Himex Company, Inc. v. U.S. Customs and Border Protection ( 2014 )

UNITED STATES DIS'I``RICT COURT
FOR THE DISTRICT OF COLUMBIA
HIMEX Co., Inc.,
Plaintiff,
Civil Case No. 12-1974 (RJL)
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FEB 20 2014
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(February Q’, 2014) [Dkc. #11]
V.
UNITED STATES
Defendant.
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Plaintiff Himex Co. ("plaintift" or "Himex"), a Los Angeles-based corporation,
brings this action against the United States Customs and Border Patrol ("CBP"), seeking
damages under the Federal Tort Claims Act ("FTCA").I Now before the Court is the
United States’ Motion to Dismiss. [Dl121 F. Supp. 2d 84, 90 (D.D.C. 2000) (internal quotations
‘ ln March 2013, the Court granted plaintiffs motion to amend the pleadings in order to
substitute the United States as the defendant.
omitted). Because the court may not address the plaintiffs claims without subject-matter
jurisdiction, a motion to dismiss under Rule l2(b)(l) imposes an affirmative obligation
on the court to ensure that jurisdiction is proper. See Schmz``a’t v. U.S. Capitol Polz'ce Ba’.,
826 F. Supp. 2d 59, 65 (D.D.C. 2011); Grand Loa’ge of Fraternal Order of Polz``ce v.
Ashcroft, 185 F. Supp. 2d 9, 13 (D.D.C. 200l). When considering a motion to dismiss
under l2(b)( l), the court may also consider materials outside the pleadings to assure itself
that jurisdiction is proper. See Herbert v. Nat’l Acaa’. OfScis., 974 F.2d l92, 197 (D.C.
Cir. ]992)).
BACKGROUND
On April 8, 2010, the United States Customs and Border Patrol seized 7,200 pairs
of sunglasses belonging to the plaintiff at the port of Los Angeles, California. Compl.
[Dkt. #1] at 11 6. The CBP seized the sunglasses because they bore marks that allegedly
violated trademarks owned by the fashion house Louis Vuitton Malleteir ("Louis
Vuitton"). See Am. Compl. [Dkt. #10] at 1111 6-7. On April 23, 2010, the Fines, Penalties
and Forfeitures Office of CBP ("FPFO") infonned Himex that the seized sunglasses were
subject to forfeiture, but that plaintiffs could avoid it by obtaining the written consent of
the trademark owner, pursuant to 19 C.F.R. § 133.52. See Ex. 1 to Def.’s Mot. to
Dismiss ("Def.’s MTD") [Dkt. #l l-l]. Alternatively, Himex could choose to abandon its
claim to the seized goods, thereby waiving any future notice by CBP regarding the
forfeiture proceedings. Ia’. FPFO also notified Himex that "[i]n addition to forfeiture, [it]
may be liable for a penalty" pursuant to 19 U.S.C. § l526(f). Id.
On May 13, 2010, a Himex representative signed a CBP "Notice of Abandonment
and Assent to Forfeiture of Prohibited or Seized Merchandise" ("Notice of
Abandonment"). Ex. 2 to Def.’s MTD [Dkt. #11-2]. The notice references the 7,200
pairs of sunglasses and states, "I hereby abandon all claim to . . . and waive any further
rights or proceeding relative to these articles." Id. On September 15, 2010, CBP issued a
Disposition Order for the destruction of the seized goods, and on November 3, 2010, the
FPFO destroyed the seized sunglasses. See Ex. B to Compl. [Dkt. #3-2].
Eight months later, in July 201l, the FPFO issued a civil penalty against Himex in
the amount of $3,125,235 pursuant to 19 U.S.C. § l526(f). See Am. Compl. at 11 9. The
amount of the penalty equaled "the value the merchandise would have had if genuine,
according to the manufacturer’s suggested retail price." Ex. C to Compl. [Dkt. #3-3]. On
August 22, 2011, plaintiff filed a petition for relief from the civil penalty, pursuant to 19
U.S.C. § 1618, arguing that the marks on the now-destroyed sunglasses were not
counterfeit of registered Louis Vuitton trademarks. See Def.’s MTD at 4. The FPFO
transmitted plaintiffs petition to the CBP’s Penalties Branch in Washington, D.C., which
then transferred it to the CBP’s Intellectual Property Rights Branch ("IPRB") for
consideration. See Am. Compl. at 1111 12, 13. On February 17, 2012, the IPRB
determined that the marks on the seized sunglasses did not infringe upon the registered
trademarks of Louis Vuitton and thus were not subject to seizure. Ia’. at 11 13. The CBP
Penalties Branch then recommended full mitigation of the penalty assessed against the
plaintiff. See Ex. D to Compl. [Dkt. #3-4].
Based on the IPRB’s determination that the plaintiffs merchandise was "not
subject to seizure under 19 U.S.C. § 1526(€),” plaintiff initiated this suit in December
2012, seeking damages in the amount of $3,125,235. Am. Compl. at 1111 13, 17, 19.
ANALYSIS
"The federal government, its agencies, and federal officials when sued in their
official capacities, are absolutely shielded from tort actions for damages unless sovereign
immunity has been waived." Klz``ne v. Republic of El Salvador, 603 F. Supp. 1313, 1316
(D.D.C. l985) (citing United States v. Testan, 424 U.S. 392, 399 (1976)). Under the
FTCA, a plaintiff may sue the government for "injury or loss of property . . . caused by
the negligent of wrongful act or omission of any employee of the Govemment." 28
U.S.C. § l346(b)(1). The FTCA thus creates a limited waiver to the government’s
sovereign immunity. See Cronauer v. United States, 394 F. Supp. 2d 93, 96 (D.D.C.
2005)
Section 2680 of Title 28 provides several enumerated exceptions to the FTCA’s
limited waiver of sovereign immunity, one of which is commonly known as the
"detention exception." See Diaz v. United States, 517 F.3d 608, 613 (2nd Cir. 2008); 28
U.S.C. § 2680(c). The FTCA waiver of sovereign immunity does not apply for "[a]ny
claim arising in respect of . . . the detention of any goods, merchandise, or other property
by any officer of customs." 28 U.S.C. § 2680(c).
However, § 2680(c) states that the waiver of sovereign immunity provided in §
1346(b) shall apply to claims that would ordinarily fall under the detention exception if
the plaintiff can establish that: (1) the property was seized for the purpose of forfeiture;
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(2) the interest of the claimant was not forfeited; (3) the interest of the claimant was not
remitted or mitigated; and (4) the interest of the claimant was not forfeited under a
federal criminal forfeiture law. See 28 U.S.C. § 2680(c)(1)-(4). In short, fulfillment of
these four statutory conditions will effectively "re-waive" sovereign immunity, and the
claim may be brought in the district courts. See Diaz, 517 F.3d at 613-l4.
Plaintiff alleges "the unlawful destruction of Himex’ [s] sunglasses was due to the
negligent or wrongful act or omission of CBP employees at the Port of Long Beach."
Pl.’s Opp’n to Def.’s Mot. to Dismiss ("Pl.’s Opp’n") at 6. Plaintiff argues this Court has
subject-matter jurisdiction over its claim due to the limited waiver of sovereign immunity
provided in the FTCA. ("Pl.’s Opp’n") at 5. Unfortunately for the plaintiff, its claim
falls squarely within the detention exception to the FTCA because it arises as a result of
the detention of goods or merchandise by an officer of customs. See 28 U.S.C. § 2680(c);
Am. Compl.11 1. Plaintiff argues, however, that its claim satisfies the statutory
requirements enumerated in 28 U.S.C. § 2680(0)(1)-(4) necessary to restore the FTCA’s
waiver of sovereign immunity. See Pl.’s Opp’n at 7. 1 disagree.
Plaintiff cannot satisfy the second requirement of 28 U.S.C. § 2680(0)(1)-(4),
namely that: "(2) the interest of the claimant was not forfeited." See 28 U.S.C. §
2680(0)(2). The Notice of Abandonment signed by Himex specifically states that it
"abandon[s] all claim to and further waive[s] [its] right to be notified in reference to the
forfeiture of the [sunglasses], and waive[s] any further rights or proceeding relative to
these articles." Ex. 2 to Def.’s MTD. Plaintiff s purported distinction between
"abandonment" and "forfeiture" of its rights in the sunglasses is unpersuasive as it
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attempts to simply wish away the clear forfeiture language contained in the Notice of
Abandonment. See Pl.’s Opp’n at 7 ("l-Iimex abandoned its interest in the seized
sunglasses. Forfeiture of the sunglasses related to the interests of other parties, if any.").
To say the least, it strains credulity for the plaintiff to argue that it "did not forfeit its
interest in the sunglasses," see id., when a Himex representative signed the clearly titled
"Notz°ce of A bandonment M’ Assent to Forfeiture of Prohibited or Seized Merchandise,"
see Ex. 2 to Def.’s MTD (emphasis added). Thus, this Court finds that plaintiffs claim
does not meet the statutory criteria of § 2680(0)(1)-(4) required to "re-waive" sovereign
immunity, and therefore this Court lacks jurisdiction.
CONCLUSION
For the foregoing reasons, the defendant’s Motion to Dismiss the Amended
Complaint must be GRANTED pursuant to 12(b)(l) of the Federal Rules of Civil
Procedure. 2 An Order consistent with this decision accompanies this Memorandum
Opinion. q o
l
RICHARD
United States District Judge
2 Because I find that this Court lacks subject-matter jurisdiction over this claim and must
therefore dismiss it pursuant to Federal Rule of Civil Procedure 12(b)(l), a discussion of
defendant’s arguments in favor of dismissal pursuant to Rule l2(b)(3) is unnecessary.
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