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However, we are unable to agree with the remainder of this section, which sets forth four (4) different standards for scope of review, ranging all the way from trial de novo, to the extremely limited provisions for judicial review contained in new $ 516(i) added by subsection (g) of $ 601 of the bill. We agree with the retention of de novo review in connection with “the imposition of countervailing or antidumping duties upon particular merchandise” (proposed 8 2640(a), last sentence, (page 22, line 19) but we find the rest of the section confusing and illogical. We recommend that this should be redrafted and clarified to provide for a system of judicial review paralleling that contained in 5 U.S.C. 8 706 : namely, trial de novo in those instances where the procedures utilized by the agency (primarily the Customs Service) are informal, and in other instances where the trial de novo requirements of 5 U.S.C. 8 706 are not met, a scope of review comparable to that contained in 5 U.S.C. $ 706 in proceedings not involve ing a trial de novo.
Proposed § 2641 pertains to witnesses and inspection of documents. The first sentence of proposed § 2641 (a) (page 23, line 13) restates existing law with the exception of proposed subsection (b). We agree with this language with the following reservation pertaining to subsection (b):
Subsection (b) provides (typographical error in bill corrected):
"(b) In any civil action, the Cutsoms Court may order that trade secrets and commercial or financial information which is privileged and confidential of a nonparty to the action or of a party or information provided to the United States by foreign governments or foreign persons shall not be disclosed or shall be disclosed to a party or its counsel only under such terms and conditions as the court may provide."
According to the Justice Department's analysis, this provision is intended to protect valuable confidential commercial information and information received from foreign governments in connection with countervailing and antidumping duty investigations. If so, the section should be limited specifically to civil actions reviewing the application of the antidumping and countervailing duty statutes to a particular class or kind of merchandise by the administrative agencies concerned. As now worded, this section would include, for instance, civil actions pertaining to the appraised value of merchandise, or civil actions pertaining to the imposition of antidumping or countervailing duty upon the particular merchandise before the court, in which the court might render judgment against plaintiff relying upon the privileged or cinfidential information, and the plaintiff might have no opportunity to meet and rebut this evidence.
Hence, a grave issue of due process would arise. It would appear that the constitutional equities favor, in such a situation, disclosure of the allegedly privileged or confidential information to the opposite party, in order that he may properly meet the issues and meet his burden of proof.
Proposed § 2643 specifies the relief which may be granted by the Customs Court in particular matters. Proposed § 2643 (a) (page 24, line 6) specifies that (with the exception of the matter subject to transfer to the Customs Court from a district court), “the Customs Court may order any form of relief which is appropriate, including but not limited to, declaratory judgments, orders of remand, writs of mandamus and prohibition, injunctions, and money judgments both for and against the United States."
We agree with this language, provided that it is modified (for the reasons previously stated) to preclude the Customs Court from rendering judgments affirmatively supporting an "alternative" classification at a higher rate of duty, or judgments in support of the government's counterclaim on matters remote from the merchandise and issues before the court. At the very least, the authority to return a money judgment in favor of the government should be limited to the particular import transaction before the court. This is necessary to avoid the chilling effect of subjecting the plaintiff to the possible assertion of a money judgment, by way of counterclaim, in favor of the United States on matters having nothing to do with the particular matters before the Court.
Proposed new § 2643(b) (page 24, line 12) provides for a remand to the appropriate administrative authority in the event the court finds that the administrative decision challenged is erroneous but on the record made is unable to determine the correct decision. A typical case might involve a civil action challenging the appraisement of the merchandise under "constructed value” (19 USC $ 1401a (d)). During the trial, the court might find that the merchandise is properly appraisable under the more preferred basis of “export value” (19 USC § 1401a (b)), but is unable to determine the proper amount of export value. Under the present practice, the court would decide that use of constructed value was erroneous under the law and that the merchandise should properly have
been appraised under export value, but because of the failure of proof, judgment must be entered sustaining the appraised value. Thus, proposed § 2642 (b) provides a much-needed element of flexibility in the Customs Court's jurisprudence, and avoids the obvious miscarriage of justice that follows in the frequently-recurring situation above-described. Accordingly, the Committee strongly supports proposed 8 2643 (b).
Proposed § 2646 (page 25, line 3) gives precedence to cases involving exclusion of merchandise, cases transferred from the district court under th new tra sfer procedures, and cases brought by American manufacturers, producers, and wholesalers. With regard to the last class of cases, the section restates existing law. We support this section.
Title V of the bill (page 25, line 9), $ 501 through $ 504, makes various changes in the jurisdiction and powers of the Court of Customs and Patent Appeals. We have no objection to any of the provisions set forth in Title V, the objectives of which are stated adequately in the Justice Department's analysis. Title VI: Miscellaneous
§ 601 of the bill (page 27, line 12) would revise $ 516 of the Tariff Act of 1930, as amended, (19 USC 1516). The purpose of the revisiou is, according to the Justice Department's analysis, “to clarify certain questions and to remedy certain defects created by the amendment to that section made by the Trade Act of 1974".
We believe that, for reasons set forth below (and to enhance clarity and eliminate some clerical errors, such as inaccurate section references), redrafting of proposal $ 516 is advisable. We believe that little purpose will be served in a section-by-section analysis, since we are unable to approve the attempted revision and codification in its entirety.
We note that $ 516 of the Tariff Act was last revised fairly recently in connection with the Trade Act of 1974. Politically, this was a bitterly contested piece of legislation, with almost every section of the act involving a battle between the "international traders" and the “domestic interests". Any attempt to completely recodify $ 516 within the context of the “Customs Courts Act of 1978"? would inevitably reopen this pitched political battle and quite possibly jeopardize the entire bill.
It is therefore suggested that a more limited revision be accomplished focusing upon harmonizing and rationalizing three post 1970 cases affecting the Antidumping Act of 1921; and in so doing, the same rationale should be applied to administrative actions under the countervailing duty statute, 19 USC § 1303.
The three cases referred to are as follows:
1. J. C. Penney Co. v. United States Treasury Department, 439 F. 2d 63 (1971), in which it was held that an importer of television sets could not seek in the District Court declaratory and injunctive relief, preventing the Treasury Department from conducting an investigation under the Antidumping Act of 1921, as amended (19 USC 160–173) as to whether imported television sets were being sold for "less than fair value”. To a large extent, the new provisions for injunctive relief contained in proposed § 2636(d) of the bill would seem to be the answer to the problems raised in Penney. However, it would appear prudent to insert specific language codifying the scope and extent of injunctive relief available either to an importer or a domestic party during the course of administrative proceedings involving the assessment, imposition, and collection of antidumping or countervailing duties upon either a class or kind of merchandise or upon specific import shipments.
2. Timken v. Simon, 539 F. 2d 221 (C.A.D.C. 1976), in which injunctive relief was granted to direct the Secretary of the Treasury to perform the ministerial duty of publishing a “finding of dumping”, and he was enjoined from ordering appraisement.
3. SCM Corp. v. U.S. International Trade Commission, 549 F. 2d 812 (C.A.D.C. 1977), in which the Court of Appeals for the District of Columbia considered the refusal by the District Court for the District of Columbia to take jurisdiction in an action by SCM to review a “negative" injury determination made by the International Trade Commission.
The District Court had held that SCM's remedy, if any, was in the Customs Court. The Court of Appeals took the unusual step of remanding the case to the District Court with instructions to “retain jurisdiction over this action until SCM has the opportunity to press its quests for relief in the Cusoms Court". As noted at the outset of this report, the SCM jurisdictional problem has quite recently been decided (on an interim basis) by a recent decision of the Customs Court (C.R.D. 78–2) but accompanied by a certificate of the jurisdictional questiou to the CCPA upon interlocutory appeal. Undoubtedly the CCPA will eventually pass upon the issue. Obviously, this jurisdictional confusion is undesirable and should be corrected promptly by clarification of $ 516. It should not be unduly difficult to draft a limited revision of g 516 specifically keyed to rationalizing and harmonizing the above holdings.
Finally, proposed § 516(i) added by $ 601 (g) of the bill (page 37, line 1) would grant to "any person adversely affected or aggrieved" an extremely limited form of judicial review for causes of action arising out of certain § 516 proceedings. The Justice Department's analysis of this new provision is as follows:
"The provision is designed to permit persons who are adversely affected by decisions of the type which would be appealable by an American manufacturer, producer or wholesaler to institute an action in the Customs Court if the American manufacturer, producer or wholesaler prevails at the administrative level (subsection (b) (1) of g 516) or determines to abandon the action after exhaustion of the administrative process.”
If it is desirable to grant the sort of "limited judicial review” contemplated, it appears to us that a more logical place to do so would be to invest such jurisdiction in the new “residual” jurisdiction of the Customs Court.
$ 602 (a) of the bill (page 38, line 23) would amend 19 USC 1514 (b) (1) by re-defining the persons entitled to file protests as follows:
"Except as provided in sections 485 (b), 516 and 557 (b) of the Tariff Act of 1930, as amended, protests may be filed with respect to merchandise which is the subject of a decision specified in subsection (a) of this section by (a) the im. porters or consignees shown on the entry papers; (b) any person paying any charge or exaction; (c) any person seeking entry or delivery; (d) any person filing a claim for drawback; or, (e) any authorized agent of any of the persons specified in (a) through (d)."
We support this provision, which clarifies in a useful fashion the operation of the present law and tends to eliminate certain repetitious litigation of a highly technical nature.
It is suggested that this provision could be improved by language pertaining to a successor corporation, a trustee in bankruptcy, or any other authorized party winding up the affairs of a dissolved or defunct corporation. Litigation has re. sulted in several instances from the filing of protests by such parties.
The second paragraph of the proposed amendment to 19 USC § 1514(b) (1) adds language authorizing a surety (on a Customs entry bond) to file a protest if the insured has failed to file a protest (page 39, line 11). The surety may file protests within 90 days of the date of liquidation or 90 days from the date of “notice of delinquency”, whichever is later (page 39, line 16).
The surety must certify that it is not filing the protest “on behalf of another party who is entitled to file a protest but because of mistake, inadvertence, or misunderstanding failed to file a protest within the time specified in subparagraph (2) of this subsection." (page 39, line 16). The surety's recovery on the protest (either administratively or before the Customs Court) is limited to the amount of duties it paid (page 39, line 23).
Under present law, sureties may neither file protests, nor institute actions in the Customs Court, nor be subrogated to the rights of the original importer. We believe the new provision will improve the administration of justice and support it.
$ 602(b) of the bill (page 40, line 1) would amend 19 USC § 1514(a) to specify that a protest against the liquidation does not include a protest against the other types of decisions specified in this paragraph. We oppose this provision. Traditionally, and in the interests of justice, a protest need not be drawn with great technical precision and it is sufficient if the protesting party adequately identifies the merchandise involved and calls the attention of the Customs officials concerned to the decision or determination claimed correct by the protestant. The proposed provision would tend to defeat the administration of justice, since au importer might otherwise adequately meet the requirements for protesting the classifica. tion, value, etc., but if he specified he is protesting the “liquidation" (even by inadvertence) he would be "out of court". We believe that efforts of this nature to place limitations or constraints upon the liberal construction of protests should not be favored.
Title VII of the bill (page 40, line 6) contains a number of technical and conforming amendments, which are adequately described in the Justice Depart
* Reference to "485(b) of the Tariff Act of 1980" (19 USC 1485(b)) appears to be & drafting error.
ment's analysis. We have no objection to any of these amendments, with the
DONALD W. PALEY, Esq.
New York County Lawyers' Association). Mr. PALEY. Mr. Chairman, I am pleased to be here today I have been involved in the practice of customs law over the past 27 years. During that time, I was president of the Association of Customs Bar and I am also presently a member of the Standing Committee on Customs Law of the American Bar Association.
I appear today on behalf of the New York County Lawyers Association as chairman of the committee on customs law, My colleague, Mr. Norman Schwartz, who is chairman of our subcommittee on s. 2857, is here with me today.
We will try to answer any questions you may have.
The New York County Lawyers Association has a larger number of members than any other local bar association in the United States. A substantial number of the attorneys who appear before the U.S. Customs Court are members of our association. Our committee is made up of members who have been affiliated with the Department of Justice, the Customs Court, and the private bar.
The Committee on Customs Law of the New York County Lawyers Association opposes passage of S. 2857 in its present form, although we endorse the general purposes of the bill. We find the following provisions particularly objectionable for the reasons set forth in our statement.
I would like to highlight them as follows:
On page 4, line 3, section 302 of the bill would add a new section 1581 to 28 U.S.C. attempting to vest exclusive jurisdiction in the Customs Court over "all il actions against the United States *** directly affecting imports". The third paragraph of proposed new 28 U.S.C. 1581 states (page 4, line 17):
Nothing in this section shall be construed to create a cause of action, or to permit the maintenance of a suit not otherwise authorized by law.
Parenthetically, we feel that there are instances where the right to inaintain a cause of action has been created. We feel that some further clarification of the quoted language is necessary.
Section 302 of the bill would further add a new section 1583(a) to 28 U.S.C. (page 5, line 15). We oppose the language use to create this "residual cause of action", although we support the concept.
Also in section 302 of this bill, proposed new 28 U.S.C. 1583 (page 7, line 17) would exclude from judicial review certain rulings of the Secretary of the Treasury.
Also in section 302 of the bill, proposed new 28 U.S.C. 1592 would allow the Government too-broad a right of counterclaim in Customs Court litigation, thus inhibiting a citizen's right to prosecute his or her case.
The last sentence of proposed new 28 U.S.C. 2636 as covered in section 402 of the bill (page 19, line 17) would arbitrarily and without reason exclude financial loss from the concept of language, as set forth in our statement which we have submitted to the committee for the record.
I would like to add to the prepared part of our statement, Mr. Chairman, to say this. Lest we create the false impression that S. 2857 is without merit, I would like to take a few moments to point out those provisions which we feel are favorable and will serve to improve the judicial machinery of the U.S. Customs Court.
They are as follows:
First, we are in full agreement with the stated purpose of section 101 in title I.
Second, the provisions of section 1582 and 2643(a) which grant additional powers to the U.S. Customs Court, including injunctive relief,
Next, the provisions of section 2643(b) which provide for remand where the plaintiff has shown that the original action by the Customs Service was incorrect.
Item 4, the provisions of section 2631 which expand the standing of persons entitled to commence an action and particularly, the inclusion of language referring to agency action as defined in section 551(13) of title V, United States Code.
Item 5, the concept of section 1591 which provides for transfer of penalty cases to the U.S. Customs Court, although we are not in agreement with the language on page 11, lines 2-6 which read, "the case shall be transferred only if the district court determines that the case involves a substantial question other than the amount of any penalty involved as to the proper classification or valuation of imported merchandise or the rate of duty imposed.”
Finally, item 6, the provisions of section 1593 which provides for the transfer of cases between the district court and the U.S. Customs Court where the wrong forum was chosen.
We feel these are highly commendable items and we are in favor of passage of those provisions.
Thank you, Mr. Chairman.
I will have to go to the floor to vote. I will leave you to answer questions from Mr. Altier.
Were you here when the AFL-CIO testified this morning?
Senator DECONCINI. Did you note that they had an objection about workers representatives not being provided the ability to sue in the Customs Court? Do you have any comment on that?
Mr. PALEY. I would like Mr. Schwartz to comment.
My off-the-cuff feeling is that their interests are probably a little more remote and should be more directly connected.
Mr. SCHWARTZ. Mr. Chairman, this boils down to the question of the residual cause of action and those parties which are entitled to take advantage of the residual cause of action.
As we tried to point out in our prepared statement, traditionally the Customs Court's jurisdiction has been limited to those specifically connected with the import. The importer, the broker, the drawback claimant—these are what I am talking about. The question is: Is