CIT Finds District Court Should Handle Apparel Seizure Case, But Stays Exclusion Issue
The Court of International Trade ruled on May 21 that an importer’s lawsuit related to seized and excluded entries of apparel should be decided by a U.S. District Court, but stayed the case because some issues may still be left unresolved. The court found the case to be a seizure case at heart, which means it’s outside of the court’s jurisdiction. But issues related to the deemed exclusion of the merchandise mean the court may still decide aspects of the case once the seizure issue is resolved. CIT also ruled on when presentation of merchandise takes place, agreeing with CBP that it occurs when a shipment is taken for physical inspection by CBP, and not the time an entry is filed.
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Blink Design imported eight entries of apparel into the Port of Los Angeles/Long Beach in November. CBP inspectors found that the quantity reported on packing lists and invoices was less than half of the actual amount in the shipment, and detained the entries. Blink got a revised invoice from the exporter reflecting the actual quantities, and tried to file post-entry amendments, but CBP wouldn’t let it. Instead, CBP seized the entries because they were used to facilitate the importation of the “clandestinely introduced” (unreported) apparel.
Quibble Over When Merchandise is ‘Presented’ to CBP
The main issue before the court was whether it had jurisdiction to hear the case at all. First it had to decide whether the apparel had indeed been “deemed excluded.” Merchandise is deemed excluded when 30 days passes after presentation for CBP examination without a decision on admissibility. Exclusion of merchandise is a protestable event that can be challenged at CIT. Seizures, on the other hand, mostly lie within the jurisdiction of U.S. District Courts.
The government said that 30 days hadn’t passed between presentation at the Centralized Examination Station (CES) and the seizures, so the shipment hadn’t been deemed excluded. They were only seized, it said. But Blink argued “presentation” instead occurs with the filing of the CF 3461 entry document. Presentation must occur for all merchandise, but only some shipments are ever taken to a CES, it reasoned. Over 30 days had passed between the filing of CF 3461 and the seizures, so the entries had been deemed excluded before they were seized, argued Blink.
Court Finds Presentation Occurs When CES, But Seizures at Time of Notice
CIT found that presentation in this case happened when the merchandise was delivered to the CES. To present means to make something available for physical inspection, it said. Entry documentation can be filed before a shipment arrives at port; it doesn’t make sense to consider containers stacked on a boat at sea to be “presented” for CBP inspection, said the court.
But either way, the 30 days had elapsed, said the court. The date that CBP says it seizes something is not the same as the date of seizure, it said. Instead, the court considers merchandise to have been seized when notice of the seizure is given to the importer. The dates that CBP issued the seizure notices were all more than 30 days after the date the merchandise arrived at the CES, so all eight entries had been deemed excluded.
Case is at Heart ‘Seizure Case,’ Belongs in District Court; May Come Back to CIT
The fact that the court may have jurisdiction didn’t mean that it actually does, however. CIT found that “this case is a seizure case at its heart.” All of the entries were seized, and they were seized before the lawsuit was filed. For five of the eight entries, the seizures occurred before Blink filed protests against deemed exclusion. Seizure cases belong in district courts, it said, so CIT can’t hear the case, it said. Instead, Blink should go to the relevant district court.
But just as only the district court can help Blink with the seizure, so only CIT can help it with the exclusion of its merchandise. CIT decided not to dismiss the lawsuit, instead staying the case until the seizure issue is resolved.
(Blink Design, Inc.v. U.S., Slip Op. 14-56, dated 05/21/14, Judge Barnett)
(Attorneys: John Peterson of Neville Peterson for plaintiff Blink Design; Jason Kenner for defendant U.S. government)