The opinion of the court was delivered by: BONSAL
Nike, Inc. ("Nike"), an Oregon corporation, instituted this action in the United States District Court for the District of Oregon alleging violations of Sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1 and 2, and the Wilson Tariff Act, 15 U.S.C. § 8, and tortious conduct constituting unfair competition. On August 14, 1980, the United States District Court for the District of Oregon transferred the action to this district pursuant to 28 U.S.C. § 1404(a).
Nike is a manufacturer, importer, and distributor of athletic shoes. Approximately 20 percent of the shoes sold by Nike are manufactured at its four plants in New Hampshire and Maine; the remaining 80 percent are manufactured at foreign locations on a contract basis and are imported for sale in the United States.
The defendants are: Rubber Manufacturers Association, Inc. ("RMA"), a trade association of which plaintiff and the other defendants are members; Bata Shoe Company, Inc. ("Bata"); Charles A. Eaton Company ("Eaton"); Brooks Shoe Manufacturing Co., Inc. ("Brooks"); Eltra Corporation ("Eltra"); Hyde Athletic Industries, Inc. ("Hyde"); New Balance Athletic Shoe, Inc. ("New Balance"); and Uniroyal, Inc. ("Uniroyal"). All but Uniroyal, which terminated its marketing and distribution of footwear in August, 1979, are presently manufacturers of athletic shoes made and distributed in the United States.
The complaint charges that the defendants conspired to cause the United States Customs Service ("Customs") to impose excessive duties on shoes imported into the United States by Nike through its agent, Nissho-Iwai American Corporation ("Nissho") on behalf of Nike's wholly-owned subsidiary, BRS, Inc. ("BRS"), by causing Customs improperly to apply the American Selling Price ("ASP") appraisement method to Nike shoe imports. As overt acts, the complaint charges that certain of the defendants filed certifications with Customs covering shoes allegedly distributed by them in the United States which were false and which were used by Customs to determine the duty payable by Nike based on the ASP of shoes of like character to those which Nike was importing. Under the ASP appraisement method, authorized by 19 U.S.C. § 1402(a)(4), the duty imposed by Customs is a percentage of the selling price of a freely-offered and sold domestic product that is "like or similar" to the imported product. Under ASP procedures, domestic manufacturers may submit to Customs copies of catalogs and price lists for shoes which they wish to be considered by Customs in making ASP determinations. These manufacturers must "certify" that the footwear described in the submitted material is freely-offered for sale for domestic consumption at the prices cited. Customs thereupon determines whether the imported shoes are "like or similar" to any certified shoe.
Plaintiff seeks injunctive relief and damages and a trial by jury.
Only the defendant Brooks has answered the complaint, denying the allegations and counterclaiming against Nike, which counterclaim is the subject of a separate proceeding. All the other defendants have moved, and Brooks has moved separately, for summary judgment pursuant to Rules 56(b) and 12(b)(6) of the Federal Rules of Civil Procedure, dismissing with prejudice Nike's claims with respect to duties assessed on Nike prior to October 2, 1979 by reason of a settlement Agreement dated August 21, 1980 between BRS, Nissho and their Sureties, and the United States Treasury and Customs, and dismissing without prejudice any claims with respect to duties assessed thereafter for Nike's failure to exhaust its administrative remedies. In a separate motion, defendants Eaton and New Balance move to dismiss the complaint as against them, pursuant to Rules 56(b) and 12(b)(6) of the Federal Rules of Civil Procedure, for failure to state a claim as against them.
Plaintiff has cross-moved, pursuant to Rule 42(b) of the Federal Rules of Civil Procedure, for an order directing separate trials on the issues of liability and damages.
On May 23, 1980, Customs ascertained the amount of duties owed on Nike athletic footwear imported between November 10, 1977 and October 2, 1979. (This determination is known as liquidation of entries.) Nike did not protest Customs' determination under 19 U.S.C. § 1514. Instead, the Agreement dated August 21, 1980 was entered into between BRS, Nissho, Peerless Insurance Company and St. Paul Fire & Marine Insurance Company, the Sureties, on the one hand, and by the United States Department of the Treasury and Customs on the other. The Agreement recites that the United States has assessed additional duties pursuant to 19 U.S.C. § 1402(g) on Nike-brand footwear classified under Item 700.60 of the tariff schedules of the United States, 19 U.S.C. § 1202, and imported on entries filed between November 10, 1977 and October 2, 1979, by Nissho on behalf of BRS. The Agreement further recites that the United States has billed Nissho for such additional duties in the amount of $ 12,113,206, payment of which has been guaranteed by the Sureties. The Agreement then recites that Nissho disputes its liability for such additional duties and that United States and Nissho have agreed to settle their dispute in accordance with the Agreement. Paragraph 1. of the Agreement provides that it is for settlement purposes only and is not an admission that Nissho is liable for additional duties, nor is it an admission by the United States that the assessment of the additional duties was erroneous. The settlement provides that Nissho shall pay to the United States the sum of $ 9,500,000 in settlement of the additional duties in not more than 24 monthly payments of not less than $ 395,833 each, beginning on October 1, 1980, with interest at 7%. In consideration of the settlement, Nissho, BRS and the Sureties waive any further procedural or administrative steps with respect to these duties and "waive all rights to seek administrative or judicial review or otherwise challenge or contest the validity of this agreement or the liquidations except in case of breach of this agreement by the United States."
Defendants contend that by causing its subsidiary, BRS, and its agent, Nissho, to enter into this Agreement, Nike waived any rights it had to contest the duties owed on entries filed before October 2, 1979. Nike, on the other hand, contends that it signed the Agreement under duress, presumably because if it had not done so its footwear might have been excluded from the United States market. However, the record does not show any duress. See, e.g., Three Rivers Motors Co. v. Ford Motor Co., 522 F.2d 885, 893-94 (3d Cir. 1975). On the contrary, the Agreement reduced the amount of duties payable by over $ 2,500,000 and Nissho won the right to pay them in installments at an interest rate substantially below the general interest rates then prevailing.
Nike concedes that it did not file any protest, pursuant to 19 U.S.C. § 1514(c)(1) and (2), with respect to the classification, appraisement or liquidation of ASP duties on any footwear imported by Nissho prior to October 2, 1979. In the absence of such protest, the decision of Customs to accept $ 9,500,000 in settlement of these duties is "final and conclusive upon all persons."* Accordingly, Nike, having chosen to pay this reduced amount, may not now challenge the propriety of Customs' final liquidation. See Port of Boston Marine Terminal Association v. Rederiaktiebolaget Transatlantic, 400 U.S. 62, 71-72, 91 S. Ct. 203, 209-210, 27 L. Ed. 2d 203 (1970).
The Agreement prohibits reopening the matter of duties levied on goods imported prior to October 2, 1979. It follows that Nike would be unable to prove in this action that the defendants influenced Customs through false certifications to impose higher duties on goods imported prior to October 2, 1979 with a view to restricting Nike's ability to compete in the American market. Moreover, the figures furnished to the Court indicate that Nike's share of the American market in athletic shoes has increased dramatically in recent years. The Court finds that by entering into the August 21, 1980 Agreement, the plaintiff voluntarily waived any antitrust claims which it may have had against the defendants for influencing the duties levied on goods imported prior to October 2, 1979.
For the foregoing reasons, the motion of the defendants for summary judgment with respect to plaintiff's claims arising prior to October 2, 1979 is granted.
There remains the matter of duties arising subsequent to October 2, 1979. Defendants contend that plaintiff has not exhausted its remedies in Customs and that until it does so, this Court is without jurisdiction. On the other hand, Nike contends that this Court has jurisdiction to take evidence to establish the claimed violations of the antitrust laws.
Congress, by Act of May 28, 1926, established the United States Customs Court. The Customs Court was given broad powers to administer the tariff laws of the United States, to hear and determine applications for the review and reappraisal of merchandise being imported, protests against decisions of collectors, petitions for remission of additional ...