The Court of International Trade's application of 28 U.S.C. [section] 1581(I) jurisdiction in 2014.

Author:Telep, Jeffrey M.
  1. Introduction II. Background III. Cases Involving Jurisdictional Disputes A. Competing Jurisdictional Claims Under Subsections 1581(a) and 1581(i) 1. The Ford Motor Co. v. United States Litigation a. The Origins of the Ford Litigation b. The CAFC Appeal c. 2014 CIT Remand i. Statute of Limitations Issue ii. The Court's Discretion to Decline Declaratory Judgment Jurisdiction 2. General Mills, Inc. v. United States 3. Carbon Activated Corp. v. United States B. Reasserting Residual Jurisdiction in a Subsection 1581(h) and 1581(i) Case 1. The 2013 Decision 2. The 2014 Decision 3. The CAFC Decision C. Competing Jurisdictional Claims Under Subsections 1581 (c) and 1581 (i) 1. The Diamond Sawblades Manufacturers Coal. v. U.S. Department of Commerce Litigation 2. Borusan Mannesmann Boru Sanayi ve Ticaret A.S. v. United States D. Cases Where Jurisdiction Was Contested Due to Mootness or Ripeness 1. Aluminum Extrusions Fair Trade Comm. v. United States 2. Fedmet Res. Corp. v. United States IV. Cases Decided Under Subsection 1581 (i) Jurisdiction A. Cases Concerning Preliminary Relief. 1. Diamond Sawblades--Manifestly Inadequate Remedy v. Irreparable Harm 2. International Fresh Trade Corp. v. United States and Kwo Lee, Inc. v. United States--Severity of Likely Harm B. CDSOA Update V. Conclusion. I. Introduction

    In 2014, the Court of International Trade preserved a high bar for plaintiffs to meet in order to succeed under residual jurisdiction, but carved out limited exceptions under which plaintiffs challenging the government could proceed and prevail under 28 U.S.C. [section] 1581 (i). This Article examines decisions by the Court of International Trade (CIT or the Court) in 2014 that involved the Court's residual jurisdiction under 28 U.S.C. [section]1581 (i). Consistent with its legislative mandate, the CIT continued to enforce subsection 1581 (i) jurisdiction as being applicable only in cases where other jurisdictional provisions are unavailable or manifestly inadequate, and continued to set a high standard for plaintiffs to secure jurisdiction under subsection 1581 (i) over claims against U.S. Customs and Border Protection (Customs) and the U.S. Department of Commerce (Commerce) under the CIT's residual jurisdiction. After briefly outlining the CIT's jurisdiction in Part II, this article will examine key takeaways from 2014 CIT cases where subsection 1581 (i) jurisdiction was challenged in Part III, and then look at cases that were decided under subsection 1581 (i) in Part IV.

    In cases against Customs that contested subsection 1581 (i) jurisdiction, the CIT demonstrated a strong preference for plaintiffs to litigate under subsection 1581(a) whenever possible. The CIT found that parties must import their entries and take advantage of the Customs protest remedy, and that the administrative burden and costs of proceeding with the subsection 1581 (a) remedy will not be enough to show that jurisdiction is manifestly inadequate. Furthermore, the CIT found that, in certain circumstances, even if subsection 1581 (i) jurisdiction has been upheld by the U.S. Court of Appeals for the Federal Circuit (CAFC), it may still block subsection 1581 (i) claims via statute of limitations bars or its discretionary, prudential jurisdiction. As an exception to this general tendency to avoid residual jurisdiction, the CIT did reverse its own decision in 2014, allowing review of a Customs challenge under residual jurisdiction where it had previously denied it and jurisdiction under subsection 1581(h).

    In suits against Commerce and the International Trade Commission (ITC), the CIT confirmed that subsection 1581 (i) jurisdiction may prevail over subsection 1581(c) jurisdiction. Although plaintiffs seeking to challenge an aspect of a Commerce antidumping or countervailing duty proceeding will need to await the final determination and pursue jurisdiction under subsection 1581(c), plaintiffs may have recourse through subsection 1581 (i) where they allege that the entire proceeding was initiated ultra vires, that is, beyond the powers of the law.

    The 2014 cases decided under subsection 1581 (i) that did not involve contested jurisdiction primarily dealt with plaintiffs' attempts to secure a preliminary injunction. The CIT emphasized the importance of establishing likely irreparable harm when seeking a preliminary injunction, and found that just because a plaintiff demonstrates that it faces manifestly inadequate relief under the jurisdictional statute does not mean that it has necessarily proven sufficient likelihood of irreparable harm. The CIT indicated further that it will grant a preliminary injunction when the likelihood of irreparable harm is thoroughly shown by record evidence.

    Finally, in 2014, the CIT continued to address outstanding claims regarding the Continued Dumping and Subsidy Offset Act of 2000 (CDSOA). Plaintiffs in those cases raised issues that had been largely addressed in litigation over previous CDSOA distributions. Nonetheless, the CIT rejected the plaintiffs' attempts to stay the present actions pending the outcome of other CIT decisions and went on to dismiss their claims.

    When taken together, the 2014 CIT decisions demonstrate that plaintiffs seeking residual jurisdiction should be prepared to demonstrate why their case presents a challenge to Customs, Commerce, or the ITC where relief is unavailable or manifestly inadequate under the traditional jurisdictional remedies, and that those seeking relief under subsection 1581 (i) must marshal strong evidence in its favor.

  2. Background

    The CIT plays a "special role in the federal judicial system." (1) Established from the former U.S. Customs Court in 1980, the Court was designed by the Customs Court Act of 1980 to facilitate "a comprehensive system for judicial review of civil actions arising out of import transactions and federal transactions affecting international trade." (2) The CIT has jurisdiction over civil actions brought against the United States, its agencies, and its officers, as provided for in 28 U.S.C. [section] 1581. Section 1581 provides jurisdiction for civil actions arising out of: the review of protests in the ascertainment, collection, and recovery of duties; (3) petitions by domestic interested parties in the ascertainment, collection, and recovery of duties; (4) judicial review in countervailing duty and antidumping duty proceedings;" determinations in trade adjustment assistance for workers, firms, communities, and farmers; (6) determinations of the Secretary of the Treasury on rules of origin; (7) disclosure of information under orders of the CIT; (8) decisions relating to customs brokers licenses and private laboratory accreditation; (9) and certain rulings "relating to classification, valuation, rate of duty, marking, restricted merchandise, entry requirements, drawbacks, vessel repairs, or similar matters." (10) Additionally, subsection 1581(j) provides that "[t]he Court of International Trade shall not have jurisdiction of any civil action arising under section 305 of the Tariff Act of 1930," which prohibits importation of immoral articles. (11)

    Additionally, the statute provides for "residual jurisdiction" over other causes of action in subsection 1581 (i), which reads:

    (i) In addition to the jurisdiction conferred upon the Court of International Trade by subsections (a)-(h) of this section and subject to the exception set forth in subsection (j) of this section, the Court of International Trade shall have exclusive jurisdiction of any civil action commenced against the United States, its agencies, or its officers, that arises out of any law of the United States providing for--

    (1) revenue from imports or tonnage;

    (2) tariffs, duties, fees, or other taxes on the importation of merchandise for reasons other than the raising of revenue;

    (3) embargoes or other quantitative restrictions on the importation of merchandise for reasons other than the protection of the public health or safety; or

    (4) administration and enforcement with respect to the matters referred to in paragraphs (1)--(3) of this subsection and subsections (a)-(h) of this section.

    This subsection shall not confer jurisdiction over an antidumping or countervailing duty determination which is reviewable either by the Court of International Trade under section 516A(a) of the Tariff Act of 1930 or by a binational panel under article 1904 of the North American Free Trade Agreement or the United States-Canada Free-Trade Agreement and section 516A(g) of the Tariff Act of 1930. (12)

    In 2014, the CIT adjudicated cases that challenged its subsection 1581 (i) jurisdiction, where it was asked to grant preliminary relief and motions to stay under subsection 1581 (i) jurisdiction, and where it entertained continued challenges to the Continued Dumping and Subsidy Offset Act. A summary of these decisions is set forth below.

  3. Cases Involving Jurisdictional Disputes

    In 2014 claims involving jurisdictional disputes, the CIT, with the unique exception of the Best Key case, (1) demonstrated a preference for subsection 1581(a) over 1581 (i) jurisdiction, even after appellate intervention upholding subsection 1581 (i), and (2) recognized a limited exception to subsection 1581(c) jurisdiction where the challenge confronts the ultra vires nature of an entire proceeding. The Court also emphasized that even where subsection 1581 (i) jurisdiction may be available, the case presented to the Court must be ripe for review.

    The U.S. Court of Appeals for the Federal Circuit has "consistently held that to prevent circumvention of the administrative processes crafted by Congress, jurisdiction under subsection 1581 (i) may not be invoked if jurisdiction under another subsection of subsection 1581 is or could have been available, unless the other subsection is shown to be manifestly inadequate." (13) The threshold for "manifest inadequacy" tends to be quite high, as "[n] either the burden of...

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