CIT Should Not Reopen Discovery in Watchmaker Classification Case, Exporter Argues

DOJ’s motion to bar a wristwatch exporter from using a late discovery production in any subsequent proceedings, or alternatively to reopen discovery, is just an “illusory claim” because no new information has actually surfaced, the exporter argued Jan. 24 at the Court of International Trade (Ildico Inc. v. U.S., CIT # 18-00136).

Both parties to the case also sought a protective order to designate as confidential any information that did not appear already in the public domain, disclosed trade secrets or revealed private or personal details.

The exporter, Ildico, brought its case to CIT way back in 2018 protesting CBP’s Harmonized Tariff Schedule classification of its wristwatches. The case has been marked by an “extensive formal fact discovery.” DOJ said it had struggled to learn the watches’ material components (see 2401120059).

DOJ said Jan. 9 that Ildico was late in providing supplemental discovery materials in the form of photographs showing the product’s faces and text “purporting to describe the merchandise”; discovery closed in September, while the material was not given to the government until December, DOJ said.

Ildico said the images it provided were not new. It said it first gave them to Commerce when it lodged its administrative protest.

“Although the government claims it needs further discovery because it cannot ‘probe’ this information, the descriptive information is found on the commercial invoices and the watch declarations for the entries covered by the protests which are part of the court record,” it said. “Moreover, the commercial invoices provide more detailed information about the watch case materials than the Supplemental photos.”

Ildico said that “nothing is new or surprising” about the photographs. It said it provided the supplement as a courtesy to the government because the supplement was convenient, combining information from several different documents on one page.

The exporter also took issue with DOJ’s claim that Commerce had not been allowed to see the watches, saying that it had when it made three representative models available for inspection.

“As a courtesy to the Government, Plaintiff’s Supplement also provides photographs of the watches inspected by [government inspection specialist] Ms. Jimenez even though she may have taken her own,” it said. “The motion is devoid of that fact. The Government also does not explain that Plaintiff’s Supplement includes, as a courtesy, photographs of watch case parts and watch crystals inspected by Government Counsel at Plaintiff’s 30(b)(6) deposition because the Government may not have taken photographs of these items either.”

Finally, Illdico said that DOJ’s “concern” about the production process of the watches’ synthetic sapphire crystals is “moot,” as Ildico had provided processing steps for them, as well as the “name and website of the crystal manufacturer.” Commerce already knows how synthetic sapphire crystals are made, as that’s “public knowledge,” the exporter argued.

“Remarkably, the Government claims it needs more time to discover how the synthetic sapphire is produced even though Customs demonstrates its intimate familiarly with this process in the Headquarters Ruling that led to this action,” it said. “Customs’ ruling even acknowledges that luxury Swiss watches, such as Richard Mille brand, use sapphire crystals!”

Ildico noted that its attorney had intended to provide, “as a courtesy,” sample crystals to the government at an inspection, but “but because she could not attend the inspection, she did not realize that Ms. Jimenez did not receive the samples.”