Wednesday, November 05, 2008

Totes, ISA, and Origin Updates

A few things worthy of note:

Totes Rehearing Denied

The Court of International Trade has denied dual requests for a rehearing in the Totes case challenging the constitutionality of gender-specific rates of duty on gloves.  You probably remember that the Court previously dismissed the case on technical grounds but permitted the plaintiff to refile if its case.  My earlier post on that is here

In the motion for rehearing, the plaintiff asserted that the discrimination is facial and, therefore, plaintiff need not plead discriminatory intent or effect.  For its part, the United States argues that the case should be dismissed on jurisdictional grounds because the plaintiff never filed a protest of the underlying liquidations.  This is the "exhaustion of administrative remedies" argument, and it fails here.  The Court holds that there is no decision by U.S. Customs and Border Protection to protest.  The importer is not challenging the tariff classification nor the rate of duty applicable under any CBP program. Rather, the challenge goes to the statute itself, and CBP certainly can't decide not to enforce a low because it is unconstitutional.  This was worked out in the Harbor Maintenance Tax litigation.

The Decisive Utterance here, seems to be this: "When seeking to challenge a provision over which Customs has no authority or discretion, a plaintiff need not file a protest and then invoke jurisdiction under section 1581(a); such a plaintiff may instead rely upon section 1581(i)."  That means, in this case, there was no need to exhaust administrative remedies.

Turning the to plaintiff's argument, the Court refused to find facial discrimination in the HTS differentiating between "Men's" gloves and "Other" gloves.  The Court essentially held that the differential in rates of duty related to the product and not to the party paying the duty.  According to the Court, any importer of Men's gloves pays the applicable duty whether that importer be a man, woman, or child.  Thus, the discrimination is not facial and the pleadings need to assert either discriminatory intent or effect.  Having failed to plead that element, the case is dismissed.

One last thing, the CIT also denied Tote's request for an immediate appeal to the Federal Circuit.  So, the action stays at the CIT and we will continue to wait and see whether this decision becomes final and, therefore, appealable.

In case you are wondering, I capitalized Decisive Utterance because it is the name of the school paper at The John Marshall Law School, where I got both my J.D. and LL.M.  The story goes that the somewhat legendary dean Nobel Lee (who needs a Wikipedia entry) used to tell students that in every reported decision there is a succinct statement encapsulating the reasoning.  That is the decisive utterance.  Finding it, according to this law as treasure hunt pedagogical approach, is the task of the student. 

ISA to Include Product Safety

I missed the Customs Symposium this year.  One of the announcements was the extension of the Importer Self Assessment program to cover product safety issues.  Here is a link to the Product Safety presentation.  The presentation is pretty useful in that it contains information on import enforcement issues related to Consumer Product Safety Commission and Food & Drug Administration regulations, plus the Product Safety ISA.  Among the benefits listed for ISA-PS are:
  • Fewer safety tests
  • Faster access to laboratories for testing
  • Permitted destruction rather than redelivery
  • Special training
The ISA-PS pilot program will require that participants submit a questionnaire response for review by both CBP and CPSC.  Participants may be subject to review at a domestic or foreign location.

Country of Origin Rule Changes

Customs has gotten around to updating the country of origin rules for NAFTA and certain textiles.  These are the rules found in Part 102 of the Customs Regulations.  I call them "country of origin rules" only to distinguish them from the preferential rules of origin under the various free trade agreements.  The notice is basically a laundry list of  changes.  But, if you are doing NAFTA Certificates of Origin or importing textiles or apparel, it behooves you to check that the country of origin rule hasn't changed.


Mr. Micawber said...

Larry: This is Paul Vandevert. I doubt you wouldn't know it wasn't me if tried to be anonymous. Anyway, Customs lawyers I really like and respect have been leading the charge on Totes, but on this issue I've never seen the beef. See my blog posting on it @ The Punchbowl: WE the Gloves of these United States

I made my post a couple of months ago, after the first decision from the CIT, but I hit the Decisive Utterance dead on. Only if I could have done that in law school.

psutter said...
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