## Facts

- Netchem, a Canadian chemical importer, entered 43 shipments of lanthanum oxide in 2011 at Detroit, Port Huron, and Newark/New York.
- Netchem initially classified the merchandise under HTSUS 2846.90.2010 (rare-earth oxides except cerium oxide), which was duty-free.
- In October 2011, Customs reclassified the shipments under HTSUS 2846.90.8000 (other rare-earth compounds/mixtures), subject to a 3.7% ad valorem duty rate.
- Following reclassification, 18 shipments were assessed duties at entry and 25 previously duty-free shipments were assessed duties upon liquidation; Netchem paid $1,539,882.97 for the 43 contested entries.
- On March 19, 2012, Netchem filed a single protest document at the Port of Buffalo listing 56 entries total (the 43 contested entries plus 13 Buffalo entries).
- When the protest was filed, only 26 of the 56 listed entries had been liquidated; the remaining 30 were liquidated after March 19, 2012.
- The Buffalo port director returned the protest document without deciding its merits, stating it included entries filed at other ports.
- Netchem treated Customs’ inaction as a “deemed denial” and sued under 28 U.S.C. § 1581(a) to contest the classification and duties.

## Issues

1. Whether the court had subject-matter jurisdiction under 28 U.S.C. § 1581(a) when the importer’s protest was filed at a port other than the ports of entry for many entries.
2. Whether § 1581(a) jurisdiction existed for entries that were protested before liquidation or involved defective liquidation/payment timing.
3. Whether an asserted “deemed denial” under the protest statute can create jurisdiction absent a valid protest properly filed and subject to Customs’ obligation to decide.
4. Whether any alternative basis of jurisdiction under § 1581 could apply when the claim is, in substance, a protest-based challenge to classification and duties.

## Decision

- The Court of International Trade granted the government’s Rule 12(b)(1) motion and dismissed the action in its entirety for lack of subject-matter jurisdiction.
- The court held that the entries were “untimely liquidated, untimely paid, or protested at the wrong port,” defeating the statutory predicates for § 1581(a) jurisdiction.
- The court declined to proceed on any alternative jurisdictional theory and did not reach the merits of the tariff classification dispute.

## Legal Principles

- The Court of International Trade’s jurisdiction is strictly statutory; without a valid jurisdictional grant and satisfied prerequisites, the court cannot adjudicate the dispute.
- Jurisdiction under 28 U.S.C. § 1581(a) requires a properly filed protest under 19 U.S.C. § 1514 and a denial (or qualifying disposition) under 19 U.S.C. § 1515.
- A protest filed at an improper port (including a single protest covering entries made at multiple other ports) is not a valid predicate for § 1581(a) jurisdiction as to those entries.
- Protest-based review presupposes proper sequencing and compliance with statutory requirements tied to liquidation and duty liability; premature or otherwise defective protests do not support § 1581(a) jurisdiction.
- A “deemed denial” mechanism does not cure an invalid or misfiled protest; constructive denial requires a protest that Customs is obligated to consider and decide.

## Conclusion

The court dismissed the importer’s classification challenge because the statutory prerequisites for protest-based jurisdiction were not met, including misfiling the protest at the wrong port and defects tied to liquidation and payment timing, leaving the duty assessments in place without a merits ruling.


Netchem, Inc. v. United States, 961 F. Supp. 2d 1336 (Ct. Int'l Trade 2014)