BON-2/RES-2-08-CO:R:C:E 222290 PH
Area Director
J.F.K. Airport Area
U.S. Customs Service
J.F.K. Airport
Building 178
Jamaica, New York 11430
RE: Application for further review of Protest No. 1001-8-006228.
Dear Sir:
The above-referenced protest was forwarded to this office for
further review. We have considered the points raised by your
office and the protestant. Our decision follows.
FACTS:
Cheese was imported into the United States at J.F.K. Airport.
The date of the entry was February 3, 1988. The notices of
redelivery which are the subject of this protest, for samples
822813 and 822815, were issued by Customs after Notices of
Refusal of Admission, dated April 19, 1988, were issued for the
merchandise by the FDA for Customs. The notice of redelivery for
sample 822813 was dated April 26, 1988, and that for sample
822815 was undated. We have obtained copies of the notices of
redelivery which are made a part of the file for this case.
Protest against the notices of redelivery was filed on July 25,
1988.
The protestant contends that because no samples were taken
and/or tested from the lots which would justify refusal, the
notices of redelivery were invalidated. The protestant also
contends that two of the notices of redelivery should be
cancelled because the authority cited for redelivery, "21 CFR
331" (actually, the authorities cited on the notice of redelivery
form were 21 CFR 381 and 19 CFR 141.113), does not exist and one
of the notices of redelivery is undated and therefore defective.
The primary contention of the protestant is that the decision
(Import Alert 12-03) of the Food and Drug Administration (FDA)
upon which the notices of redelivery were based was invalid. We
have obtained a copy of Import Alert 12-03 which is made a part
of the file for this case.
The basis for the argument by the protestant that the FDA
decision was invalid is Bellarno International Ltd. v. Food and
Drug Administration, 678 F. Supp. 410 (E.D.N.Y. 1988), in which
the Court considered the legality of an FDA Import Alert which
automatically required the detention of all entries of "American
Goods" returned pharmaceuticals. Pharmaceuticals so detained
were not to be released unless certain conditions, including the
establishment of a complete chain of custody, were met. The
Court held that the FDA's failure to conduct notice-and-comment
rule-making procedures before issuing the Import Alert violated
the Administrative Procedures Act and rendered the Import Alert
unlawful.
The protestant argues that because the FDA decision was
unlawful, Customs cannot enforce it and redelivery notices
arising from the decision are void. The protestant claims that
Customs cannot absolve itself of responsibility when it issues a
redelivery notice pursuant to an FDA Notice of Refusal because
Customs issuance of a notice of redelivery is an independent act.
If importers are precluded from challenging the underlying basis
for a notice of redelivery, the protestant argues, an importer's
right to protest would be rendered futile. The protestant
contends that the United States v. Continental Seafood, Inc., 11
CIT 768 (1987), case is not dispositive of this issue because
that case involved a failure to comply with a notice of refusal
of admission whereas this case involves a protest against a
notice of redelivery.
The protestant contends that the FDA exceeded its statutory
authority in the issuance of Import Alert 12-03. The protestant
states that although the Federal Food, Drug, and Cosmetics Act of
1938, as amended (21 U.S.C. 301 et seq.) provides for the
delivery by the Secretary of the Treasury to the FDA of samples
of food and other articles (see 21 U.S.C. 381), there is no
authority in this Act for the refusal of the admission of
merchandise solely on the basis of the description of the
merchandise in the entry papers. The protestant states that in
actuality, samples of merchandise such as that under
consideration are not submitted to the FDA; the importer is
required to submit samples to a private laboratory for analysis.
If the importer fails to comply with these procedures, the
protestant states that the merchandise is subject to refusal and
a notice of redelivery is issued. The protestant argues that
these procedures are inconsistent with the statute (21 U.S.C.
381) claimed by the FDA to provide authority for them.
The protestant contends that the FDA's issuance of Import
Alert 12-03 violated the rule-making requirements of the
Administrative Procedure Act. The protestant argues that the
decision is clearly a rule-making because never before were soft-
ripened cheeses detained on the basis of "documentary" rather
than physical samples. The protestant states that the decision
has elaborate, onerous procedures which place a financial burden,
and the burden of proof, on the individual importer. Because the
decision failed to comply with the rule-making requirements of
the Administrative Procedure Act, the protestant contends that
the decision is invalid and may not be enforced and the notices
of redelivery should be cancelled.
ISSUES:
(1) In a protest of a notice of redelivery for samples of
cheese issued on the basis of an FDA Import Alert, may Customs
review the substantive correctness of the FDA decision which is
the basis for the notice of redelivery?
(2) Is a notice of redelivery for samples of cheese issued
on the basis of an FDA Import Alert valid if the notice of
redelivery pre-prepared form cites as authority 21 CFR 381 and 19
CFR 141.113, the former of which does not exist?
(3) Is a notice of redelivery for samples of cheese issued
on the basis of an FDA Import Alert valid if the notice of
redelivery was not dated?
LAW AND ANALYSIS:
The principal contentions by the protestant involve the
legality or validity of the decision by the FDA which provided
the basis for the notices of redelivery and FDA procedures
related to redelivery and sampling. The protestant argues that
Customs cannot absolve itself of responsibility for issuance of a
notice of redelivery pursuant to an FDA decision because Customs
issuance of a notice of redelivery is an independent act. The
protestant contends that the United States v. Continental
Seafoods, Inc., 11 CIT 768 (1987), case is not dispositive of
this issue because that case involved a failure to comply with a
notice of refusal of admission whereas this case involves a
protest against a notice of redelivery.
With regard to the protestant's argument that the Continental
Seafoods case is distinguished from the case under consideration
because that case involved a failure to comply with a notice of
refusal of admission whereas this case involves a protest against
a notice of redelivery, we note that the opinion in the
Continental Seafoods case was authored by Judge Tsoucalas. Judge
Tsoucalas also authored the opinion in the case of United States
v. Toshoku America, Inc., 11 CIT 641 (1987). Although the
Toshoku CIT decision was reversed on grounds not applicable in
this case by the Court of Appeals for the Federal Circuit (United
States v. Toshoku America, Inc., App. No. 88-1221, 88-1222 (23
Cust. Bull. & Dec. 31, August 2, 1989, p. 7), the CIT decision is
helpful in considering protestant's attempt to distinguish the
Continental Seafoods case from the case under consideration. In
the CIT Toshoku case Judge Tsoucalas quoted Congress as stating
that:
... a demand for redelivery (or a "constructive
seizure"[)] to Customs custody is in reality no
different than a decision to exclude merchandise
from entry or delivery--a decision which the
Customs Court may not review. The only
difference ... is the time when the decision is
made by the Customs Service. The decision to
exclude is made at the time an entry is
attempted. A demand for redelivery is made after
the goods have already entered but the Customs
Service subsequently decides that the goods
should not have been allowed into the commerce of
the United States in the first instance. [11 CIT
at 644.]
We note that Judge Tsoucalas, in Continental Seafoods, did
not state "that the principles regarding a redelivery notice did
not apply to a notice of refusal, and that the two situations
were not analogous," as protestant claims. Judge Tsoucalas
actually stated, with regard to a statute of limitations issue,
that:
Atkinson [United States v. Atkinson, 6 CIT 257
(1983)] sets forth the broad principle that a
cause of action accrues from the time the bond--
or any contract--is breached. [6 CIT at 260.]
Further reliance on that decision, however, is
misplaced since the failure to redeliver at
issue in Atkinson is not analogous to the failure
to recondition in the instant case. [11 CIT at
770.]
Bearing in mind that "[t]he only difference [between a demand
for redelivery and a decision to exclude merchandise] is the time
when the decision is made by the Customs Service" (see Judge
Tsoucalas quotation of Congress in the CIT Toshoku decision), it
is clear that the reason for the distinction by Judge Tsoucalas
in Continental Seafoods between failure to redeliver and failure
to recondition (and the failure to export demanded by the
subsequent notice of refusal of admission), in the context of the
statute of limitations, is just this difference (i.e., when the
decision is made by Customs). In view of Judge Tsoucalas'
quotation of Congress to the effect that a demand for redelivery
is otherwise no different than a decision to exclude merchandise,
we are not convinced that Continental Seafoods is so easily
distinguished from the case under consideration. This is
particularly true in light of other, more explicit statements by
the Courts on the issue of Customs reliance on the FDA in its
(i.e., Customs) implementation of import exclusion laws of
adulterated foods (see Customs Service Decision (C.S.D.) 86-21,
noted in United States v. Utex International Inc., 6 Fed. Cir.
(T) 166, 170 (1988), for a historical summary of these laws and
Customs role in regard to them).
In United States v. Utex International Inc., 11 CIT 325
(1987), involving a notice of refusal of admission, the court
(Judge Tsoucalas) stated that:
Unquestionably, the decision to exclude food
offered for importation is committed to the
discretion of the Secretary of Health and Human
Services, administration of which rests with the
FDA ....
The decision to exclude diseased food is not a
decision by a customs officer within the
provisions of the customs law .... [11 CIT at
327; emphasis in original.]
The Utex case, which held that the importer and surety were
liable for failure to export merchandise when FDA's notice of
refusal of admission was issued after Customs liquidation of the
entry, was reversed by the Court of Appeals for the Federal
Circuit (6 Fed. Cir. (T) 166, cited above). The Court of Appeals
held that the liquidation was final as to all aspects of the
entry, including the FDA notice issued after liquidation.
However, the Court of Appeals concurred, in no uncertain terms,
with the Court of International Trade that the decision to
exclude food offered for importation is committed to the FDA,
stating:
We agree that the Customs Service has no
authority over the correctness of the FDA's
analysis of the shrimp; but the correctness of
the decision to deny admission is not at issue.
The long history of activity and jurisprudence in
this area shows that it is Customs'
responsibility to carry out the FDA decisions, in
accordance with customs law and regulations. The
various statutes and regulations make clear that
Customs is the enforcement arm of the process
wherein admissibility is determined by the FDA
.... [6 Fed. Cir. (T) at 170-171.]
Similarly, in both the CIT Toshoku decision and the Court of
Appeals for the Federal Circuit reversal of that decision
(referred to above), the special relationship of Customs and the
FDA with regard to the importation of foodstuffs was recognized
(see 11 CIT at 644-645; 23 Cust. Bull. & Dec. 31, pp. 10-11).
Based on the foregoing authorities, we conclude that, as
stated by the Court of Appeals for the Federal Circuit in Utex,
"the Customs Service has no authority over the correctness of the
FDA's analysis .... The long history of activity and
jurisprudence in this area shows that it is Customs'
responsibility to carry out the FDA decisions, in accordance with
customs law and regulations." The protest is denied with regard
to the issues of the legality or validity of the decision of the
FDA upon which the notices of redelivery were based.
The remaining bases for the protest are procedural ones. The
protestant contends that both of the notices of redelivery under
consideration should be cancelled because the authority cited for
redelivery on the notice of redelivery form does not exist. The
authority citation in the notice of redelivery form, which is
pre-printed, reads:
Redelivery is hereby ordered in accordance with
21 CFR 381 and 19 CFR 141.113.
The protestant is correct; there is no 21 CFR 381. We assume
that the provision meant to be cited is 21 U.S.C. 381, referred
to above. Additionally, the protestant contends that one of the
notices of redelivery (for sample 822815) should also be invalid
because it is not signed.
The sufficiency of a demand for redelivery was examined in
some detail in C.S.D. 85-22. Based on a number of court
decisions cited in the C.S.D., the C.S.D. held, in part, that:
In the case of textile goods which are required
to have a visa based on quantity it is sufficient
for a redelivery notice to identify the entry
number and date, to describe the merchandise that
is to be redelivered, and the reason for
redelivery.
The C.S.D. analogized notices of redelivery to notices of
denial of protests and cited several court decisions on the
sufficiency of such notices. One of the court cases discussed
was Export-Import Services, Inc., v. United States, 2 CIT 16
(1981), in which the court held that a notice of denial which was
"quite slipshod in physical appearance" (one signature was
crossed out and marked void and a second signature and the word
"denied" were in the wrong place on the form) "sufficiently
convey[ed] the impression that the protest was denied." Also
cited was Ogden Marine, Inc., v. United States, 60 CCPA 110, CAD
1090, 473 F. 2d 1405 (1973), in which the court made the
following statements about the "notice" required with regard to a
denial of a protest:
... We agree that the "notice prescribed in 28
U.S.C. 2631(a)(1) must be reasonably interpreted
in reference to the limitation placed on an
importer's right to contest the denial. ...
Information as to the action taken must be clear,
definite and explicit. The date of mailing (or
under 19 CFR 174.30 the date of denial) must be
set forth.
We do not find it essential that the recipient
be warned that the statutory period has begun to
run. Notice "of denial" is all that the statute
requires. Nor do we consider it mandatory that
the form be labeled in any particular manner so
long as the necessary information is
unequivocally conveyed to the proper party.
Turning to the returned protest form, we find
that the requisite information is provided. It
explicitly states that the protest has been
denied. ... The denial is signed by the customs
officer, fulfilling the general requirement that
written notice be signed by the person authorized
to act. The date of denial is noted .... [60
CCPA 110, at 112.]
In this case the notice of redelivery which was dated (for
sample 822815) meets the criteria described above. Redelivery is
unambiguously demanded. The entry number and date are
identified, the merchandise to be redelivered is identified, and
the reason for redelivery (i.e., "The merchandise described below
has been refused admission into the U.S. by the [FDA]") is given.
The protest is denied with regard to the claim that the notices
of redelivery were invalid because of the citation to "21 CFR
381".
The notice of redelivery for sample 822813 was not dated.
The Customs Regulations setting forth the requirements for a
notice of redelivery are found in 19 CFR 141.113(e) which
provides that:
... One copy [of the notice], with the date of
mailing or redelivery noted thereon, shall be
retained by the district director and made part
of the entry record.
As quoted above, the court in the Ogden Marine case stated
that "[t]he date of mailing (or under 19 CFR 174.30 the date of
denial [of a protest]) must be set forth." The language in 19
CFR 174.30 with regard to dating a notice of denial of a protest
("the date appearing on such notice shall be deemed the date on
which such notice was mailed") is similar to that in 19 CFR
141.113(e) with regard to dating a notice of redelivery in that
neither unambiguously requires the dating of the notice. Yet, as
noted above, the court in Ogden Marine stated that the date of
denial must be set forth. Accordingly, the protest with regard
to the notice of redelivery for sample 822813 is granted.
HOLDINGS:
(1) Customs does not have authority to, and may not review
the substantive correctness of, an FDA Import Alert which is the
basis for a notice of redelivery for samples of cheese in a
protest of the notice of redelivery.
(2) A notice of redelivery for samples of cheese issued on
the basis of an FDA Import Alert is valid and should not be
cancelled if the notice of redelivery pre-prepared form cites as
authority 21 CFR 381 and 19 CFR 141.113, the former of which does
not exist.
(3) A notice of redelivery for samples of cheese issued on
the basis of an FDA Import Alert should be cancelled because the
notice of redelivery was not dated.
Sincerely,
John Durant, Director
Commercial Rulings Division