CIT Again Dismisses Surety Co.'s Claims of CBP Discretionary Abuse
The Court of International Trade again dismissed Hartford Fire Insurance Company’s attempt to void or discharge bonds securing duties on entries made by an importer that violated U.S. import laws. CIT previously dismissed some of the claims brought by Hartford (see 12081428), but had allowed the surety to amend its complaint to say CBP abused its discretion by not requiring the importer to post a cash deposit instead of a bond. CIT granted CBP's motion to dismiss for failure to state a claim.
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The bonds at issue secured duties on entries subject to the antidumping duty order on frozen cooked crawfish tailmeat from China (A-570-848). Sunline, the importer, failed to pay the duties owed, and CBP made a demand on Hartford for payment on eight single entry bonds. But Hartford said, among other things, that CBP should have told it that Sunline was under investigation at the time, and that CBP’s silence constituted misrepresentation that voided the bonds. After Sunline, the importer, failed to pay AD duties on eight entries at the China-wide rate of 223%, CBP demanded payment from Hartford in June 2005. But CBP had begun an investigation of Sunline in mid-2003, and had indicted two of Sunline’s officers for importing crawfish tailmeat in violation of U.S. import laws in November 2003.
No Abuse of Discretion
Hartford said CBP abused its discretion by accepting the bonds on the entries in question. Hartford argued that due to the ongoing status of the investigation into Sunline, CBP had the discretion to and should have insisted on cash deposits instead of bonds, required additional security, or rejected the entries altogether. CIT disagreed because CBP had no option to demand such a cash deposit under the statutory framework at the time of the entries. Since CBP "had no discretion, there is no abuse of discretion in Customs failure to have insisted on cash deposits rather than bonds," the ruling said.
Hartford's argument that CBP did not uphold its mandate to "protect the revenue of the U.S." because it did not give the surety a chance to cancel the bonds also fell flat, the court said. "While the sureties’ revenues are arguably a part of the revenues of the United States, in the same sense that every domestic industry’s revenues must be, Plaintiff’s reading of Customs’ mandate is simply too broad," the ruling said. The CBP rejection of separate Sunline entries prior to the entries in question also don't point to an abuse of discretion, the decision said. The rejected entries were turned down due to falsification of documents that showed a different manufacturer, an issue not connected to the later entries, it said.
(Hartford Fire Ins. Co. v. United States, Slip Op. 13-84, dated 08/13/12, Judge Pogue)