CIT Notes Jurisdictional Gray Area in Section 301 Refund Case, Gives Parties 30 Days to Finish Case

The Court of International Trade, noting an impasse on a key jurisdictional question in a customs case in a Nov. 22 letter, gave the litigants 30 days to work out a solution on how best to proceed. Acknowledging the legitimacy of both sides' jurisdictional claims, Judge Jane Restani said that if the parties fail to resolve the matter in 30 days, then the plaintiff, FD Sales Company, has 10 days to amend its complaint (FD Sales Company LLC v. United States, CIT #21-00224).

The case concerns CBP's alleged failure to issue full Section 301 refunds for imports granted exclusions from the China tariffs. FD Sales brought in 60 entries of "clicking/locking vinyl flooring" under subheading 3918.10.10, which were granted exclusions from the Section 301 tariffs. The importer then sought a refund of $767,290.10 in duties paid on the goods, of which $294,342.70 was granted by CBP. In its complaint, FD Sales said the entries were granted exclusions by the Office of the U.S. Trade Representative (see 2105110057).

The importer filed the case under Section 1581(a) even though, technically, there was no denied protest. The Department of Justice moved to dismiss the case, saying that the summons was not timely filed since it didn't come within 180 days after a denied protest. FD Sales then said that the protest was "effectively denied" when CBP failed to shell out the whole refund, starting the 180-day clock from this denial (see 2110120063). However, the letter of the law says that the court must have the summons within 180 days of the date of mailing of the notice of the protest denial, DOJ said (see 2111220060).

In her letter, the judge recognized the gray area this case represents. On one hand, there was no protest denial, seemingly precluding the possibility of Section 1581(a) jurisdiction. It could be possible that the partial refund constitutes a denied protest, but this is "problematic," Restani said, "given the requirements of a protest denial." However, the judge left the door open for FD Sales to have a case under the court's Section 1581(i) "residual" jurisdiction, seeing as, "There was a timely simultaneous summons and complaint asserting an error in the administration or enforcement of the customs laws."