CAFC Questions Grounds to Challenge CBP Decision Made More Than 180 Days After Liquidation

The U.S. Court of Appeals for the Federal Circuit in a Nov. 2 oral argument questioned importer Acquisition 362, doing business as Strategic Import Supply, over its jurisdictional grounds to challenge a CBP decision, given that the company failed to file a protest. SIS argued that it didn't need to file a protest to challenge the liquidation of its entries, given that there was nothing to protest within 180 days of liquidation. At oral argument, Judges Timothy Dyk, Richard Taranto and Todd Hughes probed this position, with Hughes in particular expressing doubt over the claim, given the finality surrounding CBP's liquidation of imports (Acquisition 362 v. United States, Fed. Cir. #22-1161).

The Court of International Trade 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 set 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).

The matter went to oral argument before the appellate court, where the judges expressed a hesitancy over whether to believe the importer's claims. “Ultimately, don’t you still have the problem that there was a liquidation, and that’s a final decision of Customs?" Hughes asked. "And if you don’t protest it, you can’t challenge it?” In response, Heather Marx, counsel for SIS, said that the company had nothing to protest during those 180 days since there was no reason to believe the final rate would change. Hughes replied that regardless of whether an argument can be made for why the liquidation was wrong, it's ultimately a question of finality.

Hughes further questioned the appellant's seeming invocation of a futility argument, which would establish jurisdiction under Section 1581(i), the trade court's "residual" jurisdiction. "This doesn't seem like it was futile," the judge said. "You could've told Customs that this review was ongoing and could change the rates. ... It seems like you're asking us to expand the futility exemption to (Section 1581(i)) in a way that we haven't done before." The judge then asked for cases where a party could've filed a protest, then the liquidation became final, but the court nonetheless granted jurisdiction under Section 1581(i), to which Marx was unable to come up with a case on the spot.

Another question lingering over the oral argument concerned whether Commerce issued an order to CBP suspending liquidation during the antidumping review -- a move which would have helped the importer contest the liquidation.