## Facts

- Ford Motor Company imported vehicles into the United States from Mexico and claimed preferential duty treatment under the North American Free Trade Agreement (NAFTA).
- After Customs and Border Protection (Customs) had granted Ford’s preferential-duty claims, Customs later served Ford with an administrative summons seeking documents connected to the NAFTA entries.
- Customs sought records bearing on whether the vehicles qualified for NAFTA benefits, including information about the country of origin of vehicle components and other data tied to NAFTA eligibility and entry.
- Ford objected and refused to produce the requested materials, contending that NAFTA did not require an importer to keep or produce the specific types of documents Customs demanded.
- Ford also asserted that the requested materials were “origin” records typically kept by exporters or producers, not “entry” records that importers must maintain and provide to Customs.
- Customs issued a monetary penalty against Ford for noncompliance with the summons and Ford did not pay the penalty.
- The United States filed suit to recover the penalty, and Ford moved to dismiss for failure to state a claim under Rule 12(b)(6).

## Issues

1. Whether the United States stated a plausible claim that Customs had statutory and regulatory authority to require Ford, as an importer claiming NAFTA preferential treatment, to produce the requested records.
2. Whether Ford was entitled to dismissal on the pleadings based on its argument that NAFTA recordkeeping rules did not obligate an importer to maintain or produce the types of documents Customs demanded (including materials Ford characterized as exporter “origin” documents).
3. Whether the court could resolve the dispute over the meaning of the NAFTA implementing scheme and related regulations at the motion-to-dismiss stage.

## Decision

- The court denied Ford’s Rule 12(b)(6) motion to dismiss.
- Applying the pleading standard, the court treated the complaint’s well-pleaded allegations as true and drew reasonable inferences in the government’s favor.
- The court concluded that the United States alleged a legally viable theory that Customs could demand records tied to NAFTA qualification and could seek penalties for refusing to comply with a lawful production order.
- The court rejected Ford’s request to end the case at the pleading stage, reasoning that Ford’s statutory-and-regulatory interpretation arguments went beyond what could be decided on a motion to dismiss.
- The litigation was allowed to proceed toward a determination on the merits of Customs’ authority and Ford’s obligations.

## Legal Principles

- On a Rule 12(b)(6) motion, the court accepts well-pleaded factual allegations as true and asks whether the complaint plausibly states a claim for relief.
- An importer that seeks preferential tariff treatment under a trade agreement may be subject to recordkeeping and production duties imposed by the governing statutes and implementing regulations.
- Where the statutory or regulatory text does not conclusively foreclose the government’s reading, dismissal is generally improper because the parties’ competing interpretations require fuller development.
- In disputes involving an agency’s construction of a statute it administers and the regulations issued under that statute, courts may consider administrative deference doctrines when evaluating whether the government’s position is legally permissible—making early dismissal inappropriate if the government’s interpretation is reasonably arguable.

## Conclusion

The district court held that the United States plausibly alleged that Customs could compel Ford to produce NAFTA-related entry and qualification records and could penalize Ford for refusing to comply; therefore, Ford was not entitled to dismissal under Rule 12(b)(6), and the case proceeded beyond the pleading stage.


United States v. Ford Motor Company, 516 F. Supp. 2d 770 (2007)