                                                                  Slip Op. 13-1

                            UNITED STATES COURT OF INTERNATIONAL TRADE
________________________________________________
UNITED STATES OF AMERICA,                                                          :

                                                      Plaintiff,                   :

                                       v.                                          :

MILLENIUM LUMBER DISTRIBUTION CO.                                                  :
LTD. and XL SPECIALTY INSURANCE
COMPANY,                                                                           :

                                                  Defendants.                      :
________________________________________________________________________________
                                                                                       Court No. 06-00129
XL SPECIALTY INSURANCE COMPANY,                                                    :

                                             Cross-Claimant,                       :

                                       v.                                          :

MILLENIUM LUMBER DISTRIBUTION CO.                                                  :
 LTD.,
                                                                                   :
                                             Cross-Defendant.
[Granting Plaintiff’s Cross-Motion for Summary Judgment; Denying Defendant Millenium’s Motion
for Summary Judgment; Denying Defendant XL’s Motion for Summary Judgment]

                                                                                                   Dated: January 2, 2013

        Aimee Lee, International Trade Field Office, Commercial Litigation Branch, Civil Division,
U.S. Department of Justice, of New York, New York, argued for Plaintiff. With her on the brief
were Tony West, Assistant Attorney General, and Barbara S. Williams, Attorney in Charge,
International Trade Field Office. Of counsel on the brief was Christopher Shaw, Office of the
Assistant Chief Counsel, Bureau of Customs and Border Protection, U.S. Department of Homeland
Security, of New York, New York.

       Joel R. Junker, Joel R. Junker & Associates, of Seattle, Washington, argued for Defendant
Millenium Lumber Distribution Co. Ltd. With him on the brief was William N. Baldwin.

       T. Randolph Ferguson, Sandler, Travis & Rosenberg and Glad & Ferguson, P.C., of San
Francisco, California, argued for Defendant XL Specialty Insurance Company. With him on the
Court No. 06-00129                                                                         Page 2



brief was Arthur K. Purcell, of Sandler, Travis & Rosenberg, P.A., of New York, New York.

                                           OPINION

RIDGWAY, Judge:

       The Government commenced this action against defendant Millenium Lumber Distribution

Co. Ltd. and its surety, defendant XL Specialty Insurance Company, to collect $1,826,531.80 in

liquidated damages. See Complaint ¶¶ 1, 21, 31, 42, 44. According to the Government, Millenium

breached the terms of its customs bonds by not providing Customs with export permits required by

the U.S.-Canada Softwood Lumber Agreement.1 See id. ¶¶ 17-20, 28-31, 39-42. The Government

contends that Millenium and XL are therefore jointly and severally liable for liquidated damages.

See id. ¶¶ 10-11.

       Now pending before the Court are Millenium’s Motion for Summary Judgment, XL’s

Motion for Summary Judgment, and the Government’s Cross-Motion for Summary Judgment.

       In its Motion for Summary Judgment, Millenium claims that no breach of its customs bonds

occurred and that there is thus no basis for Customs’ assessment of liquidated damages. According

to Millenium, Customs improperly reclassified the company’s merchandise – which Millenium

describes as “angle-cut softwood lumber” – without providing notice and an opportunity to

comment. Millenium contends that its lumber is therefore properly classifiable as Millenium entered

it, under a tariff heading that is not subject to the Softwood Lumber Agreement. See, e.g.,



       1
         The U.S. Customs Service – formerly part of the U.S. Department of the Treasury – was
transferred to the U.S. Department of Homeland Security as part of the Homeland Security Act of
2002. See Bull v. United States, 479 F.3d 1365, 1368 n.1 (Fed. Cir. 2007). The agency is now
commonly known as U.S. Customs and Border Protection, and is referred to as “Customs” herein.
Court No. 06-00129                                                                            Page 3



Memorandum of Points and Authorities in Support of Defendant Millenium’s Rule 56 Motion for

Summary Judgment (“Millenium’s Motion”) at 2, 3-4; see generally Reply in Support of

Defendant’s Motion for Summary Judgment (“Millenium’s Reply Brief”).

       XL seconds Millenium’s position, adopting and incorporating by reference Millenium’s

Motion for Summary Judgment and other papers in its own Motion for Summary Judgment. See

Defendant XL Specialty Insurance Company’s Rule 56 Motion for Summary Judgment (“XL’s

Motion”) at 1-2; see generally Reply in Support of Defendant’s Motion for Summary Judgment and

Memorandum in Opposition to Plaintiff’s Cross-Motion for Summary Judgment (“XL’s Reply

Brief”).

       The Government, in turn, contends that Millenium’s failure to obtain export permits for its

merchandise violated the terms of the Softwood Lumber Agreement and related Customs

regulations, and put both Millenium and XL in breach of the applicable customs bonds, rendering

the two jointly and severally liable for the assessed liquidated damages. See, e.g., Memorandum in

Support of Plaintiff’s Cross-Motion for Summary Judgment and in Opposition to Defendant’s

Motion for Summary Judgment (“Pl.’s Cross-Motion”) at 6, 9-10, 10-13; Reply Memorandum in

Support of Plaintiff’s Cross-Motion for Summary Judgment (“Pl.’s Reply Brief”) at 1-2.

       The Government emphasizes that the instant action is a collection action, and argues that

Millenium and XL are barred from pressing their notice-and-comment claim here in an attempt to

mount an attack on what is, according to the Government, essentially a matter of tariff classification

that has already been “fully and finally litigated.” Pl.’s Cross-Motion at 7; see also Memorandum

in Opposition to Defendant’s Motion for Summary Judgment (“Pl.’s Response Brief”) at 5 (stating
Court No. 06-00129                                                                           Page 4



that tariff classification of Millenium’s goods has been “litigated . . . to judicial finality”). The

Government further argues that – even if Millenium and XL were permitted to pursue their notice-

and-comment claim in this collection action – they nevertheless could not prevail on the merits of

that claim, because, according to the Government, the statute on which the claim is based did not

apply in the circumstances of this case. See generally Pl.’s Response Brief at 18-29; Pl.’s Cross-

Motion at 22-33; Pl.’s Reply Brief at 10-14.

       Jurisdiction lies under 28 U.S.C. § 1582(2) (2000).2          For the reasons that follow,

Millenium’s Motion for Summary Judgment must be denied, as must XL’s Motion for Summary

Judgment. The Government’s Cross-Motion for Summary Judgment, on the other hand, must be

granted.


                                          I. Background

       Between late April 2000 and early January 2001, Millenium entered 168 entries of certain

softwood lumber products – described by Millenium as angle-cut softwood lumber – into the United

States from Canada. See Plaintiff’s Statement of Undisputed Material Facts (“Pl.’s Statement of

Facts”) ¶¶ 1-4; Defendant’s [XL’s] Response to Plaintiff’s Statement of Material Facts Not in Issue

(“XL’s Response to Statement of Facts”) ¶¶ 1-4; [Defendant Millenium’s] Rule 56 Statement of

Material Facts Not in Dispute (“Millenium’s Statement of Facts”) ¶ 1; Plaintiff’s Response to

Defendant’s [Millenium’s] Statement of Material Facts Not in Issue (“Pl.’s Response to Millenium’s




       2
        All citations to federal statutes herein are to the 2000 edition of the United States Code.
Similarly, all citations to federal regulations are to the 2000 edition of the Code of Federal
Regulations.
Court No. 06-00129                                                                           Page 5



Statement of Facts”) ¶ 1.3 Millenium entered the lumber under heading 4418 of the Harmonized

Tariff Schedule of the United States (“HTSUS”) (2000). See Pl.’s Statement of Facts ¶ 5; XL’s

Response to Statement of Facts ¶ 5.4

       Millenium’s entries were secured by three bonds issued by the company’s surety – XL

Specialty Insurance Company, or its predecessor, Intercargo Insurance Company. See Pl.’s

Statement of Facts ¶¶ 2-4; XL’s Response to Statement of Facts ¶¶ 2-4. As a condition of each

bond, Millenium and its surety agreed that they would comply with all customs laws and regulations,

including relevant provisions of the U.S.-Canada Softwood Lumber Agreement. See Pl.’s Cross-

Motion at 2; see also 19 C.F.R. § 113.62(k) (incorporating requirements of Softwood Lumber

Agreement into customs bonds, as part of bond conditions). Millenium and its surety also agreed

that they would be jointly and severally liable for liquidated damages in the event of a breach or

default. Pl.’s Statement of Facts ¶ 14; XL’s Response to Statement of Facts ¶ 14.

       Following entry, Customs reclassified Millenium’s merchandise under HTSUS heading

4407. See Pl.’s Statement of Facts ¶ 6; XL’s Response to Statement of Facts ¶ 6.5 Unlike

merchandise classified under heading 4418, certain merchandise falling within heading 4407 is


       3
        Only XL responded to Plaintiff’s Statement of Facts. See XL’s Response to Statement of
Facts. Because Millenium failed to respond, all facts set forth in Plaintiff’s Statement of Facts are
deemed admitted by Millenium. See USCIT Rule 56(e)(2).
       4
      Heading 4418 covers “[b]uilders’ joinery and carpentry of wood . . . .” Heading 4418,
HTSUS.

        All citations to the HTSUS herein are to the 2000 edition, which is identical to the 2001
edition in all relevant respects.
       5
        Heading 4407 covers “[w]ood sawn or chipped lengthwise, sliced or peeled, whether or not
planed, sanded or finger-jointed, of a thickness exceeding 6mm.” Heading 4407, HTSUS.
Court No. 06-00129                                                                             Page 6



subject to the Softwood Lumber Agreement, and requires export permits issued by the government

of Canada for entry into the United States. See Pl.’s Statement of Facts ¶ 6; XL’s Response to

Statement of Facts ¶ 6; 19 C.F.R. § 12.140; 19 C.F.R. § 113.62(k).

       Customs issued Notices of Action (“CF 29s”) informing Millenium that the Softwood

Lumber Agreement required the company to provide proof of issuance of the requisite export

permits for its merchandise, and stating that, absent Millenium’s submission of the necessary

documentation, liquidated damages would be assessed. See Pl.’s Statement of Facts ¶¶ 7-9; XL’s

Response to Statement of Facts ¶¶ 7-9. However, Millenium failed to provide Customs with proof

of the required permits. See Millenium’s Statement of Facts ¶ 17; Pl.’s Response to Millenium’s

Statement of Facts ¶ 17. Customs therefore issued Liquidated Damages Notices to Millenium – with

copies to XL – for all 168 entries. See 19 C.F.R. § 172.1(a);6 Pl.’s Statement of Facts ¶¶ 12-13;

XL’s Response to Statement of Facts ¶¶ 12-13.7 The Liquidated Damages Notices informed

Millenium and XL of the amount of liquidated damages assessed. See Pl.’s Statement of Facts ¶ 13;



       6
        19 C.F.R. § 172.1(a) provides:

       Notice of liquidated damages incurred. When there is a failure to meet the
       conditions of any bond posted with Customs, the principal shall be notified in writing
       of any liability for liquidated damages incurred by him and a demand shall be made
       for payment. The sureties on such bond shall also be advised in writing, at the same
       time as the principal, of the liability for liquidated damages incurred by the principal.

19 C.F.R. § 172.1(a).
       7
       The Liquidated Damages Notices demanding payment from Millenium were issued “on or
about” March 23, 2001, April 5, 2001, and September 21, 2001. See Pl.’s Statement of Facts ¶ 13;
XL’s Response to Statement of Facts ¶ 13; Complaint at Exhs. 6, 9, 12. XL received its formal
demand for payment by letter dated May 23, 2005. See Pl.’s Statement of Facts ¶ 15; XL’s
Response to Statement of Facts ¶ 15; Complaint at Exh. 7.
Court No. 06-00129                                                                          Page 7



XL’s Response to Statement of Facts ¶ 13.

       In the meantime, Millenium filed protests with Customs contesting the agency’s

classification of the company’s merchandise. See Millenium’s Motion at 2.           In its protests,

Millenium asserted, inter alia, that it had entered its merchandise under HTSUS heading 4418 in

reliance on two prior Customs ruling letters – i.e., NY B81359 and NY B88564 – which classified

specified angle-cut softwood lumber components under that heading. See Millenium’s Statement

of Facts ¶ 6; NY B81359 (Feb. 6, 1997); NY B88564 (Sept. 9, 1997).

       Customs denied Millenium’s protests, and Millenium brought suit in this court challenging

that denial. See HQ 965262 (July 10, 2002) (denying Millenium’s protests); Millenium Lumber

Distrib. Ltd. v. United States, Court No. 02-00595 (filed Sept. 12, 2002). Customs’ classification

determination was sustained by this Court, which, in turn, was affirmed on appeal. See Millenium

Lumber Distrib. Ltd. v. United States, 31 CIT 575 (2007), aff’d, 558 F.3d 1326 (Fed. Cir. 2009)

(holding that Millenium’s merchandise is properly classified under HTSUS heading 4407).

       In this related collection action, the Government seeks to recover liquidated damages from

Millenium and XL for breach of the relevant customs bonds.


                                     II. Standard of Review

       Under USCIT Rule 56(a), summary judgment is appropriate where “there is no genuine issue

as to any material fact” and the moving party is entitled to judgment as a matter of law. USCIT Rule

56(a); see generally Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Anderson v. Liberty

Lobby Inc., 477 U.S. 242, 247 (1986).
Court No. 06-00129                                                                         Page 8



       In this case, there is no dispute as to any material fact. This matter is therefore ripe for

summary judgment.


                                          III. Analysis

       The thrust of Defendants’ Motions for Summary Judgment is that Millenium and XL are not

liable for liquidated damages because, according to Millenium and XL, Customs acted improperly

in reclassifying Millenium’s lumber under HTSUS heading 4407. See generally Millenium’s

Motion at 1-4, 8-19; Millenium’s Reply Brief at 1-15; XL’s Motion at 2 (adopting and incorporating

by reference Millenium’s Motion); XL’s Reply Brief at 1-18. Specifically, Millenium and XL

contend that Millenium’s angle-cut lumber was identical to that described in two Customs ruling

letters – i.e., NY B81359 and NY B88564 – which the agency issued prior to Millenium’s

importations and which classified the lumber there in question under HTSUS heading 4418. See,

e.g., Millenium’s Motion at 1; XL’s Reply Brief at 7-8; NY B81359; NY B88564. Millenium and

XL maintain that Customs therefore violated 19 U.S.C. § 1625(c)(1) when the agency reclassified

Millenium’s lumber under heading 4407 without first providing notice and an opportunity to

comment. See, e.g., Millenium’s Motion at 2, 3-4; XL’s Reply Brief at 4-7; 19 U.S.C. § 1625(c)(1).

       Millenium and XL further assert that, because Customs reclassified Millenium’s angle-cut

lumber without providing notice and an opportunity to comment, Millenium’s lumber must be

classified under HTSUS heading 4418 (the heading under which Millenium entered the

merchandise).   See, e.g., Millenium’s Motion at 2, 3-4; XL’s Motion at 2 (adopting and

incorporating by reference Millenium’s Motion). Because heading 4418 does not implicate the

Softwood Lumber Agreement, Millenium and XL conclude that “no lumber export permits should
Court No. 06-00129                                                                             Page 9



have been required” in this case, and that the Government’s attempt to collect liquidated damages

in the instant action has “no lawful basis.” Millenium’s Motion at 2; see also XL’s Motion at 2

(adopting and incorporating by reference Millenium’s Motion).

        The statute on which Millenium and XL base their notice-and-comment claim provides, in

relevant part:

        (c) Modification and revocation

        A proposed interpretive ruling or decision which would –

                 (1)      modify . . . or revoke a prior interpretive ruling or decision which
                          has been in effect for at least 60 days; . . .
                 ...

        shall be published in the Customs Bulletin. The Secretary shall give interested
        parties an opportunity to submit, during not less than the 30-day period after the
        date of such publication, comments on the correctness of the proposed ruling or
        decision. After consideration of any comments received, the Secretary shall publish
        a final ruling or decision in the Customs Bulletin within 30 days after the closing of
        the comment period. The final ruling or decision shall become effective 60 days
        after the date of its publication.

19 U.S.C. § 1625(c)(1) (emphasis added). The applicable regulations underscore that Customs

ruling letters are applied “only with respect to transactions involving articles identical to the sample

submitted with the [request for a ruling letter] or to articles whose description is identical to the

description set forth in the ruling letter.” 19 C.F.R. § 177.9(b)(2) (emphases added).

        As discussed in greater detail below, the notice-and-comment claim asserted by Millenium

and XL is lacking in merit. Defendants’ Motions for Summary Judgment must therefore be denied.

See section III.A.2, infra.

        In its Cross-Motion for Summary Judgment, the Government asserts that Millenium’s failure
Court No. 06-00129                                                                          Page 10



to submit proof of the export permits required by the Softwood Lumber Agreement constituted a

breach of the three customs bonds that secured the entries of lumber here at issue, and that Customs

therefore properly assessed liquidated damages. See generally Pl.’s Cross-Motion at 9-10, 10-12;

Pl.’s Reply Brief at 1-2. The Government further contends that Millenium and XL are jointly and

severally liable for the liquidated damages that Customs assessed. See generally Pl.’s Cross-Motion

at 9-10, 12-13; Pl.’s Reply Brief at 1-2.

        As discussed in greater detail below, there is no dispute as to any material fact underlying

the Government’s Cross-Motion for Summary Judgment, and the Government is entitled to

judgment as a matter of law. The Government’s Cross-Motion therefore must be granted. See

section III.B, infra.


                           A. Defendants’ Motions for Summary Judgment

        Millenium and XL argue that they are not liable for liquidated damages because, they

maintain, Millenium was not legally required to obtain export permits for the subject entries of

angle-cut lumber.       Millenium and XL assert that Millenium’s lumber was identical to the

merchandise described in NY B81359 and NY B88564, which Customs had previously classified

under heading 4418. Millenium and XL contend that Customs therefore violated the statute when

the agency reclassified Millenium’s merchandise under heading 4407 without providing notice and

an opportunity to comment. Based on this notice-and-comment argument, Millenium and XL

contend that Millenium’s merchandise must be classified as entered, under heading 4418 – a tariff

provision that is not subject to the Softwood Lumber Agreement, and thus does not require export

permits. See generally Millenium’s Motion at 1-4, 8-19; Millenium’s Reply Brief at 1-15; XL’s
Court No. 06-00129                                                                            Page 11



Motion at 2 (adopting and incorporating by reference Millenium’s Motion); XL’s Reply Brief at 1-

18.

       For its part, the Government argues first that Defendants’ notice-and-comment claim

amounts to little more than a back-door challenge to the tariff classification of Millenium’s lumber,

and that – for a number of different reasons – such a claim cannot be asserted in this action. See

generally Pl.’s Response Brief at 4-5, 6-17; Pl.’s Cross-Motion at 6-7, 13-21; Pl.’s Reply Brief at

3-10. The Government further argues that, even if the notice-and-comment claim were to be

considered on its merits here, Millenium and XL could not succeed on the claim. See generally Pl.’s

Response Brief at 5-6, 18-29; Pl.’s Cross-Motion at 7, 22-33; Pl.’s Reply Brief at 10-14.

       As discussed below, the notice-and-comment claim that Millenium and XL seek to assert

cannot carry the day.


                  1. The Government’s Arguments Against Reaching the Merits
                           of Defendants’ Notice-and-Comment Claim

       The Government contends that Millenium and XL are not permitted to raise their notice-and-

comment claim in the instant action, raising four arguments to that effect.

       The Government’s principal argument is that the notice-and-comment issue “goes directly

to the issue of [the tariff] classification” of the merchandise in question, and thus could properly be

addressed only in the action that Millenium brought in this Court challenging Customs’

classification of the merchandise at issue. Pl.’s Response Brief at 8; see also Pl.’s Reply Brief at

3 (arguing that, “[a]t its core,” Defendants’ notice-and-comment argument presents “an issue of

classification,” because “the end result is a determination of whether a particular classification
Court No. 06-00129                                                                                Page 12



governs certain entries”); Millenium Lumber Distribution Ltd. v. United States, 31 CIT 575 (2007),

aff’d, 558 F.3d 1326 (Fed. Cir. 2009) (rejecting challenge to Customs’ classification of Millenium’s

merchandise under HTSUS heading 4407).

        The Government maintains that Millenium could have raised and should have raised – and,

in fact, did raise – the notice-and-comment issue in the classification suit that Millenium brought

against Customs. See Pl.’s Response Brief at 8; see also id. at 3 (noting that Millenium included

notice-and-comment claim in its Complaint in classification action, but later abandoned that claim);

Millenium, 31 CIT at 578 n.6 (noting that Millenium raised notice-and-comment claim in its

Complaint, but then “abandoned [the] claim by not developing it for purposes of summary

judgment”).8     According to the Government, “[the] proper classification of Millenium’s

merchandise” was “fully and finally litigated” in the classification action. Pl.’s Response Brief at

        8
         Millenium does not dispute that it “abandoned” its notice-and-comment claim in its
litigation challenging Customs’ tariff classification of the merchandise at issue here. See
Millenium’s Motion at 2 n.3. However, Millenium contends that it “elected to raise . . . [its notice-
and-comment] defense in this action” after the classification litigation concluded, when Millenium
assertedly “determined . . . that resolution of the underlying classification requires consideration of
the [notice-and-comment argument] . . . in this collection proceeding.” Id. But that explanation is
difficult to square with the course of events in other, very similar litigation.

         Specifically, counsel for Millenium represented Canex – another importer of Canadian
lumber – in litigation involving virtually the same arguments and essentially identical merchandise.
See Canex Int’l Lumber Sales Ltd. v. United States, 34 CIT ____, ____, 2010 WL 2594993 (2010),
aff’d per curiam, 432 Fed. Appx. 977 (Fed. Cir. 2011) (action by importer of Canadian angle-cut
lumber, challenging Customs’ tariff classification of importer’s merchandise); United States v.
Canex Int’l Lumber Sales Ltd., 35 CIT ____, ____, 2011 WL 3438870 (2011) (action by
Government to collect liquidated damages from importer of Canadian angle-cut lumber). If counsel
in fact believes that the notice-and-comment claim is properly asserted in this collection action (and
not in the classification litigation), it is unclear why – in Canex – counsel chose to litigate the notice-
and-comment claim in the classification case, rather than the collection action. See Canex, 34 CIT
at ____, 2010 WL 2594993 at *2-3 (considering, and rejecting, importer’s “notice-and-comment”
claim in litigation challenging Customs’ classification of angle-cut lumber from Canada).
Court No. 06-00129                                                                               Page 13



5. The Government concludes that Millenium thus “had the opportunity to raise [its notice-and-

comment] claim” and that Millenium and XL “cannot raise [the notice-and-comment] issue[] here

in an attempt to avoid liquidated damages.” Id. at 5, 6; see also, e.g., id. at 6-12; Pl.’s Cross-Motion

at 7, 14-20; Pl.’s Reply Brief at 3-10. But see Millenium’s Reply Brief at 1-3, 5-6; XL’s Reply Brief

at 1-6.

          To further bolster its position that Millenium and XL are not permitted to argue notice-and-

comment in this litigation, the Government also points to several variations of the doctrines of

repose. The Government first argues that the concept of claim preclusion underlying the doctrine

of res judicata bars Millenium from raising the notice-and-comment argument in this action. The

Government asserts that, because the notice-and-comment issue could have been litigated in

Millenium’s classification action, res judicata bars Millenium from now raising the issue in this

action. Pl.’s Response Brief at 13-14 (citing, inter alia, Carson v. U.S. Dep’t of Energy, 398 F.3d

1369, 1375 (Fed. Cir. 2005) (explaining that “[c]laim preclusion prevents parties from litigating

issues that could have been raised in a prior action”)); see also, e.g., Pl.’s Response Brief at 5, 12-15,

16-17. But see Millenium’s Reply Brief at 4.

          The Government makes a similar argument based on the res judicata concept of issue

preclusion, which holds that “issues which are actually and necessarily determined by a court of

competent jurisdiction are conclusive in a subsequent suit involving the parties to the prior

litigation.” See Pl.’s Response Brief at 15 (quoting Mother’s Restaurant, Inc. v. Mamma’s Pizza,

Inc., 723 F.2d 1566, 1569 (Fed. Cir. 1983)); see also, e.g., Pl.’s Response Brief at 5, 12-13, 15-17.

But see Millenium’s Reply Brief at 4. According to the Government, Millenium litigated the tariff
Court No. 06-00129                                                                            Page 14



classification of its lumber and lost, and is “bound by that decision and cannot demand that the issue

be decided over again.” Pl.’s Response Brief at 15 (quoting Mother’s Restaurant, 723 F.2d at

1569).

         In addition, the Government invokes stare decisis against both Millenium and XL, asserting

that the decision of the Court of Appeals in the classification litigation closed the door to any

attempt to re-litigate the tariff classification of Millenium’s merchandise. See, e.g., Pl.’s Response

Brief at 5, 17 (discussing Millenium Lumber Distrib. Ltd. v. United States, 558 F.3d 1326 (Fed. Cir.

2009) (affirming classification under HTSUS heading 4407)); Pl.’s Cross-Motion at 7, 21. But see

Millenium’s Reply Brief at 4; XL’s Reply Brief at 6-7. The Government contends that the doctrine

of stare decisis imposes on this court “an obligation to follow the [Court of Appeals’] classification

decision which cannot be avoided,” and concludes that it would be “improper for this action to

encompass the issue of classification when an appellate court has pronounced the binding correct

classification” of Millenium’s lumber. Pl.’s Response Brief at 17.

         As explained below, however, even if their notice-and-comment claim were considered on

its merits, Millenium and XL nevertheless still could not prevail. There is therefore no need to

consider in detail the substance of the Government’s arguments (summarized above) that the notice-

and-comment claim cannot properly be considered in this action. No matter which party were to

prevail as to each of the Government’s four arguments, the outcome of this action would remain the

same.
Court No. 06-00129                                                                             Page 15



                         2. The Government’s Arguments on the Merits of
                              Defendants’ Notice-and-Comment Claim

       Although the Government maintains that Millenium and XL are not permitted to raise their

notice-and-comment claim in the instant action, the Government argues in the alternative that, even

assuming that the notice-and-comment claim could be raised here, Millenium and XL could not

prevail on the merits of that claim. See generally Pl.’s Response Brief at 5-6, 26-29; Pl.’s Cross-

Motion at 7, 30-33; Pl.’s Reply Brief at 10-13.

       In particular, the Government emphasizes that Millenium was entitled to rely on the prior

Customs ruling letters – i.e., NY B81359 and NY B88564 – only if Millenium’s merchandise was

(in the words of the applicable regulation) “identical to the description set forth in the ruling

letter[s].” See Pl.’s Response Brief at 26-27 (quoting 19 C.F.R. § 177.9(b)(2)); Pl.’s Cross-Motion

at 30-33 (same); Pl.’s Reply Brief at 10-11 (citing 19 C.F.R. § 177.9(b)(2)). As the Government

details at some length, Millenium cannot make that showing. See Pl.’s Response Brief at 26-29;

Pl.’s Cross-Motion at 30-33; Pl.’s Reply Brief at 10-13.

       For example, the merchandise described in NY B81359 was comprised of pieces to be

“imported with a specific angle cut on one or both ends.” NY B81359. In the case at bar, the

merchandise was cut at specific angles on one end only. Millenium’s Statement of Facts ¶ 2

(explaining that merchandise was cut with “individual angles . . . on one end”); Millenium’s Motion

at 4 (same); id. at Exh. C ¶¶ 3-4 (same). Further, diagrams submitted with the merchandise in NY

B81359 showed where the pieces at issue would fit in a completed roof truss. See NY B81359. In

contrast, the “representative drawings” provided by Millenium depict where the merchandise

“could” fit in a series of truss designs; there was no showing that the particular entries were actually
Court No. 06-00129                                                                            Page 16



destined for use as truss components. Millenium’s Reply Brief at Exh. A, p. 216 (deposition of

president of Millenium, taken as part of earlier classification action, explaining use of computer

software to show “where our truss components could fit” in truss designs); see also Millenium’s

Reply Brief at 8-9 (stating that drawings were “representative” and intended to show how “pieces

could be used in a truss”); XL’s Reply Brief at 12 (same).

       Nor was Millenium’s merchandise identical to the merchandise in NY B88564. For

example, in that ruling letter, “most pieces” of the merchandise were “cut at an angle other than a

90 degree angle on both ends.” NY B88564 (emphasis added). But none of the merchandise at issue

here was angle-cut at both ends. See Millenium’s Statement of Facts ¶ 2; Millenium’s Motion at 4;

id. at Exh. C ¶¶ 3-4. Moreover, the merchandise in NY B88564 was accompanied by “illustrative

literature” showing in detail how all the pieces were “designed to fit together to make a roof truss.”

NY B88564. Millenium’s “representative drawings,” on the other hand, did not indicate how the

subject merchandise would fit together to make a roof truss. See Millenium’s Reply Brief at Exh.

A, p. 216; XL’s Reply Brief at 12.

       In short, as the Government maintains, Millenium and XL have not shown – and cannot

show – that the merchandise at issue here was “identical to the description set forth” in either NY

B81359 or NY B88564. See Pl.’s Response Brief at 26-29; Pl.’s Cross-Motion at 30-33; Pl.’s Reply

Brief at 10-13. Accordingly, contrary to their assertions, Millenium and XL were not entitled to

notice and an opportunity to comment. Nor do the two ruling letters cast any doubt on Customs’

classification of Millenium’s merchandise here.

       The validity of the Government’s position in this case is underscored by Canex, a case
Court No. 06-00129                                                                            Page 17



involving the same competing HTSUS tariff headings, the same Customs ruling letters, and

merchandise that was virtually identical to the merchandise at issue in this action. See Canex Int’l

Lumber Sales Ltd. v. United States, 34 CIT ____, ____, 2010 WL 2594993 *4 (2010), aff’d per

curiam, 432 Fed. Appx. 977 (Fed. Cir. 2011) (describing merchandise in that case as “identical in

all pertinent respects to the merchandise at issue in [Millenium]”).

       In that case, the importer, Canex, entered its merchandise as truss components under HTSUS

heading 4418. Canex, 34 CIT at ____, 2010 WL 2594993 at *1. Thereafter, Customs sent Canex

a Notice of Action reclassifying the merchandise under heading 4407, liquidated the merchandise

under that heading, and issued Notices of Liquidated Damages to the company. Id., 34 CIT at ____,

2010 WL 2594993 at *2. Canex protested Customs’ classification of its merchandise under heading

4407, and – after those protests were denied – brought a civil action challenging Customs’

classification decision. Id., 34 CIT at ____, 2010 WL 2594993 at *2.

       Canex moved for summary judgment in its classification action, raising the exact same

notice-and-comment claim that Millenium and XL have asserted here. Specifically, Canex relied

on NY B81359 and NY B88564 to argue that it was entitled by statute to notice and an opportunity

to comment, and that Customs’ reclassification of its merchandise under heading 4407 therefore was

not valid. See Canex, 34 CIT at ____, 2010 WL 2594993 at *2.

       The Canex court noted that Canex could prevail on its notice-and-comment claim only if it

could demonstrate that its lumber was identical to the lumber described in NY B81359 and NY

B88564. See Canex, 34 CIT at ____, 2010 WL 2594993 at *2. Referencing the applicable federal

regulation, the court emphasized that “a ruling letter classification applies only to articles that are
Court No. 06-00129                                                                            Page 18



identical to those in the ruling letter.” Id., 34 CIT at ____, 2010 WL 2594993 at *2 (citing 19 C.F.R.

§ 177.9(b)(2)). Ultimately, Canex could not make the requisite showing. The court explained:

       Canex’s merchandise was not identical to the merchandise in NY B88564 and NY
       B81359, which clearly were destined for specific use as part of a roof truss system.
       NY B88564 describes lumber with “[m]ost pieces” cut at an angle other than 90
       degrees on both ends and states that each shipment was accompanied by illustrative
       literature showing how the pieces were designed to fit together to make a roof truss.
       . . . NY B81359 describes lumber which was cut to specific sizes and angles that
       would “depend on the size of the roof truss,” and also was accompanied by diagrams
       that showed where the pieces would fit in a completed roof truss.

       By contrast, the intended end use of Canex’s lumber was uncertain, as the pieces
       neither appeared to be roof trusses, nor were accompanied by any illustration or
       diagram that would indicate placement in a completed roof truss. Even in the
       occasional instances where Canex submitted a diagram, Canex never located where
       the angle cut pieces would fit within the particular diagram. Unlike the merchandise
       described in the two ruling letters, all of Canex’s lumber was cut to a specific angle
       only on one end.

Canex, 34 CIT at ____, 2010 WL 2594993 at *3 (emphases added) (citations omitted).

       The decision in Canex thus turned on Canex’s inability to identify how its lumber would be

used following entry into the United States. The court highlighted the fact that the intended end use

of Canex’s lumber was “uncertain” – that is, that the pieces of lumber did not appear to be roof

trusses, and that the diagrams provided did not show with certainty how the pieces would be placed

in a roof truss. The uncertainty surrounding Canex’s lumber stood in stark contrast to the

merchandise in NY B81359 and NY B88564, which was “clearly . . . destined for specific use as

part of a roof truss system.” Canex, 34 CIT at ____, 2010 WL 2594993 at *3 (emphasis added).

The court therefore concluded that Canex’s notice-and-comment claim had no merit, because its

merchandise was not “identical” to that described in the ruling letters that Canex cited – a holding

that the Court of Appeals subsequently affirmed. See id., 34 CIT at ____, 2010 WL 2594993 at *3,
Court No. 06-00129                                                                              Page 19



aff’d per curiam, 432 Fed. Appx. 977.

        Similarly, the nature of Millenium’s merchandise was not fixed with certainty as “truss

components.” Millenium and XL strain to cast Millenium’s merchandise as “identical” to the “truss

components” described in the ruling letters that they cite. See NY B81359; NY B88564;

Millenium’s Motion at 1, 3-4, 5, 9-13; Millenium’s Reply Brief at 6-12; XL’s Reply Brief at 7-15.

As discussed above, however, those efforts are in vain.

        Indeed, both this court and the Court of Appeals have already determined that Millenium’s

merchandise was not identifiable, either in appearance or in intended use, as truss components. See

Millenium Lumber Distrib. Ltd. v. United States, 558 F.3d 1326, 1330 (Fed. Cir. 2009) (stating that

Millenium’s “imported components are more raw material for trusses or other purposes generally

than they are identifiable parts of a specific finished truss”) (emphasis added); Millenium, 31 CIT

at 580 (explaining that Millenium’s merchandise was “not identifiable or fixed with certainty as

unassembled pieces of wood trusses”). In other words, Millenium’s merchandise was not “clearly

. . . destined for specific use as part of a . . . truss system” – unlike the merchandise described in NY

B81359 and NY B88564. Canex, 34 CIT at ____, 2010 WL 2594993 at *3.

        There are no substantive grounds on which this case can be meaningfully distinguished from

Canex, where this court and the Court of Appeals ruled decisively against virtually the exact same

notice-and-comment claim that Millenium and XL assert here. The facts compel the same outcome.

Because Millenium and XL have not demonstrated, and cannot demonstrate, that Millenium’s

merchandise was “identical” to that described in NY B81359 and NY B88564, their notice-and-
Court No. 06-00129                                                                            Page 20



comment claim must fail, and their Motions for Summary Judgment must be denied.9


                       B. Plaintiff’s Cross-Motion for Summary Judgment

       In its Cross-Motion for Summary Judgment, the Government seeks to collect $1,826,531.80

in outstanding liquidated damages from Millenium and/or XL, asserting that they are jointly and

severally liable for breach of the terms of the three customs bonds that secured Millenium’s 168

entries of merchandise at issue. See Pl.’s Cross-Motion at 13. According to the Government,

Millenium failed to meet its obligations under the Softwood Lumber Agreement, and Millenium and

XL therefore violated Customs regulations relating to that agreement and breached the terms of the

relevant customs bonds (because the requirements of the Softwood Lumber Agreement are



       9
        Apart from its argument that Millenium cannot establish that its angle-cut lumber is
identical to that described in the Customs ruling letters on which Millenium and XL rely, the
Government further contends that Millenium and XL could not prevail on the merits of their notice-
and-comment claim for a second, wholly independent reason.

        Specifically, according to the Government, neither the CF 29s (Notices of Action) that
Customs issued to Millenium nor the agency’s subsequent liquidations of the relevant entries of
lumber constituted “proposed interpretive rulings or decisions” within the meaning of 19 U.S.C. §
1625(c). The Government asserts that the notice-and-comment provisions of the statute therefore
are not implicated by the facts of this case. See, e.g., Pl.’s Response Brief at 5-6, 19-26 (quoting 19
U.S.C. § 1625(c)); Pl.’s Cross-Motion at 7, 22-30; Pl.’s Reply Brief at 10-11, 13-14. But see
Millenium’s Motion at 3, 14-17; Millenium’s Reply Brief at 12-15; XL’s Reply Brief at 16-18.

        The fact that Millenium cannot establish that its angle-cut lumber is identical to that in the
Customs ruling letters that Millenium and XL cite obviates any need to here decide whether or not
the CF 29s that Customs issued to Millenium and/or the subsequent liquidations constituted
“proposed interpretive ruling[s] or decision[s]” within the meaning of the statute. Even if they were
determined to be such “proposed interpretive ruling[s] or decision[s]” (as Millenium and XL contend
they are), it would nevertheless still be the case that Millenium and XL could not prevail on their
notice-and-comment claim. Accordingly, even a determination that the CF 29s and/or liquidations
constituted “proposed interpretive ruling[s] or decision[s]” within the meaning of the statute would
not alter the outcome in this action.
Court No. 06-00129                                                                          Page 21



incorporated into customs bonds as part of the bond conditions). See generally Pl.’s Cross-Motion

at 6, 9-10, 10-13; Pl.’s Reply Brief at 1-2; see also 19 C.F.R. § 12.140 (Customs regulations

implementing Softwood Lumber Agreement); 19 C.F.R. § 113.62(k) (incorporating requirements

of Softwood Lumber Agreement into customs bonds, as part of bond conditions).

       Aside from the notice-and-comment argument pressed by Millenium and XL (and rejected

above), there is no dispute here that Millenium’s angle-cut lumber was properly classified under

HTSUS subheading 4407.10.00. See Millenium, 31 CIT at 578, aff’d, 558 F.3d at 1331 (rejecting

challenge to Customs’ classification of subject merchandise under subheading 4407.10.00). There

is similarly no dispute that, as classified under heading 4407, Millenium’s merchandise was subject

to the Softwood Lumber Agreement, and that Millenium therefore was required to obtain export

permits from the government of Canada for all of the entries at issue. See 19 C.F.R. § 12.140(a)

(requiring export permits for specified softwood lumber products from Canada that are classified

under HTSUS subheading 4407.10.00). Nor is there any dispute that Customs properly notified

Millenium that its merchandise was subject to the Softwood Lumber Agreement and that the

company was required to obtain export permits under that agreement. See Pl.’s Cross-Motion at 11;

Complaint at Exhs. 5, 11 (copies of Notices of Action (“CF 29s”)).

       It is further undisputed that Millenium did not obtain the requisite export permits, and that

Millenium’s failure to do so put both Millenium and XL in breach of the customs bonds, which

incorporated an “[a]greement to ensure” the “issuance of softwood lumber export permit[s]” to

Customs’ satisfaction. 19 C.F.R. § 113.62(k); see also 19 C.F.R. § 12.140(a); Pl.’s Cross-Motion

at 12. In addition, it is undisputed that the terms of those same bonds provide that Millenium and
Court No. 06-00129                                                                           Page 22



XL are jointly and severally liable for any liquidated damages assessments, including any

assessments as a result of any failure to comply with the requirements of the Softwood Lumber

Agreement. See Pl.’s Statement of Facts ¶ 14; XL’s Response to Statement of Facts ¶ 14; Pl.’s

Cross-Motion at 12.

       Finally, there is no dispute that Customs duly notified both Millenium and XL that liquidated

damages would be assessed as a result of Millenium’s failure to obtain the necessary export permits.

See Pl.’s Cross-Motion at 13; Complaint at Exhs. 6-7, 9, 12 (copies of Liquidated Damages Notices,

and letters to Millenium and XL dated May 23, 2005). Nevertheless, notwithstanding these facts,

neither Millenium nor XL has paid the liquidated damages.

       In sum, it is clear that the requirements of the Softwood Lumber Agreement and related

regulations have not been satisfied. It is equally clear that Customs properly assessed liquidated

damages against the relevant bonds, holding Millenium and XL jointly and severally liable. As

such, there are no issues of material fact to preclude entry of judgment in favor of the Government.

Moreover, under the circumstances, the Government is entitled by law to judgment in its favor. The

Government’s Cross-Motion for Summary Judgment therefore must be granted. Millenium and XL

are jointly and severally liable for liquidated damages in the sum of $1,826,531.80, in accordance

with Customs’ demands.


                                     C. Prejudgment Interest

       In addition to liquidated damages, the Government contends that Millenium and XL are

jointly and severally liable for prejudgment interest at the rate established under 26 U.S.C. § 6621,

from the dates of the Government’s first demands for payment. See Plaintiff’s Supplemental
Court No. 06-00129                                                                          Page 23



Submission Concerning Interest (“Pl.’s Supp. Brief”) at 2, 6, 9-10.

       As the Government observes, “the long established rule . . . permits the United States to

recover interest on money due to the government even in the absence of any statutory authorization

for an award of pre-judgment interest.” Pl.’s Supp. Brief at 3 (quoting United States v. Ford Motor

Co., 31 CIT 1178, 1181 (2007)). The Court of Appeals has instructed that prejudgment interest is

a matter of equity, and that whether to award such interest is a matter committed to the “sound

discretion” of the trial court. United States v. Reul, 959 F.2d 1572, 1577 (Fed. Cir. 1992); see

United States v. Imperial Food Imports, 834 F.2d 1013, 1016 (Fed. Cir. 1987).

       XL asserts that, because “there is no statute in the instant case mandating prejudgment

interest against a surety,” the sole basis for such an award must be to compensate the Government

for “undue delay or dilatory conduct” on the part of the surety – which, XL maintains, did not occur

here. XL Specialty Insurance Company’s Response to Plaintiff’s Supplemental Submission

Concerning Prejudgment Interest (“XL’s Supp. Brief”) at 4.10 The linchpin of XL’s argument is its

claim that “public policy” precludes an award of prejudgment interest “where any delay in payment

is the result of good faith disputes over the amount of money owed . . . , serious liability and due

process concerns, ongoing settlement discussions conducted in good faith, or other reasonable

grounds for postponement of payment.” Id. Conspicuously absent from XL’s argument, however,

is any citation to authority to support its expansive “public policy” claim, or even any explanation

as to how interest that is wholly compensatory (and in no way punitive or penal) can fairly be

characterized as contrary to public policy.



       10
            Millenium elected not to brief the issue of prejudgment interest.
Court No. 06-00129                                                                            Page 24



       Nor has XL made any effort to place within its proposed construct the growing number of

cases in which prejudgment interest has been awarded against sureties. See, e.g., Ins. Co. of N. Am.

v. United States, 951 F.2d 1244, 1247 (Fed. Cir. 1991) (affirming award of prejudgment interest

against surety); Imperial Food Imports, 834 F.2d at 1016 (same); United States v. Canex, 35 CIT

____, ____, 2011 WL 3438870 *3-4 (2011) (awarding prejudgment interest against surety); United

States v. Reul, 16 CIT 807 (1992) (same); United States v. Monza Automobili, 12 CIT 239, 242, 638

F. Supp. 818, 821 (1988) (same); United States v. Lun May Co., 12 CIT 123, 127, 680 F. Supp.

1573, 1577 (1988) (same); United States v. American Motorists Ins. Co., 11 CIT 944, 948, 680 F.

Supp. 1569, 1573 (1987) (same); United States v. Cont’l Seafoods, Inc., 11 CIT 768, 775, 672 F.

Supp. 1481, 1487 (1987) (same). Surely XL does not contend that, in each such case, the surety’s

delay in payment was attributable to bad faith and not to legitimate “disputes over the amount of

money owed . . . , serious liability and due process concerns, ongoing settlement discussions

conducted in good faith, or other reasonable grounds for postponement of payment.” Under XL’s

theory, an award of prejudgment interest against a surety would be rare indeed.11

       XL expresses particular concern that an award of prejudgment interest in this case will

exceed the limit of one of its bonds, and states that “courts have historically respected the surety’s

right to limit its liability to the amounts demanded and to the penal limits of its bonds.” See XL’s

Supp. Brief at 2-3, 7. However, XL fails to document this asserted “historic” trend. Instead, XL’s

argument – that an award of prejudgment interest beyond a surety’s bond limits presupposes an



       11
         XL makes the sweeping assertion that this court and the Court of Appeals “have declined
to award [prejudgment] interest where the surety’s delay in payment was not ‘undue’ or ‘dilatory.’”
XL’s Supp. Brief at 2. But that statement simply cannot be reconciled with the case law.
Court No. 06-00129                                                                           Page 25



unjust or unreasonable withholding of payment – is predicated largely on XL’s reading of one

particular case – Washington International Insurance. See XL’s Supp. Brief at 2-4, 8 n.2; see

generally United States v. Wash. Int’l Ins. Co., 25 CIT 1239, 177 F. Supp. 2d 1313 (2001).

       XL contends that Washington International Insurance stands for the broad proposition that

prejudgment interest in excess of a surety’s bond limits is properly awarded only when “the

withholding of payment . . . [is] unjust.” XL’s Supp. Brief at 2 (citing Washington Int’l Ins. Co.,

25 CIT 1239, 177 F. Supp. 2d 1313). However, the Canex court made short work of that argument

when XL raised it there. Canex, 35 CIT at ____, 2011 WL 3438870 at *3-4. The Canex court

expressly rejected XL’s reliance on Washington International Insurance as “misplaced,” and

explained that the case stands only for the proposition that “during the protest period the surety’s

liability cannot exceed the bond limit.” Canex, 35 CIT at ____, 2011 WL 3438870 at *4 n.7

(emphasis added). The court concluded that, contrary to XL’s assertions, “[d]ilatory conduct . . .

is not required for a surety to be liable for prejudgment interest exceeding the amount of the bond.”

Id., 35 CIT at ____, 2011 WL 3438870 at *4. In weighing the equities, the Canex court explained,

the key factor was that prejudgment interest would “compensate[] the Government for its inability

to access the money it was owed” prior to the entry of judgment. Id., 35 CIT at ____, 2011 WL

3438870 at *3.

       The Canex decision is in full accord with the Court of Appeal’s endorsement of the principle

of “complete compensation” in Princess Cruises. See Princess Cruises, Inc. v. United States, 397

F.3d 1358, 1368 (Fed. Cir. 2005). In that case, the court conceded that “[t]he degree to which the

trial court is to balance equitable factors to determine whether to award prejudgment interest is not
Court No. 06-00129                                                                              Page 26



easy to discern from the case law.” Princess Cruises, 397 F.3d at 1368. However, the Court of

Appeals found that, above all, “[p]rejudgment interest is an element of complete compensation.”

Id., 397 F.3d at 1368 (quoting West Virginia v. United States, 479 U.S. 305, 310-11 (1987)). In

arriving at that conclusion, the Court of Appeals relied on a seminal Supreme Court case, in which

the high court explained that the concept of “complete compensation” is part and parcel of the

weighing of equities:

        As our prior cases show, a persuasive consideration in determining whether such
        obligations shall bear interest is the relative equities between the beneficiaries of the
        obligation and those upon whom it has been imposed. And this Court has generally
        weighed these relative equities in accordance with the historic judicial principle
        that one for whose financial advantage an obligation was assumed or imposed, and
        who has suffered actual money damages by another’s breach of that obligation,
        should be fairly compensated for the loss thereby sustained.

Princess Cruises, 397 F.3d at 1368 (quoting Rodgers v. United States, 332 U.S. 371, 373-74 (1947)).

       Here, absent an award of prejudgment interest, Millenium and XL will have enjoyed (in

effect) a long-term “interest-free loan of the money” that has been due and owing to the

Government. Imperial Food Imports, 834 F.2d at 1016 (quoting United States v. Goodman, 6 CIT

132, 140, 572 F. Supp. 1284, 1289 (1983)). And, by the same token, absent an award of

prejudgment interest, the Government here will not be made whole for the injury that the liquidated

damages are intended to redress. See West Virginia v. United States, 479 U.S. 305, 310 n.2 (1987)

(discussing role of prejudgment interest in compensating aggrieved party). Accordingly, hewing

to the principle of “complete compensation,” equity compels an award of prejudgment interest in

this case, jointly and severally, against both Millenium and XL.

       Notably, although XL disputes its liability for prejudgment interest, it does not contest the
Court No. 06-00129                                                                        Page 27



rate of interest. Nor does XL dispute the Government’s representation that such interest typically

runs from the date of the first demand for payment. See Pl.’s Supp. Brief at 3. Because the

liquidated damages here were “fixed with certainty” at the time Customs made its first demands for

payment, prejudgment interest against Millenium is awarded at the rate established under 26 U.S.C.

§ 6621 from the dates of Customs’ first demands on the company – March 23, 2001, April 5, 2001,

and September 21, 2001, respectively. See id. at 6, 9; Complaint at Exhs. 6, 9, 12 (Liquidated

Damages Notices dated March 23, 2001, April 5, 2001, and September 21, 2001). As for XL,

prejudgment interest is awarded at the same rate from May 23, 2005 – the date of Customs’ first

demand on the surety. See Pl.’s Supp. Brief at 6, 9; Complaint at Exh. 7 (letter to XL, dated May

23, 2005).


                                         IV. Conclusion

          For the reasons set forth above, the Government’s Cross-Motion for Summary Judgment

must be granted, and the Motions for Summary Judgment filed by Millenium and XL must be

denied.

          Judgment will enter accordingly.

                                                       /s/ Delissa A. Ridgway

                                                         Delissa A. Ridgway
                                                                 Judge


Decided: January 2, 2013
         New York, New York
                                         ERRATA

United States of America v. Millenium Lumber Distribution Co. Ltd. and XL Specialty Insurance
Company, Court No. 06-00129, Slip Op. 13-1, dated January 2, 2013.


Page 3:       In line two of the second full paragraph, replace “related Customs” with “related
              customs”.

Page 8:       In line nine of the second full paragraph, replace “XL’s Reply Brief at 7-8;” with
              “XL’s Reply Brief at 7-9;”.

Page 20:      In line six of the indented paragraph, replace “Customs regulations” with “customs
              regulations”.

Page 25:      In line one of the second full paragraph, replace “Court of Appeal’s endorsement”
              with “Court of Appeals’ endorsement”.


January 23, 2013
