Court of International Trade

Most observers expect the U.S. Court of International Trade to pick the first-filed Section 301 complaint from HMTX Industries and Jasco Products as the lead case, and to stay the roughly 3,700 other actions while HMTX is litigated, blogged law firm Neville Peterson Thursday. “More than two months after the HMTX case was filed, however, there has been surprisingly little action,” other than “some minor skirmishing from some plaintiffs,” it said. Some litigants favor picking a complaint other than HMTX as the lead case or joining it with other actions that raise constitutional challenges to the Section 301 tariffs, it said. Still others argue HMTX should proceed on its own, since the CIT “will not consider constitutional issues if cases can be decided on non-constitutional grounds,” it said. DOJ’s deadline to file answers to the HMTX action “technically” has lapsed, it said: Though the CIT likely won’t hold DOJ “in default” for failing to respond, “the urgency for establishment of a case management plan is increasing.” Plaintiffs' attorneys on their own have established an “informal” steering committee to manage the case, it said, saying the committee “confers with some regularity.”

HMTX Industries and Jasco Products, first plaintiffs to file in the massive Section 301 litigation seeking to vacate the Lists 3 and 4A tariff rulemakings and get the duties refunded, strongly oppose DOJ’s prolonged briefing format and schedule proposed Monday in a motion for case management procedures (see 2010200020), said Akin Gump in a response (in Pacer) Thursday at the U.S. Court of International Trade. The government proposed the parties not begin to argue the “merits of this dispute” before 2022 or beyond, it said. “Given the ongoing harms to thousands of plaintiffs, among others, that protracted schedule is unacceptable.” The CIT instead should follow the harbor maintenance tax (HMT) litigation as a model by staying all but the HMTX-Jasco complaint and ordering the parties to file “concurrent cross-motions for summary judgment addressing particular issues, including both jurisdictional and merits questions,” said Akin Gump. Adopting the HMT litigation’s cross-motions procedure “will best achieve the aims of resolving the key legal issues in an efficient manner,” it said. “Unnecessarily delaying resolution of this case for additional months or years -- with all the attendant litigation expenses and accruing duties that would entail -- is unwarranted.” Since more than 3,500 importers filed suit, many of whose entries have already liquidated or will liquidate soon, it’s important “to confirm at the outset that the government will stipulate, as it has in other cases, that a refund remedy is available should plaintiffs prevail,” said Akin Gump. “Such relief remains critical to ensuring that these cases are handled efficiently, effectively, and with the least administrative burden possible.” DOJ hasn’t taken a position on refunds and indicated to plaintiffs it won’t do so until a test case is picked. DOJ didn’t respond to questions. DOJ’s motion for case management procedures is likely to face broader opposition, blogged law firm Thompson Hine Wednesday. "This motion is expected to trigger a raft of challenges by plaintiffs’ counsel in all of the Section 301-related cases on such DOJ positions as the composition of the Plaintiffs’ Steering Committee and the designation of appropriate test cases," it said.

Best Buy Purchasing and Best Buy Health “have been adversely affected” by the Section 301 List 3 tariffs on Chinese imports, argued the subsidiaries Monday in a complaint (in Pacer) at the U.S. Court of International Trade. It was among the roughly 3,300 suits filed at the CIT since Thursday to vacate the Lists 3 and 4A tariffs, including 700 on Monday, the last filing day for importers to qualify for refunds if the actions are successful. There was some debate Tuesday whether the Monday deadline could be open to interpretation.

The U.S. Court of International Trade should “set aside” the List 3 and 4A Section 301 tariffs on Chinese imports as “ultra vires” (“beyond the powers”) of the Office of the U.S. Trade Representative and order the duties refunded to U.S. importers, said tech companies Dana Innovations, Foster Electric, GN Audio, Scosche Industries and Sharp Electronics in five virtually identical complaints (in Pacer). They were among hundreds filed Thursday and Friday accusing USTR of overstepping Trade Act authority and violating the Administrative Procedure Act. The suits attempt to seize on a potential tariff refund opportunity, if floor-tiling plaintiffs prevail in their case (see 2009110041). The complaints are “timely,” said the dozens of them we studied, under CIT’s residual jurisdiction provision, coming before Monday’s two-year anniversary of USTR’s List 3 Federal Register notice. Though the HMTX case “may be a long-shot, you can never say never,” blogged trade expert Ted Murphy with Sidley Austin. “If you want to preserve your right to a refund, in case the flooring companies’ action is successful, you need to put a case on file at the CIT.” Scosche suffered “an actual, imminent injury that is fairly traceable to the implementation, administration, and enforcement of List 3 and/or List 4,” said the car audio supplier. The harms “can be redressed by a declaratory judgment and permanent injunction” ruling USTR’s actions unlawful under the Trade Act and “arbitrary and capricious” under the APA, said Scosche. Akin Gump filed the original suit for HMTX using as a template the complaint it drafted for CTA two years ago. Other lawyers modeled their actions after that. USTR didn't comment.

EchoStar asked to end its appeal to the U.S. Court of International Trade upholding Customs and Border Protection denial of about a quarter million dollars of claims regarding a video technology importer/exporter. The CIT ruled in June (see 1906180069). The company sought voluntary dismissal, in docket 19-2299 for EchoStar v. U.S. in the U.S. Court of Appeals for the Federal Circuit on Tuesday. EchoStar said (in Pacer) the government consented.

EchoStar appealed the U.S. Court of International Trade decision upholding denial by Customs and Border Protection of more than $276,000 in drawback claims from a video technology importer and exporter as untimely. The CIT said in June (see 1906180069) the date of filing was when a complete paper claim was submitted, not the electronic summary. The appellant/petitioner's brief is due Oct. 21, said docket 19-2299 for EchoStar v. U.S. in the U.S. Court of Appeals for the Federal Circuit. As of Friday, beyond a docketing notice (in Pacer), no additional documents were in that docket (in Pacer).

The Court of International Trade upheld Customs and Border Protection denial Monday of EchoStar’s drawback claims as untimely. EchoStar filed the claims for duty refunds worth $276,275.12 in 2014 and early 2015, before new drawback procedures under the Trade Facilitation and Trade Enforcement Act, including fully electronic filing, took effect. EchoStar transmitted its filing via the automated broker interface within the three-year deadline, but its paper claim, including CBP Form 7551 and supporting documentation, was filed too late, causing CBP to reject the claims. “CBP is ultimately not responsible for EchoStar’s failure to timely file complete drawback claims because of either the Guidance or CBP’s ‘late’ notice to EchoStar to provide additional documents,” said CIT, referring to guidance documents that EchoStar believed meant no paper documentation was necessary. The company had no immediate comment Tuesday.

Fiber network equipment is classifiable as optical instruments of chapter 90 of the Harmonized Tariff Schedule of the U.S., the Court of International Trade ruled. ADC Telecommunications argued Customs and Border Protection should have classified its “value added modules” as duty-free data transmission equipment. CIT held Wednesday that optical equipment includes fiber cables that transmit non-visible light, confirming CBP’s liquidation as “other optical appliances and instruments” at a 4.5 percent duty. A lawyer for ADC didn't comment.