Customs Penalties and Customs Brokers: The Year in Review under 28 U.S.C. (Section) 1581(g) and 1582
Pike, Damon V., Parga, Cylinda, Georgetown Journal of International Law
In keeping with tradition, the U.S. Court of International Trade ("CIT") issued relatively few substantive decisions concerning two areas of its jurisdiction which would seemingly have a broader impact than they actually do in everyday practice: 28 U.S.C. [section] 1581 (g) (concerning the CIT's ability to review decisions of the Secretary of Homeland Security (and formerly the Secretary of the Treasury) to revoke U.S. customs broker's licenses), and 28 U.S.C. [section] 1582 (concerning the CIT's review of cases brought by U.S. Customs and Border Protection ("CBP" or "Customs") to recover certain civil penalties, liquidated damages on a customs bond, or customs duties). The decisions issued in 2008 highlight once again the futility that defrocked customs brokers face when seeking to overturn administrative decisions resulting in the revocation of their licenses. These attempts are particularly difficult when the broker is a convicted felon. In these instances, the CIT tends to side with CBP in affirming in whole or in part the issuance of significant penalties for negligent or grossly negligent conduct--although CBP may now have a higher standard to meet based on the new interpretation of the broker negligence regulation imposed by the U.S. Court of Appeals for the Federal Circuit ("CAFC") in the appeal of the UPS decision discussed infra. In a troubling development, however, the CIT also seems to have imposed a new standard of negligence on importers that fail to follow the advice of counsel--even when a legitimate issue exists with respect to the soundness of that advice.
I. CASES DECIDED PURSUANT TO THE COURT'S JURISDICTION UNDER 28 U.S.C. [section] 1581 (g)
Section 1581, subsection (g), of title 28 of the United States Code gives the Court of International Trade exclusive jurisdiction over:
[A]ny civil action commenced to review--(1) any decision of the Secretary of the Treasury to deny a customs broker's license under section 641(b)(2) or (3) of the Tariff Act of 1930, or to deny a customs broker's permit under section 641(c)(1) of such Act, or to revoke a license or permit under section 641(b)(5) or (c)(2) of such Act; (2) any decision of the Secretary of the treasury to revoke or suspend a customs broker's license or permit, or impose a monetary penalty in lieu thereof, under section 641(d)(2)(B) of the Tariff Act of 1930; and (3) any decision or order of the Customs Service to deny, suspend, or revoke accreditation of a private laboratory under section 499 (b) of the Tariff Act of 1930. (1)
During the 2008 term, the Court of International Trade only heard three cases pursuant to its [section] 1581(g) jurisdiction, and two of those cases were related. The three decisions are discussed below.
A. Boynton v. United States
The court issued two decisions in the matter of Boynton v. United States. The court's first opinion (rendered in 2008) affirmed the decision of the Secretary of the Department of Homeland Security ("Secretary") to revoke the plaintiff's customs broker's license. (2) The second decision (also rendered in 2008) denied plaintiff's motion for a rehearing of the prior proceedings, which had resulted in the denial of Boynton's broker's license. (3)
In the first 2008 opinion, the court referenced its 2007 decision in this matter which discussed the problems that Ms. Boynton had in discharging her duties as a licensed customs broker, e.g., she failed to make timely deposits of duties and other fees for entries filed on behalf of her importer clients and failed to maintain properly executed powers of attorney for her employees. For these failures, Boynton was placed on both a "local" and "national" sanctions list by CBP, meaning that merchandise imported under Boynton's filer code could not be released until all duties and fees had been paid to CBP. (4) CBP then began formal revocation proceedings, which resulted in a hearing before an Administrative Law Judge and a recommendation that the Secretary revoke Boynton's license, which revocation followed. …