Washington Judge Keeps Alive Case Involving Importer's Claim of Retaliation for CIT Win
The U.S. District Court for the Western District of Washington on Aug. 7 largely kept alive a case from importer Eteros Technologies USA and its CEO Aaron McKellar against CBP for allegedly retaliating against the company for winning a customs case at the Court of International Trade. Judge Kymberly Evanson said the court has jurisdiction to review the revocation of McKellar's NEXUS membership, which lets pre-screened travelers accelerate their entrance into the U.S., and that the case isn't mooted by CBP's vacatur of an order banning McKellar from entering the U.S. for five years (Eteros Technologies USA v. United States, W.D. Wash. # 2:25-00181).
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Evanson also denied the government's motion to dismiss two of Eteros' and McKellar's claims regarding CBP's alleged Administrative Procedure Act violations, since the U.S. failed to address these claims. However, the judge said claims directly related to the vacated removal order are mooted and that the company's due process claim was insufficiently pleaded.
The decision came one day after the Court of International Trade dismissed a similar case from Eteros against CBP's alleged retaliation (see 2508060063). The trade court tossed the case for not being a trade-related dispute, though the court said Eteros was free to pursue its claims of retaliation elsewhere.
At issue is the fact that Eteros prevailed before CIT in 2022. In that case, the court ruled that the company could import "drug paraphernalia" that was legal to obtain at the state level (see 2209210034). Despite the decision and a CBP HQ ruling affirming the court's treatment of its imports, the importer said CBP officers retaliated against two Canadian Eteros executives by denying them the right to enter the U.S. and, for one of them, McKellar, banning him from entering the U.S. for five years.
Eteros filed suit in the Washington court to challenge CBP's actions, and it continued pursuing the case even after CBP vacated its order banning McKellar from entering the U.S. for five years. The government moved to dismiss the case, arguing in part that the case is mooted by the decision to vacate the removal order.
Evanson said that with respect to the challenge to the order itself, "the Court agrees that claim is moot." However, the remaining claims aren't moot, since they aren't resolved by vacatur of the order. For instance, "CBP has not restored McKellar’s NEXUS privileges," nor has it "meaningfully contested" Eteros' and McKellar's claims that "CBP has unlawfully adopted a policy of retaliating against Eteros and its employees for working in the cannabis industry, or generally exceeded its authority under the [Immigration and Nationality Act]," the judge said.
However, the court dismissed the importer's claim that CBP violated its 5th Amendment due process rights. Evanson said the claim wasn't sufficiently pleaded, since it merely claimed that CBP's actions further deprived the company of "meaningful notice and an opportunity to respond to the allegations." The complaint lacked "factual content supporting this legal conclusion as it pertains to Eteros, and this statement alone remains insufficient to plausibly state a due process claim arising from Eteros’s alleged harms."
The judge added that Eteros failed to clearly allege due process violations separate from McKellar's individual claims, undercutting the claim for a second reason. Evanson gave the importer leave to amend its claim for compliance with the court's order.
With regard to the company's and CEO's challenge to the revocation of McKellar's NEXUS card, the government argued that the decision was unreviewable, citing Supreme Court decision Kucana v. Holder for this proposition. Evanson said Kucana actually cuts against the government's argument, since, in that case, the court said 8 U.S.C. Section 1252(a)(2)(B) only strips courts of "jurisdiction over actions made discretionary by statute."
Here, CBP's discretion regarding NEXUS card eligibility is "established by regulation" and not statute, the court said. The government doesn't identify any statute "committing to CBP the discretion to grant, deny, or revoke acceptance into the NEXUS program," the judge said.
Evanson also kept two of Eteros' and McKellar's APA claims alive, since the government didn't respond to them. Under one of the counts, the pair alleged that CBP acted arbitrarily by "implementing a new policy asserting that certain employees of cannabis-involved companies are per se inadmissible for engaging in 'aiding and abetting' narcotics trafficking." In the other claim, the pair allege that CBP failed to engage in notice-and-comment rulemaking before adopting this new policy.
The judge noted that Eteros and McKellar argued that CBP "held retaliatory motives for the policy changes, which serve as the basis" for these counts. However, given the "lack of argument on these causes of action," Evanson declined to decide whether the merits of the counts are sufficiently pleaded. Though the judge did say that the claims "lack any factual content supporting Plaintiffs’ theory of retaliation."
Lastly, Evanson agreed to dismiss Eteros' and McKellar's claim for declaratory relief in which the pair asked for an order clarifying the relationship of the laws to prevent or at least inform future issues. "The Court will not issue advisory opinions or declare rights in hypothetical, future border crossings," the judge said.