CIT Tosses Suit on Liquidation of Tire Entries for Lack of Jurisdiction

July 24, 2024 by Jacob Kopnick|Penalties and Courts

The Court of International Trade on July 23 said CBP didn't have the authority to extend an order from the court enjoining liquidation of various entries to imports entered by Acquisition 362, doing business as Strategic Import Supply. Judge Mark Barnett dismissed the case for lack of subject-matter jurisdiction, finding that because Acquisition 362 wasn't a party to a separate case challenging the antidumping duty rate assessed on the company's goods, it wasn't subject to the court's order suspending liquidation of various tire entries.

Acquisition 362 entered passenger vehicle and light truck tires from Chinese exporters Shandong Hengyu Science & Technology Co. and Shandong Wanda Boto Tyre Co. from August to November 2016. The Commerce Department then started the second review of the AD order on tires from China, covering entries from 2016 to 2017.

The agency set a 64.57% AD rate for tires made by Hengyu and Wanda Boto, issuing liquidation instructions to CBP to assess the duties on the tires made by the two companies. Various parties, not including Acquisition 362, challenged this rate at CIT, after which the court enjoined the liquidation of goods exported or imported by the parties to the case. Neither Acquisition 362, Hengyu nor Wanda Boto were parties to the case, and so the importer's entries weren't enjoined from liquidation.

Commerce then issued new liquidation instructions to CBP to assess the AD on all entries not enjoined by the trade court. As a result, CBP liquidated Acquisition 362's goods, imposing the AD rate on the entries. The importer took to CIT, saying CBP illegally liquidated its goods (see 2401190063).

Barnett dismissed the case, finding a lack of subject matter jurisdiction under Section 1581(a) since CBP didn't make a "protestable decision when it followed Commerce's" most recent liquidation instructions. The court's injunction was limited to tires made by Hengyu and Wanda Boto imported by parties to the case challenging the AD review.

The judge said Acquisition 362 "offers no legal support for the proposition that Customs was empowered to expand the court-issued statutory injunction or Commerce’s instructions beyond their respective terms." After Commerce issued its final results in the review, CBP had notice that the suspension of liquidation set in place during the AD review had been lifted. Without "some further legal action to suspend," CBP's failure to liquidate the goods within six months after getting notice of the suspension being lifted would lead to the entries being deemed liquidated.

It wasn't within CBP's power to extend the court's injunction to the importer's entries, "and any gratuitous withholding of liquidation of those entries by Customs could have caused Customs to lose the ability to liquidate those entries at the correct assessment rate," the opinion said.

(Acquisition 362 v. U.S., Slip Op. 24-84, CIT # 24-00011, dated 07/23/24; Judge: Mark Barnett; Attorneys: Thomas Wallrich of Cozen O'Connor for plaintiff Acquisition 362; Hardeep Josan for defendant U.S. government)