CIT Dismisses Rack Room's Motion to Rehear HTS Gender Discrimination Case

The Court of International Trade dismissed Rack Room Shoes’ request for rehearing of its constitutionality challenge of certain tariff provisions of the Harmonized Tariff Schedule (HTS) on the grounds that the tariffs unconstitutionally discriminate by gender and age.

(In February 2012, CIT ruled that Rack Room did not plausibly demonstrate government intent to discriminate in a test case that followed the similar Totes-Isotoner case (which argued that applying different U.S. tariff rates to men's and other gloves was unconstitutional), dismissing the case with prejudice. Leading up to the Rack Room case, trade sources said 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 indicated that action on most or all of the pending cases filed by over 120 apparel imports would be determined by court action on the Rack Room test case. See ITT’s Online Archives 12022102 for summary of CIT’s dismissal of the Rack Room Case. See also ITT’s Online Archives 11083118 for summary of the Rack Room case’s implications for other pending actions.)

Rack Room Argued CIT Erred in February Dismissal

In its motion, Rack Room argued that CIT erred in its (1) failure to find that each challenged HTS provision was not facially discriminatory before proceeding to dismiss the case; and (2) overlooked USCIT Rule 9(b) when ruling that Plaintiffs must plead sufficient facts to plausibly show that Congress had an invidious intent to discriminate in adopting the challenged HTS provisions.

CIT said No Error Committed, Rack Room Needed to Allege Facts to Raise Claim; Dismissed Motion

With regard to Rack Room’s first claim, CIT said no separate fact-finding step was necessary with regards to each individual HTS subheading that the Rack Room challenges, because the gender- and age-based classifications at issue, regardless of which specific subheading is referred to, are not facially discriminatory. Moreover, said CIT, there is no difference in the form of the multiple classifications that Rack Room challenged.

With regard to Rack Room’s second claim, CIT conceded that intent may be alleged generally, but asserted Rack Room must also allege facts sufficient to raise a plausible claim.

Therefore, CIT dismissed Rack Room’s motion for rehearing.

(CIT Slip Op. 12-70, dated 06/01/12, Judges Pogue, Restani, and Barzilay)