In a recent ruling, the Court of International Trade (CIT) provided guidance on the preparation of administrative protests. Unlike the actress who protested too much in Hamlet, the court found that the importer protested just enough. In Estee Lauder, Inc. v. United States, Slip Op. 11-23 (March 1, 2011), the government sought to dismiss a tariff classification challenge due to an allegedly deficient protest. The court denied the government’s motion based on its holding that the protest specifically identified the merchandise being protested to sufficiently confer jurisdiction and notified U.S. Customs and Border Protection (Customs) of the true nature and character of the merchandise. A review of the court’s holding in this case is instructive on the importance of a well-drafted protest as a foundation for litigation at the CIT.
Estee Lauder initiated its case to challenge Customs’ classification of entries of certain cosmetic kits. The cosmetic kits consisted of various cosmetics, brushes and related items, which were assembled in a carrying case. Although the goods were physically imported in a “kit,” Estee Lauder did not classify them as a “set” under one tariff heading. Instead, in accordance with a Customs ruling issued on a similar product, Estee Lauder entered each component of the kit separately. Despite the Customs ruling, Estee Lauder believed that the cosmetic kits were properly classified as “goods put up in sets for retail sale” based on the tariff classification of the components that gave the kits their essential character.
To contest the entered classification, Estee Lauder filed an administrative protest with Customs. The protest broadly described the imported cosmetic kits as “a combination of various cosmetics, brushes, and applicators in a vanity case,” and requested that they be classified as “goods put up in sets for retail sale” with the essential character determined by the cosmetic components. The protest also included a request for accelerated disposition, and when Customs failed to act on the protest within the prescribed time period, it was deemed denied. Estee Lauder was then able to file its action with the CIT.
The government responded with a motion to dismiss, contending that Estee Lauder’s protest was insufficient to encompass the imported cosmetic kits covered by the entries at issue because the protest did not contain any reference to one particular component of the kits. The government asserted that claims based on merchandise not specifically identified in the protest must be dismissed for lack of subject matter jurisdiction. The government also contended that, due to the product’s flawed description, Estee Lauder’s protest did not apprise Customs of the company’s objections to the classification or rate of duty on the subject cosmetic kits. Finally, the government argued in the alternative that even if the court found jurisdiction over the claim generally, the protest was still insufficient as to the unnamed component.
Upon review, the court rejected all of the government’s arguments. The court began its analysis from the standpoint that it could exercise jurisdiction over valid protests. In the court’s view, valid protests must specifically set forth each category of merchandise affected and describe that merchandise. The court stated that protests are to be liberally interpreted in favor of sufficiency, so long as they convey enough information to apprise officials of the importer’s intent and the relief sought. The court held that Estee Lauder’s protest left “little doubt that the merchandise ... before the court [was] what Estee Lauder had in mind.” Similarly, the court held that the protest’s description of the cosmetic kits and the general items found within was sufficient to notify Customs of its nature and character. The court reasoned that, based on the notice provided as a result of the protest filing, Customs should have been prompted to obtain a sample of the item, which it did not do in this case. Had Customs done so, it would have discovered the exact contents of the cosmetic kits at issue.
The court’s analysis in this case turned on the language of a carefully drafted protest. While, usually, “brevity is the soul of wit,” it may be better to “protest too much” when it comes to filing protests. Importers must be careful with the language they use in administrative protests, because that language is the basis for all further actions, including litigation at the CIT. Luckily, despite the government’s aggressive attack of the protest language, this case did not become a cautionary tale of an importer that did not protest enough. Here, but for its well-reasoned protest, Estee Lauder might have expended considerable resources on initiating suit and beginning discovery, only to have its claim dismissed on the government’s motion.
The Estee Lauder case highlights the benefits of a carefully prepared administrative protest to establish the foundation of a legal challenge to a contested Customs action.