Three More Importers Sue on Section 232 'Derivatives' Tariffs; Lawsuits Expected to Multiply
A third importer has now requested a court order blocking collection of new Section 232 tariffs on steel and aluminum “derivatives," and two others are not far behind. Huttig Building Products filed a lawsuit at the Court of International Trade on Feb. 18 challenging the new tariffs, and a day later asked for a temporary restraining order and preliminary injunction that would bar imposition of the tariffs on entries from Huttig and its affiliate while the court considers the legal challenge. Astrotech Steels and Trinity Steel filed their own complaints on Feb. 20, though as of press time they had not yet asked the court to order a halt to the tariffs.
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The new filings follow a successful bid by PrimeSource to stop the tariffs on its entries (see 2002140040). All three new lawsuits are similar, challenging the new tariffs on "derivatives" on the basis that the Commerce Department didn’t follow Section 232 procedures for issuing a report and also alleging the tariffs, which took effect Feb. 8 are unconstitutional. Like PrimeSource (see 2002060075), Huttig also says Commerce went well past several deadlines for imposing tariffs.
Oman Fasteners also has filed a lawsuit challenging the new tariffs and requested an injunction, though CIT has not yet ruled on the motion. Michael House of Perkins Coie, who represents Oman Fasteners in that case, is also Huttig’s lawyer in this one. Max Schutzman of Grunfeld Desiderio is also pulling double duty, representing both Astrotech and Trinity.
Huttig says Justice Department lawyers have said they will oppose its motion for a temporary restraining order. That’s despite DOJ reaching agreement on the order in the PrimeSource case. For that reason, among others, law firm Neville Peterson called the court’s order in PrimeSource “virtually unprecedented.”
“This development is truly remarkable, for a number of reasons,” Neville Peterson said in a Feb. 19 blog post on the PrimeSource case. “First, it is extremely difficult for any litigant to obtain a court order enjoining the collection of a tax. Second, instead of fighting the injunction, as would be usual practice, the Department of Justice agreed to it.”
Neville Peterson says a rush of new lawsuits challenging the tariffs is likely -- it said so prior to the two new lawsuits filed by Trinity and Astrotech -- and not only on the new Section 232 tariffs on derivatives. Importers are now realizing that, as a result of a CIT ruling on deadlines for Section 232 investigations in a case involving Turkish steel (see 1911180013), Section 232 tariffs on steel and aluminum products from Canada, Mexico and the European Union, which were not imposed until June 1, 2018, are likely illegal as well. “A number of judicial challenges to the imposition of tariffs on these goods have already been filed,” the law firm said.
“Companies wishing to seek refunds of these duties can bring their claims by filing lawsuits in the Court of International Trade, challenging the constitutionality of the assessments,” Neville Peterson said. “Companies who file suit by May 31, 2020 can capture refunds of all Section 232 tariffs imposed on their goods. Importers can also seek refunds by filing protests with Customs -- but these protests might not reach all duty payments, and Customs will not grant any protests until a court strikes the tariffs down.”
“So, the gold rush is on -– or more appropriately, a steel and aluminum rush,” Neville Peterson said in its blog post. “In the coming months, importers will be filing claims to recover these apparently unconstitutional tariffs.”
Email ITTNews@warren-news.com for a copy of the Huttig complaint and motion for TRO.