Trump Memo on FRCP 65(c) Unlikely to Affect Trade Cases, Lawyers Say
President Donald Trump's memo regarding the enforcement of Federal Rule of Civil Procedure (FRCP) 65(c) likely won't affect trade litigation given that the Court of International Trade doesn't follow the FRCP and the existence of customs bonds, attorneys told Trade Law Daily.
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Last week, the Trump administration issued a memo instructing agency heads to request that federal courts require plaintiffs to post "security equal to the federal government’s potential costs and damages from a wrongly issued preliminary injunction or temporary restraining order." The instruction is an "attempt to chill litigation," said John Peterson, partner at Neville Peterson.
Peterson was sharply critical of the memo, noting that the president has "nothing to do" with the FRCP "except as a litigant," since Congress approves the rules and the courts administer them. The "American Rule," whereby litigants pay their own expenses, still applies, and "DOJ attorneys will simply be forced to write a lot of futile motions," he said.
Meanwhile, CIT doesn't use the FRCP and instead has its own statutory rules, Peterson added.
Lawrence Friedman, partner at Barnes Richardson, noted that most of the injunctions in trade cases are meant to "prevent liquidation and preserve a remedy for the importer." He added that, assuming an injunction only covers the plaintiff and not all importers, plaintiffs are largely already required to post security for owed duties in the form of customs bonds if the government is enjoined from collecting duties.
David Craven, managing director at Craven Trade Law, said that he hopes the "established practice of injunctions in the Court, and the power of the Court to issue these preliminary injunctions would result in maintenance of the status quo." He said the memo is a "poorly thought out 'meat axe' policy" meant to "chill litigation of all kinds against the Federal Government."
On the substance of the government's claim for security from the plaintiff, Craven said no injunctions in trade cases "would ever be 'unjustified' as all they are doing is seeking to maintain the status quo" and wouldn't result in any "demonstrable monetary harm," since the government would receive interest on any payments found to be due.