A Trek Leather executive who was recently found liable for the customs violations of his company appealed the case to the Supreme Court in a petition for a writ of certiorari filed Feb. 13. Harish Shadadpuri, the company's owner, argued he cannot automatically be held liable for over $500,000 in penalties and unpaid duties for his company’s negligent failure to declare assists on imports of men’s suits. Rather, the government has to prove he personally aided and abetted those violations, or “pierce the corporate veil” and make the case that Trek Leather’s corporate officers should be liable, of which the government did neither in the case, said Shadadpuri.
Companies can’t challenge CBP classification decisions on behalf of the manufacturers that use their products as inputs, even if they may suffer indirect injury in the form of lost sales, ruled the U.S. Court of Appeals for the Federal Circuit on Feb. 3 in an seesawing case on yarn made by Best Key (here). Instead, they must have suffered direct injury to themselves in order to challenge CBP classification decisions in court, said CAFC as it reversed a February decision from the Court of International Trade.
The U.S. Court of Appeals for the Federal Circuit on Jan. 21 affirmed a lower court ruling that found curtain wall units are subject to antidumping and countervailing duties on aluminum extrusions from China (here). Just as the Court of International Trade did in a ruling issued nearly a year ago (see 14013101), CAFC pointed to a section of the description of the scope of duties on aluminum extrusions that includes parts for curtain walls as products covered by AD/CV duties. Because curtain wall units are parts of curtain walls, they are explicitly included in the scope, said the appeals court.
A product must be “designed to” directly measure and control a property of gas or liquid in order to be classified as an automatic regulating or controlling instrument, said the U.S. Court of Appeals for the Federal Circuit on Dec. 19 as it affirmed a lower court ruling on the tariff classification of Belimo’s heating and air conditioning system flow actuators (here). The connection between air temperature and a sensor on Belimo’s actuator used to confirm the position of a damper blade is too tenuous, and the actuator should be classified as electrical machinery, said CAFC.
International Trade Today is providing readers with some of the top stories for Dec. 8-12 in case they were missed.
A Federal Circuit judge slammed the majority opinion in a recent tariff classification case that stands to “breed confusion” among importers, in a dissent from his court’s Dec. 8 decision not to allow a rehearing of the case (here). The Court of Appeals for the Federal Circuit had ruled in an August decision on screws imported by GRK Canada that a product’s use may be considered in some circumstances when interpreting “eo nomine” provisions in the tariff schedule (see 14080420). Circuit Judge Evan Wallach said the ruling conflated two separate types of analyses for classifying merchandise, violating the statutory framework for classification as well as the court’s own precedent. He was joined in the dissent by Circuit Judge Jimmie Reyna, who wrote a similar dissent when the opinion was first issued.
The U.S. Court of Appeals for the Federal Circuit on Dec. 1 affirmed the dismissal of a challenge brought by a surety for the government’s failure to warn it against providing a bond against an unscrupulous importer (here). The Court of International Trade had in June 2013 dismissed the case because, although the importer was under investigation by CBP at the time Hartford Fire Insurance agreed to provide a bond on an entry subject to antidumping duties on crawfish tail meat from China, the investigation wasn’t focused on a problem relevant to the entry at issue (see 13062817). The Appeals Court agreed, finding the fact that the importer later disappeared and Hartford was left to pay its debt wasn’t relevant to the investigation, so CBP had no reason to refuse or set additional requirements on the entry like additional bonding requirements that would have protected Hartford.
Cash deposit rates are again set to rise for three exporters of wooden bedroom furniture from China (A-570-890), after the U.S. Court of Appeals for the Federal Circuit on Dec. 1 reversed a lower court ruling (here). In its 2011 final results, the Commerce Department had assigned an AD rate of 41.75% to Dalian Huafeng Furniture Group Co., Ltd., as well as to non-individually investigated companies including Nanhai Baiyi Woodwork Co. Ltd. and Dongguan Liaobushangdun Huada Furniture Factory, Great Rich (HK) Enterprise Co., Ltd. After a Court of International Trade remand, Commerce proposed increasing the three companies’ rates to 42.17%, but CIT rejected the higher rate. Instead, CIT in November 2013 sustained a second Commerce remand redetermination that lowered the three companies’ rates to 11.79% (see 13111421). On appeal, CAFC said the lower court was incorrect to reject the first remand redetermination, and ordered CIT to reinstate the 42.17% AD rate for Huafeng, Baiyi and Huada. Because none of the three companies have since been assigned a new rate, the change will affect current AD duty cash deposit requirements.
NEW YORK -- The Court of International Trade’s hazy jurisdiction over scope issues is one of the issues that is creating headaches for importers with products that are potentially subject to antidumping and countervailing duties, said CIT Judge Jane Restani at the Court of International Trade Judicial Conference on Dec. 1. An unclear dividing line between Commerce Department and CBP scope responsibilities means that importers that want to protect themselves have to take both routes, by filing a scope ruling request and a protest, in the hope of getting to court to challenge a finding their products are subject to AD/CV duties, said Restani.
NEW YORK -- A recent court decision on the individual liability of employees and corporate officers for their companies’ customs violations won’t result in an increase in penalty actions against middle managers and other “peripheral actors,” said Joshua Kurland, a Justice Department lawyer, during remarks at the Judicial Conference of the Court of International Trade on Dec. 1. The U.S. Court of Appeals for the Federal Circuit’s September decision in U.S. v. Trek Leather merely confirmed an interpretation long held by the Justice Department and CBP on who can be held liable for customs violations, said Kurland. ”As far as we’re concerned it’s business as usual,” he said. “It’s unlikely to expect a significant change in practice as a result of the Trek Leather decision.”