September 21 Has Come and Gone – Can I Still File a Suit for Section 301 Duty Refunds?

This past week was like nothing before seen in the 40-year history of the United States Court of International Trade (CIT). From September 16 through September 21, 2020, more than 3,500 new lawsuits were filed in the CIT by importers seeking refunds of Section 301 tariffs imposed on Chinese goods appearing on the United States Trade Representative (USTR)’s Lists 3 and 4A of tariff sanctions.

As this post was completed, new suits were still being filed at a steady pace.

The cause of this filing frenzy was HMTX, Inc. v. United States, Court No. 20-00177, a suit filed on September 10 which asserts that List 3 and 4A tariffs are invalid because they did not relate to USTR’s original Section 301 investigation and finding. USTR had concluded that Chinese Intellectual Property Rights (IPR) practices unfairly burdened U.S. exports and recommended that retaliation being imposed against Chinese goods valued at $50 billion – which USTR did in Retaliation Lists 1 ($34 billion) and 2 ($16 billion).

The HMTX suit contends that Lists 3 and 4A were reactions to different Chinese trade policies, and that before imposing these tariffs, USTR was required to initiate a new Section 301 proceeding (or two). Lists 3 and 4A are not “modifications” of the initial determination and are therefore untimely. HMTX seeks a refund of List 3 and 4A tariffs paid. Apparently, thousands of other companies want a piece of that for themselves.

What is your company’s deadline to file a claim for relief?  USTR’s List 3 tariffs were published in the Federal Register on September 21, 2018.  Given the two-year statute of limitations for refund cases of this type, many reasoned that companies were required to file no later than September 20, 2020, which – since it fell on a Sunday – shifted the deadline to September 21, 2020.

But there may in fact be more time for importers to get in on the action.

Suppose your firm did not file suit in the CIT by September 21: are you out of luck? Almost certainly not. The HMTX case is filed under the Administrative Procedure Act (APA). It is well-established that a party acquires standing to sue under the APA when it suffers actual “injury in fact.” In the case of Section 301 tariffs, the first tariffs were not imposed until September 24, 2018. And, in APA cases, the first “injury in fact” an importer suffers occurs in the first date that Customs demands payment of Section 301 tariffs from that importer. Thus, if your company was not assessed with Section 301 tariffs until October 1, 2018, you arguably have until September 30, 2020 to file a suit in the CIT to redress that injury.

Moreover, each separate payment of duty constitutes a separate “injury in fact” which triggers a right to sue under the APA. Assume that you do not file a refund claim until October 15, 2020. You might be time-barred from recovering Section 301 duties paid before that date, but you would be able to preserve your right to refunds of duties paid thereafter.

So, despair not. Even if your company was unable to file a suit by September 21, you should be able to file for refunds anyway.

For more information on potential refund actions, contact any Neville Peterson LLP professional.