Storage Agreement for WRO Goods Should End When Underlying Litigation Ends, DOJ Says

A Temporary Storage Agreement should end when it is obvious a party to the agreement is no longer seeking court judgment, DOJ said in a Nov. 3 response motion at the Court of International Trade (Virtus Nutrition v. United States, CIT #21-00165).

The case involves Virtus’ challenge to CBP's exclusion of one shipment of palm fatty acid distillate and palm stearin from entry under the forced labor statute. The products were held under a Withhold Release Order (WRO) that bars the entry of palm oil products made in Malaysia by Sime Darby Plantation Bhd on the grounds that the manufacturer's palm oil was made with forced labor (see 2105130055).

Shortly after the merchandise was detained by CBP, CBP and Virtus entered into a Temporary Storage Agreement to keep the merchandise while the administrative and judicial proceedings played out. Under the agreement, Virtus was required to secure the goods where CBP inspectors could access them. Virtus was allowed to export the goods if they were not released. The goods were then excluded from entry.

In a Sept. 29 brief by Virtus, in which the company said that its intention was to show that it was more likely than not that the excluded merchandise did not have any content from Sime Darby and was not subject to the WRO. This goal "was thwarted," Virtus said, when the manufacturer declined to participate in the litigation. Virtus then turned to reexport options. If the case is to be dismissed, the trade court should keep in mind the terms of the Temporary Storage Agreement and allow the company to export the goods, the brief said (see 2210030067).

DOJ agreed that the action should be dismissed, but opposed Virtus' motion to enforce the Temporary Storage Agreement beyond the dismissal of the litigation, because "[the agreement does not extend beyond the date that plaintiff is no longer seeking a final decision." The parties agreed to the Temporary Storage Agreement “pending final decision regarding the admissibility of the shipments by [CBP],” which has been stayed while Virtus sought judgment from the Court. If Virtus is no longer seeking judgment, the agreement should be null and void, DOJ argued.

Virtus brought the case after the denial of a protest challenging CBP’s admissibility determination to detain and exclude the merchandise. "Because plaintiff does not intend to prosecute this case, i.e., challenge CBP’s denied protest related to its exclusion of merchandise, the matter should be dismissed for failure to prosecute ..., a result that would conserve the resources of the parties and the Court," DOJ said.