United States v. Ford Motor Co. , 31 Ct. Int'l Trade 1178 ( 2007 )

Slip Op. 07-112
UNITED STATES COURT OF INTERNATIONAL TRADE
BEFORE: SENIOR JUDGE NICHOLAS TSOUCALAS
________________________________________
:
UNITED STATES, :
:
Plaintiff, :
: Court No. 02-00106
v. :
:
FORD MOTOR COMPANY, :
:
Defendant. :
________________________________________:
Held: Plaintiff’s motion to clarify judgment and to collect pre-
judgment interest on unpaid duties granted.
Peter D. Keisler, Assistant Attorney General, Jeanne E.
Davidson, Director, Patricia M. McCarthy, Assistant Director,
Commercial Litigation Branch, Civil Division, United States
Department of Justice (David A. Levitt and David S. Silverbrand);
of counsel: Katherine F. Kramarich, Bureau of Customs and Border
Protection, for the United States, Plaintiff.
Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt, LLP
(David M. Murphy, Steven P. Florsheim, Robert B. Silverman, and
Frances P. Hadfield); of counsel: Paulsen K. Vandevert, for Ford
Motor Company, Defendant.
Dated: July 19, 2007
OPINION
TSOUCALAS, Senior Judge: This matter comes before the Court on the
motion of the United States (“Plaintiff” or “Government”) to
clarify the judgment issued in United States v. Ford Motor Co.
(“Ford CIT”), 29 CIT __, 387 F. Supp. 2d 1305, 1334 (2005), in
favor of the Government and against the Ford Motor Company
Court No. 02-00106 Page 2
(“Defendant” or “Ford”) awarding the Government unpaid duties in
the amount of $184,495 and civil penalties in the amount of
$3,000,000(“July 20, 2005 Judgment”). See Ford CIT, 29 CIT at __,
387 F. Supp. 2d at 1334. The July 20, 2005 Judgment was issued
contemporaneously and in accordance with the Court’s Opinion of
that date (“July 20, 2005 Opinion”), which “order[ed] Ford to
tender $184,495 for unpaid duties, and assesse[d] Ford a civil
penalty in the amount of $3,000,000, plus lawful interest.” Ford
CIT, 29 CIT at __, 387 F. Supp. 2d at 1334. The Court of Appeals
for the Federal Circuit (“CAFC”) reversed this Court’s decision in
part, and affirmed, inter alia, the amounts of duties and penalties
awarded by this Court. See United States v. Ford Motor Co. (“Ford
CAFC”), 463 F.3d 1286, 1298-1299 (Fed. Cir. 2006).
In the instant motion, the Government seeks to determine
whether the Court’s award of “lawful interest” in the July 20, 2005
Judgment encompasses pre-judgment interest on unpaid duties of
$184,495 accrued from July 19, 1995, the date of Custom’s demand.
Gov’t Mot. Clarify J. Collect Prejudgment Interest (“Gov’t Brief”)
at 1.
Statement of Facts
The full factual and procedural background of this case has
been set forth in the prior decision of the CAFC and this Court.
See Ford CAFC, 463 F.3d 1286; Ford CIT, 29 CIT __, 387 F. Supp. 2d
1305. The facts relevant to the instant inquiry are as follows.
Court No. 02-00106 Page 3
During the period February 2, 1989 through March 12, 1989, Ford
imported automotive tooling and stamping dies to the United States
from Japan. See Ford CIT, 29 CIT at __, 387 F. Supp. 2d at 1310.
The Bureau of Customs and Border Protection (“Customs”)1 demanded
payment for unpaid duties as of July 19, 1995. Gov’t Brief at Ex.
1; Def’s Opp’n Gov’t Mot. Clarify J. Collect Prejudgment Interest
(“Ford Brief”) at Ex. 2. On January 24, 2002, the Government
commenced the instant action against Ford alleging that Ford
committed fraud, gross negligence or negligence by making false
statements on the price of such merchandise, in violation of 19
U.S.C. §§ 1592(a)-(d). See Ford CIT, 29 CIT at __, 387 F. Supp.
2d at 1308. In its Complaint, the Government sought unpaid duties,
pre-judgment interest and post-judgment interest associated with
such duties, a civil penalty, post-judgment interest on the
penalty, and attorney’s fees. Complaint, at 5. A bench trial was
held from February 28 through March 10, 2005. On July 20, 2005,
this Court issued a decision finding that Ford had committed gross
negligence in violation of 19 U.S.C. §§ 1484 and 1485 and ordered
Ford to pay $3,000,000 in penalties, $184,495 in unpaid duties,
1
The Bureau of Customs and Border Protection was renamed
United States Customs and Border Protection, effective March 31,
2007. See Name Change From the Bureau of Immigration and Customs
Enforcement to U.S. Immigration and Customs Enforcement, and the
Bureau of Customs and Border Protection to U.S. Customs and Border
Protection, 72 Fed. Reg. 20,131 (April 23, 2007).
Court No. 02-00106 Page 4
plus any “lawful interest.” Ford CIT, 29 CIT at __, 387 F. Supp.
2d at 1334. As noted above, on November 22, 2006, the CAFC
reversed this Court’s decision in part, and affirmed, inter alia,
the amounts of duties and penalties awarded by this Court. Ford
CAFC, 463 F.3d 1286, 1298-1299.
By letter dated December 5, 2006,the Government sought payment
of unpaid duties in the amount of $184,495, pre-judgment interest
thereon in the amount of $196,956.23, penalties in the amount of
$3,000,000 and post-judgment interest on unpaid duties and
penalties accruing at the rate of $332.59 per day. Gov’t Brief at
1; Ford Brief at 2. Ford thereafter paid all unpaid duties,
penalties and post-judgment interest on unpaid duties and
penalties, but declined to pay the pre-judgment interest sought by
the Government on the ground that the July 20, 2005 Judgment did
not award same. Gov’t Brief at 2; Ford Brief at 3. On March 14,
2007, the Government filed the instant motion seeking to clarify
the July 20, 2005 Judgment and to recover from Ford pre-judgment
interest on unpaid duties (“Motion”). Id. On March 28, 2007, Ford
submitted its opposition to the Motion. Ford Brief at 12. On
April 4, 2007, the Government filed a motion for leave to file its
reply papers on the ground that Ford’s opposition to the Motion
addressed issues not included in the Motion. On April 10, 2007,
Ford opposed the Government’s motion for leave to file its reply
papers asserting that the Government failed to state the basis of
Court No. 02-00106 Page 5
its motion with particularity. On April 11, 2007, the Court
granted the Government leave to file its reply papers. The
Government filed its reply to the Motion that date.
Discussion
As a threshold matter, Ford opposes the Government’s motion on
the ground that it seeks to alter or amend this Court’s judgment.
Ford Brief at 3-4. As such, Ford claims the Motion should have
been brought pursuant to USCIT Rule 59(e). Id. Motions brought
under Rule 59(e) must be filed within 30 days of the entry of the
judgment. USCIT Rule 59(e). Claiming that the Government failed
to bring the instant motion within 30 days of July 20, 2005, the
date of the entry of the judgment which the Government seeks to
clarify, Ford asserts that the Motion was made untimely in
violation of Rule 59(e). Ford Brief at 3-4; USCIT Rule 59(e).
A motion to clarify and a Rule 59(e) motion to alter or amend
a judgment are distinct motions. See Osterneck v. Ernst & Whinney,
489 U.S. 169, 174 (1989); White v. New Hampshire Dep’t of
Employment Sec., 455 U.S. 445, 451 (1982) (citing Browder v.
Director, Illinois Dept. of Corr., 434 U.S. 257 (1978)); Britt v.
Whitmire, 956 F.2d 509, 512, (5th Cir. 1992) (quoting Harcon Barge
Co., Inc. v. D & G Boat Rentals, Inc., 784 F.2d 665, 669-670 (5th
Cir. 1986)). A Rule 59(e) motion involves “reconsideration of
matters properly encompassed in a decision on the merits.” White,
Court No. 02-00106 Page 6
455 U.S. at 451. “No matter how it is labeled, a motion is treated
as one made under Rule 59(e) if it ‘calls into question the
correctness of a judgment’ and seeks to alter or amend it.” Britt,
956 F.2d at 512.
As such, the instant motion does not require this Court to
reconsider the correctness of the July 20, 2005 Judgment. The
Government is not belatedly seeking an award of pre-judgment
interest. Rather, it seeks to clarify whether the July 20, 2005
Opinion awarding “lawful interest” encompassed an award of pre-
judgment interest on unpaid duties. See Gov’t Reply Clarify J.
Collect Prejudgment Interest (“Gov’t Reply”) at 5. Accordingly,
the instant motion is not subject to the time limitation of Rule
59(e).2
As to the substance of the instant motion, the long-
established rule in the Federal Courts permits the United States to
recover interest on money due to the government even in the absence
of any statutory authorization for an award of pre-judgment
interest. See United States v. Goodman, 6 CIT 132, 139-140, 572 F.
Supp. 1284, 1289 (1983)(citing Billings v. United States, 232 U.S.
261 (1914) and United States v. Abrams, 197 F.2d 803, 805 (6th Cir.
1952), cert. denied, 344 U.S. 855 (1952)). Indeed, the CAFC has
2
Ford’s request for reconsideration of the undervaluation
and loss of revenue amounts does seek to alter or amend the July
20, 2005 Judgment and is therefore untimely pursuant to Rule 59(e).
Court No. 02-00106 Page 7
affirmed this Court’s authority to award pre-judgment interest in
other similar cases based on considerations of equity and fairness.
See, e.g., United States v. Imperial Food Imports, 834 F.2d 1013,
1016 (Fed. Cir. 1987); United States v. Monza Automobili, 12 CIT
239, 683 F. Supp. 818 (1988).
The Government is entitled to pre-judgment interest on unpaid
duties in the absence of a delay in assessing and collecting
duties. See United States v. Jac Natori, 22 CIT 1101, Slip Op.
1998-162 (holding that a judgment awarding unpaid duties recovered
pursuant to 19 U.S.C § 1592 and “interest as provided by law”
includes pre-judgment interest); Monza Automobili, 12 CIT at 242,
683 F. Supp. at 820. The rationale behind this general rule is to
compensate the Government for lost use of the money due. See
Imperial Food Imports, 834 F.2d at 1016 (noting that “[i]t would be
inequitable and unfair for the government to make an interest-free
loan of this sum from the date of final demand to the date of
judgment”). In awarding “lawful interest” in the July 20, 2005
Opinion, which is incorporated by reference in the July 20, 2005
Judgment, the Court awarded both pre-judgment and post-judgment
interest on unpaid duties.
The Government did not abandon its claim for pre-judgment
interest by failing to refer to it in the pre-trial order or in the
post-trial brief. See, e.g., United States v. Nat’l Semiconductor
Corp., 30 CIT __, Slip Op. 2006-138; in Re Crescent Ship Serv.
Court No. 02-00106 Page 8
Inc., 2005 WL 1038652 (E.D. La. 2005) (noting that “a claim for
pre-judgment interest does not have to be referred to in proposed
findings of fact if it is included in the complaint”).
Moreover, the Court’s award of pre-judgment interest in the
July 20, 2005 Judgment is not barred by Rule 37 of Fed. R. App. P.
(“FRAP”) as claimed by Ford. FRAP Rule 37 provides, inter alia,
that:
Unless otherwise provided by law, if a judgment for money
in a civil case is affirmed, whatever interest is allowed
by law shall be payable from the date the judgment was
entered in the district court. (Emphasis added).
It specifically permits award of pre-judgment interest if it is
“otherwise provided by law[.]” See New England Ins. Co. v.
Healthcare Underwriters Mut. Ins. Co., 352 F.3d 599 (2d Cir. 2003);
Newburger, Loeb & Co., Inc. v. Gross, 611 F.2d 423 (2d Cir. 1979).
In the instant matter, the Court awarded pre-judgment interest on
unpaid duties pursuant to its discretionary authority as allowed by
law.3
3
The parties apparently do not dispute that pre-judgment
interest accrues from the date of Custom’s last demand. See Monza
Automobili, 12 CIT at 240; 683 F. Supp. at 820 (awarding pre-
judgment interest from the date of final demand for payment);
Imperial Food Imports, 834 F.2d at 1016 (award of pre-judgment
interest from the date of final demand was not an abuse of
discretion); United States v. Reul, 959 F.2d 1572, 1579-1581 (Fed.
Cir. 1992)(pre-judgment interest accrues while the government
pursues the claim).
Court No. 02-00106 Page 9
Conclusion
Based on the foregoing, the Government’s motion to clarify and
to seek pre-judgment interest on unpaid duties is granted.
/s/ Nicholas Tsoucalas
NICHOLAS TSOUCALAS
SENIOR JUDGE
Dated: July 19, 2007
New York, New York
UNITED STATES COURT OF INTERNATIONAL TRADE
BEFORE: SENIOR JUDGE NICHOLAS TSOUCALAS
________________________________________
:
UNITED STATES, :
:
Plaintiff, :
: Court No. 02-00106
v. :
:
FORD MOTOR COMPANY, :
:
Defendant. :
________________________________________:
JUDGMENT
Upon consideration of Plaintiff’s Motion To Clarify Judgment
And To Collect Pre-Judgment Interest, Defendant’s Opposition,
Plaintiff’s Reply, the entire record herein, and after due
deliberation, having rendered a decision herein; now, in accordance
with said decision, it is hereby
ORDERED that Plaintiff’s Motion is granted; and it is further
ORDERED that Plaintiff shall recover against Ford pre-judgment
interest in the amount of $196,956.23 in accordance with the
judgment entered in United States v. Ford Motor Co., 29 CIT __, 387
F. Supp. 2d 1305 (2005) and post-judgment interest thereon pursuant
to 28 U.S.C. § 1961.
/s/ Nicholas Tsoucalas
NICHOLAS TSOUCALAS
SENIOR JUDGE
Dated: July 19, 2007
New York, New York