Exporter Ditches Case on Value of Goods From Canadian Warehouse to Pursue Other Claims at CAFC

Canadian exporter Midwest-CBK filed a consent motion seeking to dismiss its case on whether sales from a Canadian warehouse to U.S. customers are "sales for export to the U.S." or "domestic sales." The exporter said it "will not be able to provide further evidence" on the second phase of the litigation, which "would allow for determination of a dutiable value based on the "[Free on Board] Buffalo, New York" prices at which the company sold its imports to its U.S. customers. The company wants the issue resolved so it can "further the case's other issues on appeal" (Midwest-CBK v. U.S., CIT # 17-00154).

The request is not unreasonable, just impossible for Midwest-CBK to comply with, given its business model, the company said.

The Court of International Trade last year said that Midwest's sales from a Canadian warehouse to U.S. customers are sales for export to the U.S. (see 2205200032). The U.S. then asked Midwest to provide evidence to allow for the determination of a dutiable value based on its FOB prices for goods from Buffalo. The company originally said last month that complying with this request would be impossible (see 2309110040).

Compliance would involve analyzing tens or hundreds of millions of individual sales. Midwest said it filed a customs entry for a truckload of merchandise arriving in Buffalo every day in 2013 and part of 2014, noting that each truck had goods meant for as many as 200 different U.S. customers. All of these customers were aggregated on the customs entry. Finding the "FOB Buffalo, New York" prices for the goods on a single truck "would entail analyzing each item in the 200 customer orders" -- an impossible task since the customers "were small retailers" and "each customer order tended to contain many different items," under different tariff classifications and price levels.

"Extraction of the requested data would take years of work, and hundreds of thousands of dollars in expense for the plaintiff to complete," the brief said. As a result, the "speediest, inexpensive and just way" to resolve the case "would be for a judgment of dismissal to be entered against plaintiff," Midwest claimed.