[00:00:00] Speaker 03:
Quality furniture versus United States.

[00:00:59] Speaker 02:
Mr. Peterson.

[00:01:00] Speaker 02:
Good morning, Your Honor.

[00:01:01] Speaker 02:
We're here today on a relatively narrow question concerning the subject matter jurisdiction of the United States Court of International Trade.

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Our client, Hutchinson Quality Furniture, is an importer of wooden bedroom furniture from China.

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We brought this case in order to challenge liquidation instructions.

[00:01:21] Speaker 01:
Would you agree that Fujitsu is on point here?

[00:01:23] Speaker 02:
Excuse me?

[00:01:24] Speaker 01:
Would you agree that Fujitsu is on point here?

[00:01:27] Speaker 02:
No, Your Honor, Fujitsu is not on point here because Fujitsu actually gets to the merits of a case.

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Fujitsu gets to a situation where the Commerce Department has spoken and Customs acts contrary to what the Commerce Department has said.

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In the

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Decision below, Judge Kelly relied upon the Fujitsu decision and also relied upon the Alden Leeds decision.

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Now, those are cases where Congress has given an instruction, for example, suspend liquidation of the entry or liquidate the entry at a given rate.

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And those instructions are not questioned.

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What's questioned is whether customs in liquidating an entry properly carried out those instructions.

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It's entirely possible that at the end of the day, this case may sort of fall into the Alton Leeds or Fujitsu baskets, but we don't know yet.

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We don't know yet, and that's the point.

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What we do know is that the liquidation instructions that were issued and that were challenging under the Administrative Procedure Act, and which are supposed to tell Commer or Customs when the suspension of liquidation was lifted, don't do that.

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We know that Judge Rustani's order in the Orient International case was dated in February of 2013.

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The liquidation instructions say contrary.

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They say, oh, it was lifted in June of 2013.

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Makes a big difference, because the notice is supposed to start a six-month window for customs to liquidate.

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Now, it's pretty clear from the record that the liquidation notice

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is wrong that the June 13th, 2013 order from Judge Rusnani didn't lift the suspension of liquidation.

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In fact, when the domestic furniture industry asked her for an order, which she'd issued on that date, they asked her to dissolve her injunction, which suspended liquidation of the cases.

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She didn't do that.

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She crossed out the word dissolve in the minute order, and she wrote, amend my previous decision.

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The order she issued was not, and Judge Rustani is pretty clear on what she's doing, the order that Judge Rustani issued wasn't lifting the suspension of liquidation.

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That had been lifted before, and she knew that.

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What her order was, was an order directing execution of her final judgment.

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Now, this leaves open the question.

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On what date, if ever, did the Commerce Department communicate liquidation instructions to Customs?

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On what date did the Commerce Department tell Customs the valid date on which the suspension of liquidation had lifted and on which the six-month period began to run?

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Now, I don't know that, as I stand before you.

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The only way I can find out

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is if the CIT takes jurisdiction of this case under the Administrative Procedure Act and the Commerce Department... You're trying to establish that your client is entitled to a deemed liquidated rate, right?

[00:04:48] Speaker 03:
No.

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Well, we don't know.

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No, but isn't that what you're trying to get is to say you're entitled to

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the rate at which you enter the goods because you believe the goods should have been deemed to have been liquidated at a point in time.

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What I am hoping the outcome to this case is that when we get our APA review we will find a different communication of the liquidation case?

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You want to be able to say the correct rate for these particular goods is the rate you put on the entry when you brought them in.

[00:05:20] Speaker 02:
Absolutely, that's the desired outcome.

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And I think the argument from the government is that

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That relief you could have obtained if you had gone the route of an ordinary protest.

[00:05:30] Speaker 02:
No, that's not true.

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Well, a protest is only a gateway to challenge a decision of customers.

[00:05:39] Speaker 03:
A protest says, you charged me the wrong sum.

[00:05:42] Speaker 02:
Oh no, but a protest isn't a gateway to overturn a commerce decision.

[00:05:46] Speaker 03:
I'm not talking about that.

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I'm talking about getting you what you want to get.

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I don't know that a protest gets me what I want to get, Your Honor.

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Do you affirmatively not know it?

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You say, I don't know that it gets me what I want to get.

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Well, I do know that a protest does not get me a review of the validity of commerce's liquidation instructions.

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And that would be based on this court's decision years ago in the Conoco case.

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A protest is only there to challenge erroneous decisions by customs.

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You can't use it to challenge a decision by another agency, even if that decision of the other agency happens to merge in and affect the customs.

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If the goods should have been deemed liquidated, why can't that decision be made?

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Your Honor, I don't know, to tell you the truth.

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Well, because we have to find out on what date, if any.

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Don't you have to tell me that that remedy is unavailable?

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I don't think the protest remedy is available here.

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I'm saying you don't think it.

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But I mean, my understanding was the government's argument here was pretty simple, which was that it is.

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And that's the way you should have gone.

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And that this APA is background noise.

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And that's why I asked you if Fujitsu was on point.

[00:07:06] Speaker 02:
Well, I don't believe it is, Your Honor.

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If we decide it is, then that's over, right?

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Let's say we get our administrative review.

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And let's say that we discover that the liquidation instructions or the correct lifting of suspension was communicated to customs on a different date.

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The four-month gap between the day Judge Rustani lifted the suspension and this improper notice of whatever went out from commerce.

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We very well may be able to say, these entries are deemed liquidated, and ask this court

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in this 1581i action to so find.

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Now, one of two things can follow from that.

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This court could say, in this 1581i action, yeah, those liquidations are invalid and set them aside.

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That's what the court did in the second Shinye case.

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When we talk about liquidation, it's very possible.

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The court might decide, well, I'm going to declare it invalid.

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not set it aside, in which case at least we have a defense to a collection action.

[00:08:14] Speaker 01:
But you've run through the wormhole because you're talking about I and you're ignoring A and you can't go to I if you can use A. But the question was A and you just said, I don't think so and segue it over to I. I can't use A to get the judicial review I'm looking for here.

[00:08:35] Speaker 02:
What I'm looking for here is an APA review.

[00:08:39] Speaker 02:
I'm bringing an action in equity.

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What I want the Commerce Department to do is to file a CIT there.

[00:08:45] Speaker 01:
Hang on.

[00:08:46] Speaker 01:
Hang on.

[00:08:47] Speaker 01:
On the other hand, you can get the result, which you saw it, that is a determination on liquidation.

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I can't get that, Your Honor, without overturning the liquidation instruction.

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And that's not what a protest is for.

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And again, I invite the court's attention back to the Conoco case.

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You can't use the protest to get to a decision of another agency, even if that decision is going to merge in a liquidation.

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The protest is not a magic gateway.

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In the cases that Judge Kelly talked about in her decision, cases like Alden Leeds, there was no question about what commerce had said.

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For example, in the Alden Leeds case, commerce had told customs, suspend liquidation.

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Customs disobeyed that order.

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and liquidated.

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Well, that's a customs mistake, and you've got to file a protest to undo that mistake.

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But in this case, we don't know that customs did anything wrong.

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Customs liquidated within six months after what they were told was the date of lifting a suspension to liquidation.

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What we're saying here is customs was told wrong, that it was the Commerce Department that committed the error.

[00:10:03] Speaker 02:
The only way for us to get relief is to have this case brought under 1581 I, under the Administrative Procedure Act, get commerce to put that administrative record in front of the court so that we can review it.

[00:10:17] Speaker 02:
And we think, we believe, we very well might find... Get it so you can review it.

[00:10:25] Speaker 03:
Where?

[00:10:25] Speaker 03:
In another case?

[00:10:27] Speaker 02:
Well, this wouldn't be a question of reviewing court in another case.

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This would be a question of reviewing the Administrative Procedure Act record that underlies these liquidations.

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Assume you get your judgment from us that, oh yes, commerce made a mistake.

[00:10:43] Speaker 03:
OK.

[00:10:44] Speaker 03:
Then what do you do next?

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If the record shows.

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You want us to write an opinion that says your stuff should have been deemed liquidated?

[00:10:53] Speaker 02:
Uh, well somebody, somebody at some point, this appeals just here.

[00:10:57] Speaker 03:
That's my point is we're going to file a protest then?

[00:10:59] Speaker 03:
Too late, too late for a protest, isn't it?

[00:11:02] Speaker 02:
It's too late for a protest, but.

[00:11:04] Speaker 03:
So what, how do you get, you want, you're, you want to get a ruling that says your client has to pay duty at a lower rate, right?

[00:11:14] Speaker 02:
There's, there's two ways.

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You're out of pocket now.

[00:11:16] Speaker 03:
Is the client out of pocket money at the moment?

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They've been assessed with a lot of money, you know, over and over.

[00:11:22] Speaker 02:
They haven't paid it yet, no.

[00:11:23] Speaker 02:
I mean, they're challenging that.

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How do you effectively, once you get a ruling from us, if we would agree with you, that Commerce messed up, gave the wrong instructions, how do you get from there to getting the monetary result your client wants?

[00:11:44] Speaker 02:
Well, I can get one of two things.

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As I said, as in the Shinye case, the second Shinye case, this court

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where the CIT might set aside that liquidation is invalid, even without the filing of a protest.

[00:11:56] Speaker 03:
How do they do that?

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Does the CIT just frown around in the records at customs and say, oh, they made this mistake?

[00:12:06] Speaker 02:
No, this court in Chenier, too, held customs liquidations invalid and remanded the case with orders for the CIT to direct customs to undo their liquidations and refund money to Chenier.

[00:12:18] Speaker 02:
So that's a form of relief.

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If this court were to say, I'm just going to give you declaratory relief that those instructions were invalid and that you have a deemed liquidation, then if the government brings us case against us to collect these duties, we have a Cherry Hill defense and say, you can't collect these duties because the liquidations are invalid.

[00:12:39] Speaker 02:
It is possible that we may find that the proper date of lifting of suspension was never and to this day has not been communicated to customers.

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If that were the case, then yes, we would be in the same situation, say in the Alden Leeds case.

[00:12:56] Speaker 01:
Do you want to address the amendment by Congress of 1514 to conform with our determination in Fujitsu?

[00:13:05] Speaker 02:
I think it's simply clarified that deemed liquidations as a class are subject to protest.

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But again, any liquidation, any decision

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that's going to be subject to a protest has to be a decision of customs.

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The amendment did not change the fact that the protest statute only speaks of decisions of the customs officer.

[00:13:30] Speaker 03:
So this... Well, has the customs officer made a decision with regard to these specific imports?

[00:13:35] Speaker 03:
It has.

[00:13:35] Speaker 02:
No, they only carry out a ministerial role.

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They only carry out the instructions that commerce gives them.

[00:13:41] Speaker 02:
So if commerce is... So they never make a decision.

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Pardon?

[00:13:45] Speaker 02:
They never make a decision.

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A ministerial one.

[00:13:49] Speaker 02:
A ministerial one.

[00:13:50] Speaker 02:
But again, I would urge this court... Is that a decision?

[00:13:53] Speaker 01:
Huh?

[00:13:53] Speaker 01:
Is that a decision?

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Not a decision reviewable by protest because it's not a decision of the customs officer.

[00:14:01] Speaker 01:
It's not a... That's exactly contrary to what Fujitsu and the Congress say.

[00:14:06] Speaker 01:
Well, it's... Regulable by protest.

[00:14:10] Speaker 02:
Again, Fujitsu, Alden leads, these are cases where nobody is questioning the validity of what Congress said.

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This is a different case.

[00:14:18] Speaker 02:
We're saying, customs acted on bad instructions.

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Customs is going to say, we made no decision.

[00:14:26] Speaker 02:
We carried out a ministerial function based on the instructions we were given.

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If those instructions were bad, then as a consequence, their liquidation may be set aside.

[00:14:36] Speaker 02:
But the way for me to get to show that the commerce instructions were bad is through the APA.

[00:14:43] Speaker 01:
Why can't you do that under A?

[00:14:46] Speaker 02:
Because A involves a trial de novo.

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A does not involve a review of an administrative record for commerce.

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A does not involve the APA standard of arbitrary capricious or contrary to law.

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I can't do that under A, and that's the problem.

[00:15:03] Speaker 02:
Just as, again, in the Conoco case, again, protest is not a magic window to go look into the records or look into the decisions of other agencies, even if those other agencies are then informing customs

[00:15:16] Speaker 02:
You're well into your rebuttal time, Mr. Peters.

[00:15:19] Speaker 02:
I know, Your Honor, and I'll save what little time I have.

[00:15:22] Speaker 02:
Thank you.

[00:15:24] Speaker 02:
If there's nothing else.

[00:15:31] Speaker 03:
Mr. Cassini.

[00:15:34] Speaker 00:
May it please the Court.

[00:15:36] Speaker 00:
There are two places in Fujitsu that are dispositive to this case.

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First, if you turn to page 1374, this Court held that

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A deemed liquidation is a protestable event.

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And as the court noted previously, that holding was then included in the amendment of section 1514 later on.

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And the second place has to do with the whole timing issue, and that's at page 1379, where the court explained that the suspension of liquidation does not lift until the period for all appeals is exhausted.

[00:16:14] Speaker 00:
And simply looking at the calendar in this case,

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Trial court issued its final judgment in February.

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The appeal period expired in April.

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So the earliest that any of Hutchinson's entries could have no longer been subject to the suspension of liquidation was the deadline for appeal in April.

[00:16:37] Speaker 00:
And then the entries all liquidated in September, five months later.

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Fujitsu is dispositive on both of those bases.

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And for these reasons, we respectfully request the court affirm.

[00:16:53] Speaker 00:
OK.

[00:16:56] Speaker 00:
Questions?

[00:16:56] Speaker 00:
Thank you.

[00:16:57] Speaker 01:
I think you set a new record, Mr. Tosini.

[00:17:00] Speaker 01:
Thank you.

[00:17:02] Speaker 02:
Mr. Pearson?

[00:17:05] Speaker 02:
I'll restore your time to four minutes.

[00:17:07] Speaker 02:
OK.

[00:17:07] Speaker 02:
Well, I hope I can match Mr. Tosini in brevity.

[00:17:10] Speaker 02:
There obviously isn't much to rebut here.

[00:17:14] Speaker 02:
This action is to set aside liquidation instructions.

[00:17:19] Speaker 02:
A consequence of that may be that liquidations are ruled invalid and that this court may set aside liquidations or the Court of International Trade down the road may hold them to be unenforceable.

[00:17:33] Speaker 02:
The things that Mr. Tosini referred to, whether there is some legislatively mandated 60-day stay pending appeal,

[00:17:42] Speaker 02:
That's a question you're not going to reach until you reach the merits of the liquidation instructions themselves.

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We're not going to know when the six-month period for customs to liquidate runs, until we know when, if ever, that agency got valid liquidation instructions from customs.

[00:18:03] Speaker 02:
And what I think the CIT did improperly was they said,

[00:18:08] Speaker 02:
You know, Hutchinson, we're going to take your 1581-I complaint and rewrite it as a 1581-A complaint.

[00:18:14] Speaker 03:
And liquidation, whether it was pursuant to good instructions, bad instructions, or no instructions, is barred during the appeals period.

[00:18:23] Speaker 02:
Again, if you're challenging a decision of customs.

[00:18:28] Speaker 02:
Period.

[00:18:29] Speaker 03:
I mean, the effect of the state says you're not supposed to liquidate, right?

[00:18:33] Speaker 02:
No, Your Honor, that's not true.

[00:18:34] Speaker 02:
Because in the second Shinye case, you had exactly that situation.

[00:18:38] Speaker 02:
You had liquidations, duty assessments.

[00:18:40] Speaker 02:
The protest period passed.

[00:18:42] Speaker 02:
It expired.

[00:18:43] Speaker 02:
Nobody filed a protest.

[00:18:44] Speaker 03:
During a state period?

[00:18:45] Speaker 02:
Pardon?

[00:18:46] Speaker 03:
During a period when it stayed?

[00:18:47] Speaker 02:
No, it wasn't stayed.

[00:18:49] Speaker 02:
I mean, liquidate in the second shinging.

[00:18:52] Speaker 03:
What Mr. Tosini was telling me is that you have an appeal here, and the appeal goes on to X.

[00:18:58] Speaker 03:
And you're not, Cousins is not supposed to be doing any liquidating, depending on that appeal, right?

[00:19:04] Speaker 02:
Well, no, that's way ahead of what this case is involved.

[00:19:07] Speaker 03:
Was that correct, what he said?

[00:19:09] Speaker 02:
No, actually I disagree, although I will concede that this court has made such rulings, and those rulings, if we get to the merits, may have to be looked at en banc.

[00:19:19] Speaker 03:
We've made rulings that you disagree with?

[00:19:22] Speaker 02:
I think the Fujitsu ruling and perhaps one other consolidated bearings, if I'm not mistaken.

[00:19:28] Speaker 03:
You're saying that in order to have relief here, we need to go in bank and reverse the justice?

[00:19:33] Speaker 02:
Not at this time, but at some future date, we may ask for that relief.

[00:19:37] Speaker 02:
I mean, that's the whole point here.

[00:19:41] Speaker 02:
I mean, what Mr. Tosini was talking about is this notion that Congress somehow imposed a 60-day stay on the enforcement of court of international trade orders in these cases.

[00:19:54] Speaker 02:
I would put it to you,

[00:19:55] Speaker 02:
that separation of powers would prevent Congress from exercising the direct judicial authority in such a way.

[00:20:05] Speaker 02:
The Court of International Trade rules only contain one stay of execution of any judgment, and it's a 30-day stay in the rules, which can be shortened or extended on motion.

[00:20:20] Speaker 02:
So I mean, that's another fascinating subject for a different day once we get

[00:20:25] Speaker 02:
our jurisdiction established here, and we find out when the liquidation instructions were sent.

[00:20:31] Speaker 02:
But I would disagree with Mr. Tosini that Congress somehow legislated a 60-day judicial stay of final judgments.

[00:20:40] Speaker 03:
Thank you, Mr. Peterson.

[00:20:41] Speaker 03:
We thank the party for their argument.

[00:20:44] Speaker 03:
Thank you.