Hartford Fire Insurance Co. v. United States, 648 F.3d 1371 (Fed.Cir. 2011), in a 2-1 decision, reversed the Court of International Trade opinion reported at 679 F.Supp.2d 1362 (CIT 2009). The surety on eight customs bonds did not protest the antidumping duties assessed by Customs. After the protest period expired, the surety sued arguing that it was discharged because Customs was investigating the principal at the time the bonds were written but did not inform the surety. The surety also argued for a pro tanto discharge because Customs released to the principal funds it held on other entries rather than set them off against the bonded obligations. The CIT opinion was that the surety reasonably should have known about its alleged grounds of defense in time to file an administrative protest, therefore its failure to protest Customs’ demand barred judicial review of the demand. The Federal Circuit disagreed with the premise and found that “On the particular facts of this case, the conclusion that Hartford knew or should have known of its protest grounds in time to have filed a protest under 19 U.S.C. §1514(c)(3) is not correct; the trial court erred in denying jurisdiction on that ground.” The dissenting judge thought that a reasonable surety would have made inquiries that would have revealed the facts in time to file a protest. The dissent would have affirmed the CIT.
