Court Deluged With Section 301 Suits; HMT Litigation Seen as Likely Model
The U.S. Court of International Trade is deluged with hundreds of lawsuits that closely model a Sept. 10 challenge from Akin Gump and flooring importer HMTX Industries that seeks to force refunds of Section 301 tariffs paid on List 3 and 4A goods (see 2009110041). Such a torrent of filings is rare but not unheard of at the CIT, said lawyers involved in and following the litigation. The most obvious example was the yearslong litigation over the harbor maintenance tax (HMT), when exporters challenged the lawfulness of the fees at the CIT, they said.
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HMTX's lawyer at Akin Gump, Matthew Nicely, said he's "pleased to see the support that our complaint generated across the country, and we look forward to working with the court and the other counsel to manage this litigation." CIT Clerk Mario Toscano didn't return a request for comment. Monday was the two-year statutory deadline for importers to file with CIT for any hope of collecting refunds if the HMTX action prevails.
The HMT case was resolved in 1998 when the Supreme Court ruled that the fees on exported cargo were unconstitutional. The main connection between the HMT and Section 301 tariffs is the number of litigants, emailed Michael Roll, a lawyer with Roll & Harris. The 301 suit, unlike the HMT case, doesn't involve a constitutional argument, he said. "It’s a statutory violation, but the similarity is that thousands of exporters filed suit," said Roll, whose firm represents some filers and is keeping a list of complainants. "Ultimately, the CIT picked a 'test case' in the HMT litigation and all other cases were stayed until the test case was resolved. After that, there was a judgment and claims process."
During the litigation of the HMT test case, a steering committee of plaintiffs' lawyers worked with the lawyers on the lead case, said Roll, who participated in that committee. "We all worked kinda collaboratively," he said. A different lawyer familiar with the Section 301 case agreed a test case approach is among the likely options. Another possibility would be to consolidate all the lawsuits into one, though that could be more difficult to oversee with the number of parties involved, the lawyer said.
The HMTX complaint alleged the Office of the U.S. Trade Representative overstepped its Trade Act authority to impose the List 3 and 4A tariffs on Chinese goods and violated the Administrative Procedures Act by not running transparent rulemakings. Akin Gump drafted an identical complaint for CTA two years ago that the association never filed. HMTX amended the complaint (in Pacer) Monday, adding Jasco Products as a plaintiff. CTA member Jasco, unlike HMTX and its subsidiaries with only List 3 tariff exposure, has List 3 and 4A exposure. It applied for tariff exclusions Dec. 2 on eight categories of tech accessories imports, including Bluetooth speakers and battery chargers. USTR denied them all.