CIT Denies Mediation in Classification Dispute

Court of International Trade Judge Timothy Reif denied a motion by importer Cozy Comfort for a conference to consider court-annexed mediation. In an April 26 opposition motion, the government argued that mediation would be inappropriate because there are still facts at issue and that mediation will likely be ineffective as long as the government is opposed. Reif agreed but said Cozy Comfort may renew its motion after discovery has been completed.

The dispute concerns Cozy Comfort's entries of The Comfy, which the importer classified as blankets under Harmonized Tariff Schedule subheading 6301.40.0020 but were liquidated by CBP as pullovers under subheading 6110.30.3059. In its Jan. 21 complaint (see 2201240022), Cozy Comfort claimed that the merchandise should be classified under subheading 6301.40.0020 as initially entered, under subheading 6307.90.9891 (as a “textile”), or subheading 6114.30.3070 (as an "other" garment).

Determining the correct tariff classification is a "mixed-question of law and fact," the government said. "[Cozy Comfort] has not yet served its initial disclosures, and neither party has served discovery requests," so the government will not have facts possibly necessary to conduct mediation. Without access to the relevant facts behind classification, the government said, "mediation is premature."

Furthermore, "mediation is most effective when it is supported by both parties," the government's motion said. The motion said that the court has rejected motions for mediation in other cases when one side did not agree even when discovery was much further along. Both sides engaged in settlement discussions from September 2021 through Jan. 2022 "without success," and the "posture of the parties" is unchanged since January, making mediation an "[in]efficient use of the parties’ and the court’s resources," it said.