Hatzlachh Supply Co. v. United States

1980-01-21

Headline: Importers can pursue contract claims after customs returns lost goods: Court vacates lower-court ruling and allows consideration of implied bailment contracts against the United States when seized shipments go missing.

Holding: The Court vacated the Court of Claims’ judgment and held that the Tort Claims Act’s customs-detention exception does not bar contract claims, remanding for the lower court to determine whether an implied-in-fact bailment contract exists.

Real World Impact:

Allows importers to seek contract damages from the United States for goods lost after customs seizure.
Sends the case back to the Court of Claims to decide if a binding implied contract existed.
Clarifies that the Tort Claims Act exception does not automatically block contractual remedies.

Topics: customs seizures, government liability, lost import goods, contract claims

Summary

Background

A company that imported camera supplies had its shipment seized by the United States Customs Service for customs violations. Customs agreed to return the forfeited goods after the importer paid a $40,000 penalty, but when the shipment came back more than $165,000 worth of merchandise was missing. The importer sued in the Court of Claims under the Tucker Act, the statute that lets that court hear contract claims against the United States, alleging an implied contract to preserve and redeliver the goods.

Reasoning

The central question was whether the Government could be held liable for breach of an implied-in-fact bailment contract when goods are lost while held by customs. The Court explained that the Tort Claims Act exception for the detention of goods by customs officers (28 U.S.C. § 2680(c)) removes a tort remedy but does not eliminate separate contract remedies or the Court of Claims’ power to hear contract claims under the Tucker Act. The Court rejected the lower court’s view that the FTCA exception barred any contractual claim, vacated that judgment, and sent the case back for the Court of Claims to decide whether an implied contract actually existed.

Real world impact

The ruling means an importer whose seized goods are returned incomplete may be able to press a contract claim against the United States in the Court of Claims rather than being blocked automatically by the Tort Claims Act exception. This decision is procedural, not a final finding on fault or damages, so the Court of Claims must still determine if an implied-in-fact contract existed and what relief, if any, is due.

Dissents or concurrances

Justice Blackmun dissented from the remand. He agreed with the legal points about § 2680(c) but argued the record does not support finding an implied-in-fact contract and would have affirmed the lower court on that basis.