Stare decisis within an agency

Internal agency rules and decisions can have a big impact on regulated entities even when they are denominated "procedural" rather than "substantive". On his Customs Law blog, Lawrence Friedman (Barnes/Richardson, Chicago) describes a case that binds the government to a history of internal rulings in "Redelivery and Conflicts":

... Customs was seeking $120,000 for [the importer's] failure to redeliver merchandise to Customs. [If I understand correctly, Customs requires that goods violating a Customs reg be placed under government control until the matter is resolved.] When the importer failed to redeliver, Customs sought liquidated damages .... This is the usual course of action because merchandise is, more often than not, already gone by the time the importer receive[s] the Notice to Redeliver. ... Pressman and the surety maintain that the Notice to Redeliver was late and, therefore, they are under no obligation to redeliver and [are] not liable for liquidated damages. ...

On the merits, the case turns on the timeliness of the Notice to Redeliver. The regulations permit Customs and Border Protection to demand redelivery within 30 days of the end of the conditional release period applicable to the merchandise. When Customs requests a sample, the conditional release period ends when Customs receives the sample. In this case, Customs demanded redelivery well beyond the the end of this period. Customs, however, argues that it properly extended the conditional redelivery period ...

According to the [Court of International Trade], the government's position is "bankrupt." The Court notes that 19 CFR 113.62(d) requires that Customs issue a Notice of Redelivery within 30 days of the end of the conditional release. Further, the Court noted 20 years of Customs rulings stating that the conditional release period ends on the delivery of sample to Customs. Thus, the Court found the United States had no basis on which to proceed against Pressman for liquidated damages. ...

The Court further dismissed several arguments trying to distinguish this case from twenty years of consistent interpretation. However, Mr. Friedman points out an important practical issue.

This is one of those cases that might has a short shelf life, even assuming it survives an appeal. The regulations do not address the issue squarely. Almost all of the authority relied upon here is from rulings. Customs, like all federal agencies, has the authority to reconsider its legal interpretations of ambiguous laws and regulations. To do so, though, Customs has to jump through the proper administrative hoops. With respect to previously issued rulings, that means the revocation or modification process of 19 USC § 1625. It is a good bet that someone in Customs is looking at that right now.

EMM