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United States v. American Home Assurance Co.

United States Court of Appeals, Federal Circuit

May 26, 2017

UNITED STATES, Plaintiff-Appellant
v.
AMERICAN HOME ASSURANCE COMPANY, Defendant-Cross-Appellant

         Appeals from the United States Court of International Trade in Nos. 1:09-cv-00403-LMG, 1:10-cv-00125-LMG, 1:10-cv-00175-LMG, 1:10-cv-00343-LMG, Judge Leo M. Gordon.

          Beverly A. Farrell, International Trade Field Office, Commercial Litigation Branch, Civil Division, United States Department of Justice, New York, NY, argued for plaintiff-appellant. Also represented by Amy M. Rubin; Benjamin C. Mizer, Jeanne E. Davidson, Washington, DC; Brandon Rogers, Office of Assistant Chief Counsel, United States Customs and Border Protection, Indianapolis, IN; Paula S. Smith, New York, NY.

          Herbert C. Shelley, Steptoe & Johnson, LLP, Washington, DC, argued for defendant-cross-appellant. Also represented by Mark Frederick Horning.

          Edward Graham Gallagher, The Surety & Fidelity Association of America, Washington, DC, for amicus curiae The Surety & Fidelity Association of America.

          Before Moore, Taranto, and Chen, Circuit Judges.

          Moore, Circuit Judge.

         The government appeals from the United States Court of International Trade's ("Trade Court") judgment on the pleadings holding that the government is not entitled to non-statutory equitable interest for unpaid antidumping duties for imported goods. United States v. Am. Home Assur. Co., 100 F.Supp.3d 1364, 1373 (Ct. Int'l Trade 2015) ("AHAC II"). American Home Assurance Company ("AHAC") cross-appeals the Trade Court's decision to award the government interest on the unpaid duties under 19 U.S.C. §§ 580 and 1505(d). Id. at 1371. We affirm the Trade Court decision on all issues.

         Background

         This appeal stems from four collection actions in which the government sought to recover unpaid antidumping duties from AHAC, a surety. AHAC secured three different importers' importation of preserved mushrooms and crawfish tail meat from China by issuing numerous single transaction and continuous entry bonds in 2001 and 2002. The issued bonds obligated the importers and AHAC to pay, up to the face amounts of the bonds, "any duty, tax or charge and compliance with law or regulations" resulting from covered activities. Customs liquidated the entries secured by the bonds and assessed antidumping duties on the merchandise. Each importer failed to pay the duties owed. The parties do not dispute that AHAC is liable for the principal amounts of antidumping duties owed on the bonds.

         After liquidation, Customs started charging statutory post-liquidation interest on the unpaid duties of two of the collections that did not exceed the face amount of the bonds pursuant to 19 U.S.C. § 1505(d) ("§ 1505(d) interest"). From 2003 to 2009, Customs issued multiple demands notifying AHAC of the government's intent to seek § 1505(d) interest. AHAC protested the government demands and Customs denied the protest. AHAC could have challenged Customs' denial at the Trade Court under 28 U.S.C. § 1581(a), but elected not to do so. In 2009, the government commenced four suits at the Trade Court for the collection of unpaid duties and interest, which the Trade Court consolidated. After discovery, the parties cross-moved for summary judgment. Relevant to this appeal, the parties disputed the application of equitable prejudgment interest, § 1505(d) interest, and 6% statutory prejudgment interest under 19 U.S.C. § 580 ("§ 580 interest").

         The Trade Court granted in part and denied in part both the government's and AHAC's motions. It ordered AHAC to pay § 1505(d) interest up to the face amounts of the bonds. It held that § 1505(d) interest involves "charges or exactions of whatever character" under 19 U.S.C. § 1514(a)(3) and that the statute does not contain an exception for charges or exactions arising after liquidation. It held that the bonds statutorily and contractually serve to secure the payment of duties and any interest- they do not distinguish between pre- and post-liquidation interest. It held that because the § 1505(d) interest determination is "final and conclusive" under § 1514(a) and AHAC failed to contest its denied protest, AHAC was precluded from asserting any defenses regarding its liability for § 1505(d) interest.

         The Trade Court also held AHAC liable for § 580 interest, which is 6% statutory prejudgment interest. The Trade Court declined to award equitable prejudgment interest because the 6% rate of the § 580 interest "far exceeds the applicable rates at which the Government would receive equitable interest" and awarding equitable prejudgment interest in these circumstances would over-compensate the government. The government appeals the Trade Court's denial of non-statutory equitable interest, and AHAC cross-appeals the Trade Court's award of § 580 and § 1505(d) interest to the government. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(5).

         Discussion

         We review the Trade Court's grant or denial of summary judgment for correctness as a matter of law and we decide de novo "the proper interpretation of the governing statute and regulations as well as whether genuine issues of material fact exist." United States v. Am. Home Assur. Co., 789 F.3d 1313, 1319 (Fed. Cir. 2015) ("AHAC I"). We review the Trade Court's determination not to award equitable prejudgment ...


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