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Importers May Still Be Able to File Claims for Refunds of Section 301 China Tariffs

U.S. companies that have imported goods manufactured in China and subject to List 3 or List 4a Section 301 tariffs may still be able to preserve their rights to seek refunds of those tariffs by joining litigation currently pending in the Court of International Trade challenging the legitimacy of List 3 and 4a tariffs.

On September 10, 2020, HMTX Industries filed the first lawsuit challenging the List 3 tariffs on substantive grounds (that the U.S. Trade Representative did not have the authority to assess Section 301 duties) and on procedural grounds (that the tariffs were imposed in violation of the requirements of the Administrative Procedures Act).  Over 3,700 plaintiffs have since filed lawsuits alleging similar claims.

On February 10, 2021, the Court of International Trade issued a procedural order that consolidated the over 3,700 complaints into a master case, In Re Section 301 Cases. If the case is successful, refunds of any Section 301 List 3 or 4a duties will only be available to those importers who filed a complaint.  New plaintiffs can still be added to this litigation.  After companies file an initial complaint, the case will be prosecuted by the lead plaintiff, which should minimize the litigation costs for any additional plaintiffs.

There are conflicting theories as to when the statute of limitations runs for asserting these claims.  A two-year statute of limitations applies to filing claims with the Court of International Trade.  The most conservative theory is that a statute of limitations runs on the procedural challenge to the Section 301 tariffs two years from the date the Section 301 list was published in the Federal Register.  Alternatively, under the Continuing Claim Theory, a cause of action for a substantive challenge (as opposed to a procedural challenge) accrues each time Section 301 duties are imposed on an affected importer.  Under either theory, claims relating to List 4a tariffs could not expire until at least August 20, 2021, two years from the publication of List 4.  Under the Continuing Claim Theory, importers can still file a claim for any List 3 or 4a duties paid within two years of filing a complaint.  In addition, duties paid on products that were subject to exclusions that have subsequently expired could also be included in a claim.

For more information or assistance with filing a claim, please contact Lara Phillip.