The U.S. Court of International Trade’s (CIT) docket is overflowing these days, all thanks to importers who have initiated more than 3,500 actions to date challenging the Trump Administration’s use of Section 301 of the Trade Act of 1974 (the Act).
Section 301 of the Trade Act of 1974 authorizes the USTR to impose duties to combat certain “unreasonable” or “discriminatory” trade acts by a foreign government. In the case of the Section 301 tariffs imposed against Chinese origin imports, the USTR initiated the investigation and initially imposed 25% tariffs on certain imports because of the failure of the Government of China to protect intellectual property of U.S. companies when exporting Chinese products to the U.S. market.
Lawsuits challenging the Trump Administration’s use of Section 301 are being filed under the CIT’s residual jurisdiction provision. Actions filed thereunder must be commenced “within two years after the cause of action first accrues.” An issue on everyone’s mind is how will the CIT determine the date of “first” accrual? Some may argue that the date of first accrual is importer-specific and depends on when the importer first entered and had additional Section 301 tariffs assessed on its imported List 3 and/or 4A Chinese-origin goods. Others may point to the U.S. Court of Appeals for the Federal Circuit and Ninth Circuit precedent that differentiates between actions challenging an agency’s rulemaking on substantive versus procedural grounds and, as such, starts the clock at a different point. Notwithstanding the competing interpretations of the relevant legal text, it is recommended that importers preserve their right to a refund of duties paid by commencing an action at the CIT.
Where Do the Lawsuits Stand Today?
The CIT has yet to designate a “test” case or cases; finalize the form and format of the associated briefing schedule; or determine whether a single judge or a panel of three will hear the designated case(s). The reason — an ongoing battle over whether the U.S. Department of Justice (representing all of the U.S. Government Defendants) deprived the majority of plaintiffs of notice by filing a motion to adopt case management procedures solely on the docket of HMTX Industries LLC v. United States; prematurely selected who among the plaintiffs’ attorneys will represent that group’s interests before the CIT; and proposed an unreasonable briefing schedule. Further, and importantly, the United States has yet to respond to Plaintiffs’ request for a stipulation that all eligible entries, notwithstanding liquidation status, would be eligible for refunds should they prevail. Barring Defendants formally requesting permission to file a reply or the court affirmatively seeking such a filing, Defendants’ motion will be decision-ready mid-November 2020. The CIT’s Chief Judge is likely to resolve all non–dispositive challenges within 30 days thereafter.
The bottom line is that the wheels of justice turn slowly, but there is still time to preserve your right to a refund. For assistance initiating an action at the CIT or for more information, please contact QuestaWeb representatives today.