Best Key Asks CIT to Reconsider Dismissal of Ruling Revocation Challenge
Best Key Textiles asked the Court of International Trade on Dec. 23 to reconsider its dismissal of the company’s challenge to CBP’s revocation of a ruling on the company’s metallized yarn. As a challenge under the Administrative Procedure Act to CBP’s alleged misconduct during the revocation proceeding, CIT can hear the case if it chooses, said Best Key. But if not, the interests of justice would best be served by transferring the case to a federal district court so Best Key can get a fair hearing, it said.
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CIT dismissed Best Key’s case on Dec. 13, finding it was legally barred from hearing a challenge to a ruling unless the plaintiff would directly suffer harm (see 13121317). In this case, Best Key’s yarn actually received a more favorable duty rate from the ruling revocation -- the company’s challenge rested on the injury it suffered as a result of the ruling scaring off potential customers that would otherwise have benefited from favorable tariff treatment on apparel made from the yarn. That proved to be too indirect for CIT, which found it lacked jurisdiction under 28 USC 1581(h).
The court only devoted a page of its Dec. 13 opinion to Best Key’s alternative argument that it had standing to challenge the ruling under the court’s residual jurisdiction provision at 28 USC 1581(i). Given that an importer could challenge the classification via either the court’s protest denial jurisdiction under Section 1581(a) or its customs ruling jurisdiction under Section 1581(h), the court said Best Key couldn’t use the residual provision because other legal avenues were available.
In its request for reconsideration, Best Key says the court misunderstood its arguments. Best Key wasn’t strictly challenging the content of the ruling revocation, it said, but rather the actions CBP took to get there. According to Best Key, CBP officers improperly colluded to arrange the result, including by misreporting the results of lab testing that confirmed the yarn’s metal content. The Administrative Procedure Act “provides judicial review for [a] person suffering a legal wrong because of agency action, or adversely affected or aggrieved by agency action within the meaning of a relevant statute,” says Best Key. That review would best be carried out under Section 1581(i), which in turn provides for challenges to the administration and enforcement of customs laws, including those on customs rulings, says Best Key.
Unlike other CIT cases, lawsuits under Section 1581(i) can be filed by “any person adversely affected or aggrieved by agency action,” so Best Key, which the court already admitted suffered injury (if indirect), can challenge the ruling revocation. And no other legal avenue is available to Best Key, it said. The company doesn’t import apparel, so it wouldn’t be able to file a protest of the classification and challenge it in court under Section 1581(a), it said. And the court already ruled that Section 1581(h) jurisdiction isn’t available to the company.
And if CIT nonetheless finds it cannot hear the case, Best Key argued it should transfer the case to the U.S. District Court of the District of Columbia. As a court governed by Article III of the Constitution, CIT has the authority to hear APA complaints against agency procedures if it so chooses. But if the court still says it doesn’t have jurisdiction, justice requires transfer to another court that does, Best Key said. “Plaintiff’s action raises substantial and serious questions of law regarding advance ruling administrative proceedings administered by CBP,” said Best Key. “These questions have significance not only to Best Key, but also to other parties participating in these proceedings.”
Email ITTNews@warren-news.com for a copy of Best Key’s motion.