 24.24(e)(5). It filed this action in the

CIT in March, 1995 — after United States Shoe had been

selected as the “test case” for determining the

constitutionality of the export HMT. Thus, whether

Customs’ denial of a refund claim constituted a protestable

“decision of the Customs Service” regarding the HMT was

not before the courts in United States Shoe. Accordingly,

following this Court’s United States Shoe decision holding

the export HMT to be unconstitutional, the CIT issued a new

Order, designating Swisher’s case as a “test case” regarding

the extent of the CIT’s 28 U.S.C. § 1581(a) “protest”

jurisdiction over HMT challenges. '°

The Federal Circuit acknowledged that the basis of

1 See United States Shoe Corp. v. United States, 19 Ct. Int’! Trade

Lexis 17 (1998).

8

protest jurisdiction advanced by Respondent Swisher had not

been presented in United States Shoe (See Pet.'' at 9a-10a),

and held that the export HMT is a “charge or exaction,” so

that Customs’ denial of a 19 C.F.R. § 24.24(e)(5) refund

claim is a protestable “decision of the Customs Service”

regarding same. See Pet. at 16a-18a, which gives rise to a

cause of action cognizable in the CIT under 28 U.S.C. §

1581(a). This decision did no more than acknowledge and

apply the well-established and by now unremarkable

principle that the precise statutory basis under which the CIT

exercises jurisdiction depends upon the facts of the case.

ARGUMENT

REASONS FOR DENYING THE PETITION

A. The Federal Circuit’s Decision Does

Not Conflict With this Court’s

Statements in United States Shoe

1. Petitioner asserts (Pet. at 13) that the Federal

Circuit’s decision below “directly conflicts” with this Court’s

ruling in United States Shoe, in particular with this Court’s

observation that the CIT properly exercised its 28 U.S.C. §

1581(i) jurisdiction in that case. See Pet. at 17-19. However,

as noted above, this Court’s statements in United States Shoe

only spoke to the issue of whether, under the facts of that

case, a protestable “decision of the Customs Service” existed

which could give rise to the CIT’s 28 U.S.C. § 1581(a)

“protest” jurisdiction. Indeed, this Court quoted that part of

the Federal Circuit’s decision in United States Shoe

concerning “the government’s argu[ment] that the relevant

5 Petition for A Writ of Certiorari by United States of America in

United States v. Swisher International, No.00-415.

9

‘decision’ is Customs’ acceptance of the exporter’s

payment,” and cited with approval the Federal Circuit’s

holding that, because the passive act of collecting the tax

involved nc “decision” of the Customs Service, it did not

satisfy the: requirements for establishing 28 U.S.C. § 1581(a)

jurisdiction in that case.

Contrary to petitioner’s assertion, however, this

Court’s United States Shoe decision never addressed, much

less foreclosed, the possibility that taxpayers such as Swisher

might obtain protestable “decisions of the Customs Service”

regarding the HMT, and challenge them under the CIT’s 28

U.S.C. § 1581(a) protest jurisdiction. As noted above, the

Water Resources Development Act requires that the HMT be

treated as a “customs duty” for purposes, inter alia, of

determining the jurisdiction of courts. 26 USC. §

4462(f)(1), (2). This Court’s United States Shoe decision

specifically noted that “Section 1581(a) surely concerns

customs duties,” and “confers jurisdiction on the CIT to hear

any civil action commenced to contest Customs’ denial of a

protest.” This Court further reaffirmed that “/a/ protest, as

indicated in 19 U.S.C. Section 1514, is an essential

prerequisite when one challenges an actual Customs

decision.” 523 U.S. at 365-66. The Respondent here has

simply trod a different path to judicial review of the export

HMT than the plaintiff in United States Shoe; it has secured a

protestable “decision” regarding an exaction of the HMT,

protested it, and filed a 28 U.S.C. § 1581(a) suit to challenge

the denial. This manner of proceeding is consistent with, and

apparently anticipated by, this Court’s United States Shoe

decision.

2. In any event, far from constituting a “controlling

precedent,” as petitioner suggests (Pet. at 20), this Court’s

observations in United States Shoe were dicta. The

government pointedly did not ask this Court in United States

S 114 F.3d at 1568 (Fed. Cir. 1997).

10

Shoe to consider the lower courts’ holdings that the CIT

exercised jurisdiction over that case under 28 U.S.C. §

1581(i), and the parties’ briefs to this Court did not address

the question of jurisdiction at all.'> In fact, the government’s

petition for certiorari in United States Shoe noted (at 7, n. 2)

that the issue of jurisdiction was only relevant “for other

claimants, who have challenged the Harbor Maintenance Tax

without first filing an administrative protest.” (Emphasis

added). The government’s petition in United States Shoe also

suggested that “[t]he jurisdictional issue is, moreover,

peculiar to the refund requests of exporters under the Harbor

Maintenance Tax and lacks recurring application in other

contexts.” Jd. If, as the government asserts in this case, the

selection of a particular basis of CIT jurisdiction forecloses

all other possible ways of proceeding in that court, then this

issue should have been presented to this Court in United

States Shoe. The government’s shifting positions on the

question of CIT jurisdiction over exporters’ HMT claims

confirms that its certiorari petition in this case does not raise

any significant jurisprudential issues, but is motivated solely

by the government’s displeasure with the Federal Circuit's

decision and the possibility that exporters may thereby be

able to secure additional refunds of the unconstitutionally~

exacted taxes.

Petitioner’s claim that United States Shoe is a

“controlling precedent” on the issue of jurisdiction ignores

Supreme Court Rule 23.1(c), which provides that only the

questions set forth in the petition or fairly comprised therein

” Indeed, the Court’s comments regarding jurisdiction in Uniteq

States Shoe appear to have been intended as a response to certain amicj

curiae who did not restrict their briefing to the Constitutional issue foi

which certiorari was granted, but who argued instead that the Court of

Federal Claims (“CFC”) had exclusive jurisdiction to hear actions

involving the HMT. See United States Shoe, 523 U.S. at 366, n. 3

(acknowledging the CIT’s exclusive jurisdiction, and noting that

challenges filed in the CFC could be transferred to that court).

11

will be considered by the Court. Mayor of Philadelphia v.

Educational Equality League, 415 U.S. 605, 624 (1974),

National Licorice Co. v. NLRB, 309 U.S. 350, 357 (1940).

Where this Court grants certiorari to review a jurisdictional

issue, it solicits briefing from the parties on the issue, and

makes an express decision regarding whether the lower |

court’s holding on jurisdiction shall be affirmed or reversed.

See, e.g., Asahi Metal Indus. Co. v. Superior Court of

California, 480 U.S. 102 (1987); Gsell v. Insular Collector of

Customs, 239 U.S. 93 (1915); K Mart Corp. v. Cartier Inc.,

485 U.S. 176 (1988). No such holding was issued in United

States Shoe; while this Court noted that the CIT had

exclusive jurisdiction over HMT challenges, it never held, or

even suggested, that the CIT’s power to hear such challenges

was cabined within a single subsection of that court’s

jurisdictional statute, 28 U.S.C. § 1581. Rather, this Court

noted that 28 U.S.C. § 1581(i) jurisdiction was proper under

the facts of United States Shoe, and acknowledged that

protest procedures would be proper, as in this case, where a

“decision” of the Customs Service is involved. The ruling of

the Federal Circuit in this case is consistent with that view.

B. The Exercise of the CIT’s 28 U.S.C.

§ 1581(i) “Residual” Jurisdiction in

United States Shoe Does Not Bar The

Exercise of 28 U.S.C. § 1581(a)

“Protest” Jurisdiction in Cases

Where a Protestable “Decision of the

Customs Service” Has Been Issued

Petitioner asserts that the CIT’s 28 U.S.C. § 1581(a)

“protest” jurisdiction is “not an available route for

challenging the constitutionality of the [Harbor Maintenance]

tax on exports.” Pet. at 15. Nowhere does petitioner

challenge the Federal Circuit’s ruling that the export HMT is

a “charge or exaction of whatever character within the

jurisdiction of the Secretary of the Treasury,” and thus

12

subject to protest pursuant to 19 U.S.C. § 1514(a)(3). Nor

does petitioner deny that Customs’ October 26, 1994 letter to

Swisher, denying the company’s 19 C.F.R. § 24.24(e)(5)

HMT refund claim, was a “decision of the Customs Service”

regarding such “charge or exaction.”'* Instead, petitioner

claims that because the CIT was found to have properly

exercised its 28 U.S.C. § 1581(i) jurisdiction on the facts of

United States Shoe, supra, all other avenues for exporters to

seek judicial review of the HMT in that court are thereby

foreclosed. Petitioner’s “foreclosure theory,” however, rests

on a fundamental misstatement of the jurisprudence

regarding the CIT’s 28 U.S.C. § 1581(i) jurisdiction. While

the courts have held that the CIT’s 28 U.S.C. § 1581(i)

jurisdiction should generally not be invoked unless other

avenues for jurisdiction are unavailable or “manifestly

inadequate,” the selection of the appropriate jurisdictional

vehicle has depended upon the facts of each case, and the

sound discretion of the CIT. That the CIT hears particular

issues pursuant to its Section 1581(i) jurisdiction in one case

(as in United States Shoe) has never been deemed to

foreclose other plaintiffs from seeking review of the same or

similar issues using different procedures. Indeed, petitioner’s

“foreclosure theory” is without precedential support, and is

plainly contrary to the statutes governing the CIT’s

jurisdiction.

1. In Miller & Co. v. United States, 824 F.2d 961,

963 (Fed. Cir. 1987), cert. denied, 484 U.S. 1041 (1988), the

Federal Circuit summarized its jurisprudence regarding the

CIT’s 28 U.S.C. § 1581(i) jurisdiction, observing that it

should not be invoked when “jurisdiction under another

subsection of Section 1581 is or could have been available,

unless the remedy provided under that other subsection

6 That Customs’ refusal to refund a charge or exaction is a

protestable “decision” has been settled law since Eurasia Import Co., v.

United States, 31 C.C.P.A. 202, 211-12 (1944).

13

a litigant invoking the CIT’s Section 1581(i) jurisdiction

bears the burden of showing that other avenues of jurisdiction

are unavailable or inadequate. The Federal Circuit

commented upon the burden which Miller places on Section

1581(i) litigants in Conoco, Inc. v. Foreign Trade Zones Bd

(“Conoco”), 18 F.3d 1581, 1584 n. 8 (Fed. Cir. 1994):

This threshold requirement does not appear in

the statute, but finds expression in certain of

our precedents. See, e.g., Miller & Co. v.

United States, 824 F.2d 961, 963 (Fed. Cir.

1987), cert. denied, 484 U.S. 1041, 98 L. Ed.

2d 859, 108 S. Ct. 773 (1988). It may have a

basis in the prefatory “in addition to” language

of subsection (i). See United States v.

Uniroyal, Inc., 69 C.C.P.A. 179, 687 F.2d

467, 475 (C.C.P.A. 1982)(Nies, J.,

concurring). It presumably serves the purpose

of carrying out Congress’ intent that

subsection (i) be a “residual” grant of

jurisdiction, and not be used to routinely

bypass the “traditional method” of obtaining

judicial review of international trade disputes

involving Customs — filing a protest and then

seeking judicial review if Customs denies the

protest. H.R. Rep. No. 1235, 96" Cong., 2d

Sess. 47 (1980), reprinted in 1980

U.S.C.C.A.N. 3279, 3758.

The “Miller rule” therefore acknowledges that the CIT’s 28

U.S.C. § 1581(i) jurisdiction is “in addition to” that court’s

other jurisdiction grants, and that its use is appropriate where

Miller which clearly delineates that unless another subsection under 19

U.S.C. § 1581 would be “manifestly inadequate,” section 1581(i) may not

be invoked. Pet. at 12.

14

other jurisdiction grants, and that its use is appropriate where

the remedies afforded under 28 U.S.C. § 1581(a)-(h) are

either unavailable or inadequate. Miller also confirms that

the filing of a protest against a Customs decision — the

precise pathway followed here — is the “traditional” method

for seeking judicial review of Customs’ decisions.

Courts have invoked the “Miller rule” to decline to

hear cases under Section 1581(i) where litigants failed to

avail themselves of other available avenues of jurisdiction,

such as 28 U.S.C. §1581(a) “protest” jurisdiction,’© Section

1581(b) “domestic interested party petition” jurisdiction,'’ or

Section 1581(c) jurisdiction to review Commerce Department

antidumping or countervailing duty assessments,'® without

showing why such remedies were inadequate under the

circumstances.

2. However, the CIT has frequently exercised its

Section 1581(i) “residual” jurisdiction to hear cases which -

could have been raised by protest and brought to court under

28 U.S.C. § 1581(a), or addressed under other bases of the

CIT’s jurisdiction. For example, in Conoco, supra, the

Federal Circuit held that an importer challenging a Foreign

Trade Zones Board decision imposing duties on certain

os See, e.g., United States v. Uniroyal, Inc., 687 F.2d 467, 475

(C.C.P.A. 1982)(Section 1581(i) challenge to exclusion of merchandise

not allowed when protest remedy was available, and no irreparable harm

would result from its use); Juice Farms, Inc. v. United States, 68 F.3d

1344 (Fed. Cir. 1995)(CIT properly declined to exercise Section 1581(i)

jurisdiction where importer failed to file timely protest reviewable under

Section 1581(a)).

” National Corn Growers Ass'n. v. Baker, 840 F.2d 1547 (Fed. Cir.

1988)(Section 1581(i) jurisdiction held improper in action by domestic

party challenging Customs decision, where effect of allowing such

jurisdiction would be evasion of 19 U.S.C.§ 1516 “domestic interested

party” procedures); Norcal/Crosetti Foods Inc. v. United States, 963 F.2d

356 (Fed. Cir. 1992)(same).

, See, e.g., Miller & Co., supra (importer may not invoke Section

1581(i) to challenge countervailing duty assessment after failing to

participate in Commerce Department administrative proceedings

reviewable under 28 U.S.C. § 1581(c)).

15

merchandise should be permitted to proceed under Section

1581(i), rather than being required to complete an import

transaction, pay and protest duty assessments, and invoke the

CIT’s protest jurisdiction. The Federal Circuit reasoned that

a protest would have been futile. Years earlier, virtually the

same issue had been addressed in a case brought under the

“protest” jurisdiction of the Customs Court, the CIT’s

predecessor. See Hawaiian Indep. Refinery Co. v. United

States, 460 F. Supp. 1249 (Cust. Ct. 1978).

Where Section 1581(a) protest jurisdiction is

available, but the outcome of the protest is predetermined,

the courts have readily approved the CIT’s exercise of

jurisdiction under 28 U.S.C.§ 1581(i). See, e.g., United

States Canes Sugar Refiners’ Ass'n. v. Block, 544 F. Supp.

883, 887 (Ct. Int’l Trade), aff'd on other grounds, 683 F.2d

339 (C.C.P.A. 1982)(challenge to Presidentially-imposed

quotas on sugar imports); St. Paul Fire & Marine Ins. Co. v.

United States, 959 F.2d 960 (Fed. Cir. 1992)(surety challenge

to duty demand). Similarly, where determinations could have

been reviewed under the CIT’s 28 U.S.C. § 1581(c)

jurisdiction over Commerce Department antidumping and

countervailing duty decisions, but such review is inadequate

under the circumstances, the CIT’s power to hear the case

under its Section 1581(i) “residual” jurisdiction is well-

recognized. See, e.g., NEC Corp. v. United States, 151 F.3d

1361 (Fed. Cir. 1998)(challenge to initiation of antidumping

investigation). Invoking Section 1581(i) is also appropriate

where other bases of jurisdiction are unavailable. Mitsubishi

Elec. Am. Inc. v. United States, 44 F.3d 973 (Fed. Cir. 1994).

The choice of the proper jurisdictional basis depends

upon the facts of each case: “if remedies ultimately available

under 28 U.S.C. § 1581 are rendered useless by particular

factual circumstances, such remedies may be manifestly

inadequate or ineffective.” Companhia Brasileira Carbureto

de Calcic v. United States, 18 Ct. Int’] Trade 215 (1994). See

also Pac Fung Feather Co. v. United States, 111 F.3d 114,

116 (Fed. Cir. 1997)(litigant seeking judicial review of

16

regulations under Section 1581(i) not required to apply for

ruling and seek pre-importation declaratory relief under 28

U.S.C. § 1581(h), where nature of ruling would be a foregone

conclusion).

Thus, the basis for exercise of the CIT’s jurisdiction

has always been fact-dependent. For example, Administrative

Procedure Act challenges to Customs regulations have been

entertained under the CIT’s 28 U.S.C. § 1581(a) “protest”

jurisdiction,'” its Section 1581(h) “declaratory judgment”

jurisdiction,” and its Section 1581(i) “residual”

jurisdiction.”'. Each of the referenced subsections has

different prerequisites for the institution of a suit, directly

refuting petitioner’s suggestion that there can only be one

pathway to CIT jurisdiction for a given type of challenge.

Moreover, no judicial decision, legislative history or

other authority has ever announced or supported the unique

“foreclosure theory” advanced in the Petition. It is true, as

noted above, that a litigant seeking to invoke Section 1581(i)

must show that other avenues for CIT jurisdiction are

unavailable or inadequate in its case. However, the

Suggestion that once the CIT exercises Section 1581(i)

jurisdiction in a given case, all other litigants are foreclosed

from pursuing other bases of jurisdiction is without any

foundation. That the plaintiff in United States Shoe was

allowed to proceed without first protesting an “actual

Customs decision” by no means debars litigants such as

Swisher, who secured such decisions and followed the more

* See, e.g., Miller & Co., supra (importer may not invoke Section

1581(i) to challenge countervailing duty assessment after failing to.

participate in Commerce Department administrative proceedings

reviewable under 28 U.S.C. § 1581(c)).

= See, e.g., Miller & Co., supra (importer may not invoke Section

1581(i) to challenge countervailing duty assessment after failing to

participate in Commerce Department administrative proceedings

reviewable under 28 U.S.C. § 1581(c)).

- See Pa» Fung Feather Co. v. United States, 111 F.3d 114 (Fed.

Cir. 1997).

17

“traditional” route for invoking CIT jurisdiction.

The notion that litigants having a common grievance

may approach a court of competent jurisdiction under

separate procedural vehicles hardly presents a significant

legal issue. See, e.g., Hatter v. United States, 953 F.2d 626

(Fed. Cir. 1992). In Techsnabexport, Ltd. v. United States,

16 Ct. Int’l Trade 420, 423-426 (1992), the CIT held that its

authority to accept jurisdiction over a case is not

circumscribed by its choice of a different jurisdictional

vehicle to hear other cases raising similar issues.

3. That the Petition fails to raise a credible legal issue

is further demonstrated by 28 U.S.C. § 2637, which provides

that the CIT “shall, where appropriate, require the exhaustion

of administrative remedies.” (Emphasis added). This statute

grants the CIT the equitable, discretionary power to require

or waive the exhaustion of administrative remedies as a

condition to invoking the court’s jurisdiction. The exercise

of this power is reviewable by appellate courts only for abuse

of discretion. Cemex, S.A. v. United States, 133 F.3d 897,

905 (Fed. Cir. 1998); United States v. Priority Prods, Inc.,

793 F.2d 296, 300 (Fed. Cir. 1986). That the CIT is

empowered to decide legal issues framed by an

administrative protest (as in Swisher), or without a protest (as

in United States Shoe), does not involve a significant legal

issue, but merely a fact-specific exercise of the CIT’s

discretion.

Indeed, prior to the enactment of the Customs Courts

Act of 1980, a protest was the exclusive means for

challenging a Customs decision, even where constitutional

issues were raised. See, e.g., J.W. Hampton, Jr. & Co. v.

United States, 276 U.S. 394 (1928). In passing the 1980 Act,

Congress indicated that the CIT’s Section 1581(a) protest

jurisdiction “merely restates existing law as to the jurisdiction

of the Customs Court,” S. Rep. No. 466, 96" Cong., 1* Sess.

7 (1980), and thereby continues to embrace constitutional

questions. ,

4. The “Miller rule” on which petitioner relies holds

ee

18

that a party seeking to invoke the CIT’s Section 1581(i)

“residual” jurisdiction bears the burden of demonstrating that

jurisdiction under 28 U.S.C. § 1581l(a) - (h) is either

unavailable or manifestly inadequate. However, this burden

‘is not properly thrust upon Respondent Swisher, which

asserted jurisdiction under 28 U.S.C.§ 1581(a). Whether the

CIT has jurisdiction over an action pursuant to 28 U.S.C. §

1581(a) is not a discretionary matter. See United States v.

Boe (Servco Co., Party-in-Interest), 64 C.C.P.A. 11, 16

(1976). Where, as here, jurisdiction is asserted under 28

U.S.C. § 1581(a), the only jurisdictional questions for the

courts to decide are: (1) whether the plaintiff has received a

“decision of the Customs Service” regarding one of the

matters enumerated in 19 U.S.C. § 1514; and (2) whether

such decision was timely protested. As this Court has stated,

“federal courts are vested with a ‘virtually unflagging

obligation’ to exercise the jurisdiction given them,” and

“{(wje have no more right to decline the exercise of

jurisdiction which is given, than to usurp that which is not

given.” McCarthy v. Madigan, 503 U.S. 140, 146 (1992),

citing Colorado River Water Conservation Dist. v. United

States, 424 U.S. 800, 817-818 (1976) and Cohens v. Virginia,

19 U.S. (6 Wheaton) 264 (1821).

In holding that the CIT could exercise its Section

1581(a) “protest” jurisdiction in this case, the dispositive

determination by the Federal Circuit was that the export

HMT was a “charge or exaction of whatever character within

the jurisdiction of the Secretary of the Treasury.” The

petition does not challenge or seek review of this outcome-

determinative holding, nor does it contest the timeliness of

Swisher’s protest. Indeed, petitioner avoids this issue to the

point of disingenuousness, asserting (Pet. at 19) that

- decisions regarding the HMT do not fall within certain

categories of protestable decisions, while failing to even

mention the “charges and exactions” provision in Section

1514(a)(3) on which the Federal Circuit’s decision rests. :

5. Petitioner’s claim of sovereign immunity (Pet. at

19

20-21) raises no issue deserving of review by this Court.

While it is true that statutes of limitations may be enforced

against claims for refund of an unconstitutional tax, see

McKesson Corp. v. Division of Alcoholic Beverages &

Tobacco, 496 U.S. 18, 25 (1990), the statute of limitations for

actions involving Customs’ denial of protests is clear, and

begins to run only after the protest is denied. See 28 U.S.C. §

2636(a). Nor does the use of the protest remedy allow for

evasion of any statute of limitations. Exporters who received

HMT refunds pursuant to 28 U.S.C. § 1581(i), as in United

States Shoe, are free to claim refunds of tax payments not

covered by those actions, and to protest any Customs denials

respecting such refunds. In subsequent actions brought

pursuant to the CIT’s 28 USC. § 1581(a) protest

jurisdiction, the government would be free to pursue any

defenses of laches, waiver, or election of remedies which it

might have with respect to those claims as, indeed, the

government could have raised in the instant case. See Stone

Container Corp. v. United States, 2000 U.S. App. Lexis

25466, No. 99-1333 (Fed. Cir. 2000).

20

CONCLUSION

The petition for a writ of certiorari presents no

Significant issue regarding the jurisdiction of the United

States Court of International Trade to hear cases seeking

refunds of the export HMT, and alleges no material error in

the decision of the court below. The petition should be

denied. :

Respectfully submitted,

John M. Peterson

Counsel of Record

George W. Thompson

Michael K. Tomenga

Lawrence J. Bogard

Curtis W. Knauss

Maria E. Celis

NEVILLE, PETERSON & WILLIAMS

Attorneys for Amici Curiae

Totes-Isotoner, Corporation et al.

80 Broad Street

New York, New York 10004

(212) 635-2730

October 27, 2000