Case 1:20-cv-03473-N/A Document 2 Filed 09/21/20 Page 1 of 10
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`UNITED STATES COURT OF INTERNATIONAL TRADE
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`GEMINI FOOD CORPORATION,
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`Plaintiff,
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`Court No. 20-03473
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`v.
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`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,
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`Defendants.
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`COMPLAINT
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`Plaintiff Gemini Food Corporation (Plaintiff), by and through its attorneys, allege:
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`1. Plaintiff imports various prepared food products from China that are assessed duty under
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`Harmonized Tariff Schedule ofthe United States (HTSUS) in various subheadings.
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`2. In addition to Plaintiffs regular duties under these various subheadings, its imported
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`products have been subject to the assessment of additional "Section 301" ad valorem duties under
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`HTSUS subheading 9903.88.03 (List 3) and 9903.88.15 (List 4A).
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`3. This case challenges the legality ofthese additional List 3 and List 4A "Section 301"
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`duties and the authority of Defendants to assess them under the Trade Act of1974 (Trade Act) as
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`enacted at 19 U.S.c. 2411(b).
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`Case 1:20-cv-03473-N/A Document 2 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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`1581 (i)(I)(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 ofmerchandise for reasons other
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`than the raising ofrevenue. 28 U.S.c. § 1581(i)(1)(B).
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`5. Plaintiffhas 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). Plaintiffpresently 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,
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`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 ofthe 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. § 2411(b), (c)(1)(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 ofSection 301 Investigation;
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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 1." 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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`Case 1:20-cv-03473-N/A Document 2 Filed 09/21/20 Page 4 of 10
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`the List 3 duty rate from 10% to 25%. Notice o/Modification o/Section 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,
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`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 o/Modification 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/or 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
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`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. On May 17,2019, Defendant USTR announced its intent to promulgate List 4 to cover
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`additional products subject to Section 301 ad valorem duties. Under USTR's proposal, List 4 would
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`impose an additional duty of 25% ad valorem on products worth $300 billion. Request/or
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`Comments Concerning Proposed Modification ofAction Pursuant to Section 301: 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. 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
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`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,
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`2019, whereas List 4B would impose, with limited exclusions, a 10% ad valorem duty on the
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`remaining goods, effective December 15, 2019.Id. at 43,304,43,305.
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`17. On December 18,2019, based on a trade deal with China, Defendant USTR indefinitely
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`suspended the imposition of additional duties on products of China covered by List 4B. Notice of
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`Modification ofSection 301 Action: China's Acts, Policies, and Practices Related to Technology
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`Transfer, Intellectual Property, and Innovation, 84 Fed. Reg. 69,447, 69,447 (Dec. 18,2019).
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`USTR also stated its intent to reduce by halfthe tariff rate applicable to products covered by List 4A
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`and this became effective on February 14,2020. Notice ofModification ofSection 301 Action:
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`China's Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and
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`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.
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`FIRST CLAIM FOR RELIEF
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`DECLARATORY JUDGMENT FOR VIOLATION OF THE
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`TRADE ACT OF 1974
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`19.
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`Paragraphs 1 through 18 are incorporated herein by reference.
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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
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`or not further relief is or could be sought. 28 US.c. § 2201. Any such declaration shall have the
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`force and effect of a final judgment or decree and shall be reviewable as such. !d.
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`21. The Trade Act of 1974 is limited in its scope by clear statutory language and legislative
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`intent.
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`22. To wit, pursuant to Section 301 ofthe Trade Act, the USTR is specifically granted the
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`authority to impose tariffs when it detennines that an act, policy, or practice of a foreign country is
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`unreasonable or discriminatory and burdens or restricts United States commerce, and action by the
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`United States is thus appropriate. 19 US.C. § 2411(b). List 3 and List 4A duties were not properly
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`based on such detennination.
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`23. Section 304 of the Trade Act requires the USTR to act within12 months after the date
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`on which an investigation is initiated. 19 U.S.C. § 2414(a)(1)(B), (2)(B). The USTR failed to act
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`within the required 12 months for List 3 and List 4A.
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`24. Section 307 ofthe Trade Act authorizes the USTR to modify or tenninate action taken
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`pursuant to Section 301(b) of the Trade Act when the burden imposed on US. commerce from a
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`foreign country's unfair acts, policies, or practices increases or decreases. 19 US.c. §
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`2417(a)(1)(B). In promulgating List 3 and List 4A, however, Defendants increased tariffs for
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`reasons unrelated to the acts, policies, or practices that the USTR investigated pursuant to Section
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`301 of the Trade Act. Rather, Defendants misus~d Section 307 to ''tighten the screws" in an
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`escalating trade war with China.
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`25. While Section 307 of the Trade Act also authorizes the USTR to modify or tenninate an
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`action taken pursuant to Section 301 (b) of the Trade Act if the initial action taken by the USTR is
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`Case 1:20-cv-03473-N/A Document 2 Filed 09/21/20 Page 7 of 10
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`no longer appropriate (19 U.S.c. § 2417(a)(I)(C)), it does not authorize reflexive, increased tariffs
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`for leverage in a trade dispute. "Modify" and "tenninate" in this context do not provide a valid
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`statutory underpinning for the List 3 and List 4A tariffs.
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`26. Plaintiff therefore requests the Court to declare that Defendants' actions in
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`promulgating List 3 and List 4A tariffs and the List 3 and List 4A tariffs themselves are contrary to
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`law and void ab initio.
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`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)(1).
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`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
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`limitations; or without observance of procedure required by law.
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`30. The promulgation and subsequent assessment of the List 3 and List 4A ad valorem
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`tariffs constitute final agency action that is reviewable by this Court.
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`31. The actions taken by Defendants to promulgate List 3 and List 4A ad valorem duties and'
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`the ensuing assessment of those duties are arbitrary, capricious, an abuse of discretion, otherwise
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`not in accordance with law and in excess of statutory authority.
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`32. The promulgation of List 3 and List 4A and the subsequent assessment of its ad valorem
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`duties was beyond the authority of Defendants for the reasons set forth in the First Claim for Relief,
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`including but not limited to the failure to act within 12 months ofinitiation of the investigation. 5
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`U.S.c. §706)(2)(C).
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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 ofthe USTR's Section 301
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`investigation was arbitrary, capricious, an abuse ofdiscretion, or otherwise not in accordance with
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`law under 5 U.S.c. § 706(2).
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`34. Defendants failure (1) to provide sufficient opportunity for comments (2) meaningfully
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`consider relevant factors when making their decisions, and (3) to adequately explain their rationale
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`for the List 3 assessments was arbitrary, capricious, an abuse ofdiscretion, 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 and List 4A ad valorem duties were outside the Trade Act's statutory scope and were
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`unauthorized;
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`B. Find that the Defendants violated the APA in promulgating the List 3 and List 4A ad
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`valorem duties;
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`C. Vacate the List 3 and List 4A 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 or List 4A, classified in HTSUS subheading 9903.88.03
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`or 9903 .88.15 as products of China, or any other classification under List 3 or List 4A within the
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`HTSUS, null and void ab initio.
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`E. Refund all duties paid by Plaintiff, with interest, for all import shipments into the United
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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 or List 4A, classified in HTSUS subheading 9903.88.03 or
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`9903.88.15 as products of China, or any other classification under List 3 or list 4A within the
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`HTSUS.
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`F. Issue a permanent injunction against Defendant from assessing duties on any ofthe
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`Plaintiff's products or shipments covered by List 3 or List 4A;
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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,
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`By:
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`/s/ Gary C. Cooper
`GARY C. COOPER
`LAW OFFICES OF GARY C. COOPER
`247 Yale Avenue
`Kensington, CA 94708
`Phone: (510) 697-5140
`Attorneysfor Plaintiff
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`September 21, 2020
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`Case 1:20-cv-03473-N/A Document 2 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 Rilles 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:
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`Attorney-In-Charge
`International Trade Field Office
`Commercial Litigation Branch
`U.S. Department of Justice
`26 Federal Plaza
`New York, NY 10278
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`General Counsel Joseph L. Barloon
`Office of the General Counsel
`Office ofthe U.S. Trade Representative
`600 17th Street, NW
`Washington, DC 20508
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`ChiefCounsel Scott K. Falk
`Office of Chief Counsel
`U.S. Customs & Border Protection
`1300 Pennsylvania Ave., NW
`Washington, DC 20229
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`/s/ Gary C. Cooper
`GARY C. COOPER
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