Horizon Lines, LLC v. United States

SLIP OP. 08-109
UNITED STATES COURT OF INTERNA'I``IONAL TRADE
HORIZON LINES, LLC,
Plaintiff,
Before: Jane A. Restani, Chief Judge
v.
Court No. 05-00435
UNITED STATES,
Defendant.
JUDGMENT
[Partial judgment for plaintiff re Custorns’ valuation.]
Williams Mullen (Evelvn M. Suarez and Dean A. Barclav) for the plaintiff
Grego;y G. Katsas, Assistant Attomey General; Barbara S. Williams, Attomey-
in- Charge, Intemational Trade Field Office, Comrnercial Litigation Branch, Civil Division, U.S.
Department of Justice (Edward F. Kenny); Michael Heydrich, Office of the Assistant Chief
Counsel, U.S. Customs and Border Protection, of counsel, for the defendant.
On November 20, 2007 this Court entered an Opinion and Order partially
granting and partially denying Defendant’s Motion for Summary Judgment. That is, certain
invoice items associated with the September 2001 lay-up of the vessel Horizon Crusader and
necessitated at least in part by scheduled repair were held to be dutiable on an apportioned basis.
Certain items were otherwise found to be dutiable equipment or repairs, in whole or in part.
Accordingly, the court granted defendant’s motion for summary judgment as to these items,
listed in Exhibit A hereto, and plaintiff shall take nothing on account of such items. The court
Court No. 05-00435 Page 2
found material facts at issue with respect to the remaining invoice items covered by vessel entry
C20-006086l-5. Thereafter, the parties filed Stipulations on April 17, 2008 and on September
l5, 2008, for the purpose of settling or partially settling their dispute as to the invoice items not
resolved by the November 20, 2007 Opinion and Order.
Accordingly, it is hereby ORDERED that,
1. The appropriate U.S. Customs and Border Protection ("Customs") officer shall
redetermine the vessel entry C20-006086l-5 and make refund in accordance with:
a) The court’s opinion and order of November 20, 2007;
b) The Joint Stipulations of Fact of April 17, 2008 regarding invoice items
listed in paragraph 1 under lay-up expenses, attached hereto in Exhibit B, which the parties
agreed were to have been incurred for the lay-up at Karimum Sembawang Shipyard (KSS) as
required by the American Bureau of Shipping ("ABS") Guide for Lay-up and for Reactivation of
Laid-up Ships as certified by ABS in the ABS Lay-up Survey Report’s Process lnstruction
Check Sheet on Lay-up Surveys, in accordance with this court’s November 20, 2007 Opinion
and Order;
c) The Joint Stipulations of Fact of April 17, 2008 as to (1) equipment or
repairs; (2) dual purpose expenses; or (3) items unrelated to dutiable repairs, attached hereto in
Exhibit B; and
d) The Stipulations of September l5, 2008 settling certain disputed items,
attached hereto as Exhibit C.
2. All other claims and non-stipulable entries are abandoned by the parties
Court No. 05-00435 Page 3
3. Each party is to bear its own costs, expenses and attomeys’ fees.
4. Any refund of duties will be paid with interest as provided for by law.
/s/ Jane A. Restani
Jane A. Restani
Chief Judge
Dated: This 15th day of October, 2008.
New York, New York.
EXHlBlT A
to judgment in Court No. 05-00435
2 pages
in accordance with the November 20, 2007 Opinion and Order, summary
judgment was granted defendant as to the following items:
invoices 2 & 3;
Invoice 5;
Invoice 6a;
invoice 6b: items 1100 (lay-up charges), 1104 (riggers assistance), 1108 (garbage
disposal), 1109 (shore power), 1118 (tug charge), 1118A (towing charges), 1119
(wharfage), 1124 (security watchman), 1135 (pilotage), and 8060 (marine gas oil
supply) only;
Invoice 7a;
Invoice 7b: items 1104 (riggers assistance), 1108 (garbage disposal), 1109 (shore
power), 1118 (tug assistance), 1119 (wharfage), 1124 (security Watchman), 1135
(pilotage), 8061 (Indonesian flag), 8062 (marine gas oil), and 8071 (wa1kie talkie)
only;
Invoice 8a;
invoice 8b: items 9904 (land transportation), 9906 (boat services), and 9908 (port
and navigation dues) only;
Invoice 11a2: items A (main agency fees) and B (telecornmunications charges)
only;
Invoice 11a3: items A (telecommunications charges) and C (air ticket for Mr. .loe
Blunt) only;
invoice llbl: items A (main agency fees), C (telecommunication equipment),
and E (ferry tickets to Karimun Island) only;
invoice 11b3: items A (television) and F (survey of damaged portable generator)
only;
Invoice 11b4: items B (courier services) and D (airline ticket for Mr. Wally
Becker) only;
invoice 1 1 c',
Invoice 11d1: items A (main agency fees) and C (telecommunications expenses)
only;
Invoice 11d2: items A (telecommunications expenses) and F (freight forwarding)
only;
Invoice 22a: items 1-1 (lay berth), 1-2 (telephone services), 1-4 (fireline water),
1-7 (garbage removal), 1-8 (crane services), and 1-16 (line handlers) only;
Invoice 22b: items 1-1 (lay berth), 1-2 (telephone service), 1-3 (port engineer’s
office), 1-4 (fireline water), 1-5 (gas free certification), 1-6 (sanitary facilities), 1-
7 (garbage removal), 1-9 (shore power connection), 1-10 (shore power supply in
drydock), 1-11 (shore power supply alloat), 1-13 (reefer cooling water), 1-16 (line
handlers), 1-18 (heat lamps), 1-19 (dock trial), 1-20 (sea trial), 1-21 (tank
ventilation), 1-22 (passageway), 1-24 (ballast water), 2.1-28 (cleaning hydraulic
oil from No. 8 cargo hold), and 4.2-1 (forced draft fan inspection) only;
invoices 31a through 31 c;
Invoice 31e.
EXH|BIT B
to Judgment in Court No. 05-00435
6 pages
Oll|Gll\lAL
IN Tl-IE UNITED STATES COURT OF INTERNATIONAL TRADE
BEFORE THE HONORABLE JANE A. RESTANI, CHIEF IUDGE
"-~.
I-IORIZON LINES, LLC,
plaintiff § conn No. 1:05-¢v-00435-JAR
V. '
UNl'l``ED STATES,
Det``endant.
JOINT S'I``IPULATIONS OF FACT
q Ptii'siiani to the Order oi``Novernber 20, 2007, Plaintifi``, I~lorizon Lines, LLC, and
Del"endant, l,lniled Siates, by their respective counsel, hereby submit joint stipulations of fact for
the Conri``s consideration and determination of pending matters in the above~referenced case.
T he stipulations address all pending items in the litigation, with the exception of the following
items for which l~lorizon Lines and the United States have agreed to pursue additional testimony
from joseph Walla, Horizon Lines Port Engineer:
- invoice 22b, 1-8, Crane Services;
~ invoice 22b, 2.1-9 Cargo Hold Cleaning;
o invoice 22b, 2.1-34 Ballast Tank and Engine Room Cleaning;
¢ invoice 22b_, 2.1-18 Box Girder Inspection;
o invoice 22b, 4.1-16, Forepeak Block Valve;
0 invoice 22b, 4.2~7, Boiler Stacl< Inspection;
» invoice 221:), 4.2-8 Water Washed Port and Starboard Boiler for lnspection;
¢ invoice 22b, 5.2-1 Stage Port & Stbd Boilers;
¢ invoice 22b, 5.2-3, Boi]er Access Doors, Port and Stbd inspections;
¢ invoice 22b, 5.2-4, l-lydrostatic Test, Port and Stbd Boiiers Inspections',
'<.*“
v invoice 22b, 5.2-5, Boiler Waterside, P‘ort and Stbd lnspections;
¢ invoice 22b, 5.2-6, Desuperheater inspections and Hydrotest; and
o invoice 22b, 5.2-'7, i-Iandhole Plate Removal/Seat inspection.
Both i-iorizon l_.ines and the United States believe that additional testimony from Mr.
Walia may lead to additional stipulations`` of fact.
i-iorizon i_.ines’ and the United States’ joint stipulations of fact are as foiiows:
LAY-UP EXPENSES:
it remains the position of Horizon Lines that neither the lay-up itself nor any of the
specific lay-up expenses are dutiable as they were not related to repairs Moreovcr, it remains
the position of the United States that such lay-up costs are partially dutiable as the lay-up was in
part necessitated by the repairs Taking into consideration the parties’ respective positions,
l~iorizon Lines and the United States agree that: f
l. The following expenses were incurred for the lay-up at Karimum Sernbawang as
required by the American Bureau of Shipping ("ABS") Guide for Lay-up and for Reactivation of
l.tiid-tip Ships and as certified by ABS in the ABS Lay-up Survey Report’s Process instruction
Checi< Sheet on Lay-up Surveys:
- ao ran slower nra in 5 v x is trw <-,/w, invoice 4-,
» EG Axiai Fan Blower HTR, 20 Kw, 415 V; invoice 4;
v Absonnatic 3, Desiccants, invoice 4;
» 8“ Fiexidnct l-Ioses; invoice 4;
¢ wooden Boxes &. Transportation of Materials, invoice 4;
¢ item No. 6060 in Invoice 6b, Suppiy Manpower for Mechanical Work;
» item No. 7380 in Invoice 6b, Heating Lamp and Bilge Aiarrnllnstailation;
v item No 8060B in invoice 6b, Suppiy Vent Ducting Cover;
» item 8000 in invoice 6b, Shipment of Owner’s Generator;
'¢ item 8060A in invoice 6b, Fiexibie Cabie;
\
item 2000 in Invoice 7b, Blani< Vent;
item 6000 in invoice 7b, Penetration Pipe;
item 2001 in invoice ?b, Hawse Pipe Grating;
item 2002 in invoice ?b, Air-conditioning Installation;
item 8070 in invoice ’!b, Special Shipment of Generator;
item 9908 in invoice 8b, Port and Navigation Dues',
item F in invoice lia2, Professionai Services Rendered;
item D in°lnvoice lia3, Suppiy of Night Engisieer and Cook cum Steward;
item E in invoice lia3, Suppiy of provisions;
item G in invoice iib1, Professional Services Rendereci;
item B in invoice llb3, Suppiy of Provisions;
item D in invoice llb3, Suppiy ofNight Engineer;
item E in invoice 1 ldl, Professionai Services Rendered;
item B in invoice l1d2 , Suppiy of Night Engineer and Cook cum Steward;
and
item E in invoice 1ld2, Suppiy of Provisions.
EQUIPMENT OR REPAIRS:
2. The following expenses were incurred to purchase dutiable equipment or
otherwise were dutiable repairs:
2l1-foot refrigerated container in invoice i lai;
invoice 221), 5.1-12 Combined First Stage l~ieater, Gland Condenser & Drain
Colier Package inspections;
T he following equipment contained in invoice 32, Astro Fire &. Safety, under
heading "Service Report No. 3994":
0 RFD Repair Adhesive;
Torch battery D-size;
Paraciiute rocket, red;
l..ifesmolce orange;
Snaplight 6" 12 hr;
Container operating instruction iabel;
OOOOOO
Blit retaining painter;
OOOCIOOOO
0
Container ID attachment;
RFD strip c/w crimp;
Polythene sheet, ft.;
Endorsement on container;
Tape adhesive 100 mm;
Radar reflector KR-l;
Bulb GE PR?;
Pad protection;
l..and transportation & cartage (from/to Jurong Shipyard);
The following equipment in invoice 32, Astro Fire & Safety, under heading
"Service Regort No. 5015":
o Sib Dry powder fire extinguisher c/w bracket (supplied new).
DUAL PURI’OSE EXPENSES:
3. in the instance of the dry-docking at Jurong, the following expenses are related to
both dutiable repairs and non~dutiable inspeotions:
Invoice 22b, 2.1-23 Cleaning ofNo. 2 Fuel Oil Tank (Port);
invoice 22b, 2.1~24 Pnznping and Cleaning ot``No. 3 Fuel Oil Tank (Port);
invoice 22b, 2.1-25 Clee.ning of``No. 5 F``uel Oil Tank (Port).
ITEMS UNRELATED "[``O DU"I'IABLE REPAIRS:
4.
The following expenses are not related in any way to dutiable repairs:
Invoice 22b, l-i¢l Fresh Water;
invoice 22b, l-23 Compressed Air;
invoice 22b, 2.1~12 Rucider lnspection;
invoice 22|3, 4.1-11 Main and Emergency Switchboard; _
invoice 22b, 4.2-10, No. l & 2 S.W. Service Pump Discharge Valve
lnspeetion',
The following inspections in invoice 32, Astro Fire & Safety, under heading
“Service Report No. 3994”.'
O
0
ZS-person BFG/CREWSAVER Liferaft serviced;
BFG/CREWSAVER re-Inspection oertificate;
The following inspections in Invoice 32, Astro Fire & Safety, under heading
“Service Report No. 501 5":
10 lb. Dry powder extinguisher: serviced, checked content & pressure;
l5 |b. Dry powder extinguisher: serviced, checked content & pressure;
15 Ib. COZ extinguisher: serviced & checked weight;
OOOO
Maintenance labe|;
0 Land transportation;
The following inspections'in Invoice 32, Astro Fire & Safety, under heading
"Service Report No. 5016":
o SCBA set: serviced, checked & functional tested;
8.] liter SCBA cylincler: serviced & checked pressurc;
50 liter/150 bar Cascade breathing air cylinders: serviced & checked
pressure;
o Maintenance label;
» 'l``he following inspections in Invoice 32, Astro Fire & Safety, under heading
"Service Re_rgort No. 5017":
100 1b coz cynnder; serviced & checked weighc;
UNITED STATES OF AMERICA
JEFF EY S. BUCHOLTZ
o
o 50 lb CO2 cylinder: serviced & checked weight;
o Pull handle box: checked & inspected;
o Blew through discharge pipeline for Cargoholds: tested;
o Distribution valves tested;
0 Mairitenance iabel.
Respecti"ully submitted,
HORIZON L]NES, LLC
By:
Evelyn M.
l-``rancisco J.
Wu,r.iams ML)LLEN
A Proi``essional Corporation
1666 K Streel, NW, Suite 1200
Washington, DC 20006
(202) 833-9200 Fax (202) 293-5939
C ounsel for Plar``ntg``ff
O 1’ Counsel:
Robert S. Zuckcrntan
Vice Presideiit and General Counsel
Hol'izori Lines, LLC
4064 Colony Road, Suite 200
Charlotte, NC 28211
./iciin.i.f!ed in N€w= Yor'k amf Ihe U.S. Court of
!nlerncrr."ona! Trcrde
No.r admitted in the Slme ofNorth Carolina
L.H:TZ|I\'|
l)ateci: April 16, 2003_
Interriati _r~ral Tz:dg Fie d Oft``lee
Civil Division, Dept. of Justice
Cornmerc:ial Litigation Branch
26 Federal Plaza, Suite 346
New York, New York 10278
Tel. No. 212 264 0480
C ounsel for Defendarr!
EXHlBlT C
to Judgrnent in Court No. 05-00435
4 pages
calcium
UNITED STATES COURT OF INTERNATIONAL 'I``RADE
HONORABLE JANE A. RESTANI, CHJEF JUDGE
HORIZON LINES, LLC,
Piaiaarf,
v. `` ; com No. lzos-evazs_raa
Ur~irrar) srAras,
Defendant.
S'I'IPULA'I``IONS
The parties enter into the stipulations below for the sole purpose of settling this portion of
the dispute for which the amount in controversy does not justify the expense associated with
l `` continued litigation in so doing, neither party admits or concedes that any of the stipulations
constitutes a correct application of the law to the facts of this case. Neither party shall be bound
by these stipulations in any other dispute to which ``it is a party. The stipulations herein resolve
the remaining disputed Jurong Shipyard expenses, and are believed to enable the Court to issue a
final order in this case.
1. invoice .'Zfb, l-S, Crane Services. The parties agree that these charges are dual
purpose repair expenses and should be apportioned as explained in
§Lte_§, 357 F.3d 1358, (Fed. Cir. 2004). l
i.\
2. Invoice 22b, l-9, Cargo Hold Cleaning. The parties agree that these charges are dual
purpose repair expenses and should be apportioned as explained in SL Service lnc. v. United
S_tatg, 357 F.3d 1358, (Fed. Cir. 2004).
3. Invoice 22b, 2.1-34, Ballast Tank and Engine Room Cleaning. The parties agree that
these charges are dual purpose repair expenses and should be apportioned as explained in §_L
§ervice, Inc. v. United States, 357 F.3d 1358, (Fed. Cir. 2004).
4. Invoice 22b, 2.1-18, Box Girder Inspection. The parties agree that this charge should
be treated as non-dutiable.
5. invoice 22b, 4.1-16, Forepeak Blocl< Valve. The parties agree that this charge should
be seated as daaabre. '
6. invoice 22b, 4,2-7, Boiler Stack inspection The parties agree that these charges are
dual purpose repair expenses and should be apportioned as explained in SL Servic§, Lnc. v.
United States 357 F.3d 1358, (Fcd. Cir. 2004).
7. Invoice 22b, 4.2-3, Water Washed Port and Starboard Boiler for Inspection. The
parties agree that these charges are dual purpose repair expenses and should be apportioned as
explained in SL Service, Inc. v. Qnited 'States, 357 F.Bd 1358, (Fed. Cir. 2004).
8. Invoice 22b, 5.2-1, Stage Port & Starboard Boilers. The parties agree that these
charges are dual purpose repair expenses and should be apportioned as explained in SL Service
[nc, v. United State§, 357 F.lld 1358, (Fed. Cir. 2004).
9. invoice 22b, 5.2-3, Boiler Aceess Doors, Port and Starboard inspections The parties
agree that these charges are dual purpose repair expenses and should be apportioned as explained
in SL Set“vice, Inc. v. Qnited States, 357 F.Sd 1358, (Fed. Cir. 2004).
10. Invoice 22b, 5.2-4, I-Iydrostatic Test, Port and Starboard Boilers Inspections. The
parties agree that these charges are dual purpose repair expenses and should be apportioned as
explained in sL servi¢e, rn¢. v. united states 357 red 1353, (Fed. cir. 2004;.
1 1. invoice zzb, 5.2-5, Boiler watersid¢, sort and starboard inspections The parties
agree that these charges are dual purpose repair expenses and should be apportioned as explained
in SL Service Ino. v. United States,_ 357 F.Bd 1353, (Fed. Cir. 2004).
12. Invoice 22b, 5.2-6, Desuperheater Inspeetions and I-Iydrotest. The parties agree that
these charges are dual purpose repair expenses end should be apportioned as explained in S_L
Service, fr;_c_ v. United Stat¢§. 357 F.3d 1358, (Fed. Cir. 2_004).
13. Invoice 22b, 5.2-7, Handhole Plate Removal/ Seat Inspection. The parties agree that
these charges are dual purpose repair expenses and should be apportioned as explained in §
Service, lnc. v. limited §@te , 357 F.3d ]358, (Fed. Cir. 2004).
R.especti``ully submitted,
HORIZON LINES, LLC
By: ‘ j
Evelyn M. S ez
Dean A. Bazclay
WlLL,IAMs MuLLEN
A Professional Corpora’r_ion
1666 K~Street, NW, Suite 1200
Washjngton, DC 20006
(202) 833-9200 Fax (202) 293-5939
C'aunsel for Plaz``nrz``j‘"
Of Counsel:
Robe:t S. Z.uckerrnan
Viee President and General Counsel
I-Iorizon Lines, LLC
4064 Colony Road, Suite 200
Charlotte, NC 28211
Admitted in New York and the U»S``. Court of
international T?ade
Nat admitted in the State of Norrh Carolz‘na
\5672\ lvl
Dated: September 12, 2008.
UNI'I``ED STATES OF AMERICA
B . ILL
A orney in Charge
f
I ernational 'I``rade Field
B : 'i~" d ~
Y `` P__/
EDWARD F. KE``NNY
Civil Di'vision, Dept. of justice
Commercial Litigation Branch
26 Federal Plaza, Suite 346
New York, New York 10278
'i``el. No. 212 264 0480
Coun.se!for Defendant