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CIT Issues Second Procedural Order in Section 301 Litigation - Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP

On February 16, 2021, the three-judge panel assigned to hear the litigation brought before the U.S. Court of International Trade (CIT) challenging the imposition of List 3 and List 4A Section 301 additional duties on goods from China issued a second procedural order. Included in the court’s order are the following:

  • The court has instructed the parties to identify a set of sample cases designed to be representative of the claims that have been made by the various plaintiffs. This sample will then be subject to consolidated briefing. Cases that are not part of the sample will be stayed pending the outcome of the consolidated proceedings. The parties are to confer and submit a proposed sample of cases by March 19, 2021.
     
  • The court will be designating a formal plaintiffs’ steering committee. The purpose of this committee will be to work with the court on case management issues and to present consolidated briefs and submissions to the court. GDLSK has been active in the informal plaintiffs’ steering committee that has been operating since these cases were first filed in September 2020. Plaintiffs are to submit a proposed list of steering committee members to the court by March 19, 2021.
     
  • Following the designations of the sample cases and the plaintiffs’ steering committee, the court will be issuing a briefing schedule for the sample cases. The order indicates that the court anticipates that the parties will be making cross-motions for summary judgment that will encompass the claims and defenses of the parties. Plaintiffs with the cases that are not part of the sample will have the opportunity to seek to participate in briefing as amicus curiae.

Should you have questions regarding these developments, please contact one of our attorneys.


Federal Register Notices:

January 27, 2021 - Under the Committee for the Implementation of Textile Agreements (CITA)’s current procedures for considering commercial availability requests, CITA must receive both an electronic (email) copy and an original signed, mailed copy (hard copy) to accept a submission. Under these procedures, all business confidential information must be contained solely in the hard copy, which must be mailed to CITA’s office. However, due to the ongoing COVID-19 pandemic and the current telework directive issued by the U.S. Department of Commerce, the Chairman of CITA and OTEXA staff are not able to take receipt of mailed hard copy submissions.

Under these specific and unusual circumstances, CITA has determined that it is necessary to issue a waiver of CITA’s requirements that a hard copy of submissions in commercial availability proceedings be mailed to CITA’s office and that business confidential information be included only in the hard copy. This waiver will allow for electronic submissions without original hard copies, including submissions that contain business confidential information through a secure online system. This waiver will be in effect until such time as the Chairman of CITA determines that normal CITA/Department of Commerce, Office of Textiles and Apparel (OTEXA) operations have resumed which allow for receipt of hard copy submissions. The waiver is applicable for submissions under the following free trade agreements (FTAs) and trade preference programs: the U.S.-Dominican Republic-Central America Free Trade Agreement (CAFTA-DR), the U.S.-Colombia Trade Promotion Agreement (U.S.-Colombia TPA), the U.S.-Peru Trade Promotion Agreement (U.S.-Peru TPA), the U.S.-Panama Trade Promotion Agreement (U.S.-Panama TPA), the African Growth and Opportunity Act (AGOA), and the Caribbean Basin Trade Partnership Act (CBTPA). Electronic submissions, and the secure online system referenced above, will also be utilized in coordinating with the Office of the U.S. Trade Representative (USTR) on requests for rules of origin changes under the following FTAs: the U.S.-Australia Free Trade Agreement (USAFTA), the U.S.-Bahrain Free Trade Agreement (USBFTA), the U.S.-Chile Free Trade Agreement (USCFTA), the U.S.-Korea Free Trade Agreement (KORUS FTA), the U.S.-Morocco Free Trade Agreement (USMFTA), the U.S.-Oman Free Trade Agreement (USOFTA), the U.S.-Singapore Free Trade Agreement (USSFTA), and the U.S-Mexico-Canada Agreement(USMCA). As CITA does not have formal procedures related to these proceedings, no waiver is required to institute this change.


OTEXA: Announcements - Office of Textile & Apparel

02/16/2021 – U.S. Customs and Border Protection (CBP) has published a number of frequently asked questions on the Withhold Release Order (WRO) for cotton, tomatoes and downstream products produced in the Xinjiang Uyghur Autonomous Region. Additional information on all WROs currently in force can be found by visiting the CBP.gov website.


Cybex Agrees to Pay $7.95 Million Civil Penalty for Failure to Report Serious Injuries Involving its Exercise Equipment - U.S. Consumer Product Safety Commission

WASHINGTON, D.C. – The U.S. Consumer Product Safety Commission (CPSC) announced that Cybex International, Inc., a New York corporation, has agreed to pay a $7.95 million civil penalty.  The settlement resolves CPSC’s charges that Cybex failed to immediately report to CPSC, as required by law, that its Arm Curl and Smith Press Machines contained a defect or created an unreasonable risk of serious injury.

CPSC charged that Cybex had information that a weld on its Arm Curl Machines can fatigue and fail, causing the handle to separate unexpectedly and strike the user in the face.  Cybex received 85 reports of broken handles, including reports of serious injuries and one report of permanent vision loss, but the fitness equipment manufacturer did not notify the CPSC immediately of the defect or risk.

CPSC also charged that Cybex had information that the weight bar on its Smith Press Machines can fall, posing serious impact injury hazards to the user.  Cybex received 27 reports of injuries associated with the Smith Press Machine, including reports of paralysis and spinal fracture, but the company did not notify the CPSC immediately of the defect or risk.

Cybex recalled the Arm Curl Machines on August 25, 2015, and subsequently recalled the Smith Press Machines on August 29, 2018.

In addition to paying the $7.95 million civil penalty, Cybex has agreed to maintain an enhanced compliance program to ensure compliance with the Consumer Product Safety Act (CPSA). Cybex will also maintain a related system of internal controls and procedures to ensure that information required to be disclosed by Cybex to the Commission is recorded, processed and reported in accordance with applicable law. 

Cybex is now under new ownership, and the Firm’s settlement of this matter does not constitute an admission of CPSC staff’s charges.

The penalty agreement has been accepted provisionally by the Commission by a 3-0-1 vote.  Acting Chairman Adler and Commissioners Kaye and Baiocco voted to provisionally accept the settlement agreement and order.  Commissioner Feldman did not vote on this matter and therefore is considered to have abstained.


DHS Prevents Millions of Counterfeit N95 Masks from Reaching Hospital Workers, First Responders - ICE / Department of Homeland Security

WASHINGTON – Homeland Security Investigations (HSI) federal agents have seized approximately 11 million counterfeit 3M N95 respirator masks in recent weeks, the result of ongoing collaboration between the U.S. Department of Homeland Security (DHS) and manufacturer 3M to prevent counterfeit masks from reaching hospital workers and first responders.

“These seizures illustrate the ongoing efforts of HSI, CBP, and private industry in keeping our communities and medical staff safe and free from counterfeit products,” said DHS Secretary Alejandro Mayorkas. “Often, this battle is fought behind the scenes and is unknown to the general public, but you can be assured that the DHS workforce remains firmly committed to protecting the health and safety of our medical workers, the American public, and the integrity of the American economy.”

“The public-private partnerships that are the hallmark of the IPR Center allow for swift and decisive action to protect consumers from fraudulent and potentially harmful or even deadly products. This work which is important on a blue-sky day to protect consumers, U.S. businesses, and the U.S. economy, is even more critical during the COVID-19 pandemic,” said ICE Acting Director Tae Johnson. “The IPR Center with its many government agency and industry partners are unified in their commitment to fight COVID-related fraud.”

The most recent enforcement actions occurred today, with special agents seizing hundreds of thousands of counterfeit masks from an east coast warehouse as part of an ongoing investigation into a criminal enterprise distributing counterfeit masks throughout the U.S. In the past two weeks, HSI has conducted multiple criminal search warrants and seized counterfeit masks in operations conducted in five states, from coast to coast, with more enforcement actions expected in the coming weeks. Since many of the counterfeit masks are produced abroad, HSI also works closely with its international law enforcement partners around the world to pursue leads into sources of supply and prevent shipments of counterfeit products from reaching U.S. shores.

The initial leads came to the HSI-led National Intellectual Property Rights Coordination Center last week through 3M, which shared reports of suspected counterfeits being purchased for healthcare workers. HSI mobilized quickly, initiating multi-state investigations into the individuals and organizations looking to profit from the sale and distribution of counterfeit N95 respirators.

At the same time, HSI notified about six thousand suspected victims of the fraud, in at least 12 states, including hospitals, medical facilities and others who may have purchased medical masks from the illicit dealers, urging them to immediately stop using the masks and to contact HSI immediately.

“3M is proud to partner with the U.S. Department of Homeland Security to help combat counterfeiting of 3M N95 respirators,” said Kevin Rhodes, 3M Deputy General Counsel. “This collaboration has helped prevent millions of counterfeit respirators from reaching frontline workers. We are committed to fighting the pandemic from all angles – manufacturing needed PPE, working to prevent counterfeiting, and helping ensure N95s get to where they are needed the most.”

The cases that resulted in the recent seizures of counterfeit masks are being conducted under HSI’s Operation Stolen Promise, an initiative launched in April 2020 to protect the Homeland from the increasing and evolving threat posed by COVID-19-related fraud and criminal activity.

As of Feb. 10, HSI has seized more than $33 million in illicit proceeds; made 227 arrests; served 222 criminal search warrants; opened 862 investigations; and analyzed nearly 80,000 COVID-19 domain names pursuant to Operation Stolen Promise. Working with U.S. Customs and Border Protection, more than 1,800 shipments of mislabeled, fraudulent, unauthorized or prohibited COVID-19 test kits, personal protective equipment, and other related items have been seized. These actions have kept counterfeit and substandard goods out of the supply chain and out of the hands of the general public and medical professionals; have protected individuals, businesses, and the financial system from fraud; have ensured the integrity of online marketplaces and COVID-19 related websites; and have resulted in violators being held accountable for their criminal efforts to exploit the pandemic for profit.

Anyone with information on COVID-19-related criminal activity is encouraged to contact HSI at Covid19Fraud@dhs.gov.

HSI is a directorate of U.S. Immigration and Customs Enforcement and the principal investigative arm of the U.S. Department of Homeland Security, responsible for investigating transnational crime and threats, specifically those criminal organizations that exploit the global infrastructure through which international trade, travel, and finance move. HSI operates from 220 offices throughout the United States, and 80 overseas locations in 53 countries.

 
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