Discrimination Alleged in Tariff Rates

Several lawsuits have been filed recently by importers of apparel, footwear, and accessories at the U.S. Court of International Trade (USCIT) alleging the government's assessment of different tariff rates for imported products based on the gender or age of the product's user amounts to unconstitutional gender or age discrimination. If successful, the government may be forced to refund the higher amount of duties paid based on gender or age differences on such products, which some estimate to be close to $1 billion.

The USCIT has designated one case as a "test case" to litigate the issue before a three-judge panel. The test case is Totes-Isotoner Corporation v. United States. All other cases alleging essentially the same cause of action will be held, pending the resolution of the Totes-Isotoner case.

In the meantime, by filing suit at the USCIT, an importer can protect its right to any potential refunds of higher duties paid due to such discrimination from 2 years prior to the date of filing the complaint and going forward. The sooner the case is filed, the greater the amount of potential refunds.

The case is likely to take many years to progress through the courts -- as occurred with the constitutional challenge to the Harbor Maintenance tax, which was ultimately successful. However, plaintiffs hope to secure a settlement with the government before then.

Importers who would like to protect their right to potential refunds of higher duties paid for products where the duty rate is determined based on the gender or age of the product's user should assess the classifications of their imports over the previous two years and contact an international trade attorney to assess whether filing a suit in the CIT is in the importer's best interest.