United States Court of International Trade

Slip Op. 21-81

Before the Court in In Re Section 301 Cases, Court No. 21-00025, Slip Op. 21-81 (July 6, 2021) were Plaintiff’s motions for leave to file a reply and for a preliminary injunction pursuant to U.S. CIT Rule 65(a) suspending liquidation of unliquidated entries subject to the imposition of a third and fourth round of tariffs by the Office of the United States Trade Representative pursuant to Section 301 of the Trade Act of 1974. Id. at 2. Plaintiffs requested that any injunction extend to all Section 301 Cases “subject to an opt-out mechanism” for individual plaintiffs. Id. Defendants (“the Government”) opposed the motion. Id. The Government deferred to the court’s discretion as to acceptance of Plaintiffs’ Reply. Id. Plaintiffs argued that Sections 307(a)(1)(B)–(C) of the Trade Act limit the President’s and the USTR’s authority to increase tariffs in the context of Section 301(b). Id. at 18. Defendants defend the President’s authority based upon, inter alia, the plain language of the statute. Id. For the following reasons, the Court granted Plaintiffs’ motions for leave to file a reply and for a preliminary injunction. Id. at 2.

The court has jurisdiction pursuant to 28 U.S.C. § 1581(i)(1)(B) (2018), which grants the court “exclusive jurisdiction of any civil action commenced against the United States . . . that arises out of any law of the United States providing for . . . tariffs, duties, fees, or other taxes on the importation of merchandise for reasons other than the raising of revenue.” Id. at 8. “A preliminary injunction is an extraordinary remedy never awarded as of right.” Id. “To obtain a preliminary injunction, a party must demonstrate “(1) likelihood of success on merits, (2) irreparable harm absent immediate relief, (3) the balance of interests weighing in favor of relief, and (4) that the injunction serves the public interest.” Id. at 9. The Court of Appeals for the Federal Circuit has historically applied a “sliding scale” approach. Id. Under the sliding scale approach, “the greater the potential harm to the plaintiff, the lesser the burden on Plaintiffs to make the required showing of likelihood of success on the merits.” Id. Thus, where the harm is great, a movant must only “demonstrate that it has at least a fair chance of success on the merits.” Id. Conversely, courts may not lessen a movant’s burden of demonstrating a likelihood of irreparable harm, regardless of the strength of the other factors. Id. In this case, the court found that Plaintiffs established their entitlement to a preliminary injunction. Id. “Here, Plaintiffs demonstrated they will likely suffer irreparable harm because their entries of subject merchandise will liquidate absent an injunction.” Id. “Moreover, Plaintiffs persuasively argue that there is sufficient uncertainty as to the availability of relief under Shinyei Corp. of America v. United States, 355 F.3d 1297 (Fed. Cir. 2004), to establish the likelihood that Plaintiffs will be unable to recover duties unlawfully paid should they be successful in their claim on the merits, thus demonstrating irreparable harm.” Id. at 9-10. Consequently, the Court found that “Plaintiffs’ burden to demonstrate a likelihood of success on the merits is reduced, and Plaintiffs satisfy their reduced burden by raising sufficiently serious and substantial questions regarding the interpretation and application of Section 307 of the Trade Act.” Id. at 10. Likewise, the Court found that “Plaintiffs have sufficiently demonstrated that the balance of the equities and public interest factors weigh heavily in their favor.” Id. As such, the Court granted Plaintiffs’ motion for leave to file a reply and Plaintiffs’ motion for a preliminary injunction. Id. at 29. “Moreover, to give the parties time to implement appropriate procedures, gather pertinent information, and otherwise take necessary action to comply with the Court’s order, the Court “will temporarily restrain liquidation of any unliquidated entries of merchandise imported from China by any plaintiffs in the Section 301 Cases which are subject to List 3 or List 4A duties.” Id.

Chief Judge Barnett dissented from the entry of a preliminary injunction. Id. at 30. Chief Judge Barnett found that “Plaintiffs have failed to establish a likelihood of irreparable harm.” Id. Chief Judge Barnett stated, “I cannot find that there is a likelihood of irreparable harm when my colleagues and I agree that any harm arising from liquidation would be reparable by the court by means of an order of reliquidation or a money judgment pursuant to 28 U.S.C. § 2643(a)(1) or (c)(1). Id. at 31.