CIT Doesn't Have Jurisdiction to Hear Cases on UFLPA Entity List Additions, US Argues

The Court of International Trade doesn't have subject-matter jurisdiction over the Forced Labor Enforcement Task Force's (FLETF) addition of entities to the Uyghur Forced Labor Prevention Act Entity List, the U.S. argued in an Oct. 3 motion to dismiss. Seeking dismissal of a case filed by Chinese printer cartridge manufacturer Ninestar Corp., the government said that because the FLETF's decision is neither an embargo nor a quantitive restriction, the court doesn't have jurisdiction over the proceeding under Section 1581(i), the court's "residual" jurisdiction (Ninestar Corp. v. U.S., CIT # 23-00182).

The U.S. also said Ninestar failed to exhaust its administrative remedies by not contesting the decision with the FLETF and because neither the UFLPA nor the Administrative Procedure Act requires an explanation beyond what the task force supplied.

Ninestar filed its case in the trade court in August, contending the court should vacate the listing decision given that FLETF failed to offer any "reasoned explanation" for its decision (see 2308230016). The Chinese company, and its subsidiaries, produce and sell laser printers, integrated circuit chips and printer consumables, including toner and inkjet cartridges, many of which are imported into the U.S. FLETF added the companies to the UFLPA Entity List in June for allegedly working with the Xinjiang government to reap the benefits of forced labor by Uyghurs, Kazakhs, Kyrygyz or members of other persecuted groups in Xinjiang.

While Ninestar's complaint didn't mention which subsection of Section 1581(i) it was claiming for jurisdiction, its motion for a preliminary injunction decision invokes subsection 1581(i)(1)(C) and said the case relies on the court's jurisdiction over proceedings relating to an embargo of goods imported into the U.S. Specifically, this subsection claims trade court jurisdiction over "embargoes or other quantitative restrictions on the importation of merchandise for reasons other than the protection of the public health or safety."

The government argued this doesn't allow for a review of an Entity List addition, given such an addition is neither an "embargo" nor a "quantitative restriction" on Ninestar's goods. Instead, placement on the list may lead to a decision to exclude the exporter's goods from the U.S. market, but Ninestar is not challenging such a decision here. Both an "embargo" and a "quantitative restriction" require an "express numerical limit" on the amount of goods that can be imported -- a limit not placed by the Entity List addition, the brief said.

Additionally, since importers can "overcome or avoid the UFLPA's rebuttable presumption, and the statute and regulations provide the necessary administrative mechanisms to do so ... the presumption does not meet the definition of 'embargo' as construed by the Supreme Court," the U.S. added.

The government also noted that affected parties can petition the FLETF to be removed from the list, adding that Ninestar failed to avail itself of this remedy before going to the trade court. In addition, none of the "prudential exhaustion factors" falls in the exporter's favor. For instance, Ninestar doesn't allege that administrative review would be futile nor that the task force lacked the power to grant effective relief. That Ninestar lacked all of the details of the administrative record, as alleged in the complaint, doesn't excuse the company's failure to exhaust its administrative remedies, the brief said.

The U.S. also argued that Ninestar failed to state a claim on which relief can be granted, given that neither the UFLPA nor the Administrative Procedure Act requires the exporter to be given an explanation of the government's decision beyond what was provided in the Federal Register notice. In this notice, the FLETF said Ninestar's addition was due to its work with the Xinjian government to "recruit, transport, transfer, harbor or receive forced labor" from persecuted groups in Xinjiang. There is no requirement to say more, the U.S. said.

There are additionally sound reasons the UFLPA doesn't have any greater disclosure requirements, the government noted. The U.S. can rely on privileged information, including confidential sources, in making its listing decisions. "Because the [People's Republic of China] PRC employs pervasive surveillance that can combine with seemingly innocuous information to lead to the identification of sources, the United States must take particular care to preserve any information that could reveal source identity," the brief said. "Revealing a source could prove extraordinarily dangerous to that source, potentially subjecting that source to retribution."