Cricket Hosiery, Inc. v. United States

Slip Op. 04 - 72
UNITED STATES COURT OF INTERNATIONAL TRADE
____________________________________
:
CRICKET HOSIERY, INC.; THE :
WILLIAM CARTER CO. and :
ARTEX INTERNATIONAL, INC. and :
on behalf of all others similarly situated, :
:
Plaintiffs, :
: Before: MUSGRAVE, JUDGE
v. :
:
UNITED STATES : Court No. 03-00553
:
Defendant, :
:
and :
:
F.T.B. FARMS, WILLIAM LOVELADY, :
ROBERT E. MCLENDON FARMS LLC, :
A-TUMBLING-T RANCHES, :
CALIFORNIA COTTON GROWERS :
ASSOCIATION, DELTA COUNCIL, :
SOUTHERN COTTON GROWERS, INC., :
and TEXAS COTTON PRODUCERS, INC. :
:
Defendant-Intervenors. :
____________________________________:
[Plaintiffs brought this action challenging the constitutionality of the fee collected on imports of
cotton and cotton products pursuant to the Cotton Research and Promotion Act of 1966, 7 U.S.C.
§ 2101 et seq. Plaintiffs averred that the Court of International Trade had jurisdiction pursuant to
28 U.S.C. § 1581(i). The government moved to dismiss on the ground that 7 U.S.C. § 2111 specifies
that challenges to the Cotton Research and Promotion Act are to be brought in the district courts.
Held: Because this action falls within the exclusive jurisdiction of this Court under 28 U.S.C. §
1581(i), the government’s motion is denied.]
Dated: June 18, 2004
The Cullen Law Firm (Paul D. Cullen, Sr. and Joseph A. Black) and Greenburg Traurig LLP
(Teresa M. Polino), James A. Moody, of counsel, for Plaintiffs.
Court No. 03-00553 Page 2
Peter D. Keisler, Assistant Attorney General, Barbara S. Williams, Attorney in Charge,
International Trade Field Office, Commercial Litigation Branch, Civil Division, United States
Department of Justice (Aimee Lee), Yelena Slepak, Office of Assistant Chief Counsel, International
Trade Litigation, United States Customs and Border Protection, Frank Martin, Office of the General
Counsel, United States Department of Agriculture, of counsel, for Defendant.
Wilmer Cutler Pickering Hale and Dorr LLP (David W. Ogden, Randolph D. Moss, and
Brian M. Boynton) for Defendant-Intervenors.
OPINION
Plaintiffs bring this action challenging the constitutionality of the imposition and collection
of fees on imports of cotton and cotton products pursuant to the Cotton Research and Promotion Act
of 1966 (“Cotton Act”), 7 U.S.C. § 2101 et seq. The Complaint avers that this Court has jurisdiction
pursuant to 28 U.S.C. § 1581(i)(1), (2), and (4). The government moves to dismiss for lack of
subject matter jurisdiction contending that the Cotton Act specifies the district court in which
Plaintiffs have their principal place of business as the proper forum for an action such as this. “[T]he
party asserting jurisdiction ‘has the burden of proving that jurisdiction in this court is proper.’”
United States v. Shabahang Persian Carpets, Ltd., 22 CIT 1028, 1030, 27 F. Supp. 2d 229, 232
(1998) (citation omitted). For the reasons which follow, the government’s motion is denied.
Background
The purpose of the Cotton Act is to
authorize and enable the establishment of an orderly procedure for the
development, financing through adequate assessments on all cotton
marketed in the United States and on imports of cotton, and carrying
out an effective and continuous coordinated program of research and
promotion designed to strengthen cotton’s competitive position and
Court No. 03-00553 Page 3
to maintain and expand domestic and foreign markets and uses for
United States cotton.
7 U.S.C. § 2101. The Secretary of Agriculture is authorized under 7 U.S.C. § 2102 to issue orders
to effectuate the policy of the Cotton Act and 7 U.S.C. § 2106(a)-(b) provides for the establishment
of a Cotton Board comprised of representatives selected by the Secretary from cotton-producing
states and cotton importers. The Cotton Board is responsible for “[t]he establishment, issuance,
effectuation, and administration of appropriate plans or projects for the advertising and sales
promotion of cotton and its products” and “the establishment and carrying on of research and
development projects and studies with respect to the production, ginning, processing, distribution,
or utilization of cotton and its products.” 7 C.F.R. § 1205.333. The expenses incurred by the Cotton
Board are to be paid from assessments levied on domestic producers and importers of cotton. 7
U.S.C. § 2106(e)(1); 7 C.F.R. §§1205.334(d), 1205.335(a)-(b). For importers there is
(1) An assessment of $1 per bale of cotton imported or the bale
equivalent thereof for cotton products.
(2) A supplemental assessment on each bale of cotton imported, or
the bale equivalent thereof for cotton products, which shall not
exceed one percent of the value of such cotton as determined by the
Cotton Board and approved by the Secretary and published in the
Cotton Board rules and regulations. The rate of the supplemental
assessment on imported cotton shall be the same as that paid on
cotton produced in the United States. The rate of the supplemental
assessment may be increased or decreased by the Cotton Board with
the approval of the Secretary. The Secretary shall prescribe by
regulation the value of imported cotton based on an average of current
and/or historical cotton prices.
7 C.F.R. § 1205.335(b)(1)-(2). These assessments are collected by the Bureau of Customs and
Border Protection. 7 C.F.R. § 1205.335(b).
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Plaintiffs in this action are importers of articles made of 100 percent cotton or cotton and
man-made fiber blends. They allege that they do not benefit from and object to paying the
assessment to support generic advertising of cotton and research related to its production and
marketing. Complaint ¶¶ 4-6. They assert that the mandatory assessment violates their First
Amendment rights to free speech (including the right to remain silent) and free association,
Complaint ¶ 1, and contend that this Court has jurisdiction under 28 U.S.C. § 1581(i)(1), (2), and
(4)1 “because this action arises out of a law of the United States providing for ‘revenue for imports
or tonnage’ or ‘tariffs, duties, fees, or other taxes on the importation of merchandise for reasons other
than the raising of revenue’ and ‘administration and enforcement with respect to [such] matters . .
. .” Complaint ¶ 2.
1
28 U.S.C. § 1581(i) provides in pertinent part that:
[T]he Court of International 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;
(2) tariffs, duties, fees, or other taxes on the
importation of merchandise for reasons other than the
raising of revenue;
...
(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.
Court No. 03-00553 Page 5
Arguments
The government moves to dismiss this action principally on the ground that 7 U.S.C. § 2111provides specific procedures for bringing a challenge to the Cotton Act.
Any person subject to any order may file a written petition with the
Secretary, stating that any such order or any provision of such order
or any obligation imposed in connection therewith is not in
accordance with law and praying for modification thereof or to be
exempted therefrom. He shall thereupon be given an opportunity for
a hearing upon such petition, in accordance with regulations made by
the Secretary. After such hearing, the Secretary shall make a ruling
upon the prayer of such petition which shall be final, if in accordance
with law.
7 U.S.C. § 2111(a). Following the administrative determination “[t]he district courts of the United
States in any district in which such person is an inhabitant, or has his principal place of business, are
hereby vested with jurisdiction to review such ruling, provided a complaint for that purpose is filed
within twenty days from the date of entry of such ruling.” 7 U.S.C. § 2111(b).
The government contends that Plaintiffs should not be permitted to circumvent the specific
jurisdictional scheme contemplated by Congress. The government notes that § 2111 does not
differentiate between imported and domestic cotton and asserts that it would be unfair to require
domestic handlers to undergo an administrative proceeding before bringing their action to a district
court, but permit importers to bring their case directly to the Court of International Trade. Moreover,
the government argues that “an express statutory provision providing for jurisdiction cannot be
overlooked.” Defendant’s Memorandum in Support of its Motion to Dismiss (“Def.’s Br.”) at 9.
Thus the government concludes that Plaintiffs cannot bypass this provision and bring their claims
to this Court under § 1581(i), which the government contends is a more general statute, since § 2111
Court No. 03-00553 Page 6
specifically vests jurisdiction in the district courts and provides an adequate remedy in challenges
to the Cotton Act. Def.’s Br. at 10.
Plaintiffs argue that Orleans International, Inc. v. United States, 334 F.3d 1375 (Fed. Cir.
2003), and the cases upon which it is based, are controlling precedent which vest this Court with
exclusive jurisdiction over the present action. In Orleans the Federal Circuit stated:
“[I]t is faulty analysis to look first to the jurisdiction of the district
courts to determine whether the [Court of International Trade] has
jurisdiction . . . . The focus must be solely on whether the claim falls
within the language and intent of the jurisdiction grant to the [Court
of International Trade].” Vivitar Corp. v. United States, 761 F.2d
1552, 1559-60 (Fed. Cir. 1985); see also K Mart Corp. v. Cartier,
Inc., 485 U.S. 176, 182-83, 108 S. Ct. 950, 99 L. Ed. 2d 151 (1988)
(“The District Court would be divested of jurisdiction, however, if
this action fell within one of several specific grants of jurisdiction to
the Court of International Trade.”). The correct approach, then, is to
focus on whether the “civil action” at issue falls within the language
of 28 U.S.C. § 1581(i). If the action does fall within that language,
the Court of International Trade has exclusive jurisdiction.
334 F.2d at 1378. Thus Plaintiffs conclude that “the only question should be whether the collection
of the cotton fee on imports is described in § 1581(i). Since it is, this Court has jurisdiction.”
Plaintiff’s Opposition to Defendant’s Motion to Dismiss at 6.
Discussion
The Court notes, with more than a modicum of disapprobation, the government’s usual – and,
it must be observed, unrelenting – attack upon the jurisdiction of the Court of International Trade.
Although 7 U.S.C. § 2111 provides an aggrieved party an avenue to obtain administrative and
judicial review, 28 U.S.C. § 1581(i)(2) places “any civil action commenced against the United
Court No. 03-00553 Page 7
States, its agencies, or its officers, that arises out of any law of the United States providing for . . .
tariffs, duties, fees, or other taxes on the importation of merchandise for reasons other than the
raising of revenue” within the exclusive jurisdiction of the Court of International Trade. As the
Federal Circuit stated in Vivitar Corp. v. United States, 761 F.2d 1552 (Fed. Cir. 1985), and
reaffirmed in Orleans “it is faulty analysis to look first to the jurisdiction of the district courts to
determine whether the [Court of International Trade] has jurisdiction . . . . The focus must be solely
on whether the claim falls within the language and intent of the jurisdiction grant to the [Court of
International Trade].” 761 F.2d at 1559-60. In the present case, it is undisputed that the Cotton Act
assessment constitutes a fee imposed “on the importation of merchandise for reasons other than the
raising of revenue.”2 Thus, in the absence of evidence that Congress intended to create an exception
to § 1581(i) for challenges to the assessment on cotton imports, this Court has jurisdiction.
The Court is not persuaded by the government’s argument that § 2111 is more specific and
therefore supercedes § 1581(i). To the contrary, both statutes are specific jurisdictional grants. It
is an established maxim of statutory construction that the more recent of two irreconcilably
conflicting statutes governs. 2B Norman J. Singer, STATUTES AND STATUTORY CONSTRUCTION §
51.02 (6th ed. 2000). In this instance, 7 U.S.C. § 2111 was enacted as part of the original Cotton Act
in 1966, see Pub. L. 89-502, § 12, 80 Stat. 284 (1966), but 28 U.S.C. § 1581(i) was enacted as part
of the Customs Courts Act of 1980, see Pub. L. 96-417, Title II, § 201, 94 Stat. 1728 (1980).
Moreover, the Cotton Act did not apply to imported cotton and cotton products until it was amended
2
Although the government does not expressly concede that the Cotton Act assessment falls
within the language of 28 U.S.C. § 1581(i)(2), its only opposition to the applicability of this
provision is that Congress intended 7 U.S.C. § 2111 to apply instead. Def.’s Br. at 8.
Court No. 03-00553 Page 8
in 1990, see Pub. L. 101-624, §§ 1991, 1992, 104 Stat. 3909, 3910 (1990). “It is assumed that
whenever the legislature enacts a provision it has in mind previous statutes relating to the same
subject matter.” 2B Singer, supra, § 51.02. Thus Congress was aware of both § 2111 and § 1581(i)
when it expanded the Cotton Act to cover imports. Since Congress did not amend § 2111 to give
the district courts jurisdiction over actions brought by importers, the Court concludes that Congress
did not intend to create an exception to the exclusive jurisdiction it granted to the Court of
International Trade.3
It is noteworthy that Congress passed the Customs Courts Act of 1980 to remedy the
uncertainty which then existed regarding whether actions fell within the jurisdiction of the district
courts or the Customs Court and to provide uniformity in decisions effecting international trade.
Many suits involving international trade issues are and have
been instituted in the federal district courts rather than the U.S.
Customs Court. . . . Most district courts have refused to entertain
such suits, citing the Constitutional mandate requiring uniformity in
decisions relating to imports. (See U.S. Const. art. I, § 8.) In so doing,
the district courts sought to preserve the Congressional grant of
exclusive jurisdiction to the United States Customs Court for judicial
review of all matters relating to imports.
With the growth in international trade, the number of suits in
the district courts and subsequent dismissals for want of jurisdiction
have increased. Congress is greatly concerned that numerous
individuals and firms, who believe they possess real grievances, are
expending significant amounts of time and money in a futile effort to
obtain judicial review of the merits of their case.
H.R. 7540 corrects these inequities by revising the statutes to
clarify the present status, jurisdiction and powers of the Customs
3
Because the Court holds that it has exclusive jurisdiction over this action pursuant to 28
U.S.C. § 1581(i), it does not address arguments raised by the parties regarding the adequacy of the
remedy provided by 7 U.S.C. § 2111.
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Court. The Customs Courts Act of 1980 creates a comprehensive
system of judicial review of civil actions arising from import
transactions, utilizing the specialized expertise of the United States
Customs Court and the United States Court of Customs and Patent
Appeals. This comprehensive system will ensure greater efficiency
in judicial resources and uniformity in the judicial decision making
process.
H.R. REP. NO. 96-1235, at 19-20 (1980), reprinted in 1980 U.S.C.C.A.N. 3729, 3730-31 (emphasis
added). Specifically, § 1581(i) was intended to
eliminate the confusion which currently exists as to the demarcation
between the jurisdiction of the district courts and the Court of
International Trade. This provision makes it clear that all suits of the
type specified are properly commenced only in the Court of
International Trade. The Committee has included this provision in
the legislation to eliminate much of the difficulty experienced by
international trade litigants who in the past commenced suits in the
district courts only to have those suits dismissed for want of subject
matter jurisdiction. The grant of jurisdiction in subsection (i) will
ensure that these suits will be heard on their merits.
Id. at 47, reprinted in 1980 U.S.C.C.A.N. at 3759 (emphasis added).
Conclusion
The Court has already noted its frustration with the government’s – now predictable – assault
upon the jurisdiction of the Court of International Trade, and further observes, in conclusion, that
advocacy, especially when practiced upon behalf of the sovereign, should be addressed to achieving
a fair result, that is, justice. That objective is not furthered by scorch and burn tactics or
obstructionist pursuits, characterized succinctly by the Ninth Circuit as “creative arguments.” Cornet
Stores v. Morton, 632 F.2d 96, 98 (9th Cir. 1980); accord United States v. Universal Fruits and
Court No. 03-00553 Page 10
Vegetables, 362 F.3d 551 (9th Cir. 2004). For the foregoing reasons, the government’s motion to
dismiss is denied.
/s/ R. Kenton Musgrave
R. KENTON MUSGRAVE, JUDGE
Dated: June 18, 2004
New York, New York