Trade Court Tosses Section 232 Exclusion Challenge Since Entries Are Unliquidated

The Court of International Trade in a June 1 opinion made public June 9 dismissed a case seeking Section 232 steel and aluminum tariff exclusions brought by exporter Borusan Mannesmann and importer Gulf Coast Express Pipeline. Judge Timothy Reif said that the court lacks subject matter jurisdiction since the subject entries are unliquidated. The court ruled that the plaintiffs failed to show that CBP's decision not to issue refunds before liquidation constitutes a protestable decision.

The suit seeks the exclusions for 19 entries of steel pipe from Turkey and claims jurisdiction under Section 1581(a). This prompted an initial motion to dismiss from DOJ, seeing as all the entries are not liquidated (see 2108260062). During litigation, eighteen of the entries were under an injunction in the Transpacific Steel case, which had sought to overturn the tariff hike on Turkish steel in 2018. The entries will remain unliquidated until the Transpacific case is fully settled. The remaining entry is not subject to the Transpacific litigation, but its liquidation has been extended until August 2022.

The plaintiffs argued that they're not protesting the classification and amount of duties charged on the entries but are instead seeking to protest "charges or exactions" that came with the failure to apply the exclusions. DOJ disagreed, arguing that the protest seeks to change the classification for the subject entries and, "operationally, the only way that CBP could approve the protest would be to change the tariff classification to account for the claimed exclusions" (see 2111160049).

Reif sided with the U.S. in the matter, finding that since the entries were unliquidated, the court does not have jurisdiction over the matter and that the plaintiffs failed to show that CBP's decision not to issue the refunds before liquidation constitutes a decision as to charges or extractions. The judge addressed the plaintiffs' argument that a prior CIT case, which held that the exclusionary language in the statute cannot be understood to mean that CBP's decision under Section 1520 cannot be protested, backed their position.

The court said that this case looked at CBP's denial of a post-entry NAFTA claim under Section 1520(d), which says that CBP can reliquidate an entry to refund any excess duties paid on a good qualifying under the rules of origin. The circumstances in Section 1520(d) are different from CBP's "exercise of its discretion to issue pre-liquidation refunds of deposits at issue in this case," the judge said. Further, the U.S. Court of Appeals for the Federal Circuit has repeatedly held that Section 1581(a) gives no jurisdiction for protests outside the categories listed in the statute, the judge ruled.

"As the subject merchandise remains unliquidated the administrative process is incomplete," the opinion said. "Customs has not made a 'final and conclusive' decision as to a charge or exaction or any other decision within the seven categories under § 1514(a). Accordingly, Customs has not made a protestable decision that has triggered the Court’s jurisdiction, and the court dismisses the case for lack of subject matter jurisdiction."

(Borusan Mannesmann Boru Sanayi ve Ticaret v. United States, Slip Op. 22-58, CIT #21-00186, dated 06/09/22, Judge Timothy Reif. Attorneys: Julie Mendoza of Morris Manning for plaintiffs; Guy Eddon for defendant U.S. government)