Important Deadlines Loom in Massive Section 301 Litigation
The coming weeks will mark some important deadlines in the Section 301 litigation inundating the U.S. Court of International Trade after months of inertia. New complaints keep trickling in at the rate of about one a day to join the roughly 3,500 on file beginning since mid-September, virtually all seeking to get the lists 3 and 4A Chinese tariffs vacated and the duties refunded. Many thousands more importers are represented in the filings.
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The court’s three-judge panel of Mark Barnett, Claire Kelly and Jennifer Choe-Groves set a March 12 deadline for the Department of Justice to file a “master answer” to the thousands of cases “that incorporates their defenses in law or fact to claims made against them,” according to a Feb. 10 procedural order (see 2102100049). It will be the government’s first opportunity to refute allegations that the Office of the U.S. Trade Representative overstepped its 1974 Trade Act authority by waging lists 3 and 4A as retaliatory tariffs against the Chinese and that it violated the 1946 Administrative Procedure Act (APA) by running tariff rulemakings that lacked transparency.
DOJ’s answer “will not attempt to provide a cross-reference to particular paragraphs or counts of the various complaints,” but should generically “admit or deny” the allegations, plus “make such additional allegations as are appropriate to their defenses,” the Feb. 10 order said. Lawyers with cases in the docket said they highly doubt DOJ will mount any affirmative defenses in its answer.
Attorneys told us they will be watching to see if DOJ will support, or at least not oppose, plaintiffs’ request for “interim relief” if importers ultimately prevail over the government. Akin Gump, lawyers for the first-filed HMTX/Jasco complaint, raised the issue of interim relief to land plaintiffs the assurance that if they win the litigation, they will be entitled to full refunds of all tariffs paid, regardless of the liquidation status of their import entries.
The relevant statute declares that the liquidation of an entry is final and binding on all parties, unless it is timely protested within 180 days of the liquidation. Akin Gump argued that many plaintiffs are or will be seeking refunds of List 3 duties on entries that have been liquidated and are long past the protest deadline. It wants a DOJ stipulation that plaintiffs will get their refunds if successful, regardless of whether the entries have been liquidated or protested.
Akin Gump cited recent case law in which DOJ provided that stipulation as the basis for it doing so again in the Section 301 litigation. The three-judge panel’s Feb. 16 order gave no deadline for DOJ coming back with a decision, but urged the government and the plaintiffs to convene “as soon as practicable” on the issue.
March 19 is when plaintiffs’ lawyers need to tell the court which complaints they designate to serve as the sample cases and who among their group will sit on a steering committee. Comments are due a week later from lawyers who want to argue they and their cases were shut out of either process. The court made clear it would have the final say on the test cases and the steering committee.
Virtually all plaintiffs’ attorneys used Akin Gump’s HMTX/Jasco case as a template for filing their own actions to argue violations of the Trade Act and the APA. The exceptions are the roughly 20 complaints that added the constitutional argument that only Congress, not the USTR, can engage in federal revenue collection. Paul Vandevert, one of several lawyers making the constitutional argument, told us he plans to ask for his complaint to be designated one of the sample cases and for him to personally sit on the steering committee. He will file a protest by the March 26 deadline if refused, he said.