Court Postpones Section 301 Repository for 2 Weeks, Seeks 'Clarity'

The U.S. Court of International Trade postponed for two weeks this Friday's deadline for Customs and Border Protection to create the repository through which Section 301 importers can seek to freeze liquidations of customs entries from China with Lists 3 and 4A tariff exposure under the court's July 6 preliminary injunction (PI) order. Judge Claire Kelly told a status conference Monday that the court also is postponing for two weeks Friday's deadline for plaintiffs and the government to propose modifications to the PI order.

The court for now is leaving intact the Sept. 2 expiration of the temporary restraining order period in the PI order when no customs entries can liquidate, said Kelly. “If we need to extend the TRO, we will, but we don't want to do that now.” She instructed the sides to confer on a joint status report by next Monday to give the court “clarity” on the finer points about how the repository would work and how the sides can agree to the terms.

Kelly pressed lead DOJ attorney Jamie Shookman to address in the status report how reporting errors to CBP could be resolved without being “fatal” to an importer's chances of suspending a liquidation. Plaintiffs are entitled to the “comfort” of knowing the repository won't be “a nightmare waiting to happen,” said Kelly. The judges also deserve assurances that repository errors won't result in litigation down the road that lasts “until we retire,” she said.

The postponements were the court's acknowledgement that plaintiffs and defendants remain distances apart in agreeing how to set up the repository. “What we're trying to figure out, where is the middle ground?” Chief Judge Mark Barnett asked Shookman. Is there a way, Barnett asked, for CBP to create a “template” in its Automated Commercial Environment (ACE) database that would automatically generate the information it “needs to receive” to process a suspension request?

The plaintiffs “will have to do some of this work,” said Barnett. “But the question is, how can we facilitate the communication between everybody in terms of what information needs to be provided and how can they obtain that information from the system.” Shookman responded: “That is a conversation that we will continue to have internally and with plaintiffs. If we can make progress on that in the next week, I can understand that would be to everyone's benefit.”

DOJ’s proposed repository instructions for importers would unnecessarily “create a massive amount of work” for importers and CBP, said Akin Gump lawyers for sample case plaintiffs HMTX Industries and Jasco Products in a Friday evening filing (in Pacer) in docket 1:21-cv-52. Responding to DOJ’s draft instructions filed with the court earlier that day (see 2107300032), Akin Gump said that “there remains a regrettable and significant gap” between the sides to agree on “parameters” for implementing the PI order and to “minimize the burden for all parties.”

The top “overarching concern” with the instructions is that CBP would need to process “thousands of emails and spreadsheets on a monthly basis, creating more work than should be necessary for all involved,” and going “well beyond” what the court “imagined” in its PI order, said Akin Gump. The government “could easily extract the necessary information for its repository” using data that already resides in ACE, it said. “Utilizing data within ACE -- which is the presumptively accurate source for all of the relevant import data -- would significantly decrease the likelihood of erroneous liquidations and other errors that may arise,” it said. Government lawyers counter that ACE lacks the automation needed to process large volumes of suspension requests at once in the manner the plaintiffs describe.

CBP alternatively could establish a “mechanism” for letting importers of record identify their entries during the entry submission process by creating a new entry type or flagging the entries as “subject to suspension” under the PI order, said Akin Gump: “This would eliminate the need for periodic updates (30-day or otherwise) contemplated by the instructions.”

Akin Gump again asked the government to agree to a stipulation that reliquidations and refunds would be available to importers at the end of the litigation for all entries that liquidate after July 6 if plaintiffs win, obviating the need for CBP to set up the repository. DOJ has rejected the idea on grounds that the court lacks the authority to order reliquidations or refunds, except for narrow exceptions. Kelly at the status conference appeared to chide the plaintiffs for repeatedly asking DOJ for the stipulation. “The government's not stipulating,” she said. “So we need to find a way to move forward that works” for both sides, she said.