Rack Room Asks Supreme Court to Hear Gender Discrimination Case on HTS Duty Rates
Rack Room Shoes on Dec. 4 petitioned the Supreme Court to hear its case on gender discrimination by duty rates in the Harmonized Tariff Schedule. The challenge to gender-specific duty rates on footwear and apparel was dismissed by the Court of International Trade and Court of Appeals for the Federal Circuit on its way to the Supreme Court, because they found Rack Room didn't prove the Congress intended to discriminate. Rack Room argues those courts set so high a bar in equal protection cases that discrimination challenges to laws would become nearly impossible.
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Supreme Court Denied Hearing of Another Gender Tariff Case in 2010
The Supreme Court has already turned down one request to hear a case on gender discrimination in the tariff schedule. In 2010, the court refused to hear a challenge to duty rates on gloves (see 10100602). Totes-Isotoner had argued differing duty rates for men’s gloves and other gloves are obviously and expressly discriminatory -- “facially discriminatory” in legal terms.
But the Court of International Trade in 2008, and the Court of Appeals for the Federal Circuit in 2010, said gender-based tariffs do not obviously discriminate on the basis of gender, because they could have been put in place for several reasons. They could be part of the give-and-take of trade negotiations, for example. Because the tariffs weren’t facially discriminatory, Totes-Isotoner had to show Congress intended to discriminate on the basis of gender. Both CIT and CAFC ruled that Totes-Isotoner failed to do so, and dismissed (see 08070905 and 10021020). A last-ditch attempt by Totes-Isotoner to have its case heard by the high court was denied.
Rack Room Attempts to Argue Congressional Intent; Courts Want More Facts
After it saw the results of the Totes-Isotoner case, Rack Room amended its complaint to show congressional intent. It said Congress showed its intent to discriminate based on gender when the legislative body when it decided to set duties based on gender, and not some other characteristic. The outcome of 171 similar cases hinged on the Rack Room case, a number that has since swelled to nearly 200 (see 11083118).
Despite the new argument, CIT in 2012 dismissed Rack Room’s case because it also failed to prove congressional intent (see 12022102). According to CIT, the new argument merely restated Totes-Isotoner’s claims that the gender-based duty rates were facially discriminatory. Rack Room didn’t raise any factual basis for its claims that Congress intended to discriminate, said CIT. Under the Supreme Court’s 2007 and 2009 rulings in Twombly and Iqbal, civil lawsuits, including equal protection claims like Rack Room’s, need to make a plausible argument based on facts to survive a motion to dismiss. Rack Room’s complaint lacked the facts to do so, CIT said.
CAFC in 2013 upheld the dismissal, again finding Rack Room’s arguments to be short on facts (see 13061302. Instead, “they present a legal argument that Rack Room need not show a discriminatory purpose because nondiscriminatory alternatives are available,” a situation that would “eviscerate” the requirement to show congressional intent to discriminate, said CAFC.
High Bar Set by CAFC Threatens to Close Door on Discrimination Cases
In its bid to have the Supreme Court take up the case, Rack Room conceded that its evidence for congressional intent is indirect. Yet it did rely on a fact -- that Congress legislated tariffs based on gender -- and the use of circumstantial evidence to show government intent has never been doubted before, said Rack Room.
If CAFC’s high bar for showing discriminatory intent in equal protection cases is allowed to stand, “then it will become impossible for litigants to bring direct challenges to statutes alleged to offend equal protection guarantees,” said Rack Room. The complaint might be threadbare, but direct challenges to laws frequently have to be, it said. The legislative record often gives little detail, particularly at times where Congress may be trying to hide discriminatory intent. In this case, there is no legislative record discussing each specific tariff term, so there’s no other evidence for Rack Room to show the court, Rack Room said.
Other courts have recognized this danger, and have adjusted their application of the Iqbal Supreme Court case to set a lower bar for simpler cases, said Rack Room. “The Federal Circuit by rejecting Rack Room’s complaint has now become an outlier in its understanding of Iqbal, which it is fair to say would have been applied to this case much differently were jurisdiction not exclusively in the trial court below,” said Rack Room. “The impact in that circuit -- and in others that inevitably find the holding persuasive -- will be broad and harsh, resulting in the dismissal of ‘seemingly improbable, yet potentially meritorious, discrimination claims at such an early stage.”
Email ITTNews@warren-news.com for a copy of Rack Room’s petition for certiorari.