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Everything you need to know about BMD and the industry.

Chinese Product Tariff Challenge Causes Flurry of Importer Lawsuits

A lawsuit filed late in 2020 at the U.S. Court of International Trade (“CIT”) challenging the U.S. Trade Representative’s (USTR) implementation of Section 301 “List 3” and “List 4” duties on products from China, HMTX Industries LLC et al. v. United States (Court No. 20-00177), has resulted in the filing of thousands of additional lawsuits brought by other affected importers. There are now 3,700+ companies added to the list, including Ford, Home Depot, Target, Tesla, and Walgreens, along with many other smaller importers.

BACKGROUND

In 2017, USTR was directed by the President to initiate a targeted investigation pursuant to Section 301(b) of the Trade Act of 1974 regarding China’s laws, policies, practices, and actions related to intellectual property, innovation, and technology. Upon the release of the report, USTR imposed a 25% tariff on a list of 1,333 items with a total trade value of $50B. This was followed by subsequent lists of additional products from China with tariffs ranging from 10% to 25%.The items on List 3 have an annual trade value of $200B and those on List 4 have a trade value of $300B. Items on these lists include furniture, lighting, vehicle parts, machinery, food, clothing and many more.

EXISTING LAWSUIT

On September 10, 2020, HMTX Industries LLC and two of its subsidiaries filed a complaint at CIT alleging an unlawful escalation of the ongoing trade war with China through the imposition of a third round of tariffs on imports covered under List 3 of the Section 301 tariffs. An amended complaint was filed on September 21, 2020 to include List 4A.

Plaintiffs have generally taken the position that, while initial retaliatory tariff action reflected in the implementation of Section 301 Tariffs on products found on List 1 and List 2 may have been lawful, the USTR’s subsequent round of actions (i.e., List 3 and List 4A) failed to comply with requirements under the Administrative Procedures Act.  These lawsuits, if successful, may ultimately eliminate List 3 (and where applicable, List 4A) tariffs and result in refunds.  It remains to be seen whether refunds would be applicable to all importers, or only those who filed complaints. 

The complainants seek to set aside these alleged unlawful actions and obtain a refund of any duties paid on imports of List 3 and List 4 products from China. All complaints are asking for a refund, with interest, of duties paid, costs, and reasonable attorney fees.

JOIN THE COMPLAINT

The strategy behind this type of lawsuit is to file suit and then move to consolidate with the HMTX Industries case or stay the lawsuit pending CIT’s disposition of the HMTX case. This strategy will allow the bandwagon importers to benefit if the HMTX Industries lawsuit is successful without incurring the large expenses of fully litigating their claims.

Because USTR published List 4A in the Federal Register on August 20, 2019, the two-year statute of limitations for filing a List 4A lawsuit based on publication date does not expire until August 20, 2021. This means importers that did not import products from China under List 3 (or chose not to file a List 3 lawsuit now) have an opportunity to file a lawsuit to join this challenge on imported Chinese products subject to duties under List 4A.

HOW BMD CAN HELP

Many of our clients may be directly or indirectly affected by these tariffs. Because of existing protest limitations, joining this lawsuit might be a reasonable option to attempt to recover those costs. If any clients are aware of imported items subject to these tariffs or wish to have their import documents reviewed, please contact International Law Attorney Kevin Burwell directly at kdburwell@bmdllc.com or 330-253-3715.

COVID, Privacy and More! New Challenges for Physicians in 2021

While hopefully we are coming out of the pandemic, the legal repercussions related to legislative initiatives and other actions during that time continue to apply to businesses in general and healthcare practices. It is a helpful reminder that practices make certain that they maintain accurate records in order to satisfy the reporting requirements under the various COVID-related bills and protect yourself from future employment claims.

Banking and Cannabis: Bank Lending, The Next Frontier

A fortuitous combination of developments and circumstances present the banking and cannabis industries a large opportunity to enhance each of their respective bottom lines: conventional bank lending, payment processing, treasury management and other services, and bank administered SBA and revenue bond financing to cannabis businesses.

EKRA Updates: COVID-19 Testing, Employment Agreements, and More

Ever since the Eliminating Kickbacks in Recovery Act (“EKRA”) was passed by Congress in 2018, we have been waiting to see how the law is interpreted and ultimately enforced. As a reminder, EKRA seeks to eliminate kickbacks in return for patient referrals to facilities that treat those overcoming addiction, such as recovery homes, clinical treatment centers, and laboratories. (NOTE: EKRA applies to all laboratories, not just those related to addiction treatment.) It is essentially an expansion of the Anti-Kickback Statute, which only applies to those services that are reimbursable through federal healthcare programs such as Medicare and Medicaid, to now also cover services reimbursable through private insurers.

New Interpretation of the Fair Debt Collection Practices Act Rocks the Industry

It’s not lost on us that our interpretation of § 1692c(b) runs the risk of upsetting the status quo in the debt-collection industry. This quote from the Eleventh Circuit Court of Appeal in its April 21, 2021 opinion from the case of Hunstein v. Preferred Collection and Management Services, Inc. is possibly the biggest understatement in the history of the Fair Debt Collection Practices Act. At a minimum, the Eleventh Circuit’s opinion has sent shockwaves and fear throughout multiple sectors of the financial services industry.

Construction Industry Trends and Predictions Through 2021 and Beyond: Insurance and Emerging Threats

A 2021 survey identified three key issues impacting the construction industry in 2021: (1) the financial health of contractors; (2) the continuing risk of the pandemic; and (3) technology driving productivity, but also increasing the risk of cybersecurity threats. With this backdrop, insurance premiums in the construction industry are generally on the rise in 2021.