CBP View on Protest Time Limits Turns Law 'Upside Down,' says Hitachi; Decision on High Court Hearing Dec. 3
CBP’s interpretation of the law governing time limits for protest decisions “turns that statute upside down,” said Hitachi in its final brief before the Supreme Court decides whether to hear the case. The government’s interpretation that the two-year time limit in 19 USC 1515(a) is not mandatory, as well as the Court of Appeals for the Federal Circuit’s decision affirming that view in Hitachi v. United States, nullifies the law by allowing CBP to forever refuse to allow or deny protests, it said in its reply to the Nov. 2 government brief. The Supreme Court is likely to announce its decision Dec. 3, an industry lawyer said.
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CBP Inaction Results in Deemed Allowance, says Hitachi
According to Hitachi, the government’s argument “rests on the erroneous proposition that the statute does not contain a consequence for failure to decide a protest within two years.” But Section 1515(a) does have an express consequence for inaction, it said, and that consequence is allowance of the protest. Denial requires express action by CBP, but to allow a protest does not. The definition of “allow” is to “permit by inaction or negligence,” Hitachi said. Any refund of duties that results from allowing a protest occurs after a protest is allowed by inaction, and is simply a consequence of allowing a protest, not the allowance itself, it said. According to Hitachi, Congress intentionally created this distinction, and twice rejected any requirement for express action to allow protests.
But even if there were no express consequence in the statute, the two-year time limit is mandatory and CBP must comply, Hitachi said. The law should be judged on the standard of Congressional intent, not strict rules of statutory construction, and the government’s interpretation “destroys the structure and purpose of the statute unanimously enacted by Congress,” it said. The cases relied upon by the government to argue that the lack of consequence for inaction means that the time limit isn’t mandatory do not apply here, Hitachi said. Contrary to those cases, a writ of mandamus compelling government action on a protest is not an option for importers because of CAFC’s ruling in Norman G. Jensen v. United States, it said. The government’s comparison of Section 1515(a) with the accelerated disposition provision in Section 1515(b) is flawed as well, Hitachi said. Section 1515(a) says Customs “shall review the protest and shall allow or deny such protest” within two years, and is therefore mandatory, while Section 1515(b) does not require CBP to do anything at all, it said.
Issue Hasn’t Arisen Because CBP’s Position is Recent
The problems raised by this case will multiply without Supreme Court intervention, said Hitachi. In its brief, the government said the case is unimportant and shouldn’t be granted a hearing because it was only examined by the federal circuit four decades after enactment of the law. But the time it has taken the issue to reach CAFC is irrelevant, Hitachi said. Prior to Hitachi, the government had never publicly taken the position that it is not bound by the two-year limitation to decide protests, it said. The government only began making that argument in 2007 in Hitachi, Jensen, and Samsung. With CAFC’s decision in this case, and its exclusive jurisdiction over customs cases, “there is no reason that Customs should ever allow or deny a protest,” Hitachi said.
Reversal of CAFC Ruling Would Allow ‘Wait and See’ Approach from Importers
“If Hitachi is correct, an importer could decide to gamble that CBP will take more than two years to decide a protest and, when the deadline passes, collect its refund or other relief from the deemed approved protest,” said another industry lawyer familiar with the case. If the Supreme Court refuses to hear the case, and CAFC’s decision stands, its ruling that accelerated disposition provides a remedy to importers that want their protests reviewed “hurts the importer by taking the ‘wait to win’ strategy away,” he said.
“The big picture question of whether Congress’ failure to provide a consequence for missing a deadline means there is no deadline is what might appeal to the Supreme Court,” the lawyer said. The requirement that a law provides a consequence in order for a time limit to be mandatory can produce results that run against common sense, as is the case here, he said. “Congress appears to have intended to create a deadline for Customs to act, but this rule of statutory interpretation results in there being no real deadline,” he said. “To judges unfamiliar with the strange world of customs law, that may seem like the wrong result.”
(See ITT’s Online Archives 12110606 for summary of the government’s brief, and 12090701 for summary of amicus briefs submitted by NCBFAA, AAEI, and CITBA. See also ITT’s Online Archives 12082404 for summary of Hitachi’s request for Supreme Court hearing and chances the court will take up the case.
See ITT’s Online Archives 11111428 for summary of the CAFC Hitachi decision, and 12040207 for summary of CAFC’s denial of Hitachi’s request for rehearing. See also ITT’s Online Archives 12081301 for summary of CAFC’s Jensen ruling.)
Email ITTNews@warren-news.com for a copy of Hitachi’s reply brief.