OtterBox Seeks Interest From CBP on Prior Disclosures Following Classification Suit Win

OtterBox filed a complaint with the Court of International Trade on Feb. 1, seeking to reclaim interest on tariffs it paid as part of prior disclosures on entries that have since been reclassified in its favor. Ottberbox argues that CBP has incorrectly withheld interest when returning overpayments after CIT ruled in OtterBox's favor in a tariff classification case on cellphone cases. The complaint accuses CBP of stalling in its obligation to “refund all duties overpaid, plus interest, as provided by law.”

Between 2010 and 2013, OtterBox imported protective cellphone cases through the ports of Anchorage and Los Angeles. After noticing inconsistencies in the classification of the entries, just prior to challenging CBP's classification in court, OtterBox filed prior disclosures with CBP paying duties in line with CBP's now overruled classification. At the same time, OtterBox filed voluntary disclosures of like products previously imported including imports and disclosures by LifeProof, a company OtterBox acquired in 2013.

In 2015, the Court of International Trade sided with OtterBox's classification and ordered CBP to return overpayments for those goods plus interest. OtterBox said that CBP did so but that it excluded interest for products covered by the prior disclosures and that CBP has subsequently "stonewalled, ignored, resisted, and otherwise objected" to paying that interest as ordered "for a decade."

OtterBox is seeking remittance of that interest and cites 19 U.S.C. § 1520(a)(3) in addition to CIT's 2015 ruling. "CBP was well aware that OtterBox’s duty overpayments were involuntary," OtterBox said. "The Fines, Penalties and Forfeitures (FP&F) officers at the Ports of Anchorage and Los Angeles/Long Beach overseeing the prior disclosures at issue were advised of OtterBox’s underlying classification litigation at the time of its filing, and again when OtterBox received a favorable decision from the Federal Circuit. OtterBox should, therefore, be entitled to interest on all overpayments of duties in connection with its prior disclosures from the date of payment to the date of refund." The Department of Justice filed its notice of appearance but has not yet responded to the complaint.