2018 Trade Association Comments Possibly Foreshadow Akin Gump's Section 301 Arguments
The Section 301 tariff rulemakings typified the Office of the U.S. Trade Representative's “unreasoned decision making” that’s “impermissible” under the Administrative Procedure Act, the Consumer Technology Association argued in September 2018 comments on List 3 of the tariffs (see 1809070025) that draw strong parallels to the HMTX-Jasco litigation challenging lists 3 and 4A tariffs. CTA used Akin Gump to help draft the comments two years ago. It was where CTA first floated the idea of challenging the tariffs in court. The complaint Akin Gump drafted for CTA (see 2009220029) that the association never followed through on is seen as a template for the HMTX-Jasco litigation now ongoing.
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“USTR has provided only narrow and confusing guidance on its decision-making process throughout the commenting period,” CTA said then. “To date, USTR has not made public how it weighs public comment.” If the rulemaking’s outcome “is not to be a fait accompli, USTR must seriously and carefully consider the many thousands of stakeholder views expressed in the comments, not rush to impose tariffs as soon as the comment period is over,” CTA said in the 2018 comments. List 3 took effect less than three weeks later. Akin Gump didn't comment on whether it planned to make similar arguments to the CIT in the HMTX-Jasco action.
The September 2018 CTA comments cited four examples of APA case law -- but none for the alleged Trade Act violations -- defining when and why courts had found agencies to have acted without the reasoned decision-making the statute requires. One case mentioned is a January 2014 decision in which the U.S. Court of Appeals for the D.C. Circuit found for Massachusetts Institute of Technology startup Lilliputian Systems in its challenge of a Department of Transportation ban on butane-based portable fuel cells in checked airline baggage. The agency failed to respond to relevant and significant public comment as the APA requires, the court said, mirroring the claims Akin Gump raises in HMTX-Jasco.
Lilliputian successfully argued that the prohibition was arbitrary and capricious because DOT failed to provide any explanation of its risk assessment methodology, the court said. The agency “also failed to explain why it prohibited butane fuel cell cartridges when it permits other, less stringently tested items containing butane in checked baggage,” it said.
The lists 3 and 4A actions were “arbitrary and capricious” under the APA, the complaint said, because USTR “failed to provide sufficient opportunity for comment,” and ignored “relevant factors” when making its decisions (see 2009110005). USTR also failed to “connect the record facts to the choices it made,” Akin Gump said. Despite receiving about 10,000 comments in the two rulemakings -- the vast majority opposing the tariffs -- USTR said “absolutely nothing about how those comments shaped its final promulgation of List 3 and List 4A,” it said. “USTR’s preordained decision-making bears no resemblance to the standards that the APA demands.” USTR has been silent on the litigation. A Justice Department response to Akin Gump's motion for a three-judge panel is due Oct. 21 (see 2010010049).