Chae v. Yellen

579 F.Supp.3d 1343

Byungmin CHAE, Plaintiff,

v.Janet YELLEN, United States Secretary of the Treasury, Alejandro Mayorkas, United States Secretary of Homeland Security, United States Department of the Treasury, United States Department of Homeland Security, and United States, Defendants.

Slip Op. 22-59

Court No. 20-00316

United States Court of International Trade.

June 6, 2022

Matthew C. Moench, King Moench Hirniak & Mehta, LLP, of Morris Plains, N.J., argued for plaintiff.

Marcella Powell, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of New York, N.Y., argued for defendants. With her on the brief were Brian M. Boynton, Acting Assistant Attorney General, Jeanne E. Davidson, Director, Justin R. Miller, Attorney-in-Charge, International Trade Field Office, and Aimee Lee, Assistant Director. Of counsel on the brief was Mathias Rabinovitch, Office of the Assistant Chief Counsel, International Trade Litigation, U.S. Customs and Border Protection.

OPINION

Reif, Judge:

Plaintiff, Byungmin Chae, brings this action pursuant to U.S. Court of International Trade ("USCIT" or the "Court") Rule 56.1 to challenge the decision of U.S. Customs and Border Protection ("Customs") upholding the denial of plaintiff's appeal of his result on the Customs Broker License Exam ("CBLE" or "exam").¹ Am. Compl., ECF No. 20; Br. in Supp. of Pl.’s Mot. for J. on the R. ("Pl. Br."), ECF No. 39; Reply ("Pl. Reply Br."), ECF No. 43; section 641(e) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1641(e) (2018).² Customs denied plaintiff's appeal based on his failure to attain a passing score of 75% or higher on the CBLE held on April 25, 2018 ("April 2018 exam"). Def.’s Opp. to Pl.’s Mot. for J. on the R. ("Def. Resp. Br."), ECF No. 40; 19 C.F.R. § 111.11(a)(4).

Plaintiff appeals to the court Customs’ decision to deny plaintiff credit for five questions on the April 2018 exam.³ See Pl. Reply Br. at 2. Should plaintiff receive credit for three of the five contested questions, he would attain a passing score of 75%. Plaintiff contends also that he is eligible to receive attorney fees and other expenses under the Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412(d). See Pl. Br. at 13-14.

Defendants oppose plaintiff's motion and argue that Customs’ decision to deny plaintiff credit for each contested question was supported by substantial evidence. See Def. Resp. Br. at 8; Def.’s Answer to First Am. Compl., ECF No. 27. On this basis, defendants assert that plaintiff did not attain a passing score of 75% or higher on the April 2018 exam and, consequently, that Customs’ "decision not to grant plaintiff a license due to his failure to attain a passing score ... was not arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." Def. Resp. Br. at 5-6, 22-23; 5 U.S.C. § 706(2)(A). Defendants contest also plaintiff's argument that he is entitled to attorney fees and other expenses under the EAJA. See id. at 21-23.

For the reasons discussed below, plaintiff's motion is denied.

BACKGROUND

Plaintiff sat for the CBLE on April 25, 2018. See Am. Admin. R., Ex. A, ECF No. 51. On May 18, 2018, Customs notified plaintiff that he had received a score of 65% — 10% below the passing score of 75%. See id. Plaintiff appealed this result, and the Broker Management Branch ("BMB") of Customs notified plaintiff on August 23, 2018, that, upon further review, his score had improved by two questions, resulting in a score of 67.5% — still short of the 75% score required to pass. See Am. Admin. R., Exs. B, C. Plaintiff then initiated with Customs’ Executive Assistant Commissioner ("EAC") a review of the BMB's decision. See Am. Admin. R., Ex. D. By letter dated May 23, 2019, the EAC informed plaintiff that his score had improved by three additional questions, resulting in a 71.25% score — again, short of 75%. See Am. Admin. R., Ex. L.

Plaintiff inquired how to appeal the EAC's decision but was informed that "[t]here is no 3^rd appeal." Am. Admin. R., Ex. M. Plaintiff learned subsequently, however, that he had been able to appeal his result to the USCIT and attempted to file a complaint on March 4, 2020. See Pl. Br. at 2. The Court docketed plaintiff's complaint on September 11, 2020.⁴

In a decision dated May 7, 2021, the court denied defendants’ motion to dismiss plaintiff's complaint, granted plaintiff leave to amend his complaint to bring it into compliance with the procedural requirements of USCIT Rule 10(a), and sua sponte invited plaintiff to amend his complaint to bring it into compliance with the substantive requirements of USCIT Rule 12(b)(6). Chae I , 45 CIT at ––––, 518 F. Supp. 3d at 1389-90. On July 6, 2021, plaintiff filed an amended complaint seeking review of Customs’ decision to deny plaintiff's appeal. See Am. Compl. at 1-2.

LEGAL FRAMEWORK

I. Application for a customs broker's license

Customs brokers are responsible for the application of statutes and regulations "governing the movement of merchandise into and out of the customs territory of the United States." Dunn-Heiser v. United States , 29 C.I.T. 552, 553, 374 F. Supp. 2d 1276, 1278 (2005). Pursuant to 19 U.S.C. § 1641(b)(2), the Secretary of the Treasury is vested with "broad powers" with respect to the licensing of customs brokers. DePersia v. United States , 33 C.I.T. 1103, 1105, 637 F. Supp. 2d 1244, 1247 (2009). 19 U.S.C. § 1641(b)(2) provides:

The Secretary may grant an individual a customs broker's license only if that individual is a citizen of the United States. Before granting the license, the Secretary may require an applicant to show any facts deemed necessary to establish that the applicant is of good moral character and qualified to render valuable service to others in the conduct of customs business. In assessing the qualifications of an applicant, the Secretary may conduct an examination to determine the applicant's knowledge of customs and related laws, regulations and procedures, bookkeeping, accounting, and all other appropriate matters.

19 U.S.C. § 1641(b)(2).

Customs has promulgated several regulations to implement this statute. For instance, 19 C.F.R. § 111.11(a) details the "[b]asic requirements" for an individual to obtain a customs broker's license:

(a) INDIVIDUAL . In order to obtain a broker's license, an individual must:

(1) Be a citizen of the United States on the date of submission of the application ... and not an officer or employee of the United States Government;

(2) Attain the age of 21 prior to the date of submission of the application ...;

(3) Be of good moral character; and

(4) Have established, by attaining a passing (75 percent or higher) grade on an examination taken within the 3-year period before submission of the application ... that he has sufficient knowledge of customs and related laws, regulations and procedures, bookkeeping, accounting, and all other appropriate matters to render valuable service to importers and exporters.

19 C.F.R. § 111.11(a)(1)-(4). Further, 19 C.F.R. § 111.12(a) provides information with respect to the submission of an application for a customs broker's license, and 19 C.F.R. § 111.13 regulates the examination that is described in 19 C.F.R. § 111.11(a)(4). See 19 C.F.R. §§ 111.12(a), 111.13.

II. Customs Broker License Exam

Customs’ regulations provide that "[t]he examination for an individual broker's license" — referred to as the CBLE — is "designed to determine the individual's knowledge of customs and related laws, regulations and procedures, bookkeeping, accounting, and all other appropriate matters necessary to render valuable service to importers and exporters." Id. § 111.13(a) ; see 19 U.S.C. § 1641(b)(2). The fact that this "comprehensive written licensing exam" constitutes one of the requirements to obtain a customs broker's license reflects the "complex[ity]" of the applicable statutes and regulations as well as the "integral role [of customs brokers] in international trade." Dunn-Heiser , 29 C.I.T. at 553-54, 374 F. Supp. 2d at 1278.

Customs administers the CBLE twice each year, in April and October. 19 C.F.R. § 111.13(b). The exam consists of 80 multiple choice questions. See Am. Admin. R., Ex. N, at *1. In addition, "[t]he exam is open book," and applicants are advised to bring certain specified materials to which they may refer during the exam, including the Harmonized Tariff Schedule of the United States ("HTSUS") and Title 19 of the Code of Federal Regulations ("CFR").⁵ Dunn-Heiser , 29 C.I.T. at 554, 374 F. Supp. 2d at 1278.

As noted, an applicant is required to attain a score of 75% or higher to pass the CBLE. 19 C.F.R. § 111.11(a)(4) ; 19 U.S.C. § 1641(b)(2). However, an applicant who does not attain a passing score is entitled to retake the exam without penalty.

19 C.F.R. § 111.13(e). In addition, an applicant who does not attain a passing score is entitled to appeal this result to the BMB. Id. § 111.13(f). Should the BMB affirm the result, the applicant is entitled to request that the EAC review the BMB's decision. Id. Should the EAC uphold the BMB's decision, the applicant is then entitled to appeal the EAC's decision to the USCIT. 19 U.S.C. § 1641(e)(1) ("[An] applicant ... may appeal ... by filing in the Court of International Trade, within 60 days after the issuance of the decision or order, a written petition requesting that the decision or order be modified or set aside in whole or in part.").

STANDARD OF REVIEW

This Court has jurisdiction to hear plaintiff's appeal pursuant to 28 U.S.C. § 1581(g)(1) ("The Court of International Trade shall have exclusive jurisdiction of any civil action commenced to review ... any decision of the Secretary of the Treasury to deny a customs broker's license.").

The U.S. Court of Appeals for the Federal Circuit ("Federal Circuit") has determined that two elements of review apply with respect to the appeal of an applicant's result on the CBLE. See Kenny v. Snow , 401 F.3d 1359, 1361 (Fed. Cir. 2005). The first...