On February 5, 2010, the U.S. Court of Appeals for the Federal Circuit (CAFC) issued its decision in Totes-Isotoner Corporation v. United States, upholding the U.S. Court of International Trade (CIT) decision to dismiss the complaint for failure to state a claim.
Totes-Isotoner (Totes) appealed from a judgment of the CIT dismissing its complaint against the U.S. for failure to state a claim. Totes alleged that the Harmonized Tariff Schedule of the United States (HTSUS), by imposing different rates of duty on leather gloves "for men" and leather gloves "for other persons," unconstitutionally denies the equal protection of the laws.
CAFC upheld the CIT's judgment that (1) it had jurisdiction under 28 U.S.C. §1581(i); (2) Totes had standing to bring its claims; and (3) Totes' equal protection claims were justiciable. On the merits, CAFC affirmed CIT's decisions that Totes has failed to establish an equal protection claim due to its failure to plead facts sufficient to allege a claim of unconstitutional discrimination.
Specifically, Totes argued that the tariff provisions at issue unconstitutionally discriminate based on the sex of users of gloves. CAFC noted that because tariff rates applicable to different product classifications under the HTS are "the result of multilateral international trade negotiations and reflect reciprocal trade concessions and particularized trade preferences," and that reasons behind different tariff rates depend on several factors, including country of origin, the type of product, the circumstances under which the products are imported, and the state of the domestic manufacturing industry. As a result, the Court reasoned that it was quite possible that the different tariff rates for men's and other gloves reflected the fact that the gloves are different products the rates of which may be the result of trade concessions made by the U.S. in return for unrelated trade concessions. Accordingly, to prove an equal protection claim, Totes would have to establish that, "Congress intended to discriminate against men in the tariff schedules." Absent such showing, CAFC refused to find discrimination based on disparate impact on purchasers alone.
In a concurring opinion, Judge Prost held that the proper reason to dismiss Totes' claim was that the tariff classification was not facially discriminatory, pointing out that tariff rates at issue only imposed a burden on importers, and not on gender- or age-based categories of people. Absent a showing of disparate impact on consumers based on their sex, Justice Prost concluded that Totes' failed to establish their equal protection claim.