CIT Says Importer Can't Add Claim on Previous Tariff Treatment of Tent Pods
The Court of International Trade on April 15 denied importer Under the Weather's motion for leave to amend its complaint to add a claim regarding CBP's prior tariff treatment of its imported pop-up tent "pods." Judge Timothy Reif said the proposed amended complaint "was filed after undue delay and is futile."
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Under the Weather imported the pods duty-free during 2010-2018 under Harmonized Tariff Schedule subheading 6306.22.1000, which covers backpacking tents. CBP then said in 2018 that the entries would be classified as "other" tents under subheading 6306.22.9030, dutiable at 8.8%.
The importer successfully protested the decision before CBP reverted the goods in 2019 to duty-free treatment. CBP next issued a HQ ruling in 2020, declaring that the goods fit under HTS subheading 6306.22.9030. Under the Weather took to the trade court, claiming that the HQ ruling needed a notice-and-comment period, since it revoked or modified a previous interpretive decision or ruling.
CIT rejected that claim last year, finding that the previously decided protest wasn't a "prior interpretive ruling or decision" (see 2409050030). During discovery on the importer's remaining claims, Under the Weather sought to amend its complaint to effectively renew its claim that CBP needed to impose a notice-and-comment period since it modified a "treatment previously accorded" to its pods. The importer cited two alleged examinations of the pods by CBP in 2015 as evidence of that previous treatment.
Reif rejected the motion to amend the complaint as both untimely and futile.
The court said the new complaint "raises a new theory for relief" and includes additional factual allegations of the two "full examinations" in 2015 even though the new information "did not come to light through discovery." Under the Weather now looks to amend its complaint to add factual allegations, "of which plaintiff appears to have been aware all along," five years after its protest, 19 months after its original complaint, seven months after oral argument, five months after CIT dismissed its first claim on this joint proposed scheduling order, and two months before the original discovery deadline, the court said.
"Plaintiff offers no justification or excuse for its delay, and the court considers this undue delay a sufficient basis on its own to deny the instant motion," the court said. In addition, Reif said the importer's "undue delay" would "prejudice" the U.S. and the amended complaint "would expand significantly the scope of fact discovery and require defendant to unearth decades-worth of entries and internal communications previously not at issue."
Reif also said the new claim would be futile. Under the Weather sought to refute the futility of its claim on three grounds: CBP's approval of the company's protest was an "actual determination" on which the importer can rely, CBP conducted at least two full examinations of the importer's shipments in 2015, and CBP has consistently liquidated the importer's products at the duty-free subheading. The court said none of these points saves the claim.
The court said reliance on CBP's approval of the protest is "without merit," since Under the Weather began importing more than two years since the protest was approved. The reference to the two 2015 examinations fares no better, since "plaintiff alleges neither that the examinations concerned the classification of plaintiff’s merchandise nor that the examinations were made by a customs officer 'responsible for' the classification of plaintiff’s merchandise," Reif said.
CBP also examines entries "routinely for purposes other than classification, such as for admissibility or for security purposes," the court explained. Thus, the importer failed to allege "more than a sheer possibility that" CBP acted unlawfully, Reif said.
Lastly, while the importer said it imported its pods under the duty-free subheading for eight years, the "touchstone of the treatment previously accorded inquiry is the consistency of Customs decisions with respect to the subject merchandise," the court said. "As described above, plaintiff does not allege plausibly in the proposed amended complaint that any entries were subject to 'actual determinations' by Customs for the purposes of classification."
(Under the Weather v. United States, Slip Op. 25-41, CIT # 21-00211, dated 04/15/25; Judge: Timothy Reif; Attorneys: Heather Jacobson of Nakachi Eckhardt for plaintiff Under the Weather; Luke Mathers for defendant U.S. government)