Attorney's Fees Needed to Combat Govt's 'Flagrant Disregard' of Scheduling Order, Importer Argues

Importer 3BTech asked the Court of International Trade to award it attorney's fees in a tariff classification case associated with the company's efforts in resolving the issue of the government's untimely submission of expert declarations. 3BTech said the U.S. willfully violated its disclosure obligations and "blindsided both" the company and the court by not telling either about its plans to work on the declarations when it requested an extension to file its cross-motion for judgment (3BTech v. United States, CIT # 21-00026).

The importer's motion, which comes in its case on the classification of its Swagtron hoverboards (see 2409100056), first seeks to strike the expert declarations from Norbert (Bert) Reiner and Edward Benjamin as additional expert reports produced after the discovery deadline.

Concurrently, 3BTech moved to strike the expert declaration from CBP national import specialist Matthew Sullivan, amendments to the Compendium of Classification Opinions and World Customs Organization classification opinions and the government's rule statement. The importer said all the documents were produced after the experts had been deposed, discovery had concluded and plaintiff's motion for summary judgment was filed.

The deadline to submit expert reports was Nov. 6, 2023, the importer said. While the U.S. submitted initial expert reports for Reiner and Benjamin ahead of this deadline, the government "opted to" forgo the reports and didn't refer to either of the reports in its cross-motion for judgment.

3BTech said the expert declarations the U.S. refers to now "are, in fact, additional expert reports" and shouldn't be allowed "at this late stage after the Court-ordered deadline to produce expert reports had passed." The reports "introduce new reasoning, employ new methodologies, and offer new conclusions, which were not disclosed in the Initial Expert Reports," the brief said.

The importer likened its situation to a case decided by a New Mexico federal court, Lilley v. CVS Health, which held that a party isn't allowed to use expert testimony or supplements to that testimony if it failed to timely disclose the information. Similar to the documents at issue in Lilley, the expert declarations "went beyond correcting mistakes or oversights, or merely supplementing the Initial Expert Reports" and lay out new reasoning and conclusions to boost the reports and "cure any deficiencies."

The effort to include the declarations stands in "flagrant disregard of this Court's scheduling orders," the brief said.

All of the information used in the declarations "was available to Defendant’s experts at the time ... the Initial Expert Reports were disclosed," 3BTech argued. The late disclosure is additionally "not harmless" since the government "almost entirely relies on the Expert Declarations to" support its statement of facts, and since it "completely ignores the Initial Expert Reports," the importer said.

3BTech asked for attorney's fees related to its efforts to combat the inclusion of the declarations, given the government's alleged "willful violation of its disclosure obligations." The importer said it had to "expend considerable time and resources to analyze Defendant’s new evidence, review the new findings of Defendant’s experts, and prepare this motion."

3BTech took to the court to argue that its hoverboards should receive duty-free treatment under heading 9503 for "tricycles, scooters, pedal cars and similar wheeled toys." The government argued in its cross-motion that the goods fit under heading 8711, which comes with a 25% Section 301 tariff and provides for "motorcycles (including mopeds) and cycles fitted with an auxiliary motor, with or without side-cars; side-cars."