Ironing Tables Case Presented 'Direct Challenge' to CIT Authority, Lawyer Says

A recently concluded case at the Court of International Trade was a serious contest between the power of the court and the finality of liquidation, customs lawyer Larry Friedman of Barnes Richardson said in an Aug. 2 blog post. The case at issue was Target v. U.S., in which Target attempted to reverse a reliquidation order on improperly liquidated ironing tables from China (see 2108160028). Reversing the order would "elevate the principle of finality" of liquidation over the power of the trade court, Judge Leo Gordon said in his July opinion (see 2307200049).

"This is a big case," Friedman said, noting that it was a "direct challenge to the scope of the authority of the court" and whether it is truly "of equal stature and power to the regional district courts." While the "quirky set of facts" in the proceeding may not be the best to make that call, the customs attorney said he fully expects the U.S. Court of Appeals for the Federal Circuit "to have to weigh in."

Target imported the ironing boards and deposited estimated duties of 9.47%. A court order in Home Products v. U.S. stopped the liquidation of those duties while the parties argued over the correct rate. The end result was a 72.29% rate but CBP erroneously liquidated 224 entries, 40 of which were Target's, at a lower rate. It is important that the reliquidation "was not just an administrative error; it was contrary to the judgment from the Court of International Trade," Friedman wrote. Target attempted to intervene and was granted non-party status by the court. When CIT eventually ordered CBP to reliquidate the entries, Target appealed.

Target argued that the liquidation at 9.47% was final and CBP had no authority to reliquidate at a higher rate after the initial 90-day period for voluntary reliquidations. The uniqueness of the case is that the original liquidation was CBP's fault and its decision to liquidate at the lower rate is likely a "protestable event," Friedman wrote. No party would be expected to protest a lower liquidation, but the problem "is whether the reliquidation at the higher rate to correct the error was Customs' decision."

CIT found the statutory finality of liquidation does not interfere with the court’s ability to enforce its own orders, Friedman said. The law requires that the entries be liquidated in accordance with the final decision of CIT and the only way to ensure that happens is to recognize that finality of liquidation does not apply once the court’s jurisdiction over the entries has been invoked. "The liquidation-protest process does not divest the Court of the power to ensure that its final judgment is implemented," Friedman said. Any other conclusion could lead to an "absurd possibility" of the parties expending effort only to find that the result can be overturned by a CBP mistake. Such a result cannot be what Congress intended when it passed the Customs Court Act of 1980, he said.