CIT Rules Cisco Protests Were Sufficiently Specific for Customs to Consider
In Cisco Systems, Inc. v. U.S., the Court of International Trade denied U.S. Customs and Border Protection's motion to dismiss challenges to its classification of "networking equipment" in protests filed by Cisco Systems, Inc. Customs argued that Cisco's protests were invalid because the use of the phrase "networking equipment" is too vague. However, the CIT stated that technical precision is not required in protests and that Customs could have sought more information from Cisco to evaluate its protests.
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Customs Denied Cisco Protests as Invalid & Protest Amendments as Untimely
Between 2001 and 2002, Cisco entered merchandise into the U.S. which Customs liquidated under HTS subheadings 9013.80.90 and 9013.90.90 (4.5%) as other flat-panel liquid crystal displays (LCDs). Cisco protested Customs' classification of its merchandise. In its protest, Cisco described its merchandise as "networking equipment and parts thereof" and "networking equipment and parts thereof, including amplifiers and transponders for optical fiber systems."
Between 2002 and 2003, Customs1 reliquidated those entries it could determine contained amplifiers, transponders, and/or dispersion compensation modules (DCMs), but denied 23 protests because it said Cisco's description of its goods as "networking equipment " was too vague and overly broad that it could not determine what other merchandise was being challenged. Before Customs ruled on Cisco’s protests, Cisco filed amendments to a number of the protests, but Customs deemed these amendments untimely and did not consider them. Cisco then took its case to the CIT.
Customs filed a partial motion to dismiss the case, arguing that the CIT lacked jurisdiction (i) over the entries because Cisco's protests fail to meet a legal threshold of protest specificity as they do not specifically name the merchandise at issue; and (ii) over the claims and merchandise referenced in some of the protests' amendments because they were not timely filed.
CIT Found Cisco Filed Valid Protests and Denied Customs' Motion to Dismiss
The CIT found that Cisco had filed valid protests because they adequately specified the merchandise at issue, and therefore, the CIT has jurisdiction over the amended protests. Accordingly, the CIT denied Customs' motion to dismiss the case for the following reasons:
Technical precision is not required in protests. Technical precision is not required in a protest, but the objections must be sufficiently distinct and specific to enable Customs to know the true nature and character of the objections. The CIT cited past cases in which it ruled that protest sufficiency does not turn on whether Customs can decide the entire claim based solely on information contained in the papers submitted. In this case, the CIT stated that the protests should have prompted Customs to seek the precise factual evidence necessary to evaluate them.
Protests were sufficient to notify Customs of protest claims. Although "networking equipment" is not a specific type of merchandise, it does adequately identify, albeit broadly, a category of merchandise specifically enough to fulfill the statutory requirements of 19 USC 15142. Additionally, in light of Customs' familiarity with Cisco's business and Customs' use of the phrase "networking equipment" in its publications, rulings, and workshops, the CIT found the phrase was sufficient to notify Customs of the nature of Cisco's protests' claims.
Protests' amendments were not untimely. Cisco's amendments were not untimely, even if they were filed after the 90 day period for filing amendments3, since they support what are taken to be valid protests. The CIT also noted that the amendment identified particular goods that fall under the category of merchandise specified in the original protest, not new merchandise.
Customs' motion was filed after pleadings closed. Customs' Motion to Dismiss was filed after the pleadings had closed and was therefore treated as a Motion for Judgment on the Pleadings. CIT Rule 12(d) mandates conversion of such motions to a Motion for Summary Judgment. However, if matters outside of the pleadings are attached to this motion, the CIT retains discretion to exclude it. In this case, the CIT decided to exclude the motion in the interest of securing a just, speedy, and inexpensive determination and conversion to summary judgment was not required.
1Note that the U.S. Customs Service (USCS) was transferred to the Department of Homeland Security in March 2003 as U.S. Customs and Border Protection (CBP). This case was filed with the CIT after the transfer of USCS to CBP but concerns merchandise that was entered before this transfer.
2As provided in 19 USC 1514(c)(1), a valid protest must set forth distinctly and specifically (a) each decision as to which protest is made; (b) each category of merchandise affected by each decision; (c) the nature and reasons for each objection; and (d) any other matter required by regulation.
3Pursuant to 19 CFR 174.12(e), protest amendments for entries made prior to December 18, 2004 may be made within the 90-day period after the date of notice of liquidation. Customs has discretion whether to consider any alternative claims and additional grounds or arguments submitted after the 90-day period has expired.
(Slip Op. 11-140, dated 11/18/11)