Time May Be Right for Resurrection of Importer HMF Suit, Customs Lawyer Says
An increasingly frayed connection between the Harbor Maintenance Fee and its use for maintaining ports and harbors could bring the legality of the fee on importers back into question, said Simon Gluck & Kane lawyer Chris Kane in a LinkedIn post. The legal standard for user fees requires “a close connection between the cost to the government and the benefit provided to the user,” Kane said. Previous challenges failed to meet that standard, but it now seems clear that “government is taking more than it needs,” he said.
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The fee was previously challenged by both importers and exporters, but only the export HMF was ended following a 1998 Supreme Court decision that found the fee amounted to a tax on exports and was unconstitutional. The import HMF was upheld by the U.S. Court of Appeals for the Federal Circuit, which found that the HMF “charge as assessed on imports was a user fee, not a tax,” Kane said.
Since the import HMF was upheld, “the government has accumulated over $8 Billion in the Harbor Maintenance Trust Fund,” he said. That's a “clear failure of the government to meet the test for the legitimacy of the fee on an ongoing basis,” Kane said. Multiple process questions remain, but anyone who “has paid the Harbor Maintenance user fee should have standing to contest its legality,” he said. While courts previously said that CBP's collection of export HMFs wasn't protestable as ministerial action, it could be different for imports, so it's probably “still best to file protests,” he said.