Questions Persist Over Section 301 Tariff Lawsuit Deadline; Firms Using Creative Fee Structures
Whether the deadline has passed for court challenges to lists 3 and 4 of Section 301 tariffs of goods from China continues to be in question, lawyers following the case have said. While some have pegged the deadline to Sept. 21 based on a two-year statute of limitations from when the List 3 tariffs were published in the Federal Register (see 2009160056), other factors remain in play. Filing sooner rather than later is seen as preferable, the lawyers said.
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One claim from HMTX Industries' original filing said that the Office of the U.S. Trade Representative violated the Administrative Procedure Act. “It is well-established that a party acquires standing to sue under the APA when it suffers actual 'injury in fact,'” the Neville Peterson law firm said in a blog post. “In the case of Section 301 tariffs, the first tariffs were not imposed until September 24, 2018. And, in APA cases, the first 'injury in fact' an importer suffers occurs in the first date that Customs demands payment of Section 301 tariffs from that importer. Thus, if your company was not assessed with Section 301 tariffs until October 1, 2018, you arguably have until September 30, 2020 to file a suit in the CIT to redress that injury.”
Additionally, “each separate payment of duty constitutes a separate 'injury in fact' which triggers a right to sue under the APA,” the firm said. “Assume that you do not file a refund claim until October 15, 2020. You might be time-barred from recovering Section 301 duties paid before that date, but you would be able to preserve your right to refunds of duties paid thereafter.”
Christopher Kane of Simon Gluck made a similar argument in a LinkedIn post. “[P]ractically speaking, the Legal concept of 'ripeness' informs us that 'you can't yell and get help until you've been hurt,'” he said. “You don't have a case until you've actually PAID money that the government should not have collected. That would mean that the statute of limitations would begin to expire two years after your first payment, and not finally expire until two years after your last payment of List 3 and 4A 301 duties.”
Although constitutional claims don't seem to be part of the HMTX suit, that could change, Kane said in an email. “If what the USTR and friends did with regard to the implementation of List 3 and 4A is an unconstitutional deprivation of Due Process and Equal Protection under the 5th Amendment to the U.S. Constitution, as with the violation of the Export Clause in the Export HMT case, there might be NO statute of limitations at all.” That issue may come up in response to the expected Justice Department motion to dismiss “that will probably be mounted within the next 4-5 months,” Kane said. "I know I plan to raise it.”
The HMTX complaint seems to have been in the works for some time. Akin Gump, which is representing HMTX, crafted nearly identical arguments two years ago when the Consumer Technology Association hired the firm to draft a complaint to block the List 3 tariffs that the association never followed through on (see 1810290020). Akin Gump has been working on the arguments in the HMTX case “for well over a year,” CTA emailed members days ago. The association took a hands-off approach as the thousands of complaints were mounting but appeared to act as facilitator linking Akin Gump with member companies pondering copycat suits.
If the HMTX plaintiffs win, “we can expect that list 3 (and therefore list 4 as it was administered the same) tariffs will disappear,” CTA told members. “HOWEVER, regarding refunds of tariffs already paid, the only clear beneficiary is a company with legal standing. AKA a company which files suit on specific products on lists 3 and 4.” CTA acknowledged there’s “a good deal of legal uncertainty about whether companies who do not file a lawsuit would reap the benefit, particularly after their entries liquidate, so the safer course may be to file.”
CTA told members Akin Gump was offering to file and litigate “new company claims for 301 ‘me-too’ cases” at a flat $50,000 retainer, plus a 5% cut of tariff refunds awarded, capped at $250,000. Akin Gump was willing to negotiate less costly terms for smaller enterprises that couldn’t afford the $50,000 fee, industry members said. Sandler Travis also apparently floated offers to represent smaller clients at a $3,500 fixed fee plus a 10% cut of any refunds. Neither Sandler Travis nor CTA responded to requests for comment from sister publication Consumer Electronics Daily. A spokesman for Akin Gump said the firm doesn't comment on its fee structures but has filed complaints for about 100 more companies in recent days.