The Court of International Trade (CIT) issued a decision in TR International Trading Co. v. United States (Slip Op. 20-34) on March 16, 2020, stating that if a company wishes to file an appeal under the Court’s residual jurisdiction under 19 U.S.C. §1581(i), then it must first ensure that it has either filed a protest with U.S. Customs and Border Protection (CBP) or requested a scope ruling from the Department of Commerce (Commerce). One of these two actions must occur before a company seeks judicial review by the CIT.
In the case at hand, Plaintiff TR International Trading Company (TRI) imported citric acid that it sourced from Posy Pharmachem, an Indian company that had manufactured the acid in India. TRI proffered that the acid was from India and that Posy’s processing of the acid constituted a substantial transformation under the new and different product test. At the time of importation, CBP required the posting of antidumping and countervailing duties based upon its belief that the imported citric acid was subject to the antidumping and countervailing duties on citric acid from China. TRI sought an injunction against CBP, challenged the collection of duties under the CIT’s residual jurisdiction outlined in 28 U.S.C. § 1581(i), and sought to have CBP reliquidate the entries without antidumping and countervailing duties.
TRI alleged that (1) CBP assessed the duties based on undisclosed or confidential instructions from Commerce that were arbitrary, capricious, an abuse of power, and without proper procedure, (2) CBP exceeded its authority by determining that the imported citric acid was subject to AD and CVD duties because determinations of what is inside and outside scope are reserved for Commerce, and (3) CBP misapplied Commerce’s liquidation instructions and “disregarded procedural requirements to issue notices of action proposed or action take before liquidating TRI’s entries,” which deprived TRI of the opportunity to present its reasons to CBP to withhold liquidation of the entries.
The Government moved to dismiss TRI’s complaint for lack of subject matter jurisdiction and, alternatively, for a failure to state a claim. The CIT granted the Government’s motion to dismiss for lack of subject matter jurisdiction.
TRI’s entries were filed between July and December of 2017 and identified India as the country of origin. After CBP and TRI exchanged information pursuant to CBP’s information requests, CBP determined that the imported acid was from China, was not substantially transformed in India, and therefore was subject to antidumping and countervailing duties after testing the goods and recommended that TRI obtain a scope ruling from Commerce to challenge the substantial transformation determination. TRI chose instead to directly file an action at the CIT and protested CBP’s liquidation of its entries. One protest was deemed denied and the others were suspended by CBP based on the litigation in the CIT.
19 U.S.C. § 1514(b) gives CBP the authority to determine whether goods are subject to an antidumping or countervailing duty order. TRI had two options before seeking review in the CIT: a CBP protest or a scope ruling from Commerce. In pursuing a protest, TRI could have protested the CBP application of the Citric Acid AD/CVD orders and then sought judicial review under 28 U.S.C. § 1581(a). Or, TRI could have challenged CBP’s country of origin determination by requesting a scope ruling from Commerce, and then sought judicial review under 28 U.S.C. § 1581(c). Neither option is manifestly inadequate, therefore the CIT granted the motion to dismiss.
We encourage clients and companies to contact Husch Blackwell’s International Trade and Supply Chain Team with any questions or concerns.