Under the Weather, LLC v. United States , 2024 CIT 99 ( 2024 )

Slip Op. 24-99
UNITED STATES COURT OF INTERNATIONAL TRADE
UNDER THE WEATHER, LLC,
Plaintiff,
Before: Timothy M. Reif, Judge
v.
Court No. 21-00211
UNITED STATES,
Defendant.
OPINION
[Granting defendant’s partial motion to dismiss for failure to state a claim.]
Dated: September 5, 2024
Alena Augusta Eckhardt and Heather L. Jacobson, Nakachi, Eckhardt & Jacobson,
P.C., of Seattle, WA, argued for plaintiff Under the Weather, LLC.
Luke Mathers, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S.
Department of Justice, of New York, N.Y., argued for defendant United States. With
him on the brief were Brian M. Boynton, Principal Deputy Assistant Attorney General,
and Patricia M. McCarthy, Director. Of counsel on the brief were Yelena Slepak and
Emma Tiner, Office of the Assistant Chief Counsel, International Trade Litigation, U.S.
Customs and Border Protection.
Reif, Judge: Before the court is the partial motion to dismiss of the United States
(“defendant”). Plaintiff Under the Weather, LLC (“plaintiff”) brought the instant action to
contest the denial of administrative protest 2704-20-127807 (“‘807 Protest”). Pl.’s
Compl. (“Compl.”) ¶ 1, ECF No. 17. In count II of plaintiff’s complaint, plaintiff asserts
that a prior protest approval of U.S. Customs and Border Protection (“Customs”)
constituted a “prior decision” and therefore required notice and comment procedures to
be modified or revoked. Id. ¶¶ 40-41 (citing 19 U.S.C. § 1625(c)). Because, plaintiff
Court. No. 21-00211 Page 2
maintains, the “protest review decision” on which the denial of the ‘807 Protest was
based “effectively revoked” the previous protest approval “without following the notice
and comment requirements” of § 1625(c), plaintiff contends that the protest review
decision is void and without legal effect. Id. Defendant has filed a partial motion to
dismiss, arguing that the prior protest approval to which plaintiff points was not entitled
to the procedural protections of § 1625(c). Def.’s Mot. to Dismiss (“Def. Br.”) at 6, ECF
No. 22. Defendant argues, therefore, that as to count II plaintiff has failed to state a
claim upon which relief may be granted. Id.; see USCIT R. 12(b)(6).
For the reasons discussed below, the court grants defendant’s partial motion to
dismiss.
BACKGROUND
Plaintiff imports see-through pop-up tent “pods.” Compl. ¶ 6; Pl.’s Ex. 2 (“HQ
H311492”), at 1-2; Def. Br. at 2. From 2010, when plaintiff began importing the pods,
until September 2018, plaintiff imported its pods duty free as “backpacking tents” under
the tariff subheading 6306.22.1000, HTSUS.1 Compl. ¶ 9.
On September 5, 2018, Customs issued a CF-29 Notice of Action Taken, in which
Customs disagreed with plaintiff’s classification of 12 of its entries and “rate-advanced”2
1 In entering its pods as “backpacking tents,” plaintiff relied on Treasury Decision 86-
163, which was issued in 1986 and created guidelines for classifying tents, including
backpacking tents, under the Harmonized Tariff Schedule of the United States
(“HTSUS”). Def. Br. at 2.
2 An entry is rate-advanced “when it is ‘liquidate[d] at a higher rate’ than the rate
associated with the claimed classification.” United States v. Sterling Footwear, Inc., 41
CIT , n.11, 279 F. Supp. 3d 1113, 1122 n.11 (2017)
(alteration in original) (quoting United States v. Horizon Prods. Int'l, Inc., 39 CIT , ,
82 F. Supp. 3d 1350, 1354 (2015)).
Court. No. 21-00211 Page 3
the entries as “other” tents under subheading 6306.22.9030, HTSUS, which carried a
duty of 8.8 percent. Id. ¶ 10; Def. Br. at 2-3. Then, on April 9, 2019, plaintiff filed protest
2704-19-102919 (“‘919 Protest”), contesting Customs’ classification of plaintiff’s 12
entries. Compl. ¶ 11. In that protest, plaintiff argued that its pods are classifiable
correctly as “backpacking tents” under subheading 6306.22.1000, HTSUS. Id.
The ‘919 Protest was processed by the Center of Excellence and Expertise for Apparel,
Footwear & Textiles (the “Center”). Id. ¶ 15; Def. Br. at 3. On June 13, 2019, a
supervisory import specialist (“specialist”) at the Center requested from plaintiff entry
packets for the protested entries, which plaintiff provided the following day. Compl. ¶
12. Then, on June 20, 2019, the specialist requested “additional information and
documentation in order to identify the specific tent models at issue” and “any literature”
showing that plaintiff’s pods were “in fact backpacking tents.” Id. ¶ 13; Def. Br. at 3-4.
On July 22, 2019, plaintiff responded with a letter and documentation “providing the
requested information for all entries.” Compl. ¶ 13.
Court. No. 21-00211 Page 4
On October 10, 2019, Customs approved the ‘919 Protest.3 Id. ¶ 14. The
Customs decision approving plaintiff’s protest consisted of only two lines4:
Decision Approved
Comments Protest has been approved based upon received documents.
Pl.’s Ex. 1 (“‘919 Protest Approval”).
After the approval of the ‘919 Protest, plaintiff resumed entering its pods duty free
as backpacking tents and filed for “Post Summary Corrections”5 of pods entered while
the ‘919 Protest was pending. Compl. ¶ 16.
3 Prior to Customs’ approval of the ‘919 Protest, plaintiff applied for further review.
Compl. ¶ 15. An “application for further review” allows an importer to request that
Customs’ Headquarters — meaning Regulations & Rulings (“R&R”) — review a protest
“in lieu of review by the Center director.” See 19 C.F.R. §§ 174.23, 174.24, 174.25,
174.26, 177.1(d)(6) (stating that “Headquarters Office” refers to “Regulations and
Rulings”), 177.2(b)(2)(ii)(B) (stating that “[o]nly the Headquarters Office will prepare final
decisions under . . . § 174.23 (Further Review of Protests)”); see also 19 U.S.C. §
1515(a). Customs “will publish” the ensuing “protest review decision . . . in the Customs
Bulletin or otherwise make [the protest review decision] available for public inspection.”
19 C.F.R. § 174.32; see also 19 U.S.C. § 1625(a). However, the Center director may
still conduct “a preliminary examination . . . for the purpose of determining whether the
protest may be allowed in full.” 19 C.F.R. § 174.23. If the Center director “is satisfied
that the claim is valid, he shall allow the protest.” Id. § 174.26(a). In the instant case,
no further review of the ‘919 Protest occurred because the Center director allowed the
protest. Compl. ¶¶ 14-15; Def. Br. at 5; see also 19 C.F.R. § 174.26(a).
4 The statute and Customs’ regulations require that Customs provide “reasons” when
Customs denies a protest but not when Customs allows a protest. See 19 U.S.C. §
1515(a); 19 C.F.R. §§ 174.29, 174.30(a). When Customs allows a protest, Customs
need only “refund any duties . . . found to have been collected in excess[.]” 19 C.F.R. §
174.29.
5 A Post Summary Correction allows an importer “to electronically correct entry
summary data presented to and accepted by [Customs].” Post Summary Corrections,
U.S. Customs and Border Prot. (last modified May 15, 2024),
https://www.cbp.gov/trade/programs-administration/entry-summary/post-summary-
correction.
Court. No. 21-00211 Page 5
On November 19, 2019, however, an import specialist once again requested
additional information from plaintiff with respect to entry WUG-0188371-8, which was a
subsequent entry of pods of the same models reviewed in the ‘919 Protest. Id. ¶ 17. In
an email response, counsel for plaintiff directed Customs to its prior decision in Protest
‘919. Id. ¶ 18.
On December 17, 2019, plaintiff filed Protest 2704-19-107436 (“‘436 Protest”).
Id. ¶ 21. The ‘436 Protest concerned eight entries of models of pods identical to the
entries in the ‘919 Protest. Id. Plaintiff did not apply for further review of the ‘436
Protest “on the understanding that the Protest was merely an administrative vehicle to
bring entries into conformity with CBP’s decision in [the ‘919 Protest].” Id. ¶ 22.
On January 24, 2020, Customs issued a CF-29 Notice of Proposed Action with respect
to entry WUG-0188371-8 and 21 separate entries of the pods, including 15 entries for
which plaintiff had filed Post Summary Corrections. Id. ¶ 19. In that notice, Customs
stated its position that the subject pods were classifiable under subheading
6306.22.9030, HTSUS. Id.In a conference call of March 20, 2020, with specialists from the Center, the
specialists informed counsel for plaintiff that the Center had received guidance from a
National Import Specialist that the subject pods were classifiable under subheading
6306.22.9030, HTSUS. Id. ¶ 20. The specialists explained that Customs would classify
Court. No. 21-00211 Page 6
plaintiff’s pods in accordance with that guidance and without regard to the decision in
the ‘919 Protest.6 Id.In a subsequent conference call, a Supervisory Liquidation Specialist from the
Center of Excellence and Expertise for Base Metals recommended that plaintiff file a
new protest with application for further review for the seven entries subject to the ‘436
Protest that were still eligible for amendment. Id. ¶ 24.
On May 19, 2020, counsel for plaintiff filed the ‘807 Protest, which protested
seven of the eight entries included in the ‘436 Protest. Id. ¶ 25. Plaintiff then withdrew
the ‘436 Protest and applied for further review of the ‘807 Protest. Id.On October 30, 2020, Customs issued HQ H311492. Id. ¶ 29. HQ H311492 was
in response to plaintiff’s application for further review of the ‘807 Protest and stated that
(1) the subject merchandise was classified properly under subheading 6306.22.9030,
HTSUS; and (2) 19 U.S.C. § 1625(c) did not apply because Customs’ approval of the
‘919 Protest was not a “decision” under that subsection. Id. Customs then denied the
‘807 Protest. Id.; see also HQ 311492.
Plaintiff then sought review in this court of Customs’ protest review decision HQ
H311492, alleging that “it effectively revoked the prior decision of [the ‘919 Protest]
contrary to law without following the notice and comment requirements of 19 U.S.C. §
1625(c).” Id. ¶ 41.
6 Also in the conference call of March 20, 2020, the specialists stated that the Center
would deny the ‘436 Protest, as Customs had determined that the subject merchandise
was classifiable under subheading 6306.22.9030, HTSUS. Compl. ¶ 23. In response,
counsel for plaintiff asked whether it would be possible to amend the ‘436 Protest to
apply for further review. Id. However, during that call, parties learned that one of the
entries subject to the ‘436 Protest was more than 180 days past liquidation and
therefore no longer eligible for further review. Id.Court. No. 21-00211 Page 7
On July 25, 2024, the court held oral argument. See Oral Arg. Tr., ECF No. 31.
JURISDICTION AND STANDARD OF REVIEW
The Court exercises exclusive jurisdiction over all civil actions commenced under
section 515 of the Tariff Act of 1930, 19 U.S.C. § 1515, to contest protests denied by
Customs, 28 U.S.C. § 1581(a), and reviews such actions de novo. 28 U.S.C. §
2640(a)(1) (“The Court of International Trade shall make its determinations upon the
basis of the record made before the court ....... ”).
In a USCIT Rule 12(b)(6) motion for failure to state a claim, “any factual
allegations in the complaint are assumed to be true and all inferences are drawn in
favor of the plaintiff.” Env’t One Corp. v. United States, 47 CIT , , 627 F. Supp. 3d
1349, 1355 (2023) (quoting Amoco Oil Co. v. United States, 234 F.3d 1374, 1376 (Fed.
Cir. 2000)); see generally USCIT R. 12(b)(6).
In deciding a Rule 12(b)(6) motion, the court may consider documents
“incorporated by reference or integral to the claim, items subject to judicial notice, [and]
matters of public record.” A & D Auto Sales, Inc. v. United States, 748 F.3d 1142, 1147
(Fed. Cir. 2019) (alterations in original) (quoting 5B Charles Alan Wright & Arthur R.
Miller, Federal Practice and Procedure § 1357 (3d ed. 2004)).
“A court may properly dismiss a claim pursuant to [USCIT] Rule 12(b)(6) only if
Plaintiffs’ allegations of fact are not ‘enough to raise a right to relief above the
speculative level.’” VoestAlpine USA Corp. v. United States, 46 CIT , , 578 F.
Supp. 3d 1263, 1276 (2022) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555
(2007)). To survive a motion to dismiss, plaintiff’s complaint must contain sufficient
Court. No. 21-00211 Page 8
factual material to “state a claim to relief that is plausible on its face.”7 Twombly, 550
U.S. at 570.
DISCUSSION
I. Interpretation of 19 U.S.C. § 1625(c)
Parties disagree as to the scope of “prior interpretive ruling or decision” in §
1625(c)(1) in relation to the phrase “interpretive ruling . . . or protest review decision” in
§ 1625(a). Therefore, the court considers first the correct interpretation of “prior
interpretative ruling or decision” in 19 U.S.C. § 1625(c)(1).
A. Legal framework
19 U.S.C. § 1625 is titled “Interpretive rulings and decisions; public information.”
19 U.S.C. § 1625(a) determines when Customs is required to publish in the Customs
Bulletin or otherwise make available for public inspection certain rulings and decisions:
Within 90 days after the date of issuance of any interpretive ruling (including
any ruling letter, or internal advice memorandum) or protest review decision
under this chapter with respect to any customs transaction, the Secretary
shall have such ruling or decision published in the Customs Bulletin or shall
otherwise make such ruling or decision available for public inspection.
Section 1625(c) sets out when Customs is required to provide notice and invite
public comment:
A proposed interpretive ruling or decision which would—
7 In its briefing, plaintiff asserts that under USCIT Rule 12(b)(6), “[d]ismissal . . . is
appropriate only where ‘it appears beyond doubt that no set of facts can be proven that
would entitle the plaintiff to relief.’” Pl.’s Resp. Opp’n Def.’s Mot. to Dismiss (“Pl. Br.”) at
2, ECF No. 23 (quoting Conley v. Gibson, 335 U.S. 41, 48 (1957)). However, in
Twombly, 550 U.S. at 562-63, the Supreme Court abrogated Conley’s “no set of facts”
pleading standard. Id. (“[T]his famous observation has earned its retirement. The
phrase is best forgotten as an incomplete, negative gloss on an accepted pleading
standard.”). To survive a USCIT Rule 12(b)(6) motion to dismiss, plaintiff is required to
plead “enough facts to state a claim to relief that is plausible on its face.” Id. at 570.
Court. No. 21-00211 Page 9
(1) modify (other than to correct a clerical error) or revoke a
prior interpretive ruling or decision which has been in effect for
at least 60 days; or
(2) have the effect of modifying the treatment previously
accorded by the Customs Service to substantially identical
transactions;
shall be published in the Customs Bulletin. The Secretary shall give
interested parties an opportunity to submit, during not less than the 30-day
period after the date of such publication, comments on the correctness of
the proposed ruling or decision. After consideration of any comments
received, the Secretary shall publish a final ruling or decision in the Customs
Bulletin within 30 days after the closing of the comment period. The final
ruling or decision shall become effective 60 days after the date of its
publication.
In 19 C.F.R. §§ 177.10(a) and 177.12(a)-(b), Customs elaborates on the meaning
of § 1625(a) and (c). In § 177.10(a), Customs states that it shall publish or otherwise
make available for public inspection within 90 days “any interpretive decision,” which
Customs defines to “include[] any ruling letter, internal advice memorandum, or protest
review decision.” Meanwhile, in § 177.12(a)-(b), Customs discusses “[m]odification or
revocation of interpretive rulings, protest review decisions, and previous treatment of
substantially identical transactions”:
(a) General. An interpretive ruling, which includes an internal advice
decision . . . or a holding or principle covered by a protest review decision .
. . if found to be in error or not in accord with the current views of Customs,
may be modified or revoked by an interpretive ruling issued under this
section. A modification or revocation under this section must be carried
out in accordance with the notice procedures set forth in paragraph (b) . . .
.
(b) Interpretive rulings or protest review decisions. Customs may modify or
revoke an interpretive ruling or holding or principle covered by a protest
review decision. However, when Customs contemplates the issuance
of an interpretive ruling that would modify or revoke an interpretive ruling or
holding or principle covered by a protest review decision which has been in
effect for 60 or more calendar days, [the notice and comment requirements
Court. No. 21-00211 Page 10
of § 177.12(b)(1)-(2)] will apply.
B. Analysis
The court addresses first parties’ disagreement as to the scope of § 1625(c) and
whether “prior interpretive ruling or decision” in § 1625(c) is coextensive with
“interpretive ruling (including any ruling letter, or internal advice memorandum) or
protest review decision” in § 1625(a).
Plaintiff begins by noting that in § 1625(c) Congress used different language than
in § 1625(a). Pl. Br. at 3. Specifically, § 1625(a) requires that “any interpretive ruling
(including any ruling letter, or internal advice memorandum) or protest review decision”
be published or otherwise made available within 90 days after the issuance of the
interpretive ruling or protest review decision.
Meanwhile, plaintiff observes, § 1625(c)(1) requires Customs to publish notice
and invite public comment on “[a] proposed interpretive ruling or decision which would .
. . modify . . . or revoke a prior interpretive ruling or decision.” 19 U.S.C. § 1625(c)(1)
(emphasis supplied); Pl. Br. at 5. Plaintiff asserts that the phrase “prior interpretive
ruling or decision” in § 1625(c) carries a different meaning — and a broader scope —
than “interpretive ruling . . . or protest review decision” in § 1625(a). Pl. Br. at 3-4.
According to plaintiff, “the use of different language with regard to decisions — ‘protest
review decision’ in § 1625(a) versus merely ‘decision’ in § 1625(c) — must be
understood to have different meanings.” Id. at 4 (citing Russello v. United States, 464
U.S. 16, 23 (1983)). Plaintiff argues on this basis that “the universe of items that must
be published prior to issuance per § 1625(a) must differ in some way from the universe
of items subject to notice and comment proceedings prior to modification or revocation
Court. No. 21-00211 Page 11
per § 1625(c).” Id. So, plaintiff cites two decisions of this Court and concludes that
there are “decisions” that “do not require publication upon issuance but do require
notice and comment procedures before they may be modified or revoked.” Id. at 4-5
(citing Am. Fiber & Finishing, Inc. v. United States, 39 CIT , , 121 F. Supp. 3d 1273,
1279 (2015); Kahrs Int’l, Inc. v. United States, 33 CIT 1316, 1353, 645 F. Supp. 2d 1251,
1285 (2009)).
Defendant responds that “§ 1625(c)(1)’s phrase ‘prior interpretive ruling or
decision’ refers back to § 1625(a)’s longer phrase ‘interpretive ruling (including any
ruling letter, or internal advice memorandum) or protest review decision.’” Def.’s Reply
Supp. Mot. to Dismiss (“Def. Reply Br.”) at 2, ECF No. 24 (citing Cal. Indus. Prods., Inc.
v. United States, 436 F.3d 1341, 1351 (Fed. Cir. 2006)). According to defendant,
therefore, the two phrases “should be construed consistently.” Id. Defendant maintains
that any “prior interpretive ruling or decision” that is “subject to revocation” under §
1625(c)(1) was required also to be published or otherwise made available for public
inspection when originally issued under § 1625(a). Id.
The court concludes that “a prior interpretive ruling or decision” in § 1625(c)(1)
refers back to “interpretive ruling . . . or protest review decision” in § 1625(a). Therefore,
the same universe of “decisions” subject to notice and comment upon revocation or
modification was required also to be published or otherwise made available under §
1625(a). There are no “decisions” within the scope of § 1625 that require notice and
comment to be modified or revoked but were not subject to the public inspection
requirement upon issuance.
Court. No. 21-00211 Page 12
The statute’s text is clear that “prior interpretive ruling or decision” in subsection
(c)(1) is a reference to — and is shorthand for — “interpretive ruling . . . or protest
review decision” in subsection (a). Indeed, this is evident in both the provision’s
heading and in the texts of subsections (a) and (c).8 The heading of § 1625 refers to
“[i]nterpretive rulings and decisions” — an indication that Congress wanted the phrase
to carry the same meaning under both (a) and (c). Moreover, Congress in subsections
(a) and (c) referred to “ruling or decision” repeatedly. For example:
Within 90 days after the date of issuance of any interpretive ruling (including
any ruling letter, or internal advice memorandum) or protest review decision
under this chapter . . . , the Secretary shall have such ruling or decision
published in the Customs Bulletin . . . .
8 The previous version of § 1625 concerned only “[p]ublication of decisions” and stated:
Within 120 days after issuing any precedential decision (including any ruling
letter, internal advice memorandum, or protest review decision) under this
Act with respect to any customs transaction, the Secretary shall have such
decision published in the Customs Bulletin or shall otherwise make such
decision available for public inspection.
Customs Procedural Reform and Simplification Act of 1978 (“the 1978 Act”), Pub.
L. No. 95-410, § 112, 92. Stat. 888, 898.
Although the previous version of § 1625 did not contain a notice and comment
requirement for a prior precedential decision to be revoked, the legislative history
of that act indicated that publication upon revocation of a previously published
decision was Customs policy: “[I]t will be the policy of the Customs service to
publish in the Customs Bulletin rulings of general interest . . . including rulings
that supersede, revoke, modify, or amend previously published rulings, or that
affect multiple importers of the same merchandise, or merchandise imported
through several ports.” H.R. Rep. No. 95-621, at 19 (1977). The Customs
Modernization Act amended § 1625 to its current version and added the notice
and comment procedures to modify or revoke a “prior interpretive ruling or
decision.” See Pub. L. No. 103-182, § 623, 107 Stat. 2057, 2186 (1993). The
phrase “interpretive ruling or decision” replaced “precedential decision,” although
the newly amended § 1625 retained ruling letters, internal advice memoranda
and protest review decisions as examples.
Court. No. 21-00211 Page 13
19 U.S.C. § 1625(a) (emphasis supplied); see also id. § 1625(c) (referring to “proposed
ruling or decision” and “final ruling or decision”) (emphases supplied).
The identical shorthand reference throughout both subsections to “ruling or
decision” — and not, e.g., “such ruling or protest review decision” in § 1625(a) — is a
further indication that “interpretive ruling or decision” used in § 1625(c) carries the same
meaning as the full phrase used to begin subsection (a). Such an interpretation is in
keeping with the “well-settled” rule of statutory interpretation that “words appearing in a
statute should be read consistently: a particular word appearing multiple times in a
statutory provision should be given the same reading, unless there is a clear
Congressional intent to the contrary.” Timex V.I., Inc. v. United States, 157 F.3d 879,
884 (Fed. Cir. 1998). Moreover, “[s]tatutes should be interpreted ‘as a symmetrical and
coherent regulatory scheme.’” Mellouli v. Lynch, 575 U.S. 798, 809-10 (2015) (quoting
FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 133 (2000)). On this point,
plaintiff has offered no explanation to support plaintiff’s assertion that Congress
intended for the revocation of a Customs “decision” to require notice and comment
under subsection (c)(1) even though that same decision was not subject to the public
inspection requirement of subsection (a).
Plaintiff maintains that decisions of this Court and the U.S. Court of Appeals for
the Federal Circuit (“Federal Circuit”) support plaintiff’s interpretation. Pl. Br. at 4-5 (first
quoting Am. Fiber & Finishing, 39 CIT at , 121 F. Supp. 3d at 1279 (stating that
“decision” in § 1625(c) includes, “but is not limited to, a protest review decision”); then
quoting Kahrs, 33 CIT at 1353, 645 F. Supp. 2d at 1285 (“[A] ‘protest review decision’ is
to be included among the larger category of otherwise generic Customs’ ‘decision[s].’”));
Court. No. 21-00211 Page 14
see also Cal. Indus. Prods., 436 F.3d at 1351 (“In short, ‘decision’ in the phrase ‘ruling
or decision’ in 19 U.S.C. § 1625(c), includes a ‘protest review decision.’”).
The cases on which plaintiff relies hold only that “decision” in § 1625(c) “includes”
but is not limited to protest review decisions, which Customs’ regulations and decisions
of this Court indicate is true also of § 1625(a). See 19 C.F.R. § 177.10(a) (“[A]n
interpretive decision includes any ruling letter, internal advice memorandum, or protest
review decision.”) (emphasis supplied); S. Shrimp All. v. United States, 33 CIT 560, 582,
617 F. Supp. 2d 1334, 1355 (2009). Plaintiff has pointed to no decisions in which this
Court or the Federal Circuit held that subsection (c) carried a different scope than
subsection (a). Instead, the decisions that plaintiff cites have stated that the separate
subsections should be construed consistently.
For example, in California Industrial Products, the Federal Circuit considered
whether Customs issued an “interpretive ruling or decision” under § 1625(c) that
“modif[ied] the treatment previously accorded by the Customs Service to substantially
identical transactions” under § 1625(c)(2).9 436 F.3d at 1349-50. There, plaintiff filed a
drawback claim, and in response, Customs issued a Headquarters Ruling letter denying
plaintiff’s claim. Id. at 1346-47. Then, plaintiff filed a request for further review of
9 Under Customs’ regulations, a “treatment previously accorded” under § 1625(c)(2)
requires that there is evidence that (1) there was an “actual determination by a Customs
officer regarding the facts and issues involved in the claimed treatment”; (2) the
Customs officer making the determination “was responsible for the subject matter on
which the determination was made”; and (3) “[o]ver a 2-year period immediately
preceding the claim of treatment, Customs consistently applied that determination on a
national basis as reflected in liquidations of entries . . . with respect to all or substantially
all of that person’s Customs transactions involving materially identical facts and issues.”
19 C.F.R. § 177.12(c)(1)(i).
Court. No. 21-00211 Page 15
Customs’ denial of plaintiff’s drawback claim. Id. at 1347. In response, Customs issued
“a protest review decision,” which relied on Customs’ previous Headquarters Ruling and
affirmed Customs’ denial of plaintiff’s drawback claim. Id. Customs argued before the
court that none of Customs’ actions in that case constituted an “interpretive ruling or
decision” under § 1625(c). Id. at 1349. But the Federal Circuit read § 1625(c) in
conjunction with § 1625(a) and disagreed with Customs’ interpretation:
Thus, [in § 1625(a)] “interpretive ruling” is expressly defined as “including
any ruling letter, or internal advice memorandum.” At the same time, two
lines later, the text refers back to the previously noted “interpretive ruling . .
. or protest review decision” as “such ruling or decision.” “[I]nterpretive
ruling . . . or protest review decision” and the later shorthand reference to
that phrase (“such ruling or decision”) should be construed consistently in
section 1625. In short, “decision” in the phrase “ruling or decision” in 19
U.S.C. § 1625(c), includes a “protest review decision.”
Id. at 1351 (internal citations omitted).
Because plaintiff was appealing from a Customs “protest review decision” — and
because “interpretive ruling . . . or protest review decision” and “interpretive ruling or
decision” should be “construed consistently” — Customs was required to follow the
notice and comment procedures of subsection (c).10 Id.; see also Int’l Custom Prods. v.
United States, 748 F.3d 1182, 1188 (Fed. Cir. 2014) (“Although California Industrial
Products shows that an interpretive ruling includes ruling letters and internal advice
memoranda, such documents are exemplary, not exhaustive.”). In fact, the Federal
Circuit’s instruction that the phrases “should be construed consistently” entails that the
requirements of subsection (c) are coextensive with the requirements of subsection (a).
10 The Federal Circuit concluded also that the Headquarters Ruling on which the denial
and subsequent protest review decision were based was an “interpretive ruling.” Cal.
Indus. Prods., 436 F.3d at 1351. So, Customs was required to follow notice and
comment procedures for two reasons in that case. Id.Court. No. 21-00211 Page 16
Then, in Kahrs, this Court addressed whether certain denied protests and CF-
29s (notices of action taken) were “prior interpretive ruling[s] or decision[s]” under §
1625(c)(1). 33 CIT at 1352-53, 645 F. Supp. 2d at 1284-86. The government in Kahrs
argued that § 1625(c) “covers only ‘interpretive rulings’ and ‘protest review decisions.’”
Id. at 1352-53, 645 F. Supp. 2d at 1285. However, the Court cited the Federal Circuit’s
statement in California Industrial Products that “the terms of § 1625(c) should [be] read
consistently with the terms of § 1625(a).” Id. at 1352, 645 F. Supp. 2d at 1284. The
Court concluded:
[A] “protest review decision” is to be included among the larger category of
otherwise generic Customs’ [sic] “decision[s].”
Id. at 1353, 645 F. Supp. 2d at 1285 (second alteration in original) (citing Int’l Custom
Prods., Inc. v. United States, 32 CIT 302, 309, 549 F. Supp. 2d 1384, 1393 (2008)).
The Court concluded, as a result, that “the text of § 1625 covers interpretive
rulings, ruling letters, internal advice memoranda, protest review decisions, or decisions
that are the functional equivalent of interpretive rulings or decisions.” Id. at 1353, 549 F.
Supp. 2d at 1285 (emphasis supplied) (citing 19 U.S.C. § 1625(c); 19 C.F.R. § 177.12).
In applying that interpretation to the facts of that case, the Court held that two “denied
protests” were not “within the ambit of the covered rulings or decisions of § 1625.” Id.;
see infra Section II.B.2.
Therefore, the cases to which plaintiff cites do not support plaintiff’s position that
§ 1625(c) covers a wider array of Customs actions than subsection (a). Instead, the
cases support the position that subsections (a) and (c) should be construed
consistently, such that the requirements of § 1625(a) and (c) are applied to the same set
of Customs determinations.
Court. No. 21-00211 Page 17
In sum, the court concludes that “interpretive ruling or decision” under § 1625(c)
refers back to and mirrors the scope of “interpretive ruling (including any ruling letter, or
internal advice memorandum) or protest review decision” in § 1625(a). As a result, only
interpretive rulings, protest review decisions or their “functional equivalent[s]” are
subject to the procedural requirements of § 1625(c)(1).
II. Whether plaintiff has stated a claim upon which relief can be granted
Plaintiff asserts that the ‘919 Protest approval was the “‘functional equivalent’ of
the exemplar interpretive rulings and decisions enumerated in the statute.” Compl. ¶
40. The court turns to this question next.
A. Legal framework
19 U.S.C. § 1625(c)(1) requires that Customs publish notice of and give
interested parties an opportunity to respond to “[a] proposed interpretive ruling or
decision which would . . . modify . . . or revoke a prior interpretive ruling or decision” in
effect for at least 60 days. Whether a determination is subject to the requirements of §
1625 “depends on its substance, not its form.” Am. Fiber & Finishing, 39 CIT at , 121
F. Supp. 3d at 1280 (citing Int’l Custom Prods., 748 F.3d at 1187-88).
The legislative history of § 1625 states: “[I]mporters have a right to be informed
about customs rules and regulations, as well as interpretive rulings, and to expect
certainty that the Customs Service will not unilaterally change the rules without
providing importers proper notice and an opportunity for comment.” S. Rep. No. 103-
189, at 64 (1993)); see also H.R. Rep. No. 103-361, pt. 1, at 124 (1993), reprinted in
1993 U.S.C.C.A.N. 2552, 2674 (stating that § 1625 “will provide assurances of
transparency concerning Customs rulings and policy directives”); Int’l Custom Prods.,
Court. No. 21-00211 Page 18
748 F.3d at 1187 (citing Precision Specialty Metals, Inc. v. United States, 25 CIT 1375,
1391, 182 F. Supp. 2d 1314, 1328 (2001)).
This Court has held that “the text of § 1625 covers interpretive rulings, ruling
letters, internal advice memoranda, protest review decisions, or decisions that are the
functional equivalent of interpretive rulings or decisions.” Kahrs, 33 CIT at 1353, 645 F.
Supp. 2d at 1285 (emphasis supplied). In determining whether a Customs
determination is subject to § 1625, the Federal Circuit has considered whether the
determination in question “resulted from the considered deliberations of [R&R].”11 Int’l
Custom Prods., 748 F.3d at 1188.
Courts have considered also whether the determination in question had
prospective effect. See id. (holding that notice of action was subject to § 1625(c)
because it applied the HTSUS “to the specific facts of all pending and future white
sauce entries”); see also Kahrs, 33 CIT at 1353, 645 F. Supp. 2d at 1285 (stating that
Customs’ determinations were not subject to § 1625(c) because they “[did] not require
that [merchandise] be classified henceforth under a particular tariff heading”). This
Court has also stated that a Customs determination is subject to § 1625 “‘if it ‘interprets
and applies the provisions of the Customs and related laws to a specific set of facts.’”
Am. Fiber & Finishing, 39 CIT at , 121 F. Supp. 3d at 1280 (footnotes omitted).
B. Analysis
To succeed on its claim that Customs violated the requirements of § 1625(c),
plaintiff is required to establish that (1) a “proposed interpretive ruling or decision” (2)
11 Customs regulations provide that the term “‘Headquarters Office,’ as used [therein],
means the Regulations and Rulings, Office of International Trade at Headquarters, U.S.
Customs and Border Protection, Washington, DC.” 19 C.F.R. § 177.1(c)(6).
Court. No. 21-00211 Page 19
“modified or revoked” (3) a “prior interpretive ruling or decision” (4) without first
completing the notice and comment procedures of § 1625(c). Parties do not dispute
that HQ H311492 qualifies as a “proposed interpretive ruling or decision” and that, if the
approval of the ‘919 Protest was “a prior interpretive ruling or decision,” HQ H311492
effectively revoked the approval by classifying identical merchandise differently.
However, parties dispute whether the approval of the ‘919 Protest qualifies as a “prior
interpretive ruling or decision.”
“[T]he text of § 1625 covers interpretive rulings, ruling letters, internal advice
memoranda, protest review decisions, or decisions that are the functional equivalent of
interpretive rulings or decisions.” Kahrs, 33 CIT at 1353, 645 F. Supp. 2d at 1285.
Plaintiff does not contend that the approval of the ‘919 Protest was one of the listed
items in § 1625: an interpretive ruling, a ruling letter, an internal advice memorandum or
a protest review decision. Instead, plaintiff argues that the protest approval was the
“functional equivalent” of those exemplar interpretive rulings and decisions. Compl. ¶
40.
The court concludes for three reasons that the protest approval was not the
“functional equivalent” of an interpretive ruling or decision under § 1625.
1. Whether the ‘919 Protest was the result of “considered
deliberations”
The court addresses first whether the ‘919 Protest resulted from “considered
deliberations.” Parties agree that a Customs determination may qualify as a
“interpretive ruling or decision” if it resulted from the considered deliberations of
Customs. Int’l Custom Prods., 748 F.3d at 1188. However, parties disagree as to
whether that requirement was satisfied here.
Court. No. 21-00211 Page 20
Defendant contends that plaintiff has failed to “plausibly allege” that the ‘919
Protest was the result of considered deliberations. Def. Reply Br. at 9-10. According to
defendant, only R&R can conduct the “considered deliberations” necessary to render a
Customs determination subject to § 1625(c). Id. Because the Center made the
determination in the instant case — and because plaintiff has not alleged any
involvement of R&R — defendant argues that plaintiff has failed to state a plausible
claim for which relief can be granted. Id. (citing Int’l Custom Prods., 748 F.3d at 1188).
Plaintiff responds that it has plausibly alleged that the ‘919 Protest was the result
of considered deliberations because plaintiff included in its complaint: (1) plaintiff’s
arguments before Customs; (2) Customs’ two separate requests for additional
information; and (3) the statement in the protest approval that the protest “has been
approved based upon received documents.” Pl. Br. at 18 (citing Compl. ¶¶ 11-14).
Plaintiff notes that it needed allege only “enough fact [sic] to raise a reasonable
expectation that discovery will reveal evidence,” id. (quoting Twombly, 550 U.S. 545), a
standard that plaintiff insists it met in its complaint. As to R&R, plaintiff argues that the
involvement of R&R is a relevant fact — but not a necessary condition — in determining
whether a Customs decision was the result of considered deliberations. Id. at 20.
According to plaintiff, the facts alleged in the complaint “indicate that the documents and
classification arguments provided by [p]laintiff in its initial protest and in response to
[Customs’] supplemental requests were reviewed, considered, and formed the basis for
[Customs’] decision.” Id. at 18.
The court concludes that plaintiff has failed to plausibly allege that the ‘919
Protest approval resulted from “considered deliberations” because plaintiff has not
Court. No. 21-00211 Page 21
alleged the deliberations of R&R in the approval. Instead, plaintiff has alleged that the
approval of the ‘919 Protest involved only the Center.
To start, the statute and Customs’ regulations establish that an “interpretive ruling
or decision” under § 1625 requires the “considered deliberations” of R&R. Section 1625
does not define an “interpretive ruling or decision,” but it does provide examples. The
exemplar “interpretive rulings and decisions” in § 1625 are ruling letters, internal advice
memoranda and protest review decisions. Only R&R has the authority to issue each of
these examples.12 See 19 C.F.R. § 177.1(d)(1) (“A ‘ruling’ is a written statement issued
by the Headquarters Office . . . .”); id § 177.12(a) (stating that “[a]n interpretive ruling . . .
includes an internal advice decision . . . or a holding or principle covered by a protest
review decision”); id. § 177.11(a) (“Advice or guidance as to the interpretation or proper
application of the Customs and related laws . . . may be requested by Customs Service
field offices from the Headquarters Office ....... ”) (emphasis supplied); id. § 174.26(b)(1)
(stating that a protest “for which an application for further review was filed” and which
12 The legislative history of the 1978 Act is consistent with defendant’s position that only
decisions issued with the deliberations of R&R may be subject to the requirements of §
1625. In describing the “present law,” the Senate report stated: “The Customs Service
Office of Regulations and Rulings in Washington issues notices, letters, rulings, and
written advice to customs officers and importers.” S. Rep. No. 95-778, at 21. Likewise,
the House report stated: “The Customs Service considers a ‘ruling’ to be a written
statement issued by the Headquarters Office of Regulations and Rulings . . . that
interprets and applies the provisions of the Customs and related laws to a specific set of
facts. A ruling differs from an ‘information letter,’ which is a written statement issued by
the Headquarters Office . . . .” H.R. Rep. No. 95-621, at 19. In the 1978 Act, Congress
determined to “enact into law part of [Customs’] existing regulations,” which would
ensure that importers would be aware of “the Customs Service [sic] interpretation of the
law.” S. Rep. No. 95-778, at 22. This legislative history establishes that the Congress
that enacted the original § 1625 — which set out the listed exemplars that the 1993
amendments retained — was concerned primarily with rulings and decisions
promulgated by R&R.
Court. No. 21-00211 Page 22
the “Center director decides . . . should be denied in whole or in part” is “reviewed by
the Commissioner of Customs or his designee”); id. § 177.2(b)(2)(ii)(B) (stating that
“only the Headquarters Office will prepare . . . [protest review decisions]”); Assistant
Commissioner of Customs, Office of Regulations and Rulings, et al.: Performance of
Functions, 34 Fed. Reg. 8,208 (Dep’t of Treasury May 27, 1969) (delegating “[d]ecisions
relating to . . . classification” to the “Assistant Commissioner of Customs, Office of
Regulations and Rulings,” within “the headquarters office”). Therefore, plaintiff’s
position that a Center-level protest approval — issued without the deliberations of R&R
— may be subject to the requirements of § 1625 is inconsistent with the statute and
Customs’ regulations.
In addition, decisions of the Federal Circuit support the conclusion that the
deliberations of R&R are required to trigger the requirements of § 1625. For example,
in International Custom Products, 748 F.3d at 1188-89, the Federal Circuit addressed
whether a “notice of action” could be an “interpretive ruling or decision” under § 1625(c).
In that case, the notice of action reclassified plaintiff’s entries of white sauce, stating that
“all . . . of [plaintiff’s] pending entries . . . and all future entries, would be classified”
under a different tariff subheading than Customs had previously classified the white
sauce under a Ruling Letter issued six years earlier. Id. at 1183-84. Customs argued
that notices of action “can never be an ‘interpretive ruling or decision’ and therefore
cannot trigger the procedural protections of § 1625(c).” Id. at 1188.
The Federal Circuit disagreed and affirmed the decision of the USCIT that held
that the notice of action in that case qualified as an “interpretive ruling or decision”
under subsection (c). Id. at 1189. Critically, the Federal Circuit observed that the notice
Court. No. 21-00211 Page 23
of action “resulted from the considered deliberations of [R&R], which determined that
the Ruling Letter did not apply to the Entry.” Id. at 1188 (citing Int’l Custom Prods., Inc.
v. United States, 32 CIT at 309, 549 F. Supp. 2d at 1392 (describing Customs’ “months-
long deliberative process” resulting in the notice of action, which “represented the
agency’s formal position”)). And, contrary to plaintiff’s position, the deliberations of R&R
were core to the Federal Circuit’s holding. See Int’l Custom Prods., 748 F.3d 1183(noting that R&R “is responsible for reviewing and issuing ruling letters”), 1188
(“Although the Notice of Action was not issued by [R&R], it resulted from the considered
deliberations of [R&R] ....... ”), 1189 (noting again that the notice of action “was issued
after relevant [R&R] deliberation” and therefore “subject to § 1625(c)’s procedures”).
By contrast, in the instant case plaintiff has alleged the involvement only of the
Center. See generally Compl. Accordingly, the ‘919 Protest approval was not the result
of “considered deliberations” of R&R, and for this reason was not a “prior interpretive
ruling or decision” under § 1625(c)(1).
Moreover, excluding the approval of the ‘919 Protest from the requirements of §
1625(c) is consistent with the statutory scheme. Under plaintiff’s theory, every protest
determination regarding the classification of merchandise would be subject to the
requirements of § 1625(c). Had Congress wanted to subject a typical protest approval
or denial to the requirements of § 1625(c), Congress knew how to do so, as Congress
referred to those precise decisions elsewhere in the Customs Modernization Act. See,
e.g., Pub. L. No. 103-182, § 613(a), 107 Stat. 2057, 2174 (1993) (stating that “a protest
against the decision to exclude....... merchandise which has not been allowed or denied
in whole or in part [within 30 days] shall be treated as having been denied”); see id. at §
Court. No. 21-00211 Page 24
617, 107 Stat. 2057, 2180 (referencing separately a “protest” and then “an application
for further review”); Nat'l Org. of Veterans' Advocs., Inc. v. Sec'y of Veterans Affs., 981
F.3d 1360, 1386 (Fed. Cir. 2020) (quoting Animal Legal Def. Fund v. U.S. Dep't of Agric.,
789 F.3d 1206, 1217 (11th Cir. 2015) (“Where Congress knows how to say something
but chooses not to, its silence is controlling.”)). Instead, Congress selected only certain
types of Customs rulings and decisions — each of which involves the participation of
R&R and therefore may be assumed to reflect Customs’ official policy. That Congress
elected not to include expressly in § 1625 a Center-level “allowed” or “denied” protest is
“powerful evidence,” id. at 1385, that Congress did not intend for such determinations to
be governed by § 1625.
2. Whether the ‘919 Protest had prospective effect
The court examines next whether the ‘919 Protest had prospective effect such
that plaintiff and the interested public were entitled “to expect certainty” that Customs
“w[ould] not unilaterally change” the classification “without providing . . . proper notice
and an opportunity for comment.” Int’l Custom Prods., 748 F.3d at 1187 (citing
Precision Specialty Metals, 25 CIT at 1391, 182 F. Supp. 2d at 1328).
Defendant argues that to qualify for the procedural protections of § 1625, the
determination in question is required to contain a “classification directive: a requirement
that all future entries of the same merchandise by the same importer be classified in a
particular way.” Def. Reply Br. at 10-11 (comparing Int’l Custom Prods., 748 F.3d at
1187-88, and Am. Fiber & Finishing, 39 CIT at n.27, 121 F. Supp. 3d at 1280 n.27,
with Kahrs, 33 CIT at 1353, 645 F. Supp. 2d at 1285). Because the ‘919 Protest
Court. No. 21-00211 Page 25
approval contained no such directive, defendant asserts that the protest could not have
been a “prior interpretive ruling or decision” under § 1625(c)(1). Id.
Plaintiff responds with two points. First, plaintiff argues that the cases on which
defendant relies do not establish a rule that the determination in question must state
expressly that the decision applies to future entries. Pl. Br. at 13-14. On this point,
plaintiff notes that the exemplar interpretive rulings and decisions in § 1625 often do not
provide specifically for prospective application. Id. at 11. Second, plaintiff contends that
Customs’ approval of ‘919 Protest was “inherently applicable” to all future entries of
plaintiff’s tent pods, and, as such, no express classification directive was necessary. Id.
at 10.
The entry-specific approval of the ‘919 Protest was not an “interpretive ruling or
decision” subject to § 1625 also because the approval did not direct plaintiff that future
imports of the subject merchandise be classified according to that approval.
The legislative history of the Customs Modernization Act, which added the
procedural protections of subsection (c) to § 1625, made clear by utilizing repeatedly
the words “rules,” “regulations” and “rulings,” that the notice and comment and
transparency provisions of that section were to apply to rulings with prospective effect:
[The Customs Modernization Act] implements the concept of “informed
compliance,” which is premised on the belief that importers have a right to
be informed about customs rules and regulations, as well as interpretive
rulings, and to expect certainty that the Customs Service will not unilaterally
change the rules without providing importers proper notice and an
opportunity for comment.
S. Rep. No. 103-189, at 64 (1993); see also H.R. Rep. No. 103-361, pt. 1, at 124 (1993)
(stating that § 1625 “will provide assurances of transparency concerning Customs
rulings and policy directives”).
Court. No. 21-00211 Page 26
This legislative history reveals that § 1625(c)’s “notice and comment
requirements are intended to ensure that the interested public has notice of a proposed
change in Customs’ policy and to allow the public to make comments on the
appropriateness of the change and to modify any current practices that were based in
reliance on Customs’ earlier policy.” Sea-Land Serv., Inc. v. United States, 239 F.3d
1366, 1373 (Fed. Cir. 2001). In enacting § 1625(c), Congress was concerned
principally with the ability of the interested public to stay abreast of Customs regulations
and policy with the potential for prospective application — not with entry-specific,
Center-level protest approvals like that in the ‘919 Protest.
In addition, in deciding whether § 1625 applies, the Federal Circuit and this Court
have considered whether a Customs determination stated that it would be applied
prospectively. In International Custom Products, the government maintained that the
notice of action at issue could not be subjected to § 1625 because the notice of action
was “an ‘entry-specific document’ that is ‘mailed only to the importer,’ and has no effect
on a prior policy or ruling by Customs.” Int’l Custom Prods., 748 F.3d at 1187.
However, the Federal Circuit concluded that the government’s reasoning would “elevate
form over substance” and frustrate the intent of Congress to provide transparency to
importers when Customs changes its policy. Id. Importantly, the court disagreed with
the government’s characterization of the notice of action as “entry-specific”:
Contrary to the “entry-specific document” the Government describes, the
Notice of Action in this case “applied to all” pending and future entries of
white sauce. . . . This broad proclamation effectively revoked the
classification set forth in the Ruling Letter. . . . The Notice of Action’s
reclassification of all pending and future white sauce entries after over six
years of ICP’s reliance on the Ruling Letter was just the type of “change [in]
the rules” that § 1625(c) was designed to address.
Court. No. 21-00211 Page 27
Id. (alteration in original); see also Kahrs, 33 CIT at 1353, 645 F. Supp. 2d at 1285(stating that two protest denials “[did] not fall within the ambit of” § 1625 because “there
[was] no directive set out by the[] denied protests that require Kahrs to classify its
merchandise under 4418.30.00 HTSUS”).
By contrast, the ‘919 Protest approval contained no such “broad proclamation,”
Int’l Custom Prods., 748 F.3d at 1187, but instead stated only: “Protest has been
approved based upon received documents.” Compl ¶ 14; ‘919 Protest Approval.
Therefore, the ‘919 Protest approval is not a “prior interpretive ruling or decision,” as it
lacked a directive that future entries of the subject merchandise be classified consistent
with that approval.
Plaintiff maintains that the decision to approve the ‘919 Protest was “inherently
applicable to future entries of the MyPod, OriginalPod, and XLPod.” Pl. Br. at 10. But, if
the ‘919 Protest approval were “inherently applicable” to future entries and therefore
subject to § 1625(c), then so is every Customs decision to allow or deny a protest based
on the classification of merchandise. As stated, such a result is plainly contrary to the
language and legislative history of the statute. See supra Section II.B.1.
Plaintiff notes moreover that “[m]any of the very exemplar rulings and decisions
named in § 1625 do not expressly state that the subject merchandise ‘must be classified
henceforth’” under a particular tariff classification. Id. at 11. However, the task for the
court is to determine whether the ’919 Protest approval was the “functional equivalent”
of one of the exemplar rulings and decisions listed in § 1625. Those exemplar rulings
and decisions are issued by Customs’ Headquarters Office and, as such, reflect the
“official position” of Customs. Int’l Custom Prods., 748 F.3d at 1186 (citing 19 C.F.R. §
Court. No. 21-00211 Page 28
177.9(a)). For that reason, including a prospective classification directive in such a
ruling or decision would be superfluous. But, in determining whether a ruling or decision
not enumerated in the statute and not designated for decision by Customs’
Headquarters Office is functionally equivalent to the examples that Congress provided,
decisions of the Federal Circuit and this Court require that the court consider whether
the Customs determination at issue contains a directive that the subject merchandise be
classified under a particular subheading. If so, then importers would be entitled “to
expect certainty that . . . Customs [would] not unilaterally change the rules without
providing importers proper notice and an opportunity for comment,” S. Rep. No. 103-
189, at 64, and, as a consequence, § 1625 would apply. The lack of such a directive in
Customs’ approval of the ‘919 Protest is a further indication that the approval was not a
“prior interpretive ruling or decision” under § 1625(c)(1).
3. Whether the ‘919 Protest is “interpretive”
The court considers next whether the ‘919 Protest was “interpretive.” This Court
has held that to qualify for the procedural protections of § 1625(c), the determination in
question must be “interpretive.” Kahrs, 33 CIT at 1353, 645 F. Supp. 2d at 1285-86.
Defendant asserts that the approval of the ‘919 Protest was not interpretive
because the approval “did not quote the HTSUS, apply the General Rules of
Interpretation, cite Treasury Decision 86-163 (which governs the classification of tents),
or apply [Customs’] interpretation to any of the facts at issue.” Def. Br. at 12 (citing Int’l
Custom Prods., 748 F.3d at 1188). Defendant relies on Southern Shrimp Alliance for
the proposition that “prior interpretive rulings or decisions” under § 1625 “will . . . ‘bear
indicia’ of interpretation ‘on their face.’” Id. (quoting S. Shrimp All., 33 CIT at 584, 617 F.
Court. No. 21-00211 Page 29
Supp. 2d at 1356). According to defendant, if the one-line protest approval at issue in
the instant case is interpretive, “then every other protest determination is interpretive,
too.” Def. Reply Br. at 8.
Plaintiff argues that Southern Shrimp Alliance, which addressed the meaning of
“interpretive ruling” under § 1625(a), is inapposite. Pl. Br. at 14. Plaintiff adds that the
protest approval in the instant case was “inherently interpretive” and therefore qualifies
as an “interpretive ruling or decision” under § 1625(c). Id.
Customs’ approval of the ‘919 Protest was not “a prior interpretive ruling or
decision” also because the approval was not, in fact, interpretive. A Customs decision
may be an “interpretive ruling or decision” if it “interprets and applies the provisions of
the Customs and related laws to a specific set of facts.” Am. Fiber & Finishing, 39 CIT
at , 121 F. Supp. 3d at 1280 (citing 19 C.F.R. § 177.1(d)(1)); Kahrs, 33 CIT at 1353,
645 F. Supp. 2d at 1285-86 (stating that neither Customs cargo examinations nor the
liquidation of merchandise were “‘interpretive’ rulings or decisions under § 1625(c)”). In
International Custom Products, 748 F.3d at 1188, the Federal Circuit held that the notice
of action, which identified the subject merchandise as well as the relevant tariff
subheadings, “was an interpretive document applying the HTSUS to the specific facts of
all pending and future white sauce entries.”
By contrast, the instant protest approval stated only: “Protest has been approved
based on received documents.” Compl. ¶ 14; see also ‘919 Protest Approval. That one
sentence statement did not “interpret[] and appl[y] the provisions of the Customs and
related laws to a specific set of facts.” 19 C.F.R. § 177.1(d)(1); see also Interpret,
Merriam-Webster Online Dictionary (last visited July 10, 2024), https://www.merriam-
Court. No. 21-00211 Page 30
webster.com/dictionary/interpret (defining “interpret” as “to explain or tell the meaning
of”). The statement did not identify the merchandise, explain the meaning of the
relevant tariff subheadings or otherwise provide the interested public with guidance as
to Customs’ position — the position on which the interested public would presumably be
commenting during revocation proceedings. See 19 U.S.C. § 1625(c). Plaintiff’s
position that the ’919 Protest approval was subject to subsection (c)(1) because it was
“inherently interpretive” — a phrase that plaintiff leaves undefined — would subject
every protest determination pertaining to the classification of merchandise to the
requirements of § 1625(c), a result contrary to the language and legislative history of the
statute. Therefore, the ‘919 Protest approval was not a “prior interpretive ruling or
decision” also because it was not interpretive.
Plaintiff notes that Customs “is not required to provide any detail at all when
approving protests.” Pl. Br. at 17 (citing 19 C.F.R. § 174.29); see also 19 U.S.C. §
1515(a) (requiring Customs to provide reasons when denying protests but not when
approving protests). Therefore, plaintiff cautions that a decision from this court holding
that the one-line protest approval was not interpretive would “[have] troubling
implications,” id. at 16, because it would “effectively mean that no protest approval that
was not the result of [an application for further review] can ever qualify as a ‘decision’ for
purposes of § 1625(c).” Id. at 17. Plaintiff continues that “[s]uch a blanket rule directly
contradicts” the Federal Circuit’s instruction against “elevat[ing] form over substance,”
Int’l Custom Prods., 748 F.3d at 1187, and “would create an exception large enough to
swallow the rule.” Pl. Br. at 17 (quoting Int’l Custom Prods., 32 CIT at 308, 549 F. Supp.
2d at 1391). At oral argument, plaintiff asserted that such a result “provides an
Court. No. 21-00211 Page 31
incentive” for Customs to issue decisions without a rationale and thereby “avoid the
statute entirely.” Oral Arg. Tr. at 34:11-19.
Plaintiff’s alarum is unwarranted. Congress addressed plaintiff’s concern in §
1625(c)(2). Subsection (c)(2) requires that Customs provide notice and comment
procedures before issuing a proposed interpretive ruling or decision that would “have
the effect of modifying the treatment previously accorded by the Customs Service to
substantially identical transactions.” Under 19 C.F.R. § 177.12(c)(1)(i), “a treatment was
previously accorded by Customs” if there was “an actual determination by a Customs
officer” that Customs “consistently applied . . . on a national basis . . . with respect to all
or substantially all” of an importer’s transactions “involving materially identical facts and
issues.” In Kent International, Inc. v. United States, 17 F.4th 1104, 1110 (Fed. Cir.
2021), a case in which Customs approved 14 of plaintiff’s protests, the Federal Circuit
held that those “approved protests” constituted “‘actual determinations’ that [were]
proper for consideration in assessing the treatment previously accorded.” See also
Kent Int’l, Inc. v United States, 44 CIT , , 466 F. Supp. 3d 1361, 1363 (2020)
(noting that over a two-year period Customs approved 14 of plaintiff’s protests and nine
requests for post-entry amendments); Kent Int’l, Inc. v. United States, 48 CIT , ,
628 F. Supp. 3d 1294, 1304-05 (2023) (“In the court’s view, there is little doubt that
Plaintiff has identified a set of operative facts based on CBP’s protest . . . approvals that
give rise to a claim for treatment for the classification of the subject merchandise. . . .
Customs violated that treatment in issuing the 2015 Ruling without the notice and
Court. No. 21-00211 Page 32
comment required by 19 U.S.C. § 1625(c).”).13 Accordingly, plaintiff’s position that
excluding protest approvals from the purview of § 1625(c)(1) would allow Customs to
“avoid the statute entirely,” Oral Arg. Tr. at 34:11-19, is unsupported.
In sum, the ‘919 Protest approval was not a “prior interpretive ruling or decision”
under § 1625(c)(1).
CONCLUSION
For the reasons discussed above, it is hereby
ORDERED that defendant’s partial motion to dismiss is GRANTED.
/s/ Timothy M. Reif
Timothy M. Reif, Judge
Dated: September 5, 2024
New York, New York
13 At oral argument, plaintiff stated that it “was declaring its shipment[s] for eight years”
according to its preferred tariff subheading and indicated that this “establishes the
treatment” under § 1625(c)(2). Oral Arg. Tr. at 39:12-40:20. However, plaintiff’s
complaint does not assert a cause of action under subsection (c)(2). See Compl.
Moreover, the complaint alleges only a single protest approval prior to Customs issuing
HQ H311492. Id. “The touchstone of the treatment previously accorded inquiry is the
consistency of Customs decisions with respect to the subject merchandise.” Kent Int’l,
Inc., 17 F.4th at 1109. Entries “‘admitted pursuant to representations by the importer’. . .
. without examination or Customs officer review . . . do not reflect ‘treatment’ by
Customs.” Id. Accordingly, plaintiff’s belated assertion that its eight years of entries
imported pursuant to plaintiff’s declared rate — without examination by Customs —
established a “claim of treatment” under § 1625(c)(2) fails.