Inspired Ventures LLC v. United States , 2024 CIT 121 ( 2024 )

Slip Op. 24-121
UNITED STATES COURT OF INTERNATIONAL TRADE
INSPIRED VENTURES, LLC,
Plaintiff,
Before: Lisa W. Wang, Judge
v.
Court No. 24-00062
UNITED STATES,
Defendant.
OPINION AND ORDER
[Denying Defendant’s motion to dismiss for lack of subject matter jurisdiction.]
Dated: October 30, 2024
Elon A. Pollack, Stein Shostak Shostak Pollack & O’Hara, LLP, of Los Angeles, CA,
argued for plaintiff Inspired Ventures LLC.
Alexander J. Vanderweide, Senior Trial Counsel, Civil Division, U.S. Department of
Justice, of New York, NY, argued for the defendant. With him on the brief was Brian
M. Boynton, Principal Deputy Assistant Attorney General, Patricia M. McCarthy,
Director, Justin R. Miller, Attorney-in-Charge, International Trade Field Office, and
Nico Gurian, Trial Attorney. Of counsel on the brief was Zachary S. Simmons, Office of
the Assistant Chief Counsel, International Trade Litigation, U.S. Customs and Border
Protection.
Wang, Judge: This action is a challenge to the alleged exclusion by U.S.
Customs and Border Protection (“Customs” or “CBP”) of two entries, Entry Nos. AVV-
0053438-1 (“Entry 1”) and AVV-0053445-6 (“Entry 2”), of certain rubber tires from the
People’s Republic of China (“China”) that Plaintiff, Inspired Ventures, LLC (“Inspired”),
attempted to import on November 28, 2023. Inspired commenced action before the
court on March 12, 2024. The government filed a motion to dismiss for lack of subject
matter jurisdiction on May 13, 2024, arguing that the court does not have jurisdiction
Court No. 24-00062 Page 2
under 19 U.S.C. § 1581(a) because no protestable decision has been made by
Customs. For the foregoing reasons, the government’s motion to dismiss for lack of
subject matter jurisdiction is denied.
BACKGROUND
Plaintiff, Inspired, is a Wyoming limited liability corporation, and purchaser and
importer of the subject merchandise at issue. Compl. ¶ 7, ECF No. 5. On November 28,
2023, Inspired filed entry paperwork for certain rubber tires imports from China, which
were assigned entry numbers AVV-0053438-1 and AVV-0053445-6. Id. ¶¶ 11–12.
On November 30, 2023, Customs placed both of Inspired’s entries on hold after
Customs deemed the entries a high potential risk for tariff evasion because of Inspired’s
status as a new importer, the merchandise being subject to antidumping and
countervailing duties, and duties assessed pursuant to section 301 of the Trade Act of
1974. Def.’s Mot. to Dismiss and Accompanying Mem. in Supp. of Def.’s Mot. to
Dismiss (“Def.’s Mot.”) at 4, ECF No. 10.
Customs rejected Inspired’s initial entry papers of November 28, 2023, and
requested additional documentation regarding the subject merchandise and entry
summary information. Def.’s Mot. at 4 n.3. Inspired submitted its revised entry
documentation on January 8, 2024, which was accepted by Customs on the same day.
Compl. ¶ 12.
Inspired presented its entries for physical examination by Customs on December
7, 2023, which is a requirement for entries placed on hold by Customs. Def.’s Mot. at 4;
see also Decl. of Customs Import Specialist Nancy Cain (“Cain Decl.”) ¶ 4, ECF No. 10-
Court No. 24-00062 Page 3
1. The following day, on December 8, 2023, Inspired’s entries were examined by
Customs officers, who determined that the merchandise may be in violation of
regulations promulgated by the U.S. Department of Transportation (“DOT”) concerning
rubber tires. Cain Decl. ¶ 5.
Customs subsequently issued a detention notice for Entry 1 on December 13,
2023, and a detention notice for Entry 2 on December 14, 2023. Id. ¶ 7; see also id. at
Attach. A. Both detention notices listed “POSSIBLE DOT ISSUE” as the reason for
detention. Id. at Attach. A. Customs initiated correspondence with the DOT’s National
Highway Transit Safety Administration (“NHTSA”) inquiring “whether the importation of
the [subject] tires is in violation of the statutes and regulations [that] National Highway
Transit Safety Administration administers.” Id. at Attach. B.
On December 21, 2023, NHTSA responded to Customs’ inquiry finding that the
subject tires were not compliant with the following NHTSA requirements: (1) certain
marking and label requirements; (2) certain tire identification number (“TIN”) content
requirements; and (3) certain equipment and manufacturer reporting requirements. Id.NHTSA concluded that:
NHTSA understands that the shipment of tires may be seized by CBP who
has reasonable cause to believe that any law or regulation enforced by CBP
has been violated. NHTSA is of the opinion that CBP may seize or deny
entry of the shipment of tires, and NHTSA would not be opposed to such an
action.
Id.On February 22, 2024, Customs seized Entry 1, and issued a custody receipt on
February 27, 2024. Id. at Attach. C. On March 25, 2024, Customs approved seizure of
Court No. 24-00062 Page 4
Entry 2, but the shipment was not immediately seized by Customs and remained in
detained status until August 2, 2024. Id. ¶ 11; Def.’s Status Report (“Def.’s Status
Rep.”), ECF No. 14. On August 12, 2024, Customs issued notices of seizure for Entry 1
and Entry 2. Def.’s Status Rep.
JURISDICTION
The court has held that, “[it], like all federal courts, is one of limited jurisdiction
and is presumed to be without jurisdiction unless the contrary appears affirmatively from
the record.” One World Techs., Inc. v. United States, 357 F. Supp. 3d 1278, 1286 (CIT
2018). The court’s limited jurisdiction is one that is “conferred solely by statute; an
administrative agency cannot enlarge or limit the court’s jurisdiction.” Wirtgen Am., Inc.
v. United States, 447 F. Supp. 3d 1359, 1367 (CIT 2020) (citing Myers v. United States,
272 U.S. 52, 64 (1926)).
In examining the applicable statute, 28 U.S.C. § 1581(a) states that “[t]he Court
of International Trade shall have 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
1930.” 28 U.S.C. § 1581(a). 19 U.S.C. § 1499 explains that “once an action respecting a
detention is commenced, unless the Customs Service establishes by a preponderance
of the evidence that an admissibility decision has not been reached for good cause, the
court shall grant the appropriate relief which may include, but is not limited to, an order
to cancel the detention and release the merchandise.” 19 U.S.C. § 1499(c)(5)(C).
However, 19 U.S.C. § 1499(c) limits the court’s jurisdiction to admissibility
Court No. 24-00062 Page 5
determinations made by Customs, rather than admissibility determinations that are
“vested in an agency other than the Customs Service.” 19 U.S.C. § 1499(c).
All other matters related to seizures that are not within the jurisdiction of the
Court of International Trade (“CIT”) are subject to the district courts’ original jurisdiction.
28 U.S.C. § 1356. In assessing the proper exercise of jurisdiction, “[t]he focus must be
solely on whether the claim falls within the language and intent of the jurisdictional grant
to the CIT.” Vivitar Corp. v. United States, 761 F.2d 1552, 1559–60 (Fed. Cir. 1985)
(emphasis in original).
STANDARD OF REVIEW
Under CIT Rule 12(b) “[m]otions to dismiss … allow litigants to dismiss any or all
claims for relief in any pleading for lack of subject matter jurisdiction.” Second Nature
Designs Ltd. v. United States, 654 F. Supp. 3d 1301, 1304 (CIT 2023). A summons
serves as the “initial pleading in actions to contest the denial of a protest” and “must
establish the court’s jurisdiction.” DaimlerChrysler Corp. v. United States, 442 F.3d
1313, 1318 (Fed. Cir. 2006). Moreover, whether the court has subject matter jurisdiction
to hear an action is a “threshold” inquiry. Steel Co. v. Citizens for a Better Env’t, 523
U.S. 83, 94–95 (1998).
When a Rule 12(b)(1) motion “simply challenges the court’s subject matter
jurisdiction based on the sufficiency of the pleading’s allegations—that is, the movant
presents a ‘facial’ attack on the pleading—then those allegations are taken as true and
construed in a light most favorable to the complainant.” Cedars-Sinai Medical Ctr. v.
Watkins, 11 F.3d 1573, 1583 (Fed. Cir. 1993). However, “allegations in the complaint
Court No. 24-00062 Page 6
are not controlling” if a motion disputes factual allegations that serve as the basis for the
complaint. Id. Thus, to “[establish] the predicate jurisdictional facts, a court is not
restricted to the face of the pleadings, but may review evidence extrinsic to the
pleadings ….” Id. at 1584; see also 3M Co. v. Avery Dennison Corp., 673 F.3d 1372,
1378 (Fed. Cir. 2012) (“The district court must satisfy itself that there is a factual basis
for it to exercise jurisdiction, and in doing so it may review evidence extrinsic to the
pleadings, including affidavits and deposition testimony.”) (internal quotations omitted).
Prevailing on a motion to dismiss based on a jurisdictional dispute presents a
high bar: “[i]f the party makes an allegation of fact that sufficiently invokes the subject
matter jurisdiction of the Court of International Trade, then the party has satisfied the
liberal pleading requirements of CIT Rule 8(a)(1), and a motion to dismiss is improper.”
Goodluck India Limited v. United States, 605 F. Supp. 3d 1343, 1346 n.2 (CIT 2022)
(citing CIT Rule 8(a)(1)).
DISCUSSION
I. The Government’s Motion to Dismiss Is Denied Because Customs Has
Vested Authority to Make the Relevant Admissibility Determination
The first issue before the court is whether Customs has the vested authority to
make an admissibility determination upon the detention of subject tires, which would fall
under the jurisdiction of this court, or whether the DOT’s NHTSA has the vested
authority to make an admissibility determination, which would render the court without
jurisdiction. The court must therefore determine whether Congress vested jurisdiction to
make an admissibility determination with NHTSA, rather than the jurisdiction of Customs
designated in 28 U.S.C. § 1581(a).
Court No. 24-00062 Page 7
In statutory interpretation, “[t]he first and foremost ‘tool’ to be used is the statute’s
text, giving it its plain meaning.” Timex V.I., Inc. v. United States, 157 F.3d 879, 882
(Fed. Cir. 1998). 19 U.S.C. § 1499(c)(5)(A) provides that:
The failure by the Customs Service to make a final determination with
respect to the admissibility of detained merchandise within 30 days after the
merchandise has been presented for customs examination, or such longer
period if specifically authorized by law, shall be treated as a decision of the
Customs Service to exclude the merchandise for purposes of section
1514(a)(4) of this title.
19 U.S.C. § 1499(c)(5)(A).
Such a requirement is applicable “[e]xcept in the case of merchandise with
respect to which the determination of admissibility is vested in an agency other than the
Customs Service.” Id. § 1499(c) (emphasis added). The plain meaning provides that
there exist agencies other than Customs with vested authority to make the
determination. The statute itself, however, does not provide which agencies “other than
the Customs Service” have vested authority. See id.
Because the statute is silent as to the identity of these “other” agencies, the court
must look to tools of statutory interpretation beyond the statute’s plain language. Salant
Corp. v. United States, 86 F. Supp. 2d 1301, 1305–06 (CIT 2000) (“Beyond the statute’s
text, those ‘tools’ include the statute’s structure, canons of statutory construction, and
legislative history.”).
Here, the legislative history of 19 U.S.C. § 1499(c) provides a description of the
delineation of responsibilities between Customs and other federal agencies in
admissibility determinations:
Court No. 24-00062 Page 8
In meeting the “good cause” burden related to an admissibility decision
before the Court of International Trade, the Committee intends that the
Customs Service may satisfy the “good cause” burden by showing that
another federal agency with jurisdiction over an admissibility decision has
not yet reached a determination regarding the admissibility of the
merchandise. The Committee intends, however, that this not provide the
basis for continued inordinate delay and would encourage the determination
by the court of a reasonable date certain for a decision.
The Committee recognizes that Customs often detains merchandise on
behalf of other Government agencies and is not directly involved in the
activities which result in the decision to admit or exclude the merchandise.
These agencies include the Food and Drug Administration (FDA) and the
Department of Agriculture, among others. This procedure providing
recourse through the Court of International Trade would be reserved for
admissibility determinations for which the Customs Service is responsible.
Nothing in this section is intended to change the procedures or relationship
between Customs and other Federal agencies. However, this would not
preclude application of this new procedure and remedy in those cases
where Customs has the responsibility and authority to determine the
admissibility of the merchandise, and such procedures and remedies are
agreed to by the other agency.
H.R. Rep. No. 103-361, pt. 1, at 111–12 (1993) (emphases added).
The legislative history is instructive. Congress explained that there are instances
where “another agency [has] jurisdiction over an admissibility decision.” Id. The court
only has jurisdiction for “admissibility determinations for which the Customs Service is
responsible.” Id. Congress provides two examples of “other Government agencies”
vested with admissibility authority (i.e., the FDA and the U.S. Department of Agriculture
(“USDA”)), and states that these agencies may be situated “among others.” Id.Congress’ use of the term “among others” is meant to limit the scope of federal
agencies to those with specific jurisdiction over admissibility determinations rather than
all federal agencies. Id. (specifying that such decisions must be made by “another
federal agency with jurisdiction over an admissibility decision”). Congress further
Court No. 24-00062 Page 9
explained that should an instance occur where Customs has the “responsibility and
authority” to make an admissibility determination, another agency agreeing with a
Customs determination does not transfer such authority to another agency for purposes
of 19 U.S.C. § 1499(c). Id.In sum, Customs has the vested authority to make admissibility determinations
unless specific jurisdiction has been vested by Congress in another agency.
A. DOT’s NHTSA Does Not Have Vested Authority for the Relevant
Admissibility Determinations
The court now must determine whether the DOT’s NHTSA had vested authority
to make the admissibility determination of the tires at issue. The National Traffic and
Motor Vehicle Safety Act (“NTMVSA”), 49 U.S.C. § 30101 et seq., was enacted by
Congress “to reduce traffic accidents and deaths and injuries resulting from traffic
accidents” by “prescrib[ing] motor vehicle standards for motor vehicles and motor
vehicle equipment in interstate commerce” and “carry[ing] out needed safety research
and development.” 49 U.S.C. § 30101.
49 U.S.C. § 30112(a)(1) of the NTMVSA provides that “a person may not
manufacture for sale, sell, offer for sale, introduce or deliver for introduction in interstate
commerce, or import into the United States, any motor vehicle or motor vehicle
equipment … unless the vehicle or equipment complies with the standard.” 49 U.S.C. §
30112(a)(1) (emphases added).
The government argues that because of the existence of 49 U.S.C. §
30112(a)(1), “the admissibility determination for the merchandise at issue is vested with
NHTSA, and not with CBP. Therefore, the subject tires have not been deemed excluded
Court No. 24-00062 Page 10
and the [c]ourt does not have subject matter jurisdiction over this case.” Def.’s Mot. at 9.
Inspired, however, argues that the “DOT does not have independent authority to make
admissibility determinations. Unlike the [USDA] or [FDA], which have specific authority
... the DOT simply reviews the information provided by [Customs] and advises
[Customs] as to the result of its findings for [Customs’] use in making [Customs’]
decision.” Pl.’s Mem. in Supp. of Its Opp. to Government’s Mot. to Dismiss. (“Pl.’s
Opp.”) at 11, ECF No. 12.
Inspired is correct that 49 U.S.C. § 30112(a)(1) does not provide an explicit
delegation of authority for NHTSA to make admissibility determinations for imports of
motor vehicles or motor vehicle equipment, including the tires at issue. The mere
promulgation of product standards and regulations does not vest that agency with the
authority to deny imports that fail to meet those standards. The statute provides for
regulations that manufacturers must follow, including tire identification and
recordkeeping requirements. See 49 C.F.R. § 574. Neither the statute, 49 U.S.C. §
30112(a)(1), nor the relevant TIN regulation, 49 C.F.R. § 574, provide for admissibility
authority in NHTSA. Rather, the statute and regulations provide authority for NHTSA to
conduct relevant “safety research and development,” as well as “prescribe motor vehicle
safety standards.” 49 U.S.C. § 30101. No authority to make import determinations is
vested in NHTSA under the federal statute or regulations.1
1
The court notes that a proposed amendment to 49 U.S.C. § 30112(a)(1), introduced in
July 2023, would have provided admissibility authority to DOT for imported vehicles and
vehicle equipment from Chinese manufacturers, which would include the tires at issue.
Court No. 24-00062 Page 11
In contrast to the statutory language of the NTMVSA, the agencies discussed by
Congress in the legislative history of 19 U.S.C. § 1499(c) had express congressional
authority to make entry determinations, and Customs’ role has been limited.2 In such
cases, Customs has performed a ministerial role under the “instructions” of another
agency.3 The court has held that “the ‘ministerial standard,’ in its ordinary meaning,
excludes actions requiring genuine interpretive or comparable judgments as to what is
to be done.” Thyssenkrupp Steel N. Am., Inc. v. United States, 886 F.3d 1215, 1224–25
H.R. 4761, 118th Cong. (2023). The proposed amendment expressly delegates
authority to the DOT, with “coordination” support from the U.S. Department of
Commerce. Id. Specifically, the legislation provides that the “Secretary [of
Transportation], in coordination with the Secretary of Commerce, shall determine
whether any motor vehicle or motor vehicle equipment poses a risk to United States
security.” Id. § 2. If such a finding is made, the subject merchandise “may not [be] ...
import[ed] into the United States ….” Id. In providing admissibility authority to the DOT
in the proposed amendment, Congress acknowledged that the DOT does not currently
have admissibility authority. The proposed amendment has not been passed since its
introduction.
2
For example, pursuant to the Plant Protection Act, Congress vested determination
authority on importation of plant pesticides with the Department of Agriculture rather
than Customs. Specifically, the statute provides that “it is the responsibility of the
Secretary [of Agriculture] to facilitate exports, imports, and interstate commerce in
agricultural products and other commodities that pose a risk of harboring plant pests or
noxious weeds in ways that will reduce, to the extent practicable, as determined by the
Secretary, the risk of dissemination of plant pests or noxious weeds.” 7 U.S.C. §
7701(3). (emphasis added).
3
For example, where Congress provided authority to the Department of Commerce
(“Commerce”) for the determination of antidumping duties, it specified that Customs
would be following the instructions of Commerce: “[i]n a case in which a final
determination [by Commerce] under paragraph (1) is under review ... the administering
authority shall ... transmit to the Federal Register for publication the final disposition and
issue instructions to the Customs Service with respect to the liquidation of entries
pursuant to the review.” 19 U.S.C. § 1675(a)(3) (emphases added).
Court No. 24-00062 Page 12
(Fed. Cir. 2018); see also, e.g., Koyo Corp. of U.S.A. v. United States, 497 F.3d 1231,
1242–43 (Fed. Cir. 2007) (ruling that when Customs fails to execute liquidation
instructions from another agency, and instead, by delay, leaves the entry to deemed
liquidation by operation of law, it is no longer performing a ministerial role). It would
stand to reason that when Customs performs actions requiring interpretative or
comparability judgments, it would not be performing a ministerial role.
The government cites to Andritz Sundwig GMBH v. United States, 322 F. Supp.
3d 1360 (CIT 2018), in support of its argument. Def.’s Mot. at 11. The government
argues that the court in Andritz held that it did not have jurisdiction due to the exclusion
of merchandise being based on an agricultural law, rather than a “provision of the
customs laws.” Id. The government’s reliance on this case is misplaced. In Andritz, the
court held that the authority to exclude merchandise from entry typically lies with
Customs, but the exclusion at issue was taken pursuant to the USDA’s Plant Protection
Act. Specifically, the court found that the plaintiff’s:
underlying cause of action does not stem from its protest, but rather
[emergency action notifications] EANs. The EANs themselves list USDA as
the supervisory agency and cite the Plant Protection Act and regulations
promulgated thereunder.
Id. at 1364.
There, the exclusion was issued pursuant to the EANs themselves, which listed
the USDA as the agency responsible for making the plant pest, and as a result, entry
determination. Id. Further, the Plant Protection Act specifies that the risk of harboring
plant pests shall be “determined” by the Secretary of Agriculture. See 7 U.S.C. §
7701(3) (“Congress finds that … it is the responsibility of the Secretary to facilitate
Court No. 24-00062 Page 13
exports, imports, and interstate commerce in agricultural products ... that pose a risk of
harboring plant pests ... as determined by the Secretary.”).
Here, unlike in Andritz, no separate determination authority has been delegated
to NHTSA. See 49 U.S.C. § 30112. A more apt comparison would be to CBB Group,
Inc. v. United States, 783 F. Supp. 2d 1248 (CIT 2011). In CBB Group, the court
determined that it retained jurisdiction when Customs made an admissibility
determination based on copyright law. Id. at 1256. While issues of copyright
infringement are governed by section 602 of the Copyright Act of 1976, 17 U.S.C. §
602(a)(1), the court held that “the determination of admissibility [by Customs] and the
determination of whether the merchandise is piratical [by Customs] are the same
determination.” Id. at 1255. Similar to the court’s rationale in CBB Group, Customs’
determination of admissibility and adherence to NHTSA’s safety regulations are one
and the same.
Contrary to the government’s arguments, the recommendations and opinions of
another agency do not divest Customs of its general admissibility authority. Where an
agency has vested authority to make a determination, it is not suddenly without that
authority by requesting advice from another agency. Here, Customs Import Specialist
(“IS”) Director Nancy Cain explained that, “I regularly review automotive goods imported
into the United States for compliance issues .... ” Cain Decl. ¶ 8 (emphases added). In
other words, it is Customs, not the NHTSA, which regularly conducts its own
examination of tires and other vehicle equipment pursuant to the standards provided by
NHTSA in 49 U.S.C. § 30112(a)(1). Customs may seek guidance and recommendations
Court No. 24-00062 Page 14
from another federal agency, like NHTSA, but it is Customs who makes the ultimate
compliance determination.
NHTSA explained to IS Director Cain that the tires at issue were missing a
complete tire identification number, writing that:
NHTSA understands that the shipment of tires may be seized by CBP who
has reasonable cause to believe that any law or regulation enforced by CBP
has been violated. NHTSA is of the opinion that CBP may seize or deny
entry of the shipment of tires, and NHTSA would not be opposed to such an
action.
Id. at Attach. B (emphases added).
This language makes clear that NHTSA is providing an opinion to Customs.
Here, Customs was not given instructions by NHTSA to detain the merchandise.
Instead, NHTSA itself asserted that both the determination (“reasonable cause”) and the
enforcement (“law or regulation enforced”) are within Customs’ authority. See id.Customs engaged in its own “comparable judgment as to what was to be done” with the
tires after consulting NHTSA. See Thyssenkrupp Steel, 886 F.3d at 1224–25.
At this posture, the court does not take a stance as to whether Custom’s decision
to hold the tires pursuant to DOT’s NHTSA regulations was correct. However, the court
will not “usurp [its] judicial power and prevent [itself] from fulfilling its judicial
responsibility.” CBB Group, 783 F. Supp. 2d at 1254–55. The government’s motion to
dismiss because the exclusions of Entry 1 and Entry 2 were based on NHTSA’s
admissibility authority is denied.
Court No. 24-00062 Page 15
II. The Court Has Subject Matter Jurisdiction Over Entry No. AVV-005343-1
The second issue before the court is whether the government’s motion to dismiss
as to Entry 1 should be granted because the court lacks jurisdiction to review the
seizure of goods.
The government contends that it seized Entry 1, rendering the court without
jurisdiction because “CBP’s seizure of goods is reviewable by the federal district court in
the district in which the merchandise is located.” Def.’s Mot. at 16 (citing 28 U.S.C. §
1356).4 The government further contends that “the date of actual seizure is the legally
effective date of seizure.” Id. at 17.
Inspired argues that “the goods were deemed excluded by operation of law prior
[to] seizure, if one has even been effectuated.” Pl.’s Opp. at 7. That is, Customs “did not
seize the merchandise until February 22nd, more than sixty days after the date of
(1) the December 8th examination of the goods, (2) the December 13th detention notice
and (3) the December 21st email from NHTSA to Customs.” Id. at 6 (emphasis in
original). Inspired further argues that the “purported seizure also occurred after Plaintiff
filed its protest challenging the deemed exclusion.” Id.28 U.S.C. § 1581(a) states that “[t]he Court of International Trade shall have
exclusive jurisdiction of any civil action commenced to contest the denial of a protest, in
4
Respecting the issue of seizure, the government’s motion contends only that the court
lacks jurisdiction over Entry 1. The government does not contend that the court lacks
jurisdiction over Entry 2, which was seized after the commencement of this proceeding.
See Def.’s Mot. at 17.
Court No. 24-00062 Page 16
whole or in part, under section 515 of the Tarff Act of 1930.” 28 U.S.C. § 1581(a).
Conversely, 28 U.S.C. § 1356 states that “[t]he district courts shall have original
jurisdiction ... over any seizure under any law of the United States.” In assessing the
proper exercise of jurisdiction, “[t]he focus must be solely on whether the claim falls
within the language and intent of the jurisdictional grant to the CIT.” Vivitar Corp., 761
F.2d at 1559.
There exists a “wrinkle in the seizure-exclusion jurisdictional divide.” Root
Sciences, LLC v. United States, 543 F. Supp. 3d 1358, 1368 n.2 (CIT 2021). The U.S.
Court of Appeals for the Federal Circuit has explained that it looks to the “true nature of
the action” in determining whether an exercise of jurisdiction was proper. Hutchison
Quality Furniture, Inc. v. United States, 827 F.3d 1355, 1360 (Fed. Cir. 2016). Further,
“the true nature of a particular action will depend upon the attendant facts asserted in
the pleadings.” Id.The court has generally relied on four factors to determine whether an entry
should be treated as an exclusion or a seizure for jurisdictional purposes:
In determining whether a plaintiff has challenged a seizure, as opposed to
an exclusion, the court commonly considers a number of factors, including
whether: (1) the plaintiff’s protest indicated that it was challenging the
“seizure” of the merchandise; (2) the plaintiff received a notice of seizure
from Customs; (3) the government had control over the merchandise; and
(4) upon notice, the plaintiff was required to choose between immediate
forfeiture proceedings or a petition for relief from seizure.
H & H Wholesale Servs., Inc. v. United States, 437 F. Supp. 2d 1335, 1341 (CIT 2006)
(quoting CDCOM (U.S.A.) Int’l, Inc. v. United States, 963 F. Supp. 1214, 1217
(CIT 1997)); see also Int’l Maven, Inc. v. McCauley, 678 F. Supp. 300, 302 (CIT 1988)
Court No. 24-00062 Page 17
(concluding that the CIT had no jurisdiction where: (1) the protest challenged the
seizure on its face; (2) plaintiff received notice of seizure; (3) the government had
control of the merchandise; and (4) plaintiff was able to petition for relief from seizure);
R.J.F. Fabrics, Inc. v. United States, 651 F. Supp. 1431, 1433, 1437 (CIT 1986)
(explaining that the court would not “adopt a rule that would divest the [court] of
jurisdiction simply because plaintiff filed its protest after Customs chose ... to formally
seize the subject goods” and finding that the plaintiff “properly invoked the jurisdiction of
this Court by contesting the denial of a protest”); Tempco Marketing v. United States,
957 F. Supp. 1276, 1279 (CIT 1997).
The factors considered in these cases provide a useful framework in
distinguishing between an exclusion or a seizure. See, e.g., H & H Wholesale, 437 F.
Supp. 2d at 1341. Although no one factor is determinative, each one guides the court’s
totality analysis of whether the court’s jurisdiction has attached. See H & H Wholesale,
437 F. Supp. 2d at 1342; Int’l Maven, 678 F. Supp. at 302.
The first factor concerns whether a plaintiff’s protest indicates that it is
challenging a seizure as opposed to an exclusion. See H & H Wholesale, 437 F. Supp.
2d at 1341. Here, Inspired’s protest indicated that it was challenging an exclusion rather
a seizure. Customs and Border Protection Protest Entries (“Protest Entry”), ECF No. 11-
1 at 12 (“[P]rotest is made against Customs’ decision to exclude Inspired Ventures
LLC’s admissible rubber tires imported under entry no. AVV00534381 and
AVV00534456.”).
Court No. 24-00062 Page 18
The second factor concerns whether a plaintiff has received notice of a seizure
from Customs. See H & H Wholesale, 437 F. Supp. 2d at 1341. Here, Customs failed to
provide notice to Inspired as to the seizure of the merchandise until after the
commencement of this proceeding. See Def.’s Status Rep. Specifically, the record
shows that the government did not provide formal notice of seizure for Entry 1 until
August 12, 2024, more than eight months after Inspired filed entry paperwork for the
subject merchandise. See Def.’s Status Rep. Prior to the filing of the government’s
status report, Inspired explained that it had not received notice of seizure and was thus
unable to challenge a seizure. Pl.’s Opp. at 9. The government concedes that Inspired’s
arguments were “fairly” noted, and purported to solve the problem by “[notifying] the
parties and the Court that CBP will issue the notice of seizure” for Entry 1. Def.’s Reply
at 16.
The third factor concerns whether the government has control over the
merchandise. See H & H Wholesale, 437 F. Supp. 2d at 1341. As the court has
explained, “one clear difference between exclusion and seizure is who gains control of
the merchandise by virtue of Customs’ action.” Id. at 1342. If “merchandise is excluded,
the owner regains control,” but “when merchandise is seized, Customs retains control of
it and it may not be sent to another destination.” Id. Inspired contends that
communications between Customs and its broker instructing “him to refile the entries
and deposit $30,000 in antidumping duties ... led plaintiff to believe that its merchandise
is admissible and would be released for consumption.” Pl.’s Opp. at 12. Customs,
Court No. 24-00062 Page 19
however, has maintained control over the merchandise since Inspired attempted to
import Entry 1 in November 2023. Cain Decl. ¶ 3.
The fourth factor considers whether a plaintiff, upon notice, was required to
choose between immediate forfeiture proceedings or a petition from relief from seizure.
See H & H Wholesale, 437 F. Supp. 2d at 1341. The government contends that Inspired
is entitled to challenge the purported seizure, but not before this court. Def.’s Reply at
16. However, because Inspired was not notified of the seizure of Entry 1 until August
12, 2024, which was after the commencement of this proceeding, it was unable to
choose between immediate forfeiture proceedings or a petition for relief from seizure.
See Def.’s Status Rep. Customs cannot fail to provide a seizure notice for months and
then argue that “IVL may pursue its available remedies to challenge the seizure” only
after confronted with Inspired’s briefs. Def.’s Reply at 16.
Considering the totality of the facts within the framework provided by H & H
Wholesale and other cases on this issue, the court finds that an exclusion is being
challenged. Inspired did not receive a notice of seizure prior to filing its complaint, and
there is no evidence on the record indicating that Inspired understood its merchandise
was seized prior to filing its complaint. As such, Inspired was unable to make a choice
between forfeiture proceedings or a petition for relief from seizure (i.e., Inspired had no
notice of seizure such that it could avail itself of these potential remedies). Considering
these factors together, the court finds that Inspired has challenged an exclusion of its
entries.
Court No. 24-00062 Page 20
A. The Date of Notice of Seizure Is the Operative Date
The government next argues that the legally operative date of seizure is the date
of “actual seizure” rather than the date of “notice.” The operative date would determine
whether the court’s jurisdiction has attached under § 1499(c).
19 U.S.C. § 1499(c) requires Customs to “decide whether to release or detain”
merchandise within a “5-day period … following the date on which merchandise is
presented for customs examination.” Merchandise “not released within the prescribed
period is considered to be detained.” Id. § 1499(c)(1). Where Customs does not
determine the admissibility of detained merchandise within thirty days after its
presentation for examination, the inaction will be treated as a decision by Customs to
exclude the merchandise. Id. § 1499(c)(5)(A).
In CBB Group, the court declined to dismiss an action based on seizure of an
entry because the action “did not arise as a result of the issuance of the seizure notice,
an event that took place after plaintiff’s cause of action was initiated and after the court’s
jurisdiction over that cause of action had attached.” 783 F. Supp. 2d at 1255. Similarly,
in this action, Inspired’s claim did not arise out of a seizure notice.5 Instead, Customs
5
The government cites several cases to support its view that the date of actual seizure
is the legally effective date of seizure. Def.’s Mot. at 17 (citing Root Sciences, LLC v.
United States, 543 F. Supp. 3d 1358, 1369 (CIT 2021); Tempco Marketing v. United
States, 957 F. Supp. 1276, 1279 (CIT 1997); PRP Trading Corp. v. United States, 885
F. Supp. 2d 1312, 1313–14 (CIT 2012); CDCOM (U.S.A.) Int’l Inc. v. United States, 963
F. Supp. 1214, 1217 (CIT 1997)). The government’s reliance is misplaced as these
cases dealt with the actual seizure of goods within the thirty-day requirement of 19
U.S.C. § 1499(c). No case cited by the government involved either: (1) the seizure of
goods outside this time period, (2) the issuance of a seizure notice months after an
action had commenced with the court, or (3) notice of seizure following the
Court No. 24-00062 Page 21
claims that it “has not noticed seizure ... because IVL commenced this action.” Def.’s
Reply at 15. Such a justification, however, does not explain why the commencement of
a judicial proceeding prevented Customs from issuing a seizure notice. Further, the
issuance of a seizure notice does not “deprive [the CIT] of the ability to fulfill its judicial
responsibility as directed by statute.” CBB Group, 783 F. Supp. 2d at 1255 (explaining
that “an internal agency decision to proceed with seizure, which did not ripen into notice
until twenty-one days later” did not preclude the court from providing a remedy).
The government relies on Root Sciences for its proposition that “the date of
actual seizure controls.” 543 F. Supp. 3d at 1369; see also Def.’s Reply at 15. However,
Root Sciences limited its inquiry to “whether a seizure effected within thirty days of
presentment of goods for examination constitutes an admissibility determination that
prevents a deemed exclusion from occurring by operation of law.” Id. at 1364 (emphasis
added). It is within this context that the court reached its decision, which makes its
reasoning inapplicable here.
Contrary to the government’s assertion, the act of seizure on its own does not
automatically shift jurisdiction from this court to a district court. See Def.’s Mot. at 25
(“Because Entry No. AVV-0053438-1 has been seized, the federal district court in which
commencement of court proceedings. For example, in Tempco, the date of actual
seizure fell within thirty days of the merchandise being presented for entry, but the
government’s notice of seizure was provided after thirty days. 543 F. Supp. 3d at 1279.
The court in Tempco held that no deemed exclusion occurred because “seizure
occurred within thirty days of presentation for examination.” Id.; see CDCOM, 963 F.
Supp. at 1217; PRP Trading, 885 F. Supp. 2d at 1313.
Court No. 24-00062 Page 22
the entry is located is the proper venue to challenge the seizure, not this Court.”); see
also CBB Group, 783 F. Supp. 2d at 753 (“The issuance of the Seizure Notice, which
took place after this case was brought and the court’s jurisdiction over the claim
attached, is no bar to the future ability of the court to order a remedy to which plaintiff
ultimately may be entitled.”). Moreover, the U.S. Court of Appeals for the Federal Circuit
has explained that “it is faulty analysis to look first to the jurisdiction of the district courts
to determine whether the CIT has jurisdiction. Given the broad jurisdictional grant to
district courts, a district court would always have jurisdiction, rather than the CIT, using
this approach.” Vivitar Corp., 761 F.2d at 1559.
The purpose of notice, as the government recognized in its brief, is to give the
party whose merchandise is seized the opportunity for due process. See Def.’s Reply at
20 (“[S]o that [Inspired] may pursue its available remedies to challenge the seizure, we
hereby notify the parties and the Court that CBP will issue the notice of seizure for
[Entry 1] .... ”). Where there is no notice, there is no opportunity for Inspired to avail itself
of the judicial process in the district courts.
Finally, the government argues that Customs was not required to provide notice
of seizure within any specific timeframe. Def.’s Reply at 13 (“[N]o such timeline is
required here by statute or other applicable provision of law.”) (citing 19 U.S.C. §
1499(c)(5)).6 Specifically, the government contends that 19 U.S.C. § 1499(c) does not
6
Inspired contends that Customs was required to provide notice pursuant to 19 C.F.R.
§ 162.92. Pl.’s Opp. at 8–9. The regulation cited by Inspired expressly exempts the
Tariff Act of 1930, as amended, and is thus inapplicable here.
Court No. 24-00062 Page 23
impose any timing requirements “[b]ecause CBP was not responsible for determining
the admissibility of IVL’s tires.” Id. at 14. As discussed above, the provisions of
§ 1499(c)(5) are applicable here because Customs had the vested authority to make an
admissibility determination. Customs cannot use as an argument its delay in providing
notice of seizure to divest the court of its jurisdiction. In sum, the court’s jurisdiction over
Entry 1 has attached because the subject merchandise was deemed excluded prior to
seizure.
CONCLUSION
For the foregoing reasons, Defendant’s motion to dismiss is DENIED.
It is hereby:
ORDERED that the parties are directed to confer and file within forty-five (45) days of
the date of this order a Joint Status Report and Proposed Scheduling Order; and it is
further
ORDERED that Defendant will file a responsive pleading within 14 days pursuant to CIT
Rule 12(a)(2)(A).
/s/ Lisa W. Wang
Lisa W. Wang, Judge
Dated: October 30, 2024
New York, New York