CIT Has Jurisdiction to Hear Suit on Section 301 Tariff Hike on Needles, Syringes, Importer Says

The Court of International Trade has jurisdiction over importer Retractable Technologies' suit against the Office of the U.S. Trade Representative's 100% Section 301 rate hike on needles and syringes, given that the court has already acknowledged its ability to hear cases on agency action taken under presidential direction, Retractable said. Responding to the government's motion to dismiss the case Nov. 19, Retractable pointed to the trade court's recent decision in the case granting a preliminary injunction (PI) on the liquidation of the importer's entries subject to the duties (Retractable Technologies v. U.S., CIT # 24-00185).

The U.S. moved to toss the case, claiming that CIT doesn't have jurisdiction over the matter and that Retractable failed to state a claim for which relief can be granted (see 2410160053). Regarding the court's jurisdiction, the government argued that the action implies a presidential directive not subject to the Administrative Procedure Act nor the act's foreign affairs exemption to judicial review.

In response, Retractable argued that it's the USTR's decision to impose the rate hike, and not a presidential action, that's under review. The importer invoked Judge Claire Kelly's recent decision in the case to make its point (see 2411050032). In granting the PI against liquidation but rejecting the bids for a PI and temporary restraining order on the collection of Section 301 duties, Kelly said the Section 301 tariff action here is "both reviewable and subject to the APA's foreign affairs exemption."

Retractable also cited the massive Section 301 litigation, brought by thousands of companies against the lists 3 and 4A China tariffs, in which the trade court said agency action taken under presidential direction under the statute allowing for Section 301 tariff modifications isn't non-reviewable presidential action.

CIT said the bar to judicial review is generally limited to "those cases in which the President has final constitutional or statutory responsibility for the final step necessary for the agency action directly to affect the parties." Since a directive from President Joe Biden to raise tariffs on needles and syringes by no less than 50% wasn't the final action here, the ultimate rate hike is reviewable, the brief said. Retractable said the USTR "took this action independently," noting that Biden's directive didn't require a 100% rate hike -- indicating the USTR exercised discretion.

The complaint raises two main procedural violations by the USTR in raising the tariffs: a failure to both consult the domestic industry and to engage in reasoned decision-making. The U.S. said both allegations failed to adequately assert a claim. Regarding the consultation requirement, the government said Retractable didn't allege that USTR failed to consult with any representatives of the domestic industry.

In response, Retractable said that, aside from not having access to the public record, "Retractable plainly alleges that USTR did not seek comment from it or from representatives of the domestic industry before making a recommendation to the President," then limited comments to parties seeking even higher duties on needles and syringes. While the government said Retractable would have USTR consult with every member of the domestic industry, the importer said this "is not what Retractable claims."

The company said USTR initially solicited comments only from those who benefited from the tariffs, which didn't include anyone from the domestic needle and syringe industry. A later solicitation period was then only for interested parties who would call for a tariff even higher than the 50% mark. Even by the government's standard, this limited consultation window standard doesn't satisfy the requirement that USTR hear the views of the domestic industry, the brief said.

“Cherry picking the views of favored domestic producers is not consultation with the representatives of the domestic industry," Retractable argued.

The U.S. also said it engaged in reasoned decision-making because USTR considered comments about increasing duties on health care goods. In response, Retractable said this claim ignores the various allegations it made that "USTR did not engage with the comments regarding syringes and needles, including" comments from Retractable, and those from domestic company Medline, the American Hospital Association and even from DOJ's antitrust division.