535 F.Supp.3d 1327
Ct. Int'l Trade2021Background:
- PrimeSource, an importer of steel nails, challenged Proclamation 9980, which imposed a 25% Section 232 duty on certain "derivative" steel products.
- The parties had a consent preliminary injunction (and an amended version) that prevented collection of 25% cash deposits and required PrimeSource to replace its continuous bond with one having a higher limit to cover potential Section 232 liability.
- On April 5, 2021 the Court entered judgment ordering liquidation of PrimeSource’s entries without assessment of the 25% duties; the government appealed and moved for a stay pending appeal.
- Defendants sought (1) to stay the judgment’s liquidation order, (2) to reinstate suspension of liquidation, and (3) to reinstate the requirement that PrimeSource monitor imports and maintain sufficient continuous bonding.
- The court concluded Transpacific II (Fed. Cir.) sufficiently supported defendants’ likelihood of success, found a risk of irreparable harm to the government’s ability to protect revenue absent enhanced bonding, and granted a stay pending appeal.
- The court enjoined liquidation during the appeal and ordered the parties to confer on bonding for entries on or after April 5, 2021 (or file a joint status report if no agreement).
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether to stay enforcement of the April 5 judgment pending appeal | Judgment requires liquidation without 25% duties; no need for further bonding | Stay is needed to protect government’s revenue-collection authority and ensure bonding | Stay granted; liquidation stayed pending appeal |
| Likelihood of success on the merits | Proclamation 9980 invalid under the Section 232 timing/waiver arguments | Transpacific II shows Presidential Section 232 authority may be "continuing," increasing gov’t chance on appeal | Defendants made a sufficiently strong showing (Transpacific II influential) |
| Irreparable harm absent a stay (bonding/revenue risk) | If government never had claim, revenue-protection concerns are moot | Judgment would prevent Customs from requiring bonds under 19 U.S.C. §1623(a), causing irreparable harm to revenue-security authority | Government demonstrated irreparable harm from loss of bonding authority; stay warranted |
| Balance of hardships / public interest | Enhanced bonding is burdensome (premium costs) and prejudices importer | Burden is limited (bond premiums) and public interest favors protecting revenue and lawful authority | Balance and public interest favor government; parties must agree on bonding for post-April 5 entries |
Key Cases Cited
- Nken v. Holder, 556 U.S. 418 (granting stay pending appeal standard and factors)
- Hilton v. Braunskill, 481 U.S. 770 (stay/preliminary injunction factors)
- Winter v. Nat. Res. Def. Council, 555 U.S. 7 (likelihood/irreparable-harm framework)
- Shinyei Corp. of Am. v. United States, 355 F.3d 1297 (Court of International Trade remedial power to reliquidate entries)