Cannabis Parts Importer Rallies Against 'Paradox' Created by CIT in Motion to Reconsider Seizure Case

Root filed the case after CBP seized one of its cannabis crude extract recovery machines as “drug paraphernalia.” The agency didn't notify Root of the seizure but instead sent the importer an automated notice that the goods had been deemed excluded from entry. The U.S. said the email was automated, sent off by an import specialist who “mistakenly believed” that merchandise after a seizure could still be deemed excluded. Root eventually learned of the seizure through an email from the Department of Justice eight hours after filing its case at CIT.

During litigation, Root accused DOJ of playing “judicial keep away” with the case, citing the department's history of arguing for improper jurisdiction in cases over seized and excluded merchandise in both CIT and district courts (see 2105030053). DOJ countered that its principle has been clear: CIT doesn't have jurisdiction to hear cases over seized goods, but does have jurisdiction to hear cases over excluded goods, as there was a protestable decision (see 2106300034).

The court found this to be consistent with CIT and the district courts' actual jurisdiction (see 2110070022). The judge also held that a seizure conducted within 30 days from when the goods were presented to CBP, “even if uncommunicated to the importer within those thirty days,” prevents the goods from being deemed excluded. The underlying CBP protest was not valid as there was no exclusion, the court said. However, the judge agreed with Root's argument that a seizure by itself is not an admissibility determination.

This ruling has created a paradox, leaving the jurisdictional status of the case in limbo, Root said in its motion. "As the seizure is not a determination of admissibility, it does not stop the running of the 30-day period pursuant to 19 U.S.C. § 1499(c)(5)(A), leaving the Plaintiff to wonder 'what does?'" the brief said. "By suggesting that CBP may render some 'future admissibility determination' that might trigger the need for judicial intervention by this Court, the Court’s decision implies that seizure somehow 'tolls' the running of the 30-day period."

Root then went on to argue that neither CBP nor CIT has the power to toll the 30-day deemed exclusion period. Root cited the 2020 District of Columbia Circuit decision in Allegheny Defense Project v. FERC, which found that "neither an agency nor a court may pre-empt the operation of a 'deemed denied' provision of a statute by taking an action not specified in the statute itself." CIT's decision in this case does exactly what this decision precludes: "it prevents the 30-day 'deemed exclusion' period set out in § 1499(c)(5)(A) from running; it apparently 'tolls' the period for a CBP exclusion decision to some indefinite point in the future when, after uncertain but potential District Court consideration, there may be some 'future Customs decision on admissibility,'" the brief said.

This decision has left the case in a "jurisdictional wilderness," the brief said. Ostensibly, it can be expected that if CIT does not have jurisdiction over these seizure cases, then the relevant district court does. However, district courts may dismiss a seizure case due to "'non-frivolous' Due Process arguments," without getting to the meat of the case, the brief said. So, if CBP simply doesn't make an admissibility determination, the plaintiff can't again bring its case at CIT under the Section 1581(a) jurisdiction, and would have to fasten an argument under the Section 1581(i) "residual" jurisdiction.