Memorandum Opinion and Order
DiCARLO, Judge:
The plaintiff seeks to recover civil penalties under section 592 of the Tariff Act of 1930, as amended, 19 U.S.C. § 1592, as in effect prior to the amendments made by the Customs Procedural Reform and Simplification Act of 1978, Pub.L. 95-410, 92 Stat. 888 (the Reform Act or new law). Defendant is alleged to have made 293 entries using documents containing false statements from January 20, 1972 to January 3, 1977.
Administrative proceedings began with the issuance of a pre-penalty notice on January 31, 1978. A notice of-penalty was issued on May 10, 1979, for the forfeiture value of the subject merchandise, $1,342,-771.00. The defendant petitioned for remission, under section 618 of the Tariff Act of 1930, as amended, 19 U.S.C. § 1618 (1982), and the forfeiture claim was mitigated to $152,909. Defendant declined to pay that amount and plaintiff filed this suit on July 23, 1984.
Defendant now moves to dismiss the complaint for failure to state a claim for which relief can be granted, or, alternatively, for a more definite statement.
Defendant argues that the complaint fails to state a claim in that it: (1) does not state defendant’s degree of culpability under 19 U.S.C. § 1592(e)(2)-(4) (1982); (2) does not state circumstances constituting fraud with the particularity required by Rule 9(b)
; (3) alleges that the merchandise was entered “by means of” the false statements and (4) does not contain a plain statement of the claim as required by Rule 8(a)(2). Alternatively, defendant claims it is entitled to a more definite statement pursuant to Rule 12(e).
The Court of International Trade is asked to construe, apparently for the first time, the transition rule of the Reform Act.
The transition rule provides that the judicial review provision of the Reform Act, subsection 1592(e),
becomes effective on the date of enactment, October 3, 1978, while all other provisions apply in actions
where administrative proceedings began after January 1, 1979.
It is a “familiar canon of statutory construction that the starting point for interpreting a statute is the language of the statute itself.”
Consumer Product Safety Commission v. GTE Sylvania, Inc.,
447 U.S. 102, 108, 100 S.Ct. 2051, 2056, 64 L.Ed.2d 766 (1980);
see Intercontinental Fibres, Inc. v. United States,
64 CCPA 31, 33, C.A.D. 1179, 545 F.2d 744, 746 (1976).
Since administrative proceedings began in this action before January 1, 1979, the law existing prior to the Reform Act and section (e) of the new law apply. Plaintiff must show “probable cause” that the importer “was without reasonable cause to believe the truth” of its statements. The burden then shifts to the defendant to prove that there was no violation. 19 U.S.C. §§ 1592, 1615 (1976) (amended by the Reform Act).
Defendant’s contention that the complaint fails to state a claim since it does not set forth defendant’s degree of culpability is without merit. Section 1592(e)(2)-(4) (1982) requires application of the new law burdens of proof only “if the monetary penalty is based on fraud” or “based on gross negligence,” or “based on negligence.”
Where the penalty is based on the old law, as here, and the defendant is alleged to have been “without reasonable cause to believe the truth” of its statements, subsections (2)-(4) have no application.
The action is subject only to subsection (1) of section 1592(e), which provides for
de novo
review of the amount of the penalty.
Defendant’s second contention in support of its motion to dismiss is also without merit. Since the plaintiff does not have to prove fraud under the old law, Rule 9(b) does not apply to this action.
Defendant’s third argument is that the complaint failed to state a violation because the merchandise was not entered “by means of” the false statements. Defendant relies on
United States v. Teraoka,
669 F.2d 577 (9th Cir.1982), where the Ninth Circuit Court of Appeals held that 18 U.S.C. § 542, the criminal law analogue of section 1592, was violated only where the false statements resulted in the importation of merchandise that was otherwise ex-cludable.
The Court finds nothing in the legislative history of section 1592 or its antecedents to show that Congress intended the statute to apply only to prohibited merchandise. The Senate Report on the bill that was to become the 1978 Reform Act stated that the purpose of section 1592 was “to encourage accurate completion of the entry documents upon which Customs must rely to assess duties and administer other customs laws.” S.Rep. No. 778, 95th Cong., 2d
Sess. 17,
reprinted in
1978 U.S.Code Cong. & Ad.News 2211, 2229. It is unlikely that Congress would emphasize that section 1592 was intended to allow Customs to properly “assess duties” if the statute was meant to apply only to prohibited merchandise.
Courts have always applied section 1592 and its antecedents to nonprohibited merchandise.
See, e.g. United States v. Twenty-five Packages of Panama Hats,
281 U.S. 358, 34 S.Ct. 63, 58 L.Ed. 267 (1913). Defendant’s interpretation would “emasculate that provision, depriving the United States Government of one of its more effective and widely-used customs civil enforcement statutes.”
United States v. F.A. G. Bearings, Corp.,
8 CIT_, Slip Op. 84-109 (Oct. 4, 1984), at 15.
The Court holds that section 1592 applies to the merchandise entered by the defendant.
Defendant’s fourth ground is that’ the complaint does not contain a plain statement of the claim as required by Rule 8(a)(2).
Rule 8(a)(2) requires only “a short and plain statement of the claim showing that the pleader is entitled to relief.” The purpose of the identical Rule 8(a)(2) of the Federal Rules of Civil Procedure
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Memorandum Opinion and Order
DiCARLO, Judge:
The plaintiff seeks to recover civil penalties under section 592 of the Tariff Act of 1930, as amended, 19 U.S.C. § 1592, as in effect prior to the amendments made by the Customs Procedural Reform and Simplification Act of 1978, Pub.L. 95-410, 92 Stat. 888 (the Reform Act or new law). Defendant is alleged to have made 293 entries using documents containing false statements from January 20, 1972 to January 3, 1977.
Administrative proceedings began with the issuance of a pre-penalty notice on January 31, 1978. A notice of-penalty was issued on May 10, 1979, for the forfeiture value of the subject merchandise, $1,342,-771.00. The defendant petitioned for remission, under section 618 of the Tariff Act of 1930, as amended, 19 U.S.C. § 1618 (1982), and the forfeiture claim was mitigated to $152,909. Defendant declined to pay that amount and plaintiff filed this suit on July 23, 1984.
Defendant now moves to dismiss the complaint for failure to state a claim for which relief can be granted, or, alternatively, for a more definite statement.
Defendant argues that the complaint fails to state a claim in that it: (1) does not state defendant’s degree of culpability under 19 U.S.C. § 1592(e)(2)-(4) (1982); (2) does not state circumstances constituting fraud with the particularity required by Rule 9(b)
; (3) alleges that the merchandise was entered “by means of” the false statements and (4) does not contain a plain statement of the claim as required by Rule 8(a)(2). Alternatively, defendant claims it is entitled to a more definite statement pursuant to Rule 12(e).
The Court of International Trade is asked to construe, apparently for the first time, the transition rule of the Reform Act.
The transition rule provides that the judicial review provision of the Reform Act, subsection 1592(e),
becomes effective on the date of enactment, October 3, 1978, while all other provisions apply in actions
where administrative proceedings began after January 1, 1979.
It is a “familiar canon of statutory construction that the starting point for interpreting a statute is the language of the statute itself.”
Consumer Product Safety Commission v. GTE Sylvania, Inc.,
447 U.S. 102, 108, 100 S.Ct. 2051, 2056, 64 L.Ed.2d 766 (1980);
see Intercontinental Fibres, Inc. v. United States,
64 CCPA 31, 33, C.A.D. 1179, 545 F.2d 744, 746 (1976).
Since administrative proceedings began in this action before January 1, 1979, the law existing prior to the Reform Act and section (e) of the new law apply. Plaintiff must show “probable cause” that the importer “was without reasonable cause to believe the truth” of its statements. The burden then shifts to the defendant to prove that there was no violation. 19 U.S.C. §§ 1592, 1615 (1976) (amended by the Reform Act).
Defendant’s contention that the complaint fails to state a claim since it does not set forth defendant’s degree of culpability is without merit. Section 1592(e)(2)-(4) (1982) requires application of the new law burdens of proof only “if the monetary penalty is based on fraud” or “based on gross negligence,” or “based on negligence.”
Where the penalty is based on the old law, as here, and the defendant is alleged to have been “without reasonable cause to believe the truth” of its statements, subsections (2)-(4) have no application.
The action is subject only to subsection (1) of section 1592(e), which provides for
de novo
review of the amount of the penalty.
Defendant’s second contention in support of its motion to dismiss is also without merit. Since the plaintiff does not have to prove fraud under the old law, Rule 9(b) does not apply to this action.
Defendant’s third argument is that the complaint failed to state a violation because the merchandise was not entered “by means of” the false statements. Defendant relies on
United States v. Teraoka,
669 F.2d 577 (9th Cir.1982), where the Ninth Circuit Court of Appeals held that 18 U.S.C. § 542, the criminal law analogue of section 1592, was violated only where the false statements resulted in the importation of merchandise that was otherwise ex-cludable.
The Court finds nothing in the legislative history of section 1592 or its antecedents to show that Congress intended the statute to apply only to prohibited merchandise. The Senate Report on the bill that was to become the 1978 Reform Act stated that the purpose of section 1592 was “to encourage accurate completion of the entry documents upon which Customs must rely to assess duties and administer other customs laws.” S.Rep. No. 778, 95th Cong., 2d
Sess. 17,
reprinted in
1978 U.S.Code Cong. & Ad.News 2211, 2229. It is unlikely that Congress would emphasize that section 1592 was intended to allow Customs to properly “assess duties” if the statute was meant to apply only to prohibited merchandise.
Courts have always applied section 1592 and its antecedents to nonprohibited merchandise.
See, e.g. United States v. Twenty-five Packages of Panama Hats,
281 U.S. 358, 34 S.Ct. 63, 58 L.Ed. 267 (1913). Defendant’s interpretation would “emasculate that provision, depriving the United States Government of one of its more effective and widely-used customs civil enforcement statutes.”
United States v. F.A. G. Bearings, Corp.,
8 CIT_, Slip Op. 84-109 (Oct. 4, 1984), at 15.
The Court holds that section 1592 applies to the merchandise entered by the defendant.
Defendant’s fourth ground is that’ the complaint does not contain a plain statement of the claim as required by Rule 8(a)(2).
Rule 8(a)(2) requires only “a short and plain statement of the claim showing that the pleader is entitled to relief.” The purpose of the identical Rule 8(a)(2) of the Federal Rules of Civil Procedure is to “give the defendant fair notice of what the plaintiff’s claim is and the grounds upon which it rests____ Such simplified ‘notice pleading’ is made possible by the liberal opportunity for discovery and other pretrial procedures established by the Rules____”
Conley v. Gibson,
355 U.S. 41, 47-48, 78 S.Ct. 99, 102-103, 2 L.Ed.2d 80 (1957);
see United States v. Appendagez, Inc.,
5 CIT-, 560 F.Supp. 50, 54 (1983).
Count I of the complaint alleges:
... defendant or its agent ... falsely described the imported merchandise as “ball bearings with integral shafts”, dutiable at 6 percent under item 680.33, Tariff Schedules of the United States, when, in fact, the merchandise was ball/roller bearings with integral shafts, dutiable at 7.5 percent plus 1.7 cents per pound, under item 680.35, Tariff Schedules of the United States.
Complaint, Paragraph 7.
Count II of the complaint alleges that “declarations made and invoices filed ... by defendant or its agent with its entries falsely stated the home market price of the imported merchandise.” Complaint, Paragraph 13.
The complaint identifies 293 entries by entry numbers, dates of entry, part numbers, quantity and weight, and domestic forfeiture value. Complaint, Annex A.
The Court holds that the complaint is sufficient to give the defendant fair notice of plaintiff’s claim.
Finally, defendant’s request for a more definite statement under Rule 12(e) is also denied. As demonstrated above, plaintiff’s complaint is not “so vague or ambiguous that a party cannot reasonably be required to frame a responsive pleading” as the Rule requires.
IT IS HEREBY ORDERED that defendant’s motion to dismiss, or, alternatively, for a more definite statement is denied.