CIT Again Denies Ford's Reconciliation Deemed Liquidation Case, Says Filed Too Late
The Court of International Trade on June 17 again dismissed a lawsuit brought by Ford on whether reconciliation entries it had filed had deemed liquidated. The court found that Ford’s lawsuit was too late because it was filed over two years after the entries would have deemed liquidated. Ford argued that the two-year statute of limitations should run from when it found out about the issue only two months prior to filing suit, but the court found that Ford should have known the entries hadn’t deemed liquidated when one year came and went after filing the entries without any notice of liquidation from CBP.
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Ford Wanted Refund of Duties Paid on Jaguars
Between 2005 and 2006, Ford filed reconciliation entries claiming a refund of $6.2 million in duties it had paid on Jaguar cars it imported a year earlier. Ford says the reconciliation entries should have been deemed liquidated one year after filing, because it never got notice of any extension of liquidation. It filed suit in April 2009.
Before deciding the deemed liquidation issue, the court first had to decide whether it could even hear the case. Ford filed suit under 28 USC 1581(i), a residual provision for trade cases that can’t be filed under Section 1581(a) because no CBP protest has been denied, and that can’t use Section 1581(c) because it isn’t related to trade remedies. Importantly, Section 1581(i) claims must be filed within two years of the event at issue in a case.
CIT previously dismissed the case in July 2010 because it said it lacked jurisdiction (see 10072920). CBP had liquidated the reconciliation entries shortly after Ford brought suit, and CIT found that the liquidations rendered Ford’s 1581(i) lawsuit invalid because the liquidations were protestable events covered by Section 1581(a). But the Court of Appeals for the Federal Circuit reversed in August 2012, finding that jurisdiction should be decided at the time a case is filed, and that CIT should hear the case because the reconciliation entries were still unliquidated when Ford filed suit. (see 12081026)
Clock Started Running When Ford Should Have Known, Not When it Did
With the case back at CIT, the government continued to argue that the case should still be dismissed for lack of jurisdiction. The issue in the case was whether the entries should have deemed liquidated one year after the reconciliation entries were filed, so the event at issue was the date at which the entries would have deemed liquidated. Ford filed suit more than two years after that date, so it was too late for a 1581(i) case. Ford disagreed. It said the event that sparked the lawsuit was when it found out in February 2009 that the entries hadn’t deemed liquidated. The two year period should be calculated from that date, and runs until 2011, it said.
CIT ruled that the lawsuit was too late, again finding that it has no jurisdiction. The date the two-year clock begins sticking is the date that the “aggrieved party reasonably should have known about the existence” of the issue. Ford said it found out that the entries hadn’t deemed liquidated in 2009, but it really should have known when it didn’t get a courtesy notice of liquidation in 2006 and 2007 saying the entries had deemed liquidated. Section 1581(a) may be the better route for Ford anyway, said the court. It would allow Ford not only to challenge whether the entries had deemed liquidated, but also the substance of the liquidations and reliquidations themselves.
(Ford Motor Co. v. U.S., Slip Op. 14-65, 09-00151, dated 06/17/14, Judge Barnett)