CIT Dismisses Rack Room Test Case on HTS Gender & Age Discrimination

The Court of International Trade has ruled that Rack Room Shoes, SKIZ Imports LLC, and Forever 21, Inc., which had challenged the constitutionality of certain tariff provisions of the Harmonized Tariff Schedule (HTS) on the grounds that the tariffs unconstitutionally discriminate by gender and age, did not plausibly demonstrate government intent to discriminate, dismissing the case with prejudice.

(ITT has previously reported that since the failure of the Totes-Isotoner case (which argued that applying different U.S. tariff rates to men's and other gloves was unconstitutional), trade sources had stated that over 120 apparel importers had filed lawsuits at the CIT to challenge the constitutionality of different gender-based tariff rates for apparel and footwear products. These sources had also stated that action on most or all of the pending cases would be determined by court action on this test case filed by Rack Room Shoes, and its component cases filed by SKIZ Imports LLC and Forever 21, Inc. See ITT Online Archives 11083118 for summary.)

Rack Room is a Consolidation of Earlier Totes-Isotoner Case

In Totes-Isotoner v. United States, the Court of Appeals for the Federal Circuit (CAFC) affirmed CIT’s dismissal for Totes-Isotoner’s failure to provide significant facts to establish that the government had discriminatory purpose in its allegedly dissimilar treatment of gender and age in the HTS. The plaintiffs were allowed to refile their complaints, and CIT consolidated them into the Rack Room test case.

And Attempts to Demonstrate Governmental Intent to Discriminate

Rack Room argued that because the HTS uses the gender and age of intended users of certain imported products to distinguish between tariff rates, and because those tariff rates are not equal, the HTS unconstitutionally discriminates on the basis of gender and/or age. In support of its claim, Rack Room added additional complaints in an effort to demonstrate governmental intent to discriminate.

CIT Holds that Rack Room’s Facts Were Not Specific, Dismisses Case

According to CIT, Rack Room’s argument that Congress showed intent to discriminate by specifically enacting tariffs separated by gender simply reasserted the claims rejected earlier in the Totes-Isotoner case that the tariff classifications at issue are facially discriminatory. CIT also rejected Rack Room’s citation of a 1960 study of the HTS that age and gender distinctions within the HTS are of “questionable” economic justification as not being an indication of congressional intent.

Therefore, CIT stated, Rack Room’s complaints did not assert facts that were specific enough to have some evident connection to potentially unlawful behavior. Accordingly, CIT dismissed the case with prejudice.

(Trade sources opine that this CIT decision may be appealed to the CAFC.)

(See ITT’s Online Archives 07080725, 08070905, 10021020, and 10100602 for summaries of Totes-Isotoner case, including original filing, dismissal by CIT, CAFC affirmation of dismissal, and Supreme Court’s refusal to hear the case.)

(Slip Op. 12-18, dated 02/15/12)