No Jurisdiction in Case Over Lack of Full Section 301 Refunds, DOJ Tells CIT

The Court of International Trade should dismiss a challenge of CBP's alleged failure to issue full Section 301 refunds for lack of jurisdiction since the case was untimely filed, the Department of Justice argued in a Nov. 19 brief. Plaintiff FD Sales' rebuttal says that the 180-day deadline to file a case that runs from a protest denial does not apply in this case since CBP did not actually deny the protest, but that the protest can be considered denied in part due to CBP's failure to give the full refund. DOJ countered, in the case's most recent brief, that this argument must be rejected since it is "undisputed" that FD Sales filed its summons more than 180 days after the date of the decision (FD Sales Company LLC v. United States, CIT #21-00224).

FD Sales brought in 60 entries of "clicking/locking vinyl flooring" under subheading 3918.10.10, which were granted exclusions from the Section 301 tariffs. The importer then sought a refund of $767,290.10 in duties paid on the goods, of which $294,342.70 was granted by CBP. In its complaint, FD Sales said the entries were granted exclusions by the Office of the U.S. Trade Representative (see 2105110057).

DOJ said the summons was not timely filed since it didn't come 180 days after a denied protest. FD Sales then said that the protest was "effectively denied" when CBP failed to shell out the whole refund, starting the 180-day clock from this denial (see 2110120063). However, the letter of the law says that the court must have the summons within 180 days of the date of mailing of the notice of the protest denial, DOJ said.

"FD Sales’s argument is contrary to the clear and unambiguous statutory terms, which provide that an action commenced under 28 U.S.C. § 1581(a) can challenge a protest that was denied, in whole or in part, and only if it is commenced within 180 days of the date of the issuance of the notice of denial," the brief said. "... Its time to file the summons challenging the alleged partial denial began to run from the date of CBP’s decision, not from the date when FD Sales decided it was unsatisfied with the scope of the relief."

DOJ then touched on the court's lack of jurisdiction over claims not asserted in FD Sales' protest but that have made their way to the complaint. FD Sales admitted in its prior brief that the merchandise under HTS subheading 3918.10.10 was the only merchandise under the protest. "This concession is fatal to FD Sales's case," DOJ replied.

FD Sales said that many of its entries were initially misclassified but were quickly corrected either before or concurrently with the protest via post-summary corrections. CBP denied a few of the PSCs. It is with the entries for which PSCs were submitted that the refund snafu arose. DOJ gave two possible reasons for these denials: FD Sales failed to submit the supporting documents needed to justify the reclassification of the merchandise, or the PSCs were untimely filed. Regardless of the reason, the denied PSCs are "irrelevant for purposes of this action," DOJ said.

"Once the merchandise was classified at liquidation under subheading 3918.10.20, HTSUS, FD Sales could not challenge CBP’s actions on the PSCs, and its only remedy was to protest the classification of the merchandise at liquidation, claim that it should be classified under subheading 3918.10.10, HTSUS, and subject to an exclusion from Section 301 duties," the brief said. "FD Sales’s failure to protest the classification of the merchandise at liquidation under subheading 3918.10.20, HTSUS, makes the liquidation of the entries final and conclusive with respect to that merchandise and deprives the Court of jurisdiction to review the classification of the merchandise and imposition of Section 301 duties in this action."