US Offers 'Desperate Reaches' to Fend Off Injunction in Case on UFLPA Entity Listing, Company Argues

The U.S. failed to fulfill its "simple but fundamental obligation to explain itself" in a lawsuit brought by a Chinese printer cartridge maker challenging its addition to the Uyghur Forced Labor Prevention Act Entity List, the company, Ninestar Corp., said in a reply brief supporting its motion for a preliminary injunction against the listing. Ninestar dubbed the government's response to the PI motion a series of "distractions and desperate reaches," including the U.S. claim that the Court of International Trade lacks jurisdiction because a presumptive ban on Ninestar's goods is not an "embargo" (Ninestar Corp. v. United States, CIT # 23-00182).

Ninestar filed its case under Section 1581(i), the trade court's "residual" jurisdiction, which governs civil actions stemming from U.S. laws establishing "embargoes or other quantitative restrictions on the import of merchandise for reasons other than the protection of the public health or safety." The exporter said the UFLPA and Section 307 of the Tariff Act of 1930 are two such laws.

In a motion to dismiss, the U.S. said the trade court lacks jurisdiction because importers can overcome the UFLPA's rebuttable presumption that a listed company's goods are made with forced labor (see 2310040029). Ninestar said this "argument brazenly obfuscates," because Ninestar's claims invoke both the UFLPA and Section 307 and this "rebuttable presumption" is a presumption "that the goods must be embargoed."

Rebutting the presumption involves showing that the goods in question weren't made with forced labor, responding in full to CBP requests for information and demonstrating full compliance with DHS guidance, the exporter noted. As a result, the goods are embargoed unless CBP grants an exemption. "That the UFLPA provides a process for granting exemptions or reversing an embargo does not alter the fact that the UFLPA is a law providing for embargoes," the brief said.

The U.S. claimed that Ninestar failed to exhaust its administrative remedies and that none of the company's "financial, business, reputational, or procedural injuries justify injunctive relief." The exporter discussed the Forced Labor Enforcement Task Force's (FLETF's) process by which listed companies can request a review of the decision to add them to the Entity List. Ninestar dubbed the process "optional and illusory." Given the optional nature of this review procedure and because resort to the FLETF's procedure doesn't make its decision inoperative, there is no exhaustion requirement.

Ninestar criticized the government's supposed failure to provide an "adequate explanation" for its decision to add the exporter to the Entity List, claiming that FLETF only offered short, conclusory remarks. "The FLETF has provided nothing more than conclusory assertions and rote recitations of the statutory standard," the brief said.

The Chinese company, and its subsidiaries, produce and sell laser printers, integrated circuit chips and printer consumables, including toner and inkjet cartridges, many of which are imported into the U.S. FLETF added the companies to the UFLPA Entity List in June for allegedly working with the Xinjiang government to reap the benefits of forced labor by Uyghurs, Kazakhs, Kyrygyz or members of other persecuted groups in Xinjiang (see 2308230016).

The exporter says this explanation "falls well short" of the Administrative Procedure Act's demands. The U.S. said the accusation against Ninestar came from a confidential source but was confirmed via media reports, government documents and Ninestar's forms, though the government has "either entirely redacted or refused to provide the 'company documents' and 'media reports,'" the brief said.