Erwin Hymer Grp. N. Am., Inc. v. United States

United States Court of Appeals
for the Federal Circuit
______________________
ERWIN HYMER GROUP NORTH AMERICA, INC.,
FKA ROADTREK MOTORHOMES, INC.,
Plaintiff-Appellant
v.
UNITED STATES,
Defendant-Appellee
______________________
2018-1282
______________________
Appeal from the United States Court of International
Trade in No. 1:16-cv-00133-CRK, Judge Claire R. Kelly.
______________________
Decided: July 22, 2019
______________________
JOHN MICHAEL PETERSON, Neville Peterson LLP, New
York, NY, argued for plaintiff-appellant. Also represented
by RICHARD F. O'NEILL.
MARCELLA POWELL, International Trade Field Office,
Commercial Litigation Branch, Civil Division, United
States Department of Justice, New York, NY, argued for
defendant-appellee. Also represented by AMY RUBIN;
JEANNE DAVIDSON, JOSEPH H. HUNT, WASHINGTON, DC;
MICHAEL W. HEYDRICH, Office of the Assistant Chief Coun-
2 ERWIN HYMER GROUP v. UNITED STATES
sel, United States Bureau of Customs and Border Protec-
tion, United States Department of Homeland Security,
New York, NY.
______________________
Before DYK, REYNA, and CHEN, Circuit Judges.
REYNA, Circuit Judge.
Erwin Hymer Group North America, Inc., appeals the
final judgment of the United States Court of International
Trade granting the Government’s motion for judgment on
the agency record. The Court of International Trade’s as-
sertion of residual jurisdiction under 28 U.S.C. § 1581(i)
was improper because a civil action for contesting the de-
nial of protests could have been available under 28 U.S.C.
§ 1581(a), and the remedy provided under § 1581(a) is not
manifestly inadequate. Because the Court of International
Trade lacked jurisdiction, we reverse and remand with in-
structions to dismiss.
BACKGROUND
In 2014, Erwin Hymer Group North America, Inc.,
(“Hymer”) imported 149 vehicles into the United States
from Canada. In 2015, the United States Customs and
Border Protection (“Customs”) liquidated the entries, clas-
sifying them under subheading 8703.24.00 of the Harmo-
nized Tariff Schedule of the United States (2014)
(“HTSUS”). Subheading 8703.24.00 applies a tariff of 2.5%
ad valorem to “motor vehicles principally designed for
transporting persons” and with a “spark-ignition internal
combustion reciprocating piston engine . . . [o]f a cylinder
capacity exceeding 3,000 cc.” Customs assessed duties ac-
cordingly.
In October 2015, Hymer timely filed a protest under 19
U.S.C. § 1514, contesting Customs’ classification of the ve-
hicles. The protest materials included, among other
ERWIN HYMER GROUP v. UNITED STATES 3
things, a cover letter, a standard form (“Protest Form”), 1
and a memorandum in support of the protest. Hymer ar-
gued in its protest that the entries were entitled to duty-
free treatment under HTSUS subheading 9802.00.50 and
Article 307 of the North American Free Trade Agreement,
a provision known as “American Goods Returned.” This
provision generally relates to preferential tariff treatment
for qualifying goods that reenter the United States customs
territory after repairs or alterations in Canada or Mexico.
See 19 C.F.R. § 181.64(a).
In the cover letter attached to its protest, Hymer re-
quested that Customs “suspend action on th[e] protest” un-
til the Court of International Trade (“CIT”) issued a
decision in a different case, Roadtrek Motorhomes, Inc. v.
United States, No. 11-00249. See J.A. 5, 51. The CIT had
stayed the Roadtrek case pending final disposition of a test
case on the issues raised: Pleasure-Way Indus., Inc. v.
United States, 38 I.T.R.D. 1889 (BNA), 2016 WL 6081818
(Ct. Int’l Trade 2016) (“Pleasure-Way I”), aff’d, 878 F.3d
1348 (Fed. Cir. 2018) (“Pleasure-Way II”). 2
In Pleasure-Way I, the CIT’s jurisdiction was based on
28 U.S.C. § 1581(a). The CIT addressed whether certain
van-based motorhomes—similar to the vehicles at issue in
this case—qualified for preferential tariff treatment under
HTSUS subheading 9802.00.50. Pleasure-Way I, 2016 WL
1 Hymer refers to the Protest Form as the “CF 19
Protest Form,” and the Government refers to it as the “CBP
Form 19.” Appellant Br. 4; Appellee Br. 3.
2 Hymer, formerly known as Roadtrek Motorhomes,
Inc., was the plaintiff in the Roadtrek case. In addition,
Hymer’s counsel in this case also represented Roadtrek and
Pleasure-Way in those cases. All three cases involve essen-
tially the same issue: whether the vehicles in question
qualify for duty-free treatment under HTSUS subhead-
ing 9802.00.50. In both Roadtrek and Pleasure-Way, CIT
jurisdiction was asserted under 28 U.S.C. § 1581(a).
4 ERWIN HYMER GROUP v. UNITED STATES
6081818, at *3. The CIT decided that HTSUS subhead-
ing 9802.00.50 did not apply, and on January 5, 2018, this
court affirmed that decision. Pleasure-Way II, 878 F.3d at
1349–50. Subsequently, entries of the vehicles were liqui-
dated at a rate of 2.5% ad valorem, the same rate that Cus-
toms argues should apply in this case.
While Pleasure-Way was pending, a Customs Import
Specialist reviewed Hymer’s protest, and on December 31,
2015, checked a box labeled “Approved” in Field 17 of the
Protest Form. Customs sent a copy of the Protest Form
with the checked box to Hymer but did not include a refund
check or offer any explanations.
On January 5, 2016, a Customs Entry Specialist for-
warded Hymer’s protest for review by a supervisor. On
January 11, 2016, while the matter was pending before the
Entry Specialist, Hymer received a copy of the Protest
Form with the “Approved” box checked. On the same day,
a Supervisor Import Specialist emailed an Entry Director
asking her to locate Hymer’s protest and explaining that
reliquidation should not occur because the protest was sus-
pended. The Entry Director in turn advised other Customs
employees not to reliquidate the entries. The following
day, on January 12, 2016, the Entry Director informed the
Supervisor Import Specialist that the protest had been re-
turned to the Import Specialist who initially reviewed the
protest because the protest had not been signed by the Su-
pervisor Import Specialist. On January 21, 2016, the Im-
port Specialist updated Customs’ electronic system to
reflect that, per Hymer’s request, the protest was sus-
pended pending resolution of the Roadtrek case.
On March 17, 2016, Hymer’s counsel emailed the Im-
port Specialist indicating that, on January 11, 2016, coun-
sel had received a copy of the Protest Form with the
“Approved” box checked, and asked whether the protest
was suspended. On March 27, 2016, the Import Specialist
ERWIN HYMER GROUP v. UNITED STATES 5
replied and confirmed that the protest was suspended
pending resolution of Roadtrek.
On July 18, 2016, approximately 7 months from the
date it learned of the checked-box, no-refund-check circum-
stance, Hymer sued the Government in the CIT, seeking
an order of mandamus directing Customs to reliquidate the
entries of the vehicles under HTSUS subhead-
ing 9802.00.50. Hymer asserted CIT jurisdiction under 28
U.S.C. § 1581(i)(1) and (i)(4), 3 and on grounds that Cus-
toms’ failure to provide a refund check constituted unlaw-
fully withheld action under the Administrative Procedure
Act, 5 U.S.C. § 706(1). The Government answered the com-
plaint, and both parties filed competing motions for judg-
ment in their favor.
Hymer argued that the “Approved” box on the Protest
Form constituted an “allowance” under 19 U.S.C.
§ 1515(a), 4 requiring Customs to refund Hymer’s excess
3 In relevant part, 28 U.S.C. § 1581(i) provides:
In addition to the jurisdiction conferred upon the
Court of International Trade by subsections (a)–(h)
of this section and subject to the exception set forth
in subsection (j) of this section, the Court of Inter-
national Trade shall have exclusive jurisdiction of
any civil action commenced against the United
States, its agencies, or its officers, that arises out
of any law of the United States providing for—
(1) revenue from imports or tonnage;
...
(4) administration and enforcement with respect to
the matters referred to in paragraphs (1)–(3) of this
subsection and subsections (a)–(h) of this section.
4 In relevant part, 19 U.S.C. § 1515(a) provides:
6 ERWIN HYMER GROUP v. UNITED STATES
duty deposit. Hymer asserted that the marking of the “Ap-
proved” box definitively showed its protest was allowed.
According to Hymer, this allowance in turn triggered non-
discretionary reliquidation of its entries at the zero-duty
rate advocated in Hymer’s protest. Hymer claimed it was
due a refund check in the amount of the excess duties it
deposited (2.5% ad valorem), which it claimed Customs
was improperly withholding.
The Government argued that the CIT lacked jurisdic-
tion under § 1581(i). The Government noted that Hymer
should have brought the action under § 1581(a), which
gives the CIT jurisdiction over any civil action contesting
the denial of a protest. In addition, the Government con-
tended that, because Hymer’s protest remained pending,
Hymer retained the option to file a request for an acceler-
ated disposition of its suspended protest under 19 U.S.C.
§ 1515(b), and if denied, had a right to appeal the denial at
the CIT under § 1581(a). The Government asserted that
Customs’ administrative actions in processing the protest,
which included the checking of the “Approved” box, did not
constitute an allowance under the statute and did not trig-
ger a non-discretionary duty to reliquidate the entries and
issue a refund.
Unless a request for an accelerated disposition of a
protest is filed in accordance with subsection (b) of
this section the appropriate customs officer, within
two years from the date a protest was filed in ac-
cordance with section 1514 of this title, shall re-
view the protest and shall allow or deny such
protest in whole or in part. Thereafter, any duties,
charge, or exaction found to have been assessed or
collected in excess shall be remitted or refunded
and any drawback found due shall be paid.
ERWIN HYMER GROUP v. UNITED STATES 7
On November 3, 2017, the CIT denied Hymer’s motion
for judgment on the pleadings and granted the Govern-
ment’s motion for judgment on the agency record. Erwin
Hymer Grp. N. Am., Inc. v. United States, 273 F. Supp. 3d
1336, 1338 (Ct. Int’l Trade 2017) (“CIT Opinion”).
First, the CIT rejected the Government’s argument
that it lacked jurisdiction. The CIT agreed with Hymer
that Hymer was not challenging the denial of a protest, but
rather Customs’ authority to rescind, or renege on, a final
decision to “allow” a protest. Id. at 1343–44, 1344 n.19.
The CIT reasoned that Hymer’s challenge concerns the ad-
ministration and enforcement of protests under
§ 1581(i)(4), not the denial of a protest under § 1581(a). Id.
The CIT further determined that jurisdiction under
§ 1581(a) was not available because that section applies to
appeals from denied protests, whereas Hymer was chal-
lenging Customs’ failure to act on an allegedly allowed pro-
test. Id. at 1344 n.19.
Second, the CIT concluded that Customs was not obli-
gated to refund the alleged excess duties paid. Id. at 1345–
46. The CIT found that neither the statute nor the regula-
tions defined what constitutes an allowance under
§ 1515(a). Id. Rejecting Hymer’s argument to the contrary,
the CIT held that “[t]he statutory and regulatory scheme[s]
establish[] reliquidation as the act which allows a protest.”
Id. at 1345. The CIT determined that although the Import
Specialist’s checking of the “Approved” box may have indi-
cated an initial determination, such checking did not trig-
ger a mandatory allowance by Customs. Id. at 1346. Thus,
there was no reliquidation of Hymer’s entries, and conse-
quently, no allowed protest.
Hymer appealed. We have jurisdiction under 28 U.S.C.
§ 1295(a)(5).
8 ERWIN HYMER GROUP v. UNITED STATES
DISCUSSION
We address the issue of the CIT’s jurisdiction. The CIT
asserted jurisdiction over this case under 28 U.S.C.
§ 1581(i)(4). CIT Opinion, 273 F. Supp. 3d at 1344. 5
Whether the CIT has jurisdiction is a question of law,
which we review de novo. Int’l Custom Prods., Inc. v.
United States, 467 F.3d 1324, 1326 (Fed. Cir. 2006) (“ICP”).
We often describe § 1581(i) as a “broad residual” grant
of jurisdiction. ICP, 467 F.3d at 1327. But our precedent
is “unambiguous [and] clear that [§ 1581(i)’s] scope is
strictly limited.” Id. (quoting Norcal/Crosetti Foods, Inc.
v. United States, 963 F.2d 356, 359 (Fed. Cir. 1992)). This
is so because an “overly broad interpretation” of § 1581(i)
would otherwise “threaten to swallow the specific grants of
jurisdiction contained within the other subsections.” Nor-
man G. Jensen, Inc. v. United States, 687 F.3d 1325, 1329
(Fed. Cir. 2012); accord Norcal, 963 F.2d at 359 (recogniz-
ing strict limits upon the scope of § 1581(i) are necessary to
“preserve[] the congressionally mandated procedures and
safeguards provided in the other subsections” (internal ci-
tation omitted)). Accordingly, this court has “repeatedly
held that subsection (i)(4) ‘may not be invoked when juris-
diction under another subsection of § 1581 is or could have
been available, unless the remedy provided under that
other subsection would be manifestly inadequate.” Ford
Motor Co. v. United States, 688 F.3d 1319, 1323 (Fed. Cir.
5 The Government challenged jurisdiction at the CIT
but did not address or brief the issue on appeal. The issue
arose during oral argument, and after argument, we or-
dered the parties to submit supplemental briefing on
whether jurisdiction is proper under 28 U.S.C. § 1581(i).
The parties filed supplemental letter briefs addressing ju-
risdiction. In its supplemental letter, the Government re-
asserted its arguments before the CIT that the CIT lacks
jurisdiction under § 1581(i).
ERWIN HYMER GROUP v. UNITED STATES 9
2012) (quoting Miller & Co. v. United States, 824 F.2d 961,
963 (Fed. Cir. 1987) (emphasis added)).
An inquiry into § 1581(i) jurisdiction thus primarily in-
volves two questions. First, we consider whether jurisdic-
tion under a subsection other than §1581(i) was available.
Id. Second, if jurisdiction was available under a different
subsection of § 1581, we examine whether the remedy pro-
vided under that subsection is “manifestly inadequate.” Id.
If the remedy is not manifestly inadequate, then jurisdic-
tion under § 1581(i) is not proper. The party asserting
§ 1581(i) jurisdiction bears the burden of showing that an-
other subsection is either unavailable or manifestly inade-
quate. Sunpreme Inc. v. United States, 892 F.3d 1186, 1191
(Fed. Cir. 2018) (citing Chemsol, LLC v. United States, 755
F.3d 1345, 1349 (Fed. Cir. 2014)).
The CIT concluded that jurisdiction under § 1581(a)
was not available to Hymer. We disagree. At bottom,
Hymer’s appeal is directed to Customs’ action in suspend-
ing the protest. Generally, when an importer enters mer-
chandise into the United States, the importer must deposit
estimated duties with Customs. 19 C.F.R. §§ 141.101–03.
Customs later liquidates the entries, meaning it conducts
a “final computation or ascertainment of duties on entries
for consumption or drawback entries.” Id. § 159.1. As part
of the liquidation process, Customs classifies the entries ac-
cording to the HTSUS. Id. § 152.11. If the importer disa-
grees with Customs’ classification, the importer may,
within 180 days of the date of liquidation, file a protest
with Customs. Id. §§ 174.11–12. The protest must set
forth in writing, among other things, the nature of each ob-
jection and the reasons for those objections. 19 U.S.C.
§ 1514(c). Through the protest process, importers may
challenge Customs’ classification and the liquidation or re-
liquidation of an entry. Id. § 1514(a)–(c); see also Fujitsu
Gen. Am., Inc. v. United States, 283 F.3d 1364, 1371 (Fed.
Cir. 2002).
10 ERWIN HYMER GROUP v. UNITED STATES
Once a protest is filed, Customs must typically either
allow or deny it within two years. 19 U.S.C. § 1515(a). An
importer, however, may request an accelerated disposition
of its protest at “any time concurrent with or following the
filing of such protest.” Id. § 1515(b). If the protest is not
allowed within thirty days after the mailing of the acceler-
ated disposition request, the protest is deemed denied. Id.
When an importer’s protest is denied under 19 U.S.C.
§ 1515, in whole or in part, the importer may “contest [Cus-
toms’] denial of [that] protest” by filing a civil action before
the CIT under 28 U.S.C. § 1581(a). See 19 U.S.C. § 1515(a).
If at the end of the process the protest is “allowed,” the im-
porter receives a check in the amount of excess duties paid.
The Government argues that § 1581(i) jurisdiction is
not available because two administrative options remain
available to Hymer under the protest regulatory frame-
work, both of which lead to judicial review under § 1581(a).
First, Hymer may wait until Customs takes final action on
the protest. If the protest is allowed, then Hymer will re-
ceive its refund check. If the protest is denied, Hymer may
seek judicial review under § 1581(a). Second, Hymer may
prompt Customs to act by pursuing an accelerated disposi-
tion. If Customs does not act within thirty days, the protest
will be deemed denied, thereby permitting judicial review
under § 1581(a).
Hymer claims it is barred from pursuing either option
because Customs definitively concluded the protest pro-
ceeding and allowed the protest when the Import Specialist
checked the “Approved” box on the Protest Form. Hymer
contends that § 1581(a) provides jurisdiction to review de-
nials of protests, but not an allowance of a protest.
We find Hymer’s argument inventive, but invalid. Im-
portant to this case is that Hymer caused Customs to sus-
pend the protest proceeding. Specifically, upon filing, the
protest was suspended awaiting the outcome of Roadtrek,
which in turn awaited resolution of the Pleasure-Way test
ERWIN HYMER GROUP v. UNITED STATES 11
case. Pleasure-Way has been resolved, but Customs has
not finally applied the outcome of that case to Hymer’s pro-
test.
Even assuming that Customs acted to allow the pro-
test, Customs was within its authority to reconsider that
action and restore the protest to the suspended status that
Hymer requested. See Medtronic, Inc. v. Robert Bosch
Healthcare Sys., Inc., 839 F.3d 1382, 1385 (Fed. Cir. 2016)
(“[A]dministrative agencies possess inherent authority to
reconsider their decisions, subject to certain limita-
tions, regardless of whether they possess explicit statutory
authority to do so.” (quoting Tokyo Kikai Seisakusho, Ltd.
v. United States, 529 F.3d 1352 (Fed. Cir. 2008)); GTNX,
Inc. v. INTTRA, Inc., 789 F.3d 1309, 1313 (Fed. Cir. 2015);
Home Prods. Int’l, Inc. v. United States, 633 F.3d 1369,
1377 (Fed. Cir. 2011).
When asked during oral argument, the Government re-
vealed that Hymer’s protest was still suspended awaiting
only the decision of this court. Oral Arg. 16:12–16:19,
25:15–25:40. This means that Hymer could potentially re-
ceive a favorable ruling and a refund check, an outcome
that would, of course, negate the need for Hymer to appeal.
If the protest is denied, then Hymer would have an imme-
diate avenue to appeal under § 1581(a) the very issue it
raises before this court. 6 See Norman, 687 F.3d at 1331
(holding that jurisdiction under § 1581(i) was improper be-
cause the party could have requested an accelerated dispo-
sition under § 1515(b) and then asserted jurisdiction under
§ 1581(a) if the protest was denied); cf. Hitachi Home Elecs.
(Am.), Inc. v. United States, 661 F.3d 1343, 1349–51 (Fed.
6 During oral argument, the Government asserted
that, if Customs denies Hymer’s suspended protest, Hymer
could sue under § 1581(a) and argue that the denial was
improper in light of the Import Specialist’s checking of the
“Approved” box. Oral Arg. 26:49–28:38.
12 ERWIN HYMER GROUP v. UNITED STATES
Cir. 2011) (concluding that jurisdiction under § 1581(i) was
improper where accelerated disposition under § 1515(b)
was available to the importer). In sum, Congress estab-
lished § 1581(a) as the jurisdictional route for the CIT to
address challenges to protest denials, and this route re-
mains open to Hymer. 7 We conclude that Hymer has failed
to meet its burden to demonstrate that relief under
§ 1581(a) is manifestly inadequate in light of the true na-
ture of this action.
Importers such as Hymer should not be permitted to
rest on artful or creative pleadings to expand the jurisdic-
tional scope of § 1581(i), which Congress limited as a stat-
utory basis for the CIT’s jurisdiction over protests. See
Sunpreme, 892 F.3d at 1193 (quoting Norsk Hydro Can.,
Inc. v. United States, 472 F.3d 1347, 1355 (Fed. Cir. 2006));
Am. Air Parcel Forwarding Co. v. United States, 718 F.2d
1546, 1550–51 (Fed. Cir. 1983). To permit such expansion
of jurisdiction would threaten to swallow § 1581(a) and
would be contrary to this court’s precedent.
CONCLUSION
For the foregoing reasons, we reverse the judgment of
the CIT and remand with instructions to dismiss the com-
plaint for lack of jurisdiction.
REVERSED AND REMANDED
7 The court notes, but does not address, two underly-
ing concerns: ripeness and failure to exhaust administra-
tive remedies, both of which are entrenched in the
suspension of the protest proceeding, which itself was
caused by Hymer’s hand. Although important and perhaps
even dispositive in this action, the court elects not to ad-
dress those issues given its conclusion that the CIT lacked
jurisdiction.
ERWIN HYMER GROUP v. UNITED STATES 13
COSTS
No costs.