No Protest Needed to Challenge Liquidation When Nothing to Originally Protest, Importer Argues

Importer Acquisition 362, doing business as Strategic Import Supply, didn't need to file a protest to establish jurisdiction to challenge the liquidation of its entries since there was nothing to protest within 180 days of liquidation, SIS said in an April 29 reply brief to the U.S. Court of Appeals for the Federal Circuit. DOJ continues to "improperly oversimplify the analysis" by repeating the "mantra" that the importer was required to file a protest to contest the liquidation of the entries, SIS argued, seeking remand to the Court of International Trade (Acquisition 362, LLC dba Strategic Import Supply v. U.S., Fed. Cir. #22-1161).

CIT dismissed SIS's case in April 2021, finding that the 180-day deadline for protests of CBP decisions runs from the date of liquidation, rather than the date CBP received updated assessment instructions from the Commerce Department (see 2104210066). SIS, an importer of passenger vehicle and light truck tires from China, originally filed the case seeking a lower countervailing duty rate on its entries. In the underlying CVD administrative review, Commerce counted a 30.61% duty rate for the subject entries. After uncovering errors in the case, Commerce amended the final results and reduced the rate to 15.56%. Commerce then instructed CBP to liquidate entries at the new rate.

Some relevant entries had already liquidated more than 180 days prior to Commerce's instructions. Nevertheless, the importer filed a protest with CBP, arguing that it was valid because it was filed within 180 days of the instructions. The trade court disagreed, finding that the protest was challenging a Commerce decision, not a Customs one. As such, it belonged under Section 1581(c), as opposed to Section 1581(a), as the plaintiffs had claimed, Judge Stephen Vaden said. SIS then brought its case to the Federal Circuit to contest the ruling, arguing it should not have had to file the protest because the U.S. should have provided the necessary refunds for overpaid CV duties (see 2203040065).

DOJ argued at the Federal Circuit that the belief that a protest could have been filed with CBP only after the final CVD rate was issued isn't supported by either statute or case law (see 2204110046). SIS countered that it had nothing to protest and that it's actually DOJ's position with no support in law of the facts for the "new legal obligation" to preemptively file a protest even when there's nothing to actually protest. Any protest would have been a sham protest and the courts have repeatedly found that such protests are "legally ineffective and do not constitute a proper basis for invoking CIT jurisdiction," the importer argued.

Rather, the correct basis for establishing jurisdiction at CIT isn't found in the statutes governing liquidation protests because the facts of the case differ from those for cases involving liquidation protests, SIS said. As such, jurisdiction should have been established under Section 1581(i), the trade court's "residual" jurisdiction, established when the other elements of the statute are "manifestly inadequate," the brief said. DOJ argued that the availability of a protest precludes the use of 1581(a).

"However, this argument essentially removes the long line of well-established cases that provide for Section 1581(i) jurisdiction when the potential avenues for jurisdiction under Section 1581(a) are 'manifestly unreasonable,'" the brief said. "In this case, if the Court upholds the CIT’s decision that it lacked jurisdiction under Section 1581(a) because A362’s protests were 'untimely,' it is axiomatic that Section 1581(a) was a manifestly inadequate remedy for A362 in these circumstances given the chronology of events at hand, providing the CIT subject matter jurisdiction under Section 1581(i)."