CIT Dismisses Challenge to Exclusion of Festive Utilitarian Household Textiles from Chapter 95
In Michael Simon Design, Inc. and Target Stores, et. al., v. U.S., the Court of International Trade dismissed a challenge to changes to the Harmonized Tariff Schedule which initially were recommended by the International Trade Commission and ultimately given legal effect on February 3, 2007 by a Presidential Proclamation.
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The Proclamation modified Chapter 95 of the HTS by adding Note 1(v) which excludes tableware, kitchenware, toilet articles, carpets, and other textile floor coverings, apparel, bed linen, table linen, toilet linen, kitchen linen and similar articles having a utilitarian function (classified according to their constituent material) from classification in Chapter 95 as festive articles.
- USC 1581 grants the CIT broad residual jurisdiction over any civil actions that arise out of import transactions. The CIT stated that this was the first time the court has considered whether a challenge to the President's modification of the HTS falls within its exclusive subject matter jurisdiction under 1581(i).
(Subject matter jurisdiction under 1581(i) can only be invoked if the plaintiff suffers a legal wrong because of agency action, or if it is adversely affected or aggrieved by an agency action within the meaning of a relevant statute.)
Michael Simon Design argued that its claims fell under Section 1581(i) as it was in the scope of the Administrative Procedures Act - i.e., the ITC's recommended modification of Note 1(v) to Chapter 95 in the HTS, as proposed by the World Customs Organization.
However, the CIT stated that Congress did not bestow on the ITC the authority to make such a decision. Instead, the authority to modify the HTS lies with the President, who issued a proclamation, at his discretion, based on the recommendations by the ITC.
The CIT dismissed the challenge by Michael Simon Design, stating that it is well established that the President's actions are not subject to review under the APA, because the President is not an agency within the meaning of the APA. Therefore, the modification of the HTS is not subject to judicial review under the APA, since it is outside the Court's subject matter jurisdiction.
(See ITT's Online Archives or 01/03/07 news, 07010300, for BP summary announcing the signing of the proclamation. See ITT's Online Archives or 02/05/07 news, 07020510, for BP reminder that the 2007 HTS, which included the WCO-recommended changes, took effect on February 3, 2007.)
Michael Simon Design, Inc., Tru 8, d/b/a Arriviste and Target Stores, a division of Target Corporation, v. U.S. Slip Op. 09-75 (dated 07/20/09) available at http://www.cit.uscourts.gov/Slip_op09/09-75.pdf