US Tells CIT to Dismiss Suit on Temporary Type 86 Suspension

The U.S. added that the claims fail because Seko doesn't have a "property interest" in its continued participation in the Entry Type 86 Test, and CBP's regulatory authority to establish the test meaningfully channels official discretion "by mandating a defined administrative outcome." The government said the test is a "voluntary test program" set up to "beta-test the 'effectiveness of new technology or operational procedures.'"

While CBP's announcement of the test in the Federal Register "encourages the eligible trade community" to use the test, it established the agency's decision to drop a company from the test based on a finding that its participation "poses an unacceptable compliance risk." This wide discretion given to CBP is a far cry from the inclusion of "explicitly mandatory language," which would establish a protected property interest, the brief said.

The government claimed that Seko's allegations about the importance of the Entry Type 86 Test to its business, including its software investments, higher labor costs or increased reliance on these entries, doesn't "transform participation into a legal entitlement subject to due process protections." That participating in the voluntary test helps CBP assess the "effectiveness of a new approach for these entries" doesn't create an entitlement to participation in the test, the U.S. argued.

Seko was among several brokers suspended from the Type 86 pilot program in May, as announced in a statement from CBP. The agency requested documentation from Seko in July 2023 for 10 Type 86 entries, finding "significant non-compliant" filings in the same, though no specifics were given at the time of the suspension (see 2406030044).

Both in response to Seko's motion for expedited hearing and now in a separate motion to dismiss, the U.S. claimed that Seko already received the relief it seeks: it's been conditionally reinstated into both programs (see 2406120026). CBP's conditional reinstatement said that Seko has 90 days to "take corrective action," and that it would retain full participation in the programs throughout those 90 days. Seko said it should be unconditionally reinstated in the programs and it was impossible to take full remedial action because CBP failed to provide all information about its supposed violations.

In the motion to dismiss, the government said Seko's suit isn't ripe for review because the administrative process regarding the broker's suspension from the programs is ongoing. Holding the present suit up until CBP has wrapped up its administrative process is proper and wouldn't "impose an undue burden on plaintiff" because Seko has already received its requested relief. The broker can participate in the program, and it has all the information it requested from CBP to create a remedial plan, the brief said.

For these same reasons, Seko's claims are moot, the U.S. said. The company can participate in the programs and, as of June 11, it has received "detailed examples of violations discovered by CBP with respect to certain of plaintiff’s ET86 Test entries.”

The government additionally said the claims are premature since CBP hasn't taken any "final agency action." The temporary suspensions didn't amount to the "consummation of the agency's decision making process," given that Seko still has to submit a remediation plan and CBP will provide the company with a chance to appeal, the brief said. In addition, the temporary suspensions haven't had the "direct and appreciable [legal] consequences" needed for Seko to establish that the suspensions were final agency actions, the U.S. said.

While Seko's continued participation is conditional on the company meeting certain requirements, the broker's decision on whether to meet those terms is a "practical" concern that "does not rise to the level of 'legal consequences' for the purposes of" determining whether CBP has taken a final agency action, the government said.