Barnes/Richardson Convinces Appeals Court to Reverse CIT on Jurisdictional Issue

August 12, 2011

In a two-to-one decision, the U.S. Court of Appeals for the Federal Circuit on August 11, 2001 reversed the U.S. Court of International Trade in Hartford Fire Insurance Company v. United States. Hartford Fire was represented by Barnes/Richardson attorneys Rick Van Arnam and Eric Lander, with Mr. Van Arnam arguing the case before the three-judge panel. A copy of the decision can be found at http://www.cafc.uscourts.gov/images/stories/opinions-orders/10-1198.pdf

The case involved whether Hartford, the surety for the importer, could bring a case at the Court of International Trade under the court’s residual jurisdiction, known as “(i) jurisdiction,” in a situation where it discovered its cause of action after the period for filing a protest under “(a) jurisdiction” had expired. Cases under (i) jurisdiction must be brought directly to the CIT within two years of when the cause of action first accrues, while cases under (a) jurisdiction must first have been the subject of an administrative protest filed within 180 days of liquidation, and then the summonsing of a denied protest within 180 days of the protest denial date. With limited exceptions, cases that are subject to protest cannot be brought to the CIT under (i) jurisdiction.

But this case presented one of those exceptions. The Federal Circuit held that based on the facts, the surety was under neither actual nor constructive knowledge that it had a claim that had to be protested. Rather, the discovery of the claim after the protest period had expired “reminded one of a detective story filed with happenstance, rather than what might be expected to surface as a result of routine uncovering of information through the exercise of due diligence” to quote the appeals court. In this situation, Hartford’s opportunity to file a protest had been frustrated because its claim was unknown, making (i) jurisdiction the proper avenue into court. The trade court was reversed, and the matter remanded to it for disposition on the merits.