Importers Must File Protests to Preserve Section 301 Exclusion Claims, DOJ Says

Importers must file protests to preserve their rights to Section 301 tariff exclusions issued after an entry has already liquidated, the Department of Justice said in a motion to dismiss a pair of lawsuits that seek to have the exclusions applied past the protest deadline. CBP’s failure to apply the exclusions was a protestable event, even if the exclusions did not exist at the time, and the Court of International Trade’s jurisdictional scheme means CIT can’t hear cases wherein the importer skipped the protest scheme, DOJ said.

ARP Materials and The Harrison Steel Company filed the lawsuits. They say CBP’s decision not to apply the exclusion was “ministerial” in that the agency had no choice but to implement the Section 301 tariffs, as mandated by the Office of the U.S. Trade Representative. Instead, they challenge CBP’s failure to reliquidate the entries as a “wrongful possession” by the government of its entries that should be covered by exclusions.

Four other cases have been stayed pending resolution of these two “test cases,” including a lawsuit filed by Trebbianno in August (see 2007270051). Lawyer Christopher Kane of Simon Gluck represents the importer plaintiffs in all six cases.

DOJ says the jurisdictional arguments made in the cases are incorrect. While CBP was administering an order from another agency, “its procedures for assessment and liquidation apply, and any claimed misapplication of these procedures is protestable,” DOJ said. ARP Materials and Harrison in effect are challenging the classification CBP applied to the entries upon liquidation -- CBP applied tariffs under the applicable subheading for Section 301 tariffs instead of the subheading for a Section 301 exclusion -- and classification should be challenged via a protest, DOJ said.

“Here, plaintiffs failed to file administrative protests within the statutory deadline for the particular entries covered by their amended complaints, despite having clear notice that the filing of a protest was necessary to take advantage of any change in the duty rate,” DOJ said, noting CSMS messages CBP had sent out advising importers of the need to protest (see 1905220063 and 2005040045). “A timely protest would have allowed CBP to correct the liquidation and apply the exclusion decision issued by” USTR.

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