CIT Should Toss 'Legally Indistinguishable' Case Over Section 232 Refunds

Since a steel importer's and purchaser's bid to reliquidate two entries subject to Section 232 steel and aluminum tariffs is virtually identical to its already dismissed action seeking the same thing, it should be dismissed, the Department of Justice argued in a Nov. 24 brief at the Court of International Trade. The new case, brought by the importer, Voestalpine USA, and the purchaser, Bilstein Cold Rolled Steel, which challenges the Commerce Department's Section 232 exclusion, is "legally indistinguishable" from its prior case, and, as such, is moot, the U.S. said (Voestalpine USA Corp., et al. v. United States, CIT #21-00290).

The issue began when Bilstein submitted a flawed exclusion request to Commerce's Bureau of Industry and Security. The exclusion request was approved, despite including the wrong Harmonized Tariff Schedule subheading and importer of record. The proper importer of record, Voestalpine, then brought in two steel entries that were liquidated with the Section 232 duties.

At the time, the plaintiffs said they “sought advice” from CBP and BIS over the errors in the approved exclusion request. To get retroactive relief, the agencies said, the plaintiffs must file an exclusion request identical to the original one except with the correct information. If it is granted, then the plaintiffs can contact the 232 Help Desk to attempt to open a resubmission case. Bilstein followed those steps, but BIS said that the agency wouldn't accept a resubmission of the exclusion request unless the protest period for the entries hadn't expired.

The plaintiffs then filed their cases at CIT. Despite its initial rejection, BIS then granted the second exclusion request, making it retroactive to the original exclusion request. Failing to file a protest of the liquidation of Voestalpine's two entries, the plaintiffs never sought to extend the approved exclusion to the two entries and thus did not receive a refund of the Section 232 duties paid on them. Bilstein and Voestalpine then sought the reliquidation of these entries in court, where the judge sided with the duo on one of the issues in that the court has the jurisdiction to hear the case (see 2108260024). However, the judge ultimately said that the plaintiffs had already received all the help Commerce could grant them in the form of a product exclusion, dismissing the case for failing to protest or extend the liquidation period.

In the second case, the two companies are challenging Commerce's failure to correct the incorrect HTS number in the Section 232 exclusion. DOJ now argues that the same analysis held by the court in the companies' first case applies here. "This case involves the same plaintiffs raising virtually the same claims on essentially the same facts," the brief said. "Bilstein submitted an exclusion request with a nonexistent ten-digit HTSUS provision. Bilstein then later filed a corrected second exclusion request and Commerce granted the exclusion and made it retroactive to the date on which Bilstein submitted its original exclusion request with the erroneous HTSUS number. Just as this Court found in Voestalpine I, because Commerce can provide no further relief, this Court should dismiss this case."

Further, DOJ argued that the court can toss the case for failure to state a claim upon which relief can be granted since reliquidation is unavailable. Even though Commerce granted the fixed exclusion, the plaintiffs can't just apply the correction due to "their own inaction prior to the liquidations becoming final," the brief said. "... Plaintiffs here did not seek to apply the exclusion to the entries, but admit to knowledge of the error soon after the exclusion with the invalid tariff number was approved. Despite knowing of the error, plaintiffs took no action to correct the exclusion until at least a year after the approval, when the exclusion was set to expire."