author: FORD, Judge:

text:
    SANGAMO CAPACITOR DIVISION, Plaintiff, v. UNITED STATES, Defendant.
    Court No. 78-6-00999.
    United States Court of International Trade.
    March 15, 1985.

      Barnes, Richardson & Colburn, New York City (David O. Elliott and Jack D. Mlawski), New York City, for plaintiff.
    Richard K. Willard, Acting Asst. Atty. Gen., Washington, D.C., Joseph I. Liebman, Atty. in Charge, Intern. Trade Field Office (Saul Davis), New York City, for defendant.
   FORD, Judge:

This action involves the proper classification of silvered mica plates in four frame sizes which are designated as D-10, D-15, D-19 and D-30. The merchandise was classified under Item 685.80 as Electrical Capacitors, fixed or variable, which provides for a rate of duty of 10% ad valorem.

Plaintiff claims the merchandise is entitled to entry free of duty under the Generalized System of Preferences under A516.94 as articles not specially provided for, of mica or A656.15 as articles of silver.

The statutory provisions and headnotes involved herein provide, so far as is pertinent, as follows:

Tariff Schedules of the United States, General Headnotes and Rules of Interpretation—

9. Definitions. For the purposes of the schedules, unless the context otherwise requires—

*******

(f) the terms “of”, “wholly of”, “almost wholly of”, “in part of” and “containing”, when used between the description of an article and a material (e.g., “furniture of wood”, “woven fabrics, wholly of cotton”, etc.), have the following meanings:

*******

(i) “of” means that the article is wholly or in chief value of the named material;

*******

10. General Interpretative Rules. For the purposes of these schedules— *******

(f) an article is in chief value of a material if such material exceeds in value each other single component material of the article;

*******

(h) unless the context requires otherwise, a tariff description for an article covers such article, whether assembled or not assembled, and whether finished or not finished;

Classified under—

685.80 Electrical capacitors, fixed or variable....................10% ad val.

Claimed under—

A516.94 Articles not specially provided for, of mica ..............Free (under Generalized

System of Preferences)

Articles of precious metal, including rolled precious metal:

# * # * * * sf<

A656.15 Of silver, including rolled silver .........................Free (under Generalized System of Preferences)

The record in addition to the official papers, which were received in evidence without being marked, consists of the testimony of three witnesses called on behalf of plaintiff and the receipt into evidence of fifteen exhibits introduced by plaintiff. Defendant called one witness on its behalf and introduced eight exhibits into evidence.

Plaintiffs witness, Mr. Charles L. Rogers, is the Manager of Quality and Reliability Control of mica capacitors for plaintiff. For twenty-nine years prior he held the same position covering the entire plant. Plaintiff manufactures three types of capacitors — mica, aluminum electrolytic and power factor capacitors. The witness is familiar with the silvered mica plates involved herein and the manufacture of them in India. The supplier, J.V. Electronics, was established in accordance with plaintiffs specifications and utilized plaintiffs equipment, supervisory personnel and training in setting up the manufacturing operation.

Exhibits 1 through 4 were identified as the four sizes of mica plates involved in this litigation. According to the witness, the imported merchandise consists of two basic materials, mica and silver. They are produced by placing a raw mica blank into an oven to remove moisture. It is subsequently stored in a low temperature oven to keep it moisture-free. The mica is thereafter stacked for efficient assembly and silver is applied to one side of the mica by a silk-screening process. It is dried and the silk-screening process is repeated over the first pattern.

After importation the imported merchandise is manufactured into dipped wire lead capacitors. The witness identified Exhibit 5 as a chart he had prepared covering the process of manufacture of the capacitors in the United States. The following steps are covered by Exhibit 5:

Step 1. The imported silver mica plate.

Step 2. Illustrates that the silvered mica plate is electrically inspected to determine whether or not there are any fractures or shorts in the mica itself and is then sorted into various thickness ranges.

Step 3. An illustration of the tin lead foil which will be used in a later stage in the process to make contact with the silver. Two foils are actually used in the process but only one illustrated on the chart.

Step 4. Represents plain or clear mica, referred to as a backer, which is used as an insulation material on the top and bottom of the assembly of components in the next step.

Step 5. Illustrates the assembly of the foil, the silvered mica plate, and the insulating mica called the backer.

Step 6. Shows how the multiple sections are put together in the prior step.

Step 7. The assembled section is checked for imperfections by applying voltage to the assembly.

Step 8. A varnish is applied by dipping the entire assembly. The varnish is applied to hold the assembled section together for further processing.

Step 9. The assembled section is placed in an oven to cure the varnish.

Step 10. Illustrates the fully assembled multiple section after oven curing.

Step 11. The assembled section is emersed in a bath to remove any contaminants such as chlorides and sulfides within the section assembly.

Step 12. The multiple sections are sawed into individual sections.

Step 13. Illustrates one of these sections resulting from the sawing of the multiple section.

Step 14. Illustrates the clips and leads that are used in the manufacturing process. There are two clips and two leads for each section.

Step 15. Illustrates how those clips and leads are applied to a section.

Step 16. The clipped section is adjusted and calibrated.

Step 17. The component is then washed again to remove any contaminants.

Step 18. The component is placed in an oven to remove any moisture left within the section.

Step 19. A sealant is applied to the clipped section to improve the moisture resistance of the assembly.

Step 20. The assembled section is oven baked to cure the sealant.

Step 21. An epoxy is applied for the purpose of bonding together any delaminated or fractured pieces of mica which may have occurred during the sawing operation.

Step 22. The product is then placed into an oven to cure the epoxy.

Step 23. The clipped section is encased in epoxy.

Step 24. The clipped assembly is placed in an oven to cure the epoxy.

Step 25. The encased assembly is placed in an oven to stabilize the article.

Step 26. The product is washed.

Step 27. The article is measured for voltage stress, capacitance and dissipation factor.

Step 28. The finished capacitor is marked to indicate the capacitance value or code and the working voltage of the unit. The code system would additionally indicate the size of the capacitor.

Step 29. The mark is cured in an oven.

Step 30. Illustrates the article being packed for shipment to the customer. (R. 20-23.)

With the exception of the packing indicated in Step 30, each of the manufacturing steps is required to produce a commercially saleable mica capacitor which would be in compliance with the EIA (Electronic Industries Association) standards, a copy of which was received in evidence as plaintiffs Exhibit 10. The EIA standards are admittedly the “bible” of the industry. There are other specifications utilized by the military.

Mr. Rogers testified at some length as to the minimal tests required by the EIA standards and related them to the steps set forth in plaintiffs Exhibit 5.

The witness defined a capacitor as an electronic device that is designed to receive, store and release electrical energy as an electric charge. Mr. Rogers was of the opinion that the definition of a capacitor as being a device consisting of two electrodes separated by a dielectric is too general since it would apply to many things that are not capacitors. In a mica capacitor the dielectric material is mica and the electrodes are silver. Plaintiffs Exhibit 11, a 500 OHM T.V. antenna cable, consists of two electrodes separated by a dielectric but is admittedly not a capacitor. Likewise a romex cable used to carry electric housing current also consists of an electrode separated by a dielectric, but admittedly is not a capacitor.

The witnesses for plaintiff, as well as defendant, indicated that the silvered mica plates in their imported condition are never used in the trade as capacitors in an electronic circuit. Mr. Rogers asserted that in its imported condition the silvered mica plates are mere material for use in the manufacture of capacitors. The witness testified that in the manufacturing process in the United States there are twelve materials or parts utilized while only silver and mica are used in the manufacture of the imported merchandise.

Mr. Rogers further testified the imported silvered mica plate is not a capacitor since it has no use or function and would not be recognized in the trade as a capacitor. The capacitance of a capacitor is governed by the quality of the dielectric and the size and number of dielectric distribution and electrodes. In order to obtain the desired capacitance, according to the witness, the plates are stacked in a parallel fashion. The definition of the term capacitor read to the witness from McGraw-Hill Encyclopedia of Science and Technology did not describe the imported silvered mica plates since the imported merchandise cannot function as a capacitor without performing the manufacturing operations set forth in Exhibit 5.

On cross-examination the witness testified an unfinished capacitor did not exist until Step 15 or 16 of Exhibit 5. It is not a capacitor, according to the witness, since prior to that point it has no environmental protection, protective sealants, or capacitance rating.

Plaintiff thereafter called Mr. Laird L. Macomber, senior product planner at AT & T Technologies. Mr. Macomber formerly worked at Hewlett-Packard for approximately four and one-half years as a technical publication engineer. For approximately eight years prior to that the witness held positions as an application engineer, first at Mallory Capacity Company and later with Cornell-Dubilier Company, in both instances dealing with capacitors. For approximately six and one-half years the witness was employed by C.T.S. Micro Electronics, a manufacturer of micro-circuits, utilizing capacitors.

Mr. Macomber defined a capacitor as a commercial electronic component used for the purpose of putting capacitance in an electrical circuit. It must have as minimum requirements, a known capacitance, terminals for attachment to a circuit, and be suitably mechanically enclosed in order to perform its function. Capacitance, according to the witness, is an electrical unit which measures the ability of a device to store electrical energy. The minimal requirements for commercial application of a mica capacitor are: (a) a known capacitance, (b) a rated voltage, (e) leads or terminals, (d) a suitable case or enclosure to make it mechanically rugged and sound.

Mr. Macomber testified the silvered mica plates are not capacitors since they lack the essential elements referred to supra. It was his opinion that an unfinished capacitor would not exist until Step 16 of plaintiffs Exhibit 5 since it is the first step at which leads for connecting into a circuit are provided and there is some measure of electrical utility present. In addition to the foregoing requirements, Mr. Macomber further indicated that it was necessary to have a tolerance rating for a salable capacitor.

Plaintiffs witness, Mr. Ray Holliday, is presently employed as division controller of Sangamo Capacitor Division. Prior to this employment, he was the chief financial accountant for plaintiff. His duties included the maintenance of books and records of Sangamo and includes familiarity with the purchase of imported silvered mica plates from India. The witness identified plaintiffs Exhibit 13 as a document depicting the manufacturing costs of mica capacitors at the Sangamo plant in South Carolina. The exhibit includes material and labor and overhead necessary for the manufacture of the mica capacitors. This information is determined on a standard cost system which may vary from the actual cost by no more than eight-tenths of one percent. According to Mr. Holliday the cost of the imported silvered mica plates is 2 percent for D-10, 3.7 percent for D-15, 25.1 percent for D-19, and 52 percent for D-30.

Defendant called Mr. Michael Trubowitsch, marketing manager for AVX Corporation, a leading manufacturer of multilayer ceramic capacitors. This company does not manufacture mica capacitors. Prior to his present employment, the witness was associated with various other manufacturers of capacitors. Those companies manufacture tantalum capacitors, dry electrolyte capacitors, wet aluminum electrolytic capacitors, ceramic capacitors and various plastic film capacitors. Mr. Trubowitsch’s employment did not relate directly to the production of capacitors, and he has never sold mica capacitors.

The witness, upon examining Exhibits 1 through 4, characterizes them as a capacitor array. The witness identified Exhibit G as a capacitor array made of ceramic material by the AVX Corporation. Mr. Trubowitsch testified that articles such as Exhibit G are attached into an electric circuit using various methods. While the witness was of the opinion Exhibits 1 through 4 could be similarly attached, he’ has never seen them so used, nor was he absolutely certain they would be able to accept soldering.

Mr. Trubowitsch testified that a capacitor, by definition, consists of two electrodes separated by a dielectric. He subsequently conceded the above definition should also include, by design, the introduction of capacitance into an electric circuit and that the basic definition is too encompassing. The witness agreed that the involved multilayer mica capacitors, as depicted by Exhibit 5, are designed by the manufacturer to utilize foil, clips and leads as the method to introduce capacitance to the electronic circuit. The witness further testified that the molded and dipped mica capacitor is designed to be encapsulated and have leads which are recognized requirements by the industry of such a component. The witness was unaware of any such article produced commercially without encapsulation and leads. It was the opinion of the witness that a mica capacitor produced from the imported silvered mica plates did not come into being until Step 15 of Exhibit 5. Mr. Trubowitsch knew of no trade standard for a single layered mica plate.

Based upon the record as made and the classification herein, defendant contends the imported silvered mica plates are capacitors or, in the alternative, unfinished capacitors within the meaning of General Interpretative Rule 10(h). The issue thus presented is whether the imported merchandise falls within the above or consists of mere material for the manufacture of capacitors as contended by plaintiff.

In the field of customs jurisprudence, a tariff term is construed in accordance with its common meaning, which is presumed to be the same as its commercial meaning. Nippon Kogaku (U.S.A.), Inc. v. United States, 69 CCPA 89, 673 F.2d 380 (1982). Congress is presumed to know the language of commerce, and to have framed the statutory provisions according to the general usage and denomination of the trade. Nylos Trading Company v. United States, 37 CCPA 71, C.A.D. 422 (1949).

The common meaning of a tariff term is not a question of fact but a question of law. United States v. National Carloading Corp., et al, 48 CCPA 70, C.A.D. 767 (1961); American Express Company v. United States, 39 CCPA 8, C.A.D. 456 (1951). The determination of common meaning is a matter of judicial knowledge. The Court may and does consult dictionaries, lexicographic information, scientific information and other reliable sources of information as an aid to their knowledge. United States v. Standard Surplus Sales, Inc., 69 CCPA 34, 667 F.2d 1011 (1981). The testimony of witnesses may be considered as an aid to the memory of the Court but is not binding and may be accepted or rejected. Tropical Craft Corp. v. United States, 45 CCPA 59, C.A.D. 673 (1958).

The parties have cited various definitions, including the following:

The IEEE Standard Dictionary of Electrical and Electronic Terms (1972):

Capacitor (condenser). A device consisting of two electrodes separated by a dielectric, which may be air, for introducing capacitance into an electric circuit.

McGraw-Hill Encyclopedia of Science and Technology (1982):

Capacitor. A device for introducing capacitance into a circuit. In general, a capacitor consists of two metal plates insulated from each other by a dielectric
Mica types. These capacitors use thin rectangular sheets of mica as the dielectric. The dielectric constant of mica is in the range of 6-8. The electrodes are either thin sheets of metal foil stacked alternately with the mica sheets, or thin deposits of silver applied directly to the surface of the mica sheets. Mica capacitors are used chiefly in radio-frequency applications____

The classification of ceramic capacitors was before this Court in Sprague Electric Co., et al. v. United States, et al., 65 Cust.Ct. 135, C.D. 3972 (1970), wherein the Court quoted the following language from heading 85.18 of the Brussels Nomenclature, which it noted was identical to the language of Item 685.80, supra:

Electrical capacitors (or ¡condensers) consist in principle of two conducting surfaces separated by an insulating material (dielectric), e.g., air, paper, mica, oil, resins, ceramics or glass.
They are used for various purposes in many branches of the electrical industry (e.g.: — to improve the power factor of A.C. circuits; to protect electrical contacts from the effects of arcing; for storing and releasing given quantities of electricity; in oscilating circuits; in frequency filters; and very largely in the radio, television and telephone industries).
Their characteristics (shape, size, capacitance, nature of dielectric, etc.) vary according to their intended use. The heading, however, covers all capacitors whatever their intended use (including standard capacitors used in laboratories, specially made within fine limits and designed to remain constant during use).

The definitions supra and the testimony establish a capacitor to be used in electronic circuits for the purpose of introducing capacitance. The components of a capacitor are two electrodes separated by a dielectric. However, it appears the design and the intended purpose are important. Hence any article having two electrodes separated by a dielectric does not necessarily make a capacitor. This is apparent by the examples offered as Defendant’s Exhibit H and Plaintiff’s Exhibits 11 and 12. Defendant’s Exhibit H and Plaintiff’s Exhibit 11 consist of T.Y. antenna wire, and Plaintiff’s Exhibit 12 is a piece of Romex house wire cable. These articles have the basic components of the definition and in fact may induce certain capacitance, but they are not designed, intended nor considered a capacitor by the trade.

According to the record the imported silvered mica plates are designed to be used in the manufacture of multilayered dipped capacitors with leads. They are never used for any other purpose and are not sold to the trade in their imported condition. The Electronic Industrial Association Standards, Plaintiff’s Exhibit 10, is recognized by the industry. These standards require mica capacitors to meet the specifications established by the association. The merchandise in its condition as imported is not susceptible to most of the tests and, accordingly, would not meet the El A standards.

In Sprague, supra, the Court made the following observation, which is also applicable to the imported merchandise:

Wire leads are then attached to the silvered disc to enable it to be utilized in electronic circuits. A resin is then applied to the body of the capacitor. Prior to the addition of the leads, the ceramic discs or silver ceramic discs are not electrical articles.

In view of the foregoing, it has been established to the satisfaction of the Court that the imported silvered mica plates are neither designed nor capable in their condition as imported to be utilized in electrical circuits. It is also apparent that said merchandise is neither designed nor capable of introducing a known capacitance into an electric circuit. Accordingly, the Court finds the imported silvered mica plates are not capacitors.

The question as to whether they are unfinished capacitors is also answered in the negative for the reasons hereinafter set forth. The leading case, Daisy-Heddon, Div. Victor Comptometer Corp. v. United States, 66 CCPA 97, C.A.D. 1228, 600 F.2d 799 (1979) made the following observation and set forth five factors to be considered in determining whether an article is substantially complete and, therefore, unfinished:

There are several factors which may come into play in the determination of whether an article is substantially complete. In a case, such as this, where the article is incomplete due to the omission of one or more parts, as opposed to where an article is incomplete because the material which comprises the article is in need of further processing, the following factors can be relevant: (1) Comparison of the number of omitted parts with the number of included parts; (2) comparison of the time and effort required to complete the article with the time and effort required to place it in its imported condition; (3) comparison of the cost of the included parts with that of the omitted parts; (4) the significance of the omitted parts to the overall functioning of the completed article; and, (5) trade customs, i.e., does the trade recognize the importation as an unfinished article or as merely a part of that article. This list of factors is not exhaustive; it must be recognized that fewer than all of the above factors, or additional factors, may come into play depending on the particular importation. The outcome of each case will always depend on the particular merchandise involved.

Plaintiffs Exhibit 5, which sets forth the additional steps and materials added to the imported silvered mica plates to make a commercially acceptable capacitor, clearly establishes the subject merchandise does not fall within the unfinished category provided for in Rule 10(h), supra. It has been established that twenty-nine additional steps, plus packing, are utilized and twelve materials or parts are added. In addition Exhibit 13 establishes the cost of the imported merchandise for the finished capacitors, which is 2 percent, 3.7 percent, 25.1 percent and 52.0 percent for the D-10, D-15, D-19 and D-30, respectively. Each of the steps set forth on Plaintiffs Exhibit 5 are necessary for the completion of an article which will meet the industry standard as set forth in Plaintiffs Exhibit 10.

Defendant’s reliance upon General Electric Co. v. United States, 2 CIT 84, 525 F.Supp. 1244 (1981), aff’d 69 CCPA 106, 681 F.2d 785 (1982) is misplaced. The omission of the power cord, transformer and internal connective wiring and loudspeakers is not analagous to the omission of the leads and the additional required steps set forth in Plaintiff’s Exhibit 5. The added fabrication in the case at bar relates directly to the functioning of the capacitor, while in the General Electric case the added prefabricated components related to the stereo system as a whole and not the receiver per se.

The imported silvered mica plates are, therefore, not unfinished capacitors within Rule 10(h). However, for plaintiff to be entitled to receive duty-free treatment under the Generalized System of Preferences, as set forth in General Headnote 3(c)(ii), the cost of processing performed in the beneficiary developing country is required to be not less than 35 percent of the appraised value. The Secretary of the Treasury was authorized to promulgate regulations effectuating the headnote.

In the case at bar plaintiff filed Form A upon entry which indicates that not less than 35 percent of the cost of processing were incurred in India. 19 C.F.R. 10.-173(a)(4) permits customs officials to request further information as they deem necessary. Customs did not request such additional information, hence the information contained on Form A remains uncontradicted. In House of Ideas, Inc. v. United States, 2 CIT 68 (1981), the Court held that Form A, submitted upon entry and certified by an independent governmental authority of the exporting country designated by Customs for that purpose, is deemed to be presumptively correct.

Since plaintiff claims the imported merchandise to be dutiable in chief value of silver or mica, depending upon its content, it has the burden of proof to establish the component material in chief value.

In order to determine the component material in chief value, the case law holds the value of each component must be ascertained at a time when they have reached such condition that nothing remains to be done to them except to be combined. Seeberger v. Hardy, 150 U.S. 420, 14 S.Ct. 170, 37 L.Ed. 1129 (1893); United States v. Jovita Perez, et at., 44 CCPA 35, C.A.D. 633 (1957). The affidavit of Mr. M.K. Pillai, the Director and Secretary of J.V. Electronics Ltd. the supplier, Plaintiffs Exhibit 14, specifically sets forth the values from the books and records of the company at the time of manufacture when nothing remains to be done but the joinder of the components. Based upon this evidence which stands uncontroverted, it is established that the silvered mica plates in frame sizes D-10 and D-19 are in chief value of mica and frame sizes D-15 and D-30 are in chief value of silver.

In view of the foregoing the imported silvered mica plates are not capacitors nor unfinished capacitors. The D-10 and D-19 frames sizes are articles of mica subject to classification under Item A516.94 and frame sizes D-15 and D-30 are articles of silver under Item A656.15.

Judgment will be issued accordingly.


source: Caselaw Access Project

author: DiCARLO, Judge:

license: Public Domain

text:
    Kenneth A. ANDERSON, Jr., dba Kenneth A. Anderson, Jr. & Sons, Plaintiff, v. The UNITED STATES, et al., Defendants.
    Court No. 85-4-00582.
    United States Court of International Trade.
    May 13, 1985.

      Doherty and Melahn, William E. Melahn, Boston, Mass., for plaintiff.
    Richard K. Willard, Acting Asst. Atty. Gen., Joseph I. Liebman, New York City, Attorney in Charge, International Trade Field Office, Veronica A. Perry, New York City, for defendants.
   Memorandum Opinion

DiCARLO, Judge:

Plaintiff, a customs broker, seeks a preliminary injunction prohibiting the United States Customs Service (Customs) from issuing liquidated damage claims against Seamark Corporation (Seamark) for failing to export under Customs supervision two entries of frozen shrimp denied admission into the United States.

A temporary restraining order (TRO) was issued following argument on April 23, 1985. With defendant’s consent, the TRO was extended to May 13, 1985. An evidentiary hearing was held in Boston, Massachusetts on May 6, 1985. The motion is denied, and the TRO vacated.

BACKGROUND

Seamark entered frozen shrimp at Boston under a general term bond. After entry the merchandise was held at a cold storage warehouse in Boston, pending inspection by the Food and Drug Administration. The shrimp were found to contain salmonella and filth, and were refused admission in January 1985, and ordered exported or destroyed under Customs’ supervision within 90 days pursuant to Section 801 of the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 381 (1982).

Plaintiff, as Seamark’s agent, arranged for export of the merchandise from Newark by the Nippon Yussen Kaisha Line (NYK). Plaintiff prepared two transportation and exportation (T & E) entries to accompany the merchandise to Newark. Customs’ District Director in Boston approved the T & E entries on January 30, 1985, and provided plaintiff with a franked envelope in which the entry documents were to be returned to the District Director after signature by Customs officials at Newark.

On January 31, 1985, the shrimp were transported from the warehouse to the Moran Terminal in Boston. The entry documents were given to Customs employees at the Moran Terminal.

A trucking firm hired by NYK then picked up the shrimp at Moran Terminal and transported them to Newark where, according to a representative of NYK, they were boarded on a ship bound for Thailand on February .9, 1985. The trucking firm hired by NYK removed the merchandise from Moran Terminal without Customs’ authorization and failed to pick up the T & E entries, which remained with the Customs employees at the Terminal. Customs did not inspect the merchandise at Boston or Newark.

On March 2, 1985, plaintiff learned that the T & E entries had not been executed at Newark and were still at Moran Terminal, and that Customs had not certified export of the merchandise. Plaintiff was told that since Seamark did not export the shrimp under Customs supervision within 90 days of the denial of admission Seamark did not fulfill its obligation under the bond and was subject to liquidated damage claims.

Plaintiff produced bills of lading and ship manifests to demonstrate that the merchandise had been exported, but Customs officials in Boston refused to certify export on the T & E entries.

Plaintiff brought this action to enjoin defendants from issuing liquidated damage claims against Seamark for failure to export the merchandise under Customs’ supervision.

Plaintiff alleges that he would have to indemnify Seamark and would suffer injury to his reputation should Customs issue a claim for liquidated damages against Sea-mark. Plaintiff says there has been substantial compliance with applicable regulations and that the refusal of Customs to execute the entries is “agency action unlawfully withheld” within 5 U.S.C. § 706(1) (1982).

Plaintiff asserts jurisdiction under 28 U.S.C. § 1581(i)(l)(2), and (4) (1982).

Defendants have moved to dismiss the action alleging that the plaintiff lacks standing, since any assessment of liquidated damages will lie only against Sea-mark, and that the Court does not have jurisdiction, since administrative remedies available to Seamark have not been exhausted. Defendants contend that judicial review of this claim is proper only if and when the United States initiates an action against Seamark to recover on the bond under 28 U.S.C. § 1582(2) (1982). Should the Court determine it lacks jurisdiction, plaintiff requests that the action be transferred to the District Court for the District of Massachusetts, pursuant to 28 U.S.C. § 1631 (1982).

This Court has exclusive jurisdiction of the enforcement by Customs of laws and regulations over imports. See Vivitar Corp. v. United States, 761 F.2d 1552, 1560 (Fed.Cir.1985). It is, however, permissible to reserve decision on such threshold claims as lack of jurisdiction for failure to exhaust administrative remedies and standing where relief is denied. See Secretary of the Navy v. Avrech, 418 U.S. 676, 677-678, 94 S.Ct. 3039, 3039-3040, 41 L.Ed.2d 1033 (1974) (per curiam); Ripon Society v. National Republican Party, 525 F.2d 567, 577 n. 26, 578 n. 28 (D.C.Cir.1975), cert. denied, 424 U.S. 933, 96 S.Ct. 1147, 1148, 47 L.Ed.2d 341 (1976). The Court follows this course with respect to this motion.

THE PRELIMINARY INJUNCTION

In order to prevail on this motion, plaintiff must show (1) threat of immediate irreparable harm; (2) likelihood of success on the merits; (3) that the public interest would be better served by issuing rather than by denying the injunction; and, (4) the balance of hardships on the parties favors issuing the injunction. Zenith Radio Corp. v. United States, 710 F.2d 806, 809 (Fed.Cir.1983); S.J. Stile Associates Ltd. v. Snyder, 68 CCPA 27, 30, 646 F.2d 522, 525 (1981); see Asher v. Laird, 475 F.2d 360, 362 (D.C.Cir.1973).

Plaintiff bears a “heavy burden of producing evidence” on motion for preliminary injunction. American Air Parcel Forwarding Company, Ltd. v. United States, 1 CIT 293, 298, 515 F.Supp. 47, 52 (1981).

Irreparable Harm

Plaintiff must show that the “alleged threats of irreperable harm are not remote or speculative but are actual and imminent.” State of New York v. Nuclear Regulatory Commission, 550 F.2d 745, 755 (2d Cir.1977).

Plaintiff alleges two injuries. Plaintiff testified he has an oral agreement with Seamark that makes him liable for any penalties assessed against Seamark. Plaintiff also complains that his reputation will be damaged if Customs is not enjoined from making liquidated damage claims against his client.

Both these injuries are speculative. Plaintiff’s “agreement” with Seamark appears to simply embody the agency principle that the agent will be liable to the principal for the agent’s negligence. See Restatement (Second) of Agency, § 401 comment c (1958). Plaintiff insists he was not negligent, and that he did all he could do to ensure that the T & E documents were executed by the appropriate Customs officials. The Court need not, and does not, make any finding as to plaintiff’s negligence. If plaintiff was not negligent, as he claims, he would not be liable to Sea-mark should a , liquidated damage claim issue against Seamark. No representative of Seamark, or any other importer, testified as to any intention to terminate its business relationship with plaintiff as a result of the plaintiff’s handling of these matters.

The Court holds that plaintiff has failed to demonstrate the necessary irreparable harm.

Likelihood of Success on the Merits

At the evidentiary hearing plaintiff’s counsel stated that plaintiff did not contest the reasonableness or validity of the regulations. Counsel claims that there was substantial compliance with the regulations and that plaintiff, the broker, did everything that it could have done to assure that NYK presented the T & E entries for certification by the appropriate Customs officials at Newark. Plaintiff admitted that the merchandise was removed from the Boston terminal without Customs’ authorization. These actions prevented Customs from examining and supervising the exportation of this prohibited merchandise.

Importers have an affirmative duty to present T & E entries at the port of export for certification of export under Customs’ custody. See 19 C.F.R. §§ 18.3, .7, .20, .25, .26 (1984). This duty was not met. Under these circumstances there is no likelihood that the Court will require Customs officials to acknowledge that the merchandise has been exported.

Public Interest and Balance of Hardships

The purpose of these regulations is to ensure that merchandise entered into the United States and found to be contaminated does not enter the marketplace. The public interest demands that there be scrupulous compliance with regulations requiring the exportation or destruction under Customs supervision of such merchandise. The failure to adhere to these regulations has prevented Customs from performing its duties to protect the public health and welfare.

The Court holds that the public interest is best served by denying the injunction.

In view of the Court’s determination that each of the above factors favor denial of the motion, it finds little to weigh on plaintiffs’ side in balancing the equities. The motion for a preliminary injunction is denied.

      . Liquidated damages are assessed "[w]hen there is a failure to meet the conditions of any bond posted with Customs____” 19 C.F.R. § 172.1(a) (1984).

      . The terms of the bond required Seamark to perform all acts required by law to enter the merchandise.

      . T & E entries (Customs Forms 7512 and 7512c) must accompany the merchandise to the port of exportation, where Customs executes the form's to certify that the goods have been exported. See 19 C.F.R. §§ 18.3, .7, .20, .25, .26 (1984).

      . Should the government assess a liquidated damage claim against Seamark, Seamark may petition for mitigation. See 19 C.F.R. §§ 172.-1-.33 (1984).

      . On this record and with the short time available to decide this motion before the expiration of the TRO, the Court finds the Supreme Court’s treatment of a similar question in Secretary of the Navy v. Avrech, supra, persuasive:
      Without the benefit of further oral argument, we are unwilling to decide the difficult jurisdictional issue____ We believe that even the most diligent and zealous advocate could find his ardor somewhat dampened in arguing a jurisdictional issue where the decision on the merits is thus foreordained. We accordingly leave to future case the resolution of the jurisdictional issue ...
      418 U.S. at 677-678, 94 S.Ct. at 3040.


author: DiCARLO, Judge.

text:
    AMERICAN LAMB COMPANY, et al., Plaintiffs, v. The UNITED STATES, Defendant, and New Zealand Meat Producers Board, et al., Defendant-Intervenors.
    Court No. 84-07-00952.
    United States Court of International Trade.
    May 31, 1985.
    Robert Wray Associates, Robert T. Wray, Washington, D.C., for plaintiffs.
    Kilpatrick & Cody, Joseph W. Dorn and Martin McNerney, and John J. Rademacher, Gen. Counsel, Washington, D.C., for amicus curiae, American Farm Bureau Federation.
    Lyn M. Schlitt, Gen. Counsel, Michael P. Mabile, Asst. Gen. Counsel, U.S. Intern. Trade Com’n, William E. Perry, Washington, D.C., for defendant.
    Bronz & Farrell, Edward J. Farrell, Washington, D.C., for defendant-intervenors.
   Memorandum Opinion and Order

DiCARLO, Judge.

Preliminary determination by the International Trade Commission under 19 U.S.C. § 1673b(a) that there was no “reasonable indication” that the domestic lamb industry was materially injured, or threatened with material injury, because of less than fair value sales of lamb meat from New Zealand is not in accordance with law where conflicting evidence was weighed by the Commission. The action is remanded to the Commission for reconsideration in compliance with the standard of review articulated in Republic Steel Corp. v. United States, 8 CIT-, 591 F.Supp. 640 (July 11,1984), reh’g denied, 9 CIT-, Slip Op. 85-27 (March 11, 1985) and Jeanette Sheet Glass Corp. v. United States, 9 CIT-, 607 F.Supp. 123 (March 22, 1985).

Since New Zealand is no longer “a country under the Agreement,” New Zealand is not entitled to an injury test in countervailing duty investigations and all issues relating to the Commission’s countervailing duty determination are moot.

[Action remanded in part and dismissed in part.]

Plaintiffs, three domestic lamb producers, seek review of negative preliminary determinations by the International Trade Commission (Commission) issued in anti-dumping and countervailing duty investigations pursuant to sections 733(a) and 703(a) of the Tariff Act of 1930, as amended, 19 U.S.C. §§ 1673b(a) and 1671b(a) (1982).

Plaintiffs filed a petition with the Commission and the U.S. Department of Commerce (Commerce) on April 18, 1984, alleging that the domestic lamb industry was materially injured, or threatened with material injury, because of less than fair value sales of lamb meat from New Zealand. 49 Fed.Reg. 17,828 (April 25, 1984).

Plaintiffs presented evidence of decreased prices for lamb, and of declining production of live lambs and increasing lamb and sheep slaughter, indicating a liquidation of herds. Plaintiffs alleged that importers of New Zealand lamb suppressed the prices of such meat in the United States.

During its preliminary investigation, the Commission received information from packers and producers of lamb meat, the United States Department of Agriculture, academic and trade association researchers, and intervenors.

On May 25, 1984, after weighing the conflicting testimony, the Commission found, by a 4-2 vote, that there was no reasonable indication that the United States lamb industry was materially injured, or threatened with material injury, because of sales of lamb from New Zealand. Lamb Meat from New Zealand, Investigation Nos. 731-TA-188 (Preliminary), U.S.I.T.C. Public. No. 1534 (1984). This determination was published in the Federal Register on June 13, 1984. 49 Fed.Reg. 24,458 (1984).

Plaintiffs contend that the action must be remanded since the Commission weighed conflicting evidence in determining that there was no “reasonable indication” that the domestic industry was materially injured.

Plaintiffs rely upon Republic Steel Corp. v. United States, 8 CIT-, 591 F.Supp. 640 (July 11, 1984), reh’g denied, 9 CIT -, Slip Op. 85-27 (March 11, 1985) and Jeanette Sheet Glass Corp. v. United States, 9 CIT-, 607 F.Supp. 123 (March 22, 1985). Both cases hold that the Commission may not weigh conflicting evidence in making a preliminary determination that material injury or the threat of material injury exists; in a preliminary investigation, the Commission’s responsibility is simply to find whether any facts reasonably raise the possibility of injury.

These decisions were issued after the Commission made the preliminary determination challenged in this action.

At oral argument, counsel for defendant, conceding that the Commission weighed conflicting evidence in making its determination, said that Republic Steel and Jeanette Sheet Glass could not be distinguished from this case.

Defendant has invited the Court not to follow these decisions, acknowledging that if the Court followed Republic Steel and Jeanette Sheet Glass it would have to remand this action. It argues that 19 U.S.C. § 1673b permits the Commission to evaluate conflicting evidence at the preliminary determination and to dismiss a petition if there is clear and convincing evidence that there is no reasonable indication that an industry is, or is likely to be, injured by reason of alleged less than fair value imports.

Defendant’s arguments have been rejected three times within the year by two judges of this Court with broad experience in this complex area of the law. Under these circumstances, stare decisis counsels the Court to follow the prior decisions. Defendant should address its arguments to our appellate court.

In accordance with the above, it is hereby

ORDERED that that part of plaintiffs’ motion which challenges the Commission’s determination in Investigation No. 701-TA-214 (Preliminary) is dismissed as moot; and it is further

ORDERED that the Commission’s determination with respect to material injury or threat of material injury in Investigation No. 733-TA-188 (Preliminary) is remanded for reconsideration in conformity with the standard of review set forth in Republic Steel and Jeanette Sheet Glass; and it is further

ORDERED that the Commission shall report its findings and redetermination to this Court within 30 days after the date of entry of this order.

      . On April 1, 1985, the United States Trade Representative declared that New Zealand is no longer "a country under the Agreement.” 50 Fed.Reg. 13,111 (April 2, 1985). Thus, under section 701 of the Tariff Act of 1930, 19 U.S.C. § 1671 (1982), as amended by Trade and Tariff Act of 1984, Pub.L. 98-573, sec. 602(a), 98 Stat. 3024, New Zealand is no longer entitled to an injury test in countervailing duty investigations, and all issues relating to the Commission’s countervailing duty determination, Investigation No. 701-TA-214 (Preliminary), are moot. Plaintiffs filed a new countervailing duty petition with the Department of Commerce on March 26, 1985. Lamb Meat from New Zealand: Initiation of Countervailing Duty Investigation, 50 Fed.Reg. 15,949 (April 23, 1985).

      . Intervenors, respondents in the proceedings before the Commission, are the New Zealand Meat Producers Board, the Meat Export Development Co., and the New Zealand Lamb Co., an importer of New Zealand lamb.


author: RESTANI, Judge:

text:
    FOUR “H” CORPORATION, et al., Plaintiffs, v. The UNITED STATES, Defendant.
    Court No. 83-11-01641.
    United States Court of International Trade.
    June 12, 1985.

      Myron Solter, Washington, D.C., for plaintiffs.
    Richard K. Willard, Acting Asst. Atty. Gen., David M. Cohen, Director, Commercial Litigation Branch, and Kevin C. Kennedy, Civ. Div., U.S. Dept. of Justice, Washington, D.C., for defendant.
   Opinion and Order

RESTANI, Judge:

Plaintiffs challenge a final negative anti-dumping decision of the International Trade Administration (ITA) with regard to canned mushrooms imported from the People’s Republic of China (PRC) in 1982. 48 Fed.Reg. 45,445 (October 5, 1983). Plaintiffs have filed a motion for judgment on the administrative record under Rule 56.1 of this court in which they challenge the basis chosen by the ITA for determining United States price as defined by section 772 of the Tariff Act of 1930, as amended, 19 U.S.C. § 1677a (Supp. IV 1980). The parties agree that under the statute, “purchase price,” rather than “exporter’s sales price,” determines United States price. Because the PRC has a nonmarket, state-controlled economy, the ITA did not base purchase price on the sales transactions between the PRC canneries and the China National Cereals, Oils and Foodstuffs Import and Export Corporation (CEROILS), a PRC-controlled foreign trading company, as plaintiff contends is proper, but on the sales transactions between CEROILS and United States importers.

In simplified terms, in determining anti-dumping margins in a case such as this, the ITA is to compare the price of goods in the home market (foreign market value) to the United States price. If after appropriate adjustment it is found that the United States sales are being made at a significantly lower price than are home market sales, the ITA will determine that United States sales are at less than fair value (LTFV). This, coupled with a determination by the International Trade Commission that a competing United States industry is being materially injured or threatened with material injury because of the imports, will result in the imposition of antidumping duties on the foreign imports.

CEROILS is not a manufacturer or producer of canned mushrooms, rather it is the agency by which the PRC introduces over 95% of its exported canned mushrooms into foreign commerce. 48 Fed.Reg. 45,445. Because it is not a manufacturer or a producer, CEROILS does not fit within the literal words of § 1677a(b), and plaintiffs, therefore, argue that CEROILS cannot be considered the seller in the sales transactions which determine United States purchase price. Plaintiffs argue that the correct sales transactions for purposes of determining United States purchase price are the transactions between the PRC canneries and CEROILS. Plaintiffs, however, concede that the PRC economy is state-controlled. They must concede, therefore, that the price between the canneries and CEROILS is state-controlled to some degree. If it is state-controlled to any degree it is not a reliable price when compared to prices set entirely by market forces. For this reason the ITA, in determining United States purchase price, decided to look at the first sales transaction with some clearly established influence external to the PRC. While an agency’s interpretation of a statute which it is bound to administer may not conflict with Congressional intent, the interpretation only need be reasonable. Chevron, U.S.A., Inc. v. National Resources Defense Council, — U.S. -, 104 S.Ct. 2778, 2781-83, 81 L.Ed.2d 694 (1984), reh’g denied, — U.S.-, 105 S.Ct. 28, 29, 82 L.Ed.2d 921 (1984); Zenith Radio Corp. v. United States, 437 U.S. 443, 450, 98 S.Ct. 2441, 2445, 57 L.Ed.2d 337 (1978). For the following reasons the court finds that the ITA’s interpretation here does not conflict with Congressional intent and is reasonable.

The parties agree that the version of the statute found at 19 U.S.C. § 1677a(b) (Supp. IV 1980) governs this case, but Congress, in 1984, clarified that statute by specifically codifying the methodology that the ITA employed in this case. Section 1677a(b) now provides that reseller’s price may be used alternatively with the manufacturer’s or producer’s price in determining United States purchase price. Trade and Tariff Act of 1984, Pub.L. No. 98-573, § 614, 98 Stat. 2948, 3036. Although the amendment occurred after the transactions at issue, there is reason to believe that this method always has been consistent with Congressional intent. First, the approach used here was not new to the 1984 act. It was used in Barium Carbonate from the People’s Republic of China, 49 Fed.Reg. 33,913 (Aug. 27, 1984); Barium Chloride from the People’s Republic of China, 49 Fed.Reg. 33,916 (August 27, 1984); Potassium Permanganate from the People’s Republic of China, 48 Fed.Reg. 57,347 (December 29, 1983) and Carbon Steel Plate from Romania, 47 Fed.Reg.. 35,666 (August 16, 1982) (Preliminary). Thus, the agency charged with ' interpreting § 1677a(b) determined that use of reseller’s price was appropriate in certain nonmarket economy cases. Such an interpretation is entitled to substantial weight. Melamine Chemicals, Inc. v. United States, 732 F.2d 924, 928 (Fed.Cir.1984). Second, when it enacted the reseller’s price provision in 1984, Congress essentially ratified the practice followed in the administrative proceedings listed above. H.R.Rep. No. 1156, 98th Cong., 2d Sess. 185, reprinted in 1984 U.S. Code Cong. & Ad.News 4910, 5220, 5302, indicates that the reseller’s price provision was not “explicit” prior to the 1984 Act. This implies strongly that the 1984 Congress believed that reseller’s price was always an option, although Congress had not specifically provided for it. Although the court should not place too high a value on the views of one Congress as to the construction of a statute enacted by another Congress, United States v. Southwestern Cable Co., 392 U.S. 157, 170, 88 S.Ct. 1994, 2001, 20 L.Ed.2d 1001 (1968), the views of a subsequent Congress may be given some consideration in interpreting relevant Congressional intent. Seymour v. Superintendent of Washington State Penitentiary, 368 U.S. 351, 356-57, 82 S.Ct. 424, 427-28, 7 L.Ed.2d 346 (1962); see Heckler v. Turner, — U.S. -, 105 S.Ct. 1138, 1152-53, 84 L.Ed.2d 138 (1985); Mattz v. Arnett, 412 U.S. 481, 505, 93 S.Ct. 2245, 2258, 37 L.Ed.2d 92 (1973).

Defendant also cites to legislative history of the Trade Agreement Act of 1979 in support of its interpretation of the former version of § 1677a(b). See S.Rep. No. 249, 96th Cong., 1st Sess. 93-94 (1979); H.R. Rep. No. 317, 96th Cong., 1st Sess. 75 (1979), U.S.Code Cong. & Admin.News 1979, 381. Defendant argues that these legislative documents indicate that Congress was aware of and approved of the use of reseller’s price in market economy cases as well as in nonmarket economy cases. In fact, in regards to transactions between unrelated parties, this legislative history does little more than reflect the words of the statute, that is, that producer’s or manufacturer’s price should be used to determine United States purchase price.

There is no reference in either the applicable statute or its legislative history to the problem of calculating United States price from a transaction totally internal to a nonmarket economy country and involving a controlled currency only. Where it is apparent that Congress did not think about a problem, it is incumbent upon the court to consider the policies underlying the statutory provision. Rose v. Lundy, 455 U.S. 509, 516-518, 102 S.Ct. 1198, 1202-1203, 71 L.Ed.2d 379 (1981), (citing Philbrook v. Glodgett, 421 U.S. 707, 713, 95 S.Ct. 1893, 1898, 44 L.Ed.2d 525 (1975), “In expounding a statute, we must not be guided by a single sentence or member of a sentence, but look to the provisions of the whole law, and to its object and policy.” United States v. Heirs of Boisdoré, 49 U.S. (8 How.) 113, 122, 12 L.Ed. 1009 (1849)). Accord Montana Power Co. v. Federal Power Commission, 445 F.2d 739, 746 (D.C.Cir.1970). The relevant policy is apparent in another provision of the antidumping law.

For a number of years Congress has recognized that adjustments need be made when dealing with foreign market value in countries with state-controlled economies. See 19 U.S.C. § 1677b(c) (1982); S.Rep. No. 1298, 93rd Cong., 2nd Sess. 174 (1974), U.S.Code Cong. & Admin.News 1974, 7186. In determining foreign market value, pursuant to § 1677b(c) the ITA is permitted to disregard actual sales transactions in non-market economy countries such as the PRC. Values derived from such transactions are considered unreliable because the state-controlled nature of the economy prevents ordinary market forces from setting prices. Accordingly, in this case the ITA chose the value derived from home market sales in a surrogate country, Indonesia, for comparison purposes with United States price. The ITA reasoned that the economy of Indonesia, although not state-controlled, is at the same general level of economic development as the PRC’s. 48 Fed.Reg. 45,445.

Congressional intent, as manifested in the surrogate country provision for calculating foreign market value, requires the ITA to adjust its procedures to deal with the unreliability of values derived from internal nonmarket economy transactions. 19 U.S.C. § 1677b(c)(l) (1982). The Finance Committee, in discussing the Trade Act of 1974 surrogate country provisions stated:

The Committee is concerned that the technical rules contained in the Act are insufficient to counteract dumping from State-controlled-economy countries where the supply and demand forces do not operate to produce prices, either in the home market or in third countries, which can be relied upon for comparison purposes.

S.Rep. No. 93-1298, 93rd Cong., 2nd Sess. 174, reprinted in 1974 U.S.Code Cong. & Ad.News, 7186, 7311. Thus, Congress, even prior to 1984, surely intended that some adjustment be made in procedures for calculating the corresponding United States price when ordinary procedures result in unreliable values. Because of the state-controlled nature of the economy in question, as reflected in the administrative record, Congress would have intended that the ITA adjust its procedures in order to arrive at a more correct United States price.

Given the legislative background and development discussed above, the bare words of the statute cannot stand in the way of a rational agency decision to disregard a transaction which results in an unreliable value for United States price. See Lynch v. Overholser, 369 U.S. 705, 710, 82 S.Ct. 1063, 1067, 8 L.Ed.2d 211 (1962). The ITA was reasonable in basing United States price on the transaction between the reseller, CEROILS, and the United States importers.

Accordingly, the final determination of the ITA finding no LTFV sales is sustained and this action is dismissed.

      . At the applicable time 19 U.S.C. § 1677a (Supp. IV 1980) read in relevant part:
      § 1677a. United States price
      (a) United States price
      For purposes of this subtitle, the term “United States price" means the purchase price, or the exporter's sales price, of the merchandise, whichever is appropriate.
      (b) Purchase price
      For purposes of this section, the term "purchase price” means the price at which merchandise is purchased, or agreed to be purchased, prior to the date of importation, from the manufacturer or producer of the merchandise for exportation to the United States. Appropriate adjustments for costs and expenses under subsection (d) of this section shall be made if they are not reflected in the price paid by the person by whom, or for whose account, the merchandise is imported.

      . Although plaintiffs concede the state-controlled nature of the PRC economy, during oral argument plaintiffs indicated that the price set between producers and CEROILS was actually the result of external market forces. Plaintiffs admit that this fact is not in the record. Plaintiffs also failed to timely respond to the court’s request for citations to the record to supplement the limited questionnaire response discussing the relationship of CEROILS and the producers to each other and to the state. Defendant, in turn, denied any features which, in a free-market economy context, would make the producers and CEROILS alter egos. Overall, based on the record, the court must assume that the PRC economy, and the relevant segment of that economy, is state-controlled.

      . 19 U.S.C. § 1677a(b), as amended by Trade and Tariff Act of 1984, Pub.L. No. 98-573, § 614, 98 Stat. 2948, 3036, reads:
      (b) Purchase price
      For purposes of this section, the term "purchase price” means the price at which merchandise is purchased, or agreed to be purchased, prior to the date of importation, from a reseller or the manufacturer or producer of the merchandise for exportation to the United States. Appropriate adjustments for costs and expenses under subsection (d) of this section shall be made if they are not reflected in the price paid by the person by whom, or for whose account, the merchandise is imported.

      . 19 U.S.C. § 1677b(c) (1982) provides:
      (c) State-controlled economies
      If available information indicates to the administering authority that the economy of the country from which the merchandise is exported is State-controlled to an extent that sales or offers of sales of such or similar merchandise in that country or to countries other than the United States do not permit a determination of foreign market value under subsection (a) of this section, the administering authority shall determine the foreign market value of the merchandise on the basis of the normal costs, expenses, and profits as reflected by either—

        (1) the prices, determined in accordance with subsection (a) of this section, at which such or similar merchandise of a non-State-controlled-economy country or countries is sold either—
      (A) for consumption in the home market of that country or countries, or
      (B) to other countries, including the United States; or
      (2) the constructed value of such or similar merchandise in a non-State-controlIed-economy country or countries as determined under subsection (e) of this section.


text:
    UNITED STATES, Plaintiff, v. JOAN AND DAVID HELPERN COMPANY, INC., Defendant.
    Court No. 83-7-00969.
    United States Court of International Trade.
    June 17, 1985.

      Richard K. Willard, Acting Asst. Atty. Gen., David M. Cohen, Director, Commercial Litigation Branch, Civil Div., Dept. of Justice, A. David Lafer, Washington, D.C., for plaintiff.
    Gaston Snow & Ely Bartlett, Robert D. Canty and Daniel J. Lyne, Boston, Mass., for defendant.
   Memorandum Opinion and Order

FORD, Judge:

The United States instituted this action against defendant Joan and David Helpern Company, Inc., for alleged violations of 19 U.S.C. § 1592. Before the Court is defendant’s motion for summary judgment under Rule 56(b) of the Rules of this Court. Defendant alleges the Government’s delay in initiating this action violates both the requirements of due process and the specific directive of 19 U.S.C. § 1604. In the alternative, defendant moves for dismissal with prejudice under Rule 41(b)(2) for the Government’s failure to prosecute with due diligence. The Government opposes both motions in all respects. Jurisdiction is pursuant to 28 U.S.C. § 1582.

Defendant is a Massachusetts corporation doing business as a wholesaler of footwear. Between October 2 and November 29, 1978, defendant, through its customs broker, imported boots from Italy under eleven customs consumption entries at the Port of Boston. The Government filed this action on July 21,1983, alleging the entries involved constitute violations of Section 592 of the Tariff Act of 1930, as amended, 19 U.S.C. § 1592.

As noted above, the entries at issue were made in October and November of 1978. Upon arrival of the merchandise at the Port of Boston, defendant’s customs broker paid the freight charges and prepared the consumption entry forms based on the documentation accompanying the shipment. Duty was paid on the merchandise as entered, and the boots were shipped to defendant’s place of business. Soon thereafter, the Customs Service requested a sample of the merchandise, which defendant promptly forwarded.

On August 15, 1979, defendant was issued a Prepenalty Notice demanding $18,-400.00 in loss of revenues and $73,601.92 in damages for fraud in the importation of the merchandise. It is alleged the entries were false and material in that they stated the merchandise was footwear having uppers of which over 90 percent were rubber or “plastic, other” with a duty rate of 6 percent. In fact, the uppers were less than 90 percent rubber or “plastic, other” and the applicable duty rate was 20 percent, resulting in an actual loss of $678.58 in duties. On February 11, 1980, defendant was served with formal Notice of Penalty in the above amounts. Defendant filed a request for mitigation on February 20, 1980.

In May of 1980, Customs again issued a Prepenalty Notice to defendant. Defendant waived all notice periods and sought consideration of its request for mitigation. On October 21, 1980, the request was denied and payment was demanded.

On March 10, 1981, the United States instituted an action against defendant under 19 U.S.C. § 1592 in U.S. District Court in Boston. Two days later the action was voluntarily dismissed by reason of this Court’s exclusive jurisdiction of actions brought under 19 U.S.C. § 1592.

Some fifteen months later, in May of 1982, defendant received customs invoices totaling $17,721.90. As this figure corresponded with the loss of revenue claimed by Customs, defendant offered to make payment on the condition of full satisfaction of the claim. On July 14,1982, defendant was notified by its surety of a demand by the Government for payment of $17,-721.90. Defendant informed the surety the matter was being contested. The Government withdrew its demand and notified defendant that a new complaint would be issued.

One year later, on July 21, 1983, the present action was filed. The Government moved to amend its complaint on August 3, 1983, Defendant moved for an extension of time to September 5, 1983 to file its answer. Defendant served its answer on September 2,1983. However, due to either clerical or mailing error, the answer was not recorded by the Court at that time.

On January 16, 1984, an Offer in Compromise was submitted to the Government by defendant. In October of 1984, defendant was notified its answer had not been recorded by the Court. On November 27, 1984, defendant’s motion to record its answer effective September 2, 1983, was granted. Defendant’s Offer in Compromise was rejected by the Government on February 13, 1985, at which time the Government served defendant a Request for Production of Documents. Defendant filed the motions presently before the Court on March 7, 1985.

Defendant’s motion for summary judgment cites 19 U.S.C. § 1604, the relevant part of which reads:

It shall be the duty of the Attorney General of the United States immediately to inquire into the facts of cases reported to him by customs officers and the laws applicable thereto, and if it appears probable that any fine, penalty or forfeiture has been incurred by reason of such violation ... forthwith to cause the proper proceeding to be commenced and prosecuted, without delay, for the recovery of such fine, penalty or forfeiture ...

Defendant’s alternative request for relief is dismissal under Rule 41(b)(2) of the Rules of this Court, which provides:

(b) ...
(2) Whenever it appears that an assigned action is not being prosecuted with due diligence, the court may upon its own initiative after notice, or upon motion of a defendant, order the action dismissed for lack of prosecution.

The crux of defendant's alternate claims for relief centers on the Customs Service delay in processing the penalty claim at the administrative level, which together with the Government’s inaction in prosecuting this action, allegedly amounts to material prejudice requiring this lawsuit be dismissed. Of initial concern is defendant’s motion for summary judgment under Rule 56(b). The law is well-settled that summary judgment may not be granted if any genuine issue of fact exists between the litigants. Golding Bros. v. United States, 6 CIT -, Slip Op. 83-89 (1983); S.S. Kresge Co. v. United States, 77 Cust.Ct. 154, C.R.D. 76-6 (1976). The burden of proof in establishing the lack of a triable issue is upon the moving party. Symphonic Electronics Corp. v. United States, 77 CustCt. 147, C.R.D. 76-5 (1976); Cimbel Bros. v. United States, 73 Cust.Ct. 223, C.R.D. 74-8 (1974). This burden requires the moving party to clearly establish the lack of disputed facts.

The chronology of events previously noted herein is not in dispute. However, the substantive issue in this case has yet to be either heard by the Court or briefed by the parties. The statute of limitations governing the commencement of actions brought pursuant to 19 U.S.C. § 1592 is 19 U.S.C. § 1621, which affords the Government five years from the discovery or commission of a violation to commence suit. This case was commenced within that period, and as the action is not time-barred, triable issues of fact remain before the Court and this matter is thus not ripe for summary judgment. Defendant’s motion for summary judgment must, therefore, be denied.

Of far greater concern to the Court is defendant’s motion to dismiss with prejudice under Rule 41(b)(2). The basis for this motion is similar to defendant’s claim in its motion for summary judgment. It is alleged the extraordinary length of time between the entry of defendant’s merchandise and the prosecution of this action has so materially prejudiced defendant’s position to warrant dismissal.

Defendant offers several instances which, it alleges, support its contention of detrimental prejudice. Defendant’s original attorney in this case, as well as the person who handled the entries at defendant’s customs broker, have passed away in the intervening period. Defendant’s comptroller and chief financial investigator has since retired, and discussions with him have not yielded the fact-specific information required to properly prepare a defense in this action. Defendant notes neither its request for mitigation nor its Offer of Compromise were responded to by the Government in a meaningful manner, the net effect of which was to lull defendant into a belief that no further steps need be taken at any given time. In sum, defendant claims it has been estopped by the passage of time from being able to fully defend this action.

In United States v. Eight Thousand Eight Hundred and Fifty Dollars ($8,850) in United States Currency, 461 U.S. 555, 103 S.Ct. 2005, 76 L.Ed.2d 143 (1983), the Supreme Court reiterated the balancing test of Barker v. Wingo, 407 U.S. 514, 92 S.Ct. 2182, 33 L.Ed.2d 101 (1972), for determining when governmental delay has abridged the right to a speedy trial. The four factors to be weighed under that test are length of delay, reason for the delay, defendant’s assertion of its right, and prejudice to the defendant. That case, however, involved a forfeiture proceeding and relates solely to those situations where there has been a seizure of property. The Supreme Court held the above test was appropriate in determining whether an individual’s due process rights have been violated. In the case at bar, the merchandise was not seized or detained. In fact, the merchandise involved herein has already entered the flow of commerce. Therefore, the test in $8,850 (supra) is inapplicable to the present situation. A similar determination has previously been made by this Court in United States v. Murray, 5 CIT 102 (1983).

The primary rationale underlying a dismissal under Rule 41(b) is the failure of plaintiff in his duty to process his case diligently. Lyell Theatre Cory. v. Lowes Cory., 682 F.2d 37 (2nd Cir.1982); Messenger v. United States, 231 F.2d 328 (2nd Cir.1956). This duty is imposed because of the strong policy favoring prompt disposition of cases. Prejudice to defendants resulting from unreasonable delay may be presumed. Citizens Utilities v. American Teleyhone & Telegrayh Co., 595 F.2d 1171 (9th Cir.1979), cert. denied, 444 U.S. 931, 100 S.Ct. 273, 62 L.Ed.2d 188 (1979).

It has been more than six and one-half years since the merchandise at issue was entered. The Court recognizes the Customs Service has been faced with personnel limitations while at the same time processing record, and ever-increasing, numbers of imports into this country. The Court is similarly aware that the present action, instituted in 1983, has since been re-assigned to three different Government attorneys.

Dismissal with prejudice for failure to prosecute is a drastic sanction which should be sparingly exercised. Welsh v. Automatic Poultry Feeder Co., 439 F.2d 95 (8th Cir.1971). Such a remedy should be granted only in cases in which there is a clear pattern of delay or contumacious conduct by the plaintiff. Navarro v. Chief of Police, Des Moines, Iowa, 523 F.2d 214 (8th Cir.1975). In the present case, the parties, together with the administrative agency, share in the responsibility for the prolonged proceedings. The prejudice claimed by defendant, however, may or may not prove to be significant at such time this matter is tried on the merits. Therefore, the Court will deny defendant’s motion to dismiss at this time, but will permit defendant leave to re-submit its motion after trial. In consideration of all the foregoing, judgment will be entered accordingly.

      . This fact was brought to the attention of the Government attorney by the Court, who in turn notified counsel for the defendant.