Court Denies CBP Attempt to Reliquidate Entries at Higher Tariff Rate

The Court of International Trade ruled May 8 that it will not correct the mistaken liquidation of imports of solar panels as not subject to Section 201 safeguard tariffs.

Presidential Proclamation 10101 lifted exclusions from the safeguard tariffs for certain solar panels. The plaintiff importers challenged that proclamation and the CIT ruled in their favor, prompting an appeal by the federal government. The CIT issued an order enjoining U.S. Customs and Border Protection from liquidating entries of subject goods while the appeal was pending but CBP liquidated dozens of them as not subject to the tariffs anyway.

The Court of Appeals later overturned the CIT’s decision and upheld the proclamation lifting the tariff exclusions. The government then asked the CIT to direct the reliquidation of the “inadvertently” liquidated entries, “the vast majority of which were liquidated at a lower duty rate than would have ultimately applied had CBP properly suspended liquidation.”

The CIT rejected that request and both arguments made in support of it. While the government argued that CBP may reliquidate entries liquidated in violation of a court order (like the suspension order issued by the CIT) without a further court order, the CIT asserted that “an enjoined party is not empowered to choose and implement the remedy for its own violation of an injunction,” which only the court can do. “And an enjoined agency certain cannot choose a remedy that Congress has specifically taken out of the agency’s hands,” the CIT added, pointing to 19 USC 1501 as limiting voluntary reliquidation to a 90-day period, a deadline that in this case “passed long ago.”

Thus reasserting its prerogative to determine whether reliquidation is an appropriate remedy in this case, the CIT concluded that it is not. Not only did CBP cause the very harm from which it seeks equitable relief, the CIT said, but that harm occurred due to CBP’s own lack of diligence in ensuring that the “administrative snags” to which it attributed previous violations of the CIT’s suspension order would not happen again. Moreover, the CIT said, “if CBP could always depend on the court to cure its violations” by ordering reliquidation, there would be no cost to the agency for non-compliance and companies would not be able to rely on the legal status of liquidation as final and conclusive on all persons.