Appeal from the United States Court of International Trade in case no. 06-CV-0217, Judge Leo M. Gordon.
The opinion of the court was delivered by: Dyk, Circuit Judge.
Before LINN, DYK, and O'MALLEY, Circuit Judges.
Opinion for the court filed by Circuit Judge DYK.
Dissenting opinion filed by Circuit Judge O'MALLEY.
Ford Motor Company ("Ford") appeals a judgment of the U.S. Court of International Trade ("Trade Court"). The Trade Court granted partial summary judgment in favor of the United States with respect to Ford's claims for refunds of the Harbor Maintenance Tax allegedly paid on exports before July 1, 1990. Ford Motor Co. v. United States ("Pre-July 1, 1990, Decision"), No. 06-00217, slip op. at 7 (Ct. Int'l Trade Jan. 27, 2010). The Trade Court also separately granted summary judgment in favor of the United States with respect to post-July 1, 1990, Harbor Maintenance Tax refund claims. Ford Motor Co. v. United States ("Post-July 1, 1990, Decision"), 744 F. Supp. 2d 1367, 1370 (Ct. Int'l Trade 2010). In both respects, the Trade Court found that Ford did not submit the proof of payment of export taxes required by applicable regulations. We affirm.
In 1998, the Supreme Court held that the Harbor Maintenance Tax ("HMT"), 26 U.S.C. §§ 4461-4462, was unconstitutional as applied to exports because it violated the Export Clause of the Constitution. United States v. U.S. Shoe Corp., 523 U.S. 360, 363 (1998). This case concerns the regulations adopted by U.S. Customs and Border Protection ("Customs") governing the procedures for refund claims for such export taxes. The history of the HMT and the rules adopted by Customs for the payment and refund of the HMT is set forth more fully in this court's opinion in Chrysler Corp. v. United States, 592 F.3d 1330 (Fed. Cir. 2010). For purposes of this case, the following history is a brief summary.
In 1986, Congress enacted the HMT, which required all shippers to pay an ad valorem tax on commercial cargo shipped through the nation's ports. Water Resources Development Act of 1986, Pub. L. No. 99-662, Title XIV, § 1402(a), 100 Stat. 4082, 4266-69. The HMT was imposed on exports, imports, and domestic shipments.*fn1 To receive payment of the HMT, Customs set up lock boxes at First Chicago Bank for each type of HMT payment. Separate lock boxes were established for exports, imports, and domestic shipments. HMT payors were instructed to send their payments, along with the necessary documentation, to the appropriate lock box. On receipt, the bank processed the payments and entered into its system the information related to each payment, such as the remit-ter's name and address, the type and amount of payment, and the deposit date. Each night, the information in the bank's system was transmitted by electronic interface to Customs's Automated Commercial System ("ACS") database. The bank shipped the original paper documentation to Customs the following day, but Customs did not initially review the paper documentation or verify the electronic data.
In 1998, the Supreme Court held the tax unconstitutional only as it applied to exports. After that decision, Customs developed an administrative refund process for HMT paid on exports. As part of this process, Customs contracted with a third party to create a stand-alone HMT database to assist in processing HMT refund claims for export taxes. The stand-alone HMT database contained HMT payment and refund data downloaded directly from the ACS database. Because only the HMT on exports was held unconstitutional, it was necessary to differentiate between different types of HMT payments in processing refunds.
While processing refunds, Customs discovered widespread inaccuracies in its HMT database as compared to the paper documentation received from the bank. These errors were introduced by both payors and bank personnel. Some payors submitted HMT filings that were not carefully prepared and were either unclear, illegible, or did not contain enough detail to allow the correct processing by the bank. Other payors would, for example, make payments for different types of HMT without separating export HMT payments from the other types and sending each to the appropriate lock box. Because bank personnel did not separate out payments into different categories when processing the payments, these consolidated payments would be incorrectly entered into the system as consisting of a single type of HMT payment. Even where not consolidating payment types, payors would sometimes send payments to the wrong lock box, which would cause the bank personnel to process the payment as though it were of a different type, such as, for example, processing a payment as an export HMT payment when in fact it might have been an import HMT payment which was not refundable. In other instances, bank personnel would simply incorrectly key in the information from the paper documentation received. A comparison with the paper documentation would reveal most of these errors. Customs made thousands of corrections to its database but was not able to make corrections related to payments made before July 1, 1990, because it no longer possessed the original paper documentation.
In light of the lack of paper documentation for claims filed before July 1, 1990, Customs established different requirements depending on whether an exporter was seeking a refund of pre- or post-July 1, 1990, payments. For pre-July 1, 1990, payments, the regulations provided that an exporter could not rely on the database alone but was required to submit "supporting documentation"-i.e., paper documentary proof "establishing entitlement to a refund." 19 C.F.R. § 24.24(e)(4)(iv)(C). For post-July 1, 1990, payments, Customs issued a "Harbor Maintenance Tax Payment Report and Certification" listing all export tax payments reflected in its corrected database (corrected based on the paper documentation). If an exporter concluded that the report failed to include a payment or listed an incorrect amount, the exporter could dispute the report again by submitting "supporting documentation" to establish entitlement to a refund. Id. The same regulation (19 C.F.R. § 24.24(e)(4)(iv)(C)) defined "supporting documentation" for both pre-July 1, 1990, claims and post-July 1, 1990, claims.*fn2
Ford filed HMT refund claims with Customs in April 2003 for both pre- and post-July 1, 1990, payments. To date, Ford has received export HMT refund payments totaling more than $17 million from Customs. At issue here are approximately $2.5 million in HMT refund payments that Ford alleges it is still owed. With respect to its pre-July 1, 1990, claims, Ford submitted a 1998 Freedom of Information Act ("FOIA") Report, which had been provided by Customs to Ford at Ford's request, summarizing and listing each quarterly HMT payment made between 1987 and 1992. With respect to the pre-July 1, 1990, period, the FOIA Report had been drawn entirely from the information in Customs' ACS database. In addition, Ford submitted an affidavit attesting to the fact that it was only claiming refunds of HMT paid on export shipments and two declarations from Ford employees attesting to the consistency and quality of Ford's quarterly HMT payment records. With respect to its post-July 1, 1990, claims, Ford submitted copies of 20 Export 19 C.F.R. § 24.24(e)(4)(iv)(C).
Vessel Movement Summary Sheets ("EVMSSs")*fn3 from Ford's own files which allegedly demonstrated Ford's HMT payments on export shipments for which Customs had no record.
Customs denied Ford's claims and its subsequent protest because Ford submitted insufficient supporting documentation. Ford then filed suit in the Trade Court, alleging that the supporting documentation it had filed entitled it to a refund of $2,652,257.84. Following discovery, both parties filed cross-motions for summary judgment with respect to Ford's claims for pre-July 1, 1990, HMT. The Trade Court entered judgment in favor of the United States for these claims, reasoning that the FOIA Report, because it was derived from a flawed and unreliable database, did not provide proof as required under the refund ...