Recent CIT Decisions Reclassifying Gov't Counterclaims as Defense May Not Matter, Customs Lawyer Says
A series of opinions from the Court of International Trade concerning whether the U.S. can file a counterclaim in classification cases do "not seem to change the fundamentals of classification litigation," customs lawyer Lawrence Friedman of Barnes Richardson said in a blog post. If the opinions are sustained on appeal, potential government claims seeking a different classification than the one initially used at liquidation by CBP may just be moved "from the counterclaim bucket to the defense bucket," the post said.
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Most recently, in a case brought by importer Second Nature Designs on botanicals, the trade court reclassified a government counterclaim as a defense (see 2308170020). The court said Second Nature may be liable for more duties if the defense prevails. Friedman noted this may not affect customs cases much, seeing as the U.S. Court of Appeals for the Federal Circuit ruled the trial court has an obligation to find the proper classification of a good in the 1984 Jarvis Clark Co. v. U.S. decision.
"Traditionally, a defense is asserted to undercut the plaintiff's claim, rather than to seek a remedy," making a defense a "somewhat awkward mechanism" for the government's preferred classification claim, Friedman wrote. This "may not be meaningful," though, since the court's mandate to get the right outcome may allow for the U.S. to just make its claim in its brief "without any prior pleading."
Friedman said that what may be different is "discovery," since the basis for discovery involving an alternate classification would likely need to be that it is relevant to the defense. "Otherwise, I (for one) might move for a protective order," he said.