Ford Motor Co. v. United States

Ford Motor Co. v. United States
811 F.3d 1371 (Fed. Cir. 2016)
Authored by Jacky Beda

Statement of Facts: In 2004 and 2005, Ford imported Jaguar-brand cars from the United Kingdom into the United States. These imports were subject to duty payments upon arrival to the U.S., to be paid to U.S. Customs and Border Protection (“CBP”). Ford later concluded that it had overpaid the duty payments because its own estimates were too high. Accordingly, Ford sought a refund from CBP of about $6.2 million. Consequently, Ford filed nine reconsolidation entries with CBP.

CBP has the authority to liquidate these entries, which involves determining the actual amount of duty owed. Such an appraisal must be “just, impartial, and uniform” pursuant to the Secretary of the Treasury. See 19 U.S.C. § 1502 (2012). CBP has one year from the time of filing to make the determination, but it may extend the period if additional information is needed or for good cause. See 19 U.S.C. § 1504(b). CBP has a maximum of four years to make the determination to liquidate. An extension in determining whether to liquidate may be granted if additional information is needed to properly appraise or classify the imported merchandise or if good cause for an extension is demonstrated. If an extension is not granted and liquidation has not occurred within the four-year period, CBP no longer has the authority to calculate the appropriate duty rate. Instead, the importer shall calculate the duty.

Procedural History: On April 15, 2009, Ford filed suit in the Court of International Trade (CIT) challenging CBP’s treatment of its nine reconciliation entries. Ford argued that CBP was no longer authorized to recalculate the appropriate duty because it had failed to properly extend the liquidationed period allocated to them. CBP rebutted that it properly extended the liquidation period and thus had the authority to calculate the duty. In turn, Ford sought a declaratory judgment that its nine reconciliation entries were now liquidated as a matter of law and, therefore, Ford was entitled to the $6.2 million refund based on its own duty calculation.

The CIT granted the government’s motion to dismiss, holding that Ford’s claims from 2005, except for Claim 5, were barred by the two year statute of limitations under 28 U.S.C. § 2636(i) (2012). The CIT held that Ford reasonably should have known the claims existed over two years from when the claims were actually brought. For the remaining claims, including Claim 5 and the claims from the 2006 entries, the CIT recognized that there was no statute of limitations issue. However, the court granted the government’s motion to dismiss, declining to exercise its discretionary jurisdiction. CIT claimed that it “would not be an efficient and effective use of the court’s time and resources.” Ford Motor Co., 811 F.3d at 1376. Ford appealed to the Federal Circuit.

Questions Presented: There were two legal issues before the Federal Circuit. First, whether the claims from 2005, excluding Claim 5, were barred by the statute of limitations. Second, whether the CIT abused its discretion in declining to issue declaratory relief in regards to Claim 5 and Ford’s 2006 claims.

Holding: First, the Federal Circuit held that there was no need to address the statute of limitations issue because the statute was not jurisdictional. The Federal Circuit determined that the Supreme Court in United States v. Kwai Fun Wong, 135 S. Ct. 1625, 1632 (2015) set a more stringent test, which required Congress to expressly state that a statute of limitations was jurisdictional. Absent a clear statement, the statute of limitations would be treated as non-jurisdictional. Second, CIT did not abuse its discretion in declining to issue declaratory relief because an action for a declaratory judgment brought under 28 U.S.C. § 1581(i) may not be used to challenge the calculation of duties. Instead, it is limited to the determination of whether the entries are liquidated as a matter of law. Lastly, the court held that the CIT did not abuse its discretion in dismissing Ford’s declaratory judgment claims because both the issue of whether Ford’s entries were deemed liquidated as a matter of law and the correct rate of duty could be decided in the proper alternative, streamlined action.

Reasoning: The Federal Circuit reasoned that the statute in question, § 2636(i) did not speak in jurisdictional terms because Congress “failed to provide anything like the clear statement the Court has demanded before deeming a statute of limitations.” Ford Motor Co., 811 F.3d at 1378. The Federal Circuit applied the Kwai Fun Wong test, which required a “high bar to establish that a statute of limitation is jurisdictional,” including a clear statement from Congress that the statute was jurisdictional. See Kwai Fun Wong, 135 S. Ct. at 1632–33. In applying Kwai Fun Wong, the Federal Circuit concluded that since Congress did not clearly state that the statute was jurisdictional, it should treat the restriction as non-jurisdictional. Furthermore, Congress’s separation of the filing deadline from the jurisdictional grant indicates that the statute was not jurisdictional. Lastly, nothing else in the history of the statute suggested that the statute of limitations was jurisdictional.

The Federal Circuit held that the CIT did not abuse its discretion in declining declaratory relief because the decision was not based on an incorrect conclusion of law, clearly erroneous findings of fact, or clearly unreasonable or arbitrary reasoning. In addition, CIT did not abuse its discretion because there was a more appropriate action pending that would address whether Ford was entitled to a declaratory judgment to deem the entries liquidated as a matter of law and resolve the correctness of the duty calculations if the entries are not deemed liquidated. See Ford Motor Co. v. United States, 688 F.3d 1319, 1323 (Fed. Cir. 2012).

The remaining question was whether to remand the claims from 2005, except for Claim 5, to the CIT because the statute of limitations did not bar those claims. The Federal Circuit decided not to remand because it was clear that the CIT would decline to exercise its discretionary jurisdiction for those claims as well. Because the CIT did not abuse its discretion in declining to issue declaratory relief for the claims from 2006 and Claim 5, it would also not abuse its discretion with the remaining claims from 2005. As a result, the Federal Circuit affirmed the CIT decision, dismissing all of Ford’s claims.

Dissenting Opinion: Judge Newman concluded that Ford should have been refunded the $6.2 million dollars that it had calculated as overpaid import duties. Judge Newman noted that the government itself did not dispute Ford’s findings regarding the value of the overpaid imports or the merits of the claim itself. Furthermore, Judge Newman found that there was no justification for CBP’s delay and Ford had the right to calculate the duties. After nine years of the government avoiding payment, Ford was entitled to its refund. Judge Newman further argued that the appropriate role for the judiciary is to “take on a stewardship role to achieve speedy, fair and efficient justice.” Ford Motor Co., 811 F.3d at 1382. Here, the appropriate judicial role was to order the refund and bring the matter to a close.

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