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Case 1:20-cv-03223-N/A Document 1 Filed 09/21/20 Page 1 of 10
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`UNITED STATES COURT OF INTERNATIONAL TRADE
`
`
`GREEN FOOD INGREDIENTS LLC,
`
`Plaintiff,
`
`Court No. 20-03223
`
`v.
`
`UNITED STATES; OFFICE OF THE UNITED
`STATES TRADE REPRESENTATIVE; ROBERT E.
`LIGHTHIZER, UNITED STATES TRADE
`REPRESENTATIVE; UNITED STATES CUSTOMS
`AND BORDER PROTECTION; MARK A. MORGAN,
`ACTING COMMISSIONER OF
`UNITED STATES CUSTOMS AND BORDER
`PROTECTION,
`
`Defendants.
`
`COMPLAINT
`
`Plaintiff Green Food Ingredients LLC (Plaintiff), by and through its attorneys, allege:
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`1. Plaintiff imports roasted garlic powder from China that is assessed duty under
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`Harmonized Tariff Schedule of the United States (HTSUS) subheading 2005.99.97.
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`2. In addition to Plaintiffs regular duties under subheading 2005.99.97, its imported Garlic
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`has been subject to the assessment of additional "Section 301" ad valorem duties under HTSUS
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`subheading 9903.88.03 as products of China (List 3).
`
`3. This case challenges the legality of these additional List 3 "Section 301" duties and the
`
`authority of Defendants to assessthem under the Trade Act of 1974 (Trade Act) as enacted at 19
`
`U.S.c. 2411(b).
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`1
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`

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`Case 1:20-cv-03223-N/A Document 1 Filed 09/21/20 Page 2 of 10
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`JURISDICTION
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`4. The Court ofIntemational Trade has jurisdiction over this case under 28 U.S.C. §
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`l58l(i)(l)(B), which confers to it "exclusive jurisdiction" over any civil action commenced against
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`the United States, its agencies, or its officers, that arises out of any law of the United States
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`providing for tariffs, duties, fees, or other taxes on the importation of merchandise for reasons other
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`than the raising of revenue. 28 U.S.C. § 1581(i)(l)(B).
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`5. Plaintiff has standing to bring this lawsuit under the authority of28 U.S.c. §2631(i) since
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`by reason of the Section 301 additional tariffs it is adversely affected or aggrieved by agency action
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`within the meaning of section 702 of Title 5 (5 U.S.C. § 702).
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`6. This action is timely since it has been commenced within two years after the cause of
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`action first accrued. 28 US.C. § 2636(i). Plaintiff presently contends that the earliest possible
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`accrual of the cause of action was the Notice of Modification for List 3 published in the Federal
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`Register on September 21,2018. Notice ofModification ofSection 301 Action: China's Acts,
`
`Policies, and Practices Related to 4 Case 1:20-cv-00177-N/A Document 2 Filed 09110/20 Page 5 of
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`25 Technology Transfer, Intellectual Property, and Innovation, 83 Fed Reg. 47,974 (Sept. 21,
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`2018). Thus, this action is timely filed.
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`SUMMARY OF PERTINENT ADMINISTRATIVE EVENTS
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`7. Section 301 of the Trade Act authorizes the United States Trade Representative (USTR)
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`to investigate the trade practices of a foreign country and to impose tariffs on its imports if an
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`unreasonable or discriminatory practice is found. 19 U.S.C. § 24ll(b), (c)(l)(B).
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`8. In August, 2017, Defendant Unites States Trade Representative (USTR) initiated an
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`investigation of China's trade practices under Section 301. Initiation o/Section 301 Investigation;
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`2
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`

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`Case 1:20-cv-03223-N/A Document 1 Filed 09/21/20 Page 3 of 10
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`Hearing; and Requestfor Public Comments: China's Acts, Policies, and Practices Related to
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`Technology Transfer, Intellectual Property, and Innovation, 82 Fed Reg. 40,213 (Aug. 24, 2017).
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`9. On June 20, 2018, Defendant USTR published a list of China-origin products subject to
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`an additional duty of 25% ad valorem applicable with respect to products that were entered for
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`consumption, or withdrawn from warehouse for consumption, on or after July 6, 2018. This list is
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`generally referred to as "List I." Notice ofAction and Requestfor Public Comment Concerning
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`Proposed Determination ofAction Pursuant to Section 301: China's Acts, Policies, and Practices
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`Related to Technology Transfer, Intellectual Property, and Innovation, 83 Fed Reg. 28,710 (June
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`20,2018).
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`10. On August 16, 2018, Defendant USTR published another list of China-origin products
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`subject to an additional duty of25% ad valorem. This list is generally referred to as "List 2". The
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`additional duties were effective with respect to products entered for consumption, or withdrawn
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`from warehouse for consumption, on or after August 23,2018. Notice ofAction Pursuant to
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`Section 301: China's Acts, Policies, and Practices Related to Technology Transfer, Intellectual
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`Property, and Innovation, 83 Fed Reg. 40,823, 40,823-24 (Aug. 16,2018).
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`11. On September 21,2018, "List 3" was published by Defendant USTR imposing 10% ad
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`valorem duties on additional products of China classified in the subheadings of the Harmonized
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`Tariff Schedule of the United States (HTSUS) set out in an Annex A to the notice. On January 1,
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`2019, the rate of additional duty was set to increase to 25% ad valorem. Notice ofModification of
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`Section 301 Action: China's Acts, Policies, and Practices Related to Technology Transfer,
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`Intellectual Property, and Innovation, 83 Fed Reg. 47974 (September 21,2018).
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`12. China and the United States continued to negotiate in an attempt to resolve their
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`differences. In December, 2018, and February, 2019, Defendants delayed the scheduled increase in
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`3
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`

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`Case 1:20-cv-03223-N/A Document 1 Filed 09/21/20 Page 4 of 10
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`the List 3 duty rate from 10% to 25%. Notice ofModification ofSection 301 Action: China's Acts,
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`Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation, 83
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`Fed Reg. 65,198 (Dec. 19,2018); Notice ofModification ofSection 301 Action: China's Acts,
`
`Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation, 84
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`Fed Reg. 7,966 (Mar. 5, 2019).
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`13. Since no acceptable resolution was reached, in May, 2019, Defendant USTR announced
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`its intent to raise the tariff rate on List 3 goods to 25%, effective either May 10,2019 or June 1,
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`2019, depending on the day of export. Notice ofModification ofSection 301 Action: China's Acts,
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`Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation, 84
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`Fed Reg. 20,459 (May 9,2019) ("List 3 Rate Increase Notice''); Implementing Modification to
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`Section 301 Action: China's Acts, Policies, and Practices Related to Technology Transfer,
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`Intellectual Property, and Innovation, 84 Fed Reg. 21,892 (May 15,2019).
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`14. In June, 2019, Defendant USTR invited the public to seek exclusions from List 3 duties
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`on a product-specific basis. Procedures for Requests to Exclude Particular Products From the
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`September 2018 Action Pursuant to Section 301: China's Acts, Policies, and Practices Related to
`
`Technology Transfer, Intellectual Property, and Innovation, 84 Fed Reg. 29,576 (June 24,2019).
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`A number of exclusions were subsequently granted but the bulk ofthe List 3 Section 301 ad
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`valorem duties remained in place including those paid by Plaintiff under its primary classification in
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`HTSUS subheading 2005.99.97.
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`15. Though not directly applicable to Plaintiffs current imports and duty assessments, on
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`May 17,2019, Defendant USTR announced its intent to promulgate List 4 to cover additional
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`products subject to Section 301 ad valorem duties. Under USTR's proposal, List 4 would impose an
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`additional duty of25% ad valorem on products worth $300 billion. Requestfor Comments
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`4
`
`
`

`

`Case 1:20-cv-03223-N/A Document 1 Filed 09/21/20 Page 5 of 10
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`Concerning Proposed Modification ofAction Pursuant to Section 301: China's Acts, Policies, and
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`Practices Related to Technology Transfer, Intellectual Property, and Innovation, 84 Fed Reg.
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`22,564,22,564 (May 17,2019).
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`16. On August 20, 2019, USTR issued a final notice adopting List 4 in two tranches. Notice
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`ofModification ofSection 301 Action: China's Acts, Policies, and Practices Related to Technology
`
`Transfer, Intellectual Property, and Innovation, 84 Fed Reg. 43,304 (Aug. 20, 2019). List 4A
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`would impose a 10% ad valorem duty on goods worth roughly $120 billion, effective September 1,
`
`2019, whereas List 4B would impose, with limited exclusions, a 10% ad valorem duty on the
`
`remaining goods, effective December 15,2019. Id. at 43,304, 43,305.
`
`17. On December 18, 2019, based on a trade deal with China, Defendant USTR indefinitely
`
`suspended the imposition of additional duties of 15 percent on products of China covered by List
`
`4B. Notice ofModification ofSection 301 Action: China's Acts, Policies, and Practices Related to
`
`Technology Transfer, Intellectual Property, and Innovation, 84 Fed Reg. 69,447, 69,447 (Dec. 18,
`
`2019). USTR also stated its intent to reduce by half the tariffrate applicable to products covered by
`
`List 4A and this became effective on February 14,2020. Notice ofModification ofSection 301
`
`Action: China's Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property,
`
`and Innovation, 85 Fed Reg. 3,741 (Jan. 22, 2020).
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`18. The tariffs provided in List 4B have yet to be imposed.
`
`FIRST CLAIM FOR RELIEF
`
`DECLARATORY JUDGMENT FOR VIOLATION OF THE
`
`TRADE ACT OF 1974
`
`19.
`
`Paragraphs 1 through 18 are incorporated herein by reference.
`
`5
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`

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`Case 1:20-cv-03223-N/A Document 1 Filed 09/21/20 Page 6 of 10
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`20. This court has been granted the authority, upon the filing of an appropriate pleading, to
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`declare the rights and other legal relations of any interested party seeking such declaration, whether
`
`or not further relief is or could be sought. 28 US.C. § 2201. Any such declaration shall have the
`
`force and effect of a final judgment or decree and shall be reviewable as such. Id.
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`21. The Trade Act of 1974 is limited in its scope by clear statutory language and legislative
`
`intent.
`
`22. To wit, pursuant to Section 301 of the Trade Act, the USTR is specifically granted the
`
`authority to impose tariffs when it determines that an act, policy, or practice of a foreign country is
`
`unreasonable or discriminatory and burdens or restricts United States commerce, and action by the
`
`United States is thus appropriate. 19 US.c. § 2411(b). List 3 duties were not properly based on
`
`such determination.
`
`23. Section 304 of the Trade Act requires the USTR to act within12 months after the date
`
`on which an investigation is initiated. 19 US.C. § 2414(a)(1)(B), (2)(B). The USTR failed to act
`
`within the required 12 months for List 3.
`
`24. Section 307 ofthe Trade Act authorizes the USTR to modify or terminate action taken
`
`pursuant to Section 301 (b) ofthe Trade Act when the burden imposed on US. commerce from a
`
`foreign country's unfair acts, policies, or practices increases or decreases. 19 US.C. §
`
`24 17(a)(I)(B). In promulgating List 3, however, Defendants increased tariffs for reasons unrelated
`
`to the acts, policies, or practices that the USTR investigated pursuant to Section 301 of the Trade
`
`Act. Rather, Defendants misused Section 307 to "tighten the screws" in an escalating trade war
`
`with China.
`
`25. While Section 307 of the Trade Act also authorizes the USTR to modify or terminate an
`
`action taken pursuant to Section 301 (b) of the Trade Act if the initial action taken by the USTR is
`
`6
`
`
`

`

`Case 1:20-cv-03223-N/A Document 1 Filed 09/21/20 Page 7 of 10
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`no longer appropriate (19 U.S.C. § 2417(a)(l)(C)), it does not authorize reflexive, increased tariffs
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`for leverage in a trade dispute. "Modify" and "terminate" in this context do not provide a valid
`
`statutory underpinning for the List 3 tariffs.
`
`26. Plaintifftherefore requests the Court to declare that Defendants' actions in
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`promulgating List 3 tariffs and the List 3 tariffs themselves are contrary to law and void ab initio.
`
`SECOND CLAIM FOR RELIEF
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`VIOLATION OF THE ADMINISTRAVIT PROCEDURES ACT
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`27. Paragraphs 1 through 26 are incorporated by reference.
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`28. The USTR and Customs and Border Protection are agencies subject to the requirements
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`of the Administrative Procedures ACT (APA). 5 U.S.c. § 701(b)(l).
`
`29. Under 5 U.S.c. § 706(2), courts shall hold unlawful and set aside agency action that is
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`arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; contrary to
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`constitutional right, power, privilege, or immunity; in excess of statutory jurisdiction, authority, or
`
`limitations; or without observance of procedure required by law.
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`30. The promulgation and subsequent assessment of the List 3 ad valorem tariffs constitute
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`[mal agency action that is reviewable by this Court.
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`31. The actions taken by Defendants to promulgate List 3 ad valorem duties and the ensuing
`
`assessment of those duties are arbitrary, capricious, an abuse of discretion, otherwise not in
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`accordance with law and in excess of statutory authority.
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`32. The promulgation of List 3 and the subsequent assessment of its ad valorem duties was
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`beyond the authority of Defendants for the reasons set forth in the First Claim for Relief, including
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`but not limited to the failure to act within 12 months of initiation of the investigation. 5 U.S.C.
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`§706)2) (C).
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`7
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`
`

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`Case 1:20-cv-03223-N/A Document 1 Filed 09/21/20 Page 8 of 10
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`33. The failure of Defendants to offer any evidence for a claimed increased burden from
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`China's intellectual property policies and practices that were the subject of the USTR's Section 301
`
`investigation was arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with
`
`law under 5 U.S.C. § 706(2).
`
`34. Defendants failure (1) to provide sufficient opportunity for comments (2) meaningfully
`
`consider relevant factors when making their decisions, and (3) to adequately explain their rationale
`
`for the List 3 assessments was arbitrary, capricious, an abuse of discretion, or otherwise not in
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`accordance with law under 5 U.S.c. § 706(2).
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`PRAYER FOR RELIEF
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`Wherefore, Plaintiff respectfully requests that this Court:
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`A. Declare that the actions taken by Defendants pursuant to the Trade Act and resulting in
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`List 3 ad valorem duties were outside the Trade Act's statutory scope and were unauthorized;
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`B. Find that the Defendants violated the APA in promulgating the List 3 ad valorem duties;
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`C. Vacate the List 3 rulemaking;
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`D. Find the ad valorem duties assessed against Plaintiff for all import shipments into the
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`Unites States Customs territory, entered for consumption or withdrawn from warehouse for
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`consumption under the provisions of List 3, classified in HTSUS subheading 9903.88.03 as
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`products of China, or any other classification under List 3 or within the HTSUS, null and void ab
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`initio.
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`E. Refimd all duties paid by Plaintiff, with interest, for all import shipments into the Unites
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`States Customs territory, entered for consumption or withdrawn from warehouse for consumption
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`under the provisions of List 3, classified in HTSUS subheading 9903.88.03 as products of China, or
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`any other classification under List 3 or within the HTSUS.
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`8
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`

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`Case 1:20-cv-03223-N/A Document 1 Filed 09/21/20 Page 9 of 10
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`F. Issue a pennanent injunction against Defendant from assessing duties on any of the
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`Plaintiff's products or shipments covered by List 3;
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`G. Award Plaintiff its costs and reasonable attorney fees; and
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`H. Grant such other relief as may be just and proper.
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`Respectfully submitted,
`
`By:
`
`lsi Gary C. Cooper
`GARYC. COOPER
`LAW OFFICES OF GARY C. COOPER
`247 Yale Avenue
`Kensington, CA 94708
`Phone: (510) 697-5140
`Attorneysfor Plaintiff
`
`September 21, 2020
`
`9
`
`
`

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`Case 1:20-cv-03223-N/A Document 1 Filed 09/21/20 Page 10 of 10
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`CERTIFICATE OF SERVICE
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`Pursuant to U.S. Court ofInternational Trade Rules 4(b) and (h), I certify that on September
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`21,2020, copies of Plaintiffs Summons and Complaint were served on the following parties by
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`certified mail, return receipt requested:
`
`Attorney-In-Charge
`International Trade Field Office
`Commercial Litigation Branch
`U.S. Department of Justice
`26 Federal Plaza
`New York, NY 10278
`
`General Counsel Joseph L. Bar100n
`Office of the General Counsel
`Office ofthe U.S. Trade Representative
`600 17th Street, NW
`Washington, DC 20006
`
`Chief Counsel Scott K. Falk
`Office of Chief Counsel
`U.S. Customs & Border Protection
`1300 Pennsylvania Ave., NW
`Washington, DC 20229
`
`/s/ Gary C. Cooper
`GARY C. COOPER
`
`

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