524 F.Supp.3d 1355
Ct. Int'l Trade2021Background
- Plaintiffs (HMTX, Halstead, Metroflor, Jasco) challenge USTR’s List 3 and List 4A Section 301 tariffs on imports from China and moved for a preliminary injunction to suspend liquidation of unliquidated entries.
- The court designated the suit a master/sample case among ~3,600 Section 301 cases; plaintiffs sought an injunction applicable to all Section 301 plaintiffs with opt-out for individual defendants.
- USTR imposed multiple tariff lists (Lists 1–4); Lists 3 and 4A raised duties and are the subject of this challenge; plaintiffs also asserted APA notice defects and statutory-interpretation claims under Section 307.
- The Government opposed, arguing (inter alia) massive administrative burden to suspend millions of liquidations and that reliquidation/refunds may be unavailable.
- The majority granted leave to file a reply and issued a preliminary injunction suspending liquidation of unliquidated entries for Section 301 plaintiffs subject to List 3 and List 4A, finding likely irreparable harm (or at least sufficient doubt about availability of post-liquidation relief) and serious questions on the merits.
- Chief Judge Barnett dissented as to the injunction, concluding plaintiffs failed to show likely irreparable harm because the CIT has statutory remedial powers (28 U.S.C. §§1585, 2643) and Federal Circuit precedent does not make reliquidation unavailable.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Irreparable harm from liquidation | Liquidation would permanently foreclose judicial review and recovery of unlawfully collected duties; Shinyei uncertainty makes harm irreparable | Government says monetary harm is reparable and contends reliquidation/refunds are unavailable or administrative burden counsels against stay | Court: Plaintiffs show irreparable harm because uncertainty about availability of reliquidation under Federal Circuit precedent makes lost-review/recovery likely; injunction granted (majority). |
| Likelihood of success on merits re: Section 307 | Section 307(a)(1)(B)–(C) limit USTR’s authority to increase Section 301(b) duties except in narrow circumstances; plaintiffs raise serious and substantial questions | Government invokes plain statutory text and argues tariffs were valid modifications to counter increased burden on U.S. commerce | Court: Under sliding-scale (reduced burden because of irreparable harm), plaintiffs have a fair chance of success; serious, substantial questions exist requiring full merits briefing. |
| APA / notice and actor (President vs USTR) | USTR failed to provide meaningful opportunity to comment on Lists 3/4A; timing and comment/rebuttal scheduling undermine adequacy | Government contends action was Presidential (not APA) or, if USTR action, that comment process was sufficient | Court: Parties’ briefs are cursory on this; court finds a serious question on APA/notice that warrants review. |
| Equities, remedy design (suspension vs. refunds) | Narrow suspension preserves status quo and potential remedies; administrative burden surmountable; government may avoid burden by stipulating to refunds for entries it refuses to suspend | Government stresses huge administrative burden to suspend millions of entries and prefers to litigate availability of reliquidation | Court: Balancing favors plaintiffs; crafts injunction requiring suspension of liquidation unless Government opts to stipulate it will refund unlawfully collected duties for specific entries—thus preserving remedies while reducing administrative burden. |
Key Cases Cited
- Winter v. Nat. Res. Def. Council, 555 U.S. 7 (2008) (establishes that plaintiffs must demonstrate likelihood of irreparable harm for preliminary injunctions)
- Shinyei Corp. of America v. United States, 355 F.3d 1297 (Fed. Cir. 2004) (recognizes CIT’s broad remedial power under §2643 and permits reliquidation in certain §1581(i) APA challenges)
- Ugine & Alz Belgium v. United States, 452 F.3d 1289 (Fed. Cir. 2006) (applies sliding-scale injunctive analysis and relies on uncertainty about Shinyei relief to find irreparable harm)
- American Signature, Inc. v. United States, 598 F.3d 816 (Fed. Cir. 2010) (finding preliminary relief appropriate despite potential availability of Shinyei-type remedies)
- Sumecht N.A., Inc. v. United States, 923 F.3d 1340 (Fed. Cir. 2019) (affirming denial of preliminary relief where Government conceded reliquidation/refund remedy, affecting irreparable-harm analysis)
- Zenith Radio Corp. v. United States, 710 F.2d 806 (Fed. Cir. 1983) (addresses finality of liquidation under statutory schemes and the risk of mootness absent injunctions)
- Qingdao Taifa Grp. Co. v. United States, 581 F.3d 1375 (Fed. Cir. 2009) (discusses sliding-scale approach to preliminary injunctions in trade cases)
- Wind Tower Trade Coal. v. United States, 741 F.3d 89 (Fed. Cir. 2014) (articulates that a movant with great potential harm need only show a fair chance of success)
- Silfab Solar, Inc. v. United States, 892 F.3d 1340 (Fed. Cir. 2018) (references Winter and discusses application of preliminary-injunction standards in Federal Circuit context)