Wheatland Unlikely to Succeed in Seeking to Compel CBP to Respond to Requests for Info, CIT Says

The Court of International Trade denied Wheatland Tube Company's bid for a preliminary injunction in a case seeking to compel CBP to respond to requests for information and a tariff classification ruling relating to Section 232 evasion since Wheatland has not shown a likelihood to succeed on the merits. CBP already responded to Wheatland's requests, so the plaintiff has not shown how it could succeed in the case, Judge Timothy Stanceu said.

Wheatland filed the lawsuit in January, seeking a writ of mandamus compelling CBP's response and alleging that certain importers, namely Shamrock Building Materials, are mislabeling their imports to qualify for an exception to Section 232 steel and aluminum duties (see 2201120064). At issue are two Harmonized Tariff Schedule subheadings. The Section 232 duties apply to HTS subheading 7306.30.5028 but not to subheading 8547.90.0020.

Wheatland said Shamrock in 2018 began importing electrical conduit from Mexico that it allegedly misclassified under the 8547.90.0020 subheading to avoid paying the duties. In 2019 the U.S. and Mexico struck an agreement eliminating the Section 232 duties. However, in 2020, the U.S. and Mexico held consultations to address recent surges in Mexican imports of three steel products. As a result, Mexico agreed to use a strict export licensing system for certain products, among them goods brought in under subheading 7306.30.5028.

Wheatland alleged that Shamrock began misclassifying its goods as being under HTS subheading 8547.90 two months after this regime came into effect. Wheatland then went to CBP, filing an RFI and petition for a tariff classification ruling. CBP didn't answer, leading Wheatland to file suit at CIT. The Department of Justice then moved to toss the case since CBP responded to both of Wheatland's requests (see 2202030031).

While Wheatland has not responded to the motion to dismiss, Stanceu took note of CBP's exhibits showing their responses to the plaintiff's requests and denied the company's bid for a preliminary injunction. "Even when liberally construed in this way, plaintiff’s allegation is contradicted by the documents plaintiff attached as exhibits to its submissions," Stanceu said. "... Upon reviewing both of CBP’s responses, the court concludes that Customs responded to the Request for Information in a way that satisfied the requirements of Section 516(a)(1)." The judge also said Wheatland's submissions show that it agreed with CBP's position on the tariff classification ruling as well.

"The premise of Wheatland’s claim, which is that Customs did not respond to the Request for Information in a way that satisfies the requirements of Section 516(a)(1), is based on a misinterpretation of this statutory provision and the corresponding Customs regulations in 19 C.F.R. Part 175, Subpart A," the opinion said. Plaintiff, therefore, has failed to show a likelihood of success on the merits of its claim as it relates to the Request for Information."

(Wheatland Tube Company v. United States, Slip Op. 22-16, CIT #22-00004, dated 02/23/22, Judge Timothy Stanceu. Attorneys: Roger Schagrin of Schagrin Associates for plaintiff Wheatland; Tara Hogan for defendant U.S. government)