CIT Court Actions re: China 301 Tariffs, List 3 and List 4A

Many of you will know about the challenges to the List 3 and List 4A tariffs–the hottest thing at the CIT in 25 years.

The lead case, HMTX Industries, LLC et. al. v. United States, was filed at the Court of International Trade on 9/10. The law firm behind the filing spent considerable time in drafting the 19 page complaint. After it was filed, 3,500 cases were swiftly filed in the following two weeks, relying on the same legal theories – that the USTR lacked the authority to impose a punitive tariff. ITC and co-counsel have already filed suits on behalf of 8 clients. Under one theory, if these lawsuits are successful, not only plaintiffs who filed suit will get a refund of 301 duties paid but also any importer who paid duties will be entitled to a refund. That last speculation is not tested, and prior experience under the Harbor Maintenance Fee cases 20-25 years ago has me doubting it. Obviously, it is safer to file suit.

It is most likely that the lead case will proceed on a test-case basis and all of the other cases will be suspended, with no regular activity other than housekeeping activities and monitoring developments.

Timing

Although there is a two year statute of limitations to bring such a declaratory judgment action in the CIT, the issue then becomes, when does the cause of action accrue?

For List 3 timing, a filing may still be viable even now, after the 9/18 date of the 301 announcement anniversary and the 9/24 date of first tariff collections. If the first imports took place after 9/24/18 the theory would be that the cause of action accrued with the first levy of the tariff–on another theory, a suit could be brought on even later filed entries as the cause of action would have accrued on the entries that were being challenged when the tariffs were paid

In the case of List 4A, the time to file is still 11 months away, actions can be filed until at least August 2021.

Bottom line—it is still possible to file on List 3 (especially if the $$ are substantial) and definitely ok for List 4A. A suit with challenges to both Lists 3 and 4A could proceed.

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