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DOJ Says Importer Can't Link Prior Disclosure to Classification Case Victory

OtterBox can't get refunds on a prior disclosure it made on imports of smartphone covers, even though it prevailed in a Court of International Trade case on entries of the same product, the Department of Justice said in a June 25 reply brief to OtterBox's motion to enforce the court's judgment. DOJ said CIT does not have jurisdiction over the prior disclosure in dispute, making OtterBox's bid an attempt to get a refund to which it is not entitled (Otter Products, LLC v. United States, CIT #13-00269).

In August 2013, OtterBox challenged Harmonized Tariff Schedule classification of its smartphone covers. It won its challenge in the CIT, receiving a lower tariff rate for the imports. The U.S.Court of Appeals for the Federal Circuit upheld the trade court's finding. In that complaint, OtterBox listed four entries tied to one CBP protest as an example of this improper classification.

OtterBox in December 2013 filed a prior disclosure with CBP concerning the classification of retail kits with electronic device cases entered by TreeFrog Developments. The disclosure said OtterBox had pending litigation that could affect the classification of these goods. CBP closed the prior disclosure anyway. After the litigation ended and after OtterBox kept CBP apprised of the status of the litigation, the customs agency refused to issue the refunds.

“To this day, the Government has refused to provide OtterBox with so much as a timeline for the refund of its overpayment on this improperly closed prior disclosure,” OtterBox said in its June 2 motion to enforce the court's order. “Instead, despite having communicated that remedial action was being undertaken to cure its error, CBP has steadfastly ignored OtterBox’s request, and has yet to issue the refund OtterBox is due. ... The agency’s fickle behavior has undermined OtterBox’s faith that the agency will promptly effectuate the Court’s judgment and forced OtterBox to seek further relief from the Court.”

DOJ said refunds are not required because the court has no jurisdiction to mandate refunds for this particular prior disclosure. CIT's jurisdiction is limited to the four entries covered by the CBP protest in this litigation, DOJ said. “Contrary to the complaint Otter filed in this action, none of the entries over which this Court possesses jurisdiction is covered by a prior disclosure,” the brief said. “Indeed, long after this litigation and its appeal were decided, Otter admitted that no prior disclosure is tied to the subject entries.”

OtterBox also failed to request that the prior disclosure case remain open, making its claim that the case was improperly closed incorrect, DOJ said. It was within CBP's discretion to accept and close the prior disclosure, DOJ said.