{ "attribution": { "source": "legal.exploreworldai.com", "canonical": "https://legal.exploreworldai.com/api/public/v1/judgment-text?id=us:cafc-24-1142-2026-01-08", "cite_as": "NovaCopilot, legal.exploreworldai.com (https://legal.exploreworldai.com/api/public/v1/judgment-text?id=us:cafc-24-1142-2026-01-08)", "license": "https://legal.exploreworldai.com/revision", "version": "legal-2026-10-11", "fingerprint": "ewai:us:e0b409", "proof": "sha256:8dd82326f28d4c477fad0138db0a939839e47c63dd3982c640f0626801436a6d", "jurisdiction": "us", "lang": "en", "publisher": "NovaCopilot by ExploreWorld Legal", "terms": "https://legal.exploreworldai.com/om" }, "brand_source": "Source: NovaCopilot", "item": { "schema_version": "1.0.0", "id": "us:cafc-24-1142-2026-01-08", "jurisdiction": "us", "lang": "en", "brand_source": "Source: NovaCopilot", "brand": { "product": "NovaCopilot", "platform": "ExploreWorldAI", "infrastructure": "ExploreWorld Legal", "infrastructure_url": "legal.exploreworldai.com", "legal_entity": "Valkiv Ventures AB", "permanent_url": "https://legal.exploreworldai.com/novacopilot", "source": "Source: NovaCopilot", "powered_by": "Powered by NovaCopilot", "license": "https://legal.exploreworldai.com/licensvillkor" }, "sections": [ { "title": "United States Court of Appeals", "paragraphs": [ "para_2", "para_3", "para_4" ] }, { "title": "Plaintiff-Appellant", "paragraphs": [ "para_6", "para_7" ] }, { "title": "Defendant-Appellee", "paragraphs": [ "para_9" ] }, { "title": "2024-1142", "paragraphs": [ "para_11" ] }, { "title": "Appeal from the United States Court of International", "paragraphs": [ "para_13", "para_14", "para_15" ] }, { "title": "Decided: January 8, 2026", "paragraphs": [ "para_17", "para_18", "para_19", "para_20" ] }, { "title": "MONICA PERRETTE TRIANA, International Trade Field", "paragraphs": [ "para_22" ] }, { "title": "NY, argued for defendant-appellee. Also represented by", "paragraphs": [ "para_24" ] }, { "title": "MCCARTHY, JUSTIN REINHART MILLER, BRETT SHUMATE;", "paragraphs": [] }, { "title": "EMMA TINER, Office of Assistant Chief Counsel, United", "paragraphs": [] }, { "title": "States Customs and Border Protection, United States De-", "paragraphs": [ "para_28" ] }, { "title": "Case: 24-1142 Document: 47 Page: 1 Filed: 01/08/2026", "paragraphs": [] }, { "title": "MIDWEST-CBK, LLC v. US2", "paragraphs": [ "para_31" ] }, { "title": "Before PROST and CUNNINGHAM, Circuit Judges, and", "paragraphs": [] }, { "title": "ANDREWS, District Judge.1", "paragraphs": [ "para_34" ] }, { "title": "Plaintiff Midwest-CBK, LLC (Midwest) appeals from", "paragraphs": [ "para_36" ] }, { "title": "(CIT) denying Midwest’s motion for partial summary judg-", "paragraphs": [ "para_38", "para_39", "para_40", "para_41", "para_42", "para_43" ] }, { "title": "Midwest’s transactions qualified as sales “for exportation", "paragraphs": [ "para_45", "para_46", "para_47", "para_48", "para_49" ] }, { "title": "2 Midwest moved the CIT to enter a final judgment", "paragraphs": [ "para_51", "para_52", "para_53" ] }, { "title": "Int’l Trade 2023). As such, the CIT’s ruling on the motion", "paragraphs": [ "para_55", "para_56", "para_57" ] }, { "title": "Case: 24-1142 Document: 47 Page: 2 Filed: 01/08/2026", "paragraphs": [] }, { "title": "MIDWEST-CBK, LLC v. US 3", "paragraphs": [] }, { "title": "I. BACKGROUND3", "paragraphs": [] }, { "title": "Midwest was a Minnesota-based retailer of Christmas", "paragraphs": [ "para_62" ] }, { "title": "United States, 578 F. Supp. 3d 1296, 1298 (Ct. Int’l Trade", "paragraphs": [] }, { "title": "2022). For the time period relevant to this case, Midwest", "paragraphs": [ "para_65", "para_66", "para_67" ] }, { "title": "Midwest had Canadian bank accounts to pay for expenses", "paragraphs": [ "para_69" ] }, { "title": "Midwest “purchas[ed] merchandise from foreign sup-", "paragraphs": [ "para_71" ] }, { "title": "Canada, this merchandise was stored in Midwest’s On-", "paragraphs": [ "para_73" ] }, { "title": "States-based sales staff to solicit orders and submit them", "paragraphs": [ "para_75", "para_76", "para_77", "para_78", "para_79", "para_80" ] }, { "title": "State Uniform Commercial Code.”5 J.A. 667; see Midwest-", "paragraphs": [ "para_82" ] }, { "title": "The importer of record for merchandise, with a few ex-", "paragraphs": [ "para_84", "para_85" ] }, { "title": "(Customs). See 19 U.S.C. § 1484(a). An “entry” means the", "paragraphs": [] }, { "title": "3 For the facts in this background section, we draw", "paragraphs": [ "para_88", "para_89" ] }, { "title": "4 Midwest wound up active operations at the end of", "paragraphs": [ "para_91" ] }, { "title": "5 “The term ‘FOB’ means ‘free on board.’” Midwest-", "paragraphs": [ "para_93" ] }, { "title": "Case: 24-1142 Document: 47 Page: 3 Filed: 01/08/2026", "paragraphs": [] }, { "title": "MIDWEST-CBK, LLC v. US4", "paragraphs": [ "para_96", "para_97", "para_98", "para_99", "para_100" ] }, { "title": "States. See 19 U.S.C. § 1504. “Liquidation means the final", "paragraphs": [ "para_102", "para_103" ] }, { "title": "In 2013, Midwest informed Customs that Midwest", "paragraphs": [ "para_105", "para_106", "para_107", "para_108", "para_109", "para_110", "para_111", "para_112", "para_113", "para_114" ] }, { "title": "Customs all the information Customs had ever requested", "paragraphs": [ "para_116", "para_117", "para_118", "para_119", "para_120", "para_121", "para_122", "para_123" ] }, { "title": "2016, stating that the subject merchandise should be val-", "paragraphs": [ "para_125", "para_126", "para_127", "para_128", "para_129" ] }, { "title": "Midwest subsequently brought this action. Midwest as-", "paragraphs": [ "para_131", "para_132" ] }, { "title": "Case: 24-1142 Document: 47 Page: 4 Filed: 01/08/2026", "paragraphs": [] }, { "title": "MIDWEST-CBK, LLC v. US 5", "paragraphs": [ "para_135", "para_136", "para_137" ] }, { "title": "States. Id. at 27. Midwest also contends that various en-", "paragraphs": [ "para_139", "para_140", "para_141" ] }, { "title": "II. LEGAL STANDARD", "paragraphs": [] }, { "title": "We review the CIT’s decision granting summary judg-", "paragraphs": [ "para_144", "para_145" ] }, { "title": "The CIT reviews a decision by Customs to extend a liq-", "paragraphs": [ "para_147", "para_148" ] }, { "title": "United States, 6 F.3d 763, 768 (Fed. Cir. 1993) (“Customs", "paragraphs": [ "para_150", "para_151", "para_152" ] }, { "title": "157 F.3d at 855 (reviewing extensions for abuse of discre-", "paragraphs": [ "para_154", "para_155", "para_156", "para_157", "para_158", "para_159", "para_160" ] }, { "title": "III. DISCUSSION", "paragraphs": [] }, { "title": "A. Liquidation by Operation of Law", "paragraphs": [] }, { "title": "The usual rule is that, absent a proper extension of the", "paragraphs": [ "para_164", "para_165", "para_166", "para_167", "para_168" ] }, { "title": "Case: 24-1142 Document: 47 Page: 5 Filed: 01/08/2026", "paragraphs": [] }, { "title": "MIDWEST-CBK, LLC v. US6", "paragraphs": [ "para_171", "para_172", "para_173", "para_174", "para_175" ] }, { "title": "Before the CIT, the heart of the parties’ dispute on this", "paragraphs": [ "para_177", "para_178", "para_179", "para_180", "para_181", "para_182" ] }, { "title": "2014. Midwest-CBK, 578 F. Supp. 3d at 1309. The United", "paragraphs": [] }, { "title": "States responded that during the period when the exten-", "paragraphs": [ "para_185", "para_186", "para_187" ] }, { "title": "The CIT agreed with the Government’s position, hold-", "paragraphs": [ "para_189", "para_190", "para_191" ] }, { "title": "1310. Thus, the CIT found that Customs did not abuse its", "paragraphs": [ "para_193", "para_194" ] }, { "title": "First, Midwest argues that Customs’ decision to extend", "paragraphs": [ "para_196", "para_197" ] }, { "title": "24. Midwest claims that since Customs possessed all the", "paragraphs": [ "para_199", "para_200", "para_201" ] }, { "title": "6 There are other statutory bases under which Cus-", "paragraphs": [ "para_203", "para_204" ] }, { "title": "Case: 24-1142 Document: 47 Page: 6 Filed: 01/08/2026", "paragraphs": [] }, { "title": "MIDWEST-CBK, LLC v. US 7", "paragraphs": [ "para_207", "para_208", "para_209", "para_210", "para_211", "para_212" ] }, { "title": "Fire & Marine, 6 F.3d at 768). The court found that the", "paragraphs": [ "para_214", "para_215", "para_216", "para_217", "para_218", "para_219" ] }, { "title": "Co., 157 F.3d at 856. Given the lack of explanation, the", "paragraphs": [ "para_221", "para_222", "para_223" ] }, { "title": "The facts in Ford Motor Co. are readily distinguishable", "paragraphs": [ "para_225", "para_226", "para_227", "para_228", "para_229", "para_230" ] }, { "title": "CBK, 578 F. Supp. 3d at 1309. Customs thus submitted suf-", "paragraphs": [ "para_232", "para_233" ] }, { "title": "As a result, we hold that Midwest has not “eliminate[d] all", "paragraphs": [ "para_235", "para_236", "para_237", "para_238", "para_239", "para_240" ] }, { "title": "Second, Midwest argues that the internal review that", "paragraphs": [] }, { "title": "Customs engaged in cannot form the basis for an extension", "paragraphs": [ "para_243" ] }, { "title": "Case: 24-1142 Document: 47 Page: 7 Filed: 01/08/2026", "paragraphs": [] }, { "title": "MIDWEST-CBK, LLC v. US8", "paragraphs": [ "para_246", "para_247", "para_248", "para_249", "para_250", "para_251", "para_252", "para_253" ] }, { "title": "Co. held, “Customs accurately notes that the statute does", "paragraphs": [ "para_255", "para_256", "para_257" ] }, { "title": "1504(b)(1).” Ford Motor Co., 157 F.3d at 856. The record", "paragraphs": [ "para_259", "para_260", "para_261", "para_262" ] }, { "title": "These rounds of internal review were reasonably necessary", "paragraphs": [ "para_264", "para_265", "para_266" ] }, { "title": "Third, Midwest argues in its reply brief that the Gov-", "paragraphs": [ "para_268", "para_269", "para_270", "para_271", "para_272", "para_273", "para_274", "para_275" ] }, { "title": "7 This process required Customs to audit more", "paragraphs": [ "para_277", "para_278", "para_279", "para_280" ] }, { "title": "Case: 24-1142 Document: 47 Page: 8 Filed: 01/08/2026", "paragraphs": [] }, { "title": "MIDWEST-CBK, LLC v. US 9", "paragraphs": [ "para_283", "para_284", "para_285", "para_286" ] }, { "title": "That Customs did not use some of the information in the", "paragraphs": [ "para_288", "para_289" ] }, { "title": "We therefore affirm the CIT’s ruling that Customs did", "paragraphs": [ "para_291", "para_292", "para_293" ] }, { "title": "B. Appraisement", "paragraphs": [] }, { "title": "There is a hierarchy of various appraisement methods", "paragraphs": [ "para_296" ] }, { "title": "8 (a) Generally", "paragraphs": [] }, { "title": "(1) Except as otherwise specifically provided for in", "paragraphs": [ "para_299", "para_300", "para_301" ] }, { "title": "(A) The transaction value provided for under", "paragraphs": [ "para_303" ] }, { "title": "(B) The transaction value of identical merchan-", "paragraphs": [ "para_305", "para_306", "para_307", "para_308" ] }, { "title": "(C) The transaction value of similar merchan-", "paragraphs": [ "para_310", "para_311", "para_312" ] }, { "title": "(D) The deductive value provided for under", "paragraphs": [ "para_314", "para_315" ] }, { "title": "Case: 24-1142 Document: 47 Page: 9 Filed: 01/08/2026", "paragraphs": [] }, { "title": "MIDWEST-CBK, LLC v. US10", "paragraphs": [ "para_318", "para_319", "para_320", "para_321", "para_322", "para_323", "para_324", "para_325" ] }, { "title": "In order for merchandise to be appraised on the basis", "paragraphs": [ "para_327", "para_328" ] }, { "title": "States, 175 F.3d 1327, 1338–39 (Fed. Cir. 1999). Midwest", "paragraphs": [ "para_330" ] }, { "title": "See Appellant’s Opening Br. 27. Thus, the only question is", "paragraphs": [ "para_332" ] }, { "title": "States.” This determination is a “fact-specific” one that", "paragraphs": [ "para_334", "para_335", "para_336", "para_337" ] }, { "title": "Before the CIT, Midwest contended that the sales in", "paragraphs": [ "para_339" ] }, { "title": "Midwest-CBK, 578 F. Supp. 3d at 1303. Midwest claimed", "paragraphs": [ "para_341" ] }, { "title": "Buffalo, NY” pursuant to the New York Uniform Commer-", "paragraphs": [ "para_343", "para_344", "para_345" ] }, { "title": "(E) The computed value provided for under", "paragraphs": [ "para_347", "para_348", "para_349", "para_350", "para_351", "para_352" ] }, { "title": "Case: 24-1142 Document: 47 Page: 10 Filed: 01/08/2026", "paragraphs": [] }, { "title": "MIDWEST-CBK, LLC v. US 11", "paragraphs": [ "para_355", "para_356", "para_357" ] }, { "title": "1401a(b)(1). Id. In support of this argument, Midwest re-", "paragraphs": [ "para_359" ] }, { "title": "Supp. 1344 (Ct. Int’l Trade 1989). The United States re-", "paragraphs": [ "para_361", "para_362", "para_363" ] }, { "title": "Court should not apply Orbisphere because Orbisphere re-", "paragraphs": [ "para_365", "para_366", "para_367" ] }, { "title": "The CIT agreed with the United States. It found that", "paragraphs": [] }, { "title": "Orbisphere’s reliance on Massce rendered Orbisphere un-", "paragraphs": [ "para_370", "para_371", "para_372" ] }, { "title": "Applying the law to the facts in this case, the CIT found", "paragraphs": [ "para_374", "para_375", "para_376" ] }, { "title": "1306. The CIT found these transactions constituted sales", "paragraphs": [ "para_378", "para_379", "para_380" ] }, { "title": "The crux of Midwest’s challenge to the CIT’s finding is", "paragraphs": [] }, { "title": "Midwest’s assertion that sales of the merchandise in ques-", "paragraphs": [ "para_383" ] }, { "title": "Opening Br. 29. Midwest claims these sales should not be", "paragraphs": [ "para_385" ] }, { "title": "States” and thus cannot form the basis of a transaction", "paragraphs": [ "para_387", "para_388" ] }, { "title": "First, this assertion is not supported by the text of 19", "paragraphs": [ "para_390" ] }, { "title": "Case: 24-1142 Document: 47 Page: 11 Filed: 01/08/2026", "paragraphs": [] }, { "title": "MIDWEST-CBK, LLC v. US12", "paragraphs": [ "para_393", "para_394", "para_395" ] }, { "title": "Second, Midwest’s challenge is not supported by prior", "paragraphs": [ "para_397", "para_398" ] }, { "title": "VWP, we found that sales between a Canadian manufac-", "paragraphs": [ "para_400", "para_401", "para_402", "para_403", "para_404", "para_405", "para_406" ] }, { "title": "Fashions, the CIT considered Customs’ use of “the sale be-", "paragraphs": [ "para_408", "para_409", "para_410" ] }, { "title": "U.S.-based distributor’s] price charged to its U.S. custom-", "paragraphs": [ "para_412", "para_413" ] }, { "title": "1999). Midwest has not explained why either of these cases", "paragraphs": [ "para_415" ] }, { "title": "Midwest’s other argument as to why 19 U.S.C. §", "paragraphs": [] }, { "title": "1401a(b)(1) should not apply to sales unless they occur", "paragraphs": [ "para_418", "para_419", "para_420", "para_421", "para_422", "para_423", "para_424" ] }, { "title": "N.J.” Id. at 1344–45. The CIT, relying heavily upon the", "paragraphs": [] }, { "title": "Massce court’s interpretation of § 402(d) of the Tariff Act of", "paragraphs": [] }, { "title": "1930, found that the choice between using transaction", "paragraphs": [ "para_428", "para_429" ] }, { "title": "Case: 24-1142 Document: 47 Page: 12 Filed: 01/08/2026", "paragraphs": [] }, { "title": "MIDWEST-CBK, LLC v. US 13", "paragraphs": [ "para_432", "para_433", "para_434", "para_435", "para_436", "para_437", "para_438", "para_439", "para_440", "para_441" ] }, { "title": "The CIT in the case before us correctly found Orbi-", "paragraphs": [ "para_443" ] }, { "title": "The Massce decision interpreted § 402(d) of the Tariff Act", "paragraphs": [ "para_445", "para_446", "para_447", "para_448", "para_449" ] }, { "title": "C.C.P.A. at 55 (emphasis added). Thus, Massce interpreted", "paragraphs": [ "para_451", "para_452", "para_453" ] }, { "title": "The Trade Agreements Act was passed in 1979. As the", "paragraphs": [] }, { "title": "CIT correctly noted, the Trade Agreements Act “removed", "paragraphs": [ "para_456", "para_457" ] }, { "title": "In addition, as the Senate Committee on Finance specifi-", "paragraphs": [ "para_459", "para_460", "para_461", "para_462", "para_463", "para_464", "para_465", "para_466", "para_467", "para_468" ] }, { "title": "Case: 24-1142 Document: 47 Page: 13 Filed: 01/08/2026", "paragraphs": [] }, { "title": "MIDWEST-CBK, LLC v. US14", "paragraphs": [] }, { "title": "Orbisphere relied upon the Massce court’s interpretation of", "paragraphs": [ "para_472", "para_473", "para_474" ] }, { "title": "U.S.C. §1401a(b)(1) does not require an international sale", "paragraphs": [ "para_476", "para_477" ] }, { "title": "States.” Domestic sales, in certain circumstances, may", "paragraphs": [ "para_479", "para_480" ] }, { "title": "Finally, Midwest argues that the purchase orders for", "paragraphs": [ "para_482", "para_483", "para_484", "para_485", "para_486" ] }, { "title": "1401a(b)(1), we need not reach the merits of this conten-", "paragraphs": [ "para_488" ] }, { "title": "Accordingly, we agree with the well-reasoned opinion", "paragraphs": [ "para_490", "para_491", "para_492", "para_493", "para_494" ] }, { "title": "578 F. Supp. 3d at 1304. Transaction value is the proper", "paragraphs": [ "para_496" ] }, { "title": "IV. CONCLUSION", "paragraphs": [] }, { "title": "We have considered Midwest’s arguments and find", "paragraphs": [ "para_499", "para_500" ] }, { "title": "AFFIRMED", "paragraphs": [] }, { "title": "Case: 24-1142 Document: 47 Page: 14 Filed: 01/08/2026", "paragraphs": [] } ], "paragraphs": [ { "text": "United States Court of Appeals", "paragraph_id": "para_1" }, { "text": "for the Federal Circuit", "paragraph_id": "para_2" }, { "text": "______________________", "paragraph_id": "para_3" }, { "text": "MIDWEST-CBK, LLC,", "paragraph_id": "para_4" }, { "text": "Plaintiff-Appellant", "paragraph_id": "para_5" }, { "text": "v.", "paragraph_id": "para_6" }, { "text": "UNITED STATES,", "paragraph_id": "para_7" }, { "text": "Defendant-Appellee", "paragraph_id": "para_8" }, { "text": "______________________", "paragraph_id": "para_9" }, { "text": "2024-1142", "paragraph_id": "para_10" }, { "text": "______________________", "paragraph_id": "para_11" }, { "text": "Appeal from the United States Court of International", "paragraph_id": "para_12" }, { "text": "Trade in Nos. 1:17-cv-00154-JCG, 1:17-cv-00155-JCG,", "paragraph_id": "para_13" }, { "text": "1:17-cv-00272-JCG, Judge Jennifer Choe-Groves.", "paragraph_id": "para_14" }, { "text": "______________________", "paragraph_id": "para_15" }, { "text": "Decided: January 8, 2026", "paragraph_id": "para_16" }, { "text": "______________________", "paragraph_id": "para_17" }, { "text": "PATRICK KLEIN, Neville Peterson LLP, New York, NY,", "paragraph_id": "para_18" }, { "text": "argued for plaintiff-appellant. Also represented by JOHN", "paragraph_id": "para_19" }, { "text": "M. PETERSON; RICHARD F. O'NEILL, Seattle, WA.", "paragraph_id": "para_20" }, { "text": "MONICA PERRETTE TRIANA, International Trade Field", "paragraph_id": "para_21" }, { "text": "Office, United States Department of Justice, New York,", "paragraph_id": "para_22" }, { "text": "NY, argued for defendant-appellee. Also represented by", "paragraph_id": "para_23" }, { "text": "BRANDON ALEXANDER KENNEDY, AIMEE LEE, PATRICIA M.", "paragraph_id": "para_24" }, { "text": "MCCARTHY, JUSTIN REINHART MILLER, BRETT SHUMATE;", "paragraph_id": "para_25" }, { "text": "EMMA TINER, Office of Assistant Chief Counsel, United", "paragraph_id": "para_26" }, { "text": "States Customs and Border Protection, United States De-", "paragraph_id": "para_27" }, { "text": "partment of Homeland Security, New York, NY.", "paragraph_id": "para_28" }, { "text": "Case: 24-1142 Document: 47 Page: 1 Filed: 01/08/2026", "paragraph_id": "para_29" }, { "text": "MIDWEST-CBK, LLC v. US2", "paragraph_id": "para_30" }, { "text": "______________________", "paragraph_id": "para_31" }, { "text": "Before PROST and CUNNINGHAM, Circuit Judges, and", "paragraph_id": "para_32" }, { "text": "ANDREWS, District Judge.1", "paragraph_id": "para_33" }, { "text": "ANDREWS, District Judge.", "paragraph_id": "para_34" }, { "text": "Plaintiff Midwest-CBK, LLC (Midwest) appeals from", "paragraph_id": "para_35" }, { "text": "the final judgment of the U.S. Court of International Trade", "paragraph_id": "para_36" }, { "text": "(CIT) denying Midwest’s motion for partial summary judg-", "paragraph_id": "para_37" }, { "text": "ment and granting the cross-motion for partial summary", "paragraph_id": "para_38" }, { "text": "judgment of Defendant United States.2 This court has ju-", "paragraph_id": "para_39" }, { "text": "risdiction pursuant to 28 U.S.C. § 1295(a)(5). We hold that", "paragraph_id": "para_40" }, { "text": "the CIT ruled correctly in granting the government’s cross-", "paragraph_id": "para_41" }, { "text": "motion for summary judgment that (1) the subject entries", "paragraph_id": "para_42" }, { "text": "were not deemed liquidated by operation of law; and (2)", "paragraph_id": "para_43" }, { "text": "Midwest’s transactions qualified as sales “for exportation", "paragraph_id": "para_44" }, { "text": "to the United States” under 19 U.S.C. § 1401a(b)(1). Ac-", "paragraph_id": "para_45" }, { "text": "cordingly, we affirm.", "paragraph_id": "para_46" }, { "text": "1 Honorable Richard G. Andrews, District Judge,", "paragraph_id": "para_47" }, { "text": "United States District Court for the District of Delaware,", "paragraph_id": "para_48" }, { "text": "sitting by designation.", "paragraph_id": "para_49" }, { "text": "2 Midwest moved the CIT to enter a final judgment", "paragraph_id": "para_50" }, { "text": "of dismissal against Midwest to permit it to appeal the", "paragraph_id": "para_51" }, { "text": "case; this dismissal was granted by the CIT. Midwest-CBK,", "paragraph_id": "para_52" }, { "text": "LLC v. United States, 662 F. Supp. 3d 1377, 1378–79 (Ct.", "paragraph_id": "para_53" }, { "text": "Int’l Trade 2023). As such, the CIT’s ruling on the motion", "paragraph_id": "para_54" }, { "text": "and cross-motion for partial summary judgment merge into", "paragraph_id": "para_55" }, { "text": "the final decision under Federal Rule of Appellate Proce-", "paragraph_id": "para_56" }, { "text": "dure 3(c)(4).", "paragraph_id": "para_57" }, { "text": "Case: 24-1142 Document: 47 Page: 2 Filed: 01/08/2026", "paragraph_id": "para_58" }, { "text": "MIDWEST-CBK, LLC v. US 3", "paragraph_id": "para_59" }, { "text": "I. BACKGROUND3", "paragraph_id": "para_60" }, { "text": "Midwest was a Minnesota-based retailer of Christmas", "paragraph_id": "para_61" }, { "text": "ornaments and similar items.4 Midwest-CBK, LLC v.", "paragraph_id": "para_62" }, { "text": "United States, 578 F. Supp. 3d 1296, 1298 (Ct. Int’l Trade", "paragraph_id": "para_63" }, { "text": "2022). For the time period relevant to this case, Midwest", "paragraph_id": "para_64" }, { "text": "“maintained its corporate office in [] Minnesota” and “its", "paragraph_id": "para_65" }, { "text": "inventory, distribution, warehousing, invoicing, and order", "paragraph_id": "para_66" }, { "text": "control departments [in] Ontario, Canada.” Id. at 1300.", "paragraph_id": "para_67" }, { "text": "Midwest had Canadian bank accounts to pay for expenses", "paragraph_id": "para_68" }, { "text": "related to its Canadian operations. Id.", "paragraph_id": "para_69" }, { "text": "Midwest “purchas[ed] merchandise from foreign sup-", "paragraph_id": "para_70" }, { "text": "pliers for exportation to Canada.” Id. Once imported into", "paragraph_id": "para_71" }, { "text": "Canada, this merchandise was stored in Midwest’s On-", "paragraph_id": "para_72" }, { "text": "tario-based warehouse. Id. Midwest employed a United", "paragraph_id": "para_73" }, { "text": "States-based sales staff to solicit orders and submit them", "paragraph_id": "para_74" }, { "text": "to Midwest’s personnel in Minnesota and Ontario. Id. Pur-", "paragraph_id": "para_75" }, { "text": "chase orders were reviewed by Midwest’s personnel in Can-", "paragraph_id": "para_76" }, { "text": "ada, who would prepare the merchandise for shipment", "paragraph_id": "para_77" }, { "text": "from Canada to the United States. Id. The purchase orders", "paragraph_id": "para_78" }, { "text": "provided to Midwest’s customers included the language:", "paragraph_id": "para_79" }, { "text": "“All prices FOB Buffalo, NY as defined by the New York", "paragraph_id": "para_80" }, { "text": "State Uniform Commercial Code.”5 J.A. 667; see Midwest-", "paragraph_id": "para_81" }, { "text": "CBK, 578 F. Supp. 3d at 1300.", "paragraph_id": "para_82" }, { "text": "The importer of record for merchandise, with a few ex-", "paragraph_id": "para_83" }, { "text": "ceptions, is required to submit “entries” for that merchan-", "paragraph_id": "para_84" }, { "text": "dise to United States Customs and Border Protection", "paragraph_id": "para_85" }, { "text": "(Customs). See 19 U.S.C. § 1484(a). An “entry” means the", "paragraph_id": "para_86" }, { "text": "3 For the facts in this background section, we draw", "paragraph_id": "para_87" }, { "text": "heavily from the findings of the CIT. These facts are undis-", "paragraph_id": "para_88" }, { "text": "puted.", "paragraph_id": "para_89" }, { "text": "4 Midwest wound up active operations at the end of", "paragraph_id": "para_90" }, { "text": "2018.", "paragraph_id": "para_91" }, { "text": "5 “The term ‘FOB’ means ‘free on board.’” Midwest-", "paragraph_id": "para_92" }, { "text": "CBK, 578 F. Supp. 3d at 1307.", "paragraph_id": "para_93" }, { "text": "Case: 24-1142 Document: 47 Page: 3 Filed: 01/08/2026", "paragraph_id": "para_94" }, { "text": "MIDWEST-CBK, LLC v. US4", "paragraph_id": "para_95" }, { "text": "“documentation or data required . . . to be filed with [Cus-", "paragraph_id": "para_96" }, { "text": "toms] . . . to secure the release of imported merchandise", "paragraph_id": "para_97" }, { "text": "from [Customs’] custody, or the act of filing that documen-", "paragraph_id": "para_98" }, { "text": "tation.” 19 C.F.R. § 141.0a(a). Entries must undergo “liqui-", "paragraph_id": "para_99" }, { "text": "dation” at the time merchandise is brought into the United", "paragraph_id": "para_100" }, { "text": "States. See 19 U.S.C. § 1504. “Liquidation means the final", "paragraph_id": "para_101" }, { "text": "computation or ascertainment of duties on entries . . . .” 19", "paragraph_id": "para_102" }, { "text": "C.F.R. § 159.1.", "paragraph_id": "para_103" }, { "text": "In 2013, Midwest informed Customs that Midwest", "paragraph_id": "para_104" }, { "text": "would enter merchandise based on its “deductive value,”", "paragraph_id": "para_105" }, { "text": "which it then did into 2016. Midwest-CBK, 578 F. Supp. 3d", "paragraph_id": "para_106" }, { "text": "at 1301. “Customs subsequently extended the deadline for", "paragraph_id": "para_107" }, { "text": "liquidation of [Midwest’s] entries and initiated a Regula-", "paragraph_id": "para_108" }, { "text": "tory Audit to determine the proper basis of valuation.” Id.", "paragraph_id": "para_109" }, { "text": "at 1302. “The audit involved multiple steps, including a", "paragraph_id": "para_110" }, { "text": "risk assessment of the relevant issues, the issuance of a", "paragraph_id": "para_111" }, { "text": "questionnaire, a walkthrough of import practices . . ., inter-", "paragraph_id": "para_112" }, { "text": "views with [Midwest’s] personnel, and the issuance of a fi-", "paragraph_id": "para_113" }, { "text": "nal report.” Id. By June 14, 2014, Midwest had delivered to", "paragraph_id": "para_114" }, { "text": "Customs all the information Customs had ever requested", "paragraph_id": "para_115" }, { "text": "from Midwest. Id. at 1309. “Customs completed its field-", "paragraph_id": "para_116" }, { "text": "work on October 14, 2014” and “issued a Draft Audit Report", "paragraph_id": "para_117" }, { "text": "on July 1, 2015, concluding that transaction value,” not de-", "paragraph_id": "para_118" }, { "text": "ductive value, “was the proper basis of [appraisement] for", "paragraph_id": "para_119" }, { "text": "the subject merchandise.” Id. at 1302. Midwest submitted", "paragraph_id": "para_120" }, { "text": "responsive comments on July 8, 2015, and Customs sought", "paragraph_id": "para_121" }, { "text": "no additional information from Midwest. Id. “Customs is-", "paragraph_id": "para_122" }, { "text": "sued a Final Audit Report to [Midwest] on February 24,", "paragraph_id": "para_123" }, { "text": "2016, stating that the subject merchandise should be val-", "paragraph_id": "para_124" }, { "text": "ued on the basis of transaction value.” Id. After further dis-", "paragraph_id": "para_125" }, { "text": "cussions with Midwest, Customs liquidated Midwest’s", "paragraph_id": "para_126" }, { "text": "merchandise according to transaction value, which Cus-", "paragraph_id": "para_127" }, { "text": "toms calculated using the original entered values plus a", "paragraph_id": "para_128" }, { "text": "75.75% upward adjustment. Id. at 1302–03.", "paragraph_id": "para_129" }, { "text": "Midwest subsequently brought this action. Midwest as-", "paragraph_id": "para_130" }, { "text": "serts that Customs improperly appraised the subject mer-", "paragraph_id": "para_131" }, { "text": "chandise based on transaction value rather than deductive", "paragraph_id": "para_132" }, { "text": "Case: 24-1142 Document: 47 Page: 4 Filed: 01/08/2026", "paragraph_id": "para_133" }, { "text": "MIDWEST-CBK, LLC v. US 5", "paragraph_id": "para_134" }, { "text": "value. Appellant Opening Br. 25–27. The basis for this as-", "paragraph_id": "para_135" }, { "text": "sertion is that the sales of this merchandise constituted do-", "paragraph_id": "para_136" }, { "text": "mestic sales and not sales for exportation to the United", "paragraph_id": "para_137" }, { "text": "States. Id. at 27. Midwest also contends that various en-", "paragraph_id": "para_138" }, { "text": "tries should have been deemed liquidated by operation of", "paragraph_id": "para_139" }, { "text": "law, because Customs “had no basis to extend liquidation", "paragraph_id": "para_140" }, { "text": "of entries after June 14, 2014.” Id. at 18.", "paragraph_id": "para_141" }, { "text": "II. LEGAL STANDARD", "paragraph_id": "para_142" }, { "text": "We review the CIT’s decision granting summary judg-", "paragraph_id": "para_143" }, { "text": "ment “without deference.” Ford Motor Co. v. United States,", "paragraph_id": "para_144" }, { "text": "157 F.3d 849, 854 (Fed. Cir. 1988).", "paragraph_id": "para_145" }, { "text": "The CIT reviews a decision by Customs to extend a liq-", "paragraph_id": "para_146" }, { "text": "uidation deadline for entries under the abuse of discretion", "paragraph_id": "para_147" }, { "text": "standard of review. St. Paul Fire & Marine Ins. Co. v.", "paragraph_id": "para_148" }, { "text": "United States, 6 F.3d 763, 768 (Fed. Cir. 1993) (“Customs", "paragraph_id": "para_149" }, { "text": "may, for statutory purposes . . . employ up to four years to", "paragraph_id": "para_150" }, { "text": "effect liquidation so long as the extensions it grants are not", "paragraph_id": "para_151" }, { "text": "abusive of its discretionary authority.”); see Ford Motor Co.,", "paragraph_id": "para_152" }, { "text": "157 F.3d at 855 (reviewing extensions for abuse of discre-", "paragraph_id": "para_153" }, { "text": "tion). Since the CIT granted summary judgment that the", "paragraph_id": "para_154" }, { "text": "undisputed record showed that Customs did not abuse its", "paragraph_id": "para_155" }, { "text": "discretion, we review that decision de novo. V.O.S. Selec-", "paragraph_id": "para_156" }, { "text": "tions, Inc. v. Trump, 149 F.4th 1312, 1327 (Fed. Cir. 2025).", "paragraph_id": "para_157" }, { "text": "We review the CIT’s statutory interpretation de novo.", "paragraph_id": "para_158" }, { "text": "Int’l Customs Prods., Inc. v. United States, 748 F.3d 1182,", "paragraph_id": "para_159" }, { "text": "1186 (Fed. Cir. 2014).", "paragraph_id": "para_160" }, { "text": "III. DISCUSSION", "paragraph_id": "para_161" }, { "text": "A. Liquidation by Operation of Law", "paragraph_id": "para_162" }, { "text": "The usual rule is that, absent a proper extension of the", "paragraph_id": "para_163" }, { "text": "liquidation deadline, “an entry of merchandise . . . not liq-", "paragraph_id": "para_164" }, { "text": "uidated within 1 year . . . shall be deemed liquidated at the", "paragraph_id": "para_165" }, { "text": "rate of duty, value, quantity, and amount of duties asserted", "paragraph_id": "para_166" }, { "text": "by the importer of record.” 19 U.S.C. § 1504(a)(1). The Sec-", "paragraph_id": "para_167" }, { "text": "retary of the Treasury is permitted to extend the", "paragraph_id": "para_168" }, { "text": "Case: 24-1142 Document: 47 Page: 5 Filed: 01/08/2026", "paragraph_id": "para_169" }, { "text": "MIDWEST-CBK, LLC v. US6", "paragraph_id": "para_170" }, { "text": "liquidation deadline if “the information needed for the", "paragraph_id": "para_171" }, { "text": "proper appraisement or classification of the . . . merchan-", "paragraph_id": "para_172" }, { "text": "dise . . . is not available to the Customs Service.” 19 U.S.C.", "paragraph_id": "para_173" }, { "text": "§ 1504(b)(1).6 Customs is permitted to obtain up to three", "paragraph_id": "para_174" }, { "text": "such one-year extensions. 19 C.F.R. § 159.12(e).", "paragraph_id": "para_175" }, { "text": "Before the CIT, the heart of the parties’ dispute on this", "paragraph_id": "para_176" }, { "text": "matter was whether Customs properly extended the liqui-", "paragraph_id": "para_177" }, { "text": "dation period under 19 U.S.C. § 1504(b)(1). Midwest con-", "paragraph_id": "para_178" }, { "text": "tended that Customs did not have the authority to extend", "paragraph_id": "para_179" }, { "text": "the liquidation period beyond June 14, 2015, because Mid-", "paragraph_id": "para_180" }, { "text": "west had fully responded to all of Customs’ initial and sup-", "paragraph_id": "para_181" }, { "text": "plemental requests for information on or before June 14,", "paragraph_id": "para_182" }, { "text": "2014. Midwest-CBK, 578 F. Supp. 3d at 1309. The United", "paragraph_id": "para_183" }, { "text": "States responded that during the period when the exten-", "paragraph_id": "para_184" }, { "text": "sions were made, Customs was busy collecting and review-", "paragraph_id": "para_185" }, { "text": "ing information from Midwest to determine the proper", "paragraph_id": "para_186" }, { "text": "basis of appraisement of the merchandise. Id.", "paragraph_id": "para_187" }, { "text": "The CIT agreed with the Government’s position, hold-", "paragraph_id": "para_188" }, { "text": "ing that Customs had a reasonable basis for extending liq-", "paragraph_id": "para_189" }, { "text": "uidation in order to complete the audit process, ensure its", "paragraph_id": "para_190" }, { "text": "accuracy, and comply with established standards. Id. at", "paragraph_id": "para_191" }, { "text": "1310. Thus, the CIT found that Customs did not abuse its", "paragraph_id": "para_192" }, { "text": "discretion in so acting. Id.", "paragraph_id": "para_193" }, { "text": "Midwest now raises three arguments on appeal.", "paragraph_id": "para_194" }, { "text": "First, Midwest argues that Customs’ decision to extend", "paragraph_id": "para_195" }, { "text": "liquidation in this case should not be reviewed under an", "paragraph_id": "para_196" }, { "text": "“abuse of discretion” standard. Appellant Opening Br. 23–", "paragraph_id": "para_197" }, { "text": "24. Midwest claims that since Customs possessed all the", "paragraph_id": "para_198" }, { "text": "information it required from Midwest by June 14, 2014, the", "paragraph_id": "para_199" }, { "text": "statutory condition for further extensions under 19 U.S.C.", "paragraph_id": "para_200" }, { "text": "§ 1504(b)(1) had disappeared. Id. at 24–25. Midwest likens", "paragraph_id": "para_201" }, { "text": "6 There are other statutory bases under which Cus-", "paragraph_id": "para_202" }, { "text": "toms may properly extend the liquidation period. As Cus-", "paragraph_id": "para_203" }, { "text": "toms does not assert them, we do not address them.", "paragraph_id": "para_204" }, { "text": "Case: 24-1142 Document: 47 Page: 6 Filed: 01/08/2026", "paragraph_id": "para_205" }, { "text": "MIDWEST-CBK, LLC v. US 7", "paragraph_id": "para_206" }, { "text": "the facts of this case to those in Ford Motor Co., where this", "paragraph_id": "para_207" }, { "text": "court overturned the CIT’s grant of summary judgment in", "paragraph_id": "para_208" }, { "text": "favor of the government and held that “the [CIT] cannot", "paragraph_id": "para_209" }, { "text": "uphold a decision to extend a liquidation if an importer", "paragraph_id": "para_210" }, { "text": "‘eliminate[s] all reasonable bases for making that deci-", "paragraph_id": "para_211" }, { "text": "sion.’” Ford Motor Co., 157 F.3d at 855 (quoting St. Paul", "paragraph_id": "para_212" }, { "text": "Fire & Marine, 6 F.3d at 768). The court found that the", "paragraph_id": "para_213" }, { "text": "reasons proffered by Customs to the CIT were “quite circu-", "paragraph_id": "para_214" }, { "text": "lar: Customs delayed because it needed more information", "paragraph_id": "para_215" }, { "text": "yet argues it must have needed more information because", "paragraph_id": "para_216" }, { "text": "it delayed . . . . [Customs] had known [it] needed to perform", "paragraph_id": "para_217" }, { "text": "this task three years earlier. Customs offers no explanation", "paragraph_id": "para_218" }, { "text": "for taking three years to perform this task.” Ford Motor", "paragraph_id": "para_219" }, { "text": "Co., 157 F.3d at 856. Given the lack of explanation, the", "paragraph_id": "para_220" }, { "text": "court held that the evidence “could show that Customs", "paragraph_id": "para_221" }, { "text": "abused its discretion in seeking time extensions,” making", "paragraph_id": "para_222" }, { "text": "the grant of summary judgment improper. Id. at 857.", "paragraph_id": "para_223" }, { "text": "The facts in Ford Motor Co. are readily distinguishable", "paragraph_id": "para_224" }, { "text": "from those in the case before us, however. Based on the un-", "paragraph_id": "para_225" }, { "text": "disputed facts in this case, Customs offers good reasons for", "paragraph_id": "para_226" }, { "text": "its extension of liquidation: it conducted several rounds of", "paragraph_id": "para_227" }, { "text": "audits, confirmed the accuracy of those audits, and re-", "paragraph_id": "para_228" }, { "text": "viewed them to ensure compliance with Generally Ac-", "paragraph_id": "para_229" }, { "text": "cepted Government Auditing Standards. See Midwest-", "paragraph_id": "para_230" }, { "text": "CBK, 578 F. Supp. 3d at 1309. Customs thus submitted suf-", "paragraph_id": "para_231" }, { "text": "ficient evidence into the record to demonstrate that the ex-", "paragraph_id": "para_232" }, { "text": "tension of the liquidation period was justified in this case.", "paragraph_id": "para_233" }, { "text": "As a result, we hold that Midwest has not “eliminate[d] all", "paragraph_id": "para_234" }, { "text": "reasonable bases for [Customs in] making [the] decision” to", "paragraph_id": "para_235" }, { "text": "extend liquidation. Ford Motor Co., 157 F.3d at 855 (quot-", "paragraph_id": "para_236" }, { "text": "ing St. Paul Fire & Marine, 6 F.3d at 768). We therefore", "paragraph_id": "para_237" }, { "text": "hold, in light of the factual record before us, that Customs’", "paragraph_id": "para_238" }, { "text": "extension of liquidation did not constitute an abuse of dis-", "paragraph_id": "para_239" }, { "text": "cretion.", "paragraph_id": "para_240" }, { "text": "Second, Midwest argues that the internal review that", "paragraph_id": "para_241" }, { "text": "Customs engaged in cannot form the basis for an extension", "paragraph_id": "para_242" }, { "text": "of liquidation. Appellant Opening Br. 25. It is undisputed", "paragraph_id": "para_243" }, { "text": "Case: 24-1142 Document: 47 Page: 7 Filed: 01/08/2026", "paragraph_id": "para_244" }, { "text": "MIDWEST-CBK, LLC v. US8", "paragraph_id": "para_245" }, { "text": "that Customs had received all the information it requested", "paragraph_id": "para_246" }, { "text": "from Midwest for proper appraisement of the subject mer-", "paragraph_id": "para_247" }, { "text": "chandise on or before June 14, 2014, the date by which Mid-", "paragraph_id": "para_248" }, { "text": "west had fully responded to all of Customs’ initial and", "paragraph_id": "para_249" }, { "text": "supplemental requests for information. Midwest claims", "paragraph_id": "para_250" }, { "text": "that prolonged internal deliberations do not provide a basis", "paragraph_id": "para_251" }, { "text": "for extending the liquidation period. Id. This argument is", "paragraph_id": "para_252" }, { "text": "unconvincing however, because the Court in Ford Motor", "paragraph_id": "para_253" }, { "text": "Co. held, “Customs accurately notes that the statute does", "paragraph_id": "para_254" }, { "text": "not require that information justifying a delay must come", "paragraph_id": "para_255" }, { "text": "from the importer. A need for internal information from", "paragraph_id": "para_256" }, { "text": "other Customs personnel might also satisfy section", "paragraph_id": "para_257" }, { "text": "1504(b)(1).” Ford Motor Co., 157 F.3d at 856. The record", "paragraph_id": "para_258" }, { "text": "shows that Customs engaged in several rounds of internal", "paragraph_id": "para_259" }, { "text": "deliberations to verify the accuracy of the information it re-", "paragraph_id": "para_260" }, { "text": "ceived and ensure the accuracy of the calculations it de-", "paragraph_id": "para_261" }, { "text": "rived therefrom.7 Midwest-CBK, 578 F. Supp. 3d at 1309.", "paragraph_id": "para_262" }, { "text": "These rounds of internal review were reasonably necessary", "paragraph_id": "para_263" }, { "text": "for the proper appraisement or classification of the mer-", "paragraph_id": "para_264" }, { "text": "chandise involved and thus form a proper basis for the ex-", "paragraph_id": "para_265" }, { "text": "tension of liquidation.", "paragraph_id": "para_266" }, { "text": "Third, Midwest argues in its reply brief that the Gov-", "paragraph_id": "para_267" }, { "text": "ernment’s “proffered explanation” for Customs’ decision to", "paragraph_id": "para_268" }, { "text": "extend liquidation “is untrue.” Appellant Reply Br. 10. The", "paragraph_id": "para_269" }, { "text": "“proffered explanation” is well-supported by citations to", "paragraph_id": "para_270" }, { "text": "the record, Appellee Resp. Br. 47–48, and the claim of un-", "paragraph_id": "para_271" }, { "text": "truth is not. Midwest further argues that the “proffered ex-", "paragraph_id": "para_272" }, { "text": "planation” is “immaterial and cannot satisfy the statutory", "paragraph_id": "para_273" }, { "text": "requirements for lawfully extending liquidation.” Appel-", "paragraph_id": "para_274" }, { "text": "lant Reply Br. 10. The CIT held, and we agree, that “the", "paragraph_id": "para_275" }, { "text": "7 This process required Customs to audit more", "paragraph_id": "para_276" }, { "text": "than 560 entries. Midwest-CBK, 578 F. Supp. 3d at 1302.", "paragraph_id": "para_277" }, { "text": "“Each entry comprise[s] ten to hundreds of line items, and", "paragraph_id": "para_278" }, { "text": "each line item may include any number of different items", "paragraph_id": "para_279" }, { "text": "that were subject to a particular classification.” J.A. 732.", "paragraph_id": "para_280" }, { "text": "Case: 24-1142 Document: 47 Page: 8 Filed: 01/08/2026", "paragraph_id": "para_281" }, { "text": "MIDWEST-CBK, LLC v. US 9", "paragraph_id": "para_282" }, { "text": "record reflects that Customs was actively engaged through-", "paragraph_id": "para_283" }, { "text": "out the audit process in collecting and reviewing the infor-", "paragraph_id": "para_284" }, { "text": "mation needed to determine the proper method of", "paragraph_id": "para_285" }, { "text": "appraisement.” Midwest-CBK, 578 F. Supp. 3d at 1310.", "paragraph_id": "para_286" }, { "text": "That Customs did not use some of the information in the", "paragraph_id": "para_287" }, { "text": "final appraisement does not undercut the conclusion that", "paragraph_id": "para_288" }, { "text": "Customs reasonably considered the information.", "paragraph_id": "para_289" }, { "text": "We therefore affirm the CIT’s ruling that Customs did", "paragraph_id": "para_290" }, { "text": "not abuse its discretion in extending liquidation and that", "paragraph_id": "para_291" }, { "text": "the entries in question were not liquidated by operation of", "paragraph_id": "para_292" }, { "text": "law.", "paragraph_id": "para_293" }, { "text": "B. Appraisement", "paragraph_id": "para_294" }, { "text": "There is a hierarchy of various appraisement methods", "paragraph_id": "para_295" }, { "text": "for imported merchandise.8 19 U.S.C. § 1401a(a)(1). The", "paragraph_id": "para_296" }, { "text": "8 (a) Generally", "paragraph_id": "para_297" }, { "text": "(1) Except as otherwise specifically provided for in", "paragraph_id": "para_298" }, { "text": "this chapter, imported merchandise shall be ap-", "paragraph_id": "para_299" }, { "text": "praised, for the purposes of this chapter, on the ba-", "paragraph_id": "para_300" }, { "text": "sis of the following:", "paragraph_id": "para_301" }, { "text": "(A) The transaction value provided for under", "paragraph_id": "para_302" }, { "text": "subsection (b).", "paragraph_id": "para_303" }, { "text": "(B) The transaction value of identical merchan-", "paragraph_id": "para_304" }, { "text": "dise provided for under subsection (c), if the", "paragraph_id": "para_305" }, { "text": "value referred to in subparagraph (A) cannot be", "paragraph_id": "para_306" }, { "text": "determined, or can be determined but cannot", "paragraph_id": "para_307" }, { "text": "be used by reason of subsection (b)(2).", "paragraph_id": "para_308" }, { "text": "(C) The transaction value of similar merchan-", "paragraph_id": "para_309" }, { "text": "dise provided for under subsection (c), if the", "paragraph_id": "para_310" }, { "text": "value referred to in subparagraph (B) cannot be", "paragraph_id": "para_311" }, { "text": "determined.", "paragraph_id": "para_312" }, { "text": "(D) The deductive value provided for under", "paragraph_id": "para_313" }, { "text": "subsection (d), if the value referred to in sub-", "paragraph_id": "para_314" }, { "text": "paragraph (C) cannot be determined and if the", "paragraph_id": "para_315" }, { "text": "Case: 24-1142 Document: 47 Page: 9 Filed: 01/08/2026", "paragraph_id": "para_316" }, { "text": "MIDWEST-CBK, LLC v. US10", "paragraph_id": "para_317" }, { "text": "default method of appraisement is transaction value; other", "paragraph_id": "para_318" }, { "text": "methods are appropriate if the transaction value of im-", "paragraph_id": "para_319" }, { "text": "ported merchandise cannot be determined. Transaction", "paragraph_id": "para_320" }, { "text": "value of merchandise is defined as “the price actually paid", "paragraph_id": "para_321" }, { "text": "or payable for the merchandise when sold for exportation", "paragraph_id": "para_322" }, { "text": "to the United States” in addition to various other miscella-", "paragraph_id": "para_323" }, { "text": "neous costs (e.g., packing costs, royalty or licensing fees,", "paragraph_id": "para_324" }, { "text": "commission costs). 19 U.S.C. § 1401a(b)(1).", "paragraph_id": "para_325" }, { "text": "In order for merchandise to be appraised on the basis", "paragraph_id": "para_326" }, { "text": "of transaction value, the goods must be (1) sold (2) for ex-", "paragraph_id": "para_327" }, { "text": "portation to the United States. VWP of Am., Inc. v. United", "paragraph_id": "para_328" }, { "text": "States, 175 F.3d 1327, 1338–39 (Fed. Cir. 1999). Midwest", "paragraph_id": "para_329" }, { "text": "does not contest that the merchandise was indeed “sold.”", "paragraph_id": "para_330" }, { "text": "See Appellant’s Opening Br. 27. Thus, the only question is", "paragraph_id": "para_331" }, { "text": "whether these sales were “for exportation to the United", "paragraph_id": "para_332" }, { "text": "States.” This determination is a “fact-specific” one that", "paragraph_id": "para_333" }, { "text": "“can only be made on a case-by-case basis” by a court con-", "paragraph_id": "para_334" }, { "text": "sidering the “reality of the transactions” between the seller", "paragraph_id": "para_335" }, { "text": "and buyer. E.C. McAfee Co. v. United States, 842 F.2d 314,", "paragraph_id": "para_336" }, { "text": "319 (Fed. Cir. 1988).", "paragraph_id": "para_337" }, { "text": "Before the CIT, Midwest contended that the sales in", "paragraph_id": "para_338" }, { "text": "question were not “for exportation to the United States.”", "paragraph_id": "para_339" }, { "text": "Midwest-CBK, 578 F. Supp. 3d at 1303. Midwest claimed", "paragraph_id": "para_340" }, { "text": "that, because the merchandise in question was sold “FOB", "paragraph_id": "para_341" }, { "text": "Buffalo, NY” pursuant to the New York Uniform Commer-", "paragraph_id": "para_342" }, { "text": "cial Code (UCC), sales of this merchandise should instead", "paragraph_id": "para_343" }, { "text": "importer does not request alternative valuation", "paragraph_id": "para_344" }, { "text": "under paragraph (2).", "paragraph_id": "para_345" }, { "text": "(E) The computed value provided for under", "paragraph_id": "para_346" }, { "text": "subsection (e), if the value referred to in sub-", "paragraph_id": "para_347" }, { "text": "paragraph (D) cannot be determined.", "paragraph_id": "para_348" }, { "text": "(F) The value provided for under subsection (f),", "paragraph_id": "para_349" }, { "text": "if the value referred to in subparagraph (E)", "paragraph_id": "para_350" }, { "text": "cannot be determined.", "paragraph_id": "para_351" }, { "text": "19 U.S.C. § 1401a(a)(1) (bolding removed).", "paragraph_id": "para_352" }, { "text": "Case: 24-1142 Document: 47 Page: 10 Filed: 01/08/2026", "paragraph_id": "para_353" }, { "text": "MIDWEST-CBK, LLC v. US 11", "paragraph_id": "para_354" }, { "text": "be considered as domestic sales. Id. at 1305. Midwest ar-", "paragraph_id": "para_355" }, { "text": "gued that a domestic sale could not be used as the basis of", "paragraph_id": "para_356" }, { "text": "a transaction value appraisement under 19 U.S.C. §", "paragraph_id": "para_357" }, { "text": "1401a(b)(1). Id. In support of this argument, Midwest re-", "paragraph_id": "para_358" }, { "text": "lied heavily upon Orbisphere Corp. v. United States, 726 F.", "paragraph_id": "para_359" }, { "text": "Supp. 1344 (Ct. Int’l Trade 1989). The United States re-", "paragraph_id": "para_360" }, { "text": "sponded by pointing to cases showing that an international", "paragraph_id": "para_361" }, { "text": "sale is not required to apply a transaction value appraise-", "paragraph_id": "para_362" }, { "text": "ment method under the statute. It also argued that the", "paragraph_id": "para_363" }, { "text": "Court should not apply Orbisphere because Orbisphere re-", "paragraph_id": "para_364" }, { "text": "lied on an older case, Massce, which was decided under a", "paragraph_id": "para_365" }, { "text": "predecessor version of the statute at issue. United States v.", "paragraph_id": "para_366" }, { "text": "Massce & Co., 21 C.C.P.A. 54 (1933).", "paragraph_id": "para_367" }, { "text": "The CIT agreed with the United States. It found that", "paragraph_id": "para_368" }, { "text": "Orbisphere’s reliance on Massce rendered Orbisphere un-", "paragraph_id": "para_369" }, { "text": "persuasive and that the existence of the “FOB Buffalo, NY”", "paragraph_id": "para_370" }, { "text": "term was not dispositive evidence that the sales in question", "paragraph_id": "para_371" }, { "text": "were domestic. Midwest-CBK, 578 F. Supp. 3d at 1305–07.", "paragraph_id": "para_372" }, { "text": "Applying the law to the facts in this case, the CIT found", "paragraph_id": "para_373" }, { "text": "that customers in the United States would place orders for", "paragraph_id": "para_374" }, { "text": "merchandise located in Canada; the merchandise would", "paragraph_id": "para_375" }, { "text": "then be shipped from Canada to the United States. Id. at", "paragraph_id": "para_376" }, { "text": "1306. The CIT found these transactions constituted sales", "paragraph_id": "para_377" }, { "text": "for exportation to the United States which could serve as", "paragraph_id": "para_378" }, { "text": "the basis for valuing these sales using transaction value.", "paragraph_id": "para_379" }, { "text": "Id. at 1306–07.", "paragraph_id": "para_380" }, { "text": "The crux of Midwest’s challenge to the CIT’s finding is", "paragraph_id": "para_381" }, { "text": "Midwest’s assertion that sales of the merchandise in ques-", "paragraph_id": "para_382" }, { "text": "tion occurred entirely in the United States. Appellant", "paragraph_id": "para_383" }, { "text": "Opening Br. 29. Midwest claims these sales should not be", "paragraph_id": "para_384" }, { "text": "characterized as sales “for exportation to the United", "paragraph_id": "para_385" }, { "text": "States” and thus cannot form the basis of a transaction", "paragraph_id": "para_386" }, { "text": "value appraisement. Id.", "paragraph_id": "para_387" }, { "text": "Midwest’s argument is unpersuasive.", "paragraph_id": "para_388" }, { "text": "First, this assertion is not supported by the text of 19", "paragraph_id": "para_389" }, { "text": "U.S.C. § 1401a(b)(1), which, as the CIT correctly noted,", "paragraph_id": "para_390" }, { "text": "Case: 24-1142 Document: 47 Page: 11 Filed: 01/08/2026", "paragraph_id": "para_391" }, { "text": "MIDWEST-CBK, LLC v. US12", "paragraph_id": "para_392" }, { "text": "“does not expressly require that a sale be international or", "paragraph_id": "para_393" }, { "text": "occur abroad” for the use of transaction value to apply.", "paragraph_id": "para_394" }, { "text": "Midwest-CBK, 578 F. Supp. 3d at 1306.", "paragraph_id": "para_395" }, { "text": "Second, Midwest’s challenge is not supported by prior", "paragraph_id": "para_396" }, { "text": "case law which suggests that domestic sales may in fact", "paragraph_id": "para_397" }, { "text": "serve as the basis of a transaction value appraisement. In", "paragraph_id": "para_398" }, { "text": "VWP, we found that sales between a Canadian manufac-", "paragraph_id": "para_399" }, { "text": "turer and its U.S. subsidiary were sales for exportation to", "paragraph_id": "para_400" }, { "text": "the United States that served as the basis for transaction", "paragraph_id": "para_401" }, { "text": "value. VWP, 175 F.3d at 1339. We noted, however, “if sales", "paragraph_id": "para_402" }, { "text": "by [the Canadian manufacturer] to [the U.S. subsidiary]", "paragraph_id": "para_403" }, { "text": "cannot serve as the basis for transaction value, then trans-", "paragraph_id": "para_404" }, { "text": "action value must be based upon sales by [the U.S. subsid-", "paragraph_id": "para_405" }, { "text": "iary] to its U.S. customers.” Id. at 1334. In La Perla", "paragraph_id": "para_406" }, { "text": "Fashions, the CIT considered Customs’ use of “the sale be-", "paragraph_id": "para_407" }, { "text": "tween [a U.S.-based distributor] and its U.S. customers” in", "paragraph_id": "para_408" }, { "text": "determining transaction value appraisement; the CIT con-", "paragraph_id": "para_409" }, { "text": "cluded that “transaction value can . . . be based on [the", "paragraph_id": "para_410" }, { "text": "U.S.-based distributor’s] price charged to its U.S. custom-", "paragraph_id": "para_411" }, { "text": "ers.” La Perla Fashions, Inc. v. United States, 22 C.I.T. 393,", "paragraph_id": "para_412" }, { "text": "399 (Ct. Int’l Trade 1998), aff’d, 185 F.3d 885 (Fed. Cir.", "paragraph_id": "para_413" }, { "text": "1999). Midwest has not explained why either of these cases", "paragraph_id": "para_414" }, { "text": "would be inapplicable to the facts currently before us.", "paragraph_id": "para_415" }, { "text": "Midwest’s other argument as to why 19 U.S.C. §", "paragraph_id": "para_416" }, { "text": "1401a(b)(1) should not apply to sales unless they occur", "paragraph_id": "para_417" }, { "text": "abroad rests on its reading of Orbisphere. Appellant Open-", "paragraph_id": "para_418" }, { "text": "ing Br. 39. In that case, U.S. customers placed orders for", "paragraph_id": "para_419" }, { "text": "merchandise at one of the plaintiff’s domestic locations. Or-", "paragraph_id": "para_420" }, { "text": "bisphere, 726 F. Supp. at 1344. The plaintiff forwarded", "paragraph_id": "para_421" }, { "text": "these orders to its office in Switzerland, where the mer-", "paragraph_id": "para_422" }, { "text": "chandise was manufactured, and then shipped the devices", "paragraph_id": "para_423" }, { "text": "to its customers in the United States “F.O.B. Haworth,", "paragraph_id": "para_424" }, { "text": "N.J.” Id. at 1344–45. The CIT, relying heavily upon the", "paragraph_id": "para_425" }, { "text": "Massce court’s interpretation of § 402(d) of the Tariff Act of", "paragraph_id": "para_426" }, { "text": "1930, found that the choice between using transaction", "paragraph_id": "para_427" }, { "text": "value and deductive value “depend[ed] substantially upon", "paragraph_id": "para_428" }, { "text": "where the sales of the product in question are deemed to", "paragraph_id": "para_429" }, { "text": "Case: 24-1142 Document: 47 Page: 12 Filed: 01/08/2026", "paragraph_id": "para_430" }, { "text": "MIDWEST-CBK, LLC v. US 13", "paragraph_id": "para_431" }, { "text": "have occurred.” Id. at 1350. Though the Orbisphere court", "paragraph_id": "para_432" }, { "text": "conceded that “definitions of ‘export value’ [under the Tar-", "paragraph_id": "para_433" }, { "text": "iff Act of 1930] and ‘transaction value’ [under 19 U.S.C. §", "paragraph_id": "para_434" }, { "text": "1401a(b)(1)] are not identical, the crucial element of each .", "paragraph_id": "para_435" }, { "text": ". . [is] that there have been a sale abroad . . . before either", "paragraph_id": "para_436" }, { "text": "measure is applicable.” Id. at 1350–51. The CIT concluded", "paragraph_id": "para_437" }, { "text": "that the sales at issue in Orbisphere “were consummated", "paragraph_id": "para_438" }, { "text": "within the United States,” thus “establishing ‘deductive", "paragraph_id": "para_439" }, { "text": "value’ as the correct basis for valuation of the entries.” Id.", "paragraph_id": "para_440" }, { "text": "at 1358.", "paragraph_id": "para_441" }, { "text": "The CIT in the case before us correctly found Orbi-", "paragraph_id": "para_442" }, { "text": "sphere unpersuasive due to its heavy reliance upon Massce.", "paragraph_id": "para_443" }, { "text": "The Massce decision interpreted § 402(d) of the Tariff Act", "paragraph_id": "para_444" }, { "text": "of 1930. That section of the act stated that the “export value", "paragraph_id": "para_445" }, { "text": "of imported merchandise shall be the market value or the", "paragraph_id": "para_446" }, { "text": "price . . . at which such or similar merchandise is freely", "paragraph_id": "para_447" }, { "text": "offered for sale to all purchasers in the principal markets", "paragraph_id": "para_448" }, { "text": "of the country from which [it is] exported.” Massce, 21", "paragraph_id": "para_449" }, { "text": "C.C.P.A. at 55 (emphasis added). Thus, Massce interpreted", "paragraph_id": "para_450" }, { "text": "statutory language that defined “export value.” The statu-", "paragraph_id": "para_451" }, { "text": "tory language relevant in Massce expressly based the rele-", "paragraph_id": "para_452" }, { "text": "vant determination on sales outside the United States.", "paragraph_id": "para_453" }, { "text": "The Trade Agreements Act was passed in 1979. As the", "paragraph_id": "para_454" }, { "text": "CIT correctly noted, the Trade Agreements Act “removed", "paragraph_id": "para_455" }, { "text": "all references to foreign markets in which merchandise", "paragraph_id": "para_456" }, { "text": "might be traded.” Midwest-CBK, 578 F. Supp. 3d at 1306.", "paragraph_id": "para_457" }, { "text": "In addition, as the Senate Committee on Finance specifi-", "paragraph_id": "para_458" }, { "text": "cally noted in its report on the Trade Agreements Act,", "paragraph_id": "para_459" }, { "text": "“[t]he use of transaction value as the primary basis for cus-", "paragraph_id": "para_460" }, { "text": "toms valuation will allow use of the price which the buyer", "paragraph_id": "para_461" }, { "text": "and seller agreed to in their transaction as the basis for", "paragraph_id": "para_462" }, { "text": "valuation, rather than having to resort to the more difficult", "paragraph_id": "para_463" }, { "text": "concept[] of . . . ‘principal markets of the country of expor-", "paragraph_id": "para_464" }, { "text": "tation.’” S. Rep. No. 96-249, at 119 (1979). Our subsequent", "paragraph_id": "para_465" }, { "text": "case law has also indicated that § 402(d) of the Tariff Act", "paragraph_id": "para_466" }, { "text": "of 1930 “was repealed in 1979 by the Trade Agreements Act", "paragraph_id": "para_467" }, { "text": "of 1979.” VWP, 175 F.3d at 334. Thus, the CIT’s holding in", "paragraph_id": "para_468" }, { "text": "Case: 24-1142 Document: 47 Page: 13 Filed: 01/08/2026", "paragraph_id": "para_469" }, { "text": "MIDWEST-CBK, LLC v. US14", "paragraph_id": "para_470" }, { "text": "Orbisphere relied upon the Massce court’s interpretation of", "paragraph_id": "para_471" }, { "text": "a different term (“export value”) with a differently worded", "paragraph_id": "para_472" }, { "text": "definition in a superseded statute. We therefore find Orbi-", "paragraph_id": "para_473" }, { "text": "sphere unpersuasive. The CIT correctly decided that 19", "paragraph_id": "para_474" }, { "text": "U.S.C. §1401a(b)(1) does not require an international sale", "paragraph_id": "para_475" }, { "text": "or a sale abroad to have occurred for a sale of merchandise", "paragraph_id": "para_476" }, { "text": "to be considered as a sale “for exportation to the United", "paragraph_id": "para_477" }, { "text": "States.” Domestic sales, in certain circumstances, may", "paragraph_id": "para_478" }, { "text": "qualify as the basis for using transaction value as an ap-", "paragraph_id": "para_479" }, { "text": "praisement method.", "paragraph_id": "para_480" }, { "text": "Finally, Midwest argues that the purchase orders for", "paragraph_id": "para_481" }, { "text": "the subject merchandise included the language, “FOB Buf-", "paragraph_id": "para_482" }, { "text": "falo, NY,” which indicates that the sales in question consti-", "paragraph_id": "para_483" }, { "text": "tuted domestic sales. Appellant Opening Br. 33–35. Since", "paragraph_id": "para_484" }, { "text": "we find that a domestic sale can serve as the basis for ap-", "paragraph_id": "para_485" }, { "text": "praisement based on transaction value under 19 U.S.C. §", "paragraph_id": "para_486" }, { "text": "1401a(b)(1), we need not reach the merits of this conten-", "paragraph_id": "para_487" }, { "text": "tion.", "paragraph_id": "para_488" }, { "text": "Accordingly, we agree with the well-reasoned opinion", "paragraph_id": "para_489" }, { "text": "of the CIT: “After conducting a fact-specific inquiry of", "paragraph_id": "para_490" }, { "text": "whether the sales were for exportation to the United States", "paragraph_id": "para_491" }, { "text": "under 19 U.S.C. § 1401a(b)(1), . . . the undisputed evidence", "paragraph_id": "para_492" }, { "text": "demonstrates that [Midwest’s] sales were for exportation", "paragraph_id": "para_493" }, { "text": "to the United States at the time of the sale.” Midwest-CBK,", "paragraph_id": "para_494" }, { "text": "578 F. Supp. 3d at 1304. Transaction value is the proper", "paragraph_id": "para_495" }, { "text": "basis of appraisement.", "paragraph_id": "para_496" }, { "text": "IV. CONCLUSION", "paragraph_id": "para_497" }, { "text": "We have considered Midwest’s arguments and find", "paragraph_id": "para_498" }, { "text": "them unpersuasive. 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