by
In 2011, the Commerce Department posted notice permitting interested parties to request administrative review of duty orders on ball bearings and parts thereof from France, Germany, Italy, Japan, and the United Kingdom. BMW requested administrative review of the duties on its imports from the U.K. The duty orders on ball bearings and parts thereof from Japan and the United Kingdom, first imposed in 1989, were undergoing sunset review by Commerce and the International Trade Commission (ITC), which initially decided against revocation. The ITC later determined that revocation would not likely lead to the continuation or recurrence of material injury to a U.S. industry; the Court of International Trade affirmed. Commerce published a notice that it was revoking those duty orders and discontinuing unfinished administrative reviews. In 2013, the Federal Circuit reversed. The Trade Court reinstated the ITC’s affirmative material injury determination. Commerce e-mailed counsel for all parties that had previously requested administrative review, stating only that it was“sending out a quantity-and-value-questionnaire. Commerce published notice that it was resuming the administrative reviews and noting the deadline for withdrawing requests for review. Counsel for BMW did not complete the questionnaire, withdraw from review, or otherwise respond. Finding that BMW “failed to cooperate,” Commerce employed an adverse inference in selecting a 126.44% rate (19 U.S.C. 1677e(b)) against BMW. The Federal Circuit vacated. Commerce did not set forth its reasoning in sufficient detail to allow review of whether the rate was unduly punitive. View "BMW of North America LLC v. United States" on Justia Law

by
Ford successfully sued in the Court of International Trade, challenging U.S. Customs and Border Protection’s classification of its model year 2012 Transit Connect 6/7 vehicles under Harmonized Tariff Schedule of the United States (HTSUS) Subheading 8704.31.00, which covers “[m]otor vehicles for the transport of goods,” and bears a duty rate of 25% ad valorem. Ford argued that its subject merchandise is properly classified under HTSUS Subheading 8703.23.00, which bears a lower duty rate of 2.5% ad valorem. The Federal Circuit reversed. The lower court erred by refusing to consider intended use as part of its analysis. Use is relevant in construing “other motor vehicles principally designed for the transport of persons” in HTSUS 8703 because this language suggests that classification is necessarily intertwined with whether an imported vehicle is chiefly intended to be used to transport persons. On balance, the structural design features, auxiliary design features, and inherent use considerations establish that the subject merchandise is not classifiable under HTSUS Heading 8703. View "Ford Motor Co. v. United States" on Justia Law

by
The Court of International Trade held that Sunpreme’s solar modules are covered by the scope of antidumping and countervailing duty orders on U.S. imports of certain solar cells from China and that the Department of Commerce could not instruct U.S. Customs and Border Protection to continue suspending liquidation of Sunpreme’s solar modules entered or withdrawn from warehouse for consumption before the scope inquiry was initiated. The Federal Circuit affirmed, rejecting Sunpreme’s arguments that the orders did not cover its solar modules because they do not contain crystalline silicon photovoltaic cells, do not have an additional semiconductor substrate (p/n junction), and are thin film products. Commerce cannot order the suspension of liquidation pre-scope inquiry for merchandise possibly subject to an unclear or ambiguous duty order; neither can Customs because allowing it to do so would permit Customs in the first instance to clarify or interpret the ambiguity in the duty order so as to place merchandise within its scope. Customs lacks authority to suspend liquidation under those narrow circumstances and Commerce cannot continue an ultra vires suspension of that kind. View "Sunpreme Inc. v. United States" on Justia Law

by
Segway filed a complaint (19 U.S.C. 337) with the International Trade Commission based on infringement of six patents and two trademarks--stylized and non-stylized SEGWAY marks, which cover “motorized, self-propelled, wheeled personal mobility devices, namely, wheelchairs, scooters, utility carts, and chariots.” The complaint alleged that Swagway’s self-balancing hoverboard products, marketed under the names SWAGWAY and SWAGTRON infringed Segway’s marks. Swagway proposed a consent order stipulating that Swagway would not sell or import “SWAGWAY-branded personal transporter products ... all components thereof, packaging and manuals.” Segway opposed the proposal as addressing only a subset of the claims and products at issue. After a hearing, the ALJ found that the accused products did not infringe certain patents and that use of the SWAGWAY designation, but not the SWAGTRON designation, infringed the trademarks. The Commission determined not to review the ALJ’s denial of Swagway’s consent order motion. The Federal Circuit upheld that determination and the trademark infringement determination based on the evidence supporting factors other than likelihood of confusion, including the degree of similarity between the two marks in appearance, the pronunciation of the words, and the strength of the SEGWAY marks. View "Swagway, LLC v. International Trade Commission" on Justia Law

by
The Department of Commerce imposed an antidumping duty on crystalline silicon photovoltaic cells, whether or not assembled into modules, from China. Commerce assigned Sumec Hardware a separate rate, 24.48%, assigning Sumec’s China-wide entity a margin of 249.96%. In 2015, Hardware's margin was amended to 13.18% pursuant to the U.S. Trade Representative’s decision to implement a related World Trade Organization determination. Commerce later reconsidered and assigned Hardware the China-wide rate. The Trade Court affirmed. Commerce then published a Timken notice, suspended liquidation of entries in accordance with the decision, and later instructed Customs to collect cash deposits on subject merchandise exported by Hardware at the China-wide rate of 238.95% for any entries made after October 15, 2015. In March 2016, Commerce issued liquidation instructions, ordering Customs to liquidate all Hardware entries “at the cash deposit . . . rate in effect.” Sumec sought an injunction, alleging that Commerce should have set the “date for the change in liquidation rate as the date of publication of the Timken [n]otice,” (November 23, 2015) rather than October 15, and that Hardware made entries during this 39-day period, which should have been subject to the 13.18% separate rate. The Federal Circuit affirmed the denial of Sumec’s Motion; Sumec failed to demonstrate irreparable harm. View "Sumecht NA, Inc. v. United States" on Justia Law

by
A Controlled Foreign Corporation’s income is not taxable to its domestic shareholders unless the income is distributed to them. CFC shareholders began taking loans either from the CFC or from third-party financial institutions using the CFC’s assets as collateral or having the CFC guarantee the loans to obtain a monetary return on their foreign investment. The Revenue Act of 1962 requires the inclusion in the domestic shareholder’s annual income of any increase in investment in U.S. properties made by a CFC it controls, 26 U.S.C. 956(c)(1)(C), and provides that a CFC shall be considered as holding an obligation of a U.S. person if such CFC is a pledgor or guarantor of such obligations. IRS regulations determine when a CFC’s pledge or guarantee results in the CFC being deemed the holder of the loan, and how much of the “obligation” a CFC pledgor or guarantor is deemed to hold, 26 C.F.R. 1.956-2(c)(1) and 1.956-1(e)(2). Through the SIH family, Appellant owns two CFCs. Another SIH affiliate, SIG, borrowed $1.5 billion from Merrill Lynch in 2007 in a loan guaranteed by over 30 SIH affiliates, including the CFCs that Appellant owns. Although the loan dwarfed the CFCs’ assets (roughly $240 million), Merrill Lynch insisted on having the CFCs guarantee. In 2011, when the CFCs distributed earnings to Appellant, their domestic shareholder, the IRS determined that Appellant should have reported the income at the time the CFCs guaranteed the SIG loan, treating each CFC as if it had made the entire loan directly, though the amount included in Appellant’s income was reduced from the $1.5 billion principal of the loan to the CFCs’ combined “applicable earnings.” This resulted in an additional tax of $378,312,576 to Appellant. The IRS applied the then-applicable 35% rate for ordinary income. The Tax Court and Third Circuit ruled in favor of the IRS, rejecting Appellant’s challenges to the validity of the regulations and the use of the ordinary income tax rate. View "SIH Partners LLLP v. Commissioner of Internal Revenue" on Justia Law

by
Kalle's sausage casings, imported from Germany, are comprised of a woven textile sheet that is coated with a layer of plastic on one side. The plastic coating is thin and “only fills the interstitial spaces between the textile fibers” to ensure that the casing’s “textile character remains recognizable.” The textile gives the casing its strength and shape and allows the casing to “absorb dyes and aroma substances.” The plastic coating helps prevent moisture transmission. After the textile sheet is coated in plastic, it is trimmed, folded to form a tube, and fixed with a seam for importation as flattened tubes wound around a cardboard core. The casings were liquidated by U.S. Customs and Border Protection under Harmonized Tariff Schedule of the United States (HTSUS) subheading 6307.90.98, as “[o]ther made up articles, including dress patterns,” subject to a duty of 7%. Kalle argued that the casings should be classified under subheading 3917.39.0050, which covers “[t]ubes, pipes and hoses and fittings therefor (for example, joints, elbows, flanges), of plastics,” subject to a duty of 3.1%, emphasizing that Note 8 includes “sausage casings and other lay-flat tubing.” The Trade Court granted the government summary judgment. The Federal Circuit affirmed. The casings are not “completely embedded,” or entirely fixed in a surrounding mass of plastic. The court distinguished “impregnated” fabrics. View "Kalle USA, Inc. v. United States" on Justia Law

by
Amarin markets Vascepa®, a prescription drug consisting of eicosapentaenoic acid in ethyl ester form, synthetically produced from fish oil, intended to reduce triglyceride levels in adult patients with severe hypertriglyceridemia. Vascepa® is the only FDA-approved purified ethyl ester E-EPA product sold in the U.S. Amarin filed a complaint with the International Trade Commission (ITC) under 19 U.S.C. 1337 (Tariff Act), alleging that certain companies were falsely labeling and deceptively advertising their imported synthetically produced omega-3 products as “dietary supplements,” where the products are actually “new drugs” under the Food, Drug, and Cosmetic Act (FDCA) that have not been approved for use in the U.S. Amarin claimed that their importation and sale was an unfair act or unfair method of competition because it violates the Lanham Act, 15 U.S.C. 1125(a), and the Tariff Act “based upon" FDCA standards. The FDA urged the Commission not to institute an investigation and to dismiss Amarin’s complaint, arguing that the FDCA prohibits private enforcement actions and precludes any claim that would “require[] the Commission to directly apply, enforce, or interpret the FDCA.” The ITC and Federal Circuit agreed.Amarin’s allegations are based entirely on FDCA violations; such claims are precluded by the FDCA, where the FDA has not yet provided guidance as to whether violations have occurred. Although Amarin claimed violations of the Tariff Act, its claims constituted an attempt to enforce the FDCA. View "Amarin Pharma, Inc. v. International Trade Commission" on Justia Law

by
Rubies imports and sells traditional Christmas Santa Claus costumes, including the “Premier Plush 9 Piece Santa Suit,” which consists of a jacket, pants, gloves, a toy sack, a beard, a wig, a hat, a belt, and shoe covers. Rubies requested a binding pre-importation ruling from U.S. Customs and Border Protection on the tariff classification of the Santa Suit. Customs issued a Ruling Letter HQ, classifying the Santa Suit under several tariff classifications of the Harmonized Tariff Schedule of the United States (HTSUS). Rubies contended that all nine pieces fell under HTSUS chapter 95 as “[f]estive . . . articles,” requiring duty-free entry. The Court of International Trade upheld the tariff classification. The Federal Circuit affirmed. The merchandise is excluded from classification as “festive articles” by the notes to HTSUS chapter 95, referring to “fancy dress of textile material.” View "Rubies Costume Co. v. United States" on Justia Law

by
Irwin imported several styles of hand tools, including straight jaw locking pliers, large jaw locking pliers, curved jaw locking pliers with and without wire cutters, and long nose locking pliers with wire cutters. U.S. Customs and Border Protection classified Irwin’s tools as “wrenches” under the Harmonized Tariff Schedule of the United States (HTSUS) subheading 8204.12.00 and denied each of Irwin’s protests to classify them as “pliers” under 8203.20.6030. The Trade Court granted Irwin summary judgment that the tools are properly classified as pliers. The Federal Circuit affirmed. The term pliers is not defined by use; it refers to a versatile hand tool with two handles and two jaws that are flat or serrated and are on a pivot, which must be squeezed together to enable the tool to grasp an object. The Irwin tools “1) are versatile hand tools, 2) have two handles, and 3) have two jaws, that are flat or serrated and are on a pivot, which can be squeezed together to enable the tools to grasp an object.” View "Irwin Industrial Tool Co. v. United States" on Justia Law