Important Deadlines Loom in Massive Section 301 Tariffs Litigation
The next three Fridays will mark some important deadlines in the Section 301 litigation inundating the U.S. Court of International Trade after months of inertia. New complaints continue trickling in at the rate of about one a day to join the roughly 3,500 on file since beginning in 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, including many consumer tech companies -- Bose, Clarion, Denon, Gibson, Harman, Jasco and Voxx among them.
The court’s three-judge panel of Mark Barnett, Claire Kelly and Jennifer Choe-Groves set a March 12 deadline for DOJ 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 (in Pacer). 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 China 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 it should generically “admit or deny” the allegations, plus “make such additional allegations as are appropriate to their defenses,” said the Feb. 10 order. Lawyers we canvassed with cases in the docket said they doubt DOJ will mount affirmative defenses in its answer.
Attorneys told us they will be watching to see if DOJ uses Friday’s answer to stipulate whether it 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 says the liquidation of an entry is final and binding on all parties, unless it's timely protested within 180 days of the liquidation. Akin Gump argued 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 (in Pacer) 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.
Plaintiffs’ lawyers need to tell the court March 19 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 USTR, can engage in federal revenue collection. Paul Vandevert, one of several lawyers making the constitutional argument, told us he plans to ask that his complaint 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.