Wheatland Defends Case Seeking to Compel CBP to Respond to Requests for Info at CIT

The Court of International Trade should deny the U.S.'s motion to dismiss a case from Wheatland Tube Co. seeking to compel CBP to respond to requests for information and a tariff classification ruling, Wheatland said in a March 9 reply brief. DOJ had said the trade court should toss the case, in part, since it already responded to the RFI and petition for a tariff classification. Wheatland disagreed, arguing that CBP's limited response failed to meet the requirements of Section 1516 which mandates that CBP "furnish the classification and the rate of duty imposed upon designated imported merchandise" (Wheatland Tube Company v. United States, CIT #22-00004).

Wheatland filed its case Jan. 12, 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 file suit at CIT.

DOJ now wants the case tossed since CBP responded to both of Wheatland's requests (see 2202030031). CIT initially seemed sympathetic to this position, denying Wheatland's bid for a preliminary injunction as the company is unlikely to succeed (see 2202230070).

Nevertheless, Wheatland continued its defense of its lawsuit, arguing that the court has jurisdiction over the claims since CBP's responses fail to fulfill the terms of the law. "To the extent Customs disagrees with Wheatland’s statement of Customs’ unfulfilled duties under Section 1516 when furnishing a classification, this is a 'real and substantial controversy admitting of specific relief through a decree of a conclusive character,'" the brief said. "It would thus be improper to dispose of Wheatland’s claims through a motion to dismiss."

Wheatland also argued that the issue over the petition for a tariff classification ruling remains live. CBP said that there's no disagreement over the classification and duty rate of the designated merchandise, but Wheatland "did -- and does -- disagree with the classification of the designated imported merchandise, which continues to be misclassified under HTS 8547." CBP said that if the steel conduit pipe was properly classified under 7306 and not 8547, the agency was required to cause the proper duty rate to be published in the Federal Register and cause the merchandise to be appraised at the proper duty rate.

"None of that occurred, and misclassification of the merchandise under HTS 8547 remains ongoing, rendering the Government’s argument that there is 'no disagreement between Customs and Wheatland as to the classification and rate of duty of the designated imported merchandise' an absurdity and leaving open a 'corresponding obligation that Customs respond' to the January Petition," the brief said.