文章基本信息

标题：R-E-S-P-E-C-T: what U.S. Customs wants from the courts - US Customs Service's ability to stand before judicial audience
作者：Brenda A. Jacobs
期刊名称：Bobbin
印刷版ISSN：0006-5412
出版年度：1998
卷号：Dec 1998
出版社：Edgell Communications, Inc.

R-E-S-P-E-C-T: what U.S. Customs wants from the courts - US Customs Service's ability to stand before judicial audience

Brenda A. Jacobs

The day the U.S. Customs Service has been waiting years for will soon arrive. For the past five years or more, the agency has been sounding a lot like Rodney Dangerfield, complaining to any judge who will listen that the agency just doesn't get enough respect.

Early next year, however, Customs will have the opportunity to stand before the ultimate judicial audience, the U.S. Supreme Court, to make its case for the respect it thinks has been lacking from court reviews of the agency's decisions. It's a day in court over which U.S. importers and customs lawyers are fretting because their ability to challenge Customs' decisions could be greatly circumscribed if the Supreme Court rules in the agency's favor.

Giving Customs Its Due ... Deference That Is

In the upcoming Customs matter, the Supreme Court will be considering the long-running case of Haggar Apparel Co. v. U.S., in which two lower courts have ruled that Customs should have granted a duty allowance for slacks that were assembled abroad from U.S.-fabricated components. At issue in the case, which has been pending since the late 1980s, is whether permapressing, via a heat-curing or oven-baking process, disqualified Haggar's slacks for consideration under the 9802 tariff classification and its accompanying duty reductions.

Haggar essentially challenged the Customs regulation that interprets and implements the 9802 provision. While tariff provisions are written by Congress, tariff regulations are written by Customs. (See "The Official Wording," page 56, for more details of the provision.)

The Supremes are not likely to involve themselves - as the lower courts have - in the nitty-gritty of whether baking versus ironing should affect the import duties on a pair of pants. The issue getting the top billing before the Supreme Court is far broader. Customs has asked the high court to rule that its views on tariff classification should be accepted by the courts unless these views are "clearly erroneous." Customs is asking that the courts should be required to afford "due deference" to the views of a federal agency interpreting a statute.

For years, Customs has been arguing this point with the lower courts - namely the U.S. Court of International Trade (CIT) and the Court of Appeals for the Federal Circuit (CAFC) - in cases that span multiple industries. Customs repeatedly has cited a 1984 Supreme Court case, Chevron U.S.A. v. Natural Resources Defense Council Inc., as setting a precedent that requires the courts to afford this due deference. Customs holds that the courts should only be allowed to question whether its regulation is based upon "a permissible construction" of the tariff provision. In effect, says Customs, its interpretation doesn't have to be the best or most correct interpretation of Congressional intent; it merely needs to be reasonable and not "arbitrary, capricious, or manifestly contrary to the statute."

The CIT and the CAFC have firmly and repeatedly rejected the Customs Service's argument. The two courts have been telling Customs for years that it is subject to a different standard of review than most other government agencies because its actions are reviewed by a specialized court. The CIT and CAFC are unlike other federal district courts and federal appellate courts because they were uniquely established for the express purpose of reviewing matters of international trade. In legal parlance, they are courts of "exclusive jurisdiction." All judicial reviews of customs matters must go to these courts, and cannot go to any other federal court.

Looking at the statute establishing the CIT and the CAFC, the courts assert that "the Court of International Trade's charter to 'reach the correct decision' in classification cases would be subverted if Customs' interpretation of a classification term was given deference." Not surprisingly, Customs' response to this argument has been: "Isn't every court supposed to reach the correct decision?"

Nevertheless, in the view of the CIT and CAFC, Congress intended them to conduct "de novo" reviews of Customs' legal interpretations of tariff classifications, that is, entirely new reviews that essentially start the consideration process all over again. In support of this view, the two courts note that the law under which they operate provides that they may entertain new grounds or arguments for making a decision that were not placed in issue before the Customs Service. Therefore, say the courts, if litigants before the courts are not limited to the arguments they made to Customs during the agency's administrative process, the court cannot limit itself to whether the agency's decision is a permissible construction of the law.

Waiting to be Turned Down

The fact is that Customs has not done too badly when importers have taken them to court to challenge the agency's classification decisions. As tough as the CIT and CAFC have been in many cases, they have upheld Customs' rulings, even without providing any deference to Customs. For example, when an importer appealed Customs' classification of gift boxes, both the CIT and CAFC agreed that the Customs Service was correct to classify the boxes in the same tariff provision as the glassware they contained. But the CAFC emphasized that it did so based upon a de novo review of the arguments and without providing "special deference" to Customs' views.

In another case, which dealt with the question of whether "cobalt alloy powders" should be classified under a tariff provision carrying a 5 percent duty or one that carried no duty, the CIT found in favor of the Customs Service, but only after expressly rejecting the agency's plea for due deference with: "[T] he court's statutory obligation to find the correct result limits the court's ability to give special Chevron deference to permissible constructions rendered by the United States Customs Service in the valuation or classification context."

Most recently, Customs raised the due deference argument in Levi Strauss & Co. v. U.S., another well-known "9802" case that focuses on whether stonewashing of denim is incidental to the assembly process. In an opinion issued in late September, which concluded that contrary to Customs' regulation, stonewashing is incidental, the CAFC described itself as "perplexed" that Customs continued to lament the lack of deference being paid to it.

But now the agency's agenda has become clear: It was determined to raise the deference argument in every case until it could find one that it lost and that the Supreme Court would accept for review. The Haggar case finally fit the bill, but if the Supreme Court had not accepted that case, you can be sure Customs would have asked the body to consider the Levi case as well.

The fact that the Supreme Court has agreed to hear Customs' complaint suggests that it may believe that the CIT and CAFC have been singing the wrong tune all these years. In any event, the decision of the Supreme Court in Haggar should cure the Customs Service of its chronic whine and determine who has the last laugh.

The stage is set. The Supreme Court will be either the closing performance for Customs' due deference gig or the opening act for a new and more abrasive judicial review process for importers, who would face a far more difficult time convincing the courts to reverse adverse Customs decisions.