CIT Says No Injunctive Relief for Broker Over Temporary Type 86 Suspension

Kelly held that Seko also made a "weak evidentiary showing" on the harm it would suffer absent its sought relief, and even putting the evidentiary issues aside, Seko's business and reputational harms don't warrant an injunction.

The court said any regulation "can impose costs upon businesses, and to invoke that cost as a form of irreparable harm would create a 'per se irreparable harm rule' which 'would lie in tension with the [regulation] itself.'" The claimed economic loss suffered by Seko "is a cost that many businesses face, and it is a consequence for which Seko had notice," the decision said.

Seko was among several brokers CBP suspended in May from the Entry Type 86 pilot program. The agency requested documentation from Seko in July 2023 for 10 Type 86 entries, finding "significant" noncompliant filings, though no specifics were given at the time of the suspension (see 2406030044).

The broker filed suit and sought four types of relief: restraining CBP from requiring Seko to take remedial actions for its alleged violations, stopping CBP from requiring Seko to take remedial actions, requiring CBP to provide Seko a reasonable timeline to address specific violations and stopping CBP from making the alleged violations available to anyone but CBP and Seko.

The government said that subsequent developments, namely Seko's conditional reinstatement into the programs and CBP's provision of the reasons for the suspensions, rendered the requests for a TRO and PI moot. Kelly agreed, finding the allegations "moot and speculative."

The court said Seko's been given a "detailed explanation of the specific facts of the violation" and a timeline for unconditional reinstatement," and it's been "conditionally reinstated." In addition, the U.S. "has filed its submissions under seal," addressing all of Seko's claimed harms.

Seko then altered the relief it sought, vying for unconditional reinstatement into the programs, alleging that CBP's enforcement actions have led to "significant financial harm" and irreparable damage to the "ability to retain future business."

Kelly held that the evidence for these claims "alludes to speculative harm at best." The broker claimed to have lost e-commerce clients that aren't coming back due to the suspension and that it will continue to lose customers without the PI. The judge said it's "not clear when Seko lost its customers," and that if the company did lose customers due to the suspensions, "it does not follow that it would lose more customers based on its conditional reinstatement as opposed to its unconditional reinstatement."

It also doesn't follow that the PI would "lead to the return of those customers," the judge said. Seko didn't offer any witnesses to speak to "precisely when or why business ties with Seko were severed, or under what circumstances they would be restored." Kelly added that the evidence also doesn't support the claim that the suspension has created irreparable damage to Seko's reputation. The judge said the broker again "offered no live testimony to further substantiate the claim."

The court devoted a large part of the decision to a discussion of when to afford injunctive relief, noting that loss of income is typically not enough to constitute irreparable harm, though loss of customer relationships or business opportunities can be. However, in Seko's case, the judge said Seko's claimed injuries don't call for a PI since potential economic loss alone isn't enough to get the "extraordinary remedy of injunctive relief."

Taking part in the Entry Type 86 and CTPAT programs "is predicated on remaining in good standing by following the rules and standards that CBP established," and any loss stemming from grappling with those standards can be borne by any business, the court said. Kelly added that the alleged reputational harms also fail to support the PI motion.

Where Seko's been labeled a "compliance risk" by CBP, "that harm has already occurred, and Seko fails to substantiate a claim that it currently faces an imminent harm from the conditional reinstatement under which it now operates," the decision said.

(Seko Customs Brokerage v. United States, Slip Op. 24-78, CIT # 24-00097, dated 07/15/24, Judge: Claire Kelly; Attorneys: Eric Rock of Rock Trade Law for plaintiff Seko Customs Brokerage; Edward Kenny for defendant U.S. government)