Moen, Inc. v. United States

2019 CIT 95

• Court: United States Court of International Trade
• Decided: July 26, 2019
• Docket: 15-00161
• Status: Published

Opinion

Slip Op. 19-5

UNITED STATES COURT OF INTERNATIONAL TRADE

MOEN, INC.,

Plaintiff, Before: Timothy C. Stanceu, Chief Judge v.

UNITED STATES, Court No. 15-00161

Defendant.

OPINION

[Granting plaintiff’s motion to dismiss and denying as moot other pending motions]

Date: July 26, 2019

William R. Rucker, Drinker Biddle & Reath, LLP, of Chicago, IL, for plaintiff Moen, Inc.

Jamie L. Shookman, Trial Attorney, International Trade Field Office, Civil Division, U.S. Department of Justice, of New York, NY, for defendant United States. With her on the brief were Joseph H. Hunt, Assistant Attorney General, and Amy M. Rubin, Assistant Director. Of counsel on the brief was Michael H. Heydrich, Office of the Assistant Chief Counsel, International Trade Litigation, U.S. Customs and Border Protection.

Stanceu, Chief Judge: Plaintiff Moen, Inc. (“Moen”) moves to dismiss its action against

the United States challenging the denial by U.S. Customs and Border Protection (“Customs” or

“CBP”) of its administrative protest pertaining to the tariff classification of various models of

showerheads imported from the People’s Republic of China.

Before the court are plaintiff’s motion for voluntary dismissal under USCIT Rule 41(a)

and other motions (plaintiff’s motion to exclude an expert opinion, plaintiff’s motion for leave to

file a reply in support of the motion to exclude the expert opinion, plaintiff’s motion to amend Court No. 15-00161 Page 2

the scheduling order, and defendant’s motion for summary judgment and the associated response

and reply).

Defendant opposes plaintiff’s motion for voluntary dismissal, noting in particular its

expenditure of resources and its pending summary judgment motion, which is ready for

disposition by the court.

The court will grant plaintiff’s motion to dismiss, deny all other pending motions as

moot, and enter judgment dismissing this action.

I. BACKGROUND

Plaintiff made three entries of showerheads, on January 7, 9, and 16, 2014, at the port of

Los Angeles, California (Entry Nos. 231-1288327-1, 231-1288330-5, 231-1289161-3,

respectively). Summons 1 (June 12, 2015), ECF No. 1. Customs liquidated the entries between

November 21 and 28, 2014, inclusive, classifying the imported showerheads in subheading

3924.90.5650, Harmonized Tariff Schedule of the United States (“HTSUS”) (“Tableware,

kitchenware, other household articles and hygienic or toilet articles, of plastics: Other: Other,

Other”), subject to duty at 3.4% ad val.1 Id. at 2. Plaintiff contested the liquidations in an

administrative protest filed May 20, 2015 (Protest No. 2704-15-100595). Id. at 1. Customs

denied the protest on June 3, 2015, and plaintiff commenced this action on June 12, 2015. Id.

Plaintiff filed the complaint on August 28, 2015, Compl. (Aug. 28, 2015), ECF No. 7, and

defendant filed its answer on January 22, 2016, Answer (Jan. 22, 2016), ECF No. 15.

Before the court, plaintiff claimed classification in subheading 8424.89.0000, HTSUS

(“Mechanical appliances (whether or not hand operated) for projecting, dispersing or spraying

1 All citations to the Harmonized Tariff Schedule of the United States are to the 2014 edition. Court No. 15-00161 Page 3

liquids or powders . . . ; parts thereof: Other appliances: Other”), subject to duty at 1.8% ad val.

Compl. ¶ 23. In the alternative, plaintiff claimed classification in a “parts” subheading of

heading 8424, subheading 8424.90.9080, HTSUS (“Mechanical appliances (whether or not hand

operated) for projecting, dispersing or spraying liquids or powders . . . ; parts thereof: Parts:

Other, Other”), free of duty. Id. ¶ 29.

Plaintiff filed a motion to exclude the opinion of the government’s witness, Dr. Lamyaa

El-Gabry, on February 25, 2019. Pl.’s Mot. to Exclude Expert Op. (Feb. 25, 2019), ECF No. 35.

Defendant responded to this motion on March 1, 2019. Def.’s Mem. of Law in Opp’n to Pl.’s

Mot. to Exclude Expert Op. (Mar. 1, 2019), ECF No. 36. Plaintiff filed a motion for leave to file

a reply in support of the motion to exclude the opinion on March 8, 2019. Pl.’s Mot. for Leave

to File Reply in Sup. of Mot. to Exclude Expert Op. (Mar. 8, 2019), ECF No. 37.

Plaintiff filed its motion for voluntary dismissal on April 29, 2019. Pl.’s Mot. for

Voluntary Dismissal (Apr. 29, 2019), ECF No. 42 (“Pl.’s Mot.”). Defendant moved for

summary judgment the following day, claiming that the merchandise was correctly classified by

Customs upon liquidation. Def.’s Mot. for Summ. J. and Def.’s Br. and Exs. in Supp. of its Mot.

for Summ. J. (Apr. 30, 2019), ECF Nos. 43 (public), 44 (conf.) (“Def.’s Mot.”). Defendant filed

a response in opposition to plaintiff’s motion for voluntary dismissal on May 9, 2019. Def.’s

Mem. of Law in Opp’n to Pl.’s Mot. for Voluntary Dismissal (May 9, 2019), ECF No. 47

(“Def.’s Mem.”). Plaintiff replied to defendant’s opposition on May 17, 2019. Pl.’s Reply in

Supp. for Mot. of Voluntary Dismissal (May 17, 2019), ECF No. 48. Plaintiff responded to

defendant’s motion for summary judgment on June 4, 2019, opposing defendant’s motion on the

grounds that (1) defendant has not shown entitlement to summary judgment as there are disputed

material facts in the case; and (2) granting plaintiff’s motion for voluntary dismissal would Court No. 15-00161 Page 4

provide defendant the relief it seeks and avoid unnecessary litigation. Pl.’s Resp. to Def.’s Mot.

for Summ. J. (June 4, 2019), ECF No. 49 (“Pl.’s Resp.”). Defendant replied in support of its

summary judgment motion on July 17, 2019. Reply Mem. of Law in Supp. of the Gov’t’s Mot.

for Summ. J. (July 17, 2019), ECF No. 53.

II. DISCUSSION

A. Subject Matter Jurisdiction

The court exercises jurisdiction pursuant to 28 U.S.C. § 1581(a) (2012), according to

which the U.S. Court of International Trade (“USCIT”) has exclusive jurisdiction over an action

brought under section 515 of the Tariff Act of 1930, as amended (“Tariff Act”), 19 U.S.C.

§ 1515 (2012), to contest a denial of a protest by Customs.

B. Voluntary Dismissal Pursuant to Rule 41(a)(2)

Dismissal of actions is governed by Rule 41 of the Rules of the U.S. Court of

International Trade. Where, as here, the motion for voluntary dismissal was not filed before the

opposing party served its answer to the complaint and there is no stipulation of dismissal signed

by all parties, dismissal requires a court order, and the court may order dismissal “on terms that

the court considers proper.” USCIT R. 41(a)(2). Unless otherwise stated, such dismissal is

without prejudice. Id.

C. Plaintiff’s Motion to Dismiss

Noting that goods from China classified in subheading 8424.89.90 are subject to 25%

additional duties pursuant to presidential action taken under Section 301 of the Trade Act of

1974, effective August 23, 2018, Moen gives as its reason for seeking dismissal of this case that

“[t]he Section 301 duties imposed by the Government have significantly changed the importing

landscape for showerheads manufactured in China.” Pl.’s Mot. 1. Plaintiff adds that goods from Court No. 15-00161 Page 5

China classified under subheading 8424.90.90, HTSUS, (its alternative classification claim) are

subject to Section 301 additional duties of 10%, effective September 24, 2018. Id.

D. Defendant’s Opposition to Plaintiff’s Motion to Dismiss

Defendant gives three reasons for opposing plaintiff’s motion to dismiss. It argues that

“[t]his case is ready for the Court to resolve on the merits, as indicated by the motion for

summary judgment that we filed the day after plaintiff moved to dismiss the case.” Def.’s

Mem. 3. It argues, next, that “plaintiff does not seek to abandon its classification claim” and

“will likely litigate the correct classification of its showerheads if and when goods classifiable

under its claimed tariff provision are no longer subject to the 301 duties.” Id. Additionally,

defendant points out that “significant time and resources have been expended litigating the

correct classification of plaintiff’s showerheads.” Id.

A motion for voluntary dismissal under Rule 41(a)(2) is within the sound discretion of

the court and should be granted unless clear legal prejudice to an opposing party can be shown.

9 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 2364 (3d ed.

2019). Voluntary dismissal is favored generally because ruling otherwise would require a

plaintiff to pursue a complaint in which it is no longer interested. See id. Courts typically

consider the following factors when determining whether sufficient legal prejudice exists to deny

a Rule 41(a)(2) motion: (1) defendant’s effort and expense in preparation for trial; (2) any

excessive delay or lack of diligence on the part of the plaintiff in prosecuting the action;

(3) insufficient explanation of the need for dismissal; and (4) whether defendant has filed a

motion for summary judgment. Id.

The court does not have a basis to conclude that plaintiff caused excessive delay, or

demonstrated a lack of diligence, in prosecuting this action. Nor does the court conclude that Court No. 15-00161 Page 6

plaintiff failed to provide a sufficient explanation for its request for dismissal, plaintiff having

disclosed the reason it is not interested in contesting the liquidation of the entries at issue. Pl.’s

Resp. 2. The first and fourth factors, i.e., defendant’s efforts in litigating and the motion for

summary judgment, merit further discussion.

Regarding the time and resources it has expended, defendant states that “the government

has spent over three years” litigating the classification issue in this case, that “[f]act and expert

discovery has included multiple rounds of document exchange, including documents requested

by plaintiff that could only be obtained from the National Archives and Records

Administration,” and that “[d]iscovery has also included Rule 30(b)(6) depositions” and “the

exchange of export reports.” Def.’s Mem. 1-2. Defendant adds that “[t]he Government also has

had to respond to three procedural motions that plaintiff filed after the 301 duties became

effective” and “was not advised that plaintiff was going to seek dismissal of this case until

shortly before the dispositive motion deadline, after the Government had nearly completed its

motion for summary judgment.” Id. at 2.

While the government has expended time and effort in litigation, the court cannot

presume that all of this time and effort necessarily will come to naught. Noting that plaintiff has

multiple protests that have been administratively suspended, defendant expects that if this case is

dismissed according to Rule 41(a)(2), Moen will file a new action that “would likely be identical

to this case.” Id. At least some of the effort the government devoted to discovery and the

summary judgment motion may be useful if and when a new action is brought on other entries of

the merchandise at issue. See Walter Kidde Portable Equip., Inc. v. Universal Sec. Instruments,

Inc., 479 F.3d 1330, 1337-38 (Fed. Cir. 2007). Also, upon dismissal of the instant action, the

liquidation of the entries that are the subject of this action, which occurred at the classification Court No. 15-00161 Page 7

the government advocates, will stand. For these reasons, defendant will not suffer clear legal

prejudice should Moen, having obtained dismissal, decide to litigate the classification issue later

(with respect to entries other than those at issue here), or not at all. Defendant cites Jarvis Clark

Co. v. United States, 733 F.2d 873, 878 (Fed. Cir. 1984) for the proposition that “the Court’s

responsibility is to reach the correct result” and USCIT Rule 1 for the principle that the court

should do so as efficiently as possible. Def.’s Mem. 3. But Jarvis Clark did not address the

issue posed by defendant’s motion to dismiss. Nor does the “just, speedy, and inexpensive”

requirement of Rule 1 require the court to deny the motion to dismiss where, as here, plaintiff

does not wish to proceed with its classification claim and defendant cannot establish that it will

be legally prejudiced by dismissal.

III. CONCLUSION

For the reasons stated above, the court will grant plaintiff’s motion for voluntary

dismissal without prejudice and will deny all other pending motions as moot.

Judgment will enter accordingly.

/s/ Timothy C. Stanceu Timothy C. Stanceu Chief Judge Date: July 26, 2019 New York, NY