In a September 6, 2023 opinion issued by Judge M. Miller Baker in three cases brought under the Court’s residual jurisdiction provision, 28 U.S.C. § 1581(i), the U.S. Court of International Trade (“CIT”) held that reliquidation is available as a remedy in Administrative Procedure Act (“APA”) cases.  At least in the short term, this decision creates additional uncertainty regarding the remedies available in APA cases brought before the CIT.  However, if the decision is appealed, the U.S Court of Appeals for the Federal Circuit (“Federal Circuit”) may provide a significant clarification on the scope of the CIT’s remedial powers.  Such a clarification may provide litigants long-awaited assurance that they will not lose the ability to recoup unlawfully paid duties while litigating their right to collect those very duties under the Court’s residual jurisdiction provision.    

The cases arose from challenges to the U.S. Department of Commerce’s (“Commerce”) denial of exclusion requests related to duties imposed under Section 232 of the Trade Expansion Act of 1962.  Following Commerce’s denial of the exclusion requests, most of the entries at issue finally liquidated, meaning that they liquidated and the statutory deadline to protest the liquidation passed.  The Government moved for voluntary remand, but plaintiffs opposed the motion on the basis that remand would be futile if the Court accepted the Government’s position that the CIT lacked authority to order reliquidation of finally liquidated entries, even if Commerce were to grant the requested exclusions on remand.  The Court ordered supplemental briefing and treated the parties’ submissions as partial motions for summary judgment. 

Central to the parties’ arguments, and to the Court’s opinion, was a case in the Federal Circuit, Shinyei Corporation of America v. United States, 355 F.3d 1297 (Fed. Cir. 2004).  Shinyei was a challenge to liquidation instructions issued by Commerce in violation of its own administrative determination and the CIT’s final judgment.  The Government argued that reliquidation was unavailable as a remedy, because only the statutory provision providing for administrative protests of Customs decisions explicitly provides for such relief, and the statutory scheme creates an implied prohibition on reliquidation in Commerce cases.  The Federal Circuit disagreed, holding that the protest statute’s discussion of entries becoming “final and conclusive” if not timely protested did not govern in Shinyei, and that the statute’s silence as to reliquidation in Commerce cases cannot be read as a prohibition on ordering such relief.   

Discussing Shinyei,Judge M. Miller Baker held that the case turned on a reading of the APA’s waiver of sovereign immunity set forth in 5 U.S.C. § 702, which the Supreme Court has held applies unless “Congress has dealt in particularity with a claim and [has] intended a specified remedy—including its exceptions—to be exclusive.”  Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians v. Patchak, 567 U.S. 209 (2012).  In Shinyei, neither the protest statute nor any other statute dealt with reliquidation specifically in cases challenging Commerce decisions, and as a result, the APA’s waiver of sovereign immunity applied.  Moreover, the Court explained that properly invoking the CIT’s residual jurisdiction under section 1581(i) necessarily means that no other statute addresses a plaintiff’s particular claim.  Thus, Judge M. Miller Baker held that in section 1581(i) cases, including the three cases challenging Commerce’s denial of exclusion requests, the CIT’s broad remedial powers authorized the reliquidation of finally liquidated entries.  The Court granted the Government’s motion for voluntary remand, with the condition that Commerce must instruct Customs to reliquidate any affected entries if it grants the challenged exclusion requests.  The Court also noted that while a remand order is normally interlocutory, meaning it is not final and cannot be appealed, “the condition that Plaintiffs be made whole if Commerce grants their exclusion requests appears to render the court’s order a ‘final decision,’” and it therefore entered the remand order as a separate, appealable judgment.

Judge M. Miller Baker’s decision comes amidst significant uncertainty as to the availability of reliquidation as relief in APA cases before the CIT, and importers that invoke the court’s residual jurisdiction provision often seek injunctive relief to prevent their entries from finally liquidating during litigation.  This situation played out recently in In re Section 301 Cases,which challenge duties imposed under Section 301 of the Trade Act of 1974.  The CIT granted plaintiffs’ preliminary injunction motion seeking the suspension of liquidation of millions of unliquidated entries at issue.  The Court reasoned that the Federal Circuit had created sufficient doubt regarding the scope of the CIT’s remedial authority, such that reliquidation would potentially be unavailable if plaintiffs prevailed on the merits, which demonstrated a likelihood of irreparable harm that warranted injunctive relief (the Government later stipulated to refund any Section 301 duties found to be illegally collected, rather than suspend the liquidation of millions of entries). 

Judge M. Miller made only passing reference to In re Section 301 Cases, but the rest of his opinion, along with Chief Judge Barnett’s dissent in In re Section 301 Cases, demonstrates that some CIT judges hold different views on the status of the law governing their remedial powers.  Until the Federal Circuit clarifies the issue, importers’ best chance of obtaining refunds of duties found to be unlawfully collected may still be seeking an injunction at the outset of section 1581(i) cases to suspend the liquidation of their entries. 

Husch Blackwell continues to monitor developments relating to the scope of the CIT’s remedial powers.  In the meantime, for guidance or questions relating to U.S. customs and trade laws, companies can contact Husch Blackwell’s International Trade and Supply Chain team.