CIT Says DOT Has No Authority to Admit Entries Based on Their Compliance With Safety Standards
The Transportation Department doesn't have "vested authority" to determine whether to admit entries of goods based on whether they comport with federal safety standards, the Court of International Trade held on Oct. 30. Judge Lisa Wang said that, as a result, CBP has the relevant admissibility authority and the trade court can hear the case.
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Wang also ruled that for the two entries at issue, the goods were excluded and not seized, providing CIT with subject-matter jurisdiction.
Importer Inspired Ventures imported two entries of rubber tires from China, which CBP put on hold under suspicions that the goods had a high risk for tariff evasion. Upon physical inspection, the agency suggested that the goods may be in violation of DOT safety standards, corresponding with DOT to review the goods.
DOT's National Highway Traffic Safety Administration told CBP that the tires aren't compliant with various department regulations. CBP then sought to seize the goods, though it issued Inspired a seizure notice only after the company brought the present case at CIT. A jurisdictional spat ensued on whether CIT was the proper home for the action (see 2407020012).
Wang first held that it's CBP, not DOT, that has the authority to admit the entries. Acknowledging that agencies other than CBP can have this authority, the judge turned to the legislative history to determine which agencies have this authority, given that the statute is silent on the matter. Congress said that the FDA and USDA, "among others," can make admissibility decisions.
Wang said the use of the term "among others," functions to limit the number of agencies to "those with specific jurisdiction over admissibility determinations rather than all federal agencies." The agencies Congress mentioned had "express congressional authority to make entry determinations," making CBP's role ministerial.
The court said DOT isn't such an agency. The asserted statutory basis for this authority, the National Traffic and Motor Vehicle Safety Act, says a person can't import a car or car part unless it complies with the law's safety standards. Wang said this law "does not provide an explicit delegation of authority for NHTSA to make admissibility determinations," adding that the "mere promulgation of product standards and regulations does not vest that agency with the authority to deny imports that fail to meet those standards."
The judge likened the case to CBB Group v. U.S., in which CIT said it had jurisdiction when CBP made an admissibility determination based on copyright law. While copyright infringement is governed by the Copyright Act, the court said the CBP admissibility decision and the determination of whether the merchandise at issue is "piratical" are the same decision.
DOT's mere recommendations aren't enough to "divest Customs of its general admissibility authority," the decision said. "Where an agency has vested authority to make a determination, it is not suddenly without that authority by requesting advice from another agency.”
The government also sought to dismiss the suit by claiming that for one of the entries at issue, the goods were seized and not excluded, making jurisdiction proper with the district court and not CIT. Wang found the entry to be excluded and not seized, walking through four factors used by courts to assess if an entry is excluded or seized.
The first is whether a protest indicates it's challenging a seizure or an exclusion. Wang said Inspired's protest showed it was challenging an exclusion. The second factor looks to whether the plaintiff received notice of a seizure. CBP failed here to provide notice until after the case started, the court noted. The third factor asks if the government has control over the merchandise. The judge acknowledged that CBP has kept control over the tires since the attempted import of the tires.
The fourth factor considers whether a plaintiff was required to choose between "immediate forfeiture proceedings or a petition from relief from seizure." Wang said that because Inspired wasn't notified of the seizure until after the case was filed, "it was unable to choose between immediate forfeiture proceedings or a petition for relief from seizure.”
Balancing these factors, the judge said "an exclusion is being challenged," highlighting the lack of seizure notice prior to the CIT case and the lack of evidence showing Inspired knew its goods were being seized prior to the filing of its complaint.
(Inspired Ventures v. U.S., Slip Op. 24-121, CIT # 24-00062, dated 10/30/24; Judge: Lisa Wang; Attorneys: Elon Pollack of Stein Shostak for plaintiff Inspired Ventures; Alexander Vanderweide for defendant U.S. government)