CIT Declines Otter GEO Injunction Request
The Court of International Trade shot down an injunction request from Otter Products that would have prevented CBP from stopping imports of some of the company's iPhone cases. The CIT found that Otter's injunction request failed to demonstrate "irreparable harm" that would result without the injunction, it said in the Dec. 23 decision (here). Otter sought the injunction as part of an ongoing battle against an International Trade Commission general exclusion order (GEO) that CBP found to include Otter's "Symmetry" iPhone cases. The court also found that it can't hear Otter's challenge to CBP's decision to exclude future cases because of a lack of detail as to how an import ban would hurt the company.
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Otter suggested that CIT has jurisdiction under 28 U.S.C. 1581(i) "residual jurisdiction" provisions, rather than section 1581(a) for denied protests. Otter has filed several protests with CBP and lawsuits at CIT on the issue already, and would need to continue to do so if CIT restricts its jurisdiction to Section 1581(a) and makes Otter challenge each denied protest rather than the exclusion issue in general, the company said. Otter said, as is, it would have to repeatedly enter the iPhone cases, contrary to CBP's ruling, wait for CBP "to exclude those cases, protest the exclusion, wait for the protest to be denied or ‘deemed denied’ 30 days later, and then file a Summons on each such protest" to "meet the jurisdictional requirements" of 1581(a).
The court was not convinced. That the legal regime that Congress put in place may create delays for Otter, doesn't mean the procedures are "manifestly inadequate," the legal standard for subject matter jurisdiction in 1581(i), said the CIT. The court already granted Otter a temporary restraining order and just because the company would prefer an injunction with more "breadth," the available remedies are not inadequate, said the court.
Otter's evidence for irreparable harm without an injunction also falls short, the court said. The company told the court that "since the GEO has come into force, Otter has received multiple inquiries and statements of concern from some of these customers about the availability of Symmetry cases, particularly during the upcoming holiday season, and these customers have suggested that they may need to source cases from Otter’s competitors if the GEO remains in place." But Otter has already shown that it will not suffer the harm. Under Section 1581(a), the court may only address the 20 entries already entered and protested by Otter -- the lawsuit challenges CBP's deemed denial of a protest against Notices of Redelivery. The company said it had not redelivered the entries in question and told CBP "that it had no intention of redelivering the entries in question because they had already been distributed to Otter’s customers." Therefore, the company "has effectively conceded that it will not suffer" without an injunction, said the court.
The court was also skeptical of Otter's requests for jurisdiction under section 1581(h) for challenges to rulings, which also requires concrete proof of immediate and irreparable harm. The company's claims "that it is imperative to release new cell phone case designs soon after a new cell phone model’s launch" are muddied by the company's past experience. While Otter’s Symmetry cases are designed for the iPhone 5s and 5c, which debuted in September 2013. The cases at issue were not released until six months later, said the court. The Symmetry models temporarily boosted Otter's sales, indicating a "delayed availability of the Symmetry cases may only delay when Otter will experience a boost in sales associated with the new product," the court said. Additionally, Otter has not "indicated the extent of its U.S. inventory of the Symmetry cases, the extent to which its customers have established an inventory of these particular cases, or at what point the application of the GEO to Otter’s imports of Symmetry cases will begin to impact Otter’s ability to meet any customer obligations," the judge said.
(Otter Products v. U.S., Slip Op. 14-154, CIT # 14-00328, dated 12/23/14, Judge Barnett)
(Attorneys: Louis Mastriani of Adduci Mastriani for plaintiff Otter Products, LLC; Joyce Branda for defendant U.S. government; Christian Samay for proposed Amicus Curiae or intervenors Speculative Products Design, LLC)