Prior CIT Customs Victory Can't Extend to Prior Disclosure, CIT Says, Citing Lack of Jurisdiction

OtterBox's victory in a Court of International Trade case setting a lower duty rate in a customs challenge on smartphone covers cannot be extended to a prior disclosure made by OtterBox, CIT said in an Aug. 18 opinion. Judge Claire Kelly ruled that the court did not have the jurisdiction to make the determination that entries not part of the Summons of the case should be reliquidated.

In August 2013, OtterBox challenged the classification of its smartphone covers. It won its challenge in the CIT, receiving a lower, 5.3% tariff rate for the imports. The U.S. Court of Appeals for the Federal Circuit upheld the trade court's finding. In that complaint, OtterBox listed four entries tied to one CBP protest as an example of this improper classification.

OtterBox in December 2013 filed a prior disclosure with CBP concerning the classification of retail kits with electronic device cases entered by TreeFrog Developments. The disclosure said OtterBox had pending litigation that could affect the classification of these goods. CBP closed the prior disclosure anyway. After the litigation ended and after OtterBox kept CBP apprised of the status of the litigation, the customs agency refused to issue the refunds. CBP and OtterBox debated the issue at CIT (see 2106290037), with OtterBox accusing CBP of “steadfastly ignor[ing]" its request for refunds on the disclosure.

Kelly sided with the government, ruling that it does not have the jurisdiction to extend a reliquidation order to entries not relevant to the case at hand. "However, the entries included in the Prior Disclosure were not part of the Subject Protest which forms the basis of the Court’s jurisdiction in this action," the judge said. "Because the entries associated with the Prior Disclosure were not part of the Subject Protest, they are not part of this action and the Court does not have jurisdiction to order the relief OtterBox requests."

OtterBox argued that its prior CIT victory guarantees refunds on any duties paid over CBP's misclassification of the same merchandise. "OtterBox’s argument fails," the opinion said. "The court’s classification judgment does not automatically compel reliquidation of the entries associated with the Prior Disclosure, which are separate transactions. ... Thus, OtterBox cannot use the court’s Judgment relating to the misclassification of the Subject Entries to obtain reliquidation and/or refunds for entries that were not part of the Summons and thus not subject to the Court’s jurisdiction."

(Otter Products, LLC v. United States, Slip Op. 21-103, CIT #13-00269, dated 08/18/21, Judge Kelly. Attorneys: Louis Mastriani of Adduci Mastriani for plaintiff Otter Products; Justin Miller for defendant U.S. government)