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Appeals Court Rejects Another Attempt to Challenge Gender- and Age-Based Import Tariffs

Friday, June 14, 2013
Sandler, Travis & Rosenberg Trade Report

The U.S. Court of Appeals for the Federal Circuit recently affirmed a determination by the Court of International Trade in Rack Room Shoes vs. U.S. that the plaintiffs failed to state a claim of gender or age discrimination under the equal protection component of the due process clause of the Fifth Amendment of the Constitution. As expected, the court based its decision on the standard of proof set under Totes-Isotoner Corp. v U.S., which is the test case for the pending lawsuits claiming that the imposition of different duty rates on imported products based on whether they are for men or women (gender-based) or adults or children (age-based) is a discriminatory scheme that violates the constitutional right of importers to equal protection. In that case, the appellate and trial courts ruled that the duties at issue are not discriminatory simply because they differ, and importers challenging the constitutionality of these tariffs must do more than just show that they have a disparate impact on the associated purchasers. As a result, importers challenging these duty rates must prove their claims of discrimination under a significant standard of proof.

One of the plaintiffs in Rack Room Shoes vs. U.S. alleged in its original complaint that the HTSUS discriminates on the basis of gender by charging higher tariffs to women’s footwear, as well as on age by charging higher tariffs to other persons (which includes only adult women) than to youths (which includes girls). The CAFC acknowledges that the complaint filed by the plaintiff in the case at hand is more detailed than the complaint filed by the plaintiff in Totes-Isotoner Corp. v U.S. For example, the plaintiff specifically alleged that “[f]oowear for men are generally worn by men; footwear for women are generally worn by women,” and that the resulting higher duty assessments based on gender or age burdened importers, sellers and purchasers of the goods.

The plaintiff further asserted that the HTSUS “allows for the differentiation of goods on the basis of standards that do not involve protected classes of persons, such as differentiation of goods based on differences in composition of materials, weight of materials, size of the article, or function of the article.” In addition, it claimed that “Congress intended to discriminate by directing and implementing classifications based on gender when it could have used other non-gender factors to distinguish or to separate merchandise for duty assessment purposes.”

However, despite the additional details submitted the CAFC still ruled that neither of the plaintiffs “pleaded facts sufficient to make plausible their claims that Congress enacted the relevant provisions of the HTSUS with discriminatory intent.” Among other things, the court declined to infer from the availability of non-discriminatory alternatives the discriminatory intent necessary to plead an equal protection violation “because the Commerce Clause embodies a different standard than the standard for evaluating the equal protection challenge in this case.” The court also indicated that, even though one of the plaintiffs amended its complaint to allege that the classified merchandise is of the same class, this alone “is not sufficient” because “the fact that merchandise is in the same class says nothing about whether a plausible inference exists that the classifications were adopted with discriminatory intent.”

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