Confrontation Looms in Section 301 Cases Over Debated Refund Remedy

DOJ appears to be digging in for a fight over refund relief for the thousands of Section 301 plaintiffs inundating the U.S. Court of International Trade to declare the Lists 3 and 4A Chinese tariffs unlawful. The government won’t support a stipulation in which the plaintiffs, if successful in the massive litigation, could seek refunds of all tariffs paid, said a DOJ response (in Pacer) Friday in docket 1:21-cv-52. Importers are seeking upfront government support for refunds, regardless of the imports’ liquidation status, including whether the 12-month window on protesting individual liquidations will have expired.

Friday’s deadline otherwise passed quietly for dissident plaintiffs to come forward over Akin Gump’s “coordinated proposal” (in Pacer) March 19 designating its first-filed HMTX Industries-Jasco Products as the litigation’s only sample case and seating a 15-member steering committee to manage the trial (see 2103220035). The lack of public dissension appeared to vindicate Akin Gump’s March 19 finding that it was unaware of any disagreements in its ranks.

Any issues about refund relief “have not been properly presented to the Court at this time,” said DOJ’s response to Akin Gump. “Plaintiffs are therefore seeking an advisory opinion from the Court, which is improper.” The court also “may never be required to address this issue because it may only be relevant if the Court ultimately rules against the government on the merits,” said DOJ. “We decline to enter into a stipulation concerning the relevant law that would apply to plaintiffs’ request for a remedy,” it said. “Among other problems with this suggestion, it is for the Court, not the parties, to determine the law that governs requests for relief.”

The availability of refunds regardless of liquidation status “is of critical importance to all plaintiffs,” Akin Gump argued. “Clarity regarding such relief is vital to ensuring that these cases are handled efficiently, effectively, and with the least judicial and administrative burden possible.” Without a remedy stipulation, plaintiffs would risk “permanent lost refunds” for as long as the litigation goes on, it said. It’s also in DOJ’s interest to stipulate a remedy component, said Akin Gump, or it risks being flooded with thousands of individual injunction motions to stop tariff collections while the litigation proceeds. Akin Gump said it just wants DOJ to follow the practices of two recent cases when the government stipulated support for a refund remedy. DOJ didn’t respond to questions Monday.

The government generally agrees with Akin Gump on the proposals to designate HMTX-Jasco as the sample case and picking the 15 lawyers to sit on the steering committee, said its filing. DOJ agrees any “non-substantive variations” from the HMTX-Jasco claims that the Office of the U.S. Trade Representative misused its 1974 Trade Act authority or violated the 1946 Administrative Procedure Act are “appropriate matters to be raised” through amicus briefs by plaintiffs not picked as sample cases, it said.

But “to the extent plaintiffs propose that individual plaintiffs may pursue claims as amici curiae that are substantively different” from those in the HMTX-Jasco case, including the allegation that USTR violated constitutional protections against federal revenue collections, “we object to this proposal,” said DOJ. Amicus briefs “are not an appropriate manner for individual plaintiffs to raise substantive claims that are separate from those raised in the first-filed complaint,” it said. “Any such issues should be stayed pending the resolution of the sample case, or handled through some other means.”

The court’s three-judge panel, not Akin Gump, was the first to broach the idea of amicus briefs as an avenue of trial participation for lawyers whose complaints are stayed after being passed over as sample cases. “Amicus briefs must not repeat the arguments made in the moving briefs and will be subject to substantially reduced word limitations,” said the panel’s Feb. 16 procedural order (in Pacer). It made no distinctions on the proper use of amicus briefs for substantive or nonsubstantive arguments.

DOJ also proposes severing from the trial any cases involving alleged abuses of the tariff exclusion process, it said. DOJ counts about 60 complaints among the 3,700 “that include claims challenging the exclusion process or individual exclusion decisions,” it said. The court can handle those cases individually, “or in groups if they raise generic issues about the exclusion process,” but shouldn’t do so until after the HMTX-Jasco sample case is resolved, it said.

The government is fine with Akin Gump’s proposal to be the “point of contact” for the 15-member steering committee, said DOJ. “We understand this proposal to mean that defendants will only need to coordinate with Akin Gump for any issues that require the parties to meet and confer,” and that Akin Gump in turn will coordinate with the steering committee, it said. “With this clarification, we agree to plaintiffs’ proposed steering committee.”