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Sneaker Circus Inc. v. Carter

decided: November 10, 1977.

SNEAKER CIRCUS, INC., BLAZER SPORTS INTERNATIONAL, INC. AND BOB WOLFE ASSOCIATES, INC., PLAINTIFFS-APPELLANTS,
v.
JIMMY CARTER, PRESIDENT OF THE UNITED STATES, ROBERT S. STRAUSS, SPECIAL REPRESENTATIVE FOR TRADE NEGOTIATIONS, STEPHEN J. LANDE, DEPUTY SPECIAL REPRESENTATIVE FOR TRADE NEGOTIATIONS, AND UNITED STATES INTERNATIONAL TRADE COMMISSION, DEFENDANTS-APPELLEES



Appeal from denial of injunctive relief and dismissal of complaint by footwear importers attacking validity of trade agreements with the Republic of Korea and the Republic of China for lack of subject matter jurisdiction, in the United States District Court for the Eastern District of New York, Mark A. Costantino, Judge.

Kaufman, Chief Judge, Smith and Anderson, Circuit Judges.

Author: Smith

SMITH, Circuit Judge:

This is an appeal from a judgment entered in the United States District Court for the Eastern District of New York, Mark A. Costantino, Judge, which denied injunctive relief and dismissed the complaint for want of subject matter jurisdiction. Appellants Sneaker Circus, et al., retailers, wholesalers and importers of footwear, sought injunctive and declaratory relief to invalidate certain U.S. trade agreements with the Republic of Korea and the Republic of China,*fn1 which were negotiated pursuant to the Trade Act of 1974, 19 U.S.C. §§ 2101 et seq. We find error in the determination of lack of subject matter jurisdiction and reverse and remand.

The Trade Act of 1974 is designed to encourage "open and nondiscriminatory world trade" by providing, inter alia, procedures for safeguarding American industry and labor against injurious import competition. The Act authorizes the President to negotiate orderly marketing agreements with foreign countries after reviewing recommendations prepared by the International Trade Commission.

The agreements in question limit the quantity of footwear exported from the Republic of Korea and the Republic of China to the United States during a four-year period, and are enforced by sanctions imposed by the foreign governments. The role of the U.S. Customs Service, under the terms of the agreement, is to count footwear arriving in this country to determine that quantities do not exceed the terms of the agreement, and to check goods for valid export visas.

In its complaint, Sneaker Circus asserts that these trade agreements are invalid, because they were not negotiated in conformity with the procedural requirements of the Act. It is further alleged that the failure to hold statutorily required public hearings represents a violation of the appellants' due process rights under the United States Constitution.*fn2

The District Court did not reach the question of whether the trade agreements were concluded in conformity with statutory and constitutional requirements, nor do we. The question at issue is, rather, which federal court, if any, is the appropriate forum for the determination of the validity of the Trade Agreements. Sneaker Circus argues that the case raises federal questions which require the interpretation of the fifth amendment to the United States Constitution and the Trade Act of 1974; that it is barred, by the terms of the agreements, from litigating these issues in the U.S. Customs Court; and that consequently the District Court has jurisdiction of the matter, pursuant to 28 U.S.C. §§ 1331, 1337 and the Administrative Procedure Act, 5 U.S.C. §§ 701 et seq.

Appellees, U.S. Government officials argue to the contrary that 28 U.S.C. § 1582(a), as amended, assigns the Customs Court exclusive subject matter jurisdiction over this case.

As we noted in our opinion in J. C. Penney Co. v. U.S. Treasury Department, 439 F.2d 63 (2d Cir.), cert. denied, 404 U.S. 869, 30 L. Ed. 2d 113, 92 S. Ct. 60 (1971), it is the general rule that disputes which concern the customs laws of the United States, and which arise under the Tariff Act of 1930, as amended, may be adjudicated only in the Customs Court pursuant to the grant of exclusive jurisdiction in 28 U.S.C. § 1582(a). This is the case even when those disputes are largely constitutional in nature, and even when they have not yet "ripened" sufficiently to permit immediate adjudication as justiciable "cases or controversies."*fn3 This rule is supported both by sound considerations of policy and by consistent historical precedent.*fn4

In Patchogue-Plymouth Mills Corp. v. Durning, 101 F.2d 41 (2d Cir. 1939), and in David L. Moss Co. v. United States, 103 F.2d 395 (Cust. & Pat. App. 1939), the courts indicated that jurisdictional exclusivity was a necessary condition of the uniform and consistent application of the customs laws.

There is, however, an exceptional class of cases which, while arising under the Tariff Act of 1930, is for practical or jurisprudential reasons, barred from the Customs Court by statute. In these cases, and in these cases alone, jurisdiction is vested in the District Courts by virtue of 28 U.S.C. §§ 1331 and 1337.*fn5 While this exceptional category must be narrowly construed so as not to defeat the policy justifications of the general rule, it is, nevertheless, well-grounded in federal practice and precedent. See Timken Co. v. Simon, 176 U.S. App. D.C. 219, 539 F.2d 221 at 226 n. 7 (1976).

The case at bar is among these exceptions to the exclusive jurisdiction of the Customs Court.

28 U.S.C. § 1582, which delineates the jurisdiction of the Customs Court, ...


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