DiGiorgio v. United States

8 Ct. Int'l Trade 192
CourtUnited States Court of International Trade
DecidedSeptember 27, 1984
DocketCourt No. 83-5-00694
StatusPublished

This text of 8 Ct. Int'l Trade 192 (DiGiorgio v. United States) is published on Counsel Stack Legal Research, covering United States Court of International Trade primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
DiGiorgio v. United States, 8 Ct. Int'l Trade 192 (cit 1984).

Opinion

Carman, Judge:

This matter is before me on defendants’ motion for summary judgment on their counterclaim for liquidated damages arising from the breach of an importation bond. Jurisdiction over the counterclaim rests upon 28 U.S.C. § 1583 (1982).1

The long and unfortunate history of this case began on March 9, 1975, when, at the Port of San Francisco, plaintiff imported two Ferrari automobiles. In connection with this importation, and as 19 C.F.R. § 12.73(b)(5)(x) (1983) prescribes, plaintiff was required to submit a declaration to the United States Customs Service (Customs) that, within 90 days, the imported vehicles would be brought into conformity with federal emissions standards of the United States Environmental Protection Agency (EPA), and that, within 180 days, the vehicles would be brought into compliance with the federal safety standards of the United States Department of Transportation (DOT).

See 19 C.F.R. § 12.73(b)(5)(x)2; id. § 12.80(b)(l)(iii); 40 C.F.R. § 85.1504. In addition, plaintiff was required to submit a surety [193]*193bond in connection with the entry. See 19 C.F.R. § 12.73(c) 3; id. § 113.14(g). The bond, the purpose of which is to ensure compliance with the applicable EPA and DOT standards, by its own terms provided that if the imported merchandise was not brought into conformity with the applicable entry requirements within the regulatory time period, then the importer would redeliver the merchandise to Customs. Under 19 CFR § 12.73(c), an importer has 5 days, after the running of the 90-day period, to redeliver the nonconforming vehicle. As reflected in the regulations and in the bond itself, nonperformance of this condition would result in forfeiture of the bond as liquidated damages for breach.

Customs granted four extensions of time to plaintiff, covering the better part of a year, for the vehicles to be conformed. Customs finally demanded redelivery on August 20, 1976, after plaintiff had requested a fifth extension of time. The vehicles were not redelivered, and, accordingly, Customs issued a Notice and Demand for Liquidated Damages on September 2, 1976.

Plaintiff petitioned for mitigation on October 22, 1976. During these mitigation proceedings, which appear to have lasted almost 2 years, it was learned that one of the vehicles was exported by plaintiff in June of 1976. Customs mitigated to $1,000 the damages for late performance with respect to the exported vehicle. This amount was paid by plaintiffs surety on January 11, 1979.

With respect to the other vehicle, plaintiff petitioned for mitigation on the basis that the vehicle was being modified to meet the EPA and DOT standards. On October 18, 1979, plaintiff was informed that Customs would mitigate its claim to $1,000. Plaintiff was also advised that if the amount was not paid within 30 days the claim would revert to the original amount, $6,283. Plaintiff did not pay the mitigated amount, and Customs accordingly demanded full payment of the liquidated damages.

Proceedings in the District Court

On February 19, 1980, plaintiff commenced an action for declaratory and injunctive relief against the EPA and Customs in the [194]*194United States District Court for the District of Oregon. The complaint alleged violations of due process and equal protection with respect to the validity of the regulations, the authority of Customs, the fairness of the administrative procedures, and denials of Freedom of Information Act requests. As for relief, the complaint demanded a “declaration that the plaintiff is entitled to possession and use of his automobiles free of any lien or encumbrance * * * and for the release of any and all bonds posted for the automobiles.” Complaint at 4, John diGiorgio v. United States, No. 80-234 (D. Or. Feb. 19, 1980). On March 9, 1981, the United State’s Attorney’s Office for the District of Oregon filed an answer and a counterclaim for liquidated damages. The answer basically lodged denials of plaintiffs claims and asserted affirmative defenses of failure to state a claim, lack of subject matter jurisdiction, and improper venue. Defendants in their counterclaim alleged that plaintiff had violated the terms of the surety bond and was liable in the full amount of $6,283.

On July 20, 1982, the defendants moved to dismiss the complaint and for summary judgment on their counterclaim. By order dated March 11, 1983, the district court dismissed the entire action, stating that with respect to the Customs and EPA regulations, the court was without subject matter jurisdiction, citing 28 U.S.C. § 1581 (1982), and 42 U.S.C. § 7606(b)(1) (1982) (petitions for reviewing EPA emissions standards may be filed only in appropriate circuit court of appeals or District of Columbia Circuit). The court also concluded that it lacked jurisdiction over the counterclaim since 28 U.S.C. § 1346(c) (1982), which provides federal jurisdiction over a counterclaim by the United States in an action commenced under section 1346, was inapplicable. See Richardson v. Morris, 409 U.S. 464 (1973) (per curiam). Defendants then moved to reinstate their counterclaim asserting an alternative basis of federal jurisdiction, 28 U.S.C. § 1345, and also asked the court to reconsider its denial of their earlier summary judgment motion. The court, by minute order on April 11, 1983, set aside its judgment dismissing the action. Shortly thereafter, defendants moved for “partial judgment,” requesting: (1) that judgment be entered dismissing the action vis-a-vis the EPA and dismissing all claims under the Clean Air Act; and, (2) that the remaining claims and the counterclaim be transferred to the Court of International Trade pursuant to 28 U.S.C. § 1631. The district court, by minute order of May 2, 1983, ordered the case transferred to the Court of International Trade.

Discussion

In opposing defendants’ motion for summary judgment on the counterclaim, plaintiff states three arguments: (1) the government ought to be estopped from asserting the counterclaim because plaintiff demonstrated that the automobile was brought into compliance with California emission standards, which standards alleg[195]

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Bluebook (online)
8 Ct. Int'l Trade 192, Counsel Stack Legal Research, https://law.counselstack.com/opinion/digiorgio-v-united-states-cit-1984.