CIT Rules Against Untimely Refunds for EU Beef Hormone Duties

The Court of International Trade has ruled, due to untimely claims, it cannot grant relief to two companies that sought refunds of EU beef hormone dispute duties assessed on merchandise entered after the duties were retroactively terminated. According to the CIT, the companies' complaints were filed more than two years after the action that triggered accrual of their claims -- which was the date CBP liquidated the entries and not the date of the CAFC's 2010 ruling that the retaliatory duties were terminated by operation of law in 2007.

(In 1989, the EU implemented (and amended in 2003) a ban on certain imports of meat and meat products from animals treated with growth hormones. In 1997, a World Trade Organization Dispute Settlement Body found that the EU beef hormone ban was not based on scientific evidence, and hence was contrary to the EU's WTO obligations. In response, the U.S. imposed retaliatory duties on selected food products from the EU. However, in May 2011 the U.S. terminated the duties retroactive to July 29, 2007 based on a Court of Appeals for the Federal Circuit's finding in Gilda Industries Inc., v. U.S. (October 2010) that the domestic industry failed to request that the duties continue as required by statute. See ITT's Online Archives 11052730 for summary.)

Companies Sought Refund of Retaliatory Duties on Entries Made After July 2007

Pursuant to 28 USC 1581(i)¹, Optimus, Inc. and French Feast, Inc. sought refunds of the EU beef hormone retaliatory duties assessed on entries of merchandise made after July 29, 2007 and liquidated after May 2009. The companies filed their summons and complaints against U.S. Customs and Border Protection in May 2011, about 150 days after the CAFC issued its October 2010 decision in Gilda.

Two Cos Said Their Refund Claims Began Accruing After a 2010 CAFC Decision

The companies argued that they were unaware they could challenge the retaliatory duty payments until they received information from their customs brokers. They argued their claims did not finally accrue until the CAFC's 2010 mandate in Gilda and that the dates of liquidation were irrelevant for purposes of their claims. They also contended that the collection of retaliatory duties was merely ministerial and therefore, there was no basis for denying them the duty refunds.

CIT Disagreed, Said CBP's Liquidation Triggered Accrual of the Refund Claims

The CIT found that the companies did not present any valid basis for the relief they requested, which was to "undo" liquidation or order reliquidation. Therefore, the CIT ruled that it cannot grant the companies refunds of the retaliatory duties and granted the government's motion to dismiss the cases for the following reasons:

Accrual began after CBP's liquidation of entries. According to 28 USC 2636(i), the CIT's jurisdiction over civil actions under 28 USC 1581 is barred unless commenced within two years after the cause of action first accrues -- when a claimant has, or should have had, notice of the final agency act or decision being challenged. Given that the companies were challenging CBP's authority to assess the EU beef hormone dispute retaliatory duties, the CIT stated that the event that triggered the accrual of the companies' claims was not issuance of the mandate in Gilda, but CBP's liquidation.

Claims were filed beyond two-year limit. At liquidation, CBP decided the imposition of the retaliatory duties was final and at that point, the companies' cause of action accrued. However, even prior to final assessment of the retaliatory duties, the companies were on notice that those duties were being imposed; yet they did not challenge such imposition or seek injunction to prevent the liquidation of the entries. As such, the companies did not file their complaints within the statutory two-year limit.

Accrual doesn't depend on Gilda. The CIT also stated that the companies provide no support for the argument that judicial review of another party's challenge (Gilda) somehow "suspends" the accrual of their own cause of action. The accrual of the companies' cause of action did not depend on issuance of Gilda's mandate because the accrual of a claim is not affected by a judicial interpretation of a statute. Instead, the statute’s objective meaning and effect were fixed when the statute was adopted and any later judicial pronouncements simply explain, but do not create, the operative effect.

¹28 USC 1581(i) states that the CIT has jurisdiction over any civil action against the U.S. that arises out of any U.S. law that provides for, among other things, duties on the import of merchandise for reasons other than raising revenue.

(See ITT's Online Archives 11052730 for summary of the U.S. retroactively terminating the retaliatory duties in the EU beef hormone dispute.)

Optimus, Inc.'s case (Slip Op. 11-153, dated 12/09/11) is available here.

French Feast, Inc.'s case (Slip Op. 11-152, dated 12/09/11) is available here.