Section 301 Lawyers Agree on Single Sample Case, 15-Member Committee

Lawyers for the roughly 3,700 Section 301 complaints inundating the U.S. Court of International Trade reached consensus on picking the first-filed HMTX Industries-Jasco Products action as the sole sample case in the massive litigation, and on seating 15 among their ranks for the plaintiffs’ steering committee, said HMTX-Jasco counsel Akin Gump in the lawyers’ “coordinated proposal” (in Pacer) Friday. Though plaintiffs “cannot guarantee 100% agreement on every issue on behalf of every single counsel,” they are “not aware of any objection to this proposal after repeated consultations and opportunities for review,” it said.

The court will find out definitively by Friday when dissents are due from any lawyers who feel they were denied seats on the steering committee or designations as sample cases. “The consultation process with counsel representing plaintiffs in the 3,700+ Section 301 cases filed to date has been extensive, spanning multiple email, video, and phone communications,” said Akin Gump. We learned that at least one Zoom call in the weeks leading to Friday’s filing numbered nearly 300 lawyers at a time.

There was little doubt all along that HMTX-Jasco would be one of the sample cases, though not necessarily the only one. Several law firms made positioning statements early on that the number and nature of the sample cases needed to be representative of the body of litigation “because not all the complaints have articulated the same substantive challenges or the same causes of action” (see 2010230023). Lawyers ultimately and rapidly reached consensus on the pragmatism -- widely shared -- that letting Akin Gump and HMTX-Jasco go first gave the litigation its best chance of success.

HMTX-Jasco is a “suitable representative” case for the 3,700+ complaints filed because all “share at least the same two causes of action,” said Akin Gump. They all seek a declaratory judgment that the Lists 3 and 4A tariffs are unlawful under the 1974 Trade Act and run afoul of the 1946 Administrative Procedure Act because they were forged from notice-and-comment rulemakings that were sloppy and lacked transparency. “Those two causes of action present predominantly legal issues, the resolution of which will not depend on plaintiff-specific facts or defenses.”

Any “additional claims raised by certain individual plaintiffs,” including allegations that the tariffs were an unconstitutional form of federal revenue collection or a violation of Fifth Amendment due process rights, “either reflect non-substantive variations on, or complement, the two causes of action” in HMTX-Jasco, said Akin Gump. The court’s Feb. 16 procedural order said plaintiffs whose cases would be stayed can still participate in the sample case litigation by filing amicus briefs.

Deciding which lawyers would sit on the proposed 15-member steering committee was based on such criteria as the volume of complaints their firms filed and their representation of additional claims, plus their experience arguing cases before the CIT or appellate courts, we learned. Members also were picked for their geographical diversity. Akin Gump’s filing listed their home cities next to their names. Of the 15, seven are based in Washington, D.C., three in Chicago, two in New York and one each in Los Angeles, San Francisco and Seattle. Five of the proposed members are women, including three who are women of color.

Plaintiffs can’t get DOJ to confirm that a “refund remedy” would be available for "all tariffs unlawfully collected” if they prevail in the litigation, “regardless of whether entries subject to such duties have liquidated,” said Akin Gump. “The availability of refunds regardless of liquidation status is of critical importance to all plaintiffs -- and should be important to defendants as well. Clarity regarding such relief is vital to ensuring that these cases are handled efficiently, effectively, and with the least judicial and administrative burden possible.”

DOJ supported refund stipulations in a 2020 case before the CIT and in a 2019 action before the U.S. Court of Appeals for the Federal Circuit, and should do so again for the Section 301 litigation, said Akin Gump. “Absent such relief, plaintiffs will be forced immediately to file motions for preliminary injunctive relief to enjoin the ongoing collection of (unlawful) duties pending the outcome of this lawsuit in order to avoid imminent, accruing, and irreparable harm in the form of permanent lost refunds.” If DOJ keeps refusing to back the refund stipulation, it’s feared DOJ and CIT risk getting flooded with nearly 4,000 motions for injunctive relief from virtually all the individual plaintiffs, hopelessly delaying the litigation. DOJ didn’t comment Monday.