Date: Wed, 31 Dec 1997 20:47:08 GMT Server: WebSitePro/1.1g (S/N WPO-2024) Accept-ranges: bytes Content-type: text/html Last-modified: Tue, 31 Dec 1996 19:14:02 GMT Content-length: 3685 Press Release - December 30, 1996

PRESS RELEASE
New York - December 30, 1996

CRUCIAL HEARING IN IMPORT HARBOR MAINTENANCE TAX CASE

In March 1996 a class action was commenced to contest the allegedly illegal accumulation of Several Hundreds of Millions of dollars collected by the U.S. Government on the value of imported merchandise instead of using such monies for their congressionally intended purpose, i.e., to maintain the nation's ports and harbors.

On January 7, 1997 at 11 a.m., the Court of International Trade, with Judge Jane A. Restani presiding, will be hearing oral argument on the Government's Motion to Dismiss the Import Harbor Maintenance Tax ("HMT") case Sarne v. United States (Court No. 96-03-00678). The hearing will be held in Courtroom One at the Court, which is located at One Federal Plaza, New York City (Telephone no. 212-264-0477).

The case was instituted in March 1996 to contest the legality and constitutionality of the HMT collected by U.S. Customs on imports. It was brought as a class action, with Sarne, an importer of handbags and fashion accessories, named as the lead plaintiff. Sarne is represented by Serko & Simon LLP, assisted by Wechsler, Harwood, Halebian & Feffer LLP, as counsel. Serko & Simon concentrates its practice in the Customs & International Trade area. Wechsler concentrates its practice in the area of Class Actions.

With the consent of the Government, the case was allowed to proceed, rather than being held in abeyance pending the outcome of the Export Harbor Maintenance Tax case, U.S. Shoe v. United States. U.S. Shoe was decided by the Court of International Trade in October 1995. The Import case was allowed to proceed because it involved sufficiently different circumstances so as not to be considered "decided" by the Export case.

Although an answer to the complaint filed on behalf of Sarne and other similarly situated importers was then due, the Government instead filed a motion to dismiss the action on the jurisdictional grounds that the plaintiff failed to file a protest of the Import Harbor Maintenance Tax and only after denial of the protest by Customs could the case be brought to the Court of International Trade. The grounds for dismissal, according to the Government, also included the failure by the plaintiff to state a claim for which the Court could grant relief. The Government contended that even if the Court could hear the case, the Government's failure to use the HMT monies for their intended purpose, i.e., to maintain the ports and harbors, was not actionable, since the deposit of the excess over what was being expended was being used to purchase interest-bearing Government obligations.

The plaintiff has argued to be allowed to proceed with the case, citing the jurisdiction of the Court pronounced in U.S. Shoe, which said protests were not the basis for the Court to hear HMT issues. Citing to the landmark 1803 case of Marbury v. Madison, the plaintiff also argued that administrative action, or, as in this case, inaction, is judicially reviewable. Under the standard of Marbury v. Madison, the plaintiff has said that the Court has the authority to require the Government to use the HMT fund for its intended purposes, rather than sitting on the monies as it has done to date.