Protest Needed for Judicial Review Over Lack of Section 301 Refund, DOJ Tells Federal Circuit

An importer needs to file a protest to claim jurisdiction at the Court of International Trade over protestable CBP decisions, and that includes CBP's assessment of Section 301 tariffs on goods subsequently granted a tariff exclusion, the Department of Justice said in a Jan. 18 brief. DOJ urged the U.S. Court of Appeals for the Federal Circuit to uphold CIT's decision dismissing a lawsuit from ARP Materials and Harrison Steel seeking refunds of the duties, arguing CIT's "residual" jurisdiction under Section 1581(i) does not apply, since the plaintiff-appellants had adequate notice of CBP's actions and actually received Section 301 refunds for some of their entries (see 2109280061) (ARP Materials v. United States, Fed. Cir. #21-2176).

The exclusions had been issued by the Office of the U.S. Trade Representative after the 180-day protest deadline had passed, leading the importers to file their suit under Section 1581(i). The trade court ruled that since CBP's decision to subject the entries to Section 301 duties was a tariff classification dispute, it should only have jurisdiction under Section 1581(a).

"Despite ARP’s and Harrison Steel’s contentions to the contrary, CBP made protestable decisions, undertaken pursuant to statutory authority, in classifying the entries at issue as subject to Section 301 duties and liquidating those entries," DOJ said. "As this Court has held, CBP’s decisions may be protestable even when it is applying another agency’s determinations. Here, as the trial court correctly determined, CBP rendered a protestable classification decision in liquidating certain importer entries, and ARP and Harrison Steel had the opportunity to, but did not, timely file a protest with CBP and thus invoke jurisdiction pursuant to section 1581(a)."

ARP and Harrison argued that the trade court erred by failing to explicitly address their Fifth Amendment due process and equal protection claims or their claim that CBP violated the Administrative Procedures Act's notice-and-comment provisions. But even if the Federal Circuit were allowed to weigh the arguments, which DOJ says it isn't due to ARP's and Harrison's alleged failure to bring up the claims at CIT, the appellate court should rule on DOJ's side.

"Even if the trial court erred, which it did not, any error is harmless, as ARP and Harrison Steel cannot demonstrate that the outcome of the motion to dismiss would have changed had the court considered their due process and APA arguments," the brief said.

DOJ said that the two were not time barred from submitting protests until after the exclusion decisions were published. ARP and Harrison said this would amount to an "absurdity" if such protests were barred. "But this allegation is simply not accurate," DOJ said. The plaintiff-appellants could have filed a protest to protect their right to appeal the eventual liquidation of the entries. "CBP may have liquidated entries prior to the USTR granting the claimed exclusions, but liquidating ARP’s and Harrison Steel’s entries while an administrative process before the USTR was pending still constituted a protestable decision, and did not time-bar protests, even though that process would potentially affect the rate of duty," the brief said.