Section 301 Challenge Meets Benchmarks for 3-Judge Panel, Says Akin Gump
The thousands of complaints seeking to vacate the List 3 and 4A Section 301 tariffs on Chinese goods and get the duties refunded (see 2009220027) warrant the U.S. Court of International Trade assigning the litigation to a three-judge panel instead of a single judge, motioned (login required) Akin Gump Wednesday on behalf of importers HMTX Industries and Jasco Products. DOJ told Akin Gump it opposes the motion and will file a response, the firm said.
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CIT Chief Judge Timothy Stanceu has the congressionally authorized “sound discretion” to assign litigation to a three-judge panel if it raises constitutional issues or has “broad or significant implications” for carrying out or interpreting customs laws, said Akin Gump. The huge response the litigation generated shows the lawsuits rise to the broad or significant statutory benchmark, it said. Stanceu’s chambers didn’t respond to questions Thursday, nor did DOJ.
All the roughly 3,500 complaints allege the Office of the U.S. Trade Representative waged an “unprecedented, unbounded, and unlimited trade war” with China that overstepped its 1974 Trade Act authority, said Akin Gump. No court previously “has addressed the scope and application of that authority in the context of a trade war with a foreign country,” it said. “This case thus raises a significant issue of first impression.” Though HMTX and Jasco don’t “assert a constitutional claim,” the litigation “implicates significant issues of congressional and presidential authority, as well as principles of constitutional avoidance,” it said.
The HMTX-Jasco action “also presents a question of such an exceptional nature as to necessitate the designation of a three-judge panel,” said Akin Gump. The List 3 and 4A tariffs “have affected countless U.S. companies” that import goods from China, plus “virtually all U.S. consumers, who have borne the brunt of these duties as they are passed through in the form of higher retail prices,” it said. “The exceptional nature of this challenge is amply demonstrated by the unprecedented response from the U.S. business community.” The 3,500 complaints involve “an even greater number of individual businesses,” it said. The firm also highlighted that litigation in recent years over Section 232 tariffs involving smaller trade volumes were granted a three-judge panel. “Those actions challenged whether the defendants acted in excess of the authority conferred to them, just as Plaintiffs’ action does here,” it said.
The advantages of a decision by a three-judge panel “would far outweigh any benefits derived from a single judge presiding over the action,” said Akin Gump. The “unprecedented” litigation “involves the rights of thousands of businesses” and billions of dollars in “accruing annual duties,” plus “significant questions” of executive and legislative branch authority and “intense nationwide and global interest,” it said. “There is obvious benefit to having the important questions at issue decided by a three-judge panel. By contrast, there are no obvious disadvantages to assigning this case to a three-judge panel.”
None of the 3,500 cases has been assigned to a single judge, said Akin Gump. If the court decides a single judge is “better equipped for case-management issues,” it can simply follow the precedent set in the harbor maintenance tax litigation and “assign case-management responsibilities to a single judge while leaving the significant merits issues to be decided by a three-judge panel,” it said. DOJ has until Oct. 21 to respond in docket 1:20-cv-177.