CIT Awards Broker Atty Fees for Unjust CBP Claims of Filer Code Misuse

CBP Alleged Broker Used Code to Aid Narcotics Smuggling & Suspended Code

In November 2008, CBP had alleged that Lizarraga used his code to facilitate the smuggling of narcotics into the U.S. by Mexican nationals and notified Lizarraga of the immediate and indefinite suspension of his entry filer code. Lizarraga was not afforded the benefit of a hearing or an opportunity to make a written submission prior to notification of this suspension.

CBP Agreed Not to Suspend Code in Confession of Judgment Adopted by CIT in 2010

Later in November 2008, Lizarraga challenged CBP's action before the CIT, which granted a temporary restraining order so that CBP could not suspend Lizarraga's entry filer code. CBP had no record of Lizarraga's alleged misuse of his filer code and in its 2010 "Confession of Judgment" agreed not to suspend or deactivate it. The CIT then ruled that CBP's suspension of Lizarraga's entry filer code at the administrative level was not substantially justified and adopted CBP's confession in Lizarraga's favor. Lizarraga then applied for reimbursement of attorney's fees of $223,305 and an additional $2,850 for costs and expenses under the Equal Access to Justice Act (EAJA, 28 USC 2412(d)).

CIT Now Finds Lizarraga is Entitled to All Attorney Fees for Two Reasons

Under the EAJA, a court must award a prevailing party fees and other expenses unless the court finds that the position of the U.S. was substantially justified or that special circumstances make an award unjust. The CIT has granted Lizarraga's application for fees and other expenses and states that Lizarraga is entitled to attorney's fees for all of the time his lawyers put into his case for the following reasons:

CBP's position was not substantially justified. The CIT finds that CBP's position was unreasonable and that CBP has conceded as much. Under the Administrative Procedure Act (5 USC 558), the annulment of a license can only occur after the licensee has been given notice in writing of the facts/conduct which may warrant such action and the opportunity to demonstrate or achieve compliance with all lawful requirements. Throughout this litigation, CBP has acknowledged that Lizarraga was entitled to and denied due process at the administrative level. According to the CIT, it seems clear that CBP realized its case was untenable and sought an accommodative result.

CBP didn't advance theory of how award would be unjust. The CIT also notes that CBP never advanced a plausible legal theory but rather progressively receded from its initial position until ultimately conceding error and ending the case. CBP had argued that Lizarraga unnecessarily protracted the litigation by not agreeing to CBP's move for a voluntary remand of the case in 2009. However, the CIT states that Lizarraga can hardly be said to have extended the case by refusing to agree to actions that were not in his best interest; as a result of continuing the case, CBP withdrew its suspension of Lizarraga's entry filer code. Therefore, the CIT found that this case presented no special circumstances that would preclude an EAJA award.

Accordingly, the CIT has ordered that Lizarraga must provide a yearly breakdown of attorneys fees from 2008 to 2010 (excluding paralegal services) by November 16, 2011.

¹CBP and Rosa Hernandez, the Director of Field Operations at the Otay Mesa Port of Entry in California are the defendants in this case.

(See ITT's Online Archives 10100604 for summary of CBP's 2010 "Confession of Judgment" to CIT that it would not deactivate Lizarraga's entry filer code.

See ITT's Online Archives 09051820 for summary of NCBFAA filing an amicus curiae brief in support of Lizarraga.

See ITT's Online Archives 09050620 for summary of the CBP's deactivation of Lizarraga's entry filer code due to misuse.)

(Slip Op. 11-128, dated 10/17/11)