CIT Grants Preliminary Injunction in Section 301 Litigation
The Court of International Trade will stop liquidation of unliquidated entries subject to litigation over List 3 and List 4A Section 301 China tariffs, a CIT panel said in a July 6 opinion (Court No. 21-00052). Granting a preliminary injunction, Judges Claire Kelly and Jennifer Choe-Groves held that questions over limitations on CIT's ability to reliquidate the entries or grant a monetary judgment mean the Section 301 plaintiffs risk irreparable harm in the absence of one. Chief Judge Mark Barnett dissented, arguing that the court does have the power to reliquidate, and that the resulting lack of irreparable harm weighed against granting the injunction.
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
"The potential unavailability of reliquidation or refund in this case sufficiently demonstrates irreparable harm," said Kelly and Choe-Groves. "Moreover, the Government fails to meaningfully dispute that liquidation will cause harm that cannot be undone and instead argues that any unlawfully collected duties would be forever unrecoverable," it said. And on another factor in determining whether to issue an injunction -- the plaintiffs' likelihood of success in the case -- Kelly and Choe-Groves found that the importers at least raise a "serious and substantial question," given the scale of irreparable harm at stake.
The debate centered around a Federal Circuit opinion, Shinyei Corp. of Am. v. United States, which essentially upheld CIT's ability to order reliquidation in lawsuits brought under the trade court's broad Section 1581(i) jurisdiction, such as the Section 301 litigation. Kelly and Choe-Groves said subsequent Federal Circuit decisions whittled away parts of the Shinyei decision, casting doubt over the prospect of that authority.
Barnett disagreed, saying the Federal Circuit has ruled that presumptions against the Shinyei decision run counter to the holding that CIT has “'broad remedial powers,' including the ability to order reliquidation.” Said Barnett, "the statute provides, inter alia, that the CIT 'may enter a money judgment ... for or against the United States in any civil action commenced under section 1581 or 1582 of this title' ... and, with exceptions not relevant here, may 'order any other form of relief that is appropriate in a civil action, including, but not limited to, declaratory judgments, orders of remand, injunctions, and writs of mandamus and prohibition.'"
"Given the CIT’s broad remedial authority and the absence of any explicit disagreement from my colleagues concerning the court’s authority to order reliquidation as a remedy in this case, I conclude that Plaintiffs’ showing of irreparable harm is speculative, at best," Barnett said. "My reading of the Federal Circuit precedent does not allow me to conclude that Plaintiffs have established a likelihood of irreparable harm. In the absence of such a showing, I would deny the motion for a preliminary injunction without reaching the other requirements for issuing such an injunction."
Otherwise, Kelly and Choe-Groves held that the balance of equities tipped in the plaintiffs' favor seeing as they only “seek narrow relief” in the form of the suspension of liquidation. While the administrative burden is “not insignificant,” as the court put it, options for completing the relief by the injunction exist, the decision said.
A lawyer involved in the case said that further details will need to be hammered out with the Justice Department and the court over the injunction, but that the plaintiffs are generally happy with the result.