CIT Says No Reliquidation for Entries Granted Section 232 Exclusion Post-Protest Period

The Court of International Trade dismissed two cases brought by steel importer Voestalpine USA and steel purchaser Bilstein Cold Rolled Steel seeking to retroactively apply a Section 232 steel and aluminum tariff exclusion that was originally issued with a clerical error. Judge Mark Barnett said that the plaintiffs did not seek any relief that the court could grant since the entries eligible for the exclusion had already been liquidated, and the court does not have the power to order their reliquidation.

"We're evaluating the decision, and we're looking at all the possible things to do, but we're disappointed in the decision," Lewis Leibowitz, counsel for the plaintiffs, told Trade Law Daily.

The issue started when Bilstein submitted a flawed exclusion request to Commerce's Bureau of Industry and Security. The exclusion request was approved, despite including the wrong Harmonized Tariff Schedule subheading and importer of record. The proper importer of record, Voestalpine, then brought in two steel entries that were liquidated with the Section 232 duties.

After seeking advice on how to fix the errors in the approved request, CBP and BIS said that to get retroactive relief the plaintiffs must file an exclusion request identical to the original one except with the correct information. If it is granted, then the plaintiffs can contact the 232 Help Desk to attempt to open a resubmission case. Bilstein followed those steps, but BIS said that the agency wouldn't accept a resubmission of the exclusion request unless the protest period for the entries hadn't expired.

The plaintiffs then filed their cases at CIT. Despite its initial rejection, BIS then granted the second exclusion request, making it retroactive to the original exclusion request. But by failing to file a protest of the liquidation of Voestalpine's two entries, the plaintiffs never sought to extend the approved exclusion to the two entries and thus did not receive a refund of the Section 232 duties paid on them. Bilstein and Voestalpine then sought the reliquidation of these entries in court, where the judge sided with the duo on one of the issues in that the court has the jurisdiction to hear the case (see 2108260024). However, Barnett ultimately said that the plaintiffs already had received all the help Commerce could grant them in the form of a product exclusion, dismissing the case for failing to protest or extend the liquidation period and declaring the issue moot.

The plaintiffs then filed a second case, challenging Commerce's failure to correct the incorrect HTS number in the Section 232 exclusion (see 2111290061). Voestalpine and Bilstein also urged the court to reconsider its original case, arguing that CIT committed a logical error when it dismissed the case (see 2111240040). The plaintiffs argued that once jurisdiction was established, the case is not moot and that weighing a motion to dismiss and equities should be considered separately.

The judge agreed, granting the motion for reconsideration. Looking at two U.S. Court of Appeals for the Federal Circuit cases, Barnett ruled that addressing the ability of the court to grant relief is better when addressed along with an analysis of the claims and not via mootness. Finding that reliquidation constitutes an appropriate form of relief defeats a mootness assertion, the judge said. Barnett cited an April Federal Circuit case that established the right to challenge an antidumping investigation's final determination even if it's subject to a suspension agreement (see 2204140067). In the opinion, the Federal Circuit found that dismissing the case on a mootness basis was improper based on the chance the plaintiffs could prevail on their merit claims and their contentions over the appropriate relief.

"In light of Rhone Poulenc and Confederacion, the court concludes that the appropriateness of reliquidation as a form of relief would be better addressed in conjunction with an analysis of the claims presented by Plaintiffs in these cases and not through the lens of mootness," the opinion said. "The court thus vacates its prior holding in Court No. 20-3829 that Plaintiffs’ claim was moot."

However, despite granting victory to the plaintiffs on jurisdiction, the judge dismissed both actions given that there were no claims on which the court could have granted relief. A remand is not in order since BIS issued the retroactive, revised exclusions, maxing out the relief it could dole out. The only question left is whether the court could then grant reliquidation. Barnett said it couldn't.

"The exclusion process established by the President provided that retroactive relief -- refunds of section 232 duties on entries made on or after an exclusion request was made -- is limited to unliquidated entries or entries for which liquidation is not final," the opinion said. "Regulations issued by BIS notify importers that refunds of section 232 duties are within the province of CBP, not BIS. CBP issued guidance consistent with the limitations established by the President. ... In other words, the section 232 exclusion process is a discretionary regime implemented with certain conditions and limitations."

(Voestalpine USA Corp., et al. v. United States, Slip Op. 22-47, CIT Consol. #20-03829, dated 05/17/22, Judge Mark Barnett. Attorneys: Lewis Leibowitz of The Law Office of Lewis Leibowitz for plaintiffs; Aimee Lee for defendant U.S. government)

(Voestalpine USA LLC, et al. v. United States, Slip Op. 22-47, CIT #21-00290, dated 05/17/22, Judge Mark Barnett. Attorneys: Lewis Leibowitz of The Law Office of Lewis Leibowitz for plaintiffs; Aimee Lee for defendant U.S. government)