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On October 19, 2020, the Department of Justice (DOJ) filed a <a href="https://filehost.thompsonhine.com/uploads/Doc_30_-_ZMotion_for_Case_Management_Procedures_Motion_to_Stay_and_Response_to_Motion_for_Three_Judge_Pane_2a5f.pdf" target="_blank" rel="noopener noreferrer">motion</a> before the U.S. Court of International Trade (CIT) in the matter of HMTX Industries LLC, et al. v. United States of America, et al. asking that the CIT adopt case management procedures to administer not only this case but also the approximately 3,600 complaints filed since September 10, 2020. As previously noted on the SmarTrade blog, a complaint was filed on September 10, 2020, with the CIT alleging that President Donald Trump and the Office of the U.S. Trade Representative had unlawfully implemented a third and fourth round of tariffs against China beyond the scope allowable under the Trade Act of 1974 and beyond the stated impact of China&rsquo;s unfair trade policies and practices. See <a href="https://www.thompsonhinesmartrade.com/2020/09/u-s-importer-sues-u-s-trade-representative-for-unlawful-escalation-of-section-301-tariffs-against-china/">Update of September 10, 2020</a>. The initial complaint filed by HMTX Industries LLC led to an avalanche of additional cases filed by thousands of affected importers. To date, the DOJ has entered its appearance and responded only to this first-filed complaint but is seeking permission from the CIT, inter alia, to treat certain cases as the lead cases and to treat all submissions in those cases as filed in the others.
The October 19, 2020 DOJ motion asks the CIT stay all related cases, and, if it is not granted by November 9, 2020, that it be deemed a motion for an extension of time in both the HMTX Industries case and all of the related cases. &nbsp;&nbsp;The DOJ notes that all of the cases challenge tariffs imposed by USTR in the Section 301 investigation concerning China and that plaintiffs in all of the cases contest additional tariffs imposed by &ldquo;List 3&rdquo; or &ldquo;List 4A&rdquo; (the lists) because the action was allegedly unauthorized by Section 301 of the Trade Act of 1974.&nbsp;The DOJ thus requests the following case management process for all Section 301-related cases before the CIT:
<ul>
<li>Automatic Stay: The DOJ requests that the CIT automatically stay all pending Section 301-related cases identified in an attachment to its motion, except for one or more &ldquo;test cases.&rdquo; To be released from this stay, a plaintiff, according to the DOJ, must &ldquo;make a showing of good cause&rdquo; and must consult with the Plaintiffs&rsquo; Steering Committee before such a release.</li>
<li>Plaintiffs&rsquo; Steering Committee: The DOJ requests that the CIT appoint a steering committee consisting of several lead counsel for the plaintiffs. While deferring to plaintiffs&rsquo; counsel on the composition of this committee, the DOJ has recommended that the attorneys for the first three cases filed be appointed as the Steering Committee.</li>
<li>Service/Notice of Filing Mechanism: The DOJ requests that the CIT not require the U.S. government parties to file entries of appearance in each individual case, or to file copies of documents in each individual case. Instead, the DOJ asks the CIT to create &ldquo;a tab on its website so that all parties and their counsel can have notice of any case management submission or filing in the &lsquo;test case(s)&rsquo; and that all filings be made in the &lsquo;test case(s).&#8217;&rdquo;</li>
<li>Designation of Test Case(s): The DOJ requests that the CIT designate the HMTX Industries case, the first-filed case, as the test case. It further requests that the CIT establish a deadline of 30 days from the date of the entry of any order on this matter for any plaintiffs that believe their complaints would constitute a better or additional test case to file a request with the CIT.</li>
<li>Amicus Curiae Participation: The DOJ requests that the CIT provide for amicus participation in the test case(s) by other plaintiffs. To participate as amicus curiae, the DOJ proposes that plaintiffs be required to file a notice within 30 days of the selection of any additional &ldquo;test cases&rdquo; to note that they intend to serve as amicus curiae. Further, the DOJ proposes that amicus curiae briefs be filed after the briefs filed by the test case plaintiffs, that amicus curiae should not be permitted to repeat arguments raised by the test case plaintiffs, and that their briefs be limited to 10 pages.</li>
<li>Briefing Schedule: The DOJ requests that a briefing schedule proceed but that the U.S. government parties&rsquo; motion to dismiss be briefed and decided first before the CIT proceeds with the merits of the case. The DOJ affirmed that it would be filing a motion to dismiss based on plaintiffs&rsquo; &ldquo;failure to state a claim upon which relief can be granted.&rdquo;</li>
</ul>
In its motion, the DOJ acknowledges that plaintiffs have filed a motion asking the CIT to appoint a three-judge panel for any proceeding. The DOJ states that it does not object to this motion and defers to the CIT in determining whether it will appoint such a panel to resolve the substantive claims and defenses raised in these cases. However, the DOJ argues that case management would be better handled by a single judge. This motion is expected to trigger a raft of challenges by plaintiffs&rsquo; counsel in all of the Section 301-related cases on such DOJ positions as the composition of the Plaintiffs&rsquo; Steering Committee and the designation of appropriate test cases.
Thompson Hine attorneys and trade professionals represent a number of plaintiffs in this matter and will continue to generally report on the litigation status as warranted.

core/freeform

SmarTrade

Senior Legislative and Regulatory Policy Advisor

Scott E. Diamond

International Trade

In Section 301 Tariff Refund Litigation, the DOJ Files Motion for Case Management Procedures