Customs Law Advisory - Allegheny Bradford d/b/a/ Top Line v. United States

In December 2004, the U.S. Court of International Trade (“CIT”) awarded attorney fees to defray the expenses of an importer’s challenge to U.S. Customs and Border Protection’s (“Customs”) treatment of certain shipments.  Although such awards are rare, this result demonstrates that where Customs seriously mishandles a company’s imports, not only can the CIT correct the error, but the court also may grant payment of some portion of the cost of litigation.

Allegheny Bradford d/b/a/ Top Line v. United States, Slip Op. 04-161, grew out of Top Line’s request for a scope ruling from the U.S. Department of Commerce (“Commerce”) on whether certain shipments were subject to antidumping duties.  In order to preserve its claim, Top Line secured an injunction from the CIT against liquidation of its entries until Commerce decided the scope issue.  Top Line ultimately won the scope issue, but not before Customs mistakenly liquidated the entries.  Top Line filed a protest, but Customs refused to reverse the liquidations.  Top Line challenged this result at the CIT, arguing that the Customs’ liquidations were in contempt of the court’s injunction.  The CIT agreed and ordered cancellation of the liquidations and refunds to Top Line, plus interest.  Top Line then requested that the CIT award attorney fees related to enforcing the injunction.

The Equal Access to Justice Act (“EAJA”) provides an award of attorney fees and expenses where (1) the claimant is a prevailing party, (2) the government’s position was not “substantially justified,” (3) no special circumstances would make the award unjust, and (4) the fee application was timely and itemized.  The EAJA also requires that a for-profit corporation making a claim have not more than 500 employees and a net worth not exceeding $7 million.  In this case, the Government contested only the “substantially justified” requirement, arguing that no award of attorney fees should be made.  The Government argued that even though its position proved unsuccessful at the CIT, its refusal to correct these liquidations was not without substantial justification because U.S.  law does not provide clear authority under these circumstances.

The CIT explained that it has the full power to enforce its orders and there was no reason for Customs or Commerce to think that they had the authority to even question whether a violation of a court order could or should be remedied.  Thus, the Court awarded attorney fees to Top Line, according to the rates in the EAJA.  The total award was approximately $28,000, slightly more than half the amount claimed by Top Line.  Of course, the Government may yet choose to appeal.

The EAJA standard is fairly strict.  Accordingly, such awards are rare, even for an importer that prevails in a CIT challenge to some action or decision by Customs.  The outcome in this case likely was influenced by the fact that Customs violated not only the law, but an order of the court.  Nonetheless, the decision demonstrates that where Customs’ treatment of an importer’s merchandise violates the law in an unjustifiable way, the possibility exists not only for a remedy, but also for an award of attorney fees to defray the costs of the challenge.

If you have any questions regarding CIT treatment of a decision by Customs, please contact Greg McCue at 202-429-6421.