US Tells CIT to Reject TRO, Injunction Motion Against Interim EAPA Duties on Golf Carts

The government argued that the trade court doesn't have subject matter jurisdiction over the case, which was filed under the court's "residual" jurisdictional grant in Section 1581(i), since the importer should have waited for the evasion investigation to end then file suit under Section 1581(c). The brief added that the court should refrain from entering any equitable relief against the interim measures, since the government is likely to win its motion to dismiss and the importer failed to show irreparable harm absent such relief.

Plain economic injury doesn't constitute irreparable harm, and "self-serving declarations" saying the company will go out of business if it has to continue paying the interim measures don't save the importer's bid for relief, the U.S. said.

The TRO and preliminary injunctions will be heard by Judge Jane Restani during a closed conference on April 21.

ICON filed its case at CIT amid CBP's Enforce and Protect Act investigation on evasion of the antidumping duty and countervailing duty orders on Chinese golf carts. The U.S. said that on April 6, CBP notified ICON that it had opened a formal investigation on the alleged duty evasion and was imposing interim measures. Specifically, the agency subjected imports from ICON and other importers from Sept. 7, 2024, through the pendency of the investigation to the duties.

Filing a motion for a temporary restraining order and preliminary injunction, ICON argued that it's likely to succeed on the merits of its claim that CBP violated its due process rights by imposing interim measures without any notice or "meaningful opportunity to be heard" and that the duties "will imminently put ICON out of business."

The U.S. filed a combined response to the importer's motion and a motion to dismiss, arguing that the court should dismiss for lack of subject matter jurisdiction. First, the government argued that EAPA expressly calls for judicial review under Section 1581(c). Both CIT and the U.S. Court of Appeals for the Federal Circuit have rejected similar lawsuits finding that when "relief is prospectively and realistically available under another subsection of 1581," the plaintiff can't invoke Section 1581(i) jurisdiction.

While ICON cited the trade court's decision last year in Superior Commercial Solutions v. U.S., in which Judge Jennifer Choe-Groves held that CBP's regulations regarding when notice is provided to importers in an EAPA investigation are contrary to law (see 2511260060), the U.S. said the case is inapposite. Unlike here, Superior Commercial waited until the end of the EAPA investigation, then challenged the final determination and application of interim measures.

The U.S. added that Section 1581(c) isn't a "manifestly inadequate remedy." The government said the CAFC's decision in International Custom Products v. U.S. is "instructive," since in that case, an importer sought 1581(i) jurisdiction on the basis that it would face an imminent threat of bankruptcy if it had to resort to the remedy under Section 1581(a). The Federal Circuit rejected the claim that "these hardships or the financial distress inherent in awaiting adjudication rendered the available remedy manifestly inadequate." Allowing the importer to skirt the jurisdictional limits of 1581(a) "would undermine the integrity of the clear path Congress intended a claimant to follow," the brief said.

The government added that ICON's claim is "unripe," since it challenges nonfinal agency action. CBP may reverse course in its final determination and provide the importer with refunds of cash deposits paid, but as of right now, it's unknown what the government will do, since the investigation isn't final, the brief said.

Responding to the motions for a TRO and preliminary injunction, the U.S. argued that ICON is likely to lose on the merits of its claims, given the jurisdictional issues with the case and the fact that the importer has no constitutional right to engage in international trade free of interim measures when CBP has found a reasonable suspicion of evasion.

The government said the analysis of whether a plaintiff has a protectable interest for due process purposes centers on the private interest, the risk of an "erroneous deprivation of such interest through the procedures used" and the government's interest, including the burdens any additional process would require.

It's "well established that a company does not have a constitutionally protected property interest in any rate of duty, an importation, or even engaging in international trade," and even if ICON has some property right, the court must "examine the specific procedural safeguards the situation demands and what due process ought to be afforded," the brief said. Here, the EAPA scheme affords notice and opportunity to be heard, and CBP, by regulation, has created "additional notice and opportunities to participate" throughout the EAPA investigation.

The U.S. also contested ICON's claim it will suffer irreparable injury absent equitable relief from the court. Invoking the trade court's 1997 decision in Shree Rama Entr. v. U.S., the government said the court there found that "even allegations of bankruptcy would be 'weak evidence' if based on affidavits from interested parties -- absent 'evidence from independent sources' or 'hard evidence' of the serious permanent harm that would result."

ICON isn't the first company to argue it would go out of business if it had to pay duties, the U.S. said, citing CIT's 2002 ruling in Corus Group v. Bush, in which the court rejected a claim that a company would go out of business if it had to pay tariffs. The Corus Group court held that finding irreparable harm under the "close the plant" theory would force the court "to do so in any challenge," since "every plaintiff could argue that increased tariffs would cause revenue shortfalls possibly resulting in either operating at a loss or plant closure at some future date."

The U.S. added that ICON hasn't submitted any evidence "that it will file for bankruptcy, or has taken any concrete steps to do so." The government added that ICON hasn't shown why an "asset-based loan" is the only way it could obtain financing, noting that the importer "appears to be backed by private equity firm Landon Capital Partners." ICON fails to show it couldn't turn to Landon Capital to pay the interim measures, the brief said.

A brief was also filed by proposed defendant-intervenor American Personal Transportation Vehicle Manufacturers Coalition that backed many of the government's arguments.