Cyber Power Pushes for Dismissal of CBP Counterclaim in Chinese Cables Case
The government has no cause of action to pursue counterclaims once liquidation is finalized, and the challenge of a denied protest at the Court of International Trade does not reopen the window for reliquidation at higher duty rates, Cyber Power Systems said in an April 5 brief. The brief is in support of a previous motion to dismiss a counterclaim by the government seeking to reclassify its imported cables from China at a higher duty rate (see 2203180042) (Cyber Power Systems (USA) Inc. v. U.S., CIT #21-00200).
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Cyber Power argues that the government has no cause of action to seek a higher duty rate due to the finality of liquidation, and says no statute allows the government to pursue its counterclaim. "Revenue law is statutory, and the defendant must point to a statute which specifically empowers it to make the assessment embodied in its counterclaim," the brief said.
DOJ had argued the protest and CIT lawsuit filed by Cyber Power effectively reopened liquidation so it was no longer final. But the law on protests, 19 USC 1514(a), only carves out exceptions to the finality of liquidation adverse to the importer. "It is not intended in any way, shape or form as a vehicle for rectifying actions which are adverse to CBP," Cyber Power said. Nor does Cyber Power's lawsuit reopen liquidation, Cyber Power said. "An importer’s action to contest denial of a protest, over which this Court has jurisdiction under 28 U.S.C. § 1581(a) is one limited to determining whether the importer should receive a refunds of duties paid."
Cyber Power reaffirmed its position that DOJ's argument raises potential constitutional concerns. "If the government’s assertion is that ... filing of this action imbues the defendant with a cause of action – not previously existing -- to assert a counterclaim -- it creates grave questions regarding denial of equal protection of the laws to those who dare to exercise their right to seek judicial review," Cyber Power said.