Grunfeld Vies for TRO Against Liquidation in IEEPA Tariff Refunds Cases; US Opposes

The issue of whether CIT should pause liquidation of entries in cases seeking IEEPA tariff refunds until the Supreme Court issues its decision in the lead tariff cases has been raised in the dozens of recent cases filed at the trade court. One approach, adopted by attorneys at Sandler Travis, is to agree to the government's stipulation that it won't contest CIT's ability to order reliquidation of finally liquidated entries.

The other approach, taken by Crowell & Moring and Grunfeld, is to ask the court for a pause of liquidation. Crowell filed for a preliminary injunction, while Grunfeld applied for a temporary restraining order.

Grunfeld argued that all the companies seeking refunds would likely suffer irreparable harm without the liquidation pause, since the question of the trade court's authority in this circumstance is uncertain. The firm invoked CIT's decision in the massive Section 301 litigation to enjoin liquidation of affected entries while litigation commenced.

In that decision, the trade court said that despite "broad statutory language" giving CIT authority to order whatever relief is appropriate, the U.S. Court of Appeals for the Federal Circuit has "consistently refrained from relying on that language in finding the CIT has authority to order reliquidation or refunds in 1581(i) cases and has raised doubts about the CIT's authority to do so." While the CAFC and Supreme Court may allow CIT to order reliquidation, "until it does, we must conclude that liquidation will result in irreparable economic harm," the trade court said.

Grunfeld said the government assurances that it won't contest CIT's ability to order reliquidation don't remove the possibility of irreparable harm. There's a strong chance that liquidation will "foreclose plaintiff's remedies," the brief said. The firm added that the government's proposed stipulation doesn't preclude the CAFC or Supreme Court "from concluding that liquidation precludes relief, either sua sponte, or on application from a litigant accorded standing, or if Defendants ask this Court to resolve this issue (even if they claim that they are not opposing refunds)."

In its response, the U.S. said the trade court already resolved this issue when it denied Crowell's injunction motion and said the plaintiffs are unlikely to suffer irreparable harm. The government said the Section 301 case is irrelevant, since in that case, the U.S. did contest CIT's ability to order reliquidation and the judges in that case did in fact unanimously agree that the court has the power to order reliquidation.

The U.S. also distinguished two key CAFC decisions, Target v. U.S. and Cemex v. U.S., that limited the trade court's power to order reliquidation. The government said the "consequences of liquidation in Target and Cemex derived from different statutes." Target involved an antidumping duty case filed under Section 1581(c), and the "finality of liquidation in section 1581(c) cases is governed by 19 U.S.C. 1516a(c), (e), which indicates that liquidation is final unless a party obtains a statutory injunction to ensure liquidation is consistent with the final court decision reviewing the agency’s determination," the brief said.

And Cemex involved a "Customs error, in which the finality of liquidation was governed by 19 U.S.C. § 1514(a)," which is a statute that precludes CIT from reviewing a challenge to an erroneous CBP decision "unless the statutory protest requirements are met."

The IEEPA refund cases are governed by Section 1581(i), which allows for reliquidation, the U.S. said.